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"The financial results reflect the continued successful implementation of the restructuring plan and the total commitment of our colleagues in positioning WMG for success in a changing market."
——Edgar Bronfman Jr. on WMG Year-End Results
WMG GENERATES $2.5 BILLION IN REVENUE FOR 2004
Bronfman-Led Label Group Has Operating Income Up, $240 Million in Savings After Restructuring
So far, so good.

Edgar Bronfman Jr.’s bold acquisition of Warner Music Group, and subsequent cost-cutting, have the company looking at improved 2004 results, reflecting the 10 months from January through September. The company is now reporting results for 10 months due to the change this year of its fiscal year-end from Nov. 30 to Sept. 30.

Revenue for the period was $2.5 beeeelion, up 2% from the first 10 months of 2003. Operating income increased to $7 million from a loss of $197 million last year. Net loss improved to $136 million in 2004 from a net loss of $239 million in 2003. Operating Income before Depreciation and Amortization (which replaces the standard EBITDA) increased to $219 million from $75 million for the first 10 months of 2003.

Chairman/CEO Bronfman was so pumped, he proceeded to write a song about it: "Warner Music Group has continued to make significant progress on a number of fronts. The financial results reflect the continued successful implementation of the restructuring plan and the total commitment of our colleagues in positioning WMG for success in a changing market. Now that the lion’s share of the restructuring has been completed, we can turn our entire focus to building and developing the company’s roster of recording artists and songwriters as well as paying Lyor his Hanukkah bonus. Doo-bee-doo-bee-doo."

WMG’s restructuring program will result in an estimated $250 million in savings by the end of 2005. This year’s savings for the first 10 months of 2004 total $240 million. The cost to implement the program has been estimated between $225 million and $250 million, below the original budget of $310 million. WMG had approximately $555 million in liquid assets on hand as of the end of the fiscal reporting period, $350 million of which was then returned to its equity investors, including Thomas H. Lee and Partners, on Oct. 4 as outlined by the company’s bond indenture.

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