Discovery Communications Reports Full Year and Fourth Quarter 2009 Results

(Silver Spring, Md.) Full Year 2009 Financial Highlights:

* Revenues increased 2% to $3.52 billion
* Adjusted OIBDA increased 12% to $1.46 billion
* Net income available to Discovery stockholders increased to $552 million
* Free Cash Flow increased 18% to $551 million

Silver Spring, Maryland - 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, 2009. The discussion below assumes the transaction between Discovery Holding Company (“DHC”), Discovery Communications Holding, LLC (“DCH”), and Advance/Newhouse Programming Partnership that resulted in Discovery becoming a public company occurred on January 1, 2008 and as such includes 100% of Discovery’s results.

David Zaslav, Discovery’s President and Chief Executive Officer, said, “The strength of Discovery’s performance throughout 2009 reflected the quality of our distribution platform and content assets and our focus on delivering real operating leverage. The affiliate fees we generate across the globe provided consistent resiliency throughout this past year, while the ratings growth across our networks and the value of our unique content enabled advertising to grow despite the weak environment. Our revenue growth, combined with thoughtful cost management, increased our operating efficiency, translating into double-digit Adjusted OIBDA (1) and free cash flow growth. As we look to 2010, we remain focused on further monetizing our ratings momentum in an improving advertising environment, continuing to strengthen our distribution platforms and relationships and, most importantly, delivering high quality content to our viewers.”

Fourth Quarter Results
Fourth quarter revenues of $964 million increased $60 million, or 7%, over the fourth quarter a year ago as 22% growth at International Networks and 3% growth at U.S. Networks was partially offset by a $21 million or 30% decline at Commerce, Education and Other as a result of the transition to a new commerce licensing model. Adjusted Operating Income Before Depreciation and Amortization (1) (“OIBDA”) grew to $390 million, an increase of $28 million or 8% versus the fourth quarter a year ago, mainly driven by a 42% increase at International Networks partially offset by a 4% decline at U.S. Networks due to content impairment charges of $22 million. Adjusted OIBDA margin of 40% for the fourth quarter was in-line with the same period a year ago.

Fourth quarter net income available to Discovery Communications, Inc., stockholders of $155 million ($0.36 per diluted share) grew $49 million compared to $106 million ($0.25 per diluted share) for the fourth quarter a year ago. The increased results primarily reflect the growth in Adjusted OIBDA, lower restructuring and impairment charges and an increase in Other non-operating income, partially offset by a $28 million expense in the current quarter from the change in the fair value of the mark-to-market share-based compensation, compared with a benefit of $22 million in the fourth quarter a year ago.

Free cash flow was $236 million for the fourth quarter, an increase of $108 million or 84% from the same period for 2008. Free cash flow is defined as cash flows from operating activities less acquisitions of property and equipment.

Full Year Results
Full year 2009 revenues of $3,516 million increased $73 million, or 2%, over 2008 revenues, primarily driven by 4% growth at U.S. Networks and 3% growth at International Networks. Adjusted OIBDA increased 12% to $1,464 million led by 8% growth at U.S. Networks and 16% growth at International Networks. Adjusted OIBDA margin for the full year increased to 42% from 38% in 2008.

Full year net income available to Discovery Communications, Inc. stockholders from continuing operations of $552 million ($1.30 per diluted share) grew $278 million versus $274 million ($0.85 per diluted share) a year ago. The increased results primarily reflect the higher Adjusted OIBDA, a net of tax gain on the sale of Discovery Kids channel and an increase in Other non-operating income, partially offset by a $205 million expense in the current year related to the change in the fair value of the mark-to-market share-based compensation, which was a benefit of $69 million in the prior year. 2008 net income also included $128 million of minority interest primarily associated with the Advanced Newhouse ownership prior to the transaction that resulted in Discovery Communications, Inc. becoming a public company.

Free cash flow was $551 million for the full year, an increase of $84 million or 18% from 2008. Free cash flow includes $108 million in taxes paid related to the sale of 50% of the Discovery Kids channel and $64 million of additional tax payments related to prior periods. Excluding these taxes, free cash flow for 2009 increased $256 million or 55% compared to the same period in 2008.