Net loss reflects the impact of an $83 million loss on the extinguishment of debt in connection with the company's November 2012 refinancing of certain indebtedness.
As of December 31, 2012, the company reported a cash balance of $189 million, total long-term debt of $2.225 billion, including $30 million included in the current portion of long term debt, and net debt (total long-term debt minus cash) of $2.036 billion. During the quarter, the company used $132 million of cash in connection with its November 2012 refinancing.
Cash used in operating activities was $10 million compared to cash provided by operating activities of $25 million in the prior-year quarter. Free Cash Flow was negative $25 million compared to positive $14 million in the prior-year quarter. The largest drivers of the decline in cash provided by operating activities and Free Cash Flow were a $21 million increase in cash interest due to the timing of prior-year interest payments, resulting from the company's acquisition debt refinancing, and the timing of working capital, which included higher variable compensation payments, higher artist and repertoire spend offset by higher cash collections in the quarter. (See Figure 7 below for a calculation and reconciliation of Free Cash Flow.)
Recorded Music
Recorded Music Summary Results(dollars in millions) For the Three For the Three Months ended Months ended December 31, December 31, 2012 2011 % Change -------------- -------------- ---------- (unaudited) (unaudited)Revenue $ 657 $ 659 -Digital Revenue 237 205 16%Operating income 74 63 17%OIBDA 114 104 10%
Recorded Music revenue declined 0.3%, but grew 0.8% in constant currency. The company's Recorded Music business experienced an increase in digital revenue, as subscription and streaming revenue and download revenue were both strong. Recorded Music digital revenue represented 36.1% of total Recorded Music revenue, compared to 31.1% in the prior-year quarter. Domestic Recorded Music digital revenue was $128 million, or 49.4% of total domestic Recorded Music revenue, compared to 44.9% in the prior-year quarter.
While the company's releases performed well in the quarter, they faced a difficult comparison against strong physical sales from Michael Bublé's "Christmas" in the prior-year quarter. As a result, digital revenue growth was more than offset by the decline in physical revenue. Licensing revenue grew 13.2% as a result of strong international broadcast revenue in the U.K. and Asia Pacific, while Artist Services and Expanded Rights revenue was flat, with domestic growth from merchandising sales being offset by international declines in the company's European concert promotion businesses. Revenue growth in the U.S., Japan, Latin America and Canada was offset by declines in the U.K., Italy and other parts of Europe. Major sellers included Led Zeppelin, Bruno Mars, Michael Bublé, Johnny Hallyday and the Génération Goldman tribute album.
