The growth in net income to $2 million this quarter compared to a net loss of $36 million in the prior-year quarter is largely attributable to the increase in operating income as well as the decline in interest expense to $49 million from $56 million as a result of the company's November 2012 refinancing of certain indebtedness.
As of March 31, 2013, the company reported a cash balance of $294 million, total long-term debt of $2.211 billion (including the current portion) and net debt (total long-term debt minus cash) of $1.917 billion.
Cash provided by operating activities was $135 million compared to $121 million in the prior-year quarter. Free Cash Flow was $121 million compared to $103 million in the prior-year quarter. The largest driver of the increase in cash provided by operating activities and Free Cash Flow was the company's strong operating performance in the quarter. (See Figure 7 below for a calculation and reconciliation of Free Cash Flow.)
Recorded Music Summary Results(dollars in millions) For the For the Three Three Months Months ended March ended March 31, 2013 31, 2012 % Change ----------- ----------- -------- (unaudited) (unaudited)Revenue $ 554 $ 499 11%Digital Revenue 262 222 18%Operating income 46 8 475%OIBDA 87 49 78%
Recorded Music revenue grew 11.0%, or 12.4% on a constant-currency basis. Physical and digital revenue were up 11.8% and 18.0%, respectively, due to a very strong release schedule and solid performances from carryover releases. Licensing revenue grew 10.6%. Artist Services and Expanded Rights revenue declined 16.7% due primarily to the timing of tours.
Recorded Music digital revenue represented 47.3% of total Recorded Music revenue, compared to 44.5% in the prior-year quarter. Domestic Recorded Music digital revenue was $145 million, or 58.2% of total domestic Recorded Music revenue, compared to 59.4% in the prior-year quarter. Revenue growth in the U.S., U.K., France, Germany, Canada and Latin America was offset by declines in Japan, Italy and other parts of Asia and Europe. Major sellers included Bruno Mars, Josh Groban, fun., Ed Sheeran and Blake Shelton.
Recorded Music operating margin expanded 6.7 percentage points to 8.3% from 1.6% in the prior-year quarter. Recorded Music OIBDA margin expanded 5.9 percentage points to 15.7% from 9.8% in the prior-year quarter. OIBDA and OIBDA margin improvement were driven by the growth in revenue, the decrease in costs as a percentage of revenue and the continued transition from physical to digital sales.
Music Publishing Summary Results(dollars in millions) For the For the Three Three Months Months ended March ended March 31, 2013 31, 2012 % Change ----------- ----------- -------- (unaudited) (unaudited)Revenue $ 127 $ 127 -Digital Revenue 21 14 50%Operating income 37 35 6%OIBDA 53 53 -