Press Release from Activision Blizzard, Inc.

SANTA MONICA, Calif., Feb. 10 /PRNewswire-FirstCall/ -- Activision Blizzard, Inc. (Nasdaq: ATVI) today announced December quarter and calendar year 2009 financial results.

For calendar year 2009, Activision Blizzard’s GAAP net revenues were $4.28 billion.  On a non-GAAP basis, the company’s net revenues were $4.78 billion.

For calendar year 2009, Activision Blizzard’s GAAP earnings per diluted share were $0.09.  The results include a $0.19 per share reduction in the valuation of intangible assets reflecting the impact of a weaker market on the casual and music genres.  Excluding this charge, GAAP earnings per diluted share would have been $0.28 per share.  On a non-GAAP basis, the company’s earnings per diluted share were $0.69.

For the quarter ended December 31, 2009, Activision Blizzard’s GAAP net revenues were $1.56 billion.  On a non-GAAP basis, the company’s net revenues were $2.50 billion.

For the quarter ended December 31, 2009, Activision Blizzard had a GAAP loss per diluted share of $0.23.  The results include the $0.19 per share reduction in the valuation of intangible assets described above.  Excluding this charge, GAAP loss per share would have been $0.04.  On a non-GAAP basis, the company’s earnings per diluted share were $0.49.

Activision Blizzard reports results on both a GAAP and a non-GAAP basis.  Please refer to the tables at the back of this press release for a reconciliation of the company’s GAAP and non-GAAP results.

Separately, Activision Blizzard also announced that its Board of Directors has authorized a stock repurchase program under which the company can repurchase up to $1 billion of the company's common stock.  The Board of Directors also declared an annual cash dividend of $0.15 per common share payable on April 2, 2010 to shareholders of record at the close of business on February 22, 2010.

Robert Kotick, CEO of Activision Blizzard, stated, “We delivered better-than-expected calendar year non-GAAP financial results and our fourth quarter non-GAAP net revenues and non-GAAP earnings per share were the highest in our company’s history. On a non-GAAP basis, our performance enabled us to deliver the most profitable year in our company’s history and record operating margin.  We generated approximately $1.2 billion in operating cash flow and ended the year with approximately $3.3 billion in cash and investments.  For the calendar year, in the U.S. and Europe, Call of Duty®: Modern Warfare™ 2 was the #1 best-selling title overall and DJ Hero™ was the highest grossing new IP launched in 2009.  Additionally, through Blizzard Entertainment’s World of Warcraft® we remain #1 in the subscription-based massively multiplayer online role-playing game category worldwide, according to The NPD Group and internal Activision Blizzard estimates."

Kotick continued, “Despite these challenging times, in 2010 we remain focused on expanding operating margins by growing our high-margin digital/online revenues, directing our resources to the largest and most profitable opportunities and realizing operational efficiencies globally.  On a non-GAAP basis, we expect to deliver a year of record net earnings and operating margins and are taking another step towards our long-term objective of operating margins of 30% or more.  In calendar year 2010, we expect our net earnings and operating margin growth will be driven by our product slate that includes Blizzard Entertainment’s Starcraft® II and the World of Warcraft expansion pack, Cataclysm™, as well as a diversified lineup based on Activision Publishing’s best-selling franchises including Call of Duty, Guitar Hero® and Tony Hawk®, together with other well-known titles such as True Crime®, Spider-Man® and Bakugan®.”