Guarantor and Non-Guarantor Subsidiaries Financial Information (Tables)

3 Months Ended

Dec. 31, 2015

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Schedule of Consolidating Balance Sheet (Unaudited)

Consolidating Balance Sheet (Unaudited)

December31, 2015

	WMG											WMG		WMG		Warner					Warner
	Acquisition					Non-						Acquisition		Holdings		Music					Music
	Corp.		Guarantor			Guarantor						Corp.		Corp.		Group					Group Corp.
	(issuer)		Subsidiaries			Subsidiaries			Eliminations			Consolidated		(issuer)		Corp.		Eliminations			Consolidated
	(in millions)
Assets:
Current assets:
Cash and equivalents	$	—	$	77		$	201		$	—		$	278	$	—	$	—	$	—		$	278
Accounts receivable, net		—		175			233			—			408		—		—		—			408
Inventories		—		13			28			—			41		—		—		—			41
Royalty advances expected to be recouped within one year		—		81			54			—			135		—		—		—			135
Deferred tax assets		—		—			—			—			—		—		—		—			—
Prepaid and other current assets		5		12			43			—			60		—		—		—			60
Total current assets		5		358			559			—			922		—		—		—			922
Due (to) from parent companies		841		(275	)		(566	)		—			—		—		—		—			—
Investments in and advances to (from) consolidated subsidiaries		2,372		1,225			—			(3,597	)		—		373		223		(596	)		—
Royalty advances expected to be recouped after one year		—		122			80			—			202		—		—		—			202
Property, plant and equipment, net		—		143			74			—			217		—		—		—			217
Goodwill		—		1,379			246			—			1,625		—		—		—			1,625
Intangible assets subject to amortization, net		—		1,242			1,181			—			2,423		—		—		—			2,423
Intangible assets not subject to amortization		—		71			48			—			119		—		—		—			119
Other assets		37		46			17			—			100		5		—		—			105
Total assets	$	3,255	$	4,311		$	1,639		$	(3,597	)	$	5,608	$	378	$	223	$	(596	)	$	5,613
Liabilities and Deficit:
Current liabilities:
Accounts payable	$	—	$	81		$	80		$	—		$	161	$	—	$	—	$	—		$	161
Accrued royalties		—		519			612			—			1,131		—		—		—			1,131
Accrued liabilities		1		115			183			(2	)		297		—		—		—			297
Accrued interest		42		—			—			—			42		5		—		—			47
Deferred revenue		—		136			66			—			202		—		—		—			202
Current portion of long-term debt		13		—			—			—			13		—		—		—			13
Other current liabilities		—		2			34			—			36		—		—		—			36
Total current liabilities		56		853			975			(2	)		1,882		5		—		—			1,887
Long-term debt		2,823		—			—			—			2,823		150		—		—			2,973
Deferred tax liabilities, net		—		112			174			—			286		—		—		—			286
Other noncurrent liabilities		3		124			101			—			228		—		—		—			228
Total liabilities		2,882		1,089			1,250			(2	)		5,219		155		—		—			5,374
Total Warner Music Group Corp. equity (deficit)		373		3,221			374			(3,595	)		373		223		223		(596	)		223
Noncontrolling interest		—		1			15			—			16		—		—		—			16
Total equity (deficit)		373		3,222			389			(3,595	)		389		223		223		(596	)		239
Total liabilities and equity (deficit)	$	3,255	$	4,311		$	1,639		$	(3,597	)	$	5,608	$	378	$	223	$	(596	)	$	5,613

Consolidating Balance Sheet

September30, 2015

	WMG											WMG		WMG		Warner					Warner
	Acquisition					Non-						Acquisition		Holdings		Music					Music
	Corp.		Guarantor			Guarantor						Corp.		Corp.		Group					Group Corp.
	(issuer)		Subsidiaries			Subsidiaries			Eliminations			Consolidated		(issuer)		Corp.		Eliminations			Consolidated
	(in millions)
Assets:
Current assets:
Cash and equivalents	$	—	$	73		$	173		$	—		$	246	$	—	$	—	$	—		$	246
Accounts receivable, net		—		170			179			—			349		—		—		—			349
Inventories		—		15			27			—			42		—		—		—			42
Royalty advances expected to be recouped within one year		—		80			50			—			130		—		—		—			130
Deferred tax assets		—		—			—			—			—		—		—		—			—
Prepaid and other current assets		5		9			46			—			60		—		—		—			60
Total current assets		5		347			475			—			827		—		—		—			827
Due (to) from parent companies		863		(174	)		(689	)		—			—		—		—		—			—
Investments in and advances to (from) consolidated subsidiaries		2,365		1,187			—			(3,552	)		—		376		221		(597	)		—
Royalty advances expected to be recouped after one year		—		120			75			—			195		—		—		—			195
Property, plant and equipment, net		—		145			75			—			220		—		—		—			220
Goodwill		—		1,379			253			—			1,632		—		—		—			1,632
Intangible assets subject to amortization, net		—		1,271			1,243			—			2,514		—		—		—			2,514
Intangible assets not subject to amortization		—		71			48			—			119		—		—		—			119
Other assets		39		53			17			—			109		5		—		—			114
Total assets	$	3,272	$	4,399		$	1,497		$	(3,552	)	$	5,616	$	381	$	221	$	(597	)	$	5,621
Liabilities and Deficit:
Current liabilities:
Accounts payable	$	—	$	79		$	94		$	—		$	173	$	—	$	—	$	—		$	173
Accrued royalties		—		513			574			—			1,087		—		—		—			1,087
Accrued liabilities		1		269			26			—			296		—		—		—			296
Accrued interest		48		—			—			—			48		10		—		—			58
Deferred revenue		—		140			66			—			206		—		—		—			206
Current portion of long-term debt		13		—			—			—			13		—		—		—			13
Other current liabilities		—		7			18			(1	)		24		—		—		—			24
Total current liabilities		62		1,008			778			(1	)		1,847		10		—		—			1,857
Long-term debt		2,831		—			—			—			2,831		150		—		—			2,981
Deferred tax liabilities, net		—		110			192			—			302		—		—		—			302
Other noncurrent liabilities		3		131			105			3			242		—		—		—			242
Total liabilities		2,896		1,249			1,075			2			5,222		160		—		—			5,382
Total Warner Music Group Corp. equity (deficit)		376		3,149			405			(3,554	)		376		221		221		(597	)		221
Noncontrolling interest		—		1			17			—			18		—		—		—			18
Total equity (deficit)		376		3,150			422			(3,554	)		394		221		221		(597	)		239
Total liabilities and equity (deficit)	$	3,272	$	4,399		$	1,497		$	(3,552	)	$	5,616	$	381	$	221	$	(597	)	$	5,621

Schedule of Consolidating Statement of Operations (Unaudited)

Consolidating Statement of Operations (Unaudited)

For The Three Months Ended December31, 2015

	WMG												WMG			WMG			Warner					Warner
	Acquisition						Non-						Acquisition			Holdings			Music					Music
	Corp.			Guarantor			Guarantor						Corp.			Corp.			Group					Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			(issuer)			Corp.		Eliminations			Consolidated
	(in millions)
Revenues	$	—		$	448		$	439		$	(38	)	$	849		$	—		$	—	$	—		$	849
Costs and expenses:
Cost of revenue		—			(221	)		(260	)		32			(449	)		—			—		—			(449	)
Selling, general and administrative expenses		—			(137	)		(144	)		5			(276	)		—			—		—			(276	)
Amortization of intangible assets		—			(31	)		(31	)		—			(62	)		—			—		—			(62	)
Total costs and expenses		—			(389	)		(435	)		37			(787	)		—			—		—			(787	)
Operating income (loss)		—			59			4			(1	)		62			—			—		—			62
Interest income (expense), net		(20	)		1			(21	)		—			(40	)		(5	)		—		—			(45	)
Equity gains (losses) from equity method investments		47			19			—			(66	)		—			32			27		(59	)		—
Other income (expense), net		2			(1	)		7			—			8			—			—		—			8
Income (loss) before income taxes		29			78			(10	)		(67	)		30			27			27		(59	)		25
Income tax benefit (expense)		3			(5	)		4			1			3			—			—		—			3
Net income (loss)		32			73			(6	)		(66	)		33			27			27		(59	)		28
Less: income attributable to noncontrolling interest		—			—			(1	)		—			(1	)		—			—		—			(1	)
Net income (loss) attributable to Warner Music Group Corp.	$	32		$	73		$	(7	)	$	(66	)	$	32		$	27		$	27	$	(59	)	$	27

Consolidating Statement of Operations (Unaudited)

For The Three Months Ended December31, 2014

	WMG												WMG			WMG			Warner					Warner
	Acquisition						Non-						Acquisition			Holdings			Music					Music
	Corp.			Guarantor			Guarantor						Corp.			Corp.			Group					Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			(issuer)			Corp.			Eliminations		Consolidated
	(in millions)
Revenues	$	—		$	361		$	513		$	(45	)	$	829		$	—		$	—		$	—	$	829
Costs and expenses:
Cost of revenue		—			(167	)		(318	)		40			(445	)		—			—			—		(445	)
Selling, general and administrative expenses		1			(133	)		(169	)		5			(296	)		—			—			—		(296	)
Amortization of intangible assets		—			(30	)		(35	)		—			(65	)		—			—			—		(65	)
Total costs and expenses		1			(330	)		(522	)		45			(806	)		—			—			—		(806	)
Operating income (loss)		1			31			(9	)		—			23			—			—			—		23
Interest income (expense), net		(21	)		2			(22	)		—			(41	)		(5	)		—			—		(46	)
Equity gains (losses) from equity method investments		(6	)		(2	)		—			8			—			(37	)		(42	)		79		—
Other income (expense), net		(2	)		—			(7	)		—			(9	)		—			—			—		(9	)
Income (loss) before income taxes		(28	)		31			(38	)		8			(27	)		(42	)		(42	)		79		(32	)
Income tax benefit (expense)		(9	)		(8	)		(1	)		9			(9	)		—			—			—		(9	)
Net income (loss)		(37	)		23			(39	)		17			(36	)		(42	)		(42	)		79		(41	)
Less: income attributable to noncontrolling interest		—			—			(1	)		—			(1	)		—			—			—		(1	)
Net income (loss) attributable to Warner Music Group Corp.	$	(37	)	$	23		$	(40	)	$	17		$	(37	)	$	(42	)	$	(42	)	$	79	$	(42	)

Schedule of Consolidating Statement of Comprehensive Income (Unaudited)

Consolidating Statement of Comprehensive Income (Unaudited)

For The Three Months Ended December31, 2015

	WMG												WMG			WMG			Warner						Warner
	Acquisition						Non-						Acquisition			Holdings			Music						Music
	Corp.			Guarantor			Guarantor						Corp.			Corp.			Group						Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			(issuer)			Corp.			Eliminations			Consolidated
	(in millions)
Net (loss) income	$	32		$	73		$	(6	)	$	(66	)	$	33		$	27		$	27		$	(59	)	$	28
Other comprehensive income (loss), net of tax:
Foreign currency adjustment		(24	)		—			(24	)		24			(24	)		(24	)		(24	)		48			(24	)
Deferred losses on derivative financial    instruments		(1	)		(1	)		—			1			(1	)		(1	)		(1	)		2			(1	)
Other comprehensive income (loss), net of tax:		(25	)		(1	)		(24	)		25			(25	)		(25	)		(25	)		50			(25	)
Total comprehensive (loss) income		7			72			(30	)		(41	)		8			2			2			(9	)		3
Less: income attributable to noncontrolling interest		—			—			(1	)		—			(1	)		—			—			—			(1	)
Comprehensive (loss) income attributable to    Warner Music Group Corp.	$	7		$	72		$	(31	)	$	(41	)	$	7		$	2		$	2		$	(9	)	$	2

Consolidating Statement of Comprehensive Income (Unaudited)

For The Three Months Ended December31, 2014

	WMG										WMG			WMG			Warner					Warner
	Acquisition					Non-					Acquisition			Holdings			Music					Music
	Corp.			Guarantor		Guarantor					Corp.			Corp.			Group					Group Corp.
	(issuer)			Subsidiaries		Subsidiaries			Eliminations		Consolidated			(issuer)			Corp.			Eliminations		Consolidated
	(in millions)
Net (loss) income	$	(37	)	$	23	$	(39	)	$	17	$	(36	)	$	(42	)	$	(42	)	$	79	$	(41	)
Other comprehensive income (loss), net of tax:
Foreign currency adjustment		(34	)		—		(34	)		34		(34	)		(34	)		(34	)		68		(34	)
Other comprehensive income (loss), net of tax:		(34	)		—		(34	)		34		(34	)		(34	)		(34	)		68		(34	)
Total comprehensive (loss) income		(71	)		23		(73	)		51		(70	)		(76	)		(76	)		147		(75	)
Less: income attributable to noncontrolling interest		—			—		(1	)		—		(1	)		—			—			—		(1	)
Comprehensive (loss) income attributable to    Warner Music Group Corp.	$	(71	)	$	23	$	(74	)	$	51	$	(71	)	$	(76	)	$	(76	)	$	147	$	(76	)

Schedule of Consolidating Statement of Cash Flows (Unaudited)

Consolidating Statement of Cash Flows (Unaudited)

For The Three Months Ended December31, 2015

	WMG												WMG			WMG			Warner						Warner
	Acquisition						Non-						Acquisition			Holdings			Music						Music
	Corp.			Guarantor			Guarantor						Corp.			Corp.			Group						Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			(issuer)			Corp.			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities
Net (loss) income	$	32		$	73		$	(6	)	$	(66	)	$	33		$	27		$	27		$	(59	)	$	28
Adjustments to reconcile net (loss) income to    net cash provided by operating activities:
Depreciation and amortization		—			41			34			—			75			—			—			—			75
Unrealized gains/losses and    remeasurement of foreign    denominated loans		120			19			(147	)		—			(8	)		—			—			—			(8	)
Deferred income taxes		—			—			(9	)		—			(9	)		—			—			—			(9	)
Non-cash interest expense		2			—			—			—			2			—			—			—			2
Non-cash share-based compensation    expense		—			1			—			—			1			—			—			—			1
Equity losses (gains), including    distributions		(47	)		(19	)		—			66			—			(32	)		(27	)		59			—
Changes in operating assets and liabilities:
Accounts receivable		—			(5	)		(58	)		—			(63	)		—			—			—			(63	)
Inventories		—			2			(3	)		—			(1	)		—			—			—			(1	)
Royalty advances		—			(3	)		(13	)		—			(16	)		—			—			—			(16	)
Accounts payable and accrued liabilities		—			(184	)		173			—			(11	)		—			—			—			(11	)
Royalty payables		—			7			51			—			58			—			—			—			58
Accrued interest		(6	)		—			—			—			(6	)		(5	)		—			—			(11	)
Deferred revenue		—			(2	)		3			—			1			—			—			—			1
Other balance sheet changes		—			—			15			—			15			—			—			—			15
Net cash provided by (used in) operating    activities		101			(70	)		40			—			71			(10	)		—			—			61
Cash flows from investing activities
Acquisition of music publishing rights, net		—			(6	)		(1	)		—			(7	)		—			—			—			(7	)
Capital expenditures		—			(7	)		(3	)		—			(10	)		—			—			—			(10	)
Investments and acquisitions of businesses,    net		—			(1	)		—			—			(1	)		—			—			—			(1	)
Advances to issuer		(88	)		—			—			88			—			—			—			—			—
Net cash provided by (used in) investing    activities		(88	)		(14	)		(4	)		88			(18	)		—			—			—			(18	)
Cash flows from financing activities
Dividend by Acquisition Corp. to Holdings    Corp.		(10	)		—			—			—			(10	)		10			—			—			—
Repayment of Acquisition Corp. Senior Term    Loan Facility		(3	)		—			—			—			(3	)		—			—			—			(3	)
Distribution to noncontrolling interest holder		—			—			(3	)		—			(3	)		—			—			—			(3	)
Change in due to (from) issuer		—			88			—			(88	)		—			—			—			—			—
Net cash provided by (used in) financing    activities		(13	)		88			(3	)		(88	)		(16	)		10			—			—			(6	)
Effect of exchange rate changes on cash and    equivalents		—			—			(5	)		—			(5	)		—			—			—			(5	)
Net increase (decrease) in cash and    equivalents		—			4			28			—			32			—			—			—			32
Cash and equivalents at beginning of period		—			73			173			—			246			—			—			—			246
Cash and equivalents at end of period	$	—		$	77		$	201		$	—		$	278		$	—		$	—		$	—		$	278

Consolidating Statement of Cash Flows (Unaudited)

For The Three Months Ended December31, 2014

	WMG												WMG			WMG			Warner						Warner
	Acquisition						Non-						Acquisition			Holdings			Music						Music
	Corp.			Guarantor			Guarantor						Corp.			Corp.			Group						Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			(issuer)			Corp.			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities
Net (loss) income	$	(37	)	$	23		$	(39	)	$	17		$	(36	)	$	(42	)	$	(42	)	$	79		$	(41	)
Adjustments to reconcile net (loss) income to net cash    provided by operating activities:
Depreciation and amortization		—			41			38			—			79			—			—			—			79
Unrealized gains/losses and remeasurement of    foreign denominated loans		(9	)		—			23			—			14			—			—			—			14
Deferred income taxes		—			—			—			—			—			—			—			—			—
Non-cash interest expense		2			—			—			—			2			—			—			—			2
Non-cash share-based compensation expense		—			—			—			—			—			—			—			—			—
Equity losses (gains), including distributions		6			2			—			(8	)		—			37			42			(79	)		—
Changes in operating assets and liabilities:																										—
Accounts receivable		—			38			(105	)		—			(67	)		—			—			—			(67	)
Inventories		—			1			(2	)		—			(1	)		—			—			—			(1	)
Royalty advances		—			2			(9	)		—			(7	)		—			—			—			(7	)
Accounts payable and accrued liabilities		—			(10	)		(37	)		—			(47	)		—			—			—			(47	)
Royalty payables		—			(37	)		83			—			46			—			—			—			46
Accrued interest		(7	)		—			—			—			(7	)		(5	)		—			—			(12	)
Deferred revenue		—			19			20			—			39			—			—			—			39
Other balance sheet changes		(1	)		4			36			(9	)		30			—			—			—			30
Net cash provided by (used in) operating activities		(46	)		83			8			—			45			(10	)		—			—			35
Cash flows from investing activities
Acquisition of music publishing rights, net		—			(4	)		(1	)		—			(5	)		—			—			—			(5	)
Capital expenditures		—			(18	)		(6	)		—			(24	)		—			—			—			(24	)
Investments and acquisitions of businesses, net		—			(6	)		(2	)		—			(8	)		—			—			—			(8	)
Advances to issuer		59			—			—			(59	)		—			—			—			—			—
Net cash provided by (used in) investing activities		59			(28	)		(9	)		(59	)		(37	)		—			—			—			(37	)
Cash flows from financing activities
Dividend by Acquisition Corp. to Holdings Corp.		(10	)		—			—			—			(10	)		10			—			—			—
Proceeds from the Revolving Credit Facility		100			—			—			—			100			—			—			—			100
Repayment of the Revolving Credit Facility		(100	)		—			—			—			(100	)		—			—			—			(100	)
Repayment of Acquisition Corp. Senior Term Loan    Facility		(3	)		—			—			—			(3	)		—			—			—			(3	)
Distribution to noncontrolling interest holder		—			—			—			—			—			—			—			—			—
Change in due to (from) issuer		—			(59	)		—			59			—			—			—			—			—
Net cash provided by (used in) financing activities		(13	)		(59	)		-			59			(13	)		10			—			—			(3	)
Effect of exchange rate changes on cash and equivalents		—			—			(7	)		—			(7	)		—			—			—			(7	)
Net increase (decrease) in cash and equivalents		—			(4	)		(8	)		—			(12	)		—			—			—			(12	)
Cash and equivalents at beginning of period		—			26			131			—			157			—			—			—			157
Cash and equivalents at end of period	$	—		$	22		$	123		$	—		$	145		$	—		$	—		$	—		$	145