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®.”

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“Our significant accomplishments in 2009 are the result of the expertise and skills of our employees around the world.  Their hard work and commitment to excellence made us stronger even during difficult times.  Our strategy and capabilities are supported by a very strong financial position. We continue to put our cash to work, including the announcements we made today — the authorization of our second billion dollar stock buyback program in two years and our first cash dividend, both of which reflect our confidence in the future and our 18-year commitment to industry leading shareholder value creation,” Kotick added.