Guarantor and Non-Guarantor Subsidiaries Financial Information Unaudited (Tables)

3 Months Ended

Dec. 31, 2017

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Schedule of Consolidating Balance Sheet

Consolidating Balance Sheet (Unaudited)

December 31, 2017

	WMG											WMG				Warner					Warner
	Acquisition					Non-						Acquisition		WMG		Music					Music
	Corp.		Guarantor			Guarantor						Corp.		Holdings		Group					Group Corp.
	(issuer)		Subsidiaries			Subsidiaries			Eliminations			Consolidated		Corp.		Corp.		Eliminations			Consolidated
	(in millions)
Assets:
Current assets:
Cash and equivalents	$	—	$	435		$	341		$	—		$	776	$	—	$	—	$	—		$	776
Accounts receivable, net		—		247			252			—			499		—		—		—			499
Inventories		—		13			25			—			38		—		—		—			38
Royalty advances expected to be recouped within one year		—		86			56			—			142		—		—		—			142
Prepaid and other current assets		—		14			33			—			47		—		—		—			47
Total current assets		—		795			707			—			1,502		—		—		—			1,502
Due from (to) parent companies		500		(4	)		(496	)		—			—		—		—		—			—
Investments in and advances to consolidated subsidiaries		2,644		1,453			—			(4,097	)		—		391		391		(782	)		—
Royalty advances expected to be recouped after one year		—		106			69			—			175		—		—		—			175
Property, plant and equipment, net		—		139			74			—			213		—		—		—			213
Goodwill		—		1,368			320			—			1,688		—		—		—			1,688
Intangible assets subject to amortization, net		—		1,006			1,039			—			2,045		—		—		—			2,045
Intangible assets not subject to amortization		—		71			46			—			117		—		—		—			117
Deferred tax assets, net		—		53			8			—			61		—		—		—			61
Other assets		7		47			20			—			74		—		—		—			74
Total assets	$	3,151	$	5,034		$	1,787		$	(4,097	)	$	5,875	$	391	$	391	$	(782	)	$	5,875
Liabilities and Deficit:
Current liabilities:
Accounts payable	$	—	$	87		$	79		$	—		$	166	$	—	$	—	$	—		$	166
Accrued royalties		—		791			615			—			1,406		—		—		—			1,406
Accrued liabilities		—		175			226			—			401		—		—		—			401
Accrued interest		25		—			—			—			25		—		—		—			25
Deferred revenue		—		148			53			—			201		—		—		—			201
Other current liabilities		—		4			31			—			35		—		—		—			35
Total current liabilities		25		1,205			1,004			—			2,234		—		—		—			2,234
Long-term debt		2,818		—			—			—			2,818		—		—		—			2,818
Deferred tax liabilities, net		—		—			196			—			196		—		—		—			196
Other noncurrent liabilities		1		195			110			—			306		—		—		—			306
Total liabilities		2,844		1,400			1,310			—			5,554		—		—		—			5,554
Total Warner Music Group Corp. equity		307		3,630			467			(4,097	)		307		391		391		(782	)		307
Noncontrolling interest		—		4			10			—			14		—		—		—			14
Total equity		307		3,634			477			(4,097	)		321		391		391		(782	)		321
Total liabilities and equity	$	3,151	$	5,034		$	1,787		$	(4,097	)	$	5,875	$	391	$	391	$	(782	)	$	5,875

Consolidating Balance Sheet

September 30, 2017

	WMG										WMG				Warner					Warner
	Acquisition				Non-						Acquisition		WMG		Music					Music
	Corp.		Guarantor		Guarantor						Corp.		Holdings		Group					Group Corp.
	(issuer)		Subsidiaries		Subsidiaries			Eliminations			Consolidated		Corp.		Corp.		Eliminations			Consolidated
	(in millions)
Assets:
Current assets:
Cash and equivalents	$	—	$	347	$	300		$	—		$	647	$	—	$	—	$	—		$	647
Accounts receivable, net		—		214		190			—			404		—		—		—			404
Inventories		—		12		27			—			39		—		—		—			39
Royalty advances expected to be recouped within one year		—		89		52			—			141		—		—		—			141
Prepaid and other current assets		—		15		29			—			44		—		—		—			44
Total current assets		—		677		598			—			1,275		—		—		—			1,275
Due from (to) parent companies		418		96		(514	)		—			—		—		—		—			—
Investments in and advances to consolidated subsidiaries		2,721		1,312		—			(4,033	)		—		377		377		(754	)		—
Royalty advances expected to be recouped after one year		—		109		63			—			172		—		—		—			172
Property, plant and equipment, net		—		139		74			—			213		—		—		—			213
Goodwill		—		1,368		317			—			1,685		—		—		—			1,685
Intangible assets subject to amortization, net		—		1,029		1,061			—			2,090		—		—		—			2,090
Intangible assets not subject to amortization		—		71		46			—			117		—		—		—			117
Deferred tax assets, net		—		89		8			—			97		—		—		—			97
Other assets		7		45		17			—			69		—		—		—			69
Total assets	$	3,146	$	4,935	$	1,670		$	(4,033	)	$	5,718	$	377	$	377	$	(754	)	$	5,718
Liabilities and Deficit:
Current liabilities:
Accounts payable	$	—	$	135	$	73		$	—		$	208	$	—	$	—	$	—		$	208
Accrued royalties		—		732		531			—			1,263		—		—		—			1,263
Accrued liabilities		—		144		221			—			365		—		—		—			365
Accrued interest		41		—		—			—			41		—		—		—			41
Deferred revenue		—		125		72			—			197		—		—		—			197
Other current liabilities		—		3		23			—			26		—		—		—			26
Total current liabilities		41		1,139		920			—			2,100		—		—		—			2,100
Long-term debt		2,811		—		—			—			2,811		—		—		—			2,811
Deferred tax liabilities, net		—		—		190			—			190		—		—		—			190
Other noncurrent liabilities		1		196		112			—			309		—		—		—			309
Total liabilities		2,853		1,335		1,222			—			5,410		—		—		—			5,410
Total Warner Music Group Corp. equity		293		3,596		437			(4,033	)		293		377		377		(754	)		293
Noncontrolling interest		—		4		11			—			15		—		—		—			15
Total equity		293		3,600		448			(4,033	)		308		377		377		(754	)		308
Total liabilities and equity	$	3,146	$	4,935	$	1,670		$	(4,033	)	$	5,718	$	377	$	377	$	(754	)	$	5,718

Schedule of Consolidating Statement of Operations

Consolidating Statement of Operations (Unaudited)

For The Three Months Ended December 31, 2017

	WMG												WMG					Warner					Warner
	Acquisition						Non-						Acquisition			WMG		Music					Music
	Corp.			Guarantor			Guarantor						Corp.			Holdings		Group					Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Corp.		Corp.		Eliminations			Consolidated
	(in millions)
Revenues	$	—		$	547		$	621		$	(123	)	$	1,045		$	—	$	—	$	—		$	1,045
Costs and expenses:
Cost of revenue		—			(257	)		(393	)		81			(569	)		—		—		—			(569	)
Selling, general and administrative expenses		—			(235	)		(138	)		40			(333	)		—		—		—			(333	)
Amortization of intangible assets		—			(24	)		(29	)		—			(53	)		—		—		—			(53	)
Total costs and expenses		—			(516	)		(560	)		121			(955	)		—		—		—			(955	)
Operating income		—			31			61			(2	)		90			—		—		—			90
Loss on extinguishment of debt		(1	)		—			—			—			(1	)		—		—		—			(1	)
Interest expense, net		(29	)		1			(8	)		—			(36	)		—		—		—			(36	)
Equity gains (losses) from equity method investments		90			44			—			(133	)		1			4		4		(8	)		1
Other income, net		(4	)		9			(2	)		—			3			—		—		—			3
Income before income taxes		56			85			51			(135	)		57			4		4		(8	)		57
Income tax (expense) benefit		(52	)		(51	)		(10	)		61			(52	)		—		—		—			(52	)
Net income		4			34			41			(74	)		5			4		4		(8	)		5
Less: income attributable to noncontrolling interest		—			—			(1	)		—			(1	)		—		—		—			(1	)
Net income (loss) attributable to Warner Music Group Corp.	$	4		$	34		$	40		$	(74	)	$	4		$	4	$	4	$	(8	)	$	4

Consolidating Statement of Operations (Unaudited)

For The Three Months Ended December 31, 2016

	WMG												WMG					Warner					Warner
	Acquisition						Non-						Acquisition			WMG		Music					Music
	Corp.			Guarantor			Guarantor						Corp.			Holdings		Group					Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Corp.		Corp.		Eliminations			Consolidated
	(in millions)
Revenues	$	—		$	490		$	521		$	(94	)	$	917		$	—	$	—	$	—		$	917
Costs and expenses:
Cost of revenue		—			(220	)		(341	)		65			(496	)		—		—		—			(496	)
Selling, general and administrative expenses		(1	)		(176	)		(128	)		29			(276	)		—		—		—			(276	)
Amortization of intangible assets		—			(25	)		(26	)		—			(51	)		—		—		—			(51	)
Total costs and expenses		(1	)		(421	)		(495	)		94			(823	)		—		—		—			(823	)
Operating (loss) income		(1	)		69			26			—			94			—		—		—			94
Loss on extinguishment of debt		(32	)		—			—			—			(32	)		—		—		—			(32	)
Interest (expense) income, net		(23	)		1			(18	)		—			(40	)		—		—		—			(40	)
Equity gains (losses) from equity method investments		83			40			—			(123	)		—			22		22		(44	)		—
Other income, net		12			3			4			—			19			—		—		—			19
Income before income taxes		39			113			12			(123	)		41			22		22		(44	)		41
Income tax (expense) benefit		(17	)		(18	)		(9	)		27			(17	)		—		—		—			(17	)
Net income		22			95			3			(96	)		24			22		22		(44	)		24
Less: income attributable to noncontrolling interest		—			—			(2	)		—			(2	)		—		—		—			(2	)
Net income attributable to Warner Music Group Corp.	$	22		$	95		$	1		$	(96	)	$	22		$	22	$	22	$	(44	)	$	22

Schedule of Consolidating Statement of Comprehensive Income

Consolidating Statement of Comprehensive Income (Unaudited)

For The Three Months Ended December 31, 2017

	WMG										WMG					Warner					Warner
	Acquisition				Non-						Acquisition			WMG		Music					Music
	Corp.		Guarantor		Guarantor						Corp.			Holdings		Group					Group Corp.
	(issuer)		Subsidiaries		Subsidiaries			Eliminations			Consolidated			Corp.		Corp.		Eliminations			Consolidated
	(in millions)
Net income	$	4	$	34	$	41		$	(74	)	$	5		$	4	$	4	$	(8	)	$	5
Other comprehensive income, net of tax:
Foreign currency adjustment		9		—		(9	)		9			9			9		9		(18	)		9
Deferred gains (losses) on derivative financial instruments		1		—		(1	)		1			1			1		1		(2	)		1
Other comprehensive income, net of tax:		10		—		(10	)		10			10			10		10		(20	)		10
Total comprehensive income (loss)		14		34		31			(64	)		15			14		14		(28	)		15
Less: income attributable to noncontrolling interest		—		—		(1	)		—			(1	)		—		—		—			(1	)
Comprehensive income attributable to Warner Music Group Corp.	$	14	$	34	$	30		$	(64	)	$	14		$	14	$	14	$	(28	)	$	14

Consolidating Statement of Comprehensive Income (Unaudited)

For The Three Months Ended December 31, 2016

	WMG												WMG						Warner							Warner
	Acquisition						Non-						Acquisition			WMG			Music							Music
	Corp.			Guarantor			Guarantor						Corp.			Holdings			Group							Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Corp.			Corp.			Eliminations			Consolidated
	(in millions)
Net income	$	22		$	95		$	3		$	(96	)	$	24		$	22		$	22		$	(44	)		$	24
Other comprehensive (loss) income, net of tax:
Foreign currency adjustment		(37	)		—			37			(37	)		(37	)		(37	)		(37	)		74				(37	)
Deferred losses on derivative financial instruments		(2	)		(2	)		—			2			(2	)		(2	)		(2	)		4				(2	)
Other comprehensive (loss) income, net of tax:		(39	)		(2	)		37			(35	)		(39	)		(39	)		(39	)		78				(39	)
Total comprehensive (loss) income		(17	)		93			40			(131	)		(15	)		(17	)		(17	)		34				(15	)
Less: income attributable to noncontrolling interest		—			—			(2	)		—			(2	)		—			—			—				(2	)
Comprehensive (loss) income attributable to Warner Music Group Corp.	$	(17	)	$	93		$	38		$	(131	)	$	(17	)	$	(17	)	$	(17	)	$	34			$	(17	)

Schedule of Consolidating Statement of Cash Flows

Consolidating Statement of Cash Flows (Unaudited)

For The Three Months Ended December 31, 2017

	WMG												WMG						Warner						Warner
	Acquisition						Non-						Acquisition			WMG			Music						Music
	Corp.			Guarantor			Guarantor						Corp.			Holdings			Group						Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Corp.			Corp.			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities
Net income	$	4		$	34		$	41		$	(74	)	$	5		$	4		$	4		$	(8	)	$	5
Adjustments to reconcile net income to net cash    provided by operating activities:
Depreciation and amortization		—			32			33			—			65			—			—			—			65
Unrealized losses/gains and remeasurement of    foreign denominated loans		6			1			(2	)		—			5			—			—			—			5
Deferred income taxes		—			—			42			—			42			—			—			—			42
Loss on extinguishment of debt		1			—			—			—			1			—			—			—			1
Net gain on investments		—			(7	)		—			—			(7	)		—			—			—			(7	)
Non-cash interest expense		1			—			—			—			1			—			—			—			1
Equity-based compensation expense		—			18			—			—			18			—			—			—			18
Equity (gains) losses, including distributions		(90	)		(43	)		—			133			—			(4	)		(4	)		8			—
Changes in operating assets and liabilities:
Accounts receivable		—			(33	)		(60	)		—			(93	)		—			—			—			(93	)
Inventories		—			—			2			—			2			—			—			—			2
Royalty advances		—			5			(10	)		—			(5	)		—			—			—			(5	)
Accounts payable and accrued liabilities		—			65			(29	)		(59	)		(23	)		—			—			—			(23	)
Royalty payables		—			59			82			—			141			—			—			—			141
Accrued interest		(16	)		—			—			—			(16	)		—			—			—			(16	)
Deferred revenue		—			17			(20	)		—			(3	)		—			—			—			(3	)
Other balance sheet changes		-			37			(34	)		—			3			—			—			—			3
Net cash provided by operating activities		(94	)		185			45			—			136			—			—			—			136
Cash flows from investing activities
Acquisition of music publishing rights, net		—			—			(1	)		—			(1	)		—			—			—			(1	)
Capital expenditures		—			(13	)		(3	)		—			(16	)		—			—			—			(16	)
Investments and acquisitions of businesses, net		—			(1	)		—			—			(1	)		—			—			—			(1	)
Proceeds from the sale of investments		—			12			—			—			12			—			—			—			12
Advances from issuer		95			—			—			(95	)		—			—			—			—			—
Net cash used in investing activities		95			(2	)		(4	)		(95	)		(6	)		—			—			—			(6	)
Cash flows from financing activities
Proceeds from issuance of Acquisition Corp. 4.125% Senior Secured Notes		—			—			—			—			—			—			—			—			—
Proceeds from issuance of Acquisition Corp. 4.875% Senior Secured Notes		—			—			—			—			—			—			—			—			—
Proceeds from issuance of Acquisition Corp. Senior Term Loan Facility		—			—			—			—			—			—			—			—			—
Repayment of Acquisition Corp. 6.00% Senior Secured Notes		—			—			—			—			—			—			—			—			—
Repayment of Acquisition Corp. 6.25% Senior Secured Notes		—			—			—			—			—			—			—			—			—
Repayment of Acquisition Corp. 5.625% Senior Secured Notes		—			—			—			—			—			—			—			—			—
Call premiums paid on early redemption of debt		—			—			—			—			—			—			—			—			—
Deferred financing costs paid		(1	)		—			—			—			(1	)		—			—			—			(1	)
Distribution to noncontrolling interest holder		—			—			(2	)		—			(2	)		—			—			—			(2	)
Change in due to (from) issuer		—			(95	)		—			95			—			—			—			—			—
Net cash used in financing activities		(1	)		(95	)		(2	)		95			(3	)		—			—			—			(3	)
Effect of exchange rate changes on cash and equivalents		—			—			2			—			2			—			—			—			2
Net increase in cash and equivalents		—			88			41			—			129			—			—			—			129
Cash and equivalents at beginning of period		—			347			300			—			647			—			—			—			647
Cash and equivalents at end of period	$	—		$	435		$	341		$	—		$	776		$	—		$	—		$	—		$	776

Consolidating Statement of Cash Flows (Unaudited)

For The Nine Months Ended December 31, 2016

	WMG												WMG						Warner						Warner
	Acquisition						Non-						Acquisition			WMG			Music						Music
	Corp.			Guarantor			Guarantor						Corp.			Holdings			Group						Group Corp.
	(issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Corp.			Corp.			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities
Net income	$	22		$	95		$	3		$	(96	)	$	24		$	22		$	22		$	(44	)	$	24
Adjustments to reconcile net income to net cash provided    by operating activities:
Depreciation and amortization		—			35			28			—			63			—			—			—			63
Unrealized (gains)/losses and remeasurement of foreign    denominated loans		(21	)		(9	)		13			—			(17	)		—			—			—			(17	)
Deferred income taxes		—			—			(2	)		—			(2	)		—			—			—			(2	)
Loss on extinguishment of debt		32			—			—			—			32			—			—			—			32
Non-cash interest expense		3			—			—			—			3			—			—			—			3
Non-cash stock-based compensation expenses		—			10			—			—			10			—			—			—			10
Equity (gains) losses, including distributions		(83	)		(40	)		—			123			—			(22	)		(22	)		44			—
Changes in operating assets and liabilities:
Accounts receivable		—			(19	)		(46	)		—			(65	)		—			—			—			(65	)
Inventories		—			2			1			—			3			—			—			—			3
Royalty advances		—			7			(6	)		—			1			—			—			—			1
Accounts payable and accrued liabilities		—			6			9			(27	)		(12	)		—			—			—			(12	)
Royalty payables		—			40			72			—			112			—			—			—			112
Accrued interest		(10	)		—			—			—			(10	)		—			—			—			(10	)
Deferred revenue		—			(33	)		32			—			(1	)		—			—			—			(1	)
Other balance sheet changes		—			12			3			—			15			—			—			—			15
Net cash provided by (used in) operating activities		(57	)		106			107			—			156			—			—			—			156
Cash flows from investing activities
Acquisition of music publishing rights, net		—			—			(1	)		—			(1	)		—			—			—			(1	)
Capital expenditures		—			(6	)		(2	)		—			(8	)		—			—			—			(8	)
Investments and acquisitions of businesses, net		—			(3	)		—			—			(3	)		—			—			—			(3	)
Advances to issuer		95			—			—			(95	)		—			—			—			—			—
Net cash (used in) provided by investing activities		95			(9	)		(3	)		(95	)		(12	)		—			—			—			(12	)
Cash flows from financing activities
Proceeds from issuance of Acquisition Corp. 4.125% Senior Secured Notes		380			—			—			—			380			—			—			—			380
Proceeds from issuance of Acquisition Corp. 4.875% Senior Secured Notes		250			—			—			—			250			—			—			—			250
Proceeds from issuance of Acquisition Corp. Senior Term Loan Facility		22			—			—			—			22			—			—			—			22
Repayment of Acquisition Corp. 6.00% Senior Secured Notes		(450	)		—			—			—			(450	)		—			—			—			(450	)
Repayment of Acquisition Corp. 6.25% Senior Secured Notes		(173	)		—			—			—			(173	)		—			—			—			(173	)
Repayment of Acquisition Corp. 5.625% Senior Secured Notes		(28	)		—			—			—			(28	)		—			—			—			(28	)
Financing costs paid		(27	)		—			—			—			(27	)		—			—			—			(27	)
Deferred financing costs paid		(12	)		—			—			—			(12	)		—			—			—			(12	)
Change in due to (from) issuer		—			(95	)		—			95			—			—			—			—			—
Net cash provided by (used in) financing activities		(38	)		(95	)		—			95			(38	)		—			—			—			(38	)
Effect of exchange rate changes on cash and equivalents		—			—			(10	)		—			(10	)		—			—			—			(10	)
Net increase (decrease) in cash and equivalents		—			2			94			—			96			—			—			—			96
Cash and equivalents at beginning of period		—			180			179			—			359			—			—			—			359
Cash and equivalents at end of period	$	—		$	182		$	273		$	—		$	455		$	—		$	—		$	—		$	455