Russell (RML) 10-Q 2005 Q3 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2005

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number

1-5822

RUSSELL CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	63-0180720
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

3330 Cumberland Blvd., Suite 800, Atlanta, Georgia	30339
(Address of Principal Executive Offices)	(Zip Code)

(678) 742-8000

(Registrant’s Telephone Number, Including Area Code)

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x

The number of shares outstanding of each of the issuer’s classes of common stock.

Class	Outstanding at November 7, 2005
Common Stock, Par Value $.01 Per Share	33,082,489 shares (Excludes Treasury)

INDEX

			Page No.
Part I.	Financial Information
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets — October 2, 2005, January 1, 2005 and October 3, 2004	3
		Condensed Consolidated Statements of Income — Thirteen Weeks Ended October 2, 2005 and October 3, 2004	4
		Thirty-nine Weeks Ended October 2, 2005 and October 3, 2004	5
		Condensed Consolidated Statements of Cash Flows — Thirty-nine Weeks Ended October 2, 2005 and October 3, 2004	6
		Notes to Condensed Consolidated Financial Statements	7
		Report of Independent Registered Public Accounting Firm	21
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures about Market Risks	29
	Item 4.	Controls and Procedures	29
Part II.	Other Information
	Item 1.	Legal Proceedings	30
	Item 5.	Other Information	30
	Item 6.	Exhibits and Reports on Form 8-K	30

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PART I. – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RUSSELL CORPORATION

Condensed Consolidated Balance Sheets

(In Thousands Except Share and Per Share Amounts)

	October 2, 2005			January 1, 2005			October 3, 2004
	(Unaudited)			(Note 1)			(Unaudited)
ASSETS
Current assets:
Cash	$	48,581		$	29,816		$	37,361
Accounts receivable, net		338,578			212,063			289,325
Inventories – Note 2		426,426			411,701			385,203
Prepaid expenses & other current assets		43,611			23,838			21,153
Total current assets		857,196			677,418			733,042
Property, plant & equipment, net		316,226			322,890			316,077
Other assets		254,261			253,801			151,003
Total assets	$	1,427,683		$	1,254,109		$	1,200,122
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable & accrued expenses	$	227,683		$	194,476		$	194,396
Short-term debt		10,132			18,190			13,831
Current maturities of long-term debt		2,048			6,938			4,405
Total current liabilities		239,863			219,604			212,632
Long-term debt, less current maturities		497,591			372,921			359,115
Deferred liabilities		87,166			84,637			59,723
Non-controlling interests		14,986			14,096			13,015
Stockholders’ equity:
Common stock, par value $.01 per share; authorized 150,000,000 shares, issued 41,419,958 shares		414			414			414
Paid-in capital		37,253			40,716			40,377
Retained earnings		774,458			755,799			746,801
Treasury stock, at cost 8,337,469 shares at 10/2/05, 8,654,614 shares at 1/1/05 and 8,752,669 shares at 10/3/04)		(192,214	)		(201,171	)		(203,976	)
Accumulated other comprehensive loss		(31,834	)		(32,907	)		(27,979	)
Total stockholders’ equity		588,077			562,851			555,637
Total liabilities & stockholders’ equity	$	1,427,683		$	1,254,109		$	1,200,122

See accompanying notes to condensed consolidated financial statements.

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RUSSELL CORPORATION

Condensed Consolidated Statements of Income

(In Thousands Except Share and Per Share Amounts)

(Unaudited)

	13 Weeks Ended
	October 2, 2005			October 3, 2004
Net sales	$	424,632		$	422,656
Cost of goods sold		307,240			300,853
Gross profit		117,392			121,803
Selling, general & administrative expenses		84,501			78,445
Other income, net		(1,005	)		(630	)
Operating income		33,896			43,988
Interest expense, net		10,382			8,222
Earnings of non-controlling interests		144			666
Income before income taxes		23,370			35,100
Provision for income taxes		7,610			8,161
Net income	$	15,760		$	26,939
Weighted-average common shares outstanding:
Basic		33,176,005			32,691,064
Diluted		33,380,966			32,901,106
Net income per common share:
Basic	$	0.48		$	0.82
Diluted	$	0.47		$	0.82
Cash dividends per common share	$	0.04		$	0.04

See accompanying notes to condensed consolidated financial statements.

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RUSSELL CORPORATION

Condensed Consolidated Statements of Income

(In Thousands Except Share and Per Share Amounts)

(Unaudited)

	39 Weeks Ended
	October 2, 2005			October 3, 2004
Net sales	$	1,079,973		$	964,220
Cost of goods sold		786,486			697,439
Gross profit		293,487			266,781
Selling, general & administrative expenses		231,203			196,610
Other income, net		(2,573	)		(5,739	)
Operating income		64,857			75,910
Interest expense, net		29,336			23,163
Earnings of non-controlling interests		1,565			940
Income before income taxes		33,956			51,807
Provision for income taxes		11,351			14,175
Net income	$	22,605		$	37,632
Weighted-average common shares outstanding:
Basic		33,003,348			32,639,512
Diluted		33,318,486			32,861,790
Net income per common share:
Basic	$	0. 68		$	1.15
Diluted	$	0. 68		$	1.15
Cash dividends per common share	$	0. 12		$	0.12

See accompanying notes to condensed consolidated financial statements.

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RUSSELL CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	39 Weeks Ended
	October 2, 2005			October 3, 2004
Operating Activities:
Net income	$	22,605		$	37,632
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		36,342			34,859
Amortization		2,816			1,000
Earnings of non-controlling interests		1,565			940
Provision for deferred income taxes		20,497			—
Gain on sale of assets		(788	)		(4,672	)
Other		3,741			6,923
Changes in operating assets & liabilities:
Trade accounts receivable		(133,962	)		(101,812	)
Inventories		(17,840	)		(26,973	)
Prepaid expenses and other current assets		(7,390	)		639
Other assets		(2,140	)		5,805
Accounts payable and accrued expenses		29,631			22,950
Income taxes		(11,791	)		11,905
Pension and other deferred liabilities		(10,712	)		(7,632	)
Net cash used in operating activities		(67,426	)		(18,436	)
Investing Activities:
Purchases of property, plant & equipment		(30,290	)		(17,717	)
Proceeds from the sale of property, plant & equipment and other assets		2,911			8,624
Cash refunded from (paid for) acquisitions, joint ventures and other, net		1,031			(43,293	)
Other		(46	)		1,619
Net cash used in investing activities		(26,394	)		(50,767	)
Financing Activities:
Borrowings on credit facility and other, net		118,960			74,990
(Payments) borrowings on short-term debt, net		(7,238	)		5,993
Dividends on common stock		(3,948	)		(3,910	)
Treasury stock re-issued		5,050			2,195
Cost of common stock for treasury		(37	)		(17	)
Net cash provided by financing activities		112,787			79,251
Effect of exchange rate changes on cash		(202	)		(662	)
Net increase in cash		18,765			9,386
Increase in cash from consolidating Frontier Yarns, LLC		—			7,859
Cash balance at beginning of period		29,816			20,116
Cash balance at end of period	$	48,581		$	37,361
Supplemental schedule of non-cash investing and financing activities:
Sold building – portion of proceeds in the form of a note	$	—		$	1,500
Sold investment – portion of proceeds in the form of stock and receivable		—			4,945
Non-cash investing and financing activities	$	—		$	6,445

See accompanying notes to condensed consolidated financial statements.

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RUSSELL CORPORATION

Notes to Condensed Consolidated Financial Statements

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In our opinion, the accompanying interim condensed consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly our financial position as of October 2, 2005 and October 3, 2004, the results of our operations for the thirteen and thirty-nine weeks ended October 2, 2005 and October 3, 2004, and our cash flows for the thirty-nine weeks ended October 2, 2005 and October 3, 2004. The unaudited condensed consolidated financial statements as of October 2, 2005 and October 3, 2004 include the consolidation of Frontier Yarns, LLC (“Frontier Yarns”), our 45.3% owned yarn joint venture. Prior to the quarter ended April 4, 2004, we accounted for our investment in Frontier Yarns using the equity method of accounting.

The condensed consolidated balance sheet at January 1, 2005 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

For further information about our significant accounting policies, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended January 1, 2005.

Certain prior year amounts have been reclassified to conform to the 2005 presentation. These changes had no impact on previously reported results of operations or stockholders’ equity.

Our revenues and income are subject to seasonal variations. Consequently, the results of operations for the thirteen and thirty-nine weeks ended October 2, 2005 and October 3, 2004 are not necessarily indicative of the results to be expected for the full year.

2. INVENTORIES

Inventories of finished goods, work-in-process and raw materials are carried at the lower of cost or market, with cost for the majority of our inventories determined under the Last-In, First-Out (LIFO) method. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory valuation. Any adjustments arising out of our interim LIFO calculations are allocated to each quarter based on cost of goods sold.

The components of inventories consist of the following: (in thousands)

	10/2/05			1/1/05			10/3/04
Finished goods	$	320,111		$	340,487		$	315,515
Work in process		90,780			53,598			51,073
Raw materials and supplies		20,915			25,711			25,689
		431,806			419,796			392,277
LIFO and lower-of-cost or market adjustments, net		(5,380	)		(8,095	)		(7,074	)
	$	426,426		$	411,701		$	385,203

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3. ACQUISITIONS

On June 15, 2004, we acquired the net assets of American Athletic, Inc. (“AAI”) for approximately $13 million. Founded in 1954, AAI manufactures a variety of products including basketball and volleyball equipment, athletic mats and gymnastics apparatus under a variety of brands, including American Athletic and BPI. AAI markets these products to high schools, universities, professional teams, and athletic clubs globally.

On July 19, 2004, we acquired the net assets of Huffy Sports Company (“Huffy Sports”), a division of Huffy Corporation, for approximately $30 million. Huffy Sports sells basketball equipment, including backboards and inflatable balls under theHuffy Sports®,Sure Shot® andHydra Rib® brands.

On December 30, 2004, we acquired Brooks Sports, Inc. (“Brooks”) for approximately $115 million. Brooks is a provider of performance athletic footwear, apparel and accessories to running enthusiasts worldwide. Brooks products are sold predominantly through specialty running stores and other retail outlets specializing in high quality, performance running products.

The results of AAI’s, Huffy Sports’ and Brooks’ operations have been included in our consolidated financial statements since their respective acquisition dates.

4. COMMITMENTS AND CONTINGENCIES

Commitments. Refer to Note 8 to our consolidated financial statements in our 2004 Annual Report on Form 10-K for a description of our commitments.

Contingencies. We are a co-defendant inLocke, et al. v. Russell Corporation, et al. filed on January 13, 2000 in the Circuit Court of Jefferson County, Alabama, in which five plaintiff families who own property on Lake Martin in the Raintree Subdivision in Alexander City, Alabama, seek unspecified money damages for trespass and nuisance. The parties have reached an agreement in principle, which is subject to negotiation and execution of a formal settlement agreement, to settle this case on terms which will not have a material adverse effect on us. A complaint substantially identical to the one filed in theLocke case was filed on November 20, 2001, in the circuit court of Jefferson County, Alabama, by two residents of the Raintree Subdivision (Gould v. Russell Corporation, et al.). The trial court has entered summary judgment in our favor on all claims in that case, and the plaintiffs have filed a motion to alter that determination, which remains pending. It is our expectation that the settlement of theLocke case will include settlement of theGouldcase.

We also are a party to various other lawsuits arising out of the conduct of our business. We do not believe that any of these lawsuits, if adversely determined, would have a material adverse effect upon us.

5. TERMINATION BENEFITS

In August 2005, we eliminated the Chief Operating Officer position which resulted in a $3.2 million charge to selling, general, and administrative expenses in our condensed consolidated statement of income in the 2005 third quarter. Of the $3.2 million charge, approximately $1.2 million relates to the acceleration of vesting of stock awards under the terms of an employment agreement. At October 2, 2005, we have a $2.0 million liability associated with the unpaid portion of these termination benefits.

6. STOCK-BASED COMPENSATION

On January 5, 2003, we adopted the prospective transition provisions of FASB Statement of Financial Accounting Standards (“SFAS”) No. 148, which amended SFAS No. 123,Accounting and Disclosure of Stock-based Compensation. SFAS No. 148 uses a fair value based method of accounting for employee stock options and similar equity instruments. By electing the prospective transition method of SFAS No. 148, our results of operations and our financial position are not affected by stock compensation awards granted prior to January 5, 2003.

We recognized stock compensation (income) expense of approximately ($0.5) million and $1.0 million for the thirteen and thirty-nine weeks ended October 2, 2005, respectively, and $2.3 million and $3.8 million for the thirteen and thirty-nine weeks ended October 3, 2004, respectively. The decrease in stock compensation

8

expense for the 2005 third quarter and for the thirty-nine weeks ended October 2, 2005 versus the comparable prior year periods is due to the earnings decline in 2005 that will result in a lower payout of stock compensation awards than was previously anticipated and expensed. The reduction in compensation expense exceeded the additional stock compensation expense incurred related to the elimination of the Chief Operating Officer position.

For stock compensation awards granted prior to January 5, 2003, we used the intrinsic value approach under Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees. The following table presents a comparison of reported results versus pro forma results that assumes the fair value based method of accounting had been applied to all stock compensation awards granted. For purposes of calculating the pro forma amounts below, the estimated fair value of the options is determined using the Black-Scholes option valuation model and is amortized to expense over the options’ vesting period.

	13 Weeks Ended (in thousands except per share amounts)						39 Weeks Ended (in thousands except per share amounts)
	10/2/05			10/3/04			10/2/05			10/3/04
Reported net income	$	15,760		$	26,939		$	22,605		$	37,632
Stock-based employee compensation, net of tax, assuming SFAS No. 148 was applied for all periods		(14	)		(60	)		(42	)		(181	)
Pro forma net income	$	15,746		$	26,879		$	22,563		$	37,451
Reported net income per share-basic	$	0.48		$	0.82		$	0. 68		$	1.15
Pro forma net income per share-basic	$	0.47		$	0.82		$	0. 68		$	1.15
Reported net income per share-diluted	$	0.47		$	0.82		$	0. 68		$	1.15
Pro forma net income per share-diluted	$	0.47		$	0.82		$	0.68		$	1.14

On December 16, 2004, the FASB issued Statement No. 123 (revised 2004),Share-Based Payment, (“Statement 123 (R)”), which is a revision of SFAS No. 123. Statement 123(R) supersedes APB No. 25 and amends FASB Statement No. 95,Statement of Cash Flows. Statement 123 (R) also supersedes SFAS No. 148, which we adopted on January 5, 2003. The approach in Statement 123(R) is similar to the approach described in SFAS No. 123. However, Statement 123(R)requiresall share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. In addition, Statement 123(R) will require us to record stock compensation expense as stock compensation awards granted prior to January 5, 2003 vest, which is a change from our current accounting treatment under SFAS No. 148. Currently, we use the Black-Scholes formula to estimate the value of stock options granted to employees and expect to continue to use this acceptable option valuation model under Statement 123(R). Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after the effective date. We expect to adopt Statement 123(R) in January 2006, and we do not believe this new standard will have a material impact on our results of operations or financial position.

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7. DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING

Our diluted weighted-average common shares outstanding are calculated as follows:

	13 Weeks Ended		39 Weeks Ended
	10/2/05	10/3/04	10/2/05	10/3/04
Basic weighted-average common shares outstanding	33,176,005	32,691,064	33,003,348	32,639,512
Net common shares underlying unissued restricted stock and issuable on exercise of dilutive stock options	204,961	210,042	315,138	222,278
Diluted weighted-average common shares outstanding	33,380,966	32,901,106	33,318,486	32,861,790

Options to purchase 1.6 million shares of our common stock for the thirteen and thirty-nine weeks ended October 2, 2005, and 1.7 million and 1.8 million shares of our common stock for the thirteen and thirty-nine weeks ended October 3, 2004, respectively, were excluded from the computation of diluted weighted-average common shares outstanding because the exercise prices of the options exceeded the average market price.

8. COMPREHENSIVE INCOME

Comprehensive income consists of net income and certain changes in assets and liabilities that are not included in net income but are instead reported within accumulated other comprehensive loss, a separate component of stockholders’ equity. The components of comprehensive income, net of tax, for the periods indicated below are as follows:

	13 Weeks Ended (in thousands)						39 Weeks Ended (in thousands)
	10/2/05			10/3/04			10/2/05			10/3/04
Net Income	$	15,760		$	26,939		$	22,605		$	37,632
Other comprehensive income (loss):
Foreign currency translation loss, net		(242	)		(67	)		(2,995	)		(255	)
Gain on derivative instruments, net		291			235			3,950			1,723
Minimum pension liability, net		—			—			118			—
Total other comprehensive income		49			168			1,073			1,468
Comprehensive income, net	$	15,809		$	27,107		$	23,678		$	39,100

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9. SEGMENT INFORMATION

We operate our global business primarily in two reportable segments: Sporting Goods and Activewear. The Sporting Goods segment consists of sports apparel, sports equipment and athletic footwear, which are sold principally under the brandsRussell Athletic®, Spalding®, Brooks®, American Athletic®, Huffy Sports®, Mossy Oak®, Moving Comfort®, Bike®, Dudley®,and Sherrin^®. We market and distribute products in the Sporting Goods segment primarily through sporting goods dealers, specialty running stores, department and sports specialty stores, and college stores. Products in the Sporting Goods segment are primarily sourced.

The Activewear segment consists of our basic, performance and careerwear apparel products, such as t-shirts, sweatshirts and sweatpants, knit shirts, socks, and school uniforms. Products in the Activewear segment are sold principally under theJERZEES® andCross Creek^® brands through mass merchandisers, distributors, screenprinters, and embroiderers. Products in the Activewear segment are primarily manufactured by the Company utilizing a combination of owned facilities and third-party contractors.

Other segments that do not meet the quantitative thresholds for determining reportable segments primarily include our fabrics division, custom private label business and Frontier Yarns. These are included in the “All Other” data presented herein.

Prior to 2005, we operated our business along distribution channels and reported two segments: Domestic and International Apparel. In 2005 and after several acquisitions in prior years that have redefined Russell as an authentic athletic and sporting goods company, we have realigned our operations by brands and products. Accordingly, the segment data presented herein for 2004 has been restated to present our segment data on the new basis of segment reporting.

Our management evaluates performance and allocates resources based on profit or loss from operations before interest and income taxes (Segment operating income). Segment operating income as presented by us may not be comparable to similarly titled measures used by other companies. The accounting policies of the reportable segments are the same as those described in Note 1 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended January 1, 2005. Except for transactions with Frontier Yarns, intersegment transfers are primarily recorded at cost, with no intercompany profit or loss on intersegment transfers.

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Following is selected financial data by reportable segment:

	13 Weeks Ended (in thousands)				39 Weeks Ended (in thousands)
	10/2/05		10/3/04		10/2/05		10/3/04
Net sales:
Sporting Goods	$	201,840	$	192,360	$	527,425	$	438,061
Activewear		207,828		215,064		505,987		484,181
All Other		14,964		15,232		46,561		41,978
Total net sales	$	424,632	$	422,656	$	1,079,973	$	964,220
Segment operating income:
Sporting Goods	$	15,518	$	23,949	$	34,917	$	48,504
Activewear		21,275		25,051		36,240		35,801
All Other		1,423		1,131		5,257		4,287
Total Segment operating income	$	38,216	$	50,131	$	76,414	$	88,592
Depreciation & amortization expense:
Sporting Goods	$	3,796	$	3,181	$	12,014	$	9,418
Activewear		5,533		6,128		19,242		19,117
All Other		1,480		1,658		4,574		4,561
Corporate		1,260		807		3,328		2,763
Total depreciation & amortization expense	$	12,069	$	11,774	$	39,158	$	35,859
Capital expenditures:
Sporting Goods	$	1,323	$	1,330	$	4,263	$	2,871
Activewear		5,954		4,917		20,856		11,478
All Other		245		145		740		420
Corporate		1,832		1,104		4,431		2,948
Total capital expenditures	$	9,354	$	7,496	$	30,290	$	17,717
Assets:
Sporting Goods	$	591,930	$	418,350
Activewear		657,594		584,149
All Other		59,843		69,339
Corporate		118,316		128,284
Total assets	$	1,427,683	$	1,200,122

A reconciliation of total segment operating income to consolidated income before income taxes is as follows:

	13 Weeks Ended (in thousands)						39 Weeks Ended (in thousands)
	10/2/05			10/3/04			10/2/05			10/3/04
Total segment operating income	$	38,216		$	50,131		$	76,414		$	88,592
Unallocated amounts:
Corporate expenses		(4,464	)		(6,809	)		(13,122	)		(13,622	)
Interest expense, net		(10,382	)		(8,222	)		(29,336	)		(23,163	)
Consolidated income before income taxes	$	23,370		$	35,100		$	33,956		$	51,807

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10. EMPLOYEE RETIREMENT BENEFITS

The following table presents the components of net periodic pension benefit cost for our qualified, noncontributory, defined benefit pension plans and unfunded plans that provide retirement benefits in excess of qualified plan formulas or regulatory limitations for certain employees:

	13 Weeks Ended (in thousands)						39 Weeks Ended (in thousands)
	10/2/05			10/3/04			10/2/05			10/3/04
Service cost	$	1,473		$	1,244		$	4,420		$	3,691
Interest cost		2,900			2,750			8,701			8,184
Expected return on plan assets		(2,901	)		(2,849	)		(8,429	)		(8,171	)
Net amortization		943			334			2,827			1,001
Net periodic pension benefit cost	$	2,415		$	1,479		$	7,519		$	4,705

For the thirty-nine weeks ended October 2, 2005, we made $14.5 million in contributions to our qualified defined benefit pension plans versus $10.2 million in the comparable period last year.

11. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The following tables present condensed consolidating financial information for: (a) Russell Corporation (the “Parent”) on a stand-alone basis; (b) on a combined basis, the guarantors of the Senior Notes (“Subsidiary Guarantors”), which include Jerzees Apparel, LLC; Mossy Oak Apparel Company; Cross Creek Apparel, LLC; Cross Creek Holdings, Inc.; DeSoto Mills, LLC; Russell Financial Services, Inc.; Russell Asset Management, Inc.; Russell Apparel, LLC; RINTEL Properties, Inc.; Russell Yarn, LLC; Russell Co-Op, LLC; and Brooks Sports, Inc. (all of which are wholly owned); and (c) on a combined basis, the non-guarantor subsidiaries, which include Alexander City Flying Service, Inc.; Russell Servicing Co., Inc.; Russell Europe Limited; Russell Mexico, S.A. de C.V.; Jerzees Campeche, S.A. de C.V.; Jerzees Yucatan, S.A. de C.V.; Athletic de Camargo, S.A. de C.V.; Jerzees de Jimenez, S.A. de C.V.; Cross Creek de Honduras, S.A. de C.V.; Russell Corp. Australia Pty Ltd; Russell do Brasil, Ltda.; Russell Corp. Far East, Limited; Russell Japan KK; Spalding Canada Corp.; Jerzees de Honduras, S.A. do C.V.; Jerzees Buena Vista, S.A.; Jerzees Choloma, S.A.; Russell del Caribe, Inc.; Russell France SARL; Russell Germany GmbH; Russell Spain, S.L.; Russell Italy S.r.l.; Servicios Russell, S.A. de C.V.; Russell Foreign Sales Ltd.; Russell Corp. Bangladesh Limited; Russell Holdings Europe B.V.; Ruservicios, S.A.; Eagle R Holdings Limited; Citygate Textiles Limited; Russell Colombia Ltda; Russell Athletic Holdings (Ireland) Limited; SGG Lisco LLC; SGG Patents LLC; RLA Manufacturing, S.de R.L.; Brooks GmbH; Brooks Sports Limited (UK); Total Quality Apparel Resources, Inc. (Inactive); Cumberland Asset Management, Inc.; Jerzees Holdings (Ireland) Limited; Russco Holdings, Ltd.; Picos-Comércio Têxtil, Lda.; Picos III-Confecção de Vestuārio, Lda.; and Frontier Yarns, LLC (our 45.3% owned yarn joint venture). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantee by each 100% owned Subsidiary Guarantor is full and unconditional, joint and several, and we believe separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. Furthermore, there are no significant legal restrictions on the Parent’s ability to obtain funds from its subsidiaries by dividend or loan.

The Parent is comprised of manufacturing operations in Alabama, Wisconsin and Iowa, and certain corporate management, information services, and finance functions.

13

Russell Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

October 2, 2005 (In thousands) (unaudited)	Parent			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash	$	587		$	20,249	$	27,745		$	—		$	48,581
Accounts receivable, net		26,147			307,106		87,402			(82,077	)		338,578
Inventories		268,944			54,592		102,890			—			426,426
Prepaid expenses and other current assets		38,974			13,375		1,423			(10,161	)		43,611
Total current assets		334,652			395,322		219,460			(92,238	)		857,196
Property, plant & equipment, net		193,803			31,052		91,371			—			316,226
Investment in subsidiaries		1,378,098			195		52			(1,378,345	)		—
Intercompany balances		(633,282	)		647,261		(13,979	)		—			—
Other assets		67,902			171,584		14,775			—			254,261
	$	1,341,173		$	1,245,414	$	311,679		$	(1,470,583	)	$	1,427,683
Liabilities & Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	197,370		$	40,324	$	82,227		$	(92,238	)	$	227,683
Short-term debt		—			—		10,132			—			10,132
Current maturities of long-term debt		17			—		2,031			—			2,048
Total current liabilities		197,387			40,324		94,390			(92,238	)		239,863
Long-term debt, less current maturities		490,413			—		7,178			—			497,591
Deferred liabilities		50,310			34,996		1,860			—			87,166
Non-controlling interests		14,986			—		—			—			14,986
Stockholders’ equity		588,077			1,170,094		208,251			(1,378,345	)		588,077
	$	1,341,173		$	1,245,414	$	311,679		$	(1,470,583	)	$	1,427,683

14

Russell Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

January 1, 2005 (In thousands)	Parent			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash	$	2,554		$	5,594	$	21,668		$	—		$	29,816
Accounts receivable, net		(2,177	)		186,294		59,629			(31,683	)		212,063
Inventories		272,396			59,678		79,627			—			411,701
Prepaid expenses and other current assets		32,796			7,334		578			(16,870	)		23,838
Total current assets		305,569			258,900		161,502			(48,553	)		677,418
Property, plant & equipment, net		209,928			36,372		76,590			—			322,890
Investment in subsidiaries		1,243,104			195		—			(1,243,299	)		—
Intercompany balances		(679,171	)		701,970		(22,799	)		—			—
Other assets		70,602			171,476		11,723			—			253,801
	$	1,150,032		$	1,168,913	$	227,016		$	(1,291,852	)	$	1,254,109
Liabilities & Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	153,446		$	40,405	$	49,178		$	(48,553	)	$	194,476
Short-term debt		—			—		18,190			—			18,190
Current maturities of long-term debt		5,016			—		1,922			—			6,938
Total current liabilities		158,462			40,405		69,290			(48,553	)		219,604
Long-term debt, less current maturities		365,083			—		7,838			—			372,921
Deferred liabilities		49,540			30,002		5,095			—			84,637
Non-controlling interests		14,096			—		—			—			14,096
Stockholders’ equity		562,851			1,098,506		144,793			(1,243,299	)		562,851
	$	1,150,032		$	1,168,913	$	227,016		$	(1,291,852	)	$	1,254,109

15

Russell Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

October 3, 2004 (In thousands) (unaudited)	Parent			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash	$	2,152		$	18,144	$	17,065		$	—		$	37,361
Accounts receivable, net		6,095			252,022		65,698			(34,490	)		289,325
Inventories		275,327			37,660		72,216			—			385,203
Prepaid expenses and other current assets		34,007			5,047		1,858			(19,759	)		21,153
Total current assets		317,581			312,873		156,837			(54,249	)		733,042
Property, plant & equipment, net		214,943			35,805		65,329			—			316,077
Investment in subsidiaries		1,028,271			195		—			(1,028,466	)		—
Intercompany balances		(540,343	)		552,473		(12,130	)		—			—
Other assets		113,205			26,057		11,741			—			151,003
	$	1,133,657		$	927,403	$	221,777		$	(1,082,715	)	$	1,200,122
Liabilities & Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	169,072		$	21,620	$	57,953		$	(54,249	)	$	194,396
Short-term debt		—			—		13,831			—			13,831
Current maturities of long-term debt		2,517			—		1,888			—			4,405
Total current liabilities		171,589			21,620		73,672			(54,249	)		212,632
Long-term debt, less current maturities		350,780			—		8,335			—			359,115
Deferred liabilities		42,636			12,080		5,007			—			59,723
Non-controlling interests		13,015			—		—			—			13,015
Stockholders’ equity		555,637			893,703		134,763			(1,028,466	)		555,637
	$	1,133,657		$	927,403	$	221,777		$	(1,082,715	)	$	1,200,122

16

Russell Corporation and Subsidiaries

Condensed Consolidated Statements of Income

For the 13 Weeks Ended October 2, 2005 (In thousands) (unaudited)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	383,400		$	87,012		$	198,507		$	(244,287	)	$	424,632
Cost of goods sold		311,561			66,669			173,034			(244,024	)		307,240
Gross profit		71,839			20,343			25,473			(263	)		117,392
Selling, general and administrative expenses		47,053			26,934			10,514			—			84,501
Other expense (income), net		17,270			(17,031	)		(1,244	)		—			(1,005	)
Operating income (loss)		7,516			10,440			16,203			(263	)		33,896
Interest expense (income), net		21,214			(11,139	)		307			—			10,382
Earnings of non-controlling interests		144			—			—			—			144
Income (loss) before income taxes and equity in earnings of consolidated subsidiaries		(13,842	)		21,579			15,896			(263	)		23,370
Provision (benefit) for income taxes		882			5,833			895			—			7,610
Equity in earnings of consolidated subsidiaries, net of income taxes		30,484			—			—			(30,484	)		—
Net income (loss)	$	15,760		$	15,746		$	15,001		$	(30,747	)	$	15,760

Russell Corporation and Subsidiaries

Condensed Consolidated Statements of Income

For the 13 Weeks Ended October 3, 2004 (In thousands) (unaudited)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	348,080		$	60,989		$	87,991		$	(74,404	)	$	422,656
Cost of goods sold		254,030			44,521			75,645			(73,343	)		300,853
Gross profit		94,050			16,468			12,346			(1,061	)		121,803
Selling, general and administrative expenses		51,225			18,886			8,334			—			78,445
Other expense (income), net		26,927			(26,798	)		(917	)		158			(630	)
Operating income (loss)		15,898			24,380			4,929			(1,219	)		43,988
Interest expense (income), net		(17,020	)		24,932			310			—			8,222
Earnings of non-controlling interests		666			—			—			—			666
Income (loss) before income taxes and equity in earnings of consolidated subsidiaries		32,252			(552	)		4,619			(1,219	)		35,100
Provision (benefit) for income taxes		5,667			1,802			692			—			8,161
Equity in earnings of consolidated subsidiaries, net of income taxes		354			—			—			(354	)		—
Net income (loss)	$	26,939		$	(2,354	)	$	3,927		$	(1,573	)	$	26,939

17

Russell Corporation and Subsidiaries

Condensed Consolidated Statements of Income

For the 39 Weeks Ended October 2, 2005 (In thousands) (unaudited)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	966,949		$	217,656		$	551,310		$	(655,942	)	$	1,079,973
Cost of goods sold		783,563			166,176			489,827			(653,080	)		786,486
Gross profit		183,386			51,480			61,483			(2,862	)		293,487
Selling, general and administrative expenses		124,576			74,473			32,154			—			231,203
Other expense (income), net		98,112			(97,987	)		(2,698	)		—			(2,573	)
Operating income (loss)		(39,302	)		74,994			32,027			(2,862	)		64,857
Interest expense (income), net		60,110			(31,938	)		1,164			—			29,336
Earnings of non-controlling interests		1,565			—			—			—			1,565
Income (loss) before income taxes and equity in earnings of consolidated subsidiaries		(100,977	)		106,932			30,863			(2,862	)		33,956
Provision (benefit) for income taxes		(26,975	)		35,496			2,830			—			11,351
Equity in earnings of consolidated subsidiaries, net of income taxes		96,607			—			—			(96,607	)		—
Net income (loss)	$	22,605		$	71,436		$	28,033		$	(99,469	)	$	22,605

Russell Corporation and Subsidiaries

Condensed Consolidated Statements of Income

For the 39 Weeks Ended October 3, 2004 (In thousands) (unaudited)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	752,153		$	132,667		$	218,654		$	(139,254	)	$	964,220
Cost of goods sold		554,286			98,893			181,795			(137,535	)		697,439
Gross profit		197,867			33,774			36,859			(1,719	)		266,781
Selling, general and administrative expenses		126,389			46,352			23,869			—			196,610
Other expense (income), net		81,093			(85,586	)		(1,246	)		—			(5,739	)
Operating income (loss)		(9,615	)		73,008			14,236			(1,719	)		75,910
Interest expense (income), net		11,676			10,738			749			—			23,163
Earnings of non-controlling interests		940			—			—			—			940
Income (loss) before income taxes and equity in earnings of consolidated subsidiaries		(22,231	)		62,270			13,487			(1,719	)		51,807
Provision (benefit) for income taxes		(12,977	)		24,793			2,359			—			14,175
Equity in earnings of consolidated subsidiaries, net of income taxes		46,886			—			—			(46,886	)		—
Net income (loss)	$	37,632		$	37,477		$	11,128		$	(48,605	)	$	37,632

18

Russell Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the 39 Weeks Ended October 2, 2005 (In thousands) (unaudited)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Operating Activities
Net cash (used in) provided by operating activities	$	(42,732	)	$	43,027		$	(67,721	)	$	—	$	(67,426	)
Investing Activities
Purchases of property, plant and equipment		(11,334	)		(1,210	)		(17,746	)		—		(30,290	)
Investment in and advances to subsidiaries		(74,496	)		(28,126	)		102,622			—		—
Proceeds from the sale of property, plant and equipment and other assets		793			2,003			115			—		2,911
Cash refunded from (paid for) acquisitions, joint ventures and other, net		4,441			(1,039	)		(2,371	)		—		1,031
Other		(46	)		—			—			—		(46	)
Net cash (used in ) provided by investing activities		(80,642	)		(28,372	)		82,620			—		(26,394	)
Financing Activities
Borrowings (payments) on credit facility and other, net		120,342			—			(1,382	)		—		118,960
Payments on short-term debt, net		—			—			(7,238	)		—		(7,238	)
Dividends on common stock		(3,948	)		—			—			—		(3,948	)
Treasury stock re-issued		5,050			—			—			—		5,050
Cost of common stock for treasury		(37	)		—			—			—		(37	)
Net cash provided by (used in) financing activities		121,407			—			(8,620	)		—		112,787
Effect of exchange rate changes on cash		—			—			(202	)		—		(202	)
Net (decrease) increase in cash		(1,967	)		14,655			6,077			—		18,765
Cash balance at beginning of period		2,554			5,594			21,668			—		29,816
Cash balance at end of period	$	587		$	20,249		$	27,745		$	—	$	48,581

19

Russell Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the 39 Weeks Ended October 3, 2004 (In thousands) (unaudited)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Operating Activities
Net cash (used in) provided by operating activities	$	48,569		$	(4,675	)	$	(62,330	)	$	—	$	(18,436	)
Investing Activities
Purchases of property, plant and equipment		(8,162	)		(1,263	)		(8,292	)		—		(17,717	)
Investment in and advances to subsidiaries		(78,807	)		7,392			71,415			—		—
Proceeds from sales of property, plant and equipment		7,650			851			123			—		8,624
Cash paid for acquisitions, joint ventures and other		(43,293	)		—			—			—		(43,293	)
Other		1,619			—			—			—		1,619
Net cash (used in) provided by investing activities		(120,993	)		6,980			63,246			—		(50,767	)
Financing Activities
Borrowings on credit facility, net		75,894			—			(904	)		—		74,990
Borrowings on short-term debt		—			—			5,993			—		5,993
Dividends on common stock		(3,910	)		—			—			—		(3,910	)
Treasury stock re-issued		2,195			—			—			—		2,195
Cost of common stock for treasury		(17	)		—			—			—		(17	)
Net cash provided by financing activities		74,162			—			5,089			—		79,251
Effect of exchange rate changes on cash		—			—			(662	)		—		(662	)
Net increase in cash		1,738			2,305			5,343			—		9,386
Increase in cash from consolidating Frontier Yarns, LLC		—			—			7,859			—		7,859
Cash balance at beginning of period		414			15,840			3,862			—		20,116
Cash balance at end of period	$	2,152		$	18,145		$	17,064		$	—	$	37,361

20

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Russell Corporation

We have reviewed the condensed consolidated balance sheets of Russell Corporation and subsidiaries as of October 2, 2005 and October 3, 2004, the related condensed consolidated statements of income for the thirteen and thirty-nine week periods ended October 2, 2005 and October 3, 2004, and the condensed consolidated statements of cash flows for the thirty-nine week periods ended October 2, 2005 and October 3, 2004. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Russell Corporation and subsidiaries as of January 1, 2005, and the related consolidated statements of income, stockholders’ equity, and cash flows for the year then ended [not presented herein] and in our report dated March 16, 2005, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph for the consolidation of Frontier Yarns in accordance with the provisions of FASB Interpretation No. 46,Consolidation of Variable Interest Entities. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 1, 2005, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Atlanta, Georgia

November 3, 2005

21

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Russell Corporation is a leading authentic athletic and sporting goods company with over a century of success. We operate our global business primarily in two reportable segments: Sporting Goods and Activewear. The Sporting Goods segment consists of sports apparel, sports equipment and athletic footwear, which are sold principally under the brandsRussell Athletic®, Spalding®, Brooks®, American Athletic®, Huffy Sports®, Mossy Oak®, Moving Comfort®, Bike®, Dudley®,andSherrin®. The Activewear segment consists of our basic, performance and careerwear apparel products, such as t-shirts, sweatshirts and sweatpants, knit shirts, socks, and school uniforms. Products in the Activewear segment are sold principally under theJERZEES® andCross Creek® brands. Other businesses that do not meet the quantitative thresholds for determining reportable segments primarily include our fabrics division, custom private label business and Frontier Yarns.

In 2004, we made three strategic acquisitions to further advance our position in the sports equipment and athletic footwear businesses. On June 15, 2004, we acquired American Athletic, Inc. (“AAI”), a leader in the gymnastics equipment business, but just as important to us, provided our Spalding business a platform for extension into the basketball backboard and backboard systems business. On July 19, 2004, we acquired Huffy Sports, which further expanded our basketball backboard, backboard systems and accessories business. On December 30, 2004, we entered the athletic footwear business with the acquisition of Brooks Sports (“Brooks”). Brooks is a pioneer in the technical footwear industry, and its technical apparel is highly valued in the world of serious runners.

Typically, demand for our apparel products is higher during the third and fourth quarters of each fiscal year. Weather conditions also affect the demand for our apparel products, particularly for fleece products (sweatshirts and sweatpants). Generally, we produce, source and store finished goods inventory, particularly fleece, to meet the expected demand for delivery in the upcoming season.

Summary of results for the third quarter of 2005 included:

• Net sales were at $424.6 million for the third quarter, which included $32.9 million of incremental sales from our 2004 acquisitions.

• Although the 2005 third quarter results were impacted by operational issues carried over from the 2005 second quarter, we have made significant improvements in sewing efficiencies in offshore plants while reducing manufacturing variances associated with the ramp-up of production within textile operations in Alexander City, Alabama.

• Eliminated the Chief Operating Officer position resulting in termination benefits of $3.2 million, before tax (or $0.06 per diluted share after tax).

• Incurred direct losses, net of insurance recoveries, of approximately $1.0 million (or $0.02 per diluted share after tax) from Hurricanes Katrina and Rita during the 2005 third quarter. These direct losses included higher transportation costs incurred to expedite customer orders, increases in fiber prices and the loss of more than 40 containers of product. In addition to the direct costs, we incurred business interruption losses due to the hurricanes such as lost earnings associated with missed sales. We do expect further recovery from our insurance carriers on the business interruption portion of our loss.

22

DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

Consolidated Results

The following information is derived from our unaudited condensed consolidated statements of income for the thirteen and thirty-nine weeks ended October 2, 2005 and October 3, 2004.

	13 Weeks Ended										39 Weeks Ended
(Dollars in millions)	October 2, 2005					October 3, 2004					October 2, 2005					October 3, 2004
Net sales	$	424.6		100.0	%	$	422.7		100.0	%	$	1,080.0		100.0	%	$	964.2		100.0	%
Cost of goods sold		307.2		72.4	%		300.9		71.2	%		786.5		72.8	%		697.4		72.3	%
Gross profit		117.4		27.6	%		121.8		28.8	%		293.5		27.2	%		266.8		27.7	%
Selling, general & administrative expenses (SG&A)		84.5		19.9	%		78.4		18.5	%		231.2		21.4	%		196.6		20.4	%
Other income, net		(1.0	)	(0.2	)%		(0.6	)	(0.1	)%		(2.6	)	(0.2	)%		(5.7	)	(0.6	)%
Operating income		33.9		7.9	%		44.0		10.4	%		64.9		6.0	%		75.9		7.9	%
Interest expense, net		10.4		2.4	%		8.2		1.9	%		29.3		2.7	%		23.2		2.4	%
Earnings of non-controlling interests		0.1		—	%		0.7		0.2	%		1.6		0.1	%		0.9		0.1	%
Income before income taxes		23.4		5.5	%		35.1		8.3	%		34.0		3.2	%		51.8		5.4	%
Provision for income taxes		7.6		1.8	%		8.2		1.9	%		11.4		1.1	%		14.2		1.5	%
Net income	$	15.8		3.7	%	$	26.9		6.4	%	$	22.6		2.1	%	$	37.6		3.9	%

Net sales for the 2005 third quarter were $424.6 million, an increase of $1.9 million, or 0.4%, from last year’s third quarter sales of $422.7 million. Incremental net sales from acquisitions (Brooks and Huffy Sports) were $32.9 million for the third quarter of 2005, while net sales from our ongoing businesses were down 7.3% versus the comparable period last year. Net sales for the thirty-nine weeks ended October 2, 2005 were $1,080.0 million, an increase of $115.8 million, or 12.0%, from the comparable period a year ago. Incremental net sales from acquisitions (Brooks, Huffy Sports and AAI) were $137.6 million for the thirty-nine weeks ended October 2, 2005, while net sales from our ongoing businesses were down 2.3% versus the comparable period last year. See segment analysis below for more information.

Gross profit was $117.4 million, or 27.6% of net sales, in the 2005 third quarter versus a gross profit of $121.8 million, or 28.8% of net sales, in the prior year. Excluding the contribution from acquisitions, our gross profit was $103.4 million, or 26.4% of net sales. This decrease in gross profit as a percent of net sales is primarily due to (i) lower sales volumes of Russell Athletic branded products, (ii) lower pricing in the Artwear channel of the Activewear segment, (iii) lower sales volume and pricing in the Mass Retail channel of the Activewear segment, (iv) lower pricing in the Mossy Oak business and (v) higher transportation costs in the Activewear and Sporting Goods segments due to the impact of the hurricanes.

Gross profit was $293.5 million, or 27.2% of net sales, in the first nine months of 2005 versus a gross profit of $266.8 million, or 27.7% of net sales, in the prior year. Excluding the contribution from acquisitions, our gross profit was $244.3 million, or 25.9% of net sales. This decrease in gross profit as a percent of net sales for the nine months ended October 2, 2005, is primarily due to (i) lower sales volumes of Russell Athletic branded products, (ii) lower pricing in our Mossy Oak business, (iii) significant costs incurred in our Activewear segment in the 2005 second quarter to ramp up production quickly to meet increased demand for our products and react to changes in style mix, (iv) lower sales volume and pricing in the Mass Retail channel of our Activewear segment and (v) higher transportation costs in our Activewear and Sporting Goods segments due to the impact of the hurricanes, which more than offset the positive impact of higher sales volume in the Artwear channel of our Activewear segment.

Selling, general and administrative expenses (“SG&A”) were $84.5 million, or 19.9% of net sales, in the 2005 third quarter versus 18.5% of net sales in the comparable prior year period. SG&A was $231.2 million, or 21.4% of net sales, for the first thirty-nine weeks of 2005 versus $196.6 million, or 20.4% of net sales, in the comparable prior

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year period. This increase in SG&A as a percent of net sales is primarily due to the impact of acquisitions (as our recently acquired sporting goods brands have higher SG&A costs as a percent of sales than do our base businesses), termination benefits associated with the elimination of the Chief Operating Officer position, additional expenses to comply with the Sarbanes-Oxley Act of 2002 and higher pension costs, offset partially by lower incentive compensation expense.

Other income was $1.0 million in the 2005 third quarter, up $0.4 million versus $0.6 million in the comparable period a year ago. For the thirty-nine weeks ended October 2, 2005, other income was $2.6 million, down $3.1 million from the $5.7 million in the prior period. This decrease was primarily driven by the $4.4 million gain on the sale of our investment in Marmot Mountain. Ltd. (“Marmot”) in the 2004 second quarter, less $1.0 million in gains on sales of non-core assets in the thirty-nine weeks ended October 2, 2005.

Interest expense for the 2005 third quarter was $10.4 million, an increase of $2.2 million over the comparable prior year period. Interest expense for the thirty-nine weeks ended October 2, 2005, was $29.3 million, an increase of $6.1 million over the prior year. These increases are the result of higher debt balances used to fund our investments in acquisitions plus higher interest rates. In addition, we incurred higher interest expense in the 2005 third quarter as a result of the increased receivables in the Artwear channel of our Activewear segment, where in competitive situations we have matched competitors’ payment terms with extended dating programs.

Our effective tax rate was 32.5% for the 2005 third quarter and 33.5% for the thirty-nine weeks ended October 2, 2005, which reflects a shift in income to lower taxing jurisdictions (primarily foreign countries). Our effective tax rate was 23.4% for the 2004 third quarter and 27.4% for the thirty-nine weeks ended October 3, 2004, which reflects the $4.5 million tax benefit that was recognized in the 2004 third quarter from the closure of federal tax audits for 2002 and prior years.

Segment Results

The following table presents a breakdown of our net sales and segment operating income by segment:

	13 Weeks Ended (in millions)				39 Weeks Ended (in millions)
	October 2, 2005		October 3, 2004		October 2, 2005		October 3, 2004
Net sales:
Sporting Goods	$	201.8	$	192.4	$	527.4	$	438.1
Activewear		207.8		215.1		506.0		484.2
All Other		15.0		15.2		46.6		41.9
Total net sales	$	424.6	$	422.7	$	1,080.0	$	964.2
Segment operating income:
Sporting Goods	$	15.5	$	23.9	$	34.9	$	48.5
Activewear		21.3		25.1		36.2		35.8
All Other		1.4		1.1		5.3		4.3
Total Segment operating income	$	38.2	$	50.1	$	76.4	$	88.6

Sporting Goods

For the 2005 third quarter, net sales in our Sporting Goods segment totaled $201.8 million, an increase of $9.4 million, or 4.9%, from the comparable period last year. Excluding incremental net sales from acquisitions, net sales in the Sporting Goods segment for the 2005 third quarter decreased $23.5 million, or 12.2%. This decrease in quarter-over-quarter net sales primarily relates to lower volumes of Russell Athletic branded products in part due to the expiration in December 2004 of the Major League Baseball apparel contract, the discontinuance of the Discus brand at a major account and shipments missed due to the hurricanes. In addition, Spalding had lower licensing revenue due to the continued strategic shift in licensees to better position its brand, and Mossy Oak’s sales are down quarter-over-quarter due to lower pricing.

For the thirty-nine weeks ended October 2, 2005, net sales in our Sporting Goods segment totaled $527.4 million, an increase of $89.3 million, or 20.4%, from the comparable period last year. Excluding incremental net sales from

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acquisitions, net sales in the Sporting Goods segment for the thirty-nine weeks ended October 2, 2005 decreased $48.3 million, or 11.0%. This decrease in net sales is primarily due to our Russell Athletic and Mossy Oak businesses. For Russell Athletic, sales were down due to volume decreases driven by, among other things, expiration of the Major League Baseball apparel contract in December 2004, the discontinuance of the Discus brand at a major account and missed shipments of our Russell Athletic branded products caused by the hurricanes. For Mossy Oak, both sales volume and pricing contributed to the decrease in net sales. Pricing in the Mossy Oak business continues to be pressured by our competitors and several of our customers who are substantially promoting their own private label camouflage products.

In the 2005 third quarter, our Sporting Goods segment operating income was $15.5 million, or 7.7% of the segment’s net sales, versus $23.9 million, or 12.4% of the segment’s net sales, in the comparable period last year. Excluding the impact from acquisitions, Sporting Goods segment operating income was $11.0 million, or 6.5% for the 2005 third quarter. The decrease in segment operating income is primarily due to the factors noted above that describe the decrease in net sales quarter-over-quarter plus duplicate costs incurred during the period of transition as we move some of the Huffy Sports backboard production to China and higher transportation costs due to the hurricanes.

For the thirty-nine weeks ended October 2, 2005, our Sporting Goods segment operating income was $34.9 million, or 6.6% of the segment’s net sales, versus $48.5 million, or 11.1% of the segment’s net sales, in the comparable period last year. Excluding the impact from acquisitions and the $4.4 million gain on the sale of our investment in Marmot in the prior year, Sporting Goods segment operating income was $20.7 million, or 5.3%, for the 2005 third quarter versus $44.1 million, or 10.1%, for the comparable prior year period. The decrease in segment operating income is primarily due to the factors noted above that describe the decrease in the 2005 third quarter operating income versus the comparable prior year period.

Activewear

For the 2005 third quarter, net sales in our Activewear segment totaled $207.8 million, a decrease of $7.3 million, or 3.4%, from the comparable period last year. This decrease in net sales was primarily driven by volume, as a result of adjustments of inventory at retail, and pricing in the Mass Retail channel. Dozens shipped in the 2005 third quarter were down approximately 10.4% versus the comparable prior year period. Net sales in the Artwear channel were basically flat quarter-over-quarter despite a price decline and lost sales due to supply disruptions caused by the hurricanes. International apparel sales were up $5.2 million versus the prior period.

For the thirty-nine weeks ended October 2, 2005, net sales in our Activewear segment totaled $506.0 million, an increase of $21.8 million, or 4.5%, from the comparable period last year. This increase in net sales was primarily driven by volume in the Artwear channel as dozens shipped in the first thirty-nine weeks of 2005 were up approximately 12.8% versus the comparable prior year period, despite the loss in sales from the supply chain disruption caused by the hurricanes.

Activewear segment operating income for the 2005 third quarter was $21.3 million, or 10.3% of the segment’s net sales, versus $25.1 million, or 11.7% of the segment’s net sales, in the comparable period last year. This decrease was the result of price declines quarter-over-quarter in the Artwear channel along with higher transportation costs due to the hurricanes.

On a year-to-date basis, Activewear segment operating income is $36.2 million, or 7.2% of the segment’s net sales in 2005 versus $35.8 million, or 7.4% of the segment’s net sales, in 2004. This increase is the result of the sales volume increase in the Artwear channel that more than offset the operational issues that impacted the 2005 second and third quarters and the adverse impact from the hurricanes.

All Other

For the 2005 third quarter, net sales for all other segments totaled $15.0 million which was consistent with the comparable prior year period. Net sales for the thirty-nine weeks ended October 2, 2005, for all other segments were $46.6 million, an increase of $4.7 million, or 11.2%, from the comparable period’s net sales of $41.9 million. This increase in net sales was primarily driven by increased volume in our fabrics division as yards sold were up 11.8% and higher net sales from Frontier Yarns.

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In the 2005 third quarter, all other segments contributed $1.4 million of segment operating income, or 9.3% of their net sales, versus $1.1 million, or 7.2% of their net sales, in the comparable period last year. For the first nine months of 2005, all other segments contributed $5.3 million of segment operating income, or 11.4% of their net sales, versus $4.3 million, or 10.3% of their net sales, in the comparable prior year period. This increase was primarily driven by the increased sales volume in our fabrics division and in Frontier Yarns, which more than offset the additional rework costs and the increase in bad debt reserves that occurred in the 2005 second quarter.

Corporate Expenses

Corporate expenses are primarily enterprise costs that are not allocated to the segments. Corporate expenses decreased by $2.3 million to $4.5 million in the 2005 third quarter versus $6.8 million in the comparable prior year period. This decrease was primarily the result of lower incentive compensation expense as a result of our earnings decline in the 2005 third quarter and outlook for the remainder of the year, which more than offset the $3.2 million in termination benefits associated with the elimination of the Chief Operating Officer position.

For the thirty-nine weeks ended October 2, 2005, corporate expenses decreased by $0.5 million to $13.1 million versus $13.6 in the comparable prior year period. This decrease is primarily the result of lower incentive compensation expense and gains on sales of non-core assets offset by incremental costs to comply with the Sarbanes-Oxley Act of 2002, additional pension cost and the $3.2 million of termination benefits associated with the elimination of the Chief Operating Officer position.

LIQUIDITY AND CAPITAL RESOURCES

Our financial condition is reflected in the following (dollars in thousands):

	October 2, 2005			January 1, 2005			October 3, 2004
Working capital	$	617,333		$	457,814		$	520,410
Net debt	$	461,190		$	368,233		$	339,990
Net debt to total capital ratio		44	%		40	%		38	%

Net debt is defined as short-term and long-term borrowings less cash. For the ratio of net debt to total capital, total capital is defined as net debt plus stockholders’ equity.

The increase in working capital at October 2, 2005 as compared to October 3, 2004 is primarily due to the acquisition of Brooks Sports and the increase in receivables in the Artwear channel of our Activewear segment, where due to competitive situations, we have matched competitors’ payment terms with extended dating programs.

Net debt is $121.2 million higher at October 2, 2005 as compared to October 3, 2004, which is due to approximately $114.0 million of net investments in acquisitions that have been made during the same period.

Cash from Operating Activities

Cash provided by operating activities is primarily dependent on the level of income and controlling investments in inventories and other working capital components. Cash provided by operating activities is typically substantially higher in the second half of the year due to higher net income and reduced working capital requirements during that period.

Our operations used approximately $67.4 million of cash during thirty-nine weeks ended October 2, 2005, versus using $18.4 million during the same period in 2004. The primary reasons for the increase in cash usage were (i) higher than normal receivables, due to matching competitors’ payment terms with extended dating programs in the Artwear channel of our Activewear segment, (ii) net increase in cash outflow for incentive compensation (i.e. a component of accounts payable and accrued expenses), as higher incentive compensation was earned in 2004 (paid in early 2005), compared with lower amounts earned in 2003 (paid in early 2004) and (iii) $4.3 million in higher contributions to our qualified defined benefit pension plans.

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Cash from Investing Activities

Net cash used in investing activities was $26.4 million for the thirty-nine weeks ending October 2, 2005 versus $50.8 million in the comparable prior year period. Our investing activities in the 2005 thirty-nine weeks period have consisted primarily of capital expenditures of $30.3 million less $7.4 million of proceeds from the settlement of disputes in the Spalding purchase agreement and the sale of non-core assets. In the first thirty-nine weeks of 2004, our investing activities primarily consisted of capital expenditures of $17.7 million and investments in acquisitions of $43.3 million less $8.6 million of proceeds from the sale of non-core assets and $1.6 million of distributions from joint ventures.

For fiscal 2005, we are forecasting capital expenditures to be in the $45 million to $50 million range. The majority of planned fiscal 2005 capital expenditures are to further enhance our manufacturing capabilities, including the completion of Phase I of the new textile facility in Honduras, and to improve our information systems capabilities to support our business initiatives.

Cash From Financing Activities

We paid $3.9 million in dividends ($0.12 per share) during the first thirty-nine weeks of 2005 and 2004.

On October 2, 2005, our debt facilities and outstanding debt obligations included:

• $300 million Secured Revolving Credit Facility, (the “Revolver”) due April 2007, of which $240.4 million was outstanding;

• $250 million in 9.25% Senior Unsecured Notes, (the “Senior Notes”) due 2010; and

• $19.4 million of other outstanding borrowings of which $7.2 million related to our line of credit used by our subsidiary in the United Kingdom, $2.9 million related to draws made by Frontier Yarns on their factored receivables, and $9.3 million in other debt that is primarily made up of notes and capital leases held by Frontier Yarns for machinery and equipment used in operations.

On April 6, 2005, we paid off the remaining $10 million outstanding under our Senior Secured Term Loan.

Under the Revolver, pricing is adjusted quarterly based on our consolidated fixed charge coverage ratio. Variable interest on the Revolver from July 4, 2005 to October 2, 2005 was either LIBOR plus 2.00% (6.23% at October 2, 2005) or Base Rate plus 0.50% (7.25% at October 2, 2005), with an annual commitment fee on the unused portion of the Facilities of 0.375%.

For the fourth quarter of 2005, variable interest on the Revolver is expected to be consistent with the third quarter 2005, as either LIBOR plus 2.00% or Base Rate plus 0.50% with an annual commitment fee on the unused portion of the Facilities of 0.375%.

Adequacy of Borrowing Capacity

The availability under our Revolver is subject to a borrowing base limitation that is determined on the basis of eligible accounts receivable and inventory. As of October 2, 2005, we had $240.4 million outstanding under the Revolver and approximately $48.0 million of availability under our Revolver. We also had $48.6 million in cash available to fund ongoing operations. Although there can be no assurances, we believe that cash flow available from operations, along with the availability under our Revolver and cash on hand, will be sufficient to operate our business; satisfy our working capital, capital expenditure and pension funding requirements; and meet our foreseeable liquidity requirements, including debt service on our Senior Notes.

Contingencies

For information concerning our ongoing litigation, see Note 4 to the Condensed Consolidated Financial Statements.

Commitments

For information about our contractual cash obligations and other commercial commitments, refer to Management’s Discussion & Analysis of Financial Condition and Results of Operations in our 2004 Annual Report on Form 10-K.

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Quantitative and Qualitative Disclosures About Market Risks

We are exposed to market risks relating to fluctuations in interest rates, currency exchange rates and commodity prices. Our financial risk management objectives are to minimize the potential impact of interest rate, foreign exchange rate and commodity price fluctuations on our earnings, cash flows and equity. To manage these risks, we may use various financial instruments, including interest rate swap agreements, foreign currency forward contracts and commodity futures contracts. Refer to Notes 1 and 4 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended January 1, 2005, for a more complete description of our accounting policies and the extent of our use of such instruments.

The following analyses present the sensitivity of the market value, earnings or cash flows, as applicable, of our significant financial instruments to hypothetical changes in interest rates, exchange rates and commodity prices as if these changes had occurred at October 2, 2005. The range of changes chosen for these analyses reflects our view of changes that are reasonably possible over a one-year period. Market values are the present values of projected future cash flows based on the interest rate assumptions or quoted market prices, where available. These forward-looking disclosures are selective in nature and only address the potential impacts from financial instruments. They do not include other potential effects, which could impact our business as a result of these changes in interest rates, exchange rates and commodity prices.

Interest Rate and Debt Sensitivity Analysis.At October 2, 2005, our outstanding debt totaled $509.8 million, which consisted of fixed-rate debt of $259.3 million and variable-rate debt of $250.5 million. Based on our average outstanding borrowings under our variable-rate debt for the thirty-nine weeks ended October 2, 2005, a one-percentage point increase in interest rates would have negatively impacted our 2005 third quarter pre-tax earnings and cash flows by approximately $1.7 million. A one-percentage point increase in market interest rates would decrease the fair market value of our fixed-rate debt at October 2, 2005 by approximately $1.4 million. Changes in the fair value of our fixed rate debt will not have any impact on us unless we repurchase the debt in the open market.

Currency Exchange Rate Sensitivity.We have foreign currency exposures related to buying, selling and financing in currencies other than our functional currencies. We also have foreign currency exposure related to foreign denominated revenues and costs translated into U.S. dollars. These exposures are primarily concentrated in the euro and British pound sterling and to a lesser extent, the Canadian dollar, Australian dollar and Japanese yen. We enter into foreign currency forward contracts to manage the risk associated with doing business in foreign currencies. Our policy is to hedge currency exposures of firm commitments and anticipated transactions denominated in non-functional currencies to protect against the possibility of diminished cash flow and adverse impacts on earnings. At October 2, 2005, we had a $1.9 million asset associated with these foreign currency forward contracts. A five-percentage point adverse change in the foreign currency spot rates would decrease our foreign currency forward contract asset at October 2, 2005 by $1.8 million. Changes in the fair value of our foreign currency forward contract liability will not have any impact on our results of operations unless these contracts are deemed to be ineffective at hedging currency exposures of anticipated transactions. We generally view our net investments in foreign subsidiaries that have a functional currency other than the U.S. dollar as long-term. As a result, we generally do not hedge these net investments.

Commodity Price Sensitivity.The availability and price of cotton is subject to wide fluctuations due to unpredictable factors such as weather conditions, governmental regulations, economic climate or other unforeseen circumstances. In addition, the price of polyester is subject to fluctuations, due to petroleum prices, the economic climate or other unforeseen circumstances, such as we have recently experienced with hurricanes. We purchase yarn from Frontier Yarns, Frontier Spinning, and other third parties, and our yarn pricing will continue to be impacted by the price of cotton and polyester. We did not have any outstanding commodity futures contracts at October 2, 2005.

FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes “forward-looking” statements (as defined by the Private Securities Litigation Reform Act of 1995 (the “Act”)) that describe our beliefs concerning future business conditions, prospects, growth opportunities, and the outlook for the Company based upon currently available information. Wherever possible, we have identified these forward-looking statements by words such as “anticipate”, “believe”, “could”, “may”, “intend”, “estimate”, “expect”, “project”, “could”, “will”, and similar expressions. We include such statements because we believe it is important to communicate our future expectations to our stockholders, and we therefore make such forward-looking statements in reliance upon the safe harbor provisions of the Act. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, any projections of net sales, gross margin, expenses, or earnings or losses from operations or per share. These forward-looking statements are based upon assumptions we believe are reasonable.

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Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: (a) the impact of Hurricane Katrina and other recent hurricanes on our business; (b) the effect of pricing pressures and competition on our businesses; (c) our ability to fully resolve current operational issues and implement operational improvements; (d) changes in customer demand for our products; (e) changes in weather and the seasonal nature of our business; (f) changes in economic conditions such as changes in interest rates, currency exchange rates, commodity prices, and other external and political factors over which we have no control; (g) significant competitive activity, including promotional and price competition; (h) our investments in capital expenditures; (i) our management of inventory levels and working capital; (j) our debt structure, cash management and cash requirements; (k) our ability to efficiently utilize plants and equipment; (l) the short- and long-term effects on our business of higher prices for raw materials, energy, and transportation; and (m) other risk factors listed from time to time in our SEC filings. We undertake no obligation to revise the forward-looking statements included in this Quarterly Report on Form 10-Q to reflect any future events or circumstances. Our actual results, performance or achievements could differ materially from the results expressed or implied by any forward-looking statements contained in this Quarterly Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We are exposed to market risks relating to fluctuations in interest rates, currency exchange rates and commodity prices. Please see our update under the “LIQUIDITY AND CAPITAL RESOURCES” section in Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to ensure that such information is accumulated and communicated to our management, including our Chairman and Chief Executive Officer and Senior Vice President, Chief Financial Officer as appropriate, to allow timely decisions regarding disclosure. As of the end of the period covered by this Quarterly Report on Form 10-Q, we evaluated, under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer and Senior Vice President, Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chairman and Chief Executive Officer and Senior Vice President, Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are effective.

During the fiscal quarter ended October 2, 2005, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Contingencies. For information concerning our ongoing litigation, see Note 4 to the Condensed Consolidated Financial Statements.

ITEM 5. OTHER INFORMATION

In our Current Report on Form 8-K filed on August 16, 2005, we reported that the employment of Jonathan R. Letzler as President and Chief Operating Officer of Russell Corporation terminated effective August 10, 2005 in connection with the elimination of that position. We further reported that under the terms of his employment agreement, dated November 20, 2002, Mr. Letzler was entitled to certain payments and other benefits in connection with his separation from employment. On November 10, 2005, Mr. Letzler and Russell Corporation entered into a Separation Agreement and General Release (the “Separation Agreement”), pursuant to which those separation payments and benefits were amended in order to comply with certain recently enacted provisions of the Internal Revenue Code and the regulations thereunder.

Under the Separation Agreement, Mr. Letzler will receive, no later than December 31, 2005, a one-time, lump sum payment of approximately $1.9 million (less applicable taxes and withholdings) equal to and in lieu of the salary- and bonus-based severance pay, additional retirement benefit and group health plan subsidy he would have received under the terms of his employment agreement. No later than December 31, 2005, he also will receive the 100,000 shares of Russell Common Stock (less the number of such shares withheld to pay applicable taxes and other withholdings) to which he was entitled under the terms of his employment agreement. All payments and benefits to Mr. Letzler under the Separation Agreement are subject to Mr. Letzler’s reasonable compliance with covenants contained therein, including noncompetition and nondisclosure covenants.

The description of material terms of the Separation Agreement contained in this Item 5 of our Quarterly Report on Form 10-Q is hereby qualified in its entirety by reference to the Separation Agreement, which is filed as Exhibit (10a) to this Form 10-Q and is incorporated by reference into this Item 5.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)

Exhibit Numbers	Description
(3a)	Restated Certificate of Incorporation of Russell Corporation, a Delaware corporation, effective April 27, 2005 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K dated April 27, 2005)
(3b)	Amended and Restated By-Laws of Russell Corporation, a Delaware corporation, effective April 27, 2005 (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K dated April 27, 2005)
(3c)	Certificate of Designation of Series A Junior Participating Preferred Stock of Russell Corporation, effective April 27, 2005 (incorporated by reference to Exhibit 3.3 to Current Report on Form 8-K dated April 27, 2005)
(4a)	Amendment to Rights Agreement, dated as of April 27, 2005 (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K dated April 27, 2005)
(10a)	Separation Agreement and General Release, dated November 10, 2005, between Jonathan R. Letzler and Russell Corporation
(15)	Letter re/ unaudited interim financial information
(31a)	Rule 13a-14(a)/15d-14(a) CEO Certification
(31b)	Rule 13a-14(a)/15d-14(a) CFO Certification
(32)	Section 1350 Certifications
(99a)	2004 and 2003 Segment Information by Quarter

(b) Reports on Form 8-K

On July 14, 2005, we furnished a Form 8-K, under Items 2.02 and 9.01, relating to the issuance on that date of our press release setting forth a revised outlook of operating results for the fiscal 2005 second quarter.

On August 2, 2005, we filed a Form 8-K dated July 27, 2005, under Items 1.01, 5.02 and 9.01, relating to the appointment of Victoria W. Beck as Vice President/Corporate Controller and describing the material terms of her employment agreement with Russell Corporation.

On July 28, 2005, we furnished a Form 8-K under Items 2.02 and 9.01 relating to the issuance of our press release announcing our results of operations for the fiscal 2005 second quarter.

On August 16, 2005, we filed a Form 8-K dated August 10, 2005, under Items 1.02, 5.02 and 9.01, relating to the termination of employment of Jonathan R. Letzler, President and Chief Operating Officer, and describing the material terms of his termination benefits.

On September 20, 2005, we filed a Form 8-K under Items 8.01 and 9.01 relating to the issuance of our September 19, 2005 press release setting forth a revised outlook of operating results for fiscal 2005.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RUSSELL CORPORATION
	(Registrant)
Date: November 14, 2005	/s/ Robert D. Koney, Jr.
	Robert D. Koney, Jr.
	Senior Vice President, Chief Financial Officer
	(Principal Financial Officer)
Date: November 14, 2005	/s/ Victoria W. Beck
	Victoria W. Beck
	Corporate Controller

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