Reservoir Media Inc

Previous wording

Our Current Artist and Catalog recorded music businesses are both primarily handled by our Chrysalis Records label based in London and our Tommy Boy record label based in New York City. We also manage some select Catalog recorded music under our Philly Groove Records and Reservoir Records labels. We also own income participation interests in recordings by The Isley Brothers, The Commodores, Wisin and Yandel, Alabama and Travis Tritt, and an interest in the Loud Records catalog containing recordings by the Wu-Tang Clan. Our core Catalog includes recordings under the Chrysalis Records label by artists such as Sinéad O’Connor, The Specials, Generation X and The Waterboys, and De La Soul, as well as recordings under the Tommy Boy record label by artists such as House of Pain, Naughty By Nature, and Queen Latifah.

Current wording

Our Current Artist and Catalog recorded music businesses are both primarily managed by our Chrysalis Records label based in London and our Tommy Boy record label based in New York City. We also manage some select Catalog recorded music under our Philly Groove Records and Reservoir Records labels. We also own income participation interests in recordings by The Isley Brothers, The Commodores, Wisin and Yandel, Alabama and Travis Tritt, and an interest in the Loud Records catalog containing recordings by the Wu-Tang Clan. Our core Catalog includes recordings under the Chrysalis Records label by artists such as Sinéad O’Connor, The Specials, Generation X and The Waterboys, and De La Soul, as well as recordings under the Tommy Boy record label by artists such as House of Pain, Naughty By Nature, and Queen Latifah.

Previous wording

Our Current Artist and Catalog recorded music distribution is handled by a network of distribution partners. Chrysalis Records current frontline releases are distributed through Secretly Distribution, with prior frontline releases distributed via PIAS. Chrysalis Records and Tommy Boy catalogs are distributed via our agreements with MERLIN, AMPED, Proper and other partners.

Current wording

Our Current Artist and Catalog recorded music distribution is managed by a network of distribution partners. Chrysalis Records current frontline releases are distributed through Secretly Distribution, with prior frontline releases distributed via PIAS. Chrysalis Records and Tommy Boy catalogs are distributed via our agreements with MERLIN, AMPED, Proper and other partners.

Previous wording

Total revenues increased by $2,480 thousand, or 8%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven by a 15% increase in Music Publishing revenue, partially offset by a 7% decrease in Recorded Music revenue. Music Publishing revenues represented 70% and 65% of total revenues for the three months ended June 30, 2024 and the three months ended June 30, 2023, respectively. Recorded Music revenues represented 28% and 33% of total revenues for the three months ended June 30, 2024 and the three months ended June 30, 2023, respectively. U.S. and international revenues represented 59% and 41%, respectively, of total revenues for the three months ended June 30, 2024. U.S. and international revenues represented 60% and 40%, respectively, of total revenues for the three months ended June 30, 2023.

Current wording

Total revenues increased by $2,270 thousand, or 6%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by a 10% increase in Music Publishing revenue, partially offset by a 1% decrease in Recorded Music revenue. Music Publishing revenues represented 70% and 67% of total revenues for the three months ended September 30, 2024 and the three months ended September 30, 2023, respectively. Recorded Music revenues represented 26% and 28% of total revenues for the three months ended September 30, 2024 and the three months ended September 30, 2023, respectively. U.S. and international revenues represented 58% and 42%, respectively, of total revenues for the three months ended September 30, 2024. U.S. and international revenues represented 57% and 43%, respectively, of total revenues for the three months ended September 30, 2023.

Previous wording

Total digital revenues increased by $3,670 thousand, or 21%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to price increases at multiple music streaming services, as well as the impact of catalog acquisitions. Total digital revenues represented 62% and 55% of consolidated revenues for the three months ended June 30, 2024 and the three months ended June 30, 2023, respectively.

Current wording

Total digital revenues increased by $2,779 thousand, or 14%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to price increases at multiple music streaming services, as well as the impact of catalog acquisitions. Total digital revenues represented 56% and 52% of consolidated revenues for the three months ended September 30, 2024 and the three months ended September 30, 2023, respectively.

Previous wording

Music Publishing revenues increased by $3,209 thousand, or 15%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase in Music Publishing revenue was mainly driven by acquisitions of catalogs and revenue from the existing catalog, which benefitted from price increases at multiple music streaming services, and led to increases in digital revenue, performance revenue and mechanical revenue, partially offset by decreases in synchronization revenue and other revenue.

Current wording

Music Publishing revenues increased by $2,688 thousand, or 10%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase in Music Publishing revenue was mainly driven by acquisitions of catalogs and revenue from the existing catalog, which benefitted from price increases at multiple music streaming services that contributed to an increase in digital revenue. Additionally, synchronization revenue increased during the three months ended September 30, 2024, driven primarily by the timing of licenses. These factors were partially offset by decreases in performance revenue, partially due to the timing of hit songs, and mechanical revenue.

Previous wording

On a geographic basis, U.S. Music Publishing revenues represented 57% of total Music Publishing revenues for the three months ended June 30, 2024 compared to 63% for the three months ended June 30, 2023. International Music Publishing revenues represented 43% of total Music Publishing revenues for the three months ended June 30, 2024 compared to 37% for the three months ended June 30, 2023.

Current wording

On a geographic basis, U.S. Music Publishing revenues represented 56% of total Music Publishing revenues for the three months ended September 30, 2024 compared to 55% for the three months ended September 30, 2023. International Music Publishing revenues represented 44% of total Music Publishing revenues for the three months ended September 30, 2024 compared to 45% for the three months ended September 30, 2023.

Previous wording

On a geographic basis, U.S. Recorded Music revenues represented 59% of total Recorded Music revenues for the three months ended June 30, 2024 compared to 53% for the three months ended June 30, 2023. International Recorded Music revenues represented 41% of total Recorded Music revenues for the three months ended June 30, 2024 compared to 47% for the three months ended June 30, 2023.

Current wording

On a geographic basis, U.S. Recorded Music revenues represented 57% of total Recorded Music revenues for the three months ended September 30, 2024 compared to 54% for the three months ended September 30, 2023. International Recorded Music revenues represented 43% of total Recorded Music revenues for the three months ended September 30, 2024 compared to 46% for the three months ended September 30, 2023.

Previous wording

Recorded Music revenues decreased by $754 thousand, or 7%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease in Recorded Music revenue was driven by a $2,222 thousand decrease in physical revenue, primarily due to 2023 De La Soul releases. The decrease in physical revenue was partially offset by continued growth at music streaming services and price increases at multiple music streaming services, as well as increases in neighboring rights revenue and synchronization revenue.

Current wording

Recorded Music revenues decreased by $889 thousand, or 4%, during the six months ended September 30, 2024 compared to the six months ended September 30, 2023. The decrease in Recorded Music revenue reflects a decrease in physical revenue after robust sales of new De La Soul releases in 2023. The decrease in physical revenue was partially offset by continued growth at music streaming services and price increases at multiple music streaming services, as well as increases in neighboring rights revenue and synchronization revenue.

Previous wording

Cost of revenues decreased by $191 thousand, or 1%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Cost of revenues as a percentage of revenues decreased to 39% for the three months ended June 30, 2024 from 42% for the three months ended June 30, 2023.

Current wording

Cost of revenues increased by $389 thousand, or 3%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Cost of revenues as a percentage of revenues decreased to 36% for the three months ended September 30, 2024 from 38% for the three months ended September 30, 2023.

Previous wording

Writer royalties and other publishing costs for the Music Publishing segment increased by $1,130 thousand, or 12%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Writer royalties and other publishing costs as a percentage of Music Publishing revenues decreased to 44% for the three months ended June 30, 2024 from 46% for the three months ended June 30, 2023. The increase in margins was due to the change in the mix of revenue by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Current wording

Writer royalties and other publishing costs for the Music Publishing segment increased by $514 thousand, or 5%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Writer royalties and other publishing costs as a percentage of Music Publishing revenues decreased to 41% for the three months ended September 30, 2024 from 43% for the three months ended September 30, 2023. The increase in gross margin was due to the change in the mix of revenue by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Previous wording

Artist royalties and other recorded music costs for the Recorded Music segment decreased by $1,321 thousand, or 33%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Artist royalties and other recorded music costs as a percentage of recorded music revenues decreased to 27% for the three months ended June 30, 2024 from 38% for the three months ended June 30, 2023. The decrease in artist royalties and other recorded music costs and increase in margins were due primarily to the decrease in physical sales and change in the mix of sales by type to a lower percentage of physical sales, which carry higher costs than other types of revenue.

Current wording

Artist royalties and other recorded music costs for the Recorded Music segment decreased by $1,446 thousand, or 20%, during the six months ended September 30, 2024 compared to the six months ended September 30, 2023. Artist royalties and other recorded music costs as a percentage of recorded music revenues decreased to 28% for the six months ended September 30, 2024 from 34% for the six months ended September 30, 2023. The decrease in artist royalties and other recorded music costs and increase in gross margin were due primarily to the decrease in physical sales and change in the mix of sales by type to a lower percentage of physical sales, which carry higher costs than other types of revenue.

Previous wording

Amortization and depreciation expense increased by $329 thousand, or 5%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven primarily by an increase in the Music Publishing segment. Music Publishing amortization and depreciation expense increased by $298 thousand, or 7%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to the acquisition of additional music catalogs.

Current wording

Amortization and depreciation expense increased by $216 thousand, or 3%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to the acquisition of additional music catalogs.

Previous wording

Music Publishing administration expenses increased by $994 thousand, or 18%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Expressed as a percentage of revenues, Music Publishing administration expenses were 27% for the three months ended June 30, 2024 and the three months ended June 30, 2023.

Current wording

Recorded Music administration expenses increased by $115 thousand, or 5%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Expressed as a percentage of revenue, Recorded Music administration expenses increased to 21% for the three months ended September 30, 2024 from 20% for the three months ended September 30, 2023.

Previous wording

Recorded Music administration expenses decreased by $391 thousand, or 13%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Expressed as a percentage of revenue, Recorded Music administration expenses decreased to 26% for the three months ended June 30, 2024 from 28% for the three months ended June 30, 2023, primarily due to the non-recurrence of legal fees related to a matter incurred during the three months ended June 30, 2023.

Current wording

Recorded Music administration expenses decreased by $276 thousand, or 5%, during the six months ended September 30, 2024 compared to the six months ended September 30, 2023. Expressed as a percentage of revenue, Recorded Music administration expenses decreased to 23% for the six months ended September 30, 2024 from 24% for the six months ended September 30, 2023.

Previous wording

Interest expense increased by $326 thousand, or 7%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven primarily by increased debt balances due to use of funds in acquisitions of music catalogs and writer signings, as well as an increase in SOFR. The Company expects its interest expense will increase on the portions of its borrowings that are hedged beginning in October 2024, as existing swaps mature, and new swap contracts become effective.

Current wording

Interest expense decreased by $799 thousand, or 14%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven primarily by the nonrecurrence of approximately $620 thousand incurred in connection with settlement of the Royalty Dispute. The Company’s interest expense will increase on the portions of its borrowings that are hedged beginning in October 2024, as its previous swap contracts matured on September 30 2024, and new swap contracts became effective on the same date.

Previous wording

Loss on foreign exchange increased by $30 thousand for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This change was due to fluctuations in the two foreign currencies we are directly exposed to, namely British pound sterling and euro.

Current wording

Loss on foreign exchange decreased by $4 thousand for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This change was due to fluctuations in the two foreign currencies we are directly exposed to, namely British pound sterling and euro.

Previous wording

Loss on fair value of swaps was $490 thousand for the three months ended June 30, 2024. Gain on the fair value of swaps for the three months ended June 30, 2023 was $1,845 thousand. This change was due to marking to market our interest rate swap hedges.

Current wording

Loss on fair value of swaps was $5,127 thousand for the three months ended September 30, 2024. Gain on the fair value of swaps for the three months ended September 30, 2023 was $628 thousand. This change was due to marking to market our interest rate swap hedges and was driven primarily by the September 2024 decrease in SOFR, as well as the time value of the swaps that expired on September 30, 2024.

Previous wording

Income tax benefit was $294 thousand during the three months ended June 30, 2024 compared to income tax expense of $62 thousand during the three months ended June 30, 2023. The effective income tax rate during the three months ended June 30, 2024 was 39.3% compared to 27.5% during the three months ended June 30, 2023. During the three months ended June 30, 2024, the Company recorded an incremental tax benefit of approximately $103,000 to its deferred tax liabilities related to certain international intangible assets. Additionally, the change in the effective income tax rate reflect changes in the mix of income from multiple tax jurisdictions.

Current wording

Income tax benefit was $447 thousand during the six months ended September 30, 2024 compared to income tax expense of $354 thousand during the six months ended September 30, 2023. Income tax benefit during the six months ended September 30, 2024 reflects excess tax benefits related to share-based compensation and an incremental tax benefit of approximately $103 thousand to the Company’s deferred tax liabilities related to certain international intangible assets. Additionally, the change in income tax (benefit) expense reflects changes in the mix of income from multiple tax jurisdictions.

Previous wording

Net loss was $453 thousand during the three months ended June 30, 2024 compared to the net income of $164 thousand during the three months ended June 30, 2023. The decrease in net income was driven primarily by the loss on fair value of swaps during the three months ended June 30, 2024 compared to gain on fair value of swaps during the three months ended June 30, 2023 and an increase in interest expense. These factors were partially offset by an increase in operating income, which reflects revenue growth and improved margins, and an income tax benefit in the three months ended June 30, 2024 compared to income tax expense in the three months ended June 30, 2023.

Current wording

Net loss was $301 thousand during the six months ended September 30, 2024 compared to the net income of $847 thousand during the six months ended September 30, 2023. The decrease in net income was driven primarily by the loss on fair value of swaps, partially offset by the nonrecurrence of the Recoupable legal fee write-off and related interest associated with the Royalty Dispute, improved gross margin and an income tax benefit in the current period.

Previous wording

We use certain financial information, such as OIBDA, OIBDA Margin, EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin, which are non-GAAP financial measures, which means they have not been prepared in accordance with U.S. GAAP. Reservoir’s management uses these non-GAAP financial measures to evaluate our operations, measure its performance and make strategic decisions. We believe that the use of these non-GAAP financial measures provides useful information to investors and others in understanding our results of operations and trends in the same manner as our management and in evaluating our financial measures as compared to the financial measures of other similar companies, many of which present similar non-GAAP financial measures. However, these non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by our management about which items are excluded or included in determining these non-GAAP financial measures and, therefore, should not be considered as a substitute for net income, operating income or any other operating performance measures calculated in accordance with GAAP. Using such non-GAAP financial measures in isolation to analyze our business would have material limitations because the calculations are based on the subjective determination of our management regarding the nature and classification of events and circumstances. In addition, although other companies in our industry may report measures titled OIBDA, OIBDA margin, Adjusted EBITDA, and Adjusted EBITDA Margin, or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate such non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, such non-GAAP financial measures should be considered alongside other financial performance measures and other financial results presented in accordance with GAAP. Reconciliations of OIBDA to operating income and EBITDA and Adjusted EBITDA to net income are provided below.

Current wording

results of operations and trends in the same manner as our management and in evaluating our financial measures as compared to the financial measures of other similar companies, many of which present similar non-GAAP financial measures. However, these non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by our management about which items are excluded or included in determining these non-GAAP financial measures and, therefore, should not be considered as a substitute for net income, operating income or any other operating performance measures calculated in accordance with GAAP. Using such non-GAAP financial measures in isolation to analyze our business would have material limitations because the calculations are based on the subjective determination of our management regarding the nature and classification of events and circumstances. In addition, although other companies in our industry may report measures titled OIBDA, OIBDA margin, Adjusted EBITDA, and Adjusted EBITDA Margin, or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate such non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, such non-GAAP financial measures should be considered alongside other financial performance measures and other financial results presented in accordance with GAAP. Reconciliations of OIBDA to operating income and EBITDA and Adjusted EBITDA to net income (loss) are provided below.

Previous wording

Music Publishing OIBDA increased by $1,085 thousand, or 19%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Expressed as a percentage of revenue, Music Publishing OIBDA Margin increased to 28% in the three months ended June 30, 2024 from 27% in the three months ended June 30, 2023. The increases in Music Publishing OIBDA and OIBDA Margin reflect revenue growth and improved margins.

Current wording

Music Publishing OIBDA increased by $4,759 thousand, or 77%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Expressed as a percentage of revenue, Music Publishing OIBDA Margin increased to 38% in the three months ended September 30, 2024 from 24% in the three months ended September 30, 2023. The increases in Music Publishing OIBDA and OIBDA Margin reflect the nonrecurrence of the Recoupable legal fee write-off in as well as revenue growth and improved gross margin.

Previous wording

Consolidated OIBDA increased by $2,145 thousand, or 23%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven by a $1,085 thousand increase in Music Publishing OIBDA and a $958 thousand increase in Recorded Music OIBDA. Expressed as a percentage of revenue, OIBDA Margin increased to 33% for the three months ended June 30, 2024 from 29% for the three months ended June 30, 2023.

Current wording

Consolidated OIBDA increased by $6,338 thousand, or 29%, during the six months ended September 30, 2024 compared to the six months ended September 30, 2023, driven by a $5,842 thousand increase in Music Publishing OIBDA and an $834 thousand increase in Recorded Music OIBDA. Expressed as a percentage of revenue, OIBDA Margin increased to 37% for the six months ended September 30, 2024 from 31% for the six months ended September 30, 2023.

Previous wording

Recorded Music OIBDA increased by $958 thousand, or 27% during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Expressed as a percentage of revenue, Recorded Music OIBDA Margin increased to 46% during the three months ended June 30, 2024 from 34% in the three months ended June 30, 2023, driven primarily by the* *change in the mix of revenue by type to a lower percentage of physical sales.

Current wording

Recorded Music OIBDA increased by $834 thousand, or 9% during the six months ended September 30, 2024 compared to the six months ended September 30, 2023. Expressed as a percentage of revenue, Recorded Music OIBDA Margin increased to 48% during the six months ended September 30, 2024 from 43% in the six months ended September 30, 2023, driven primarily by the change in the mix of revenue by type to a lower percentage of physical sales.

Previous wording

Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA

Current wording

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

Previous wording

The following table reconciles net income to Adjusted EBITDA (in thousands):

Current wording

The following table reconciles net income (loss) to Adjusted EBITDA (in thousands):

Previous wording

Adjusted EBITDA increased by $2,505 thousand, or 25%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily as a result of revenue growth and improved margins. Adjusted EBITDA Margin increased to 37% during the three months ended June 30, 2024 compared to 32% during the three months ended June 30, 2023, primarily due to revenue growth, improved gross margins driven by a lower percentage of physical revenue, and effective cost management.

Current wording

Adjusted EBITDA increased by $1,736 thousand, or 11%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Adjusted EBITDA Margin increased to 43% during the three months ended September 30, 2024 compared to 41% during the three months ended September 30, 2023. Adjusted EBITDA and Adjusted EBITDA Margin improved during the three months ended September 30, 2024 primarily due to revenue growth and improved gross margin.

Previous wording

As of June 30, 2024, we had $324,127 thousand of debt (net of $4,701 thousand of deferred financing costs) and $16,359 thousand of cash and cash equivalents.

Current wording

As of September 30, 2024, we had $324,463 thousand of debt (net of $4,365 thousand of deferred financing costs) and $21,068 thousand of cash and cash equivalents.

Previous wording

Cash provided by operating activities was $8,556 thousand for the three months ended June 30, 2024 compared to cash used for operating activities of $861 thousand for the three months ended June 30, 2023. The primary driver of the $9,417 thousand increase in cash provided by operating activities during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was an increase in royalty advance recoupments and the timing of collection of accounts receivable, partially offset by the timing of payments for royalties payable and accounts payable and accrued expenses.

Current wording

Cash provided by operating activities was $21,872 thousand for the six months ended September 30, 2024 compared to $18,857 thousand for the six months ended September 30, 2023. The primary drivers of the $3,015 thousand increase in cash provided by operating activities were an increase in earnings and royalty advance recoupments, partially offset by the timing of collection of accounts receivable and payments for accounts payable and accrued expenses and royalties payable.

Previous wording

Cash used for investing activities was $1,899 thousand for the three months ended June 30. 2024 compared to $15,227 thousand for the three months ended June 30, 2023. The decrease in cash used in investing activities was primarily due to a decrease in acquisitions of music catalogs.

Current wording

Cash used for investing activities was $10,702 thousand for the six months ended September 30, 2024 compared to $32,516 thousand for the six months ended September 30, 2023. The decrease in cash used in investing activities was primarily due to a decrease in acquisitions of music catalogs.

Previous wording

Cash (used for) provided by financing activities was $(8,415) thousand for the three months ended June 30, 2024 compared to $13,294 thousand for the three months ended June 30, 2023. The change in cash (used for) provided by financing activities in the three months ended June 30, 2024 primarily reflects an $11,000 thousand decrease in borrowings used for investing activities and a $10,000 thousand repayment towards the secured line of credit.

Current wording

Cash (used for) provided by financing activities was $(8,338) thousand for the six months ended September 30, 2024 compared to $19,573 thousand for the six months ended September 30, 2023. The change in cash (used for) provided by financing activities primarily reflects an $17,000 thousand decrease in borrowings used for investing activities and a $10,000 thousand repayment towards the secured line of credit.

Previous wording

At June 30, 2024, RMM had the following interest rate swaps outstanding, under which it pays a fixed rate and receives a floating interest payment from the counterparty based on SOFR with reference to notional amounts adjusted to match the amended scheduled principal repayments pursuant to the Senior Credit Facility (in thousands):

Current wording

As of September 30, 2024, RMM had the following interest rate swaps outstanding, under which it pays a fixed rate and receives a floating interest payment from the counterparty based on SOFR with reference to notional amounts adjusted to match the amended scheduled principal repayments pursuant to the Senior Credit Facility (in thousands):

Previous wording

Management believes that funds generated from our operations, borrowings under the Senior Credit Facility and available cash and equivalents will be sufficient to fund our debt service requirements, working capital requirements and capital expenditure requirements for the foreseeable future. However, our ability to continue to fund these items and to reduce debt may be affected by general economic, financial, competitive, legislative and regulatory factors, as well as other industry-specific factors such as the ability to control music piracy and the continued transition from physical to digital formats in the recorded music and music publishing industries. It could also be affected by the severity and duration of natural or human-made disasters, including pandemics. We and our affiliates continue to evaluate opportunities to, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, seek to pay dividends or prepay outstanding debt or repurchase or retire our outstanding debt. The amounts involved in any such transactions, individually or in the aggregate, may be material and may be funded from available cash or from additional borrowings or equity raises. In addition, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity, and other factors, we may seek to refinance the Senior Credit Facility with existing cash and/or with funds provided from additional borrowings.

Current wording

Management believes that funds generated from our operations, borrowings under the Senior Credit Facility and available cash and equivalents will be sufficient to fund our debt service requirements, working capital requirements and capital expenditure requirements for the foreseeable future. However, our ability to continue to fund these items and to reduce debt may be affected by general economic, financial, competitive, legislative and regulatory factors, as well as other industry-specific factors such as the ability to control music piracy and the continued transition from physical to digital formats in the recorded music and music publishing industries. It could also be affected by the severity and duration of natural or human-made disasters, including pandemics. We and our affiliates continue to evaluate opportunities to, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, prepay outstanding debt or repurchase or retire our outstanding debt or to pay dividends. The amounts involved in any such transactions, individually or in the aggregate, may be material and may be funded from available cash or from additional borrowings or equity raises. In addition, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity, and other factors, we may seek to refinance the Senior Credit Facility with existing cash and/or with funds provided from additional borrowings.