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Second Quarter 2010 Financial Highlights:

·        Revenues increased 11% to $963 million
·        Adjusted OIBDA increased 18% to $455 million
·        Net Income decreased 40% to $106 million and increased 61% to $211 million adjusting for one-time items
·        Refinanced $3 billion of debt, lowering interest rates and extending maturities

Silver Spring, Maryland - August 3, 2010:  Discovery Communications, Inc. ("Discovery" or the "Company") (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the second quarter ended June 30, 2010.  

David Zaslav, Discovery's President and Chief Executive Officer said, "Discovery's second quarter results reflect our strong execution across our portfolio of domestic and international networks.  We delivered double-digit revenue and Adjusted OIBDA growth, capitalizing on the greater global demand for advertising while continuing to demonstrate the operating leverage inherent in our business model. At the same time we remain focused on further strengthening our global content, with increased investments in Animal Planet and ID translating into ratings and advertising growth domestically, while TLC is expanding its footprint internationally.  Lastly, we significantly strengthened our financial position, refinancing $3 billion of debt at historically low interest rates and greatly enhanced our financial flexibility.  The combination of our strong operating performance and financial position has enabled us to introduce a $1 billion share repurchase plan to return capital to stockholders."

Second quarter revenues of $963 million increased $98 million, or 11%, over the second quarter a year ago led by 10% growth at U.S. Networks  and 15% growth at International Networks.  Adjusted Operating Income Before Depreciation and Amortization ⁽¹⁾ ("OIBDA") grew 18% to $455 million, driven by a 45% increase at International Networks and an 11% increase at U.S. Networks.  Total company Adjusted OIBDA margin increased to 47% for the second quarter from 45% for the same period a year ago.  

Second quarter net income available to Discovery Communications, Inc. stockholders of $106 million ($0.25 per diluted share) decreased $71 million compared to $177 million ($0.42 per diluted share) for the second quarter a year ago which included a gain on the sale of 50% of the Discovery Kids channel.  The current quarter results reflect the strong operating performance, which was more than offset by a loss on the early extinguishment of debt and termination of interest rate swaps.  Excluding these items, net income for the quarter increased $80 million ⁽²⁾.

Free cash flow was negative $44 million for the second quarter, a decrease of $217 million from the second quarter of 2009 as increased operating performance was more than offset by payments of $138 million for the early extinguishment of debt and termination of interest rate swaps, $60 million increased spending for stock-based compensation and $61 million in higher cash taxes due to higher earnings and the expiration of domestic programming deductions.  Free cash flow is defined as cash provided by operating activities less acquisitions of property and equipment.

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