EXHIBIT 99.1
Q2 INTEREST AND OTHER INCOME EXPECTED TO BE APPROXIMATELY $2.3 BILLION
CHARGE BE TAKEN IN Q2 FOR ESTIMATED MTH MOTHERBOARD
REPLACEMENT COSTS TO BE APPROXIMATELY $200 MILLION
SANTA CLARA, Calif. -- June 20, 2000 -- Intel announced today that it
expects interest and other income for the second quarter to be
approximately $2.3 billion, up from previous guidance of $725 million,
primarily due to higher than expected realized gains on the sale of equity
investments. This revised estimate depends on equity market levels and
volatility, the realization of expected gains on investments, including
gains on investments acquired by third parties, and assuming no
unanticipated items.
In addition, the company announced it will take a charge to cost of sales
in the second quarter of approximately $200 million, or $0.02 per share on
a post split basis, to cover the estimated remaining costs associated with
the memory translator hub (MTH) motherboard replacement program announced
on May 10. The estimated cost of the replacement program is based upon
current expectations regarding the number of motherboards that will be
replaced (the user replacement rate) and the actual cost to replace. These
estimates may change in the future.
This second quarter charge is in addition to the revenue and inventory
reserves related to the MTH issue that the company took in the first
quarter and disclosed in the company's Form 10-Q filed May 16, 2000. In
this filing the company adjusted first quarter revenues for product sold
prior to the end of the first quarter that may be returned from customers
due to the MTH issue. The company also recorded additional inventory
reserves related to such products that may be returned and the company's
inventory of these products as of the end of the first quarter. The
revision of first quarter's earnings from these reserves had a gross margin
impact of $53 million, or less than $0.01 per share on a post-split basis.
The company's second quarter results, scheduled to be announced July 18,
and results for prior periods will be adjusted to reflect the impact of the
2-for-1 stock split (to be effected as a special stock distribution)
announced May 17 and payable July 30 to shareholders of record on July 2.
Excluding the impact of the change in interest and other income and the MTH
motherboard replacement cost charge, all other guidance provided in the
Business Outlook section of the company's first quarter Form 10-Q and
earnings release remains unchanged.
Intel, the world's largest chip maker, is also a leading manufacturer of
computer, networking and communications products. Additional information
about Intel is available at www.intel.com/pressroom.
