$WMG
Warner Music Group Corp

2013 Q1 Form 10-Q Financial Statement

#000119312513057575 Filed on February 14, 2013

View on sec.gov

Income Statement

Concept 2013 Q1 2012 Q4 2012 Q3
Revenue $675.0M $769.0M $731.0M
YoY Change 8.35% -0.77% 31.47%
Cost Of Revenue $327.0M $407.0M $368.0M
YoY Change 2.83% -3.1% 27.78%
Gross Profit $348.0M $362.0M $363.0M
YoY Change 14.1% 1.97% 35.45%
Gross Profit Margin 51.56% 47.07% 49.66%
Selling, General & Admin $244.0M $263.0M $260.0M
YoY Change 4.72% -1.87% 39.78%
% of Gross Profit 70.11% 72.65% 71.63%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $12.00M $61.00M $62.00M
YoY Change -80.95% 1.67% 31.91%
% of Gross Profit 3.45% 16.85% 17.08%
Operating Expenses $244.0M $263.0M $322.0M
YoY Change 4.72% -1.87% 73.12%
Operating Profit $57.00M $51.00M $41.00M
YoY Change 159.09% 30.77% 20.59%
Interest Expense $49.00M $53.00M -$56.00M
YoY Change -12.5% -7.02% -190.32%
% of Operating Profit 85.96% 103.92% -136.59%
Other Income/Expense, Net -$4.000M -$5.000M $2.000M
YoY Change -300.0% 150.0%
Pretax Income $4.000M -$90.00M -$13.00M
YoY Change -112.5% 350.0% -53.57%
Income Tax -$11.00M $4.000M
% Of Pretax Income
Net Earnings $2.000M -$80.00M -$18.00M
YoY Change -105.56% 207.69% -41.94%
Net Earnings / Revenue 0.3% -10.4% -2.46%
Basic Earnings Per Share
Diluted Earnings Per Share
COMMON SHARES
Basic Shares Outstanding 1.055K shares 1.000K shares 1.000K shares
Diluted Shares Outstanding

Balance Sheet

Concept 2013 Q1 2012 Q4 2012 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $294.0M $189.0M $302.0M
YoY Change 8.09% 12.5% 96.1%
Cash & Equivalents $294.0M $189.0M $302.0M
Short-Term Investments
Other Short-Term Assets $66.00M $52.00M $44.00M
YoY Change -71.67% -78.24% -2.22%
Inventory $25.00M $27.00M $28.00M
Prepaid Expenses
Receivables $328.0M $418.0M $398.0M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $883.0M $869.0M $939.0M
YoY Change 5.37% 1.4% 17.08%
LONG-TERM ASSETS
Property, Plant & Equipment $138.0M $147.0M $152.0M
YoY Change -19.77% -16.95% -16.48%
Goodwill $1.384B $1.384B $1.380B
YoY Change 0.58%
Intangibles $2.473B $2.601B
YoY Change
Long-Term Investments
YoY Change
Other Assets $83.00M $82.00M $64.00M
YoY Change -63.6% -66.94% -9.86%
Total Long-Term Assets $4.225B $4.330B $4.339B
YoY Change -5.4% -4.1% -5.22%
TOTAL ASSETS
Total Short-Term Assets $883.0M $869.0M $939.0M
Total Long-Term Assets $4.225B $4.330B $4.339B
Total Assets $5.108B $5.199B $5.278B
YoY Change -3.7% -3.22% -1.9%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $137.0M $149.0M $156.0M
YoY Change -4.2% 9.56% -5.45%
Accrued Expenses $198.0M $215.0M $253.0M
YoY Change -84.71% -83.44% 16.59%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $30.00M $30.00M
YoY Change
Total Short-Term Liabilities $1.588B $1.641B $1.606B
YoY Change 2.92% 3.99% 5.52%
LONG-TERM LIABILITIES
Long-Term Debt $2.181B $2.195B $2.206B
YoY Change -1.4% -0.86% -0.5%
Other Long-Term Liabilities $141.0M $141.0M $147.0M
YoY Change 3.68% 4.44% -0.68%
Total Long-Term Liabilities $2.322B $2.336B $2.353B
YoY Change -1.11% -0.55% -0.51%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.588B $1.641B $1.606B
Total Long-Term Liabilities $2.322B $2.336B $2.353B
Total Liabilities $4.253B $4.335B $4.334B
YoY Change -1.3% -0.28% 0.84%
SHAREHOLDERS EQUITY
Retained Earnings -$221.0M -$223.0M -$143.0M
YoY Change 361.29%
Common Stock $0.00 $0.00 $0.00
YoY Change -100.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $836.0M $847.0M $927.0M
YoY Change
Total Liabilities & Shareholders Equity $5.108B $5.199B $5.278B
YoY Change -3.7% -3.22% -1.9%

Cashflow Statement

Concept 2013 Q1 2012 Q4 2012 Q3
OPERATING ACTIVITIES
Net Income $2.000M -$80.00M -$18.00M
YoY Change -105.56% 207.69% -41.94%
Depreciation, Depletion And Amortization $12.00M $61.00M $62.00M
YoY Change -80.95% 1.67% 31.91%
Cash From Operating Activities $135.0M -$10.00M $102.0M
YoY Change 11.57% -140.0% -259.38%
INVESTING ACTIVITIES
Capital Expenditures -$9.000M -$15.00M -$19.00M
YoY Change -30.77% 15.38% 5.56%
Acquisitions
YoY Change
Other Investing Activities -$5.000M $0.00 -$3.000M
YoY Change 0.0% -100.0% -99.77%
Cash From Investing Activities -$14.00M -$15.00M -$22.00M
YoY Change -22.22% 36.36% -98.3%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -11.00M -86.00M -1.000M
YoY Change 1000.0% 8500.0% -100.08%
NET CHANGE
Cash From Operating Activities 135.0M -10.00M 102.0M
Cash From Investing Activities -14.00M -15.00M -22.00M
Cash From Financing Activities -11.00M -86.00M -1.000M
Net Change In Cash 110.0M -111.0M 79.00M
YoY Change 7.84% -953.85% -150.32%
FREE CASH FLOW
Cash From Operating Activities $135.0M -$10.00M $102.0M
Capital Expenditures -$9.000M -$15.00M -$19.00M
Free Cash Flow $144.0M $5.000M $121.0M
YoY Change 7.46% -86.84% -363.04%

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CY2012Q4 us-gaap Basis Of Accounting
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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> <!-- xbrl,body --> <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 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&#xA0;31, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ended September&#xA0;30, 2013.</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, 2012 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 fiscal year ended September&#xA0;30, 2012 (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. All 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 December&#xA0;31, 2012 and December&#xA0;31, 2011 relate to the three-month periods ended December&#xA0;28, 2012 and December&#xA0;30, 2011, respectively. For convenience purposes, the Company continues to date its financial statements as of December&#xA0;31.</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 that other than described in Note 11, no additional disclosures are necessary.</font></p> <p style="MARGIN-TOP: 18px; 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 first quarter of fiscal 2013, the Company adopted ASU 2011-05, Presentation of Comprehensive Income. 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 operations and other comprehensive income. The Company simultaneously adopted ASU 2011-12, 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. 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. The adoption of these standard updates did not 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">During the first quarter of fiscal 2013, the Company adopted ASU 2011-08, Testing Goodwill for Impairment. ASU 2011-08 provides entities with an option to perform a qualitative assessment to determine whether further impairment testing is necessary. The adoption of this standard update did not have an 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">During the first quarter of fiscal 2013, the Company adopted ASU 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, which provides the option to perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. The adoption of this standard update did not have an 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 December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. In January 2013, the FASB issued ASU&#xA0;2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, to clarify which financial assets and financial liabilities are included within the scope of ASU&#xA0;2011-11. These ASUs require additional quantitative and qualitative disclosures over financial instruments and derivative instruments that are offset on the balance</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px"> <font style="FONT-FAMILY: Times New Roman" size="2">In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU requires entities to disclose, in one place, information about the amounts reclassified out of accumulated other comprehensive income by component. ASU&#xA0;2013-02 is effective for reporting periods beginning after December&#xA0;15, 2012. The adoption of this standard is not expected to have a significant impact on the Company&#x2019;s financial statements, other than disclosure.</font></p> <p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2">sheet or subject to master netting arrangements. Both ASUs are effective for annual and interim reporting periods for fiscal years beginning on or after January&#xA0;1, 2013. The adoption of these standards is not expected to have a significant impact on the Company&#x2019;s financial statements, other than presentation.</font></p> </div>
CY2012Q4 us-gaap Other Comprehensive Income Loss Net Of Tax
OtherComprehensiveIncomeLossNetOfTax
2000000
CY2012Q4 us-gaap Increase Decrease In Inventories
IncreaseDecreaseInInventories
-1000000
CY2012Q4 us-gaap Deferred Income Tax Expense Benefit
DeferredIncomeTaxExpenseBenefit
-10000000
CY2012Q4 us-gaap Net Income Loss
NetIncomeLoss
-80000000
CY2012Q4 us-gaap Goodwill Acquired During Period
GoodwillAcquiredDuringPeriod
CY2012Q4 us-gaap Costs And Expenses
CostsAndExpenses
718000000
CY2012Q4 us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
-86000000
CY2012Q4 us-gaap Payments Of Financing Costs
PaymentsOfFinancingCosts
30000000
CY2012Q4 us-gaap Comprehensive Income Net Of Tax
ComprehensiveIncomeNetOfTax
-78000000
CY2012Q4 us-gaap Increase Decrease In Interest Payable Net
IncreaseDecreaseInInterestPayableNet
-49000000
CY2012Q4 us-gaap Revenues
Revenues
769000000
CY2012Q4 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
262000000
CY2012Q4 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-11000000
CY2012Q4 us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
EffectOfExchangeRateOnCashAndCashEquivalents
-2000000
CY2012Q4 us-gaap Net Income Loss Attributable To Noncontrolling Interest
NetIncomeLossAttributableToNoncontrollingInterest
1000000
CY2012Q4 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
IncreaseDecreaseInAccountsPayableAndAccruedLiabilities
-53000000
CY2012Q4 us-gaap Payments To Acquire Productive Assets
PaymentsToAcquireProductiveAssets
7000000
CY2012Q4 us-gaap Business Acquisition Date Of Acquisition Agreement1
BusinessAcquisitionDateOfAcquisitionAgreement1
2013-02-06
CY2012Q4 us-gaap Amortization Of Intangible Assets
AmortizationOfIntangibleAssets
48000000
CY2012Q4 us-gaap Income Taxes Paid Net
IncomeTaxesPaidNet
5000000
CY2012Q4 us-gaap Comprehensive Income Net Of Tax Including Portion Attributable To Noncontrolling Interest
ComprehensiveIncomeNetOfTaxIncludingPortionAttributableToNoncontrollingInterest
-77000000
CY2012Q4 us-gaap Interest Expense
InterestExpense
53000000
CY2012Q4 us-gaap Gains Losses On Extinguishment Of Debt
GainsLossesOnExtinguishmentOfDebt
-83000000
CY2012Q4 us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
-10000000
CY2012Q4 us-gaap Other Comprehensive Income Unrealized Gain Loss On Derivatives Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedGainLossOnDerivativesArisingDuringPeriodNetOfTax
CY2012Q4 wmg Repayment Of Revolving Credit Facility
RepaymentOfRevolvingCreditFacility
31000000
CY2012Q4 us-gaap Cost Of Revenue
CostOfRevenue
408000000
CY2012Q4 wmg Revolving Credit Facility Maturity Date
RevolvingCreditFacilityMaturityDate
November 1, 2017
CY2012Q4 wmg Increase Decrease In Advance Royalties
IncreaseDecreaseInAdvanceRoyalties
35000000
CY2012Q4 wmg Loan Facility Maturity
LoanFacilityMaturity
November 1, 2018
CY2012Q4 wmg Income Loss From Continuing Operations Before Income Taxes Depreciation And Amortization
IncomeLossFromContinuingOperationsBeforeIncomeTaxesDepreciationAndAmortization
112000000
CY2012Q4 wmg Increase Decrease In Accumulated Other Comprehensive Income Loss
IncreaseDecreaseInAccumulatedOtherComprehensiveIncomeLoss
2000000
CY2012Q4 wmg Number Of Songwriters And Composers
NumberOfSongwritersAndComposers
65000 pure
CY2012Q4 wmg Proceeds From Term Loan Facility
ProceedsFromTermLoanFacility
594000000
CY2012Q4 wmg Other Comprehensive Income Minimum Pension Liability Net Adjustment Net Of Taxes
OtherComprehensiveIncomeMinimumPensionLiabilityNetAdjustmentNetOfTaxes
CY2012Q4 wmg Non Cash Interest Income Expense
NonCashInterestIncomeExpense
-2000000
CY2012Q4 wmg Equity Gain Loss From Net Income Loss Of Subsidiaries
EquityGainLossFromNetIncomeLossOfSubsidiaries
CY2012Q4 wmg Early Redemption Fees
EarlyRedemptionFees
127000000
CY2012Q4 wmg Repayment Of Term Loan Payable Thereafter
RepaymentOfTermLoanPayableThereafter
450000000
CY2012Q4 wmg Annual Repayment Of Term Loan Facility
AnnualRepaymentOfTermLoanFacility
30000000
CY2012Q4 wmg Deconsolidation Of Entity Equity Impact
DeconsolidationOfEntityEquityImpact
-2000000
CY2012Q4 wmg Date Of Announcement Of Agreement
DateOfAnnouncementOfAgreement
2013-02-07

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