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Press Release: Activision Blizzard Announces -5-

· 02/04/2021 16:14
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES (Amounts in millions, except per share data) Cost of Cost of Revenues--Product Cost of Cost of Revenues--Product Sales: Software Revenues--In-game/Subs/Other: Revenues--In-game/Subs/Other: Restructuring Total Costs Year Ended Net Sales: Product Royalties and Game Operations and Software Royalties and Product Sales and General and and related and December 31, 2020 Revenues Costs Amortization Distribution Costs Amortization Development Marketing Administrative costs Expenses ------------------ ----------- ------------------- ------------------- ------------------------------- ------------------------------- ------------- ----------- ---------------- --------------- ------------ GAAP Measurement $ 8,086 $ 705 $ 269 $ 1,131 $ 155 $ 1,150 $ 1,064 $ 784 $ 94 $ 5,352 Share-based compensation(1) -- -- (14) (1) -- (42) (21) (140) -- (218) Amortization of intangible assets(2) -- -- -- -- (68) -- -- (11) -- (79) Restructuring and related costs(3) -- -- -- -- -- -- -- -- (94) (94) ----------- ------------------- ------------------- ------------------------------- ------------------------------- ------------- ----------- ---------------- --------------- ---------- Non-GAAP Measurement $ 8,086 $ 705 $ 255 $ 1,130 $ 87 $ 1,108 $ 1,043 $ 633 $ -- $ 4,961 === ====== ====== =========== ======= ========== ============ ================= ============= ================ === ======== ======= ====== ======== ====== ======= ====== Net effect of deferred revenues and related cost of revenues(4) $ 333 $ (40) $ 111 $ 13 $ 11 $ -- $ -- $ -- $ -- $ 95 Operating Basic Earnings Diluted Earnings Income Net Income per Share per Share ----------- ------------------- ------------------- ------------------------------- GAAP Measurement $ 2,734 $ 2,197 $ 2.85 $ 2.82 Share-based compensation(1) 218 218 0.28 0.28 Amortization of intangible assets(2) 79 79 0.10 0.10 Restructuring and related costs(3) 94 94 0.12 0.12 Loss on extinguishment of debt(5) -- 31 0.04 0.04 Income tax impacts from items above(6) -- (123) (0.16) (0.16) ----------- ------------------- ------------------- ------------------------------- Non-GAAP Measurement $ 3,125 $ 2,496 $ 3.24 $ 3.21 === ====== ====== =========== ======= ========== ============ ================= Net effect of deferred revenues and related cost of revenues(4) $ 238 $ 205 $ 0.26 $ 0.26 (1) Includes expenses related to share-based compensation. (2) Reflects amortization of intangible assets from purchase price accounting. (3) Reflects restructuring initiatives, primarily severance and other restructuring-related costs. (4) Reflects the net effect from deferral of revenues and (recognition) of deferred revenues, along with related cost of revenues, on certain of our online enabled products, including the effects of taxes. (5) Reflects the loss on extinguishment of debt from financing activities. (6) Reflects the income tax impact associated with the above items. Tax impact on non-GAAP pre-tax income is calculated under the same accounting principles applied to the GAAP pre-tax income under ASC 740, which employs an annual effective tax rate method to the results.compensation(1) -- -- (6) -- -- (14) (3) (57) -- (80) Amortization of intangible assets(2) -- -- -- -- (13) -- -- (5) -- (18) Restructuring and related costs(3) -- -- -- -- -- -- -- -- (55) (55) ----------- ------------------- ------------------- ------------------------------- ------------------------------- ------------- ----------- ---------------- --------------- ---------- Non-GAAP Measurement $ 2,413 $ 349 $ 111 $ 313 $ 26 $ 336 $ 338 $ 193 $ -- $ 1,666 === ====== ======= ========== ======= ========== ============= ================ ============== =============== ==== ======= === ====== ====== ======== ====== ======= ====== Net effect of deferred revenues and related cost of revenues(4) $ 638 $ 31 $ 193 $ 5 $ 2 $ -- $ -- $ -- $ -- $ 231 Operating Basic Earnings Diluted Earnings Income Net Income per Share per Share ----------- ------------------- ------------------- ------------------------------- GAAP Measurement $ 594 $ 508 $ 0.66 $ 0.65 Share-based compensation(1) 80 80 0.10 0.10 Amortization of intangible assets(2) 18 18 0.02 0.02 Restructuring and related costs(3) 55 55 0.07 0.07 Income tax impacts from items above(5) -- (71) (0.09) (0.09) ----------- ------------------- ------------------- ------------------------------- Non-GAAP Measurement $ 747 $ 590 $ 0.76 $ 0.76 === ====== ======= ========== ======= ========== ============= ================ Net effect of deferred revenues and related cost of revenues(4) $ 407 $ 353 $ 0.46 $ 0.45 (1) Includes expenses related to share-based compensation. (2) Reflects amortization of intangible assets from purchase price accounting. (3) Reflects restructuring initiatives, primarily severance and other restructuring-related costs. (4) Reflects the net effect from deferral of revenues and (recognition) of deferred revenues, along with related cost of revenues, on certain of our online enabled products, including the effects of taxes. (5) Reflects the income tax impact associated with the above items. Tax impact on non-GAAP pre-tax income is calculated under the same accounting principles applied to the GAAP pre-tax income under ASC 740, which employs an annual effective tax rate method to the results.

The GAAP and non-GAAP earnings per share information is presented as calculated. The sum of these measures, as presented, may differ due to the impact of rounding.

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February 04, 2021 16:14 ET (21:14 GMT)