(press release) Discovery Communications, Inc. ("Discovery" or the "Company") (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the second quarter ended June 30, 2015."Driven by our unmatched portfolio and steady growth around the world, Discovery's strong start to the year continued in the second quarter," said Discovery Communications President and CEO David Zaslav. "We have carried that momentum into the third quarter and signed three landmark deals - the historic agreement for the Olympic Games in Europe, our agreement to acquire full ownership of Eurosport and our comprehensive long-term renewal with Comcast - that will bolster Discovery's position and market share for years to come. I am pleased with the progress we made in the first half of the year and look forward to building our stable of content, IP and world-class platforms to drive viewer engagement and meaningful value to distributors, advertisers and shareholders now and into the future."
Second Quarter Results
Second quarter revenues of $1,654 million increased $44 million, or 3%, over the second quarter a year ago, led by 5% growth at U.S. Networks and 1% growth at International Networks. Adjusted Operating Income Before Depreciation and Amortization(1) ("OIBDA") decreased 2% to $680 million, as 7% growth at U.S. Networks was more than offset by an 11% decline at International Networks and a small operating loss at Education and Other. Total Company revenues grew 11% and Adjusted OIBDA grew 6% excluding currency effects, as changes in foreign currency exchange rates reduced both second quarter revenue and Adjusted OIBDA growth by 8%. Excluding currency effects, the impact of Eurosport(2) and the consolidation of Discovery Family, total Company revenues increased 4% and Adjusted OIBDA increased 3%.
Second quarter net income available to Discovery Communications, Inc. decreased to $286 million ($0.44 per diluted share)(3) compared to $379 million ($0.54 per diluted share) for the second quarter a year ago, primarily due to higher foreign currency losses, a lower gain on disposition, a gain on the consolidation of Eurosport in the prior year, and higher restructuring and other charges due to content impairments, partially offset by lower income tax expense. Adjusted Earnings Per Diluted Share(4) ("Adjusted EPS"), which excludes the impact of amortization of acquisition-related intangible assets, was $0.49 in the second quarter of this year, down 16%, compared with $0.58 in the same period a year ago. Adjusted EPS increased 4% excluding currency effects, as changes in foreign currency exchange rates reduced second quarter Adjusted EPS by 20%. For the last twelve months, Adjusted EPS excluding currency was up 11% compared with the prior twelve month period.
U.S. Networks' revenues in the second quarter of 2015 increased 5% to $814 million, driven by 12% distribution growth. The 12% distribution revenue growth was primarily driven by higher rates and the consolidation of Discovery Family. Advertising revenues were relatively flat, as higher pricing was offset by lower delivery. Excluding the consolidation of Discovery Family, distribution revenues grew 6% and total revenues grew 1% over the prior year's second quarter.
Adjusted OIBDA increased 7% to $496 million. Excluding the consolidation of Discovery Family, Adjusted OIBDA increased 4%, as operating expenses declined 3%, mainly due to lower personnel, marketing and facilities expenses.
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