Acquisition of Parlophone Label Group (Tables) (Parlophone Label Group)

6 Months Ended

Mar. 31, 2014

Parlophone Label Group

Preliminary Estimate of Acquisition Consideration and Preliminary Purchase Price Allocation to Estimated Fair Value of Assets Acquired and Liabilities Assumed

The table below presents (i) the preliminary estimate of the PLG Acquisition consideration as it relates to the acquisition of PLG by the Buyers and (ii) the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of July 1, 2013 (in millions):

Purchase Price	£	487
Preliminary Working Capital Adjustment		13
Adjusted Purchase Price	£	500
Foreign Exchange Rate at July 1, 2013		1.53
Adjusted Purchase Price in U.S. dollars	$	765
Fair Value of assets acquired and liabilities assumed:
Cash		46
Accounts receivable		80
Other current assets		8
Property, plant and equipment		39
Intangible assets		764
Accounts payable		(83	)
Royalties payable		(147	)
Other current liabilities		(21	)
Deferred revenue		(25	)
Deferred tax liabilities		(139	)
Other noncurrent liabilities *		(27	)
Fair value of net assets acquired		495
Goodwill recorded *		270
Total purchase price allocated	$	765

* Amounts have been adjusted in the first quarter of fiscal 2014 based on new information obtained during the measurement period.

Components of Intangible Assets Identified and Useful Lives

The components of the intangible assets identified in the table above and the related useful lives, allocated to the Company’s Recorded Music reportable segment, are as follows:

	Value		Useful Life
	(in millions)
Trademark and trade name	$	17		Indefinite
Catalog		442		13 years
Artist contracts		305		10 years

Business Acquisition Pro Forma Financial Information

The pro forma information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the PLG Acquisition had taken place at the beginning of fiscal 2013.

	Three Months Ended March 31, 2013			Six Months Ended March 31, 2013
		(in millions)
Revenue	$	727		$	1,633
Operating income		43			97
Net loss attributable to Warner Music Group Corp.		(38	)		(104	)