The following discussion and analysis is a summary and should be read together with our consolidated financial statements and the notes included elsewhere in this 10-Q. We utilize a 52-53 week fiscal year ending on the Saturday nearest March 31. Fiscal 2006 will end on April 1, 2006 (“Fiscal 2006”) and reflects a 52-week period. Fiscal 2005 ended April 2, 2005 (“Fiscal 2005”) and was a 52-week period. In turn, the second quarter for Fiscal 2006 ended October 1, 2005 and was a 13-week period. The second quarter for Fiscal 2005 ended October 2, 2004 and was a 13-week period as well.

      Various statements in this Form 10-Q, in future filings with the Securities and Exchange Commission, in our press releases and in oral statements made by or with the approval of authorized personnel constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations about our future operations, results or financial condition and are generally indicated by words or phrases such as “anticipate,” “estimate,” “expect,” “project,” “we believe,” “is or remains optimistic,” “currently envisions” and similar words or phrases and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: risks associated with a general economic downturn and other events leading to a reduction in discretionary consumer spending; risks associated with implementing our plans to enhance our worldwide luxury retail business, inventory management and operating efficiencies; risks associated with changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors; changes in global economic or political conditions; risks associated with our dependence on sales to a limited number of large department store customers, including risks related to mergers and acquisitions and the extending of credit; risks associated with our dependence on our licensing partners for a substantial portion of our net income and our lack of operational and financial control over licensed businesses; risks associated with financial condition of licensees, including the impact on our net income and business of one or more licensees’ reorganization; risks associated with consolidations, restructurings and other ownership changes in the department store industry; risks associated with competition in the segments of the fashion and consumer product industries in which we operate, including our ability to shape, stimulate and respond to changing consumer tastes and demands by producing attractive products, brands and marketing and our ability to remain competitive in the areas of quality and price; uncertainties relating to our ability to implement our growth strategies or successfully integrate acquired businesses; risks associated with our entry into new markets, either through internal development activities or through acquisitions; risks associated with changes in import quotas, other restrictions or tariffs affecting our ability to source products; risks associated with the possible adverse impact of our unaffiliated manufacturers’ inability to manufacture products in a timely manner, to meet quality standards or to use acceptable labor practices; risks associated with changes in social, political, economic and other conditions affecting foreign operations or sourcing, including foreign currency fluctuations; risks related to current or future litigation or our ability to establish and protect our trademarks and other proprietary rights; risks related to fluctuations in foreign currency affecting our foreign subsidiaries’ and foreign licensees’ results of operations, the relative prices at which we and our foreign competitors sell products in the same market, and our operating and manufacturing costs outside the United States; and risks associated with our control by Lauren family members, the anti-takeover effect of our two classes of common stock and the potential impact of stock repurchases. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

INTRODUCTION

      Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is provided as a supplement to the unaudited interim financial statements and footnotes included elsewhere

herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations. MD&A is organized as follows:

OVERVIEW

      Our Company is a leader in the design, marketing and distribution of premium lifestyle products. Our long-standing reputation and distinctive image have been consistently developed across an expanding number of products, brands and international markets. PRLC’s brand names include Polo, Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Black Label, Polo Sport, Ralph Lauren, Blue Label, Lauren, Polo Jeans, RL, Rugby, Chaps and Club Monaco , among others.

      We classify our interests into three business segments: wholesale, retail and licensing. Through those interests, we design, license, contract for the manufacture of, market and distribute men’s, women’s and children’s apparel, accessories, fragrances and home furnishings. Our wholesale business consists of wholesale-channel sales principally to major department and specialty stores located throughout the United States and Europe. Our retail business consists of retail-channel sales directly to consumers through wholly owned, full-price and factory retail stores located throughout the United States, Canada, Europe, South America and Asia, and through our jointly owned retail internet site located at www.polo.com . In addition, our licensing business consists of royalty-based arrangements under which we license the right to third parties to use our various trademarks in connection with the manufacture and sale of designated products, such as eyewear and fragrances, in specified geographic areas.

      Our business is affected by seasonal trends, with higher levels of wholesale sales in our second and fourth quarters and higher retail sales in our second and third quarters. These trends result primarily from the timing of seasonal wholesale shipments and key vacation travel and holiday periods in the retail segment. Accordingly, our operating results and cash flows for the three and six-month periods ended October 1, 2005 are not necessarily indicative of the results that may be expected for Fiscal 2006 as a whole.

      As previously discussed in our Quarterly Report on Form 10-Q for the three-month period ended July 2, 2005 (the “First Quarter 2006 10-Q”), we had to restate certain quarterly financial information for our Fiscal 2005 quarterly periods. Such restatements principally related to corrections over (i) our lease accounting pursuant to new interpretive guidance issued by the SEC in February 2005, (ii) the consolidation of Ralph Lauren Media, LLC (“RL Media”), a jointly owned variable interest entity that conducts our e-commerce initiatives, and (iii) certain reclassifications to our statement of cash flows. No restatement of our financial statements for full Fiscal 2005 as a whole was necessary. Information regarding these restatements, including reconciliations from previously filed financial statements, is set forth in Note 4 to our accompanying consolidated financial statements.

      On July 15, 2005, the Company acquired from Reebok International, Ltd (“Reebok”) all of the issued and outstanding shares of capital stock of Ralph Lauren Footwear Co., Inc., our global licensee for men’s, women’s and children’s footwear, as well as certain foreign assets owned by affiliates of Reebok (collectively, the “Footwear Business”). The acquisition cost was approximately $112.5 million in cash, including $2 million of transaction costs. The purchase price is subject to certain post-closing adjustments. The results of operations for the Footwear Business are included in our consolidated results of operations commencing July 16, 2005.

      Since 1999, we have been involved in litigation with the United States Polo Association, Inc., Jordache, Ltd. and certain other entities affiliated with them (collectively, the “USPA Group”) in the United States District Court for the Southern District of New York over alleged infringements of our trademark rights. On October 20, 2005, a jury found that one of the four “double horsemen” logos that the USPA Group sought to use infringed on our world famous Polo Player Symbol trademark and enjoined its use, but did allow the use of the other three trademarks. We are considering an appeal, and it is premature to assess the potential impact on our business resulting from this adverse ruling. However, we believe that the quality of our premium lifestyle products and brands will continue to drive growth in our operating and financial performance notwithstanding this ruling.

      Net revenues. Net revenues for the second quarter of Fiscal 2006 were $1,027.3 million, an increase of $131.7 million over net revenues for the second quarter of Fiscal 2005. Net revenues by business segment were as follows (dollars in thousands):

      Wholesale Net Sales increased by $75.0 million, or 14.9%, primarily due to the following:

      Retail Net Sales increased by $56.3 million, or 17.0%, primarily as a result of:

      Licensing Revenue increased by $0.5 million, or 0.8%, primarily due to the following:

      Foreign exchange rate fluctuations in the value of the Euro reduced recorded wholesale sales by $0.2 million and retail sales by $0.3 million.

      Cost of Goods Sold. Cost of goods sold was $475.8 million for the three months ended October 1, 2005, compared to $449.6 million for the three months ended October 2, 2004. Expressed as a percentage of net revenues, cost of goods sold was 46.3% for the three months ended October 1, 2005, compared to 50.2% for the three months ended October 2, 2004. The reduction in cost of goods sold as a percentage of net revenues reflected a continued focus on inventory management and sourcing efficiencies and reduced markdown activity as a result of better sell through on our products.

      Gross Profit. Gross profit increased $105.5 million, or 23.7%, for the three months ended October 1, 2005 over the three months ended October 2, 2004. This increase reflected higher net sales, improved merchandise margins and sourcing efficiencies generally across our wholesale and retail businesses.

      Gross profit as a percentage of net revenues increased from 49.8% in the comparable period of the prior year to 53.7% due to the reductions in cost of goods sold as a percentage of net revenues discussed above and a shift in mix from off-price to more full-price wholesale merchandising.

      Selling, General and Administrative Expenses. Selling, general and administrative expenses (“SG&A”) increased $46.4 million, or 14.4%, to $368.0 million for the three months ended October 1, 2005 from

$321.6 million for the three months ended October 2, 2004. SG&A as a percentage of net revenues decreased to 35.8% from 35.9%. The increase in SG&A was driven by:

      The remainder of the increase in SG&A results from a number of factors, including higher distribution costs as a result of volume increases.

      Amortization of Intangible Assets. Amortization of intangible assets increased from $0.6 million during the three months ended October 2, 2004 to $1.6 million during the three months ended October 1, 2005 as a result of amortization of intangible assets as part of the Childrenswear Business acquired in July 2004 and the Footwear Business acquired in July 2005.

      Impairments of Retail Assets. A non-cash impairment charge of $4.9 million was recognized during the three months ended October 1, 2005 to reduce the carrying value of fixed assets used in certain of our retail stores, largely relating to our Club Monaco brand. Such stores had been underperforming against the Company’s operating plans and it was determined that management’s actions to improve the financial performance of those store locations had not resulted in a level of increased cash flows to support the recovery of the carrying value of fixed assets deployed in the stores. A $0.6 million impairment charge also was recognized in the comparable period of the prior year relating to Club Monaco retail stores.

      Due to the seasonal nature of the Company’s business, with significant retail sales occurring each year in the months of November through January in connection with the holiday season, it is possible that lower-than-expected holiday sales in certain other Club Monaco retail stores could trigger an additional impairment of retail fixed assets that would be recognized during the second half of Fiscal 2006.

      Operating Income. Operating income increased $54.7 million, or 44.7%, for the three months ended October 1, 2005 over the three months ended October 2, 2004. Operating income for our three business segments is provided below (dollars in thousands):

      Foreign Currency Gains (Losses). The effect of foreign currency exchange rate fluctuations resulted in a loss of $6.0 million for the three months ended October 1, 2005, compared to a $3.1 million gain for the three months ended October 2, 2004. The increased losses in fiscal 2005 principally related to unfavorable foreign currency exchange movements associated with intercompany receivables and payables that were not of a long-term investment nature and were settled by our international subsidiaries.

      Interest Expense. Interest expense was $2.8 million for the three months ended October 1, 2005, compared to $2.6 million for the three months ended October 2, 2004. There were no significant fluctuations in the level of interest expense incurred by us.

      Interest Income. Interest income increased to $2.9 million for the three months ended October 1, 2005 from $0.6 million for the three months ended October 2, 2004. The increase was the result of a higher level of excess cash reinvestment and higher interest rates on our investments.

      Provision for Income Taxes. The effective tax rate was 37.6% for the three months ended October 1, 2005, compared to 35.2% for the three months ended October 2, 2004. The increase in the effective tax rate was due primarily to a greater portion of our income being generated in higher tax jurisdictions.

      Other Income (Expense), Net. Other income (expense), net, was a net expense of $2.6 million for the three months ended October 1, 2005, compared to a net expense of $0.7 million for the three months ended October 2, 2004. The increased losses principally related to higher minority interest expense allocated to the partners in our jointly owned RL Media venture associated with its improved operating performance.

      Net Income. Net income increased to $104.2 million for the three months ended October 1, 2005, compared to $79.3 million for the three months ended October 2, 2004. The $24.9 million increase in net income principally related to our $54.7 million increase in operating income discussed above, offset in part by higher foreign currency losses and an increase in our tax provision associated with both a higher level of income and a higher effective tax rate.

      Net Income Per Share. Diluted net income per share increased to $0.97 per share for the three months ended October 1, 2005, compared $0.77 per share for the three months ended October 1, 2004. The higher per-share performance resulted from an increase in net income, partially offset by an increase in weighted average shares outstanding due to stock option exercises and the issuance of restricted stock units.

      Net revenues. Net revenues for the six months ended October 1, 2005 were $1,779.3 million, an increase of $277.7 million over net revenues for the six months ended October 2, 2004. Net revenues by business segment were as follows (dollars in thousands):

      Wholesale Net Sales increased by $173.2 million, or 23.4%, primarily due to the following:

      Retail Net Sales increased by $103.6 million, or 16.2%, primarily as a result of:

      Licensing Revenue increased by $0.9 million, or 0.8%, primarily due to the following:

      Foreign exchange rate fluctuations in the value of the Euro increased recorded wholesale sales by $3.1 million and retail sales by $2.5 million.

      Cost of Goods Sold. Cost of goods sold was $813.3 million for the six months ended October 1, 2005, compared to $740.1 million for the six months ended October 2, 2004. Expressed as a percentage of net revenues, cost of goods sold was 45.8% for the six months ended October 1, 2005, compared to 49.3% for the six months ended October 2, 2004. The reduction in cost of goods sold as a percentage of net revenues reflected a continued focus on inventory management and sourcing efficiencies and reduced markdown activity as a result of better sell through on our products.

      Gross Profit. Gross profit increased $204.5 million, or 26.9%, for the six months ended October 1, 2005 over the six months ended October 2, 2004. This increase reflected higher net sales, improved merchandise margins and sourcing efficiencies generally across our wholesale and retail businesses.

      Gross profit as a percentage of net revenues increased from 50.7% in the comparable period of the prior year to 54.2% as a result of the decrease in cost of goods sold as a percentage of net revenues discussed above and a shift in mix from off-price to more full-price wholesale merchandising.

      Selling, General and Administrative Expenses. Selling, general and administrative expenses (“SG&A”) increased $85.2 million, or 13.8%, to $701.3 million for the six months ended October 1, 2005 from $616.1 million for the six months ended October 2, 2004. SG&A as a percentage of net revenues decreased to 39.4% from 41.0%. The increase in SG&A was driven by:

      The remainder of the increase in SG&A results from a number of factors, including higher distribution costs as a result of volume increases. Approximately $3.6 million of the increase in the six months was due to the impact of foreign currency exchange rate fluctuations, primarily due to the strengthening of the Euro.

      Amortization of Intangible Assets. Amortization of intangible assets increased from $1.2 million during the six months ended October 2, 2004 to $2.6 million during the six months ended October 1, 2005 as a result of amortization of intangible assets as part of the Childrenswear Business acquired in July 2004 and the Footwear Business acquired in July 2005.

      Impairments of Retail Assets. A non-cash impairment charge of $4.9 million was recognized during the six months ended October 1, 2005 to reduce the carrying value of fixed assets used in certain of our retail stores, largely relating to our Club Monaco brand. Such stores had been underperforming against the Company’s operating plans and it was determined that management’s actions to improve the financial performance of those store locations had not resulted in a level of increased cash flows to support the recovery of the carrying value of fixed assets deployed in the stores. A $0.6 million impairment charge also was recognized in the comparable period of the prior year relating to Club Monaco stores.

      Due to the seasonal nature of the Company’s business, with significant retail sales occurring each year in the months of November through January in connection with the holiday season, it is possible that lower-than-expected holiday sales in certain other Club Monaco retail stores could trigger an additional impairment of retail fixed assets that would be recognized during the second half of Fiscal 2006.

      Operating Income. Operating income increased $115.2 million, or 81.1%, for the six months ended October 1, 2005 over the six months ended October 2, 2004. Operating income for our three business segments is provided below (dollars in thousands):

      Foreign Currency Gains (Losses). The effect of foreign currency exchange rate fluctuations resulted in a loss of $6.0 million for the six months ended October 1, 2005, compared to a $2.9 million gain for the six months ended October 2, 2004. The increased losses in fiscal 2005 principally related to unfavorable foreign exchange movements associated with intercompany receivables and payables that were not of a long-term investment nature and were settled by our international subsidiaries.

      Interest Expense. Interest expense was $5.3 million for the six months ended October 1, 2005 and $5.2 million for the six months ended October 2, 2004. There were no significant fluctuations in the level of interest expense incurred by us.

      Interest Income. Interest income increased to $5.9 million for the six months ended October 1, 2005 from $1.6 million for the six months ended October 2, 2004. The increase was the result of a higher level of excess cash reinvestment and higher interest rates on our investments.

      Provision for Income Taxes. The effective tax rate was 37.6% for the six months ended October 1, 2005, compared to 35.2% for the six months ended October 2, 2004. The increase in the effective tax rate was due primarily to a greater portion of our income being generated in higher tax jurisdictions.

      Other Income (Expense), Net. Other income (expense), net, was a net expense of $2.2 million for the six months ended October 1, 2005, compared to net income of $0.4 million for the six months ended October 2, 2004. The increased losses principally related to higher minority interest expense allocated to the partners in our jointly owned RL Media venture associated with its improved operating performance.

      Net Income. Net income increased to $155.0 million for six months ended October 1, 2005, compared to $92.0 million for the six months ended October 2, 2004. The $63.0 million increase in net income principally related to our $115.2 million increase in operating income discussed above, offset in part by higher foreign currency losses and an increase in our tax provision associated with both a higher level of income and a higher effective tax rate.

      Net Income Per Share. Diluted net income per share increased to $1.46 per share, compared to $0.89 per share for the six months ended October 2, 2004. The higher per-share performance resulted from an increase in net income, partially offset by an increase in weighted average shares outstanding due to stock option exercises and the issuance of restricted stock units.

FINANCIAL CONDITION AND LIQUIDITY

      At October 1, 2005, we had $383.2 million of cash and cash equivalents, $267.7 million of debt (net cash of $115.5 million, defined as total cash and cash equivalents less total debt) and $1.879 billion of stockholders’ equity. This compares to $350.5 million of cash and cash equivalents, $291.0 million of debt (net cash of $59.5 million) and $1.676 billion of stockholders equity at April 2, 2005.

      The increase in our net cash position principally relates to our strong growth in operating cash flows, offset in part by the use of approximately $110 million of available cash on hand to fund the acquisition of the Footwear Business. The increase in stockholders’ equity principally relates to our strong earnings growth in Fiscal 2006.

      Net Cash Provided by Operating Activities. Net cash provided by operating activities increased to $198.1 million during the six-month period ended October 1, 2005, compared to $119.4 million for the six-month period ended October 2, 2004. This $78.7 million increase in cash flow was driven primarily by changes in working capital and the increase in net income.

      Net Cash Used in Investing Activities. Net cash used in investing activities was $188.5 million for the six months ended October 1, 2005, as compared to $328.5 million for the six months ended October 2, 2004. For the six months ended October 1, 2005, net cash used in investing activities included $114.0 million principally relating to the acquisition of the footwear product line. For the six months ended October 2, 2004, net cash used in investing activities reflected $244.1 million for the acquisition of certain assets of RL Childrenswear, LLC. For both periods, net cash used in investing activities reflected capital expenditures of $74.5 million for the six months ended October 1, 2005, as compared to $84.4 million for the six months ended October 2, 2004.

      Net Cash Provided by Financing Activities. Net cash provided by financing activities was $27.7 million for the six months ended October 1, 2005, compared to $14.2 million in the six months ended October 2, 2004. The increase in cash provided by financing activities during the six months ended October 1, 2005 principally related to $42.4 million received from the exercise of stock options, as compared to $26 million for the six months ended October 2, 2004.

      Our primary sources of liquidity are the cash flow generated from our operations, $450 million of availability under our credit facility, available cash and equivalents and other potential sources of financial capacity relating to our under-leveraged capital structure. These sources of liquidity are needed to fund our ongoing cash requirements, including working capital requirements, retail store expansion, construction and renovation of shop-within-shops, investment in technological infrastructure, acquisitions, dividends, debt repayment, stock repurchases and other corporate activities. We believe that our existing sources of cash will be sufficient to support our operating and capital requirements for the foreseeable future.

      As discussed below under the section entitled “Debt and Covenant Compliance,” we had no borrowings under our credit facility as of October 1, 2005. However, in the event of a material acquisition, settlement of a material contingency or a material adverse business development, we may need to draw on our credit facility or other potential sources of financing.

      On February 1, 2005, our Board of Directors approved a stock repurchase plan which allows for the purchase of up to an additional $100 million in our stock, in addition to the approximately $22.5 million of authorized repurchases remaining under our original stock repurchase plan which expires in 2006. The new repurchase plan does not have a termination date. We have not repurchased any shares of our stock pursuant to these plans during Fiscal 2006.

      We intend to continue to pay regular quarterly dividends on our outstanding common stock. However, any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition and other factors our Board of Directors may deem relevant.

      We declared a quarterly dividend of $0.05 per outstanding share in each quarter of Fiscal 2006 and Fiscal 2005. The aggregate amount of dividend payments was $10.4 million in the six-month period ended October 1, 2005, compared to $10.1 million in the six-month period ended October 2, 2004.

      We have outstanding approximately € 227.0 million principal amount of 6.125% notes (the “Euro Debt”) that are due in November 2006. The carrying value of the Euro Debt changes as a result of changes in Euro exchange rates. As of October 1, 2005, the carrying value of the Euro Debt was $267.7 million, compared to $291.0 million at April 2, 2005.

      In addition, we have a credit facility that currently provides for a $450 million revolving line of credit, which can be increased up to $525 million. The credit facility expires on October 6, 2009. This credit facility also is used to support the issuance of letters of credit. As of October 1, 2005, we had no borrowings under the credit facility, but were contingently liable for $46.7 million of outstanding letters of credit (primarily relating to inventory purchase commitments).

      Our credit facility requires us to maintain certain financial covenants, consisting of (i) a minimum ratio of Earnings Before Interest, Taxes, Depreciation, Amortization and Rent (“EBITDAR”) to Consolidated Interest Expense and (ii) a maximum ratio of Adjusted Debt to EBITDAR, as such terms are defined in the credit facility.

      Our credit facility also contains covenants that, subject to specified exceptions, restrict our ability to:

      Upon the occurrence of an event of default under the credit facility, the lenders may cease making loans, terminate the credit facility, and declare all amounts outstanding to be immediately due and payable. The credit facility specifies a number of events of default (many of which are subject to applicable grace periods), including, among others, the failure to make timely principal and interest payments or to satisfy the covenants, including the financial covenants described above. Additionally, the credit facility provides that an event of default will occur if Mr. Ralph Lauren and related entities fail to maintain a specified minimum percentage of the voting power of our common stock.

      As of October 1, 2005, we were in compliance with all covenants under the credit facility.

      As discussed in Note 13 to our audited consolidated financial statements included in our Annual Report on Form 10-K for Fiscal 2005 and Note 10 to the accompanying unaudited consolidated financial statements, we are exposed to market risk arising from changes in market rates and prices, particularly movements in foreign currency exchange rates and interest rates. We manage these exposures through operating and financing activities and, when appropriate, through the use of derivative financial instruments, consisting of interest rate swap agreements and foreign exchange forward contracts.

      As of October 1, 2005, there have been no significant changes in our interest rate and foreign currency exposures, changes in the types of derivative instruments used to hedge those exposures, or significant changes in underlying market conditions since April 2, 2005.

      The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities and Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

      As of October 1, 2005, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to the Securities and Exchange Act Rule 13(a)-15(b). Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of October 1, 2005 due to the material weakness in our internal control over financial reporting with respect to income taxes identified during the Company’s assessment of internal control over financial reporting as of April 2, 2005 and reported in our Fiscal 2005 Annual Report on Form 10-K, and the additional material weakness relating to inadequacies in the controls over the period-end financial closing and reporting process reported in our Quarterly Report on Form 10-Q for the fiscal quarter ended July 1, 2005. Although we have begun the implementation of our plans to remediate these material weaknesses, such implementation will continue during the remainder of Fiscal 2006 and these material weaknesses are not yet remediated. No material weaknesses will be considered remediated until the remediated procedures have operated for an appropriate period, have been tested, and management has concluded that they are operating effectively.

      To compensate for these material weaknesses, the Company performed additional analysis and other procedures and utilized temporary resources in order to prepare the unaudited quarterly consolidated financial statements in accordance with generally accepted accounting principles in the United States of America. Accordingly, management believes that the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

      Primary focuses of the remediation plans include the augmentation of technical expertise across all principal accounting areas, improved internal training and development, and heightened monthly and quarterly review procedures. In connection with these plans, we hired a new Vice President, Controller on September 19, 2005. Except for our preliminary remediation efforts, there were no changes during the quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.