2023 Q3 Form 10-K Financial Statement

#000131916123000036 Filed on November 21, 2023

View on sec.gov

Income Statement

Concept 2023 Q3 2023
Revenue $1.586B $6.037B
YoY Change 5.95% 1.99%
Cost Of Revenue $845.0M $3.177B
YoY Change 5.76% 3.15%
Gross Profit $741.0M $2.860B
YoY Change 6.16% 0.74%
Gross Profit Margin 46.72% 47.37%
Selling, General & Admin $451.0M $1.826B
YoY Change -0.44% -1.93%
% of Gross Profit 60.86% 63.85%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $79.00M $332.0M
YoY Change -3.66% -2.06%
% of Gross Profit 10.66% 11.61%
Operating Expenses $530.0M $1.826B
YoY Change -0.93% -1.93%
Operating Profit $211.0M $790.0M
YoY Change 29.45% 10.64%
Interest Expense -$36.00M -$141.0M
YoY Change 16.13% 12.8%
% of Operating Profit -17.06% -17.85%
Other Income/Expense, Net $36.00M -$36.00M
YoY Change -34.55% -123.84%
Pretax Income $212.0M $609.0M
YoY Change 13.37% -17.7%
Income Tax $58.00M $170.0M
% Of Pretax Income 27.36% 27.91%
Net Earnings $150.0M $430.0M
YoY Change 1.35% -21.96%
Net Earnings / Revenue 9.46% 7.12%
Basic Earnings Per Share
Diluted Earnings Per Share $0.29 $0.82
COMMON SHARES
Basic Shares Outstanding
Diluted Shares Outstanding

Balance Sheet

Concept 2023 Q3 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $641.0M $641.0M
YoY Change 9.76% 9.76%
Cash & Equivalents $641.0M $641.0M
Short-Term Investments
Other Short-Term Assets $515.0M $515.0M
YoY Change 11.23% 11.23%
Inventory $126.0M $126.0M
Prepaid Expenses
Receivables $1.120B $1.120B
Other Receivables $0.00 $0.00
Total Short-Term Assets $2.402B $2.402B
YoY Change 12.3% 12.3%
LONG-TERM ASSETS
Property, Plant & Equipment $458.0M $703.0M
YoY Change 10.36% 9.67%
Goodwill $1.993B
YoY Change 3.8%
Intangibles $2.502B
YoY Change 4.95%
Long-Term Investments
YoY Change
Other Assets $225.0M $945.0M
YoY Change 6.13% 27.02%
Total Long-Term Assets $6.143B $6.143B
YoY Change 7.98% 7.98%
TOTAL ASSETS
Total Short-Term Assets $2.402B $2.402B
Total Long-Term Assets $6.143B $6.143B
Total Assets $8.545B $8.545B
YoY Change 9.16% 9.16%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $300.0M $300.0M
YoY Change 11.94% 11.94%
Accrued Expenses $533.0M $2.811B
YoY Change 16.63% 15.58%
Deferred Revenue $371.0M
YoY Change -12.29%
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $3.539B $3.539B
YoY Change 5.08% 5.08%
LONG-TERM LIABILITIES
Long-Term Debt $3.964B $3.964B
YoY Change 6.22% 6.22%
Other Long-Term Liabilities $141.0M $396.0M
YoY Change 42.42% 16.47%
Total Long-Term Liabilities $4.105B $4.360B
YoY Change 7.15% 7.07%
TOTAL LIABILITIES
Total Short-Term Liabilities $3.539B $3.539B
Total Long-Term Liabilities $4.105B $4.360B
Total Liabilities $8.115B $8.238B
YoY Change 5.94% 7.32%
SHAREHOLDERS EQUITY
Retained Earnings -$1.387B
YoY Change -6.09%
Common Stock $2.015B
YoY Change 2.03%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $307.0M $307.0M
YoY Change
Total Liabilities & Shareholders Equity $8.545B $8.545B
YoY Change 9.16% 9.16%

Cashflow Statement

Concept 2023 Q3 2023
OPERATING ACTIVITIES
Net Income $150.0M $430.0M
YoY Change 1.35% -21.96%
Depreciation, Depletion And Amortization $79.00M $332.0M
YoY Change -3.66% -2.06%
Cash From Operating Activities $338.0M $687.0M
YoY Change -16.75% -7.41%
INVESTING ACTIVITIES
Capital Expenditures $99.00M $241.0M
YoY Change -294.12% -173.93%
Acquisitions $126.0M
YoY Change -75.25%
Other Investing Activities -$97.00M -$59.00M
YoY Change 870.0% -88.15%
Cash From Investing Activities -$196.0M -$300.0M
YoY Change 221.31% -63.59%
FINANCING ACTIVITIES
Cash Dividend Paid $340.0M
YoY Change 6.92%
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -92.00M -$325.0M
YoY Change 0.0% -272.87%
NET CHANGE
Cash From Operating Activities 338.0M $687.0M
Cash From Investing Activities -196.0M -$300.0M
Cash From Financing Activities -92.00M -$325.0M
Net Change In Cash 50.00M $57.00M
YoY Change -80.24% -32.94%
FREE CASH FLOW
Cash From Operating Activities $338.0M $687.0M
Capital Expenditures $99.00M $241.0M
Free Cash Flow $239.0M $446.0M
YoY Change -47.7% -58.24%

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Description of Business<div style="margin-top:6pt;text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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 entertainment companies.</span></div><div style="margin-top:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Initial Public Offering</span></div><div style="margin-top:6pt;text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On June 5, 2020, the Company completed an initial public offering (“IPO”) of Class A common stock of the Company, par value $0.001 per share (“Class A Common Stock”). The Company listed its shares on the NASDAQ stock market under the ticker symbol “WMG.” The offering consisted entirely of secondary shares sold by Access Industries, LLC (collectively with its affiliates, “Access”) and certain related selling stockholders.</span></div><div style="margin-top:12pt;text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Access continues to hold all of the Class B common stock of the Company, par value $0.001 per share (“Class B Common Stock”), representing approximately 98% of the total combined voting power of the Company’s outstanding common stock and approximately 73% of the economic interest as of September 30, 2023. As a result, the Company is a “controlled company” within the meaning of the corporate governance standards of NASDAQ. See Item 1A. Risk Factors — Risks Related to Our Controlling Stockholder.</span></div><div style="margin-top:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Recorded Music Operations</span></div><div style="margin-top:6pt;text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Our Recorded Music business primarily consists of the discovery and development of recording artists and the related marketing, promotion, distribution, sale and licensing of music created by such recording artists. We play an integral role in virtually all aspects of the recorded music value chain from discovering and developing talent to producing, distributing and selling music to marketing and promoting recording artists and their music.</span></div><div style="margin-top:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Music Publishing Operations</span></div><div style="margin-top:6pt;text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself. In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business shares the revenues generated from use of the musical compositions with the songwriter or other rightsholders.</span></div>
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<div style="margin-top:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Use of Estimates</span></div><div style="margin-top:6pt;text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.</span></div>
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