New York, New York - March 7, 2005 -- Marvel Enterprises, Inc. (NYSE: MVL), a global entertainment and licensing company, today reported operating results for the fourth quarter and year ended December 31, 2004.

Q4 2004 Highlights:

·         Net sales and operating income increased primarily due to contributions from Marvel’s joint venture (JV) with Sony for Spider-Man movie merchandising and to improved international licensing revenues.

·         A shift towards revenues in licensing in Q4 2004 led to company-wide operating margin of 41% compared to 31% in the prior year period. 

·         A previously recorded valuation allowance associated with state and local NOL carryforwards was eliminated, resulting in a non-cash, non-recurring credit to income tax of approximately $6.2 million ($0.06 per share), reducing the Q4 2004 income tax rate to 12.7%.

·         4Q 2004 reported EPS of $0.27 as compared to $0.12 in the prior year period.

Marvel’s Chairman, Morton Handel, commented, “Our strong 2004 operating results continue to reflect the expanding global power of the Marvel brand and an increase in consumer and media products based on our characters.  Our consumer product division made tremendous progress during the year in further enhancing our portfolio of licensing relationships.  This continuation of our category consolidation strategy, which focuses on teaming with leading partners, improves retail support and long-term sales potential.  Of note, Marvel’s growing global consumer brand supported a 100% increase in international licensing revenue contributions, to $28 million in 2004.

“Additionally, Marvel continues to make strides in extending our development pipeline for entertainment projects.  In light of our success and the increased value of our brand, Marvel has been able to improve the economic terms for new media and consumer product projects.   The Company is also moving aggressively into the animated television and DVD markets to increase the support for our brands on a worldwide basis. 

“In publishing, following our previously stated strategic goals, we are entering new retail channels. Marvel recently reached a distribution agreement with 7-Eleven convenience stores to introduce marvel comic books, which are specifically designed and targeted at the important children demographic.  Finally, our toy division’s performance was acknowledged as it was named Wal-Mart’s ‘Import Vendor of the Year’ for 2004.”

Commencing with Q4 2004, for all periods presented, Marvel has reclassified the revenue and related costs generated from its license and agency agreements with Toy Biz Worldwide LTD (TBW) from the licensing division to the Toy division, which is reflected in the tables below.  A complete table reconciling the reclassification of TBW contributions for the periods shown below is presented at the end of this release.

Marvel Enterprises, Inc. Segment Net Sales/Operating income (dollars in thousands)
	Three Months Ended December 31		Twelve Months Ended December 30
	2004	2003	2004	2003
Licensing:     Net Sales	$56,656	$29,981	$214,734	$124,449
Operating Income	34,251	10,204	152,726	83,227
Publishing:    Net Sales	22,069	18,955	85,943	73,255
Operating Income	11,621	7,189	37,272	25,442
Toys:              Net Sales	21,767	36,811	212,791	149,922
Operating Income	2,860	14,318	58,144	77,905
Corporate Overhead:	(7,377)	(5,126)	(23,729)	(19,352)
TOTAL NET SALES	100,492	85,747	513,468	347,626
TOTAL OPERATING INCOME	41,355	26,585	224,413	167,222

Segment Review:

·          Licensing Segment net sales increased 89% to $56.7 million in Q4 2004 primarily due to significantly improved contributions from, and the consolidation of, the joint venture with Sony for Spider-Man movie merchandising, as well as contributions from international licensing operations.  Q4 2004 net licensing sales include approximately $29.2 million in gross sales recognized as a result of the consolidation of the JV, compared to the year ago period in which Marvel’s portion of the JV’s results of $2.4 million were recorded as equity in net income of the joint venture.  International licensing net sales, excluding JV activity, increased more than 168% year-over-year to $9.9 million in Q4 2004 as Marvel’s new international offices continued to leverage global marketing momentum.

Marvel Enterprises, Inc. Licensing Sales by Category (dollars in thousands)
(in thousands)	Three Months Ended			Twelve Months Ended
	12/31/04	12/31/03		12/31/04	12/31/03
Apparel and accessories	$14,539	$11,693		$78,798	$39,218
Entertainment (including studios, themed attractions and electronic games)	26,347	8,250		62,296	50,589
Toy Royalties	7,433	4,230		34,217	14,946
Other (Domestics, food and other)	8,337	5,808		39,423	19,696
Total	$56,656	$29,981		$214,734	$124,449

Total licensing operating expenses remained flat at $22.4 million in Q4 2004 compared to $22.1 million in the prior-year period. Accounting for Sony’s minority interest in the Spider-Man movie merchandising joint venture as royalty expense, licensing operating income in the quarter would have been $27.6 million and operating margins for the licensing segment would have been 49% in Q4 2004 compared to 34% in Q4 2003.

·         Marvel’s Publishing Segment net sales rose 16% to $22.1 million due to strength in core comic and trade paperbacks as well as growth in new mass-market retail chains. Marvel experienced slight increases in both the number of comic book titles shipped and the average circulation per title in Q4 2004 compared to the prior year period. Excluding the benefit of reductions in reserves, operating income in Q4 2004 would have been $9.9 million, an operating margin of 44%, compared to an operating margin of 38% in the prior-year period. 

·         Marvel’s Toy Segment net sales decreased 41% to $21.8 million from the prior-year period primarily due to decreased sales of action figures and accessories based on the Lord of The Rings franchise and The Hulk movies.  Spider-Man movie toy sales were $14.2 million in Q4 2004 compared with sales of $11.3 million in Q4 2003.  As previously disclosed, a planned increase in advertising and promotion expense ahead of the 2004 holiday season, coupled with lower sales volumes, resulted in a year-over-year decline in the operating margins for the toy division from 39% in Q4 2003 to 13% in Q4 2004.  Full year 2004 sales of Spider-Man movie toys were $175.3 million, slightly ahead of guidance of $160 million to $170 million.  Marvel toy inventory was only $1.3 million at year-end. 

(in thousands)	Three Months Ended			Twelve Months Ended
	12/31/04	12/31/03		12/31/04	12/31/03
Marvel Toy Net Sales	$17,357	$25,878		$197,604	$85,167
Master Toy License:
- Toy Royalties	2,450	5,140		9,298	29,579
- Fees for services rendered	1,960	5,793		5,889	35,176
Total Toy Segment	$21,767	$36,811		$212,791	$149,922

·         Corporate Overhead, which included a $4.0 million charge for the early termination of the Company’s lease for its corporate office space and a credit for insurance collections of $5 million, was $7.4 million in Q4 2004 compared to $5.1 million in the prior year period.  Marvel’s new lease will generate annual savings of approximately $1.5 million per year.

Balance Sheet Update:

After common stock repurchases totaling $58 million in 2004, Marvel had cash and cash equivalents of $205 million as of December 31, 2004.  During the fourth quarter of 2004, Marvel repurchased approximately 1 million shares for a total consideration of $14.4 million (average price of $13.96 per share).  As of March 4, 2005, Marvel continues to have $42.0 million available under its initial repurchase authorization. 

Marvel Studios (Development and release dates are controlled by Movie Studios)
Marvel Character Feature Film Line-Up For 2005
Film/Character	Studio/Distributor	Status
Elektra	New Regency/ Fox	Released Jan. 14, 2005
Fantastic Four	Fox	July 8, 2005 release (1)
Marvel Character Feature Film Development Pipeline (Partial List)
Character/Property	Studio/Distributor	Status
X-Men 3	Fox	Summer, 2006 release (1)
Ghost Rider	Sony	Script, Director, Filming started, Slated for 2006
Iron Man	New Line Cinema	Script, Targeted for 2006
Luke Cage	Sony/Columbia	Script, Director, Targeted for 2006
The Punisher 2	Lions Gate	Writer, Director, Targeted for 2006
Deathlok	Paramount	Script, Director, Targeted for 2006
Spider-Man 3	Sony/Columbia	Director, May 4, 2007 release
Namor	Universal Pictures	Script, Targeted for 2007
The Hulk 2	Universal Pictures	Development, Targeted for 2007
Wolverine	Fox	Development, Targeted for 2007
Marvel Character Feature Film Projects in Development Ant-Man, Black Panther, Captain America, Nick Fury, Silver Surfer, Thor
Marvel Character Animated Direct-to-Video Projects in Development
Partnership with Lions Gate to develop, produce and distribute original animated DVD features.  Four projects in 2D/3D format are in development with the first release slated for 2006.  Characters include: The Avengers 1, The Avengers 2 and Iron Man.
Marvel Character Animated TV Projects in Development
Partnership with Antefilms Distribution to produce an original animated television series based on the Fantastic Four. 26, thirty-minute 2D/3D animated episodes are planned with initial TV airings in 2006.
Marvel Character Live Action TV Projects in Development
Blade and Brother Voodoo are two Marvel characters that are in development.

(1)     Represents a change from the previously supplied schedule

2005 Video Game Release Schedule (Release dates are controlled by Publishing partners)
Publisher	Character	Release
Activision	Spider-Man & Friends	Q1 2005
	Fantastic Four	Q2 2005
	Ultimate Spider-Man	Q3 2005
	X-Men Legends II	Q4 2005
Electronic Arts	Marvel versus EA	Q4 2005
THQ Inc	Punisher	Q1 2005
Vivendi Universal	Hulk: Ultimate Destruction	Q3 2005

Q1 2005 financial guidance: Q1 2005 results are expected to benefit from continued strength in Spider-Man 2 movie merchandise licensing, domestic renewals and international licensing.  Net sales derived from the licensing segment for the first quarter are expected to be approximately 65% - 70% of total net sales with operating margins in this segment of roughly 65% - 70%.  After this quarter, Marvel will only be providing updates on annual guidance. 

Marvel Enterprises, Inc.
(in millions –  except per share amounts)	Q1 2005 Guidance	Q1 2004 Results (Unaudited)	2005 Guidance (1)	2004 Results
Net sales	$88 - $98	$122	$370 - $390	$513
Net income (2)	$29 - $34	$31	$120 - $126	$125
EPS attributable to common stock (2)	$0.25 - $0.29	$0.27	$1.07 - $1.12	$1.10

(1) Previous 2005 guidance ranges were provided in the Company’s October 28, 2004 release.

(2)  2004 full year net income and EPS attributable to common stock include one-time charges of approximately $12 million associated with the early redemption in June 2004 of the Company’s 12% Senior Notes due 2012.

2005 Guidance and Drivers: Marvel reiterated its previously provided 2005 financial guidance ranges even though the company has added incremental costs for the expense of options in the second half of 2005 that are required by FASB Statement Number 123R. Classifying Toy Biz Worldwide income in the toy division, the licensing division is now expected to generate roughly 50% of total sales for the year with operating margins ranging between 60% - 70%.  Some planned advertising for the Fantastic Four brand is included in the licensing and toy divisions.  The following are expected to be some of the key factors in Marvel’s 2005 financial performance and are reflected in the Company’s financial guidance range.

§         Ongoing contributions from the Spider-Man 2 feature film.

§         Contributions from the syndication of the first Spider-Man feature film as well as an advance for the Spider-Man movie expected to release in 2007.

§         Approximately $20 million in license revenue to be derived from the Spider-Man joint venture.

§         The Fantastic Four movie release and related licensing, as well as licensing associated with other entertainment projects slated for 2005 or thereafter, noted in the table above.

§         An estimated $80 million of wholesale sales of Fantastic Four toys by our master toy licensee.

§         Domestic license renewals, including category consolidation efforts, which should exceed $60 million.

§         Domestic licensing overages of $35 million (compared to $37 million in 2004).

§         International licensing revenues in excess of $30 million.

§         Modest top line and bottom line growth from the publishing division.

§         The benefit of interest income versus interest expense incurred in 2004, coupled with a lower average fully diluted share count, reflecting stock repurchases in 2004.

§         Additional expense of $4 million in the second half related to the new accounting required for stock options.

Marvel cautions investors that inherent variability in the timing of license opportunities and entertainment events, the timing of their revenue recognition, and their relative success contribute to sequential and year-over-year variability in its interim financial results and could have a material impact on quarterly results as well as Marvel’s ability to achieve the financial performance included in its financial guidance.

MARVEL ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(In thousands, except per share data)

(unaudited)

				Three Months										Twelve Months
				Ended December 31,										Ended December 31,
			2004					2003					2004					2003
	Net sales...................		$100,492					$85,747					$513,468					$347,626
	Cost of sales..................		17,888					21,832					159,589					79,466
	Gross profit..................		82,604					63,915					353,879					268,160
	Operating expenses:
	Selling, general and administrative.......		45,752					38,717					142,839					108,882
	Depreciation and amortization.........		877					1,530					3,783					4,338
	Total operating expenses...........		46,629					40,247					146,622					113,220
	Equity in net income of joint venture.......							2,383					8,117					10,869
	Other Income, net		5,380					535					9,039					1,413
	Operating income ...............		41,355					26,586					224,413					167,222
	Interest expense..............							4,772					20,487					18,718
	Interest income and other expenses, net		802					459					2,946					1,868
	Income before income taxes...........		42,157					22,273					206,872					150,372
	Income tax expense (benefit)..........		5,364					8,777					64,631					(1,276)
	Minority interest in consolidated joint venture....		6,669										17,364					---
	Net income..................		30,124					13,496					124,877					151,648
	Less: preferred dividend requirement.......												---					1,163
Net income attributable to common stock......		30,124					13,496					$124,877					$150,485
Basic earnings per share attributable to common stock		$0.29					$0.12					$1.17					$1.50
Weighted average number of basic shares outstanding.		104,642					108,062					107,173					100,355
Diluted earnings per share attributable to common stock..		$0.27					$0.12					$1.10					$1.34
Weighted average number of diluted shares outstanding.		111,794					115,152					113,957					113,439

Marvel Enterprises, Inc.
December 31, 2004
Consolidated Balance Sheets

	December 31, 2004		December 31, 2003
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents...	$  204,790		$   32,562
Certificates of deposit and commercial paper..	--		214,457
Accounts receivable, net...	73,576		51,820
Inventories, net ....	6,587		12,975
Distribution receivable from joint venture, net..	--		2,056
Deferred income taxes, net...	7,981		18,197
Deferred financing costs...	--		667
Prepaid expenses and other current assets..	2,734		2,273
Total current assets	295,668		335,007
Molds, tools and equipment, net...	5,553		5,811
Product and package design costs, net ...	1,249		1,433
Goodwill, net .... ..	341,708		341,708
Accounts receivable, non-current portion...	37,718		26,437
Deferred  income taxes, net ...	32,583		28,246
Deferred financing costs...	--		2,779
Other assets....	335		436
Total assets... .	$  714,814		$ 741,857
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable....	$  6,006		$ 18,455