Discovery Communications Reports Third Quarter 2016 Results

Third Quarter 2016 Financial Highlights:

  • Revenues of $1,556 million were flat vs. last year (increased 3% excluding currency effects)
  • DCI Net Income decreased 22% to $219 million (decreased 23% excluding currency effects)
  • Diluted EPS decreased 16% to $0.36 and Adjusted EPS decreased 15% to $0.40 (decreased 14% excluding currency effects)
  • Repurchased $374 million of stock

Silver Spring, Maryland – November 1, 2016: Discovery Communications, Inc. (“Discovery” or the “Company”) (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the third quarter ended September 30, 2016.

“While we faced challenging but expected headwinds this quarter, Discovery is well positioned for long-term growth driven by our well-defined global brands, differentiated content and favorable distribution agreements,” said David Zaslav, President and CEO, Discovery Communications. “We have continued to strengthen and maximize our traditional pay-TV offering with robust new programming while aggressively exploiting new opportunities to leverage our content across numerous digital platforms around the world. Amid an ever shifting global media ecosystem, Discovery is evolving to reach more consumers on more screens and platforms than ever before.”

Third Quarter Results

Third quarter revenues of $1,556 million were flat compared to the prior year, as 2% growth at U.S. Networks and 19% growth at Education and Other were offset by a 3% decline at International Networks, primarily due to currency effects.  Adjusted Operating Income Before Depreciation and Amortization (“OIBDA”) decreased 2% to $562 million, as 3% growth at U.S. Networks was more than offset by a 16% decline at International Networks, partially due to currency effects.  Excluding currency effects, total Company revenues and Adjusted OIBDA grew 3% and 1%, respectively.

Third quarter net income available to Discovery Communications, Inc. (“DCI Net Income”) decreased 22% to $219 million compared to $279 million for the third quarter of 2015, primarily due to a $50 million (or $0.08 per share) after-tax impairment charge related to the Lionsgate investment and higher equity-based compensation, partially offset by a decrease in taxes, currency-related transactional gains and higher contribution from equity investees income.  Diluted earnings per share decreased 16% to $0.36 due to lower DCI Net Income, partially offset by lower shares outstanding.  Adjusted Earnings Per Diluted Share (“Adjusted EPS”), which excludes the impact of amortization of acquisition-related intangible assets, decreased 15% to $0.40 for the third quarter 2016 compared to $0.47 for the third quarter 2015.  Third quarter Adjusted EPS excluding currency effects decreased 14%.

Free cash flow increased 75% to $410 million for the third quarter of 2016 as cash flow from operations increased to $436 million while capital expenditures increased 8% to $26 million.  Capital expenditures for the first nine months of 2016 decreased 9%.  Third quarter cash flow from operations increased primarily due to lower cash taxes and the timing of working capital.  Third quarter free cash flow excluding the impact of currency effects increased 112%.  Free cash flow is defined as cash provided by operating activities less purchases of property and equipment.

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Discovery Communications Third Quarter 2016 Results Press Release

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