December 5, 2005 -...

33rd Annual UBS Global Media Week Conference

December 5, 2005

December 5, 2005

Caution Concerning Forward Looking Statements and Non-GAAP Financial Measures

Today’s presentation includes forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities

Litigation Reform Act of 1995; particularly statements regarding our future financial performance and the future performance of the

music industry. These statements are based on management’s current expectations or beliefs and industry publications and

surveys, and are subject to uncertainty and changes in circumstances.

Actual results may vary materially from those expressed or implied by the statements, due to changes in economic, business,

competitive, technological, strategic or regulatory factors, and factors affecting the operations of the businesses of Warner Music

Group.

More detailed information about these factors may be found in filings by Warner Music Group with the Securities and Exchange

Commission, including its most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q in the sections entitled

“Risk Factors" and "'Safe Harbor' Statement Under Private Securities Litigation Reform Act.” Warner Music Group is under no

obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of

new information, future events or otherwise.

Today’s presentation also includes information regarding the historical financial performance through September 30, 2005

of Warner Music Group and its subsidiaries, including historical financial performance as reflected in non-GAAP financial measures

such as Operating Income before Depreciation and Amortization, Adjusted Operating Income before Depreciation and Amortization

and Unlevered after-tax cash flow excluding non-recurring chargers. Please note that schedules setting out the reconciliation of

these historical non-GAAP financial measures to operating income and cash provided by operations are included in the schedules

included in the Company’s earnings release for the quarter and year ended September 30, 2005 posted on the Company’s website

at www.wmg.com and are also posted on the Company's website as an Appendix to a copy of this presentation under "Investor

Relations" and "Presentations”.

December 5, 2005

Key Investment Points

Leading the Renaissance of the Music Industry

Transforming to a Music Content Company

Driving “Margin-Share” through A&R Strategy

Ensuring Profitable Growth through Financial Discipline

Demo


December 5, 2005

An Infinite Increase in Distribution Points

Increase in 3G mobile phones 71M in 2005 to 576M in 2009

Increase in mobile music downloads and audio streaming

$137M in 2005 to $1.6B in 2009

Limited number of Physical Stores

2005 2006 2007 2008 2009


MP3-Player Shipments 48M in 2005 to 78M in 2008

2005: Estimated 75M points of distribution

2009: Over 500M points of distribution

Sources: IDC, Worldwide Compressed Audio Player 2004 – 2008 Forecast; PricewaterhouseCoopers, Global Entertainment & Media Outlook, 2005 – 2009; Informa Telecoms & Media, Mobile Music.

December 5, 2005

Driven by Converging Forces

ExclusiveContent Providers

Retail

Digital

Download Subscription Mobile

Customers


Cross-Platform

Aggregators

December 5, 2005

Driven by Converging Forces

ExclusiveContent Providers

Digital

Download Subscription Mobile


Cross-Platform

Aggregators

Customers☺☺☺☺☺☺☺ ☺☺ ☺☺☺☺☺

Retail

December 5, 2005

Stabilizing Recorded Music Industry


$0

$10

$20

$30

$40

2000 2001 2002 2003 2004 2005 2006 2007 2008

Physical Digital

Global Recorded Music Market($ in Billions)

Notes: Traditional includes CD, cassette and vinyl albums, singles and DVDs; Digital includes downloads and subscription revenue as well as mobile revenues, such as from ringtones, mastertones, ringback tones and over-the-air downloads.Sources: Informa, Global Music Forecasts; Informa Telecoms & Media, Mobile Music; Goldman Sachs; Deutsche Bank; Citigroup.

-3%YoY Growth in % -6% -1% 2%-6% 0% 2% 3%

20%

80%

Digital

Physical

As % of Total

2008

6%

94%

2005

CAGR(2005 – 2008)

2%

$40 $39

$34 $34 $34$36 $36 $35 $36

December 5, 2005

Growing Music Publishing Industry


$0

$1

$2

$3

$4

$5

2000 2001 2002 2003 2004 2005 2006 2007 2008

Music Publishing

Global Music Publishing Market($ in Billions)

Sources: Music & Copyright; Enders Analysis.

-3%YoY Growth in % 5% 4% 5%1% 3% 4% 5%

CAGR(2005 – 2008)

5%

$3.4 $3.3$3.6

$3.7 $4.0

$3.4 $3.4

$4.1$4.3

December 5, 2005

Piracy Contained

Legitimate Digital Distribution

EducationalFollowing Grokster ruling:

Piracy awareness has increased from 35% to 90%

Over 70% of consumers now support suing illegal downloaders, file-sharing companies or both

US unique users of P2P networks are stabilizing and down significantly over the last 2 years


Approximately 2M tracks available for download at over 300 legitimate online music sites globally

Grokster agrees to transform into a legal service

iMesh is the first illegal service to convert to a legitimate P2P business model

LegalUnanimous Supreme Court ruling in MGM vs. Grokster sends clear message that IP will be protected and sets framework for collaboration between content and technology communities

Intensified enforcement efforts

December 5, 2005

Demo


December 5, 2005


Records- and Songs-Based Company

Music Content Company

Frontline Recordings

Deep Catalog

Music Video

Publishing Rights

ArtworkLyrics

Artist-Branded Content

Frontline Recordings

Deep Catalog

Music Video

Publishing Rights

Content

LPs, CDs, DVDs

DualDisc/DVD-ARingtones, Master Tones, RingbackSingles, Bundles

Video Downloads –Online & Mobile

Video GamesMerchandise

LPs, CDs, DVDs

Products

Retail

Broadcast

Music TV

Retail

Broadcast

Music TV

Alternate RetailInternet PortalsPortable Music

DeviceMobile PhoneSatellite Radio

PSP…

Channels


December 5, 2005

Innovation through Value-Added Products

Collector’s edition

Track pack

Premium

Enhanced

Super-premium

Premium

Super-premium

Single (@radio release) Single

Standard album

New products

Pre-Release Street date/ Post-release (0-6 months)

Post-release/catalog(6+ months)

Pri

cin

g

Albums/Album bundles

Tracks/Track bundles

Cross-album/artist EP

Enhanced (pre-order only)


December 5, 2005

Digital Bundles at Various Price Points


SRP: $12.99SRP: $12.99

Enhanced

Big & Rich ”Comin’ to Your City”

SRP: $11.99SRP: $11.99

Bundle Contents:

Album

Bonus Track

Digital Album Booklet: album art, liner notes

Track Pack

The Click Five“Catch Your Wave”

SRP: $4.00SRP: $4.00

Bundle Contents:

Two Tracks

Interactive Album Booklet: photos, lyrics, desktop wallpaper, poster, ringtone info, bios

Enhanced

Bundle Contents:

Album

“Hung Up” single at pre-order

Music video


Madonna“Confessions on a Dance

Floor”

Harry Potter and the Goblet of Fire

Original Motion Picture Soundtrack

Premium

SRP: $14.99SRP: $14.99

Bundle Contents available as one week pre-release only:

Album

Three bonus tracks


December 5, 2005


WMG Reaches Over 620 Million Mobile Subscribers Worldwide

South Korea19m subs.

South Korea Telecom

UK59m subs.

T-Mobile

Orange

O2

Vodafone

Hutchinson 3*

Virgin Mobile*

France44m subs.

Orange

Vodafone (SFR)

Bouygues Telecom *

(*) Denotes deals which are via aggregator

Germany68m subs.

T-Mobile

Vodafone

E-Plus*

O2

Canada14m subs.

Bell Mobility

Rogers / Microcell

Telus Mobility*

Italy63m subs.

TIM

Vodafone

Wind

Hutchinson

Japan89m subs.

NTT Docomo

KDDI

Vodafone

Australia 18m subs.

Telstra

Optus*

Vodafone

Hutchison

Benelux25m subs.

KPN*

Vodafone

T-Mobile

Telfort*

Orange

Proximus

Mobistar

Base*

Spain38m subs.

Movistar

Vodafone

Amena

US186m subs.

Cingular/AT&T*

Verizon

SprintNextel

T-Mobile

Virgin (MVNO)

December 5, 2005

Mobile Offerings Multiplying


Images / Logos

Full-Track Downloads

MasterTones

Ring Back Tones

T-Mobile US

South Korea

Telecom

NTT DoCoMo

KDDI

Asia

Vodafone

T-Mobile

Orange

Europe

Virgin

Verizon

Sprint

Cingular

North

America

VideosPoly / Mono

December 5, 2005

Absolute Growth in Digital Exceeded Decline in Physical

$36$44

$53

$35

$25

$0

$25

$50

$75

FY 2004 Q1 05 Q2 05 Q3 05 Q4 05

WMG Total Digital Revenues($ in Millions)

In FY05, digital revenues increased four-fold

$79

($25)

$0

$25

$50

$75

$100

WMG US Recorded Music Absolute Growth / (Decline)

FY 2005($ in Millions)


$157

($13)

Physical

Digital

December 5, 2005

Demo

Driving “Margin-Share” Through A&R Strategy

December 5, 2005

WMG Gaining US Share

WMG, 16.0%

EMI, 11.1%

Indies, 13.6%

UMG, 29.2%

SONY/BMG, 30.1%

YTD 2004

WMG, 17.2%

EMI, 10.5%

Indies, 13.4%

UMG, 31.7%

SONY/BMG, 27.2%

YTD 2005

Source: SoundScan as of 11/27/05.

Current Quarter Highlights WMG Share Momentum


December 5, 2005

Promotional Mix Extends Product Lifecycle

WMG has focused first on developing a broad suite of content from existing superstar artists sold à la carte or in bundles

Example:

Green Day

Digital Bonus Tracks

Ringtones (music)

Ringtones (voice)

Wallpaper

UMD for PSP (1)

Video Clips

Live CD+DVD

Note:(1) UMD Universal Media Disc.


December 5, 2005

Unwavering Focus on Innovative A&R Paying Off

Atlantic Revitalization Gaining Traction

New Artists Nurtured Through Grassroots Efforts

Incubators Driving Urban Market Share Gains

Long-Standing Artist Relationships Mined Over Time


Demo

Ensuring Profitable GrowthThrough Financial Discipline

December 5, 2005

Solid Performance in Challenging Year

$601

$2,859 $2,924

$607$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

FY 2004 FY2005

Music Publishing Recorded Music

WMG Total Revenues(1)

($ in Millions)WMG Total Adjusted OIBDA(2)(3)

($ in Millions)

$145

$291

$448

$145

$0

$100

$200

$300

$400

$500

$600

FY 2004 FY2005

Music Publishing Recorded Music

Adjusted OIBDA Margin

(in %)

2004 2005

Notes:(1) Total WMG revenues of $3.5bn for FY 2005 and $3.4bn for FY 2004 include $29m and $23m of inter-segment eliminations respectively.(2) Total WMG OIBDA of $491m for FY 2005 and $374m for FY 2004 exclude $102m and $62m respectively of corporate expenses and eliminations which also exclude certain non-recurring items and FAS 123 expenses.(3) Divisional adjusted OIBDA excludes certain non-recurring charges and FAS123 expenses. FY2005 recorded music adjusted OIBDA excludes $20m in IPO-related charges and $31m in restructuring charges, as well as $12m in FAS123 expenses. FY2004 recorded music adjusted OIBDA excludes $24m in restructuring charges and $1m in FAS123 expenses. FY2005 music publishing adjusted OIBDA excludes $1m in IPO-related charges and $3m in FAS123 expenses. FY2004 music publishing adjusted OIBDA excludes $1m in restructuring charges.

10.2%

24.1%

15.3%

23.9%

Strong Margin Expansion in Recorded Music

Ensuring Profitable Growth Through Financial Discipline

RM

MP

$374

$491

$3.4 bn $3.5 bn

December 5, 2005

Cost Savings Enabled by Flexible Cost Base


Notes:(1) WMG total cost base excludes non-recurring charges, including $5m for legal settlement charges, $24m related to restructuring, and $29m of IPO-related charges, as well as $25m FAS123 expenses.

Product Costs

Royalties

Distribution Licensing

Variable Marketing

G&A

A&R

Sales & Marketing OH

0%

20%

40%

60%

80%

100%

FY 2005

WMG Total Cost Base(1)

Fixed Costs

Discretionary Costs

Variable Costs

24%

18%

58%

As % of Total

December 5, 2005

A Revenue Base that Is Stable and Diversified


WMG Revenue Composition

10%

35%

38%

100% 17%

0%

20%

40%

60%

80%

100%

Total WMG Revenue

Music Publishing

Catalog New Releases (Proven Artists)

New Releases (New Artists)

Source: Management estimates of typical year revenue composition.

December 5, 2005

Driving High Cash Conversion

Notes: (1) Cash Conversion is defined as unlevered after-tax cash flow excluding non-recurring charges over adjusted OIBDA.(2) Unlevered after-tax cash flow is calculated by subtracting capital expenditures and cash paid (received) for investments from net cash provided by operating activities, as well as excluding cash interest and certain non-recurring IPO-related charges. Unlevered after tax cash flow excludes $108m in non-recurring IPO-related charges for FY2005, $103m for Q3 2005, and $3m each for Q2 and for Q1 2005.


WMG Cash Conversion(1)(2)

($ in Millions)

$83 $98$80

$410

$55$53

$220

$119

$491

$195

$0

$100

$200

$300

$400

$500

Q1 2005 Q2 2005 Q3 2005 Q4 2005 FY 2005

Unlevered after-tax cash flow excluding non-recurring charges

Adjusted OIBDA

43% 224%Cash Conversion in % 66% 46% 84%

December 5, 2005

Key Investment Points



Driving “Margin-Share” through A&R Strategy

Ensuring Profitable Growth through Financial Discipline

December 5, 2005

Demo

Q&A

December 5, 2005

Demo

Appendix

December 5, 2005

Demo

Supplemental Disclosures Regarding Non-GAAP Financial Information

December 5, 2005

OIBDA

We evaluate our operating performance based on several factors, including our primary financial measure of operating income (loss) 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 other intangible assets (which we refer to as OIBDA). We consider OIBDA to be an important indicator of the operational strengths and performance of our businesses, and believe the adjusted results help 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 revenues in our businesses. Accordingly, OIBDA should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) and other measures of financial performance reported in accordance with accounting principles generally accepted in the U.S.

December 5, 2005

Reconciliation of OIBDA to Net Loss, Twelve Months Ended 9/30/05versus 9/30/04 (dollars in millions)

Twelve TwelveMonths MonthsEnded Ended

Sept 30, Sept 30, 2005 2004(a)

(audited) (unaudited)OIBDA $322 $333

Depreciation expense (51) (67) Amortization expense (187) (201) Impairment of goodwill and other intangible assets (1,019) Operating income (loss) $84 ($954) Interest expense (182) (82) Net investment-related gains (losses) 1 (9) Equity in losses of equity-method investees (1) (13) Deal-related transaction costs (63) Loss on repayment of Holdings Notes (35) Loss on repayment of bridge loan (6) Unrealized (loss) gain on warrants 17 (120) Minority interest expense (5) (14) Other income (expense), net 7 (11) Loss before income taxes ($114) ($1,272) Income tax expense (55) (150) Net Loss ($169) ($1,422)

(a) - The twelve-month period ended September 30, 2004 is the combination of the five months ended February 29, 2004 of the predecessor company and the seven months ended September 30, 2004 of the successor company.

December 5, 2005

Adjusted Results

As previously disclosed, the current year contained a number of non-recurring charges that occurred concurrently with or in connection with our initial public offering. Such charges relate to specific IPO-related one-time events and do not reflect on-going operations of the business. In addition, the fourth quarter contained non-recurring charges in connection with our integration of the Lava label into the Atlantic Records Group and our settlement of the Spitzer investigation. The prior year also contained non-recurring items. Therefore, the company is also presenting results excluding these items and FAS 123 expenses. We consider these adjusted results to be an important indicator of the operational strengths and performance of our businesses, including the ability to provide cash flows to service debt. However, a limitation of the use of these adjusted amounts as performance measures is that they do not reflect the charges noted and, therefore, do not necessarily represent funds available for discretionary use, and are not necessarily measures of the company’s ability to fund its cash needs. Accordingly, these adjusted amounts should be considered in addition to, not as a substitute for, operating income (loss), net income (loss), EPS and other measures of financial performance reported in accordance with accounting principles generally accepted in the U.S.

December 5, 2005

Reconciliation of GAAP Operating Income to Non-GAAP Adjusted OIBDA, Twelve Months Ended 9/30/05 versus 9/30/04 (dollars in millions)

Twelve TwelveMonths MonthsEnded Ended

Sept 30, Sept 30,2005 2004(a)

(audited) (unaudited)Total WMG Operating Income (Loss) - GAAP $84 ($954)Depreciation and amortization 238 268Impairment of goodwill and intangible assets 1,019Total WMG OIBDA $322 $333Non-recurring severance and other 24Legal settlement 5Restructuring costs 7 34Loss on termination of management agreement 73IPO-related cash bonus 10Bonus related to stock awards 19Management fees 6 6Total WMG OIBDA Excluding Non-Recurring Charges $466 $373FAS 123 expense 25 1Total WMG Adjusted OIBDA $491 $374

Recorded Music Operating Income (Loss) - GAAP $215 ($934)Depreciation and amortization 165 181Impairment of goodwill and intangible assets 1,019Recorded Music OIBDA $380 $266Non-recurring severance and other 24Restructuring costs 7 24IPO-related cash bonus 8Bonus related to stock awards 12Recorded Music OIBDA Excluding Non-Recurring Charges $431 $290FAS 123 expense 17 1Recorded Music Adjusted OIBDA $448 $291

Music Publishing Operating Income (Loss) - GAAP $82 $74Depreciation and amortization 59 70Music Publishing OIBDA $141 $144Restructuring costs 1IPO-related cash bonus 1Music Publishing OIBDA Excluding Non-Recurring Charges $142 $145FAS 123 expense 3Music Publishing Adjusted OIBDA $145 $145

(a) - The twelve-month period ended September 30, 2004 is the combination of the five months ended February 29, 2004 of the predecessor company and the seven months ended September 30, 2004 of the successor company.

December 5, 2005

Reconciliation of GAAP Operating Income to Non-GAAP Adjusted OIBDA, Three Months Ended 9/30/05, 6/30/05, 3/31/05 and 12/31/04 and Twelve Months Ended 9/30/05 (dollars in millions)

Twelve Three Three Three ThreeMonths Months Months Months MonthsEnded Ended Ended Ended Ended

Sept 30, Sept 30, June 30, March 31, Dec 30,2005 2005 2005 2005 2004

(audited) (unaudited) (unaudited) (unaudited) (unaudited)

Total WMG Operating Income (Loss) - GAAP $84 $19 ($92) $27 $130Depreciation and amortization 51 11 12 14 14Impairment of goodwill and intangible assets 187 47 47 47 46Total WMG OIBDA $322 $77 ($33) $88 $190Non-recurring severance and other 24 24Legal settlement 5 4 1Restructuring costs 7 7Loss on termination of management agreement 73 73IPO-related cash bonus 10 10Bonus related to stock awards 19 19Management fees 6 1 3 3Total WMG OIBDA Excluding Non-Recurring Charges $466 $112 $71 $91 $193FAS 123 expense 25 7 9 7 2Total WMG Adjusted OIBDA $491 $119 $80 $98 $195

December 5, 2005

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, make strategic acquisitions and investments, fund ongoing operations and working capital needs and pay ongoing regular quarterly dividends. 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.

December 5, 2005

Free Cash Flow (cont’d)

As 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. As 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, cash flow provided by operating activities.

December 5, 2005

Free Cash Flow (cont’d)

Free cash flow includes cash paid for interest and certain non-recurring payments related to our IPO. We also review our cash flow adjusted for these items, a measure we call unlevered after-tax cash flow excluding certain non-recurring IPO related items. Management believes this measure provides investors with an additional important perspective on our cash generation ability. We consider unlevered after-tax cash flow excluding certain non-recurring IPO related items 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 noted 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 accounting principles generally accepted in the U.S.

December 5, 2005

Calculation of Non-GAAP Free Cash Flow, Three Months Ended 9/30/05, 6/30/05, 3/31/05 and 12/31/04 and Twelve Months Ended 9/30/05 (dollars in millions)



(audited) (unaudited) (unaudited) (unaudited) (unaudited)Net cash flow provided by operating activities $205 $33 ($120) $229 $63Less: Capital expenditures 30 10 6 8 6Less: Cash paid (received) for investments 24 (10) (13) 28 19Free cash flow (b) $151 $33 ($113) $193 $38



Free cash flow $151 $33 ($113) $193 $38Plus: Cash paid for interest 151 22 63 24 42Plus: Cash paid to terminate management agreement 73 73Plus: IPO-related cash bonus 10 10Plus: Cash bonus related to stock awards 19 19Plus: Cash paid for management fees 6 1 3 3Unlevered after-tax cash flow excluding non-recurring IPO-related expenses

$410 $55 $53 $220 $83

(b) - Free cash flow includes cash paid for interest and certain non-recurring cash payments as follows (in millions):

December 5, 2005 -...

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