Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2013 | Feb. 06, 2014 | |
Document Document And Entity Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Dec-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'wmg | ' |
Entity Registrant Name | 'Warner Music Group Corp. | ' |
Entity Central Index Key | '0001319161 | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 1,055 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and equivalents | $129 | $155 |
Accounts receivable, less allowances of $79 and $55 million | 566 | 511 |
Inventories | 34 | 33 |
Royalty advances expected to be recouped within one year | 105 | 93 |
Deferred tax assets | 43 | 43 |
Prepaid and other current assets | 61 | 59 |
Total current assets | 938 | 894 |
Royalty advances expected to be recouped after one year | 195 | 173 |
Property, plant and equipment, net | 181 | 180 |
Goodwill | 1,677 | 1,668 |
Intangible assets subject to amortization, net | 3,074 | 3,107 |
Intangible assets not subject to amortization | 120 | 120 |
Other assets | 103 | 110 |
Total assets | 6,288 | 6,252 |
Current liabilities: | ' | ' |
Accounts payable | 246 | 280 |
Accrued royalties | 1,203 | 1,147 |
Accrued liabilities | 288 | 321 |
Accrued interest | 58 | 75 |
Deferred revenue | 192 | 139 |
Current portion of long-term debt | 68 | 13 |
Other current liabilities | 21 | 25 |
Total current liabilities | 2,076 | 2,000 |
Long-term debt | 2,858 | 2,854 |
Deferred tax liabilities, net | 422 | 439 |
Other noncurrent liabilities | 234 | 216 |
Total liabilities | 5,590 | 5,509 |
Equity: | ' | ' |
Common stock ($0.001 par value; 10,000 shares authorized; 1,055 shares issued and outstanding) | ' | ' |
Additional paid-in capital | 1,128 | 1,128 |
Accumulated deficit | -378 | -341 |
Accumulated other comprehensive loss, net | -69 | -61 |
Total Warner Music Group Corp. equity | 681 | 726 |
Noncontrolling interest | 17 | 17 |
Total equity | 698 | 743 |
Total liabilities and equity | $6,288 | $6,252 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Accounts receivable, allowances | $79 | $55 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 10,000 | 10,000 |
Common stock, shares issued | 1,055 | 1,055 |
Common stock, shares outstanding | 1,055 | 1,055 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Revenues | $815 | $769 | ||
Costs and expenses: | ' | ' | ||
Cost of revenues | -441 | -408 | ||
Selling, general and administrative expenses | -293 | [1] | -262 | [1] |
Amortization of intangible assets | -66 | -48 | ||
Total costs and expenses | -800 | -718 | ||
Operating income | 15 | 51 | ||
Loss on extinguishment of debt | ' | -83 | ||
Interest expense, net | -55 | -53 | ||
Other expense, net | -4 | -5 | ||
Loss before income taxes | -44 | -90 | ||
Income tax benefit | 8 | 11 | ||
Net loss | -36 | -79 | ||
Less: income attributable to noncontrolling interest | -1 | -1 | ||
Net loss attributable to Warner Music Group Corp. | ($37) | ($80) | ||
[1] | (a)Includes depreciation expense of:$(12)$(13) |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Depreciation expense | ($12) | ($13) |
Consolidated_Statement_of_Comp
Consolidated Statement of Comprehensive Loss (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Net loss | ($36) | ($79) | |
Other comprehensive income (loss), net of tax: | ' | ' | |
Foreign currency translation adjustment | -8 | 2 | |
Total other comprehensive (loss) income, net of tax: | -8 | [1] | 2 |
Total comprehensive loss | -44 | -77 | |
Less: comprehensive income attributable to noncontrolling interest | -1 | -1 | |
Comprehensive loss attributable to Warner Music Group Corp. | ($45) | ($78) | |
[1] | (a) Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature of $(2) million. |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | ' | ' |
Net loss | ($36) | ($79) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Loss on extinguishment of debt | ' | 83 |
Depreciation and amortization | 78 | 61 |
Deferred income taxes | -16 | -10 |
Non-cash share-based compensation expense | 3 | ' |
Non-cash interest expense | 4 | 2 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -56 | -23 |
Inventories | -1 | 1 |
Royalty advances | -35 | -35 |
Accounts payable and accrued liabilities | -79 | -53 |
Royalty payables | 56 | 32 |
Accrued interest | -17 | -49 |
Deferred income | 60 | 55 |
Other balance sheet changes | -13 | 5 |
Net cash used in operating activities | -52 | -10 |
Cash flows from investing activities | ' | ' |
Acquisition of music publishing rights | -10 | -8 |
Investments and acquisitions of businesses, net of cash acquired | -4 | ' |
Capital expenditures | -12 | -7 |
Net cash used in investing activities | -26 | -15 |
Cash flows from financing activities | ' | ' |
Proceeds from draw down of the Revolving Credit Facility | 155 | 31 |
Repayment of the Revolving Credit Facility | -100 | -31 |
Proceeds from Acquisition Corp Term Loan Facility | ' | 594 |
Financing costs paid | ' | -127 |
Deferred financing costs paid | ' | -30 |
Distributions to noncontrolling interest holder | -1 | ' |
Net cash provided by (used in) financing activities | 54 | -86 |
Effect of exchange rate changes on cash and equivalents | -2 | -2 |
Net decrease in cash and equivalents | -26 | -113 |
Cash and equivalents at beginning of period | 155 | 302 |
Cash and equivalents at end of period | 129 | 189 |
6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 500 |
6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 227 |
9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp Senior Secured Notes | ' | ($1,250) |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) | Dec. 31, 2013 | Dec. 31, 2012 |
6.00% Senior Secured Notes | ' | ' |
Interest rate | 6.00% | 6.00% |
6.25% Senior Secured Notes | ' | ' |
Interest rate | 6.25% | 6.25% |
9.5% Senior Secured Notes | ' | ' |
Interest rate | ' | 9.50% |
Consolidated_Statement_of_Equi
Consolidated Statement of Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Warner Music Group Corp. Equity | Noncontrolling Interests | |
In Millions, except Share data | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||
Beginning balance at Sep. 30, 2013 | $743 | ' | $1,128 | ($341) | ($61) | $726 | $17 | |
Beginning balance, shares at Sep. 30, 2013 | 1,055 | 1,055 | ' | ' | ' | ' | ' | |
Beginning balance, per share value at Sep. 30, 2013 | $0.00 | 0.001 | ' | ' | ' | ' | ' | |
Net (loss) income | -36 | ' | ' | -37 | ' | -37 | 1 | |
Other comprehensive loss, net of tax | -8 | [1] | ' | ' | ' | -8 | -8 | ' |
Distribution to noncontrolling interest | -1 | ' | ' | ' | ' | ' | -1 | |
Ending balance at Dec. 31, 2013 | $698 | ' | $1,128 | ($378) | ($69) | $681 | $17 | |
Ending balance, shares at Dec. 31, 2013 | 1,055 | 1,055 | ' | ' | ' | ' | ' | |
Ending balance, per share value at Dec. 31, 2013 | $0.00 | 0.001 | ' | ' | ' | ' | ' | |
[1] | (a) Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature of $(2) million. |
Description_of_Business
Description of Business | 3 Months Ended |
Dec. 31, 2013 | |
Description of Business | ' |
1. 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-based content companies. | |
Acquisition of Warner Music Group by Access Industries | |
Pursuant to an Agreement and Plan of Merger, dated as of May 6, 2011 (the “Merger Agreement”), by and among the Company, AI Entertainment Holdings LLC (formerly Airplanes Music LLC), a Delaware limited liability company (“Parent”) and an affiliate of Access Industries, Inc. (“Access”), and Airplanes Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), on July 20, 2011 (the “Merger Closing Date”), Merger Sub merged with and into the Company with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). In connection with the Merger, the Company delisted its common stock from listing on the NYSE. The Company continues to file with the SEC current and periodic reports that would be required to be filed with the SEC pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) in accordance with certain covenants contained in the instruments covering its outstanding indebtedness. | |
PLG Acquisition | |
On July 1, 2013, the Company completed its acquisition of Parlophone Label Group. See Note 4 for a further discussion. | |
The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. A brief description of these operations is presented below. | |
Recorded Music Operations | |
The Company’s Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company plays an integral role in virtually all aspects of the recorded music value chain from discovering and developing talent to producing albums and promoting artists and their products. | |
In the United States, Recorded Music operations are conducted principally through the Company’s major record labels—Warner Bros. Records and the Atlantic Records Group. The Company’s Recorded Music operations also include Rhino, a division that specializes in marketing the Company’s music catalog through compilations and reissuances of previously released music and video titles, as well as in the licensing of recordings to and from third parties for various uses, including film and television soundtracks. The Company also conducts its Recorded Music operations through a collection of additional record labels, including, among others, Asylum, Big Beat, East West, Elektra, Erato, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Rykodisc, Sire, Warner Classics, Warner Music Nashville and Word. | |
Outside the United States, Recorded Music activities are conducted in more than 50 countries primarily through various subsidiaries, affiliates and non-affiliated licensees. Internationally the Company engages in the same activities as in the United States: discovering and signing artists and distributing, marketing and selling their recorded music. In most cases, the Company also markets and distributes the records of those artists for whom the Company’s domestic record labels have international rights. In certain smaller markets, the Company licenses the right to distribute the Company’s records to non-affiliated third-party record labels. The Company’s international artist services operations also include a network of concert promoters through which it provides resources to coordinate tours for the Company’s artists and other artists as well as management companies that partner with artists on other aspects of their career such as merchandising, fan clubs, endorsements, as well as appearances and sponsorship. | |
The Company’s Recorded Music distribution operations include Warner-Elektra-Atlantic Corporation (“WEA Corp.”), which markets and sells music and video products to retailers and wholesale distributors in the U.S., Alternative Distribution Alliance (“ADA”), which distributes the products of independent labels to retail and wholesale distributors in the U.S.; various distribution centers and ventures operated internationally, an 80% interest in Word, which specializes in the distribution of music products in the Christian retail marketplace, and the Company’s worldwide artist and label-services organization, including ADA Worldwide, which provides distribution services outside of the U.S. through a network of affiliated and non-affiliated distributors. | |
In addition to the Company’s Recorded Music products being sold in physical retail outlets, Recorded Music products are also sold in physical form to online physical retailers such as Amazon.com, barnesandnoble.com and bestbuy.com and in digital form to online digital download services such as Apple’s iTunes and Google Play, and are otherwise exploited by digital streaming services such as Beats Music, Deezer, Rhapsody and Spotify, and digital radio services such as Pandora, iTunes Radio and iHeart Radio. | |
The Company has integrated the sale of digital content into all aspects of its business including Artist & Repertoire (“A&R”), marketing, promotion and distribution. The Company’s business development executives work closely with A&R departments to ensure that while a record is being produced, digital assets are also created with all distribution channels in mind, including streaming services, social networking sites, online portals and music-centered destinations. The Company also works side-by-side with its online and mobile partners to test new concepts. The Company believes existing and new digital businesses will be a significant source of growth for at least the next several years and will provide new opportunities to successfully monetize its assets and create new revenue streams. The proportion of digital revenues attributed to each distribution channel varies by region and proportions may change as the roll out of new technologies continues. As an owner of music content, the Company believes it is well positioned to take advantage of growth in digital distribution and emerging technologies to maximize the value of its assets. | |
The Company is also diversifying its revenues beyond its traditional businesses by entering into expanded-rights deals with recording artists in order to partner with artists in other aspects of their careers. Under these agreements, the Company provides services to and participates in artists’ activities outside the traditional recorded music business. The Company builds artist services capabilities and platforms for exploiting this broader set of music-related rights and participating more broadly in the monetization of the artist brands it helps create. | |
The Company believes that entering into artist services and expanded-rights deals and enhancing its artist services capabilities will permit it to diversify revenue streams and capitalize on revenue opportunities in merchandising, fan clubs, sponsorship, concert promotion and touring. This will provide for improved long-term relationships with artists and allow the Company to more effectively connect artists and fans. | |
Music Publishing Operations | |
Where recorded music is focused on exploiting a particular recording of a composition, music publishing is an intellectual property business focused on the exploitation of the composition itself. In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, the Company’s Music Publishing business garners a share of the revenues generated from use of the composition. | |
The Company’s Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in Los Angeles with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. The Company owns or controls rights to more than one million musical compositions, including numerous pop hits, American standards, folk songs and motion picture and theatrical compositions. Assembled over decades, its award-winning catalog includes over 65,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, techno, alternative, gospel and other Christian music. Warner/Chappell also administers the music and soundtracks of several third-party television and film producers and studios, including Lucasfilm, Ltd., Hallmark Entertainment and Disney Music Publishing. Since 2012, Warner/Chappell has been making an effort to augment its film and TV music business, with the acquisitions of certain songs and recordings from numerous critically acclaimed films and TV shows. These acquisitions will help Warner/Chappell take advantage of the higher margins and strong synchronization and performance income in the TV/film space. The Company’s production music library business includes Non-Stop Music, Groove Addicts Production Music Library, Carlin Recorded Music Library and 615 Music, collectively branded as Warner/Chappell Production Music. |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2013 | |
Basis of Presentation | ' |
2. Basis of Presentation | |
Interim Financial Statements | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“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 of 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 month period ended December 31, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 2014. | |
The consolidated balance sheet at September 30, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of 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, 2013 (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 inter-company 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. | |
The Company maintains a 52-53 week fiscal year ending on the Friday nearest to each reporting date. As such, all references to December 31, 2013 and December 31, 2012 relate to the three-month periods ended December 27, 2013 and December 28, 2012, respectively. For convenience purposes, the Company continues to date its financial statements as of December 31. | |
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. | |
New Accounting Pronouncements | |
During the first quarter of fiscal 2014, the Company simultaneously adopted Accounting Standards Updates (“ASU”) 2011-11, Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”) and ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”). ASU 2011-11 and ASU 2013-01 require additional quantitative and qualitative disclosures over financial instruments and derivative instruments that are offset on the balance sheet or subject to master netting arrangements. The adoption of these standards did not have an impact on the Company’s financial statements, other than disclosure. | |
During the first quarter of fiscal 2014, the Company adopted ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires entities to disclose, in one place, information about the amounts reclassified out of accumulated other comprehensive income by component. The adoption of this standard did not have an impact on the Company’s financial statements, other than disclosure. | |
In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 attempts to eliminate diversity in practice by requiring an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU 2013-11 is effective for annual and interim reporting periods for fiscal years beginning after December 15, 2013. The adoption of this standard is not expected to have a significant impact on the Company’s financial statements, other than presentation. |
Comprehensive_Loss_Income
Comprehensive (Loss) Income | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Comprehensive (Loss) Income | ' | |||||||||||||||
3. Comprehensive Income (Loss) | ||||||||||||||||
Comprehensive income (loss), which is reported in the accompanying consolidated statements of equity (deficit), consists of net income (loss) and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income (loss). For the Company, the components of other comprehensive income (loss) primarily consist of foreign currency translation gains and losses, minimum pension liabilities, and deferred gains and losses on financial instruments designated as hedges under FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”), which include interest-rate swap and foreign exchange contracts. The following summary sets forth the changes in the components of accumulated other comprehensive loss, net of related taxes: | ||||||||||||||||
Foreign | Minimum | Deferred Gains | Accumulated | |||||||||||||
Currency | Pension | (Losses) | Other | |||||||||||||
Translation | Liability | On Derivative | Comprehensive | |||||||||||||
Gain (Loss) | Adjustment | Financial | Income (Loss) | |||||||||||||
Instruments | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at September 30, 2013 | $ | (57 | ) | $ | (4 | ) | $ | — | $ | (61 | ) | |||||
Other comprehensive loss (a) | -8 | — | — | (8 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | ||||||||||||
Balance at December 31, 2013 | $ | (65 | ) | $ | (4 | ) | $ | — | $ | (69 | ) | |||||
___________ | ||||||||||||||||
(a) | Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature of $(2) million. |
Acquisition_of_Parlophone_Labe
Acquisition of Parlophone Label Group | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Acquisition of Parlophone Label Group | ' | |||||||
4. Acquisition of Parlophone Label Group | ||||||||
On February 6, 2013, the Company signed a definitive agreement to acquire 100% of the shares of the Parlophone Label Group from Universal Music Group, a division of Vivendi, for £487 million, subject to a closing working capital adjustment, in an all-cash transaction (the “Acquisition”) pursuant to a Share Sale and Purchase Agreement (the “PLG Agreement”) by and among Warner Music Holdings Limited, an English company and wholly-owned subsidiary of the Company (“WM Holdings UK”), certain related entities identified in the PLG Agreement (such entities, together with WM Holdings UK, the “Buyers”), Acquisition Corp., as Buyers’ Guarantor, and EGH1 BV, a Dutch company, EMI Group Holdings BV, a Dutch company, and Delta Holdings BV, a Dutch company, as Sellers (as defined therein) (collectively, the “PLG Sellers”), and Universal International Music BV, a Dutch company, as Sellers’ Guarantor (as defined therein), pursuant to which the PLG Sellers agreed to sell, and the Buyers agreed to buy, the outstanding shares of capital stock of PLG Holdco Limited, an English company (“PLG Holdco”) and certain related entities identified in the PLG Agreement (such entities, together with PLG Holdco, “PLG”). | ||||||||
On June 28, 2013, the parties to the PLG Agreement entered into a Deed of Variation, resulting in an Amended and Restated Share Sale and Purchase Agreement (the “PLG Amended Agreement”). The PLG Amended Agreement provided for, among other amendments, a revision to the definition of “Aggregate Payments” to increase this amount from the consideration paid for the outstanding shares of capital stock in PLG Holdco and certain related entities identified in the PLG Amended Agreement to an amount that reflects the entire purchase price. The adjustment to this definition results in a greater potential cap on liability for the PLG Sellers in connection with certain claims that may be brought under the PLG Amended Agreement. | ||||||||
On July 1, 2013, the Company completed the Acquisition. In connection with the Acquisition, the Company incurred $20 million in professional fees and integration costs during the three months ended December 31, 2013 and $38 million in professional fees and integration costs, as well as an $11 million fee under the Management Agreement (defined below), during the fiscal year ended September 30, 2013. | ||||||||
The Acquisition was accounted for in accordance with FASB ASC Topic 805, Business Combination (“ASC 805”), using the acquisition method of accounting. The assets acquired and liabilities assumed in connection with the Acquisition, including identifiable intangible assets, have been measured at their fair value primarily using Level 3 inputs (see Note 13 for additional information on fair value inputs). Determining the fair value of the assets acquired and liabilities assumed requires judgment and involved the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset useful lives and market multiples, among other items. The use of different estimates and judgments could yield materially different results. | ||||||||
The table below presents (i) the preliminary estimate of the Acquisition consideration as it relates to the acquisition of PLG by the Buyers and (ii) the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of July 1, 2013 (in millions): | ||||||||
Purchase Price | £ | 487 | ||||||
Preliminary Working Capital Adjustment | 13 | |||||||
Adjusted Purchase Price | £ | 500 | ||||||
Foreign Exchange Rate at July 1, 2013 | 1.53 | |||||||
Adjusted Purchase Price in U.S. dollars | $ | 765 | ||||||
Fair Value of assets acquired and liabilities assumed: | ||||||||
Cash | 46 | |||||||
Accounts receivable | 80 | |||||||
Other current assets | 8 | |||||||
Property, plant and equipment | 39 | |||||||
Intangible assets | 764 | |||||||
Accounts payable | (83 | ) | ||||||
Royalties payable | (147 | ) | ||||||
Other current liabilities | (21 | ) | ||||||
Deferred revenue | (25 | ) | ||||||
Deferred tax liabilities | (139 | ) | ||||||
Other noncurrent liabilities * | (27 | ) | ||||||
Fair value of net assets acquired | 495 | |||||||
Goodwill recorded * | 270 | |||||||
Total purchase price allocated | $ | 765 | ||||||
* | Amounts have been adjusted based on new information obtained during the measurement period. | |||||||
The excess of the purchase price, over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets and deferred tax adjustments, has been recorded to goodwill. The goodwill recorded as part of the Acquisition reflects the expected value to be generated from the continuing transition of the music industry and the expected resulting cost savings; cost and revenue synergies to be realized; as well as any intangible assets that do not qualify for separate recognition. The resulting goodwill has been allocated to our Recorded Music reportable segment. The Company does not expect the goodwill recognized to be deductible for income tax purposes. Any impairment charges made in future periods associated with goodwill will not be tax deductible. | ||||||||
The final allocation of the purchase price is pending determination of the final consideration, including the determination of the final working capital adjustment pursuant to the mechanism set forth in the PLG Agreement. | ||||||||
The components of the intangible assets identified in the table above and the related useful lives, allocated to the Company’s Recorded Music reportable segment, are as follows: | ||||||||
Value | Useful Life | |||||||
(in millions) | ||||||||
Trademark and trade name | $ | 17 | Indefinite | |||||
Catalog | 442 | 13 years | ||||||
Artist contracts | 305 | 10 years | ||||||
Pro Forma Financial Information (unaudited) | ||||||||
The following unaudited pro forma information has been presented as if the Acquisition occurred on October 1, 2012. This information is based on historical results of operations, adjusted to give effect to pro forma events that are (i) directly attributable to the Acquisition; (ii) factually supportable; and (iii) expected to have a continuing impact on the Company’s combined results. Additionally, certain pro forma adjustments have been made to the historical results of PLG in order to (i) convert them to U.S. GAAP; (ii) conform their accounting policies to those applied by the Company; (iii) present them in U.S. dollars; (iv) align accounting periods; and (v) eliminate revenue and expenses and related assets and liabilities for international licensing agreements to sell repertoire owned by non acquired entities that have been terminated as a result of the Acquisition and excluded assets not acquired by the Company. The unaudited pro forma results do not reflect the realization of any cost savings as a result of restructuring activities and other cost savings initiatives planned subsequent to the Acquisition or the related estimated restructuring charges contemplated in association with any such expected cost savings. Such charges will be expensed in the appropriate accounting periods. The unaudited pro forma results for the three months ended December 31, 2012 includes the licensing income remitted to the repertoire owner by the selling territory, but does not reflect the licensing fee retained and related direct costs incurred by the selling territory. For the three months ended December 31, 2013, where WMG is the selling territory, the licensing fee and direct costs are included in our consolidated results. | ||||||||
The pro forma information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the Acquisition had taken place at the beginning of fiscal 2013. | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2012 | ||||||||
(in millions) | ||||||||
Revenue | $ | 906 | ||||||
Operating income | 54 | |||||||
Net loss attributable to Warner Music Group Corp. | (66 | ) | ||||||
Actual results related to PLG included in the Consolidated Statements of Operations for the three months ended December 31, 2013 consist of revenues of $74 million and operating loss of $23 million, which includes professional fees and integration costs associated with the Acquisition. The results related to PLG included in the above results for the three months ended December 31, 2012 consist of revenues of $137 million and operating income of $3 million. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||
5. Goodwill and Intangible Assets | ||||||||||||
Goodwill | ||||||||||||
The following analysis details the changes in goodwill for each reportable segment during the three months ended December 31, 2013: | ||||||||||||
Recorded | Music | Total | ||||||||||
Music | Publishing | |||||||||||
(in millions) | ||||||||||||
Balance at September 30, 2013 | $ | 1,204 | $ | 464 | $ | 1,668 | ||||||
Acquisitions | 7 | — | 7 | |||||||||
Dispositions | — | — | — | |||||||||
Other adjustments | 2 | — | 2 | |||||||||
Balance at December 31, 2013 | $ | 1,213 | $ | 464 | $ | 1,677 | ||||||
Acquisitions during the three months ended December 31, 2013 represent an adjustment to preliminary amounts recorded in the prior period as a result of the Acquisition of PLG based on new information obtained during the measurement period. Other adjustments during the three months ended December 31, 2013 represent foreign currency movements. | ||||||||||||
The Company performs its annual goodwill impairment test in accordance with FASB ASC Topic 350, Intangibles—Goodwill and other (“ASC 350”) during the fourth quarter of each fiscal year. 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. | ||||||||||||
Other Intangible Assets | ||||||||||||
Other intangible assets consist of the following: | ||||||||||||
Weighted | December 31, | September 30, | ||||||||||
Average | 2013 | 2013 | ||||||||||
Useful Life | ||||||||||||
(in millions) | ||||||||||||
Intangible assets subject to amortization: | ||||||||||||
Recorded music catalog | 11 years | $ | 1,014 | $ | 1,006 | |||||||
Music publishing copyrights | 28 years | 1,566 | 1,546 | |||||||||
Artist and songwriter contracts | 13 years | 988 | 983 | |||||||||
Trademarks | 7 years | 7 | 7 | |||||||||
3,575 | 3,542 | |||||||||||
Accumulated amortization | (501 | ) | (435 | ) | ||||||||
Total net intangible assets subject to amortization | 3,074 | 3,107 | ||||||||||
Intangible assets not subject to amortization: | ||||||||||||
Trademarks and tradenames | Indefinite | 120 | 120 | |||||||||
Total net other intangible assets | $ | 3,194 | $ | 3,227 | ||||||||
Debt
Debt | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt | ' | |||||||
6. Debt | ||||||||
Debt Capitalization | ||||||||
Long-term debt, including the current portion, consisted of the following: | ||||||||
December 31, | September 30, | |||||||
2013 | 2013 | |||||||
(in millions) | ||||||||
Revolving Credit Facility (a) | 55 | — | ||||||
Term Loan Facility due 2020—Acquisition Corp. (b) | 1,303 | 1,303 | ||||||
6.00% Senior Secured Notes due 2021—Acquisition Corp. | 450 | 450 | ||||||
6.25% Senior Secured Notes due 2021—Acquisition Corp. (c) | 216 | 213 | ||||||
11.5% Senior Notes due 2018—Acquisition Corp. (d) | 752 | 751 | ||||||
13.75% Senior Notes due 2019—Holdings | 150 | 150 | ||||||
Total debt | $ | 2,926 | $ | 2,867 | ||||
Less: current portion | 68 | 13 | ||||||
Total long-term debt | $ | 2,858 | $ | 2,854 | ||||
(a) | Reflects $150 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $11 million and $1 million at December 31, 2013 and September 30, 2013, respectively. There were $55 million of loans outstanding under the Revolving Credit Facility at December 31, 2013, included in the current portion of long term debt. There were no loans outstanding at September 30, 2013. | |||||||
(b) | Principal amount of $1.310 billion less unamortized discount of $7 million at both December 31, 2013 and September 30, 2013. Of this amount, $13 million at both December 31, 2013 and September 30, 2013, representing the scheduled amortization, was included in the current portion of long term debt. | |||||||
(c) | Face amount of €158 million. Amounts above represent the dollar equivalent of such notes at December 31, 2013 and September 30, 2013. | |||||||
(d) | Face amount of $765 million less unamortized discounts of $13 million and $14 million at December 31, 2013 and September 30, 2013, respectively. | |||||||
2012 Debt Refinancing | ||||||||
On November 1, 2012, the Company completed a refinancing (the “2012 Refinancing”) of its then outstanding senior secured notes due 2016. In connection with the 2012 Refinancing, the Company issued new senior secured notes consisting of $500 million aggregate principal amount of Senior Secured Notes due 2021 and €175 million aggregate principal amount of Senior Secured Notes due 2021 (the “New Secured Notes”) and entered into new senior secured credit facilities consisting of a $600 million term loan facility (the “Term Loan Facility”) and a $150 million revolving credit facility (the “Revolving Credit Facility” and, together with Term Loan Facility, the “New Senior Credit Facilities”). Acquisition Corp. is the borrower under the Revolving Credit Facility (the “Revolving Borrower”) and under the Term Loan Facility (the “Term Loan Borrower”). The proceeds from the 2012 Refinancing, together with $101 million of the Company’s available cash, were used to pay the total consideration due in connection with the tender offers for all of the Company’s previously outstanding $1.250 billion 9.50% senior secured notes due 2016 (the “Old Secured Notes”) as well as associated fees and expenses and to redeem all of the remaining notes not tendered in the tender offers. The Company also retired its existing $60 million revolving credit facility (the “Old Revolving Credit Facility”) in connection with the 2012 Refinancing, replacing it with the Revolving Credit Facility. The Company also borrowed $31 million under the Revolving Credit Facility as part of the 2012 Refinancing, which loans were repaid in full on December 3, 2012. | ||||||||
In connection with the 2012 Refinancing, the Company made a redemption payment of $1.377 billion, which included the repayment of the Company’s previously outstanding $1.250 billion Old Secured Notes, tender/call premiums of $93 million and consent fees of approximately $34 million. The Company also paid approximately $45 million in accrued interest through the closing date. | ||||||||
The Company recorded a loss on extinguishment of debt of approximately $83 million in connection with the 2012 Refinancing in the fiscal year ended September 30, 2013, which represents the difference between the redemption payment and the carrying value of the debt at the refinancing date, which included the principal value of $1.250 billion, plus unamortized premiums of $55 million, less unamortized debt issuance costs of $11 million related to the Old Secured Notes. | ||||||||
Modification of Term Loan Facility and Drawdown of Incremental Term Loan Facility | ||||||||
On May 9, 2013, Acquisition Corp. prepaid $102.5 million in aggregate principal amount of term loans under the Term Loan Facility (the “Term Loan Repayment”). Also on May 9, 2013, Acquisition Corp. entered into an amendment to the Term Loan Facility among Acquisition Corp, Holdings, the subsidiaries of Acquisition Corp. party thereto, Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the “Term Loan Credit Agreement Amendment”), providing for a $820 million delayed draw senior secured term loan facility (the “Incremental Term Loan Facility”). On July 1, 2013, Acquisition Corp. drew down the $820 million Incremental Term Loan Facility to fund the acquisition of PLG, pay fees, costs and expenses related to the acquisition and for general corporate purposes of Acquisition Corp. and its subsidiaries. | ||||||||
As part of the amendment to the Term Loan Facility, the interest rate, maturity date, and scheduled amortization were changed. | ||||||||
Debt Redemptions | ||||||||
On June 21, 2013, Acquisition Corp. redeemed 10% of its Senior Secured Notes due 2021, representing repayment of $50 million in aggregate principal amount of its outstanding 6.000% Senior Secured Notes due 2021 and €17.5 million in aggregate principal amount of its outstanding 6.250% Senior Secured Notes due 2021. The Company recorded a loss on extinguishment of debt of approximately $2 million in the fiscal year ended September 30, 2013, which represents the premium paid on early redemption. | ||||||||
Interest Rates | ||||||||
The loans under the Revolving Credit Facility bear interest at Revolving Borrower’s election at a rate equal to (i) the rate for deposits in the currency in which the applicable borrowing is denominated in the London interbank market (adjusted for maximum reserves) for the applicable interest period (“Revolving LIBOR Rate”), plus 2.00% per annum, 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) the overnight federal funds rate plus 0.50% and (z) the one-month Revolving LIBOR Rate plus 1.0% per annum (“Revolving Base Rate”), plus, in each case, 1.00% per annum. 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 Revolving Credit Facility bears a facility fee equal to 0.50%, payable quarterly in arrears, based on the daily commitments during the preceding quarter. The Revolving Credit Facility bears customary letter of credit fees. Acquisition Corp. is also required to pay certain upfront fees to lenders and agency fees to the agent under the Revolving Credit Facility, in the amounts and at the times agreed between the relevant parties. | ||||||||
The loans under the Term Loan Facility bear interest at Term Loan Borrower’s election at a rate equal to (i) the rate for deposits in U.S. dollars in the London interbank market (adjusted for maximum reserves) for the applicable interest period (“Term Loan LIBOR Rate”), plus 2.75% per annum, 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) the overnight federal funds rate plus 0.50% and (z) the one-month Term Loan LIBOR Rate plus 1.0% per annum (“Term Loan Base Rate”), plus, in each case, 1.75% per annum. The Term Loan LIBOR Rate shall be deemed to be not less than 1.00%. 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. | ||||||||
Amortization and Maturity of Term Loan Facility | ||||||||
The loans under the amended Term Loan Facility amortize in equal quarterly installments due December, March, June and September in aggregate annual amounts equal to 1.00% of the original principal amount of the amended Term Loan Facility with the balance payable on maturity date of the Term Loans. The amended Term Loan Facility matures on July 1, 2020, with a springing maturity date on July 2, 2018 in the event that more than $153 million aggregate principal amount of the 11.50% Senior Notes of Acquisition Corp. due October 1, 2018 are outstanding on June 28, 2018 unless, on June 28, 2018, the senior secured indebtedness to EBITDA ratio of Acquisition Corp. is less than or equal to 3.50 to 1.00. | ||||||||
Maturity of Revolving Credit Facility | ||||||||
The Revolving Credit Facility matures on November 1, 2017. | ||||||||
Maturities of Senior Notes | ||||||||
As of December 31, 2013, there are no scheduled maturities of notes until 2018, when $765 million is scheduled to mature. Thereafter, $816 million is scheduled to mature. | ||||||||
Interest Expense, net | ||||||||
Total interest expense, net was $55 million and $53 million for the three months ended December 31, 2013 and December 31, 2012, respectively. The weighted-average interest rate of the Company’s total debt was 6.8% at December 31, 2013, 6.9% at September 30, 2013 and 8.2% at December 31, 2012. |
Restructuring
Restructuring | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Restructuring | ' | |||||||||||||||
7. Restructuring | ||||||||||||||||
In conjunction with the Acquisition, the Company undertook a plan to achieve cost savings (the “Restructuring Plan”), primarily through headcount reductions. The Restructuring Plan was approved by the CEO prior to the close of the Acquisition. Under the Restructuring Plan, the Company currently expects to record an aggregate of approximately $85 million in restructuring charges, currently estimated to be made up of employee-related costs of $61 million, real estate costs of $18 million and other costs of $6 million. Total restructuring costs of $7 million were incurred in the three months ended December 31, 2013 with respect to these actions, which consist entirely of employee-related costs. Total costs to date under the Restructuring Plan are $29 million, including total cash payments of $23 million. The remainder of the Restructuring Plan is expected to be completed by the end of fiscal 2015. | ||||||||||||||||
Total restructuring activity is as follows: | ||||||||||||||||
Employee- | Real Estate Costs | Other | Total | |||||||||||||
related Costs | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at September 30, 2013 | $ | 10 | $ | — | $ | — | $ | 10 | ||||||||
Restructuring expense | 7 | — | — | 7 | ||||||||||||
Cash Payments | (11 | ) | — | — | (11 | ) | ||||||||||
Balance at December 31, 2013 | $ | 6 | $ | — | $ | — | $ | 6 | ||||||||
The restructuring accrual is recorded in other current liabilities on the consolidated balance sheet. These balances reflect estimated future cash outlays. | ||||||||||||||||
A summary of the charges in the consolidated statement of operations resulting from the Restructuring Plan is shown below: | ||||||||||||||||
Three months ended | ||||||||||||||||
December 31, 2013 | ||||||||||||||||
(in millions) | ||||||||||||||||
Selling, general and administrative expense | $ | 7 | ||||||||||||||
Total restructuring expense | $ | 7 | ||||||||||||||
All of the above expenses were recorded in the Recorded Music reportable segment. |
ShareBased_Compensation_Plan
Share-Based Compensation Plan | 3 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Share-Based Compensation Plan | ' | |||||||||||||||||||||||
8. Share-Based Compensation Plans | ||||||||||||||||||||||||
Effective January 1, 2013, eligible individuals were invited to participate in the Senior Management Free Cash Flow Plan (the “Plan”). Eligible individuals include any employee, consultant or officer of the Company or any of its affiliates, who is selected by the Company’s Compensation Committee to participate in the Plan. Under the Plan, participants are allocated a specific portion of the Company’s free cash flow to use to purchase the equivalent of Company stock through the acquisition of deferred equity units. Participants also receive a grant of profit interests in a purposely established LLC holding company (the “LLC”) that represent an economic entitlement to future appreciation over an equivalent number of shares of Company stock (“matching units”). The Company’s Board of Directors authorized the issuance of up to 82.1918 shares of the Company’s common stock pursuant to the Plan, 41.0959 in respect of deferred equity units and 41.0959 in respect of matching units. The LLC currently owns 55 issued and outstanding shares. Each deferred equity unit is equivalent to 1/10,000 of a share of Company stock. The Company will allocate units to active participants each Plan year at the time that annual free cash flow bonuses for such Plan year are determined and may grant unallocated units under the Plan to certain members of current or future management. At the time that annual free cash flow bonuses for such Plan year are determined, a participant shall be credited a number of deferred equity units based on their respective allocation divided by $107.13 (the grant date intrinsic value) and an equal number of the related matching units will be allocated. The redemption price of the deferred equity units will equal the fair market value of a fractional share of the Company’s stock on the date of the settlement and the redemption price for the matching units will equal the excess, if any, of the then fair market value of one Company fractional share over the grant date intrinsic value of one fractional share. | ||||||||||||||||||||||||
The Company accounts for share-based payments as required by FASB ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees to be recognized as compensation expense. Under the recognition provision of ASC 718, liability classified share-based compensation costs are measured each reporting date until settlement. The Company’s policy is to measure share-based compensation costs using the intrinsic value method instead of fair value as it is not practical to estimate the volatility of its share price. | ||||||||||||||||||||||||
For accounting purposes, the grant date was established at the point the Company and the participant reached a mutual understanding of the key terms and conditions, in this case the date at which the participant accepted the invitation to participate in the Plan. For accounting purposes, deferred equity units are deemed to generally vest between one and seven years and matching equity units granted under the Plan are deemed to vest two years after the allocation to the participant’s account. All deferred and matching equity units will be settled in three installments in December 2018, 2019, and 2020. The deferred units will be settled at the participant’s election for cash equal to the fair market value or one fractional company share. The matching units will be settled for cash equal to the redemption price. In December 2020, all outstanding units become mandatorily redeemable at the then redemption price. Due to this mandatory redemption clause, the Company has classified the awards under the Plan as liability awards. Dividend distributions, if any, are also paid out on vested deferred equity units and are calculated on the same basis as the Company’s common shares. The Company has applied a graded (tranche-by-tranche) attribution method and expenses share-based compensation on an accelerated basis over the vesting period of the share award. | ||||||||||||||||||||||||
The following is a summary of the Company’s share awards for the period ended December 31, 2013: | ||||||||||||||||||||||||
Deferred | Matching | Deferred | Matching | Deferred Equity | Matching Equity | |||||||||||||||||||
Equity Units | Equity Units | Equity Units | Equity Units | Units Weighted- | Units Weighted- | |||||||||||||||||||
Fair Value | Intrinsic | Average | Average | |||||||||||||||||||||
Value | Grant-Date | Grant-Date | ||||||||||||||||||||||
Intrinsic | Intrinsic | |||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||
Unvested units at September 30, 2013 | 24 | 24 | $ | 134.62 | $ | 27.49 | $ | 107.13 | $ | — | ||||||||||||||
Granted | — | — | 134.62 | 27.49 | 107.13 | — | ||||||||||||||||||
Vested | (5 | ) | — | 134.62 | 27.49 | 107.13 | — | |||||||||||||||||
Forfeited | (1 | ) | (1 | ) | 134.62 | 27.49 | 107.13 | — | ||||||||||||||||
Unvested units at December 31, 2013 | 18 | 23 | 134.62 | 27.49 | 107.13 | — | ||||||||||||||||||
The weighted-average grant date intrinsic value of deferred equity unit awards for the period ended December 31, 2013 was $107.13. The fair value of these deferred equity units at December 31, 2013 was $134.62. There was no such activity in the comparable prior year period. | ||||||||||||||||||||||||
Compensation Expense | ||||||||||||||||||||||||
The Company recognized non-cash compensation expense related to its share-based compensation plan of $3 million for the three months ended December 31, 2013. Of the $3 million, $2 million related to awards for employees and $1 million related to awards for non-employees for the three months ended December 31, 2013. | ||||||||||||||||||||||||
In addition, as of December 31, 2013, the Company had approximately $16 million of unrecognized compensation costs related to its unvested share awards. The remaining weighted average period over which total compensation related to unvested awards is expected to be recognized is 3 years. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies | ' |
9. Commitments and Contingencies | |
Pricing of Digital Music Downloads | |
On December 20, 2005 and February 3, 2006, the Attorney General of the State of New York served the Company with requests for information in connection with an industry-wide investigation as to the pricing of digital music downloads. On February 28, 2006, the Antitrust Division of the U.S. Department of Justice served us with a Civil Investigative Demand, also seeking information relating to the pricing of digitally downloaded music. Both investigations were ultimately closed, but subsequent to the announcements of the investigations, more than thirty putative class action lawsuits were filed concerning the pricing of digital music downloads. The lawsuits were consolidated in the Southern District of New York. The consolidated amended complaint, filed on April 13, 2007, alleges conspiracy among record companies to delay the release of their content for digital distribution, inflate their pricing of CDs and fix prices for digital downloads. The complaint seeks unspecified compensatory, statutory and treble damages. On October 9, 2008, the District Court issued an order dismissing the case as to all defendants, including us. However, on January 12, 2010, the Second Circuit vacated the judgment of the District Court and remanded the case for further proceedings and on January 10, 2011, the Supreme Court denied the defendants’ petition for Certiorari. | |
Upon remand to the District Court, all defendants, including the Company, filed a renewed motion to dismiss challenging, among other things, plaintiffs’ state law claims and standing to bring certain claims. The renewed motion was based mainly on arguments made in defendants’ original motion to dismiss, but not addressed by the District Court. On July 18, 2011, the District Court granted defendants’ motion in part, and denied it in part. Notably, all claims on behalf of the CD-purchaser class were dismissed with prejudice. However, a wide variety of state and federal claims remain, for the class of internet download purchasers. The parties have filed amended pleadings complying with the court’s order, and the case is currently in discovery. The Company intends to defend against these lawsuits vigorously, but is unable to predict the outcome of these suits. Regardless of the merits of the claims, this and any related litigation could continue to be costly, and divert the time and resources of management. The potential outcomes of these claims that are reasonably possible cannot be determined at this time and an estimate of the reasonably possible loss or range of loss cannot presently be made. | |
Music Download Putative Class Action Suits | |
Five putative class action lawsuits have been filed against the Company in Federal Court in the Northern District of California between February 2, 2012 and March 10, 2012. The lawsuits, which were brought by various recording artists, all allege that the Company has improperly calculated the royalties due to them for certain digital music sales under the terms of their recording contracts. The named plaintiffs purport to raise these claims on their own behalf and, as a putative class action, on behalf of other similarly situated artists. Plaintiffs base their claims on a previous ruling that held another recorded music company had breached the specific recording contracts at issue in that case through its payment of royalties for music downloads and ringtones. In the wake of that ruling, a number of recording artists have initiated suits seeking similar relief against all of the major record companies, including us. Plaintiffs seek to have the interpretation of the contracts in that prior case applied to their different and separate contracts. | |
On April 10, 2012, the Company filed a motion to dismiss various claims in one of the lawsuits, with the intention of filing similar motions in the remaining suits, on the various applicable response dates. Meanwhile, certain plaintiffs’ counsel moved to be appointed as interim lead counsel, and other plaintiffs’ counsel moved to consolidate the various actions. In a June 1, 2012 order, the court consolidated the cases and appointed interim co-lead class counsel. Plaintiffs filed a consolidated, master complaint on August 21, 2012. | |
On December 31, 2013, Plaintiffs filed a Motion for Preliminary Approval of Class Action Settlement. As part of the settlement, the Company will make available $11.5 million (less attorneys’ fees, costs, and costs of claims administration and class notice) to compensate class members for past sales of downloads and ringtones. On January 23, 2014, the Court granted preliminary approval of the settlement. The hearing on final approval of the settlement is scheduled for October 2, 2014. Based on an evaluation of potential outcomes of these claims that are reasonably possible and an estimate of the reasonably possible loss or range of loss possible, the Company has recorded what it believes is an appropriate reserve related to these cases, which amount is not material. | |
Other Matters | |
In addition to the matters discussed above, the Company is involved in various litigation and regulatory proceedings arising in the normal course of business. Where it is determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, the Company establishes an accrual. In none of the currently pending proceedings is the amount of accrual material. An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including (1) the results of ongoing discovery; (2) uncertain damage theories and demands; (3) a less than complete factual record; (4) uncertainty concerning legal theories and their resolution by courts or regulators; and (5) the unpredictable nature of the opposing party and its demands. However, the Company cannot predict with certainty the outcome of any litigation or the potential for future litigation. As such, the Company continuously monitors these proceedings as they develop and adjusts any accrual or disclosure as needed. Regardless of the outcome, litigation could have an adverse impact on the Company, including the Company’s brand value, because of defense costs, diversion of management resources and other factors and it could have a material effect on the Company’s results of operations for a given reporting period. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Derivative Financial Instruments | ' | |||||||
10. Derivative Financial Instruments | ||||||||
Foreign Currency Risk | ||||||||
The Company uses derivative financial instruments, primarily foreign currency forward exchange contracts (“FX Contracts”) for the purpose of managing foreign currency exchange risk by reducing the effects of fluctuations in foreign currency exchange rates. | ||||||||
The Company enters into FX Contracts primarily to hedge its royalty payments and balance sheet items denominated in foreign currency, including Euro denominated debt. The Company applies hedge accounting to FX Contracts for cash flows related to royalty payments The Company records these FX Contracts in the consolidated balance sheet at fair value and changes in fair value are recognized in Other Comprehensive Income (“OCI”) for unrealized items and recognized in earnings for realized items. The Company elects to not apply hedge accounting to foreign currency exposures related to balance sheet items. The Company records these FX Contracts in the consolidated balance sheet at fair value and changes in fair value are immediately recognized in earnings. Fair value is determined by using observable market transactions of spot and forward rates (i.e., Level 2 inputs) which is discussed further in Note 13. | ||||||||
Netting provisions are provided for in existing International Swap and Derivative Association Inc. (“ISDA”) agreements in situations where the Company executes multiple contracts with the same counterparty. As a result, net assets or liabilities resulting from foreign exchange derivatives subject to these netting agreements are classified within other current assets or other current liabilities in the Company’s consolidated balance sheets. | ||||||||
Historically, the Company has used, and continues to use, foreign exchange forward contracts and foreign exchange options primarily to hedge the risk that unremitted or future royalties and license fees owed to its domestic companies for the sale, or anticipated sale, of U.S.-copyrighted products abroad may be adversely affected by changes in foreign currency exchange rates. The Company focuses on managing the level of exposure to the risk of foreign currency exchange rate fluctuations on its major currencies, which include the Euro, British pound sterling, Japanese yen, Canadian dollar, Swedish krona and Australian dollar. In addition, the Company currently hedges foreign currency risk associated with financing transactions such as third-party and inter-company debt and other balance sheet items. | ||||||||
For royalty-related hedges, the Company records foreign exchange contracts at fair value on its balance sheet and the related gains or losses on these contracts are deferred in equity (as a component of comprehensive loss). These deferred gains and losses are recognized in income in the period in which the related royalties and license fees being hedged are received and recognized in income. However, to the extent that any of these contracts are not considered to be perfectly effective in offsetting the change in the value of the royalties and license fees being hedged, any changes in fair value relating to the ineffective portion of these contracts are immediately recognized in income. For hedges of financing transactions and other balance sheet items, hedge gains and losses are taken directly to the statement of operations where there is an equal and offsetting entry related to the underlying exposure. Gains and losses on foreign exchange contracts generally are included as a component of other income (expense), net, in the Company’s consolidated statement of operations. | ||||||||
As of December 31, 2013, the Company had outstanding hedge contracts for the sale of $89 million and the purchase of $783 million of foreign currencies at fixed rates. As of December 31, 2013, the Company had no deferred gains or losses in comprehensive loss related to foreign exchange hedging. As of September 30, 2013, the Company had outstanding hedge contracts for the sale of $249 million and the purchase of $1.044 billion of foreign currencies at fixed rates. As of September 30, 2013, the Company had no deferred gains or losses in comprehensive loss related to foreign exchange hedging. | ||||||||
Interest Rate Risk | ||||||||
The Company has $2.946 billion of principal debt outstanding at December 31, 2013, of which $1.365 billion is variable rate debt. As such, the Company is exposed to changes in interest rates. At December 31, 2013, 54% of the Company’s debt was at a fixed rate. In addition, at December 31, 2013, all of the Company’s floating rate debt under the Term Loan Facility was subject to a LIBOR floor of 1.0%, which is in excess of the current LIBOR rate. The LIBOR floor has effectively turned these LIBOR loans into fixed-rate debt until such time as the LIBOR rate moves higher than the floor. | ||||||||
In addition to the $1.365 billion of variable rate debt, the Company also had $1.581 billion of fixed-rate debt. Based on the level of interest rates prevailing at December 31, 2013, the fair value of the fixed-rate and variable rate debt was approximately $3.120 billion. The fair value of the Company’s debt instruments are 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. Further, based on the amount of its fixed-rate debt, a 25 basis point increase or decrease in the level of interest rates would increase or decrease the fair value of the fixed-rate debt by approximately $10 million. Due to the LIBOR floor of 1%, a 25 basis point increase or decrease in the level of interest rates would have no impact on the fair value of the Company’s variable rate debt. This potential increase or decrease is based on the simplified assumption that the level of fixed-rate debt remains constant with an immediate across the board increase or decrease in the level of interest rates with no subsequent changes in rates for the remainder of the period. | ||||||||
The Company monitors its positions with, and the credit quality of, the financial institutions that are party to any of its financial transactions. The following is a summary of amounts recorded in the Consolidated Balance Sheet pertaining to the Company’s use of foreign currency derivatives at December 31, 2013 and September 30, 2013: | ||||||||
December 31, | September 30, | |||||||
2013(a) | 2013(b) | |||||||
(in millions) | ||||||||
Other current assets | $ | − | $ | 1 | ||||
Other current liabilities | (13 | ) | (23 | ) | ||||
(a) | Includes $4 million and $17 million of foreign exchange derivative contracts in asset and liability positions, respectively. | |||||||
(b) | Includes $5 million and $27 million of foreign exchange derivative contracts in asset and liability positions, respectively. | |||||||
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
11. Segment Information | |||||||||||||||||
As discussed more fully in Note 1, 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, non-cash amortization of intangible assets and non-cash impairment charges to reduce the carrying value of goodwill and intangible assets (“OIBDA”). The Company has supplemented its analysis of OIBDA results by segment with an analysis of operating income (loss) by segment. | |||||||||||||||||
The accounting policies of the Company’s business segments are the same as those described in the summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. The Company accounts for intersegment sales at fair value as if the sales were to third parties. While inter-company 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. Segment information consists of the following: | |||||||||||||||||
Three Months Ended | Recorded | Music | Corporate | Total | |||||||||||||
music | publishing | expenses and | |||||||||||||||
eliminations | |||||||||||||||||
(in millions) | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
$ | 691 | $ | 128 | $ | (4 | ) | $ | 815 | |||||||||
Revenues | |||||||||||||||||
OIBDA | 93 | 19 | (19 | ) | 93 | ||||||||||||
Depreciation of property, plant and equipment | (8 | ) | (1 | ) | (3 | ) | (12 | ) | |||||||||
Amortization of intangible assets | (50 | ) | (16 | ) | — | (66 | ) | ||||||||||
Operating income (loss) | $ | 35 | $ | 2 | $ | (22 | ) | $ | 15 | ||||||||
December 31, 2012 | |||||||||||||||||
Revenues | $ | 657 | $ | 116 | $ | (4 | ) | $ | 769 | ||||||||
OIBDA | 114 | 16 | (18 | ) | 112 | ||||||||||||
Depreciation of property, plant and equipment | (7 | ) | (2 | ) | (4 | ) | (13 | ) | |||||||||
Amortization of intangible assets | (33 | ) | (15 | ) | — | (48 | ) | ||||||||||
Operating income (loss) | $ | 74 | $ | (1 | ) | $ | (22 | ) | $ | 51 | |||||||
Additional_Financial_Informati
Additional Financial Information | 3 Months Ended |
Dec. 31, 2013 | |
Additional Financial Information | ' |
12. Additional Financial Information | |
Cash Interest and Taxes | |
The Company made interest payments of approximately $68 million and $100 million during the three months ended December 31, 2013 and December 31, 2012, respectively. The Company paid approximately $3 million and $5 million of income and withholding taxes, net of refunds, during the three months ended December 31, 2013 and December 31, 2012, respectively. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
13. Fair Value Measurements | ||||||||||||||||
FASB ASC Topic 820, Fair Value Measurements and Dsiclosures (“ASC 820”) defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. | ||||||||||||||||
In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | ||||||||||||||||
— | Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. | |||||||||||||||
— | Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||
— | Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. | |||||||||||||||
In accordance with the fair value hierarchy, described above, the following table shows the fair value of the Company’s financial instruments that are required to be measured at fair value as of December 31, 2013 and September 30, 2013. Balances in other current and other non-current liabilities represent purchase obligations and contingent consideration related to the Company’s various acquisitions. Derivatives not designated as hedging instruments represent the balances in other current assets and other current liabilities below and the gains and losses on these financial instruments are included as a component of other (expense) income, net, in the statement of operations. | ||||||||||||||||
Fair Value Measurements as of December 31, 2013 | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in millions) | ||||||||||||||||
Other Current Assets: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | — | $ | — | $ | — | ||||||||
Other Current Liabilities: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | (13 | ) | $ | — | $ | (13 | ) | ||||||
Other Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (14 | ) | $ | (14 | ) | ||||||
Other Non-Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (7 | ) | $ | (7 | ) | ||||||
Total | $ | — | $ | (13 | ) | $ | (21 | ) | $ | (34 | ) | |||||
Fair Value Measurements as of September 30, 2013 | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in millions) | ||||||||||||||||
Other Current Assets: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | 1 | $ | — | $ | 1 | ||||||||
Other Current Liabilities: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | (23 | ) | $ | — | $ | (23 | ) | ||||||
Other Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (13 | ) | $ | (13 | ) | ||||||
Other Non-Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (9 | ) | $ | (9 | ) | ||||||
Total | $ | — | $ | (22 | ) | $ | (22 | ) | $ | (44 | ) | |||||
(a) | The fair value of the 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 purchase obligations and contingent consideration related to the Company’s various acquisitions. This is based on a discounted cash flow approach and it is adjusted to fair value on a recurring basis and any adjustments are included as a component of operating income in the statement of operations. These amounts were mainly calculated using unobservable inputs such as future earnings performance of the Company’s various acquisitions and the expected timing of the payment. | |||||||||||||||
The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3: | ||||||||||||||||
Total | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at September 30, 2013 | $ | 22 | ||||||||||||||
Additions | 2 | |||||||||||||||
Payments | (3 | ) | ||||||||||||||
Balance at December 31, 2013 | $ | 21 | ||||||||||||||
The decrease in net liabilities classified as Level 3 was primarily related to contingent consideration payments made during the period. | ||||||||||||||||
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 an 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. | ||||||||||||||||
Fair Value of Debt | ||||||||||||||||
Based on the level of interest rates prevailing at December 31, 2013, the fair value of the Company’s debt was $3.120 billion. Unrealized gains or losses on debt do not result in the realization or expenditure of cash and generally are not recognized for financial reporting purposes unless the debt is retired prior to its maturity. |
Guarantor_And_NonGuarantor_Sub
Guarantor And Non-Guarantor Subsidiaries Financial Information | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
Guarantor And Non-Guarantor Subsidiaries Financial Information | ' | |||||||||||||||||||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Financial Statements | ||||||||||||||||||||||||||||||||||||||||||
The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp. Holdings has issued and outstanding the 13.75% Senior Notes due 2019 (the “Holdings Notes”). In addition, Acquisition Corp. has issued and outstanding the 6.00% Senior Secured Notes due 2021, the 6.25% Senior Secured Notes due 2021, and the 11.50% Senior Notes due 2018 (together, the “Acquisition Corp. Notes”). | ||||||||||||||||||||||||||||||||||||||||||
The Holdings Notes are guaranteed by the Company. This guarantee is full and unconditional. The following condensed consolidating financial statements are presented for the information of the holders of the Holdings Notes and present the results of operations, financial position and cash flows of (i) the Company, which is the guarantor of the Holdings Notes, (ii) Holdings, which is the issuer of the Holdings Notes, (iii) the subsidiaries of Holdings (Acquisition Corp. is the only direct subsidiary of Holdings) and which are not guarantors of the Holdings Notes, (iv) the eliminations necessary to arrive at the information for the Company on a consolidated basis. Investments in consolidated or combined subsidiaries are presented under the equity method of accounting. | ||||||||||||||||||||||||||||||||||||||||||
The Acquisition Corp. Notes are also guaranteed by the Company and, in addition, are guaranteed by all of Acquisition Corp.’s domestic wholly owned subsidiaries. The secured notes are guaranteed on a senior secured basis and the unsecured notes are guaranteed on an unsecured senior basis. The Company’s guarantee of the Acquisition Corp. Notes is full and unconditional. The guarantee of the Acquisition Corp. Notes by Acquisition Corp.’s domestic, wholly-owned subsidiaries are full, unconditional, joint and several. The following condensed consolidating financial statements are also presented for the information of the holders of the Acquisition Corp. Notes and present the results of operations, financial position and cash flows of (i) Acquisition Corp., which is the issuer of the Acquisition Corp. Notes, (ii) the guarantor subsidiaries of Acquisition Corp., (iii) the non-guarantor subsidiaries of Acquisition Corp. and (iv) the eliminations necessary to arrive at the information for Acquisition Corp. on a consolidated basis. Investments in consolidated subsidiaries are presented under the equity method of accounting. There are no restrictions on Acquisition Corp.’s ability to obtain funds from any of its wholly owned subsidiaries through dividends, loans or advances. | ||||||||||||||||||||||||||||||||||||||||||
The Company and Holdings are holding companies that conduct substantially all of their business operations through Acquisition Corp. Accordingly, the ability of the Company and Holdings to obtain funds from their subsidiaries is restricted by the indentures for the Acquisition Corp. Notes and the credit agreements for the Acquisition Corp. New Senior Credit Facilities, and, with respect to the Company, the indenture for the Holdings Notes. | ||||||||||||||||||||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Balance Sheet (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | ─ | $ | 10 | $ | 119 | $ | ─ | $ | 129 | $ | ─ | $ | ─ | $ | ─ | $ | 129 | ||||||||||||||||||||||||
Accounts receivable, net | ─ | 183 | 383 | ─ | 566 | ─ | ─ | ─ | 566 | |||||||||||||||||||||||||||||||||
Inventories | ─ | 9 | 25 | ─ | 34 | ─ | ─ | ─ | 34 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped within one year | ─ | 58 | 47 | ─ | 105 | ─ | ─ | ─ | 105 | |||||||||||||||||||||||||||||||||
Deferred tax assets | ─ | 20 | 23 | ─ | 43 | ─ | ─ | ─ | 43 | |||||||||||||||||||||||||||||||||
Prepaid and other current assets | 5 | 8 | 48 | ─ | 61 | ─ | ─ | ─ | 61 | |||||||||||||||||||||||||||||||||
Total current assets | 5 | 288 | 645 | ─ | 938 | ─ | ─ | ─ | 938 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped after one year | ─ | 107 | 88 | ─ | 195 | ─ | ─ | ─ | 195 | |||||||||||||||||||||||||||||||||
Investments in and advances to (from) consolidated subsidiaries | 2,806 | 894 | ─ | -3,700 | ─ | 829 | 681 | -1,510 | ─ | |||||||||||||||||||||||||||||||||
Property, plant and equipment, net | ─ | 103 | 78 | ─ | 181 | ─ | ─ | ─ | 181 | |||||||||||||||||||||||||||||||||
Goodwill | ─ | 1,379 | 298 | ─ | 1,677 | ─ | ─ | ─ | 1,677 | |||||||||||||||||||||||||||||||||
Intangible assets subject to amortization, net | ─ | 989 | 2,085 | ─ | 3,074 | ─ | ─ | ─ | 3,074 | |||||||||||||||||||||||||||||||||
Intangible assets not subject to amortization | ─ | 75 | 45 | ─ | 120 | ─ | ─ | ─ | 120 | |||||||||||||||||||||||||||||||||
Due (to) from parent companies | 797 | 23 | -820 | ─ | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Other assets | 65 | 12 | 19 | ─ | 96 | 7 | ─ | ─ | 103 | |||||||||||||||||||||||||||||||||
Total assets | $ | 3,673 | $ | 3,870 | $ | 2,438 | $ | -3,700 | $ | 6,281 | $ | 836 | $ | 681 | $ | -1,510 | $ | 6,288 | ||||||||||||||||||||||||
Liabilities and Deficit: | ||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts payable | $ | ─ | $ | 75 | $ | 171 | $ | ─ | $ | 246 | $ | ─ | $ | ─ | $ | ─ | $ | 246 | ||||||||||||||||||||||||
Accrued royalties | ─ | 513 | 690 | ─ | 1,203 | ─ | ─ | ─ | 1,203 | |||||||||||||||||||||||||||||||||
Accrued liabilities | ─ | 66 | 222 | ─ | 288 | ─ | ─ | ─ | 288 | |||||||||||||||||||||||||||||||||
Accrued interest | 53 | ─ | ─ | ─ | 53 | 5 | ─ | ─ | 58 | |||||||||||||||||||||||||||||||||
Deferred revenue | ─ | 114 | 78 | ─ | 192 | ─ | ─ | ─ | 192 | |||||||||||||||||||||||||||||||||
Current portion of long-term debt | 68 | ─ | ─ | ─ | 68 | ─ | ─ | ─ | 68 | |||||||||||||||||||||||||||||||||
Other current liabilities | ─ | 16 | 5 | ─ | 21 | ─ | ─ | ─ | 21 | |||||||||||||||||||||||||||||||||
Total current liabilities | 121 | 784 | 1,166 | ─ | 2,071 | 5 | ─ | ─ | 2,076 | |||||||||||||||||||||||||||||||||
Long-term debt | 2,708 | ─ | ─ | ─ | 2,708 | 150 | ─ | ─ | 2,858 | |||||||||||||||||||||||||||||||||
Deferred tax liabilities, net | ─ | 127 | 295 | ─ | 422 | ─ | ─ | ─ | 422 | |||||||||||||||||||||||||||||||||
Other noncurrent liabilities | 15 | 83 | 136 | ─ | 234 | ─ | ─ | ─ | 234 | |||||||||||||||||||||||||||||||||
Total liabilities | 2,844 | 994 | 1,597 | ─ | 5,435 | 155 | ─ | ─ | 5,590 | |||||||||||||||||||||||||||||||||
Total Warner Music Group Corp. equity (deficit) | 829 | 2,876 | 824 | -3,700 | 829 | 681 | 681 | -1,510 | 681 | |||||||||||||||||||||||||||||||||
Noncontrolling interest | ─ | ─ | 17 | ─ | 17 | ─ | ─ | ─ | 17 | |||||||||||||||||||||||||||||||||
Total equity (deficit) | 829 | 2,876 | 841 | -3,700 | 846 | 681 | 681 | -1,510 | 698 | |||||||||||||||||||||||||||||||||
Total liabilities and equity (deficit) | $ | 3,673 | $ | 3,870 | $ | 2,438 | $ | -3,700 | $ | 6,281 | $ | 836 | $ | 681 | $ | -1,510 | $ | 6,288 | ||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | ─ | $ | 16 | $ | 139 | $ | ─ | $ | 155 | $ | ─ | $ | ─ | $ | ─ | $ | 155 | ||||||||||||||||||||||||
Accounts receivable, net | ─ | 185 | 326 | ─ | 511 | ─ | ─ | ─ | 511 | |||||||||||||||||||||||||||||||||
Inventories | ─ | 10 | 23 | ─ | 33 | ─ | ─ | ─ | 33 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped within one year | ─ | 59 | 34 | ─ | 93 | ─ | ─ | ─ | 93 | |||||||||||||||||||||||||||||||||
Deferred tax assets | ─ | 21 | 22 | ─ | 43 | ─ | ─ | ─ | 43 | |||||||||||||||||||||||||||||||||
Prepaid and other current assets | 5 | 8 | 46 | ─ | 59 | ─ | ─ | ─ | 59 | |||||||||||||||||||||||||||||||||
Total current assets | 5 | 299 | 590 | ─ | 894 | ─ | ─ | ─ | 894 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped after one year | ─ | 109 | 64 | ─ | 173 | ─ | ─ | ─ | 173 | |||||||||||||||||||||||||||||||||
Investments in and advances to (from) consolidated subsidiaries | 2,811 | 930 | ─ | (3,741 | ) | ─ | 879 | 726 | (1,605 | ) | ─ | |||||||||||||||||||||||||||||||
Property, plant and equipment, net | ─ | 101 | 79 | ─ | 180 | ─ | ─ | ─ | 180 | |||||||||||||||||||||||||||||||||
Goodwill | ─ | 1,379 | 289 | ─ | 1,668 | ─ | ─ | ─ | 1,668 | |||||||||||||||||||||||||||||||||
Intangible assets subject to amortization, net | ─ | 1,007 | 2,100 | ─ | 3,107 | ─ | ─ | ─ | 3,107 | |||||||||||||||||||||||||||||||||
Intangible assets not subject to amortization | ─ | 75 | 45 | ─ | 120 | ─ | ─ | ─ | 120 | |||||||||||||||||||||||||||||||||
Due (to) from parent companies | 799 | (27 | ) | (772 | ) | ─ | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||
Other assets | 68 | 14 | 21 | ─ | 103 | 7 | ─ | ─ | 110 | |||||||||||||||||||||||||||||||||
Total assets | $ | 3,683 | $ | 3,887 | $ | 2,416 | $ | (3,741 | ) | $ | 6,245 | $ | 886 | $ | 726 | $ | (1,605 | ) | $ | 6,252 | ||||||||||||||||||||||
Liabilities and Deficit: | ||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts payable | ─ | $ | 96 | $ | 184 | ─ | $ | 280 | ─ | ─ | ─ | $ | 280 | |||||||||||||||||||||||||||||
Accrued royalties | ─ | 570 | 577 | ─ | 1,147 | ─ | ─ | ─ | 1,147 | |||||||||||||||||||||||||||||||||
Accrued liabilities | ─ | 94 | 227 | ─ | 321 | ─ | ─ | ─ | 321 | |||||||||||||||||||||||||||||||||
Accrued interest | 65 | ─ | ─ | ─ | 65 | 10 | ─ | ─ | 75 | |||||||||||||||||||||||||||||||||
Deferred revenue | ─ | 56 | 83 | ─ | 139 | ─ | ─ | ─ | 139 | |||||||||||||||||||||||||||||||||
Current portion of long-term debt | 13 | ─ | ─ | ─ | 13 | ─ | ─ | ─ | 13 | |||||||||||||||||||||||||||||||||
Other current liabilities | ─ | 23 | (4 | ) | 6 | 25 | ─ | ─ | ─ | 25 | ||||||||||||||||||||||||||||||||
Total current liabilities | 78 | 839 | 1,067 | 6 | 1,990 | 10 | ─ | ─ | 2,000 | |||||||||||||||||||||||||||||||||
Long-term debt | 2,704 | ─ | ─ | ─ | 2,704 | 150 | ─ | ─ | 2,854 | |||||||||||||||||||||||||||||||||
Deferred tax liabilities, net | ─ | 128 | 311 | ─ | 439 | ─ | ─ | ─ | 439 | |||||||||||||||||||||||||||||||||
Other noncurrent liabilities | 22 | 68 | 133 | (7 | ) | 216 | ─ | ─ | ─ | 216 | ||||||||||||||||||||||||||||||||
Total liabilities | 2,804 | 1,035 | 1,511 | (1 | ) | 5,349 | 160 | ─ | ─ | 5,509 | ||||||||||||||||||||||||||||||||
Total Warner Music Group Corp. equity (deficit) | 879 | 2,852 | 888 | (3,740 | ) | 879 | 726 | 726 | (1,605 | ) | 726 | |||||||||||||||||||||||||||||||
Noncontrolling interest | ─ | ─ | 17 | ─ | 17 | ─ | ─ | ─ | 17 | |||||||||||||||||||||||||||||||||
Total equity (deficit) | 879 | 2,852 | 905 | (3,740 | ) | 896 | 726 | 726 | (1,605 | ) | 743 | |||||||||||||||||||||||||||||||
Total liabilities and equity (deficit) | $ | 3,683 | $ | 3,887 | $ | 2,416 | $ | (3,741 | ) | $ | 6,245 | $ | 886 | $ | 726 | $ | (1,605 | ) | $ | 6,252 | ||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statements of Operations (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | ─ | $ | 354 | $ | 510 | $ | -49 | $ | 815 | $ | ─ | $ | ─ | $ | ─ | $ | 815 | ||||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | ─ | -155 | -335 | 49 | -441 | ─ | ─ | ─ | -441 | |||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | ─ | -115 | -179 | 1 | -293 | ─ | ─ | ─ | -293 | |||||||||||||||||||||||||||||||||
Amortization of intangible assets | ─ | -30 | -36 | ─ | -66 | ─ | ─ | ─ | -66 | |||||||||||||||||||||||||||||||||
Total costs and expenses | ─ | -300 | -550 | 50 | -800 | ─ | ─ | ─ | -800 | |||||||||||||||||||||||||||||||||
Operating income (expense) | ─ | 54 | -40 | 1 | 15 | ─ | ─ | ─ | 15 | |||||||||||||||||||||||||||||||||
Interest income (expense), net | -31 | 1 | -20 | ─ | -50 | -5 | ─ | ─ | -55 | |||||||||||||||||||||||||||||||||
Equity gains (losses) from consolidated subsidiaries | -21 | -13 | ─ | 34 | ─ | -32 | -37 | 69 | ─ | |||||||||||||||||||||||||||||||||
Other income (expense), net | 12 | -14 | -2 | ─ | -4 | ─ | ─ | ─ | -4 | |||||||||||||||||||||||||||||||||
(Loss) income before income taxes | -40 | 28 | -62 | 35 | -39 | -37 | -37 | 69 | -44 | |||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 8 | -4 | 7 | -3 | 8 | ─ | ─ | ─ | 8 | |||||||||||||||||||||||||||||||||
Net (loss) income | -32 | 24 | -55 | 32 | -31 | -37 | -37 | 69 | -36 | |||||||||||||||||||||||||||||||||
Less: loss attributable to noncontrolling interest | ─ | ─ | -1 | ─ | -1 | ─ | ─ | ─ | -1 | |||||||||||||||||||||||||||||||||
Net (loss) income attributable to Warner Music Group Corp. | $ | -32 | $ | 24 | $ | -56 | $ | 32 | $ | -32 | $ | -37 | $ | -37 | $ | 69 | $ | -37 | ||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statements of Operations (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | ─ | $ | 344 | $ | 481 | $ | (56 | ) | $ | 769 | $ | ─ | $ | ─ | $ | ─ | $ | 769 | |||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | ─ | (162 | ) | (295 | ) | 49 | (408 | ) | ─ | ─ | ─ | (408 | ) | |||||||||||||||||||||||||||||
Selling, general and administrative expenses | ─ | (123 | ) | (154 | ) | 15 | (262 | ) | ─ | ─ | ─ | (262 | ) | |||||||||||||||||||||||||||||
Amortization of intangible assets | ─ | (30 | ) | (18 | ) | ─ | (48 | ) | ─ | ─ | ─ | (48 | ) | |||||||||||||||||||||||||||||
Total costs and expenses | ─ | (315 | ) | (467 | ) | 64 | (718 | ) | ─ | ─ | ─ | (718 | ) | |||||||||||||||||||||||||||||
Operating income (expense) | ─ | 29 | 14 | 8 | 51 | ─ | ─ | ─ | 51 | |||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | (83 | ) | ─ | ─ | ─ | (83 | ) | ─ | ─ | ─ | (83 | ) | ||||||||||||||||||||||||||||||
Interest (expense) income, net | (43 | ) | 1 | (5 | ) | ─ | (47 | ) | (6 | ) | ─ | ─ | (53 | ) | ||||||||||||||||||||||||||||
Equity gains (losses) from consolidated subsidiaries | 41 | (17 | ) | ─ | (24 | ) | ─ | (74 | ) | (80 | ) | 154 | ─ | |||||||||||||||||||||||||||||
Other expense, net | ─ | (5 | ) | ─ | ─ | (5 | ) | ─ | ─ | ─ | (5 | ) | ||||||||||||||||||||||||||||||
(Loss) income before income taxes | (85 | ) | 8 | 9 | (16 | ) | (84 | ) | (80 | ) | (80 | ) | 154 | (90 | ) | |||||||||||||||||||||||||||
Income tax benefit (expense) | 11 | 10 | (1 | ) | (9 | ) | 11 | ─ | ─ | ─ | 11 | |||||||||||||||||||||||||||||||
Net (loss) income | (74 | ) | 18 | 8 | (25 | ) | (73 | ) | (80 | ) | (80 | ) | 154 | (79 | ) | |||||||||||||||||||||||||||
Less: loss attributable to noncontrolling interest | ─ | ─ | (1 | ) | ─ | (1 | ) | ─ | ─ | ─ | (1 | ) | ||||||||||||||||||||||||||||||
Net (loss) income attributable to Warner Music Group Corp. | $ | (74 | ) | $ | 18 | $ | 7 | $ | (25 | ) | $ | (74 | ) | $ | (80 | ) | $ | (80 | ) | $ | 154 | $ | (80 | ) | ||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (32 | ) | $ | 24 | $ | (55 | ) | $ | 32 | $ | (31 | ) | $ | (37 | ) | $ | (37 | ) | $ | 69 | $ | (36 | ) | ||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (8 | ) | ─ | (8 | ) | 8 | (8 | ) | (8 | ) | (8 | ) | 16 | (8 | ) | |||||||||||||||||||||||||||
Other comprehensive loss, net of tax: | (8 | ) | ─ | (8 | ) | 8 | (8 | ) | (8 | ) | (8 | ) | 16 | (8 | ) | |||||||||||||||||||||||||||
Total comprehensive (loss) income | (40 | ) | 24 | (63 | ) | 40 | (39 | ) | (45 | ) | (45 | ) | 85 | (44 | ) | |||||||||||||||||||||||||||
Comprehensive income attributable to noncontrolling interest | ─ | ─ | (1 | ) | ─ | (1 | ) | ─ | ─ | ─ | (1 | ) | ||||||||||||||||||||||||||||||
Comprehensive (loss) income attributable to Warner Music Group Corp. | $ | (40 | ) | $ | 24 | $ | (64 | ) | $ | 40 | $ | (40 | ) | $ | (45 | ) | $ | (45 | ) | $ | 85 | $ | (45 | ) | ||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (74 | ) | $ | 18 | $ | 8 | $ | (25 | ) | $ | (73 | ) | $ | (80 | ) | $ | (80 | ) | $ | 154 | $ | (79 | ) | ||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 2 | ─ | 2 | (2 | ) | 2 | 2 | 2 | (4 | ) | 2 | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax: | 2 | ─ | 2 | (2 | ) | 2 | 2 | 2 | (4 | ) | 2 | |||||||||||||||||||||||||||||||
Total comprehensive (loss) income | (72 | ) | 18 | 10 | (27 | ) | (71 | ) | (78 | ) | (78 | ) | 150 | (77 | ) | |||||||||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interest | ─ | ─ | (1 | ) | ─ | (1 | ) | ─ | ─ | ─ | (1 | ) | ||||||||||||||||||||||||||||||
Comprehensive (loss) income attributable to Warner Music Group Corp. | $ | (72 | ) | $ | 18 | $ | 9 | $ | (27 | ) | $ | (72 | ) | $ | (78 | ) | $ | (78 | ) | $ | 150 | $ | (78 | ) | ||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Cash Flows (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | -32 | $ | 24 | $ | -55 | $ | 32 | $ | -31 | $ | -37 | $ | -37 | $ | 69 | $ | -36 | ||||||||||||||||||||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | ─ | 38 | 40 | ─ | 78 | ─ | ─ | ─ | 78 | |||||||||||||||||||||||||||||||||
Deferred income taxes | ─ | ─ | -16 | ─ | -16 | ─ | ─ | ─ | -16 | |||||||||||||||||||||||||||||||||
Non-cash interest expense | 4 | ─ | ─ | ─ | 4 | ─ | ─ | ─ | 4 | |||||||||||||||||||||||||||||||||
Non-cash share-based compensation expense | ─ | 3 | ─ | ─ | 3 | ─ | ─ | ─ | 3 | |||||||||||||||||||||||||||||||||
Equity (gains) losses, including distributions | 21 | 13 | ─ | -34 | ─ | 32 | 37 | -69 | ─ | |||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | ─ | 2 | -58 | ─ | -56 | ─ | ─ | ─ | -56 | |||||||||||||||||||||||||||||||||
Inventories | ─ | 1 | -2 | ─ | -1 | ─ | ─ | ─ | -1 | |||||||||||||||||||||||||||||||||
Royalty advances | ─ | 2 | -37 | ─ | -35 | ─ | ─ | ─ | -35 | |||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | ─ | -109 | 51 | -21 | -79 | ─ | ─ | ─ | -79 | |||||||||||||||||||||||||||||||||
Royalty payables | ─ | -56 | 112 | ─ | 56 | ─ | ─ | ─ | 56 | |||||||||||||||||||||||||||||||||
Accrued interest | -12 | ─ | ─ | ─ | -12 | -5 | ─ | ─ | -17 | |||||||||||||||||||||||||||||||||
Deferred income | ─ | 60 | ─ | ─ | 60 | ─ | ─ | ─ | 60 | |||||||||||||||||||||||||||||||||
Other balance sheet changes | 3 | 3 | -42 | 23 | -13 | ─ | ─ | ─ | -13 | |||||||||||||||||||||||||||||||||
Net cash (used in) provided by operating activities | -16 | -19 | -7 | ─ | -42 | -10 | ─ | ─ | -52 | |||||||||||||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||||||||||||||||
Acquisition of music publishing rights | ─ | -6 | -4 | ─ | -10 | ─ | ─ | ─ | -10 | |||||||||||||||||||||||||||||||||
Change in due to (from) subsidiaries | -29 | ─ | ─ | 29 | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Capital expenditures | ─ | -9 | -3 | ─ | -12 | ─ | ─ | ─ | -12 | |||||||||||||||||||||||||||||||||
Investments and acquisitions of businesses, net of cash acquired | ─ | -1 | -3 | ─ | -4 | ─ | ─ | ─ | -4 | |||||||||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | -29 | -16 | -10 | 29 | -26 | ─ | ─ | ─ | -26 | |||||||||||||||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||||||||||||||||
Dividend by Acquisition Corp.to Holdings Corp. | -10 | ─ | ─ | ─ | -10 | 10 | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Distribution to noncontrolling interest holder | ─ | ─ | -1 | ─ | -1 | ─ | ─ | ─ | -1 | |||||||||||||||||||||||||||||||||
Proceeds from draw down of the Revolving Credit Facility | 155 | ─ | ─ | ─ | 155 | ─ | ─ | ─ | 155 | |||||||||||||||||||||||||||||||||
Repayment of the Revolving Credit Facility | -100 | ─ | ─ | ─ | -100 | ─ | ─ | ─ | -100 | |||||||||||||||||||||||||||||||||
Change in due (from) to issuer | ─ | 29 | ─ | -29 | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | 45 | 29 | -1 | -29 | 44 | 10 | ─ | ─ | 54 | |||||||||||||||||||||||||||||||||
Effect of foreign currency exchange rate changes on cash | ─ | ─ | -2 | ─ | -2 | ─ | ─ | ─ | -2 | |||||||||||||||||||||||||||||||||
Net (decrease) increase in cash and equivalents | ─ | -6 | -20 | ─ | -26 | ─ | ─ | ─ | -26 | |||||||||||||||||||||||||||||||||
Cash and equivalents at beginning of period | ─ | 16 | 139 | ─ | 155 | ─ | ─ | ─ | 155 | |||||||||||||||||||||||||||||||||
Cash and equivalents at end of period | $ | ─ | $ | 10 | $ | $119 | $ | ─ | $ | 129 | $ | ─ | $ | ─ | $ | ─ | $ | 129 | ||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Cash Flows (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (74 | ) | $ | 18 | $ | 8 | $ | (25 | ) | $ | (73 | ) | $ | (80 | ) | $ | (80 | ) | $ | 154 | $ | (79 | ) | ||||||||||||||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 83 | ─ | ─ | ─ | 83 | ─ | ─ | ─ | 83 | |||||||||||||||||||||||||||||||||
Depreciation and amortization | ─ | 39 | 22 | ─ | 61 | ─ | ─ | ─ | 61 | |||||||||||||||||||||||||||||||||
Deferred income taxes | ─ | ─ | (10 | ) | ─ | (10 | ) | ─ | ─ | ─ | (10 | ) | ||||||||||||||||||||||||||||||
Non-cash interest expense | 2 | ─ | ─ | ─ | 2 | ─ | ─ | ─ | 2 | |||||||||||||||||||||||||||||||||
Equity (gains) losses, including distributions | (41 | ) | 17 | ─ | 24 | ─ | 74 | 80 | (154 | ) | ─ | |||||||||||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | ─ | (14 | ) | (9 | ) | ─ | (23 | ) | ─ | ─ | ─ | (23 | ) | |||||||||||||||||||||||||||||
Inventories | ─ | 1 | ─ | ─ | 1 | ─ | ─ | ─ | 1 | |||||||||||||||||||||||||||||||||
Royalty advances | ─ | (25 | ) | (10 | ) | ─ | (35 | ) | ─ | ─ | ─ | (35 | ) | |||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | ─ | 29 | (80 | ) | (2 | ) | (53 | ) | ─ | ─ | ─ | (53 | ) | |||||||||||||||||||||||||||||
Royalty payables | ─ | (36 | ) | 68 | ─ | 32 | ─ | ─ | ─ | 32 | ||||||||||||||||||||||||||||||||
Accrued interest | (44 | ) | ─ | ─ | ─ | (44 | ) | (5 | ) | ─ | ─ | (49 | ) | |||||||||||||||||||||||||||||
Deferred income | ─ | 40 | 15 | ─ | 55 | ─ | ─ | ─ | 55 | |||||||||||||||||||||||||||||||||
Other balance sheet changes | 11 | (14 | ) | 5 | 3 | 5 | ─ | ─ | ─ | 5 | ||||||||||||||||||||||||||||||||
Net cash (used in) provided by operating activities | (63 | ) | 55 | 9 | ─ | 1 | (11 | ) | ─ | ─ | (10 | ) | ||||||||||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||||||||||||||||
Acquisition of music publishing rights | ─ | (6 | ) | (2 | ) | ─ | (8 | ) | ─ | ─ | ─ | (8 | ) | |||||||||||||||||||||||||||||
Change in due to (from) subsidiaries | 106 | ─ | ─ | (106 | ) | ─ | ─ | ─ | ─ | ─ | ||||||||||||||||||||||||||||||||
Capital expenditures | ─ | (4 | ) | (3 | ) | ─ | (7 | ) | ─ | ─ | ─ | (7 | ) | |||||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | 106 | (10 | ) | (5 | ) | (106 | ) | (15 | ) | ─ | ─ | ─ | (15 | ) | ||||||||||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||||||||||||||||
Dividend by Acquisition Corp.to Holdings Corp. | (2 | ) | ─ | ─ | ─ | (2 | ) | 2 | ─ | ─ | ─ | |||||||||||||||||||||||||||||||
Proceeds from draw down of the Revolving Credit Facility | 31 | ─ | ─ | ─ | 31 | ─ | ─ | ─ | 31 | |||||||||||||||||||||||||||||||||
Repayment of the Revolving Credit Facility | (31 | ) | ─ | ─ | ─ | (31 | ) | ─ | ─ | ─ | (31 | ) | ||||||||||||||||||||||||||||||
Proceeds from issuance of Acquisition Corp 6.0% Senior Secured Notes | 500 | ─ | ─ | ─ | 500 | ─ | ─ | ─ | 500 | |||||||||||||||||||||||||||||||||
Proceeds from issuance of Acquisition Corp 6.25% Senior Secured Notes | 227 | ─ | ─ | ─ | 227 | ─ | ─ | ─ | 227 | |||||||||||||||||||||||||||||||||
Proceeds from Acquisition Corp Term Loan Facility | 594 | ─ | ─ | ─ | 594 | ─ | ─ | ─ | 594 | |||||||||||||||||||||||||||||||||
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | (1,250 | ) | ─ | ─ | ─ | (1,250 | ) | ─ | ─ | ─ | (1,250 | ) | ||||||||||||||||||||||||||||||
Financing costs paid | (127 | ) | ─ | ─ | ─ | (127 | ) | ─ | ─ | ─ | (127 | ) | ||||||||||||||||||||||||||||||
Deferred financing costs paid | (29 | ) | ─ | ─ | ─ | (29 | ) | (1 | ) | ─ | ─ | (30 | ) | |||||||||||||||||||||||||||||
Change in due to (from) issuer | ─ | (106 | ) | ─ | 106 | ─ | ─ | ─ | ─ | ─ | ||||||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | (87 | ) | (106 | ) | ─ | 106 | (87 | ) | 1 | ─ | ─ | (86 | ) | |||||||||||||||||||||||||||||
Effect of foreign currency exchange rate changes on cash | ─ | ─ | (2 | ) | ─ | (2 | ) | ─ | ─ | ─ | (2 | ) | ||||||||||||||||||||||||||||||
Net (decrease) increase in cash and equivalents | (44 | ) | (61 | ) | 2 | ─ | (103 | ) | (10 | ) | ─ | ─ | (113 | ) | ||||||||||||||||||||||||||||
Cash and equivalents at beginning of period | 44 | 105 | 143 | ─ | 292 | 10 | ─ | ─ | 302 | |||||||||||||||||||||||||||||||||
Cash and equivalents at end of period | $ | ─ | $ | 44 | $ | 145 | $ | ─ | $ | 189 | $ | ─ | $ | ─ | $ | ─ | $ | 189 | ||||||||||||||||||||||||
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Interim Financial Statements | ' |
Interim Financial Statements | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“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 of 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 month period ended December 31, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 2014. | |
The consolidated balance sheet at September 30, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of 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, 2013 (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 inter-company 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. | |
The Company maintains a 52-53 week fiscal year ending on the Friday nearest to each reporting date. As such, all references to December 31, 2013 and December 31, 2012 relate to the three-month periods ended December 27, 2013 and December 28, 2012, respectively. For convenience purposes, the Company continues to date its financial statements as of December 31. | |
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. | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements | |
During the first quarter of fiscal 2014, the Company simultaneously adopted Accounting Standards Updates (“ASU”) 2011-11, Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”) and ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”). ASU 2011-11 and ASU 2013-01 require additional quantitative and qualitative disclosures over financial instruments and derivative instruments that are offset on the balance sheet or subject to master netting arrangements. The adoption of these standards did not have an impact on the Company’s financial statements, other than disclosure. | |
During the first quarter of fiscal 2014, the Company adopted ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires entities to disclose, in one place, information about the amounts reclassified out of accumulated other comprehensive income by component. The adoption of this standard did not have an impact on the Company’s financial statements, other than disclosure. | |
In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 attempts to eliminate diversity in practice by requiring an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU 2013-11 is effective for annual and interim reporting periods for fiscal years beginning after December 15, 2013. The adoption of this standard is not expected to have a significant impact on the Company’s financial statements, other than presentation. |
Comprehensive_Loss_Income_Tabl
Comprehensive (Loss) Income (Tables) | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Schedule of Accumulated Other Comprehensive Income Loss | ' | |||||||||||||||
Comprehensive income (loss), which is reported in the accompanying consolidated statements of equity (deficit), consists of net income (loss) and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income (loss). For the Company, the components of other comprehensive income (loss) primarily consist of foreign currency translation gains and losses, minimum pension liabilities, and deferred gains and losses on financial instruments designated as hedges under FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”), which include interest-rate swap and foreign exchange contracts. The following summary sets forth the changes in the components of accumulated other comprehensive loss, net of related taxes: | ||||||||||||||||
Foreign | Minimum | Deferred Gains | Accumulated | |||||||||||||
Currency | Pension | (Losses) | Other | |||||||||||||
Translation | Liability | On Derivative | Comprehensive | |||||||||||||
Gain (Loss) | Adjustment | Financial | Income (Loss) | |||||||||||||
Instruments | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at September 30, 2013 | $ | (57 | ) | $ | (4 | ) | $ | — | $ | (61 | ) | |||||
Other comprehensive loss (a) | -8 | — | — | (8 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | ||||||||||||
Balance at December 31, 2013 | $ | (65 | ) | $ | (4 | ) | $ | — | $ | (69 | ) | |||||
___________ | ||||||||||||||||
(a) | Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature of $(2) million. |
Acquisition_of_Parlophone_Labe1
Acquisition of Parlophone Label Group (Tables) (Parlophone Label Group) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Parlophone Label Group | ' | |||||||
Preliminary Estimate of Acquisition Consideration and Preliminary Purchase Price Allocation to Estimated Fair Value of Assets Acquired and Liabilities Assumed | ' | |||||||
The table below presents (i) the preliminary estimate of the Acquisition consideration as it relates to the acquisition of PLG by the Buyers and (ii) the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of July 1, 2013 (in millions): | ||||||||
Purchase Price | £ | 487 | ||||||
Preliminary Working Capital Adjustment | 13 | |||||||
Adjusted Purchase Price | £ | 500 | ||||||
Foreign Exchange Rate at July 1, 2013 | 1.53 | |||||||
Adjusted Purchase Price in U.S. dollars | $ | 765 | ||||||
Fair Value of assets acquired and liabilities assumed: | ||||||||
Cash | 46 | |||||||
Accounts receivable | 80 | |||||||
Other current assets | 8 | |||||||
Property, plant and equipment | 39 | |||||||
Intangible assets | 764 | |||||||
Accounts payable | (83 | ) | ||||||
Royalties payable | (147 | ) | ||||||
Other current liabilities | (21 | ) | ||||||
Deferred revenue | (25 | ) | ||||||
Deferred tax liabilities | (139 | ) | ||||||
Other noncurrent liabilities * | (27 | ) | ||||||
Fair value of net assets acquired | 495 | |||||||
Goodwill recorded * | 270 | |||||||
Total purchase price allocated | $ | 765 | ||||||
* | Amounts have been adjusted based on new information obtained during the measurement period. | |||||||
Components of Intangible Assets Identified and Useful Lives | ' | |||||||
The components of the intangible assets identified in the table above and the related useful lives, allocated to the Company’s Recorded Music reportable segment, are as follows: | ||||||||
Value | Useful Life | |||||||
(in millions) | ||||||||
Trademark and trade name | $ | 17 | Indefinite | |||||
Catalog | 442 | 13 years | ||||||
Artist contracts | 305 | 10 years | ||||||
Business Acquisition Pro Forma Financial Information | ' | |||||||
The pro forma information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the Acquisition had taken place at the beginning of fiscal 2013. | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2012 | ||||||||
(in millions) | ||||||||
Revenue | $ | 906 | ||||||
Operating income | 54 | |||||||
Net loss attributable to Warner Music Group Corp. | (66 | ) | ||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Changes in Goodwill for Each Reportable Segment | ' | |||||||||||
The following analysis details the changes in goodwill for each reportable segment during the three months ended December 31, 2013: | ||||||||||||
Recorded | Music | Total | ||||||||||
Music | Publishing | |||||||||||
(in millions) | ||||||||||||
Balance at September 30, 2013 | $ | 1,204 | $ | 464 | $ | 1,668 | ||||||
Acquisitions | 7 | — | 7 | |||||||||
Dispositions | — | — | — | |||||||||
Other adjustments | 2 | — | 2 | |||||||||
Balance at December 31, 2013 | $ | 1,213 | $ | 464 | $ | 1,677 | ||||||
Schedule of Other Intangible Assets | ' | |||||||||||
Other intangible assets consist of the following: | ||||||||||||
Weighted | December 31, | September 30, | ||||||||||
Average | 2013 | 2013 | ||||||||||
Useful Life | ||||||||||||
(in millions) | ||||||||||||
Intangible assets subject to amortization: | ||||||||||||
Recorded music catalog | 11 years | $ | 1,014 | $ | 1,006 | |||||||
Music publishing copyrights | 28 years | 1,566 | 1,546 | |||||||||
Artist and songwriter contracts | 13 years | 988 | 983 | |||||||||
Trademarks | 7 years | 7 | 7 | |||||||||
3,575 | 3,542 | |||||||||||
Accumulated amortization | (501 | ) | (435 | ) | ||||||||
Total net intangible assets subject to amortization | 3,074 | 3,107 | ||||||||||
Intangible assets not subject to amortization: | ||||||||||||
Trademarks and tradenames | Indefinite | 120 | 120 | |||||||||
Total net other intangible assets | $ | 3,194 | $ | 3,227 | ||||||||
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Long-term Debt | ' | |||||||
Long-term debt, including the current portion, consisted of the following: | ||||||||
December 31, | September 30, | |||||||
2013 | 2013 | |||||||
(in millions) | ||||||||
Revolving Credit Facility (a) | 55 | — | ||||||
Term Loan Facility due 2020—Acquisition Corp. (b) | 1,303 | 1,303 | ||||||
6.00% Senior Secured Notes due 2021—Acquisition Corp. | 450 | 450 | ||||||
6.25% Senior Secured Notes due 2021—Acquisition Corp. (c) | 216 | 213 | ||||||
11.5% Senior Notes due 2018—Acquisition Corp. (d) | 752 | 751 | ||||||
13.75% Senior Notes due 2019—Holdings | 150 | 150 | ||||||
Total debt | $ | 2,926 | $ | 2,867 | ||||
Less: current portion | 68 | 13 | ||||||
Total long-term debt | $ | 2,858 | $ | 2,854 | ||||
(a) | Reflects $150 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $11 million and $1 million at December 31, 2013 and September 30, 2013, respectively. There were $55 million of loans outstanding under the Revolving Credit Facility at December 31, 2013, included in the current portion of long term debt. There were no loans outstanding at September 30, 2013. | |||||||
(b) | Principal amount of $1.310 billion less unamortized discount of $7 million at both December 31, 2013 and September 30, 2013. Of this amount, $13 million at both December 31, 2013 and September 30, 2013, representing the scheduled amortization, was included in the current portion of long term debt. | |||||||
(c) | Face amount of €158 million. Amounts above represent the dollar equivalent of such notes at December 31, 2013 and September 30, 2013. | |||||||
(d) | Face amount of $765 million less unamortized discounts of $13 million and $14 million at December 31, 2013 and September 30, 2013, respectively. |
Restructuring_Tables
Restructuring (Tables) | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Summary of Charges in Consolidated Statement of Operations | ' | |||||||||||||||
Total restructuring activity is as follows: | ||||||||||||||||
Employee- | Real Estate Costs | Other | Total | |||||||||||||
related Costs | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at September 30, 2013 | $ | 10 | $ | — | $ | — | $ | 10 | ||||||||
Restructuring expense | 7 | — | — | 7 | ||||||||||||
Cash Payments | (11 | ) | — | — | (11 | ) | ||||||||||
Balance at December 31, 2013 | $ | 6 | $ | — | $ | — | $ | 6 | ||||||||
Income Statement | ' | |||||||||||||||
Summary of Charges in Consolidated Statement of Operations | ' | |||||||||||||||
A summary of the charges in the consolidated statement of operations resulting from the Restructuring Plan is shown below: | ||||||||||||||||
Three months ended | ||||||||||||||||
December 31, 2013 | ||||||||||||||||
(in millions) | ||||||||||||||||
Selling, general and administrative expense | $ | 7 | ||||||||||||||
Total restructuring expense | $ | 7 | ||||||||||||||
ShareBased_Compensation_Plan_T
Share-Based Compensation Plan (Tables) | 3 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Summary of Company's Share Awards | ' | |||||||||||||||||||||||
The following is a summary of the Company’s share awards for the period ended December 31, 2013: | ||||||||||||||||||||||||
Deferred | Matching | Deferred | Matching | Deferred Equity | Matching Equity | |||||||||||||||||||
Equity Units | Equity Units | Equity Units | Equity Units | Units Weighted- | Units Weighted- | |||||||||||||||||||
Fair Value | Intrinsic | Average | Average | |||||||||||||||||||||
Value | Grant-Date | Grant-Date | ||||||||||||||||||||||
Intrinsic | Intrinsic | |||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||
Unvested units at September 30, 2013 | 24 | 24 | $ | 134.62 | $ | 27.49 | $ | 107.13 | $ | — | ||||||||||||||
Granted | — | — | 134.62 | 27.49 | 107.13 | — | ||||||||||||||||||
Vested | (5 | ) | — | 134.62 | 27.49 | 107.13 | — | |||||||||||||||||
Forfeited | (1 | ) | (1 | ) | 134.62 | 27.49 | 107.13 | — | ||||||||||||||||
Unvested units at December 31, 2013 | 18 | 23 | 134.62 | 27.49 | 107.13 | — | ||||||||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Summary of Amounts Recorded in Consolidated Balance Sheet | ' | |||||||
The Company monitors its positions with, and the credit quality of, the financial institutions that are party to any of its financial transactions. The following is a summary of amounts recorded in the Consolidated Balance Sheet pertaining to the Company’s use of foreign currency derivatives at December 31, 2013 and September 30, 2013: | ||||||||
December 31, | September 30, | |||||||
2013(a) | 2013(b) | |||||||
(in millions) | ||||||||
Other current assets | $ | − | $ | 1 | ||||
Other current liabilities | (13 | ) | (23 | ) | ||||
(a) | Includes $4 million and $17 million of foreign exchange derivative contracts in asset and liability positions, respectively. | |||||||
(b) | Includes $5 million and $27 million of foreign exchange derivative contracts in asset and liability positions, respectively. |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Schedule of Segment Information | ' | ||||||||||||||||
The accounting policies of the Company’s business segments are the same as those described in the summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. The Company accounts for intersegment sales at fair value as if the sales were to third parties. While inter-company 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. Segment information consists of the following: | |||||||||||||||||
Three Months Ended | Recorded | Music | Corporate | Total | |||||||||||||
music | publishing | expenses and | |||||||||||||||
eliminations | |||||||||||||||||
(in millions) | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
$ | 691 | $ | 128 | $ | (4 | ) | $ | 815 | |||||||||
Revenues | |||||||||||||||||
OIBDA | 93 | 19 | (19 | ) | 93 | ||||||||||||
Depreciation of property, plant and equipment | (8 | ) | (1 | ) | (3 | ) | (12 | ) | |||||||||
Amortization of intangible assets | (50 | ) | (16 | ) | — | (66 | ) | ||||||||||
Operating income (loss) | $ | 35 | $ | 2 | $ | (22 | ) | $ | 15 | ||||||||
December 31, 2012 | |||||||||||||||||
Revenues | $ | 657 | $ | 116 | $ | (4 | ) | $ | 769 | ||||||||
OIBDA | 114 | 16 | (18 | ) | 112 | ||||||||||||
Depreciation of property, plant and equipment | (7 | ) | (2 | ) | (4 | ) | (13 | ) | |||||||||
Amortization of intangible assets | (33 | ) | (15 | ) | — | (48 | ) | ||||||||||
Operating income (loss) | $ | 74 | $ | (1 | ) | $ | (22 | ) | $ | 51 | |||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Schedule of Fair Value of Financial Instruments | ' | |||||||||||||||
In accordance with the fair value hierarchy, described above, the following table shows the fair value of the Company’s financial instruments that are required to be measured at fair value as of December 31, 2013 and September 30, 2013. Balances in other current and other non-current liabilities represent purchase obligations and contingent consideration related to the Company’s various acquisitions. Derivatives not designated as hedging instruments represent the balances in other current assets and other current liabilities below and the gains and losses on these financial instruments are included as a component of other (expense) income, net, in the statement of operations. | ||||||||||||||||
Fair Value Measurements as of December 31, 2013 | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in millions) | ||||||||||||||||
Other Current Assets: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | — | $ | — | $ | — | ||||||||
Other Current Liabilities: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | (13 | ) | $ | — | $ | (13 | ) | ||||||
Other Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (14 | ) | $ | (14 | ) | ||||||
Other Non-Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (7 | ) | $ | (7 | ) | ||||||
Total | $ | — | $ | (13 | ) | $ | (21 | ) | $ | (34 | ) | |||||
Fair Value Measurements as of September 30, 2013 | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in millions) | ||||||||||||||||
Other Current Assets: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | 1 | $ | — | $ | 1 | ||||||||
Other Current Liabilities: | ||||||||||||||||
Foreign Currency Forward Exchange Contracts (a) | $ | — | $ | (23 | ) | $ | — | $ | (23 | ) | ||||||
Other Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (13 | ) | $ | (13 | ) | ||||||
Other Non-Current Liabilities: | ||||||||||||||||
Contractual Obligations (b) | $ | — | $ | — | $ | (9 | ) | $ | (9 | ) | ||||||
Total | $ | — | $ | (22 | ) | $ | (22 | ) | $ | (44 | ) | |||||
(a) | The fair value of the 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 purchase obligations and contingent consideration related to the Company’s various acquisitions. This is based on a discounted cash flow approach and it is adjusted to fair value on a recurring basis and any adjustments are included as a component of operating income in the statement of operations. These amounts were mainly calculated using unobservable inputs such as future earnings performance of the Company’s various acquisitions and the expected timing of the payment. | |||||||||||||||
Reconciliation of Net Assets and Liabilities Classified as Level 3 | ' | |||||||||||||||
The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3: | ||||||||||||||||
Total | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at September 30, 2013 | $ | 22 | ||||||||||||||
Additions | 2 | |||||||||||||||
Payments | (3 | ) | ||||||||||||||
Balance at December 31, 2013 | $ | 21 | ||||||||||||||
Guarantor_And_NonGuarantor_Sub1
Guarantor And Non-Guarantor Subsidiaries Financial Information (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
Guarantor And Non-Guarantor Subsidiaries Financial Information | ' | |||||||||||||||||||||||||||||||||||||||||
Consolidating Balance Sheet (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | ─ | $ | 10 | $ | 119 | $ | ─ | $ | 129 | $ | ─ | $ | ─ | $ | ─ | $ | 129 | ||||||||||||||||||||||||
Accounts receivable, net | ─ | 183 | 383 | ─ | 566 | ─ | ─ | ─ | 566 | |||||||||||||||||||||||||||||||||
Inventories | ─ | 9 | 25 | ─ | 34 | ─ | ─ | ─ | 34 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped within one year | ─ | 58 | 47 | ─ | 105 | ─ | ─ | ─ | 105 | |||||||||||||||||||||||||||||||||
Deferred tax assets | ─ | 20 | 23 | ─ | 43 | ─ | ─ | ─ | 43 | |||||||||||||||||||||||||||||||||
Prepaid and other current assets | 5 | 8 | 48 | ─ | 61 | ─ | ─ | ─ | 61 | |||||||||||||||||||||||||||||||||
Total current assets | 5 | 288 | 645 | ─ | 938 | ─ | ─ | ─ | 938 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped after one year | ─ | 107 | 88 | ─ | 195 | ─ | ─ | ─ | 195 | |||||||||||||||||||||||||||||||||
Investments in and advances to (from) consolidated subsidiaries | 2,806 | 894 | ─ | -3,700 | ─ | 829 | 681 | -1,510 | ─ | |||||||||||||||||||||||||||||||||
Property, plant and equipment, net | ─ | 103 | 78 | ─ | 181 | ─ | ─ | ─ | 181 | |||||||||||||||||||||||||||||||||
Goodwill | ─ | 1,379 | 298 | ─ | 1,677 | ─ | ─ | ─ | 1,677 | |||||||||||||||||||||||||||||||||
Intangible assets subject to amortization, net | ─ | 989 | 2,085 | ─ | 3,074 | ─ | ─ | ─ | 3,074 | |||||||||||||||||||||||||||||||||
Intangible assets not subject to amortization | ─ | 75 | 45 | ─ | 120 | ─ | ─ | ─ | 120 | |||||||||||||||||||||||||||||||||
Due (to) from parent companies | 797 | 23 | -820 | ─ | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Other assets | 65 | 12 | 19 | ─ | 96 | 7 | ─ | ─ | 103 | |||||||||||||||||||||||||||||||||
Total assets | $ | 3,673 | $ | 3,870 | $ | 2,438 | $ | -3,700 | $ | 6,281 | $ | 836 | $ | 681 | $ | -1,510 | $ | 6,288 | ||||||||||||||||||||||||
Liabilities and Deficit: | ||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts payable | $ | ─ | $ | 75 | $ | 171 | $ | ─ | $ | 246 | $ | ─ | $ | ─ | $ | ─ | $ | 246 | ||||||||||||||||||||||||
Accrued royalties | ─ | 513 | 690 | ─ | 1,203 | ─ | ─ | ─ | 1,203 | |||||||||||||||||||||||||||||||||
Accrued liabilities | ─ | 66 | 222 | ─ | 288 | ─ | ─ | ─ | 288 | |||||||||||||||||||||||||||||||||
Accrued interest | 53 | ─ | ─ | ─ | 53 | 5 | ─ | ─ | 58 | |||||||||||||||||||||||||||||||||
Deferred revenue | ─ | 114 | 78 | ─ | 192 | ─ | ─ | ─ | 192 | |||||||||||||||||||||||||||||||||
Current portion of long-term debt | 68 | ─ | ─ | ─ | 68 | ─ | ─ | ─ | 68 | |||||||||||||||||||||||||||||||||
Other current liabilities | ─ | 16 | 5 | ─ | 21 | ─ | ─ | ─ | 21 | |||||||||||||||||||||||||||||||||
Total current liabilities | 121 | 784 | 1,166 | ─ | 2,071 | 5 | ─ | ─ | 2,076 | |||||||||||||||||||||||||||||||||
Long-term debt | 2,708 | ─ | ─ | ─ | 2,708 | 150 | ─ | ─ | 2,858 | |||||||||||||||||||||||||||||||||
Deferred tax liabilities, net | ─ | 127 | 295 | ─ | 422 | ─ | ─ | ─ | 422 | |||||||||||||||||||||||||||||||||
Other noncurrent liabilities | 15 | 83 | 136 | ─ | 234 | ─ | ─ | ─ | 234 | |||||||||||||||||||||||||||||||||
Total liabilities | 2,844 | 994 | 1,597 | ─ | 5,435 | 155 | ─ | ─ | 5,590 | |||||||||||||||||||||||||||||||||
Total Warner Music Group Corp. equity (deficit) | 829 | 2,876 | 824 | -3,700 | 829 | 681 | 681 | -1,510 | 681 | |||||||||||||||||||||||||||||||||
Noncontrolling interest | ─ | ─ | 17 | ─ | 17 | ─ | ─ | ─ | 17 | |||||||||||||||||||||||||||||||||
Total equity (deficit) | 829 | 2,876 | 841 | -3,700 | 846 | 681 | 681 | -1,510 | 698 | |||||||||||||||||||||||||||||||||
Total liabilities and equity (deficit) | $ | 3,673 | $ | 3,870 | $ | 2,438 | $ | -3,700 | $ | 6,281 | $ | 836 | $ | 681 | $ | -1,510 | $ | 6,288 | ||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | ─ | $ | 16 | $ | 139 | $ | ─ | $ | 155 | $ | ─ | $ | ─ | $ | ─ | $ | 155 | ||||||||||||||||||||||||
Accounts receivable, net | ─ | 185 | 326 | ─ | 511 | ─ | ─ | ─ | 511 | |||||||||||||||||||||||||||||||||
Inventories | ─ | 10 | 23 | ─ | 33 | ─ | ─ | ─ | 33 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped within one year | ─ | 59 | 34 | ─ | 93 | ─ | ─ | ─ | 93 | |||||||||||||||||||||||||||||||||
Deferred tax assets | ─ | 21 | 22 | ─ | 43 | ─ | ─ | ─ | 43 | |||||||||||||||||||||||||||||||||
Prepaid and other current assets | 5 | 8 | 46 | ─ | 59 | ─ | ─ | ─ | 59 | |||||||||||||||||||||||||||||||||
Total current assets | 5 | 299 | 590 | ─ | 894 | ─ | ─ | ─ | 894 | |||||||||||||||||||||||||||||||||
Royalty advances expected to be recouped after one year | ─ | 109 | 64 | ─ | 173 | ─ | ─ | ─ | 173 | |||||||||||||||||||||||||||||||||
Investments in and advances to (from) consolidated subsidiaries | 2,811 | 930 | ─ | (3,741 | ) | ─ | 879 | 726 | (1,605 | ) | ─ | |||||||||||||||||||||||||||||||
Property, plant and equipment, net | ─ | 101 | 79 | ─ | 180 | ─ | ─ | ─ | 180 | |||||||||||||||||||||||||||||||||
Goodwill | ─ | 1,379 | 289 | ─ | 1,668 | ─ | ─ | ─ | 1,668 | |||||||||||||||||||||||||||||||||
Intangible assets subject to amortization, net | ─ | 1,007 | 2,100 | ─ | 3,107 | ─ | ─ | ─ | 3,107 | |||||||||||||||||||||||||||||||||
Intangible assets not subject to amortization | ─ | 75 | 45 | ─ | 120 | ─ | ─ | ─ | 120 | |||||||||||||||||||||||||||||||||
Due (to) from parent companies | 799 | (27 | ) | (772 | ) | ─ | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||
Other assets | 68 | 14 | 21 | ─ | 103 | 7 | ─ | ─ | 110 | |||||||||||||||||||||||||||||||||
Total assets | $ | 3,683 | $ | 3,887 | $ | 2,416 | $ | (3,741 | ) | $ | 6,245 | $ | 886 | $ | 726 | $ | (1,605 | ) | $ | 6,252 | ||||||||||||||||||||||
Liabilities and Deficit: | ||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts payable | ─ | $ | 96 | $ | 184 | ─ | $ | 280 | ─ | ─ | ─ | $ | 280 | |||||||||||||||||||||||||||||
Accrued royalties | ─ | 570 | 577 | ─ | 1,147 | ─ | ─ | ─ | 1,147 | |||||||||||||||||||||||||||||||||
Accrued liabilities | ─ | 94 | 227 | ─ | 321 | ─ | ─ | ─ | 321 | |||||||||||||||||||||||||||||||||
Accrued interest | 65 | ─ | ─ | ─ | 65 | 10 | ─ | ─ | 75 | |||||||||||||||||||||||||||||||||
Deferred revenue | ─ | 56 | 83 | ─ | 139 | ─ | ─ | ─ | 139 | |||||||||||||||||||||||||||||||||
Current portion of long-term debt | 13 | ─ | ─ | ─ | 13 | ─ | ─ | ─ | 13 | |||||||||||||||||||||||||||||||||
Other current liabilities | ─ | 23 | (4 | ) | 6 | 25 | ─ | ─ | ─ | 25 | ||||||||||||||||||||||||||||||||
Total current liabilities | 78 | 839 | 1,067 | 6 | 1,990 | 10 | ─ | ─ | 2,000 | |||||||||||||||||||||||||||||||||
Long-term debt | 2,704 | ─ | ─ | ─ | 2,704 | 150 | ─ | ─ | 2,854 | |||||||||||||||||||||||||||||||||
Deferred tax liabilities, net | ─ | 128 | 311 | ─ | 439 | ─ | ─ | ─ | 439 | |||||||||||||||||||||||||||||||||
Other noncurrent liabilities | 22 | 68 | 133 | (7 | ) | 216 | ─ | ─ | ─ | 216 | ||||||||||||||||||||||||||||||||
Total liabilities | 2,804 | 1,035 | 1,511 | (1 | ) | 5,349 | 160 | ─ | ─ | 5,509 | ||||||||||||||||||||||||||||||||
Total Warner Music Group Corp. equity (deficit) | 879 | 2,852 | 888 | (3,740 | ) | 879 | 726 | 726 | (1,605 | ) | 726 | |||||||||||||||||||||||||||||||
Noncontrolling interest | ─ | ─ | 17 | ─ | 17 | ─ | ─ | ─ | 17 | |||||||||||||||||||||||||||||||||
Total equity (deficit) | 879 | 2,852 | 905 | (3,740 | ) | 896 | 726 | 726 | (1,605 | ) | 743 | |||||||||||||||||||||||||||||||
Total liabilities and equity (deficit) | $ | 3,683 | $ | 3,887 | $ | 2,416 | $ | (3,741 | ) | $ | 6,245 | $ | 886 | $ | 726 | $ | (1,605 | ) | $ | 6,252 | ||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statements of Operations (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | ─ | $ | 354 | $ | 510 | $ | -49 | $ | 815 | $ | ─ | $ | ─ | $ | ─ | $ | 815 | ||||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | ─ | -155 | -335 | 49 | -441 | ─ | ─ | ─ | -441 | |||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | ─ | -115 | -179 | 1 | -293 | ─ | ─ | ─ | -293 | |||||||||||||||||||||||||||||||||
Amortization of intangible assets | ─ | -30 | -36 | ─ | -66 | ─ | ─ | ─ | -66 | |||||||||||||||||||||||||||||||||
Total costs and expenses | ─ | -300 | -550 | 50 | -800 | ─ | ─ | ─ | -800 | |||||||||||||||||||||||||||||||||
Operating income (expense) | ─ | 54 | -40 | 1 | 15 | ─ | ─ | ─ | 15 | |||||||||||||||||||||||||||||||||
Interest income (expense), net | -31 | 1 | -20 | ─ | -50 | -5 | ─ | ─ | -55 | |||||||||||||||||||||||||||||||||
Equity gains (losses) from consolidated subsidiaries | -21 | -13 | ─ | 34 | ─ | -32 | -37 | 69 | ─ | |||||||||||||||||||||||||||||||||
Other income (expense), net | 12 | -14 | -2 | ─ | -4 | ─ | ─ | ─ | -4 | |||||||||||||||||||||||||||||||||
(Loss) income before income taxes | -40 | 28 | -62 | 35 | -39 | -37 | -37 | 69 | -44 | |||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 8 | -4 | 7 | -3 | 8 | ─ | ─ | ─ | 8 | |||||||||||||||||||||||||||||||||
Net (loss) income | -32 | 24 | -55 | 32 | -31 | -37 | -37 | 69 | -36 | |||||||||||||||||||||||||||||||||
Less: loss attributable to noncontrolling interest | ─ | ─ | -1 | ─ | -1 | ─ | ─ | ─ | -1 | |||||||||||||||||||||||||||||||||
Net (loss) income attributable to Warner Music Group Corp. | $ | -32 | $ | 24 | $ | -56 | $ | 32 | $ | -32 | $ | -37 | $ | -37 | $ | 69 | $ | -37 | ||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statements of Operations (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | ─ | $ | 344 | $ | 481 | $ | (56 | ) | $ | 769 | $ | ─ | $ | ─ | $ | ─ | $ | 769 | |||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | ─ | (162 | ) | (295 | ) | 49 | (408 | ) | ─ | ─ | ─ | (408 | ) | |||||||||||||||||||||||||||||
Selling, general and administrative expenses | ─ | (123 | ) | (154 | ) | 15 | (262 | ) | ─ | ─ | ─ | (262 | ) | |||||||||||||||||||||||||||||
Amortization of intangible assets | ─ | (30 | ) | (18 | ) | ─ | (48 | ) | ─ | ─ | ─ | (48 | ) | |||||||||||||||||||||||||||||
Total costs and expenses | ─ | (315 | ) | (467 | ) | 64 | (718 | ) | ─ | ─ | ─ | (718 | ) | |||||||||||||||||||||||||||||
Operating income (expense) | ─ | 29 | 14 | 8 | 51 | ─ | ─ | ─ | 51 | |||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | (83 | ) | ─ | ─ | ─ | (83 | ) | ─ | ─ | ─ | (83 | ) | ||||||||||||||||||||||||||||||
Interest (expense) income, net | (43 | ) | 1 | (5 | ) | ─ | (47 | ) | (6 | ) | ─ | ─ | (53 | ) | ||||||||||||||||||||||||||||
Equity gains (losses) from consolidated subsidiaries | 41 | (17 | ) | ─ | (24 | ) | ─ | (74 | ) | (80 | ) | 154 | ─ | |||||||||||||||||||||||||||||
Other expense, net | ─ | (5 | ) | ─ | ─ | (5 | ) | ─ | ─ | ─ | (5 | ) | ||||||||||||||||||||||||||||||
(Loss) income before income taxes | (85 | ) | 8 | 9 | (16 | ) | (84 | ) | (80 | ) | (80 | ) | 154 | (90 | ) | |||||||||||||||||||||||||||
Income tax benefit (expense) | 11 | 10 | (1 | ) | (9 | ) | 11 | ─ | ─ | ─ | 11 | |||||||||||||||||||||||||||||||
Net (loss) income | (74 | ) | 18 | 8 | (25 | ) | (73 | ) | (80 | ) | (80 | ) | 154 | (79 | ) | |||||||||||||||||||||||||||
Less: loss attributable to noncontrolling interest | ─ | ─ | (1 | ) | ─ | (1 | ) | ─ | ─ | ─ | (1 | ) | ||||||||||||||||||||||||||||||
Net (loss) income attributable to Warner Music Group Corp. | $ | (74 | ) | $ | 18 | $ | 7 | $ | (25 | ) | $ | (74 | ) | $ | (80 | ) | $ | (80 | ) | $ | 154 | $ | (80 | ) | ||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (32 | ) | $ | 24 | $ | (55 | ) | $ | 32 | $ | (31 | ) | $ | (37 | ) | $ | (37 | ) | $ | 69 | $ | (36 | ) | ||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (8 | ) | ─ | (8 | ) | 8 | (8 | ) | (8 | ) | (8 | ) | 16 | (8 | ) | |||||||||||||||||||||||||||
Other comprehensive loss, net of tax: | (8 | ) | ─ | (8 | ) | 8 | (8 | ) | (8 | ) | (8 | ) | 16 | (8 | ) | |||||||||||||||||||||||||||
Total comprehensive (loss) income | (40 | ) | 24 | (63 | ) | 40 | (39 | ) | (45 | ) | (45 | ) | 85 | (44 | ) | |||||||||||||||||||||||||||
Comprehensive income attributable to noncontrolling interest | ─ | ─ | (1 | ) | ─ | (1 | ) | ─ | ─ | ─ | (1 | ) | ||||||||||||||||||||||||||||||
Comprehensive (loss) income attributable to Warner Music Group Corp. | $ | (40 | ) | $ | 24 | $ | (64 | ) | $ | 40 | $ | (40 | ) | $ | (45 | ) | $ | (45 | ) | $ | 85 | $ | (45 | ) | ||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (74 | ) | $ | 18 | $ | 8 | $ | (25 | ) | $ | (73 | ) | $ | (80 | ) | $ | (80 | ) | $ | 154 | $ | (79 | ) | ||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 2 | ─ | 2 | (2 | ) | 2 | 2 | 2 | (4 | ) | 2 | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax: | 2 | ─ | 2 | (2 | ) | 2 | 2 | 2 | (4 | ) | 2 | |||||||||||||||||||||||||||||||
Total comprehensive (loss) income | (72 | ) | 18 | 10 | (27 | ) | (71 | ) | (78 | ) | (78 | ) | 150 | (77 | ) | |||||||||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interest | ─ | ─ | (1 | ) | ─ | (1 | ) | ─ | ─ | ─ | (1 | ) | ||||||||||||||||||||||||||||||
Comprehensive (loss) income attributable to Warner Music Group Corp. | $ | (72 | ) | $ | 18 | $ | 9 | $ | (27 | ) | $ | (72 | ) | $ | (78 | ) | $ | (78 | ) | $ | 150 | $ | (78 | ) | ||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Cash Flows (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | -32 | $ | 24 | $ | -55 | $ | 32 | $ | -31 | $ | -37 | $ | -37 | $ | 69 | $ | -36 | ||||||||||||||||||||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | ─ | 38 | 40 | ─ | 78 | ─ | ─ | ─ | 78 | |||||||||||||||||||||||||||||||||
Deferred income taxes | ─ | ─ | -16 | ─ | -16 | ─ | ─ | ─ | -16 | |||||||||||||||||||||||||||||||||
Non-cash interest expense | 4 | ─ | ─ | ─ | 4 | ─ | ─ | ─ | 4 | |||||||||||||||||||||||||||||||||
Non-cash share-based compensation expense | ─ | 3 | ─ | ─ | 3 | ─ | ─ | ─ | 3 | |||||||||||||||||||||||||||||||||
Equity (gains) losses, including distributions | 21 | 13 | ─ | -34 | ─ | 32 | 37 | -69 | ─ | |||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | ─ | 2 | -58 | ─ | -56 | ─ | ─ | ─ | -56 | |||||||||||||||||||||||||||||||||
Inventories | ─ | 1 | -2 | ─ | -1 | ─ | ─ | ─ | -1 | |||||||||||||||||||||||||||||||||
Royalty advances | ─ | 2 | -37 | ─ | -35 | ─ | ─ | ─ | -35 | |||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | ─ | -109 | 51 | -21 | -79 | ─ | ─ | ─ | -79 | |||||||||||||||||||||||||||||||||
Royalty payables | ─ | -56 | 112 | ─ | 56 | ─ | ─ | ─ | 56 | |||||||||||||||||||||||||||||||||
Accrued interest | -12 | ─ | ─ | ─ | -12 | -5 | ─ | ─ | -17 | |||||||||||||||||||||||||||||||||
Deferred income | ─ | 60 | ─ | ─ | 60 | ─ | ─ | ─ | 60 | |||||||||||||||||||||||||||||||||
Other balance sheet changes | 3 | 3 | -42 | 23 | -13 | ─ | ─ | ─ | -13 | |||||||||||||||||||||||||||||||||
Net cash (used in) provided by operating activities | -16 | -19 | -7 | ─ | -42 | -10 | ─ | ─ | -52 | |||||||||||||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||||||||||||||||
Acquisition of music publishing rights | ─ | -6 | -4 | ─ | -10 | ─ | ─ | ─ | -10 | |||||||||||||||||||||||||||||||||
Change in due to (from) subsidiaries | -29 | ─ | ─ | 29 | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Capital expenditures | ─ | -9 | -3 | ─ | -12 | ─ | ─ | ─ | -12 | |||||||||||||||||||||||||||||||||
Investments and acquisitions of businesses, net of cash acquired | ─ | -1 | -3 | ─ | -4 | ─ | ─ | ─ | -4 | |||||||||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | -29 | -16 | -10 | 29 | -26 | ─ | ─ | ─ | -26 | |||||||||||||||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||||||||||||||||
Dividend by Acquisition Corp.to Holdings Corp. | -10 | ─ | ─ | ─ | -10 | 10 | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Distribution to noncontrolling interest holder | ─ | ─ | -1 | ─ | -1 | ─ | ─ | ─ | -1 | |||||||||||||||||||||||||||||||||
Proceeds from draw down of the Revolving Credit Facility | 155 | ─ | ─ | ─ | 155 | ─ | ─ | ─ | 155 | |||||||||||||||||||||||||||||||||
Repayment of the Revolving Credit Facility | -100 | ─ | ─ | ─ | -100 | ─ | ─ | ─ | -100 | |||||||||||||||||||||||||||||||||
Change in due (from) to issuer | ─ | 29 | ─ | -29 | ─ | ─ | ─ | ─ | ─ | |||||||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | 45 | 29 | -1 | -29 | 44 | 10 | ─ | ─ | 54 | |||||||||||||||||||||||||||||||||
Effect of foreign currency exchange rate changes on cash | ─ | ─ | -2 | ─ | -2 | ─ | ─ | ─ | -2 | |||||||||||||||||||||||||||||||||
Net (decrease) increase in cash and equivalents | ─ | -6 | -20 | ─ | -26 | ─ | ─ | ─ | -26 | |||||||||||||||||||||||||||||||||
Cash and equivalents at beginning of period | ─ | 16 | 139 | ─ | 155 | ─ | ─ | ─ | 155 | |||||||||||||||||||||||||||||||||
Cash and equivalents at end of period | $ | ─ | $ | 10 | $ | $119 | $ | ─ | $ | 129 | $ | ─ | $ | ─ | $ | ─ | $ | 129 | ||||||||||||||||||||||||
WARNER MUSIC GROUP CORP. | ||||||||||||||||||||||||||||||||||||||||||
Supplementary Information | ||||||||||||||||||||||||||||||||||||||||||
Consolidating Statement of Cash Flows (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||
WMG | Guarantor | Non- | Eliminations | WMG | WMG | Warner | Eliminations | Warner Music | ||||||||||||||||||||||||||||||||||
Acquisition | Subsidiaries | Guarantor | Acquisition | Holdings | Music | Group Corp. | ||||||||||||||||||||||||||||||||||||
Corp. | Subsidiaries | Corp. | Corp. | Group | Consolidated | |||||||||||||||||||||||||||||||||||||
(issuer) | Consolidated | (issuer) | Corp. | |||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (74 | ) | $ | 18 | $ | 8 | $ | (25 | ) | $ | (73 | ) | $ | (80 | ) | $ | (80 | ) | $ | 154 | $ | (79 | ) | ||||||||||||||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 83 | ─ | ─ | ─ | 83 | ─ | ─ | ─ | 83 | |||||||||||||||||||||||||||||||||
Depreciation and amortization | ─ | 39 | 22 | ─ | 61 | ─ | ─ | ─ | 61 | |||||||||||||||||||||||||||||||||
Deferred income taxes | ─ | ─ | (10 | ) | ─ | (10 | ) | ─ | ─ | ─ | (10 | ) | ||||||||||||||||||||||||||||||
Non-cash interest expense | 2 | ─ | ─ | ─ | 2 | ─ | ─ | ─ | 2 | |||||||||||||||||||||||||||||||||
Equity (gains) losses, including distributions | (41 | ) | 17 | ─ | 24 | ─ | 74 | 80 | (154 | ) | ─ | |||||||||||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | ─ | (14 | ) | (9 | ) | ─ | (23 | ) | ─ | ─ | ─ | (23 | ) | |||||||||||||||||||||||||||||
Inventories | ─ | 1 | ─ | ─ | 1 | ─ | ─ | ─ | 1 | |||||||||||||||||||||||||||||||||
Royalty advances | ─ | (25 | ) | (10 | ) | ─ | (35 | ) | ─ | ─ | ─ | (35 | ) | |||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | ─ | 29 | (80 | ) | (2 | ) | (53 | ) | ─ | ─ | ─ | (53 | ) | |||||||||||||||||||||||||||||
Royalty payables | ─ | (36 | ) | 68 | ─ | 32 | ─ | ─ | ─ | 32 | ||||||||||||||||||||||||||||||||
Accrued interest | (44 | ) | ─ | ─ | ─ | (44 | ) | (5 | ) | ─ | ─ | (49 | ) | |||||||||||||||||||||||||||||
Deferred income | ─ | 40 | 15 | ─ | 55 | ─ | ─ | ─ | 55 | |||||||||||||||||||||||||||||||||
Other balance sheet changes | 11 | (14 | ) | 5 | 3 | 5 | ─ | ─ | ─ | 5 | ||||||||||||||||||||||||||||||||
Net cash (used in) provided by operating activities | (63 | ) | 55 | 9 | ─ | 1 | (11 | ) | ─ | ─ | (10 | ) | ||||||||||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||||||||||||||||
Acquisition of music publishing rights | ─ | (6 | ) | (2 | ) | ─ | (8 | ) | ─ | ─ | ─ | (8 | ) | |||||||||||||||||||||||||||||
Change in due to (from) subsidiaries | 106 | ─ | ─ | (106 | ) | ─ | ─ | ─ | ─ | ─ | ||||||||||||||||||||||||||||||||
Capital expenditures | ─ | (4 | ) | (3 | ) | ─ | (7 | ) | ─ | ─ | ─ | (7 | ) | |||||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | 106 | (10 | ) | (5 | ) | (106 | ) | (15 | ) | ─ | ─ | ─ | (15 | ) | ||||||||||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||||||||||||||||
Dividend by Acquisition Corp.to Holdings Corp. | (2 | ) | ─ | ─ | ─ | (2 | ) | 2 | ─ | ─ | ─ | |||||||||||||||||||||||||||||||
Proceeds from draw down of the Revolving Credit Facility | 31 | ─ | ─ | ─ | 31 | ─ | ─ | ─ | 31 | |||||||||||||||||||||||||||||||||
Repayment of the Revolving Credit Facility | (31 | ) | ─ | ─ | ─ | (31 | ) | ─ | ─ | ─ | (31 | ) | ||||||||||||||||||||||||||||||
Proceeds from issuance of Acquisition Corp 6.0% Senior Secured Notes | 500 | ─ | ─ | ─ | 500 | ─ | ─ | ─ | 500 | |||||||||||||||||||||||||||||||||
Proceeds from issuance of Acquisition Corp 6.25% Senior Secured Notes | 227 | ─ | ─ | ─ | 227 | ─ | ─ | ─ | 227 | |||||||||||||||||||||||||||||||||
Proceeds from Acquisition Corp Term Loan Facility | 594 | ─ | ─ | ─ | 594 | ─ | ─ | ─ | 594 | |||||||||||||||||||||||||||||||||
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | (1,250 | ) | ─ | ─ | ─ | (1,250 | ) | ─ | ─ | ─ | (1,250 | ) | ||||||||||||||||||||||||||||||
Financing costs paid | (127 | ) | ─ | ─ | ─ | (127 | ) | ─ | ─ | ─ | (127 | ) | ||||||||||||||||||||||||||||||
Deferred financing costs paid | (29 | ) | ─ | ─ | ─ | (29 | ) | (1 | ) | ─ | ─ | (30 | ) | |||||||||||||||||||||||||||||
Change in due to (from) issuer | ─ | (106 | ) | ─ | 106 | ─ | ─ | ─ | ─ | ─ | ||||||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | (87 | ) | (106 | ) | ─ | 106 | (87 | ) | 1 | ─ | ─ | (86 | ) | |||||||||||||||||||||||||||||
Effect of foreign currency exchange rate changes on cash | ─ | ─ | (2 | ) | ─ | (2 | ) | ─ | ─ | ─ | (2 | ) | ||||||||||||||||||||||||||||||
Net (decrease) increase in cash and equivalents | (44 | ) | (61 | ) | 2 | ─ | (103 | ) | (10 | ) | ─ | ─ | (113 | ) | ||||||||||||||||||||||||||||
Cash and equivalents at beginning of period | 44 | 105 | 143 | ─ | 292 | 10 | ─ | ─ | 302 | |||||||||||||||||||||||||||||||||
Cash and equivalents at end of period | $ | ─ | $ | 44 | $ | 145 | $ | ─ | $ | 189 | $ | ─ | $ | ─ | $ | ─ | $ | 189 | ||||||||||||||||||||||||
Description_of_Business_Additi
Description of Business - Additional Information (Detail) | 3 Months Ended | 0 Months Ended | 3 Months Ended |
Dec. 31, 2013 | Jul. 02, 2013 | Dec. 31, 2013 | |
Country | Parlophone Label Group | WEA Corp. | |
Description Of Business [Line Items] | ' | ' | ' |
Acquisition date | ' | 1-Jul-13 | ' |
Number of countries in which Recorded Music activity conducted | 50 | ' | ' |
Percentage of ownership | ' | ' | 80.00% |
Number of songwriters and composers | 65,000 | ' | ' |
Comprehensive_Income_Loss_Sche
Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income Loss (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | |
Beginning balance | ($61) | ' | |
Other comprehensive loss | -8 | [1] | 2 |
Amounts reclassified from accumulated other comprehensive income | ' | ' | |
Ending balance | -69 | ' | |
Foreign Currency Translation Gain (Loss) | ' | ' | |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | |
Beginning balance | -57 | ' | |
Other comprehensive loss | -8 | [1] | ' |
Amounts reclassified from accumulated other comprehensive income | ' | ' | |
Ending balance | -65 | ' | |
Minimum Pension Liability Adjustment | ' | ' | |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | |
Beginning balance | -4 | ' | |
Other comprehensive loss | ' | [1] | ' |
Amounts reclassified from accumulated other comprehensive income | ' | ' | |
Ending balance | -4 | ' | |
Deferred Gains (Losses) on Derivative Financial Instruments | ' | ' | |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | |
Beginning balance | ' | ' | |
Other comprehensive loss | ' | [1] | ' |
Amounts reclassified from accumulated other comprehensive income | ' | ' | |
Ending balance | ' | ' | |
[1] | (a) Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature of $(2) million. |
Comprehensive_Income_Loss_Sche1
Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income Loss (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Accumulated Other Comprehensive Income Loss [Line Items] | ' |
Foreign currency translation adjustments included intra-entity foreign currency transactions | ($2) |
Acquisition_of_Parlophone_Labe2
Acquisition of Parlophone Label Group - Preliminary Estimate of Acquisition Consideration and Preliminary Purchase Price Allocation to Estimated Fair Value of Assets Acquired and Liabilities Assumed (Detail) | 3 Months Ended | 0 Months Ended | 5 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Feb. 06, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | |
USD ($) | Parlophone Label Group | Parlophone Label Group | Parlophone Label Group | ||
GBP (£) | USD ($) | GBP (£) | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | |
Purchase Price | ' | £ 487 | ' | £ 487 | |
Preliminary Working Capital Adjustment | ' | ' | ' | 13 | |
Adjusted Purchase Price | ' | ' | 765 | 500 | |
Foreign Exchange Rate at July 1, 2013 | ' | ' | 1.53 | 1.53 | |
Fair Value of assets acquired and liabilities assumed: | ' | ' | ' | ' | |
Cash | ' | ' | 46 | ' | |
Accounts receivable | ' | ' | 80 | ' | |
Other current assets | ' | ' | 8 | ' | |
Property, plant and equipment | ' | ' | 39 | ' | |
Intangible assets | ' | ' | 764 | ' | |
Accounts payable | ' | ' | -83 | ' | |
Royalties payable | ' | ' | -147 | ' | |
Other current liabilities | ' | ' | -21 | ' | |
Deferred revenue | ' | ' | -25 | ' | |
Deferred tax liabilities | ' | ' | -139 | ' | |
Other noncurrent liabilities | ' | ' | -27 | [1] | ' |
Fair value of net assets acquired | ' | ' | 495 | ' | |
Goodwill recorded | 7 | ' | 270 | [1] | ' |
Total purchase price allocated | ' | ' | $765 | ' | |
[1] | Amounts have been adjusted based on new information obtained during the measurement period. |
Acquisition_of_Parlophone_Labe3
Acquisition of Parlophone Label Group - Components of Intangible Assets Identified and Useful Lives (Detail) (Recorded Music, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Trademarks and Trade Names | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' |
Indefinite lived intangible assets, Value | $17 |
Catalog | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' |
Finite lived intangible assets, Value | 442 |
Intangible assets, Useful Life | '13 years |
Artist Contracts | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' |
Finite lived intangible assets, Value | $305 |
Intangible assets, Useful Life | '10 years |
Acquisition_of_Parlophone_Labe4
Acquisition of Parlophone Label Group - Business Acquisition Pro Forma Financial Information (Detail) (Parlophone Label Group, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2012 |
Parlophone Label Group | ' |
Business Acquisition Pro Forma Information [Line Items] | ' |
Revenue | $906 |
Operating income | 54 |
Net loss attributable to Warner Music Group Corp. | ($66) |
Acquisition_of_Parlophone_Labe5
Acquisition of Parlophone Label Group - Additional Information (Detail) (Parlophone Label Group) | 0 Months Ended | 3 Months Ended | 5 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Feb. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Sep. 30, 2013 |
GBP (£) | USD ($) | USD ($) | GBP (£) | USD ($) | |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Percentage of ownership on acquisition | 100.00% | ' | ' | ' | ' |
Business acquisition, cash paid | £ 487 | ' | ' | £ 487 | ' |
Business acquisition, date of agreement | ' | 6-Feb-13 | ' | ' | ' |
Professional fees and integration costs related to Acquisition | ' | 20 | ' | ' | 38 |
Additional Transaction fee under Management Agreement in relation to Acquisition | ' | ' | ' | ' | 11 |
Pro forma revenue since acquisition date | ' | 74 | ' | ' | ' |
Acquired entity pro forma revenue | ' | ' | 137 | ' | ' |
Actual operating income loss of acquired entity | ' | -23 | ' | ' | ' |
Acquired entity pro forma operating income (loss) | ' | ' | $3 | ' | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Changes in Goodwill for Each Reportable Segment (Detail) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Goodwill [Line Items] | ' |
Beginning balance | $1,668 |
Acquisitions | 7 |
Dispositions | ' |
Other adjustments | 2 |
Ending balance | 1,677 |
Recorded Music | ' |
Goodwill [Line Items] | ' |
Beginning balance | 1,204 |
Acquisitions | 7 |
Dispositions | ' |
Other adjustments | 2 |
Ending balance | 1,213 |
Music Publishing | ' |
Goodwill [Line Items] | ' |
Beginning balance | 464 |
Acquisitions | ' |
Dispositions | ' |
Other adjustments | ' |
Ending balance | $464 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Schedule of Other Intangible Assets (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets subject to amortization, gross | $3,575 | $3,542 |
Accumulated amortization | -501 | -435 |
Total net intangible assets subject to amortization | 3,074 | 3,107 |
Intangible assets not subject to amortization | 120 | 120 |
Total net other intangible assets | 3,194 | 3,227 |
Recorded Music Catalog | ' | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, Useful Life | '11 years | ' |
Intangible assets subject to amortization, gross | 1,014 | 1,006 |
Music Publishing Copyrights | ' | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, Useful Life | '28 years | ' |
Intangible assets subject to amortization, gross | 1,566 | 1,546 |
Artist And Songwriter Contracts | ' | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, Useful Life | '13 years | ' |
Intangible assets subject to amortization, gross | 988 | 983 |
Trademarks | ' | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, Useful Life | '7 years | ' |
Intangible assets subject to amortization, gross | 7 | 7 |
Trademarks and Trade Names | ' | ' |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets not subject to amortization | $120 | $120 |
Debt_Longterm_Debt_Detail
Debt - Long-term Debt (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | ||
In Millions, unless otherwise specified | ||||
Debt Instrument [Line Items] | ' | ' | ||
Current portion of long-term debt | $68 | $13 | ||
Total long-term debt | 2,926 | 2,867 | ||
Long-term debt | 2,858 | 2,854 | ||
Term Loan Facility due 2020 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Current portion of long-term debt | 13 | 13 | ||
Total long-term debt | 1,303 | [1] | 1,303 | [1] |
6.00% Senior Secured Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Total long-term debt | 450 | 450 | ||
6.25% Senior Secured Notes | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Total long-term debt | 216 | [2] | 213 | [2] |
11.5% Senior Notes due 2018 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Total long-term debt | 752 | [3] | 751 | [3] |
13.75% Holdings Notes due 2019 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Total long-term debt | 150 | 150 | ||
Revolving Credit Facility | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Current portion of long-term debt | $55 | [4] | ' | |
[1] | Principal amount of $1.310 billion less unamortized discount of $7 million at both DecemberB 31, 2013 and SeptemberB 30, 2013. Of this amount, $13 million at both DecemberB 31, 2013 and SeptemberB 30, 2013, representing the scheduled amortization, was included in the current portion of long term debt. | |||
[2] | Face amount of €158 million. Amounts above represent the dollar equivalent of such notes at DecemberB 31, 2013 and SeptemberB 30, 2013. | |||
[3] | Face amount of $765 million less unamortized discounts of $13 million and $14 million at DecemberB 31, 2013 and SeptemberB 30, 2013, respectively. | |||
[4] | Reflects $150 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $11 million and $1 million at DecemberB 31, 2013 and SeptemberB 30, 2013, respectively. There were $55 million of loans outstanding under the Revolving Credit Facility at DecemberB 31, 2013, included in the current portion of long term debt. There were no loans outstanding at September 30, 2013. |
Debt_Longterm_Debt_Parenthetic
Debt - Long-term Debt (Parenthetical) (Detail) | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | |
In Millions, unless otherwise specified | USD ($) | USD ($) | Term Loan Facility due 2020 | Term Loan Facility due 2020 | 6.00% Senior Secured Notes | 6.00% Senior Secured Notes | 6.25% Senior Secured Notes | 6.25% Senior Secured Notes | 11.5% Unsecured WMG Notes due 2018 | 11.5% Unsecured WMG Notes due 2018 | 13.75% Holdings Notes due 2019 | Revolving Credit Facility | Revolving Credit Facility | |
USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Maturity date | ' | ' | '2020 | ' | '2021 | ' | '2021 | ' | '2018 | ' | '2019 | ' | ' | |
Interest rate | ' | ' | ' | ' | 6.00% | 6.00% | 6.25% | 6.25% | 11.50% | ' | 13.75% | ' | ' | |
Commitments under revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $150 | ' | |
Letters of credit outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11 | 1 | |
Revolving Credit Facility Outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55 | 0 | |
Face or Principal amount of Debt Instrument | ' | ' | 1,310 | ' | ' | ' | 158 | ' | 765 | ' | ' | ' | ' | |
Unamortized discount | ' | ' | 7 | 7 | ' | ' | ' | ' | 13 | 14 | ' | ' | ' | |
Current portion of long-term debt | $68 | $13 | $13 | $13 | ' | ' | ' | ' | ' | ' | ' | $55 | [1] | ' |
[1] | Reflects $150 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $11 million and $1 million at DecemberB 31, 2013 and SeptemberB 30, 2013, respectively. There were $55 million of loans outstanding under the Revolving Credit Facility at DecemberB 31, 2013, included in the current portion of long term debt. There were no loans outstanding at September 30, 2013. |
Debt_2012_Debt_Refinancing_Add
Debt - 2012 Debt Refinancing - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||
In Millions, unless otherwise specified | 9-May-13 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Nov. 01, 2012 | Nov. 01, 2012 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 01, 2012 | Nov. 01, 2012 | Nov. 01, 2012 | Nov. 01, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
USD ($) | USD ($) | USD ($) | 6.00% Senior Secured Notes | 6.00% Senior Secured Notes | 6.25% Senior Secured Notes | 6.25% Senior Secured Notes | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Incremental Term Loan Facility | 2012 Debt Refinancing | 2012 Debt Refinancing | 2012 Debt Refinancing | 2012 Debt Refinancing | 2012 Debt Refinancing | 2012 Debt Refinancing | 2012 Debt Refinancing | 2012 Debt Refinancing | 2012 Debt Refinancing | Debt Redemption | Debt Redemption | Debt Redemption | Debt Redemption | |
EUR (€) | London Interbank Offered Rate (LIBOR) | Base Rate | 11.50% Senior Notes Due In October 2018 | 11.50% Senior Notes Due In October 2018 | USD ($) | London Interbank Offered Rate (LIBOR) | Base Rate | USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | Refinancing Transaction | 9.5% Senior Secured Notes due 2016 | Term Loan Facility | Revolving Credit Facility | USD ($) | Senior Secured Notes due 2021 | 6.00% Senior Secured Notes | 6.25% Senior Secured Notes | |||||||||
Minimum | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | ||||||||||||||||||||||||
USD ($) | ||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face or Principal amount of Debt Instrument | ' | ' | ' | ' | ' | € 158 | ' | ' | ' | ' | ' | $153 | ' | ' | ' | ' | $820 | $500 | € 175 | ' | $1,250 | ' | ' | ' | $600 | ' | ' | ' | ' | ' |
Due date of Senior Secured Notes | ' | ' | ' | '2021 | ' | '2021 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2021 | '2021 | ' | ' | ' | ' | '2016 | ' | ' | ' | ' | ' | ' |
Issuance of Term Loan and Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150 | ' | ' | ' | ' |
Available cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101 | ' | ' | ' | ' | ' | ' | ' | ' |
Senior Secured Notes Extinguished | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,250 | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | 6.00% | 6.00% | 6.25% | 6.25% | ' | ' | ' | 11.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.50% | ' | ' | ' | ' | ' | ' |
Retired Revolving Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60 | ' | ' | ' | ' |
Repayment of New Revolving Credit Facility | ' | 100 | 31 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,377 | ' | ' | ' | ' | ' | ' | ' |
Repayments of long term debt outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,250 | ' | ' | ' | ' | ' | ' | ' |
Tender/Call premium on redemption of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 93 | ' | ' | ' | ' | ' | ' | ' |
Secured Notes consent fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 34 | ' | ' | ' | ' | ' | ' | ' |
Accrued interest paid | ' | 68 | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45 | ' | ' | ' | ' | ' | ' | ' |
Loss on extinguishment of debt | ' | ' | -83 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -83 | ' | ' | ' | ' | ' | ' | -2 | ' | ' | ' |
Debt unamortized premium of Old Secured Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance costs related to Old Secured Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid term loans | 102.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incremental draw down of Term Loan Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 820 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, marginal interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 2.75% | 1.75% | ' | ' | ' | ' | 2.00% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate applicable to overdue principal | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description of variable rate basis | ' | ' | ' | ' | ' | ' | ' | 'The loans under the Term Loan Facility bear interest at Term Loan Borrowerbs election at a rate equal to (i) the rate for deposits in U.S. dollars in the London interbank market (adjusted for maximum reserves) for the applicable interest period (bTerm Loan LIBOR Rateb), plus 2.75% per annum, 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) the overnight federal funds rate plus 0.50% and (z) the one-month Term Loan LIBOR Rate plus 1.0% per annum (bTerm Loan Base Rateb), plus, in each case, 1.75% per annum. | ' | ' | ' | ' | 'The loans under the Revolving Credit Facility bear interest at Revolving Borrowerbs election at a rate equal to (i) the rate for deposits in the currency in which the applicable borrowing is denominated in the London interbank market (adjusted for maximum reserves) for the applicable interest period (bRevolving LIBOR Rateb), plus 2.00% per annum, 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) the overnight federal funds rate plus 0.50% and (z) the one-month Revolving LIBOR Rate plus 1.0% per annum (bRevolving Base Rateb), plus, in each case, 1.00% per annum. 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. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual Amortization of original principal on term loan | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit Facility maturity date | ' | ' | ' | ' | ' | ' | ' | 1-Jul-20 | ' | ' | ' | ' | 1-Nov-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit facility springing maturity date | ' | ' | ' | ' | ' | ' | ' | 2-Jul-18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Oct-18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior secured indebtedness to EBITDA ratio | ' | ' | ' | ' | ' | ' | ' | 3.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of senior secured notes redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' |
Repayment of Acquisition Corp Senior Secured Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50 | € 17.50 |
Debt_Interest_Rates_Additional
Debt - Interest Rates - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' |
Interest rate applicable to overdue principal | 2.00% |
Revolving Credit Facility fee | 0.50% |
Revolving Credit Facility | ' |
Debt Instrument [Line Items] | ' |
Revolver Libor rate plus Election Rate | 2.00% |
Revolver Base rate plus Election Rate | 1.00% |
Interest rate applicable to overdue principal | 2.00% |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Debt Instrument [Line Items] | ' | ' | ' |
Total interest expense, net | $55 | $53 | ' |
Weighted-average interest rate of total debt | 6.80% | 8.20% | 6.90% |
Revolving Credit Facility | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Credit Facility maturity date | 1-Nov-17 | ' | ' |
Senior Notes | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Scheduled maturities of long-term debt in 2018 | 765 | ' | ' |
Scheduled to mature | $816 | ' | ' |
Restructuring_Summary_of_Restr
Restructuring - Summary of Restructuring Activity (Detail) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Restructuring Cost And Reserve [Line Items] | ' |
Beginning balance | $10 |
Restructuring expense | 7 |
Cash Payments | -11 |
Ending balance | 6 |
Employee-related Costs | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Beginning balance | 10 |
Restructuring expense | 7 |
Cash Payments | -11 |
Ending balance | 6 |
Real Estate Costs | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Beginning balance | ' |
Restructuring expense | ' |
Cash Payments | ' |
Ending balance | ' |
Other Costs | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Beginning balance | ' |
Restructuring expense | ' |
Cash Payments | ' |
Ending balance | ' |
Restructuring_Summary_of_Charg
Restructuring - Summary of Charges in Consolidated Statement of Operations (Detail) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Restructuring Cost And Reserve [Line Items] | ' |
Total restructuring expense | $7 |
Selling, General and Administrative Expenses | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Total restructuring expense | $7 |
Restructuring_Additional_Infor
Restructuring - Additional Information (Detail) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Restructuring Cost And Reserve [Line Items] | ' |
Restructuring charges | $85 |
Restructuring costs | 7 |
Restructuring cost incurred to date | 29 |
Employee-related Costs | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Restructuring charges | 61 |
Restructuring costs | 7 |
Real Estate Costs | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Restructuring charges | 18 |
Restructuring costs | ' |
Other Costs | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Restructuring charges | 6 |
Restructuring costs | ' |
Cash Payments | ' |
Restructuring Cost And Reserve [Line Items] | ' |
Restructuring cost incurred to date | $23 |
ShareBased_Compensation_Plans_
Share-Based Compensation Plans - Additional Information (Detail) (USD $) | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Shares issued and outstanding to LLC | 55 |
Weighted-average grant date intrinsic value of share awards | $107.13 |
Fair value of deferred equity units | $134.62 |
Non-cash compensation expense | $3 |
Unrecognized compensation costs | 16 |
Total compensation of unvested awards expected to be recognized, weighted average period | '3 years |
Employees | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Non-cash compensation expense | 2 |
Non-Employees | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Non-cash compensation expense | $1 |
Maximum | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Shares Held in Employee Stock Option Plan, Allocated | 82.1918 |
Deferred equity unit share | 0.0001 |
Deferred Equity Units | Maximum | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Shares Held in Employee Stock Option Plan, Allocated | 41.0959 |
Share awards vesting period | '7 years |
Deferred Equity Units | Minimum | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Share awards vesting period | '1 year |
Matching Equity Units | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Share awards vesting period | '2 years |
Matching Equity Units | Maximum | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Shares Held in Employee Stock Option Plan, Allocated | 41.0959 |
ShareBased_Compensation_Plans_1
Share-Based Compensation Plans - Summary of Company's Share Awards (Detail) (USD $) | 3 Months Ended |
Dec. 31, 2013 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Unvested units, Fair Value at December 31, 2013 | $134.62 |
Weighted-average grant date intrinsic value of share awards | $107.13 |
Deferred Equity Units | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Unvested units at September 30, 2013 | 24 |
Units, Granted | ' |
Units, Vested | -5 |
Units, Forfeited | -1 |
Unvested units at December 31, 2013 | 18 |
Unvested units, Fair Value at September 30, 2013 | $134.62 |
Fair Value, Granted | $134.62 |
Fair Value, Vested | $134.62 |
Fair Value, Forfeited | $134.62 |
Unvested units, Fair Value at December 31, 2013 | $134.62 |
Unvested units, Weighted-Average Grant-Date Intrinsic Value at September 30, 2013 | $107.13 |
Weighted-Average Grant-Date Intrinsic Value, Granted | $107.13 |
Weighted-Average Grant-Date Intrinsic Value, Vested | $107.13 |
Weighted-Average Grant-Date Intrinsic Value, Forfeited | $107.13 |
Unvested units, Weighted-Average Grant-Date Intrinsic Value at December 31, 2013 | $107.13 |
Matching Equity Units | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Unvested units at September 30, 2013 | 24 |
Units, Granted | ' |
Units, Vested | ' |
Units, Forfeited | -1 |
Unvested units at December 31, 2013 | 23 |
Unvested units at September 30, 2013 | $27.49 |
Weighted-average grant date intrinsic value of share awards | $27.49 |
Units, Vested | $27.49 |
Units, Forfeited | $27.49 |
Unvested units at December 31, 2013 | $27.49 |
Unvested units, Weighted-Average Grant-Date Intrinsic Value at September 30, 2013 | ' |
Weighted-Average Grant-Date Intrinsic Value, Granted | ' |
Weighted-Average Grant-Date Intrinsic Value, Vested | ' |
Weighted-Average Grant-Date Intrinsic Value, Forfeited | ' |
Unvested units, Weighted-Average Grant-Date Intrinsic Value at December 31, 2013 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 10, 2012 | Dec. 31, 2013 |
Lawsuits | ||
Disclosure - Commitments and Contingencies - Additional Information (Detail) [Line Items] | ' | ' |
Number of putative class action lawsuits | 5 | ' |
Settlement amount | ' | $11.50 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2013 |
Derivatives Fair Value [Line Items] | ' | ' |
Total long-term debt | $2,867 | 2,926 |
Fair value of fixed-rate and variable rate debt outstanding | ' | 3,120 |
Foreign Currency Risk Management | Sale | ' | ' |
Derivatives Fair Value [Line Items] | ' | ' |
Outstanding hedge contracts | 249 | 89 |
Foreign Currency Risk Management | Purchase | ' | ' |
Derivatives Fair Value [Line Items] | ' | ' |
Outstanding hedge contracts | 1,044 | 783 |
Interest Rate Risk Management | ' | ' |
Derivatives Fair Value [Line Items] | ' | ' |
Total long-term debt | 2,946 | ' |
Variable rate debt | 1,365 | ' |
Percentage of fixed rate debt | 54.00% | ' |
LIBOR floor rate | ' | 1.00% |
Fixed-rate debt, amount | 1,581 | ' |
Fair value of fixed-rate and variable rate debt outstanding | 3,120 | ' |
Basis points | 0.25% | ' |
LIBOR floor rate | 1.00% | ' |
Increase or decrease in the fair value of debt | $10 | ' |
Derivative_Financial_Instrumen3
Derivative Financial Instruments - Summary of Amounts Recorded in Consolidated Balance Sheet (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | ||
In Millions, unless otherwise specified | ||||
Derivatives Fair Value [Line Items] | ' | ' | ||
Other current liabilities | $21 | $25 | ||
Other Current Assets | ' | ' | ||
Derivatives Fair Value [Line Items] | ' | ' | ||
Other current assets | ' | 1 | [1] | |
Other Current Liabilities | ' | ' | ||
Derivatives Fair Value [Line Items] | ' | ' | ||
Other current liabilities | ($13) | [2] | ($23) | [1] |
[1] | Includes $5 million and $27 million of foreign exchange derivative contracts in asset and liability positions, respectively. | |||
[2] | Includes $4 million and $17 million of foreign exchange derivative contracts in asset and liability positions, respectively |
Derivative_Financial_Instrumen4
Derivative Financial Instruments - Summary of Amounts Recorded in Consolidated Balance Sheet (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Derivatives Fair Value [Line Items] | ' | ' |
Foreign exchange derivative contracts in asset | $4 | $5 |
Foreign exchange derivative contracts in liability | $17 | $27 |
Segment_Information_Schedule_o
Segment Information - Schedule of Segment Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | $815 | $769 |
OIBDA | 93 | 112 |
Depreciation of property, plant and equipment | -12 | -13 |
Amortization of intangible assets | -66 | -48 |
Operating income | 15 | 51 |
Operating Segments | Recorded Music | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 691 | 657 |
OIBDA | 93 | 114 |
Depreciation of property, plant and equipment | -8 | -7 |
Amortization of intangible assets | -50 | -33 |
Operating income | 35 | 74 |
Operating Segments | Music Publishing | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 128 | 116 |
OIBDA | 19 | 16 |
Depreciation of property, plant and equipment | -1 | -2 |
Amortization of intangible assets | -16 | -15 |
Operating income | 2 | -1 |
Corporate Expenses and Eliminations | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | -4 | -4 |
OIBDA | -19 | -18 |
Depreciation of property, plant and equipment | -3 | -4 |
Amortization of intangible assets | ' | ' |
Operating income | ($22) | ($22) |
Additional_Financial_Informati1
Additional Financial Information - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow Information [Line Items] | ' | ' |
Accrued interest paid | $68 | $100 |
Income and withholding taxes, net of refunds | $3 | $5 |
Fair_Value_Measurements_Schedu
Fair Value Measurements - Schedule of Fair Value of Financial Instruments (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | ||
In Millions, unless otherwise specified | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Total | ($34) | ($44) | ||
Level 1 | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Total | ' | ' | ||
Level 2 | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Total | -13 | -22 | ||
Level 3 | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Total | -21 | -22 | ||
Foreign Currency Forward Exchange Contracts | Other Current Assets | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | ' | [1] | 1 | [1] |
Foreign Currency Forward Exchange Contracts | Level 1 | Other Current Assets | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | ' | [1] | ' | [1] |
Foreign Currency Forward Exchange Contracts | Level 2 | Other Current Assets | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | ' | [1] | 1 | [1] |
Foreign Currency Forward Exchange Contracts | Level 3 | Other Current Assets | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | ' | [1] | ' | [1] |
Foreign Currency Forward Exchange Contracts | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | -13 | [1] | -23 | [1] |
Foreign Currency Forward Exchange Contracts | Level 1 | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | ' | [1] | ' | [1] |
Foreign Currency Forward Exchange Contracts | Level 2 | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | -13 | [1] | -23 | [1] |
Foreign Currency Forward Exchange Contracts | Level 3 | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Foreign Currency Forward Exchange Contracts | ' | [1] | ' | [1] |
Contractual Obligations | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | -14 | [2] | -13 | [2] |
Contractual Obligations | Other Non-Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | -7 | [2] | -9 | [2] |
Contractual Obligations | Level 1 | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | ' | [2] | ' | [2] |
Contractual Obligations | Level 1 | Other Non-Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | ' | [2] | ' | [2] |
Contractual Obligations | Level 2 | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | ' | [2] | ' | [2] |
Contractual Obligations | Level 2 | Other Non-Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | ' | [2] | ' | [2] |
Contractual Obligations | Level 3 | Other Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | -14 | [2] | -13 | [2] |
Contractual Obligations | Level 3 | Other Non-Current Liabilities | ' | ' | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' | ||
Contractual Obligations | ($7) | [2] | ($9) | [2] |
[1] | The fair value of the 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. | |||
[2] | This represents purchase obligations and contingent consideration related to the Companybs various acquisitions. This is based on a discounted cash flow approach and it is adjusted to fair value on a recurring basis and any adjustments are included as a component of operating income in the statement of operations. These amounts were mainly calculated using unobservable inputs such as future earnings performance of the Companybs various acquisitions and the expected timing of the payment. |
Fair_Value_Measurements_Reconc
Fair Value Measurements - Reconciliation of Net Assets and Liabilities Classified as Level 3 (Detail) (Successor, Level 3, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Successor | Level 3 | ' |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ' |
Balance at September 30, 2013 | $22 |
Additions | 2 |
Payments | -3 |
Balance at December 31, 2013 | $21 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Disclosure - Fair Value Measurements - Additional Information (Detail) [Line Items] | ' |
Fair value of fixed-rate and variable rate debt outstanding | $3,120 |
Guarantor_And_NonGuarantor_Sub2
Guarantor And Non-Guarantor Subsidiaries Financial Information - Additional Information (Detail) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
13.75% Holdings Notes due 2019 | ' | ' |
Parent Company Only Financial Information [Line Items] | ' | ' |
Interest rate | 13.75% | ' |
Due date of Senior Secured Notes | '2019 | ' |
6.00% Senior Secured Notes | ' | ' |
Parent Company Only Financial Information [Line Items] | ' | ' |
Interest rate | 6.00% | 6.00% |
Due date of Senior Secured Notes | '2021 | ' |
6.25% Senior Secured Notes | ' | ' |
Parent Company Only Financial Information [Line Items] | ' | ' |
Interest rate | 6.25% | 6.25% |
Due date of Senior Secured Notes | '2021 | ' |
11.5% Senior Notes due 2018 | ' | ' |
Parent Company Only Financial Information [Line Items] | ' | ' |
Interest rate | 11.50% | ' |
Due date of Senior Secured Notes | '2018 | ' |
Guarantor_And_NonGuarantor_Sub3
Guarantor And Non-Guarantor Subsidiaries Financial Information - Consolidating Balance Sheet (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Millions, unless otherwise specified | ||||
Current assets: | ' | ' | ' | ' |
Cash and equivalents | $129 | $155 | $189 | $302 |
Accounts receivable, net | 566 | 511 | ' | ' |
Inventories | 34 | 33 | ' | ' |
Royalty advances expected to be recouped within one year | 105 | 93 | ' | ' |
Deferred tax assets | 43 | 43 | ' | ' |
Prepaid and other current assets | 61 | 59 | ' | ' |
Total current assets | 938 | 894 | ' | ' |
Royalty advances expected to be recouped after one year | 195 | 173 | ' | ' |
Property, plant and equipment, net | 181 | 180 | ' | ' |
Goodwill | 1,677 | 1,668 | ' | ' |
Intangible assets subject to amortization, net | 3,074 | 3,107 | ' | ' |
Intangible assets not subject to amortization | 120 | 120 | ' | ' |
Other assets | 103 | 110 | ' | ' |
Total assets | 6,288 | 6,252 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 246 | 280 | ' | ' |
Accrued royalties | 1,203 | 1,147 | ' | ' |
Accrued liabilities | 288 | 321 | ' | ' |
Accrued interest | 58 | 75 | ' | ' |
Deferred revenue | 192 | 139 | ' | ' |
Current portion of long-term debt | 68 | 13 | ' | ' |
Other current liabilities | 21 | 25 | ' | ' |
Total current liabilities | 2,076 | 2,000 | ' | ' |
Long-term debt | 2,858 | 2,854 | ' | ' |
Deferred tax liabilities, net | 422 | 439 | ' | ' |
Other noncurrent liabilities | 234 | 216 | ' | ' |
Total liabilities | 5,590 | 5,509 | ' | ' |
Total Warner Music Group Corp. equity (deficit) | 681 | 726 | ' | ' |
Noncontrolling interest | 17 | 17 | ' | ' |
Total equity (deficit) | 698 | 743 | ' | ' |
Total liabilities and equity (deficit) | 6,288 | 6,252 | ' | ' |
Eliminations | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Investments in and advances to (from) consolidated subsidiaries | -3,700 | -3,741 | ' | ' |
Total assets | -3,700 | -3,741 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Other current liabilities | ' | 6 | ' | ' |
Total current liabilities | ' | 6 | ' | ' |
Other noncurrent liabilities | ' | -7 | ' | ' |
Total liabilities | ' | -1 | ' | ' |
Total Warner Music Group Corp. equity (deficit) | -3,700 | -3,740 | ' | ' |
Total equity (deficit) | -3,700 | -3,740 | ' | ' |
Total liabilities and equity (deficit) | -3,700 | -3,741 | ' | ' |
Eliminations | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Investments in and advances to (from) consolidated subsidiaries | -1,510 | -1,605 | ' | ' |
Total assets | -1,510 | -1,605 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Total Warner Music Group Corp. equity (deficit) | -1,510 | -1,605 | ' | ' |
Total equity (deficit) | -1,510 | -1,605 | ' | ' |
Total liabilities and equity (deficit) | -1,510 | -1,605 | ' | ' |
WMG Acquisition Corp. (issuer) | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | ' | ' | ' | 44 |
Prepaid and other current assets | 5 | 5 | ' | ' |
Total current assets | 5 | 5 | ' | ' |
Investments in and advances to (from) consolidated subsidiaries | 2,806 | 2,811 | ' | ' |
Due (to) from parent companies | 797 | 799 | ' | ' |
Other assets | 65 | 68 | ' | ' |
Total assets | 3,673 | 3,683 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accrued interest | 53 | 65 | ' | ' |
Current portion of long-term debt | 68 | 13 | ' | ' |
Total current liabilities | 121 | 78 | ' | ' |
Long-term debt | 2,708 | 2,704 | ' | ' |
Other noncurrent liabilities | 15 | 22 | ' | ' |
Total liabilities | 2,844 | 2,804 | ' | ' |
Total Warner Music Group Corp. equity (deficit) | 829 | 879 | ' | ' |
Total equity (deficit) | 829 | 879 | ' | ' |
Total liabilities and equity (deficit) | 3,673 | 3,683 | ' | ' |
Guarantor Subsidiaries | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | 10 | 16 | 44 | 105 |
Accounts receivable, net | 183 | 185 | ' | ' |
Inventories | 9 | 10 | ' | ' |
Royalty advances expected to be recouped within one year | 58 | 59 | ' | ' |
Deferred tax assets | 20 | 21 | ' | ' |
Prepaid and other current assets | 8 | 8 | ' | ' |
Total current assets | 288 | 299 | ' | ' |
Royalty advances expected to be recouped after one year | 107 | 109 | ' | ' |
Investments in and advances to (from) consolidated subsidiaries | 894 | 930 | ' | ' |
Property, plant and equipment, net | 103 | 101 | ' | ' |
Goodwill | 1,379 | 1,379 | ' | ' |
Intangible assets subject to amortization, net | 989 | 1,007 | ' | ' |
Intangible assets not subject to amortization | 75 | 75 | ' | ' |
Due (to) from parent companies | 23 | -27 | ' | ' |
Other assets | 12 | 14 | ' | ' |
Total assets | 3,870 | 3,887 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 75 | 96 | ' | ' |
Accrued royalties | 513 | 570 | ' | ' |
Accrued liabilities | 66 | 94 | ' | ' |
Deferred revenue | 114 | 56 | ' | ' |
Other current liabilities | 16 | 23 | ' | ' |
Total current liabilities | 784 | 839 | ' | ' |
Deferred tax liabilities, net | 127 | 128 | ' | ' |
Other noncurrent liabilities | 83 | 68 | ' | ' |
Total liabilities | 994 | 1,035 | ' | ' |
Total Warner Music Group Corp. equity (deficit) | 2,876 | 2,852 | ' | ' |
Total equity (deficit) | 2,876 | 2,852 | ' | ' |
Total liabilities and equity (deficit) | 3,870 | 3,887 | ' | ' |
Non-Guarantor Subsidiaries | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | 119 | 139 | 145 | 143 |
Accounts receivable, net | 383 | 326 | ' | ' |
Inventories | 25 | 23 | ' | ' |
Royalty advances expected to be recouped within one year | 47 | 34 | ' | ' |
Deferred tax assets | 23 | 22 | ' | ' |
Prepaid and other current assets | 48 | 46 | ' | ' |
Total current assets | 645 | 590 | ' | ' |
Royalty advances expected to be recouped after one year | 88 | 64 | ' | ' |
Property, plant and equipment, net | 78 | 79 | ' | ' |
Goodwill | 298 | 289 | ' | ' |
Intangible assets subject to amortization, net | 2,085 | 2,100 | ' | ' |
Intangible assets not subject to amortization | 45 | 45 | ' | ' |
Due (to) from parent companies | -820 | -772 | ' | ' |
Other assets | 19 | 21 | ' | ' |
Total assets | 2,438 | 2,416 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 171 | 184 | ' | ' |
Accrued royalties | 690 | 577 | ' | ' |
Accrued liabilities | 222 | 227 | ' | ' |
Deferred revenue | 78 | 83 | ' | ' |
Other current liabilities | 5 | -4 | ' | ' |
Total current liabilities | 1,166 | 1,067 | ' | ' |
Deferred tax liabilities, net | 295 | 311 | ' | ' |
Other noncurrent liabilities | 136 | 133 | ' | ' |
Total liabilities | 1,597 | 1,511 | ' | ' |
Total Warner Music Group Corp. equity (deficit) | 824 | 888 | ' | ' |
Noncontrolling interest | 17 | 17 | ' | ' |
Total equity (deficit) | 841 | 905 | ' | ' |
Total liabilities and equity (deficit) | 2,438 | 2,416 | ' | ' |
WMG Acquisition Corp. Consolidated | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | 129 | 155 | 189 | 292 |
Accounts receivable, net | 566 | 511 | ' | ' |
Inventories | 34 | 33 | ' | ' |
Royalty advances expected to be recouped within one year | 105 | 93 | ' | ' |
Deferred tax assets | 43 | 43 | ' | ' |
Prepaid and other current assets | 61 | 59 | ' | ' |
Total current assets | 938 | 894 | ' | ' |
Royalty advances expected to be recouped after one year | 195 | 173 | ' | ' |
Property, plant and equipment, net | 181 | 180 | ' | ' |
Goodwill | 1,677 | 1,668 | ' | ' |
Intangible assets subject to amortization, net | 3,074 | 3,107 | ' | ' |
Intangible assets not subject to amortization | 120 | 120 | ' | ' |
Other assets | 96 | 103 | ' | ' |
Total assets | 6,281 | 6,245 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 246 | 280 | ' | ' |
Accrued royalties | 1,203 | 1,147 | ' | ' |
Accrued liabilities | 288 | 321 | ' | ' |
Accrued interest | 53 | 65 | ' | ' |
Deferred revenue | 192 | 139 | ' | ' |
Current portion of long-term debt | 68 | 13 | ' | ' |
Other current liabilities | 21 | 25 | ' | ' |
Total current liabilities | 2,071 | 1,990 | ' | ' |
Long-term debt | 2,708 | 2,704 | ' | ' |
Deferred tax liabilities, net | 422 | 439 | ' | ' |
Other noncurrent liabilities | 234 | 216 | ' | ' |
Total liabilities | 5,435 | 5,349 | ' | ' |
Total Warner Music Group Corp. equity (deficit) | 829 | 879 | ' | ' |
Noncontrolling interest | 17 | 17 | ' | ' |
Total equity (deficit) | 846 | 896 | ' | ' |
Total liabilities and equity (deficit) | 6,281 | 6,245 | ' | ' |
WMG Holdings Corp. (issuer) | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | ' | ' | ' | 10 |
Investments in and advances to (from) consolidated subsidiaries | 829 | 879 | ' | ' |
Other assets | 7 | 7 | ' | ' |
Total assets | 836 | 886 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accrued interest | 5 | 10 | ' | ' |
Total current liabilities | 5 | 10 | ' | ' |
Long-term debt | 150 | 150 | ' | ' |
Total liabilities | 155 | 160 | ' | ' |
Total Warner Music Group Corp. equity (deficit) | 681 | 726 | ' | ' |
Total equity (deficit) | 681 | 726 | ' | ' |
Total liabilities and equity (deficit) | 836 | 886 | ' | ' |
Warner Music Group Corp. | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Investments in and advances to (from) consolidated subsidiaries | 681 | 726 | ' | ' |
Total assets | 681 | 726 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Total Warner Music Group Corp. equity (deficit) | 681 | 726 | ' | ' |
Total equity (deficit) | 681 | 726 | ' | ' |
Total liabilities and equity (deficit) | $681 | $726 | ' | ' |
Guarantor_And_NonGuarantor_Sub4
Guarantor And Non-Guarantor Subsidiaries Financial Information - Consolidating Statements of Operations (Detail) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Condensed Financial Statements Captions [Line Items] | ' | ' | ||
Revenues | $815 | $769 | ||
Costs and expenses: | ' | ' | ||
Cost of revenues | -441 | -408 | ||
Selling, general and administrative expenses | -293 | [1] | -262 | [1] |
Amortization of intangible assets | -66 | -48 | ||
Total costs and expenses | -800 | -718 | ||
Operating income (expense) | 15 | 51 | ||
Loss on extinguishment of debt | ' | -83 | ||
Interest expense, net | -55 | -53 | ||
Other expense, net | -4 | -5 | ||
(Loss) income before income taxes | -44 | -90 | ||
Income tax benefit | 8 | 11 | ||
Net (loss) income | -36 | -79 | ||
Less: income attributable to noncontrolling interest | -1 | -1 | ||
Net (loss) income attributable to Warner Music Group Corp. | -37 | -80 | ||
Eliminations | ' | ' | ||
Condensed Financial Statements Captions [Line Items] | ' | ' | ||
Revenues | -49 | -56 | ||
Costs and expenses: | ' | ' | ||
Cost of revenues | 49 | 49 | ||
Selling, general and administrative expenses | 1 | 15 | ||
Total costs and expenses | 50 | 64 | ||
Operating income (expense) | 1 | 8 | ||
Loss on extinguishment of debt | ' | ' | ||
Equity gains (losses) from consolidated subsidiaries | 34 | -24 | ||
(Loss) income before income taxes | 35 | -16 | ||
Income tax benefit | -3 | -9 | ||
Net (loss) income | 32 | -25 | ||
Net (loss) income attributable to Warner Music Group Corp. | 32 | -25 | ||
Eliminations | ' | ' | ||
Costs and expenses: | ' | ' | ||
Loss on extinguishment of debt | ' | ' | ||
Equity gains (losses) from consolidated subsidiaries | 69 | 154 | ||
(Loss) income before income taxes | 69 | 154 | ||
Net (loss) income | 69 | 154 | ||
Net (loss) income attributable to Warner Music Group Corp. | 69 | 154 | ||
WMG Acquisition Corp. (issuer) | ' | ' | ||
Costs and expenses: | ' | ' | ||
Loss on extinguishment of debt | ' | -83 | ||
Interest expense, net | -31 | -43 | ||
Equity gains (losses) from consolidated subsidiaries | -21 | 41 | ||
Other expense, net | 12 | ' | ||
(Loss) income before income taxes | -40 | -85 | ||
Income tax benefit | 8 | 11 | ||
Net (loss) income | -32 | -74 | ||
Net (loss) income attributable to Warner Music Group Corp. | -32 | -74 | ||
Guarantor Subsidiaries | ' | ' | ||
Condensed Financial Statements Captions [Line Items] | ' | ' | ||
Revenues | 354 | 344 | ||
Costs and expenses: | ' | ' | ||
Cost of revenues | -155 | -162 | ||
Selling, general and administrative expenses | -115 | -123 | ||
Amortization of intangible assets | -30 | -30 | ||
Total costs and expenses | -300 | -315 | ||
Operating income (expense) | 54 | 29 | ||
Loss on extinguishment of debt | ' | ' | ||
Interest expense, net | 1 | 1 | ||
Equity gains (losses) from consolidated subsidiaries | -13 | -17 | ||
Other expense, net | -14 | -5 | ||
(Loss) income before income taxes | 28 | 8 | ||
Income tax benefit | -4 | 10 | ||
Net (loss) income | 24 | 18 | ||
Net (loss) income attributable to Warner Music Group Corp. | 24 | 18 | ||
Non-Guarantor Subsidiaries | ' | ' | ||
Condensed Financial Statements Captions [Line Items] | ' | ' | ||
Revenues | 510 | 481 | ||
Costs and expenses: | ' | ' | ||
Cost of revenues | -335 | -295 | ||
Selling, general and administrative expenses | -179 | -154 | ||
Amortization of intangible assets | -36 | -18 | ||
Total costs and expenses | -550 | -467 | ||
Operating income (expense) | -40 | 14 | ||
Loss on extinguishment of debt | ' | ' | ||
Interest expense, net | -20 | -5 | ||
Other expense, net | -2 | ' | ||
(Loss) income before income taxes | -62 | 9 | ||
Income tax benefit | 7 | -1 | ||
Net (loss) income | -55 | 8 | ||
Less: income attributable to noncontrolling interest | -1 | -1 | ||
Net (loss) income attributable to Warner Music Group Corp. | -56 | 7 | ||
WMG Acquisition Corp. Consolidated | ' | ' | ||
Condensed Financial Statements Captions [Line Items] | ' | ' | ||
Revenues | 815 | 769 | ||
Costs and expenses: | ' | ' | ||
Cost of revenues | -441 | -408 | ||
Selling, general and administrative expenses | -293 | -262 | ||
Amortization of intangible assets | -66 | -48 | ||
Total costs and expenses | -800 | -718 | ||
Operating income (expense) | 15 | 51 | ||
Loss on extinguishment of debt | ' | -83 | ||
Interest expense, net | -50 | -47 | ||
Other expense, net | -4 | -5 | ||
(Loss) income before income taxes | -39 | -84 | ||
Income tax benefit | 8 | 11 | ||
Net (loss) income | -31 | -73 | ||
Less: income attributable to noncontrolling interest | -1 | -1 | ||
Net (loss) income attributable to Warner Music Group Corp. | -32 | -74 | ||
WMG Holdings Corp. (issuer) | ' | ' | ||
Costs and expenses: | ' | ' | ||
Loss on extinguishment of debt | ' | ' | ||
Interest expense, net | -5 | -6 | ||
Equity gains (losses) from consolidated subsidiaries | -32 | -74 | ||
(Loss) income before income taxes | -37 | -80 | ||
Net (loss) income | -37 | -80 | ||
Net (loss) income attributable to Warner Music Group Corp. | -37 | -80 | ||
Warner Music Group Corp. | ' | ' | ||
Costs and expenses: | ' | ' | ||
Loss on extinguishment of debt | ' | ' | ||
Equity gains (losses) from consolidated subsidiaries | -37 | -80 | ||
(Loss) income before income taxes | -37 | -80 | ||
Net (loss) income | -37 | -80 | ||
Net (loss) income attributable to Warner Music Group Corp. | ($37) | ($80) | ||
[1] | (a)Includes depreciation expense of:$(12)$(13) |
Guarantor_And_NonGuarantor_Sub5
Guarantor And Non-Guarantor Subsidiaries Financial Information - Consolidating Statement of Comprehensive Income (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | ($36) | ($79) | |
Foreign currency translation adjustment | -8 | 2 | |
Other comprehensive loss, net of tax | -8 | [1] | 2 |
Total comprehensive (loss) income | -44 | -77 | |
Comprehensive income attributable to noncontrolling interest | -1 | -1 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | -45 | -78 | |
Eliminations | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | 32 | -25 | |
Foreign currency translation adjustment | 8 | -2 | |
Other comprehensive loss, net of tax | 8 | -2 | |
Total comprehensive (loss) income | 40 | -27 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | 40 | -27 | |
Eliminations | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | 69 | 154 | |
Foreign currency translation adjustment | 16 | -4 | |
Other comprehensive loss, net of tax | 16 | -4 | |
Total comprehensive (loss) income | 85 | 150 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | 85 | 150 | |
WMG Acquisition Corp. (issuer) | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | -32 | -74 | |
Foreign currency translation adjustment | -8 | 2 | |
Other comprehensive loss, net of tax | -8 | 2 | |
Total comprehensive (loss) income | -40 | -72 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | -40 | -72 | |
Guarantor Subsidiaries | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | 24 | 18 | |
Total comprehensive (loss) income | 24 | 18 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | 24 | 18 | |
Non-Guarantor Subsidiaries | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | -55 | 8 | |
Foreign currency translation adjustment | -8 | 2 | |
Other comprehensive loss, net of tax | -8 | 2 | |
Total comprehensive (loss) income | -63 | 10 | |
Comprehensive income attributable to noncontrolling interest | -1 | -1 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | -64 | 9 | |
WMG Acquisition Corp. Consolidated | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | -31 | -73 | |
Foreign currency translation adjustment | -8 | 2 | |
Other comprehensive loss, net of tax | -8 | 2 | |
Total comprehensive (loss) income | -39 | -71 | |
Comprehensive income attributable to noncontrolling interest | -1 | -1 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | -40 | -72 | |
WMG Holdings Corp. (issuer) | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | -37 | -80 | |
Foreign currency translation adjustment | -8 | 2 | |
Other comprehensive loss, net of tax | -8 | 2 | |
Total comprehensive (loss) income | -45 | -78 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | -45 | -78 | |
Warner Music Group Corp. | ' | ' | |
Condensed Financial Statements Captions [Line Items] | ' | ' | |
Net (loss) income | -37 | -80 | |
Foreign currency translation adjustment | -8 | 2 | |
Other comprehensive loss, net of tax | -8 | 2 | |
Total comprehensive (loss) income | -45 | -78 | |
Comprehensive (loss) income attributable to Warner Music Group Corp. | ($45) | ($78) | |
[1] | (a) Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature of $(2) million. |
Guarantor_And_NonGuarantor_Sub6
Guarantor And Non-Guarantor Subsidiaries Financial Information - Consolidating Statement of Cash Flows (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | ' | ' |
Net (loss) income | ($36) | ($79) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | 83 |
Depreciation and amortization | 78 | 61 |
Deferred income taxes | -16 | -10 |
Non-cash interest expense | 4 | 2 |
Non-cash share-based compensation expense | 3 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -56 | -23 |
Inventories | -1 | 1 |
Royalty advances | -35 | -35 |
Accounts payable and accrued liabilities | -79 | -53 |
Royalty payables | 56 | 32 |
Accrued interest | -17 | -49 |
Deferred income | 60 | 55 |
Other balance sheet changes | -13 | 5 |
Net cash (used in) provided by operating activities | -52 | -10 |
Cash flows from investing activities | ' | ' |
Acquisition of music publishing rights | -10 | -8 |
Capital expenditures | -12 | -7 |
Investments and acquisitions of businesses, net of cash acquired | -4 | ' |
Net cash (used in) provided by investing activities | -26 | -15 |
Cash flows from financing activities | ' | ' |
Distributions to noncontrolling interest holder | -1 | ' |
Proceeds from draw down of the Revolving Credit Facility | 155 | 31 |
Repayment of the Revolving Credit Facility | -100 | -31 |
Proceeds from Acquisition Corp Term Loan Facility | ' | 594 |
Financing costs paid | ' | -127 |
Deferred financing costs paid | ' | -30 |
Net cash (used in) provided by financing activities | 54 | -86 |
Effect of foreign currency exchange rate changes on cash | -2 | -2 |
Net (decrease) increase in cash and equivalents | -26 | -113 |
Cash and equivalents at beginning of period | 155 | 302 |
Cash and equivalents at end of period | 129 | 189 |
6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 500 |
6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 227 |
9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | -1,250 |
Eliminations | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | 32 | -25 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | ' |
Equity (gains) losses, including distributions | -34 | 24 |
Changes in operating assets and liabilities: | ' | ' |
Accounts payable and accrued liabilities | -21 | -2 |
Other balance sheet changes | 23 | 3 |
Cash flows from investing activities | ' | ' |
Change in due to (from) subsidiaries | 29 | -106 |
Net cash (used in) provided by investing activities | 29 | -106 |
Cash flows from financing activities | ' | ' |
Proceeds from Acquisition Corp Term Loan Facility | ' | ' |
Financing costs paid | ' | ' |
Deferred financing costs paid | ' | ' |
Change in due to (from) issuer | -29 | 106 |
Net cash (used in) provided by financing activities | -29 | 106 |
Eliminations | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Eliminations | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Eliminations | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | ' |
Eliminations | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | 69 | 154 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | ' |
Equity (gains) losses, including distributions | -69 | -154 |
Cash flows from financing activities | ' | ' |
Proceeds from Acquisition Corp Term Loan Facility | ' | ' |
Financing costs paid | ' | ' |
Deferred financing costs paid | ' | ' |
Eliminations | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Eliminations | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Eliminations | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | ' |
WMG Acquisition Corp. (issuer) | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | -32 | -74 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | 83 |
Non-cash interest expense | 4 | 2 |
Equity (gains) losses, including distributions | 21 | -41 |
Changes in operating assets and liabilities: | ' | ' |
Accrued interest | -12 | -44 |
Other balance sheet changes | 3 | 11 |
Net cash (used in) provided by operating activities | -16 | -63 |
Cash flows from investing activities | ' | ' |
Change in due to (from) subsidiaries | -29 | 106 |
Net cash (used in) provided by investing activities | -29 | 106 |
Cash flows from financing activities | ' | ' |
Dividend by Acquisition Corp.to Holdings Corp. | -10 | ' |
Proceeds from draw down of the Revolving Credit Facility | 155 | 31 |
Repayment of the Revolving Credit Facility | -100 | -31 |
Proceeds from Acquisition Corp Term Loan Facility | ' | 594 |
Financing costs paid | ' | -127 |
Deferred financing costs paid | ' | -29 |
Net cash (used in) provided by financing activities | 45 | -87 |
Dividend by Acquisition Corp.to Holdings Corp. | ' | -2 |
Net (decrease) increase in cash and equivalents | ' | -44 |
Cash and equivalents at beginning of period | ' | 44 |
WMG Acquisition Corp. (issuer) | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 500 |
WMG Acquisition Corp. (issuer) | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 227 |
WMG Acquisition Corp. (issuer) | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | -1,250 |
Guarantor Subsidiaries | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | 24 | 18 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | ' |
Depreciation and amortization | 38 | 39 |
Non-cash share-based compensation expense | 3 | ' |
Equity (gains) losses, including distributions | 13 | 17 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 2 | -14 |
Inventories | 1 | 1 |
Royalty advances | 2 | -25 |
Accounts payable and accrued liabilities | -109 | 29 |
Royalty payables | -56 | -36 |
Deferred income | 60 | 40 |
Other balance sheet changes | 3 | -14 |
Net cash (used in) provided by operating activities | -19 | 55 |
Cash flows from investing activities | ' | ' |
Acquisition of music publishing rights | -6 | -6 |
Capital expenditures | -9 | -4 |
Investments and acquisitions of businesses, net of cash acquired | -1 | ' |
Net cash (used in) provided by investing activities | -16 | -10 |
Cash flows from financing activities | ' | ' |
Proceeds from Acquisition Corp Term Loan Facility | ' | ' |
Financing costs paid | ' | ' |
Deferred financing costs paid | ' | ' |
Change in due to (from) issuer | 29 | -106 |
Net cash (used in) provided by financing activities | 29 | -106 |
Net (decrease) increase in cash and equivalents | -6 | -61 |
Cash and equivalents at beginning of period | 16 | 105 |
Cash and equivalents at end of period | 10 | 44 |
Guarantor Subsidiaries | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Guarantor Subsidiaries | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Guarantor Subsidiaries | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | ' |
Non-Guarantor Subsidiaries | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | -55 | 8 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | ' |
Depreciation and amortization | 40 | 22 |
Deferred income taxes | -16 | -10 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -58 | -9 |
Inventories | -2 | ' |
Royalty advances | -37 | -10 |
Accounts payable and accrued liabilities | 51 | -80 |
Royalty payables | 112 | 68 |
Deferred income | ' | 15 |
Other balance sheet changes | -42 | 5 |
Net cash (used in) provided by operating activities | -7 | 9 |
Cash flows from investing activities | ' | ' |
Acquisition of music publishing rights | -4 | -2 |
Capital expenditures | -3 | -3 |
Investments and acquisitions of businesses, net of cash acquired | -3 | ' |
Net cash (used in) provided by investing activities | -10 | -5 |
Cash flows from financing activities | ' | ' |
Distributions to noncontrolling interest holder | -1 | ' |
Proceeds from Acquisition Corp Term Loan Facility | ' | ' |
Financing costs paid | ' | ' |
Deferred financing costs paid | ' | ' |
Net cash (used in) provided by financing activities | -1 | ' |
Effect of foreign currency exchange rate changes on cash | -2 | -2 |
Net (decrease) increase in cash and equivalents | -20 | 2 |
Cash and equivalents at beginning of period | 139 | 143 |
Cash and equivalents at end of period | 119 | 145 |
Non-Guarantor Subsidiaries | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Non-Guarantor Subsidiaries | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Non-Guarantor Subsidiaries | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | ' |
WMG Acquisition Corp. Consolidated | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | -31 | -73 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | 83 |
Depreciation and amortization | 78 | 61 |
Deferred income taxes | -16 | -10 |
Non-cash interest expense | 4 | 2 |
Non-cash share-based compensation expense | 3 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -56 | -23 |
Inventories | -1 | 1 |
Royalty advances | -35 | -35 |
Accounts payable and accrued liabilities | -79 | -53 |
Royalty payables | 56 | 32 |
Accrued interest | -12 | -44 |
Deferred income | 60 | 55 |
Other balance sheet changes | -13 | 5 |
Net cash (used in) provided by operating activities | -42 | 1 |
Cash flows from investing activities | ' | ' |
Acquisition of music publishing rights | -10 | -8 |
Capital expenditures | -12 | -7 |
Investments and acquisitions of businesses, net of cash acquired | -4 | ' |
Net cash (used in) provided by investing activities | -26 | -15 |
Cash flows from financing activities | ' | ' |
Dividend by Acquisition Corp.to Holdings Corp. | -10 | ' |
Distributions to noncontrolling interest holder | -1 | ' |
Proceeds from draw down of the Revolving Credit Facility | 155 | 31 |
Repayment of the Revolving Credit Facility | -100 | -31 |
Proceeds from Acquisition Corp Term Loan Facility | ' | 594 |
Financing costs paid | ' | -127 |
Deferred financing costs paid | ' | -29 |
Net cash (used in) provided by financing activities | 44 | -87 |
Dividend by Acquisition Corp.to Holdings Corp. | ' | -2 |
Effect of foreign currency exchange rate changes on cash | -2 | -2 |
Net (decrease) increase in cash and equivalents | -26 | -103 |
Cash and equivalents at beginning of period | 155 | 292 |
Cash and equivalents at end of period | 129 | 189 |
WMG Acquisition Corp. Consolidated | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 500 |
WMG Acquisition Corp. Consolidated | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | 227 |
WMG Acquisition Corp. Consolidated | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | -1,250 |
WMG Holdings Corp. (issuer) | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | -37 | -80 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | ' |
Equity (gains) losses, including distributions | 32 | 74 |
Changes in operating assets and liabilities: | ' | ' |
Accrued interest | -5 | -5 |
Net cash (used in) provided by operating activities | -10 | -11 |
Cash flows from financing activities | ' | ' |
Dividend by Acquisition Corp.to Holdings Corp. | 10 | ' |
Proceeds from Acquisition Corp Term Loan Facility | ' | ' |
Financing costs paid | ' | ' |
Deferred financing costs paid | ' | -1 |
Net cash (used in) provided by financing activities | 10 | 1 |
Dividend by Acquisition Corp.to Holdings Corp. | ' | 2 |
Net (decrease) increase in cash and equivalents | ' | -10 |
Cash and equivalents at beginning of period | ' | 10 |
WMG Holdings Corp. (issuer) | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
WMG Holdings Corp. (issuer) | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
WMG Holdings Corp. (issuer) | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | ' |
Warner Music Group Corp. | ' | ' |
Cash flows from operating activities | ' | ' |
Net (loss) income | -37 | -80 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' |
Loss on extinguishment of debt | ' | ' |
Equity (gains) losses, including distributions | 37 | 80 |
Cash flows from financing activities | ' | ' |
Proceeds from Acquisition Corp Term Loan Facility | ' | ' |
Financing costs paid | ' | ' |
Deferred financing costs paid | ' | ' |
Warner Music Group Corp. | 6.00% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Warner Music Group Corp. | 6.25% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of Acquisition Corp | ' | ' |
Warner Music Group Corp. | 9.5% Senior Secured Notes | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of Acquisition Corp. 9.5% Senior Secured Notes | ' | ' |
Guarantor_And_NonGuarantor_Sub7
Guarantor And Non-Guarantor Subsidiaries Financial Information - Consolidating Statement of Cash Flows (Parenthetical) (Detail) | Dec. 31, 2013 | Dec. 31, 2012 |
6.00% Senior Secured Notes | ' | ' |
Condensed Financial Statements Captions [Line Items] | ' | ' |
Interest rate | 6.00% | 6.00% |
6.25% Senior Secured Notes | ' | ' |
Condensed Financial Statements Captions [Line Items] | ' | ' |
Interest rate | 6.25% | 6.25% |
9.5% Senior Secured Notes | ' | ' |
Condensed Financial Statements Captions [Line Items] | ' | ' |
Interest rate | ' | 9.50% |