Segment Information

6 Months Ended

Mar. 31, 2014

Segment Information

11. Segment Information

As discussed more fully in Note 1, based on the nature of its products and services, the Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing, which also represent the reportable segments of the Company. Information as to each of these operations is set forth below. The Company evaluates performance based on several factors, of which the primary financial measure is operating income (loss) before non-cash depreciation of tangible assets, non-cash amortization of intangible assets (“OIBDA”). The Company has supplemented its analysis of OIBDA results by segment with an analysis of operating income (loss) by segment.

The accounting policies of the Company’s business segments are the same as those described in the summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. The Company accounts for intersegment sales at fair value as if the sales were to third parties. While intercompany transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses recognized by the segment that is counterparty to the transaction) are eliminated in consolidation, and therefore, do not themselves impact consolidated results. Segment information consisted of the following:

Three Months Ended	Recorded Music			Music Publishing			Corporate expenses and eliminations			Total
	(in millions)
March 31, 2014
Revenues	$	535		$	122		$	(4	)	$	653
OIBDA		39			55			(20	)		74
Depreciation of property, plant and equipment		(9	)		(1	)		(3	)		(13	)
Amortization of intangible assets		(49	)		(17	)		—			(66	)
Operating income (loss)	$	(19	)	$	37		$	(23	)	$	(5	)
March 31, 2013
Revenues	$	554		$	127		$	(6	)	$	675
OIBDA		86			53			(23	)		116
Depreciation of property, plant and equipment		(9	)		(1	)		(2	)		(12	)
Amortization of intangible assets		(32	)		(15	)		—			(47	)
Operating income (loss)	$	45		$	37		$	(25	)	$	57

Six Months Ended	Recorded Music			Music Publishing			Corporate expenses and eliminations			Total
	(in millions)
March 31, 2014
Revenues	$	1,226		$	250		$	(8	)	$	1,468
OIBDA		132			74			(39	)		167
Depreciation of property, plant and equipment		(17	)		(2	)		(6	)		(25	)
Amortization of intangible assets		(99	)		(33	)		—			(132	)
Operating income (loss)	$	16		$	39		$	(45	)	$	10
March 31, 2013
Revenues	$	1,211		$	243		$	(10	)	$	1,444
OIBDA		200			69			(41	)		228
Depreciation of property, plant and equipment		(16	)		(3	)		(6	)		(25	)
Amortization of intangible assets		(65	)		(30	)		—			(95	)
Operating income (loss)	$	119		$	36		$	(47	)	$	108