Craig Felenstein David M. Zaslav - Chief Executive Officer, President, Director and Member of Executive Committee Andrew C. Warren - Chief Financial Officer and Senior Executive Vice President Mark G. Hollinger - Chief Executive Officer of Discovery Networks International and President of Discovery Networks International

Douglas D. Mitchelson - Deutsche Bank AG, Research Division Benjamin Swinburne - Morgan Stanley, Research Division Todd Juenger - Sanford C. Bernstein & Co., LLC., Research Division David Bank - RBC Capital Markets, LLC, Research Division Jessica Reif Cohen - BofA Merrill Lynch, Research Division Michael Nathanson - Nomura Securities Co. Ltd., Research Division Richard Greenfield - BTIG, LLC, Research Division Alexia S. Quadrani - JP Morgan Chase & Co, Research Division Alan S. Gould - Evercore Partners Inc., Research Division David W. Miller - B. Riley & Co., LLC, Research Division

Good day, ladies and gentlemen. Welcome to the Q4 2012 Discovery Communications, Inc. Earnings Conference Call. My name is Charlene, and I will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would like to turn the call over to Craig Felenstein, Senior Vice President of Investor Relations. Please proceed.

Good morning, everyone. Thank you for joining us for Discovery Communications' Fourth Quarter and Full Year 2012 Earnings Call. Joining me today is David Zaslav, our President and Chief Executive Officer; Andy Warren, our Chief Financial Officer; and Mark Hollinger, President and CEO of our international operations. You should have received our earnings release. But if not, feel free to access it on our website at www.discoverycommunications.com. On today's call, we will begin with some opening comments from David and Andy, after which, we will open the call up for your questions. [Operator Instructions] 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 Form 10-K and subsequent filings made with the U.S. Securities and Exchange Commission. And with that, I'll turn the call over to David. David M. Zaslav: Thanks, Craig. Good morning, everyone, and thank you for joining us. 2012 was another year of successful operational execution and strong financial results for Discovery as we delivered sustained growth, further invested in our global brands and content and developed new and diverse strategic opportunities around the world. Since becoming a public company in the fall of 2008, Discovery has demonstrated a unique ability to generate healthy and consistent returns, capitalizing on the sturdiness of our business model, the widespread appeal of our content and the unparalleled global distribution platform we have built for more than 20 years. As technology rapidly evolves and economies ebb and flow, Discovery's underlying focus remains exactly the same, delivering long-term value by creating the highest-quality content with great storytelling and compelling characters that can be leveraged around the globe and across a growing number of digital and consumer platforms. Our targeted investment strategy emphasizes geographies and brands that offer meaningful advertising and affiliate upside, a key factor in our strong and dependable growth over the last few years. The success of this strategy was never more evident than in the record results we delivered in 2012, which were driven in large part by the market share gains in the U.S. and around the world as we strengthened our existing brands, such as Animal Planet and ID; launched new brands, such as Destination America; and extended strong brands globally, such as ID in Latin America and Discovery Kids in Asia. Domestically, this was our fourth consecutive year taking market share as viewership across our portfolio was up 6%, and our best-in-class ad sales team translated the larger audiences into double-digit ad growth, excluding one-time items. This growth speaks partly to the strong ad market, but also to the breadth and depth of our brand portfolio and the ability of our ad sales team to maximize the market and create value-enhancing ad campaigns for clients. On the viewership side, ID continues to be a juggernaut. It celebrated its fifth anniversary last month, and our sustained investment in increasing its content offering continues to pay off. ID just delivered its 45th straight month of year-over-year primetime gains in its key demo, the longest streak among any ad-supported cable network. And in January, they premiered their newest hit, REDRUM, which delivered the network's best performing primetime telecast ever. ID has the longest length of tune in all of television in both primetime and total day and finished 2012 up over 20% in all of its key demos. This momentum is poised to continue in 2013, with a great development slate, 35 returning series, increased distribution and viewership and most importantly, still discounted CPMs relative to its audience and reach. Animal Planet also had its best year ever, with viewership up 17% versus 2011, led by the success of River Monsters, Finding Bigfoot, Call of the Wildman and Tanked, all of which grew versus a season ago. It was one of the fastest-growing networks in all of cable in 2012 in terms of viewership. And with 15% more returning hours in 2013, we expect Animal Planet to continue growing its audience in the year ahead. Our newest brand, Destination America, also delivered big growth this year, up 30% versus 2011, and we only launched Destination America 7 short months ago. In addition, Science and Velocity also experienced double-digit gains for the year and continued their strong momentum. The success of these emerging networks provides a great launching pad heading into 2013, especially when coupled with the big momentum we currently have at our flagships, Discovery and TLC. Discovery built upon the strong audience it generated during Shark Week in August and delivered its best fourth quarter ever, with viewership up 14% versus a year ago. Its success was broad-based, with returning hits such as Gold Rush and Moonshiners growing versus last season, all-new series such as Fast N' Loud, Jungle Gold and Amish Mafia emerged as breakout hits. In fact, Amish Mafia delivered the highest-rated premier in the network's history, building on the huge audience generated with American Chopper Live. Several of these series also helped Discovery get off to a great start in 2013, with viewership on the channel up over 20% in January. It was the best month in Discovery's history. And with more returning hits than ever before and a great slate of new series and specials, Discovery Channel is extremely well positioned to take additional share in the year ahead. TLC also had a strong finish to 2012, with fourth quarter viewership up 13%, led by returning favorites Long Island Medium and Sister Wives, both of which built their audience from last season; and by the new hit, Breaking Amish, which was TLC's highest-rated new series ever. For 2013, TLC has 30 series returning to its schedule. And with a robust development pipeline, we expect to further build its audience in the year ahead. So as you can see, we finished up 2012 in great shape across our domestic portfolio, and we've built upon that momentum with our viewership market share up 7% in January. We're off to a great start this year. And while still early, with real momentum across our portfolio, strong upfront under our belts, continued strength in scatter pricing and cancellations less than a year ago, we're confident that we will deliver another year of significant advertising growth domestically. We're also enjoying some meaningful momentum at our joint ventures after strengthening their content pipelines and driving viewership throughout last year. Hub is now available in 72 million homes, up from 56 million at launch. The network built its audience every quarter in 2012, including 14% gains in the fourth quarter among kids 2 to 11 in both total day and primetime, making The Hub the fastest-growing kids cable network in 2012. And with a great slate of new and returning series set for 2013, it is poised to further build its audience in the year ahead. At OWN, Oprah and her team continue to connect with more and more viewers each and every month. In 2012, OWN delivered 12 consecutive months of year-on-year ratings gains and generated 36% audience growth for the full year. And that success is poised to continue with more tent-poles returning than ever before and the slate of new series scheduled for 2013, including 2 new series from Tyler Perry, one of the great writer/producers in media, which is set to launch in May. I've seen the scripts and the shows, and they do look strong. Very exciting for us. With OWN generating real audience growth and with support from all of our original advertisers, and all of our affiliate deals completed now, except for one distributor, we are fully on track to reach our previously stated goal of cash flow breakeven during the second half of this year. So as you can see, our content investment strategy is generating real momentum across our domestic portfolio, and the increased market share is translating into sustained financial growth. Same story is playing out internationally. We have made targeted content investments globally to capitalize on our unparalleled distribution platform. And as a result, we are increasing our share in the growing pay-TV universe and capturing more and more advertising dollars. Overall viewership across our international portfolio expanded by more than 25% in 2012. And that growth was very much broad-based. We delivered double-digit increases across nearly every region, led by Italy and Spain in Western Europe; Mexico and Brazil in Latin America; and Russia and South Africa. We're certainly benefiting from an expanding subscriber base, with overall subs growing about 12%. But we are also leveraging the success of our domestic programming, like Gold Rush on Discovery and Cake Boss on TLC, while our international production team is providing local markets with compelling content that's really resonating with viewers. Having a presence in over 210 countries allows us to identify additional opportunities to further expand our reach, depending on the market dynamics. Whether it's launching free-to-air networks in countries like Italy, where we use mostly existing in-language content to keep costs low, rolling out Discovery Kids across Asia or our expansion of ID into 138 countries to capitalize on the worldwide popularity of investigative and forensic programming. As we invest in organic growth opportunities, we have kept our eyes open to identify external opportunities to create additional long-term value and further strengthen our growth portfolio. We believe the 2 transactions we announced at the end of last year do exactly that. As we've demonstrated over the past several years, we are highly selective when pursuing external assets. The acquisition of ProSieben's fully distributed suite of Nordic networks, which is expected to close this quarter, will expand our portfolio and deepen our footprint across some of the most well-penetrated and stable cable TV markets in the world. These assets are primarily dual-revenue-stream businesses in strong and stable TV markets with attractive consumer demographics and where Discovery has tremendous experience, having launched our first international network in the Nordic region more than 20 years ago. These are well-positioned channels that complement our non-fiction networks in terms of genre appeal and demographic reach, and we believe the combination of these 2 businesses will create nice synergies while strengthening our relationships with existing advertisers and affiliate partners. The transaction with TF1, which closed in December, allows us to further diversify our network portfolio, including most notably a 20% interest in Eurosport Group and an enhanced presence in France, where we have been traditionally underrepresented. Five separate Eurosport networks are in nearly 60 countries and reach 130 million subscribers, making it the most widely distributed sports network group in Europe. And given our strong expertise with local ad sales, we anticipate driving value for both TF1 and Discovery. Both of these transactions strengthened the tremendous platform Discovery has built over the last 2 decades, the broad distribution we have, the strong EPG channel placement, the brand loyalty and the critical relationships that come from working in local markets for many, many years. Our international growth story remains strongly intact. And these transactions further bolster our long-term outlook by deepening our geographic footprint, broadening our portfolio with new networks and brands and enhancing our creative pipeline with new talent, personalities and formats. As we invest in our existing businesses and integrate these new assets into our portfolio, delivering sustained financial results and operating leverage remains a top priority. Andy will walk you through our 2013 guidance in a moment, but we fully expect another year of strong organic growth while returning significant capital to shareholders. We have nearly $1.5 billion remaining under our recently expanded buyback program, and we will continue to return capital to shareholders aggressively if it is in the best use of our balance sheet. 2012 was another great year for Discovery as we continued to deliver strong financial results while further executing operationally and strategically to better position the company for sustained long-term success. In 2013, with continuing operating momentum across our domestic and international portfolio and a current favorable operating environment, we remain committed to capitalizing on the growth opportunities across our platforms to build additional shareholder value. And now let me turn the call over to Andy Warren. Andrew C. Warren: Thanks, David. Discovery produced another strong quarter of operating results during the fourth quarter as we leveraged the large audiences we're generating around the globe to double-digit worldwide ad revenue growth and the increasing subscriber base we're delivering outside the U.S. into double-digit international affiliate revenue growth. On a reported basis, total company revenue in the fourth quarter increased 8%, led by 15% international growth and 4% domestic growth. Organic revenue growth, where it excludes the impact of foreign currency movements, as well as nonrecurring ad revenue and additional licensing revenues in the prior year, was up over 10%. Total operating expenses on a reported basis increased 6%, higher than previously anticipated, primarily due to strategic transaction costs, a greater impact from foreign currency movements and increased marketing and personnel costs. Excluding the transaction costs and the impacts of foreign currency, as well as higher content costs a year ago from impairments and changes in amortization rates, total expenses increased 8% versus the fourth quarter last year. Discovery's continued ability to generate revenue growth in excess of expenses translated into a 9% increase in reported adjusted OIBDA during the fourth quarter. Excluding the impact of foreign currency, as well as the previously highlighted revenue and expense items that are onetime in nature in both the current and prior year, organic adjusted OIBDA grew 12% versus the fourth quarter a year ago. Net income from continuing operations decreased to $224 million as the strong operating performance in the current year and improved equity earnings were more than offset primarily by higher taxes, as well as increased mark-to-market share-based compensation expense through depreciation in our share price. The increase in book taxes versus a year ago was predominantly due to $112 million of foreign tax credits recognized in the fourth quarter of 2011. Higher-than-normal tax rate in the current quarter was driven by increased tax reserves and the impact of restructuring our international operations that I discussed last quarter. As previously mentioned, the restructuring will ultimately lower our effective tax rate over time, and we do anticipate an effective tax rate of around 38% for 2013. Free cash flow decreased $20 million to $304 million in the fourth quarter as the improved operating performance was more than offset by higher content investment and increased cash taxes. The programming spend in the current year is certainly paying off in terms of ratings momentum and higher advertising revenue. That content amortization growth will be in the low- to mid-teens to 2013 as content amortization catches up with the cash investments made in both 2011 and 2012. We do anticipate that programming spending growth will slow down considerably in 2013 versus last year. Looking back at the full year, Discovery's 2012 financial performance demonstrates our sustained ability to deliver consistent revenue and adjusted OIBDA growth while continuing to invest in our networks and operations worldwide. On a reported basis, for the full year, we delevered -- delivered 8% revenue and 9% adjusted OIBDA growth. Excluding foreign currency, revenue grew 9% and adjusted OIBDA increased 12% versus 2011, which resulted in our adjusted OIBDA margin expanding by 100 basis points in 2012. Turning to the operating units. The U.S. Networks continued to perform well during the fourth quarter. On a reported basis, total domestic revenues increased 4% as advertising revenue grew 9% from viewership gains across our portfolio, as well as favorable pricing and demand environment. Affiliate revenue increased 2% versus a year ago, as higher rates and digital subscribers partially offset by a decline in digital licensing revenue. Excluding the nonrecurring ad sales item in 2011 and the higher licensing revenue from the fourth quarter a year ago, U.S. advertising increased 10%, and affiliate fee growth was 5%. For the full year, our U.S. sales team delivered another strong growth with ad sales, excluding nonrecurring revenue items, up 10% on top of the 15% organic growth we delivered in 2011. Current ad market trends continue to be encouraging, with double-digit scatter pricing above the gains we garnered during the upfront negotiations. We have some nice ratings momentum across many of our networks, as David mentioned. And with the healthy macro environment continuing, we anticipate high-single-digit ad growth in the first quarter of 2013, building upon the impressive 13% organic growth we delivered in the first quarter a year ago. For the full year, our distribution team also achieved very strong results, delivering 4% growth on top of the -- 12% increase we delivered in 2011 on the back of our digital licensing agreements. We also completed a few new affiliate deals with existing operators that secured higher rates across the portfolio, as well as additional distribution for a number of our emerging networks. Turning to the costs side. Domestic operating expenses were down 1% from the fourth quarter of 2011, which included higher content costs due to impairment charges, changes in amortization rates and costs associated with digital licensing agreements. Excluding these costs, our operating expenses increased 7% compared to a year ago due to higher content amortization and increased personnel costs. On a reported basis, domestic adjusted OIBDA increased 7% for the quarter and 8% for the year. Excluding the impacts of licensing agreements, content impairment charges and changes in amortization rates, domestic adjusted OIBDA increased 4% in the fourth quarter and 6% for the full year. Turning to our international operations. We continue to deliver some good momentum across our global operations, with reported revenues expanding 15% and by 16% ad and 12% affiliate growth. Excluding the impact of exchange rates, total revenue growth was 18%, with advertising revenue increasing 18% and affiliate revenue up 15%. As we mentioned on our last call, it was anticipated that ad revenue would accelerate in the fourth quarter, and we exceeded our original expectation of mid-teen growth. We delivered double-digit growth across nearly all regions, led by Western Europe, mainly from growing market share, as well as the continued success of several of our free-to-air initiatives, including Real Time in Italy and Quest in the U.K. We also saw a double-digit growth in the quarter in Latin America, driven by the success of our U.S. Hispanic networks, as well as growth in Mexico and Venezuela. The affiliate revenue increase, which included 4 percentage points of benefit from lower launch-support amortization were driven by further strong subscriber additions worldwide and by continued growth from Brazil and Mexico in Latin America, as well as Russia and Turkey. Operating costs internationally were up 10% on a reported basis and 11% excluding the impact of foreign currency, primarily driven by higher content amortization, as well as increased personnel and infrastructure costs due to additional investment in growth initiatives and the buildout of our global platform to support our long-term growth expectations. Our international segment delivered 21% adjusted OIBDA growth in the fourth quarter, excluding currency impact, as our international team continued to generate strong revenue increases while thoughtfully investing in key growth initiatives. The fourth quarter completed another year of rapid growth and terrific performance from our international team, with revenues and adjusted OIBDA both up 18%, excluding foreign currency, in 2012. These results follow up in the 13% revenue and 18% adjusted OIBDA growth delivered, excluding currency, in 2011. As we look ahead to 2013, we are encouraged by the momentum across our global portfolio and the continued strong pricing and demand environment in many of our key markets. We anticipate closing on the SBS transaction during the first quarter. And our full year expectations include our forecast for these Nordic businesses for the remainder of the year. For the full year 2013, we expect total revenues to be between $5.575 billion and $5.7 billion. We anticipate adjusted OIBDA to be between $2.425 billion and $2.525 billion, with revenue growth partially offset by higher operating expenses due in large part to the higher content amortization I discussed earlier. For comparison purposes, excluding the SBS results from our full year expectations, we are forecasting double-digit revenue and adjusted OIBDA growth in 2013. It's important to note that the first quarter growth rates will be lower than the remainder of the year, given the positive impact from the Amazon agreement in the first quarter a year ago. Net income is expected to be between $1.2 billion and $1.3 billion, led by the strong operating performance and the improvement in equity earnings due to continued progress at OWN. This growth will be partially offset by the increased tax rate I mentioned earlier, as well as higher interest expense due mostly to additional debt raised in conjunction with our SBS and TF1 transactions. Our guidance assumes no material purchase accounting adjustments upon closing the SBS transaction, and we'll update you next quarter on any changes to these expectations. Free cash flow is expected to grow significantly in 2013 from improved operating performance, as well as the benefit from the extension of the Section 181 domestic content production deduction, which is extended retroactively to the beginning of last year. In 2012, with a strong balance sheet and continued financial and operating momentum, we returned nearly $1.4 billion to our shareholders through execution of our share repurchase program. Since August 2010, we have spent nearly $3 billion buying back shares, reducing the outstanding share count by over 70 million shares or 17%. Our first priority remains investing in our core businesses to drive sustained, long-term growth through investment in existing networks and platforms or through exploring external initiatives. But given the free cash flow we are generating, our gross leverage targets, as well as our long range free cash flow per share growth expectations, we have unique opportunity to continue returning capital to shareholders, while we also invest in our businesses. We anticipate returning similar amounts of capital to shareholders through buybacks in 2013, as we did in 2012. However, as previously highlighted back in December, having capital needs associated with the timing of closing the SBS transaction, we do not anticipate buying shares until the second quarter of this year. Thanks again for your time this morning. Now David and I will be happy to answer any questions you may have.

[Operator Instructions] The first question is from the line of Doug Mitchelson from Deutsche Bank. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: David, do you see any other interesting acquisition opportunities right now? And for 2013, from your viewpoint, what are the most important execution priorities? I mean, where could -- you laid out your guidance and your outlook. Where do you think there's a potential to do better, where you think there's the risk of doing worse? David M. Zaslav: Okay, thanks, Doug. In terms of acquisitions, we have a great balance sheet. And we have a real opportunity with our existing platforms to grow organically, and we've been doing that over the last several years. The idea of buying additional assets is we're always opportunistic, but we were looking for the past 6 years, and it took us 6 years to find Eurosport and SBS and Switchover. The real focus for us is we're only going to do an acquisition if we think we can grow as fast or faster, as well as having real strategic value for us. So we will continue to look. If we find assets that meet that formula, we'll go ahead. But in the meantime, though we have -- we've expanded our platform dominance. And we're doing a better job, I think, than we ever have creatively in terms of populating our channels with great storytelling and strong characters and growing our market share, so I feel like we're in very good shape right now. And we'll see if anything else comes up. In terms of priorities, I think the #1 priority is to continue to grow market share. We are unique in our approach. And in the last year alone, we increased our investment in content by $200 million. But we did grow our market share last year by 8% in a market that was flat. The year before, we grew 3%, and the year before, we grew 7%. So as we look at this company, the focus is to continue to deploy capital to take full advantage of the fact that we have 14 channels here in the U.S. And as you look around the world, we have better -- we have a better platform portfolio than anyone. This past year, we grew 25% market share outside the U.S., including launching a number of new channels, where we're using our existing content. And so if we can continue to grow our market share and continue to create an environment where we have the best creatives working with us to build our brands, you're going to see a significant amount of growth because there's more and more windows for our content, and there's more and more platforms for us to put it. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: Does that suggest that you should be ramping your investment in content even further than you already are? David M. Zaslav: Well, last year -- we've taken it up significantly over the last 5 years. And because we had so much success last year, as you look at Discovery, Animal Planet, ID, TLC, the success that we've had, including at Science, we have a lot more returning series than we've ever had. And returning series that are really, that are freshman or sophomore. So we don't have a lot of older series in our portfolio right now. And so because of that, you will see this year that we'll be relatively flat. And that will be significant because we won't have to go out fishing as much to find new content for 2 reasons. One, our creative team, I think, is better than we've ever had, and we understand our brands and what the viewer is looking for on each channel. But also more importantly, we have a lot of returning series, more than we've ever had, on each channel. So we're in this odd moment where we could spend about the same amount of money and get a lot more creative content because remember that within our business model, when we have series that work, we own those shows for the long haul. So the additional costs of those shows in Season 2, 4, 5 is -- there is no opportunity to come back and really leverage those, and so that's a real opportunity for us. So it will level off, Doug, and I think that, that will help with -- you see a big pickup in amortization this year, you'll see that level off significantly because we're going to be tapering down, but I think we'll taper down and we'll accelerate market share.

The next question is from the line of Ben Swinburne from Morgan Stanley. Benjamin Swinburne - Morgan Stanley, Research Division: I wanted to ask about the distribution renewals that you talked about, Andy, in your prepared remarks. Now that they're behind you, can you tell us how many subs they covered and whether you expect, if you sort of cut through all the noise with digital and launch amortization, if the affiliate revenue growth will accelerate in '13 versus '12? I think it was around 5% in '12. And, David, what was the strategy going in, I think Andy mentioned more distribution, higher fees. But there are a lot of things you guys could go for, more ad inventory, higher fees in ID in particular, and you had a lot of ratings strength. What was the sort of goal for the team going in other than just getting as much money as possible? David M. Zaslav: Thanks, Ben. I do think we're very well positioned for these discussions. Six years ago, our market share was about 4% on cable. Today, it's about 10%. We have a lot more channels that are -- that have niche audiences, that are -- that feel that our channels are very -- and brands are very important to them. So that -- and all of our deals come up at the same time, as we've discussed. So I think we have a very good hand. We also have a very good equitable argument with distributors because we've spent a lot more on content as our market share -- has grown. And I think all of our distributors would agree that our channels have become much more important. The viewership is up, they are making more money selling them. So it was a very good backdrop. For this year, there were just very few deals that came up. We said the deals were going to be coming up over the next -- last year and over the next 5 years. This year, it was a smaller percentage. And so we did very well in terms of getting increases in fees, well above where -- what are -- what's in our existing deals, which is 4% to 5%. In addition, we were able to get more distribution for a number of our channels, which doesn't -- which helps us. When you take a look at ID, that was in 55 million homes, and it's now in over 80 million. That's becoming a big asset for us. Science, that was in 45 million homes. That's in over 70 million now. So we get the increase in rate, we then get paid on those channels that get rolled down, and then we get additional ad revenue on the viewership of those channels. But you won't see a significant bump this year because the scale of the deals that came up were just small. And we always mention that they feather in over the next 4 years. So I think if we do -- we expect that we'll do as well going forward, and you'll see more of it in '14 and '15 as more deals come up. And one other thing. We did not give any TV Everywhere rights as part of these deals, which I think is -- was important for us. We couldn't determine what the right value was. And it was amicable, but we agreed in this case to table it. I think there's a decent chance we'll do some TV Everywhere deals over the next few months. But the good news is there is no distributor in the U.S. that has TV Everywhere rights for our content. And given that we are almost 10% of viewership on cable, I think that, that is a very valuable opportunity. And it's a good opportunity for us because TV Everywhere is -- it's measured on computers, it'll be measured on pads soon, and it provides a good economic model that's measured -- that will be measured for us. Benjamin Swinburne - Morgan Stanley, Research Division: So it sounds like these deals set the stage for that 5% to accelerate, but it's going to take multiple years as it phases in as the deals get bigger. Is that a fair takeaway? David M. Zaslav: Correct. And now having said that, if TV Everywhere -- we could do TV Everywhere this year as a separate basket of consideration. Or there could be deals that are up next year, the year after, in 2015 or '16, where a distributor wants TV Everywhere rights, where we could either do it independently, or we might decide to roll forward a whole new deal as part of that. But assuming that, that doesn't happen, then it'll feather in over the next couple of years.

Our next question is from the line of Todd Juenger from Sanford Bernstein. Todd Juenger - Sanford C. Bernstein & Co., LLC., Research Division: Just a couple quick ones for you. So in terms of international advertising, in the past, you sometimes have been willing to talk a little bit about Europe specifically. Obviously, a lot of stuff going on there, including your free-to-air launches in the macro environment. I wonder if there's any comments you'd be willing to make about how that all came together for you in the quarter and what you're seeing for the year. And I might as well ask my follow-up quickly, and it's more a tidy -- a housekeeping one. On your guidance for the first Q [ph] of '13, it looks from the interest expense as if your debt seems to be more or less keeping flat. I'm just wondering what your thoughts are on leveraging the company going forward and if I'm interpreting that correctly, or why you wouldn't raise the debt level commensurate with the EBITDA growth. David M. Zaslav: Thanks, Todd. I'm going to give a -- just a quick on international and then pass to Mark Hollinger, who's the CEO of our International business. We had -- you saw we had 18% growth in advertising. The fact that we're in 210 countries, yes, there was some softness in France and Germany, but on the other hand, we had so much market share growth, where we grew 25% market share that we were able to continue to grow. And you have subscriber growth in the aggregate of about 12%. So we have a lot of winds at our back. There's a number of markets, particularly Latin America and India and Russia, that feel a lot like the U.S. in -- back in the early '90s, where you're gaining market share, more and more advertisers are coming on, and we're well positioned. The reason we're doing so well in Western Europe is we have an odd and effective strategy on free-to-air. We use it as a compliment in a few markets, but we have existing content that's already paid for in-language, so we're really -- we get a broadcast network in a market that doesn't have high paid penetration. And then we're able to basically gain market share by putting on a lot of content at very, very low cost. But Mark's done a great job last year. I think we outperformed certainly our expectations, and we're accelerating now into 2013. Let me pass it to Mark. Mark G. Hollinger: Thanks, David. Yes, I think if you look overall, the ad sales growth for the quarter and for the year was actually a nice balance across a number of regions. Clearly, Western Europe was probably the leader of the pack, driven by a lot of the free-to-air initiatives. Italy, and Quest in the U.K. But I think if you look more broadly, you can see that there was strength in Latin America with Mexico and Colombia and Venezuela. There was strength in Central and Eastern Europe with Poland. And India ended up being a great story for us. So I think we found that with lots of different market dynamics in different places, that we're well positioned having the breadth of portfolio and frankly, again, the combination in markets where free-to-air can play a big piece that we have. We have the platforms to continue to drive double-digit growth on the ad sales side. Again, the pacing for first quarter is looking the same. It's a nice broadly sort of distributed pacing for first quarter. David M. Zaslav: The attractive piece for us is we're gaining market share around the world not just in channels but in viewership. And we're seeing, whether you call it softness or recession or weakness, in a ton of markets. Having said that, we're able to grow aggressively in -- even across a challenged environment. So Brazil still is growing strong in terms of subscribers, but the economy has been soft. And when those economies begin to turn, when you're seeing the kind of growth that we see right now with really challenged environments -- so our strategy is grow market share, do it inexpensively with a lot of in-language content. And we're very confident about the year ahead. But as -- if we can get a turn in some of these economies, then we can really -- we can see even more growth. Andy? Andrew C. Warren: Todd, regarding your 2013 debt and interest question, as you've heard us say before, we're very focused on a gross leverage ratio of 2.5x to 3x. So given the EBITDA growth we are forecasting for '13, as well as the SBS transaction, we do think we'll have about $1 billion of additional debt, year-end '13 versus year-end '12, and therefore, about $50 million of additional interest expense as well in '13 than '12.

Our next question is from the line of David Bank, RBC Capital Markets. David Bank - RBC Capital Markets, LLC, Research Division: Two quick ones. The first is, if you look at the success of Animal Planet versus -- and versus the success of ID and how you're monetizing both, are you -- do you feel like you are monetizing the audience increases in Animal Planet? I think to a certain extent, you've been going out of the typical demo in some of those audience increases. And so how is the monetization of that going, and is there like a transition period? And the second question is I guess as you have successfully hit, or look on target to hit, the guidance with respect to OWN and its breakeven point, at what point do you think it'll be time to sort of update the guidance, move out the targets and start talking about the positive contribution and giving us a sense of how that could sort of move the needle below the OIBDA line? David M. Zaslav: Thanks, David. Look, Animal Planet was really, I think, the breakout surprise for last year. With all of the effort that we made in -- over the last 6 years and even the years before I got here, it was a channel that everyone said that they loved but not a lot of people watched. And so we built a very strong creative team led by Marjorie Kaplan, and we invested money for the last several years trying to find the audience and grow the channel. And candidly, we had our ups and downs. But before this year, we were really struggling with how do we get this from being the #35 channel, #40 channel, in America to something that's more meaningful because we were able to get much lower CPMs on this channel, and the viewership has been low. And Marjorie has really broken through. This -- the channel is now a top 20 channel in America. On Sunday, Marjorie had 2 shows that were the top 20 shows. It was the #1 channel in our portfolio on Sunday. There's a number of series that have a lot of traction. The demo has converted from being more female to more male and young and quite attractive. The good news and bad news is we have a very good audience now, and it's compelling. It helps us strategically in fighting against the other non-fiction channels like Geo and HISTORY, both of which do a good job, but having a successful Animal Planet helps that. The bad news is that our CPMs are still low on Animal Planet. But the good news is that over the next 2 to 3 years, you'll see us continuing to get a premium and catching up. It's going to take some time. We're already starting to do better. The advertisers are excited about our success. So in the cycle, that will be a CPM [Audio Gap] it's over a period of time. And it -- more so than even TLC, the success of Animal Planet we'll take around the world, and we've already started to. So part of that 25% market share growth is we got better and better content that works well around the world, moving. ID, as we've talked about often, is still on the backside of its CPM entitlement. And if ID didn't grow at all in terms of viewership over the next 2 years, we would -- you would see very substantial growth because of the CPM. During day time, ID is a top 10 network, sometimes it's a top 5 network in America. And the amount of women that it's delivering is very valuable, and we're way underpriced still, although we're making progress. So both of those, we think, are going to be a helper. On OWN, we're ahead of where we thought we'd be on rating. Oprah's doing a great job. Beyonce will be on this Saturday. You saw what we did with Lance, and we took that all over the world. We said we'd fund less in 2012 than we did in 2011, we did. Everything is moving in the right direction. Maybe most importantly, this was a channel that had no sub fees, or virtually no sub fees, when we entered into this business. And today, we've done deals with every operator in America, except for one, paying sub fees that started on January 1, and so we feel very good about it. Oprah is really energized. And we got Tyler Perry working with us, one of the great talents in the media business, and he's working very hard on a comedy and a drama. He has actually started shooting. He was -- has sent me some pictures. Oprah was in the control room yesterday with him in Atlanta, very -- so OWN is going very well. And Andy will talk to you about when we'll update you. Andrew C. Warren: Yes, David, just to give you some more thoughts on that. It was about a year ago that we said we would have funding in '12 less than '11. And as you said, the second half of '13 would be cash flow neutral. We couldn't feel better about the momentum and the results we have today. As David said, we achieved our financial objective for '12 funding, it was less than '11. And I've mentioned, we have -- really gives us a real line of sight to some very positive results out to 2013. So it is a big driver of our improvement. And EPS and the other income line will be significantly improved this year versus last. We will throughout the year give you all an update on the results, and particularly on the second half view, which we see now as being a debt reduction and a pay-down of our debt obligation, particularly in the second half of this year.

Our next question is from the line of Jessica Reif Cohen, Bank of America Merrill Lynch. Jessica Reif Cohen - BofA Merrill Lynch, Research Division: I wanted to go back to the affiliate deals. I know you haven't exposed a lot, but I was just wondering if you could give us kind of what percent of the contracts come up at the end of this year. Or if 2013 isn't the big year. Year-end contracts from 2012, you said, were small. When do we start to see -- what is the big year in terms of affiliate renewals? And within the rights again, David, you said you're not giving TV Everywhere, but you're giving VOD rights. And just the strategy of going for distribution, even with balancing distribution, increased distribution versus rates, I'm just wondering if you can -- I don't know, if there is any help that you can give us at all with the overall revenue growth on that side over the next few years, how much will it accelerate? David M. Zaslav: Thanks, Jessica. We've said -- we said last year that it comes in over 5 years and that it's -- there isn't any 1 year that has 60%. So we don't want to get any more specific than that. Our #1 focus is that the actual fees go up. And getting the fees to go up, which are long cycle, which we can bank, and that's the most important piece of the strategy, and we think given the fact that our fees have only been going up 5%, but our market share is going up more than that, our channels are more valuable and they all come up at once, that we have a good argument, and the operators that we dealt with this year agreed with us. Having said that, if you can pick up several million subscribers with a guaranteed sub fee against those subscribers, that becomes a guaranteed affiliate also, if assuming that those are -- that you're able to be moved down in a way that you would have never otherwise. So I think the second thing that we look for is to get more carriage for our channels with guaranteed fees against those, which when you put those together and you add them up, it adds to your overall increase in affiliate fees. There are a bunch of other things that you can look at, but those are the 2 biggest ones. And TV Everywhere and VOD, we've held back TV Everywhere. There are some distributors that are looking for SVOD to compete with Netflix, which is great for us. And I've always -- I've said recently, this is probably the best time to be in the content business because there's more players, more people that want to pay us for our content in more windows. The fact that some operators want to get into the SVOD business is another bite at the apple in addition to TV Everywhere, but we haven't given any SVOD rights, we haven't given any TV Everywhere rights, and we've given limited VOD, which has been our operandi from the beginning. Andy? Andrew C. Warren: Jessica, we're clearly not going to give any forward-looking viewer guidance on how the affiliate growth is going to look. But 2012 was a good year. The growth of those deals was good. The standard distribution, as David mentioned, was good for us, especially on the emerging nets. So we're not going to give any forward look, but at least the first year of that 5-year cadence was productive. Jessica Reif Cohen - BofA Merrill Lynch, Research Division: And then you said long cycle, how long are the newer contracts? Andrew C. Warren: Look, we don't -- we're not going to disclose specifically. But in general, our international deals tend to be about somewhere in the 3-year range shorter than the U.S. In the U.S., our deals have historically been in the 5-year range. There are some of the players in the market that we've seen have gone longer than that. It's something that we will look at, and whatever -- if, in fact, there is value there, we would go longer or we might go shorter.

Our next question is from the line of Michael Nathanson from Nomura. Michael Nathanson - Nomura Securities Co. Ltd., Research Division: Let me have one for Andy, and then I'll come back to David on affiliate fees. Andy, if you look at your domestic network profitability this year, it's kind of amazing. You converted almost every dollar of revenue incremental into profit. And I wonder, when we look at the recent trends in domestic business, what do you think is kind of the right range of incremental conversion of revenue, let's say in the next 1 or 2 years? So what's kind of the right way to think about that? Andrew C. Warren: Domestic, Michael, would be probably in the, long term, 50% to 60% [ph] range, especially given the higher content amort that we talked about. Content amort, that catch up relative to the cash spend in the last couple years, as I said, it's going to be in the low to mid-teens. So that certainly will have an impact on that, but we still expect solid flow-through of margin domestically. Michael Nathanson - Nomura Securities Co. Ltd., Research Division: Okay. And then, David, just going back to affiliate fees. It's a good question. When you look at how people have done deals, some people have gotten big step-ups year one. Some other people have just taken the step-ups over the life of the contract. How do you think about that balance? Are you going for a big 1-year step-up or should we think about this over like the life of a new deal? David M. Zaslav: When we're looking at doing a deal, it's really how do we get the most value for our overall package. I guess our preference would probably be straight line. If a distributor wanted to give it to us in some other way because it was more beneficial, we certainly -- we could just tie in value back-end, front-end, to make a determination. The deals that we've done have been straight line so far. And so I think you'll see it flow in evenly. Michael Nathanson - Nomura Securities Co. Ltd., Research Division: So therefore, if you look at the step-up in '13 to '12, we can't assume -- that's just not -- that you can't assume really anything from like, hey, that's the 1-year step-up. It's going to be... David M. Zaslav: We didn't do any front-loading of anything so far.

The next question is from the line of Richard Greenfield from BTIG. Richard Greenfield - BTIG, LLC, Research Division: When you look at broadcast TV, it appears from the ratings that collectively the business is in serious trouble. And I think when you look at the success that shows on your networks have had in terms of 18 to 49 or even just broader demographics, things like AMC with The Walking Dead and FX have attained, we've -- there's been this like steady market share bleed between broadcast and cable, and advertising has followed. But we haven't seen any kind of big gaps in terms of change year-over-year. Is that a 2013 or 2014 event? Like what has to happen so that you see huge chunks move broadly in advertising? And when we look at networks like you have like ID, et cetera, when do we start to see much bigger-size movements? David M. Zaslav: Rich, it's hard to tell. I think that we have subscriber growth flat in the U.S. We have viewership flat in the U.S. The one win that we have at our back right now is the fact that there is still a 32%, 33% CPM differential between broadcast and cable. They do deliver, in general, a bigger audience, but that's becoming less and less so. When we put Gold Rush on, on Friday night, we're the #1 network in America. We beat the broadcasters. When we put on Honey Boo Boo or Breaking Amish or Long Island Medium on TLC, we could be #1 with women 18 to 34, 18 to 49. So clearly, the justification for the CPM differential is eroding. Having said that, these things take time. We haven't seen any significant step differential, but we have seen more money coming to cable, and we have seen that spread every year get a little smaller, which is to our advantage. That's the wind at our back. We're always making the argument that we're delivering bigger audiences and we should be getting more money. Alebrije [ph] does a great job at that, and we'll continue to bang on that door. The good news is I think you'll probably see over the next couple of years that will be the sustained wind at our back as we continue to grow market share as an industry, that more of the dollar should come to us at some better pricing. Richard Greenfield - BTIG, LLC, Research Division: And then just a follow-up, when you look at all of the SVOD deals that have happened, have you seen -- obviously, Walking Dead has had these blow-out ratings from the leverage they've gotten from their viewership. When you look at this type of programming you've put up on Netflix and Amazon, can you point to shows that weren't as successful, where they've come back and been much more successful year-over-year, and you think you can tie it to the introduction of those shows in prior seasons to new audience members? David M. Zaslav: Here's what we've learned so far. Netflix and Amazon have been great partners for us. We have a unique deal with them in that our content -- the content we'd put on there is older. We were conservative coming in, but we did -- we were able to move a lot of content onto those platforms. And we put our brand on. Any time you look at a show from us, you'll see our brand. We spent the last 1.5 years taking a look at how is our content consumed and what impact does it have. The good news is we don't see any degradation. It's way too early to tell, but in our type programming, in shows like -- a show like Gold Rush or Deadliest Catch, there's an argument that people consume that, consume a whole season. They might consume a season from 3 years ago, and then they want to see the new season. So if anything, we think there may be a little bit of a helper with that, but I think it remains to be seen. The good news for us is that as our market share has grown, I think we've become even more attractive. As the number of hit series we have across all of our portfolio have grown, I think we've become more attractive, and it's been a very effective window for us. There are some series that surprise us. There's a couple of things that aren't on Discovery or TLC anymore that do quite well, and I think that falls into that kind of the campy -- it'll really surprise you sometimes what people will watch on a rainy Saturday afternoon.

The next question is from the line of Alexia Quadrani from JPMorgan. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: Just staying on that SVOD topic right there. Could you give us a sense on how we should assume those revenues will fall in, in 2013? I believe you have the right to extend your deal with Netflix this year. Should we assume that's going to be in the numbers? Any color would be great. Andrew C. Warren: Sure, Alexia, it's Andy. We do have a third-year extension on that, and the predominance of that revenue would be probably recognized in the second quarter, with some as well in the third. It really depends on the timing of when the content is delivered to Netflix, but think in terms of predominantly 2Q and some in the third quarter. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: Do you think that the total then SVOD dollars could be up year-over-year in '13 versus '12? Andrew C. Warren: We're not going to quantify specifically, but it's a significant amount, and it's certainly in line with the total SVOD in 2012. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: Okay. And then just lastly, on the comments about the holding off the TV Everywhere rights, I guess what's the hesitation there? Is it waiting for the ratings to come in other media? And I guess what sort of holds you back? David M. Zaslav: Well it's 2 things. One, it needs to be -- we feel like it needs to be measured. So right now, if anybody is viewing our content, if we broadly deployed it and people were viewing our content on pads, it wouldn't be measured. So one of the attractions of TV Everywhere is that your content could be viewed on other platforms, but it is measured. It's measured by Nielsen, and you could accumulate the fair value for it. That's one. But two, if distributors are offering our content on other platforms, and the fact that they are able to do that enhances the experience that a consumer has with their distributor, whether it be Comcast or Time Warner or Charter, if in addition to getting their phone and their broadband, they also have TV Everywhere and they can watch on any device and if it has an effect on the way they feel about the distributor, if it has an effect on the churn, it's not clear exactly what the value is, but the value -- there is real value in us providing that, and the operators agree with that. And we just need to figure out how to apportion that value. And we haven't yet agreed on how to do that.

The next question is from the line of Alan Gould from Evercore. Alan S. Gould - Evercore Partners Inc., Research Division: Two questions. Andy, can you just give us an idea, do you have digital distribution revenue up versus 2012 built into your 2013 guidance? And, David, the ratings have been terrific. But is there any risk that you're going off-brand a little bit? I think of a show like the Amish show, for example. David M. Zaslav: Okay, let me start with Discovery. Because I don't think Discovery has ever been more on-brand. If you take a look, we have Africa running on Tuesdays, which is very core to what we are. We have Gold Rush, where we're going out to Alaska and learning about how to mine for gold. Moonshiners, we have a number of -- we have Curiosity on Sunday nights. So the balance of specials together with real series about adventure and survival, we're in this perfect balance right now. Breaking -- Amish Mafia, which is on Discovery, and has been very popular, it is on-brand. It's -- as you think about how people live in America and around the world, what are the different societies and subcultures, that's certainly part of it. But as you look at the bull's eye of Discovery, it is things like Gold Rush and Curiosity, as well as a lot of our Survival, which we still have and will have more of. MythBusters. So we feel right now that Discovery is in a sweet spot. We do have a great creative team. Eileen O'Neill, who runs Discovery and TLC, really spent -- she's been running it now for 3 years. It took about 1.5 years to figure out what is Discovery when it's at its best, who is the audience, how do we build it? And you saw our strategy of standing down during the Olympics and then coming forward with our best creative series after that. And we -- so far, it's been no looking back. Obviously, there's ups and downs in this business. And creatively, every show isn't going to work. But I think Discovery, from a brand perspective and from a viewer perspective, is the best it's ever been. Andrew C. Warren: Alan, regarding your digital question, it is yet to be determined as actually which titles will be delivered this year. But broadly speaking, think in terms of a flat revenue, digital revenue in '13 versus '12.

The next question is from David Miller from Riley Caris. David W. Miller - B. Riley & Co., LLC, Research Division: David, just a question about the diligence process with regard to SBS and TF1 Eurosport. When you guys were looking into these deals and just doing your diligence and just kind of justifying the price that you paid, which obviously looks like it's just -- it's going to turn out to be super accretive. Was the thinking there that -- particularly with SBS, that some of these networks are broken and you could turn around the ratings with some of your library programming, and you could realize the upside there? Or was the thinking more that this is a macro call and that you're going in when obviously Europe just has a lot of structural problems, and hopefully, they kind of work their way through that and you can realize the upside there? Or was it a combination of both? Just interested in your thoughts. David M. Zaslav: Well, with both the Eurosport and in particular, SBS, we paid less than our multiple. We have 8 channels in Norway, Denmark and Sweden, so we have some synergy. We also have been in that market for 20 years. They're actually a great leadership team. They've done a good job of growing market share. And the markets are stable. Mark spent a lot of time over there. The deal isn't closed yet, but, Mark, why don't you give an update on SBS and Eurosport and how you see it? Mark G. Hollinger: Yes, look, I think with SBS and frankly, in the Nordics with the combination of SBS and Eurosport, we have an opportunity in, as David says, really great markets. Great pay-TV penetration, strong economies, economies that are well positioned vis-à-vis the rest of the Eurozone to really drive scale in a way that we have never been able to. The Nordics have traditionally been some of Discovery Network's highest audience share markets. I think we may have the highest audience share anywhere in our pay-TV world in Norway, for example. To be able to combine that with what SBS has done. And then also, potentially to bring Eurosport into the mix, from a sales point of view, from a content-sharing point of view, I think we see that there are sort of multiple upsides. It's not about things being broken. It's about I think bringing all those assets together in a way they can really drive growth. I think that there is probably in Sweden where TLC has been a bit under-distributed and where the SBS portfolio is smaller than it is in the other markets, but we do have a chance for a new channel or 2 in the Swedish market, which would be terrific. But this is definitely one where we have taken on great assets with a great management team in great markets. We think that now the combination of our networks and Eurosport can really drive that even further.

Okay, that's all we have for today, operator. Thank you very much for joining us, everybody. If you have any follow-ups, please give us a call. Thank you. David M. Zaslav: Thank you.

Thank you. Thank you for joining today's conference. This concludes the presentation, and you may now disconnect. Good day.