What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2025-02-06 · 213 added, 101 removed, 479 unchanged (40% of the section changed)

30 unchanged sentences

Total current liabilities 3,916 3,897

Acquisition Corp.

long-term debt

Asset-based long-term debt

Operating lease liabilities, noncurrent 216 228

3 unchanged sentences

Class A common stock, $ 0.001 par value;

1,000,000 shares authorized, 144,301 and 142,559 shares issued and outstanding as of December 31, 2024 and September 30, 2024, respectively

1,000,000 shares authorized, 145,032 and 142,559 shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively

Class B common stock, $ 0.001 par value;

1,000,000 shares authorized, 375,380 and 375,380 issued and outstanding as of December 31, 2024 and September 30, 2024, respectively

1,000,000 shares authorized, 375,380 issued and outstanding as of March 31, 2025 and September 30, 2024, respectively

Additional paid-in capital 2,088 2,077

11 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2025 2024 2025 2024

Revenue $ 1,484 $ 1,494 $ 3,150 $ 3,242

3 unchanged sentences

Restructuring and impairments

( 13 ) ( 95 ) ( 40 ) ( 95 )

Amortization expense ( 62 ) ( 57 ) ( 119 ) ( 112 )

3 unchanged sentences

Interest expense, net ( 39 ) ( 42 ) ( 76 ) ( 81 )

Other income (expense) 153 ( 50 )

Other (expense) income ( 64 ) 37 89 ( 13 )

Income before income taxes 65 114 395 379

3 unchanged sentences

Net income attributable to Warner Music Group Corp.

$ 36 $ 96 $ 272 $ 255

Net income per share attributable to common stockholders:

11 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2025 2024 2025 2024

Net income $ 36 $ 96 $ 277 $ 289

Other comprehensive (loss) income, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency adjustment 84 ( 41 ) ( 45 ) 23

1 unchanged sentence

Minimum pension liability

Other comprehensive (loss) income, net of tax ( 129 ) 62

Other comprehensive income (loss), net of tax 84 ( 41 ) ( 45 ) 21

Total comprehensive income 120 55 232 310

1 unchanged sentence

Comprehensive income attributable to Warner Music Group Corp.

$ 120 $ 55 $ 227 $ 276

See accompanying notes

2 unchanged sentences

(In millions)

Three Months Ended

Six Months Ended

Cash flows from operating activities

30 unchanged sentences

Cash flows from financing activities

Partial proceeds from Senior Term Loan Facility refinancing

Partial repayment of Senior Term Loan Facility refinancing

Deferred financing costs paid — ( 2 )

Distribution to noncontrolling interest holders ( 8 ) ( 5 )

6 unchanged sentences

Effect of exchange rate changes on cash and equivalents ( 8 ) ( 1 )

Net increase in cash and equivalents 108 113

Net decrease in cash and equivalents ( 57 ) ( 54 )

Cash and equivalents at beginning of period 694 641

4 unchanged sentences

(In millions, except share amounts which are reflected in thousands, and per share data)

Three Months Ended December 31, 2024

Six Months Ended March 31, 2025

Common Stock Class B

4 unchanged sentences

Equity Non-controlling

Interest Total

Interest Total Equity

Shares Value Shares Value

1 unchanged sentence

Net income — — — — — 272 — 272 5 277

Other comprehensive income, net of tax

— — — — — — ( 129 ) ( 129 ) — ( 129 )

Other comprehensive loss, net of tax — — — — — — ( 45 ) ( 45 ) — ( 45 )

Dividends ($ 0.36 per share)

— — — — — ( 189 ) — ( 189 ) — ( 189 )

Stock-based compensation

— — — — 20 — — 20 — 20

Stock-based compensation expense — — — — 34 — — 34 — 34

Distribution to noncontrolling interest holders — — — — — — — — ( 8 ) ( 8 )

Acquisition of noncontrolling interests — — — — — — — — 74 74

Vesting of restricted stock units, net of shares withheld for employee taxes 795 — — — ( 19 ) — — ( 19 ) — ( 19 )

64 — — — ( 2 ) — — ( 2 ) — ( 2 )

Shares issued under the Plan 1,738 — — — — — — — — —

1,738 — — — — — — — — —

Common shares repurchased and retired ( 60 ) — — — ( 2 ) — — ( 2 ) — ( 2 )

Other — — — — ( 2 ) — — ( 2 ) ( 5 ) ( 7 )

Balance at December 31, 2024 144,301 $ — 375,380 $ 1 $ 2,091 $ ( 1,171 ) $ ( 376 ) $ 545 $ 152 $ 697

Three Months Ended December 31, 2023

Balance at March 31, 2025 145,032 $ — 375,380 $ 1 $ 2,088 $ ( 1,230 ) $ ( 292 ) $ 567 $ 223 $ 790

Three Months Ended March 31, 2025

Common Stock Class B

4 unchanged sentences

Equity Non-controlling

Interest Total

Interest Total Equity

Shares Value Shares Value

Balance at December 31, 2024 144,301 $ — 375,380 $ 1 $ 2,091 $ ( 1,171 ) $ ( 376 ) $ 545 $ 152 $ 697

Net income — — — — — 36 — 36 — 36

Other comprehensive income, net of tax — — — — — — 84 84 — 84

Dividends ($ 0.18 per share)

— — — — — ( 95 ) — ( 95 ) — ( 95 )

Stock-based compensation expense — — — — 14 — — 14 — 14

Acquisition of noncontrolling interests — — — — — — — — 74 74

Vesting of restricted stock units, net of shares withheld for employee taxes 731 — — — ( 17 ) — — ( 17 ) — ( 17 )

Conversion of Class B Shares to Class A shares — — — — — — — — — —

Shares issued under Omnibus Incentive Plan — — — — — — — — — —

Other — — — — — — — — ( 3 ) ( 3 )

Balance at March 31, 2025 145,032 $ — 375,380 $ 1 $ 2,088 $ ( 1,230 ) $ ( 292 ) $ 567 $ 223 $ 790

Six Months Ended March 31, 2024

Common Stock Class B

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Equity (Deficit) Non-controlling

Interest Total Equity (Deficit)

Shares Value Shares Value

Balance at September 30, 2023 138,345 $ — 377,650 $ 1 $ 2,015 $ ( 1,387 ) $ ( 322 ) $ 307 $ 123 $ 430

7 unchanged sentences

Shares issued under the Plan 1,738 — — — — — — — — —

1,738 — — — — — — — — —

Exchange of Class B shares for Class A shares

1,335 — ( 1,335 ) — — — — — — —

Shares issued under Omnibus Incentive Plan 178 — — — — — — — — —

Balance at March 31, 2024 141,596 $ — 376,315 $ 1 $ 2,043 $ ( 1,310 ) $ ( 301 ) $ 433 $ 152 $ 585

Three Months Ended March 31, 2024

Common Stock Class B

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Equity Non-controlling

Interest Total Equity

Shares Value Shares Value

Balance at December 31, 2023 140,637 $ — 377,103 $ 1 $ 2,039 $ ( 1,317 ) $ ( 260 ) $ 463 $ 153 $ 616

Net income — — — — — 96 — 96 — 96

Other comprehensive loss, net of tax — — — — — — ( 41 ) ( 41 ) — ( 41 )

Dividends ($ 0.17 per share)

— — — — — ( 89 ) — ( 89 ) — ( 89 )

Stock-based compensation

— — — — 9 — — 9 — 9

Distribution to noncontrolling interest holders — — — — — — — — ( 1 ) ( 1 )

Shares issued under the Plan

— — — — — — — — — —

Exchange of Class B shares for Class A shares 788 — ( 788 ) — — — — — — —

Shares issued under Omnibus Incentive Plan 171 — — — ( 5 ) — — ( 5 ) — ( 5 )

Balance at March 31, 2024 141,596 $ — 376,315 $ 1 $ 2,043 $ ( 1,310 ) $ ( 301 ) $ 433 $ 152 $ 585

See accompanying notes

24 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended December 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025.

Operating results for the three and six months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025.

The consolidated balance sheet at September 30, 2024 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S.

7 unchanged sentences

If an entity is not deemed to be a VIE, the Company consolidates the entity if the Company has a controlling voting interest.

As of December 31, 2024 and September 30, 2024, there were approximately $ 66 million and $ 77 million of assets, respectively, and $ 2 million and $ 2 million of liabilities, respectively, related to VIEs included in our condensed consolidated balance sheets.

As of March 31, 2025 and September 30, 2024, there were approximately $ 70 million and $ 77 million of assets, respectively, related to VIEs included in our condensed consolidated balance sheets.

As of March 31, 2025 and September 30, 2024, there were approximately $ 2 million of liabilities related to VIEs included in our condensed consolidated balance sheets.

The Company has performed a review of all subsequent events through the date the financial statements were issued and has determined that no additional disclosures are necessary.

27 unchanged sentences

Diluted earnings per share is computed by dividing net income available to each class of stock, less earnings available to participating securities, divided by the weighted average number of outstanding common shares, plus dilutive potential common shares, which is calculated using the treasury-stock method.

The potentially dilutive common shares did not have a dilutive effect on the Company’s EPS calculation for the three months ended December 31, 2024 and 2023, respectively.

The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three months ended December 31, 2024 and 2023 (in millions, except share amounts, which are reflected in thousands, and per share data):

Three Months Ended December 31,

The potentially dilutive common shares did not have a dilutive effect on the Company’s EPS calculation for the three and six months ended March 31, 2025 and 2024.

The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three and six months ended March 31, 2025 and 2024 (in millions, except share amounts, which are reflected in thousands, and per share data):

Three Months Ended March 31,

Class A Class B Class A Class B

3 unchanged sentences

Net income attributable to participating securities (a)

Net income attributable to common stockholders $ 10 $ 26 $ 26 $ 69

Weighted average shares outstanding 144,938 375,380 141,044 376,800

Basic and Diluted EPS $ 0.07 $ 0.07 $ 0.18 $ 0.18

Six Months Ended March 31,

Class A Class B Class A Class B

Basic and Diluted EPS:

Net income attributable to Warner Music Group Corp.

$ 78 $ 194 $ 71 $ 184

Net income attributable to participating securities (a)

( 3 ) — ( 3 ) —

Net income attributable to common stockholders $ 75 $ 194 $ 68 $ 184

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2025 2024 2025 2024

(in millions)

3 unchanged sentences

Total digital and physical

953 959 1,992 2,021

Artist services and expanded-rights 117 126 313 330

5 unchanged sentences

Synchronization 49 48 88 87

Other 4 4 11 7

Total Music Publishing 310 306 633 610

5 unchanged sentences

Music Publishing 161 170 334 342

658 678 1,363 1,477

International Recorded Music 678 681 1,491 1,499

1 unchanged sentence

Total international

827 817 1,790 1,767

Intersegment eliminations ( 1 ) ( 1 ) ( 3 ) ( 2 )

2 unchanged sentences

Sales Returns and Uncollectible Accounts

Based on management’s analysis of sales returns, refund liabilities of $ 22 million and $ 20 million were established at December 31, 2024 and September 30, 2024, respectively.

Based on management’s analysis of estimated credit losses, reserves of $ 24 million and $ 26 million were established at December 31, 2024 and September 30, 2024, respectively.

Based on management’s analysis of sales returns, refund liabilities of $ 17 million and $ 20 million were established at March 31, 2025 and September 30, 2024, respectively.

Based on management’s analysis of estimated credit losses, reserves of $ 23 million and $ 26 million were established at March 31, 2025 and September 30, 2024, respectively.

Deferred Revenue

Deferred revenue increased by $ 244 million during the three months ended December 31, 2024 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period.

Revenues of $ 88 million were recognized during the three months ended December 31, 2024 related to the balance of deferred revenue at September 30, 2024.

Deferred revenue increased by $ 436 million during the six months ended March 31, 2025 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period.

Revenues of $ 146 million were recognized during the six months ended March 31, 2025 related to the balance of deferred revenue at September 30, 2024.

There were no other significant changes to deferred revenue during the reporting period.

Performance Obligations

For the three months ended December 31, 2024 and December 31, 2023, the Company recognized revenue of $ 40 million and $ 30 million, respectively, from performance obligations satisfied in previous periods.

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at December 31, 2024 are as follows:

For the three months ended March 31, 2025 and March 31, 2024, the Company recognized revenue of $ 17 million and $ 44 million, respectively, from performance obligations satisfied in previous periods.

For the six months ended March 31, 2025 and March 31, 2024, the Company recognized revenue of $ 57 million and $ 74 million, respectively, from performance obligations satisfied in previous periods.

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at March 31, 2025 are as follows:

Thereafter Total

11 unchanged sentences

Other comprehensive loss ( 45 ) — ( 45 )

Balances at December 31, 2024 $ ( 373 ) $ ( 3 ) $ ( 376 )

Balances at March 31, 2025 $ ( 289 ) $ ( 3 ) $ ( 292 )

______________________________________

7 unchanged sentences

Other adjustments (a) ( 11 ) — ( 11 )

Balances at December 31, 2024 $ 1,549 $ 464 $ 2,013

Balances at March 31, 2025 $ 1,567 $ 464 $ 2,031

______________________________________

(a) Other adjustments during the three months ended December 31, 2024 represent foreign currency movements.

(a) Other adjustments during the six months ended March 31, 2025 represent foreign currency movements.

The Company performs its annual goodwill impairment test in accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”) during the fourth quarter of each fiscal year as of July 1.

3 unchanged sentences

Intangible assets consist of the following:

Weighted-Average Useful Life December 31,

Weighted-Average Useful Life March 31,

2025 September 30,

12 unchanged sentences

Total net intangible assets $ 2,915 $ 2,511

The decrease in net intangible assets during the three months ended December 31, 2024 is primarily related to foreign currency movements, partially offset by business combinations which resulted in the recognition of intangible assets with a preliminary estimated fair value of $ 39 million in the aggregate within recorded music catalogs, artist and songwriter contracts, trademarks, and other intangibles.

The increase in net intangible assets during the six months ended March 31, 2025 is primarily related to the acquisition of Tempo Music Holdings, LLC (“Tempo”) which is further described below.

Additionally, the Company completed various business combinations during the six months ended March 31, 2025 which resulted in the recognition of intangible assets with a preliminary estimated fair value of $ 38 million in the aggregate within recorded music catalogs, artist and songwriter contracts, trademarks, and other intangibles.

The increase in net intangible assets was partially offset by unfavorable foreign currency movements.

On February 5, 2025, WMG Tempo Holdco LLC, a wholly owned subsidiary of Acquisition Corp.

and an indirect subsidiary of the Company,which has majority representation on the board of WMG Tempo Holdco LLC, acquired a 50.1 % interest in Tempo, a proprietary music rights acquisition platform, for consideration of $ 76 million, including transaction costs, with an option, exercisable on or prior to November 30, 2027, to acquire the remaining 49.9 % of Tempo for approximately $ 73 million, subject to contractual adjustments.

The transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations , and the Company recognized $ 351 million of music publishing copyrights and $ 87 million of recorded music catalogs which will each be amortized over an estimated useful life of 15 years.

Additionally, the Company recognized approximately $ 13 million of net assets, which consists primarily of cash and accounts receivables.

In connection with the transaction, the Company assumed long-term debt held by one of Tempo’s subsidiaries, which was recognized on the acquisition date at its estimated fair value of approximately $ 302 million.

The assumed long-term debt is secured only by certain music rights owned by Tempo and is nonrecourse to the Company and its subsidiaries, other than Tempo (refer to Note 7 for more information on the acquired long-term debt).

Finally, the Company recognized a corresponding noncontrolling interest of $ 73 million based on the fair value of the acquired assets.

Debt Capitalization

Long-term debt, all of which was issued by Acquisition Corp., consists of the following:

As of March 31, 2025, our long-term debt consists of the following:

2025 September 30,

2 unchanged sentences

Senior Term Loan Facility due 2031 1,295 1,295

2.750 % Senior Secured Notes due 2028 (€ 325 face amount)

2.750 % Senior Secured Notes due 2028

3.750 % Senior Secured Notes due 2029

2.250 % Senior Secured Notes due 2031 (€ 445 face amount)

3.875 % Senior Secured Notes due 2030

2.250 % Senior Secured Notes due 2031

3.000 % Senior Secured Notes due 2031

Mortgage Term Loan due 2033 17 18

Total long-term debt, including the current portion $ 3,987 $ 4,048

Issuance premium less unamortized discount and unamortized deferred financing costs ( 32 ) ( 34 )

Total debt, including the current portion 4,020 4,048

Premium less unamortized discount and unamortized DFCs ( 30 ) ( 34 )

Total Acquisition Corp.

long-term debt, including the current portion, net $ 3,990 $ 4,014

Tempo Asset-Based Notes due 2050 311 —

Unamortized discount

Total asset-based long-term debt, including the current portion, net (b)

Total long-term debt, including the current portion, net $ 4,292 $ 4,014

______________________________________

(a) Reflects $ 350 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $ 2 million as of December 31, 2024 and September 30, 2024.

There were no loans outstanding under the Revolving Credit Facility at December 31, 2024 or September 30, 2024.

(a) Reflects $ 350 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $ 2 million as of March 31, 2025 and September 30, 2024.

There were no loans outstanding under the Revolving Credit Facility as of March 31, 2025 and September 30, 2024.

(b) The Tempo Asset-Based Notes due 2050 are secured only by certain music rights owned by Tempo and are nonrecourse to the Company and its subsidiaries, other than Tempo.

The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp.

Acquisition Corp.

is party to a $ 1,295 million senior secured term loan credit facility, pursuant to a credit agreement dated November 1, 2012, as amended or supplemented (the “Senior Term Loan Credit Agreement”) with JPMorgan Chase Bank NA, as administrative agent and collateral agent, and the other financial institutions and lenders from time to time party thereto (the “Senior Term Loan Facility”).

Additionally, as of December 31, 2024 Acquisition Corp.

is party to and the borrower under a $ 1,295 million senior secured term loan credit facility, pursuant to a credit agreement dated November 1, 2012, as amended or supplemented (the “Senior Term Loan Credit Agreement”) with JPMorgan Chase Bank NA, as administrative agent and collateral agent, and the other financial institutions and lenders from time to time party thereto (the “Senior Term Loan Facility”).

Additionally, as of March 31, 2025 Acquisition Corp.

had issued and outstanding the 2.750 % Senior Secured Notes due 2028, the 3.750 % Senior Secured Notes due 2029, the 3.875 % Senior Secured Notes due 2030, the 2.250 % Senior Secured Notes due 2031 and the 3.000 % Senior Secured Notes due 2031 (together, the “Acquisition Corp.

9 unchanged sentences

Senior Credit Facilities, including the Revolving Credit Facility (as defined below) and the Senior Term Loan Facility, should Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increase above 3.50 :1.00 and the term loans not achieve an investment grade rating, the covenants under the Revolving Credit Facility, which are currently suspended, will be reinstated and the ability of the Company and Holdings to obtain funds from their subsidiaries will be restricted by the Revolving Credit Facility.

The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of December 31, 2024 .

The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of March 31, 2025 .

Fiscal 2025 Transactions

Acquisition of Tempo

Following its acquisition of Tempo on February 5, 2025, the Company holds approximately $ 311 million of asset-based securities due November 2050 (“Asset-Based Notes”) issued by a subsidiary of Tempo and secured only by certain music rights owned by Tempo and is nonrecourse to the Company and its subsidiaries, other than Tempo.

These notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62 % until November 30, 2027, with higher interest rates thereafter.

Principal and interest are payable in equal semi-annual installments.

Interest Rates

1 unchanged sentence

provided that, in respect of 2020 Revolving Loans, the applicable margin with respect to such loans is subject to adjustment as set forth in the pricing grid in the Revolving Credit Agreement.

Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.11 x at December 31, 2024,

the applicable margin for SOFR loans and RFR loans would be 1.375 % instead of 1.875 % and the applicable margin for ABR loans would be 0.375 % instead of 0.875 % in the case of 2020 Revolving Loans.

Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.30 x at March 31, 2025, the applicable margin for SOFR loans and risk-free rate loans would be 1.375 % instead of 1.875 % and the applicable margin for ABR loans would be 0.375 % instead of 0.875 % in the case of 2020 Revolving Loans.

If there is a payment default at any time, then the interest rate applicable to overdue principal will be the rate otherwise applicable to such loan plus 2.0 % per annum.

4 unchanged sentences

The term loan entered into on January 27, 2023 (the “Term Loan Mortgage”) bears interest at a rate of 30-day SOFR plus the applicable margin of 1.40 %, subject to a zero floor.

Interest on the Asset-Based Notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62 % until November 30, 2027.

Following November 30, 2027, if the Asset-Based Notes remain outstanding, the interest rate on the outstanding Asset-Based Notes will increase by a per annum rate equal to the greater of:

(i) 5.0 % and (ii) the amount, if any, by which the sum of the following exceeds the interest rate otherwise payable with respect to such Asset-Based Notes:

(A) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on November 30, 2027 of the U.S.

treasury security having a term closest to seven years plus (B) 5.0 %, plus (C) with respect to class A notes, 3.53 % and, with respect to class B notes, 4.28 %.

The Company has entered into, and in the future may enter into, interest rate swaps to manage interest rate risk.

As of December 31, 2024, there are no interest rate swaps outstanding.

As of March 31, 2025, there are no interest rate swaps outstanding.

Maturity of Senior Term Loan Facility

3 unchanged sentences

Maturities of Senior Secured Notes

As of December 31, 2024, there are no scheduled maturities of notes until 2028, when $ 337 million is scheduled to mature.

As of March 31, 2025, there are no scheduled maturities of notes until 2028, when $ 352 million is scheduled to mature.

Thereafter, $ 2.667 billion is scheduled to mature.

1 unchanged sentence

The maturity date of the Term Loan Mortgage is January 27, 2033, subject to a call option exercisable by Truist Bank at any time after January 27, 2028 if certain criteria relating to the Company’s creditworthiness are met.

Maturity of Tempo Asset-Based Notes

The maturity date of the Asset-Based Notes is November 30, 2050.

Interest Expense, net

Total interest expense, net was $ 37 million and $ 39 million for the three months ended December 31, 2024 and 2023, respectively.

Interest expense, net includes interest expense related to our outstanding indebtedness of $ 43 million and $ 45 million for the three months ended December 31, 2024 and 2023, respectively.

The weighted-average interest rate of the Company’s total debt was 4.2 % at December 31, 2024, 4.3 % at September 30, 2024, and 4.6 % at December 31, 2023.

Total interest expense, net was $ 39 million and $ 42 million for the three months ended March 31, 2025 and 2024, respectively, and $ 76 million and $ 81 million for the six months ended March 31, 2025 and 2024, respectively.

Interest expense, net includes interest expense related to our outstanding indebtedness of $ 44 million and $ 46 million for the three months ended March 31, 2025 and 2024, respectively, and $ 87 million and $ 91 million for the six months ended March 31, 2025 and 2024, respectively.

The weighted-average interest rate of the Company’s total debt was 4.1 % at March 31, 2025, 4.3 % at September 30, 2024, and 4.5 % at March 31, 2024.

Restructuring and Impairments

2 unchanged sentences

The Company expects to incur total non-recurring restructuring charges of approximately $ 240 million or approximately $ 160 million of total non-recurring after tax charges .

The expected pre-tax charges include approximately $ 154 million of severance and other termination costs, along with approximately $ 76 million of non-cash impairment charges.

The expected pre-tax charges include approximately $ 158 million of severance and other contract termination costs, along with approximately $ 82 million of non-cash impairment charges.

The majority of severance payments and other termination costs are expected to be paid by the end of fiscal year 2026.

For the three months ended December 31, 2024, total severance costs recorded in connection with the Strategic Restructuring Plan were $ 1 million, of which $ 2 million of expense was recognized in our Recorded Music segment while there was a $ 1 million benefit recognized at Corporate associated with a change in estimate for costs previously recorded.

Additionally, for the three months ended December 31, 2024, the Company recognized $ 26 million of impairment losses which were recognized in our Recorded Music

For the three months ended March 31, 2025, total severance and other contract termination costs recorded in connection with the Strategic Restructuring Plan were $ 7 million, all of which was recognized in our Recorded Music segment.

For the six months ended March 31, 2025, total severance and other contract termination costs recorded in connection with the Strategic Restructuring Plan were $ 8 million, of which $ 9 million of expense was recognized in our Recorded Music segment while there was a $ 1 million benefit recognized at Corporate due to a change in estimate.

Additionally, for the three and six months ended March 31, 2025, the Company recognized $ 6 million and $ 32 million of impairment losses, respectively, all of which were recognized in our Recorded Music segment.

Impairment charges recognized during the period primarily relate to the write-off of certain long-form audiovisual production assets and lease termination costs for office closures.

As of December 31, 2024, total cumulative restructuring and impairment charges recognized in connection with the Strategic Restructuring Plan were $ 205 million with $ 195 million of costs recognized in our Recorded Music segment and $ 10 million recognized at Corporate.

These costs are composed of $ 129 million of severance and other termination benefits, of which $ 7 million was non-cash, and $ 76 million of non-cash impairment charges.

The below table sets forth the activity for the three months ended December 31, 2024 in the restructuring accrual associated with the Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

The Company continues to review its operations for additional cost

savings and efficiencies.

Our ongoing review could result in additional costs and charges which may be significant.

As of March 31, 2025, total cumulative restructuring and impairment charges recognized in connection with the Strategic Restructuring Plan were $ 218 million with $ 208 million of costs recognized in our Recorded Music segment and $ 10 million recognized at Corporate.

These costs are composed of $ 136 million of severance and other contract termination costs, of which $ 7 million was non-cash, and $ 82 million of non-cash impairment charges.

The below table sets forth the activity for the six months ended March 31, 2025 in the restructuring accrual associated with the Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

Severance Costs Contract Termination Costs Total

4 unchanged sentences

Foreign currency movements ( 1 ) — ( 1 )

Balance at December 31, 2024 $ 76 $ 3 $ 79

Balance at March 31, 2025 $ 52 $ 8 $ 60

Commitments and Contingencies

7 unchanged sentences

Stock-based compensation consists primarily of common stock, restricted stock units and market-based performance share units granted to eligible employees and executives under the Omnibus Incentive Plan.

For the three months ended December 31, 2024, the Company recognized a total of $ 13 million of non-cash stock-based compensation expense, which was recorded to additional paid-in capital.

For the three months ended December 31, 2023, the Company recognized a total of $ 9 million of non-cash stock-based compensation expense, all of which was recorded to additional paid-in capital.

During the three months ended December 31, 2024 and 2023, $ 7 million and $ 15 million of share-based compensation liabilities were reclassified to additional paid-in capital upon a certain number of awards becoming determinable, respectively.

During the three months ended December 31, 2024, in connection with the Senior Management Free Cash Flow Plan (the “Plan”), the Company issued a total of 1,738,018 shares of Class A Common Stock to settle participants’ deferred equity units previously issued under the Plan.

During the three months ended December 31, 2024, the Company satisfied the vesting of RSUs by issuing 63,886 shares of Class A Common Stock under the Omnibus Incentive Plan, which is net of shares used to settle employee income tax obligations.

For the three and six months ended March 31, 2025, the Company recognized a total of $ 14 million and $ 27 million of non-cash stock-based compensation expense, respectively, which was recorded to additional paid-in capital.

For the three and six months ended March 31, 2024, the Company recognized a total of $ 9 million and $ 18 million of non-cash stock-based compensation expense, respectively, all of which was recorded to additional paid-in capital.

During the six months ended March 31, 2025 and 2024, $ 7 million and $ 15 million of share-based compensation liabilities were reclassified to additional paid-in capital upon a certain number of awards becoming determinable, respectively.

During the six months ended March 31, 2025, in connection with the Senior Management Free Cash Flow Plan (the “Plan”), the Company issued a total of 1,738,018 shares of Class A Common Stock to settle all remaining participants’ deferred equity units previously issued under the Plan.

During the three and six months ended March 31, 2025, the Company satisfied the vesting of RSUs by issuing 730,903 and 794,789 shares of Class A Common Stock under the Omnibus Incentive Plan, respectively, which is net of shares used to settle employee income tax obligations.

Share Repurchase Program

On November 14, 2024, the Company’s board of directors authorized a new $ 100 million share repurchase program (the “Share Repurchase Program”), which is intended to offset dilution from the Omnibus Incentive Plan.

Under this authorization, the Company may, from time to time, purchase shares of its Class A Common Stock through open market transactions, privately

negotiated transactions, forward, derivative, or accelerated repurchase transactions, tender offers or otherwise, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act.

Under this authorization, the Company may, from time to time, purchase shares of its Class A Common Stock through open market transactions, privately negotiated transactions, forward, derivative, or accelerated repurchase transactions, tender offers or otherwise, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act.

The $ 100 million share repurchase authorization does not obligate the Company to purchase any shares and the Share Repurchase Program does not have a fixed expiration date.

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The authorization for the Share Repurchase Program may be suspended, terminated, increased or decreased by the Company’s board of directors at any time.

The following table summarizes our total share repurchases and retirement under the Share Repurchase Program during the three months ended December 31, 2024:

We did not repurchase any common shares during the three months ended March 31, 2025.

The following table summarizes our total share repurchases and retirement under the Share Repurchase Program during the three and six months ended March 31, 2025:

Three Months Ended

March 31, 2025 Six Months Ended

March 31, 2025

Share Repurchase Type

Shares Amount

(in millions) Shares Amount

(in millions)

Open Market Repurchases

For the three months ended December 31, 2024, the Company recorded an income tax expense of $ 89 million.

The income tax expense for the three months ended December 31, 2024 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than the United States, including withholding taxes, and U.S.

state and local taxes, unrecognized tax benefit related to uncertain tax positions, and non-deductible executive compensation under IRC Section 162(m).

These charges were partially offset by tax benefits associated with R&D credits, and the net impact of GILTI and foreign derived intangible income (“FDII”).

For the three months ended December 31, 2023, the Company recorded an income tax expense of $ 72 million.

The income tax expense for the three months ended December 31, 2023 is higher than the expected tax benefit at the statutory tax rate of 21% primarily due to foreign income taxed at rates higher than the United States, including withholding taxes, U.S.

state and local taxes, unrecognized tax benefit related to uncertain tax positions, and non-deductible executive compensation under IRC Section 162(m).

These charges were partially offset by tax benefits associated with R&D credits, release of U.S.

state valuation allowance, and the net impact of GILTI and FDII.

The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of December 31, 2024 could decrease by up to approximately $ 2 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months.

— $ — 60,383 $ 2

For the three and six months ended March 31, 2025, the Company recorded an income tax expense of $ 29 million and $ 118 million, respectively.

The income tax expense for the three and six months ended March 31, 2025 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, U.S.

state and local taxes, non-deductible executive compensation under IRC Section 162(m), and unrecognized tax benefit related to uncertain tax positions.

These charges were partially offset by tax benefits associated with Research and Development (“R&D”) credits, and the net impact of GILTI and foreign derived intangible income (“FDII”).

For the three and six months ended March 31, 2024, the Company recorded an income tax expense of $ 18 million and $ 90 million, respectively.

The income tax expense for the three and six months ended March 31, 2024 is higher than the expected tax benefit at the statutory tax rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, U.S.

state and local taxes, non-deductible executive compensation under IRC Section 162(m), and unrecognized tax benefit related to uncertain tax positions.

These charges were partially offset by the tax benefit from the winding down of the Company’s owned and operated media properties, nontaxable income from partnerships, the net impact of GILTI and FDII, and tax benefits associated with R&D credits.

The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of March 31, 2025 could decrease by up to approximately $ 2 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months.

The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%.

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The Company uses derivative financial instruments, primarily foreign currency forward exchange contracts, for the purposes of managing foreign currency exchange rate risk on expected future cash flows.

As of December 31, 2024, the Company had outstanding foreign currency forward exchange contracts for the sale of $ 438 million and the purchase of $ 260 million of foreign currencies at fixed rates that will be settled by September 2025.

As of March 31, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $ 369 million and the purchase of $ 206 million of foreign currencies at fixed rates that will be settled by September 2025.

As of September 30, 2024, the Company had no foreign currency forward exchange contracts outstanding.

The Company recorded realized pre-tax gains of $ 3 million and unrealized pre-tax gains of $ 12 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the three months ended December 31, 2024.

The Company recorded no realized pre-tax gains or losses and recorded unrealized pre-tax losses of $ 6 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the three months ended December 31, 2023.

The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at December 31, 2024 and September 30, 2024:

The Company recorded realized pre-tax gains of $ 7 million and unrealized pre-tax gains of $ 3 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the six months ended March 31, 2025.

The Company recorded realized pre-tax gains of $ 1 million and recorded no unrealized pre-tax gains or losses related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the six months ended March 31, 2024.

The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at March 31, 2025 and September 30, 2024:

2025 September 30,

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Three Months Ended (in millions)

December 31, 2024

March 31, 2025

Revenues $ 1,175 $ 310 $ ( 1 ) $ 1,484

1 unchanged sentence

270 85 ( 52 ) 303

December 31, 2023

March 31, 2024

Revenues $ 1,189 $ 306 $ ( 1 ) $ 1,494

1 unchanged sentence

272 82 ( 42 ) 312

Publishing Corporate

eliminations Total

Six Months Ended (in millions)

March 31, 2025

Revenues $ 2,520 $ 633 $ ( 3 ) $ 3,150

Adjusted OIBDA

593 168 ( 95 ) 666

March 31, 2024

Revenues 2,634 610 ( 2 ) 3,242

Adjusted OIBDA

684 168 ( 89 ) 763

Adjusted OIBDA is not a measure defined by U.S.

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For the Three Months Ended

March 31, For the Six Months Ended

2025 2024 2025 2024

Operating income $ 168 $ 119 $ 382 $ 473

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Supplemental Cash Flow Disclosures

The Company made interest payments of approximately $ 18 million and $ 33 million during the three months ended December 31, 2024 and 2023, respectively.

The Company paid approximately $ 43 million and $ 39 million of income and withholding taxes, net of refunds, for the three months ended December 31, 2024 and 2023, respectively.

Non-cash investing activities were approximately $ 18 million related to business combinations and the acquisition of music catalogs during the three months ended December 31, 2024, and $ 18 million related to the acquisition of music publishing rights and music catalogs during the three months ended December 31, 2023.

The Company made interest payments of approximately $ 53 million and $ 57 million during the three months ended March 31, 2025 and 2024, respectively, and approximately $ 71 million and $ 90 million during the six months ended March 31, 2025 and 2024, respectively.

The Company paid approximately $ 58 million and $ 33 million of income and withholding taxes, net of refunds, for the three months ended March 31, 2025 and 2024, respectively, and approximately $ 101 million and $ 72 million of income and withholding taxes, net of refunds, for the six months ended March 31, 2025 and 2024, respectively.

Non-cash investing activities were approximately $ 34 million related to business combinations and the acquisition of music catalogs during the six months ended March 31, 2025, and $ 18 million related to the acquisition of music publishing rights and music catalogs during the six months ended March 31, 2024.

Net Gain on Divestitures

The Company recognized a pre-tax gain of $ 17 million during the three months ended December 31, 2023 in connection with the divestiture of certain sound recordings rights in the period which has been reflected as a net gain on divestiture in the accompanying condensed consolidated statement of operations.

The Company recognized a pre-tax gain of $ 14 million and $ 31 million during the three and six months ended March 31, 2024, respectively, in connection with the divestiture of certain sound recordings rights in the period which has been reflected as a net gain on divestiture in the accompanying condensed consolidated statement of operations.

Net Gain on Sale of Investments

The Company recognized a pre-tax realized net gain of $ 29 million during the three months ended December 31, 2024 in connection with the sale of an investment which has been presented within the Other income (expense) line of the accompanying condensed consolidated statement of operations.

The Company recognized a pre-tax realized net gain of $ 29 million during the six months ended March 31, 2025 in connection with the sale of an investment which has been presented within the Other income (expense) line of the accompanying condensed consolidated statement of operations.

The Company’s ability to pay dividends may be restricted by covenants in the credit agreement for the Revolving Credit Facility which are currently suspended but which will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50 :1.00 and the term loans do not achieve an investment grade rating.

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Therefore, there can be no assurance that the Company will pay any dividends to holders of the Company’s common stock, or as to the amount of any such dividends.

On November 8, 2024, the Company’s board of directors declared a cash dividend of $ 0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on December 3, 2024.

The Company paid an aggregate of approximately $ 94 million, or $ 0.18 per share, in cash dividends to stockholders and participating security holders for the three months ended December 31, 2024.

On February 14, 2025, the Company’s board of directors declared a cash dividend of $ 0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on March 4, 2025.

The Company paid an aggregate of approximately $ 95 million and $ 189 million, or $ 0.18 and $ 0.36 per share, in cash dividends to stockholders and participating security holders for the three and six months ended March 31, 2025.

Fair Value Measurements

The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of December 31, 2024 and September 30, 2024.

Fair Value Measurements as of December 31, 2024

The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of March 31, 2025 and September 30, 2024.

Fair Value Measurements as of March 31, 2025

(Level 1) (Level 2) (Level 3) Total

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Foreign currency forward exchange contracts (a)

$ — $ 4 $ — $ 4

Other current liabilities:

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The Company has elected to use the measurement alternative to fair value that will allow these investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes.

In each of the three month periods ended December 31, 2024 and 2023, the Company recorded approximately $ 1 million of impairment charges on these investments.

In addition, there were no observable price changes events that were completed during the three months ended December 31, 2024 and 2023.

In the three and six month periods ended March 31, 2025, the Company recorded approximately $ 2 million and $ 3 million of impairment charges on these investments, respectively.

The Company did not record any impairment charges on these investments during the three months ended March 31, 2024 and recorded approximately $ 1 million of impairment charges on these investments during the six months ended March 31, 2024.

In addition, there were no observable price changes events that were completed during the three and six months ended March 31, 2025 and 2024.

Fair Value of Debt

Based on the level of interest rates prevailing at December 31, 2024, the fair value of the Company’s debt was $ 3.751 billion.

Based on the level of interest rates prevailing at March 31, 2025, the fair value of the Company’s debt was $ 4.112 billion.

Based on the level of interest rates prevailing at September 30, 2024, the fair value of the Company’s debt was $ 3.836 billion.

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both approaches are considered a Level 2 measurement.

Subsequent Events

The Company has performed a review of all subsequent events through the date the financial statements were issued on February 6, 2025.

On February 5, 2025, WMG Tempo Holdco LLC, a wholly owned subsidiary of Acquisition Corp.

and an indirect subsidiary of the Company, entered into a Share Purchase Agreement by and among WMG Tempo Holdco LLC and various affiliates of Providence Equity Partners, including Tempo Music Holdings, LLC (“Tempo”), a proprietary music rights acquisition platform, pursuant to which WMG Tempo Holdco LLC (a) acquired a 50.1 % interest in Tempo for approximately $ 76 million, subject to a post-closing working capital adjustment, and (b) received an option, exercisable on or prior to November 30, 2027, to acquire the remaining

49.9 % of Tempo for approximately $ 73 million, subject to contractual adjustments.

A subsidiary of Tempo is the issuer of approximately $ 311 million of asset-based securities due November 2050 secured by certain music rights owned by Tempo.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements