Second Quarter 2016 Financial Highlights:
- Revenues increased 3% to $1,708 million (increased 6% excluding currency effects)
- DCI Net Income increased 43% to $408 million (increased 26% excluding currency effects)
- Diluted EPS increased 50% to $0.66 and Adjusted EPS increased 45% to $0.71 (increased 31% excluding currency effects)
- Repurchased $377 million of stock
Silver Spring, Maryland – August 2, 2016: Discovery Communications, Inc. (“Discovery” or the “Company”) (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the second quarter ended June 30, 2016.
“Discovery posted a solid quarter of growth and financial results by investing in premium and diversified content that fuels the passion of superfans on pay-TV, free-to-air, direct-to-consumer and digital platforms. Our differentiated portfolio of nonfiction, sports and children’s content in more than 220 markets positions Discovery for continued growth and shareholder value creation in the months and years to come,” said David Zaslav, President and CEO of Discovery Communications.
Second Quarter Results
Second quarter revenues of $1,708 million increased 3% compared to the prior year, as 7% growth at U.S. Networks and 15% growth at Education and Other was partially offset by a slight decline at International Networks, primarily due to currency effects and the impact of the SBS Radio disposition. Adjusted Operating Income Before Depreciation and Amortization (“OIBDA”) increased 4% to $706 million, as 10% growth at U.S. Networks was partially offset by a 6% decline at International Networks, primarily due to currency effects. Excluding currency effects, total Company revenues and Adjusted OIBDA grew 6% and 8%, respectively, as changes in foreign currency exchange rates reduced revenue and Adjusted OIBDA growth by 3% and 4%, respectively. Excluding currency effects and the impact of the SBS Radio disposition, total Company revenues increased 8% and Adjusted OIBDA increased 10%.
Second quarter net income available to Discovery Communications, Inc. (“DCI Net Income”) increased 43% to $408 million compared to $286 million for the second quarter of 2015, primarily due to improved operating results, currency-related transactional gains, a decrease in taxes and lower equity-based compensation, partially offset by a decline in income from equity investees, higher restructuring charges and higher interest expense. Diluted earnings per share increased 50% to $0.66 due to higher DCI Net Income and lower shares outstanding. Adjusted Earnings Per Diluted Share (“Adjusted EPS”), which excludes the impact of amortization of acquisition-related intangible assets, was up 45% to $0.71 for the second quarter 2016 compared to $0.49 for the second quarter 2015. Adjusted EPS excluding currency effects increased 31%.
Free cash flow decreased 4% to $301 million for the second quarter of 2016 as cash flow from operations declined slightly to $329 million and capital expenditures increased 56% to $28 million due to the timing of capital expenditures throughout the year. Capital expenditures for year to date 2016 decreased 17%. Cash flow from operations declined slightly primarily due to improved operating performance and lower cash taxes more than offset by the timing of working capital. Free cash flow excluding currency effects declined 6% for the second quarter. Free cash flow is defined as cash provided by operating activities less purchases of property and equipment.
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Discovery Communications Second Quarter 2016 Results Press Release