DISCOVERY COMMUNICATIONS REPORTS FULL YEAR AND FOURTH QUARTER 2010 RESULTS
February 11, 2011
Full Year 2010 Financial Highlights:
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· Revenues increased 9% to $3.77 billion
· Adjusted OIBDA increased 14% to $1.70 billion
· Net income from continuing operations increased 17% to $641 million
· Repurchased 16.7 million shares at an aggregate purchase price of $605 million
Silver Spring, Maryland - February 11, 2011: Discovery Communications, Inc. ("Discovery" or the "Company") (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the full year and fourth quarter ended December 31, 2010.
David Zaslav, Discovery's President and Chief Executive Officer said, "Discovery delivered another year of strong and consistent growth in 2010 as we leveraged our diverse slate of quality content across our worldwide distribution platform in an improving global economic environment. We generated significant advertising and distribution revenue growth while thoughtfully managing our cost base. As a result, we were able to increase our margins and free cash flow growth while continuing to invest in content across our existing portfolio of assets and joint ventures. Our strong performance and financial position enabled us to begin returning capital to shareholders with the repurchase of over $600 million in stock this past year. As we move forward in 2011, we will continue to focus on creating high quality programming and expanding our market share globally as we deliver strong operating performance and enhance shareholder value."
Fourth Quarter Results
Fourth quarter revenues of $1,015 million increased $65 million, or 7%, over the fourth quarter a year ago, led by 9% growth at U.S. Networks and 4% growth at International Networks. Adjusted Operating Income Before Depreciation and Amortization (1) ("OIBDA") grew 16% to $461 million, driven by a 16% increase at U.S. Networks and a 7% increase at International Networks. Adjusted OIBDA margin for the fourth quarter increased to 45% from 42% in the fourth quarter of 2009.
Fourth quarter net income from continuing operations available to Discovery Communications, Inc. stockholders of $205 million ($0.48 per diluted share) increased $50 million compared to $155 million ($0.36 per diluted share) for the fourth quarter a year ago. The current quarter results primarily reflect the strong operating performance partially offset by higher other expense of $32 million, mainly from losses related to our joint venture investments, and increased provision for income taxes.
Free cash flow was $203 million for the fourth quarter, a decrease of $41 million from the fourth quarter of 2009, as the increased operating performance was more than offset by higher taxes and the timing of working capital. Free cash flow is defined as cash provided by operating activities less acquisitions of property and equipment.
Full Year Results
Full year 2010 revenues of $3,773 million increased $315 million, or 9%, over 2009 revenues, primarily driven by 9% growth at U.S. Networks and 11% growth at International Networks. Adjusted OIBDA increased 14% to $1,699 million led by 11% growth at U.S. Networks and 22% growth at International Networks. Adjusted OIBDA margin for the full year increased to 45% from 43% in 2009.
Full year net income from continuing operations available to Discovery Communications, Inc. stockholders of $641 million ($1.49 per diluted share) increased $94 million compared to $547 million ($1.29 per diluted share) a year ago, which included a $252 million pre-tax gain on the sale of Discovery Kids channel. The current year results primarily reflect the strong operating performance, $63 million of lower expense from the unrealized change in the fair value of mark-to-market share-based compensation and $192 million in lower provision for income taxes, partially offset by a $136 million loss on the early extinguishment of debt and termination of interest rate swaps.
Free cash flow was $619 million for the full year, an increase of $32 million from full year 2009. Current year results primarily reflect the increased operating performance partially offset by payments of $138 million for the early extinguishment of debt and termination of interest rate swaps and $77 million increased spending for stock-based compensation. 2009 results included cash tax payments of $108 million related to the sale of Discovery Kids, as well as $64 million of tax payments related to prior periods.
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Discovery Communications Full Year and Fourth Quarter 2010 Results Press Release