Discovery Communications Reports First Quarter 2016 Results

Discovery Communications Reports First Quarter 2016 Results

SILVER SPRING, Md., May 5, 2016 /PRNewswire/ --

First Quarter 2016 Financial Highlights:


-- Revenues increased 2% to $1,561 million (increased 5% excluding currency
effects)
-- Adjusted OIBDA increased 2% to $577 million (increased 7% excluding
currency effects)
-- Adjusted EPS increased 10% to $0.46 (increased 18% excluding currency
effects)
-- Repurchased $373 million of stock
Discovery Communications, Inc. ("Discovery" or the "Company") (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the first quarter ended March 31, 2016.

https://photos.prnewswire.com/prnvar/20160504/363969LOGO

"Discovery's business momentum continued to build in the first quarter with strong viewership across our worldwide portfolio of brands and platforms. Our unmatched global distribution network, diverse, much loved brands, and unique flexible business model yet again produced strong results, particularly in the U.S.," said David Zaslav, President and CEO of Discovery Communications. "We have also made progress in reaching consumers across the world's 7 billion screens with a robust multiplatform strategy that is increasingly showing potential to drive growth in the future. Given the long-term growth profile associated with the investments we've made, I remain optimistic about our overall operating and financial prospects, the opportunities ahead, and our potential to deliver significant shareholder value."

First Quarter Results

First quarter revenues of $1,561 million increased 2% compared to the prior year, as 8% growth at U.S. Networks was partially offset by a 3% decline at International Networks, primarily due to currency effects, and lower revenues at Education and Other. Adjusted Operating Income Before Depreciation and Amortization ("OIBDA")((1)) increased 2% to $577 million, as 11% growth at U.S. Networks was partially offset by a 14% decline at International Networks, primarily due to currency effects, and a small operating loss at Education and Other. Excluding currency effects, total Company revenues and Adjusted OIBDA grew 5% and 7%, respectively, as changes in foreign currency exchange rates reduced revenue and Adjusted OIBDA growth by 3% and 5%, respectively. Excluding currency effects and the impact of the SBS Radio disposition((2)), total Company revenues and Adjusted OIBDA both increased 7%.

First quarter net income available to Discovery Communications, Inc. increased 5% to $263 million ($0.42 per diluted share)((3)) compared to $250 million ($0.37 per diluted share) for the first quarter of 2015, primarily due to improved operating results, a decrease in taxes, lower currency-related losses, and a gain from the sale of SBS Radio, partially offset by higher equity-based compensation and a decline in income from equity investees. Adjusted Earnings Per Diluted Share ("Adjusted EPS")((1)), which excludes the impact of amortization of acquisition-related intangible assets, was up 10% to $0.46 for the first quarter 2016 compared to $0.42 for the first quarter 2015. Adjusted EPS excluding currency effects increased 18%, as changes in foreign currency exchange rates reduced first quarter Adjusted EPS growth by 8%. For the last twelve months ending March 31, 2016, Adjusted EPS excluding currency effects was up 11% compared to the twelve month period ending March 31, 2015.



(1) See full definitions of Adjusted
Operating Income Before Depreciation
and Amortization and Adjusted Earnings
Per Diluted Share on page 5.

(2) The Company completed its sale of SBS
Radio on June 30, 2015.

(3) All per share amounts are calculated
using Net Income Available to Discovery
Communications, Inc. Series A, B and C
common stockholders. See table on page
12 for the full schedule.
Free cash flow increased 62% to $47 million for the first quarter of 2016, primarily due to improved operating performance and lower cash taxes, partially offset by the timing of working capital and higher content spend. Free cash flow growth excluding currency effects was not meaningful for the first quarter, but increased 53% for the last twelve months ending March 31, 2016 compared to the twelve month period ending March 31, 2015. Free cash flow is defined as cash provided by operating activities less purchases of property and equipment.






SEGMENT RESULTS


(dollars in millions) Three Months Ended March 31,
----------------------------

2016 2015 Change
---- ---- ------

Revenues:

U.S. Networks $807 $749 8%

International Networks 711 735 (3)%

Education and Other 44 54 (19)%

Corporate and Inter-
Segment Eliminations (1) (1) - %
--- ---

Total Revenues $1,561 $1,537 2%
====== ======


Adjusted OIBDA:

U.S. Networks $473 $425 11%

International Networks 185 215 (14)%

Education and Other (1) 5 NM

Corporate and Inter-
Segment Eliminations (80) (77) 4%
--- ---

Total Adjusted OIBDA $577 $568 2%
==== ====



U.S. Networks
-------------


(dollars in millions) Three Months Ended March 31,
----------------------------

2016 2015 Change
---- ---- ------

Revenues:

Distribution $390 $362 8%

Advertising 402 375 7%

Other 15 12 25%
--- ---

Total Revenues $807 $749 8%
==== ====

Adjusted OIBDA $473 $425 11%

Adjusted OIBDA Margin 59% 57%
U.S. Networks' revenues in the first quarter of 2016 increased 8% to $807 million, driven by 8% distribution growth and 7% advertising growth. Distribution revenue growth was primarily driven by higher rates. Advertising revenues increased 7% primarily due to higher pricing and inventory management, partially offset by lower delivery.

Adjusted OIBDA increased 11% to $473 million, as revenue growth was partially offset by a 3% increase in operating expenses, mainly due to higher content amortization.



International Networks
----------------------


(dollars in
millions) Three Months Ended March 31,
----------------------------

2016 2015 Change
---- ---- ------

Revenues:

Distribution $411 $396 4%

Advertising 285 312 (9)%

Other 15 27 (44)%
--- ---

Total Revenues $711 $735 (3)%
==== ====

Adjusted OIBDA $185 $215 (14)%

Adjusted OIBDA
Margin 26% 29%
International Networks' revenues for the first quarter decreased 3% to $711 million and Adjusted OIBDA decreased 14% to $185 million. Changes in foreign currency exchange rates reduced first quarter international revenues and Adjusted OIBDA growth by 6% and 12%, respectively. Excluding currency effects and the impact of SBS Radio, total revenues were up 7%. Distribution revenues, excluding the impact of currency effects, grew 12% mostly due to increased subscribers in Latin America and higher rates in CEEMEA and Northern Europe, as well as contributions from Eurosport France((1)). Excluding the impact of Eurosport France, distribution revenues on a constant currency basis would have been up 7%. Advertising revenues, excluding the impact of SBS Radio and currency effects, were up 4%, primarily due to higher volume and ratings in Southern Europe and higher pricing and volume in CEEMEA, partially offset by a decline in Northern Europe due to the Telenor blackout and lower ratings.

Excluding the impact of SBS Radio and foreign currency exchange rates, Adjusted OIBDA was down 2%, reflecting 7% revenue growth more than offset by an 11% increase in operating expenses. The higher operating expenses were primarily due to increased content costs.



Education and Other
-------------------


(dollars in millions) Three Months Ended March 31,
----------------------------

2016 2015 Change
---- ---- ------

Revenues $44 $54 (19)%

Adjusted OIBDA $(1) $5 NM

Adjusted OIBDA Margin NM 9%
Education and Other revenues for the first quarter decreased by $10 million primarily due to lower external production deliveries at the Studios production business. Adjusted OIBDA decreased by $6 million primarily due to additional investments in Education Techbooks and lower external Studios production deliveries.

Corporate and Inter-Segment Eliminations

Adjusted OIBDA for the first quarter of 2016 decreased by $3 million primarily due to higher personnel costs and information technology investments.



(1) The Company completed its
acquisition of a controlling
stake in Eurosport France on
March 31, 2015, resulting in
the consolidation of Eurosport
France as of that date.
STOCK REPURCHASE

During the quarter, the Company, pursuant to its existing stock repurchase program, repurchased 8.4 million shares of its Series C common stock at an average price of $25.44 per share, for a total of $214 million. On February 22, 2016, the Company repurchased 2.9 million shares from Advance/Newhouse Programming Partnership ("ANPP") at $55.43 per share (or $27.72 per share on a split adjusted basis), for a total of $159 million pursuant to the previously announced share repurchase agreement described below between the Company and ANPP. In total, the Company spent $373 million on share repurchases during the first quarter of 2016.

Through March 31, 2016, the Company has repurchased 123.4 million shares of Series C common stock and 2.8 million shares of its Series A common stock under its stock repurchase program. In aggregate, including the 27.0 million preferred shares acquired from ANPP and from Advance Programming Holdings, LLC, this represents 36%, or $7.0 billion, of the Company's outstanding shares since buyback activity was authorized in 2010 at an average price of $26.60 per share on a split adjusted basis. Note that the aggregate share numbers have not been adjusted to reflect the stock dividend that was distributed in August 2014.

On May 22, 2014, the Company entered into a share repurchase agreement with ANPP to repurchase its shares of the Company's Series C convertible preferred stock, on a quarterly basis, in proportion to the Company's repurchases under its stock repurchase program in a manner that is intended to maintain ANPP's current ownership percentage of the Company. This agreement was amended by letter agreement on August 25, 2014.

OTHER ITEMS

On March 11, 2016, the Company completed an offering of $500 million aggregate principal amount of its 4.90% senior notes due 2026. The Company intends to use the net proceeds for general corporate purposes.

FULL YEAR 2016 OUTLOOK

For the full year ending December 31, 2016, Discovery expects Adjusted EPS excluding currency effects to grow at least high teens and free cash flow excluding currency effects to grow at least high teens.

NON-GAAP FINANCIAL MEASURES

Adjusted OIBDA, Adjusted Net Income, Adjusted EPS and Free Cash Flow
In addition to the results prepared in accordance with U.S. generally accepted accounting principles ("GAAP") provided in this release, the Company has presented Adjusted OIBDA, Adjusted Net Income, Adjusted EPS and free cash flow. The Company evaluates the operating performance of its segments based on financial measures such as revenues and Adjusted OIBDA. Adjusted OIBDA is defined as operating income excluding: (i) mark-to-market equity-based compensation, (ii) depreciation and amortization, (iii) amortization of deferred launch incentives, (iv) restructuring and other charges, (v) certain impairment charges, (vi) gains and losses on business and asset dispositions, and (vii) certain inter-segment eliminations related to production studios.

The Company uses Adjusted OIBDA to assess the operating results and performance of its segments, perform analytical comparisons, identify strategies to improve performance and allocate resources to each segment. The Company believes Adjusted OIBDA is relevant to investors because it allows them to analyze the operating performance of each segment using the same metric management uses. The Company excludes mark-to-market equity-based compensation, restructuring and other charges, certain impairment charges, and gains and losses on business and asset dispositions from the calculation of Adjusted OIBDA due to their volatility. The Company also excludes depreciation of fixed assets, amortization of intangible assets and deferred launch incentives, as these amounts do not represent cash payments in the current reporting period. Additionally, certain corporate expenses and inter-segment eliminations related to production studios are excluded from segment results to enable executive management to evaluate segment performance based upon the decisions of segment executives.

The Company defines Adjusted Net Income as net income available to Discovery Communications, Inc. stockholders excluding the impact of amortization of acquisition-related intangible assets, and defines Adjusted EPS as earnings excluding the impact of amortization of acquisition-related intangible assets per diluted share. Note that given the change in conversion ratio for our preferred stock, the preferred shares are now only included in the diluted share count. The Company believes Adjusted Net Income and Adjusted EPS are relevant to investors because these metrics allow them to evaluate the performance of the Company's operations exclusive of the non-cash amortization of acquisition-related intangible assets that impact the comparability of results from period to period.

The Company defines free cash flow as cash provided by operating activities less acquisitions of property and equipment. The Company uses free cash flow as it believes it is an important indicator for management and investors of the Company's liquidity, including its ability to reduce debt, make strategic investments and return capital to stockholders.

Adjusted OIBDA, Adjusted Net Income, Adjusted EPS and free cash flow are non-GAAP measures, and should be considered in addition to, but not as a substitute for, operating income, net income, earnings per diluted share and other measures of financial performance reported in accordance with GAAP. Please review the supplemental financial schedules beginning on page 10 for reconciliations to GAAP measures.

Conference Call Information

Discovery Communications, Inc. will host a conference call today, May 5, 2016 at 8:30 a.m. ET to discuss its first quarter results. To listen to the call, visit http://discoverycommunications.com or dial 1-800-901-5213 inside the U.S. and 1-617-786-2962 outside of the U.S., using the following passcode: DISCA.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties and on information available to the Company as of the date hereof. The Company's actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its Annual Report on Form 10-K filed with the SEC on February 18, 2016. Forward-looking statements include statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future, and can be identified by forward-looking words such as "anticipate," "believe," "could," "continue," "estimate," "expect," "intend," "may," "should," "will" and "would" or similar words. Forward-looking statements in this release include, without limitation, statements regarding investing in our programming and strategic growth initiatives and the full year 2016 outlook. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.



DISCOVERY COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in millions, except per share amounts)


Three Months Ended March 31,
----------------------------

2016 2015
---- ----

Revenues:

Distribution $801 $758

Advertising 687 687

Other 73 92
--- ---

Total revenues 1,561 1,537
----- -----

Costs and expenses:

Costs of revenues, excluding
depreciation and amortization 592 565

Selling, general and administrative 408 400

Depreciation and amortization 79 81

Restructuring and other charges 6 9

Gain on disposition (13) -
---

Total costs and expenses 1,072 1,055
----- -----

Operating income 489 482

Interest expense (85) (89)

(Loss) income from equity investees,
net (8) 1

Other expense, net (16) (19)
--- ---

Income before income taxes 380 375

Income tax expense (111) (125)
---- ----

Net income 269 250

Net income attributable to
redeemable noncontrolling interests (6) -
---

Net income available to Discovery
Communications, Inc. $263 $250
==== ====


Net income per share available to
Discovery Communications, Inc.
Series A, B and C common
stockholders:

Basic $0.42 $0.38

Diluted(1) $0.42 $0.37


Weighted average shares outstanding:

Basic 413 439

Diluted(1) 630 667


(1) Diluted shares adjust for the potential dilution that would occur if common stock equivalents, including
convertible preferred stock and equity-based awards, were converted into common stock or exercised.






DISCOVERY COMMUNICATIONS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited; in millions)


March 31, 2016 December 31,
2015
-------------- -------------

ASSETS

Current assets:

Cash and cash equivalents $333 $390

Receivables, net 1,520 1,479

Content rights, net 352 313

Deferred income taxes 91 68

Prepaid expenses and other current
assets 371 346
--- ---

Total current assets 2,667 2,596


Noncurrent content rights, net 2,029 2,030

Property and equipment, net 466 488

Goodwill 8,207 8,164

Intangible assets, net 1,718 1,730

Equity method investments 529 567

Other noncurrent assets 262 289
--- ---

Total assets $15,878 $15,864
======= =======


LIABILITIES AND EQUITY

Current liabilities:

Accounts payable $171 $282

Accrued liabilities 974 988

Deferred revenues 205 190

Current portion of debt 25 119
--- ---

Total current liabilities 1,375 1,579


Noncurrent portion of debt 7,965 7,616

Deferred income taxes 510 556

Other noncurrent liabilities 414 421
--- ---

Total liabilities 10,264 10,172


Redeemable noncontrolling interests 248 241


Equity:

Preferred stock 2 2

Common stock 5 5

Additional paid-in capital 7,027 7,021

Treasury stock, at cost (5,675) (5,461)

Retained earnings 4,621 4,517

Accumulated other comprehensive loss (614) (633)
---- ----

Total equity 5,366 5,451
----- -----

Total liabilities and equity $15,878 $15,864
======= =======









DISCOVERY COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)


Three Months Ended March 31,
----------------------------

2016 2015
---- ----

Operating Activities

Net income $269 $250

Adjustments to reconcile net income
to cash provided by operating
activities:

Equity-based
compensation expense 24 2

Depreciation and
amortization 79 81

Content amortization
and impairment
expense 441 407

Gain on disposition (13) -

Remeasurement gain on
previously held
equity interest - (2)

Equity in earnings of
investee companies,
net of cash
distributions 9 1

Deferred income taxes (58) (48)

Realized loss from
derivative
instruments - 11

Other, net 15 9

Changes in operating assets and
liabilities, net of business
combinations:

Receivables, net (7) (10)

Content rights, net (488) (445)

Accounts payable and
accrued liabilities (148) (134)

Equity-based
compensation
liabilities (5) (25)

Income taxes
receivable and
prepaid income taxes 28 3

Other, net (84) (37)
--- ---

Cash provided by
operating activities 62 63


Investing Activities

Purchases of property
and equipment (15) (34)

Business
acquisitions, net of
cash acquired - (16)

Payments for
derivative
instruments, net - (11)

Distributions from
equity method
investees 15 15

Investments in equity
method investees,
net 4 (26)

Investments in cost
method investments (4) -

Other investing
activities, net (1) (6)
--- ---

Cash used in
investing activities (1) (78)


Financing Activities

Commercial paper
(repayments)
borrowings, net (93) 199

Borrowings under
revolving credit
facility 95 123

Principal repayments
of revolving credit
facility (252) (13)

Borrowings from debt,
net of discount 498 936

Principal repayments
of debt - (849)

Principal repayments
of capital lease
obligations (12) (12)

Repurchases of stock (373) (317)

Distributions to
redeemable
noncontrolling
interests (2) -

Equity-based plan
payments, net (5) (17)

Hedge of borrowings
from debt
instruments - (29)

Other financing
activities, net (11) (9)
--- ---

Cash (used in)
provided by
financing activities (155) 12


Effect of exchange
rate changes on cash
and cash equivalents 37 (43)
--- ---


Net change in cash
and cash equivalents (57) (46)

Cash and cash
equivalents,
beginning of period 390 367
--- ---

Cash and cash
equivalents, end of
period $333 $321
==== ====






DISCOVERY COMMUNICATIONS, INC.

SUPPLEMENTAL FINANCIAL DATA

RECONCILIATION OF ADJUSTED OPERATING INCOME BEFORE

DEPRECIATION AND AMORTIZATION

(unaudited; in millions)


Three Months Ended March 31, 2016
---------------------------------

Adjusted Depreciation Amortization Mark-to-Market Restructuring Gain on Inter-
of and Other Disposition segment
Charges Eliminations Operating

Operating and Deferred
Launch
Incentives Equity-Based Income

Income Before Amortization Compensation

Depreciation
and

Amortization
------------

U.S. Networks $473 $(7) $ - $ - $(1) $ - $(4) $461

International Networks 185 (54) (3) - (5) 13 (1) 135

Education and Other (1) (2) - - - - 5 2

Corporate and Inter-
Segment Eliminations (80) (16) - (13) - - - (109)
--- --- --- --- --- --- ---

Total $577 $(79) $(3) $(13) $(6) $13 $ - $489
==== ==== === ==== === === === === ====




Three Months Ended March 31, 2015
---------------------------------

Adjusted Amortization Mark-to-Market Restructuring Gain on Inter-
of and Other Disposition segment
Charges Eliminations Operating

Operating Depreciation Deferred
Launch
Incentives Equity-Based Income

Income Before and Compensation

Depreciation
and Amortization

Amortization
------------

U.S. Networks $425 $(8) $ - $ - $(7) $ - $(2) $408

International Networks 215 (57) (4) - (2) - (1) 151

Education and Other 5 (2) - - - - 3 6

Corporate and Inter-
Segment Eliminations (77) (14) - 8 - - - (83)
--- --- --- --- --- --- --- ---

Total $568 $(81) $(4) $8 $(9) $ - $ - $482
==== ==== === === === === === === === ====











DISCOVERY COMMUNICATIONS, INC.

SUPPLEMENTAL FINANCIAL DATA

SELECTED FINANCIAL DETAIL

(unaudited; in millions, except per share amounts)


SELECTED TOTAL COMPANY FINANCIAL METRICS - YEAR OVER YEAR GROWTH RATES REPORTED AND EXCLUDING FOREIGN CURRENCY IMPACT


Three Months Ended March 31,
----------------------------

2016 2015 % Change % Change

(Reported) (ex-FX)
--------- ------

Revenues $1,561 $1,537 2% 5%


Adjusted OIBDA $577 $568 2% 7%


Adjusted EPS $0.46 $0.42 10% 18%


Free Cash Flow $47 $29 62% NM




SELECTED INTERNATIONAL NETWORKS FINANCIAL METRICS - YEAR OVER YEAR GROWTH RATES REPORTED AND EXCLUDING FOREIGN CURRENCY IMPACT


Three Months Ended March 31,
----------------------------

2016 2015 % Change % Change

(Reported) (ex-FX)
--------- ------

Revenues $711 $735 (3)% 3%


Adjusted OIBDA $185 $215 (14)% (2)%






DISCOVERY COMMUNICATIONS, INC.

SUPPLEMENTAL FINANCIAL DATA

SELECTED FINANCIAL DETAIL

(unaudited; in millions, except per share amounts)


EARNINGS PER SHARE


Three Months Ended March 31,
----------------------------

2016 2015
---- ----

Numerator:

Net income $269 $250

Less:

Allocation of
undistributed
income to Series A
convertible
preferred stock (59) (53)

Net income
attributable to
redeemable
noncontrolling
interests (6) -

Net income
available to per share
Discovery
Communications,
Inc. Series A, B
and C common and
Series C
convertible
preferred
stockholders for
basic net income $204 $197
---- ----

Allocation of net
income available basic net income
to Discovery per share:
Communications
Inc. Series A, B
and C common
stockholders and
Series C
convertible
preferred
stockholders for

Series A, B and C
common
stockholders 173 166

Series C
convertible
preferred
stockholders 31 31
--- ---

Total 204 197


Add:

Allocation of
undistributed
income to Series A
convertible
preferred
stockholders 59 53

Net income
available to
Discovery
Communications,
Inc. Series A, B
and C common
stockholders for
diluted net income
per share $263 $250
==== ====


Denominator:

Weighted average
Series A, B and C
common shares
outstanding -
basic 413 439

Weighted average
impact of assumed
preferred stock
conversion 214 223

Weighted average
dilutive effect of
equity-based
awards 3 5
--- ---

Weighted average
Series A, B and C
common shares
outstanding -
diluted 630 667
=== ===

Weighted average
Series C
convertible
preferred stock
outstanding -
basic and diluted 36 41
=== ===


Basic net income
per share
available to
Discovery
Communications,
Inc. Series A, B
and C common and
Series C
convertible
preferred
stockholders:

Series A, B and C
common
stockholders $0.42 $0.38

Series C
convertible
preferred
stockholders $0.84 $0.76


Diluted net income
per share
available to
Discovery
Communications,
Inc. Series A, B
and C common and
Series C
convertible
preferred
stockholders:

Series A, B and C
common
stockholders $0.42 $0.37

Series C
convertible
preferred
stockholders $0.84 $0.74






DISCOVERY COMMUNICATIONS, INC.

SUPPLEMENTAL FINANCIAL DATA

SELECTED FINANCIAL DETAIL

(unaudited; in millions, except per share amounts)


CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED NET EARNINGS PER DILUTED SHARE


Three Months Ended March 31,
----------------------------

2016 2015 Change
---- ---- ------

Net Income available to Discovery
Communications, Inc. Series A, B
and C common stockholders for
diluted net income per share $263 $250 $13

Amortization of acquisition-
related intangible assets, net of
tax 27 29 (2)
---

Adjusted Net Income $290 $279 $11
==== ==== ===


Three Months Ended March 31,
----------------------------

2016 2015 Change
---- ---- ------

Diluted net income per share
available to Discovery
Communications, Inc. Series A, B
and C common stockholders $0.42 $0.37 $0.05

Amortization of acquisition-
related intangible assets, net of
tax 0.04 0.05 (0.01)

Adjusted earnings per diluted
share $0.46 $0.42 $0.04
===== ===== =====




CALCULATION OF FREE CASH FLOW


Three Months Ended March 31,
----------------------------

2016 2015 Change
---- ---- ------

Cash provided by operating
activities $62 $63 $(1)

Purchases of property and
equipment (15) (34) 19
--- --- ---

Free cash flow $47 $29 $18
=== === ===








DISCOVERY COMMUNICATIONS, INC.

SUPPLEMENTAL FINANCIAL DATA

SELECTED FINANCIAL DETAIL

(unaudited; in millions, except per share amounts)


BORROWINGS

March 31, 2016
--------------

5.625% Senior notes, semi-annual
interest, due August 2019 $500

5.05% Senior notes, semi-annual
interest, due June 2020 1,300

4.375% Senior notes, semi-annual
interest, due June 2021 650

2.375% Senior notes, euro
denominated, annual interest, due
March 2022 339

3.30% Senior notes, semi-annual
interest, due May 2022 500

3.25% Senior notes, semi-annual
interest, due April 2023 350

3.45% Senior notes, semi-annual
interest, due March 2025 300

4.90% Senior notes, semi-annual
interest, due March 2026 500

1.90% Senior notes, euro
denominated, annual interest, due
March 2027 678

6.35% Senior notes, semi-annual
interest, due June 2040 850

4.95% Senior notes, semi-annual
interest, due May 2042 500

4.875% Senior notes, semi-annual
interest, due April 2043 850

Revolving credit facility 614

Capital lease obligations 130

Commercial paper -
---

Total debt 8,061

Unamortized discount and debt
issuance costs (71)
---

Debt, net 7,990

Current portion of debt (25)
---

Noncurrent portion of debt $7,965
======




SHARE COUNT ROLL FORWARD Common Preferred Total
------------------------ ------ --------- -----

(Basic shares, in millions)

Total shares outstanding as
of December 31, 2015 418.0 108.2 526.2

Shares repurchased (8.4) (2.9) (11.3)

Shares issued - equity-
based compensation 0.8 - 0.8

Conversion of shares 0.6 (0.3) 0.3

Total shares outstanding as
of March 31, 2016 411.0 105.0 516.0
===== ===== =====


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SOURCE Discovery Communications, Inc.

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Discovery Communications, Inc.

CONTACT: Corporate Communications, Tammy Shea, (240) 662-6506, tammy_shea@discovery.com; Investor Relations, Jackie Burka, (212) 548-5642, jackie_burka@discovery.com

Web Site: http://discoverycommunications.com


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