GTW Gateway

IRVINE, Calif., Aug. 3 /PRNewswire-FirstCall/ -- Gateway, Inc. (NYSE:GTW) plans to release second quarter earnings in conjunction with the filing of its 10-Q report on or before August 15, pending finalization of accounting for elements of the April 2005 agreement with Microsoft, which includes income statement classification of the marketing and development related program spending benefits of the agreement. The finalization of the Microsoft accounting treatment will only result in additional benefits or income to Gateway. "Because of the complex accounting interpretation issues related to our agreement with Microsoft, we voluntarily made a pre-filing submission seeking the SEC's guidance to ensure we apply proper accounting treatment," said Rod Sherwood, Gateway senior vice president and CFO. "The SEC has given guidance on the framework for the Gateway-Microsoft accounting treatment and we are now working with our advisors on apportionment of values for the elements of the agreement that represent future marketing and development spending versus the legal settlement." On April 11, Gateway and Microsoft announced a $150 million agreement to work together on the marketing and development of Gateway personal computing products and to resolve legal issues between the two companies. As part of the agreement, Microsoft agreed to provide funds that Gateway is required to use for marketing and promotional initiatives, including advertising and promotions, sales training and consulting, as well as the research, development and testing of new Gateway products that can run current Microsoft products and Microsoft's next-generation operating system and productivity software. About Gateway Since its founding in 1985, Irvine, Calif.-based Gateway (NYSE:GTW) has been a technology pioneer, offering award-winning PCs and related products to consumers, businesses, government agencies and schools. After acquiring eMachines in early 2004, Gateway is now the third largest PC company in the U.S. and among the top ten worldwide. The company's value-based eMachines brand is sold exclusively by leading retailers worldwide, while the premium Gateway line is available at major retailers, over the web and phone, and through its direct and indirect sales force. See http://www.gateway.com/ for more information. Special note This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not materialize or prove incorrect, could cause Gateway's results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be forward-looking statements, including any projections or preliminary estimates of earnings, revenues, or other financial items; any statements of plans, strategies and objectives of management for future operations; the extent of seasonal changes in demand; any statements regarding proposed new products, services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks that contribute to the uncertain nature of these statements include, among others, risks related to shifting our distribution model to third-party retail; competitive factors and pricing pressures, including the impact of aggressive pricing cuts by larger competitors; general conditions in the personal computing industry, including changes in overall demand and average selling prices, shifts from desktops to mobile computing products and information appliances and the impact of new microprocessors and operating software; the ability to simplify the company's business, change its distribution model and restructure its operations and cost structure; component supply shortages; short product cycles; the ability to access new technology; infrastructure requirements; risks of international business; foreign currency fluctuations; risks relating to new or acquired businesses, joint ventures and strategic alliances; risks related to financing customer orders; changes in accounting rules; the impact of litigation and government regulation generally; inventory risks due to shifts in market demand; the impact of employee reductions and management changes and additions; and general economic conditions, and other risks described from time to time in Gateway's Securities and Exchange Commission periodic reports and filings. Gateway assumes no obligation to update any forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made. DATASOURCE: Gateway, Inc. CONTACT: Media, David Hallisey, +1-949-471-7703, , or John W. Spelich, +1-949-471-7710, , or Investors, Marlys Johnson, +1-605-232-2709, , all of Gateway, Inc. Web site: http://www.gateway.com/

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