Reebok Reports Third Quarter 2005 Earnings

Reebok International Ltd. (NYSE:RBK) today reported netincome for the third quarter ended September 30, 2005 of $117.7million, or $1.87 per diluted share, an earnings per share increase of39.6% when compared to net income of $81.8 million, or $1.34 perdiluted share, for the third quarter of 2004. The third quarter 2005results were impacted by an after-tax gain of $49 million from thesale of the Company's Ralph Lauren Footwear business and $2.5 millionof costs pertaining to certain legal and other expenses associatedwith the proposed merger with adidas. In addition, the Company'soperating results were effected by the previously announcedintegration of The Hockey Company into the Reebok Brand and from theCompany's previously announced plans to reposition its business withFootlocker, Inc., as well as Footlocker's efforts to reduce theirinventory levels over the balance of 2005.

Net sales for the 2005 third quarter were $1.04 billion ascompared with 2004's third quarter net sales of $1.16 billion. For theReebok Brand, worldwide sales in the 2005 third quarter were $912million as compared with 2004's third quarter sales of $1 billion.Currency fluctuations had no material effect on sales comparisonsduring the quarter.

Paul Fireman, the Company's Chairman and Chief Executive Officersaid, "This was certainly an eventful and unusual quarter for us withthe announcement on August 3, 2005 of our proposed merger withadidas." The Company believes that the announcement of the plannedmerger with adidas has created in the short-term some retaileruncertainty with respect to the Company, and that this impacted theCompany's sales and order intake in the quarter, particularly withcertain mall based retailers in the U.S. "As we noted last quarter, weare working on repositioning our business with one of our majorcustomers, Footlocker, Inc., by shifting some of our Classic businessat Footlocker into new Performance categories that we believe willstimulate consumer demand. Footlocker has also announced plans toreduce their inventory levels over the balance of 2005, and we havebeen working with them to help them achieve this," Fireman said. Thishas had a more significant impact in the quarter than the Companypreviously anticipated, and resulted in a decline in the Company'ssales to Footlocker during the quarter of $46 million as compared withthe prior year's third quarter. "While in the short term this isnegatively impacting our operating results, we believe our strategy toreposition our business with Footlocker will help to improve ouroperating margins in the future," Fireman noted. "The Company'soperating results also continue to be negatively impacted by theintegration of The Hockey Company business into the Reebok Brand. TheCompany is consolidating multiple warehouses in Canada into its newdistribution facility in St. Laurent. The Company has encountered somestartup problems in this new facility and this has caused somedifficulty in shipping the current orders for The Hockey Company'sproducts. However, the demand for The Hockey Company's products isbeing favorably impacted by the start of the NHL season. There hasbeen a high degree of fan interest in the NHL and we believe the2005/2006 season will stimulate a renewed interest in hockey andgreater demand for our products," Fireman said.

The Company believes that the U.S. market has become promotionalin response to economic factors such as rising energy costs and theeffect of Hurricanes Katrina and Rita. It expects this trend tocontinue for the balance of the year. "During the back-to-schoolperiod in the U.S. sales of Classic derivative products slowed down atretail as we continue to see a shift in the U.S. market towardperformance products. Our new Pump technology product introduction isstill in its early stages. For the remainder of this year and for 2006and beyond we plan to introduce several new evolutions of ourself-inflating, self-regulating Pump technology. We believe the Pumptechnology will become a volume and earnings contributor as we evolvethe technology and market its benefits to sports performanceenthusiasts," Fireman noted.

"During this past quarter, we decided to consolidate our ReebokBrand product and marketing groups under one leader. We believe thatthe new organizational structure will give us greater focus on productand marketing concepts for our targeted consumer groups. The newproduct teams are fully integrated from design and development throughto marketing, and support our product initiatives under the Rbk,Performance, Lifestyle and Children's platforms. These teams will nowdesign and develop product and marketing concepts for a focusedconsumer segment, rather than by product category as we had in thepast. We also restructured our Rbk product team to have a more focusedapproach on the younger consumer. This team will be responsible forcreating cutting edge product and marketing concepts from running andbasketball to lifestyle categories such as Classic and music. Ourathletes demand products from us that maximize their performancethrough technology and innovation and our Performance product andmarketing team will be focused on delivering new products to athletesthat will meet or exceed their needs. Our Lifestyle team will focus oncreating new product designs that reflect the different types ofconsumers for whom Classic products are intended," Fireman said.

"With respect to our Classic products, while sales of Classicderivative products did slow down in the U.S. during the quarter, thiswas not our experience in Europe where sales of Classic Fusion andClassic Original products continue to be strong. Our Classic productshave been a strength of the Reebok Brand for many years and we believethis will continue into the future. We plan to launch a new line ofRbk Classic products later in 2006 and we will be accelerating therollout of our Classic Fusion products into several key markets,including the U.S.," Fireman continued.

"The new "I am what I am" Brand marketing campaign that welaunched in February continues to receive a favorable response fromconsumers. Our research indicates that our advertising is beingreceived as both relevant and aspirational by our target consumers andwe will continue to invest behind this campaign. As we move into 2006our Brand campaign will evolve into a more product specific focus tohelp launch our new product initiatives and to drive consumer demand,"Fireman added.

"During the quarter, sales of Reebok sports licensed apparel,which includes the NFL, NBA and NHL, increased. Our fan-based licensedapparel continues to perform well in team shops where sales of NFL andNBA products increased by 30% in the quarter. We also continue to workwith our league partners to launch exciting new initiatives to growthis business. For example, sales of our NFL and NBA women's productsincreased substantially for the quarter and for the year to date. And,with the NFL and NHL seasons underway and the NBA season about to tipoff, we are well positioned to have another successful year in sportslicensed apparel," Fireman stated.

"Our other brands, Rockport and the Greg Norman collection, hadanother successful quarter. While sales of our Rockport brand declinedslightly in the quarter, the quality of their business continues toimprove. Sales to better department stores increased 11% in thequarter and overall operating performance has improved on ayear-to-year basis. Rockport's closeout sales and sales to the volumechannel declined 15% in the quarter, reflecting a healthier business.We believe the Rockport Brand has made solid progress in thecomfort-casual market with innovative styling and unique technologies.And, in a difficult and promotional retail environment Rockport hasmanaged to raise its average selling prices due to new productintroductions with higher price points. Our Greg Norman Brand turnedin another strong performance this quarter with double-digit salesgrowth for the eleventh consecutive quarter. The growth for the GregNorman Brand was fueled by record fill-in and at-once orders in itscore golf business this quarter where sales increased by 23% over lastyear. The increases were driven by strong full-price retail sellthroughs primarily in Greg Norman's technology driven Play Drycollection," Fireman noted.

The Company reported that its gross margin for the third quarterof 2005 was 43.3%, an improvement of 290 basis points when comparedwith the gross margin of 40.4% in the third quarter of 2004. "For thequarter, most of the improvement came from our international markets,"Fireman said.

Worldwide inventories at September 30, 2005 totaled $507 millioncompared to $505 million a year ago. Accounts receivable at September30, 2005 was $740 million compared to $814 million a year ago. Duringthe quarter, the Company repaid from available cash its $100 million,6.75% debentures which became due on September 15, 2005. At September30, 2005 the Company had $482 million of cash as compared with $270million of cash at September 30, 2004.

"Looking forward to the balance of 2005, we believe that ourfourth quarter revenue, excluding the impact of the sale in July 2005of our Ralph Lauren Footwear business, will be in the range of theprior year's fourth quarter. However, we believe that based onimproved gross margins and as a result, improved operating margins,our fourth quarter diluted earnings per share, excluding any mergerrelated or other unusual items, will be in the range of $.55 to $.65which is in the range of current analyst estimates. Our outlook withrespect to the fourth quarter reflects one of our key financial goalswhich is to improve the operating margins of the Company. Lookingforward, we are excited about the prospects of combining our greatCompany with adidas. The combined company will be able to offer anenhanced portfolio of global brands that truly addresses the needs oftoday's and tomorrow's consumers," Fireman concluded.

This release includes forward-looking statements about the Companyand its sales, revenues, earnings, spending, margins, cash flow,future orders, inventory, products, actions, plans, strategies,objectives and guidance with respect to the Company's future operatingresults. These statements are based on our current expectations andare subject to certain risks and uncertainties that could cause theCompany's actual results to vary materially from the results discussedin those forward-looking statements. The Company assumes no obligationto update any such forward-looking statements to reflect actualresults, changes in assumptions or changes in other factors affectingsuch forward-looking statements. Factors that might cause suchdifferences include -- but are not limited to -- the following:economic conditions in the Company's major markets; competition;shifts in consumer preferences; the ability to maintain advantageouslicenses with the Company's licensors; risks associated with theCompany's international sales, distribution and manufacturing;increases in raw material prices; the Company's ability to manage andforecast its growth and inventories; the loss of significant customersor suppliers; the effect of currency fluctuations; and other factorsmentioned or incorporated by reference in this release and in theCompany's 2004 Annual Report on Form 10-K and quarterly reports onForm 10-Q, all of which are on file at the SEC. With respect to anystatements concerning future orders, the Company's backlog position isnot necessarily indicative of future sales because a significantportion of our business, including sales by Company-owned retailstores, Rockport and Greg Norman are not included in the open orders.In addition, many markets are not included in open orders since salesare made by independent distributors. Finally, many orders may becancelled, currency may fluctuate and the ratio of future orders to"at once" shipments may vary from year to year. During our earningscall we may also discuss non-GAAP financial information. Thereconciliation of the comparable GAAP information and other analyticalinformation will be available on our website at www.reebok.com.

(Table follows)
Reebok International Ltd.
Financial Summary

Three months ended September 30,
2005 2004

Net sales $1,041,209,000 $1,164,734,000
Net income (1) $ 117,656,000 $ 81,827,000
Average basic shares 59,675,000 58,472,000
Average diluted shares (2) 63,067,000 61,151,000
Basic earnings per share $1.97 $1.40
Diluted earnings per share $1.87 $1.34

Nine months ended September 30,
2005 2004

Net sales $2,842,479,000 $2,810,158,000
Net income (3) $ 197,972,000 $ 144,683,000
Average basic shares 59,498,000 57,873,000
Average diluted shares (2) 62,583,000 63,683,000
Basic earnings per share (3) $3.33 $2.50
Diluted earnings per share (3) $3.17 $2.32

1) Includes $80.3 million pre-tax gain on sale of Ralph Lauren
Footwear and $2.5 million of certain legal and other expenses
associated with the proposed merger with adidas.

2) Assumes conversion of $53.2 million of convertible debt into
1,037,846 shares of Reebok common stock from May 1, 2004 and the
conversion of convertible debt into 6,483,402 shares of Reebok
common stock through the Redemption date of 5/17/04.

3) Includes the effect of a one-time after-tax earnings charge in May
2004 of $7,108 (or $.11 per share) resulting from the early
redemption of the Company's $250 million 4.25% Convertible
Debentures.

Reebok International Ltd., headquartered in Canton, MA, is aleading worldwide designer, marketer and distributor of sports,fitness and casual footwear, apparel and equipment under the Reebok,Rockport, CCM, JOFA, KOHO and Greg Norman Brands. Sales for 2004totaled approximately $3.8 billion.
Reebok International Ltd
THREE MONTHS ENDED SEPTEMBER 30,
(Amounts in millions except per share data)

---------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 2005 2004
---------------------------------------------------------------------
Net sales $1,041.2 $1,164.7
Cost of sales 590.3 694.1
-------------------
Gross Margin 450.9 470.6
% of Net sales 43.3% 40.4%
Selling, general and administrative expenses 347.1 346.1
% of Net sales 33.3% 29.7%
Interest expense, net 1.4 4.3
Other expenses (income), net (1) (76.5) (0.5)
-------------------
Income before income taxes and minority interest (1) 178.9 120.7
% of Net sales 17.2% 10.4%
Income taxes 58.6 36.8
-------------------
Income before minority interest (1) 120.3 83.9
Minority interest 2.6 2.1
-------------------
Net income (1) $117.7 $81.8
===================

Basic earnings per share (1) $1.97 $1.40
Diluted earnings per share (1)(2) $1.87 $1.34

Average basic shares 59,675 58,472
Average diluted shares (2) 63,067 61,151


(1) In 2005, includes $80.3 million pre-tax gain ($48.8 million after
tax) on sale of Ralph Lauren Footwear and $2.5 million of certain
legal and other expenses associated with the proposed merger with
adidas.

(2) Assumes conversion of $53.2 million of convertible debt into
1,037,846 shares of Reebok Common Stock.


Reebok International Ltd
NINE MONTHS ENDED SEPTEMBER 30,
(Amounts in millions except per share data)

---------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 2005 2004
---------------------------------------------------------------------
Net sales $2,842.5 $2,810.2
Cost of sales 1,663.0 1,687.6
-------------------
Gross Margin 1,179.5 1,122.6
% of Net sales 41.5% 39.9%
Selling, general and administrative expenses 950.1 883.4
% of Net sales 33.4% 31.4%
Interest expense, net 6.7 9.5
Other expenses (income), net (1) (73.8) 4.2
Loss on extinguishment of debt (2) - 10.2
-------------------
Income before income taxes and minority interest (1) 296.5 215.3
% of Net sales 10.4% 7.7%
Income taxes 93.2 65.7
-------------------
Income before minority interest (1) 203.3 149.6
Minority interest 5.3 4.9
-------------------
Net income (1) $198.0 $144.7
===================

Basic earnings per share (1) $3.33 $2.50
Diluted earnings per share (1)(3) $3.17 $2.32

Average basic shares 59,498 57,873
Average diluted shares (3) 62,583 63,683

(1) In 2005, includes $80.3 million pre-tax gain ($48.8 million after
tax) on sale of Ralph Lauren Footwear and $2.5 million of certain
legal and other expenses associated with the proposed merger with
adidas.

(2) Costs related to the early redemption of the Company's $250.0
million 4.25% Convertible Debentures

(3) Assumes conversion of $53.2 million of convertible debt into
1,037,846 shares of Reebok Common Stock from May 1,2004 and
assumes conversion of convertible debt into 6,483,402 shares of
Reebok Common Stock through the redemption date of May 17, 2004.


Reebok International Ltd
COMPARATIVE SALES ANALYSIS
THREE MONTHS ENDED SEPTEMBER 30,
(Amounts in millions except per share data)

---------------------------------------------------------------------
REPORTED DOLLARS 2005 2004 Change 2005/2004
---------------------------------------------------------------------
Reebok:
U.S.A - Footwear $241.0 $302.4 -20.3%
U.S.A - Apparel 204.8 204.1 0.3%
-----------------------------------
445.8 506.5 -12.0%
-----------------------------------
International - Footwear 238.9 262.1 -8.9%
International - Apparel 227.4 234.7 -3.1%
-----------------------------------
466.3 496.8 -6.1%
-----------------------------------
Reebok Worldwide - Footwear 479.9 564.5 -15.0%
Reebok Worldwide - Apparel 432.2 438.8 -1.5%
-----------------------------------
912.1 1,003.3 -9.1%
-----------------------------------
Rockport 102.6 106.0 -3.2%
Ralph Lauren Footwear 6.5 38.7 -83.2%
Greg Norman Collection 20.0 16.7 19.8%
-----------------------------------
Total
Company $1,041.2 $1,164.7 -10.6%
-----------------------------------
Footwear $589.0 $709.2 -16.9%
Apparel 452.2 455.5 -0.7%
-----------------------------------
Total
Company $1,041.2 $1,164.7 -10.6%
---------------------------------------------------------------------

---------------------------------------------------------------------
CONSTANT DOLLARS 2005 2004 Change 2005/2004
---------------------------------------------------------------------
Reebok:
U.S.A - Footwear $241.0 $302.4 -20.3%
U.S.A - Apparel 204.8 204.1 0.3%
-----------------------------------
445.8 506.5 -12.0%
-----------------------------------
International - Footwear 238.9 265.8 -10.1%
International - Apparel 227.4 240.2 -5.3%
-----------------------------------
466.3 506.0 -7.8%
-----------------------------------
Reebok Worldwide - Footwear 479.9 568.2 -15.5%
Reebok Worldwide - Apparel 432.2 444.3 -2.7%
-----------------------------------
912.1 1,012.5 -9.9%
-----------------------------------
Rockport 102.6 106.8 -3.9%
Ralph Lauren Footwear 6.5 38.9
Greg Norman Collection 20.0 16.8 19.0%

-----------------------------------
Total
Company $1,041.2 $1,175.0 -11.4%
-----------------------------------
Footwear 589.0 $713.9 -17.5%
Apparel 452.2 461.1 -1.9%
-----------------------------------
Total
Company $1,041.2 $1,175.0 -11.4%
---------------------------------------------------------------------

Reebok International Ltd
COMPARATIVE SALES ANALYSIS
NINE MONTHS ENDED SEPTEMBER 30,
(Amounts in millions except per share data)

---------------------------------------------------------------------
REPORTED DOLLARS 2005 2004 Change 2005/2004
---------------------------------------------------------------------
Reebok:
U.S.A - Footwear $794.9 $842.3 -5.6%
U.S.A - Apparel 427.6 391.6 9.2%
-----------------------------------
1,222.5 1,233.9 -0.9%
-----------------------------------
International - Footwear 678.4 622.7 8.9%
International - Apparel 534.5 524.5 1.9%
-----------------------------------
1,212.9 1,147.2 5.7%
-----------------------------------
Reebok Worldwide - Footwear 1,473.3 1,465.0 0.6%
Reebok Worldwide - Apparel 962.1 916.1 5.0%
-----------------------------------
2,435.4 2,381.1 2.3%
-----------------------------------
Rockport 278.3 280.9 -0.9%
Ralph Lauren Footwear 65.0 93.7 -30.6%
Greg Norman Collection 63.8 54.5 17.1%
-----------------------------------
Total
Company $2,842.5 $2,810.2 1.1%
-----------------------------------
Footwear $1,816.6 $1,839.6 -1.3%
Apparel 1,025.9 970.6 5.7%
-----------------------------------
Total
Company $2,842.5 $2,810.2 1.1%
---------------------------------------------------------------------

---------------------------------------------------------------------
CONSTANT DOLLARS 2005 2004 Change 2005/2004
---------------------------------------------------------------------
Reebok:
U.S.A - Footwear $794.9 $842.3 -5.6%
U.S.A - Apparel 427.6 391.6 9.2%
-----------------------------------
1,222.5 1,233.9 -0.9%
-----------------------------------
International - Footwear 678.4 643.0 5.5%
International - Apparel 534.5 544.0 -1.7%
-----------------------------------
1,212.9 1,187.0 2.2%
-----------------------------------
Reebok Worldwide - Footwear 1,473.3 1,485.3 -0.8%
Reebok Worldwide - Apparel 962.1 935.6 2.8%
-----------------------------------
2,435.4 2,420.9 0.6%
-----------------------------------
Rockport 278.3 284.6 -2.2%
Ralph Lauren Footwear 65.0 94.4 -31.1%
Greg Norman Collection 63.8 54.8 16.4%
-----------------------------------
Total
Company $2,842.5 $2,854.7 -0.4%
-----------------------------------
Footwear 1,816.6 $1,864.3 -2.6%
Apparel 1,025.9 990.4 3.6%
-----------------------------------
Total
Company $2,842.5 $2,854.7 -0.4%
---------------------------------------------------------------------

Reebok International Ltd
September 30, 2005
(Amounts in millions)

---------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS 2005 2004
---------------------------------------------------------------------
ASSETS
-------------------------------------------------
Cash $481.5 $269.6
Accounts receivable, net 739.9 814.1
Inventory 506.6 505.0
Other current assets 227.8 190.3
-------------------
Total current assets 1,955.8 1,779.0

Property and equipment, net 189.7 166.9
Intangibles, net 323.0 286.8
Other non-current assets 74.3 53.2
-------------------
Total $2,542.8 $2,285.9
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------------------
Notes payable to banks $59.1 $39.6
Current portion of long term debt - 100.2
Accounts payable, accrued expenses and income
taxes payable 613.6 605.9
-------------------
Total current liabilities 672.7 745.7

Long term debt, net of current portion 359.6 359.2
Minority interest and other long term liabilities 51.5 35.2

Stockholders' equity 1,459.0 1,145.8
-------------------
Total $2,542.8 $2,285.9
---------------------------------------------------------------------

---------------------------------------------------------------------
September 30,
ADDITIONAL FINANCIAL INFORMATION 2005 2004
---------------------------------------------------------------------
Working capital $1,283.1 $1,033.3
Current ratio 2.9 2.4
Days sales outstanding 57 59
Inventory turns 4.2 4.7
Total borrowings $418.7 $499.0
---------------------------------------------------------------------

Reebok International Ltd
ORDERS SCHEDULED FOR DELIVERY
--------------------
Percentage Change
2005/2004
---------------------------------------------------------------------
For the period October 1 to March 31, Reported Constant
Dollars Dollars
---------------------------------------------------------------------
U.S.A.:

Footwear - 18.4% - 18.4%
Apparel - 11.4% - 11.4%

Total Domestic - 16.7% - 16.7%

International

Footwear + 1.1% + 2.2%
Apparel + 7.3% + 8.4%

Total International + 3.9% + 5.0%

Total Reebok Brand - 8.2% - 7.8%

Footwear - 11.8% - 11.5%
Apparel - 1.0% - .5%

Total Reebok Brand - 8.2% - 7.8%


Reebok International Ltd
RECONCILIATION OF REPORTED TO CONSTANT Dollar SALES
(Amounts in millions except per share data)

---------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30, 2005 2004 2005/2004
---------------------------------------------------------------------
Reported Dollars:
Footwear $589.0 $709.2 -16.9%
Apparel 452.2 455.5 -0.7%
-----------------------------
Total Company 1,041.2 1,164.7 -10.6%
-----------------------------

Effect of Change in Foreign Currency
Translation:
Footwear - 4.7
Apparel - 5.6
-----------------------------
- 10.3
-----------------------------
Constant Dollars:
Footwear 589.0 713.9 -17.5%
Apparel 452.2 461.1 -1.9%
-----------------------------
Total Company $1,041.2 $1,175.0 -11.4%
---------------------------------------------------------------------

---------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 2005 2004 2005/2004
---------------------------------------------------------------------
Reported Dollars:
Footwear $1,816.6 $1,839.6 -1.3%
Apparel 1,025.9 970.6 5.7%
-----------------------------
Total Company 2,842.5 2,810.2 1.1%
-----------------------------

Effect of Change in Foreign Currency
Translation:
Footwear - 24.7
Apparel - 19.8
-----------------------------
- 44.5
-----------------------------
Constant Dollars:
Footwear 1,816.6 1,864.3 -2.6%
Apparel 1,025.9 990.4 3.6%
-----------------------------
Total Company 2,842.5 2,854.7 -0.4%
---------------------------------------------------------------------

Reebok International Ltd
RECONCILIATION OF CERTAIN NON-GAAP MEASURES
(Amounts in millions except per share data)

---------------------------------------------------------------------
NET SALES WITHOUT RALPH LAUREN FOOTWEAR
THREE MONTHS ENDED SEPTEMBER 30, 2005 2004 2005/2004
---------------------------------------------------------------------
Reported Dollars $1,041.2 $1,164.7 -10.6%

Sales of Ralph Lauren Footwear 6.5 38.7 -83.2%

----------------------------
Reported Dollars without Ralph Lauren
Footwear $1,034.7 $1,126.0 -8.1%
---------------------------------------------------------------------

---------------------------------------------------------------------
NET SALES WITHOUT RALPH LAUREN FOOTWEAR
NINE MONTHS ENDED SEPTEMBER 30, 2005 2004 2005/2004
---------------------------------------------------------------------
Reported Dollars $2,842.5 $2,810.2 1.1%

Sales of Ralph Lauren Footwear 65.0 93.7 -30.6%

----------------------------
Reported Dollars without Ralph Lauren
Footwear $2,777.5 $2,716.5 2.2%
---------------------------------------------------------------------

---------------------------------------------------------------------
TAX RATE WITHOUT RALPH LAUREN FOOTWEAR Income Effective
THREE MONTHS ENDED SEPTEMBER 30, 2005 Tax Tax Rate
---------------------------------------------------------------------
Income before income taxes and minority
interest as reported $178.9 $58.6 32.8%

Gain on sale of Ralph Lauren Footwear 80.3 31.5 39.2%
----------------------------
Income before income taxes and minority
interest excluding gain on sale of Ralph
Lauren Footwear $98.6 $27.1 27.5%
---------------------------------------------------------------------

---------------------------------------------------------------------
TAX RATE WITHOUT RALPH LAUREN FOOTWEAR Income Effective
NINE MONTHS ENDED SEPTEMBER 30, 2005 Tax Tax Rate
---------------------------------------------------------------------
Income before income taxes and minority
interest as reported $296.5 $93.2 31.4%

Gain on sale of Ralph Lauren Footwear 80.3 31.5 39.2%

----------------------------
Income before income taxes and minority
interest excluding gain on sale of Ralph
Lauren Footwear $216.2 $61.7 28.5%
---------------------------------------------------------------------