##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 FORM 10-K/A
 (Amendment No. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
  DISCOVERY HOLDING COMPANY
  State of Delaware 
(State or other jurisdiction of 
incorporation or organization)
    
    20-2471174
(I.R.S. Employer Identification No.)
 12300 Liberty Boulevard 
Englewood, Colorado
(Address of principal executive offices)
    
    80112
(Zip Code)
   Title of each class
    
    Name of exchange on which registeredSeries A Common Stock, par value $.01 per share
    
    Nasdaq Global Select MarketSeries B Common Stock, par value $.01 per share
    
    Nasdaq Global Select Market
  þ o
 o þ
 þ o
 þ
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### Table of Contents



EXPLANATORY NOTE
 Annual Meeting




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##### 



DISCOVERY HOLDING COMPANY  2007 ANNUAL REPORT ON FORM 10-K/A
 (Amendment No. 1)
 Table of Contents
 Part IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance.
    
    III-1Item 11.
    
    Executive Compensation.
    
    III-3Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
    
    III-12Item 13.
    
    Certain Relationships and Related Transactions, and Director
Independence.
    
    III-15Item 14.
    
    Principal Accounting Fees and Services
    
    III-16Part IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    IV-1Rule 13a-14(a)/15d-14(a) CertificationRule 13a-14(a)/15d-14(a) CertificationRule 13a-14(a)/15d-14(a) CertificationSection 1350 Certification
  i




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
 Executive Officers and Directors
 Liberty
 Name
    
    PositionJohn C. Malone
Born March 7, 1941
    
    Chief Executive Officer
and Chairman of the Board
of our company since March
2005, and a director of
our company since May
2005. Mr. Malone has
served as Chairman of the
Board and a director of
Liberty since 1990. Mr.
Malone served as Chairman
of the Board of
Tele-Communications, Inc.,
the former parent company
of Liberty (TCI), from
November 1996 to March
1999; and Chief Executive
Officer of TCI from
January 1994 to March
1999. Mr. Malone is
Chairman of the Board of
Liberty Global, Inc.
(Liberty Global)  and The DirecTV Group, Inc. and a
director of
IAC/InterActiveCorp and
Expedia, Inc.Robert R. Bennett
Born April 19, 1958
    
    President of our company
since March 2005, and a
director of our company
since May 2005. Mr.
Bennett served as
President of Liberty from
April 1997 to February
2006 and as Chief
Executive Officer of
Liberty from April 1997 to
August 2005. Mr. Bennett
held various executive
positions with Liberty
since its inception in
1990. Mr. Bennett is a
director of Liberty and
Sprint Nextel Corporation.David J.A. Flowers
Born May 17, 1954
    
    Senior Vice President and Treasurer of our
company since March 2005. Mr. Flowers has
served as Senior Vice President of Liberty
since October 2000 and Treasurer of Liberty
since April 1997. Mr. Flowers served as a
Vice President of Liberty from June 1995 to
October 2000.Albert E. Rosenthaler
Born August 29, 1959
    
    Senior Vice President of our company since
March 2005. Mr. Rosenthaler has served as
Senior Vice President of Liberty since April
2002. Prior to joining Liberty, Mr.
Rosenthaler was a tax partner in the
accounting firm of Arthur Andersen LLP for
more than five years.Christopher W. Shean
Born July 16, 1965
    
    Senior Vice President and Controller of our
company since March 2005. Mr. Shean has
served as Senior Vice President of Liberty
since January 2002 and Controller of Liberty
since October 2000. Mr. Shean served as a
Vice President of Liberty from October 2000
to January 2002.Charles Y. Tanabe
Born November 27, 1951
    
    Senior Vice President, General Counsel and
Secretary of our company since March 2005.
Mr. Tanabe has served as Executive Vice
President of Liberty since January 2007 and
General Counsel of Liberty since January
1999. Mr. Tanabe served as Senior Vice
President of Liberty from January 1999 to
December 2006 and Secretary of Liberty from
April 2001 to January 2007.
 III-1




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##### Table of Contents



Name
    
    PositionPaul A. Gould
Born September 27, 1945
    
    A director of our company
since May 2005. Mr. Gould
has served as a Managing
Director of Allen &
Company Incorporated, an
investment banking
services company, for more
than the last five years.
Mr. Gould is a director of
Liberty, Ampco-Pittsburgh
Corporation and Liberty
Global.M. LaVoy Robison
Born September 6, 1935
    
    A director of our company
since May 2005. Mr.
Robison has been executive
director and a board
member of The Anschutz
Foundation (a private
foundation) since January
1998. Mr. Robison is a
director of Liberty.J. David Wargo
Born October 1, 1953
    
    A director of our company
since May 2005. Mr. Wargo
has served as President of
Wargo & Company, Inc., a
private investment company
specializing in the
communications industry,
since January 1993. Mr.
Wargo is a director of
Strayer Education, Inc.
and Liberty Global.
    Section 16(a) Beneficial Ownership Reporting Compliance
 SEC
  Code of Ethics
 www.discoveryholdingcompany.com
 Audit Committee
  III-2




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##### Table of Contents



Item 11. Executive Compensation.
 Compensation Discussion and Analysis
 Services Agreement with Liberty
 Named Executive Officers
 spin-off
     Equity Incentive Compensation
 incentive plan transitional plan
 III-3




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##### Table of Contents



DHC spin-off option adjusted
Liberty award
   Employment Contracts, Termination of Employment and Change in Control Arrangements
 look-back period
  Summary Compensation Table
  III-4




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##### Table of Contents



Name and
    
    
    
    
    
    Salary
    
    Option Awards
    
    All Other
    
    TotalPrincipal Position
    
    Year
    
    ($)(1)
    
    ($)(2)
    
    Compensation ($)(3)
    
    ($)John C. Malone
    
    
    2007
    
    
    
    390
    
    
    
    278,896
    
    
    
    150,000
    
    
    
    429,286Chief Executive
    
    
    2006
    
    
    
    390
    
    
    
    355,303
    
    
    
    75,000
    
    
    
    430,693Officer and Chairman
of the Board
(principal executive
officer)Robert R. Bennett
    
    
    2007
    
    
    
    500,000
    
    
    
    51,588
    (4)
    
    
    
    
    
    
    551,588President
    
    
    2006
    
    
    
    468,750
    
    
    
    
    
    
    
    
    
    
    
    468,750David J.A. Flowers
    
    
    2007
    
    
    
    31,250
    
    
    
    61,133
    
    
    
    
    
    
    
    92,383Senior Vice
    
    
    2006
    
    
    
    28,750
    
    
    
    88,850
    
    
    
    
    
    
    
    117,600President and
Treasurer (principal
financial officer)Albert E. Rosenthaler
    
    
    2007
    
    
    
    62,500
    
    
    
    70,374
    
    
    
    
    
    
    
    132,874Senior Vice President
    
    
    2006
    
    
    
    43,125
    
    
    
    119,208
    
    
    
    
    
    
    
    162,333Christopher W. Shean
    
    
    2007
    
    
    
    125,000
    
    
    
    62,364
    
    
    
    
    
    
    
    187,364Senior Vice
    
    
    2006
    
    
    
    115,000
    
    
    
    82,647
    
    
    
    
    
    
    
    197,647President and
Controller
(principal
accounting officer)Charles Y. Tanabe
    
    
    2007
    
    
    
    170,000
    
    
    
    62,073
    
    
    
    
    
    
    
    232,073Senior Vice
    
    
    2006
    
    
    
    143,000
    
    
    
    93,770
    
    
    
    
    
    
    
    236,770President, General
Counsel and
Secretary
 
 (1)
    
    During 2006 and 2007, each of our Named Executive Officers was also an executive officer or
employee of Liberty. Pursuant to a services agreement between us and Liberty, Liberty
allocates a portion of the compensation it pays to the Named Executive Officers to us as
described above in Compensation Discussion and Analysis. In addition to the salary amount
for each Named Executive Officer included in the table, Liberty allocates to us an amount for
employee benefits equal to 15% of the allocated amount of the salary that is allocated to us
for that Named Executive Officer. The amounts in the table represent amounts allocated to us
by Liberty for the years ended December 31, 2007 and 2006.(2)
    
    The dollar amounts recognized for financial statement reporting purposes have been calculated
in accordance with FAS 123R. For a description of the assumptions applied in these
calculations, see Note 4 to our consolidated financial statements for the year ended December
31, 2007 (which are included in our Annual Report on Form 10-K as filed with the SEC on
February 15, 2008).(3)
    
    Pursuant to Mr. Malones employment agreement with Liberty, he is entitled to receive an
annual allowance for personal expenses (which was $500,000 during 2006 and increased to $1
million during 2007), such as payment for or reimbursement of professional fees and other
expenses incurred for estate, tax planning and other services and personal use of corporate
aircraft and flight crew. Liberty has allocated 15% of this allowance during each of 2007 and
2006 to us pursuant to the services agreement. III-5




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##### Table of Contents



(4)
    
    On May 16, 2007, Mr. Bennett received a grant of options to acquire 10,000 shares of our
Series A stock for his service to our company. The dollar amounts recognized for financial
statement purposes, as calculated in accordance with FAS 123R, under these options is included
in the table. Grants of Plan-Based Awards
  All other optionawards: Number of
    
    Exercise or base
    
    Grant date fairsecurities
    
    price of option
    
    value of stock andName
    
    Grant date
    
    underlying options
    
    awards
    
    option awardsRobert R. BennettSeries A
    
    May 16, 2007
    
    
    10,000
    (1)
    
    $
    22.90
    
    
    $
    77,382
 
 (1)
    
    Vests on May 16, 2008. Outstanding Equity Awards at Fiscal Year-End
  Option awardsNumber of
    
    Number ofsecurities
    
    securitiesunderlying
    
    underlyingunexercised
    
    unexercised
    
    Option exercise
    
    Option expirationName
    
    options-Exercisable
    
    options-Unexercisable
    
    price ($)
    
    dateJohn C. MaloneSeries A
    
    
    13,333
    
    
    
    6,667
    (1)
    
    
    14.67
    
    
    
    6/14/08Series B
    
    
    1,148,540
    
    
    
    
    
    
    
    19.06
    
    
    
    2/28/11120,000
    
    
    
    60,000
    (1)
    
    
    15.91
    
    
    
    6/14/08Robert R. BennettSeries A
    
    
    100,000
    
    
    
    
    
    
    
    13.00
    
    
    
    7/31/13100,000
    
    
    
    
    
    
    
    11.84
    
    
    
    8/6/14
    
    
    
    10,000
    (2)
    
    
    22.90
    
    
    
    5/16/17Series B
    
    
    1,667,985
    
    
    
    
    
    
    
    19.06
    
    
    
    2/28/11David J.A. FlowersSeries A
    
    
    147,686
    
    
    
    
    
    
    
    17.54
    
    
    
    2/28/1116,000
    
    
    
    4,000
    (3)
    
    
    13.00
    
    
    
    7/31/1315,000
    
    
    
    10,000
    (4)
    
    
    11.84
    
    
    
    8/6/14Albert E. RosenthalerSeries A
    
    
    
    
    
    
    5,000
    (3)
    
    
    13.00
    
    
    
    7/31/13
    
    
    
    10,000
    (4)
    
    
    11.84
    
    
    
    8/6/14Christopher W. SheanSeries A
    
    
    
    
    
    
    5,000
    (3)
    
    
    13.00
    
    
    
    7/31/13
    
    
    
    10,000
    (4)
    
    
    11.84
    
    
    
    8/6/14
 III-6




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##### Table of Contents



Option awardsNumber of
    
    Number ofsecurities
    
    securitiesunderlying
    
    underlyingunexercised
    
    unexercised
    
    Option exercise
    
    Option expirationName
    
    options-Exercisable
    
    options-Unexercisable
    
    price ($)
    
    dateCharles Y. TanabeSeries A
    
    
    101,915
    
    
    
    
    
    
    
    17.54
    
    
    
    2/28/11
    
    
    
    5,000
    (3)
    
    
    13.00
    
    
    
    7/31/13
    
    
    
    9,000
    (4)
    
    
    11.84
    
    
    
    8/6/14
 
 (1)
    
    Vests as to 100% on June 14, 2008.(2)
    
    Vests as to 100% on May 16, 2008.(3)
    
    Vests as to 100% on July 31, 2008.(4)
    
    Vests as to 50% on each of August 6, 2008 and 2009. Option Exercises and Stock Vested Table
  Option awardsNumber ofshares
    
    Valueacquired on
    
    realized onName
    
    exercise
    
    exercise ($)Albert E. RosenthalerSeries A
    
    
    86,280
    
    
    
    1,207,334Christopher W. SheanSeries A
    
    
    68,845
    
    
    
    839,732Charles Y. TanabeSeries A
    
    
    128,500
    
    
    
    1,329,189
 III-7




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Potential Payments Upon Termination or Change-in-Control
     
    
    Voluntary Termination. Under the incentive plan and the transitional plan, each
Named Executive Officer would only have a right to the equity grants which vested prior to his
termination date.
    
    Termination for Cause. All equity grants (whether vested or unvested) under the
incentive plan and the transitional plan would be forfeited by any Named Executive Officer who is
terminated by Liberty for cause. The incentive plan and the transitional plan define cause as
insubordination, dishonesty, incompetence, moral turpitude, other misconduct of any kind and the
refusal to perform his duties and responsibilities for any reason other than illness or incapacity;
provided that, if such termination is within 12 months after a change in control (as described
below), cause means a felony conviction for fraud, misappropriation or embezzlement.
    
    Termination Without Cause. Pursuant to the incentive plan and the transitional plan
(and the related award agreements), if a Named Executive Officer were terminated without cause, in
addition to his vested equity awards, he would be entitled to vesting in full with respect to any
outstanding options that would have vested during the calendar year in which the termination occurs
and the lapse of restrictions with respect to any restricted share awards that would have vested
during such calendar year.
    
    Death. In the event of death, the incentive plan and the transitional plan provide
for vesting in full of any outstanding options and the lapse of restrictions on any restricted
share awards.
  
    
    Disability. In the event of a disability, which is generally the inability to
perform gainful activity for at least 12 months, the incentive plan and the transitional plan
provide for vesting in full of any outstanding options and the lapse of restrictions on any
restricted share awards.
  III-8




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##### Table of Contents




    
    Termination After a Change in Control. In case of a change in control of our
company, the incentive plan and the transitional plan provide for vesting in full of any
outstanding options and the lapse of restrictions on any restricted share awards. A change in
control is generally defined as:
 
    
    The acquisition of beneficial ownership of at least 20% of the combined voting power
of the then outstanding shares of our company ordinarily having the right to vote in the
election of directors.
    
    Any non-exempt person purchases our common stock pursuant to a tender offer or
exchange offer, without the prior consent of our board.
    
    The individuals constituting the board of directors over any two consecutive years
cease to constitute at least a majority of the board, subject to certain exceptions that
permit the board to approve new members by approval of at least two-thirds of the remaining
directors.
    
    Any merger, consolidation or binding share exchange that causes the persons who were
common stockholders of the company immediately prior thereto to lose their proportionate
interest in the common stock or voting power of the successor or to have less than a
majority of the combined voting power of the then outstanding shares ordinarily having the
right to vote in the election of directors, the sale of substantially all of the assets of
the company or the dissolution of the company.
  III-9




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Benefits Payable Upon Termination or Change in Control
 Voluntary
    
    
    
    
    
    TerminationTermination
    
    Termination
    
    Without Cause
    
    
    
    
    
    
    
    
    
    After a ChangeName
    
    ($)
    
    for Cause ($)
    
    ($)
    
    Death ($)
    
    Disability ($)
    
    in Control ($)John C. MaloneOptions
    
    
    8,813,848
    (1)
    
    
    
    
    
    
    8,813,848
    (1)
    
    
    9,465,052
    (2)
    
    
    9,465,052
    (2)
    
    
    9,465,052
    (2)Robert R. BennettSeverance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    240,000
    
    
    
    240,000
    
    
    
    Options
    
    
    13,452,622
    (1)
    
    
    
    
    
    
    13,452,622
    (1)
    
    
    13,475,022
    (2)
    
    
    13,475,022
    (2)
    
    
    13,475,022
    (2)Total
    
    
    13,452,622
    
    
    
    
    
    
    
    13,452,622
    
    
    
    13,715,022
    
    
    
    13,715,022
    
    
    
    13,475,022David J.A. FlowersOptions
    
    
    1,516,154
    (1)
    
    
    
    
    
    
    1,516,154
    (1)
    
    
    1,697,714
    (2)
    
    
    1,697,714
    (2)
    
    
    1,697,714
    (2)Albert E. RosenthalerOptions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193,700
    (2)
    
    
    193,700
    (2)
    
    
    193,700
    (2)Christopher W. SheanOptions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193,700
    (2)
    
    
    193,700
    (2)
    
    
    193,700
    (2)Charles Y. TanabeOptions
    
    
    774,554
    (1)
    
    
    
    
    
    
    774,554
    (1)
    
    
    954,954
    (2)
    
    
    954,954
    (2)
    
    
    954,954
    (2)
 
 (1)
    
    Based on the number of vested options held by each Named Executive Officer at year-end. For
more information, see the Outstanding Equity Awards at Fiscal Year-End table above.(2)
    
    Based on (i) the number of vested options and (ii) the number of unvested options, in each
case, held by each Named Executive Officer at year-end. For more information, see the
Outstanding Equity Awards at Fiscal Year-End table above. III-10




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Director Compensation Table
  Fees Earnedor Paid in Cash
    
    OptionName (1)
    
    ($)(2)
    
    Awards ($)(3)(4)
    
    Total ($)Paul A. Gould
    
    
    63,000
    
    
    
    66,494
    (5)
    
    
    129,494M. LaVoy Robison
    
    
    75,000
    
    
    
    66,494
    (6)
    
    
    141,494J. David Wargo
    
    
    63,000
    
    
    
    66,494
    (7)
    
    
    129,494
 
 (1)
    
    Excludes John C. Malone and Robert R. Bennett, each of whom is a director of our company and a Named
Executive Officer.(2)
    
    Each of our directors who is not an officer or employee of our company is paid a retainer of
$50,000 per year, payable quarterly in arrears, plus a fee of $1,000 for each board meeting he
attends. In addition, the chairman and each other member of the audit committee of our board
of directors is paid a fee of $5,000 and $2,000, respectively, for each audit committee
meeting he attends. Each member of the executive committee and the compensation committee who
is not an employee of our company receives a fee of $1,000 for each committee meeting he
attends. Fees to our directors are payable in cash. In addition, we reimburse members of our
board for travel expenses incurred to attend any meetings of our board or any committee
thereof.(3)
    
    The dollar amounts recognized for financial statement purposes have been calculated in
accordance with FAS 123R. For a description of the assumptions applied in these calculations,
see Note 13 to our consolidated financial statements for the year ended December 31, 2007
(which are included in our Annual Report on Form 10-K as filed with the SEC on February 15,
2008).(4)
    
    Pursuant to the Discovery Holding Company 2005 Nonemployee Director Incentive Plan, on May
16, 2007, our board of directors granted each of the nonemployee directors options (the
director options) to purchase 10,000 shares of our Series A common stock at an exercise price
equal to $22.90, which was the closing price of our Series A common stock on the grant date.
The director options received by each director had a grant date fair value of $77,382. The
director options will become exercisable on the date of the Annual Meeting, or on such earlier
date that the grantee ceases to be a director because of death or disability, and will
terminate without becoming exercisable if the grantee resigns or is removed from the board
before the date of the Annual Meeting. The director options will, upon becoming exercisable,
be exercisable until May 16, 2017, or, if earlier, until the first business day following the
first anniversary of the date the grantee ceases to be a director (or, if the grantee dies
within that period, until the first business day following the expiration of the one-year
period beginning on the date of the grantees death).(5)
    
    In addition to the director options, as of February 29, 2008, Mr. Gould held an aggregate
14,175 outstanding option awards, all of which were granted prior to 2007.(6)
    
    In addition to the director options, as of February 29, 2008, Mr. Robison held an aggregate
13,300 outstanding option awards, all of which were granted prior to 2007.(7)
    
    In addition to the director options, as of February 29, 2008, Mr. Wargo held an aggregate
11,048 outstanding option awards, all of which were granted prior to 2007. Compensation Committee Interlocks and Insider Participation
  III-11




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Compensation Committee Report
  Submitted by the Members of the Compensation Committee:
Paul A. Gould
M. LaVoy Robison
J. David Wargo
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
 Equity Compensation Plans
 Securities Authorized for Issuance under Equity Compensation Plans
  EQUITY COMPENSATION PLAN INFORMATIONNumber ofNumber of
    
    
    
    
    
    securitiessecurities to
    
    Weighted
    
    available forbe issued
    
    average
    
    future issuanceupon exercise
    
    exercise
    
    under equityof
    
    price of
    
    compensationoutstanding
    
    outstanding
    
    plans (excludingoptions,
    
    options,
    
    securitieswarrants and
    
    warrants and
    
    reflected in thePlan Category
    
    rights
    
    rights
    
    first column)Equity compensation plans
approved by security holders:Discovery Holding Company
2005 Incentive Plan:Series A common stock
    
    
    10,000
    
    
    $
    22.90
    
    
    
    9,990,000
    (1)Series B common stock
    
    
    
    
    
    $
    
    
    
    
    Discovery Holding Company
2005 Nonemployee Director
Incentive Plan:Series A common stock
    
    
    60,000
    
    
    $
    18.69
    
    
    
    4,940,000
    (1)Series B common stock
    
    
    
    
    
    $
    
    
    
    
    Discovery Holding Company
Transitional Stock
Adjustment Plan(2):Series A common stock
    
    
    1,082,292
    
    
    $
    15.42
    
    
    
    Series B common stock
    
    
    2,996,525
    
    
    $
    18.87
    
    
    
    Equity compensation plans not
approved by security
holdersNone
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    4,148,817
    
    
    $
    17.91
    
    
    
    14,930,000
 
 (1)
    
    Each plan permits grants of, or with respect to, shares of our Series A common stock or
Series B common stock subject to a single aggregate limit.(2)
    
    The transitional plan was adopted in connection with the spin-off to provide for the
supplemental award of options to purchase shares of our common stock and restricted shares of
our Series A
common stock, in each case, pursuant to adjustments made to Liberty stock incentive awards in
accordance with the anti-dilution provisions of Libertys stock incentive plans. III-12




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Security Ownership of Certain Beneficial Owners and Management
 Security Ownership of Certain Beneficial Owners
   Name and Address of
    
    
    
    
    
    Amount and Nature of
    
    Percent of
    
    VotingBeneficial Owner
    
    Title of Class
    
    Beneficial Ownership
    
    Class
    
    PowerHarris Associates L.P.
    
    Series A
    
    
    26,937,050
    (1)
    
    
    9.19
    %
    
    
    6.4
    %Two North LaSalle Street,
Suite 500,
Chicago, IL 60602T. Rowe Price Associates, Inc.
    
    Series A
    
    
    15,491,272
    (2)
    
    
    5.8
    %
    
    
    0.7
    %100 E. Pratt Street,
Baltimore, MD 21202
 
 (1)
    
    The number of shares of common stock is based upon Amendment No. 3 to the Schedule 13G dated
February 12, 2008, filed by Harris Associates L.P., an investment adviser, and its general
partner, Harris Associates Inc., with respect to our Series A common stock. Harris Associates
is deemed to be the beneficial owner of 26,937,050 shares of our Series A common stock, as a
result of acting as investment adviser. The Schedule 13G reflects that Harris Associates has
shared voting power over 24,731,330 shares of our Series A common stock.(2)
    
    The number of shares of common stock is based upon Amendment No. 1 to the Schedule 13G dated
February 14, 2008, filed by T. Rowe Price Associates, Inc., an investment adviser, with
respect to our Series A common stock. T. Rowe Price is deemed to be the beneficial owner of
15,491,272 shares of our Series A common stock. The Schedule 13G reflects that T. Rowe Price
has sole voting power over 2,700,515 shares of our Series A common stock. Security Ownership of Management
    III-13




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##### Table of Contents



Amount and Nature of
    
    PercentName of
    
    
    
    Beneficial Ownership
    
    of
    
    VotingBeneficial Owner
    
    Title of Class
    
    (in thousands)
    
    Class
    
    PowerJohn C. Malone
    
    Series A
    
    3,394(1)(2)(3)
    
    1.3%
    
    31.1%Series B
    
    12,127(1)(3)
    
    92.3%Robert R. Bennett
    
    Series A
    
    328(3)(4)(5)
    
    *
    
    4.2%Series B
    
    1,668(3)(5)
    
    12.3%Paul A. Gould
    
    Series A
    
    202(3)
    
    *
    
    *Series B
    
    174
    
    1.5%M. LaVoy Robison
    
    Series A
    
    14(3)
    
    *
    
    *Series B
    
    J. David Wargo
    
    Series A
    
    20(3)(6)
    
    *
    
    *Series B
    
    David J.A. Flowers
    
    Series A
    
    206(3)(4)
    
    *
    
    *Series B
    
    Albert E. Rosenthaler
    
    Series A
    
    1(4)
    
    *
    
    *Series B
    
    Christopher W. Shean
    
    Series A
    
    1(4)
    
    *
    
    *Series B
    
    Charles Y. Tanabe
    
    Series A
    
    103(3)(4)(7)
    
    *
    
    *Series B
    
    All directors and executive
    
    Series A
    
    4,268(2)(3)(4)(5)(6)(8)
    
    1.6%
    
    34.5%officers as a Group
    
    Series B
    
    13,969(3)(5)(8)
    
    94.4%(9 persons)
 
 *
    
    Less than one percent(1)
    
    Includes 480,889 shares of our Series A common stock and 340,943 shares of our Series B
common stock held by Mr. Malones wife, Mrs. Leslie Malone, as to which shares Mr. Malone has
disclaimed beneficial ownership.(2)
    
    Includes 330 and 1,217,920 shares of our Series A common stock held by two trusts with
respect to which Mr. Malone is the sole trustee and, with his wife, retains a unitrust
interest in the trust.(3)
    
    Includes beneficial ownership of shares that may be acquired upon exercise of stock options
exercisable within 60 days after March 31, 2008. Messrs. Malone and Bennett have the right to
convert the options to purchase shares of our Series B common stock into options to purchase
shares of our Series A common stock. Series A
    
    Series BJohn C. Malone
    
    
    13,333
    
    
    
    1,268,540Robert R. Bennett
    
    
    200,000
    
    
    
    1,667,985Paul A. Gould
    
    
    14,175
    
    
    
    M. LaVoy Robison
    
    
    13,300
    
    
    
    J. David Wargo
    
    
    11,048
    
    
    
    David J.A. Flowers
    
    
    178,686
    
    
    
    Charles Y. Tanabe
    
    
    101,915
    
    
    
    
 III-14




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##### Table of Contents



(4)
    
    Includes shares of our Series A common stock held by the Liberty 401(k) Savings Plan as
follows:
 Robert R. Bennett
    
    
    2,705David J.A. Flowers
    
    
    1,221Albert E. Rosenthaler
    
    
    532Christopher W. Shean
    
    
    566Charles Y. Tanabe
    
    
    632
 (5)
    
    Includes 109,826 shares of our Series A common stock and 40 shares of our Series B common
stock owned by Hilltop Investments, Inc., which is jointly owned by Mr. Bennett and his wife,
Mrs. Deborah Bennett.(6)
    
    Includes 3,137 shares of our Series A common stock held in various accounts managed by Mr.
Wargo, as to which shares Mr. Wargo has disclaimed beneficial ownership.(7)
    
    Includes 306 shares of our Series A common stock held by Mr. Tanabes wife, Arlene Bobrow, as
to which shares Mr. Tanabe has disclaimed beneficial ownership.(8)
    
    Includes 481,195 shares of our Series A common stock and 340,943 shares of our Series B
common stock held by relatives of certain directors and executive officers, as to which shares
beneficial ownership by such directors and executive officers has been disclaimed.
 Change of Control
 Advance/Newhouse Transaction
 
 Item 13. Certain Relationships and Related Transactions, and Director Independence .
 Director Independence
  
    
    is not an employee or member of our management or the management of any of our
subsidiaries;
    
    has no material relationship with us (either directly or as a partner, stockholder
or officer of an organization that has a relationship with us); for this purpose
material relationships can, for example, include commercial, industrial, banking,
consulting, legal, accounting, charitable and familial relationships;
    
    has no other relationship with us or our subsidiaries that would interfere with the
exercise of independent judgment as a director; and
    
    does not accept any consulting, advisory or other compensatory fee from us, except
fees received for services as a director (including fees for serving on a committee of
our board of directors).
  III-15




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##### Table of Contents




    
    is, or, during the three years preceding the determination date (which period of
three years is referred to as the determination period), was employed by us or any of
our subsidiaries, or has a family member who is or was during the determination period
an executive officer of our company or any of our subsidiaries;
    
    is, or has an immediate family member who is, an executive officer, partner or
controlling shareholder of an organization that made payments to or received payments
from us for property or services in the current or any of the past three fiscal years,
in an amount which exceeded the greater of $200,000 or 5% of the recipients
consolidated gross revenue for that year, other than payments solely from investments
in our securities or payments under non-discretionary charitable contribution matching
programs;
    
    received, or has an immediate family member who received, any payment in excess of
$60,000 from us or any of our subsidiaries during any period of twelve consecutive
months within the determination period, other than (a) director and committee fees, (b)
payments arising solely from investments in our securities, (c) compensation to an
immediate family member who is a non-executive employee of our company or any of our
subsidiaries, (d) benefits under a tax-qualified retirement plan, (e) non-discretionary
compensation, or (f) certain permitted loans;
    
    is, or has an immediate family member who is, a current partner of the external
auditor of our company or any of our subsidiaries or was a partner or employee with the
external auditor of our company or any of our subsidiaries who worked on the audit of
our company or any of our subsidiaries at any time during the determination period; or
    
    is, or during the determination period was, or has a family member who is, or during
the determination period was, employed as an executive officer by a company as to which
an executive officer of our company serves, or during the determination period served,
as a director and member of the compensation committee of such other company.
 www.discoveryholdingcompany.com
 
 Item 14. Principal Accounting Fees and Services
 Audit Fees and All Other Fees
  2007
    
    
    2006Audit fees
    
    $
    1,969,000
    
    
    
    2,044,000Audit related fees (1)
    
    
    33,000
    
    
    
    152,000Audit and audit related fees
    
    
    2,002,000
    
    
    
    2,196,000Tax fees (2)
    
    
    527,000
    
    
    
    283,000Total fees
    
    $
    2,529,000
    
    
    
    2,479,000
 III-16




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##### Table of Contents



(1)
    
    Audit related fees include fees incurred for due diligence related to potential business
combinations and audits of financial statements of certain employee benefits plans.(2)
    
    Tax fees consisted of tax compliance and consultations regarding the tax implications of
certain transactions.  Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
of Independent Auditor
 pre-approved services
 
    
    audit services as specified in the policy, including (i) financial audits of our
company and our subsidiaries, (ii) services associated with our periodic reports,
registration statements and other documents filed or issued in connection with a
securities offering (including comfort letters and consents), (iii) attestations of our
managements reports on internal controls and (iv) consultations with management as to
accounting or reporting of transactions;
    
    audit related services as specified in the policy, including (i) due diligence
services, (ii) financial audits of employee benefit plans, (iii) attestation services
not required by statute or regulation, (iv) certain audits incremental to the audit of
our consolidated financial statements and (v) closing balance sheet audits related to
dispositions; and
    
    tax services as specified in the policy, including federal, state, local and
international tax planning, compliance and review services, and tax due diligence and
advice regarding mergers and acquisitions.
    III-17




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules .
 Financial Statements
   
 Financial Statement Schedules
  (i)
    
    All schedules have been omitted because they are not applicable, not
material or the required information is set forth in the financial statements or
notes thereto.(ii)
    
    Separate financial statements for Discovery Communications Holding,
LLC:
 
 Exhibits
  2
    
     Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession:
 2.1
    
    Reorganization Agreement among Liberty Media Corporation, Discovery
Holding Company (DHC) and Ascent Media Group, Inc. (incorporated by reference to
Exhibit 2.1 to DHCs Registration Statement on Form 10, dated July 15, 2005 (File
No. 000-51205) (the Form 10)).
 3
    
     Articles of Incorporation and Bylaws:
 3.1
    
    Restated Certificate of Incorporation of DHC (incorporated by reference
to Exhibit 3.1 to the Form 10).3.2
    
    Bylaws of DHC (incorporated by reference to Exhibit 3.2 to the Form
10).
 4
    
     Instruments Defining the Rights of Securities Holders, including Indentures:
 4.1
    
    Specimen Certificate for shares of the Series A common stock, par value
$.01 per share, of DHC (incorporated by reference to Exhibit 4.1 to the Form 10).
 IV-1




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##### Table of Contents



4.2
    
    Specimen Certificate for shares of the Series B common stock, par value
$.01 per share, of DHC (incorporated by reference to Exhibit 4.2 to the Form 10).4.3
    
    Rights Agreement between DHC and EquiServe Trust Company, N.A., as
Rights Agent (incorporated by reference to Exhibit 4.3 to the Form 10).
 10
    
     Material Contracts:
 10.1
    
    Amended and Restated Limited Liability Company Agreement of Discovery
Communications Holding, LLC, dated as of May 14, 2007, by and among
Advance/Newhouse Programming Partnership, LMC Discovery, Inc. and John S.
Hendricks.*10.2
    
    Form of Tax Sharing Agreement between Liberty Media Corporation and DHC
(incorporated by reference to Exhibit 10.6 to the Form 10).10.3
    
    Discovery Holding Company 2005 Incentive Plan (As Amended and Restated
Effective August 15, 2007) (incorporated by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of Discovery Holding Company for the quarter ended
September 30, 2007 (File No. 000-51205) as filed on November 7, 2007).10.4
    
    Discovery Holding Company 2005 Non-Employee Director Incentive Plan (As
Amended and Restated Effective August 15, 2007) (incorporated by reference to
Exhibit 10.2 to the Quarterly Report on Form 10-Q of Discovery Holding Company for
the quarter ended September 30, 2007 (File No. 000-51205) as filed on November 7,
2007).10.5
    
    Discovery Holding Company Transitional Stock Adjustment Plan (As
Amended and Restated Effective August 15, 2007) (incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q of Discovery Holding Company for
the quarter ended September 30, 2007 (File No. 000-51205) as filed on November 7,
2007).10.6
    
    Agreement between DHC and John C. Malone (incorporated by reference to
Exhibit 10.10 to the Form 10).10.7
    
    Agreement, dated June 24, 2005, between Discovery and DHC (incorporated
by reference to Exhibit 10.11 to the Form 10).10.8
    
    Indemnification Agreement, dated as of June 24, 2005, between Cox and
DHC (incorporated by reference to Exhibit 10.12 to the Form 10).10.9
    
    Indemnification Agreement, dated as of June 24, 2005, between
NewChannels and DHC (incorporated by reference to Exhibit 10.13 to the Form 10).10.10
    
    Form of Indemnification Agreement with Directors and Executive
Officers (incorporated by reference to Exhibit 10.14 to the Form 10).
 21
    
     Subsidiaries of Discovery Holding Company.*23
    
     Consents of Experts and Counsel:
 23.1
    
    Consent of KPMG LLP.*23.2
    
    Consent of PricewaterhouseCoopers LLP.*
 31
    
     Rule 13a-14(a)/15d-14(a) Certifications:
 31.1
    
    Rule 13a-14(a)/15d-14(a) Certification.**31.2
    
    Rule 13a-14(a)/15d-14(a) Certification.**31.3
    
    Rule 13a-14(a)/15d-14(a) Certification.**
 32
    
     Section 1350 Certification.***
 
 *
    
    Filed with the Registrants Annual Report on Form 10-K on February 15, 2008.**
    
    Filed herewith.***
    
    Furnished herewith. IV-2




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##### Table of Contents



SIGNATURES
  DISCOVERY HOLDING COMPANYDated: April 29, 2008
    By:
    /s/ John C. MaloneJohn C. MaloneChief Executive Officer  Signature
    
    Title
    
    Date/s/ John C. Malone

John C. Malone
    
    Chairman of the Board, Director
and Chief Executive Officer
    
    April 29, 2008/s/ Robert R. Bennett

Robert R. Bennett
    
    Director and President
    
    April 29, 2008/s/ Paul A. Gould

Paul A. Gould
    
    Director
    
    April 29, 2008/s/ M. LaVoy Robison

M. LaVoy Robison
    
    Director
    
    April 29, 2008/s/ J. David Wargo

J. David Wargo
    
    Director
    
    April 29, 2008/s/ David J.A. Flowers

David J.A. Flowers
    
    Senior Vice President and Treasurer
(Principal Financial Officer)
    
    April 29, 2008/s/ Christopher W. Shean

Christopher W. Shean
    
    Senior Vice President and Controller
(Principal Accounting Officer)
    
    April 29, 2008
 Signature Page to Form 10-K/A




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##### Table of Contents



EXHIBIT INDEX
  2
    
     Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession:
 2.1
    
    Reorganization Agreement among Liberty Media Corporation, Discovery
Holding Company (DHC) and Ascent Media Group, Inc. (incorporated by reference to
Exhibit 2.1 to DHCs Registration Statement on Form 10, dated July 15, 2005 (File
No. 000-51205) (the Form 10)).
 3
    
     Articles of Incorporation and Bylaws:
 3.1
    
    Restated Certificate of Incorporation of DHC (incorporated by
reference to Exhibit 3.1 to the Form 10).3.2
    
    Bylaws of DHC (incorporated by reference to Exhibit 3.2 to the Form
10).
 4
    
     Instruments Defining the Rights of Securities Holders, including Indentures:
 4.1
    
    Specimen Certificate for shares of the Series A common stock, par
value $.01 per share, of DHC (incorporated by reference to Exhibit 4.1 to the Form
10).4.2
    
    Specimen Certificate for shares of the Series B common stock, par
value $.01 per share, of DHC (incorporated by reference to Exhibit 4.2 to the Form
10).4.3
    
    Rights Agreement between DHC and EquiServe Trust Company, N.A., as
Rights Agent (incorporated by reference to Exhibit 4.3 to the Form 10).
 10
    
     Material Contracts:
 10.1
    
    Amended and Restated Limited Liability Company Agreement of Discovery
Communications Holding, LLC, dated as of May 14, 2007, by and among
Advance/Newhouse Programming Partnership, LMC Discovery, Inc. and John S.
Hendricks.*10.2
    
    Form of Tax Sharing Agreement between Liberty Media Corporation and
DHC (incorporated by reference to Exhibit 10.6 to the Form 10).10.3
    
    Discovery Holding Company 2005 Incentive Plan (As Amended and
Restated Effective August 15, 2007) (incorporated by reference to Exhibit 10.1 to
the Quarterly Report on Form 10-Q of Discovery Holding Company for the quarter
ended September 30, 2007 (File No. 000-51205) as filed on November 7, 2007).10.4
    
    Discovery Holding Company 2005 Non-Employee Director Incentive Plan
(As Amended and Restated Effective August 15, 2007) (incorporated by reference to
Exhibit 10.2 to the Quarterly Report on Form 10-Q of Discovery Holding Company for
the quarter ended September 30, 2007 (File No. 000-51205) as filed on November 7,
2007).10.5
    
    Discovery Holding Company Transitional Stock Adjustment Plan (As
Amended and Restated Effective August 15, 2007) (incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q of Discovery Holding Company for
the quarter ended September 30, 2007 (File No. 000-51205) as filed on November 7,
2007).10.6
    
    Agreement between DHC and John C. Malone (incorporated by reference
to Exhibit 10.10 to the Form 10).10.7
    
    Agreement, dated June 24, 2005, between Discovery and DHC
(incorporated by reference to Exhibit 10.11 to the Form 10).10.8
    
    Indemnification Agreement, dated as of June 24, 2005, between Cox and
DHC (incorporated by reference to Exhibit 10.12 to the Form 10).10.9
    
    Indemnification Agreement, dated as of June 24, 2005, between
NewChannels and DHC (incorporated by reference to Exhibit 10.13 to the Form 10).10.10
    
    Form of Indemnification Agreement with Directors and Executive
Officers (incorporated by reference to Exhibit 10.14 to the Form 10).
 21
    
     Subsidiaries of Discovery Holding Company.*23
    
     Consents of Experts and Counsel:
 23.1
    
    Consent of KPMG LLP.*23.2
    
    Consent of PricewaterhouseCoopers LLP.*
 31
    
     Rule 13a-14(a)/15d-14(a) Certifications:
 31.1
    
    Rule 13a-14(a)/15d-14(a) Certification.**




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##### Table of Contents



31.2
    
    Rule 13a-14(a)/15d-14(a) Certification.**31.3
    
    Rule 13a-14(a)/15d-14(a) Certification.**
 32
    
     Section 1350 Certification.***
 
 *
    
    Filed with the Registrants Annual Report on Form 10-K on February 15, 2008.**
    
    Filed herewith.***
    
    Furnished herewith.