Form 8-K Discovery Communications For: May 04
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): 05/04/2016
Discovery Communications, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 001-34177
Delaware | 35-2333914 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation) | Identification No.) | |
One Discovery Place
Silver Spring, Maryland 20910
(Address of principal executive offices, including zip code)
240-662-2000
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.05 Costs Associated with Exit or Disposal Activities.
On April 28, 2016, Discovery Communications, Inc. (the “Company”) committed to a cost-savings plan that encompasses a series of actions intended to enable the Company to more efficiently operate in a leaner and more directed cost structure and invest in growth initiatives, including digital services and content creation. The cost-savings plan will include personnel adjustments, restructurings and budget re-allocations. These actions will be conducted in accordance with local laws and regulations. The Company expects to substantially complete the implementation of the cost savings plan by the end of the third quarter of 2016.
As part of this initiative, on May 4, 2016, the Company began notifying eligible U.S. employees regarding a voluntary buyout for eligible individuals as part of this cost-savings plan. The Company will review the proposed acceptances and determine if business needs will permit them to be implemented.
Including the costs of the voluntary buyout offer, the Company expects to incur severance and other related expenses of between $40 and $60 million relating to all personnel adjustments.
The Company also expects to take additional actions to reduce its non-personnel costs and is continuing to evaluate its overall expense base. At this time, however, the Company is unable to estimate the amount, if any, of cash and total charges, including non-cash impairment charges (if any) that it could incur in connection with the additional cost-savings actions under consideration. If there are any such costs, the Company expects to recognize these charges through the end of 2016.
This Report contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, which are identified by words such as “plans,” “expects,” “may,” “believes,” “estimates” or “estimated, “intends,” and other similar words, expressions, and formulations. This Report contains forward-looking statements regarding the timing and scope of the restructuring plan; the size of the restructuring plan and the amount and timing of the related charges; and the expected cost savings resulting from the restructuring plan. Many factors could affect the actual results of the restructuring plan, and variances from Discovery's current expectations regarding such factors could cause actual results of the restructuring plan to differ materially from those expressed in these forward-looking statements. Discovery presently considers the following to be a non-exclusive list of important factors that could cause actual results to differ materially from its expectations: the timing and execution of plans and programs that may be subject to local labor law requirements, including consultation with appropriate works councils; assumptions related to severance, post-retirement costs, and relocation costs; future acquisitions, dispositions, or investments; new business initiatives and changes in product roadmap, development, and manufacturing; and/or assumptions related to cost savings, product demand and operating efficiencies. A detailed discussion of these and other risks and uncertainties that could cause Discovery’s actual results to differ materially from these forward-looking statements is included in the documents that Discovery files with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K. These forward-looking statements speak only as of the date of this Report, and Discovery does not undertake any obligation to revise or update such statements, whether as a result of new information, future events, or otherwise.
Item 7.01 Regulation FD Disclosure.
On May 4, 2016, Discovery sent an internal memo to its employees, attached hereto as Exhibit 99.1, announcing a restructuring plan designed to align its operations with evolving business needs and improve efficiencies.
The information in Item 7.01 of this Report is furnished and shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is furnished as part of this Report:
Exhibit No. | Description |
99.1 | Discovery Communications Internal Memo dated May 4, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Discovery Communications, Inc. | ||||||
Date: May 4, 2016 | By: | /s/ Bruce Campbell | ||||
Bruce Campbell | ||||||
Chief Development, Distribution & Legal Officer | ||||||
EXHIBIT INDEX
The following exhibit is furnished as part of this Report:
Exhibit No. | Description |
99.1 | Discovery Communications Internal Memo dated May 4, 2016 |
Internal Memo sent to Discovery Communications employees - May 4, 2016
Embracing Change to Drive Innovation, Investment and Growth: A Message from David Zaslav
The changes affecting the media industry today are something you all know well… shifting consumer behavior and new technologies are factors that have touched each and every one of us, and our roles here at Discovery, in some way. These changes, while making an enormous impact on the industry, are not new. The media industry has for years been reinventing itself, changing and growing to adapt to the new technologies and evolving viewership habits that have affected this business since its early days.
At Discovery, we have consistently embraced this evolution as an opportunity for innovation, investment and growth. We have evolved from one channel in one market with one distribution platform to an average of ten channels in 220 markets distributing our content across pay TV, free to air and direct to consumer platforms.
As part of our ongoing strategic planning, we consistently look at our structure and organization in order to maintain our leadership position, stay ahead of the industry and have the resources to invest in new areas of growth. We are rolling out a number of cost-reduction efforts around the globe, including budget reallocations, technical and process improvements and organizational restructuring, all designed to make us more competitive and ensure that we can continue investing in new growth initiatives. The specifics of the cost reductions will vary across business units and geographies, and you will hear from your leadership team in the days and weeks ahead. There is no doubt that change can be challenging and difficult. This process, while necessary, is a tough one. In making these hard decisions, we are positioning Discovery for many more years of success and growth as a leader in global entertainment.
The ultimate goal is to maximize our legacy linear TV business while aggressively pursuing new opportunities to diversify and strengthen our content, launch new digital and mobile offerings, and bring world-class content to more people across more screens than ever before. The cost savings will allow us to continue growing our business while investing in four key areas: more loved content; sports and other valuable IP; digital services and OTT products; and international growth markets.
There is no doubt that the state of Discovery is strong. U.S. ad sales are up, domestic and international affiliate revenue is healthy, we are launching and investing in new digital platforms like Discovery GO, Seeker and Discovery VR, and our networks are performing well and gaining share around the world. All the success we have today has been driven by embracing change and disrupting ourselves in the past. I am confident that these cost-reduction measures will both amplify our current strengths and pave a clear path for continued growth and success.
Through this process, it will be more critical than ever to work together with the respect, encouragement and forward-looking approach that has been an important part of Discovery’s DNA for more than 30 years.
Together, we can embrace the change, lead the disruption and continue transforming our company for the future.
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