Condensed Consolidating Financial Statements |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS Overview As of June 30, 2018 and December 31, 2017, most of the outstanding senior notes have been issued by DCL, a wholly owned subsidiary of the Company, pursuant to one or more Registration Statements on Form S-3 filed with the U.S. Securities and Exchange Commission ("SEC"). (See Note 6.) Each of the Company, DCL and/or Discovery Communications Holding LLC (“DCH”) (collectively the “Issuers”) have the ability to conduct registered offerings of debt securities. Set forth below are condensed consolidating financial statements presenting the financial position, results of operations and comprehensive income and cash flows of (i) the Company, (ii) Scripps Networks, (iii) DCH, (iv) DCL, (v) the non-guarantor subsidiaries of DCL and Scripps Networks on a combined basis, and (vi) reclassifications and eliminations necessary to arrive at the consolidated financial statement balances for the Company. DCL primarily includes the Discovery Channel and TLC networks in the U.S. The non-guarantor subsidiaries of DCL and Scripps Networks include substantially all of the Company’s other U.S. and international networks, education businesses, production companies and most of the Company’s websites and digital distribution arrangements. The non-guarantor subsidiaries of DCL are wholly owned subsidiaries of DCL with the exception of certain equity method investments. DCL is a wholly owned subsidiary of DCH. The Company wholly owns DCH through a 33 1/3% direct ownership interest and a 66 2/3% indirect ownership interest through Discovery Holding Company (“DHC”), a wholly owned subsidiary of the Company. DHC is included in the other non-guarantor subsidiaries of the Company. On April 3, 2018, the Company completed a non-cash transaction in which $2.3 billion aggregate principal amount of Scripps Networks outstanding debt was exchanged for Discovery senior notes (See Note 6). The exchanged Scripps Networks senior notes are fully and unconditionally guaranteed by Scripps Networks and the Company. During the three months ended June 30, 2018, the Company completed a series of senior note guaranty transactions and as a result as of June 30, 2018, the Company and Scripps Networks fully and unconditionally guarantee all of Discovery's senior notes on an unsecured basis, except for the $243 million un-exchanged Scripps Networks Senior Notes. (See Note 6.) The condensed consolidated financial statements presented below reflect the addition of Scripps Networks as a guarantor as of and for the three months ended June 30, 2018. Prior to the debt exchange and for the quarter ended March 31, 2018, the Company presented Scripps Networks combined with its non-guarantor subsidiaries separately as other non-guarantor subsidiaries of Discovery. Basis of Presentation Solely for purposes of presenting the condensed consolidating financial statements, investments in the Company’s subsidiaries have been accounted for by their respective parent company using the equity method. Accordingly, in the following condensed consolidating financial statements the equity method has been applied to (i) the Company’s interests in DCH, Scripps Networks, and the other non-guarantor subsidiaries of the Company, including the non-guarantor subsidiaries of Scripps Networks, (ii) DCH’s interest in DCL, and (iii) DCL’s interests in the non-guarantor subsidiaries of DCL and Scripps Networks. Inter-company accounts and transactions have been eliminated to arrive at the consolidated financial statement amounts for the Company. The Company’s accounting bases in all subsidiaries, including goodwill and recognized intangible assets, have been “pushed down” to the applicable subsidiaries. The operations of certain of the Company’s international subsidiaries are excluded from the Company’s consolidated U.S. income tax return. Tax expense related to permanent differences has been allocated to the entity that created the difference. Tax expense related to temporary differences has been allocated to the entity that created the difference, where identifiable. The remaining temporary differences are allocated to each entity included in the Company’s consolidated U.S. income tax return based on each entity’s relative pretax income. Deferred taxes have been allocated based upon the temporary differences between the carrying amounts of the respective assets and liabilities of the applicable entities. The condensed consolidating financial statements should be read in conjunction with the consolidated financial statements of the Company. Condensed Consolidating Balance Sheet June 30, 2018 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | Scripps Networks | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | ASSETS | | | | | | | | | | | | | | | | | Current assets: | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 47 |
| | $ | — |
| | $ | 25 |
| | $ | 246 |
| | $ | 74 |
| | $ | — |
| | $ | 392 |
| Receivables, net | | — |
| | — |
| | — |
| | 474 |
| | 1,350 |
| | 923 |
| | — |
| | 2,747 |
| Content rights, net | | — |
| | — |
| | — |
| | 3 |
| | 269 |
| | 86 |
| | — |
| | 358 |
| Prepaid expenses and other current assets | | 20 |
| | 53 |
| | 31 |
| | 33 |
| | 155 |
| | 117 |
| | — |
| | 409 |
| Inter-company trade receivables, net | | — |
| | — |
| | — |
| | 182 |
| | — |
| | — |
| | (182 | ) | | — |
| Total current assets | | 20 |
| | 100 |
| | 31 |
| | 717 |
| | 2,020 |
| | 1,200 |
| | (182 | ) | | 3,906 |
| Investment in and advances to subsidiaries | | 7,918 |
| | 13,795 |
| | (5,945 | ) | | 6,494 |
| | — |
| | (3,929 | ) | | (18,333 | ) | | — |
| Noncurrent content rights, net | | — |
| | — |
| | — |
| | 676 |
| | 1,576 |
| | 1,006 |
| | — |
| | 3,258 |
| Assets held for sale | | — |
| | — |
| | — |
| | 68 |
| | — |
| | — |
| | — |
| | 68 |
| Goodwill, net | | — |
| | — |
| | — |
| | 3,678 |
| | 3,316 |
| | 6,125 |
| | — |
| | 13,119 |
| Intangible assets, net | | — |
| | — |
| | — |
| | 256 |
| | 1,377 |
| | 8,735 |
| | — |
| | 10,368 |
| Equity method investments, including note receivable | | — |
| | 96 |
| | — |
| | 23 |
| | 317 |
| | 587 |
| | — |
| | 1,023 |
| Other noncurrent assets, including property and equipment, net | | — |
| | — |
| | 20 |
| | 516 |
| | 772 |
| | 462 |
| | (20 | ) | | 1,750 |
| Total assets | | $ | 7,938 |
| | $ | 13,991 |
| | $ | (5,894 | ) | | $ | 12,428 |
| | $ | 9,378 |
| | $ | 14,186 |
| | $ | (18,535 | ) | | $ | 33,492 |
| LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | Current liabilities: | | | | | | | | | | | | | | | | | Current portion of debt | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 608 |
| | $ | 27 |
| | $ | 11 |
| | $ | — |
| | $ | 646 |
| Other current liabilities | | — |
| | 83 |
| | — |
| | 339 |
| | 1,147 |
| | 481 |
| | — |
| | 2,050 |
| Inter-company trade payables, net | | — |
| | — |
| | — |
| | — |
| | 182 |
| | — |
| | (182 | ) | | — |
| Total current liabilities | | — |
| | 83 |
| | — |
| | 947 |
| | 1,356 |
| | 492 |
| | (182 | ) | | 2,696 |
| Noncurrent portion of debt | | — |
| | 241 |
| | — |
| | 16,858 |
| | 544 |
| | 40 |
| | — |
| | 17,683 |
| Other noncurrent liabilities | | 2 |
| | 86 |
| | — |
| | 568 |
| | 574 |
| | 1,866 |
| | (19 | ) | | 3,077 |
| Total liabilities | | 2 |
| | 410 |
| | — |
| | 18,373 |
| | 2,474 |
| | 2,398 |
| | (201 | ) | | 23,456 |
| Redeemable noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | 410 |
| | — |
| | — |
| | 410 |
| Equity attributable to Discovery, Inc. | | 7,936 |
| | 13,581 |
| | (5,894 | ) | | (5,945 | ) | | 6,494 |
| | 11,788 |
| | (20,024 | ) | | 7,936 |
| Noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,690 |
| | 1,690 |
| Total equity | | 7,936 |
| | 13,581 |
| | (5,894 | ) | | (5,945 | ) | | 6,494 |
| | 11,788 |
| | (18,334 | ) | | 9,626 |
| Total liabilities and equity | | $ | 7,938 |
| | $ | 13,991 |
| | $ | (5,894 | ) | | $ | 12,428 |
| | $ | 9,378 |
| | $ | 14,186 |
| | $ | (18,535 | ) | | $ | 33,492 |
|
Condensed Consolidating Balance Sheet December 31, 2017 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | ASSETS | | | | | | | | | | | | | | | Current assets: | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | — |
| | $ | 6,800 |
| | $ | 509 |
| | $ | — |
| | $ | — |
| | $ | 7,309 |
| Receivables, net | | — |
| | — |
| | 410 |
| | 1,428 |
| | — |
| | — |
| | 1,838 |
| Content rights, net | | — |
| | — |
| | 4 |
| | 406 |
| | — |
| | — |
| | 410 |
| Prepaid expenses and other current assets | | 49 |
| | 32 |
| | 204 |
| | 149 |
| | — |
| | — |
| | 434 |
| Inter-company trade receivables, net | | — |
| | — |
| | 205 |
| | — |
| | — |
| | (205 | ) | | — |
| Total current assets | | 49 |
| | 32 |
| | 7,623 |
| | 2,492 |
| | — |
| | (205 | ) | | 9,991 |
| Investment in and advances to subsidiaries | | 4,563 |
| | 4,532 |
| | 6,951 |
| | — |
| | 3,056 |
| | (19,102 | ) | | — |
| Noncurrent content rights, net | | — |
| | — |
| | 672 |
| | 1,541 |
| | — |
| | — |
| | 2,213 |
| Goodwill, net | | — |
| | — |
| | 3,677 |
| | 3,396 |
| | — |
| | — |
| | 7,073 |
| Intangible assets, net | | — |
| | — |
| | 259 |
| | 1,511 |
| | — |
| | — |
| | 1,770 |
| Equity method investments, including note receivable | | — |
| | — |
| | 25 |
| | 310 |
| | — |
| | — |
| | 335 |
| Other noncurrent assets, including property and equipment, net | | — |
| | 20 |
| | 364 |
| | 809 |
| | — |
| | (20 | ) | | 1,173 |
| Total assets | | $ | 4,612 |
| | $ | 4,584 |
| | $ | 19,571 |
| | $ | 10,059 |
| | $ | 3,056 |
| | $ | (19,327 | ) | | $ | 22,555 |
| LIABILITIES AND EQUITY | | | | | | | | | | | | | | | Current liabilities: | | | | | | | | | | | | | | | Current portion of debt | | $ | — |
| | $ | — |
| | $ | 7 |
| | $ | 23 |
| | $ | — |
| | $ | — |
| | $ | 30 |
| Other current liabilities | | — |
| | — |
| | 572 |
| | 1,269 |
| | — |
| | — |
| | 1,841 |
| Inter-company trade payables, net | | — |
| | — |
| | — |
| | 205 |
| | — |
| | (205 | ) | | — |
| Total current liabilities | | — |
| | — |
| | 579 |
| | 1,497 |
| | — |
| | (205 | ) | | 1,871 |
| Noncurrent portion of debt | | — |
| | — |
| | 14,163 |
| | 592 |
| | — |
| | — |
| | 14,755 |
| Other noncurrent liabilities | | 2 |
| | — |
| | 297 |
| | 606 |
| | 21 |
| | (20 | ) | | 906 |
| Total liabilities | | 2 |
| | — |
| | 15,039 |
| | 2,695 |
| | 21 |
| | (225 | ) | | 17,532 |
| Redeemable noncontrolling interests | | — |
| | — |
| | — |
| | 413 |
| | — |
| | — |
| | 413 |
| Total equity | | 4,610 |
| | 4,584 |
| | 4,532 |
| | 6,951 |
| | 3,035 |
| | (19,102 | ) | | 4,610 |
| Total liabilities and equity | | $ | 4,612 |
| | $ | 4,584 |
| | $ | 19,571 |
| | $ | 10,059 |
| | $ | 3,056 |
| | $ | (19,327 | ) | | $ | 22,555 |
|
Condensed Consolidating Statement of Operations Three Months Ended June 30, 2018 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | Scripps Networks | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Revenues | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 506 |
| | $ | 1,385 |
| | $ | 961 |
| | $ | (7 | ) | | $ | 2,845 |
| Costs of revenues, excluding depreciation and amortization | | — |
| | — |
| | — |
| | 107 |
| | 593 |
| | 292 |
| | 3 |
| | 995 |
| Selling, general and administrative | | 5 |
| | 1 |
| | — |
| | 87 |
| | 417 |
| | 187 |
| | (10 | ) | | 687 |
| Depreciation and amortization | | — |
| | — |
| | — |
| | 11 |
| | 100 |
| | 299 |
| | — |
| | 410 |
| Restructuring and other charges | | 1 |
| | — |
| | — |
| | 16 |
| | 137 |
| | 35 |
| | (2 | ) | | 187 |
| Gain on disposition | | — |
| | — |
| | — |
| | — |
| | (84 | ) | | — |
| | — |
| | (84 | ) | Total costs and expenses | | 6 |
| | 1 |
| | — |
| | 221 |
| | 1,163 |
| | 813 |
| | (9 | ) | | 2,195 |
| Operating (loss) income | | (6 | ) | | (1 | ) | | — |
| | 285 |
| | 222 |
| | 148 |
| | 2 |
| | 650 |
| Equity in earnings of subsidiaries | | 222 |
| | 82 |
| | 154 |
| | 53 |
| | — |
| | 103 |
| | (614 | ) | | — |
| Interest income (expense) | | — |
| | 2 |
| | — |
| | (188 | ) | | (10 | ) | | — |
| | — |
| | (196 | ) | Income (loss) from equity investees, net | | — |
| | — |
| | — |
| | 1 |
| | (46 | ) | | 5 |
| | — |
| | (40 | ) | Other income (expense), net | | — |
| | 1 |
| | — |
| | 73 |
| | (82 | ) | | (38 | ) | | (1 | ) | | (47 | ) | Income before income taxes | | 216 |
| | 84 |
| | 154 |
| | 224 |
| | 84 |
| | 218 |
| | (613 | ) | | 367 |
| Income tax benefit (expense) | | 1 |
| | — |
| | — |
| | (70 | ) | | (26 | ) | | (28 | ) | | — |
| | (123 | ) | Net income | | 217 |
| | 84 |
| | 154 |
| | 154 |
| | 58 |
| | 190 |
| | (613 | ) | | 244 |
| Net income attributable to noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (23 | ) | | (23 | ) | Net income attributable to redeemable noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (5 | ) | | (5 | ) | Net income available to Discovery, Inc. | | $ | 217 |
| | $ | 84 |
| | $ | 154 |
| | $ | 154 |
| | $ | 58 |
| | $ | 190 |
| | $ | (641 | ) | | $ | 216 |
|
Condensed Consolidating Statement of Operations Three Months Ended June 30, 2017 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Revenues | | $ | — |
| | $ | — |
| | $ | 525 |
| | $ | 1,224 |
| | $ | — |
| | $ | (4 | ) | | $ | 1,745 |
| Costs of revenues, excluding depreciation and amortization | | — |
| | — |
| | 112 |
| | 522 |
| | — |
| | — |
| | 634 |
| Selling, general and administrative | | 5 |
| | — |
| | 56 |
| | 332 |
| | — |
| | (4 | ) | | 389 |
| Depreciation and amortization | | — |
| | — |
| | 11 |
| | 69 |
| | — |
| | — |
| | 80 |
| Restructuring and other charges | | — |
| | — |
| | 3 |
| | 5 |
| | — |
| | — |
| | 8 |
| Loss on disposition | | — |
| | — |
| | — |
| | 4 |
| | — |
| | — |
| | 4 |
| Total costs and expenses | | 5 |
| | — |
| | 182 |
| | 932 |
| | — |
| | (4 | ) | | 1,115 |
| Operating (loss) income | | (5 | ) | | — |
| | 343 |
| | 292 |
| | — |
| | — |
| | 630 |
| Equity in earnings of subsidiaries | | 376 |
| | 376 |
| | 245 |
| | — |
| | 251 |
| | (1,248 | ) | | — |
| Interest expense | | — |
| | — |
| | (83 | ) | | (8 | ) | | — |
| | — |
| | (91 | ) | Loss from equity investees, net | | — |
| | — |
| | — |
| | (42 | ) | | — |
| | — |
| | (42 | ) | Other (expense) income, net | | — |
| | — |
| | (62 | ) | | 38 |
| | — |
| | — |
| | (24 | ) | Income before income taxes | | 371 |
| | 376 |
| | 443 |
| | 280 |
| | 251 |
| | (1,248 | ) | | 473 |
| Income tax benefit (expense) | | 3 |
| | — |
| | (67 | ) | | (29 | ) | | — |
| | — |
| | (93 | ) | Net income | | 374 |
| | 376 |
| | 376 |
| | 251 |
| | 251 |
| | (1,248 | ) | | 380 |
| Net income attributable to redeemable noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | (6 | ) | | (6 | ) | Net income available to Discovery, Inc. | | $ | 374 |
| | $ | 376 |
| | $ | 376 |
| | $ | 251 |
| | $ | 251 |
| | $ | (1,254 | ) | | $ | 374 |
|
Condensed Consolidating Statement of Operations Six Months Ended June 30, 2018 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | Scripps Networks | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Revenues | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 994 |
| | $ | 2,934 |
| | $ | 1,234 |
| | $ | (10 | ) | | $ | 5,152 |
| Costs of revenues, excluding depreciation and amortization | | — |
| | — |
| | — |
| | 214 |
| | 1,459 |
| | 384 |
| | (2 | ) | | 2,055 |
| Selling, general and administrative | | 31 |
| | — |
| | — |
| | 167 |
| | 853 |
| | 253 |
| | (8 | ) | | 1,296 |
| Depreciation and amortization | | — |
| | — |
| | — |
| | 28 |
| | 193 |
| | 382 |
| | — |
| | 603 |
| Restructuring and other charges | | 9 |
| | — |
| | — |
| | 59 |
| | 235 |
| | 127 |
| | (2 | ) | | 428 |
| Gain on disposition | | — |
| | — |
| | — |
| | — |
| | (84 | ) | | — |
| | — |
| | (84 | ) | Total costs and expenses | | 40 |
| | — |
| | — |
| | 468 |
| | 2,656 |
| | 1,146 |
| | (12 | ) | | 4,298 |
| Operating (loss) income | | (40 | ) | | — |
| | — |
| | 526 |
| | 278 |
| | 88 |
| | 2 |
| | 854 |
| Equity in earnings of subsidiaries | | 239 |
| | 38 |
| | 225 |
| | 62 |
| | — |
| | 150 |
| | (714 | ) | | — |
| Interest expense | | — |
| | (4 | ) | | — |
| | (345 | ) | | (22 | ) | | (2 | ) | | — |
| | (373 | ) | Income (loss) from equity investees, net | | — |
| | — |
| | — |
| | 1 |
| | (77 | ) | | 14 |
| | — |
| | (62 | ) | Other income (expense), net | | — |
| | 2 |
| | — |
| | 49 |
| | (78 | ) | | (41 | ) | | (1 | ) | | (69 | ) | Income before income taxes | | 199 |
| | 36 |
| | 225 |
| | 293 |
| | 101 |
| | 209 |
| | (713 | ) | | 350 |
| Income tax benefit (expense) | | 9 |
| | — |
| | — |
| | (68 | ) | | (28 | ) | | (16 | ) | | — |
| | (103 | ) | Net income | | 208 |
| | 36 |
| | 225 |
| | 225 |
| | 73 |
| | 193 |
| | (713 | ) | | 247 |
| Net income attributable to noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (28 | ) | | (28 | ) | Net income attributable to redeemable noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (11 | ) | | (11 | ) | Net income available to Discovery, Inc. | | $ | 208 |
| | $ | 36 |
| | $ | 225 |
| | $ | 225 |
| | $ | 73 |
| | $ | 193 |
| | $ | (752 | ) | | $ | 208 |
|
Condensed Consolidating Statement of Operations Six Months Ended June 30, 2017 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Revenues | | $ | — |
| | $ | — |
| | $ | 1,016 |
| | $ | 2,349 |
| | $ | — |
| | $ | (7 | ) | | $ | 3,358 |
| Costs of revenues, excluding depreciation and amortization | | — |
| | — |
| | 220 |
| | 1,021 |
| | — |
| | — |
| | 1,241 |
| Selling, general and administrative | | 9 |
| | — |
| | 130 |
| | 672 |
| | — |
| | (7 | ) | | 804 |
| Depreciation and amortization | | — |
| | — |
| | 23 |
| | 137 |
| | — |
| | — |
| | 160 |
| Restructuring and other charges | | — |
| | — |
| | 19 |
| | 13 |
| | — |
| | — |
| | 32 |
| Loss on disposition | | — |
| | — |
| | — |
| | 4 |
| | — |
| | — |
| | 4 |
| Total costs and expenses | | 9 |
| | — |
| | 392 |
| | 1,847 |
| | — |
| | (7 | ) | | 2,241 |
| Operating (loss) income | | (9 | ) | | — |
| | 624 |
| | 502 |
| | — |
| | — |
| | 1,117 |
| Equity in earnings of subsidiaries | | 594 |
| | 594 |
| | 385 |
| | — |
| | 396 |
| | (1,969 | ) | | — |
| Interest expense | | — |
| | — |
| | (169 | ) | | (13 | ) | | — |
| | — |
| | (182 | ) | Loss on extinguishment of debt | | — |
| | — |
| | (54 | ) | | — |
| | — |
| | — |
|
| (54 | ) | Income (loss) from equity investees, net | | — |
| | — |
| | 1 |
| | (96 | ) | | — |
| | — |
| | (95 | ) | Other (expense) income, net | | — |
| | — |
| | (89 | ) | | 52 |
| | — |
| | — |
| | (37 | ) | Income before income taxes | | 585 |
| | 594 |
| | 698 |
| | 445 |
| | 396 |
| | (1,969 | ) | | 749 |
| Income tax benefit (expense) | | 4 |
| | — |
| | (104 | ) | | (48 | ) | | — |
| | — |
| | (148 | ) | Net income | | 589 |
| | 594 |
| | 594 |
| | 397 |
| | 396 |
| | (1,969 | ) | | 601 |
| Net income attributable to redeemable noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | (12 | ) | | (12 | ) | Net income available to Discovery, Inc. | | $ | 589 |
| | $ | 594 |
| | $ | 594 |
| | $ | 397 |
| | $ | 396 |
| | $ | (1,981 | ) | | $ | 589 |
|
Condensed Consolidating Statement of Comprehensive Income Three Months Ended June 30, 2018 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | Scripps Networks | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Net income | | $ | 217 |
| | $ | 84 |
| | $ | 154 |
| | $ | 154 |
| | $ | 58 |
| | $ | 190 |
| | $ | (613 | ) | | $ | 244 |
| Other comprehensive (loss) income adjustments, net of tax: | | | | | | | | | | | | | | | | | Currency translation | | (206 | ) | | (197 | ) | | (49 | ) | | (49 | ) | | (64 | ) | | (230 | ) | | 589 |
| | (206 | ) | Derivatives | | 29 |
| | — |
| | 29 |
| | 29 |
| | 29 |
| | 19 |
| | (106 | ) | | 29 |
| Comprehensive income (loss) | | 40 |
| | (113 | ) | | 134 |
| | 134 |
| | 23 |
| | (21 | ) | | (130 | ) | | 67 |
| Comprehensive income attributable to noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (23 | ) | | (23 | ) | Comprehensive income attributable to redeemable noncontrolling interests | | 2 |
| | — |
| | 2 |
| | 2 |
| | 2 |
| | 1 |
| | (14 | ) | | (5 | ) | Comprehensive income (loss) attributable to Discovery, Inc. | | $ | 42 |
| | $ | (113 | ) | | $ | 136 |
| | $ | 136 |
| | $ | 25 |
| | $ | (20 | ) | | $ | (167 | ) | | $ | 39 |
|
Condensed Consolidating Statement of Comprehensive Income Three Months Ended June 30, 2017 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Net income | | $ | 374 |
| | $ | 376 |
| | $ | 376 |
| | $ | 251 |
| | $ | 251 |
| | $ | (1,248 | ) | | $ | 380 |
| Other comprehensive income (loss) adjustments, net of tax: | | | | | | | | | | | | | | | Currency translation | | 91 |
| | 91 |
| | 91 |
| | 91 |
| | 61 |
| | (334 | ) | | 91 |
| Available-for-sale securities | | 5 |
| | 5 |
| | 5 |
| | 5 |
| | 4 |
| | (19 | ) | | 5 |
| Derivatives | | (9 | ) | | (9 | ) | | (9 | ) | | (9 | ) | | (6 | ) | | 33 |
| | (9 | ) | Comprehensive income | | 461 |
| | 463 |
| | 463 |
| | 338 |
| | 310 |
| | (1,568 | ) | | 467 |
| Comprehensive income attributable to redeemable noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | (6 | ) | | (6 | ) | Comprehensive income attributable to Discovery, Inc. | | $ | 461 |
| | $ | 463 |
| | $ | 463 |
| | $ | 338 |
| | $ | 310 |
| | $ | (1,574 | ) | | $ | 461 |
|
Condensed Consolidating Statement of Comprehensive Income (Loss) Six Months Ended June 30, 2018 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | Scripps Networks | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Net income | | $ | 208 |
| | $ | 36 |
| | $ | 225 |
| | $ | 225 |
| | $ | 73 |
| | $ | 193 |
| | $ | (713 | ) | | $ | 247 |
| Other comprehensive (loss) income adjustments, net of tax: | | | | | | | | | | | | | | | | | Currency translation | | (203 | ) | | (177 | ) | | (26 | ) | | (26 | ) | | (41 | ) | | (194 | ) | | 464 |
| | (203 | ) | Derivatives | | 24 |
| | — |
| | 24 |
| | 24 |
| | 24 |
| | 16 |
| | (88 | ) | | 24 |
| Comprehensive income (loss) | | 29 |
| | (141 | ) | | 223 |
| | 223 |
| | 56 |
| | 15 |
| | (337 | ) | | 68 |
| Comprehensive income attributable to noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (28 | ) | | (28 | ) | Comprehensive income attributable to redeemable noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (11 | ) | | (11 | ) | Comprehensive income (loss) attributable to Discovery, Inc. | | $ | 29 |
| | $ | (141 | ) | | $ | 223 |
| | $ | 223 |
| | $ | 56 |
| | $ | 15 |
| | $ | (376 | ) | | $ | 29 |
|
Condensed Consolidating Statement of Comprehensive Income (Loss) Six Months Ended June 30, 2017 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Net income | | $ | 589 |
| | $ | 594 |
| | $ | 594 |
| | $ | 397 |
| | $ | 396 |
| | $ | (1,969 | ) | | $ | 601 |
| Other comprehensive income (loss) adjustments, net of tax: | | | | | | | | | | | | | | | Currency translation | | 159 |
| | 159 |
| | 159 |
| | 159 |
| | 106 |
| | (583 | ) | | 159 |
| Available-for-sale securities | | 4 |
| | 4 |
| | 4 |
| | 4 |
| | 3 |
| | (15 | ) | | 4 |
| Derivatives | | (17 | ) | | (17 | ) | | (17 | ) | | (18 | ) | | (11 | ) | | 63 |
| | (17 | ) | Comprehensive income | | 735 |
| | 740 |
| | 740 |
| | 542 |
| | 494 |
| | (2,504 | ) | | 747 |
| Comprehensive income attributable to redeemable noncontrolling interests | | (1 | ) | | (1 | ) | | (1 | ) | | (1 | ) | | (1 | ) | | (8 | ) | | (13 | ) | Comprehensive income attributable to Discovery, Inc. | | $ | 734 |
| | $ | 739 |
| | $ | 739 |
| | $ | 541 |
| | $ | 493 |
| | $ | (2,512 | ) | | $ | 734 |
|
Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2018 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | Scripps Networks | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Operating Activities | | | | | | | | | | | | | | | | | Cash (used in) provided by operating activities | | $ | (100 | ) | | $ | (14 | ) | | $ | (8 | ) | | $ | 156 |
| | $ | 405 |
| | $ | 277 |
| | $ | — |
| | $ | 716 |
| Investing Activities | | | | | | | | | | | | | | | | | Business acquisitions, net of cash acquired | | (8,714 | ) | | 54 |
| | — |
| | — |
| | — |
| | 95 |
| | — |
| | (8,565 | ) | Payments for investments | | — |
| | — |
| | — |
| | (10 | ) | | (45 | ) | | 7 |
| | — |
| | (48 | ) | Proceeds from dispositions, net of cash disposed | | — |
| | — |
| | — |
| | — |
| | 107 |
| | — |
| | — |
| | 107 |
| Purchases of property and equipment | | — |
| | — |
| | — |
| | (12 | ) | | (56 | ) | | (14 | ) | | — |
| | (82 | ) | Proceeds from derivative instruments, net | | — |
| | — |
| | — |
| | — |
| | 1 |
| | — |
| | — |
| | 1 |
| Inter-company distributions, and other investing activities, net | | — |
|
| 7 |
|
| — |
|
| 8 |
|
| 5 |
|
| (8 | ) |
| (8 | ) |
| 4 |
| Cash (used in) provided by investing activities | | (8,714 | ) | | 61 |
| | — |
| | (14 | ) | | 12 |
| | 80 |
| | (8 | ) | | (8,583 | ) | Financing Activities | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| Commercial paper borrowings, net | | — |
| | — |
| | — |
| | 579 |
| | — |
| | — |
| | — |
| | 579 |
| Principal repayments of revolving credit facility | | — |
| | — |
| | — |
| | — |
| | (50 | ) | | — |
| | — |
| | (50 | ) | Borrowings under term loan facilities | | — |
| | — |
| | — |
| | 2,000 |
| | — |
| | — |
| | — |
| | 2,000 |
| Principal (repayments) borrowings of term loans | | — |
| | — |
| | — |
| | (1,500 | ) | | — |
| | — |
| | — |
| | (1,500 | ) | Principal repayments of capital lease obligations | | — |
| | — |
| | — |
| | (4 | ) | | (17 | ) | | (4 | ) | | — |
| | (25 | ) | Distributions to noncontrolling interests and redeemable noncontrolling interests | | — |
| | — |
| | — |
| | (19 | ) | | (2 | ) | | (38 | ) | | — |
| | (59 | ) | Share-based plan proceeds, net | | 26 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 26 |
| Borrowings under program financing line of credit | | — |
| | — |
| | — |
| | 23 |
| | — |
| | — |
| | — |
| | 23 |
| Inter-company contributions and other financing activities, net | | 8,788 |
| | — |
| | 8 |
| | (7,996 | ) | | (589 | ) | | (236 | ) | | 8 |
| | (17 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash provided by (used in) financing activities | | 8,814 |
| | — |
| | 8 |
| | (6,917 | ) | | (658 | ) | | (278 | ) | | 8 |
| | 977 |
| Effect of exchange rate changes on cash and cash equivalents | | — |
| | — |
| | — |
| | — |
| | (22 | ) | | (5 | ) | | — |
| | (27 | ) | Net change in cash and cash equivalents | | — |
| | 47 |
| | — |
| | (6,775 | ) | | (263 | ) | | 74 |
| | — |
| | (6,917 | ) | Cash and cash equivalents, beginning of period | | — |
| | — |
| | — |
| | 6,800 |
| | 509 |
| | — |
| | — |
| | 7,309 |
| Cash and cash equivalents, end of period | | — |
| | 47 |
| | — |
| | 25 |
| | 246 |
| | 74 |
| | — |
| | 392 |
|
Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2017 (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discovery | | DCH | | DCL | | Non-Guarantor Subsidiaries of DCL | | Other Non- Guarantor Subsidiaries of Discovery | | Reclassifications and Eliminations | | Discovery and Subsidiaries | Operating Activities | | | | | | | | | | | | | | | Cash provided by (used in) operating activities | | $ | 37 |
| | $ | (5 | ) | | $ | (22 | ) | | $ | 433 |
| | $ | — |
| | $ | — |
| | $ | 443 |
| Investing Activities | | | | | | | | | | | | | | | Payments for investments | | — |
| | — |
| | (7 | ) | | (263 | ) | | — |
| | — |
| | (270 | ) | Purchases of property and equipment | | — |
| | — |
| | (26 | ) | | (52 | ) | | — |
| | — |
| | (78 | ) | Distributions from equity method investees | | — |
| | — |
| | — |
| | 18 |
| | — |
| | — |
| | 18 |
| Proceeds from dispositions, net of cash disposed | | — |
| | — |
| | — |
| | 29 |
| | — |
| | — |
| | 29 |
| Proceeds from derivative instruments, net | | — |
| | — |
| | — |
| | 5 |
| | — |
| | — |
| | 5 |
| Other investing activities, net | | — |
| | — |
| | 27 |
| | 3 |
| | — |
| | (27 | ) | | 3 |
| Cash used in investing activities | | — |
| | — |
| | (6 | ) | | (260 | ) | | — |
| | (27 | ) | | (293 | ) | Financing Activities | | | | | | | | | | | | | | | Commercial paper borrowings, net | | — |
| | — |
| | 25 |
| | — |
| | — |
| | — |
| | 25 |
| Borrowings under revolving credit facility | | — |
| | — |
| | 350 |
| | — |
| | — |
| | — |
| | 350 |
| Principal repayments of revolving credit facility | | — |
| | — |
| | (200 | ) | | — |
| | — |
| | — |
| | (200 | ) | Borrowings from debt, net of discount and including premiums | | — |
| | — |
| | 659 |
| | — |
| | — |
| | — |
| | 659 |
| Principal repayments of debt, including discount payment and premiums to par value | | — |
| | — |
| | (650 | ) | | — |
| | — |
| | — |
| | (650 | ) | Principal repayments of capital lease obligations | | — |
| | — |
| | (3 | ) | | (16 | ) | | — |
| | — |
| | (19 | ) | Repurchases of stock | | (501 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | (501 | ) | Cash settlement of common stock repurchase contracts | | 58 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 58 |
| Distributions to redeemable noncontrolling interests | | — |
| | — |
| | — |
| | (20 | ) | | — |
| | — |
| | (20 | ) | Share-based plan proceeds, net | | 11 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 11 |
| Inter-company contributions and other financing activities, net | | 395 |
| | 5 |
| | (165 | ) | | (270 | ) | | — |
| | 27 |
| | (8 | ) | Cash (used in) provided by financing activities | | (37 | ) | | 5 |
| | 16 |
| | (306 | ) | | — |
| | 27 |
| | (295 | ) | Effect of exchange rate changes on cash and cash equivalents | | — |
| | — |
| | — |
| | 51 |
| | — |
| | — |
| | 51 |
| Net change in cash and cash equivalents | | — |
| | — |
| | (12 | ) | | (82 | ) | | — |
| | — |
| | (94 | ) | Cash and cash equivalents, beginning of period | | — |
| | — |
| | 20 |
| | 280 |
| | — |
| | — |
| | 300 |
| Cash and cash equivalents, end of period | | $ | — |
| | $ | — |
| | $ | 8 |
| | $ | 198 |
| | $ | — |
| | $ | — |
| | $ | 206 |
|
|