The company reports results on both a GAAP and a non-GAAP basis. Non-GAAP results exclude the impact of the change in deferred net revenues and related costs of sales; equity-based compensation expense; non-core exit operations; one-time costs related to the business combination with Vivendi Games; the amortization of intangibles and the changes in cost of sales resulting from purchase price accounting adjustments; and associated tax benefits. The company also reviews segment performance exclusive of the items noted above. Please refer to the tables at the back of this press release for a reconciliation of the company's GAAP and non-GAAP results by selected line items of the consolidated statement of operations and reconciliations of the company's GAAP segment performance and non-GAAP comparable basis performance.

For the quarter ended December 31, 2008, Activision Blizzard's GAAP net revenues were $1.6 billion and the company's non-GAAP net revenues were $2.3 billion. The company's prior non-GAAP net revenues outlook was $2.2 billion.

For the quarter ended December 31, 2008, Activision Blizzard recorded a GAAP operating loss of $148 million. The company's non-GAAP operating income was $644 million for the quarter, the highest in the company's history.

For the quarter ended December 31, 2008, Activision Blizzard had a GAAP net loss of $72 million, or a GAAP loss per diluted share of $0.05. The company had non-GAAP net income of $429 million and non-GAAP earnings per diluted share of $0.31. The company's prior non-GAAP earnings per diluted share outlook was $0.29.

For the calendar year, Activision Blizzard's GAAP net revenues were $3.0 billion. The company's segment net revenues from core operations were $3.7 billion. Including Activision's stand-alone net revenues of $1.3 billion for the pre-acquisition period of January 1 - July 9, 2008, the company's non-GAAP comparable-basis net revenues were $5.0 billion, the highest in the company's history. The company's prior non-GAAP comparable-basis net revenues outlook was $4.9 billion.

Activision Blizzard's GAAP operating loss for the calendar year 2008 was $0.2 billion. The company's segment operating income from Activision Blizzard's core operations was $1.0 billion. Including Activision's pre-acquisition stand-alone segment operating income of $0.2 billion for January 1 - July 9, 2008, the company's non-GAAP comparable-basis operating income was $1.2 billion, which is inline with the company's prior outlook.

Robert Kotick, CEO of Activision Blizzard, stated, "Activision Blizzard has delivered record December quarter and calendar year 2008 non-GAAP comparable-basis results. On a non-GAAP comparable basis, Activision Blizzard has finished the calendar year as the largest and most profitable third-party publisher with more than $5 billion of net revenues. These results exceeded the calendar 2009 financial goals that we outlined over a year ago -- when we announced the planned combination of Activision and Blizzard -- of $4.3 billion of non-GAAP net revenues and non-GAAP operating income of $1.1 billion. We achieved these results one full year ahead of our original plan. Our balance sheet remains strong with no debt and more than $3 billion in cash."

Kotick continued, "In 2008, we had four of the top-10 best-selling games worldwide for the year. Ninety percent of the top-ten best-selling games worldwide were based on proven franchises, validating our strategy of a focused product slate with high-quality titles based on well-established brands. We enter 2009 with the finest product slate in our company's history and an organization properly sized and resourced to compete alongside the many new entrants and existing competitors in our industry. During the year, we will continue to employ our proven strategies that have worked so well for us over the last decade."

Kotick added, "During the year, we successfully achieved our merger restructuring goals, including the elimination of unprofitable product lines, right sizing our organization and integrating disparate accounting and IT systems, all with minimal disruption to our business. The success of our merger integration coupled with the strength of our product lineup should enable us to once again deliver record, industry-leading non-GAAP margins in 2009. All of our accomplishments reflect the effort, imagination and intellectual and creative talents of the people who work here. We are well poised to continue generating future shareholder value, as we have for the past 17 years."

In North America and Europe, for the calendar year, Activision Blizzard had two of the top-five best-selling franchises on the consoles across all platforms -- Guitar Hero and Call of Duty, and was the #1 third-party publisher for the Wii platform, according to The NPD Group, Charttrack and Gfk. Additionally, Blizzard Entertainment's World of Warcraft: Wrath of the Lich King was the #1 PC title in North America and Europe for the calendar year.

• Activision Blizzard had four top 10-best selling PC titles in dollars in North America and Europe for the calendar year, according to The NPD Group, Charttrack and Gfk.
• In North America, Activision Blizzard was the #1 third-party console and handheld software publisher in dollars for the calendar year, according to The NPD Group.
• For the calendar year, Activision Blizzard had the #1 U.S. best-selling title in dollars on the Nintendo DS, Guitar Hero On Tour, according to the NPD Group.
• For the December quarter, Activision Blizzard was the #1 console, handheld and PC publisher in the U.S. and Europe, according to The NPD Group, Charttrack and Gfk.
• During the December quarter, Guitar Hero III: Legends of Rock became the first video game ever to surpass $1 billion in sales from a single title, according to The NPD Group, Charttrack and Gfk.
• For the December quarter, Activision Blizzard had the #1 and #2 best-selling console titles, Guitar HeroWorld Tour and Call of DutyWorld at War respectively, in dollars in North America and Europe, according to The NPD Group.
• On December 23, 2008 Blizzard Entertainment, Inc. announced that World of Warcraft its award-winning subscription-based massively multiplayer online role-playing game, is now played by more than 11.5 million subscribers worldwide.
• On November 10, 2008 -Activision Publishing acquired video game developer Budcat Creations, an award-winning development studio with expertise on the Wii home video game system and the Nintendo DS.
• On November 5, 2008, Activision Blizzard 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. Under this authorization the company purchased $126 million, or approximately 13 million shares, of common stock at an average price of $9.68 per share.

For the March quarter of calendar year 2009, Activision Publishing expects to release two titles during the last week of March, Guitar Hero Metallica and Monsters vs. Aliens. Guitar Hero Metallica enables players to experience the intensity and skill of Metallica, one of the greatest heavy metal bands of all time, as well as 20 other bands hand-picked by Metallica for their influence on the band's music. The game will be released for the Xbox 360 video game system from Microsoft, PlayStation3 computer entertainment system and Nintendo Wii . Additionally, the company will release Monsters vs. Aliens, based on DreamWorks Animation's upcoming 3D movie, for the PlayStation 2 computer entertainment system, PlayStation 3 computer entertainment system, Xbox 360 video game system from Microsoft, Nintendo Wii, Nintendo DS, and Games for Windows PC.

Due to current macroeconomic conditions, the company's outlook is subject to significant risks and uncertainties including declines in demand for the company's products, fluctuations in foreign exchange rates, and counterparty risks relating to customers, licensees, licensors and manufacturers. The company's outlook is also based on assumptions about sell through rates for the company's products, the new slate of products and progress in integrating operations following the company's recent business combination transaction. As a result of these and other factors, actual results may deviate materially from the outlook presented below.

For calendar 2009, Activision Blizzard expects GAAP net revenues of $4.2 billion, and GAAP earnings per diluted share of $0.22. On a non-GAAP basis, the company expects net revenues of $4.7 billion for the calendar year. The revenue outlook includes a reduction of more than $200 million in revenue from the company's lower margin distribution and the co-publishing businesses and a negative year-over-year impact of more than $400 million from a stronger dollar. On a constant exchange rate basis, however, the company expects another year of Non-GAAP revenue growth. The company's non-GAAP earnings per diluted share are expected to be $0.61 for the calendar year.

For the March quarter 2009, Activision Blizzard expects GAAP net revenues of $860 million, and GAAP earnings per diluted share of $0.08. On a non-GAAP basis, the company expects net revenues of $550 million and $0.03 earnings per diluted share for the March quarter.