relatively short program period (generally less than 18 months) and are not expected to recur now that the programs are completed. Therefore, their inclusion may distort historical trends. Additionally, amounts could vary significantly from period to period based on the timing of specific actions under these programs and management could not reasonably predict the amount of these costs on a quarterly basis. Because the amounts could not be reasonably predicted on a quarterly basis, management has not included these costs in its previously announced earnings outlooks. Management uses these non-GAAP operating expense and operating income measures along with the related GAAP measures to conduct and measure its business against internally developed objectives and evaluate the performance of its consolidated operations and geographic operating segments. Management believes these measures are useful information to investors because they provide meaningful comparisons to prior periods, management’s previous outlooks, and the analysts’ own financial models, which may exclude the costs of these actions. Material limitations associated with the use of these measures as compared to the GAAP measures of operating expenses and operating income is that they do not reflect all period costs included in operating expenses and operating income associated with these actions and as such may not be comparable to other companies with similar actions who present such costs differently. To compensate for these limitations, management believes that it is appropriate to consider operating expenses and operating income determined under GAAP as well as on a non-GAAP basis.

     Non-GAAP Net Income and Non-GAAP Earnings Per Share. GAAP net income and earnings per share for the thirteen and thirty-nine weeks ended October 1, 2005 were impacted by all of the items impacting the non-GAAP measures discussed above as well as the charge associated with the redemption of senior subordinated notes and the termination of related interest-rate swap agreements. Non-GAAP net income excludes the after-tax impact of all these items and non-GAAP earnings per share is calculated by dividing non-GAAP net income by weighted average shares outstanding calculated on a fully diluted basis. The economic substance behind our decision to use the non-GAAP net income and earnings per share measures, which exclude the estimated after-tax impact of the outsourcing and optimization plan in North America, the integration of Tech Pacific as well as the charge associated with the redemption of senior subordinated notes and the termination of related interest-rate swap agreements, is that the costs and tax impact related to these programs and actions were incremental to operations in the normal course of business, related costs were incurred over a relatively short program period (generally less than 18 months) and the related costs are not expected to recur now that the programs are completed. Therefore, their inclusion may distort historical trends. Additionally, amounts could vary significantly from period to period based on the timing of specific actions under these programs. As a result, management could not reasonably predict the amount of these costs on a quarterly basis. Because the amounts could not be reasonably predicted on a quarterly basis, management has not included these items in its previously announced earnings outlooks.

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