July 31, 2014

(Silver Spring, MD) Second Quarter 2014 Financial Highlights:

Revenues increased 10% to $1,610 million Adjusted OIBDA increased 6% to $694 million Net Income available to Discovery Communications, Inc. increased 26% to $379 million Adjusted Earnings per Diluted Share for the last twelve months increased 35% to $3.62 Repurchased 6.7 million shares of common stock for $503 million

Silver Spring, Maryland – July 31, 2014: Discovery Communications, Inc. (“Discovery” or the “Company”) (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the second quarter ended June 30, 2014.

David Zaslav, Discovery’s President and Chief Executive Officer, said, “The operating strength across Discovery’s organic businesses, along with increased contributions from strategic acquisitions, led to sustained financial momentum during the second quarter.  Our persistent focus on building a broad and deep content portfolio to leverage the opportunities across our unique distribution platform is driving viewership and revenue growth worldwide as pay-tv continues to evolve.  Going forward, investing in compelling programing remains a priority as we integrate our recent acquisitions and build new avenues of growth so we can deliver additional long term value to our shareholders."

Second Quarter Results

Second quarter revenues of $1,610 million increased $143 million, or 10%, over the second quarter a year ago, as 23% growth at International Networks was partially offset by a 2% decline at U.S. Networks, primarily due to additional revenues from licensing agreements in the prior year.  Adjusted Operating Income Before Depreciation and Amortization (“OIBDA”) increased 6% to $694 million, as International Networks were up 19% while U.S. Networks were down 1% due to the impact of licensing agreements. Excluding the impact of the Eurosport transaction,foreign currency fluctuations and licensing agreements, total Company revenues increased 9% and Adjusted OIBDA increased 11%.

Second quarter net income available to Discovery Communications, Inc. of $379 million ($1.09 per diluted share) increased $79 million, or 26%, compared to  $300 million ($0.82 per diluted share) for the second quarter a year ago, primarily due to the strong operating performance in the current quarter. The current quarter results also reflect a $31 million gain associated with the sale of HowStuffWorks, a $29 million gain associated with the consolidation of  Eurosport and a $15 million increase in equity earnings.  Adjusted Earnings Per Diluted Share ("Adjusted EPS"), which excludes the impact of the amortization of acquisition related intangible assets, was $1.16 per diluted share in the second quarter of this year compared with $0.91 per diluted share in the same period a year ago.  For the last twelve months, Adjusted EPS was $3.62, up 35% compared with $2.69 in the prior twelve months.

Free cash flow was $202 million for the second quarter, a decrease of $109 million, or down 35% from the second quarter of 2013, as increased operating performance was more than offset by higher tax payments, as well as higher content and interest payments. 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 2014 Results Press Release