Discovery Communications, Inc. (NASDAQ:DISC.K) Q3 2016 Earnings Conference Call - Preliminary Transcript

Nov 01, 2016 • 08:30 am ET


Discovery Communications, Inc. (NASDAQ:DISC.K) Q3 2016 Earnings Conference Call - Preliminary Transcript


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Good day, ladies and gentlemen, and welcome to the Discovery Communications third quarter 2016 earnings call. At this time, all participate are in a listen-only mode. [Operator Instructions] Later we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, today's conference is being recorded.

I would now like to introduce your host for today's conference, Ms. Jackie Burka, Vice President, Investor Relations. Ma'am, please go ahead.

Jackie Burka

Good morning, everyone. Thank you for joining us for Discovery Communications' 2016 third quarter earnings call. Joining me today are David Zaslav, our President and Chief Executive Officer, and Andy Warren, our Chief Financial Officer. You should have received our earnings release, but if not, feel free to access it on our website at On today's call, we will begin with some opening comments from David and Andy and then we will open up the call for your questions. Please keep to one question so we can accommodate as many people as possible.

Before we start, I would like to remind you that comments today regarding the company's future business plans, prospects and financial performance are forward-looking statements that we make pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are made based on management's current knowledge and assumptions about future events, and they involve risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see our annual report for the year ended December 31, 2015, and our subsequent filings made with the US Securities and Exchange Commission.

And with that, I will turn the call over to David.

David M. Zaslav

Good morning, everyone. I'm pleased to join you this morning during a very exciting time for the media industry. As the industry continues to evolve at an increasingly rapid pace, we know that powerful and love content is still king. Discovery remains focused on diversifying and augmenting the value of our global content portfolio of strong brands and franchises in over 220 markets around the world. We have continued to strengthen our traditional Pay-TV dual revenue streams while investing to drive additional value on Pay-TV and across new digital platforms. Since our last call, we have made some key strategic investments.

We have seen expected but still difficult third quarter advertising results, in part due to the Olympics. We have completed a major US distribution deal, and we have watched a continuation of strong trends in distribution revenue, which are 50% of our US and 50% of our international businesses. That long cycle, domestic and international revenue mix makes Discovery unlike any other US-based multi-channel network company. Today, I want to talk about five major developments since our last earnings call. Our new CFO, two strategic investments, the financial foundation provided by our large distribution deals, and