$WMG
Warner Music Group Corp

2012 Q3 Form 10-Q Financial Statement

#000119312512345554 Filed on August 09, 2012

View on sec.gov

Income Statement

Concept 2012 Q3 2012 Q2 2011 Q3
Revenue $731.0M $651.0M $556.0M
YoY Change 31.47% -5.38% -26.06%
Cost Of Revenue $368.0M $353.0M $288.0M
YoY Change 27.78% -7.11% -25.39%
Gross Profit $363.0M $298.0M $268.0M
YoY Change 35.45% -3.25% -26.78%
Gross Profit Margin 49.66% 45.78% 48.2%
Selling, General & Admin $260.0M $244.0M $186.0M
YoY Change 39.78% 2.95% -33.81%
% of Gross Profit 71.63% 81.88% 69.4%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $62.00M $59.00M $47.00M
YoY Change 31.91% -11.94% -27.69%
% of Gross Profit 17.08% 19.8% 17.54%
Operating Expenses $322.0M $244.0M $186.0M
YoY Change 73.12% 2.95% -46.24%
Operating Profit $41.00M $7.000M $34.00M
YoY Change 20.59% -30.0% 70.0%
Interest Expense -$56.00M $56.00M $62.00M
YoY Change -190.32% 19.15% -231.91%
% of Operating Profit -136.59% 800.0% 182.35%
Other Income/Expense, Net $2.000M $6.000M $0.00
YoY Change 0.0% -100.0%
Pretax Income -$13.00M -$43.00M -$28.00M
YoY Change -53.57% 38.71% -3.45%
Income Tax $4.000M -$11.00M $3.000M
% Of Pretax Income
Net Earnings -$18.00M -$32.00M -$31.00M
YoY Change -41.94% -30.43% -32.61%
Net Earnings / Revenue -2.46% -4.92% -5.58%
Basic Earnings Per Share
Diluted Earnings Per Share
COMMON SHARES
Basic Shares Outstanding 1.000K shares
Diluted Shares Outstanding

Balance Sheet

Concept 2012 Q3 2012 Q2 2011 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $302.0M $219.0M $154.0M
YoY Change 96.1% -24.48% -64.92%
Cash & Equivalents $302.0M $219.0M $154.0M
Short-Term Investments
Other Short-Term Assets $44.00M $50.00M $45.00M
YoY Change -2.22% -82.08% -82.07%
Inventory $28.00M $27.00M $29.00M
Prepaid Expenses
Receivables $398.0M $327.0M $385.0M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $939.0M $798.0M $802.0M
YoY Change 17.08% -16.35% -30.92%
LONG-TERM ASSETS
Property, Plant & Equipment $152.0M $156.0M $182.0M
YoY Change -16.48% 25.81% 50.41%
Goodwill $1.380B $1.379B $1.372B
YoY Change 0.58%
Intangibles $2.601B
YoY Change
Long-Term Investments
YoY Change
Other Assets $64.00M $68.00M $71.00M
YoY Change -9.86% -73.44% -71.94%
Total Long-Term Assets $4.339B $4.365B $4.578B
YoY Change -5.22% 66.03% 72.75%
TOTAL ASSETS
Total Short-Term Assets $939.0M $798.0M $802.0M
Total Long-Term Assets $4.339B $4.365B $4.578B
Total Assets $5.278B $5.163B $5.380B
YoY Change -1.9% 44.1% 41.17%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $156.0M $117.0M $165.0M
YoY Change -5.45% -17.02% -19.9%
Accrued Expenses $253.0M $214.0M $217.0M
YoY Change 16.59% -83.27% -84.58%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $1.606B $1.475B $1.522B
YoY Change 5.52% -6.88% -13.18%
LONG-TERM LIABILITIES
Long-Term Debt $2.206B $2.209B $2.217B
YoY Change -0.5% 13.17% 13.98%
Other Long-Term Liabilities $147.0M $144.0M $148.0M
YoY Change -0.68% -16.28% -4.52%
Total Long-Term Liabilities $2.353B $2.353B $2.365B
YoY Change -0.51% 10.78% 12.62%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.606B $1.475B $1.522B
Total Long-Term Liabilities $2.353B $2.353B $2.365B
Total Liabilities $4.334B $4.202B $4.298B
YoY Change 0.84% 7.17% 5.45%
SHAREHOLDERS EQUITY
Retained Earnings -$143.0M -$125.0M -$31.00M
YoY Change 361.29%
Common Stock $0.00 $1.129B $1.129B
YoY Change -100.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $927.0M $944.0M $1.065B
YoY Change
Total Liabilities & Shareholders Equity $5.278B $5.163B $5.380B
YoY Change -1.9% 44.1% 41.17%

Cashflow Statement

Concept 2012 Q3 2012 Q2 2011 Q3
OPERATING ACTIVITIES
Net Income -$18.00M -$32.00M -$31.00M
YoY Change -41.94% -30.43% -32.61%
Depreciation, Depletion And Amortization $62.00M $59.00M $47.00M
YoY Change 31.91% -11.94% -27.69%
Cash From Operating Activities $102.0M -$39.00M -$64.00M
YoY Change -259.38% 254.55% -228.0%
INVESTING ACTIVITIES
Capital Expenditures -$19.00M -$19.00M -$18.00M
YoY Change 5.56% -17.39% 0.0%
Acquisitions
YoY Change
Other Investing Activities -$3.000M $12.00M -$1.278B
YoY Change -99.77% -700.0% 21200.0%
Cash From Investing Activities -$22.00M -$7.000M -$1.292B
YoY Change -98.3% -72.0% 5283.33%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -1.000M 0.000 1.199B
YoY Change -100.08% -100.0% -120000.0%
NET CHANGE
Cash From Operating Activities 102.0M -39.00M -64.00M
Cash From Investing Activities -22.00M -7.000M -1.292B
Cash From Financing Activities -1.000M 0.000 1.199B
Net Change In Cash 79.00M -46.00M -157.0M
YoY Change -150.32% 53.33% -728.0%
FREE CASH FLOW
Cash From Operating Activities $102.0M -$39.00M -$64.00M
Capital Expenditures -$19.00M -$19.00M -$18.00M
Free Cash Flow $121.0M -$20.00M -$46.00M
YoY Change -363.04% -266.67% -167.65%

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<div> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>2. Basis of Presentation</b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Interim Financial Statements</b></font></p> <p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (&#x201C;U.S. GAAP&#x201D;) 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 footnotes 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 and nine month periods ended June&#xA0;30, 2012 are not necessarily indicative of the results that may be expected for the twelve months ended September&#xA0;30, 2012.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">The consolidated balance sheet at September&#xA0;30, 2011 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the twelve months ended September&#xA0;30, 2011(File No.&#xA0;001-32502).</font></p> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Basis of Consolidation</b></font></p> <p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">The accompanying financial statements present the consolidated accounts of all entities in which the Company has a controlling voting interest and/or variable interest entities required to be consolidated in accordance with U.S. GAAP. Significant inter-company balances and transactions have been eliminated. Certain reclassifications have been made to the prior fiscal years&#x2019; consolidated financial statements to conform with the current fiscal-year presentation.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">Financial Accounting Standards Board (&#x201C;FASB&#x201D;) Accounting Standards Codification (&#x201C;ASC&#x201D;) Topic 810, Consolidation (&#x201C;ASC 810&#x201D;) requires the Company first evaluate its investments to determine if any investments qualify as a variable interest entity (&#x201C;VIE&#x201D;). 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)&#xA0;the power to control the most significant activities of the VIE and (ii)&#xA0;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.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">The Company maintains a 52-53 week fiscal year ending on the Friday nearest to each reporting date. As such, all references to June&#xA0;30, 2012 and June&#xA0;30, 2011 relate to the three and nine-month periods ended June&#xA0;29, 2012 and June&#xA0;24, 2011, respectively. For convenience purposes, the Company continues to date its financial statements as of June&#xA0;30.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">The Company has performed a review of all subsequent events through the date the financial statements were issued, and has determined no additional disclosures are necessary.</font></p> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; FONT-SIZE: 1px"> &#xA0;</p> <p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>New Accounting Pronouncements</b></font></p> <p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">During the second quarter of fiscal 2012, the Company adopted ASU 2011-04, <i>Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.</i> ASU 2011-04 provides a consistent definition of fair value and ensures that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. The adoption of this standard update did not have a significant impact on the Company&#x2019;s consolidated financial statements.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">In June 2011, the FASB issued ASU 2011-05, <i>Presentation of Comprehensive Income.</i> ASU 2011-05 requires entities to present items of net income and other comprehensive income either in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive, statements of net income and other comprehensive income. In addition, in December 2011, the FASB issued ASU 2011-12, <i>Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No.&#xA0;2011-05.</i> ASU 2011-12 defers the requirement to present components of reclassifications of comprehensive income on the statement of comprehensive income, with all other requirements of ASU 2011-05 unaffected. Both ASU 2011-05 and 2011-12 will be effective as of October&#xA0;1, 2012 for the Company and are not expected to have a significant impact on the Company&#x2019;s financial statements, other than presentation.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">In September 2011, the FASB issued ASU 2011-08, <i>Testing Goodwill for Impairment</i>. ASU 2011-08 provides entities with an option to perform a qualitative assessment to determine whether further impairment testing is necessary. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December&#xA0;15, 2011, with early adoption permitted. This standard is not expected to have a significant impact on the Company&#x2019;s financial statements.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">In July 2012, the FASB issued ASU 2012-02, <i>Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment</i>, which provides the option to perform a qualitative, rather than quantitative, assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. ASU 2012-02 will be effective for the Company on October 1, 2012 and is not expected to have a material impact on the Company&#x2019;s financial statements.</font></p> </div>
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us-gaap Increase Decrease In Interest Payable Net
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us-gaap Net Income Loss Attributable To Noncontrolling Interest
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ck0001319161 Goodwill Impaired Disposal
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ck0001319161 Number Of Songwriters And Composers
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