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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
For the quarterly period ended March 31, 2005
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-9340

REEBOK INTERNATIONAL LTD.
Incorporated pursuant to the Laws of The Commonwealth of Massachusetts

Internal Revenue Service—Employer Identification No. 04-2678061

1895 J.W. Foster Boulevard, Canton, Massachusetts, 02021 (781) 401-5000

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 ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 under the Securities Exchange Act of 1934). Yes ý No o

The total number of shares of the Registrant's Common Stock, par value $.01 per share, outstanding on ~~August 1~~April 29, ~~2004~~2005 was 59,~~147~~669,~~498~~800.

REEBOK INTERNATIONAL LTD.

INDEX

PART I. FINANCIAL INFORMATION:
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets— June 30, 2004 and 2003	3
	Condensed Consolidated Balance Sheets—March 31, 2005 and 2004	3
	Condensed Consolidated Statements of Income— Three and Six Months Ended June 30, 2004 and 2003	4
	Condensed Consolidated Statements of Income—Three Months Ended March 31, 2005 and 2004	4
	Condensed Consolidated Statements of Cash Flows— Six Months Ended June 30, 2004 and 2003	5
	Condensed Consolidated Statements of Cash Flows—Three Months Ended March 31, 2005 and 2004	5
	Notes to Condensed Consolidated Financial Statements	6-10
Item 2.	Management's Discussion and Analysis of ~~Results~~Financial ofCondition ~~Operations~~ and ~~Financial~~Results ~~Condition~~of Operations	1211-18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2018
Item 4.	Controls and Procedures	2119
Part II. OTHER INFORMATION:
Item 1.	Legal Proceedings	2220
Item 2.	~~Changes~~Unregistered inSales of Equity Securities and Use of Proceeds	2220
Item 3.	Defaults Upon Senior Securities	2220
Item 4.	Submission of Matters to a Vote of Security Holders	2220
Item 5.	Other Information	2320
Item 6.	Exhibits ~~and Current Reports on Form 8-K~~	2320

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Reebok International Ltd. Condensed Consolidated Balance Sheets Amounts in thousands, except per share data

			June 30,
			March 31,
									December 31, 2003
									December 31, 2004
			2004			2003
			2005			2004
			(Unaudited)						(See Note 1)
			Amounts in thousands, except per share data
Assets
Current assets:
Current Assets:
	Cash and cash equivalents		$	~~501~~483,~~377~~388		$	~~459~~614,~~985~~872		$	~~693~~565,~~599~~233
	Accounts receivable, net of allowance for doubtful accounts (June 2004, $76,579 June 2003, $66,406, December 2003, $70,823)			623,264			540,669			532,320
	Accounts receivable, net of allowance for doubtful accounts (March 2005, $84,276, March 2004, $72,951, December 2004, $81,280)			707,689			564,301			660,599
	Inventory			~~539~~470,~~392~~233			~~476~~408,~~248~~781			~~352~~458,~~692~~435
	Deferred income taxes			~~116~~113,~~697~~384			~~116~~98,~~950~~483			~~100~~111,~~070~~516
	Prepaid expenses and other current assets			6478,~~640~~301			5456,~~698~~008			4861,~~169~~730
		Total current assets		1,~~845~~852,~~370~~995			1,~~648~~742,~~550~~445			1,~~726~~857,~~850~~513
Property and equipment, net				~~160~~183,~~542~~510			~~141~~149,~~901~~562			~~149~~183,~~765~~799
Other non-current assets:
	Goodwill, net			82126,~~817~~052			2324,~~431~~690			24124,~~690~~125
	Intangibles, net of amortization			~~199~~195,~~881~~919			4341,~~770~~696			42196,~~296~~138
	Deferred income taxes			1941,~~511~~568			1720,~~889~~581			2244,~~478~~892
	Other			2931,~~736~~122			2325,~~801~~166			2334,~~663~~161
		Total Assets	$	2,~~337~~431,~~857~~166		$	12,~~899~~004,~~342~~140		$	12,~~989~~440,~~742~~628
Liabilities and Stockholders' Equity
Current liabilities:
	Notes payable to banks		$	1556,~~772~~006		$	1817,~~233~~338		$	863,~~055~~179
	Current portion of long-term debt			~~152~~100,~~907~~464			~~142~~161			~~163~~100,627
	Accounts payable			~~183~~165,~~257~~593			~~156~~137,~~403~~123			~~155~~183,~~904~~853
	Accrued expenses			~~359~~339,~~955~~807			~~364~~333,~~332~~035			~~374~~386,~~849~~725
	Income taxes payable			3973,~~834~~162			3237,~~072~~364			2771,~~017~~930
		Total current liabilities		~~751~~735,~~725~~032			~~571~~525,~~182~~021			~~565~~806,~~988~~314
Long-term debt, net of current portion				~~452~~359,~~880~~815			353,~~209~~017			~~353~~360,~~225~~126
Minority interest and other long-term liabilities				35,769			47,255			36,819
Minority interest				10,444			13,757			8,514
Other long-term liabilities				41,775			30,125			45,718
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01; authorized 250,000 shares; issued shares: June 2004, 101,924; June 2003, 99,941; December 2003, 101,081				1,019			999			1,011
	Common stock, par value $.01; authorized 250,000 shares; issued shares: March 2005, 102,312; March 2004, 101,441; December 2004, 101,827			1,023			1,014			1,018
~~Retained earnings~~	Retained earnings			12,~~874~~035,~~318~~754			1,~~685~~838,~~923~~860			1,~~796~~985,~~321~~324
	Less shares in treasury at cost: June 2004, 42,618; June 2003, 40,754; December 2003, 41,473			(780,510	)		(714,127	)		(740,189	)
	Less shares in treasury at cost: March 2005, 42,619; March 2004, 41,511; December 2004, 42,619			(780,510	)		(741,683	)		(780,510	)
Unearned compensation				(27,~~054~~457	)		(~~1,265~~991	)		(15,~~225~~804	)
Accumulated other comprehensive gain (loss)				435,~~710~~290			(4314,~~834~~980	)		~~(22~~19,~~208~~928	)
	~~Total Stockholders' Equity~~	Total Stockholders' Equity		1,~~097~~284,~~483~~100			~~927~~1,~~696~~082,220			1,~~033~~219,~~710~~956
~~Total Liabilities and Stockholders' Equity~~		Total Liabilities and Stockholders' Equity	$	2,~~337~~431,~~857~~166		$	12,~~899~~004,~~342~~140		$	12,~~989~~440,~~742~~628

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

Reebok International Ltd. Condensed Consolidated Statements of Income (Unaudited) Amounts in thousands, except per share data

			Three Months Ended June 30,						Six Months Ended June 30,
				Three Months Ended March 31,
			2004			2003			2004		2003
				2005			2004
			Amounts in thousands, except per share data
Net sales				$	925,035		$	831,861
Net sales			$	813,565		$	802,576		$	1,645,425	$	1,600,856
	Costs and expenses:
Costs and expenses:
		Cost of sales			552,075			497,742
	Cost of sales			495,788			501,963			993,530		996,361
		Selling, general and administrative expenses			303,875			266,129
	Selling, general and administrative expenses			271,113			260,419			537,241		496,679
		Interest expense, net			2,676			3,544
	Interest expense, net			1,643			3,973			5,187		8,557
		Other expense, net			1,187			1,836
	Loss on early extinguishment of debt			10,228						10,228
					859,813			769,251
	Other expense, net			2,891			(1,150	)		4,726		525
Income before income taxes and minority interest					65,222			62,610
				781,663			765,205			1,550,912		1,502,122
Income taxes					19,619			19,096
Income before income taxes and minority interest				31,902			37,371			94,513		98,734
Income before minority interest					45,603			43,514
Income taxes				9,730			11,360			28,826		30,015
Minority interest					2,374			2,410
Income before minority interest				22,172			26,011			65,687		68,719
Net income				$	43,229		$	41,104
Minority interest				420			406			2,830		2,278
Basic earnings per share:				$	0.73		$	0.69
Net income			$	21,752		$	25,605		$	62,857	$	66,441
Diluted earnings per share:				$	0.70		$	0.63
Basic earnings per share			$	.36		$	.43		$	1.05	$	1.12
Dividends per common share:				$	0.15		$	0.15
Diluted earnings per share			$	.35		$	.41		$	.98	$	1.04
Dividends per common share									$	.15

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

Reebok International Ltd. Condensed Consolidated Statements of Cash Flows (Unaudited) Amounts in thousands, except per share data

			Six Months Ended June 30,
			Three Months Ended March 31,
			2004			2003
			2005			2004
			Amounts in thousands
Cash flows from operating activities:
Net income			$	6243,~~857~~229		$	6641,~~441~~104
Adjustments to reconcile net income to net cash used for operating activities:
	Depreciation and amortization			1711,~~952~~626			169,~~741~~221
	Minority interest			2,~~830~~374			2,~~278~~410
	Non-cash loss on early extinguishment of debt			4,916
	Deferred income taxes			2,114			3,484
	Deferred income taxes			(13,660	)		2,200
Changes in operating assets and liabilities, excluding the effect of acquisitions:
	Accounts receivable			(1954,~~460~~336	)		(~~106~~31,~~809~~664	)
	Inventory			(~~120~~14,~~558~~028	)		(6454,~~417~~714	)
	Prepaid expenses and other			(1214,~~805~~717	)		(187,~~540~~343	)
	Accounts payable and accrued expenses			4(37,~~406~~720	)		(344,~~700~~695	)
	Dividends to minority shareholders						(1,566	)
	Income taxes payable			4,024			12,107
	Income taxes payable			27,123			(7,808	)
		Total adjustments		(100,663	)		(111,194	)
		Total adjustments		(109,256	)		(181,621	)
	Net cash used for operating activities:			(57,434	)		(70,090	)
Net cash used for operating activities:				(46,399	)		(115,180	)
Cash flows used for investing activities:
Payments to acquire property and equipment	~~Payments to acquire property and equipment~~			(1510,~~795~~528	)		(218,~~009~~163	)
	Purchase of The Hockey Company (net of cash acquired)			(193,052	)
	Net cash used for investing activities			(10,528	)		(8,163	)
Net cash used for investing activities				(208,847	)		(21,009	)
Cash flows (used for) provided by financing activities:
Net borrowings of notes payable to banks	~~Net borrowings of notes payable to banks~~			8(7,~~091~~493	)		(19,~~596~~185	)
Re-payments of long-term debt	~~Re-payments of long-term debt~~			(~~250,326~~192	)		(~~287~~138	)
	Net proceeds from issuance of convertible debentures			343,000
Proceeds from issuance of common stock to employees				12,625			8,625
	Proceeds from issuance of common stock to employees			18,777			11,227
Dividends paid				(8,952	)		(8,972	)
	Dividends paid			(8,972	)
Repurchase of common stock				(1,765	)		(1,494	)
	Repurchase of common stock			(40,321	)		(53,705	)
	Net cash (used for) provided by financing activities			(5,777	)		7,206
	Net cash (used for) provided by financing activities			70,249			(44,361	)
Effect of exchange rate changes on cash and cash equivalents				(8,106	)		(7,680	)
Effect of exchange rate changes on cash and cash equivalents				(7,225	)		(1,832	)
Net decrease in cash and cash equivalents				(81,845	)		(78,727	)
Net decrease in cash and cash equivalents				(192,222	)		(182,382	)
Cash and cash equivalents at beginning of period				565,233			693,599
Cash and cash equivalents at beginning of period				693,599			642,367
Cash and cash equivalents at end of period			$	483,388		$	614,872
Cash and cash equivalents at end of period			$	501,377		$	459,985
Supplemental disclosures of cash flow information:
Interest paid	~~Interest paid~~		$	147,~~733~~118		$	1311,~~358~~038
Income taxes paid	~~Income taxes paid~~			1112,~~658~~596			283,~~710~~830

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

Reebok International Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share data)

1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods. The interim financial information and notes thereto should be read in conjunction with the Company's latest annual report on Form 10-K. The results of operations for the three ~~and six~~ months ended ~~June~~March 3031, ~~2004~~2005 are not necessarily indicative of results to be expected for the entire year.

The balance sheet at December 31, ~~2003~~2004 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2003~~2004.

Reclassification

Certain amounts in prior periods have been reclassified to conform to the 2005 presentation. These reclassifications had no impact on previously reported results of operations or stockholders' equity.

Accounting for Stock-Based Compensation

At ~~June~~March 3031, ~~2004~~2005, the Company had stock-based employee compensation plans. The Company accounts for those plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees,", and related Interpretations. The Company's policy is to grant stock options with an exercise price equal to the market value at the date of the grant, and accordingly no compensation expense is recognized. The Company provides pro forma disclosures of the compensation expense determined under the fair value provisions of Financial Accounting Standards Board Statement No. 123, "Accounting for Stock-Based Compensation." The Company expects to adopt FASB Statement No. 123 (revised 2004) "Share-Based Payment" ("SFAS 123R") on January 1, 2006. The standard requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. See Recently Issued Accounting Standards below.

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows (in thousands, except for earnings per share information):

	Three Months Ended June 30,				Six Months Ended June 30,
	2004		2003		2004		2003
Net income	$	21,752	$	25,605	$	62,857	$	66,441
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect		3,171		3,707		3,139		5,756
Pro forma net income	$	18,581	$	21,898	$	59,718	$	60,685
Basic earnings per share:
As reported	$	.36	$	.43	$	1.05	$	1.12
Pro forma	$	.32	$	.38	$	1.02	$	1.04
Diluted earnings per share:
As reported	$	.35	$	.41	$	.98	$	1.04
Pro forma	$	.30	$	.36	$	.95	$	.97

	Three Months Ended March 31,
	2005		2004
Net income	$	43,229	$	41,104
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards net of related tax effect		2,454		1,413

Pro forma net income	$	40,775	$	39,691

	Three Months Ended March 31,
	2005		2004
Basic earnings per share:
As reported	$	.73	$	.69
Pro forma	$	.69	$	.68
Diluted earnings per share:
As reported	$	.70	$	.63
Pro forma	$	.66	$	.62

Pro forma information regarding net income and earnings per share is required by SFAS 123, which requires that the information be determined as if the Company had accounted for its employee stock options granted subsequent to December 31, 1994 under the fair value method of that Statement. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions as follows:

	Three Months Ended June 30,		Six Months Ended June 30,
	Three Months Ended March 31,
	2004	2003	2004	2003
	2005	2004
Risk-free interest rates	24.81%	2.08%	~~3.3%~~	~~2.1%~~
Dividend yields	0.747%~~–.76%~~	0.8%	~~.82%–.86%~~	0%
Volatility factors of the expected market price of the Company's common stock	.3322	.5233	~~.31–.33~~	~~.46–.52~~
Weighted-average expected life of the option	3.5 years	3.5 years	~~3.5 years~~	~~3.5 years~~

Net income, as reported, included $~~258~~692 and $~~223~~233 of restricted stock -based compensation expense for the three months ended ~~June~~March 3031, ~~2004~~2005 and ~~2003, respectively and $491 and $432 of restricted stock based compensation expense for the six months ended June 30,~~ 2004 ~~and 2003~~, respectively.

Recently Issued Accounting Standards

On ~~July~~December 616, 2004, the ~~Emerging Issues Task Force of the~~ Financial Accounting Standards Board (~~the~~ "~~EITF~~FASB") ~~reached~~issued aFASB ~~tentative~~Statement ~~conclusion on EITF Issue~~ No. ~~04-8,~~123 ~~"The~~(revised ~~Effect~~2004) ~~of Contingently Convertible Debt on Diluted Earnings Per~~ "Share,-Based Payment" ~~that contingently convertible debt instruments~~ ("~~Co-Cos~~SFAS 123R") ~~are subject to the~~, ~~if-converted~~which ~~method~~is ~~under~~a ~~FASB~~revision of Statement No. ~~128~~123, ~~Earnings~~"Accounting ~~Per~~for ~~Share,~~Stock-Based ~~regardless~~Compensation" ~~of the contingent features included in the instrument~~ (~~contingent price triggers, parity triggers, etc.~~"SFAS 123"). ~~Under~~SFAS 123R ~~current~~supersedes ~~practice,~~APB ~~issuers of Co-Cos exclude the potential common shares underlying the Co-Co from the calculation of diluted earnings per share until the market price or other contingency is met.~~

On April 30, 2004, the Company sold $350.0 million of its 20-year convertible debentures in the 144A private placement market. The convertible debentures are senior unsecured obligations of the Company and are convertible into the Company's common stock under certain circumstances at a conversion rate of $51.26, subject to certain adjustments. The convertible debentures bear regular interest at an annual rate of 2.0%. As a result of the restricted convertibility feature of the debentures, the common stock issuable upon conversion of the debentures is not required under current generally accepted accounting principles to be included in the Company's fully diluted shares until the occurrence of certain events.

~~The~~Opinion ~~following~~No. 25, ~~table~~"Accounting ~~sets~~for ~~forth~~Stock ~~the~~Issued ~~calculation~~to Employees," and amends FASB Statement No. 95, "Statement of ~~diluted~~Cash ~~earnings~~Flows." ~~per~~Generally, ~~share~~the ~~assuming~~approach in SFAS 123R is similar to the approach ~~conversion~~described ofin ~~these~~SFAS 123. ~~convertible~~However, ~~debentures~~SFAS 123R ~~into~~requires ~~common~~all share-based payments to employees, including grants of employee stock ~~(amounts~~options, to be recognized in ~~thousands,~~the ~~except~~income ~~per~~statement ~~share~~based ~~data):~~on their fair values. Pro forma disclosure will no longer be an alternative.

	Three Months Ended June 30,				Six Months Ended June 30,
	2004		2003		2004		2003
Numerator for diluted earnings per share:
As reported (see Note 3)	$	22,711	$	27,454	$	65,662	$	70,139
Interest on 2.0% convertible debentures, net of income taxes		825				825
Proforma	$	23,536	$	27,454	$	66,487	$	70,139
Denominator for diluted earnings per share:
As reported (see Note 3)		64,960		67,442		66,689		67,752
Assumed conversion of 2.0% convertible debentures		4,652				2,326
Proforma		69,612		67,442		69,015		67,752
Diluted earnings per share:
As reported	$	.35	$	.41	$	.98	$	1.04
Pro forma	$	.34	$	.41	$	.96	$	1.04

Under SFAS 123R, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at the date of adoption. The transition alternatives include the modified retrospective and the modified prospective adoption methods. Under the modified retrospective method, prior periods may be restated based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures either for all periods presented or as of the beginning of the year of adoption.

~~Reclassification~~ The modified prospective method requires that compensation expense be recognized beginning with the effective date, based on the requirements of SFAS 123R, for all share-based payments granted after the effective date, and based on the requirements of SFAS 123, for all awards granted to employees prior to the effective date of SFAS 123R that remain unvested on the effective date.

~~Certain~~The provisions ~~amounts~~of inthis ~~prior~~statement ~~periods~~will ~~have~~be ~~been~~effective ~~reclassified~~as toof ~~conform~~the tobeginning of the ~~2004~~first ~~presentation~~interim or annual reporting period that begins after December 31, 2005. ~~These~~The ~~reclassifications~~Company ~~had~~expects noto ~~impact~~adopt the standard on ~~previously~~January 1, ~~reported~~2006. ~~results~~ The Company is evaluating the requirements of ~~operations~~SFAS 123R and has not determined its method of adoption. The Company does not believe, however, that SFAS 123R will have a material impact on its financial position or ~~stockholders'~~results ~~equity~~of operations.

2
SPECIAL CHARGES

Details of the special charge activity during the ~~six~~three months ended ~~June~~March 3031, ~~2004~~2005 are as follows:

	Total			Employee Severance and Other			Marketing Contracts
Balance, December 31, 2003	$	11,053		$	3,653		$	7,400
Balance, December 31, 2004	$	7,064		$	1,264		$	5,800
2004 Utilization		(1,229	)		(429	)		(800	)
2005 Utilization		(1,328	)		(928	)		(400	)
Balance, June 30, 2004	$	9,824		$	3,224		$	6,600
Balance, March 31, 2005	$	5,736		$	336		$	5,400

The remaining accrual, which reflects a portion of the total costs to be incurred related to the Company's European reorganization, is comprised primarily of severance, lease termination costs and contractual marketing obligations and will be utilized over the next few years as planned consolidations occur and contractual obligations come due. The short-term portion of the accrual, or $1,936, is included in accrued expenses, with the balance of $3,800 included in other long-term liabilities.

The short-term portion of the accrual, or $4,824, is included in accrued expenses with the balance of $5,000 included in other long-term liabilities.

3
EARNINGS PER SHARE

Basic earnings per share excludes dilution and is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if options and warrants to acquire common stock were exercised and assumes the conversion of the 4.25% convertible debentures into common stock when dilutive through the redemption date of May 17, 2004.

Diluted earnings per share reflects the potential dilution that could occur if options to acquire common stock were exercised and assumes the conversion of the convertible debentures into common stock when dilutive.

The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands, except per share data):

			Three Months Ended June 30,					Six Months Ended June 30,
		Three Months Ended March 31,
			2004			2003		2004		2003
		2005			2004
Numerator for basic earnings per share:
Net income		$	43,229		$	41,104
Net income			$	21,752		$	25,605	$	62,857	$	66,441
Numerator for diluted earnings per share:
Numerator for diluted earnings per share:
Net income		$	43,229		$	41,104
Net income			$	21,752		$	25,605	$	62,857	$	66,441
Interest on 4.25% convertible debentures, net of income taxes						1,846
Interest on 4.25% convertible debentures, net of income taxes				959			1,849		2,805		3,698
Interest on 2.00% convertible debentures, net of income taxes			186
Net income		$	$43,415	~~22,711~~	$	$42,950	~~27,454~~	$	~~65,662~~	$	~~70,139~~
Denominator for basic earnings per share:
Weighted average shares			59,331	~~59,652~~		59,681	~~59,097~~		~~59,666~~		~~59,486~~
Denominator for diluted earnings per share:
Weighted average shares			59,331	~~59,652~~		59,681	~~59,097~~		~~59,666~~		~~59,486~~
Effect of dilutive securities:
Dilutive employee stock options and warrants	~~Dilutive employee stock options and warrants~~		1,968	~~1,959~~		2,254	~~1,862~~		~~2,107~~		~~1,783~~
	Assumed conversion of 4.25% convertible debentures			3,349			6,483		4,916		6,483
Assumed conversion of 4.25% convertible Debentures						6,483
				64,960			67,442		66,689		67,752
Assumed conversion of 2.00% convertible Debentures			1,038
Basic earnings per share			$	.36		$	.43	$	1.05	$	1.12
			62,337			68,418
Diluted earnings per share			$	.35		$	.41	$	.98	$	1.04
Basic earnings per share:		$	.73		$	.69
Diluted earnings per share:		$	.70		$	.63

4
COMPREHENSIVE INCOME

The following table sets forth the computation of comprehensive income:

	Three Months Ended June 30,						Six Months Ended June 30,
	Three Months Ended March 31,
	2004			2003			2004			2003
	2005			2004
Net income	$	2143,~~752~~229		$	2541,~~605~~104		$	~~62,857~~		$	~~66,441~~
Changes in foreign currency translation adjustments		(112,~~965~~443	)		19(2,~~251~~439	)		~~(4,398~~	)		~~21,767~~
Net change due to hedging instruments in accordance with FAS 133		2127,~~656~~805			~~(17~~9,~~768~~667	)		~~31,323~~			~~(8,878~~	)
Comprehensive income	$	4158,~~443~~591		$	2748,~~088~~332		$	~~89,782~~		$	~~79,330~~

5
COMMITMENTS AND CONTINGENCIES

The Company is involved in various legal proceedings generally incidental to its business. While it is not feasible to predict or determine the outcome of these proceedings, management does not believe that they should result in a materially adverse effect on the Company's financial position, results of operations or liquidity.

The Company has entered into financing agreements, real property and equipment leases which contain tax indemnity provisions. The maximum potential amount of future payments is not determinable since any amounts potentially owed by the Company would be due to future changes in tax rates or income tax regulations which cannot be predicted.

6
ACQUISITION OF COMMON STOCK

Under various share repurchase programs, the Board of Directors has authorized the repurchase of Reebok common stock in the open market or privately negotiated transactions. During the ~~six~~three months ended ~~June~~March 3031, ~~2004~~2005, the Company acquired 140,~~145,600~~000 shares of ~~treasury~~its common stock for approximately $401.38 million. As of ~~June~~March 3031, ~~2004~~2005, the Company ~~had~~ had approximately $~~109~~65.98 million available for future repurchases of its common stock under these Board authorized programs.

7 ACQUISITION OF THE HOCKEY COMPANY

The Company has acquired all of the common shares of Montreal-based The Hockey Company Holdings, Inc. ("The Hockey Company"). The equity value of the transaction was approximately $209.3 million, plus the assumption of debt and certain accruals of approximately $157.5 million. The transaction was effected through a Canadian tender offer completed on June 18, 2004 at which time the Company acquired 92% of the outstanding shares of The Hockey Company, followed by the acquisition of the remaining shares that were not tendered on July 23, 2004. The Hockey Company is a leading supplier of hockey apparel and equipment and, pursuant to a long-term license with the National Hockey League ("NHL"), is the exclusive supplier of authentic, replica and practice jerseys using NHL names and logos, including authentic "on-ice" game jerseys for all thirty NHL teams. The Company has performed a preliminary analysis of the purchase accounting and will finalize this accounting during the third quarter of 2004.

The acquisition was effective as of June 30, 2004. Accordingly, the balance sheet of The Hockey Company is included in the condensed consolidated balance sheet as of June 30, 2004 but the sales and

~~earnings~~ ~~for~~ ~~The~~ Item ~~Hockey~~2. ~~Company are not included in the Company~~Management's ~~results~~Discussion ~~for~~and ~~the~~Analysis ~~second quarter~~ of ~~2004~~Financial asCondition ~~these~~and ~~amounts~~Results ~~were~~of ~~immaterial to the consolidated results~~Operations.

8 SUBSEQUENT EVENT

On July 26, 2004, the Company's subsidiaries The Hockey Company and Sport Maska, Inc. completed a tender offer for all of their issued and outstanding 111/4% Senior Secured Notes due 2009 and a related consent solicitation to effect certain amendments to the indenture governing these notes. Approximately $117.5 million in principal amount of the notes were tendered for consideration equal to approximately $140.3 million. The notes purchased in the tender offer will be retired, and the indenture governing the notes remaining outstanding has been amended to eliminate substantially all of the affirmative and restrictive covenants, certain repurchase rights and certain events of default and related provisions. Approximately $7.5 million of the principal amount of the notes remain outstanding.

Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition.

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the Company's sales, revenues, earnings, spending, margins, cash flow, future orders, inventory, products, actions, plans, strategies, objectives and guidance with respect to the Company's future operating results. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe," "anticipate," "expect," "estimate," "intend," "plan," "project," "will be," "will continue," "will result," "could," "may," "might," or any variations of such words or other words with similar meanings. Any such statements are subject to risks and uncertainties that could cause the Company's actual results to differ materially from the results discussed in such forward-looking statements. Prospective information is based on management's then current expectations or forecasts. Such information is subject to the risk that such expectations or forecasts, or the assumptions underlying such expectations or forecasts, may change. The Company assumes no obligation to update any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.

Risks and uncertainties that could affect the Company's actual results and could cause such results to differ materially from those contained in forward-looking statements made by or on behalf of the Company 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 advantageous licenses with the ~~sports leagues and other brands the~~ Company's ~~licenses~~licensors; risks associated with the Company's international sales, distribution and manufacturing; increases in raw material prices; the Company's ability to manage and forecast its growth and inventories; the loss of significant customers or suppliers; and the effect of currency fluctuations. This list of risk factors is not exhaustive. Other risks and uncertainties are discussed elsewhere in this report and in further detail under the caption entitled "Issues and Uncertainties" included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2003~~2004, which has been filed with the Securities and Exchange Commission. InThe ~~addition, the~~ Company operates in a highly competitive and rapidly changing environment. Therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on the Company's business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. With respect to any statements concerning future orders, the Company's ~~backlog~~open order position is not necessarily indicative of future sales because ~~the~~a ~~ratio~~significant portion of ~~future~~the Company's ~~orders~~business, toincluding ~~"at once" shipments as well as~~ sales by Company-owned retail ~~outlet~~ stores, ~~may~~Rockport, ~~vary~~Ralph ~~from~~Lauren ~~year~~Footwear toand ~~year.~~The InGreg ~~addition,~~Norman ~~currencies~~Collection ~~may~~are ~~fluctuate,~~not ~~many~~included ~~customer~~in ~~orders~~the ~~are~~backlog. In ~~cancelable~~addition, ~~and~~ many markets are not included in open orders since sales are made by independent distributors. ~~Accordingly~~Finally, ~~investors~~many ~~should~~orders ~~not~~may ~~place~~be ~~undue~~cancelled, ~~reliance~~currency onmay ~~forward-looking~~fluctuate ~~statements~~and asthe aratio ~~prediction~~ of ~~actual~~future ~~results~~orders to "at once" shipments may vary from year to year.

CRITICAL ACCOUNTING POLICIES —The Company's significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004. The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis the Company evaluates its estimates, including those related to sales returns and allowances, the realizability of outstanding

The Company's significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003. The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis the Company evaluates its estimates, including those related 11

12accounts receivable, the carrying value of inventories, hedging policies, endorsement contracts and the provision for income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. However, results may differ from these estimates under different assumptions or conditions. The Company is not aware of any trends, demands, commitments, events or uncertainties that are reasonably likely to occur that would materially affect the methodology, the assumptions described, or accounting estimates used. There have been no material changes made to the accounting estimate in the past three years. In the past, actual results have not been materially different from the Company's estimates. Management has discussed the development and selection of its accounting estimates, and the Management's Discussion and Analysis disclosure regarding these estimates, with its audit committee.

to sales returns and allowances, the realizability of outstanding accounts receivable, the carrying value of inventories, hedging policies, and the provision for income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In the past, actual results have not been materially different from the Company's estimates. However, results may differ from these estimates under different assumptions or conditions.

The Company has identified the following as critical accounting policies based on the significant judgments and estimates used in determining the amounts reported in its consolidated financial statements:

Sales Returns and Allowances

The Company records reductions to revenue for estimated customer returns and allowances. The Company bases its estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns and allowances that have not yet been received by the Company. The actual amount of customer returns or allowances, which is inherently uncertain, may differ from the Company's estimates. If actual or expected returns and allowances were significantly greater or lower than the reserves the Company had established, the Company would record an adjustment to reduce or increase net sales and net income in the period in which it made such a determination.

Accounts Receivable

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company ~~estimates~~ estimates potential losses based on the Company's historical rate of credit losses, its knowledge of the financial condition of certain customers and an assessment of the overall conditions at retail. ~~Historically,~~ ~~losses have been within the Company's expectations.~~ If the financial condition of the Company's customers was to change, adjustments may be required to these estimates. ~~Furthermore,~~If the Company ~~provides~~determined ~~for~~that ~~estimated~~increases ~~losses~~or ~~resulting~~decreases ~~from~~to ~~differences~~the ~~between~~allowance for doubtful accounts was appropriate, the ~~gross~~Company ~~carrying~~would ~~value~~record ofan ~~its~~adjustment ~~receivables~~to ~~and~~increase ~~the~~or ~~amounts~~reduce ~~that~~selling, ~~customers~~general ~~estimate~~and ~~are~~administrative ~~owed~~expense toand net income in the ~~Company.~~period ~~The~~in ~~settlement~~which ~~or resolution~~the ofCompany ~~these~~made ~~differences~~such ~~could~~a determination. ~~result~~Historically, inlosses ~~future~~have ~~changes~~been towithin ~~these~~the ~~estimates~~Company's expectations. IfFurthermore, the Company ~~determined~~provides ~~that~~for ~~increases~~estimated orlosses ~~decreases~~resulting tofrom differences between the ~~allowance~~gross ~~for~~carrying ~~doubtful~~value ~~accounts~~of its ~~was~~receivables ~~appropriate,~~and the ~~Company~~ ~~would~~amounts ~~record~~that ancustomers ~~adjustment~~estimate toare ~~increase~~owed orto ~~reduce~~the ~~selling,~~Company. ~~general~~The ~~and~~settlement ~~administrative~~or ~~expense~~resolution ~~and~~of ~~net~~these ~~income~~differences incould ~~the~~result ~~period~~ in ~~which~~future ~~the~~changes ~~Company~~to ~~made~~these ~~such a determination~~estimates.

Inventory Valuation

The Company values its inventory at the lower of cost (first-in, first-out method) or market. Market value is estimated based upon assumptions made about future demand and retail market conditions. If the Company determines that the estimated market value of its inventory is less than the carrying value of such inventory, the Company provides a reserve for such difference as a charge to cost of sales. If actual market conditions are more or less favorable than those projected by the Company, further adjustments may be required that would increase ~~decrease~~ or ~~increase~~decrease the Company's cost of sales and net income in the period in which they were recorded.

Hedging Policies

The Company uses foreign currency forward contracts, options contracts and interest rate swap agreements to hedge its exposure to: (1) merchandise purchased in U.S. Dollars that is forecasted to be sold to customers in other currencies; (2) significant assets and liabilities that are denominated in other currencies; and (3) interest rate movement. If actual fluctuations in foreign exchange rates or interest rates are more or less favorable than those projected by management, or if the actual amount of merchandise purchased in U.S. Dollars to be sold to customers in other currencies differs from the amounts projected, an adjustment may be required to reduce or increase cost of goods sold or other income and net income.

13Endorsement Contracts

~~currencies; and~~In ~~(3) interest~~general, ~~rate~~endorsement ~~movement.~~payments Ifare ~~actual~~expensed ~~fluctuations~~on ina ~~foreign~~straight-line ~~exchange~~basis ~~rates~~over orthe ~~interest~~term ~~rates~~of ~~are~~the ~~more~~contract. orHowever, ~~less~~certain ~~favorable~~contract ~~than~~elements ~~those~~may ~~projected~~be byaccounted ~~management,~~for differently orbased ifupon the ~~actual amount~~facts ofand ~~merchandise~~circumstances ~~purchased~~of ineach Uindividual contract.S. ~~Dollars~~Certain tocontracts beprovide ~~sold~~for tocontingent ~~customers~~payments infor ~~other~~meeting ~~currencies~~specific ~~differs~~performance ~~from~~achievements. ~~the~~The ~~amounts~~Company ~~projected,~~records these ancontingent ~~adjustment~~payments ~~may~~in beselling, ~~required~~general toand ~~reduce~~administrative orexpenses ~~increase~~when ~~cost~~the ofspecific ~~goods~~performance ~~sold or~~achievement ~~other~~has ~~income~~been ~~and net income~~met.

Some of the contracts provide for payments based upon endorsers maintaining a level of performance in their sport over an extended period of time (e.g., maintaining a top ranking in a sport for a year). These amounts are reported in selling, general and administrative expenses when the Company determines that it is probable that the specified level of performance will be maintained throughout the period. In these instances, to the extent that actual payments to the endorser differ from the Company's estimate due to changes in the endorser's athletic performance, increased or decreased selling, general and administrative expenses may be reported in a future period.

Some of the contracts provide for royalty payments to endorsers based upon a predetermined percentage of sales of particular products. The Company expenses a portion of these payments in cost of sales and a portion in selling, general and administrative expenses as the related sales are made. In certain contracts, the Company offers minimum guaranteed royalty payments. For contractual obligations for which the Company estimates that it will not meet the minimum guaranteed amount of royalty fees through sales of product, the Company records the fees on a straight-line basis over the guarantee period.

Income Taxes

The carrying value of the Company's net deferred tax assets assumes that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions to realize the value of these assets. If the Company is unable to generate sufficient future taxable income in these jurisdictions, an adjustment may be required into the net carrying value of the deferred tax assets resulting in additional income tax expense in the Company's consolidated statement of income, thereby reducing net income. Management evaluates the realizability of the deferred tax assets ~~and~~ and assesses the need for any valuation adjustment quarterly.

~~CONSTANT~~RECENTLY ~~DOLLAR~~ISSUED ~~COMPARISONS~~ ACCOUNTING STANDARDS—The Company has described the impact anticipated from the adoption of certain new accounting pronouncements effective in 2005 in Note 1 to the Condensed Consolidated Financial Statements for the quarter ended March 31, 2005.

NON-GAAP MEASURES—The Company provides certain constant dollar comparisons, which eliminate the effect of foreign currency fluctuations on such comparisons, in this Quarterly Report on Form 10-Q. Constant dollars are calculated by translating the prior period financial information at the current period foreign exchange rates, thereby eliminating the effect of foreign currency fluctuations. Because of the significance of the Company's international operations and because of the significant fluctuation that has occurred in foreign currency values as compared to the U.S. Dollar, the Company believes that disclosing constant dollar comparisons in certain instances assists in the readers' understanding of the Company's consolidated financial statements. However, such comparisons may not reflect future changes in currency.

fluctuation that has occurred in foreign currency values as compared to the U.S. Dollar, the Company believes that disclosing constant dollar comparisons in certain instances assists in the readers' understanding of the Company's consolidated financial statements. However, such comparisons may not reflect future changes in currency.

In this Quarterly Report on Form 10-Q the Company provides certain net sales and balance sheet comparisons which exclude the results of The Hockey Company. Since the Company acquired The Hockey Company effective June 30, 2004, The Hockey Company results are included in the Reebok Brand results from the acquisition date. The Company believes that disclosing comparisons excluding the results of The Hockey Company in certain instances assists in the readers' understanding of the Company's consolidated financial statements.

OPERATING RESULTS

~~Second~~First Quarter ~~2004~~2005 Compared to ~~Second~~First Quarter ~~2003~~2004

Net sales for the quarter ended ~~June~~March 3031, ~~2004,~~2005 were $~~813~~925.60 million, an increase of $1193.01 million, or 111.42%, from the quarter ended ~~June~~ March 3031, ~~2003~~ 2004 net sales of $~~802~~831.69 million. On a constant dollar basis, which eliminates the effect of currency exchange fluctuations, net sales for the quarter ended ~~June~~March 3031, ~~2004,~~ ~~decreased~~2005 increased $1177.87 million, or 19.32%. Worldwide sales of the Reebok Brand were $~~681~~783.02 million in the ~~second~~first quarter of ~~2004~~2005, an increase of $1486.73 million, or 212.24%, from $~~666~~696.39 million in the ~~second~~first quarter of ~~2003~~2004. ~~On a constant dollar basis, worldwide sales of the Reebok Brand decreased $6.0 million or 0.9%.~~

~~U.S.~~The ~~footwear~~following ~~sales~~table ofprovides ~~the~~a ~~Reebok~~reconciliation ~~Brand increased 2.8% to $279.3 million in the second quarter~~ of ~~2004~~net ~~from~~sales ~~$271.8 million~~for in the ~~second~~three ~~quarter~~months ofended ~~2003. U.S. footwear revenues were adversely impacted by the bankruptcy filing of one of the Company's major customers, Footstar, which filed under Chapter 11 on~~ March 231, ~~2004.~~2005 ~~This~~and ~~resulted in the cancellation of open orders that would have shipped in the second quarter of~~ 2004~~. U.S. footwear revenue was also adversely affected by negative retail outlet store comparisons that were driven by weak retail sales in June. Also during the quarter~~, ~~the~~excluding ~~Company's U.S. footwear off-price business declined compared to~~ the ~~second~~sales ~~quarter~~ of ~~2003~~The asHockey ~~the~~ Company: ~~believes it is continuing to effectively manage its footwear inventory levels, thereby reducing the closeout sales of its footwear products.~~

A key focus of the Reebok Brand is to build upon the success of its three product and marketing platforms: Rbk, Performance and Classic. During the quarter, sales of Rbk footwear product in the U.S. endorsed by music icons 50 Cent and Jay-Z increased by over 350% from the second quarter of 2003. During the quarter, sales of running footwear in the U.S. increased 9.4% from the second quarter of 2003. The Company's Classic category continued to perform well in the quarter. During the quarter,

			2005						2004
Net Sales			As Reported		The Hockey Company		Without The Hockey Company		As Reported
Reebok Brand:
	U.S. Footwear		$	272.7	$	2.6	$	270.1	$	260.7
	U.S. Apparel			113.6		5.9		107.7		97.9
	International			396.9		15.7		381.2		338.3

		Total Reebok Brand	$	783.2	$	24.2	$	759.0	$	696.9

		Total Company	$	925.0	$	24.2	$	900.8	$	831.9

U.S. footwear sales of the Reebok Brand increased 4.6% to $272.7 million in the first quarter of 2005 from $260.7 million in the first quarter of 2004. During the quarter, the Company's full price, fill-in business for U.S. footwear increased and returns, cancellations and off-price close-out business declined as a percentage of sales when compared to the prior year's first quarter. Also during the first quarter of 2005, footwear and apparel sales in the Company's U.S. outlet stores were flat with the prior year's first quarter on a comparable store basis, in what the Company believes was a difficult retail environment.

As part of the Company's strategy to grow quality market share, the Company continues to invest in three key product and marketing platforms: Rbk, Performance, and Classic. The Company believes that its Rbk product and marketing platform, which was launched three years ago, has successfully introduced Reebok in a younger and fresher way. Many of its new technology products, such as The Pump, feature the Rbk branding. During the 2005 first quarter, the Company experienced an improvement in the performance of its Allen Iverson basketball products. Iverson is healthy, was the most valuable player in the NBA All-Star game and led the league in scoring for the 2004-2005 basketball regular season. During the 2005 first quarter, U.S. footwear sales of Rbk products increased double-digits driven by the strong sell-in of Rbk footwear products endorsed by music icons. The

~~U.S.~~Company ~~sales~~believes ofthat ~~Classic~~its ~~footwear~~strategy ~~increased~~to bymarket ~~28.3%~~to ~~from~~younger ~~the~~consumers ~~second~~is ~~quarter~~working ofand ~~2003.~~as ~~The~~a ~~sales~~result, ~~increase~~U.S. isfootwear ~~from~~sales ~~both~~of ~~the~~Rbk ~~Company's Classic original~~ products asincreased ~~well~~to asabout ~~the~~16% ~~Classic~~of ~~derivative~~our ~~products that~~U.S. ~~are~~footwear ~~more~~sales ~~fashion~~in ~~forward~~the quarter.

~~U.S.~~With ~~apparel~~regard ~~sales~~to of the ~~Reebok~~Company's ~~Brand~~Performance ~~decreased~~footwear inproducts, ~~the~~it ~~second~~continues ~~quarter of 2004 by 17.9%~~ to ~~$89.6 million~~drive ~~from~~its ~~$109.1 million~~running inbusiness ~~the~~through ~~second~~its ~~quarter~~Premier line of ~~2003.~~running ~~The sales decline was in both sports licensed apparel and branded apparel~~products. InSince ~~order to support~~ the Company's ~~growing~~launched ~~sports~~Premier ~~licensed~~approximately two ~~apparel~~years ~~business~~ago, ~~the~~it ~~Company~~believes ~~needed~~it tohas ~~implement~~been asuccessful ~~new, state-of-the-art~~in ~~warehouse~~improving ~~and~~its ~~manufacturing~~penetration ~~system~~into ~~for~~running ~~its~~specialty ~~Indianapolis~~shops ~~facility.~~around ~~Since~~ the ~~second~~world. ~~quarter~~And, ofit ~~the~~believes ~~year~~that it is ~~the~~successfully ~~lowest~~executing ~~volume~~its ~~quarter~~strategy ~~for this~~to ~~location~~leverage the ~~Company~~authenticity ~~decided~~of toPremier ~~shut~~running ~~down~~products ~~the~~into ~~facility~~other ~~for~~running ~~approximately~~product ~~four~~offerings ~~weeks beginning~~ in ~~mid-April in~~ order to ~~implement~~reach ~~the~~multiple ~~new~~channels ~~systems. As a result~~ of ~~the~~distribution ~~shutdown,~~and ~~the~~a ~~Company lost~~broader ~~approximately~~consumer ~~$15.0 million~~base inwith ~~sales~~a ingreater ~~the~~range ~~second quarter, but plans to ship much~~ of ~~this~~price points. ~~product~~In ~~during~~ the ~~third~~first quarter of ~~2004~~2005, U.S. ~~The~~footwear ~~Company's~~sales ~~ability~~of tosports ~~achieve~~performance ~~this~~products ~~will~~increased ~~depend~~8%. ~~upon how~~During ~~quickly~~ the ~~shipments~~quarter, ~~from this facility return to normal capacity~~U.S. ~~The~~footwear ~~facility~~sales ~~has~~of ~~experienced~~Reebok ~~some~~running ~~start-up~~products ~~problems,~~increased ~~but~~19% over the ~~Company~~prior year's ~~believes~~first ~~that they will be resolved shortly~~quarter. The Company's ~~branded~~cleated ~~apparel~~business ~~sales~~is ~~were~~also ~~down~~performing ~~significantly~~well ~~for~~which the ~~quarter.~~Company ~~Part~~believes ~~of the decline~~ is ~~the~~a result of ~~the~~its ~~Company's~~relationships ~~strategy~~with tothe ~~reposition~~four ~~this~~major ~~product~~sports ~~line~~leagues ~~for~~in ~~future~~the ~~growth~~United ~~and~~States. ~~to exit~~Sales ~~certain~~of ~~unprofitable~~football ~~product groups~~ and ~~part~~baseball iscleated ~~due~~product toincreased ~~the~~approximately ~~generally~~280% ~~difficult~~in ~~year~~the ~~at retail for core branded apparel products~~quarter.

The Company's ~~acquired~~third ~~Montreal-based~~product ~~The~~and ~~Hockey~~marketing ~~Company~~platform, ~~Holdings Inc.~~Reebok ~~("The~~Classic, ~~Hockey~~reported ~~Company")~~a ~~effective~~worldwide ~~June 30,~~constant ~~2004~~dollar footwear sales increase of 4.3% ~~Accordingly,~~in the ~~balance~~quarter, ~~sheet~~although sales of ~~The~~Classic ~~Hockey~~product ~~Company~~did isdecline ~~included~~slightly in the ~~condensed~~U.S., ~~consolidated~~consistent ~~balance~~with ~~sheet~~the asmarket oftrend ~~June 30,~~to ~~2004~~more ~~but~~technical product. Overall, the ~~sales~~growth ~~and~~of ~~earnings~~Reebok ~~for~~Classic ~~The~~is ~~Hockey~~being ~~Company~~driven by the introduction of new products that are ~~not~~more ~~included~~contemporary and inappeal ~~the~~to a younger consumer. The Company's ~~results~~is continuing its product segmentation strategy for Reebok Classic product to ensure that the ~~second~~right ~~quarter~~product ofassortment is being offered in the right ~~2004~~retail doors to satisfy our consumers' needs.

~~International~~U.S. apparel sales of the Reebok Brand ~~(including~~increased ~~footwear~~by ~~and~~16.0% ~~apparel)~~to ~~were~~ $~~312~~113.16 million in the ~~second~~first quarter of ~~2004,~~2005 ~~an increase of 9.4%~~ from ~~sales of~~ $~~285~~97.49 million in the ~~second~~first quarter of ~~2003~~2004. ~~International~~Excluding ~~footwear~~the sales ~~increased~~of ~~6.1%~~the Hockey ~~and~~Company ~~international~~in ~~apparel~~2005, sales of U.S. apparel increased by 1310.70%. ~~Changes~~The inCompany ~~foreign~~generated ~~currency~~double-digit ~~exchange~~sales ~~rates~~increases ~~have~~in ~~favorably~~both ~~impacted~~sports ~~these comparisons.~~licensed Onand aReebok ~~constant~~branded ~~dollar~~apparel ~~basis,~~in ~~international~~the ~~sales~~first quarter of 2005 as compared to the ~~Reebok~~first ~~Brand~~quarter ~~increased~~of $62004.~~0 million,~~ orThe ~~2.0%,~~Company's ~~international~~sports ~~footwear~~licensed ~~sales~~products ~~decreased~~continue ~~approximately~~to ~~0.2%~~perform ~~and~~well ~~international apparel~~with strong sales ~~increased~~increases byto ~~approximately~~athletic 4specialty retailers, sporting goods dealers and team shops.~~8%.~~ InDuring ~~constant~~the ~~dollars~~quarter, sales of both NFL and NBA apparel products increased indouble ~~many~~digits. ~~European~~The ~~countries~~Company ~~including~~is ~~Austria,~~also ~~Belgium,~~beginning ~~Finland,~~to ~~Germany,~~experience ~~Holland,~~success ~~Poland,~~in ~~Russia,~~its ~~Switzerland~~European ~~and the~~region Uwith its NFL licensed products.K. ~~However,~~All ~~sales~~key ~~declined~~markets ~~significantly~~and countries in ~~France~~Europe ~~where~~are anow ~~few~~selling ~~major~~NFL ~~retailers~~licensed ~~continue~~products toand ~~struggle~~certain ~~with~~new ~~high~~markets, ~~apparel~~such as Poland and ~~footwear~~the ~~stock~~Middle ~~levels~~East, ~~much~~just ofrecently ~~which~~began isselling ~~coming~~product. ~~from~~Most ~~their~~of ~~own private~~the ~~label~~sales ~~brands.~~increases ~~For~~have ~~the~~come ~~quarter~~from apparel, inincluding ~~constant~~women's ~~dollars~~NFL products, ~~international~~but sales ~~increased~~of inNFL ~~the~~headwear ~~basketball,~~are ~~training,~~also ~~soccer~~beginning ~~and~~to ~~walking~~increase ~~categories~~with some key accounts.

~~Rockport's~~International ~~second~~sales ~~quarter~~of ~~2004~~the ~~sales~~Reebok Brand (including footwear and apparel) were $88396.09 million in the first quarter of 2005, aan ~~decrease~~increase of 317.13% from sales of $90338.83 million in the ~~second~~ first quarter of ~~2003~~2004. ~~Domestic~~The Hockey Company sales ~~for~~represent ~~the~~approximately ~~Rockport~~$15.7 million ~~Brand decreased~~of 5the increase.~~9%,~~ ~~whereas~~International ~~international~~footwear sales increased 322.51% asand ~~compared~~international toapparel ~~the~~sales ~~second~~increased ~~quarter~~by ~~of 2003~~11.2%. Changes ~~Currency~~in ~~has~~foreign currency exchange rates have favorably impacted these comparisons. On a constant dollar basis, international sales of the ~~Rockport~~Reebok Brand ~~decreased~~increased 3$45.61 million, or 12.8%. International ~~revenues~~footwear ~~accounted~~sales ~~for~~increased approximately 3317.4% ofand ~~Rockport's~~international apparel sales inincreased ~~the~~by ~~second~~approximately ~~quarter~~7.0%. Substantially all of ~~2004~~the asinternational ~~compared~~apparel sales increase is due to ~~31%~~the inclusion of The Hockey Company sales in the ~~second~~2005 first quarter. On a category basis, the sales improvement came from the Adventure, Classics, Training, Kids, Running, Tennis and Walking categories. Internationally our Rbk product sales currently represent less than 5% of ~~2003~~total footwear sales.

~~Sales~~In ofconstant dollars, sales increased in the Company's ~~other~~Europe, ~~brands~~Africa and Mideast region, ~~Ralph~~in ~~Lauren~~countries ~~Footwear~~such ~~and~~as ~~The~~Austria, ~~Greg~~Belgium, ~~Norman~~Germany, ~~Collection~~Holland, ~~were~~Poland, ~~$44~~Portugal, Russia, Scandinavia and the U.~~6 million~~K., whereas sales declined in France, Italy and Spain. In the ~~second~~U.K., during the quarter ofthe ~~2004~~Company reported strong sales increases, with a ~~decrease~~double-digit ofconstant ~~2.0%~~dollar ~~from~~footwear sales ofincrease and a 7% ~~$45.5 million~~constant dollar apparel sales increase in the ~~second~~ quarter. ofThe ~~2003.~~Company's Asia Pacific region performed well

During the second quarter of 2004, the Company's overall gross margin was 39.1% of sales, an improvement of 160 basis points when compared with the Company's gross margin of 37.5% in the second quarter of 2003. During the second quarter of 2004 the Company's gross margins in both its U.S. footwear and apparel business have improved. The Company's gross margin during the quarter also benefited from the strengthening of exchange rates in many of its international markets. The improvement in the Company's international margins had the effect of improving its overall operating margins by approximately 20 basis points.

~~Selling,~~in ~~general and administrative expenses for~~ the ~~second~~ quarter ofwith ~~2004~~double-digit ~~were~~sales ~~$271.1 million,~~increases orin ~~33.3%~~Australia, ~~of sales~~China, ~~an increase of $10.7 million when compared with the second quarter of 2003 selling~~India, ~~general~~Japan and ~~administrative~~Korea. ~~expenses~~In ofLatin ~~$260.4 million~~America, ~~or 32.4% of~~ sales. ~~The~~by ~~Company continues to invest in brand building initiatives designed to lay~~ the ~~foundation~~ ~~for~~Company's ~~future~~independent ~~sales~~distributors ~~and~~increased ~~profit~~by ~~growth~~25% ~~worldwide.~~in ~~During~~ the ~~second~~ quarter ~~of 2004 both advertising~~ and ~~marketing~~the Company ~~and~~again ~~research~~noted ~~and~~strong ~~development expenses increased as a percentage of~~ sales ~~as compared~~performance toin ~~the~~virtually ~~second~~all ~~quarter~~ of ~~2003. In addition,~~ the ~~Company~~countries ~~is investing~~ in ~~new~~which ~~systems~~it ~~and various supply chain initiatives and the Company is streamlining its product development processes~~operates.

OnRockport's ~~May 17,~~sales ~~2004,~~for the ~~Company~~first ~~redeemed~~quarter ~~for~~of ~~cash~~2005 ~~the~~were $~~250~~90.0 million, ~~outstanding~~an ~~principal~~increase ~~amount~~of 3.6% from sales of ~~its~~$86.9 million 4in the first quarter of 2004.25 Domestic sales for the Rockport Brand decreased 1.4%, ~~convertible~~whereas ~~debentures~~international ~~due~~sales ~~2021~~increased 11.3% ~~The~~as ~~redemption~~compared ~~price~~to ~~included~~the ~~a call~~first ~~premium~~quarter of $52004.~~3 million~~ Currency has favorably impacted these comparisons. ~~The~~On ~~call~~a ~~premium~~constant ~~and~~dollar ~~the~~basis, ~~writeoff~~international sales of the ~~remaining~~Rockport ~~unamortized,~~brand ~~original~~increased ~~debt~~6.4%. ~~issuance~~International ~~costs~~revenues accounted for approximately 42% of ~~$4.9 million~~Rockport's ~~resulted~~sales in athe ~~$10.2 million pre-tax~~first ~~loss~~quarter ~~due~~of 2005 as compared to 39% in the ~~early~~first ~~extinguishment~~quarter of ~~debt~~2004.

~~For~~Sales of the ~~quarter~~Company's ~~ended June 30, 2004,~~ other ~~expenses~~brands, ~~net,~~Ralph ~~was~~Lauren ~~income~~Footwear ofand ~~$3.0 million~~The ~~compared~~Greg toNorman anCollection, ~~expense~~were of $151.18 million in the ~~second~~first quarter of ~~2003. Included in other expenses~~2005, ~~net,~~an isincrease ~~the amortization~~ of ~~finite-lived~~7.7% ~~intangibles,~~from ~~certain~~sales ~~currency losses and other non-operating expenses~~of $48.1 million ~~The~~in ~~fluctuation was primarily due to~~ the ~~fluctuation~~first ~~in currency~~quarter ~~gains~~of ~~(losses)~~2004.

~~Net~~The ~~interest~~Company's ~~expense~~overall gross margin was $140.~~6 million~~3% ~~for~~of sales during the first quarter ~~ended~~of ~~June 30~~2005, ~~2004,~~which ais ~~decrease~~an increase of ~~$2.4 million~~10 asbasis points when compared towith the ~~second~~Company's ~~quarter~~gross margin of ~~2003~~40.2% ~~During~~in the ~~second~~first quarter of 2004,. ~~interest~~During ~~expense~~the ~~was $6.2 million~~quarter, ~~which~~the isCompany's ~~comparable~~footwear tomargins ~~interest~~improved ~~expense~~but ofwere ~~$6.8 million~~partially inoffset ~~the~~by ~~second~~a ~~quarter~~decline ofin ~~2003~~its apparel margins. ~~Interest~~The ~~income~~Company's ~~was~~international ~~$4.6 million~~margins improved, anhelped by ~~increase~~favorable currency comparisons that were partially offset by the impact of ~~$1.8 million~~price ~~from~~adjustments to competitively value the ~~second~~product ~~quarter~~line at retail and by the impact of ~~2003~~closeouts. The ~~increase~~gross impact of currency movements contributed approximately 85 basis points to the consolidated margins in ~~interest~~the ~~income~~quarter. ~~resulted~~However, ~~from~~the ~~interest~~net ~~earned~~improvement onin the ~~favorable~~international ~~settlement~~margins had the effect of ~~some~~improving consolidated ~~outstanding~~margins ~~income~~by ~~tax~~only ~~matters~~58 basis points in the quarter.

~~The~~Selling, ~~Company's~~general ~~effective~~and ~~income~~administrative ~~tax~~expenses ~~rate~~for ~~was~~the 30first quarter of 2005 were $303.59 million, or 32.9% inof ~~the~~sales, ~~second~~an ~~quarter~~increase of ~~2004~~$37.8 million aswhen compared to 30$266.41 million, or 32.0% inof sales, for the ~~second~~first quarter of ~~2003~~2004. ~~Based~~During onthe ~~current estimates~~quarter, the Company ~~expects~~launched ~~that~~its largest global integrated marketing and advertising campaign in nearly a decade and significantly increased its overall advertising spend for the ~~full~~Reebok ~~year~~Brand. ~~2004~~The ~~effective~~"I ~~income~~Am ~~tax~~What ~~rate~~I ~~will~~Am" ~~approximate~~marketing 30campaign celebrates authenticity and individuality and the Company believes that it is both relevant and inspiring for young consumers.5% In several key markets in Europe the Company's advertising spending more than tripled. ~~However,~~The coordinated launch of the ~~actual~~"I ~~effective~~Am ~~tax~~What ~~rate~~I ~~could fluctuate~~Am" ~~depending~~campaign onin Europe covered thirteen countries including the ~~level~~U.K., France, Spain and ~~geographic~~Italy. ~~mix~~As a result of these investments in the quarter, the Company's ~~earnings~~total ~~and~~Reebok ifBrand ~~there~~advertising ~~are~~expense ~~changes~~increased inapproximately ~~statutory~~40% ~~rates~~as compared with 2004's first quarter.

~~First~~For the ~~Six~~quarter ~~Months~~ended March 31, 2005, other expenses, net, was income of ~~2004~~$1.2 million. ~~Compared~~Included toin ~~First~~other ~~Six~~expenses, ~~Months~~net, is the amortization of ~~2003~~ finite-lived intangibles, certain currency gains and losses and other non-operating expenses.

Net interest ~~sales~~expense ~~for~~was ~~the six months ended June 30, 2004, were~~ $~~1.645 billion, a~~ 2.~~8% increase from net sales of $1.601~~7 ~~billion~~million for the ~~six~~quarter ~~months~~ ended ~~June~~March 3031, ~~2003.~~2005, On a ~~constant~~decrease ~~dollar basis, which eliminates the effect~~ of ~~currency~~$0.9 million ~~exchange~~as ~~fluctuations,~~compared ~~net~~to ~~sales~~the ~~for~~first ~~the~~quarter ~~six~~of ~~months~~2004. ~~ended~~Interest ~~June 30,~~expense ~~2004,~~increased ~~decreased~~ $170.5 ~~million~~ during orthe ~~1.1%.~~first ~~Worldwide~~quarter ~~sales~~ of ~~the~~2005 ~~Reebok~~and ~~Brand~~interest ~~were~~income increased $1.~~378~~4 ~~billion~~million infor the first ~~six~~quarter ~~months~~ of ~~2004,~~2005 anas ~~increase~~compared ofto ~~3.6% from $1.330 billion in~~ the first ~~six~~quarter ~~months~~ of ~~2003~~ 2004. OnThe aincrease ~~constant~~in ~~dollar~~interest ~~basis,~~income ~~worldwide~~is ~~sales~~due ofto increased ~~the~~interest ~~Reebok Brand decreased $9~~rates.~~1 million~~ ~~or 0.7%.~~

~~U.S.~~The ~~footwear~~Company's ~~sales~~effective ofincome ~~the~~tax ~~Reebok~~rate ~~Brand~~was ~~increased 2~~30.208% tofor ~~$540.0 million in~~ the first ~~six~~quarter ~~months~~ of ~~2004~~2005 ~~from~~as ~~$528.5 million~~compared into ~~the first six months of 2003~~30.50% ~~U.S.~~for ~~footwear revenues were adversely impacted by~~ the ~~bankruptcy~~first ~~filing~~quarter of ~~one of the Company's major customers, Footstar, which filed under Chapter 11 on March 2,~~ 2004. The ~~uncertainties~~Company ~~about~~expects ~~the~~that ~~financial condition~~its offull ~~Footstar~~year ~~and~~2005 ~~its~~effective ~~ultimate~~income ~~bankruptcy~~tax rate ~~filing~~will ~~resulted~~be in the ~~cancellation~~range of ~~open~~30% ~~orders~~to ~~that~~31%. ~~would~~The ~~have~~estimated ~~shipped~~2005 intax ~~the~~rate ~~first~~is ~~six~~based ~~months~~on ofcurrent ~~2004.~~tax ~~Sales~~law ofand ~~Rbk footwear product in~~ the ~~U.S. endorsed~~current byexpected ~~music~~geographic ~~icons~~mix 50of ~~Cent~~our ~~and~~earnings. ~~Jay-Z~~Under ~~increased~~current ~~significantly~~accounting inrules, the ~~first~~tax ~~six~~rate could, ~~months~~and ofis ~~2004~~expected ~~as compared~~ to, ~~the~~fluctuate ~~first~~on ~~six~~a ~~months~~quarterly ofbasis ~~2003.~~depending ~~During~~on the ~~first~~jurisdictions ~~six~~in ~~months~~which ofprofits ~~2004,~~are ~~sales~~considered ~~of running~~to ~~footwear~~be inearned, ~~the~~changes ~~U.S.~~in ~~increased~~estimates ~~approximately~~of ~~25.6%~~credits asand ~~compared~~deductions, to the ~~first~~resolution ~~six months~~ of issues ~~2003.~~arising ~~During~~from ~~the~~tax ~~first~~audits ~~six~~with ~~months~~various oftaxing ~~2004,~~authorities ~~U.S.~~and ~~sales of~~ the ~~Company's~~ability ~~Classic footwear increased by approximately 26.5% as compared~~ to ~~the~~realize ~~same~~deferred ~~period~~tax ~~in 2003~~assets.

U.S. apparel sales of the Reebok Brand decreased in the first six months of 2004 by 5.6% to $187.4 million from $198.5 million in the first six months of 2003. During the first six months of 2004 sales of both NFL and NBA products increased double digits from the first six months of 2003. The Company's branded apparel sales were down significantly for the first half of the year as compared to the first half of 2003.

International sales of the Reebok Brand (including footwear and apparel) were $650.4 million in the first six months of 2004, an increase of 7.8% from sales of $603.2 million in the first six months of 2003. Changes in foreign currency have favorably impacted these comparisons. On a constant dollar basis, international sales of the Reebok Brand decreased $9.5 million or 1.4%, international footwear sales decreased approximately 1.8% and international apparel sales decreased by approximately 1.0%. In constant dollars, sales increased in many European countries including Austria, Finland, Germany, Holland, Poland, Russia, and Switzerland. However, sales declined significantly in France where a few major retailers continue to struggle with high apparel and footwear stock levels, much of which is coming from their own private label brands. For the first six months of 2004, in constant dollars, international sales increased in the basketball, training, soccer and walking categories.

Rockport's sales for the first six months 2004 were $175.0 million, a decrease of 3.6% from sales of $181.5 million in the first six months of 2003. Domestic sales for the Rockport Brand decreased 10.2%, whereas international sales increased 11.1% as compared to the first six months of 2003. Currency has favorably impacted these comparisons. On a constant dollar basis, international sales of the Rockport Brand decreased 6.1%. International revenues accounted for approximately 36% of Rockport's sales in the first six months of 2004 as compared to 31% in the first six months of 2003.

Sales of the Company's other brands; Ralph Lauren Footwear and The Greg Norman Collection, were $92.6 million in the first six months of 2004, an increase of 3.8% from sales of $89.2 million in the first six months of 2003.

During the first six months of 2004, the Company's overall gross margin was 39.6% of sales, which is an increase of 180 basis points when compared with the Company's gross margin of 37.8% in the first six months of 2003. During the first six months of 2004 the Company's gross margins in both its U.S. footwear and apparel business have improved. The Company's gross margin during the six months also benefited from the strengthening of exchange rates in many of its international markets. The improvement in the Company's international margins had the effect of improving its overall operating margins by approximately 65 basis points.

Selling, general and administrative expenses for the first six months of 2004 were $537.2 million, or 32.6% of sales, an increase of $40.5 million when compared with the first six months of 2003 selling, general and administrative expenses of $496.7 million, or 31.0% of sales. The Company continues to invest in brand building initiatives designed to lay the foundation for future sales and profit growth worldwide. During the first six months of 2004, advertising and marketing expenses increased approximately 13.5% and total research and development and product development increased approximately 16.1%.

On May 17, 2004 the Company redeemed the $250.0 million outstanding principal amount of its 4.25% convertible debentures due 2021. The redemption price included a call premium of $5.3 million. The call premium and the writeoff of the remaining unamortized, original debt issuance costs of $4.9 million resulted in a loss due the early extinguishment of debt of $10.2 million.

For the six months ended June 30, 2004, other expenses, net, was $4.7 million compared to $0.5 million during the first six months of 2003. Included in other expenses, net, are the amortization of finite-lived intangibles, certain currency losses and other non-operating expenses. The fluctuation was primarily due to the fluctuation in currency gains (losses).

Net interest expense was $5.2 million for the six months ended June 30, 2004, a decrease of $3.4 million as compared to the first six months of 2003. During the first six months of 2004, interest expense was $12.4 million, a decrease of $1.1 million from interest expense of $13.3 million in the first six months of 2003. Interest income was $7.2 million, an increase of $2.4 million from the first six months of 2003. The increase in interest income resulted from interest earned on the favorable settlement of some outstanding income tax matters.

The Company's effective income tax rate was 30.5% in the first six months of 2004 as compared to 30.4% in the first six months of 2003. Based on current estimates, the Company expects that the full year 2004 effective income tax rate will approximate 30.5%. However, the actual effective tax rate could fluctuate depending on the level and geographic mix of the Company's earnings and if there are changes in statutory rates.

Reebok Brand Backlog of Open Orders

Worldwide backlog of open customer orders (including The Hockey Company) scheduled for delivery during the period ~~July~~April 1, ~~2004~~2005 through ~~December~~September 3130, ~~2004~~2005 for the Reebok Brand increased 24.52% as compared to the same period last year. Backlog in constant dollars is calculated by translating the 2004 backlog at the ~~2004~~2005 foreign exchange rates, thereby eliminating the effect of currency fluctuations on the comparisons.

Comparisons regarding orders scheduled for delivery for the period ~~July~~April 1, ~~2004~~2005 through ~~December~~September 3130, ~~2004~~2005 ~~are as follows~~ for the Reebok Brand are as follows:

		Percentage Change 2004/2004
		As Reported Percentage Change 2005/2004
		Reported Dollars		~~Constant Dollars~~	Constant Dollars
U.S.A.:
USA:
Footwear		+~~7.0~~	%4.6	~~+7.0~~%	%+	4.6	%
Apparel		+~~0.3~~	%7.3	~~+0.3~~%	%+	7.3	%
	Total Domestic	+~~4.5~~	%5.4	~~+4.5~~%	%+	5.4	%
International:
Footwear		+~~6.8~~	%11.4	~~+0.4~~%	%+	5.3	%
Apparel		-~~7.2~~	%6.6	~~-12.1~~%	%-	11.2	%
	Total International	~~-0.2~~+	%2.6	~~-5.8~~%	%-	2.7	%
Total Reebok Brand:
Footwear		+~~6.9~~	%7.0	~~+4.5~~%	%+	4.9	%
Apparel		-~~3.4~~	%0.5	~~-5.9~~%	%-	3.3	%
	Total Reebok Brand	+~~2.5~~	%4.2	~~+0.1~~%	%+	1.8	%

~~These~~The inclusion of The Hockey Company in the Company's open backlog is favorably affecting comparisons ~~are~~since ~~not~~most ~~necessarily~~of ~~indicative~~The Hockey Company's open backlog relates to the second quarter of ~~future~~2005 ~~sales~~and ~~trends~~the Company did not acquire The Hockey Company until June 2004. ~~Many~~The ~~customer~~Company's ~~orders~~backlog ~~are~~position ~~cancelable~~is ~~with~~not ~~little~~necessarily orindicative noof ~~penalty,~~future ~~currencies~~sales ~~may~~because ~~fluctuate~~a significant portion of the Company's business, including sales by Company-owned retail ~~outlet~~ stores, ~~are~~Rockport, ~~not~~Ralph ~~included~~Lauren inFootwear ~~the backlog~~ and ~~can~~The ~~vary~~Greg ~~from~~Norman ~~year-to-year,~~Collection ~~many~~are ~~markets~~not included in ~~Latin~~the ~~America~~backlog. ~~and~~In ~~Asia~~addition, ~~Pacific~~many markets are not included in ~~the~~open ~~backlog~~orders ~~because~~since sales are made by independent distributors. Finally, many orders may be cancelled, currency may fluctuate and the ratio of future orders ~~booked early~~ to "at- once" shipments ~~can~~may vary from ~~period~~year to ~~period~~year.

Liquidity and Sources of Capital

At ~~June~~March 3031, ~~2004~~2005, the Company's working capital was $1.~~094~~118 billion as compared ~~with~~to $1.~~161~~051 billion at December 31, ~~2003~~2004 and $1.~~077~~217 billion at ~~June~~ March 3031, ~~2003~~2004. The current ratio, a comparison of current assets to current liabilities, ~~at June 30, 2004~~ was 2.5 to 1 at March 31, as2005 compared to 32.1 3 to 1 at December 31, ~~2003~~2004 and 23.93 to 1 at March 31, ~~June~~2004. The decrease in the current ratio from March 3031, ~~2003~~2004 to March 31, 2005 is primarily due to the purchase of The Hockey Company for $197.7 million in cash (net of cash received) during the second quarter of 2004 and to the increase in the current portion of long term debt of $100.0 million as a result of the Company's 6.75% debentures becoming payable during 2005.

18Accounts receivable at March 31, 2005 were $707.7 million compared to $564.3 million at March 31, 2004. Inventory at March 31, 2005 were $470.2 million compared to $408.8 million at March 31, 2004. The increases in inventory and accounts receivable are primarily related to the Company's acquisition of The Hockey Company and to the effects of currency. Excluding the impact of The Hockey Company and currency, inventory decreased approximately $13.8 million or 3% and accounts receivable increased

Inventory at June 30, 2004 increased by $63.1 million, or 13.3%, from June 30, 2003. Accounts receivable increased $82.6 million or 15.3%. The increases were primarily due to the Company's acquisition of The Hockey Company and to the effects of currency. Excluding the impact of The Hockey Company and currency, inventory declined approximately $16.2 million or 3.3%. The decrease was primarily due to a decrease in Rockport inventory. Excluding the impact of The Hockey Company and currency, accounts receivable declined approximately $4.5 million or .8%. 17

~~The~~approximately ~~following~~$83.0 million ~~table~~or ~~sets~~15%. ~~forth~~Much aof ~~reconciliation~~the ~~between~~Company's ~~inventory~~sales ~~and~~growth ~~receivables~~was asin ofregions ~~June 30,~~where ~~2004~~the ~~including~~days ~~and~~sales ~~excluding~~outstanding ~~the~~in ~~effect~~receivables of("DSOs") are longer than the ~~acquisition~~Company's ofaverage ~~The~~and, ~~Hockey~~as ~~Company (~~a result, ~~non-gaap~~the ~~measure):~~Company's DSOs increased from the prior year's first quarter.

		As Reported		The Hockey Company		Without The Hockey Company
Inventory		539,392		67,544		471,848
Accounts Receivable (net)		623,264		73,310		549,954

The following table sets forth a reconciliation between inventory and receivables as of March 31, 2005 and 2004, excluding the effect of currency and The Hockey Company:

Cash used for operations during the first six months of 2004 was $46.4 million, as compared to cash used for operations of $115.2 million during the first six months of 2003. The Company has acquired all the common shares of Montreal-based The Hockey Company for approximately $193.1 million (net of cash acquired) plus the assumption of debt and certain accruals of $157.5 million. Capital expenditures for the six months ended June 30, 2004 were $15.8 million as compared to $21.0 million during the first six months of 2003. Capital expenditures for 2004 are expected to be in the range of $65.0 to $75.0 million in order to support the Company's European regionalization, the rollout of SAP, the enhancement of its sports licensing operations capability, and retail and other facility requirements internationally.

			March 31,
Inventory			2005			2004		Increase/ Decrease
Balance as reported			$	470.2		$	408.8	15.0%
	Less:
		Effect of currency		(9.1	)
		The Hockey Company		(66.1	)

			$	395.0		$	408.8	-3.4%

On April 30, 2004 the Company sold $350.0 million of its 20-year convertible debentures in the 144A private placement market. The convertible debentures are senior unsecured obligations of the Company and are convertible into the Company's common stock under certain circumstances at a conversion rate of $51.26, subject to certain adjustments. The convertible debentures bear regular interest at an annual rate of 2.0%. Regular interest is payable in cash semi-annually through May 1, 2009, and thereafter will accrue and be due and payable only upon the earlier to occur of redemption, repurchase or final maturity. As a result of the restricted convertibility feature of the debentures, the common stock issuable upon conversion of the debentures is not required under current generally accepted accounting principles to be included in the Company's fully diluted shares until the occurrence of certain events. However, the accounting treatment for such contingently convertible debentures may change to an "as if" converted method for calculating diluted earnings per share. (See note 1)

			March 31,
Accounts Receivable			2005			2004		Increase/ Decrease
Balance as reported			$	707.7		$	564.3	25.4	%
	Less:
		Effect of currency		(18.2	)
		The Hockey Company		(42.1	)

			$	647.4		$	564.3	14.7	%

OnCash ~~May 17,~~used ~~2004~~for operations during the ~~Company~~first ~~redeemed~~three ~~for~~months ~~cash~~of ~~the~~2005 was $~~250~~57.04 million, ~~outstanding~~as ~~principal~~compared ~~amount~~to ofcash ~~its~~used 4for operations of $70.~~25%~~1 million ~~convertible~~during ~~debentures~~the ~~due~~first ~~2021.~~three ~~The~~months ~~redemption~~of ~~price~~2004. onCapital ~~May~~expenditures for the three months ended March 1731, ~~2004~~2005 ~~was~~were ~~equal~~$10.5 million toand ~~102~~$8.~~125%~~2 million offor the ~~principal~~first ~~amount~~three months of ~~the~~2004. ~~convertible~~The ~~debentures,~~capital ~~together~~expenditures ~~with~~are ~~accrued~~primarily ~~and~~related ~~unpaid~~to the ~~interest~~Company's upEuropean toregionalization, ~~but~~the ~~not~~rollout ~~including~~of SAP, the ~~redemption~~enhancement ~~date.~~of ~~The~~its ~~holders received~~sports ~~the~~licensing ~~redemption~~operations ~~price~~capability, inand ~~cash~~retail and other facility requirements internationally.

The Company believes that cash generated from operations, together with the Company's existing credit lines and other financial resources, will adequately finance the Company's planned ~~2004~~ ~~cash~~2005 cash requirements. However, the Company's actual experience may differ from the expectations set forth in the preceding sentence. Factors that might lead to a difference include, but are not limited to, the matters discussed in the Company's Annual Report on Form 10-K under the heading "Issues and Uncertainties," as well as future events that might have the effect of reducing the Company's available cash balances (such as unexpected operating losses or increased capital or other expenditures, as well as increases in the Company's inventory or accounts receivable), or future events that might reduce or eliminate the availability of external financial resources.

19During the three months ended March 31, 2005, the Company acquired 40,000 shares of its common stock for $1.8 million. Also, during the three month period ended March 31, 2005, the Company paid cash dividends in the amount of $0.15 per share, or $9.0 million in the aggregate.

During the six months ended June 30, 2004, the Company acquired 1,145,600 shares of treasury stock for $40.3 million. The acquisition of the shares was in accordance with the Company's previously announced intention to utilize share buybacks to partially offset the dilutive effect of outstanding stock options.

OFF BALANCE SHEET ARRANGEMENTS

The Company occupies its European distribution facility in Rotterdam, The Netherlands, under an operating lease entered into in 1998. During the quarter, the Company finalized an amendment to the lease under which the initial term was extended for an additional ten years, with one five-year renewal option.

For further information regarding the Company's off balance sheet arrangements, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003 and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.

LONG-TERM COMMITMENTS

Details of the Company's contractual obligations for long-term debt, leases and endorsement contracts and minimum royalty agreements, have been updated to reflect the acquisition of The Hockey Company as well as the inclusion of certain minimum royalties under license agreements:

	Payments Due by Period
	Total		2004		2005		2006		2007		2008+
Long-term Debt	$	605.1	$	152.9	$	100.2	$	.2	$	.2	$	351.6
Endorsement Contracts and Minimum Royalties		574.2		92.1		88.6		78.6		73.5		241.4
Operating Leases		230.7		58.2		48.9		41.3		34.8		47.5
Capital Lease Obligations		1.1		.2		.2		.2		.2		.3
Total	$	1,411.1	$	303.4	$	237.9	$	120.3	$	108.7	$	640.8

Endorsement contracts and minimum royalties represent approximate amounts of base compensation and minimum guaranteed royalties the Company is committed to pay to endorsers and licensors. The Company is obligated to pay certain endorsers and licensors royalties based on a percentage of net sales of licensed products, subject to minimum royalty payments. During 2003 substantially all of the Company's aggregate minimum royalty requirements were earned through the sale of licensed products. Actual payments under some endorsement contracts are likely to vary based upon bonuses paid, or reductions enforced, for specific performance achievements in future periods. The Company is also obligated to furnish certain endorsers with Reebok products for their use. It is not possible to determine on an annual basis what will be spent as the contracts do not generally stipulate a specific amount of cash to be spent on the product.

For further details regarding the Company's contractual obligations for long-term debt, leases and endorsement contracts, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our market risks, and the ways we manage them, are summarized in management's discussion and analysis of financial condition and results of operations as of December 31, ~~2003~~ 2004, included in the Company's Form 10-K for the year ended December 31, ~~2003~~2004. There have been no material changes in the first ~~six~~three months of ~~2004~~2005 to such risks or our management of such risks.

2018

Item 4. Controls and Procedures

a): The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 (the "Exchange Act") as of the end of the period covered by this report. Based upon that evaluation, the Company's management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed in this report has been properly recorded, processed, summarized and reported within the required time periods.
b): There has been no change in the Company's internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

2119

PART II—OTHER INFORMATION

Item 1:. Legal Proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(e): Issuer Purchases of Equity Securities

Period		Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (in Thousands)
January 1, 2005 through January 31, 2005						$	67,517
February 1, 2005 through February 28, 2005						$	67,517
March 1, 2005 through March 31, 2005		40,000	$	44.11	40,000	$	65,753

	TOTALS	40,000	$	44.11	40,000	$	65,753

In February 2004 the Company's Board of Directors approved the continuation of the Company's share repurchase programs that had been previously authorized by the Board and authorized the repurchase of an additional $111.0 million of the Company's common stock in the open market or privately negotiated transactions. This brought the total authorized repurchases remaining under this program, as of the date of the Board's approval, to approximately $150.0 million. During the three months ended March 31, 2005, the Company acquired 40,000 shares of its common stock for approximately $1.8 million. As of March 31, 2005, the Company had approximately $65.8 million available for future repurchases of its common stock under these Board authorized programs.

Item 3. Defaults upon Senior Securities.

None.

Item 2:4. ~~Changes~~Submission inof ~~Securities~~Matters ~~and~~to ~~Use~~a Vote of ~~Proceeds~~Security Holders.

(e) Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
April 1, 2004 through April 30, 2004
May 1, 2004 through May 31, 2004	607,900	$	34.04	607,900	128,010,114
June 1, 2004 through June 30, 2004	500,000	$	36.27	500,000	109,872,702
TOTALS	1,107,900	$	35.04	1,107,900	109,872,702

Under various share repurchase programs, the Board of Directors has authorized the repurchase of Reebok common stock in the open market or privately negotiated transactions. During the three months ended June 30, 2004, the Company acquired 1,107,900 shares of treasury stock for approximately $38.8 million. As of June 30, 2004, the Company had approximately $109.9 million available for future repurchases of its common stock under these Board authorized programs.

Item 3: Defaults upon Senior Securities.

None.

Item 4:5. ~~Submission~~Other ~~of Matters to a Vote of Security Holders~~Information.

The Company held its Annual Meeting of Shareholders on May 4, 2004. At the Annual Meeting:

Name of Director	Votes For	Votes Withheld
Norman Axelrod	54,697,296	2,235,074
Paul R. Duncan	56,343,731	588,639
Richard G. Lesser	54,642,617	2,289,753
Deval L. Patrick	56,359,294	573,076

Item 5: Other Information.

None.

Item 6:. Exhibits ~~and Reports on Form 8-K.~~

Instruments Defining the Rights of Security Holders
4.1		Indenture, dated April 3, 2002, among The Hockey Company, Sport Maska Inc., The Bank of New York, as Trustee, and the Subsidiary Guarantors named therein, relating to Units consisting of 111/4% Senior Secured Notes due 2009 of The Hockey Company and 111/4% Senior Secured Notes due 2009 of Sport Maska Inc. (filed as Exhibit 4.2 to The Hockey Company's Current Report on Form 8-K dated April 11, 2002 and incorporated herein by reference).
4.2		First Supplemental Indenture, dated May 22, 2003, among The Hockey Company, Sport Maska Inc., The Bank of New York, as Trustee, and the Guarantors named therein (filed as Exhibit 4.1 to The Hockey Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 and incorporated herein by reference).
4.3		Second Supplemental Indenture, dated May 22, 2003, among The Hockey Company, Sport Maska Inc., The Bank of New York, as Trustee, and the Guarantors named therein (filed as Exhibit 4.2 to The Hockey Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 and incorporated herein by reference).
4.4		Third Supplemental Indenture, dated as of July 13, 2004, among The Hockey Company, Sport Maska Inc., The Bank of New York, as Trustee, and the Guarantors named therein (filed herewith).
Other Exhibits & Certifications
31.1		Certification of Paul Fireman, Chairman and Chief Executive Officer, dated August 9, 2004, and made pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Kenneth Watchmaker, Executive Vice President and Chief Financial Officer, dated August 9, 2004, and made pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Paul Fireman, Chairman and Chief Executive Officer, dated as of August 9, 2004, and made pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Kenneth Watchmaker, Executive Vice President and Chief Financial Officer, dated as of August 9, 2004, and made pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

None.

~~(b) Reports on Form 8-K~~ 20

~~The Company filed a Current Report on Form 8-K with the Commission on April 8, 2004. Under Item 5 of Form 8-K, "~~Other ~~Events," the Company~~ ~~filed a press release regarding the proposed acquisition by Reebok of The Hockey Company Holdings~~Exhibits ~~Inc.~~& ~~(the~~Certifications ~~"Acquisition"). In connection with the Acquisition, Reebok entered into a Support Agreement and a Lock-up Agreement, which the Company filed with the Report under Item 7.~~

31.1: Certification of Paul Fireman, Chairman and Chief Executive Officer, dated May 3, 2005, and made pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2: Certification of Kenneth Watchmaker, Executive Vice President and Chief Financial Officer, dated May 3, 2005, and made pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1: Certification of Paul Fireman, Chairman and Chief Executive Officer, dated as of May 3, 2005, and made pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2: Certification of Kenneth Watchmaker, Executive Vice President and Chief Financial Officer, dated as of May 3, 2005, and made pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~The Company furnished a Current Report on Form 8-K to the Commission on April 23, 2004. The Company furnished its preliminary financial results for the quarter ended March 31, 2004 pursuant to~~ 21

Item 12 of Form 8-K, "Results of Operations and Financial Condition," and in accordance with SEC Release No. 33-8216.

The Company filed a Current Report on Form 8-K with the Commission on April 27, 2004. Under Item 5 of Form 10-K, "Other Events," the Company filed a press release regarding the Company's intention to sell through a private offering up to $300 million of convertible debentures due 2024.

SIGNATURE

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.

Date: August 9, 2004
Date: May 3, 2005
	REEBOK INTERNATIONAL LTD.
	BY:	/s/ KENNETH WATCHMAKER Kenneth Watchmaker Executive Vice President and Chief Financial Officer

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