##### 



UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549
    FORM 10-K
    þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934: For the fiscal year ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File
    No. 0-22187
 RENAISSANCE LEARNING,
    INC.
 (Exact name of Registrant as
    specified in its charter)
  Wisconsin

39-1559474(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)2911 Peach Street
    P.O. Box 8036
    Wisconsin Rapids, Wisconsin

54495-8036(Zip Code)(Address of principal executive
    offices)   (715) 424-3636
    Title of Each Class:

Name of Each Exchange on Which Registered:Common Stock, $.01 par
    value

The NASDAQ Global Select
    Market   None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



INDEX
  
  PagePART IItem 1.


BusinessOverview


2Software, Laptop
    Computing Solutions and Other Educational Products


3Professional
    Services


5Product
    Development


5Selling and
    Marketing


5Production


6Competition


6Intellectual
    Property


6Employees


7Backlog


7Forward-Looking
    Statements


7Item 1A.


Risk
    Factors


7Item 1B.


Unresolved Staff
    Comments


11Item 2.


Properties


11Item 3.


Legal
    Proceedings


11Item 4.


Submission of
    Matters to a Vote of Security Holders


11PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


13Item 6.


Selected
    Financial Data


16Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


17Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


25Item 8.


Financial
    Statements and Supplementary Data


26Item 9.


Changes In and
    Disagreements With Accountants on Accounting and Financial
    Disclosure


46Item 9A.


Controls and
    Procedures


46Item 9B.


Other
    Information


48PART IIIItem 10.


Directors and
    Executive Officers of the Registrant


49Item 11.


Executive
    Compensation


49Item 12.


Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters


49Item 13.


Certain
    Relationships and Related Transactions


50Item 14.


Principal
    Accountant Fees and Services


50PART IVItem 15.


Exhibits and
    Financial Statement Schedules


51   1




---



##### 



PART I  Item 1.
    Business Overview    ccelerated Reader*, STAR Reading STAR Early
    Literacy Read Now Power Up! Accelerated Math STAR Math Math Facts in a Flash. AlphaSmart English in
    a Flash 2Know! Accelerated Math
  Accelerated Reader Accelerated Reader
  Renaissance Place Renaissance
    Place Renaissance Place Accelerated Reader Enterprise Accelerated Math
    Enterprise Renaissance Place
      AR, AccelScan, Accelerated Math, Accelerated Reader,
    Accelerated Vocabulary, AlphaSmart, Dana, English in a Flash,
    MathFacts in a Flash, Neo, Read Now, Renaissance, Renaissance
    Learning, Renaissance Place, STAR Early Literacy, STAR Reading,
    STAR Math and 2Know! are trademarks of Renaissance Learning,
    Inc.
    registered®,
    common law or pending registration in the United States and
    other countries. Other trademarks are the property of their
    respective owners.
         Power Up! and Steck-Vaughn are
    trademarks of Harcourt Achieve, Inc., registered in the United
    States of America
    and/or other
    jurisdictions.
 2




---



##### 



NASDAQ Global Select
    Market ® 54495-8036 (715) 424-3636). Form 10-K Form 10-Q Form 8-K http://www.renlearn.com 1-800-SEC-0330. Form 10-K.
 Software,
    Laptop Computing Solutions and Other Educational
    Products  Accelerated Reader Accelerated Reader Accelerated Reader Accelerated Reader Accelerated
    Reader Literacy Skills
  STAR Reading STAR Reading
  STAR Early Literacy STAR Early Literacy
  Read Now Power Up! Steck-Vaughn Read Now Power Up! e-learning
 3




---



##### 



Read Now Power Up!
  Accelerated Math Accelerated Math AccelScan Accelerated Math
  AccelScan, Accelerated Math is AccelScan
  STAR Math STAR Reading. STAR Math STAR Math
  MathFacts in a Flash
  English in a Flash
  AlphaSmart Laptops easy-to-use, total-cost-of-ownership Neo Dana. AlphaSmart AlphaSmart
  2Know! state-of-the-art Renaissance
    Learning
  Educator Resource Products.
 4




---



##### 



Professional
    Services    Support Plans.
  Technical Services. Renaissance Renaissance Place
  Training and Professional Development Services. (iii) full-day
  Renaissance Online University
 Product
    Development     Selling
    and Marketing  .
 5




---



##### 



Accelerated Reader ccelerated Math Read Now Power Up! and/or
 Production  Accelerated Reader Accelerated Math
  AlphaSmart 2Know! AccelScan
 Competition     Intellectual
    Property   6




---



##### 



Employees   Backlog   Forward-Looking
    Statements  Form 10-K, Item 1-Business Item 7-Managements Item 1A-Risk
  Item 1A.
    Risk
    Factors  Reliance on Single Product Line. Accelerated
    Reader Accelerated Reader Accelerated Reader
  Geographic Concentration of Sales.
  Dependence on Educational Institutions and Government
    Funding.
 7




---



##### 



and/or
  Dependence on Continued Product Development. and/or
  Acquisitions.
  Reliance on statistical studies to demonstrate effectiveness
    of our products and services.
    Limited Protection of Intellectual Property and Proprietary
    Rights.
 8




---



##### 



Selling and Marketing Strategy and Product
    Acceptance.
  Risks of International Expansion.
  Educational Philosophies.
  Highly Competitive Industry.
    Dependence on Key Personnel.
 9




---



##### 



Ability to Attract and Retain Qualified
    Personnel.
  Fluctuations in Quarterly Performance.
  
    delays in the development
    and/or
    shipment of new products;
    the closing of large contract sales, such as those to school
    districts;
    the shipment of new products for which orders have been building
    for a period of time; and
    seasonal variations due to, among other things, the budget and
    school year cycles of our school customers.    
    charges related to acquisitions and divestitures, including
    related expenses, the write-off of in-process research and
    development, the amortization of intangible assets, asset
    impairments and similar items;
    charges related to obsolete or impaired assets;
    supply-chain issues such as manufacturing problems, delivery
    delays, or quality issues;
    expenses related to product development and marketing
    initiatives; and
    seasonal variability of product support costs.    Management of Growth.
  Share Price Volatility. and/or and/or
  War, Acts of War and Terrorism.
  Concentration of Share Ownership; Control by Principal
    Shareholders/Management.
 10




---



##### 



Shares Eligible for Future Sale.
  Cash Dividends.
  Possible Antitakeover Effects of Certain Articles and By-Laws
    Provisions and Provisions of Wisconsin Law.
  Divestitures.
   Item 1B.
    Unresolved
    Staff Comments     Item 2.
    Properties     Item 3.
    Legal
    Proceedings     Item 4.
    Submission
    of Matters to a Vote of Security Holders   11




---



##### 



EXECUTIVE
    OFFICERS OF THE REGISTRANT
  Name and Age of Officer

OfficeJudith Ames Paul
    Age 60

Ms. Paul is the co-founder of the
    company and has been chairman of the board of directors since
    February 2006. From 1986 until July 2001, and again from August
    2002 until July 2003, Ms. Paul served as chairman of the
    board, and from July 2001 until August 2002, and again from July
    2003 until February 2006, Ms. Paul served as co-chairman
    with Mr. Paul. Ms. Paul has been a director since
    1986. Ms. Paul acts as our spokesperson and is a leading
    teacher advocate. Ms. Paul holds a bachelors degree
    in elementary education from the University of Illinois. Judith
    Paul is Terrance Pauls wife.Terrance D. Paul
    Age 60

Mr. Paul is the co-founder of the
    company and has been our chief executive officer since February
    2006. From February 2006 to April 2006, Mr. Paul also
    served as our president. From August 2002 until July 2003,
    Mr. Paul served as our chief executive officer. From July
    1996 until July 2001, Mr. Paul served as vice chairman of
    the board and from July 2001 until August 2002, and again from
    July 2003 until February 2006, Mr. Paul served as
    co-chairman with Ms. Paul. Mr. Paul has been a
    director since 1986. Mr. Paul holds a law degree from the
    University of Illinois and an MBA from Bradley University.
    Terrance Paul is Judith Pauls husband.Steven A. Schmidt
    Age 52

Mr. Schmidt has been our president
    and chief operating officer since April 2006. From November 2005
    until January 2006, he served as the companys senior vice
    president, administration and operations. From July 2003 to
    November 2005, Mr. Schmidt served as the companys
    executive vice president. From August 1999 until November 2004,
    he served as our chief financial officer and secretary, and from
    August 1999 until July 2003, he also served as a vice president.
    From January 1998 until December 1998, he served as corporate
    controller for Wausau-Mosinee Paper Corporation, a specialty
    paper manufacturer. Mr. Schmidt holds a bachelors
    degree in accountancy from the University of
    Wisconsin-La Crosse, and is a certified public accountant
    (CPA).Mary T. Minch
    Age 40

Ms. Minch has been our chief
    financial officer and secretary since November 2004 and has
    served as senior vice president, finance since January 2007.
    From December 2003 to January 2007, Ms. Minch served as the
    companys vice president, finance. From February 2003 to
    December 2003, Ms. Minch held the position of North
    American division controller for Stora Enso North American,
    Corp., a forest product company whose parent company acquired
    Consolidated Papers, Inc. From October 2000 to February 2003,
    she served as controller-magazine papers at Stora Enso North
    American, Corp. Ms. Minch holds bachelors degrees in
    managerial accounting and finance from the University of
    Wisconsin-Stevens Point and a masters degree from the
    University of Wisconsin-Oshkosh, and is a certified public
    accountant (CPA).      12




---



##### 



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    Holders
    Historical
    Dividends
   13




---



##### 



Performance
    Graph
      COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among Renaissance Learning, Inc., The NASDAQ Composite Index
    And A Peer Group
 
  *
    
    $100 invested on 12/31/01 in stock or index-including
    reinvestment of dividends. Fiscal year ending December 31.  Cumulative Return12/01


12/02


12/03


12/04


12/05


12/06Renaissance Learning,
    Inc.


100.00



62.03



79.00



66.24



68.25



64.87NASDAQ Composite
    Index


100.00



71.97



107.18



117.07



120.50



137.02Peer Group


100.00



44.57



81.10



85.92



98.88



95.45  14




---



##### 



Recent
    Sales of Unregistered Securities
    Changes
    in Securities, Use of Proceeds and Issuer Purchases of Equity
    Securities
        Total Number ofShares Purchased as


Maximum Number ofPart of Publicly


Shares that May Yet BeTotal Number of


Average Price


Announced Plans or


Purchased Under thePeriod

Shares Purchased


Paid per Share


Programs


Plans or ProgramsOctober 1-31


54,341


$
14.86



54,341



538,722November 1-30


47,277



16.88



47,277



491,445December 1-31


102,134



17.51



102,134



389,311Total


203,752


$
16.66



203,752  15




---



##### 



Item 6.
    Selected
    Financial Data  SELECTED
    HISTORICAL CONSOLIDATED FINANCIAL DATA
    (In thousands, except per share amounts)
  Year Ended December 31,2006


2005


2004


2003


2002Consolidated Income Statement
    DataNet sales:Products

$
90,750


$
94,296


$
91,482


$
106,080


$
108,406Services


20,778



21,987



20,242



21,552



20,985Total net sales


111,528



116,283



111,724



127,632



129,391Cost of sales:Products


16,455



12,917



6,167



10,656



11,782Services


10,011



8,669



9,532



9,628



9,243Total cost of sales


26,466



21,586



15,699



20,284



21,025Gross profit


85,062



94,697



96,025



107,348



108,366Operating expenses:Product development


17,291



17,046



14,536



14,881



14,960Selling and marketing


33,639



30,778



30,551



27,997



28,013General and administrative


16,330



12,989



12,005



12,346



12,682Total operating expenses


67,260



60,813



57,092



55,224



55,655Operating income


17,802



33,884



38,933



52,124



52,711Other, net


1,234



3,494



1,640



2,267



3,760Income  continuing
    operations before income taxes


19,036



37,378



40,573



54,391



56,471Income taxes 
    continuing operations


7,043



13,211



15,012



19,406



21,744Income  continuing
    operations


11,993



24,167



25,561



34,985



34,727Income (loss) 
    discontinued operations






584



(2,859
)


(2,444
)


(3,289
)Net income

$
11,993


$
24,751


$
22,702


$
32,541


$
31,438Earnings (loss) per share:Basic:Continuing operations


0.41



0.78



0.82



1.12



1.03Discontinued operations


0.00



0.02



(0.09
)


(0.07
)


(0.10
)Net income

$
0.41


$
0.80


$
0.73


$
1.05


$
0.93Diluted:Continuing operations


0.41



0.78



0.82



1.12



1.02Discontinued operations


0.00



0.02



(0.09
)


(0.08
)


(0.10
)Net income

$
0.41


$
0.80


$
0.73


$
1.04


$
0.92Cash dividends declared per share

$
0.20


$
0.20


$
2.31
*

$



$
Consolidated Balance Sheet
    DataWorking capital

$
15,282


$
21,539


$
41,815


$
103,240


$
74,496Total assets


117,711



128,382



114,724



159,601



147,611Shareholders equity


79,571



95,866



84,417



133,330



121,236     *
    
    Includes a special dividend of $2.15 per share.   16




---



##### 



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
      (i) off-the-shelf off-the-shelf percentage-of-completion
         17




---



##### 



Acquisition
    and Divestiture
  AlphaSmart easy-to-use, total-cost-of-ownership Neo Dana. AlphaSmart
    Results
    of Operations
    Renaissance Place
  Renaissance Place
   18




---



##### 



For the Years Ended December 31,2006


2005


2004Net Sales:Products


81.4
%


81.1
%


81.9
%Services


18.6



18.9



18.1Total net sales


100.0
%


100.0
%


100.0
%Cost of sales:Products


18.1
%


13.7
%


6.7
%Services


48.2



39.4



47.1Total cost of sales


23.7



18.6



14.1Gross profit:Products


81.9



86.3



93.3Services


51.8



60.6



52.9Total gross profit


76.3



81.4



85.9Operating expenses:Product development


15.5



14.7



13.0Selling and marketing


30.2



26.5



27.4General and administrative


14.6



11.1



10.7Operating income


16.0



29.1



34.8Other, net


1.1



3.1



1.5Income  continuing
    operations before income taxes


17.1



32.2



36.3Income taxes 
    continuing operations


6.3



11.4



13.4Income  continuing
    operations


10.8



20.8



22.9Income  discontinued
    operations


0.0



0.5



(2.6
)Net Income


10.8
%


21.3
%


20.3
%   Years
    Ended December 31, 2006 and 2005
  Net Sales. Accelerated Reader
   19




---



##### 



Cost of Sales.
      Product Development.
  Selling and Marketing.
  General and Administrative.
  Operating Income.
  Other income.
  Income Tax Expense  Continuing
    Operations.
 20




---



##### 



Discontinued Operations.
  Years
    Ended December 31, 2005 and 2004
  Net Sales.
    Cost of Sales.
  National School Renaissance Conference.
    Product Development.
  Selling and Marketing.
  General and Administrative.
  Operating Income.
  Other income.
 21




---



##### 



Income Tax Expense  Continuing
    Operations.
  Discontinued Operations.
  Liquidity
    and Capital Resources
            Off-Balance
    Sheet Arrangements and Aggregate Contractual
    Obligations
    Operating Leases.
 22




---



##### 



Purchase Obligations. AlphaSmart AccelScan 2Know!
    Payments Due by PeriodLess Than 1


1-3


3-5


More ThanContractual Obligations

Total


Year


Years


Years


5 Years(In thousands)Operating lease obligations

$
7,108


$
1,969


$
3,700


$
653


$
786Purchase obligations


5,170



5,151



19







Total

$
12,278


$
7,120


$
3,719


$
653


$
786   Retirement Plan.
  Other Obligations.
  Critical
    Accounting Policies and Estimates
  and/or
  Revenue Recognition. No. 97-2 off-the-shelf percentage-of-completion
   23




---



##### 



Impairment or Disposal of Long-Lived Assets.
    Software Support and Product Warranty
    Obligations.
  Software Development Costs. product-by-product
  Taxes. non-United
    Recent
    Accounting Pronouncement
   24




---



##### 



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest Rate Risk.
  Market Risk.
      Foreign Currency Exchange Rate Risk.
 25




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             Internal Control 
    Integrated Framework
  
    26




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 As of December 31, 2006 and 2005
  2006


2005(In Thousands,Except Share andPer Share Amounts)ASSETSCurrent assets:Cash and cash equivalents

$
25,978


$
7,083Investment securities


2,500



23,363Accounts receivable, less allowance
    of $1,133 and $1,340, respectively


10,528



11,393Inventories


4,108



4,138Prepaid expenses


1,896



1,722Income taxes receivable


1,291



Deferred tax asset


3,596



3,693Other current assets


97



390Total current assets


49,994



51,782Investment securities


1,625



4,132Property, plant and equipment, net


11,811



11,475Deferred tax asset






738Goodwill


46,973



45,906Other intangibles, net


6,124



6,787Capitalized software, net


727



420Other receivables






5,909Other non-current assets


457



1,233Total assets

$
117,711


$
128,382LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,782


$
3,280Deferred revenue


23,751



18,255Payroll and employee benefits


4,750



4,156Income taxes payable






313Other current liabilities


3,429



4,239Total current liabilities


34,712



30,243Deferred revenue


885



670Deferred compensation and other
    employee benefits


1,665



1,603Deferred tax liability


878



Total liabilities


38,140



32,516Shareholders equity:Common stock, $.01 par; shares
    authorized: 150,000,000; issued: 34,736,647 shares at
    December 31, 2006 and 2005


347



347Additional paid-in capital


55,542



56,522Retained earnings


124,290



118,233Treasury stock, at cost:
    5,733,130 shares at December 31, 2006;
    4,387,594 shares at December 31, 2005


(99,265
)


(78,845
)Unearned restricted stock
    compensation


(1,417
)


(438
)Accumulated other comprehensive
    income


74



47Total shareholders equity


79,571



95,866Total liabilities and
    shareholders equity

$
117,711


$
128,382    27




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
 For the Years Ended December 31, 2006, 2005 and
    2004
  2006


2005


2004(In Thousands, Except Per Share Amounts)Net Sales:Products

$
90,750


$
94,296


$
91,482Services


20,778



21,987



20,242Total net sales


111,528



116,283



111,724Cost of sales:Products


16,455



12,917



6,167Services


10,011



8,669



9,532Total cost of sales


26,466



21,586



15,699Gross profit


85,062



94,697



96,025Operating expenses:Product development


17,291



17,046



14,536Selling and marketing


33,639



30,778



30,551General and administrative


16,330



12,989



12,005Total operating expenses


67,260



60,813



57,092Operating income


17,802



33,884



38,933Other income:Interest income


1,078



1,324



1,072Other, net


156



2,170



568Income  continuing
    operations before income taxes


19,036



37,378



40,573Income taxes 
    continuing operations


7,043



13,211



15,012Income  continuing
    operations


11,993



24,167



25,561Income (loss) 
    discontinued operations






584



(2,859
)Net Income

$
11,993


$
24,751


$
22,702Earnings (Loss) per share:BasicContinuing operations

$
0.41


$
0.78


$
0.82Discontinued operations


0.00



0.02



(0.09
)Net income

$
0.41


$
0.80


$
0.73DilutedContinuing operations

$
0.41


$
0.78


$
0.82Discontinued operations


0.00



0.02



(0.09
)Net income

$
0.41


$
0.80


$
0.73    28




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
 For the Years Ended December 31, 2006, 2005 and
    2004
  AccumulatedCommon


Additional








Unearned


Other


TotalStock


Paid-in


Retained


Treasury


Restricted Stock


Comprehensive


ShareholdersAmount(1)


Capital


Earnings


Stock


Compensation


Income (Loss)


Equity(In Thousands)Balance, December 31, 2003

$
347


$
54,167


$
148,596


$
(69,838
)

$



$
58


$
133,330Net income










22,702















22,702Foreign currency translation






















46



46Comprehensive income


























22,748Dividends ($2.31 per share)










(71,609
)














(71,609
)Stock repurchased for treasury














(5,539
)










(5,539
)Exercise of stock options






(833
)






5,164











4,331Tax benefit on stock options






1,156



















1,156Balance, December 31, 2004


347



54,490



99,689



(70,213
)






104



84,417Net income










24,751















24,751Foreign currency translation






















(57
)


(57
)Comprehensive income


























24,694Dividends ($.20 per share)










(6,207
)














(6,207
)Stock repurchased for treasury














(32,374
)










(32,374
)Treasury shares issued for
    purchase of AlphaSmart






2,171







20,895











23,066Exercise of stock options






(350
)






2,455











2,105Tax benefit on stock options






112



















112Restricted stock grants






99







392



(491
)






Shared-based compensation


















53







53Balance, December 31, 2005


347



56,522



118,233



(78,845
)


(438
)


47



95,866Net income










11,993















11,993Foreign currency translation






















27



27Comprehensive income


























12,020Dividends ($.20 per share)










(5,936
)














(5,936
)Stock repurchased for treasury














(22,474
)










(22,474
)Exercise of stock options






(2
)






18











16Payment for cancellation of stock
    options






(1,001
)


















(1,001
)Share-based compensation






86











601







687Tax benefit on stock options






393



















393Restricted stock grants






(456
)






2,036



(1,580
)






Balance, December 31, 2006

$
347


$
55,542


$
124,290


$
(99,265
)

$
(1,417
)

$
74


$
79,571     (1)
    
    Common Stock, $0.01 par value, 150,000,000 shares
    authorized.   29




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 For the Years Ended December 31, 2006, 2005 and
    2004
  2006


2005


2004(In thousands)Reconciliation of net income to
    net cash provided by operating activities:Net income

$
11,993


$
24,751


$
22,702(Income) loss from discontinued
    operations






(584
)


2,859Income from continuing operations


11,993



24,167



25,561Adjustments to arrive at cash
    provided by operating activities:Depreciation and amortization


3,541



3,179



3,315Amortization of investment
    discounts/premiums


163



396



696Share-based compensation expense


687



53



Deferred income taxes


2,719



1,437



118Excess tax benefits from share
    based payment arrangements


(393
)


(112
)


(1,156
)Gain on sale of property


(4
)


(1,798
)


9Change in assets and liabilities,
    excluding the effects of acquisitions and divestituresAccounts receivable


938



1,903



4,090Inventories


(334
)


568



(94
)Prepaid expenses


(291
)


(369
)


107Income taxes


(975
)


(937
)


(214
)Accounts payable and other
    liabilities


(1,405
)


(483
)


650Deferred revenue


5,711



1,821



6,034Other current assets


293



1,460



437Other


(375
)


128



(33
)Cash provided by continuing
    operating activities


22,268



31,413



39,520Cash used by discontinued
    operations






(116
)


(3,437
)Net cash provided by operating
    activities


22,268



31,297



36,083Cash flows from investing
    activities:Purchase of property, plant and
    equipment


(2,819
)


(2,419
)


(1,046
)Purchase of investment securities


(517
)


(6,834
)


(46,408
)Maturities/sales of investment
    securities


23,722



25,049



48,949Capitalized software development
    costs


(689
)


(279
)


(563
)Proceeds from mortgage note


5,909







Net proceeds from sale of property


23



3,166



1Net proceeds from sale of
    subsidiary






75



Acquisitions of business, net of
    cash acquired






(33,970
)


Cash provided (used) by investing
    activities


25,629



(15,212
)


933Cash used by discontinued
    operations










(365
)Net cash provided (used) by
    investing activities


25,629



(15,212
)


568Cash flows from financing
    activities:Return of capital to minority
    interest






(98
)


(54
)Proceeds from exercise of stock
    options


16



2,105



4,331Payment for cancellation of stock
    options


(1,001
)






Excess tax benefits from share
    based payment arrangements


393



112



1,156Dividends paid


(5,936
)


(6,207
)


(71,609
)Purchase of treasury stock


(22,474
)


(32,374
)


(5,539
)Net cash used by financing
    activities


(29,002
)


(36,462
)


(71,715
)Net increase (decrease) in cash
    and cash equivalents


18,895



(20,377
)


(35,064
)Cash and cash equivalents,
    beginning of period


7,083



27,460



62,524Cash and cash equivalents, end of
    period

$
25,978


$
7,083


$
27,460Supplemental cash flow informationCash paid during the year
    for Income taxes (net of refunds)

$
5,281


$
11,121


$
13,054    30




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    Consolidation    (2)
    Basis of
    presentation    (3)
    Nature of
    operations    Accelerated Reader STAR Reading,
    STAR Early Literacy, Read Now Power Up!, Accelerated Math, STAR
    Math, MathFacts in a Flash, and English in a Flash.
  AlphaSmart 2Know! Accelscan Accelerated Math
    (4)
    Acquisition  easy-to-use
 31




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   10-year
  available-for-sale
  Twelve Months Ended December 31,2005


2004(In Thousands, Exceptper Share Amounts)Net sales

$
131,576


$
147,151Income from continuing operations


24,104



26,971Earnings per share from continuing
    operationsBasic earnings per share

$
0.75


$
0.83Diluted earnings per share


0.75



0.82   (5)
    Significant
    accounting policies  (a)
    Use of
    estimates    (b)
    Revenue
    recognition  No. 97-2
  (i) off-the-shelf off-the-shelf percentage-of-completion
 32




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       (c)
    Impairment
    or Disposal of Long-Lived Assets.      (d)
    Cash and
    cash equivalents    2006


2005(In Thousands)Cash and time deposits

$
5,953


$
7,083Municipal obligations


20,025



$
25,978


$
7,083   (e)
    Investment
    securities  held-to-maturity
  held-to-maturity
 33




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2006


2005Carrying


Fair


Carrying


FairValue


Value


Value


Value(In Thousands)Debt securities due in less than
    1 year:Corporate bonds

$



$



$
3,000


$
2,976Municipal bonds


2,500



2,496



20,363



20,270Current investment securities


2,500



2,496



23,363



23,246Debt securities due in 1 to
    2 years:Municipal bonds










2,529



2,513Equity securities:Mutual fund investments


1,625



1,625



1,603



1,603Non-current investment securities


1,625



1,625



4,132



4,116Total investment securities

$
4,125


$
4,121


$
27,495


$
27,362   (f)
    Inventories  first-in,
  (g)
    Advertising
    costs    (h)
    Property,
    plant and equipment     34




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005(In Thousands)Land and improvements

$
1,219


$
1,219Buildings


9,967



9,991Furniture, fixtures and office
    equipment


4,694



4,729Computer and production equipment


11,474



11,274Other


1,713



1,667Total property, plant and equipment


29,067



28,880Less  accumulated
    depreciation and amortization


17,256



17,405Property, plant and equipment, net

$
11,811


$
11,475   (i)
    Software
    development costs  product-by-product
  (j)
    Sales and
    concentration of credit risks    (k)
    Share-based
    compensation       35




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2005


2004(In Thousands, Except Per Share Amounts)Net Income, as reported

$
24,751


$
22,702Add: share based compensation
    included in reported net income, net of tax


33



Deduct: total share-based
    compensation expense determined under fair-value based method
    for all awards, net of tax


2,518



1,681Pro forma net income

$
22,266


$
21,021Basic earnings per share:As reported

$
0.80


$
0.73Pro forma


0.72



0.68Diluted earnings per share:As reported

$
0.80


$
0.73Pro forma


0.72



0.67The per share weighted average
    fair value of options granted under the plan during the year is:

$
10.06


$
14.08     2006


2005


2004Dividend yield


1.39
%


1.01
%


0.64
%Expected volatility


55.00
%


57.08
%


62.48
%Risk-free interest rate


4.66
%


4.00
%


3.39
%Expected life (in years)


5



5



6    36




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (l) Earnings
    per common share
          2006


2005


2004Basic weighted average shares
    outstanding


29,551,309



30,966,501



31,046,200Dilutive effect of outstanding
    stock options


7,626



63,151



153,611Dilutive effect of restricted
    shares


10,325



20



Diluted weighted average shares
    outstanding


29,569,260



31,029,672



31,199,811   (m) Income
    taxes
    (n) Comprehensive
    income (loss)
    (o) Shipping
    and handling revenues and costs
   37




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (p)
    Other
    receivable    (6)
    Goodwill
    and other intangible assets      (In Thousands)Balance at December 31, 2004

$
2,757Acquisition


43,134Translation


15Balance at December 31, 2005


45,906Acquisition  final
    allocation adjustment


1,066Translation


1Balance at December 31, 2006

$
46,973   10-year
    December 31, 2006


December 31, 2005Gross


Accumulated





Gross


AccumulatedAmount


Amortization


Net


Amount


Amortization


Net(In Thousands)Tradename

$
3,000






$
3,000


$
3,000






$
3,000Customer relationships


4,150


$
1,026



3,124



4,150


$
363



3,787Other intangibles

$
7,150


$
1,026


$
6,124


$
7,150


$
363


$
6,787  38




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (7)
    Income
    taxes    2006


2005


2004(In Thousands)Current tax provision:U.S. federal

$
3,783


$
9,840


$
12,341State and local


518



1,850



2,497Foreign


23



84



56Total current tax provision


4,324



11,774



14,894Deferred tax provision:U.S. federal


2,571



1,329



113State and local


148



108



5Total deferred tax provision


2,719



1,437



118Provision for income taxes

$
7,043


$
13,211


$
15,012     2006


2005


2004(In Thousands)Income tax provision at statutory
    tax rate

$
6,663



35.0
%

$
13,083



35.0
%

$
14,201



35.0
%State and local taxes, net of
    federal tax benefit


433



2.3
%


1,273



3.4
%


1,640



4.0
%Federal tax credits and exclusions


(82
)


(0.4
)%


(327
)


(0.8
)%


(262
)


(0.6
)%Resolution of prior period tax
    matters






0.0
%


(779
)


(2.1
)%






0.0
%Other


29



0.1
%


(39
)


(0.2
)%


(567
)


(1.4
)%Provision for income taxes

$
7,043



37.0
%

$
13,211



35.3
%

$
15,012



37.0
%     2006


2005(In Thousands)Current deferred tax assets:Deferred revenue

$
1,062


$
854Expenses not currently deductible


2,534



2,839Net current deferred tax assets


3,596



3,693Noncurrent deferred tax assets
    (liabilities):Deferred revenue


32



100Expenses not currently deductible


86



1,676Depreciation and amortization


388



255Intangibles


(1,384
)


(1,293
)Net noncurrent deferred tax asset
    (liability)


(878
)


738Total deferred tax assets

$
2,718


$
4,431  39




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (8)
    Lines of
    credit    (9)
    Lease
    commitments      (In Thousands)2007

$
1,9692008


1,6592009


1,1272010


9142011


653After 2011


786$
7,108   (10)
    Litigation    (11)
    Retirement
    plans         40




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       2006


2005


2004(In Thousands)Employer matching
    contribution  401(k) Plan

$
1,318


$
1,027


$
1,124Employer matching
    contribution  SERP


15



16



24Loss related to unfunded SERP
    liability










16Total

$
1,333


$
1,043


$
1,164   (12)
    Stock
    incentive plan    Stock option awards
    Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOutstanding at beginning of year


1,519,820


$
22.42



1,625,038


$
22.85



1,989,383


$
21.82Granted


9,616



14.86



223,044



20.58



122,067



24.73Exercised*


(241,149
)


13.54



(135,880
)


15.49



(285,522
)


15.17Forfeitures


(392,771
)


26.47



(192,382
)


28.82



(200,890
)


24.68Outstanding at end of year


895,516



22.96



1,519,820



22.42



1,625,038



22.85Options exercisable at end of year


893,297


$
22.98



1,515,381


$
22.44



1,074,182


$
23.12     *
    
    Includes 240,119 of shares related to payment of $1,000,501 to
    cancel
    in-the-money
    options, primarily of the companys former chief executive
    officer 41




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Outstanding Options


Exercisable OptionsWeighted Average








Weighted AverageRange of

Options


Remaining


Weighted Average


Options


Exercise Price ofExercise Price

Outstanding


Contractual Life


Exercise Price


Exercisable


Exercisable Options$ 8.00 to $16.00


67,442



3.10


$
12.55



67,442


$
12.55$16.01 to $22.00


434,372



5.10



17.81



432,153



17.82$22.01 to $29.00


95,927



7.40



24.48



95,927



24.48$29.01 to $34.00


194,303



4.43



30.65



194,303



30.65$34.01 to $40.00


102,938



3.93



35.45



102,938



35.45$40.01 to $52.00


534



4.55



51.49



534



51.49$8.00 to $51.58


895,516



4.91


$
22.96



893,297


$
22.98   Restricted stock awards
    (13)
    Shareholders
    equity      Aggregate AnnualWeighted Average


Cost ofNumber of Shares


Repurchased Price


RepurchasedRepurchased


Per Share*


Stock*2006


1,461,216


$
15.38


$
22,474,6282005


1,837,231


$
18.00


$
32,373,7192004


290,000


$
18.19


$
5,539,329     *
    
    Includes broker commission   42




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (14)
    Segment
    reporting    (15)
    Quarterly
    results of operations (unaudited)    Quarter EndedMarch 31


June 30


September 30


December 31(In Thousands, Except Per Share Amounts)2006Net sales

$
31,117


$
29,319


$
25,167


$
25,925Gross profit


23,983



22,462



18,768



19,849Operating income


5,240



7,076



2,987



2,499Income  continuing
    operations before income taxes


5,522



7,419



3,303



2,792Income taxes 
    continuing operations


2,043



2,745



1,222



1,033Income  continuing
    operations


3,479



4,674



2,081



1,759Income  discontinued
    operations














Net income


3,479



4,674



2,081



1,759Earnings per share:Basic and diluted:Continuing operations


0.12



0.16



0.07



0.06Discontinued operations














Net income


0.12



0.16



0.07



0.06Common stock price per share:High


19.96



17.21



15.19



18.76Low


15.98



12.64



10.61



13.71 43




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Quarter EndedMarch 31


June 30


September 30


December 31(In Thousands, Except Per Share Amounts)2005Net sales

$
27,557


$
28,346


$
31,389


$
28,991Gross profit


23,608



24,210



23,992



22,887Operating income


8,876



11,150



7,399



6,459Income  continuing
    operations before income taxes


9,332



11,652



7,803



8,591Income taxes 
    continuing operations


3,453



4,311



2,887



2,560Income  continuing
    operations


5,879



7,341



4,916



6,031Income  discontinued
    operations


584











Net income


6,463



7,341



4,916



6,031Earnings per share:Basic and diluted:Continuing operations


0.19



0.24



0.16



0.20Discontinued operations


0.02











Net income


0.21



0.24



0.16



0.20Common stock price per share:High


18.39



20.30



24.16



20.29Low


15.25



15.67



16.09



13.69   Earnings per share amounts for each quarter are required to
    be calculated independently and therefore may not total to the
    amount calculated for the year.
  Generation21 was divested during the first quarter of 2005
    and, therefore, its results for all periods presented in the
    consolidated financial statements are reflected as discontinued
    operations.
  (16)
    Recent
    accounting pronouncements    (17)
    Discontinued
    operations   44




---



##### 



RENAISSANCE
    LEARNING, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2005


2004(In thousands)Operating (loss)

$
(192
)

$
(4,538
)Income tax benefit


76



1,679Loss from operations, net


(116
)


(2,859
)(Loss) on disposal


(642
)


Tax benefit on disposal


1,342



Gain on disposal, net


700



Gain (loss) from discontinued
    operations, net

$
584


$
(2,859
)   (18)
    Subsequent
    event   45




---



##### 



Item 9.
    Changes
    In and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rule 13a-15(e)
    Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f) Internal
    Control  Integrated Framework Internal Control  Integrated Framework
   46




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board of Directors and Shareholders of
 Renaissance Learning, Inc. and Subsidiaries
  Internal Control  Integrated Framework
        Internal
    Control  Integrated Framework Internal Control  Integrated
    Framework
    DELOITTE &
    TOUCHE LLP
    47




---



##### 



Item 9B.
    Other
    Information  Not applicable.
 48




---



##### 



PART III  Item 10.
    Directors
    and Executive Officers of the Registrant  Executive Officers.
  Directors.
  Section 16 Compliance.
  Code of Ethics. Regulation S-K.
  Audit Committee.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Regulation S-K
 49




---



##### 



Regulation S-K
  EQUITY
    COMPENSATION PLAN INFORMATION
    Number of SecuritiesAvailable for FutureNumber of Securities





Issuance Underto be Issued Upon


Weighted-Average


Equity CompensationExercise of


Exercise Price of


Plans (ExcludingOutstanding Options,


Outstanding Options,


Securities ReflectedPlan category

Warrants and Rights


Warrants and Rights


in First Column)Equity compensation plans approved
    by security holders


893,297


$
22.98



2,740,014
(1)Equity compensation plans not
    approved by security holders(2)


N/A



N/A



N/ATotal


893,297


$
22.98



2,740,014     (1)
    
    Of the 6,000,000 shares currently authorized for issuance
    under our 1997 stock incentive plan, 2,500,620 remain available
    for future issuance. Under our 1998 employee stock purchase plan
    (ESPP), 239,394 shares remain available for future
    issuance. We did not offer the ESPP to employees in 2006 and do
    not intend to offer the plan to the employees in 2007.(2)
    
    Both of the companys equity compensation plans have been
    approved by shareholders.  Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accountant Fees and Services   50




---



##### 



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a)(1)
    Financial Statements.  Consolidated
    Financial StatementsReport
    of Independent Registered Public Accounting FirmConsolidated
    Balance Sheets as of December 31, 2006 and 2005Consolidated
    Statements of Income for the years ended December 31, 2006,
    2005 and 2004Consolidated
    Statements of Shareholders Equity for the years ended
    December 31, 2006, 2005 and 2004Consolidated
    Statements of Cash Flows for the years ended December 31,
    2006, 2005 and 2004Notes
    to Consolidated Financial Statements   (a)(2)
    Financial Statement Schedules.    (a)(3)
    Exhibits.    (b)
    Exhibits.    (c)
    Financial
    Statements Excluded from Annual Report to
    Shareholders.   51




---



##### 



SIGNATURES
      By:
    /s/  Terrance
    D. Paul         Name

Title

Date/s/  Terrance
    D. PaulTerrance
    D. Paul

Chief Executive Officer
    (Principal Executive
    Officer) and a Director

February 23, 2007/s/  Mary
    T. MinchMary
    T. Minch

Senior Vice President-Finance,
    Chief Financial Officer and
    Secretary (Principal
    Financial and Accounting
    Officer)

February 23, 2007   Directors:
    Judith A. Paul, Addison L. Piper, John H. Grunewald, Gordon H.
    Gunnlaugsson, Harold E. Jordan and Judith A. Ryan  By:

/s/  Mary
    T. MinchMary
    T. Minch
    Attorney-In-Fact*



February 23, 2007     *
    
    Pursuant to authority granted by powers of attorney, copies of
    which are filed herewith. 52




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##### 



Exhibit Index
  ExhibitNumber

Exhibit2
.1

LLC Interest purchase Agreement
    dated as of February 28, 2005 among Registrant,
    Generation21 Learning Systems, LLC and John Stearns (pursuant to
    Item 601(b)(2) of
    Regulation S-K,
    the schedules and exhibits to the LLC Interest Purchase
    Agreement have been omitted; a copy of such schedules and
    exhibits will be supplementally provided to the SEC upon
    request).(17)2
.2

Agreement and Plan of Merger and
    Reorganization by and among Registrant, RLI Acquisition Corp.,
    Inc., RLI Acquisition Sub, LLC and AlphaSmart, Inc. dated as of
    January 24, 2005, as amended on April 20, 2005
    (pursuant to Item 601(b)(2) of
    Regulation S-K,
    the annex, exhibits and schedules to the Agreement and Plan of
    Merger and Reorganization have been omitted; a copy of such
    annex, exhibits and schedules will be supplementally provided to
    the SEC upon request).(18)2
.3

Purchase Agreement dated as of
    November 1, 2005 among Renaissance Learning, Inc. and
    DezCon, LLC (pursuant to Item 601(b)(2) of
    regulation S-K,
    the exhibits to the Purchase Agreement have been omitted; a copy
    of such exhibits will be supplementally provided to the
    Securities and Exchange Commission upon request).(19)3
.1

Amended and Restated Articles of
    Incorporation of Registrant, as amended.(10)3
.2

Amended and Restated By-laws of
    Registrant, as amended.(7)4
.1

Form of Stock Certificate.(2)10
.1

1997 Stock Incentive Plan (as
    amended and restated).(3)*10
.2

Credit Agreement dated as of
    December 1, 2003, by and between Wells Fargo Bank, National
    Association and Registrant.(16)10
.3

First Amendment to Credit Agreement
    dated as of September 1, 2004 by and between Wells Fargo
    Bank, National Association and Registrant.(15)10
.4

Second Amendment to Credit
    Agreement dated as of May 31, 2005 by and between Wells
    Fargo Bank, National Association and Registrant.(23)10
.5

Third Amendment to Credit Agreement
    dated as of October 1, 2005 by and between Wells Fargo
    Bank, National Association and Registrant.(23)10
.6

Fourth Amendment to Credit
    Agreement dated as of June 30, 2006 by and between
    WellsFargo Bank, National Association and Registrant.(24)10
.7

Amended and Restated Employee Stock
    Purchase Plan.(9)*10
.8

Severance Agreement between
    Registrant and Michael H. Baum dated June 27, 2003.(13)*10
.9

Severance Agreement between
    Registrant and John R. Hickey dated February 15, 2006.(22)*10
.10

Incentive Bonus Plan.(13)*10
.11

Transfer Agreement dated as of
    June 16, 2004 between Registrant and Terrance D. Paul.(14)*10
.12

Assignment and Assumption of
    Transfer Agreement dated as of June 16, 2004 between
    Registrant and Terrance D. Paul.(14)*10
.13

Executive Officer Compensation
    Summary. (25)*10
.14

Offer to Purchase effective as of
    November 1, 2005 among Registrant and Planning Design
    Build, Inc.(19)10
.15

Form of Restricted Stock
    Agreement.(20)*10
.16

Form of Restricted Stock Unit
    Agreement between Registrant and certain non-employee
    directors.(24)10
.17

Form of Nonstatutory Stock Option
    Agreement between Registrant and certain employees and
    consultants.(21)*10
.18

Form of Nonstatutory Stock Option
    Agreement between Registrant and certain non-employee
    directors.(21)*10
.19

Form of Non-Employee Director
    Indemnification Agreement.(26)14
.1

Code of Business Conduct and
    Ethics.(16)21
.1

Subsidiaries of Registrant.23
.1

Consent of Independent Registered
    Public Accounting Firm.24
.1

Directors Powers of Attorney.31
.1

Section 302 Certification by
    Terrance D. Paul, Chief Executive Officer.31
.2

Section 302 Certification by
    Mary T. Minch, Chief Financial Officer.32
.1

Section 906 Certification by
    Terrance D. Paul, Chief Executive Officer.32
.2

Section 906 Certification by
    Mary T. Minch, Chief Financial Officer.99
.1

Schedule II 
    Valuation and Qualifying Accounts.  53




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##### 



(1)
    
    [Reserved].(2)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended September 30, 1997 (SEC File
    No. 0-22187).(3)
    
    Incorporated by reference to
    Registrants
    Form S-8
    filed on April 18, 2003 (Registration
    No. 333-104622).(4)
    
    Incorporated by reference to
    Registrants
    Form 10-K
    for the fiscal year ended December 31, 1997 (SEC File
    No. 0-22187).(5)
    
    Incorporated by reference to
    Registrants
    Form 10-K
    for the fiscal year ended December 31, 1998 (SEC File
    No. 0-22187).(6)
    
    Incorporated by reference to
    Registrants
    Form 10-K
    for the fiscal year ended December 31, 1999 (SEC File
    No. 0-22187).(7)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended March 31, 2000 (SEC File
    No. 0-22187).(8)
    
    [Reserved].(9)
    
    Incorporated by reference to
    Registrants
    Form 10-K
    for the fiscal year ended December 31, 2000 (SEC File
    No. 0-22187).(10)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended March 31, 2001 (SEC File
    No. 0-22187).(11)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended March 31, 2002 (SEC File
    No. 0-22187).(12)
    
    Incorporated by reference to
    Registrants
    Form 8-K
    dated May 22, 2002 (SEC File
    No. 0-22187).(13)
    
    [Reserved].(14)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended June 30, 2004 (SEC File
    No. 0-22187).(15)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended September 30, 2004 (SEC File
    No. 0-22187).(16)
    
    Incorporated by reference to
    Registrants
    Form 10-K
    for the fiscal year ended December 31, 2003 (SEC File
    No. 0-22187).(17)
    
    Incorporated by reference to
    Registrants
    Form 8-K
    filed on March 4, 2005 (SEC File
    No. 0-22187).(18)
    
    Incorporated by reference to
    Registrants
    Form 8-K
    filed on April 26, 2005 (SEC File
    No. 0-22187).(19)
    
    Incorporated by reference to
    Registrants
    Form 8-K
    filed on November 4, 2005 (SEC File
    No. 0-22187).(20)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended June 30, 2005 (SEC File
    No. 0-22187).(21)
    
    Incorporated by reference to
    Registrants
    Form 8-K
    filed on March 7, 2005 (SEC File
    No. 0-22187).(22)
    
    Incorporated by reference to
    Registrants
    Form 8-K
    filed on February 21, 2006 (SEC File
    No. 0-22187).(23)
    
    Incorporated by reference to
    Registrants
    Form 10-K
    for the fiscal year ended December 31, 2005 (SEC File
    No. 0-22187).(24)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended September 30, 2006 (SEC File
    No. 0-22187).(25)
    
    Incorporated by reference to
    Registrants
    Form 10-Q
    for the quarter ended June 30, 2006 (SEC File
    No. 0-22187).(26)
    
    Incorporated by reference to
    Registrants
    Form 8-K
    filed on January 29, 2006 (SEC File
    No. 0-22187).*
    
    Management contracts or
    compensatory plans or arrangements.  54495-8036,
 54