We did not see anything in the second quarter results that would cause us to alter our full year 2005 stand-alone estimate for Federated of $4.58 per share,

This liquidation has been so sharp, so severe, not just in this last quarter, but over the past year, that even with a modest pickup in demand, production is almost bound to increase as we move through the balance of this year.

Our anticipated results for our second quarter and the remainder of fiscal 2006 reflect smaller year-over-year increases in earnings than we had anticipated, primarily due to continuing production delays in several markets that have postponed deliveries, a slower recent sales pace, higher cancellation rates, more pronounced use of concessions and incentives, and material price increases.

These second-quarter results continue the favorable trend in industry conditions that we began to see earlier this year. We will be divesting or closing operations that no longer meet the company's financial or strategic objectives.

The departure could not have come at a more inopportune time.

Second quarter onwards, we expect better results based on new launches and acquisitions.