UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

                  For the quarterly period ended March 31, 2007

                                       OR

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

                        Commission file number 001-14790

                            Playboy Enterprises, Inc.
             (Exact name of registrant as specified in its charter)

                Delaware                                36-4249478
        (State of incorporation)         (I.R.S. Employer Identification Number)

      680 North Lake Shore Drive
               Chicago, IL                                 60611
(Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (312) 751-8000

--------------------------------------------------------------------------------

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

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

  Large accelerated filer |_| Accelerated filer |X| Non-accelerated filer |_|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Act).
Yes  |_|  No  |X|

At April 30,  2007,  there  were  4,864,102  shares of Class A common  stock and
28,378,639 shares of Class B common stock outstanding.

<PAGE>

FORWARD-LOOKING STATEMENTS

      This Quarterly Report on Form 10-Q contains "forward-looking  statements,"
including statements in Part I. Item 2. "Management's Discussion and Analysis of
Financial  Condition and Results of  Operations," as to  expectations,  beliefs,
plans,  objectives and future financial performance,  and assumptions underlying
or  concerning  the  foregoing.  We use words  such as "may,"  "will,"  "would,"
"could," "should," "believes,"  "estimates," "projects," "potential," "expects,"
"plans,"  "anticipates,"  "intends,"  "continues" and other similar terminology.
These forward-looking  statements involve known and unknown risks, uncertainties
and other factors, which could cause our actual results, performance or outcomes
to differ  materially  from those  expressed  or implied in the  forward-looking
statements.  We  want  to  caution  you  not  to  place  undue  reliance  on any
forward-looking  statements.  We undertake no obligation to publicly  update any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.

      The  following  are some of the  important  factors  that could  cause our
actual  results,  performance  or  outcomes  to  differ  materially  from  those
discussed in the forward-looking statements:

(1)   Foreign,  national,  state and local  government  regulations,  actions or
      initiatives, including:

      (a)   attempts to limit or otherwise  regulate the sale,  distribution  or
            transmission   of   adult-oriented   materials,   including   print,
            television, video, Internet and wireless materials,

      (b)   limitations  on the  advertisement  of  tobacco,  alcohol  and other
            products which are important sources of advertising  revenue for us,
            or

      (c)   substantive  changes in postal  regulations which could increase our
            postage and distribution costs;

(2)   Risks associated with our foreign operations,  including market acceptance
      and demand for our products and the products of our licensees;

(3)   Our  ability to manage the risk  associated  with our  exposure to foreign
      currency exchange rate fluctuations;

(4)   Changes in general economic conditions,  consumer spending habits, viewing
      patterns,  fashion trends or the retail sales  environment  which, in each
      case,  could reduce demand for our programming and products and impact our
      advertising revenues;

(5)   Our ability to protect our trademarks,  copyrights and other  intellectual
      property;

(6)   Risks as a distributor of media content, including our becoming subject to
      claims for defamation, invasion of privacy, negligence,  copyright, patent
      or  trademark  infringement,  and other  claims  based on the  nature  and
      content of the materials we distribute;

(7)   The risk  our  outstanding  litigation  could  result  in  settlements  or
      judgments which are material to us;

(8)   Dilution from any potential  issuance of common stock or convertible  debt
      in connection with financings or acquisition activities;

(9)   Competition  for  advertisers  from  other  publications,  media or online
      providers or any decrease in spending by advertisers,  either generally or
      with respect to the adult male market;

(10)  Competition in the television,  men's magazine,  Internet,  new electronic
      media and product licensing markets;

(11)  Attempts  by  consumers  or  private   advocacy   groups  to  exclude  our
      programming or other products from distribution;

(12)  Our  television,  Internet  and  wireless  businesses'  reliance  on third
      parties  for  technology  and  distribution,   and  any  changes  in  that
      technology  and/or  unforeseen  delays in its  implementation  which might
      affect our plans and assumptions;

(13)  Risks  associated with losing access to transponders or technical  failure
      of transponders or other transmitting or playback equipment that is beyond
      our  control  and  competition  for  channel  space on  linear  television
      platforms or video-on-demand platforms;

(14)  Failure to maintain our  agreements  with multiple  system  operators,  or
      MSOs, and direct-to-home, or DTH, operators on favorable terms, as well as
      any decline in our access to, and  acceptance by, DTH and/or cable systems
      and the possible resulting deterioration in the terms, cancellation of fee
      arrangements or pressure on splits with operators of these systems;

(15)  Risks that we may not realize the expected increased sales and profits and
      other benefits from acquisitions;

(16)  Any charges or costs we incur in connection with restructuring measures we
      may take in the future;

(17)  Risks  associated  with the  financial  condition  of Claxson  Interactive
      Group, Inc., our Playboy TV-Latin America, LLC, joint venture partner;

(18)  Increases in paper, printing or postage costs;

(19)  Risks  associated  with certain  minimum  revenue  amounts  under  certain
      television distribution agreements;


                                       2
<PAGE>

(20)  Effects  of  the  national   consolidation  of  the  single-copy  magazine
      distribution system;

(21)  Effects of the national consolidation of television distribution companies
      (e.g., cable MSOs, satellite platforms and telecommunications  companies);
      and

(22)  Risks associated with the viability of our  subscription-,  on demand- and
      e-commerce-based Internet models.

      For a detailed  discussion  of these and other factors that may affect our
performance,  see Part 1. Item 1A. "Risk  Factors" in our Annual  Report on Form
10-K for the year ended December 31, 2006.


                                       3
<PAGE>

                            PLAYBOY ENTERPRISES, INC.
                                    FORM 10-Q


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>
                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements

            Condensed Consolidated Statements of Operations and Comprehensive
            Income for the Quarters Ended March 31, 2007 and 2006 (Unaudited)              5

            Condensed Consolidated Balance Sheets at March 31, 2007 (Unaudited)
            and December 31, 2006                                                          6

            Condensed Consolidated Statements of Cash Flows for the Quarters
            Ended March 31, 2007 and 2006 (Unaudited)                                      7

            Notes to Condensed Consolidated Financial Statements (Unaudited)               8

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
         Operations                                                                       13

Item 3.  Quantitative and Qualitative Disclosures About Market Risk                       17

Item 4.  Controls and Procedures                                                          17

                                   PART II
                              OTHER INFORMATION

Item 1.  Legal Proceedings                                                                18

Item 1A. Risk Factors                                                                     18

Item 6.  Exhibits                                                                         19
</TABLE>


                                       4
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                            PLAYBOY ENTERPRISES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                   for the Quarters Ended March 31 (Unaudited)
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                       2007        2006
-----------------------------------------------------------------------------------------
<S>                                                                  <C>         <C>
Net revenues                                                         $ 85,415    $ 82,120
-----------------------------------------------------------------------------------------
Costs and expenses
   Cost of sales                                                      (66,947)    (63,252)
   Selling and administrative expenses                                (14,583)    (15,337)
-----------------------------------------------------------------------------------------
Total costs and expenses                                              (81,530)    (78,589)
-----------------------------------------------------------------------------------------
Operating income                                                        3,885       3,531
-----------------------------------------------------------------------------------------
Nonoperating income (expense)
   Investment income                                                      475         607
   Interest expense                                                    (1,362)     (1,428)
   Amortization of deferred financing fees                               (134)       (134)
   Other, net                                                            (139)       (196)
-----------------------------------------------------------------------------------------
Total nonoperating expense                                             (1,160)     (1,151)
-----------------------------------------------------------------------------------------
Income before income taxes                                              2,725       2,380
Income tax expense                                                     (1,251)     (1,591)
-----------------------------------------------------------------------------------------
Net income                                                              1,474         789
-----------------------------------------------------------------------------------------

Other comprehensive income (loss)
   Unrealized gain on marketable securities                                57         120
   Unrealized loss on derivatives                                         (11)         (2)
   Foreign currency translation gain (loss)                              (177)         85
-----------------------------------------------------------------------------------------
Total other comprehensive income (loss)                                  (131)        203
-----------------------------------------------------------------------------------------
Comprehensive income                                                 $  1,343    $    992
=========================================================================================

Weighted average number of common shares outstanding
   Basic                                                               33,230      33,141
=========================================================================================
   Diluted                                                             33,269      33,453
=========================================================================================

Basic and diluted earnings per common share                          $   0.04    $   0.02
=========================================================================================
</TABLE>

  The accompanying Notes to Condensed Consolidated Financial Statements are an
                       integral part of these statements.


                                       5
<PAGE>

                            PLAYBOY ENTERPRISES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                   (Unaudited)
                                                                     March 31,   December 31,
                                                                       2007          2006
---------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>
Assets
Cash and cash equivalents                                            $  25,234      $  26,748
Marketable securities and short-term investments                        15,208          9,000
Receivables, net of allowance for doubtful accounts of
   $4,161 and $3,688, respectively                                      44,185         47,728
Receivables from related parties                                         2,173          1,791
Inventories                                                             13,338         12,599
Deferred subscription acquisition costs                                 10,445          9,931
Other current assets                                                    11,237          9,426
---------------------------------------------------------------------------------------------
   Total current assets                                                121,820        117,223
---------------------------------------------------------------------------------------------
Property and equipment, net                                             18,860         17,407
Long-term receivables                                                    4,665          4,665
Programming costs, net                                                  56,590         55,183
Goodwill                                                               132,976        132,974
Trademarks                                                              64,141         63,794
Distribution agreements, net of accumulated amortization
   of $3,777 and $3,435, respectively                                   29,363         29,705
Other noncurrent assets                                                 14,457         14,832
---------------------------------------------------------------------------------------------
Total assets                                                         $ 442,872      $ 435,783
=============================================================================================

Liabilities
Acquisition liabilities                                              $  10,776      $  10,773
Accounts payable                                                        30,851         28,846
Accrued salaries, wages and employee benefits                            6,753          4,896
Deferred revenues                                                       46,217         45,050
Accrued litigation settlement                                            2,500          1,800
Other liabilities and accrued expenses                                  13,266         14,124
---------------------------------------------------------------------------------------------
   Total current liabilities                                           110,363        105,489
---------------------------------------------------------------------------------------------
Financing obligations                                                  115,000        115,000
Acquisition liabilities                                                  9,833          9,692
Net deferred tax liabilities                                            18,841         18,422
Other noncurrent liabilities                                            24,019         23,552
---------------------------------------------------------------------------------------------
   Total liabilities                                                   278,056        272,155
---------------------------------------------------------------------------------------------

Shareholders' equity
Common stock, $0.01 par value
   Class A voting - 7,500,000 shares authorized; 4,864,102 issued           49             49
   Class B nonvoting - 75,000,000 shares authorized;
      28,755,699 and 28,743,914 issued, respectively                       288            287
Capital in excess of par value                                         227,619        227,775
Accumulated deficit                                                    (56,217)       (57,691)
Treasury stock, at cost, 381,971 shares                                 (5,000)        (5,000)
Accumulated other comprehensive loss                                    (1,923)        (1,792)
---------------------------------------------------------------------------------------------
   Total shareholders' equity                                          164,816        163,628
---------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                           $ 442,872      $ 435,783
=============================================================================================
</TABLE>


  The accompanying Notes to Condensed Consolidated Financial Statements are an
                       integral part of these statements.


                                       6
<PAGE>

                            PLAYBOY ENTERPRISES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   for the Quarters Ended March 31 (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                       2007        2006
-----------------------------------------------------------------------------------------
<S>                                                                  <C>         <C>
Cash flows from operating activities
Net income                                                           $  1,474    $    789
Adjustments to reconcile net income to net cash provided by
  operating activities:
   Depreciation of property and equipment                               1,115         885
   Amortization of intangible assets                                      600         285
   Amortization of investments in entertainment programming             8,581       8,498
   Amortization of deferred financing fees                                134         134
   Deferred income taxes                                                  419         905
   Net change in operating assets and liabilities                       5,351          59
   Investments in entertainment programming                            (9,813)     (9,331)
   Litigation settlement                                                   --      (1,000)
   Stock-based compensation                                              (234)        793
   Other, net                                                            (184)         53
-----------------------------------------------------------------------------------------
Net cash provided by operating activities                               7,443       2,070
-----------------------------------------------------------------------------------------
Cash flows from investing activities
Purchases of investments                                               (6,155)       (185)
Additions to property and equipment                                    (2,576)     (1,099)
-----------------------------------------------------------------------------------------
Net cash used for investing activities                                 (8,731)     (1,284)
-----------------------------------------------------------------------------------------
Cash flows from financing activities
Payments of acquisition liabilities                                      (319)     (1,457)
Proceeds from stock-based compensation                                     39         185
-----------------------------------------------------------------------------------------
Net cash used for financing activities                                   (280)     (1,272)
-----------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents               54          44
-----------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                              (1,514)       (442)
Cash and cash equivalents at beginning of period                       26,748      26,089
-----------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                           $ 25,234    $ 25,647
=========================================================================================
</TABLE>

  The accompanying Notes to Condensed Consolidated Financial Statements are an
                       integral part of these statements.


                                       7
<PAGE>

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(A)   BASIS OF PREPARATION

      The  financial  information  included  in these  financial  statements  is
unaudited but, in the opinion of management,  reflects all normal  recurring and
other  adjustments  necessary  for a fair  presentation  of the  results for the
interim  periods.  The  interim  results  of  operations  and cash flows are not
necessarily  indicative  of those  results  and cash flows for the entire  year.
These  financial  statements  should be read in  conjunction  with the financial
statements and notes to the financial  statements contained in our Annual Report
on Form 10-K for the fiscal  year  ended  December  31,  2006.  Certain  amounts
reported for the prior periods have been  reclassified to conform to the current
year's presentation.

(B)   RECENTLY ISSUED ACCOUNTING STANDARDS

      In February 2007, the Financial  Accounting  Standards Board, or the FASB,
issued  Statement  of  Financial  Accounting  Standards  No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities, including an amendment of
FASB  Statement  No. 115, or Statement  159.  Statement  159 allows  entities to
voluntarily elect to measure many financial assets and financial  liabilities at
fair value.  The  election is made on an  instrument-by-instrument  basis and is
irrevocable. We are required to adopt Statement 159 at the beginning of 2008. We
are  currently  evaluating  the impact of adopting  Statement  159 on our future
results of operations and financial condition.

      In September  2006,  the FASB issued  Statement  of  Financial  Accounting
Standards No. 158,  Employers'  Accounting for Defined Benefit Pension and Other
Postretirement  Plans - an  amendment  of FASB  Statements  No. 87, 88, 106, and
132(R),  or Statement 158.  Statement 158 requires an entity to (a) recognize in
its  statement of  financial  position an asset or an  obligation  for a defined
benefit  postretirement  plan's  funded  status,  (b) measure a defined  benefit
postretirement plan's assets and obligations that determine its funded status as
of the end of the employer's fiscal year and (c) recognize changes in the funded
status of a defined benefit  postretirement plan in comprehensive  income in the
year in which  the  changes  occur.  We  adopted  the  recognition  and  related
disclosure  provisions  of  Statement  158  effective  December  31,  2006.  The
measurement  date provision of Statement 158 is effective at the end of 2008. We
do not expect the measurement date provision of adopting Statement 158 to have a
significant impact on our future results of operations or financial condition.

      In September  2006,  the FASB issued  Statement  of  Financial  Accounting
Standards  No. 157, Fair Value  Measurements,  or Statement  157.  Statement 157
provides   enhanced  guidance  for  using  fair  value  to  measure  assets  and
liabilities.  We are required to adopt  Statement 157 effective at the beginning
of 2008. We are currently evaluating the impact of adopting Statement 157 on our
future results of operations and financial condition.

(C)   RESTRUCTURING EXPENSES

      During the quarter  ended March 31,  2007,  we made cash  payments of $0.2
million  and $19  thousand  related  to our 2006 and 2002  restructuring  plans,
respectively.   Of  the  total  costs  related  to  our   restructuring   plans,
approximately  $12.2 million was paid by March 31, 2007, with the remaining $0.4
million to be paid through 2008.

      In 2006, we  implemented a cost  reduction  plan that will result in lower
overhead costs and annual programming and editorial expenses. As a result of the
2006 restructuring plan, we reported a charge in 2006 of $2.1 million related to
costs  associated with a workforce  reduction of 15 employees.  In addition,  in
2006,  we recorded a favorable  adjustment  of $0.2  million and an  unfavorable
adjustment  of $0.1 million  related to the 2002 and 2001  restructuring  plans,
respectively,  as a result of changes in plan assumptions  primarily  related to
excess office space.


                                       8
<PAGE>

      The  following   table  sets  forth  the  activity  and  balances  of  our
restructuring  reserves  for  the  year  ended  December  31,  2006  and for the
three-month period ended March 31, 2007 (in thousands):

<TABLE>
<CAPTION>
                                                            Consolidation
                                                            of Facilities
                                               Workforce         and
                                               Reduction      Operations       Total
-------------------------------------------------------------------------------------
<S>                                             <C>            <C>            <C>
Balance at December 31, 2005                    $     --       $  1,210       $ 1,210
Reserve recorded                                   2,103             --         2,103
Adjustments to previous estimates                     --           (105)         (105)
Other                                                 --           (574)         (574)
Cash payments                                     (1,673)          (263)       (1,936)
-------------------------------------------------------------------------------------
Balance at December 31, 2006                         430            268           698
Cash payments                                       (241)           (19)         (260)
-------------------------------------------------------------------------------------
Balance at March 31, 2007                       $    189       $    249       $   438
=====================================================================================
</TABLE>

(D)   EARNINGS PER COMMON SHARE

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

<TABLE>
<CAPTION>
                                                                      Quarters Ended
                                                                        March 31,
                                                                   -------------------
                                                                      2007       2006
--------------------------------------------------------------------------------------
<S>                                                                <C>        <C>
Numerator:
  For basic and diluted EPS - net income                           $  1,474   $    789
======================================================================================
Denominator:
  For basic EPS - weighted average shares                            33,230     33,141
  Effect of dilutive potential common shares:
     Employee stock options and other                                    39        312
--------------------------------------------------------------------------------------
       Dilutive potential common shares                                  39        312
--------------------------------------------------------------------------------------
  For diluted EPS - weighted average shares                          33,269     33,453
======================================================================================
Basic and Diluted EPS                                              $   0.04   $   0.02
======================================================================================
</TABLE>

      The following table sets forth the number of shares related to outstanding
options  to  purchase  our  Class B common  stock,  or  Class B  stock,  and the
potential  shares  of  Class B  stock  contingently  issuable  under  our  3.00%
convertible  senior  subordinated  notes due 2025, or convertible  notes.  These
shares were not  included in the  computations  of diluted EPS for the  quarters
presented, as their inclusion would have been antidilutive (in thousands):

<TABLE>
<CAPTION>
                                                                       Quarters Ended
                                                                          March 31,
                                                                     -----------------
                                                                       2007       2006
--------------------------------------------------------------------------------------
<S>                                                                   <C>        <C>
Stock options                                                         3,166      2,409
Convertible notes                                                     6,758      6,758
--------------------------------------------------------------------------------------
Total                                                                 9,924      9,167
======================================================================================
</TABLE>


                                       9
<PAGE>

(E)   INVENTORIES

      The following table sets forth inventories,  which are stated at the lower
of cost (specific cost and average cost) or fair value (in thousands):

<TABLE>
<CAPTION>
                                                                  March 31,   December 31,
                                                                     2007         2006
------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>
Paper                                                              $  3,039      $  2,917
Editorial and other prepublication costs                              7,761         7,425
Merchandise finished goods                                            2,538         2,257
-----------------------------------------------------------------------------------------
Total inventories                                                  $ 13,338      $ 12,599
=========================================================================================
</TABLE>

(F)   INCOME TAXES

      Our income tax provision  consists of foreign income tax, which relates to
our international networks and withholding tax on licensing income, for which we
do not receive a current U.S.  income tax benefit due to our net operating loss,
or NOL,  position.  Our income tax provision also includes  deferred federal and
state  income  taxes  related  to  the   amortization   of  goodwill  and  other
indefinite-lived intangibles, which cannot be offset against deferred tax assets
due to the indefinite reversal period of the deferred tax liabilities.

      In June  2006,  the FASB  issued  Interpretation  No. 48,  Accounting  for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, or FIN
48. FIN 48 clarifies the accounting for  uncertainty in income taxes  recognized
in a company's financial  statements and prescribes a recognition  threshold and
measurement attribute for the financial statement recognition and measurement of
a tax  position  taken or  expected  to be taken  in a tax  return.  FIN 48 also
provides  guidance  on  description,  classification,  interest  and  penalties,
accounting in interim periods,  disclosure and transition.  We adopted FIN 48 on
January 1, 2007. Pursuant to FIN 48 and as a result of the implementation of FIN
48, we recognized no  adjustment  in the liability for  unrecognized  income tax
benefits.  At March 31, 2007, we did not have any material  unrecognized  income
tax benefits.  We do not expect to recognize  significant increases or decreases
in unrecognized income tax benefits during 2007.

      Our continuing  practice is to recognize interest and/or penalties related
to income tax matters in income tax expense.

      The statute of limitations for tax years 2003 through 2006 remains open to
examination by the major U.S. taxing  jurisdictions to which we are subject.  In
addition, for all tax years prior to 2003 generating an NOL, tax authorities can
adjust the amount of NOL. In our international tax  jurisdictions,  numerous tax
years remain subject to examination  by tax  authorities,  including tax returns
for at least 2002 and  subsequent  years in all of our major  international  tax
jurisdictions.

(G)   CONTINGENCIES

      In 2006, we recorded $1.8 million, based on an agreement in principle, for
the settlement of litigation with Directrix,  Inc., or Directrix. The settlement
amount, which is subject to Bankruptcy Court approval, will be paid in 2007. The
settlement  is a  compromise  of  disputed  claims  and is not an  admission  of
liability.  We believe that we had good defenses against Directrix's claims, but
made the reasonable  business decision to settle the litigation to avoid further
management  distraction  and defense  costs,  which we had estimated  would have
approximately equaled the amount of the settlement.

      In 2006, we acquired Club Jenna, Inc. and related companies,  a multimedia
adult entertainment business, to complement our existing television,  online and
DVD businesses. We paid $7.7 million at closing with additional payments of $1.6
million,  $1.7 million,  $2.3 million and $4.3 million  required in 2007,  2008,
2009 and 2010, respectively.  Pursuant to the acquisition agreement, we are also
obligated to make future contingent earnout payments based primarily on sales of
existing content of the acquired  business over a ten-year period and on content
produced by the acquired  business during the five-year period after the closing
of the acquisition.  If the required  performance  benchmarks are achieved,  any
contingent  earnout  payments will be recorded as additional  purchase price. No
earnout payments have been made through March 31, 2007.


                                       10
<PAGE>

      In 2005, we acquired an affiliate  network of websites to  complement  our
existing online business.  We paid $8.0 million at closing, $2.0 million in 2006
and an additional  payment of $2.0 million is required in 2007.  Pursuant to the
asset  purchase  agreement,  we are also  obligated  to make  future  contingent
earnout  payments  over a five-year  period  based  primarily  on the  financial
performance of the acquired business. If the required performance benchmarks are
achieved,  any  contingent  earnout  payments  will be  recorded  as  additional
purchase price and/or compensation  expense.  During 2006, an earnout payment of
$0.1 million was made and recorded as additional  purchase  price. No additional
earnout payments have been made in 2007.

      In 2002,  a $4.4 million  verdict was entered  against us by a state trial
court in Texas in a lawsuit with a former publishing licensee. We terminated the
license in 1998 due to the licensee's failure to pay royalties and other amounts
due us under the license  agreement.  We appealed and the State  Appellate Court
reversed  the  judgment  by the trial  court,  rendered  judgment  for us on the
majority of  plaintiffs'  claims and  remanded  the  remaining  claims for a new
trial.  We filed a petition  for review with the Texas  Supreme  Court.  We have
posted a bond in the amount of approximately $9.4 million,  which represents the
amount of the judgment, costs and estimated pre- and post-judgment interest. We,
on advice of legal  counsel,  believe  that it is not  probable  that a material
judgment against us will be sustained and have not recorded a liability for this
case in  accordance  with  Statement of Financial  Accounting  Standards  No. 5,
Accounting for Contingencies.

(H)   BENEFIT PLANS

      We currently  maintain a practice of paying a separation  allowance  under
our  salary  continuation  policy  to  employees  with at  least  five  years of
continuous service who voluntarily  terminate  employment with us and are at age
60 or thereafter,  which is not funded.  We made cash payments under this policy
of $0.1  million and $0.2 million  during the quarters  ended March 31, 2007 and
2006, respectively.

(I)   STOCK-BASED COMPENSATION

      The following table sets forth stock-based  compensation expense (benefit)
related to stock options,  restricted  stock units,  other equity awards and our
employee stock purchase plan, or ESPP (in thousands):

<TABLE>
<CAPTION>
                                                                    Quarters Ended
                                                                       March 31,
                                                                 --------------------
                                                                   2007        2006
-------------------------------------------------------------------------------------
<S>                                                              <C>         <C>
Stock options                                                    $   (283)   $    709
Restricted stock units                                                 --          35
Other equity awards                                                    42          43
ESPP                                                                    7           6
-------------------------------------------------------------------------------------
Total                                                            $   (234)   $    793
=====================================================================================
</TABLE>

      Statement  of  Financial  Accounting  Standards  No. 123  (revised  2004),
Share-Based  Payment,  requires  that the  total  amount  of  compensation  cost
recognized  at the end of the  vesting  period  be based on the  number of stock
options that actually vest as of the completion of the vesting period.  Upon the
vesting of certain stock option grants, we adjusted our stock-based compensation
expense to reflect actual versus estimated  forfeitures  through March 31, 2007.
During the quarter ended March 31, 2007,  we recorded a favorable  adjustment of
$1.0 million to reflect  higher  actual than  estimated  forfeitures  for vested
stock option grants.


                                       11
<PAGE>

(J)   SEGMENT INFORMATION

      The following table sets forth financial information by reportable segment
(in thousands):

<TABLE>
<CAPTION>
                                                                             Quarters Ended
                                                                                March 31,
                                                                       ------------------------
                                                                          2007           2006
-----------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>
Net revenues
Entertainment                                                          $  50,858      $  51,177
Publishing                                                                23,345         23,495
Licensing                                                                 11,212          7,448
-----------------------------------------------------------------------------------------------
Total                                                                  $  85,415      $  82,120
===============================================================================================
Income before income taxes
Entertainment                                                          $   4,304      $   7,873
Publishing                                                                (2,396)        (2,297)
Licensing                                                                  7,677          4,346
Corporate Administration and Promotion                                    (5,700)        (6,391)
Investment income                                                            475            607
Interest expense                                                          (1,362)        (1,428)
Amortization of deferred financing fees                                     (134)          (134)
Other, net                                                                  (139)          (196)
-----------------------------------------------------------------------------------------------
Total                                                                  $   2,725      $   2,380
===============================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                       March 31,   December 31,
                                                                          2007         2006
-----------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>
Identifiable assets
Entertainment                                                          $ 286,957      $ 288,540
Publishing                                                                37,951         38,146
Licensing                                                                 11,582          9,386
Corporate Administration and Promotion                                   106,382         99,711
-----------------------------------------------------------------------------------------------
Total                                                                  $ 442,872      $ 435,783
===============================================================================================
</TABLE>


                                       12
<PAGE>

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

      This  discussion   should  be  read  in  conjunction  with  the  Condensed
Consolidated  Financial Statements and accompanying notes in Item 1 and with our
Annual  Report on Form 10-K for the year ended  December  31,  2006.  All period
references are to our fiscal periods unless otherwise indicated.

RESULTS OF OPERATIONS (1)

      The  following  table sets forth our results of  operations  (in millions,
except per share amounts):

<TABLE>
<CAPTION>
                                                                          Quarters Ended
                                                                             March 31,
                                                                     ----------------------
                                                                       2007          2006
-------------------------------------------------------------------------------------------
<S>                                                                  <C>           <C>
Net revenues
Entertainment
  Domestic TV                                                        $   19.7      $   22.3
  International TV                                                       13.8          12.4
  Online/mobile                                                          15.7          15.3
  Other                                                                   1.7           1.2
-------------------------------------------------------------------------------------------
  Total Entertainment                                                    50.9          51.2
-------------------------------------------------------------------------------------------
Publishing
  Domestic magazine                                                      19.1          19.2
  International magazine                                                  1.9           1.7
  Special editions and other                                              2.3           2.6
-------------------------------------------------------------------------------------------
  Total Publishing                                                       23.3          23.5
-------------------------------------------------------------------------------------------
Licensing
  Consumer products                                                       8.7           6.8
  Location-based entertainment                                            0.9            --
  Marketing events                                                        0.3           0.2
  Other                                                                   1.3           0.4
-------------------------------------------------------------------------------------------
  Total Licensing                                                        11.2           7.4
-------------------------------------------------------------------------------------------
Total net revenues                                                   $   85.4      $   82.1
===========================================================================================

Net income
Entertainment
  Before programming amortization and online content expenses        $   14.5      $   17.3
  Programming amortization and online content expenses                  (10.2)         (9.4)
-------------------------------------------------------------------------------------------
  Total Entertainment                                                     4.3           7.9
-------------------------------------------------------------------------------------------
Publishing                                                               (2.4)         (2.3)
-------------------------------------------------------------------------------------------
Licensing                                                                 7.7           4.3
-------------------------------------------------------------------------------------------
Corporate Administration and Promotion                                   (5.7)         (6.4)
-------------------------------------------------------------------------------------------
Operating income                                                          3.9           3.5
-------------------------------------------------------------------------------------------
Nonoperating income (expense)
  Investment income                                                       0.5           0.6
  Interest expense                                                       (1.4)         (1.4)
  Amortization of deferred financing fees                                (0.1)         (0.1)
  Other, net                                                             (0.2)         (0.2)
-------------------------------------------------------------------------------------------
Total nonoperating expense                                               (1.2)         (1.1)
-------------------------------------------------------------------------------------------
Income before income taxes                                                2.7           2.4
Income tax expense                                                       (1.2)         (1.6)
-------------------------------------------------------------------------------------------
Net income                                                           $    1.5      $    0.8
===========================================================================================
Basic and diluted earnings per common share                          $   0.04      $   0.02
===========================================================================================
</TABLE>


(1)   Certain amounts  reported for the prior periods have been  reclassified to
      conform to the current year's presentation.


                                       13
<PAGE>

      Our revenues  increased  $3.3 million,  or 4%,  compared to the prior year
quarter primarily due to higher Licensing Group revenues.

      Operating  income  increased $0.4 million,  or 10%,  compared to the prior
year quarter due to higher Licensing Group results combined with lower Corporate
Administration and Promotion expense, which more than offset significantly lower
Entertainment  Group  results.  Year over year  Publishing  Group  results  were
comparable.  The current  year  operating  results  included  lower stock option
expense as a result of a higher actual than estimated forfeiture rate, which was
mostly offset by expense related to a reduction in force.

      Net income of $1.5 million improved by $0.7 million,  or 87%,  compared to
the prior year quarter due to the higher operating results previously  discussed
combined with a decrease in income tax expense of $0.4 million.

      Several  of  our  businesses   may  experience   variations  in  quarterly
performance.  As a result,  our  performance  in any quarter is not  necessarily
reflective  of full-year  or  longer-term  trends.  Playboy  magazine  newsstand
revenues vary from issue to issue,  with revenues  generally  higher for holiday
issues and any issues  including  editorial or pictorial  features that generate
additional  public  interest.  Advertising  revenues  also vary from  quarter to
quarter  depending  on  economic  conditions,  holiday  issues  and  changes  in
advertising buying patterns.  Online subscription revenues and operating results
are  impacted  by  decreased  Internet  traffic  during  the  summer  months and
e-commerce  revenues and operating results are typically strongest in the fourth
quarter due to the holiday buying season.

ENTERTAINMENT GROUP

      The following  discussion focuses on the revenues and profit  contribution
before  programming  amortization  and online  content  expenses  of each of our
Entertainment Group businesses.

      Revenues from our domestic TV networks decreased $2.6 million, or 12%, and
profit  contribution  decreased $2.0 million compared to the prior year quarter.
These  decreases were due to lower  direct-to-home,  or DTH,  revenues and lower
movie network cable  pay-per-view  revenues as a result of less overall carriage
of our linear  networks due to the loss of exclusive  carriage on one  satellite
service in the 2006 second quarter and the  continuing  transition in cable from
linear  networks to a more  competitive  video-on-demand,  or VOD,  environment.
Expense  related to certain  distribution  agreements  that we began  amortizing
during the fourth quarter of the prior year and increased  distribution  expense
related to VOD also contributed to the lower profitability. Partially offsetting
these  decreases  were  favorable  variances  related  to  previously  estimated
revenues,  increased VOD revenues and lower marketing expenses.  We believe that
domestic TV revenues have  stabilized and that they will remain in line with the
first  quarter,  excluding the  favorable  variances  related to the  previously
estimated revenues.

      International  TV revenues  increased  $1.4  million,  or 12%,  and profit
contribution was flat compared to the prior year quarter.

      Online/mobile   revenues  increased  $0.4  million,   or  2%,  and  profit
contribution  increased $0.6 million compared to the prior year quarter.  Online
subscription  revenues  increased  due to our  acquisition  in June 2006 of Club
Jenna,  Inc. and related  companies,  or Club Jenna.  Advertising  revenues from
Playboy.com  also  increased.  E-commerce  revenues  declined  primarily  due to
licensing  our Spice  Catalog  in  September  2006.  Mobile  revenues  decreased
primarily due to lower royalties, primarily from Europe.

      Revenues from other businesses  increased $0.5 million,  or 40%, as profit
contribution  decreased  $0.7 million  compared to the prior year  quarter.  The
current  quarter  results  reflected the positive  benefits of a full quarter of
Playboy Radio on SIRIUS Satellite Radio and of the Club Jenna acquisition, which
were more than offset by a legal settlement.

      The  group's  administrative  expenses  increased  $0.6  million,  or 11%,
compared  to the prior year  quarter due in part to higher  legal and  severance
expenses.

      Programming  amortization  and  online  content  expenses  increased  $0.8
million,  or 8%,  compared to the prior year quarter  primarily due to increased
investments  in content to support  new and  existing  websites.  We  anticipate
annual programming  amortization and online content expense to be $39.8 million,
which could vary based on,


                                       14
<PAGE>

among other things, the timing of completion of productions.

      Segment income for the group decreased $3.6 million,  or 45%,  compared to
the prior year quarter due to the operating  results  previously  discussed.  We
believe that the group's  segment  income in the last nine months of the current
year will be in line with that of the prior year's last nine months.

PUBLISHING GROUP

      Domestic  magazine  revenues were flat compared to the prior year quarter.
Advertising revenues increased $1.0 million due to a 15% increase in advertising
pages  coupled  with a 6% increase in average net revenue per page.  Advertising
sales for the 2007 second quarter  magazine issues are closed,  and we expect to
report  approximately  2%  lower  advertising  revenues  and  a 6%  increase  in
advertising  pages compared to the 2006 second  quarter.  Subscription  revenues
decreased $1.0 million  primarily due to fewer copies served in the current year
quarter. Newsstand revenues were flat compared to the prior year quarter as a 7%
decrease in the number of copies sold in the current  year quarter was offset by
a favorable variance related to prior issues.

      Revenues from special  editions and other decreased $0.3 million,  or 11%,
compared to the prior year  quarter,  as a 17% decrease in the number of special
editions  newsstand copies sold in the current year quarter was partially offset
by a favorable variance related to prior issues.

      The group's  segment results were  essentially  flat compared to the prior
year  quarter  as the lower  revenues  previously  discussed  combined  with the
allocation of actual post-employment benefit costs from Corporate Administration
and Promotion and additional subscription collection costs were mostly offset by
lower manufacturing and administration expenses. We continue to believe that the
group's segment  profitability will be consistent with the financial performance
of the last two years.

LICENSING GROUP

      Licensing Group revenues  increased $3.8 million,  or 51%, compared to the
prior year  quarter.  The current year quarter  reflected a $1.3 million sale of
original  art compared to $0.4  million in the prior year  quarter.  The current
year quarter also  reflected  royalties  from our  location-based  entertainment
venue at the Palms Casino Resort in Las Vegas, which opened in October 2006, and
higher consumer products royalties,  principally from Europe, Southeast Asia and
Australia.  The group's segment income increased $3.4 million,  or 77%, compared
to the prior  year  quarter  as a result  of the  revenue  increases  previously
discussed.  We are  now  projecting  growth  of  approximately  20 to 25% in the
Licensing  Group's segment income,  excluding the impact of the sale of original
art.

CORPORATE ADMINISTRATION AND PROMOTION

      Corporate  Administration and Promotion expense decreased $0.7 million, or
11%,  compared to the prior year  quarter,  primarily  due to the  allocation of
actual post-employment benefit costs to the Publishing Group in the current year
quarter,  partially  offset by expense  related to certain  trademark costs that
were previously capitalized.  We believe Corporate  Administration and Promotion
expense will increase  compared to 2006,  reflecting  both an  inflation-related
increase and the impact of the previously mentioned trademark costs.

RESTRUCTURING EXPENSES

      During the quarter  ended March 31,  2007,  we made cash  payments of $0.2
million  and $19  thousand  related  to our 2006 and 2002  restructuring  plans,
respectively.   Of  the  total  costs  related  to  our   restructuring   plans,
approximately  $12.2 million was paid by March 31, 2007, with the remaining $0.4
million to be paid through 2008.

INCOME TAX EXPENSE

      Our effective  income tax rate differs from the U.S.  statutory  rate. Our
income tax  provision  consists  of foreign  income  tax,  which  relates to our
international  networks and withholding tax on licensing income, for which we do
not receive a current  U.S.  income tax benefit  due to our net  operating  loss
position.  Our income tax  provision  also includes  deferred  federal and state
income taxes related to the amortization of goodwill and other  indefinite-lived
intangibles,  which  cannot be offset  against  deferred  tax  assets due to the
indefinite reversal period of the


                                       15
<PAGE>

deferred tax liabilities.

      In June  2006,  the FASB  issued  Interpretation  No. 48,  Accounting  for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, or FIN
48. We adopted FIN 48 on January 1, 2007.  Pursuant to FIN 48 and as a result of
the  implementation  of FIN 48, we recognized no adjustment in the liability for
unrecognized  income  tax  benefits.  At  March  31,  2007,  we did not have any
material  unrecognized  income  tax  benefits.  We do not  expect  to  recognize
significant increases or decreases in unrecognized tax benefits during 2007.

LIQUIDITY AND CAPITAL RESOURCES

      At March 31,  2007,  we had  $25.2  million  in cash and cash  equivalents
compared to $26.7 million in cash and cash  equivalents at December 31, 2006. We
also had $9.0  million  and $3.0  million of auction  rate  securities,  or ARS,
included in marketable  securities and short-term  investments at March 31, 2007
and December 31, 2006,  respectively.  ARS generally have long-term  maturities;
however,   these   investments  have   characteristics   similar  to  short-term
investments because at predetermined  intervals,  typically every 28 days, there
is a new auction  process.  Total financing  obligations  were $115.0 million at
both March 31, 2007 and December 31, 2006.

      At March 31, 2007, cash generated from our operating activities,  existing
cash and cash equivalents and marketable  securities and short-term  investments
were fulfilling our liquidity  requirements.  We also had a $50.0 million credit
facility, which can be used for revolving borrowings,  issuing letters of credit
or a combination of both. At March 31, 2007,  there were no borrowings and $10.6
million in letters of credit outstanding under this facility, resulting in $39.4
million of available borrowings under this facility.

CASH FLOWS FROM OPERATING ACTIVITIES

      Net cash provided by operating activities was $7.4 million, an increase of
$5.4  million  compared to the prior year  quarter  primarily  due to changes in
working capital.

CASH FLOWS FROM INVESTING ACTIVITIES

      Net cash used for investing  activities  was $8.7 million,  an increase of
$7.4 million compared to the prior year quarter. This increase was primarily due
to the purchase of $6.0 million in ARS and capital expenditures of $2.6 million,
which were primarily  related to leasehold  improvements  at our New York office
and Los Angeles programming facility and technology-related items.

CASH FLOWS FROM FINANCING ACTIVITIES

      Net cash used for financing  activities  was $0.3  million,  a decrease of
$1.0  million  compared  to the  prior  year  quarter  primarily  due  to  lower
acquisition liability payments related to our international TV business.

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

      The positive  effect of foreign  currency  exchange rates on cash and cash
equivalents  during  the  current  year and prior  year  quarter  was due to the
weakening of the U.S. dollar against the Euro and pound sterling.


                                       16
<PAGE>

RECENTLY ISSUED ACCOUNTING STANDARDS

      In February 2007, the Financial  Accounting  Standards Board, or the FASB,
issued  Statement  of  Financial  Accounting  Standards  No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities, including an amendment of
FASB  Statement  No. 115, or Statement  159.  Statement  159 allows  entities to
voluntarily elect to measure many financial assets and financial  liabilities at
fair value.  The  election is made on an  instrument-by-instrument  basis and is
irrevocable. We are required to adopt Statement 159 at the beginning of 2008. We
are  currently  evaluating  the impact of adopting  Statement  159 on our future
results of operations and financial condition.

      In September  2006,  the FASB issued  Statement  of  Financial  Accounting
Standards No. 158,  Employers'  Accounting for Defined Benefit Pension and Other
Postretirement  Plans - an  amendment  of FASB  Statements  No. 87, 88, 106, and
132(R),  or Statement 158.  Statement 158 requires an entity to (a) recognize in
its  statement of  financial  position an asset or an  obligation  for a defined
benefit  postretirement  plan's  funded  status,  (b) measure a defined  benefit
postretirement plan's assets and obligations that determine its funded status as
of the end of the employer's fiscal year and (c) recognize changes in the funded
status of a defined benefit  postretirement plan in comprehensive  income in the
year in which  the  changes  occur.  We  adopted  the  recognition  and  related
disclosure  provisions  of  Statement  158  effective  December  31,  2006.  The
measurement  date provision of Statement 158 is effective at the end of 2008. We
do not expect the measurement date provision of adopting Statement 158 to have a
significant impact on our future results of operations or financial condition.

      In September  2006,  the FASB issued  Statement  of  Financial  Accounting
Standards  No. 157, Fair Value  Measurements,  or Statement  157.  Statement 157
provides   enhanced  guidance  for  using  fair  value  to  measure  assets  and
liabilities.  We are required to adopt  Statement 157 effective at the beginning
of 2008. We are currently evaluating the impact of adopting Statement 157 on our
future results of operations and financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      At March 31, 2007, we did not have any floating  interest  rate  exposure.
All of our outstanding  debt as of that date consisted of the 3.00%  convertible
senior  subordinated  notes due 2025, or convertible notes, which are fixed-rate
obligations.  The fair value of the $115.0 million aggregate principal amount of
the  convertible  notes will be influenced by changes in market  interest rates,
the share price of our Class B stock and our credit quality.  At March 31, 2007,
the convertible notes had an implied fair value of $108.7 million.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

      Our management,  with the participation of our Chief Executive Officer and
Chief  Financial  Officer,  has evaluated the  effectiveness  of our  disclosure
controls  and  procedures  (as  such  term is  defined  in Rules  13a-15(e)  and
15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange
Act) as of the end of the period covered by this quarterly report. Based on such
evaluation,  our Chief  Executive  Officer  and  Chief  Financial  Officer  have
concluded  that,  as of the end of such  period,  our  disclosure  controls  and
procedures are effective in recording, processing, summarizing and reporting, on
a timely basis,  information  required to be disclosed by us in the reports that
we file or submit under the Exchange Act.

Internal Control over Financial Reporting

      There have not been any changes in our  internal  control  over  financial
reporting (as such term is defined in Rules  13a-15(f)  and 15d-15(f)  under the
Exchange Act) during the fiscal  quarter to which this report  relates that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.


                                       17
<PAGE>

                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      There have been no material changes to our Legal  Proceedings as contained
in our Annual Report on Form 10-K for the year ended December 31, 2006.

ITEM 1A. RISK FACTORS

      There have been no material  changes to our Risk  Factors as  contained in
our Annual Report on Form 10-K for the year ended December 31, 2006.


                                       18
<PAGE>

ITEM 6. EXHIBITS

Exhibit Number                        Description
--------------                        -----------

31.1  Certification  of Chief Executive  Officer  pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002

31.2  Certification  of Chief Financial  Officer  pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002

32    Certification  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002


                                       19
<PAGE>

                                   SIGNATURES

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


                                              PLAYBOY ENTERPRISES, INC.
                                                    (Registrant)


Date: May 9, 2007                             By     /s/ Linda Havard
                                                     ----------------
                                                     Linda G. Havard
                                                     Executive Vice President,
                                                     Finance and Operations,
                                                     and Chief Financial Officer
                                                     (Authorized Officer and
                                                     Principal Financial and
                                                     Accounting Officer)


                                       20
<PAGE>

                                  EXHIBIT INDEX

Exhibit Number                     Description
--------------                     -----------

31.1  Certification  of Chief Executive  Officer  pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002

31.2  Certification  of Chief Financial  Officer  pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002

32    Certification  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002


                                       21