Warner Music Group Corp. Reports Results for the Fiscal Fourth
Quarter and Full Year Ended September 30, 2011

12/08/11
--  Adjusted OIBDA and adjusted OIBDA margin expanded in the quarter and
    fiscal year
--  Digital revenue represented nearly 50% of U.S. Recorded Music revenue
    in the quarter

Warner Music Group Corp. today announced its fourth-quarter and full-year financial results for the period ended September 30, 2011.

"In the quarter and throughout the fiscal year, WMG continued to perform," said Stephen Cooper, Warner Music Group's CEO. "The company grew digital and '360' revenue, executed on its strategy of establishing more comprehensive artist partnerships and continued to position itself well for the opportunities that exist in the rapidly evolving recorded music and music publishing industries."

"Our cost-management efforts and the continued transition from physical to digital revenue streams enabled us to increase adjusted OIBDA margins for both the fourth quarter and the fiscal year," added Steven Macri, Warner Music Group's Executive Vice President and CFO.

Total WMG

Total WMG Summary Results
----------------------------------------------------------------------------
(dollars in millions)
                 For the                        For the
                 Combined    For the            Combined    For the
                  Three       Three              Twelve      Twelve
                  Months      Months             Months      Months
                  ended       ended              ended       ended
                September   September     %    September   September     %
               30, 2011(1)   30, 2010  Change 30, 2011(1)   30, 2010  Change
               ----------- ----------- ------ ----------- ----------- ------
               (unaudited) (unaudited)        (unaudited) (unaudited)
Revenue        $       707 $       753   (6%) $     2,869 $     2,988   (4%)
Digital Revenue        210         197     7%         820         759     8%
Operating
 income (loss)        (21)          20      -          32          90  (64%)
Adjusted
 operating
 income (loss)
 (1)                    39          20    95%          99          90    10%
OIBDA                   41          85  (52%)         290         348  (17%)
Adjusted
 OIBDA(1)              101          85    19%         357         348     3%
Net loss
 attributable
 to Warner
 Music Group
 Corp.               (103)        (46) (124%)       (205)       (143)  (43%)
Adjusted Net
 loss
 attributable
 to Warner
 Music Group
 Corp.(1)      $      (43) $      (46)     7% $     (138) $     (143)     3%

----------------------------------------------------------------------------

(1) See "Supplemental Disclosures Regarding Non-GAAP Financial Measures" at
 the end of this release for details regarding these measures.



Fourth-Quarter Results For the quarter, revenue reflects a light release schedule, as well as the continued transition to digital in the recorded music industry. Revenue growth in France, Spain and Latin America was offset by weakness in the U.S., Japan and the rest of Europe. Digital revenue represented 29.7% of total revenue for the quarter, compared to 26.2% in the prior-year quarter. The growth in digital revenue reflects growth in global downloads and subscription/streaming services, partially offset by continued declines in the ringtone business.

Adjusted operating margin expanded 2.8 percentage points to 5.5% from 2.7%. Adjusted OIBDA margin expanded 3.0 percentage points to 14.3% from 11.3%. Operating income, adjusted operating income, OIBDA and adjusted OIBDA for the quarter included $10 million of severance charges ($7 million in Recorded Music and $3 million in Corporate) compared to $34 million of severance charges in the prior-year quarter ($31 million in Recorded Music, $2 million in Music Publishing and $1 million in Corporate) (the "Quarterly Severance Charges"). See below for calculations and reconciliations of OIBDA and OIBDA margin.

Adjusted net loss reflects the impact of an increase in interest expense, to $72 million from $47 million, related to the July 2011 refinancing of certain existing indebtedness in connection with the acquisition of the company by Access Industries. The refinancing resulted in $19 million in tender/call premiums and $15 million of accrued interest paid in connection with the debt obligations repaid in full. In addition, the new debt obligations carry higher interest rates.

As of September 30, 2011, the company reported a cash balance of $154 million, total long-term debt of $2.22 billion and net debt (total long-term debt minus cash) of $2.06 billion.

Cash used in operating activities was $34 million compared to cash provided by operating activities of $50 million in the prior-year quarter. Free Cash Flow, defined below, was negative $52 million compared to positive $25 million in the prior-year quarter. The primary factors impacting the comparison of Free Cash Flow were $46 million in expenses related to the acquisition of the company by Access Industries (the vast majority of which were paid in the fourth quarter) and the $34 million increase in cash paid for tender/call premiums and interest.

Full-Year Results For the fiscal year, revenue reflects the continued decline in physical sales in the recorded music industry and a more robust release schedule in the prior fiscal year, partially offset by increases in digital revenue, licensing revenue and non-traditional Recorded Music revenue. Digital revenue represented 28.6% of total revenue, compared to 25.4% in the prior year.

Adjusted operating margin expanded 0.5 percentage points to 3.5% from 3.0% in the prior year. Adjusted OIBDA margin expanded 0.8 percentage points to 12.4% from 11.6% in the prior year. Operating income, adjusted operating income, OIBDA and adjusted OIBDA in the fiscal year included $38 million of severance charges ($24 million in Recorded Music, $6 million in Music Publishing and $8 million in Corporate) compared to $54 million of severance charges in the prior fiscal year ($46 million in Recorded Music, $2 million in Music Publishing and $6 million in Corporate) (the "Fiscal-Year Severance Charges").

Adjusted net loss reflects the impact of the increase in interest expense related to the July 2011 refinancing of certain indebtedness in connection with the acquisition of the company by Access Industries.

Cash used in operating activities was $52 million compared to cash provided by operating activities of $150 million in the prior fiscal year. Free Cash Flow was negative $221 million, compared to positive $65 million in fiscal year 2010. The primary factors impacting the comparison in Free Cash Flow between the fiscal year and fiscal year 2010 were $87 million in additional investments in the fiscal year, $53 million in expenses related to the acquisition of the company by Access Industries (the vast majority of which were paid in the fiscal year) and the $41 million increase in cash paid for tender/call premiums and interest, largely driven by the July 2011 refinancing.

Recorded Music

Recorded Music Summary Results
----------------------------------------------------------------------------
(dollars in millions)
              For the                          For the
             Combined      For the            Combined      For the
           Three Months Three Months           Twelve       Twelve
               ended        ended           Months ended Months ended
             September    September     %     September    September     %
            30, 2011(1)   30, 2010   Change  30, 2011(1)   30, 2010   Change
           ------------ ------------ ------ ------------ ------------ ------
            (unaudited)  (unaudited)         (unaudited)  (unaudited)
Revenue    $        571 $        620   (8%) $      2,344 $      2,459   (5%)
Digital
 Revenue            194          183     6%          768          713     8%
Operating
 income
 (loss)              13            7    86%          110          102     8%
Adjusted
 operating
 income
 (loss) (1)          21            7   200%          118          102    16%
OIBDA                54           52     4%          282          279     1%
Adjusted
 OIBDA(1)  $         62 $         52    19% $        290 $        279     4%

----------------------------------------------------------------------------

(1) See "Supplemental Disclosures Regarding Non-GAAP Financial Measures" at
 the end of this release for details regarding these measures.



Fourth-Quarter Results The company's Recorded Music business experienced growth in digital revenue, as download revenue and subscription/streaming revenue were strong. Recorded Music digital revenue represented 34.0% of total Recorded Music revenue, compared to 29.5% in the prior-year quarter. Domestic Recorded Music digital revenue was $107 million, or 49.5% of total domestic Recorded Music revenue, compared to 39.5% in the prior-year quarter. Non-traditional Recorded Music revenue also grew, driven by the company's European concert promotion business. The digital revenue growth was more than offset by contracting demand for physical product. Major sellers included Red Hot Chili Peppers, Bruno Mars, Lenny Kravitz, Blake Shelton and Jason Derulo.

Recorded Music adjusted operating margin expanded 2.6 percentage points to 3.7% from 1.1% in the prior-year quarter. Recorded Music adjusted OIBDA margin expanded 2.5 percentage points to 10.9% from 8.4% in the prior-year quarter. Operating income, adjusted operating income, OIBDA and adjusted OIBDA reflects the impact of the Quarterly Severance Charges.

Full-Year Results Digital Recorded Music revenue represented 32.8% of Recorded Music revenue for the fiscal year, up from 29.0% in fiscal year 2010. Domestic Recorded Music digital revenue amounted to $433 million, or 45.2% of total domestic Recorded Music revenue, up from $421 million or 40.4% in the prior fiscal year. Major sellers included Bruno Mars, Cee Lo Green, Red Hot Chili Peppers, Michael Buble and James Blunt.

Recorded Music adjusted operating margin expanded 0.9 percentage points to 5.0% from 4.1% in the prior year. Recorded Music adjusted OIBDA margin grew 1.0 percentage point to 12.4% from 11.4% in the prior year. Operating income, adjusted operating income, OIBDA and adjusted OIBDA reflect the impact of the Fiscal-Year Severance Charges.

Music Publishing

Music Publishing Summary Results
----------------------------------------------------------------------------
(dollars in millions)
              For the                          For the
             Combined      For the            Combined      For the
           Three Months Three Months           Twelve       Twelve
               ended        ended           Months ended Months ended
             September    September     %     September    September     %
            30, 2011(1)   30, 2010   Change  30, 2011(1)   30, 2010   Change
           ------------ ------------ ------ ------------ ------------ ------
            (unaudited)  (unaudited)         (unaudited)  (unaudited)
Revenue    $        141 $        142   (1%) $        544 $        556   (2%)
Digital
 Revenue             17           18   (6%)           60           59     2%
Operating
 income
 (loss)              40           38     5%           73           86  (15%)
Adjusted
 operating
 income
 (loss) (1)          43           38    13%           76           86  (12%)
OIBDA                57           56     2%          147          157   (6%)
Adjusted
 OIBDA(1)  $         60 $         56     7% $        150 $        157   (4%)

----------------------------------------------------------------------------

(1) See "Supplemental Disclosures Regarding Non-GAAP Financial Measures" at
 the end of this release for details regarding these measures.



Fourth-Quarter Results Music Publishing results in the prior-year quarter included the benefit of $5 million in revenue and $2 million in OIBDA from an agreement reached by the U.S. recorded music and music publishing industries, related to the payment of mechanical royalties accrued in prior years by record companies. Mechanical revenue declined, reflecting the ongoing transition in the recorded music industry as well as the mechanical royalties benefit in the prior-year quarter. An increase in performance revenue reflected recent acquisitions and timing of collections from international societies, while declines in synchronization and digital revenue were also due to timing.

Music Publishing adjusted operating margin expanded 3.7 percentage points to 30.5% from 26.8% in the prior-year quarter. Music Publishing adjusted OIBDA margin expanded 3.2 percentage points to 42.6% from 39.4%. Operating income, adjusted operating income, OIBDA and adjusted OIBDA reflect the impact of the Quarterly Severance Charges.

Full-Year Results The decrease in Music Publishing revenue was driven by an expected decrease in mechanical revenue, partially offset by an increase in synchronization revenue, performance revenue, digital revenue and other revenue. Digital Music Publishing revenue represented 11.0% of total Music Publishing revenue in the fiscal year, compared to 10.6% in fiscal year 2010.

Music Publishing adjusted operating margin was 14.0%, down 1.5 percentage points from 15.5% in fiscal year 2010. Music Publishing adjusted OIBDA margin was 27.6%, down 0.6 percentage points from 28.2% in the prior year. Operating income, adjusted operating income, OIBDA and OIBDA margin reflect the impact of the Fiscal-Year Severance Charges.

Financial details for the quarter and fiscal year can be found in the company's Annual Report on Form 10-K, for the period ended September 30, 2011, filed today with the Securities and Exchange Commission.

This morning, management will be hosting a conference call to discuss the results at 8:30 A.M. EST. The call will be webcast on www.wmg.com.

About Warner Music Group With its broad roster of new stars and legendary artists, Warner Music Group is home to a collection of the best-known record labels in the music industry including Asylum, Atlantic, Cordless, East West, Elektra, Nonesuch, Reprise, Rhino, Roadrunner, Rykodisc, Sire, Warner Bros. and Word, as well as Warner/Chappell Music, one of the world's leading music publishers, with a catalog of more than one million copyrights worldwide.

"Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995 This communication includes forward-looking statements that reflect the current views of Warner Music Group about future events and financial performance. Words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts" and variations of such words or similar expressions that predict or indicate future events or trends, or that do not relate to historical matters, identify forward-looking statements. All forward-looking statements are made as of today, and we disclaim any duty to update such statements. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that management's expectations, beliefs and projections will result or be achieved. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Please refer to our Form 10-K, Form 10-Qs and our other filings with the U.S. Securities and Exchange Commission concerning factors that could cause actual results to differ materially from those described in our forward-looking statements.

We maintain an Internet site at www.wmg.com. We use our website as a channel of distribution of material company information. Financial and other material information regarding Warner Music Group is routinely posted on and accessible at http://investors.wmg.com. In addition, you may automatically receive email alerts and other information about Warner Music Group by enrolling your email by visiting the "email alerts" section at http://investors.wmg.com. Our website and the information posted on it or connected to it shall not be deemed to be incorporated by reference into this communication.

Figure 1. Warner Music Group Corp. - Consolidated Statements of Operations,
 Three and Twelve Months 9/30/11 versus 9/30/10 (dollars in millions)

                    Successor   Predecessor               Predecessor
                  ------------ ------------              ------------
                                               For the
                    From July                 Combined      For the
                    20, 2011   From July 1, Three Months Three Months
                     through   2011 through     ended        Ended
                    September    July 19,     September    September     %
                    30, 2011       2011       30, 2011     30, 2010   Change
                  ------------ ------------ ------------ ------------ ------
                   (unaudited)  (unaudited)  (unaudited)  (unaudited)
Revenues          $        554 $        153 $        707 $        753   (6%)
Costs and
 expenses:
Cost of revenues         (286)         (83)        (369)        (388)   (5%)
Selling, general
 and
 administrative
 expenses                (186)         (76)        (262)        (291)  (10%)
Transaction costs         (10)         (36)         (46)            -      -
Amortization of
 intangible assets        (38)         (13)         (51)         (54)   (6%)
                  ------------ ------------ ------------ ------------ ------
Total costs and
 expenses         $      (520) $      (208) $      (728) $      (733)   (1%)
                  ------------ ------------ ------------ ------------ ------
Operating income
 (loss)           $         34 $       (55) $       (21) $         20      -
Interest expense,
 net                      (62)         (10)         (72)         (47)    53%
Impairment of
 cost-method
 investment                  -            -            -            -      -
Other income
 (expense), net              -            -            -          (2) (100%)
                  ------------ ------------ ------------ ------------ ------
Loss before income
 taxes            $       (28) $       (65) $       (93) $       (29)      -
                  ------------ ------------ ------------ ------------ ------
Income tax expense         (3)          (7)         (10)         (17)  (41%)
                  ------------ ------------ ------------ ------------ ------
Net loss          $       (31) $       (72) $      (103) $       (46)      -
Less: loss
 attributable to
 noncontrolling
 interest                    -            -            -            -      -
                  ------------ ------------ ------------ ------------ ------
Net loss
 attributable to
 Warner Music
 Group Corp.      $       (31) $       (72) $      (103) $       (46)      -
                  ============ ============ ============ ============ ======


                    Successor   Predecessor               Predecessor
                  --------------------------             -------------
                                               For the
                    From July                 Combined      For the
                    20, 2011   From October    Twelve       Twelve
                     through      1, 2010   Months ended Months ended
                    September  through July   September    September     %
                    30, 2011     19, 2011     30, 2011     30, 2010   Change
                  ------------ ------------ ------------ ------------ ------
                    (audited)    (audited)   (unaudited)   (audited)
Revenues          $        554 $      2,315 $      2,869 $      2,988   (4%)
Costs and
 expenses:
Cost of revenues         (286)      (1,265)      (1,551)      (1,584)   (2%)
Selling, general
 and
 administrative
 expenses                (186)        (831)      (1,017)      (1,095)   (7%)
Transaction costs         (10)         (43)         (53)            -      -
Amortization of
 intangible
 assets                   (38)        (178)        (216)        (219)   (1%)
                  ------------ ------------ ------------ ------------ ------
Total costs and
 expenses         $      (520) $    (2,317) $    (2,837) $    (2,898)   (2%)
                  ------------ ------------ ------------ ------------ ------
Operating income
 (loss)           $         34 $        (2) $         32 $         90  (64%)
Interest expense,
 net                      (62)        (151)        (213)        (190)    12%
Impairment of
 cost-method
 investment                  -            -            -          (1) (100%)
Other income
 (expense), net              -            5            5          (3)      -
                  ------------ ------------ ------------ ------------ ------
Loss before
 income taxes     $       (28) $      (148) $      (176) $      (104)    69%
                  ------------ ------------ ------------ ------------ ------
Income tax
 expense                   (3)         (27)         (30)         (41)  (27%)
                  ------------ ------------ ------------ ------------ ------
Net loss          $       (31) $      (175) $      (206) $      (145)    42%
Less: loss
 attributable to
 noncontrolling
 interest                    -            1            1            2  (50%)
                  ------------ ------------ ------------ ------------ ------
Net loss
 attributable to
 Warner Music
 Group Corp.      $       (31) $      (174) $      (205) $      (143)    43%
                  ============ ============ ============ ============ ======


Figure 2. Warner Music Group Corp. - Consolidated Balance Sheets as of
 9/30/2011 and 09/30/10 (dollars in millions)

                                     Successor      Predecessor
                                  --------------  --------------
                                   September 30,   September 30,
                                       2011            2010       % Change
                                  --------------  --------------  --------
                                     (audited)       (audited)
Assets:
Current Assets
  Cash & cash equivalents         $          154  $          439       (65%)
  Accounts receivable, less
   allowances of $0 and $111                 385             434       (11%)
  Inventories                                 29              37       (22%)
  Royalty advances (expected to
   be recouped w/in 1 year)                  141             143        (1%)
  Deferred tax assets                         54              30        80%
  Other current assets                        86              78        10%
                                  --------------  --------------  --------
Total Current Assets              $          849  $        1,161       (27%)
Royalty advances (expected to be
 recouped after 1 year)                      173             189        (8%)
Property, plant & equipment, net             182             121        50%
Goodwill                                   1,366           1,057        29%
Intangible assets subject to
 amortization, net                         2,718           1,119         -
Intangible assets not subject to
 amortization                                102             100         2%
Other assets                                  79              64        23%
                                  --------------  --------------  --------
Total Assets                      $        5,469  $        3,811        44%
                                  ==============  ==============  ========

Liabilities & Equity (Deficit):
Current Liabilities
  Accounts payable                $          165  $          206       (20%)
  Accrued royalties                          974           1,034        (6%)
  Accrued liabilities                        217             314       (31%)
  Accrued interest                            55              59        (7%)
  Deferred revenue                           101             100         1%
  Other current liabilities                   53              40        33%
                                  --------------  --------------  --------
Total Current Liabilities         $        1,565  $        1,753       (11%)

Long-term debt                             2,217           1,945        14%
Deferred tax liabilities                     420             169         -
Other noncurrent liabilities                 154             155        (1%)
                                  --------------  --------------  --------
Total Liabilities                 $        4,356  $        4,022         8%

Common stock                                   -               -
Additional paid-in capital                 1,129             611        85%
Accumulated deficit                          (31)           (929)      (97%)
Accumulated other comprehensive
 (loss) income, net                           (2)             53         -
                                  --------------  --------------  --------
Total Warner Music Group Corp.
 Equity (Deficit)                 $        1,096  $         (265)        -

Noncontrolling interest                       17              54       (69%)
                                  --------------  --------------  --------
Total Equity (Deficit)                     1,113            (211)        -
                                  --------------  --------------  --------

                                  --------------  --------------  --------
Total Liabilities & Equity
 (Deficit)                        $        5,469  $        3,811        44%
                                  ==============  ==============  ========



Figure 3. Warner Music Group Corp. - Summarized Statements of Cash Flows,
 Three and Twelve Months 9/30/11 versus 9/30/10 (dollars in millions)


                Successor      Predecessor                     Predecessor
             --------------  --------------                  --------------
                                                 For the
              From July 20,                  Combined Three   For the Three
              2011 through    From July 1,    Months ended    Months Ended
              September 30,   2011 through    September 30,   September 30,
                  2011        July 19, 2011       2011            2010
             --------------  --------------  --------------  --------------
               (unaudited)     (unaudited)     (unaudited)     (unaudited)
Net cash
 (used in)
 provided by
 operating
 activities  $          (64) $           30  $          (34) $           50
Net cash
 used in
 investing
 activities          (1,292)             (4)         (1,296)            (24)
Net cash
 provided by
 (used in)
 financing
 activities           1,199               -           1,199              (1)
Effect of
 foreign
 currency
 exchange
 rates on
 cash                    (8)              3              (5)             14
             --------------  --------------  --------------  --------------
Net
 (decrease)
 increase in
 cash        $         (165) $           29  $         (136) $           39
             ==============  ==============  ==============  ==============



                Successor      Predecessor                     Predecessor
             --------------  --------------                  --------------
                                                 For the
                                                Combined
              From July 20,   From October    Twelve Months  For the Twelve
              2011 through       1, 2010          ended       Months ended
              September 30,   through July    September 30,   September 30,
                  2011          19, 2011          2011            2010
             --------------  --------------  --------------  --------------
                (audited)       (audited)      (unaudited)      (audited)
Net cash
 (used in)
 provided by
 operating
 activities  $          (64) $           12  $          (52) $          150
Net cash
 used in
 investing
 activities          (1,292)           (155)         (1,447)            (85)
Net cash
 provided by
 (used in)
 financing
 activities           1,199               5           1,204              (3)
Effect of
 foreign
 currency
 exchange
 rates on
 cash                    (8)             18              10              (7)
             --------------  --------------  --------------  --------------
Net
 (decrease)
 increase in
 cash        $         (165) $         (120) $         (285) $           55
             ==============  ==============  ==============  ==============


Supplemental Disclosures Regarding Non-GAAP Financial Measures We evaluate our operating performance based on several factors, including the following non-GAAP financial measures:

OIBDA OIBDA reflects our operating income before non-cash depreciation of tangible assets, non-cash amortization of intangible assets and non-cash impairment charges to reduce the carrying value of goodwill and intangible assets. We consider OIBDA to be an important indicator of the operational strengths and performance of our businesses, and believe the presentation of OIBDA helps improve the ability to understand the company's operating performance and evaluate our performance in comparison to comparable periods. However, a limitation of the use of OIBDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenue in our businesses. Accordingly, OIBDA should be considered in addition to, not as a substitute for, operating income, net income (loss) and other measures of financial performance reported in accordance with accounting principles generally accepted in the U.S ("GAAP"). In addition, OIBDA, as we calculate it, may not be comparable to similarly titled measures employed by other companies.


Figure 4. Warner Music Group Corp. - Reconciliation of OIBDA to Net Loss,
 Three and Twelve Months 9/30/11 versus 9/30/10 (dollars in millions)


                  Successor   Predecessor               Predecessor
                ------------ ------------              ------------
                                             For the
                  From July                 Combined      For the
                  20, 2011   From July 1, Three Months Three Months
                   through   2011 through     ended        Ended
                  September    July 19,     September    September
                  30, 2011       2011       30, 2011     30, 2010   % Change
                ------------ ------------ ------------ ------------ --------
                 (unaudited)  (unaudited)  (unaudited)  (unaudited)
OIBDA           $         81 $       (40) $         41 $         85    (52%)
Depreciation
 expense                 (9)          (2)         (11)         (11)        -
Amortization
 expense                (38)         (13)         (51)         (54)     (6%)
                ------------ ------------ ------------ ------------ --------
Operating
 income (loss)  $         34 $       (55) $       (21) $         20        -
Interest
 expense, net           (62)         (10)         (72)         (47)      53%
Other (expense)
 income, net               -            -            -          (2)   (100%)
                ------------ ------------ ------------ ------------ --------
Loss before
 income taxes   $       (28) $       (65) $       (93) $       (29)        -
                ------------ ------------ ------------ ------------ --------
Income tax
 expense                 (3)          (7)         (10)         (17)    (41%)
                ------------ ------------ ------------ ------------ --------
Net loss        $       (31) $       (72) $      (103) $       (46)        -
Less: loss
 attributable
 to
 noncontrolling
 interest                  -            -            -            -        -
                ------------ ------------ ------------ ------------ --------
Net loss
 attributable
 to Warner
 Music Group
 Corp.          $       (31) $       (72) $      (103) $       (46)        -
                ============ ============ ============ ============ ========


Operating
 income margin          6.1%      (35.9%)       (3.0%)         2.7%
OIBDA margin           14.6%      (26.1%)         5.8%        11.3%

                  Successor   Predecessor               Predecessor
                ------------ ------------              ------------
                                             For the
                  From July                 Combined      For the
                  20, 2011   From October    Twelve       Twelve
                   through      1, 2010   Months ended Months ended
                  September  through July   September    September
                  30, 2011     19, 2011     30, 2011     30, 2010   % Change
                ------------ ------------ ------------ ------------ --------
                 (unaudited)  (unaudited)  (unaudited)  (unaudited)
OIBDA           $         81 $        209 $        290 $        348    (17%)
Depreciation
 expense                 (9)         (33)         (42)         (39)       8%
Amortization
 expense                (38)        (178)        (216)        (219)     (1%)
                ------------ ------------ ------------ ------------ --------
Operating
 income (loss)  $         34 $        (2) $         32 $         90    (64%)
Interest
 expense, net           (62)        (151)        (213)        (190)      12%
Impairment of
 cost-method
 investments               -            -            -          (1)   (100%)
Other (expense)
 income, net               -            5            5          (3)        -
                ------------ ------------ ------------ ------------ --------
Loss before
 income taxes   $       (28) $      (148) $      (176) $      (104)      69%
                ------------ ------------ ------------ ------------ --------
Income tax
 expense                 (3)         (27)         (30)         (41)    (27%)
                ------------ ------------ ------------ ------------ --------
Net loss        $       (31) $      (175) $      (206) $      (145)      42%
Less: loss
 attributable
 to
 noncontrolling
 interest                  -            1            1            2    (50%)
                ------------ ------------ ------------ ------------ --------
Net loss
 attributable
 to Warner
 Music Group
 Corp.          $       (31) $      (174) $      (205) $      (143)      43%
                ============ ============ ============ ============ ========


Operating
 income margin          6.1%       (0.1%)         1.1%         3.0%
OIBDA margin           14.6%         9.0%        10.1%        11.6%




Figure 5. Warner Music Group Corp. - Reconciliation of Segment Operating
 Income to OIBDA, Three and Twelve Months 9/30/11 versus 9/30/11 (dollars in
 millions)

                  Successor   Predecessor               Predecessor
                 ----------- ------------              ------------
                                             For the
                  From July                 Combined      For the
                   20, 2011  From July 1, Three Months Three Months
                   through   2011 through     ended        Ended
                  September    July 19,     September    September
                   30, 2011      2011       30, 2011     30, 2010   % Change
                 ----------- ------------ ------------ ------------ --------
                 (unaudited)  (unaudited)  (unaudited)  (unaudited)
Total WMG
 Operating
 Income (Loss) -
 GAAP            $        34 $       (55) $       (21) $         20        -
Depreciation and
 Amortization             47           15           62           65      -5%
                 ----------- ------------ ------------ ------------ --------
Total WMG OIBDA  $        81 $       (40) $         41 $         85     -52%
                 =========== ============ ============ ============ ========

Recorded Music
 Operating
 Income - GAAP   $        17 $        (4) $         13 $          7      86%
Depreciation and
 Amortization             31           10           41           45      -9%
                 ----------- ------------ ------------ ------------ --------
Recorded Music
 OIBDA           $        48 $          6 $         54 $         52       4%
                 =========== ============ ============ ============ ========

Music Publishing
 Operating
 Income - GAAP   $        39 $          1 $         40 $         38       5%
Depreciation and
 Amortization             12            5           17           18      -6%
                 ----------- ------------ ------------ ------------ --------
Music Publishing
 OIBDA           $        51 $          6 $         57 $         56       2%
                 =========== ============ ============ ============ ========


                  Successor   Predecessor               Predecessor
                 ----------- ------------              ------------
                                             For the
                  From July                 Combined      For the
                   20, 2011  From October    Twelve       Twelve
                   through      1, 2010   Months ended Months ended
                  September  through July   September    September
                   30, 2011    19, 2011     30, 2011     30, 2010   % Change
                 ----------- ------------ ------------ ------------ --------
                 (unaudited)  (unaudited)  (unaudited)  (unaudited)
Total WMG
 Operating
 Income (Loss) -
 GAAP            $        34 $        (2) $         32 $         90    (64%)
Depreciation and
 Amortization             47          211          258          258        -
                 ----------- ------------ ------------ ------------ --------
Total WMG OIBDA  $        81 $        209 $        290 $        348    (17%)
                 =========== ============ ============ ============ ========

Recorded Music
 Operating
 Income - GAAP   $        17 $         93 $        110 $        102       8%
Depreciation and
 Amortization             31          141          172          177     (3%)
                 ----------- ------------ ------------ ------------ --------
Recorded Music
 OIBDA           $        48 $        234 $        282 $        279       1%
                 =========== ============ ============ ============ ========

Music Publishing
 Operating
 Income - GAAP   $        39 $         34 $         73 $         86    (15%)
Depreciation and
 Amortization             12           62           74           71       4%
                 ----------- ------------ ------------ ------------ --------
Music Publishing
 OIBDA           $        51 $         96 $        147 $        157     (6%)
                 =========== ============ ============ ============ ========

Adjusted Operating Income, Adjusted OIBDA and Adjusted Net Income (Loss) Adjusted operating income, adjusted OIBDA and adjusted net income (loss) is operating income, OIBDA and net income (loss), respectively, adjusted to exclude the impact of certain items relating to the acquisition of the Company by Access that affect comparability ("Factors Affecting Comparability"). Factors affecting period-to-period comparability of the unadjusted measures in fiscal year 2011 included expenses and share-based compensation expense related to the acquisition of the company by Access Industries. The Company uses adjusted operating income, adjusted OIBDA and adjusted net loss attributable to Warner Music Group Corp., as applicable, to evaluate the Company's actual operating performance. The Company believes that the adjusted results provide relevant and useful information for investors because they clarify the Company's actual operating performance, make it easier to compare the Company's results with those of other companies in our industry and allow investors to review performance in the same way as our management. Since these are not measures of performance calculated in accordance with generally accepted accounting principles, they should not be considered in isolation of, or as a substitute for, operating income, OIBDA and net loss attributable to WMG as indicators of operating performance, and they may not be comparable to similarly titled measures employed by other companies.



Figure 6. Warner Music Group Corp. - Reconciliation of Reported Results to
Adjusted Results, Three and Twelve Months 9/30/11 (dollars in millions)

For the Combined Three Months ended September 30, 2011
----------------------------------------------------------------------------

                                           Recorded     Music
                              Total WMG     Music     Publishing
                              Operating   Operating   Operating   Total WMG
                                Income      Income      Income      OIBDA
                             ----------- ----------- ----------- -----------
                             (unaudited) (unaudited) (unaudited) (unaudited)
Reported Results             $      (21) $        13 $        40 $        41
Factors Affecting
 Comparability:
   Acquisition Expenses(1)            46           -           2          46
   Share-Based Compensation
    Expense(2)                        14           8           1          14
                             ----------- ----------- ----------- -----------
Adjusted Results             $        39 $        21 $        43 $       101

----------------------------------------------------------------------------


For the Combined Three Months ended September 30, 2011
------------------------------------------------------------------

                                                        Net loss
                                                      attributable
                                            Music      to Warner
                               Recorded   Publishing  Music Group
                             Music OIBDA    OIBDA        Corp.
                             ----------- ----------- -------------
                             (unaudited) (unaudited)  (unaudited)
Reported Results             $        54 $        57 $       (103)
Factors Affecting
 Comparability:
   Acquisition Expenses(1)             -           2            46
   Share-Based Compensation
    Expense(2)                         8           1            14
                             ----------- ----------- -------------
Adjusted Results             $        62 $        60 $        (43)

------------------------------------------------------------------


For the Combined Twelve Months ended September 30, 2011
----------------------------------------------------------------------------

                                           Recorded     Music
                              Total WMG     Music     Publishing
                              Operating   Operating   Operating   Total WMG
                                Income      Income      Income      OIBDA
                             ----------- ----------- ----------- -----------
                             (unaudited) (unaudited) (unaudited) (unaudited)
Reported Results             $        32 $       110 $        73 $       290
Factors Affecting
 Comparability:
   Acquisition Expenses(1)            53           -           2          53
   Share-Based Compensation
    Expense(2)                        14           8           1          14
                             ----------- ----------- ----------- -----------
Adjusted Results             $        99 $       118 $        76 $       357

----------------------------------------------------------------------------

For the Combined Twelve Months ended September 30, 2011
------------------------------------------------------------------

                                                        Net loss
                                                      attributable
                                            Music      to Warner
                               Recorded   Publishing  Music Group
                             Music OIBDA    OIBDA        Corp.
                             ----------- ----------- -------------
                             (unaudited) (unaudited)  (unaudited)
Reported Results             $       282 $       147 $       (205)
Factors Affecting
 Comparability:
   Acquisition Expenses(1)             -           2            53
   Share-Based Compensation
    Expense(2)                         8           1            14
                             ----------- ----------- -------------
Adjusted Results             $       290 $       150 $       (138)

------------------------------------------------------------------

(1) Adjusted Results for the three months and twelve months ended September
30, 2011 exclude $46 million ($44 million corporate and $2 million Music
Publishing) and $53 million ($51 million corporate and $2 million Music
Publishing) respectively in fees incurred in connection with the acquisition
of the Company by Access Industries. These costs primarily included
advisory, accounting, legal and other professional fees.
(2) Adjusted Results for the three months and twelve months ended September
30, 2011 exclude $14 million ($8 million Recorded Music, $1 million Music
Publishing and $5 million corporate) in share-based compensation expense
incurred in connection with the acquisition of the Company by Access
Industries.




Figure 7. Warner Music Group Corp. - Summary Financial Results, Three and
 Twelve Months 9/30/11 versus 9/30/10 (dollars in millions)

Summary Results - Quarter
----------------------------------------------------------------------------

                       Successor  Predecessor             Predecessor
                      ----------- -----------             -----------
                                                For the
                                                Combined    For the
                       From July   From July     Three       Three
                        20, 2011    1, 2011      Months      Months
                        through     through      ended       Ended
                       September    July 19,   September   September     %
                        30, 2011      2011      30, 2011    30, 2010  Change
                      ----------- ----------- ----------- ----------- ------
Total WMG             (unaudited) (unaudited) (unaudited) (unaudited)
----------------------
Revenue               $       554 $       153 $       707 $       753   (6%)
Digital Revenue               161          49         210         197     7%
Operating income
 (loss)                        34        (55)        (21)          20      -
Adjusted operating
 income (loss)                 44         (5)          39          20    95%
OIBDA                          81        (40)          41          85  (52%)
Adjusted OIBDA                 91          10         101          85    19%
Net loss attributable
 to Warner Music
 Group Corp.                 (31)        (72)       (103)        (46) (124%)
Adjusted Net loss
 attributable to
 Warner Music Group
 Corp.                $      (21) $      (22) $      (43) $      (46)     7%

Recorded Music
----------------------
Revenue               $       454 $       117 $       571 $       620   (8%)
Digital Revenue               147          47         194         183     6%
Operating income
 (loss)                        17         (4)          13           7    86%
Adjusted operating
 income (loss)                 17           4          21           7   200%
OIBDA                          48           6          54          52     4%
Adjusted OIBDA        $        48 $        14 $        62 $        52    19%

Music Publishing
----------------------
Revenue               $       104 $        37 $       141 $       142   (1%)
Digital Revenue                15           2          17          18   (6%)
Operating income
 (loss)                        39           1          40          38     5%
Adjusted operating
 income (loss)                 39           4          43          38    13%
OIBDA                          51           6          57          56     2%
Adjusted OIBDA        $        51 $         9 $        60 $        56     7%


Summary Results - Fiscal Year
----------------------------------------------------------------------------

                       Successor  Predecessor             Predecessor
                      ----------- -----------             -----------
                                                For the
                                      From      Combined    For the
                       From July   October 1,    Twelve      Twelve
                        20, 2011      2010       Months      Months
                        through     through      ended       ended
                       September    July 19,   September   September     %
                        30, 2011      2011      30, 2011    30, 2010  Change
                      ----------- ----------- ----------- ----------- ------
Total WMG             (unaudited) (unaudited) (unaudited) (unaudited)
----------------------
Revenue               $       554 $     2,315 $     2,869 $     2,988   (4%)
Digital Revenue               161         659         820         759     8%
Operating income
 (loss)                        34         (2)          32          90  (64%)
Adjusted operating
 income (loss)                 44          55          99          90    10%
OIBDA                          81         209         290         348  (17%)
Adjusted OIBDA                 91         266         357         348     3%
Net loss attributable
 to Warner Music
 Group Corp.                 (31)       (174)       (205)       (143)  (43%)
Adjusted Net loss
 attributable to
 Warner Music Group
 Corp.                $      (21) $     (117) $     (138) $     (143)     3%

Recorded Music
----------------------
Revenue               $       454 $     1,890 $     2,344 $     2,459   (5%)
Digital Revenue               147         621         768         713     8%
Operating income
 (loss)                        17          93         110         102     8%
Adjusted operating
 income (loss)                 17         101         118         102    16%
OIBDA                          48         234         282         279     1%
Adjusted OIBDA        $        48 $       242 $       290 $       279     4%

Music Publishing
----------------------
Revenue               $       104 $       440 $       544 $       556   (2%)
Digital Revenue                15          45          60          59     2%
Operating income
 (loss)                        39          34          73          86  (15%)
Adjusted operating
 income (loss)                 39          37          76          86  (12%)
OIBDA                          51          96         147         157   (6%)
Adjusted OIBDA        $        51 $        99 $       150 $       157   (4%)



Constant Currency Because exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of revenue on a constant-currency basis in addition to reported revenue helps improve the ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant-currency information compares results between periods as if exchange rates had remained constant period over period. We use results on a constant-currency basis as one measure to evaluate our performance. We calculate constant-currency results by applying current-year foreign currency exchange rates to prior-year results. However, a limitation of the use of the constant-currency results as a performance measure is that it does not reflect the impact of exchange rates on our revenue, including, for example, the $50 million, $40 million and $9 million unfavorable impact of exchange rates on our Total, Recorded Music and Music Publishing revenue, in the three months ended September 30, 2011 compared to the prior-year quarter. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant-currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with GAAP.


Figure 8. Warner Music Group Corp. - Revenue by Geography and Segment, Three
 and Twelve Months 9/30/11 versus 9/30/10 as Reported and Constant Currency
 (dollars in millions)

                  Successor  Predecessor             Predecessor Predecessor
                 ----------- -----------             ----------- -----------
                                           For the
                                           Combined    For the     For the
                  From July   From July     Three       Three       Three
                   20, 2011    1, 2011      Months      Months      Months
                   through     through      ended       Ended       Ended
                  September    July 19,   September   September   September
                   30, 2011      2011      30, 2011    30, 2010    30, 2010
                 ----------- ----------- ----------- ----------- -----------
                 As reported As reported As reported As reported  Constant $
                 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)

US revenue
 Recorded Music  $       173 $        43 $       216 $       263 $       263
 Music Publishing         40           6          46          59          59

International
 revenue
 Recorded Music          281          74         355         357         397
 Music Publishing         64          31          95          83          92

Intersegment
 eliminations            (4)         (1)         (5)         (9)         (8)

                 ----------- ----------- ----------- ----------- -----------
Total Revenue    $       554 $       153 $       707 $       753 $       803
                 =========== =========== =========== =========== ===========

Revenue by
 Segment:
Recorded Music   $       454 $       117 $       571 $       620 $       660
Music Publishing
  Mechanical              24           7          31          40          43
  Performance             41          20          61          52          57
  Synchronization         21           7          28          29          30
  Digital                 15           2          17          18          18
  Other                    3           1           4           3           3
                 ----------- ----------- ----------- ----------- -----------
Total Music
 Publishing              104          37         141         142         151
Intersegment
 eliminations            (4)         (1)         (5)         (9)         (8)
                 ----------- ----------- ----------- ----------- -----------
Total Revenue    $       554 $       153 $       707 $       753 $       803
                 =========== =========== =========== =========== ===========

                 -----------------------------------------------------------
Total Digital
 Revenue         $       161 $        49 $       210 $       197 $       205
                 =========== =========== =========== =========== ===========


                  Successor  Predecessor             Predecessor Predecessor
                 ----------- -----------             ----------- -----------
                                           For the
                                 From      Combined    For the     For the
                  From July   October 1,    Twelve      Twelve      Twelve
                   20, 2011      2010       Months      Months      Months
                   through     through      ended       ended       Ended
                  September    July 19,   September   September   September
                   30, 2011      2011      30, 2011    30, 2010    30, 2010
                 ----------- ----------- ----------- ----------- -----------
                 As reported As reported As reported As reported  Constant $
                 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)

US revenue
 Recorded Music  $       173 $       785 $       958 $     1,043 $     1,043
 Music Publishing         40         155         195         214         214

International
 revenue
 Recorded Music          281       1,105       1,386       1,416       1,474
 Music Publishing         64         285         349         342         358

Intersegment
 eliminations            (4)        (15)        (19)        (27)        (26)

                 ----------- ----------- ----------- ----------- -----------
Total Revenue    $       554 $     2,315 $     2,869 $     2,988 $     3,063
                 =========== =========== =========== =========== ===========

Revenue by
 Segment:
Recorded Music   $       454 $     1,890 $     2,344 $     2,459 $     2,517
Music Publishing
  Mechanical              24         118         142         177         182
  Performance             41         173         214         207         214
  Synchronization         21          92         113         102         105
  Digital                 15          45          60          59          60
  Other                    3          12          15          11          11
                 ----------- ----------- ----------- ----------- -----------
Total Music
 Publishing              104         440         544         556         572
Intersegment
 eliminations            (4)        (15)        (19)        (27)        (26)
                 ----------- ----------- ----------- ----------- -----------
Total Revenue    $       554 $     2,315 $     2,869 $     2,988 $     3,063
                 =========== =========== =========== =========== ===========

                 -----------------------------------------------------------
Total Digital
 Revenue         $       161 $       659 $       820 $       759 $       776
                 =========== =========== =========== =========== ===========



Free Cash Flow Free Cash Flow reflects our cash flow provided by operating activities less capital expenditures and cash paid or received for investments. We use Free Cash Flow, among other measures, to evaluate our operating performance. Management believes Free Cash Flow provides investors with an important perspective on the cash available to service debt, fund ongoing operations and working capital needs, make strategic acquisitions and investments and pay any dividends or fund any repurchases of our outstanding notes or common stock in open market purchases, privately negotiated purchases or otherwise. As a result, Free Cash Flow is a significant measure of our ability to generate long-term value. It is useful for investors to know whether this ability is being enhanced or degraded as a result of our operating performance. We believe the presentation of Free Cash Flow is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. In addition, Free Cash Flow is also a primary measure used externally by our investors and analysts for purposes of valuation and comparing the operating performance of our company to other companies in our industry.

Because Free Cash Flow is not a measure of performance calculated in accordance with GAAP, Free Cash Flow should not be considered in isolation of, or as a substitute for, net income (loss) as an indicator of operating performance or cash flow provided by operating activities as a measure of liquidity. Free Cash Flow, as we calculate it, may not be comparable to similarly titled measures employed by other companies. In addition, Free Cash Flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Because Free Cash Flow deducts capital expenditures and cash paid or received for investments from "cash flow provided by operating activities" (the most directly comparable GAAP financial measure), users of this information should consider the types of events and transactions that are not reflected. We provide below a reconciliation of Free Cash Flow to the most directly comparable amount reported under GAAP, which is "net cash flow (used in) provided by operating activities."

Unlevered After-Tax Cash Flow Free Cash Flow includes cash paid for interest. We also review our cash flow adjusted for cash paid for interest, a measure we call Unlevered After-Tax Cash Flow. Management believes this measure provides investors with an additional important perspective on our cash generation ability. We consider Unlevered After-Tax Cash Flow to be an important indicator of the performance of our businesses and believe the presentation is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. A limitation of the use of this measure is that it does not reflect the charges for cash interest and, therefore, does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the company's ability to fund its cash needs. Accordingly, this measure should be considered in addition to, not as a substitute for, net cash flow provided by operating activities and other measures of liquidity reported in accordance with GAAP.



Figure 9. Warner Music Group Corp. - Calculation of Free Cash Flow and
 Unlevered After-Tax Cash Flow, Three and Tweleve Months 9/30/11 versus
 9/30/10 (dollars in millions)

                              Successor  Predecessor             Predecessor
                             ----------- -----------             -----------
                                                       For the
                                                       Combined    For the
                              From July   From July     Three       Three
                               20, 2011    1, 2011      Months      Months
                               through     through      ended       Ended
                              September    July 19,   September   September
                               30, 2011      2011      30, 2011    30, 2010
                             ----------- ----------- ----------- -----------
                             (unaudited) (unaudited) (unaudited) (unaudited)
Net cash flow (used in)
 provided by operating
 activities                  $      (64) $        30 $      (34) $        50
Less: Capital expenditures            11           3          14          21
Less: Net cash paid for
 investments                           3           1           4           4

                             ----------- ----------- ----------- -----------
Free Cash Flow               $      (78) $        26 $      (52) $        25
                             =========== =========== =========== ===========

   Plus: Cash paid for
    interest                          34           -          34           -
                             ----------- ----------- ----------- -----------
   Unlevered After-Tax Cash
    Flow                     $      (44) $        26 $      (18) $        25
                             =========== =========== =========== ===========


                              Successor  Predecessor             Predecessor
                             ----------- -----------             -----------
                                                       For the
                                             From      Combined    For the
                              From July   October 1,    Twelve      Twelve
                               20, 2011      2010       Months      Months
                               through     through      ended       ended
                              September    July 19,   September   September
                               30, 2011      2011      30, 2011    30, 2010
                             ----------- ----------- ----------- -----------
Net cash flow (used in)
 provided by operating
 activities                  $      (64) $        12 $      (52) $       150
Less: Capital expenditures            11          37          48          51
Less: Net cash paid for
 investments                           3         118         121          34

                             ----------- ----------- ----------- -----------
Free Cash Flow               $      (78) $     (143) $     (221) $        65
                             =========== =========== =========== ===========

   Plus: Cash paid for
    interest                          34         176         210         169
                             ----------- ----------- ----------- -----------
   Unlevered After-Tax Cash
    Flow                     $      (44) $        33 $      (11) $       234
                             =========== =========== =========== ===========



Media Contact:
Will Tanous
(212) 275-2244
Will.Tanous@wmg.com

Investor Contact:
Erika Begun
(212) 275-4850
Erika.Begun@wmg.com


SOURCE: Warner Music Group

mailto:Will.Tanous@wmg.com
mailto:Erika.Begun@wmg.com