Guarantor and Non-Guarantor Subsidiaries Financial Information

12 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Guarantor and Non-Guarantor Subsidiaries Financial Information

The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp. As of September 30, 2019 Acquisition Corp. had issued and outstanding the 5.000% Senior Secured Notes due 2023, the 4.125% Senior Secured Notes due 2024, the 4.875% Senior Secured Notes due 2024, the 3.625% Senior Secured Notes due 2026 and the 5.500% Senior Notes due 2026 (together, the “Acquisition Corp. Notes”).

The Acquisition Corp. Notes are 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 is full, unconditional and 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. Senior Credit Facilities, including the Revolving Credit Facility and the Senior Term Loan Facility.

Consolidating Balance Sheet

September 30, 2019

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Assets
Current assets:
Cash and equivalents	$	—		$	386		$	233	$	—		$	619		$	—	$	—	$	—		$	619
Accounts receivable, net	—			334			441		—			775			—		—		—			775
Inventories	—			11			63		—			74			—		—		—			74
Royalty advances expected to be recouped within one year	—			112			58		—			170			—		—		—			170
Prepaid and other current assets	—			12			41		—			53			—		—		—			53
Total current assets	—			855			836		—			1,691			—		—		—			1,691
Due from (to) parent companies	458			(531		)	73		—			—			—		—		—			—
Investments in and advances to consolidated subsidiaries	2,272			2,567			—		(4,839		)	—			878		878		(1,756		)	—
Royalty advances expected to be recouped after one year	—			137			71		—			208			—		—		—			208
Property, plant and equipment, net	—			200			100		—			300			—		—		—			300
Goodwill	—			1,370			391		—			1,761			—		—		—			1,761
Intangible assets subject to amortization, net	—			884			839		—			1,723			—		—		—			1,723
Intangible assets not subject to amortization	—			71			80		—			151			—		—		—			151
Deferred tax assets, net	—			30			8		—			38			—		—		—			38
Other assets	7			115			23		—			145			—		—		—			145
Total assets	$	2,737		$	5,698		$	2,421	$	(4,839	)	$	6,017		$	878	$	878	$	(1,756	)	$	6,017
Liabilities and Equity
Current liabilities:
Accounts payable	$	—		$	160		$	100	$	—		$	260		$	—	$	—	$	—		$	260
Accrued royalties	4			813			750		—			1,567			—		—		—			1,567
Accrued liabilities	—			266			226		—			492			—		—		—			492
Accrued interest	34			—			—		—			34			—		—		—			34
Deferred revenue	—			42			138		—			180			—		—		—			180
Other current liabilities	—			221			65		—			286			—		—		—			286
Total current liabilities	38			1,502			1,279		—			2,819			—		—		—			2,819
Long-term debt	2,974			—			—		—			2,974			—		—		—			2,974
Deferred tax liabilities, net	—			—			172		—			172			—		—		—			172
Other noncurrent liabilities	14			200			107		—			321			—		—		—			321
Total liabilities	3,026			1,702			1,558		—			6,286			—		—		—			6,286
Total Warner Music Group Corp. (deficit) equity	(289		)	3,992			847		(4,839		)	(289		)	878		878		(1,756		)	(289		)
Noncontrolling interest	—			4			16		—			20			—		—		—			20
Total equity	(289		)	3,996			863		(4,839		)	(269		)	878		878		(1,756		)	(269		)
Total liabilities and equity	$	2,737		$	5,698		$	2,421	$	(4,839	)	$	6,017		$	878	$	878	$	(1,756	)	$	6,017

Consolidating Balance Sheet

September 30, 2018

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Assets
Current assets:
Cash and equivalents	$	—		$	169		$	345		$	—		$	514		$	—	$	—	$	—		$	514
Accounts receivable, net	—			262			185			—			447			—		—		—			447
Inventories	—			18			24			—			42			—		—		—			42
Royalty advances expected to be recouped within one year	—			79			44			—			123			—		—		—			123
Prepaid and other current assets	—			15			35			—			50			—		—		—			50
Total current assets	—			543			633			—			1,176			—		—		—			1,176
Due from (to) parent companies	488			(214		)	(274		)	—			—			—		—		—			—
Investments in and advances to consolidated subsidiaries	2,018			2,192			—			(4,210		)	—			675		675		(1,350		)	—
Royalty advances expected to be recouped after one year	—			93			60			—			153			—		—		—			153
Property, plant and equipment, net	—			155			74			—			229			—		—		—			229
Goodwill	—			1,370			322			—			1,692			—		—		—			1,692
Intangible assets subject to amortization, net	—			956			895			—			1,851			—		—		—			1,851
Intangible assets not subject to amortization	—			71			83			—			154			—		—		—			154
Deferred tax assets, net	—			—			11			—			11			—		—		—			11
Other assets	12			55			11			—			78			—		—		—			78
Total assets	$	2,518		$	5,221		$	1,815		$	(4,210	)	$	5,344		$	675	$	675	$	(1,350	)	$	5,344
Liabilities and Equity
Current liabilities:
Accounts payable	$	—		$	200		$	81		$	—		$	281		$	—	$	—	$	—		$	281
Accrued royalties	—			869			527			—			1,396			—		—		—			1,396
Accrued liabilities	—			195			228			—			423			—		—		—			423
Accrued interest	31			—			—			—			31			—		—		—			31
Deferred revenue	—			94			114			—			208			—		—		—			208
Other current liabilities	—			2			32			—			34			—		—		—			34
Total current liabilities	31			1,360			982			—			2,373			—		—		—			2,373
Long-term debt	2,819			—			—			—			2,819			—		—		—			2,819
Deferred tax liabilities, net	—			3			162			—			165			—		—		—			165
Other noncurrent liabilities	2			197			108			—			307			—		—		—			307
Total liabilities	2,852			1,560			1,252			—			5,664			—		—		—			5,664
Total Warner Music Group Corp. (deficit) equity	(334		)	3,656			554			(4,210		)	(334		)	675		675		(1,350		)	(334		)
Noncontrolling interest	—			5			9			—			14			—		—		—			14
Total equity	(334		)	3,661			563			(4,210		)	(320		)	675		675		(1,350		)	(320		)
Total liabilities and equity	$	2,518		$	5,221		$	1,815		$	(4,210	)	$	5,344		$	675	$	675	$	(1,350	)	$	5,344

Consolidating Statement of Operations

For The Fiscal Year Ended September 30, 2019

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Revenues	$	—		$	2,041		$	2,804		$	(370	)	$	4,475		$	—	$	—	$	—		$	4,475
Costs and expenses:
Cost of revenue	—			(1,109		)	(1,603		)	311			(2,401		)	—		—		—			(2,401		)
Selling, general and administrative expenses	—			(765		)	(804		)	59			(1,510		)	—		—		—			(1,510		)
Amortization of intangible assets	—			(97		)	(111		)	—			(208		)	—		—		—			(208		)
Total costs and expenses	—			(1,971		)	(2,518		)	370			(4,119		)	—		—		—			(4,119		)
Operating income	—			70			286			—			356			—		—		—			356
Loss on extinguishment of debt	(7		)	—			—			—			(7		)	—		—		—			(7		)
Interest expense, net	(71		)	(50		)	(21		)	—			(142		)	—		—		—			(142		)
Equity gains from consolidated subsidiaries	311			185			—			(496		)	—			256		256		(512		)	—
Other income (expense), net	32			56			(28		)	—			60			—		—		—			60
Income before income taxes	265			261			237			(496		)	267			256		256		(512		)	267
Income tax (expense) benefit	(9		)	12			(51		)	39			(9		)	—		—		—			(9		)
Net income	256			273			186			(457		)	258			256		256		(512		)	258
Less: Income attributable to noncontrolling interest	—			—			(2		)	—			(2		)	—		—		—			(2		)
Net income attributable to Warner Music Group Corp.	$	256		$	273		$	184		$	(457	)	$	256		$	256	$	256	$	(512	)	$	256

Consolidating Statement of Operations

For The Fiscal Year Ended September 30, 2018

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Revenues	$	—		$	2,284		$	2,245		$	(524	)	$	4,005		$	—	$	—	$	—		$	4,005
Costs and expenses:
Cost of revenue	—			(1,090		)	(1,442		)	361			(2,171		)	—		—		—			(2,171		)
Selling, general and administrative expenses	—			(1,040		)	(534		)	163			(1,411		)	—		—		—			(1,411		)
Amortization of intangible assets	—			(96		)	(110		)	—			(206		)	—		—		—			(206		)
Total costs and expenses	—			(2,226		)	(2,086		)	524			(3,788		)	—		—		—			(3,788		)
Operating income	—			58			159			—			217			—		—		—			217
Loss on extinguishment of debt	(31		)	—			—			—			(31		)	—		—		—			(31		)
Interest (expense) income, net	(116		)	4			(26		)	—			(138		)	—		—		—			(138		)
Equity gains from consolidated subsidiaries	207			122			—			(329		)	—			307		307		(614		)	—
Other income, net	377			7			10			—			394			—		—		—			394
Income before income taxes	437			191			143			(329		)	442			307		307		(614		)	442
Income tax expense	(130		)	(130		)	(39		)	169			(130		)	—		—		—			(130		)
Net income	307			61			104			(160		)	312			307		307		(614		)	312
Less: Income attributable to noncontrolling interest	—			(1		)	(4		)	—			(5		)	—		—		—			(5		)
Net income attributable to Warner Music Group Corp.	$	307		$	60		$	100		$	(160	)	$	307		$	307	$	307	$	(614	)	$	307

Consolidating Statement of Operations

For The Fiscal Year Ended September 30, 2017

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Revenues	$	—		$	1,978		$	2,008		$	(410	)	$	3,576		$	—	$	—	$	—		$	3,576
Costs and expenses:
Cost of revenue	—			(922		)	(1,275		)	266			(1,931		)	—		—		—			(1,931		)
Selling, general and administrative expenses	(1		)	(900		)	(464		)	143			(1,222		)	—		—		—			(1,222		)
Amortization of intangible assets	—			(100		)	(101		)	—			(201		)	—		—		—			(201		)
Total costs and expenses	(1		)	(1,922		)	(1,840		)	409			(3,354		)	—		—		—			(3,354		)
Operating income (loss)	(1		)	56			168			(1		)	222			—		—		—			222
Loss on extinguishment of debt	(35		)	—			—			—			(35		)	—		—		—			(35		)
Interest (expense) income, net	(95		)	2			(56		)	—			(149		)	—		—		—			(149		)
Equity gains from consolidated subsidiaries	124			87			—			(210		)	1			143		143		(286		)	1
Other expense, net	(1		)	(17		)	(23		)	—			(41		)	—		—		—			(41		)
(Loss) income before income taxes	(8		)	128			89			(211		)	(2		)	143		143		(286		)	(2		)
Income tax benefit (expense)	151			154			(30		)	(124		)	151			—		—		—			151
Net income	143			282			59			(335		)	149			143		143		(286		)	149
Less: Income attributable to noncontrolling interest	—			(1		)	(5		)	—			(6		)	—		—		—			(6		)
Net income attributable to Warner Music Group Corp.	$	143		$	281		$	54		$	(335	)	$	143		$	143	$	143	$	(286	)	$	143

Consolidating Statement of Comprehensive Income

For The Fiscal Year Ended September 30, 2019

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Net income	$	256		$	273	$	186		$	(457	)	$	258		$	256		$	256		$	(512	)	$	258
Other comprehensive (loss) income, net of tax:
Foreign currency adjustment	(34		)	—		34			(34		)	(34		)	(36		)	(36		)	72			(34		)
Deferred loss on derivative financial instruments	(11		)	—		(11		)	11			(11		)	(11		)	(11		)	22			(11		)
Minimum pension liability	(5		)	—		—			—			(5		)	(5		)	(5		)	10			(5		)
Other comprehensive (loss) income, net of tax	(50		)	—		23			(23		)	(50		)	(52		)	(52		)	104			(50		)
Total comprehensive income	206			273		209			(480		)	208			204			204			(408		)	208
Less: Income attributable to noncontrolling interest	—			—		(2		)	—			(2		)	—			—			—			(2		)
Comprehensive income attributable to Warner Music Group Corp.	$	206		$	273	$	207		$	(480	)	$	206		$	204		$	204		$	(408	)	$	206

Consolidating Statement of Comprehensive Income

For The Fiscal Year Ended September 30, 2018

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Net income	$	307		$	61		$	104		$	(160	)	$	312		$	307		$	307		$	(614	)	$	312
Other comprehensive (loss) income, net of tax:
Foreign currency adjustment	(13		)	—			13			(13		)	(13		)	(13		)	(13		)	26			(13		)
Deferred gain on derivative financial instruments	3			—			3			(3		)	3			3			3			(6		)	3
Minimum pension liability	1			—			1			(1		)	1			1			1			(2		)	1
Other comprehensive (loss) income, net of tax	(9		)	—			17			(17		)	(9		)	(9		)	(9		)	18			(9		)
Total comprehensive income	298			61			121			(177		)	303			298			298			(596		)	303
Less: Income attributable to noncontrolling interest	—			(1		)	(4		)	—			(5		)	—			—			—			(5		)
Comprehensive income attributable to Warner Music Group Corp.	$	298		$	60		$	117		$	(177	)	$	298		$	298		$	298		$	(596	)	$	298

Consolidating Statement of Comprehensive Income

For The Fiscal Year Ended September 30, 2017

	WMG Acquisition Corp. (issuer)		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Net income	$	143	$	282		$	59		$	(335	)	$	149		$	143	$	143	$	(286	)	$	149
Other comprehensive income (loss), net of tax:
Foreign currency adjustment	30		—			(30		)	30			30			32		32		(64		)	30
Deferred loss on derivative financial instruments	—		(1		)	—			1			—			—		—		—			—
Minimum pension liability	7		—			7			(7		)	7			7		7		(14		)	7
Other comprehensive income (loss), net of tax	37		(1		)	(23		)	24			37			39		39		(78		)	37
Total comprehensive income	180		281			36			(311		)	186			182		182		(364		)	186
Less: Income attributable to noncontrolling interest	—		(1		)	(5		)	—			(6		)	—		—		—			(6		)
Comprehensive income attributable to Warner Music Group Corp.	$	180	$	280		$	31		$	(311	)	$	180		$	182	$	182	$	(364	)	$	180

Consolidating Statement of Cash Flows

For The Fiscal Year Ended September 30, 2019

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Cash flows from operating activities
Net income	$	256		$	273		$	186		$	(457	)	$	258		$	256		$	256		$	(512	)	$	258
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	—			138			131			—			269			—			—			—			269
Unrealized (gains) losses and remeasurement of foreign-denominated loans	(43		)	—			15			—			(28		)	—			—			—			(28		)
Deferred income taxes	—			—			(68		)	—			(68		)	—			—			—			(68		)
Loss on extinguishment of debt	7			—			—			—			7			—			—			—			7
Net gain on divestitures and investments	—			(18		)	(2		)	—			(20		)	—			—			—			(20		)
Non-cash interest expense	6			—			—			—			6			—			—			—			6
Equity-based compensation expense	—			50			—			—			50			—			—			—			50
Equity gains, including distributions	(311		)	(185		)	—			496			—			(256		)	(256		)	512			—
Changes in operating assets and liabilities:
Accounts receivable, net	—			10			(100		)	—			(90		)	—			—			—			(90		)
Inventories	—			7			(4		)	—			3			—			—			—			3
Royalty advances	—			(77		)	(33		)	—			(110		)	—			—			—			(110		)
Accounts payable and accrued liabilities	—			315			(273		)	(39		)	3			—			—			—			3
Royalty payables	—			(68		)	198			—			130			—			—			—			130
Accrued interest	3			—			—			—			3			—			—			—			3
Deferred revenue	—			(53		)	49			—			(4		)	—			—			—			(4		)
Other balance sheet changes	8			(41		)	24			—			(9		)	—			—			—			(9		)
Net cash (used in) provided by operating activities	(74		)	351			123			—			400			—			—			—			400
Cash flows from investing activities
Acquisition of music publishing rights and music catalogs, net	—			(24		)	(17		)	—			(41		)	—			—			—			(41		)
Capital expenditures	—			(85		)	(19		)	—			(104		)	—			—			—			(104		)
Investments and acquisitions of businesses, net of cash received	—			(42		)	(189		)	—			(231		)	—			—			—			(231		)
Advance to Issuer	(111		)	—			—			111			—			—			—			—			—
Net cash used in investing activities	(111		)	(151		)	(225		)	111			(376		)	—			—			—			(376		)
Cash flows from financing activities
Dividend by Acquisition Corp. to Holdings Corp.	—			(94		)	—			—			(94		)	—			—			—			(94		)
Proceeds from issuance of Acquisition Corp. 3.625% Senior Notes due 2026	514			—			—			—			514			—			—			—			514
Repayment of Acquisition Corp. 4.125% Senior Secured Notes	(40		)	—			—			—			(40		)	—			—			—			(40		)
Repayment of Acquisition Corp. 4.875% Senior Secured Notes	(30		)	—			—			—			(30		)	—			—			—			(30		)
Repayment of Acquisition Corp. 5.625% Senior Secured Notes	(247		)	—			—			—			(247		)	—			—			—			(247		)
Call premiums paid on early redemption of debt	(5		)	—			—			—			(5		)	—			—			—			(5		)
Deferred financing costs paid	(7		)	—			—			—			(7		)	—			—			—			(7		)
Distribution to noncontrolling interest holder	—			—			(3		)	—			(3		)	—			—			—			(3		)
Change in due to (from) issuer	—			111			—			(111		)	—			—			—			—			—
Net cash provided by (used in) financing activities	185			17			(3		)	(111		)	88			—			—			—			88
Effect of exchange rate changes on cash and equivalents	—			—			(7		)	—			(7		)	—			—			—			(7		)
Net increase (decrease) in cash and equivalents	—			217			(112		)	—			105			—			—			—			105
Cash and equivalents at beginning of period	—			169			345			—			514			—			—			—			514
Cash and equivalents at end of period	$	—		$	386		$	233		$	—		$	619		$	—		$	—		$	—		$	619

Consolidating Statement of Cash Flows

For The Fiscal Year Ended September 30, 2018

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Cash flows from operating activities
Net income	$	307		$	61		$	104		$	(160	)	$	312		$	307		$	307		$	(614	)	$	312
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	—			136			125			—			261			—			—			—			261
Unrealized gains/losses and remeasurement of foreign-denominated loans	(3		)	—			—			—			(3		)	—			—			—			(3		)
Deferred income taxes	—			—			66			—			66			—			—			—			66
Loss on extinguishment of debt	31			—			—			—			31			—			—			—			31
Net loss (gain) on divestitures and investments	(504		)	78			37			—			(389		)	—			—			—			(389		)
Non-cash interest expense	6			—			—			—			6			—			—			—			6
Equity-based compensation expense	—			62			—			—			62			—			—			—			62
Equity losses (gains), including distributions	(207		)	(122		)	—			329			—			(307		)	(307		)	614			—
Changes in operating assets and liabilities:
Accounts receivable, net	—			(48		)	5			—			(43		)	—			—			—			(43		)
Inventories	—			(5		)	2			—			(3		)	—			—			—			(3		)
Royalty advances	—			24			7			—			31			—			—			—			31
Accounts payable and accrued liabilities	—			449			(198		)	(169		)	82			—			—			—			82
Royalty payables	—			48			(26		)	—			22			—			—			—			22
Accrued interest	(10		)	—			—			—			(10		)	—			—			—			(10		)
Deferred revenue	—			(48		)	44			—			(4		)	—			—			—			(4		)
Other balance sheet changes	—			89			(85		)	—			4			—			—			—			4
Net cash (used in) provided by operating activities	(380		)	724			81			—			425			—			—			—			425
Cash flows from investing activities
Acquisition of music publishing rights, net	—			(11		)	(3		)	—			(14		)	—			—			—			(14		)
Capital expenditures	—			(60		)	(14		)	—			(74		)	—			—			—			(74		)
Investments and acquisitions of businesses, net	—			(17		)	(6		)	—			(23		)	—			—			—			(23		)
Divestitures, net	504			12			—			—			516			—			—			—			516
Advance to Issuer	(99		)	—			—			99			—			—			—			—			—
Net cash provided by (used in) investing activities	405			(76		)	(23		)	99			405			—			—			—			405
Cash flows from financing activities
Dividend by Acquisition Corp. to Holdings Corp.	—			(925		)	—			—			(925		)	—			—			—			(925		)
Proceeds from issuance of Acquisition Corp. 5.500% Senior Notes	325			—			—			—			325			—			—			—			325
Proceeds from issuance of Acquisition Corp. Senior Term Loan Facility	320			—			—			—			320			—			—			—			320
Repayment of Acquisition Corp. 6.750% Senior Secured Notes	(635		)	—			—			—			(635		)	—			—			—			(635		)
Call premiums paid on early redemption of debt	(23		)	—			—			—			(23		)	—			—			—			(23		)
Deferred financing costs paid	(12		)	—			—			—			(12		)	—			—			—			(12		)
Distribution to noncontrolling interest holder	—			—			(5		)	—			(5		)	—			—			—			(5		)
Change in due (from) to issuer	—			99			—			(99		)	—			—			—			—			—
Net cash used in financing activities	(25		)	(826		)	(5		)	(99		)	(955		)	—			—			—			(955		)
Effect of exchange rate changes on cash and equivalents	—			—			(8		)	—			(8		)	—			—			—			(8		)
Net increase in cash and equivalents	—			(178		)	45			—			(133		)	—			—			—			(133		)
Cash and equivalents at beginning of period	—			347			300			—			647			—			—			—			647
Cash and equivalents at end of period	$	—		$	169		$	345		$	—		$	514		$	—		$	—		$	—		$	514

Consolidating Statement of Cash Flows

For The Fiscal Year Ended September 30, 2017

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp.			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Cash flows from operating activities
Net income	$	143		$	282		$	59		$	(335	)	$	149		$	143		$	143		$	(286	)	$	149
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	—			137			114			—			251			—			—			—			251
Unrealized gains/losses and remeasurement of foreign-denominated loans	27			—			(3		)	—			24			—			—			—			24
Deferred income taxes	2			—			(194		)	—			(192		)	—			—			—			(192		)
Loss on extinguishment of debt	35			—			—			—			35			—			—			—			35
Net loss (gain) on divestitures and investments	—			33			(16		)	—			17			—			—			—			17
Non-cash interest expense	8			—			—			—			8			—			—			—			8
Equity-based compensation expense	—			70			—			—			70			—			—			—			70
Equity losses (gains), including distributions	(124		)	(86		)	—			210			—			(143		)	(143		)	286			—
Changes in operating assets and liabilities:
Accounts receivable, net	—			(37		)	(23		)	—			(60		)	—			—			—			(60		)
Inventories	—			2			(1		)	—			1			—			—			—			1
Royalty advances	—			2			15			—			17			—			—			—			17
Accounts payable and accrued liabilities	(120		)	(4		)	47			125			48			—			—			—			48
Royalty payables	—			126			10			—			136			—			—			—			136
Accrued interest	3			—			—			—			3			—			—			—			3
Deferred revenue	—			(6		)	28			—			22			—			—			—			22
Other balance sheet changes	5			(204		)	205			—			6			—			—			—			6
Net cash (used in) provided by operating activities	(21		)	315			241			—			535			—			—			—			535
Cash flows from investing activities
Acquisition of music publishing rights, net	—			(9		)	(7		)	—			(16		)	—			—			—			(16		)
Capital expenditures	—			(31		)	(13		)	—			(44		)	—			—			—			(44		)
Investments and acquisitions of businesses, net	—			(6		)	(133		)	—			(139		)	—			—			—			(139		)
Divestitures, net	—			42			31			—			73			—			—			—			73
Advance to Issuer	60			—			—			(60		)	—			—			—			—			—
Net cash provided by (used in) investing activities	60			(4		)	(122		)	(60		)	(126		)	—			—			—			(126		)
Cash flows from financing activities
Dividend by Acquisition Corp. to Holdings Corp.	—			(84		)	—			—			(84		)	84			—			—			—
Proceeds from issuance of Acquisition Corp. 4.125% Senior Secured Notes	380			—			—			—			380			—			—			—			380
Proceeds from issuance of Acquisition Corp. 4.875% Senior Secured Notes	250			—			—			—			250			—			—			—			250
Proceeds from issuance of Acquisition Corp. Senior Term Loan Facility	22			—			—			—			22			—			—			—			22
Repayment of Acquisition Corp. 6.000% Senior Secured Notes	(450		)	—			—			—			(450		)	—			—			—			(450		)
Repayment of Acquisition Corp. 6.250% Senior Secured Notes	(173		)	—			—			—			(173		)	—			—			—			(173		)
Repayment of Acquisition Corp. 5.625% Senior Secured Notes	(28		)	—			—			—			(28		)	—			—			—			(28		)
Call premiums paid on early redemption of debt	(27		)	—			—			—			(27		)	—			—			—			(27		)
Deferred financing costs paid	(13		)	—			—			—			(13		)	—			—			—			(13		)
Distribution to noncontrolling interest holder	—			—			(5		)	—			(5		)	—			—			—			(5		)
Dividends paid	—			—			—			—			—			(84		)	—			—			(84		)
Change in due (from) to issuer	—			(60		)	—			60			—			—			—			—			—
Net cash (used in) provided by financing activities	(39		)	(144		)	(5		)	60			(128		)	—			—			—			(128		)
Effect of exchange rate changes on cash and equivalents	—			—			7			—			7			—			—			—			7
Net increase in cash and equivalents	—			167			121			—			288			—			—			—			288
Cash and equivalents at beginning of period	—			180			179			—			359			—			—			—			359
Cash and equivalents at end of period	$	—		$	347		$	300		$	—		$	647		$	—		$	—		$	—		$	647