Discovery's revenue increased 11 per cent to $ 259 million and operating cash flow increased by eight per cent to $ 41 million. The increase in revenue was due to growth in both advertising and distribution revenue as well as favorable foreign currency exchange rates.

Net ad revenue increased 19 per cent primarily due to higher viewership in Europe and Latin America, combined with an increased subscriber base in most markets
worldwide.

This was, however, partially offset by a decline in advertising revenue in the UK due to a difficult ad market.

Net distribution revenue increased six per cent due to an 11 per cent increase in average paying subscription units combined with contractual rate increases in certain markets. This was, however, partially offset by an increase in launch amortisation.

Growth in paying subscription units was primarily due to subscriber growth in Europe and Latin America.

Operating expenses increased 12 per cent due to increased programming costs. Programming costs increased due to the launch of several networks in Europe along with a new free-to-air channel in Germany branded as DMax which was acquired in March 2006 and launched in September 2006.

Excluding the effects of exchange rates, International Networks revenue increased six per cent and operating cash flow was flat.

In the US, network operating expenses increased three per cent due to an increase in SG&A partially offset by a decrease in programming expense. The increase in
SG&A was primarily due to higher compensation and benefits and higher marketing expenses.

Marketing expenses increased due to increased spending to promote original productions. Programming expense decreased due to the exclusion of Travel Channel partially offset by an increase in content amortisation due to the company's continued investment in original productions across its main US networks and accelerated amortiation from certain programmes.

In May Discovery had announced that it would close its 103 mall-based and stand-alone Discovery Channel stores, which closures were completed in the third quarter of 2007. These stores had been part of Discovery's Commerce business.

As a result of the store closures, the following consolidated financial results of Discovery have been prepared to reflect the retail store business as discontinued operations for accounting purposes.

Accordingly, the revenue, costs and expenses of the retail store business have been excluded from the financial results included in this press release.

Historically, Discovery's retail store business has generated operating losses in the first three quarters of the year and an operating profit in the fourth quarter. The results of 2006 followed this same pattern.