Official Press Release

NEW YORK--(BUSINESS WIRE)--March 3, 2003--

- Global Sales of Marvel-Licensed Consumer Products Exceeded $2


Billion in 2002 -

Marvel Enterprises, Inc. (NYSE: MVL), a global provider of

entertainment content, today reported financial results for its fourth

quarter and year ended December 31, 2002 and raised its financial

guidance for 2003. Marvel's 2002 results and strong 2003 prospects

mark its successful transformation to a licensing-driven business

focused on entertainment media (film, comics, TV, video games, online,

toys, etc.) and consumer products and promotions.


The year 2002, with the launch of Spider-Man: The Movie, also

marked the debut of improved feature film economics that provide

Marvel the potential for substantial royalty income, based on the

success of films featuring its characters.

Q4 Overview:

Reflecting particularly strong contributions from licensing and

toys, Q4 net sales rose 74% to $86.5 million, EBITDA increased 136% to

$24.8 million and free cash flow increased $33.6 million to $33.1

million. Reflecting previously announced one-time, non-cash charges

principally related to the Convertible Preferred Stock exchange offer

in November and the early retirement of a bank loan, Marvel reported a

Q4 2002 net loss applicable to common stockholders of $48.7 million,

or $1.03 per share. Excluding these one-time, non-cash charges, Marvel

would have reported Q4 earnings applicable to common stockholders of

$12.4 million, or $0.19 per share.


Q4 results included approximately $4.3 million in royalty income

from DVD/video sales of Spider-Man: The Movie and approximately $6.7

million in EBITDA from Marvel's equity interest in net income from the

Spider-Man: The Movie licensing joint venture with Sony. Initial

royalties related to the DVD/video sales were recognized earlier than

the previous forecast of Q1 2003.


Marvel President and CEO, Allen Lipson, commented, "In 2002 Marvel

re-emerged as one of the leading providers of entertainment content

for global media and consumer products, demonstrating that Marvel's

reach goes well beyond our comic books and legions of fans. A telling

illustration of Marvel's reach is our estimate, based on the reported

sales of our licensees, that more than $2 billion worth of Marvel

character licensed consumer products were purchased at retail in 2002.

This figure excludes over $1.4 billion in Spider-Man: The Movie ticket

and DVD/video sales. Tens of millions of people around the world saw

Spider-Man: The Movie and many millions more read our comic book

offerings, played Marvel character video games, or purchased or

received Marvel branded toys or licensed products. We are now able to

leverage our intellectual property across multiple revenue streams and

benefit from the related consumer exposure and project synergies. With

three films, six video game titles, several TV series, untold numbers

of licensed products slated for release in 2003, and a growing

pipeline of entertainment events and products for 2004 and beyond, we

look forward to continued future success within our business model.


"The influence, power and consumer reach of the entire Marvel

character universe was again showcased by the success of the recent

release of the Fox feature film, DareDevil, which has amassed over $84

million in box office revenues just in the U.S. during its first 17

days of release. Importantly, DareDevil generated approximately $42.5

million in domestic box office revenue its first weekend, more than

doubling the previous box office record for a President's Day weekend

release, despite a bitter snowstorm in the Northeast. This performance

continues an impressive streak of Marvel character-based feature films

achieving blockbuster opening weekends and underscores Marvel's rich

history of timeless storytelling and creativity with a broad

demographic reach. We continue to prove that all of our characters,

even those less well known, are unrivaled in their power to entertain

and captivate consumers through both entertainment projects and

consumer products."

Marvel Enterprises, Inc.

Divisional Revenue/EBITDA

----------------------------------------------------------------------

Three Months Twelve Months

(in millions) Ended Ended

December 31, December 31, YTD %

2002 2001 2002 2001 Change

------------------------------- ------------- --------------- --------

Licensing: Net Sales $28.2 $17.4 $79.6 $40.0 + 99 %

------------------------------- ------ ------ ------- ------- --------

EBITDA (1) $26.1 $9.2 $69.4 $25.1 + 176 %

------------------------------- ------ ------ ------- ------- --------

Publishing: Net Sales $16.7 $15.3 $64.5 $49.5 +30 %

------------------------------- ------ ------ ------- ------- --------

EBITDA (2) $5.2 $8.5 $19.5 $17.6 + 11 %

------------------------------- ------ ------ ------- ------- --------

Toys: Net Sales $41.6 $16.9 $155.0 $91.7 + 69 %

------------------------------- ------ ------ ------- ------- --------

EBITDA (3) $1.6 $(4.7) $14.5 $0.4 + 3525 %

------------------------------- ------ ------ ------- ------- --------

Corporate: Net Sales -- -- -- --

------------------------------- ------ ------ ------- ------- --------

EBITDA (4) (5) $(8.1) $(2.5) $(17.3) $(12.5) N/A

------------------------------- ------ ------ ------- ------- --------

TOTAL NET SALES $86.5 $49.6 $299.1 $181.2 + 65 %

------------------------------- ------ ------ ------- ------- --------

TOTAL EBITDA $24.8 $10.5 $86.1 $30.6 + 181 %

------------------------------- ------ ------ ------- ------- --------

(1) Toy licensing royalties from Toy Biz Worldwide Ltd. (reported

in Licensing segment) totaled $14.8 million and $21.8 million in the

fourth quarter and twelve months of 2002, respectively, and $1.6

million and $3.2 million in the fourth quarter and twelve months of

2001, respectively.


(2) 2001 Q4 and full year Publishing EBITDA reflects an income

item of approximately $3.5 million from the reversal of administrative

claim accruals that are no longer required related to the bankruptcy

of Marvel Entertainment Group.


(3) 2002 Q4 and full year Toys EBITDA results include charges of

$2.5 million and $3.4 million, respectively, for the planned

discontinuance of the Spectra Star division and charges of $4.8

million and $7.9 million, respectively, related to the accelerated

write-off of prepaid royalty advances related to the Lord of the Rings

toy license.


(4) 2002 Q4 and full year Corporate EBITDA results include

reserves totaling approximately $4.4 million for estimated settlement

values associated with three litigation matters.


(5) Twelve months 2001 Corporate EBITDA results include a $3

million charge from a litigation settlement regarding a 1994 toy

license between the Company and The Coleman Company.

Divisional Review

  • Net sales in the Licensing Division, Marvel's principal source of profit and cash flow, increased approximately 62% to $28.2 million in Q4 from $17.4 million in the prior year period. In addition to revenue associated with Spider-Man: The Movie noted above, the division benefited from strong demand for Marvel character-based consumer goods including video games, and toy lines sold by Toy Biz Worldwide, a Marvel licensee. As evidenced by the growing demand for Marvel-related merchandise, net sales in the licensing division increased 99% or $39.6 million to $79.6 million in 2002 from $40.0 million in 2001, and EBITDA increased by $44.3 million to $69.4 million for the year. This improvement reflects a combination of new licenses, improving licensing terms and new license categories as well as substantial royalties above guaranteed advance payments from existing agreements.
  • Marvel's Publishing Division net sales increased 9% to $16.7 million in the fourth quarter and 30% in 2002 over 2001. The improvements are due to renewed interest in comics, supported by Marvel's creative enhancements and growing profile, as well as a full-year contribution of Marvel's re-launched graphic novel (trade paperback) offerings which amounted to $15.5 million in sales in 2002 compared to $5.3 million in 2001.
  • Marvel's Toy Division sales increased 146% to $41.6 million in Q4 2002 compared to sales of $16.9 million in the year ago period. The increase is attributable to continued strong sales success of Marvel's Spider-Man: The Movie action figure line which is developed and sold by Marvel's Toy Biz Division. Full year revenues increased 69% in 2002 due principally to the contribution of Spider-Man: The Movie toys, which generated over $100 million in total revenue for Marvel in the period. In contrast, in fiscal 2003 the bulk of Marvel character-based toys will be produced and sold by Marvel's licensee, Toy Biz Worldwide, and recorded as a royalty income contribution within Marvel's licensing segment. This shift from in-house production to licensing will lead to a previously disclosed decline in toy revenue, but no anticipated decline in the Company's overall EBITDA.

Balance Sheet Improvements in 2002:

In November, Marvel exchanged approximately 85% of its 8%

convertible preferred shares for 24.5 million shares of Marvel common

stock, reducing future annualized paid in-kind dividends by

approximately $14.5 million. Additionally, utilizing growing cash

flows, Marvel prepaid the balance of a three-year $37 million term

loan which was initiated in December 2001. Marvel had approximately

$53.7 million in cash and $151.0 million in 12% Senior Notes as of

December 31, 2002, or net debt of $97.3 million. This compares to cash

of $21.6 million and debt of $188.0 million at December 31, 2001, or

net debt of $166.4 million, and reflects Marvel's improving free cash

flows.


Mr. Lipson commented on Marvel's strategy for 2003 and beyond,

"From a business standpoint, our focus continues to be on maximizing

profits and free cash flow while minimizing capital risk and

investment. Our capital expenditure budget remains a very modest $2-$3

million in 2003, allowing us to accumulate our free cash flows for the

repayment of our high yield debt, when callable, in June 2004. We

remain committed to leveraging our vast pipeline of intellectual

property across a growing array of consumer and entertainment markets,

and we will continue to minimize capital investments of any kind. This

efficient business model is built upon the teaming of our incomparable

portfolio of entertainment content and our tremendous creative talents

in comic publishing, entertainment development and toy design and

development, with a broad and diversified base of world-class partners

that are committed to our characters and to ensuring high quality

output and timely development. Though unique in the entertainment

realm, we believe our strategy is ideally suited for Marvel to

continue building on our successful transformation to yield strong

year-over-year financial performance with expected variability in

quarter-over-quarter comparisons."

Pro Forma Comparison:

The following pro forma comparison excludes a number of

non-recurring and non-cash items in order to derive a more useful

comparison of year-over-year operating results. Please review the

footnotes below which reflect assumptions and adjustments that were

made to arrive at the pro forma figures:

Marvel Enterprises, Inc.

Pro Forma Comparison

----------------------------------------------------------------------

Quarter Ended Twelve Months Ended

December 31, 2002 December 31, 2002

(in millions, except Pro Forma Reported Pro Forma Reported

per share data)

---------------------------------- ----------------- -----------------

Net sales $86.5 $86.5 $299.1 $299.1

---------------------------------- ----------------- -----------------

EBITDA $24.8 $24.8 $86.1 $86.1

---------------------------------- ----------------- -----------------

Interest expense (1) $4.8 $14.0 $20.5 $41.7

---------------------------------- ----------------- -----------------

Income before income taxes $18.2 $8.9 $59.8 $38.7

---------------------------------- ----------------- -----------------

Income tax provision (2) $1.5 $1.9 $5.0 $11.9

---------------------------------- ----------------- -----------------

Net income (2) (3) $16.7 $7.2 $54.8 $22.6

---------------------------------- ----------------- -----------------

Net income attributable to common

stock (4) $16.0 $(48.7) $41.9 $(45.5)

---------------------------------- ----------------- -----------------

Net income per share attributable

to common stock (4) $ 0.25 $ (1.03) $ 0.86 $ (1.18)

---------------------------------- ----------------- -----------------

Weighted average number of

Diluted common shares (4) 67.8 47.3 63.4 38.5

---------------------------------- ----------------- -----------------

(1) Pro forma excludes non-cash expense of $9.2 million and $21.2

million in Q4 and the full year, respectively, from amortization of

non-cash HSBC loan costs and warrants, warrants issued to Isaac

Perlmutter for his bank loan guarantee, and from senior note offering

costs.


(2) Pro forma excludes non-cash charges applicable to the

utilization of pre-acquisition NOLs for the three-months and year

ended December 31, 2002. These charges represent the estimated current

cash tax provision for state and foreign taxes.


(3) Pro forma results for Q4 2002 excludes a non-cash tax benefit

of $200,000 and also full year 2002 excludes a one-time, non-cash,

after-tax charge of $4.2 million, initially recorded in the first

quarter, related to the implementation of FAS 142.


(4) Excludes a one-time, non-cash preferred stock dividend of

$55.3 million in the fourth quarter and full year 2002 related to

Marvel's exchange offer for its 8% convertible preferred stock. The

dividend reflects the value of the issuance of 6.2 million shares of

Marvel common stock (valued at $8.95 per share), which was in excess

of the conversion terms of the convertible preferred stock.

Marvel Character Feature Film Line-Up

Release dates and development timing are not within Marvel's control

----------------------------------------------------------------------

Film/Character Studio/Distributor Targeted

Release Date

----------------------------------------------------------------------

DareDevil New Regency/Fox February 14,

2003

----------------------------------------------------------------------

X2 (X-Men Sequel) Fox May 2, 2003

----------------------------------------------------------------------

The Incredible Hulk Universal June 20, 2003

----------------------------------------------------------------------

The Punisher Artisan 2004 (1)

----------------------------------------------------------------------

Spider-Man II Sony/Columbia May 7, 2004

----------------------------------------------------------------------

Iron Fist Artisan 2004 (1)

----------------------------------------------------------------------

Ghost Rider Paramount 2004 (1)

----------------------------------------------------------------------

Deathlok Paramount 2004 (1)

----------------------------------------------------------------------

Elektra New Regency/Fox 2005 (1)

----------------------------------------------------------------------

DareDevil sequel New Regency/Fox 2005 (1)

----------------------------------------------------------------------

Dr. Strange Miramax 2005 (1)

----------------------------------------------------------------------

Namor Universal 2005 (1)

----------------------------------------------------------------------

Fantastic 4 Fox TBD (1)

----------------------------------------------------------------------

Silver Surfer Fox TBD (1)

----------------------------------------------------------------------

Iron Man New Line TBD (1)

----------------------------------------------------------------------

Blade III New Line TBD (1)

----------------------------------------------------------------------

Prime Universal TBD

----------------------------------------------------------------------

(1) Denotes new or adjusted release timing

----------------------------------------------------------------------

Marvel Character Video Game and Online Game Line-Up:

(development/release schedule timing are outside Marvel's control)

----------------------------------------------------------------------

Marvel Character/Property Publisher Release Date (2)

----------------------------------------------------------------------

Blade Activision 2000, 2002

----------------------------------------------------------------------

Spider-Man Activision 2001, 2002,

2005/2006 (1)

----------------------------------------------------------------------

X-Men Activision 2001, 2002, 2003

----------------------------------------------------------------------

Marvel vs Capcom Capcom 2002, 2003

----------------------------------------------------------------------

DareDevil Encore 2003

----------------------------------------------------------------------

Iron Man Activision 2002

----------------------------------------------------------------------

The Incredible Hulk Universal

Interactive 2003

----------------------------------------------------------------------

The Punisher THQ Inc. 2003

----------------------------------------------------------------------

Wolverine Activision 2003

----------------------------------------------------------------------

Elektra Encore 2004

----------------------------------------------------------------------

Fantastic Four Activision In development

----------------------------------------------------------------------

Captain America THQ Inc. TBD

----------------------------------------------------------------------

Nick Fury THQ Inc. TBD

----------------------------------------------------------------------

----------------------------------------------------------------------

Marvel Universe (3) Universal

Interactive 2006 (1)

----------------------------------------------------------------------

(1) Denotes new or adjusted release timing

----------------------------------------------------------------------

(2) Actual and potential timing of release

----------------------------------------------------------------------

(3) Online Massive Multi-Player Persistent Universe Game

----------------------------------------------------------------------

Updated Financial Guidance: Based on stronger than expected

performances across the company and notwithstanding the early

realization of approximately $4.3 million in Spider-Man The Movie

revenues in Q4 '02 from Q1 '03, Marvel is raising its Q1 and

full-year 2003 guidance as reflected in the table below. The

substantial increase in Q1 guidance reflects license royalties

expected to be earned associated with contracts executed well in

advance of Marvel's earlier expectations, including expected

contributions from Marvel's toy licensee for action figures and

accessories (principally from the Hulk toy line). Accordingly, Marvel

is raising its full year EBITDA guidance range by $4 million to

$92-$97 million. As previously noted, Q1 and fiscal 2003 guidance also

reflects contributions associated with Marvel's recently amended video

game agreement with Activision.


Marvel estimates that approximately 10% of EBITDA guidance for

2003 is directly attributable to royalties the Company anticipates

from the three Marvel-character feature films slated for 2003 release.

Contributions from these films, excluding The Hulk, for which there is

a gross participation cap on the first film (no cap on any sequels),

are expected to continue into 2004 and beyond. Marvel's guidance also

includes expected contributions from a growing array of consumer

product and toy licenses; a growing lineup of TV exposures from first

run series; continued growth in the Company's comic book and trade

paperback business; and an unprecedented lineup of six Marvel

character video game releases on all of the major game platforms.


Marvel's guidance is based on management's current view of

business trends and expectations for all operating divisions. Marvel

cautions investors that changes in the timing of entertainment

projects and licensing opportunities and their relative success as

well as timing of revenue recognition for entertainment and licensing

revenue streams, could have a material impact on quarterly and full

year results.

Marvel Enterprises, Inc. - Updated Q1 and Full-Year 2003 Guidance

----------------------------------------------------------------------

(in millions - except per New Previous New

share amounts) Q1 2003 Q1 2003 FY 2003

Guidance Guidance Guidance

----------------------------------------- -------------- -------------

Total revenues $80 - $85 $67 - $72 $215 -$220

----------------------------------------- -------------- -------------

EBITDA $45 - $50 $22 - $27 $92 - $97

----------------------------------------- -------------- -------------

Net income (3) $27 - $31 $10 - $14 $50 - $54

----------------------------------------- -------------- -------------

EPS attributable to common

stock (1) (2) (3) $0.36 - $0.41 $0.15 - $0.19 $0.64 -$0.69

----------------------------------------- -------------- -------------

Weighted average diluted

common shares 73.7 73.1 73.7

----------------------------------------- -------------- -------------

Free cash flow $23 - $28 $16 - $20 $69 - $74

----------------------------------------- -------------- -------------

Free cash flow per share $0.31 -$0.38 $0.22 - $0.29 $0.94 -$1.00

----------------------------------------- -------------- -------------

(in millions - except per share Previous Actual Actual

amounts) FY 2003 Q1 2002 FY 2002

Guidance

----------------------------------------------------- -------- -------

Total revenues $205 - $215 $57.2 $299.1

----------------------------------------------------- -------- -------

EBITDA $88 - $93 $10.3 $86.1

----------------------------------------------------- -------- -------

Net income (3) $42 - $45 $1.0 $26.8

----------------------------------------------------- -------- -------

EPS attributable to common stock (1)

(2) (3) $0.57 - $0.62 ($0.09) $0.32

----------------------------------------------------- -------- -------

Weighted average diluted common shares

69.7 34.4 44.0

----------------------------------------------------- -------- -------

Free cash flow $69 - $74 $3.1 $91.8

----------------------------------------------------- -------- -------

Free cash flow per share

$0.99 - $1.06 $0.09 $2.09

----------------------------------------------------- -------- -------

(see accompanying footnotes)

(1) Full-year 2002 net income per share attributable to common

stock excludes a $55.3 million non-cash charge related to the

completion of Marvel's Preferred Share exchange offer (described

above).


(2) Q1 2003 and FY 2003 net income attributable to common stock

includes approximately $700,000 and $2.7 million in preferred stock

dividends, respectively. Q1 2002 and FY 2002 net income attributable

to common stock includes approximately $4.1 million and $12.8 million

(excluding the above one-time, non-cash charge of $55.3 million) in

preferred stock dividends respectively.


(3) Q1 and FY 2002 net income excludes the impact of the non-cash

SFAS 142 impairment charge of $4.6 million and $4.2 million,

respectively.

About Marvel Enterprises

Marvel Enterprises, Inc. is leading global character-based

entertainment company that has developed and owns a library of over

4,700 characters which have entertained generations around the world

for over 60 years. Marvel's operations are focused in entertainment

and consumer product licensing and comic book publishing. Marvel's

creative teams support the development of feature films (and DVD/home

video); video games, TV series and toy lines based on its characters,

and Marvel licenses its characters for a broad and growing range of

consumer products and services including apparel, collectibles, foods

and promotions. Marvel's comic book division is a leading publisher in

the global marketplace while also serving as an invaluable source of

intellectual property. Marvel's Toy Biz division is a recognized

creative force and leader in toy design, sales and marketing,

developing and overseeing both licensee and in-house toy lines. For

additional information visit http://www.marvel.com.


Except for historical information contained herein, the statements

in this news release regarding the Company's plans are forward-looking

statements that are dependent upon certain risks and uncertainties,

including the Company's potential inability to successfully implement

its business strategy, a decrease in the level of media exposure or

popularity of the Company's characters resulting in declining revenues

from products based on those characters, the timing of releases and

the decisions to proceed with feature films and TV series based on the

Company's characters, the lack of commercial success of entertainment

projects based on the Company's characters, the lack of commercial

success of properties owned by major entertainment companies that have

granted the Company toy licenses, the lack of consumer acceptance of

new product introductions, the imposition of quotas or tariffs on toys

manufactured in China as a result of a deterioration in trade

relations between the U.S. and China, changing consumer preferences,

production delays or shortfalls, continued pressure by certain of the

Company's major retail customers to significantly reduce their toy

inventory levels, the impact of competition and changes to the

competitive environment on the Company's products and services, the

ability of the Company's licensees to successfully market and sell the

licensed products, changes in technology and changes in governmental

regulation and the continued financial stability of major licensees of

the Company. Those and other risks and uncertainties are described in

the Company's filings with the Securities and Exchange Commission,

including the Company's Annual Report on Form 10-K, Quarterly Reports

on Form 10-Q and Current Reports on Form 8-K. Marvel assumes no

obligation to publicly update or revise any forward-looking

statements.


Marvel Enterprises, Inc.

Summary Consolidated Statements Of Operations

(in thousands, except per share data)

----------------------------------------------------------------------

Three Months Ended Twelve Months Ended

December 31, December 31,

2002 2001 2002 2001

------------------------------------------------ ---------------------

Net sales $86,507 $49,594 $299,046 $181,224

-------------------------------------- --------- ---------- ----------

Cost of sales 37,940 18,795 142,103 88,709

-------------------------------------- --------- ---------- ----------

Gross profit 48,567 30,799 156,943 92,515

-------------------------------------- --------- ---------- ----------

Selling, general and

administrative expenses 30,612 23,704 85,800 62,048

-------------------------------------- --------- ---------- ----------

Pre-acquisition litigation

charge (1) ---- ---- ---- 3,000

-------------------------------------- --------- ---------- ----------

Administrative claims

payable no longer required ---- (3,474) ---- (3,474)

-------------------------------------- --------- ---------- ----------

Equity in net income (loss)

of joint venture (2) 6,676 (55) 13,802 (325)

-------------------------------------- --------- ---------- ----------

Other income 203 ---- 1,170 ----

-------------------------------------- --------- ---------- ----------

EBITDA (3) 24,834 10,514 86,115 30,616

-------------------------------------- --------- ---------- ----------

Depreciation and

amortization 1,791 1,578 5,433 5,559

-------------------------------------- --------- ---------- ----------

Amortization of goodwill and

other intangibles 84 5,983 339 23,764

-------------------------------------- --------- ---------- ----------

Operating income 22,959 2,953 80,343 1,293

-------------------------------------- --------- ---------- ----------

Interest expense, including

amortization

of debt discount (4) 14,015 5,328 41,667 28,119

-------------------------------------- --------- ---------- ----------

Income (loss) before income

taxes 8,944 (2,375) 38,676 (26,826)

-------------------------------------- --------- ---------- ----------

Income tax provision

(benefit) (5) 1,947 (5,742) 11,902 647

-------------------------------------- --------- ---------- ----------

Income (loss) before

cumulative effect of change

in accounting principle and

extraordinary gain 6,997 3,367 26,774 (27,473)

-------------------------------------- --------- ---------- ----------

Cumulative effect of change

in accounting principle,

net of taxes (222) ---- 4,164 ----

-------------------------------------- --------- ---------- ----------

Extraordinary gain, net of

income tax provision ---- 19,093 ----- 32,738

-------------------------------------- --------- ---------- ----------

Net income $7,219 $22,460 $22,610 $5,265

-------------------------------------- --------- ---------- ----------

Preferred dividend

requirement (6) 55,916 4,077 68,132 16,034

-------------------------------------- --------- ---------- ----------

Net (loss) income

attributable to common

stock $(48,697) $18,383 $(45,522) $(10,769)

-------------------------------------- --------- ---------- ----------

Diluted loss per common

share from continuing

operations $(1.04) $(0.02) $(1.07) $(1.27)

-------------------------------------- --------- ---------- ----------

Diluted (loss) income per

common share after

cumulative effect of change

in accounting principle and

extraordinary gain $(1.03) $0.53 $(1.18) $(0.31)

-------------------------------------- --------- ---------- ----------

Weighted average number of

diluted common shares 47,278 34,763 38,514 34,322

-------------------------------------- --------- ---------- ----------

(1) Reflects a $3 million litigation charge related to a 1994 toy

license between Toy Biz and The Coleman Company.


(2) Marvel's share of revenues, net of expenses, from its

licensing joint venture with Sony for Spider-Man: The Movie.


(3) EBITDA is defined as earnings before cumulative effect of

change in accounting principle, extraordinary gain, interest expense,

income taxes, and depreciation and amortization. EBITDA does not

represent net income or cash flows from operations as those terms are

defined by generally accepted accounting principles. EBITDA does not

necessarily indicate whether cash flows will be sufficient to fund

cash needs.


(4) Q4 and FY 2002 interest expense include, respectively, $1.5

million and $9.4 million in non-cash items related to the amortization

of HSBC credit facility costs, warrants issued to Isaac Perlmutter and

senior note offering costs. The amounts also include $7.7 and $11.8

million in non-cash loan costs amortization that were accelerated into

Q4 and FY 2002 as a result of Marvel's prepayments, in August 2002 and

December 2002, of its bank debt.


(5) Q4 and FY 2002 estimated cash state and foreign taxes amount

to $0 and $1.0 million, respectively. The remaining provision

represents non-cash provisions relating to the use of net operating

loss carry forwards incurred in the operating period before the

bankruptcy and are available to offset current year taxable income.


(6) Q4 and FY 2002 include a one-time, non-cash preferred stock

dividend of $55.3 million related to Marvel's exchange offer for its

8% convertible preferred stock. The dividend reflected the value of

the issuance of 6.2 million shares of Marvel common stock (valued at

$8.95) in excess of conversion terms of the convertible preferred.

MARVEL ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31, December 31,

2002 2001

-------------------------

ASSETS

Current assets:

Cash and cash equivalents $53,690 $21,591

Accounts receivable, net 43,420 35,648

Inventories, net 16,036 20,916

Income tax receivable ----- 334

Amounts due from joint venture 2,102 ----

Deferred financing costs 667 9,144

Prepaid expenses and other 6,700 12,594

-------------------------

Total current assets 122,615 100,227

Molds, tools and equipment, net 6,997 8,076

Product and package design costs, net 859 2,218

Accounts receivable, non-current portion 17,284 11,890

Goodwill, net 365,604 380,675

Other intangibles, net 649 988

Deferred charges and other assets 65 139

Deferred financing costs, net 3,446 13,357

-------------------------

Total assets $517,519 $517,570

=========================

LIABILITIES, CUMULATIVE CONVERTIBLE EXCHANGEABLE

REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $11,607 $13,052

Accrued expenses and other 48,371 35,146

Current portion of credit facility ------ 6,172

Administrative claims payable 1,303 3,500

Unsecured creditors payable 3,034 5,239

Deferred revenue 25,696 7,128

-------------------------

Total current liabilities 90,011 70,237

-------------------------

Senior Notes 150,962 150,962

Long term portion of credit facility ------ 30,828

Accrued rent 897 1,064

Deferred revenue, non-current portion ------ 14,546

-------------------------

Total liabilities 241,870 267,637

-------------------------

Cumulative convertible exchangeable

redeemable preferred stock 32,780 207,975

-------------------------

Stockholders' equity

Common stock 685 421

Additional paid-in capital 486,106 238,769

Accumulated deficit (208,419) (162,897)

Accumulated other comprehensive loss (2,548) (1,380)

-------------------------

Total stockholders' equity before

treasury stock 275,824 74,913

Treasury stock (32,955) (32,955)

-------------------------

Total stockholders' equity 242,869 41,958

-------------------------

Total liabilities, cumulative

convertible exchangeable redeemable

preferred stock and stockholders'

equity $517,519 $517,570

=========================

--30--