The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp. Holdings has issued and outstanding the 13.75% Senior Notes due 2019 (the “Holdings Notes”). In addition, Acquisition Corp. had issued and outstanding, as of March 31, 2014, the 6.00% Senior Secured Notes due 2021, the 6.25% Senior Secured Notes due 2021 and the 11.50% Senior Notes due 2018 (together, the “Acquisition Corp. Notes”).

The Holdings Notes are guaranteed by the Company. This guarantee is full and unconditional. The following condensed consolidating financial statements are presented for the information of the holders of the Holdings Notes and present the results of operations, financial position and cash flows of (i) the Company, which is the guarantor of the Holdings Notes, (ii) Holdings, which is the issuer of the Holdings Notes, (iii) the subsidiaries of Holdings (Acquisition Corp. is the only direct subsidiary of Holdings), which are not guarantors of the Holdings Notes, and (iv) the eliminations necessary to arrive at the information for the Company on a consolidated basis. Investments in consolidated or combined subsidiaries are presented under the equity method of accounting.

The Acquisition Corp. Notes are, or were, also guaranteed by the Company and, in addition, are guaranteed by all of Acquisition Corp.’s domestic wholly owned subsidiaries. The secured notes are guaranteed on a senior secured basis and the unsecured notes are guaranteed on an unsecured senior basis. The Company’s guarantee of the Acquisition Corp. Notes is full and unconditional. The guarantee of the Acquisition Corp. Notes by Acquisition Corp.’s domestic, wholly-owned subsidiaries are full, unconditional, joint and several. The following condensed consolidating financial statements are also presented for the information of the holders of the Acquisition Corp. Notes and present the results of operations, financial position and cash flows of (i) Acquisition Corp., which is the issuer of the Acquisition Corp. Notes, (ii) the guarantor subsidiaries of Acquisition Corp., (iii) the non-guarantor subsidiaries of Acquisition Corp. and (iv) the eliminations necessary to arrive at the information for Acquisition Corp. on a consolidated basis. Investments in consolidated subsidiaries are presented under the equity method of accounting. There are no restrictions on Acquisition Corp.’s ability to obtain funds from any of its wholly owned subsidiaries through dividends, loans or advances. The New Senior Secured Notes and the New Unsecured Notes are also guaranteed by the Company and, in addition, are guaranteed by all of Acquisition Corp.’s domestic wholly owned subsidiaries.

The Company and Holdings are holding companies that conduct substantially all of their business operations through Acquisition Corp. Accordingly, the ability of the Company and Holdings to obtain funds from their subsidiaries is restricted by the indentures for the Acquisition Corp. Notes (and, subsequent to the 2014 Refinancing, the indentures for the New Senior Secured Notes and the New Unsecured Notes) and the credit agreements for the Acquisition Corp. New Senior Credit Facilities, and, with respect to the Company, the indenture for the Holdings Notes.

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Balance Sheet (Unaudited)

March 31, 2014

	WMG Acquisition Corp. (issuer)		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated		WMG Holdings Corp. (issuer)		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Assets:
Current assets:
Cash and equivalents	$	─	$	27		$	122		$	─		$	149	$	─	$	─	$	─		$	149
Accounts receivable, net		─		143			251			─			394		─		─		─			394
Inventories		─		9			26			─			35		─		─		─			35
Royalty advances expected to be recouped within one year		─		60			43			─			103		─		─		─			103
Deferred tax assets		─		21			22			─			43		─		─		─			43
Prepaid and other current assets		5		7			72			─			84		─		─		─			84
Total current assets		5		267			536			─			808		─		─		─			808
Due (to) from parent companies		965		(48	)		(917	)		─			─		─		─		─			─
Investments in and advances to (from) consolidated subsidiaries		2,544		1,127			─			(3,671	)		─		777		623		(1,400	)		─
Royalty advances expected to be recouped after one year		─		111			80			─			191		─		─		─			191
Property, plant and equipment, net		─		107			80			─			187		─		─		─			187
Goodwill		─		1,379			300			─			1,679		─		─		─			1,679
Intangible assets subject to amortization, net		─		964			2,067			─			3,031		─		─		─			3,031
Intangible assets not subject to amortization		─		75			45			─			120		─		─		─			120
Other assets		63		21			24			─			108		6		─		─			114
Total assets	$	3,577	$	4,003		$	2,215		$	(3,671	)	$	6,124	$	783	$	623	$	(1,400	)	$	6,130
Liabilities and Deficit:
Current liabilities:
Accounts payable	$	─	$	82		$	128		$	─		$	210	$	─	$	─	$	─		$	210
Accrued royalties		─		532			608			─			1,140		─		─		─			1,140
Accrued liabilities		─		76			196			─			272		─		─		─			272
Accrued interest		65		─			─			─			65		10		─		─			75
Deferred revenue		─		171			92			─			263		─		─		─			263
Current portion of long-term debt		13		─			─			─			13		─		─		─			13
Other current liabilities		─		─			10			─			10		─		─		─			10
Total current liabilities		78		861			1,034			─			1,973		10		─		─			1,983
Long-term debt		2,706		─			─			─			2,706		150		─		─			2,856
Deferred tax liabilities, net		─		126			290			─			416		─		─		─			416
Other noncurrent liabilities		16		82			136			─			234		─		─		─			234
Total liabilities		2,800		1,069			1,460			─			5,329		160		─		─			5,489
Total Warner Music Group Corp. equity (deficit)		777		2,934			737			(3,671	)		777		623		623		(1,400	)		623
Noncontrolling interest		─		─			18			─			18		─		─		─			18
Total equity (deficit)		777		2,934			755			(3,671	)		795		623		623		(1,400	)		641
Total liabilities and equity (deficit)	$	3,577	$	4,003		$	2,215		$	(3,671	)	$	6,124	$	783	$	623	$	(1,400	)	$	6,130

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Balance Sheet

September 30, 2013

	WMG Acquisition Corp. (issuer)		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated		WMG Holdings Corp. (issuer)		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Assets:
Current assets:
Cash and equivalents	$	─	$	16		$	139		$	─		$	155	$	─	$	─	$	─		$	155
Accounts receivable, net		─		185			326			─			511		─		─		─			511
Inventories		─		10			23			─			33		─		─		─			33
Royalty advances expected to be recouped within one year		─		59			34			─			93		─		─		─			93
Deferred tax assets		─		21			22			─			43		─		─		─			43
Prepaid and other current assets		5		8			46			─			59		─		─		─			59
Total current assets		5		299			590			─			894		─		─		─			894
Due (to) from parent companies		799		(27	)		(772	)		─			─		─		─		─			─
Investments in and advances to (from) consolidated subsidiaries		2,811		930			─			(3,741	)		─		879		726		(1,605	)		─
Royalty advances expected to be recouped after one year		─		109			64			─			173		─		─		─			173
Property, plant and equipment, net		─		101			79			─			180		─		─		─			180
Goodwill		─		1,379			289			─			1,668		─		─		─			1,668
Intangible assets subject to amortization, net		─		1,007			2,100			─			3,107		─		─		─			3,107
Intangible assets not subject to amortization		─		75			45			─			120		─		─		─			120
Other assets		68		14			21			─			103		7		─		─			110
Total assets	$	3,683	$	3,887		$	2,416		$	(3,741	)	$	6,245	$	886	$	726	$	(1,605	)	$	6,252
Liabilities and Deficit:
Current liabilities:
Accounts payable		─	$	96		$	184			─		$	280		─		─		─		$	280
Accrued royalties		─		570			577			─			1,147		─		─		─			1,147
Accrued liabilities		─		94			227			─			321		─		─		─			321
Accrued interest		65		─			─			─			65		10		─		─			75
Deferred revenue		─		56			83			─			139		─		─		─			139
Current portion of long-term debt		13		─			─			─			13		─		─		─			13
Other current liabilities		─		23			(4	)		6			25		─		─		─			25
Total current liabilities		78		839			1,067			6			1,990		10		─		─			2,000
Long-term debt		2,704		─			─			─			2,704		150		─		─			2,854
Deferred tax liabilities, net		─		128			311			─			439		─		─		─			439
Other noncurrent liabilities		22		68			133			(7	)		216		─		─		─			216
Total liabilities		2,804		1,035			1,511			(1	)		5,349		160		─		─			5,509
Total Warner Music Group Corp. equity (deficit)		879		2,852			888			(3,740	)		879		726		726		(1,605	)		726
Noncontrolling interest		─		─			17			─			17		─		─		─			17
Total equity (deficit)		879		2,852			905			(3,740	)		896		726		726		(1,605	)		743
Total liabilities and equity (deficit)	$	3,683	$	3,887		$	2,416		$	(3,741	)	$	6,245	$	886	$	726	$	(1,605	)	$	6,252

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statements of Operations (Unaudited)

For The Three Months Ended March 31, 2014

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations		Warner Music Group Corp. Consolidated
	(in millions)
Revenues	$	─		$	349		$	332		$	(28	)	$	653		$	─		$	─		$	─	$	653
Costs and expenses:
Cost of revenues		─			(136	)		(208	)		25			(319	)		─			─			─		(319	)
Selling, general and administrative expenses		─			(119	)		(156	)		2			(273	)		─			─			─		(273	)
Amortization of intangible assets		─			(30	)		(36	)		─			(66	)		─			─			─		(66	)
Total costs and expenses		─			(285	)		(400	)		27			(658	)		─			─			─		(658	)
Operating income (expense)		─			64			(68	)		(1	)		(5	)		─			─			─		(5	)
Interest income (expense), net		(28	)		3			(23	)		─			(48	)		(6	)		─			─		(54	)
Equity gains (losses) from consolidated subsidiaries		(32	)		2			─			30			─			(54	)		(60	)		114		─
Other income (expense), net		3			(7	)		1			─			(3	)		─			─			─		(3	)
Income (loss) before income taxes		(57	)		62			(90	)		29			(56	)		(60	)		(60	)		114		(62	)
Income tax (expense) benefit		3			(4	)		3			1			3			─			─			─		3
Net income (loss)		(54	)		58			(87	)		30			(53	)		(60	)		(60	)		114		(59	)
Less: income attributable to noncontrolling interest		─			─			(1	)		─			(1	)		─			─			─		(1	)
Net income (loss) attributable to Warner Music Group Corp.	$	(54	)	$	58		$	(88	)	$	30		$	(54	)	$	(60	)	$	(60	)	$	114	$	(60	)

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statements of Operations (Unaudited)

For The Three Months Ended March 31, 2013

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Revenues	$	─		$	351		$	373		$	(49	)	$	675		$	─		$	─	$	─		$	675
Costs and expenses:
Cost of revenues		─			(166	)		(205	)		44			(327	)		─			─		─			(327	)
Selling, general and administrative expenses		─			(128	)		(113	)		(3	)		(244	)		─			─		─			(244	)
Amortization of intangible assets		─			(28	)		(19	)		─			(47	)		─			─		─			(47	)
Total costs and expenses		─			(322	)		(337	)		41			(618	)		─			─		─			(618	)
Operating income (loss)		─			29			36			(8	)		57			─			─		─			57
Interest income (expense), net		(41	)		2			(4	)		─			(43	)		(6	)		─		─			(49	)
Equity gains (losses) from consolidated subsidiaries		56			(28	)		─			(28	)		─			7			2		(9	)		─
Other income (expense), net		(7	)		5			(2	)		─			(4	)		─			─		─			(4	)
Income (loss) before income taxes		8			8			30			(36	)		10			1			2		(9	)		4
Income tax (expense) benefit		─			─			1			(1	)		─			─			─		─			─
Net income (loss)		8			8			31			(37	)		10			1			2		(9	)		4
Less: income attributable to noncontrolling interest		─			─			(2	)		─			(2	)		─			─		─			(2	)
Net income (loss) attributable to Warner Music Group Corp.	$	8		$	8		$	29		$	(37	)	$	8		$	1		$	2	$	(9	)	$	2

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statements of Operations (Unaudited)

For The Six Months Ended March 31, 2014

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations		Warner Music Group Corp. Consolidated
	(in millions)
Revenues	$	—		$	703		$	842		$	(77	)	$	1,468		$	—		$	—		$	—	$	1,468
Costs and expenses:
Cost of revenues		—			(291	)		(543	)		74			(760	)		—			—			—		(760	)
Selling, general and administrative expenses		—			(234	)		(335	)		3			(566	)		—			—			—		(566	)
Amortization of intangible assets		—			(60	)		(72	)		—			(132	)		—			—			—		(132	)
Total costs and expenses		—			(585	)		(950	)		77			(1,458	)		—			—			—		(1,458	)
Operating income (loss)		—			118			(108	)		—			10			—			—			—		10
Interest income (expense), net		(59	)		4			(43	)		—			(98	)		(11	)		—			—		(109	)
Equity gains (losses) from consolidated subsidiaries		(53	)		(11	)		—			64			—			(86	)		(97	)		183		—
Other income (expense), net		15			(21	)		(1	)		—			(7	)		—			—			—		(7	)
Income (loss) before income taxes		(97	)		90			(152	)		64			(95	)		(97	)		(97	)		183		(106	)
Income tax (expense) benefit		11			(8	)		10			(2	)		11			—			—			—		11
Net income (loss)		(86	)		82			(142	)		62			(84	)		(97	)		(97	)		183		(95	)
Less: income attributable to noncontrolling interest		—			—			(2	)		—			(2	)		—			—			—		(2	)
Net income (loss) attributable to Warner Music Group Corp.	$	(86	)	$	82		$	(144	)	$	62		$	(86	)	$	(97	)	$	(97	)	$	183	$	(97	)

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statements of Operations (Unaudited)

For The Six Months Ended March 31, 2013

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations		Warner Music Group Corp. Consolidated
	(in millions)
Revenues	$	—		$	695		$	854		$	(105	)	$	1,444		$	—		$	—		$	—	$	1,444
Costs and expenses:
Cost of revenues		—			(327	)		(500	)		93			(734	)		—			—			—		(734	)
Selling, general and administrative expenses		—			(252	)		(267	)		12			(507	)		—			—			—		(507	)
Amortization of intangible assets		—			(58	)		(37	)		—			(95	)		—			—			—		(95	)
Total costs and expenses		—			(637	)		(804	)		105			(1,336	)		—			—			—		(1,336	)
Operating income		—			58			50			—			108			—			—			—		108
Loss on extinguishment of debt		(83	)		—			—			—			(83	)		—			—			—		(83	)
Interest income (expense), net		(85	)		3			(9	)		—			(91	)		(11	)		—			—		(102	)
Equity gains (losses) from consolidated subsidiaries		97			(45	)		—			(52	)		—			(67	)		(78	)		145		—
Other income (expense), net		(7	)		—			(2	)		—			(9	)		—			—			—		(9	)
Income (loss) before income taxes		(78	)		16			39			(52	)		(75	)		(78	)		(78	)		145		(86	)
Income tax (expense) benefit		11			10			—			(10	)		11			—			—			—		11
Net income (loss)		(67	)		26			39			(62	)		(64	)		(78	)		(78	)		145		(75	)
Less: income attributable to noncontrolling interest		—			—			(3	)		—			(3	)		—			—			—		(3	)
Net income (loss) attributable to Warner Music Group Corp.	$	(67	)	$	26		$	36		$	(62	)	$	(67	)	$	(78	)	$	(78	)	$	145	$	(78	)

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statement of Comprehensive Income (Unaudited)

For The Three Months Ended March 31, 2014

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Net income (loss)	$	(54	)	$	58	$	(87	)	$	30		$	(53	)	$	(60	)	$	(60	)	$	114		$	(59	)
Other comprehensive income (loss), net of tax:
Foreign currency adjustment		2			—		2			(2	)		2			2			2			(4	)		2
Other comprehensive income (loss), net of tax:		2			—		2			(2	)		2			2			2			(4	)		2
Total comprehensive income (loss)		(52	)		58		(85	)		28			(51	)		(58	)		(58	)		110			(57	)
Less: comprehensive income attributable to noncontrolling interest		—			—		(1	)		—			(1	)		—			—			—			(1	)
Comprehensive income (loss) attributable to Warner Music Group Corp.	$	(52	)	$	58	$	(86	)	$	28		$	(52	)	$	(58	)	$	(58	)	$	110		$	(58	)

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statement of Comprehensive Income (Unaudited)

For The Three Months Ended March 31, 2013

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)		Warner Music Group Corp.		Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Net income (loss)	$	8		$	8	$	31		$	(37	)	$	10		$	1	$	2	$	(9	)	$	4
Other comprehensive income (loss), net of tax:
Foreign currency adjustment		(14	)		—		(14	)		14			(14	)		—		—		—			(14	)
Other comprehensive income (loss), net of tax:		(14	)		—		(14	)		14			(14	)		—		—		—			(14	)
Total comprehensive income (loss)		(6	)		8		17			(23	)		(4	)		1		2		(9	)		(10	)
Less: comprehensive income attributable to noncontrolling interest		—			—		(2	)		—			(2	)		—		—		—			(2	)
Comprehensive income (loss) attributable to Warner Music Group Corp.	$	(6	)	$	8	$	15		$	(23	)	$	(6	)	$	1	$	2	$	(9	)	$	(12	)

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statement of Comprehensive Income (Unaudited)

For The Six Months Ended March 31, 2014

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations		WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations		Warner Music Group Corp. Consolidated
	(in millions)
Net income (loss)	$	(86	)	$	82	$	(142	)	$	62	$	(84	)	$	(97	)	$	(97	)	$	183	$	(95	)
Other comprehensive income (loss), net of tax:
Foreign currency adjustment		(6	)		—		(6	)		6		(6	)		(6	)		(6	)		12		(6	)
Other comprehensive income (loss), net of tax:		(6	)		—		(6	)		6		(6	)		(6	)		(6	)		12		(6	)
Total comprehensive income (loss)		(92	)		82		(148	)		68		(90	)		(103	)		(103	)		195		(101	)
Less: comprehensive income attributable to noncontrolling interest		—			—		(2	)		—		(2	)		—			—			—		(2	)
Comprehensive income (loss) attributable to Warner Music Group Corp.	$	(92	)	$	82	$	(150	)	$	68	$	(92	)	$	(103	)	$	(103	)	$	195	$	(103	)

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statement of Comprehensive Income (Unaudited)

For The Six Months Ended March 31, 2013

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations		Warner Music Group Corp. Consolidated
	(in millions)
Net income (loss)	$	(67	)	$	26	$	39		$	(62	)	$	(64	)	$	(78	)	$	(78	)	$	145	$	(75	)
Other comprehensive income (loss), net of tax:
Foreign currency adjustment		(12	)		—		(12	)		12			(12	)		—			—			—		(12	)
Other comprehensive income (loss), net of tax:		(12	)		—		(12	)		12			(12	)		—			—			—		(12	)
Total comprehensive income (loss)		(79	)		26		27			(50	)		(76	)		(78	)		(78	)		145		(87	)
Less: comprehensive income attributable to noncontrolling interest		—			—		(3	)		—			(3	)		—			—			—		(3	)
Comprehensive income (loss) attributable to Warner Music Group Corp.	$	(79	)	$	26	$	24		$	(50	)	$	(79	)	$	(78	)	$	(78	)	$	145	$	(90	)

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statement of Cash Flows (Unaudited)

For The Six Months Ended March 31, 2014

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Cash flows from operating activities:
Net (loss) income	$	(86	)	$	82		$	(142	)	$	62		$	(84	)	$	(97	)	$	(97	)	$	183		$	(95	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		—			77			80			—			157			—			—			—			157
Deferred income taxes		—			—			(23	)		—			(23	)		—			—			—			(23	)
Non-cash interest expense		7			—			—			—			7			1			—			—			8
Equity (gains) losses		53			11			—			(64	)		—			86			97			(183	)		—
Non-cash share-based compensation expense		—			3			—			—			3			—			—			—			3
Changes in operating assets and liabilities:
Accounts receivable		—			41			77			—			118			—			—			—			118
Inventories		—			1			(3	)		—			(2	)		—			—			—			(2	)
Royalty advances		—			(3	)		(25	)		—			(28	)		—			—			—			(28	)
Accounts payable and accrued liabilities		—			(187	)		58			8			(121	)		—			—			—			(121	)
Royalty payables		—			(38	)		29			—			(9	)		—			—			—			(9	)
Accrued interest		—			—			—			—			—			—			—			—			—
Deferred revenue		—			115			13			—			128			—			—			—			128
Other balance sheet changes		3			(10	)		(44	)		(6	)		(57	)		—			—			—			(57	)
Net cash (used in) provided by operating activities		(23	)		92			20			—			89			(10	)		—			—			79
Cash flows from investing activities:
Acquisition of music publishing rights		—			(13	)		(6	)		—			(19	)		—			—			—			(19	)
Investments and acquisitions of businesses		—			(10	)		(16	)		—			(26	)		—			—			—			(26	)
Capital expenditures		—			(22	)		(8	)		—			(30	)		—			—			—			(30	)
Change in due to (from) subsidiaries		36			—			—			(36	)		—			—			—			—			—
Net cash (used in) provided by investing activities		36			(45	)		(30	)		(36	)		(75	)		—			—			—			(75	)
Cash flows from financing activities:
Dividend by Acquisition Corp.to Holdings Corp.		(10	)		—			—			—			(10	)		10			—			—			—
Proceeds from the Revolving Credit Facility		230			—			—			—			230			—			—			—			230
Repayment of the Revolving Credit Facility		(230	)		—			—			—			(230	)		—			—			—			(230	)
Amortization of Term Loan		(3	)		—			—			—			(3	)		—			—			—			(3	)
Repayment of capital lease obligations		—			—			(1	)		—			(1	)											(1	)
Distribution to noncontrolling interest holder		—			—			(1	)		—			(1	)		—			—			—			(1	)
Change in due (from) to issuer		—			(36	)		—			36			—			—			—			—			—
Net cash (used in) provided by financing activities		(13	)		(36	)		(2	)		36			(15	)		10			—			—			(5	)
Effect of foreign currency exchange rate changes on cash		—			—			(5	)		—			(5	)		—			—			—			(5	)
Net (decrease) increase in cash and equivalents		—			11			(17	)		—			(6	)		—			—			—			(6	)
Cash and equivalents at beginning of period		—			16			139			—			155			—			—			—			155
Cash and equivalents at end of period	$	—		$	27		$	122		$	—		$	149		$	—		$	—		$	—		$	149

WARNER MUSIC GROUP CORP.

Supplementary Information

Consolidating Statement of Cash Flows (Unaudited)

For The Six Months Ended March 31, 2013

	WMG Acquisition Corp. (issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			WMG Acquisition Corp. Consolidated			WMG Holdings Corp. (issuer)			Warner Music Group Corp.			Eliminations			Warner Music Group Corp. Consolidated
	(in millions)
Cash flows from operating activities:
Net (loss) income	$	(67	)	$	26		$	39		$	(62	)	$	(64	)	$	(78	)	$	(78	)	$	145		$	(75	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Loss on extinguishment of debt		83			─			─			─			83			─			─			─			83
Depreciation and amortization		─			77			43			─			120			─			─			─			120
Deferred income taxes		─			─			(12	)		─			(12	)		─			─			─			(12	)
Non-cash interest expense		5			─			─			─			5			1			─			─			6
Equity (gains) losses		(97	)		45			─			52			─			67			78			(145	)		─
Non-cash share based compensation expense		─			4			─			─			4						─			─			4
Changes in operating assets and liabilities:
Accounts receivable		(1	)		(7	)		72			─			64			─			─			─			64
Inventories		─			1			1			─			2			─			─			─			2
Royalty advances		─			(18	)		8			─			(10	)		─			─			─			(10	)
Accounts payable and accrued liabilities		─			31			(121	)		16			(74	)		─			─			─			(74	)
Royalty payables		─			30			(18	)		─			12			─			─			─			12
Accrued interest		(13	)		─			─			─			(13	)		─			─			─			(13	)
Deferred revenue		─			27			19			─			46			─			─			─			46
Other balance sheet changes		2			(10	)		(14	)		(6	)		(28	)		─			─			─			(28	)
Net cash (used in) provided by operating activities		(88	)		206			17			─			135			(10	)		─			─			125
Cash flows from investing activities:
Acquisition of music publishing rights		─			(8	)		(3	)		─			(11	)		─			─			─			(11	)
Investments and acquisitions of businesses		─			(5	)		─			─			(5	)		─			─			─			(5	)
Capital expenditures		─			(9	)		(4	)		─			(13	)		─			─			─			(13	)
Advances to issuer		195			─			─			(195	)		─			─			─			─			─
Net cash (used in) provided by investing activities		195			(22	)		(7	)		(195	)		(29	)		─			─			─			(29	)
Cash flows from financing activities:
Dividend by Acquisition Corp.to Holdings Corp.		(12	)		─			─			─			(12	)		12			─			─			─
Proceeds from the Revolving Credit Facility		31			─			─			─			31			─			─			─			31
Repayment of the Revolving Credit Facility		(31	)		─			─			─			(31	)		─			─			─			(31	)
Proceeds from issuance of Acquisition Corp 6.0% Senior Secured Notes		500			─			─			─			500			─			─			─			500
Proceeds from issuance of Acquisition Corp 6.25% Senior Secured Notes		227			─			─			─			227			─			─			─			227
Proceeds from Acquisition Corp Term Loan Facility		594			─			─			─			594			─			─			─			594
Repayment of Acquisition Corp. 9.5% Senior Secured Notes		(1,250	)		─			─			─			(1,250	)		─			─			─			(1,250	)
Financing costs paid		(127	)		─			─			─			(127	)		─			─			─			(127	)
Deferred financing costs paid		(31	)		─			─			─			(31	)		(2	)		─			─			(33	)
Amortization of Term Loan		(8	)		─			─			─			(8	)		─			─			─			(8	)
Change in due to (from) to issuer		─			(195	)		─			195			─			─			─			─			─
Net cash (used in) provided by financing activities		(107	)		(195	)		─			195			(107	)		10			─			─			(97	)
Effect of foreign currency exchange rate changes on cash		─			─			(7	)		─			(7	)		─			─			─			(7	)
Net (decrease) increase in cash and equivalents		─			(11	)		3			─			(8	)		─			─			─			(8	)
Cash and equivalents at beginning of period		44			105			143			─			292			10			─			─			302
Cash and equivalents at end of period	$	44		$	94		$	146		$	─		$	284		$	10		$	─		$	─		$	294