##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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FORM 10-Q



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

For the quarterly period ended June 30, 2006

OR



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

For the transition period from  to



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Jarden
Corporation



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|                       |  |                        |  |                          
|---------------------- |  | ---------------------- |  | -------------------------
|Delaware               |  | 0-21052                |  | 35-1828377               
|State of Incorporation |  | Commission File Number |  | IRS Identification Number

555 Theodore Fremd Avenue

Rye, New York 10580

Registrants telephone number, including area code:
(914) 967-9400



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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  x        Accelerated filer ̈Non-accelerated filer ̈

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

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                                        |  |                             
|--------------------------------------- |  | ----------------------------
|Class                                   |  | Outstanding at July 26, 2006
|Common Stock, par value $0.01 per share |  | 66,551,387 shares           



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##### Table of Contents

JARDEN CORPORATION

Quarterly Report on Form 10-Q

For the three and six month periods ended June 30, 2006

INDEX



|         |  |                                                                                                                          |  |           
|-------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | ----------
|         |  |                                                                                                                          |  | PageNumber
|PART I.  |  | FINANCIAL INFORMATION:                                                                                                   |  |           
|Item 1.  |  | Financial Statements:                                                                                                    |  |           
|         |  | Condensed Consolidated Statements of Income for the three and six month periods ended June 30, 2006 and 2005 (unaudited) |  | 3         
|         |  | Condensed Consolidated Balance Sheets at June 30, 2006 (unaudited) and December 31, 2005                                 |  | 4         
|         |  | Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 2006 and 2005 (unaudited)       |  | 5         
|         |  | Notes to Condensed Consolidated Financial Statements                                                                     |  | 6         
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                    |  | 22        
|Item 3.  |  | Quantitative and Qualitative Disclosures About Market Risk                                                               |  | 29        
|Item 4.  |  | Controls and Procedures                                                                                                  |  | 30        
|PART II. |  | OTHER INFORMATION:                                                                                                       |  | 31        
|Item 1.  |  | Legal Proceedings                                                                                                        |  | 31        
|Item 1A. |  | Risk Factors                                                                                                             |  | 31        
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                                      |  | 31        
|Item 6.  |  | Exhibits                                                                                                                 |  | 32        



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##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

JARDEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In millions, except per
share amounts)



|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ----- | ------------ | ---------------------- | ----- | ------------- |  | ------------ | ------- |  | - | ------- | -
|                                                                                                                                                                                                                                                          |  | Three month period ended |       |              | Six month period ended |      
|                                                                                                                                                                                                                                                          |  | June 30,2006             |       | June 30,2005 |                        |       | June 30, 2006 |  | June 30,2005 |        
|Net sales                                                                                                                                                                                                                                                 |  | $                        | 962.0 |              | $                      | 754.4 |               |  | $            | 1,753.7 |  | $ | 1,275.7 |  
|Cost of sales                                                                                                                                                                                                                                             |  |                          | 729.9 |              |                        | 557.9 |               |  |              | 1,335.9 |  |   | 958.3   |  
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Gross profit                                                                                                                                                                                                                                              |  |                          | 232.1 |              |                        | 196.5 |               |  |              | 417.8   |  |   | 317.4   |  
|Selling, general and administrative expenses (including stock-based compensation costs of $4.3 and $0.6 for the three months ended
June 30, 2006 and 2005, respectively, and $9.7 and $0.8 for the six months ended June 30, 2006 and 2005, respectively) |  |                          | 147.1 |              |                        | 118.6 |               |  |              | 288.9   |  |   | 215.5   |  
|Reorganization and acquisition-related integration costs, net                                                                                                                                                                                             |  |                          | 5.6   |              |                        | 5.9   |               |  |              | 15.0    |  |   | 8.8     |  
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Operating earnings                                                                                                                                                                                                                                        |  |                          | 79.4  |              |                        | 72.0  |               |  |              | 113.9   |  |   | 93.1    |  
|Interest expense, net                                                                                                                                                                                                                                     |  |                          | 28.3  |              |                        | 19.1  |               |  |              | 53.9    |  |   | 34.1    |  
|Loss on early extinguishment of debt                                                                                                                                                                                                                      |  |                          |      |              |                        |      |               |  |              |        |  |   | 6.1     |  
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Income before taxes                                                                                                                                                                                                                                       |  |                          | 51.1  |              |                        | 52.9  |               |  |              | 60.0    |  |   | 52.9    |  
|Income tax provision                                                                                                                                                                                                                                      |  |                          | 37.8  |              |                        | 20.1  |               |  |              | 41.0    |  |   | 20.1    |  
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Net income                                                                                                                                                                                                                                                |  |                          | 13.3  |              |                        | 32.8  |               |  |              | 19.0    |  |   | 32.8    |  
|Paid-in-kind dividends on Series B and C preferred stock                                                                                                                                                                                                  |  |                          |      |              |                        | (2.8  | )             |  |              |        |  |   | (8.3    | )
|Charge from beneficial conversion of Series C preferred stock                                                                                                                                                                                             |  |                          |      |              |                        | (22.4 | )             |  |              |        |  |   | (38.9   | )
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Income (loss) allocable to common stockholders                                                                                                                                                                                                            |  |                          | 13.3  |              |                        | 7.6   |               |  |              | 19.0    |  |   | (14.4   | )
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Less: income allocable to preferred stockholders                                                                                                                                                                                                          |  |                          |      |              |                        | (1.9  | )             |  |              |        |  |   |        |  
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Income allocable to common stockholders                                                                                                                                                                                                                   |  | $                        | 13.3  |              | $                      | 5.7   |               |  | $            | 19.0    |  | $ | (14.4   | )
|                                                                                                                                                                                                                                                          |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Earnings (loss) per share:                                                                                                                                                                                                                                |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Basic earnings (loss) per share                                                                                                                                                                                                                           |  | $                        | 0.21  |              | $                      | 0.13  |               |  | $            | 0.29    |  | $ | (0.33   | )
|Diluted earnings (loss) per share                                                                                                                                                                                                                         |  | $                        | 0.20  |              | $                      | 0.12  |               |  | $            | 0.29    |  | $ | (0.33   | )
|                                                                                                                                                                                                                                                          |  |                          |       |             
|Weighted average shares outstanding:                                                                                                                                                                                                                      |  |                          |       |              |                        |       |               |  |              |         |  |   |         |  
|Basic                                                                                                                                                                                                                                                     |  |                          | 64.5  |              |                        | 44.0  |               |  |              | 65.1    |  |   | 43.6    |  
|Diluted                                                                                                                                                                                                                                                   |  |                          | 65.5  |              |                        | 45.8  |               |  |              | 66.0    |  |   | 43.6    |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

JARDEN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)



|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                                                                            |  | (Unaudited)June 30,2006 |         |   | December 31,2005 |  
|Assets                                                                                                                                                                                                      |  |                         |         |   |                  |   |         |  
|Current assets:                                                                                                                                                                                             |  |                         |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                                                                                   |  | $                       | 65.3    |   |                  | $ | 237.1   |  
|Accounts receivable, net of allowances of $32.2 in 2006, $41.2 in 2005                                                                                                                                      |  |                         | 560.1   |   |                  |   | 523.2   |  
|Inventories                                                                                                                                                                                                 |  |                         | 689.0   |   |                  |   | 566.3   |  
|Deferred income taxes                                                                                                                                                                                       |  |                         | 84.7    |   |                  |   | 84.7    |  
|Prepaid expenses and other current assets                                                                                                                                                                   |  |                         | 42.2    |   |                  |   | 53.1    |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Total current assets                                                                                                                                                                                        |  |                         | 1,441.3 |   |                  |   | 1,464.4 |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Non-current assets:                                                                                                                                                                                         |  |                         |         |   |                  |   |         |  
|Property, plant and equipment, net                                                                                                                                                                          |  |                         | 321.5   |   |                  |   | 320.6   |  
|Goodwill                                                                                                                                                                                                    |  |                         | 1,315.7 |   |                  |   | 1,263.2 |  
|Intangibles, net                                                                                                                                                                                            |  |                         | 434.5   |   |                  |   | 431.2   |  
|Other assets                                                                                                                                                                                                |  |                         | 60.5    |   |                  |   | 45.2    |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Total assets                                                                                                                                                                                                |  | $                       | 3,573.5 |   |                  | $ | 3,524.6 |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Liabilities and stockholders equity                                                                                                                                                                        |  |                         |         |   |                  |   |         |  
|Current liabilities:                                                                                                                                                                                        |  |                         |         |   |                  |   |         |  
|Short-term debt and current portion of long-term debt                                                                                                                                                       |  | $                       | 105.5   |   |                  | $ | 86.3    |  
|Accounts payable                                                                                                                                                                                            |  |                         | 292.8   |   |                  |   | 260.2   |  
|Accrued salaries, wages and employee benefits                                                                                                                                                               |  |                         | 84.4    |   |                  |   | 107.9   |  
|Taxes on income                                                                                                                                                                                             |  |                         | 9.9     |   |                  |   | 15.4    |  
|Deferred consideration for acquisitions                                                                                                                                                                     |  |                         | 4.8     |   |                  |   | 11.6    |  
|Other current liabilities                                                                                                                                                                                   |  |                         | 251.7   |   |                  |   | 233.1   |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Total current liabilities                                                                                                                                                                                   |  |                         | 749.1   |   |                  |   | 714.5   |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Non-current liabilities:                                                                                                                                                                                    |  |                         |         |   |                  |   |         |  
|Long-term debt                                                                                                                                                                                              |  |                         | 1,445.8 |   |                  |   | 1,455.1 |  
|Deferred income taxes                                                                                                                                                                                       |  |                         | 135.8   |   |                  |   | 123.9   |  
|Other non-current liabilities                                                                                                                                                                               |  |                         | 236.8   |   |                  |   | 227.3   |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Total non-current liabilities                                                                                                                                                                               |  |                         | 1,818.4 |   |                  |   | 1,806.3 |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Total liabilities                                                                                                                                                                                           |  |                         | 2,567.5 |   |                  |   | 2,520.8 |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Stockholders equity                                                                                                                                                                                        |  |                         |         |   |                  |   |         |  
|Preferred stock ($0.01 par value, 5 shares authorized, no shares issued and outstanding at June 30, 2006 and December 31,
2005)                                                                             |  |                         |        |   |                  |   |        |  
|Common stock ($0.01 par value, 150 shares authorized; 68.8 shares issued at June 30, 2006 and December 31, 2005; and 66.5 and 68.1
shares outstanding at June 30, 2006 and December 31, 2005, respectively) |  |                         | 0.7     |   |                  |   | 0.7     |  
|Additional paid-in capital                                                                                                                                                                                  |  |                         | 874.1   |   |                  |   | 877.3   |  
|Retained earnings                                                                                                                                                                                           |  |                         | 174.3   |   |                  |   | 155.3   |  
|Accumulated other comprehensive income (loss)                                                                                                                                                               |  |                         | 15.9    |   |                  |   | (4.0    | )
|Less: Treasury stock, at cost, 2.3 and 0.7 shares at June 30, 2006 and December 31, 2005, respectively                                                                                                      |  |                         | (59.0   | ) |                  |   | (25.5   | )
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Total stockholders equity                                                                                                                                                                                  |  |                         | 1,006.0 |   |                  |   | 1,003.8 |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                                                                                                                                                  |  | $                       | 3,573.5 |   |                  | $ | 3,524.6 |  
|                                                                                                                                                                                                            |  |                         |         |   |                  |   |         |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

JARDEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)



|                                                                               |  |                        |        |   |              |   |        |  
|------------------------------------------------------------------------------ |  | ---------------------- | ------ | - | ------------ | - | ------ | -
|                                                                               |  | Six month period ended |       
|                                                                               |  | June 30,2006           |        |   | June 30,2005 |  
|Cash flows from operating activities:                                          |  |                        |        |   |              |   |        |  
|Net income                                                                     |  | $                      | 19.0   |   |              | $ | 32.8   |  
|Reconciliation of net income to net cash used in operating activities:         |  |                        |        |   |              |   |        |  
|Depreciation and amortization                                                  |  |                        | 30.9   |   |              |   | 25.4   |  
|Other non-cash items                                                           |  |                        | 41.9   |   |              |   | 21.4   |  
|Changes in operating assets and liabilities, net of effects from acquisitions: |  |                        |        |   |              |   |        |  
|Accounts receivable                                                            |  |                        | (14.9  | ) |              |   | (90.8  | )
|Inventory                                                                      |  |                        | (118.7 | ) |              |   | (38.4  | )
|Accounts payable                                                               |  |                        | 29.5   |   |              |   | 31.9   |  
|Other assets and liabilities                                                   |  |                        | (51.2  | ) |              |   | (44.6  | )
|                                                                               |  |                        |        |   |              |   |        |  
|Net cash used in operating activities                                          |  |                        | (63.5  | ) |              |   | (62.3  | )
|                                                                               |  |                        |        |   |              |   |        |  
|Cash flows from financing activities:                                          |  |                        |        |   |              |   |        |  
|Proceeds from revolving credit borrowings                                      |  |                        | 183.6  |   |              |   | 63.7   |  
|Payments on revolving credit borrowings                                        |  |                        | (104.3 | ) |              |   | (51.3  | )
|Proceeds from issuance of senior debt                                          |  |                        |       |   |              |   | 950.0  |  
|Payments on senior debt                                                        |  |                        | (60.0  | ) |              |   | (307.4 | )
|Borrowings under foreign lines of credit, net                                  |  |                        | 7.2    |   |              |   |       |  
|Proceeds from issuance of stock, net of transaction fees                       |  |                        | 3.5    |   |              |   | 350.4  |  
|Repurchase of common stock                                                     |  |                        | (50.0  | ) |              |   |       |  
|Debt issuance costs                                                            |  |                        | (2.2   | ) |              |   | (17.6  | )
|Other borrowings (repayments), net                                             |  |                        | (0.9   | ) |              |   | 1.6    |  
|                                                                               |  |                        |        |   |              |   |        |  
|Net cash (used in) provided by financing activities                            |  |                        | (23.1  | ) |              |   | 989.4  |  
|                                                                               |  |                        |        |   |              |   |        |  
|Cash flows from investing activities:                                          |  |                        |        |   |              |   |        |  
|Additions to property, plant and equipment                                     |  |                        | (31.2  | ) |              |   | (24.7  | )
|Acquisition of businesses, net of cash acquired                                |  |                        | (54.0  | ) |              |   | (818.1 | )
|Other                                                                          |  |                        | (0.2   | ) |              |   | (1.1   | )
|                                                                               |  |                        |        |   |              |   |        |  
|Net cash used in investing activities                                          |  |                        | (85.4  | ) |              |   | (843.9 | )
|Effect of exchange rate changes on cash                                        |  |                        | 0.2    |   |              |   |       |  
|                                                                               |  |                        |        |   |              |   |        |  
|Net (decrease) increase in cash and cash equivalents                           |  |                        | (171.8 | ) |              |   | 83.2   |  
|Cash and cash equivalents at beginning of period                               |  |                        | 237.1  |   |              |   | 20.7   |  
|                                                                               |  |                        |        |   |              |   |        |  
|Cash and cash equivalents at end of period                                     |  | $                      | 65.3   |   |              | $ | 103.9  |  
|                                                                               |  |                        |        |   |              |   |        |  
|                                                                               |  |                        |        |   |              |  
|                                                                               |  |                        |        |   |              |  
|                                                                               |  |                        |        |   |              |  
|                                                                               |  |                        |        |   |              |  
|Supplemental non-cash disclosure:                                              |  |                        |        |   |              |   |        |  
|Common stock issued in conjunction with acquisitions                           |  | $                      |       |   |              | $ | 281.5  |  
|Supplemental cash disclosures:                                                 |  |                        |        |   |              |   |        |  
|Taxes paid                                                                     |  | $                      | 22.0   |   |              | $ | 13.9   |  
|Interest paid                                                                  |  | $                      | 56.0   |   |              | $ | 31.9   |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

JARDEN CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, except for December 31, 2005 amounts)

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Jarden Corporation (the Company or Jarden) have been prepared in
accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission
(SEC). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements reflect all normal and recurring
adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. The Condensed Consolidated Balance Sheet at December 31, 2005 has been derived from the audited financial statements
as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim statements should be read in conjunction with the condensed consolidated
financial statements and the related notes thereto included in the Companys latest Annual Report on Form 10-K and any amendment thereto for the year ended December 31, 2005. Results of operations for the periods shown are not necessarily
indicative of results for the full year, particularly in view of the varying seasonality of certain of the Companys product line sales and the acquisitions of American Household, Inc. (AHI and the AHI Acquisition) and
The Holmes Group, Inc. (Holmes and the THG Acquisition) completed on January 24, 2005 and July 18, 2005, respectively (see Note 5). All significant intercompany transactions have been eliminated in consolidation.
These unaudited condensed consolidated interim financial statements include estimates and assumptions of management that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these
estimates.

Certain reclassifications have been made in the Companys financial statements of the prior year to conform to the current year
presentation. These reclassifications have no impact on previously reported net income.

New Accounting Standards

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43,
Chapter 4 (SFAS 151). SFAS 151 requires the exclusion of certain costs from inventories and the allocation of fixed production overheads to inventories to be based on normal capacity of the production facilities. The provisions of SFAS
151 became effective for costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS 151 did not have a significant impact on the Companys consolidated financial position, results of operation and cash flows for
the three and six months ended June 30, 2006.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Correction,
effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. SFAS No. 154 supersedes APB Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting
Accounting Changes in Interim Financial Statements and requires retrospective application to prior periods of any voluntary changes to alternatively permitted accounting principles, unless impracticable. The Company has determined SFAS
No. 154 does not have an impact on the condensed consolidated financial statements as of and for the three and six month periods ended June 30, 2006.

In February 2006, the FASB issued SFAS No. 155 Accounting for Certain Hybrid Financial Instrument  an amendment of FASB No. 133 and 140 (SFAS No. 155). SFAS No. 155 is effective for all
financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006. For the three and six months ended June 30, 2006, the Company determined there was no significant
impact on the consolidated financial position, results of operations and cash flows of the Company as a result of adopting the provisions of SFAS No. 155.

During the fourth quarter of 2005, the Company adopted SFAS No. 123R, Share-Based Payment (Revised 2004), (SFAS No. 123R). On February 3, 2006, the FASB issued FASB Staff Position SFAS 123R-4,
Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event (FSP SFAS 123R-4). FSP FAS 123R-4 is effective for the Company for the
reporting period ended June 30, 2006. The Company concluded that the adoption of FSP FAS 123R-4 did not have a material impact on its consolidated financial position, results of operations, and cash flows.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets  an amendment of FASB Statement No. 140 (SFAS
No. 156). SFAS No. 156 is effective for fiscal years beginning after September 15, 2006. For the three and six months ended June 30, 2006, the Company does not believe there will be a significant impact on the consolidated
financial position, results of operations and cash flows as a result of adopting SFAS No. 156.

In June 2006, the FASB issued FASB interpretation
No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB No. 109 (FIN 48).FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the
financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. FIN 48 is effective for fiscal years beginning after December 15, 2006. If there
are changes in net assets as a result of application of FIN 48 these will be accounted for as an adjustment to retained earnings. The Company is currently assessing the impact of FIN 48 on its consolidated financial position and results of
operations.

Product Warranty Costs

The Company
recognizes warranty costs based on an estimate of amounts required to meet future warranty obligations arising as part of the sale of its products. In accordance with the SFAS No. 5 Accounting for Contingencies, the Company accrues
an estimated liability at the time of a product sale based on historical claim rates applied to current period sales, as well as any information applicable to current product sales that may indicate a deviation from such historical claim rate
trends. Product warranty reserves included $66.2 million within Other current liabilities and $5.6 million within Other non-current liabilities in the Companys Condensed Consolidated Balance Sheet as of June 30,
2006. At December 31, 2005, product warranty reserves included $54 million within Other current liabilities and $5.9 million within Other non-current liabilities in the Companys Condensed Consolidated Balance
Sheet.



6



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##### Table of Contents

Activity for the six months ended June 30, 2006 was as follows (in
millions):



|                                      |  |   |       |  
|------------------------------------- |  | - | ----- | -
|Warranty reserve at December 31, 2005 |  | $ | 59.9  |  
|Acquisitions and other adjustments    |  |   | 17.7  |  
|Provisions for warranties issued, net |  |   | 53.0  |  
|Warranty claims paid                  |  |   | (58.8 | )
|                                      |  |   |       |  
|Warranty reserve at June 30, 2006     |  | $ | 71.8  |  
|                                      |  |   |       |  

2. Stock-Based Compensation

Effective October 1, 2005, the Company adopted SFAS No. 123R which requires the measurement and recognition of all unvested outstanding stock based payment awards made to employees and directors based on
estimated fair value at date of grant. Compensation cost is recognized on a straight-line basis in the Condensed Consolidated Statement of Income related to stock options and restricted stock expected to vest as well as the Companys employee
stock purchase plans.

The fair value of stock options was determined using the Black-Scholes option-pricing model which was previously used for disclosing
the Companys pro forma information under SFAS 123. The fair value of the market-based restricted stock awards was determined using a Monte Carlo simulation embedded in a lattice model, and for all other restricted stock awards were based on
the closing price of the Companys common stock on the date of grant. The determination of the fair value of the Companys stock option awards and restricted stock awards is based on a variety of factors including, but not limited to, the
Companys common stock price, expected stock price volatility over the term of awards, and actual and projected exercise behavior. Additionally pursuant to SFAS 123R, the Company has estimated forfeitures for options and restricted stock awards
at the dates of grant based on historical experience and will revise as necessary if actual forfeitures differ from these estimates.

For the three and six
month periods ended June 30, 2006, the Company recorded $4.3 million and $9.7 million of stock based compensation costs (pretax) in accordance with SFAS 123R. For the three and six month periods ended June 30, 2005, share based
compensation costs of $0.6 million and $0.8 million were recognized using the intrinsic value method as opposed to the fair value method as permitted under APB No. 25. Had share based compensation costs been recognized using the fair value
method, pro forma net loss allocable to shareholders and loss per share would have been presented as follows (in millions, except per share data):



|                                                                                                                                                |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ---- | ------------ | ---------------------- | ----- | ------------ |  | ------------ | ---- |  | - | ----- | -
|                                                                                                                                                |  | Three month period ended |      |              | Six month period ended |      
|                                                                                                                                                |  | June 30,2006             |      | June 30,2005 |                        |       | June 30,2006 |  | June 30,2005 |     
|Net income, as reported                                                                                                                         |  | $                        | 13.3 |              | $                      | 32.8  |              |  | $            | 19.0 |  | $ | 32.8  |  
|Paid-in-kind dividends on Series B and C preferred stock                                                                                        |  |                          |     |              |                        | (2.8  | )            |  |              |     |  |   | (8.3  | )
|Charges from beneficial conversions of Series B and C preferred Stock                                                                           |  |                          |     |              |                        | (22.4 | )            |  |              |     |  |   | (38.9 | )
|                                                                                                                                                |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Net income (loss) attributable to stockholders                                                                                                  |  |                          | 13.3 |              |                        | 7.6   |              |  |              | 19.0 |  |   | (14.4 | )
|Less: income allocable to preferred stockholders                                                                                                |  |                          |     |              |                        | (1.9  | )            |  |              |     |  |   |      |  
|                                                                                                                                                |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Income (loss) allocable to common stockholders                                                                                                  |  |                          | 13.3 |              |                        | 5.7   |              |  |              | 19.0 |  |   | (14.4 | )
|Add: Total stock-based employee compensation expense included in reported net income, net of related tax effects                                |  |                          |     |              |                        | 0.2   |              |  |              |     |  |   | 0.4   |  
|Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of tax related
effects |  |                          |     |              |                        | (3.4  | )            |  |              |     |  |   | (4.4  | )
|                                                                                                                                                |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Pro forma net income (loss) allocable to common stockholders                                                                                    |  | $                        | 13.3 |              | $                      | 2.5   |              |  | $            | 19.0 |  | $ | (18.4 | )
|                                                                                                                                                |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Basic earnings (loss) per share:                                                                                                                |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|As reported                                                                                                                                     |  | $                        | 0.21 |              | $                      | 0.13  |              |  | $            | 0.29 |  | $ | (0.33 | )
|Pro forma                                                                                                                                       |  | $                        | 0.21 |              | $                      | 0.06  |              |  | $            | 0.29 |  | $ | (0.42 | )
|Diluted earnings (loss) per share:                                                                                                              |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|As reported                                                                                                                                     |  | $                        | 0.20 |              | $                      | 0.12  |              |  | $            | 0.28 |  | $ | (0.33 | )
|Pro forma                                                                                                                                       |  | $                        | 0.20 |              | $                      | 0.06  |              |  | $            | 0.28 |  | $ | (0.42 | )

For the six month period ended June 30, 2006, the Company issued 0.3 restricted share awards. For those
awards with common stock price vesting thresholds, the weighted average grant date fair values of these awards was $22.40 based on the following assumptions:



|                                   |  |      |  
|---------------------------------- |  | ---- | -
|Expected volatility                |  | 36.5 | %
|Risk-free interest rates           |  | 4.2  | %
|Derived service periods (in years) |  | 1.4  |  

For all other restricted share awards issued during the six month period ended June 30, 2006, the weighted
average grant date fair value was $27.80. As of June 30, 2006, unrecognized compensation cost attributable to all restricted share awards was $19.6 million expected to be recognized over a weighted average period of one year.

For the six month period ended June 30, 2006, the Company issued 0.1 million options, with a weighted average grant date fair value of $11.63 per share. As of
June 30, 2006 unrecognized compensation cost attributable to stock options was $13.9 million expected to be recognized over a weighted average period of 1.3 years.



7



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##### Table of Contents

3. Inventories

Inventories are stated at the lower of cost or market with cost being determined principally by the first-in, first-out method (FIFO), and were comprised of the following at June 30, 2006 and December 31, 2005 (in
millions):



|                           |  |              |       |                  |   |      
|-------------------------- |  | ------------ | ----- | ---------------- | - | -----
|                           |  | June 30,2006 |       | December 31,2005
|Raw materials and supplies |  | $            | 139.0 |                  | $ | 108.4
|Work in process            |  |              | 51.8  |                  |   | 24.9 
|Finished goods             |  |              | 498.2 |                  |   | 433.0
|                           |  |              |       |                  |   |      
|Total inventories          |  | $            | 689.0 |                  | $ | 566.3
|                           |  |              |       |                  |   |      

4. Property, Plant and Equipment

Property, plant and equipment, net, consist of the following at June 30, 2006 and December 31, 2005 (in millions):



|                               |  |              |        |   |                  |   |        |  
|------------------------------ |  | ------------ | ------ | - | ---------------- | - | ------ | -
|                               |  | June 30,2006 |        |   | December 31,2005 |  
|Land                           |  | $            | 24.4   |   |                  | $ | 23.8   |  
|Buildings                      |  |              | 106.2  |   |                  |   | 98.4   |  
|Machinery and equipment        |  |              | 393.1  |   |                  |   | 374.5  |  
|Less: Accumulated depreciation |  |              | (202.2 | ) |                  |   | (176.1 | )
|                               |  |              |        |   |                  |   |        |  
|                               |  | $            | 321.5  |   |                  | $ | 320.6  |  
|                               |  |              |        |   |                  |   |        |  

As of June 30, 2006, assets held under capital leases amounted to $18.8 million and are included in
Machinery and equipment.

Depreciation and amortization of property, plant and equipment charged against operations for the three and six month
periods ended June 30, 2006 was $15.1 million and $30.9 million, respectively, and $13.3 million and $25.4 million for the three and six month periods ended June 30, 2005, respectively.

5. Acquisitions

On July 18, 2005, the Company completed the
acquisition of Holmes for approximately $420 million in cash and 6.15 million shares of the Companys common stock. Holmes is a leading manufacturer and distributor of select home environment and small kitchen electrics under
well-recognized consumer brands, including Bionaire ® , Crock-Pot ® ,
Harmony ® , Holmes ® , Patton ® , Rival ® , Seal-a-Meal ® and White Mountain. The aggregate purchase price was approximately $681 million, including transaction expenses. The cash portion of the THG Acquisition purchase price was financed
with the issuance of an additional $380 million of term debt under the Senior Credit Facility, cash on hand and revolver borrowings.

On January 24,
2005, the Company completed its acquisition of AHI, a privately held company, for approximately $746 million for 100% of its equity and the repayment of approximately $100 million of indebtedness. AHI is the parent of The Coleman Company, Inc.
(Coleman) and Sunbeam Products, Inc. (which we refer to as Jarden Consumer Solutions or JCS), leading producers of global consumer products through brands such as BRK ® , Campingaz ® , Coleman ® , First Alert ® , Health o meter ® , Mr. Coffee ®
, Oster ® and Sunbeam ® . Of the equity portion of the purchase price, $40 million was held back by
the Company to cover potential indemnification claims against the sellers of AHI and has not been accrued as a liability or considered part of the purchase price since the outcome of this contingency remains uncertain.

The Company financed the AHI Acquisition with the issuance of $350 million of equity securities and a new $1.05 billion senior credit facility (Senior Credit
Facility), consisting of a term loan facility (Term Loan) in the aggregate principal amount of $850 million and a revolving credit facility (Revolver) with an aggregate commitment of $200 million. This facility replaced
the Companys Second Amended Credit Agreement (Second Amended Credit Agreement).

The AHI Acquisition and THG Acquisition represent
significant elements in advancing the Companys strategy of acquiring branded consumer products businesses with leading market positions in markets for products used in and around the home and home away from home.

The unaudited pro forma financial information below is not intended to represent or be indicative of the Companys consolidated results of operations or financial
condition that would have been reported had these acquisitions been completed as of the beginning of the periods presented and should not be taken as indicative of the Companys future consolidated results of operations or financial condition.
Pro forma adjustments are tax-effected at the applicable statutory tax rates. The following unaudited pro forma financial information includes the actual reported results of the Company, as well as giving pro forma effect to the THG Acquisition, the
AHI Acquisition and related financing as if they had been consummated as of January 1, 2005 (in millions, except per share data):



|                                                                                                                        |  |                           |       |   |                           |   |         |  
|----------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----- | - | ------------------------- | - | ------- | -
|                                                                                                                        |  | Three month period ended  |       |   | Six month period ended    |  
|                                                                                                                        |  | June 30, 2005 (Pro Forma) |       |   | June 30, 2005 (Pro Forma) |  
|Net sales                                                                                                               |  | $                         | 872.1 |   |                           | $ | 1,583.8 |  
|Net income                                                                                                              |  |                           | 26.5  |   |                           |   | 23.0    |  
|Net loss allocable to common stockholders (after deducting preferred stock dividends and beneficial conversion charges) |  |                           | (0.7  | ) |                           |   | (21.7   | )
|Diluted loss per share                                                                                                  |  |                           | (0.01 | ) |                           |   | (0.44   | )

During 2005, the Company completed three tuck-in acquisitions within the Branded consumables segment. During the
six months ended June 30, 2006, the Company completed three tuck-in acquisitions, two within Branded consumables and one within JCS. None of these tuck-in acquisitions were significant and therefore have been excluded from the pro forma
disclosures above.



8



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##### Table of Contents

The goodwill and other intangibles recorded in connection with the Companys acquisitions are discussed in Note 6.
The table below summarizes the estimated fair values of the assets acquired and the liabilities assumed at the effective date of acquisition for the THG Acquisition (in millions):



|                                                                 |  |   |      
|---------------------------------------------------------------- |  | - | -----
|Current assets                                                   |  | $ | 275.0
|Property, plant and equipment                                    |  |   | 50.0 
|Other non-current assets                                         |  |   | 34.5 
|                                                                 |  |   |      
|Total assets acquired                                            |  |   | 359.5
|Current liabilities                                              |  |   | 136.9
|Non-current liabilities                                          |  |   | 71.3 
|                                                                 |  |   |      
|Total liabilities assumed                                        |  |   | 208.2
|                                                                 |  |   |      
|Net assets acquired                                              |  |   | 151.3
|Purchase price (including transaction expenses and assumed debt) |  |   | 680.6
|                                                                 |  |   |      
|Purchase price paid in excess of fair value of tangible assets   |  | $ | 529.3
|                                                                 |  |   |      

The purchase price allocation related to the THG Acquisition is still preliminary and will be finalized prior to
the end of the third quarter.

6. Intangibles

As of
June 30, 2006 and December 31, 2005, the Companys intangible assets by segment are as follows (in millions):



|                                                       |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  
|------------------------------------------------------ |  | ------------------- | ----- | - | --------------------- | - | ----- | ----------------- |  | ----- | ----- |  | - | ------- | -
|                                                       |  | Branded Consumables |       |   | Consumer Solutions(1) |   |       | Outdoor Solutions |  | Total |      
|June 30, 2006                                          |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  
|Intangible assets not subject to amortization:         |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  
|Goodwill                                               |  |                     | 464.7 |   |                       |   | 611.4 |                   |  |       | 239.6 |  |   | 1,315.7 |  
|Trademarks                                             |  |                     | 79.4  |   |                       |   | 275.4 |                   |  |       | 76.4  |  |   | 431.2   |  
|                                                       |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  
|                                                       |  | $                   | 544.1 |   |                       | $ | 886.8 |                   |  | $     | 316.0 |  | $ | 1,746.9 |  
|                                                       |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  
|Intangible assets subject to amortization:             |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  
|Patents                                                |  | $                   |      |   |                       | $ | 0.1   |                   |  | $     |      |  | $ | 0.1     |  
|Non-compete agreements                                 |  |                     | 1.1   |   |                       |   | 0.4   |                   |  |       |      |  |   | 1.5     |  
|Manufacturing processes and expertise                  |  |                     |      |   |                       |   | 6.7   |                   |  |       |      |  |   | 6.7     |  
|Accumulated amortization                               |  |                     | (1.1  | ) |                       |   | (3.9  | )                 |  |       |      |  |   | (5.0    | )
|                                                       |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  
|Total goodwill, trademarks and other intangible assets |  | $                   | 544.1 |   |                       | $ | 890.1 |                   |  | $     | 316.0 |  | $ | 1,750.2 |  
|                                                       |  |                     |       |   |                       |   |       |                   |  |       |       |  |   |         |  

---

|(1) | The purchase price allocation related to the THG Acquisition is still preliminary and will be
finalized prior to the end of the third quarter.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------



|                                                       |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  
|------------------------------------------------------ |  | ------------------- | ----- | - | ------------------ | - | ----- | ----------------- |  | ----- | ----- |  | - | ------- | -
|                                                       |  | Branded Consumables |       |   | Consumer Solutions |   |       | Outdoor Solutions |  | Total |      
|December 31, 2005                                      |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  
|Intangible assets not subject to amortization:         |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  
|Goodwill                                               |  | $                   | 437.9 |   |                    | $ | 588.3 |                   |  | $     | 237.0 |  | $ | 1,263.2 |  
|Trademarks                                             |  |                     | 75.5  |   |                    |   | 275.4 |                   |  |       | 76.4  |  |   | 427.3   |  
|                                                       |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  
|                                                       |  | $                   | 513.4 |   |                    | $ | 863.7 |                   |  | $     | 313.4 |  | $ | 1,690.5 |  
|                                                       |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  
|Intangible assets subject to amortization:             |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  
|Patents                                                |  | $                   |      |   |                    | $ | 0.1   |                   |  | $     |      |  | $ | 0.1     |  
|Non-compete agreements                                 |  |                     | 1.1   |   |                    |   | 0.4   |                   |  |       |      |  |   | 1.5     |  
|Manufacturing processes and expertise                  |  |                     |      |   |                    |   | 6.7   |                   |  |       |      |  |   | 6.7     |  
|Accumulated amortization                               |  |                     | (1.0  | ) |                    |   | (3.4  | )                 |  |       |      |  |   | (4.4    | )
|                                                       |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  
|Total goodwill, trademarks and other intangible assets |  | $                   | 513.5 |   |                    | $ | 867.5 |                   |  | $     | 313.4 |  | $ | 1,694.4 |  
|                                                       |  |                     |       |   |                    |   |       |                   |  |       |       |  |   |         |  

In the Branded consumables segment, the only intangible assets which had finite lives and were subject to
amortization were two non-compete agreements in the aggregate amount of approximately $1.1 million, which were assumed by the Company in connection with the USPC Acquisition and which were being amortized over the term of the respective agreements.
Amortization for the non-compete agreements are less than $0.1 million in the three month periods ended June 30, 2006 and 2005, and $0.1 million and $0.3 million for the six month periods ended June 30, 2006 and 2005, respectively. These
amounts are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income.

In the Consumer solutions
segment, the only intangible assets which have finite lives and are currently subject to amortization are the manufacturing processes and expertise and patents, which are being amortized over a period of seven years. Amortization for the
manufacturing processes and expertise in the aggregate amount of approximately $0.3 million were recorded in the three month periods ended June 30, 2006 and 2005, and $0.6 million and $0.5 million for the six month periods ended June 30,
2006 and 2005, respectively. These amounts are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income. Amortization of the patents was less than $0.1 million for both the three and six month
periods ended June 30, 2006 as well as 2005.

As of June 30, 2006, approximately $900 million of the goodwill and other intangible assets
recorded by the Company is not deductible for income tax purposes. Such amount is subject to change based upon purchase accounting adjustments that may be made within the allocation period.



9



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##### Table of Contents

7. Income Taxes

For
the three and six months ended June 30, 2006, the Companys tax rate was 74% and 68%, respectively, primarily due to a deferred tax provision of $19.1 million recorded in the second quarter of 2006 in conjunction with the legal entity
reorganization of the Companys domestic Consumer solutions segment.

8. Debt

Debt is comprised of the following at June 30, 2006 and December 31, 2005 (in millions):



|                                                           |  |               |         |   |                   |   |         |  
|---------------------------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ------- | -
|                                                           |  | June 30, 2006 |         |   | December 31, 2005 |  
|Senior Credit Facility Term Loans                          |  | $             | 1,203.6 |   |                   | $ | 1,263.1 |  
|93/4%
Senior Subordinated Notes                            |  |               | 179.9   |   |                   |   | 179.9   |  
|Senior Credit Facility Revolver                            |  |               | 79.3    |   |                   |   |        |  
|Non-U.S. borrowings (including Foreign Senior Debt)        |  |               | 72.5    |   |                   |   | 61.9    |  
|Other (primarily capital leases)                           |  |               | 19.2    |   |                   |   | 19.9    |  
|Non-debt balances arising from interest rate swap activity |  |               | (3.2    | ) |                   |   | 16.6    |  
|                                                           |  |               |         |   |                   |   |         |  
|Total debt                                                 |  |               | 1,551.3 |   |                   |   | 1,541.4 |  
|Less: current portion                                      |  |               | (105.5  | ) |                   |   | (86.3   | )
|                                                           |  |               |         |   |                   |   |         |  
|Total long-term debt                                       |  | $             | 1,445.8 |   |                   | $ | 1,455.1 |  
|                                                           |  |               |         |   |                   |   |         |  

Senior Credit Facility

On February 24, 2006, the Company executed an amendment to its Senior Credit Facility which modified certain covenants and permitted the Company to increase its repurchases of common stock. In connection with this amendment, the
Company agreed to repay $26 million of principal outstanding under its Senior Credit Facility Term Loans, which was repaid in March 2006 and accordingly classified as Short-term debt and current portion of long-term debt on the Condensed
Consolidated Balance Sheets as of December 31, 2005. In March 2006, in accordance with the Senior Credit Facility agreement, the Company was required to repay $2.4 million of its Senior Credit Facility Term Loans and Foreign Senior Debt based
on a calculation of Excess Cash Flow as defined in the Senior Credit Facility, which along with a voluntary repayment on its Senior Credit Facility Term Loans of $25 million, was made in April 2006.

As of June 30, 2006, the Company had $1,204 million outstanding under its Term Loan and $79.3 million outstanding under its Revolver. As of June 30, 2006, net
availability under the Senior Credit Facility was approximately $90.3 million, after deducting $30.4 million of issued letters of credit. The Company is required to pay commitment fees on the unused balance of the Senior Credit Facility Revolver.

9. Derivative Financial Instruments

The Company does
not invest or trade in any significant derivative financial or commodity instruments nor does it invest in any foreign financial instruments. The Company does not use derivative instruments for speculative purposes.

The Company actively manages its fixed and floating rate debt mix using interest rate swaps. The Company will enter into fixed and floating rate swaps to alter its
exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest. Floating rate swaps are used to convert the fixed rates of long-term debt into short-term variable rates to take
advantage of current market conditions. Fixed rate swaps are used to reduce the Companys risk of the possibility of increased interest costs. Interest rate swap contracts are therefore used by the Company to separate interest rate risk
management from the debt funding decision.

At June 30, 2006, the interest rate on approximately 46% of the Companys debt obligation, excluding
the amortizing non-debt balances arising from interest rate swap transactions, was fixed by either the nature of the obligation or through interest rate swap contracts.

Fair Value Hedges

The Company has a cross-currency interest rate swap that fixes the exchange rate of the amortizing
loan balance for a $42.7 million notional principal amount Canadian loan denominated in U.S. dollars. The swap instrument exchanges the variable interest rate U.S. dollar balance (3-month U.S. LIBOR plus a spread of 175 basis points) and the
equivalent variable interest rate Canadian dollar balance (3-month CAD BA plus a spread of 192 basis points). The fair market value of this interest rate swap as of June 30, 2006 was a non-cash liability of approximately $2.2 million and is
included in Non-current liabilities in the Condensed Consolidated Balance Sheet, with a corresponding offset to long-term debt.

The Company
also has two swaps in a notional principal amount totaling $105 million to receive a fixed rate of interest and pay a variable rate of interest based upon six-month LIBOR in arrears, plus a spread of 523 to 528 basis points.

These swaps are considered to be effective hedges against changes in the fair value of our fixed-rate debt obligation for both tax and accounting purposes. Accordingly,
the interest rate swap contracts are reflected at fair value in the Companys Condensed Consolidated Balance Sheets and the related portion of fixed-rate debt being hedged is reflected at an amount equal to the sum of its carrying value plus an
adjustment representing the change in fair value of the debt obligations attributable to the interest rate risk being hedged. The fair market value of these interest rate swaps as of June 30, 2006 was a non-cash liability of approximately $7.3
million and is included in Non-current liabilities in the Condensed Consolidated Balance Sheet, with a corresponding offset to long-term debt. Changes during any accounting period in the fair value of the interest rate swaps, as well as
offsetting changes in the adjusted carrying value of the related portion of fixed-rate debt being hedged, will be recognized as adjustments to interest expense in the Companys Condensed Consolidated Statements of Income. The net effect of this
accounting on the Companys operating results is that interest expense on the portion of fixed-rate debt being hedged is generally recorded based on variable interest rates. The Company is exposed to credit loss, in the event of non-performance
by the other party to its current existing swap, a large financial institution. However, the Company does not anticipate non-performance by the other party.



10



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##### Table of Contents

Cash Flow Hedges

The
Company has six interest rate swaps which convert an aggregate notional principal amount of $625 million from floating rate interest payments (excluding the Companys applicable margin) under its term loan facility to fixed interest rate
obligations. The variable rate of interest is based on three-month LIBOR. The fixed rates range from 4.73% to 4.805%.

Gains and losses related to
the effective portion of these swaps are reported as a component of Accumulated other comprehensive income and are reclassified into earnings in the same period that the hedged transaction affects earnings. As of June 30, 2006, the
fair value of these swaps was approximately $14.3 million (before tax) and such amount is included as an unrealized gain in Accumulated other comprehensive income on the Companys Condensed Consolidated Balance Sheet.

Interest Rate Swaps Recouponments

During prior years, the Company
recouponed and replaced an aggregate of $730 million notional principal amount interest rate swaps creating a non-cash liability of $23.4 million which is amortized through interest expense over the remaining life of the original swaps. Such
recouponed amounts received for fair value hedges are included as a portion of Long-term debt while amounts received for cash flow hedges are included in Accumulated other comprehensive income.

Foreign Exchange Rate Contracts

The Company utilizes forward foreign
exchange rate contracts (Forward Contracts) to reduce its foreign currency exchange rate exposures. The Company designates qualifying Forward Contracts as cash flow hedge instruments. At June 30, 2006, the fair value of its open
Forward Contracts was a net liability of approximately $0.4 million, and is reflected in Other current liabilities in its Condensed Consolidated Balance Sheet. The unrealized change in the fair values of open Forward Contracts from
December 31, 2005 to June 30, 2006 was a net loss of approximately $1.7 million, of which $1.5 million of net losses were reclassified to Accumulated other comprehensive income. At June 30, 2006, the U.S. dollar equivalent
contractual notional amounts to purchase and sell currencies for open Forward Contracts totaled $113.8 million.

The Companys derivative activities
do not create additional risk because gains and losses on derivative contracts offset gains and losses on the assets, liabilities and transactions being hedged. As derivative contracts are initiated, the Company designates the instruments
individually as either a fair value hedge or a cash flow hedge. Management reviews the correlation and effectiveness of its derivatives on a periodic basis.

10. Contingencies

The Company is involved in various legal disputes and other legal proceedings that arise from time to time in the
ordinary course of business. In addition, the Company or various of its subsidiaries have been identified by the United States Environmental Protection Agency or a state environmental agency as a Potentially Responsible Party pursuant to the federal
Superfund Act and/or state Superfund laws comparable to the federal law at various sites. Based on currently available information, the Company does not believe that the disposition of any of the legal or environmental disputes the Company is
currently involved in will have a material adverse effect upon the financial condition, results of operations, cash flows or competitive position of the Company. It is possible, that as additional information becomes available, the impact on the
Company of an adverse determination could have a different effect.

Litigation

The Company and/or its subsidiaries are involved in various lawsuits arising from time to time that the Company considers ordinary routine litigation incidental to its business. Amounts accrued for litigation matters
represent the anticipated costs (damages and/or settlement amounts) in connection with pending litigation and claims and related anticipated legal fees for defending such actions. The costs are accrued when it is both probable that a liability has
been incurred and the amount can be reasonably estimated. The accruals are based upon the Companys assessment, after consultation with counsel (if deemed appropriate), of probable loss based on the facts and circumstances of each case, the
legal issues involved, the nature of the claim made, the nature of the damages sought and any relevant information about the plaintiffs and other significant factors that vary by case. When it is not possible to estimate a specific expected cost to
be incurred, the Company evaluates the range of probable loss and records the minimum end of the range. The Company believes that anticipated probable costs of litigation matters have been adequately accrued to the extent determinable.

Environmental Matters

The Companys operations are subject
to certain federal, state, local and foreign environmental laws and regulations in addition to laws and regulations regarding labeling and packaging of products and the sales of products containing certain environmentally sensitive materials.

In addition to ongoing environmental compliance at its operations, the Company also is actively engaged in environmental remediation activities, the
majority of which relate to divested operations and sites. The Company or various of its subsidiaries have been identified by the United States Environmental Protection Agency (EPA) or a state environmental agency as a Potentially
Responsible Party (PRP) pursuant to the federal Superfund Act and/or state Superfund laws comparable to the federal law at various sites (collectively, the Environmental Sites).

The Company has established reserves to cover the anticipated probable costs of investigation and remediation, based upon periodic reviews of all sites for which they
have, or may have remediation responsibility. The Company accrues environmental investigation and remediation costs when it is probable that a liability has been incurred, the amount of the liability can be reasonably estimated and their
responsibility for the liability is established. Generally, the timing of these accruals coincides with the earlier of formal commitment to an investigation plan, completion of a feasibility study or a commitment to a formal plan of action. The
Company accrued its best estimate of investigation and remediation costs based upon facts known at such dates and because of the inherent difficulties in estimating the ultimate amount of environmental costs, which are further described below, these
estimates may materially change in the future as a result of the uncertainties described below. Estimated costs, which are based upon experience with similar sites and technical evaluations, are judgmental in nature and are recorded at discounted
amounts without considering the impact of inflation and are adjusted periodically to reflect changes in applicable laws or regulations, changes in available technologies and receipt by the Company of new information. It is difficult to estimate the
ultimate level of future environmental expenditures due to a number of uncertainties surrounding environmental liabilities. These uncertainties include the applicability of laws and regulations, changes in environmental remediation requirements, the
enactment of additional regulations, uncertainties surrounding remediation procedures including the development of new technology, the identification of new sites for which the Company and various of its subsidiaries could be a PRP, information
relating to the exact nature and extent of the contamination at each site and the extent of required cleanup efforts, the uncertainties with respect to the ultimate outcome of issues which may be actively contested and the varying costs of
alternative remediation strategies.

Due to the uncertainty described above, the Companys ultimate future liability with respect to sites at which
remediation has not been completed may vary from the amounts reserved as of June 30, 2006.



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The Company believes that the costs of completing environmental remediation of all sites for which the Company has a
remediation responsibility have been adequately reserved and that the ultimate resolution of these matters will not have a material adverse effect upon the Companys consolidated financial position, results of operations or cash
flows.

Product Liability Matters

As a consumer goods
manufacturer and distributor, the Company and/or its subsidiaries face the risk of product liability and related lawsuits involving claims for substantial money damages, product recall actions and higher than anticipated rates of warranty returns or
other returns of goods.

The Company and/or its subsidiaries are party to various personal injury and property damage lawsuits relating to their products
and incidental to its business. Annually, the Company sets its product liability insurance program which is an occurrence-based program based on the Company and its subsidiaries current and historical claims experience and the availability and
cost of insurance. The Companys product liability insurance program generally is comprised of a self-insurance retention per occurrence and an aggregate limit on exposure.

Cumulative amounts estimated to be payable by the Company with respect to pending and potential claims for all years in which the Company is liable under its self-insurance retention have been accrued as liabilities.
Such accrued liabilities are based on estimates (which include actuarial determinations made by an independent actuarial consultant as to liability exposure, taking into account prior experience, number of claims and other relevant factors); thus,
the Companys ultimate liability may exceed or be less than the amounts accrued. The methods of making such estimates and establishing the resulting liability are reviewed on a regular basis and any adjustments resulting therefrom are reflected
in current operating results.

Based on current information, the Company believes that the ultimate conclusion of the various pending product liability
claims and lawsuits of the Company, in the aggregate, will not have a material adverse effect on the Companys consolidated financial position, results of operations or cash flows.

Securities and Related Litigation

In January and February 2006, purported class action lawsuits were filed in the
Federal District Court for the Southern District of New York against the Company and certain Company officers alleging violations of the federal securities laws. The actions purport to be filed on behalf of purchasers of the Companys common
stock during the period from June 29, 2005 (the date the Company announced the signing of the agreement to acquire Holmes) through January 12, 2006.

The complaints, which are substantially similar to one another, allege, among other things, that the plaintiffs were injured by reason of certain allegedly false and misleading statements made by the Company relating to the expected
benefits of the THG Acquisition. Joint lead plaintiffs were appointed on June 9, 2006. No class has been certified in the actions. The lead plaintiffs are to file an amended complaint by August 11, 2006.

In February 2006, a derivative complaint was filed against certain Company officers and the Board of Directors of the Company in the United States District Court for the
Southern District of New York. The Company is named as a nominal defendant. The complaint alleges, among other things, that the individual defendants violated their fiduciary duties by failing to disclose material information and/or by misleading
the investing public about the Companys business and financial condition relating to the THG Acquisition. The complaint seeks damages and other monetary relief against the individual defendants. The Company and the individual defendants filed
a motion to dismiss the complaint on June 15, 2006.

These actions are in the early stages of litigation and an outcome cannot be predicted.
Management does not believe that the outcome of this litigation will have a material adverse effect on the financial position, results of operations or cash flows of the Company. The Company intends to defend itself vigorously in these actions.

11. Equity

In February 2006, the Board of Directors
of the Company authorized a new stock repurchase program to acquire up to $150 million of Company common stock through open market and privately negotiated transactions. On March 1, 2006, the Company repurchased 2 million shares of
the Companys common stock for $50 million through a privately negotiated transaction.



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12. Earnings Per Share Calculation

A computation of earnings per share for the three and six month periods ended June 30, 2006 and 2005 was as follows (in millions, except per share data):



|                                                                             |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|---------------------------------------------------------------------------- |  | ------------------------ | ---- | ------------ | ---------------------- | ----- | ------------ |  | ------------ | ---- |  | - | ----- | -
|                                                                             |  | Three month period ended |      |              | Six month period ended |      
|                                                                             |  | June 30,2006             |      | June 30,2005 |                        |       | June 30,2006 |  | June 30,2005 |     
|Net income, as reported                                                      |  | $                        | 13.3 |              | $                      | 32.8  |              |  | $            | 19.0 |  | $ | 32.8  |  
|Paid-in-kind dividends on Series B and C preferred stock                     |  |                          |     |              |                        | (2.8  | )            |  |              |     |  |   | (8.3  | )
|Charges from beneficial conversions of Series B and Series C preferred stock |  |                          |     |              |                        | (22.4 | )            |  |              |     |  |   | (38.9 | )
|                                                                             |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Income (loss) allocable to common stockholders                               |  |                          | 13.3 |              | $                      | 7.6   |              |  | $            | 19.0 |  | $ | (14.4 | )
|                                                                             |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Less: income allocable to preferred stockholders                             |  |                          |     |              |                        | (1.9  | )            |  |              |     |  |   |      |  
|                                                                             |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Income allocable to common stockholders                                      |  | $                        | 13.3 |              |                        | 5.7   |              |  |              | 19.0 |  |   | (14.4 | )
|                                                                             |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|                                                                             |  |                          |      |             
|Weighted average shares outstanding                                          |  |                          | 64.5 |              |                        | 44.0  |              |  |              | 65.1 |  |   | 43.6  |  
|Additional shares assuming conversion of stock options and restricted stock  |  |                          | 1.0  |              |                        | 1.8   |              |  |              | 0.9  |  |   |      |  
|                                                                             |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Weighted average shares outstanding assuming conversion                      |  |                          | 65.5 |              |                        | 45.8  |              |  |              | 66.0 |  |   | 43.6  |  
|                                                                             |  |                          |      |              |                        |       |              |  |              |      |  |   |       |  
|Basic earnings (loss) per share                                              |  | $                        | 0.21 |              | $                      | 0.13  |              |  | $            | 0.29 |  | $ | (0.33 | )
|Diluted earnings (loss) per share                                            |  | $                        | 0.20 |              | $                      | 0.12  |              |  | $            | 0.29 |  | $ | (0.33 | )

13. Comprehensive Income

Comprehensive income for the three and six month periods ended June 30, 2006 and 2005 was as follows (in millions):



|                                                             |  |                          |      |   |                        |   |      |              |  |   |              |   |  |   |      |  
|------------------------------------------------------------ |  | ------------------------ | ---- | - | ---------------------- | - | ---- | ------------ |  | - | ------------ | - |  | - | ---- | -
|                                                             |  | Three month period ended |      |   | Six month period ended |  
|                                                             |  | June 30,2006             |      |   | June 30,2005           |   |      | June 30,2006 |  |   | June 30,2005 |  
|Net income                                                   |  | $                        | 13.3 |   |                        | $ | 32.8 |              |  | $ | 19.0         |   |  | $ | 32.8 |  
|Unrealized gain (loss) on interest rate swaps                |  |                          | 5.2  |   |                        |   | (4.6 | )            |  |   | 19.7         |   |  |   | 1.2  |  
|Foreign currency translation                                 |  |                          | 2.4  |   |                        |   | (4.9 | )            |  |   | 3.2          |   |  |   | (6.9 | )
|Unrealized (loss) gain on foreign exchange forward contracts |  |                          | (2.4 | ) |                        |   | (0.2 | )            |  |   | (3.0         | ) |  |   | 0.3  |  
|                                                             |  |                          |      |   |                        |   |      |              |  |   |              |   |  |   |      |  
|Comprehensive income                                         |  | $                        | 18.5 |   |                        | $ | 23.1 |              |  | $ | 38.9         |   |  | $ | 27.4 |  
|                                                             |  |                          |      |   |                        |   |      |              |  |   |              |   |  |   |      |  



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14. Employee Benefit Plans

Components of Net Periodic Costs for Domestic Plans

Net periodic pension costs and net periodic postretirement costs for domestic plans
include the following components (in millions):



|                                                   |  |                          |      |   |                          |   |      |               |  |   |               |   |  |   |    
|-------------------------------------------------- |  | ------------------------ | ---- | - | ------------------------ | - | ---- | ------------- |  | - | ------------- | - |  | - | ---
|                                                   |  | Pension Benefits         |      |   | Postretirement Benefits 
|                                                   |  | Three month period ended |      |   | Three month period ended
|                                                   |  | June 30, 2006            |      |   | June 30, 2005            |   |      | June 30, 2006 |  |   | June 30, 2005
|Service cost                                       |  | $                        | 0.1  |   |                          | $ | 0.3  |               |  | $ | 0.1           |   |  | $ | 0.1
|Interest cost                                      |  |                          | 3.5  |   |                          |   | 3.3  |               |  |   | 0.3           |   |  |   | 0.4
|Expected return on plan assets                     |  |                          | (3.1 | ) |                          |   | (2.9 | )             |  |   |              |   |  |   |   
|Amortization of unrecognized prior service benefit |  |                          |     |   |                          |   |     |               |  |   | (0.1          | ) |  |   |   
|Recognized net actuarial loss (gain)               |  |                          | 0.1  |   |                          |   |     |               |  |   |              |   |  |   |   
|                                                   |  |                          |      |   |                          |   |      |               |  |   |               |   |  |   |    
|Net periodic cost                                  |  | $                        | 0.6  |   |                          | $ | 0.7  |               |  | $ | 0.3           |   |  | $ | 0.5
|                                                   |  |                          |      |   |                          |   |      |               |  |   |               |   |  |   |    
|Curtailment gain                                   |  |                          |     |   |                          |   |     |               |  |   | (1.7          | ) |  |   |   
|                                                   |  |                          |      |   |                          |   |      |               |  |   |               |   |  |   |    
|Total pension cost                                 |  | $                        | 0.6  |   |                          | $ | 0.7  |               |  | $ | (1.4          | ) |  | $ | 0.5
|                                                   |  |                          |      |   |                          |   |      |               |  |   |               |   |  |   |    



|                                                   |  |                        |      |   |                         |   |      |              |  |   |               |   |  |   |    
|-------------------------------------------------- |  | ---------------------- | ---- | - | ----------------------- | - | ---- | ------------ |  | - | ------------- | - |  | - | ---
|                                                   |  | Pension Benefits       |      |   | Postretirement Benefits
|                                                   |  | Six month period ended |      |   | Six month period ended 
|                                                   |  | June 30, 2006          |      |   | June 30, 2005           |   |      | June 30,2006 |  |   | June 30, 2005
|Service cost                                       |  | $                      | 0.3  |   |                         | $ | 0.6  |              |  | $ | 0.2           |   |  | $ | 0.3
|Interest cost                                      |  |                        | 7.0  |   |                         |   | 5.6  |              |  |   | 0.7           |   |  |   | 0.7
|Expected return on plan assets                     |  |                        | (6.2 | ) |                         |   | (5.1 | )            |  |   |              |   |  |   |   
|Amortization of unrecognized prior service benefit |  |                        | 0.1  |   |                         |   | 0.1  |              |  |   | (0.1          | ) |  |   |   
|Recognized net actuarial loss (gain)               |  |                        | 0.1  |   |                         |   | 0.1  |              |  |   | 0.1           |   |  |   |   
|                                                   |  |                        |      |   |                         |   |      |              |  |   |               |   |  |   |    
|Net periodic cost                                  |  | $                      | 1.3  |   |                         | $ | 1.3  |              |  | $ | 0.9           |   |  | $ | 1.0
|                                                   |  |                        |      |   |                         |   |      |              |  |   |               |   |  |   |    
|Curtailment gain                                   |  |                        |     |   |                         |   |     |              |  |   | (1.7          | ) |  |   |   
|                                                   |  |                        |      |   |                         |   |      |              |  |   |               |   |  |   |    
|Total pension cost                                 |  | $                      | 1.3  |   |                         | $ | 1.3  |              |  | $ | (0.8          | ) |  | $ | 1.0
|                                                   |  |                        |      |   |                         |   |      |              |  |   |               |   |  |   |    

Components of Net Periodic Pension Costs for Foreign Plans

Net periodic pension costs for foreign plans include the following components (in millions):



|                               |  |                                      |      |   |                                      |   |      |  
|------------------------------ |  | ------------------------------------ | ---- | - | ------------------------------------ | - | ---- | -
|                               |  | Three monthperiod endedJune 30, 2006 |      |   | Three monthperiod endedJune 30, 2005 |  
|Service cost                   |  | $                                    | 0.2  |   |                                      | $ | 0.2  |  
|Interest cost                  |  |                                      | 0.1  |   |                                      |   | 0.1  |  
|Expected return on plan assets |  |                                      | (0.1 | ) |                                      |   | (0.1 | )
|                               |  |                                      |      |   |                                      |   |      |  
|Net periodic pension cost      |  | $                                    | 0.2  |   |                                      | $ | 0.2  |  
|                               |  |                                      |      |   |                                      |   |      |  
|Curtailment gain               |  |                                      | (0.1 | ) |                                      |   |     |  
|                               |  |                                      |      |   |                                      |   |      |  
|Total pension cost             |  | $                                    | 0.1  |   |                                      | $ | 0.2  |  
|                               |  |                                      |      |   |                                      |   |      |  



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|                               |  |                                    |      |   |                                    |   |      |  
|------------------------------ |  | ---------------------------------- | ---- | - | ---------------------------------- | - | ---- | -
|                               |  | Six monthperiod endedJune 30, 2006 |      |   | Six monthperiod endedJune 30, 2005 |  
|Service cost                   |  | $                                  | 0.4  |   |                                    | $ | 0.3  |  
|Interest cost                  |  |                                    | 0.3  |   |                                    |   | 0.3  |  
|Expected return on plan assets |  |                                    | (0.2 | ) |                                    |   | (0.2 | )
|                               |  |                                    |      |   |                                    |   |      |  
|Net periodic pension cost      |  | $                                  | 0.5  |   |                                    | $ | 0.4  |  
|                               |  |                                    |      |   |                                    |   |      |  
|Curtailment gain               |  |                                    | (0.1 | ) |                                    |   |     |  
|                               |  |                                    |      |   |                                    |   |      |  
|Total pension cost             |  | $                                  | 0.4  |   |                                    | $ | 0.4  |  
|                               |  |                                    |      |   |                                    |   |      |  

15. Reorganization and Acquisition-Related Integration Costs

The following table sets forth the details and the activity related to reorganization and acquisition-related integration costs, net as of June 30, 2006 (in
millions):



|                                     |  |                                   |      |                                                |   |                             |  |   |              |   |  |                               |       |   |  |   |    
|------------------------------------ |  | --------------------------------- | ---- | ---------------------------------------------- | - | --------------------------- |  | - | ------------ | - |  | ----------------------------- | ----- | - |  | - | ---
|                                     |  | AccrualBalance atDecember 31,2005 |      | ReorganizationandAcquisition-Related Costs,net |   | ForeignCurrencyTranslations |  |   | CashPayments |   |  | AccrualBalance atJune 30,2006
|Severance and other employee related |  | $                                 | 15.9 |                                                | $ | 4.0                         |  | $ | 0.1          |   |  | $                             | (17.0 | ) |  | $ | 3.0
|Other costs                          |  |                                   | 1.6  |                                                |   | 9.3                         |  |   | (0.1         | ) |  |                               | (7.4  | ) |  |   | 3.4
|                                     |  |                                   |      |                                                |   |                             |  |   |              |   |  |                               |       |   |  |   |    
|Sub-total                            |  | $                                 | 17.5 |                                                |   | 13.3                        |  | $ |             |   |  | $                             | (24.4 | ) |  | $ | 6.4
|                                     |  |                                   |      |                                                |   |                             |  |   |              |   |  |                               |       |   |  |   |    
|Impairment charges                   |  |                                   |      |                                                |   | 1.7                         |  |   |              |   |  |                               |       |   |  |   |    
|                                     |  |                                   |      |                                                |   |                             |  |   |              |   |  |                               |       |   |  |   |    
|Total                                |  |                                   |      |                                                | $ | 15.0                        |  |   |              |   |  |                               |       |   |  |   |    
|                                     |  |                                   |      |                                                |   |                             |  |   |              |   |  |                               |       |   |  |   |    

Consumer Solutions Segment Reorganization

As part of the AHI Acquisition and THG Acquisition, it was determined that, due to similarities between the combined Consumer solutions segment customer base,
distribution channels and operations, significant cost savings could be achieved by integrating certain functions of the businesses, such as distribution and warehousing, information technology and certain administrative functions. In order to
leverage a shared infrastructure, the Company initiated certain reorganization plans during 2005. During the six months ended June 30, 2006, the Company recorded charges of approximately $3.6 million in severance and other employee
benefit-related costs and $6.6 million in other costs related to these plans. Of the $3.6 million related to employee terminations, $3.1 million was included in Reorganization and acquisition-related integration costs, net in the
Condensed Consolidated Statements of Income, $0.5 million was included in the determination of the cost of the THG Acquisition. Other costs primarily consist of $1.7 million of retention bonuses, $1.9 million of professional fees, $1.1
million of travel expenses and $0.8 million of relocation costs as well as $0.5 million of facility exit costs. Other costs are included in Reorganization and acquisition-related integration costs, net in the Condensed Consolidated
Statements of Income. The initiative is expected to result in approximately 160 terminations of which approximately 99 were terminated as of June 30, 2006. As of June 30, 2006, $3.4 million of severance, other employee benefit-related
costs and other costs remain accrued in the Condensed Consolidated Balance Sheet. The amounts are included in Other current liabilities and Other non-current liabilities for $3.2 million and $0.2 million, respectively. The
amounts accrued are expected to be fully paid by the end of 2007.

Outdoor Solutions Segment

European Reorganization

During 2006, the Company made a strategic plan to
rationalize its European manufacturing and administrative platform in order to facilitate a long-term cost savings initiative. During the six months ended June 30, 2006, the Company recorded net charges of $0.6 million, related to this
strategic plan consisting of severance and other employee benefit-related costs which are reflected in Reorganization and acquisition-related integration costs, net in the Condensed Consolidated Statements of Income. As of June 30,
2006, $0.4 million remains accrued and is reflected in Other current liabilities in the Condensed Consolidated Balance Sheet. The amounts accrued are expected to be substantially paid by 2007.

Outsourcing

In prior years, Coleman announced its intention to outsource
the manufacturing of its outdoor recreation appliances manufactured at its Lyon, France facility, and Coleman initiated the outsourcing activities upon completion of reviews conducted by government and union officials. Other manufacturing operations
in Lyon were unaffected by this move. During the six months ended June 30, 2006, the Company reversed approximately $0.3 million of charges, primarily related to the plant closing. These are reflected in Reorganization and
acquisition-related integration costs, net in the Condensed Consolidated Statements of Income. The initiative is currently scheduled to be substantially completed in 2006 and is expected to result in the termination of approximately 125
employees, of which 117 were terminated as of June 30, 2006. As of June 30, 2006, $2 million, primarily related to severance and other employee benefit-related costs, remains accrued, of which $1.9 million is reflected in Other
current liabilities and $0.1 million is reflected in Other non-current liabilities in the Condensed Consolidated Balance Sheets. The amounts accrued are expected to be fully paid by 2007.



15



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##### Table of Contents

Branded Consumables Segment

Outsourcing

During the second quarter of
2006, the Company revised its initial plan to outsource the manufacturing of certain products in the Branded consumables segment. This change in the plan was due to a change in strategy made by new senior management within the operations who had
joined the organization in the second quarter of 2006. The Company recorded a reversal of previous amounts ($2.4 million) associated with this plan during the second quarter of 2006.

Segment Reorganization

During the first
quarter of 2005, the Company began implementing a strategic plan to reorganize its Branded consumables segment and thereby facilitate long-term cost savings and improve management and reporting capabilities. Specific cost savings initiatives include
the utilization of certain shared distribution and warehousing services and information systems platforms and outsourcing the manufacturing of certain kitchen products. During the six months ended June 30, 2006, the Company recorded severance
charges of $0.5 million and other charges of $3.8 million primarily related to a fixed asset impairment ($1.7 million) and inventory move costs ($1.3 million) which are included in Reorganization and acquisition-related integration costs,
net in the Condensed Consolidated Statements of Income. As of June 30, 2006, approximately $0.6 million of the charges recorded remain accrued and are reflected in Other current liabilities in the Condensed Consolidated
Balance Sheets. All amounts are expected to be paid in 2006.

Corporate Reorganization and Acquisition-Related Integration Costs

As part of the AHI Acquisition, it was determined that certain corporate functions of the two entities would be combined and redundant functions would be eliminated.
Further, certain functions and responsibilities would be transitioned to the Companys offices in Florida, while other functions would transition to the Companys New York headquarters. During the six months ended June 30, 2006, the
Company recorded charges of $0.7 million consisting primarily of retention and travel expenses directly associated with the reorganization, which are included in Reorganization and acquisition-related integration costs, net in the
Condensed Consolidated Statements of Income. The initiative was completed during the second quarter of 2006 and resulted in the termination of 21 employees, all of which were terminated as of June 30, 2006.

16. Segment Information

During the first quarter of 2006, management
changed the Companys reportable segments to reflect the new structure of the organization and the manner in which the chief operating decision maker regularly assesses information for decision-making purposes, including the allocation of
resources. As a result, the First Alert business was moved from the Consumer solutions segment to the Branded consumables segment. During the second quarter 2006, the Company changed the manner in which it measures segment operating performance to
be segment earnings. All prior periods have been reclassified to conform to the current reporting structure and performance measures. For comparative prior year annual data, see Exhibit 99.1 filed herewithin.

The Company reports four business segments: Branded consumables, Consumer solutions, Outdoor solutions and Process solutions.

In the Branded consumables segment, the Company markets, distributes and in certain cases manufactures a broad line of branded products that includes arts and crafts,
paintbrushes, childrens card games, clothespins, collectible tins, food preparation kits, home canning jars, jar closures, kitchen matches, other craft items, plastic cutlery, playing cards and card accessories, rope, cord and twine, smoke and
carbon monoxide alarms, storage and workshop accessories, toothpicks and other accessories marketed under the Aviator®, Ball®, Bee®, Bernardin®, Bicycle®, BRK®, Crawford®, Diamond®, First Alert®, Forster®, Hoyle®, KEM®, Kerr®, Lehigh®, Leslie-Locke®and Loew-Cornell®brand names, among
others.

In the Consumer solutions segment, the Company manufactures or sources, markets and distributes an array of innovative kitchen and other household
products that includes bedding, blenders, coffee makers, heating pads, home vacuum packaging machines, personal and animal grooming products, and warming blankets, as well as related consumable products. The segments leading brands include
Bionaire®, Crock-Pot®, FoodSaver®, Harmony®, Health o meter®, Holmes®, Mr. Coffee®, Oster®, Patton®, Rival®, Seal-a-Meal®, Sunbeam®, VillaWare®and White Mountain. As discussed in Note 5, the JCS portion of this business was purchased with the AHI Acquisition effective January 24, 2005, and the Holmes portion of this business was
purchased with the THG Acquisition, effective July 18, 2005.

In the Outdoor solutions segment, the Company manufactures or sources, markets and
distributes outdoor leisure products worldwide under the Campingaz®and
Coleman®brand names for use outside the home or away from the home, such as products for
camping, backpacking, tailgating, backyard grilling and other outdoor activities.

The Process solutions segment (formerly referred to as the
Other segment) primarily consists of a plastic consumables business which manufactures, markets and distributes a wide variety of consumer and medical plastic products, including products sold to retailers by the Companys Branded
consumables segment (plastic cutlery) and Consumer solutions segment (containers). The Process solutions segment also includes a producer of zinc strip.



16



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##### Table of Contents

|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|-------------------------------------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | ---------------- |  | - | ---------------- | - |  | ------------------------ | ---- | - | ---------------------- | - | ----- | --------------------- |  | - | ------------ | - |  | - | ----- | - |  | - | ----- | -
|(in millions)                                                  |  | BrandedConsumables |       |   | ConsumerSolutions |   |       | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |      |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Three months ended June 30, 2006                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Net sales                                                      |  | $                  | 206.5 |   |                   | $ | 359.5 |                  |  | $ | 331.9            |   |  | $                        | 81.0 |   |                        | $ | (16.9 | )                     |  | $ | 962.0        |   |  |   |      |   |  | $ | 962.0 |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Segment earnings (loss)                                        |  |                    | 34.9  |   |                   |   | 30.6  |                  |  |   | 47.9             |   |  |                          | 9.7  |   |                        |   |      |                       |  |   | 123.1        |   |  |   | (17.8 | ) |  |   | 105.3 |  
|Adjustments to reconcile to reported operating earnings(loss): |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Reorganization and acquisition-related integration costs, net  |  |                    | (1.0  | ) |                   |   | (4.6  | )                |  |   | 0.4              |   |  |                          |     |   |                        |   |      |                       |  |   | (5.2         | ) |  |   | (0.4  | ) |  |   | (5.6  | )
|Other integration-related costs                                |  |                    |      |   |                   |   | (0.9  | )                |  |   |                 |   |  |                          |     |   |                        |   |      |                       |  |   | (0.9         | ) |  |   |      |   |  |   | (0.9  | )
|Stock-based compensation                                       |  |                    |      |   |                   |   |      |                  |  |   |                 |   |  |                          |     |   |                        |   |      |                       |  |   |             |   |  |   | (4.3  | ) |  |   | (4.3  | )
|Depreciation and amortization                                  |  |                    | (2.9  | ) |                   |   | (5.4  | )                |  |   | (4.2             | ) |  |                          | (2.3 | ) |                        |   |      |                       |  |   | (14.8        | ) |  |   | (0.3  | ) |  |   | (15.1 | )
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Operating earnings (loss)                                      |  | $                  | 31.0  |   |                   | $ | 19.7  |                  |  | $ | 44.1             |   |  | $                        | 7.4  |   |                        |   |      |                       |  | $ | 102.2        |   |  | $ | (22.8 | ) |  | $ | 79.4  |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Depreciation and amortization                                  |  | $                  | 2.9   |   |                   | $ | 5.4   |                  |  | $ | 4.2              |   |  | $                        | 2.3  |   |                        |   |      |                       |  | $ | 14.8         |   |  | $ | 0.3   |   |  | $ | 15.1  |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|                                                               |  |                    |       |   |                   |   |       |                 
|(in millions)                                                  |  | BrandedConsumables |       |   | ConsumerSolutions |   |       | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |      |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Three months ended June 30, 2005 (Reclassified)                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Net sales                                                      |  | $                  | 193.8 |   |                   | $ | 217.5 |                  |  | $ | 298.6            |   |  | $                        | 63.4 |   |                        | $ | (18.9 | )                     |  | $ | 754.4        |   |  |   |      |   |  | $ | 754.4 |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Segment earnings (loss)                                        |  |                    | 28.6  |   |                   |   | 14.6  |                  |  |   | 45.5             |   |  |                          | 9.0  |   |                        |   |      |                       |  |   | 97.7         |   |  |   | (6.5  | ) |  |   | 91.2  |  
|Adjustments to reconcile to reported operating earnings(loss): |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Reorganization and acquisition-related integration costs       |  |                    | (1.3  | ) |                   |   | (3.6  | )                |  |   | (0.4             | ) |  |                          |     |   |                        |   |      |                       |  |   | (5.3         | ) |  |   | (0.6  | ) |  |   | (5.9  | )
|Depreciation and amortization                                  |  |                    | (2.4  | ) |                   |   | (4.1  | )                |  |   | (4.4             | ) |  |                          | (2.3 | ) |                        |   |      |                       |  |   | (13.2        | ) |  |   | (0.1  | ) |  |   | (13.3 | )
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Operating earnings (loss)                                      |  | $                  | 24.9  |   |                   | $ | 6.9   |                  |  | $ | 40.7             |   |  | $                        | 6.7  |   |                        |   |      |                       |  | $ | 79.2         |   |  | $ | (7.2  | ) |  | $ | 72.0  |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Depreciation and amortization                                  |  | $                  | 2.4   |   |                   | $ | 4.1   |                  |  | $ | 4.4              |   |  | $                        | 2.3  |   |                        |   |      |                       |  | $ | 13.2         |   |  | $ | 0.1   |   |  | $ | 13.3  |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  



17



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##### Table of Contents

|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|--------------------------------------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ------- | ---------------- |  | - | ---------------- | - |  | ------------------------ | ----- | - | ---------------------- | - | ----- | --------------------- |  | - | ------------ | - |  | - | ----- | - |  | - | ------- | -
|(in millions)                                                   |  | BrandedConsumables |       |   | ConsumerSolutions |   |         | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |       |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Six months ended June 30, 2006                                  |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|(Reclassified)                                                  |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Net sales                                                       |  | $                  | 361.3 |   |                   | $ | 711.0   |                  |  | $ | 560.0            |   |  | $                        | 156.1 |   |                        | $ | (34.7 | )                     |  | $ | 1,753.7      |   |  |   |      |   |  | $ | 1,753.7 |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Segment earnings (loss)                                         |  |                    | 52.5  |   |                   |   | 59.8    |                  |  |   | 69.2             |   |  |                          | 19.4  |   |                        |   |      |                       |  |   | 200.9        |   |  |   | (29.3 | ) |  |   | 171.6   |  
|Adjustments to reconcile to reported operating earnings (loss): |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Reorganization and acquisition-related integration costs, net   |  |                    | (4.3  | ) |                   |   | (9.7    | )                |  |   | (0.3             | ) |  |                          |      |   |                        |   |      |                       |  |   | (14.3        | ) |  |   | (0.7  | ) |  |   | (15.0   | )
|Inventory write-off                                             |  |                    |      |   |                   |   |        |                  |  |   | (0.3             | ) |  |                          |      |   |                        |   |      |                       |  |   | (0.3         | ) |  |   |      |   |  |   | (0.3    | )
|Other integration-related costs                                 |  |                    |      |   |                   |   | (1.8    | )                |  |   |                 |   |  |                          |      |   |                        |   |      |                       |  |   | (1.8         | ) |  |   |      |   |  |   | (1.8    | )
|Stock-based compensation                                        |  |                    |      |   |                   |   |        |                  |  |   |                 |   |  |                          |      |   |                        |   |      |                       |  |   |             |   |  |   | (9.7  | ) |  |   | (9.7    | )
|Depreciation and amortization                                   |  |                    | (5.6  | ) |                   |   | (11.6   | )                |  |   | (8.4             | ) |  |                          | (4.7  | ) |                        |   |      |                       |  |   | (30.3        | ) |  |   | (0.6  | ) |  |   | (30.9   | )
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Operating earnings (loss)                                       |  | $                  | 42.6  |   |                   | $ | 36.7    |                  |  | $ | 60.2             |   |  | $                        | 14.7  |   |                        |   |      |                       |  | $ | 154.2        |   |  | $ | (40.3 | ) |  | $ | 113.9   |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Depreciation and amortization                                   |  | $                  | 5.6   |   |                   | $ | 11.6    |                  |  | $ | 8.4              |   |  | $                        | 4.7   |   |                        |   |      |                       |  | $ | 30.3         |   |  | $ | 0.6   |   |  | $ | 30.9    |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Total assets                                                    |  | $                  | 930.9 |   |                   | $ | 1,688.6 |                  |  | $ | 803.6            |   |  | $                        | 100.3 |   |                        |   |      |                       |  | $ | 3,523.4      |   |  | $ | 50.1  |   |  | $ | 3,573.5 |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|                                                                |  |                    |       |   |                   |   |         |                 
|(in millions)                                                   |  | BrandedConsumables |       |   | ConsumerSolutions |   |         | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |       |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Six months ended June 30, 2005                                  |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|(Reclassified)                                                  |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Net sales                                                       |  | $                  | 329.2 |   |                   | $ | 384.6   |                  |  | $ | 481.5            |   |  | $                        | 115.1 |   |                        | $ | (34.7 | )                     |  | $ | 1,275.7      |   |  |   |      |   |  | $ | 1,275.7 |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Segment earnings (loss)                                         |  |                    | 46.3  |   |                   |   | 27.2    |                  |  |   | 69.4             |   |  |                          | 15.2  |   |                        |   |      |                       |  |   | 158.1        |   |  |   | (14.4 | ) |  |   | 143.7   |  
|Adjustments to reconcile to reported operating earnings (loss): |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Manufacturers profit in inventory                              |  |                    | (0.2  | ) |                   |   |        |                  |  |   |                 |   |  |                          |      |   |                        |   |      |                       |  |   | (0.2         | ) |  |   | (16.2 | ) |  |   | (16.4   | )
|Reorganization and acquisition-related integration costs        |  |                    | (1.3  | ) |                   |   | (4.2    | )                |  |   | (0.8             | ) |  |                          |      |   |                        |   |      |                       |  |   | (6.3         | ) |  |   | (2.5  | ) |  |   | (8.8    | )
|Depreciation and amortization                                   |  |                    | (5.1  | ) |                   |   | (7.1    | )                |  |   | (8.5             | ) |  |                          | (4.6  | ) |                        |   |      |                       |  |   | (25.3        | ) |  |   | (0.1  | ) |  |   | (25.4   | )
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Operating earnings (loss)                                       |  | $                  | 39.7  |   |                   | $ | 15.9    |                  |  | $ | 60.1             |   |  | $                        | 10.6  |   |                        |   |      |                       |  | $ | 126.3        |   |  | $ | (33.2 | ) |  | $ | 93.1    |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Depreciation and amortization                                   |  |                    | 5.1   |   |                   | $ | 7.1     |                  |  | $ | 8.5              |   |  | $                        | 4.6   |   |                        |   |      |                       |  | $ | 25.3         |   |  | $ | 0.1   |   |  | $ | 25.4    |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Total assets                                                    |  | $                  | 790.0 |   |                   | $ | 613.6   |                  |  | $ | 498.3            |   |  | $                        | 72.0  |   |                        |   |      |                       |  | $ | 1,973.9      |   |  | $ | 758.1 |   |  | $ | 2,732.0 |  
|                                                                |  |                    |       |   |                   |   |         |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  

---

|(a) | Intersegment sales are recorded at cost plus an agreed upon profit on sales.
|--- | ----------------------------------------------------------------------------

|(b) | For the three and six month periods ended June 30, 2006, unallocated costs include $0.4
million and $0.7 million of reorganization and acquisition-related integration costs, net, respectively, and $4.3 million and $9.7 million of non-cash compensation costs, respectively, related to the issuance of stock options and restricted shares
of the Companys common stock to employees and Directors of the Company (see Note 2). For the six months ended June 30, 2005, unallocated costs include a purchase accounting adjustment for the elimination of manufacturers profit in
inventory of $16.2 million related to the AHI acquisition. For the three and six month periods ended June 30, 2005, unallocated costs include $0.6 million and $2.5 million of reorganization and acquisition-related integration costs,
respectively, and $0.6 million and $0.8 million of non-cash compensation, respectively, related to the issuance of restricted shares of Company common stock.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Companys sales are principally within the United States. The Companys international operations are mainly based in Europe, Canada, Latin America and Japan. Net sales of the Companys products
outside of the United States were approximately $253 million and $442 million for the three and six month periods ended June 30, 2006, respectively, or on a percentage basis approximately 26% and 25%, respectively, of the Companys net
sales. For the three and six month periods ended June 30, 2005, net sales of the Companys products outside of the United States were approximately $221 million and $380 million, or on a percentage basis approximately 29% and 30%,
respectively of the Companys net sales for the same period.

17. Condensed Consolidating Financial Statements

The Companys 93/4% Senior
Subordinated Notes are fully guaranteed, jointly and severally, by several of the Companys domestic subsidiaries (Guarantor Subsidiaries). The Companys non-United States subsidiaries and those domestic subsidiaries who are
not guarantors (Non-Guarantor Subsidiaries) are not guaranteeing these Senior Subordinated Notes. Following the AHI Acquisition in 2005, the Non-Guarantor Subsidiaries are not considered minor and, as such, pursuant to Article 3-10(f) of
Regulation S-X, the Company has presented below the summarized condensed consolidating financial statements of the Company (Parent), the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis as of
June 30, 2006 and December 31, 2005 and for the three and six month periods ended June 30, 2006 and 2005.



18



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Condensed Consolidating Statements of Income (in millions):



|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|------------------------------------ |  | -------------------------------------- | ----- | - | --------------------- | - | ------- | ------------------------- |  | ------------ | ----- |  | ------------ | ------ | - |  | - | -------
|                                     |  | Three month period ended June 30, 2006
|                                     |  | Parent                                 |       |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  | Eliminations |       |  | Consolidated
|Net sales                            |  | $                                      |      |   |                       | $ | 737.2   |                           |  | $            | 287.1 |  | $            | (62.3  | ) |  | $ | 962.0  
|Costs and expenses                   |  |                                        | 21.3  |   |                       |   | 666.0   |                           |  |              | 257.6 |  |              | (62.3  | ) |  |   | 882.6  
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Operating (loss) earnings            |  |                                        | (21.3 | ) |                       |   | 71.2    |                           |  |              | 29.5  |  |              |       |   |  |   | 79.4   
|Other expense, net                   |  |                                        | 46.2  |   |                       |   | 10.1    |                           |  |              | 9.8   |  |              |       |   |  |   | 66.1   
|Equity in the income of subsidiaries |  |                                        | 80.8  |   |                       |   | 18.4    |                           |  |              |      |  |              | (99.2  | ) |  |   |       
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Net income (loss)                    |  | $                                      | 13.3  |   |                       | $ | 79.5    |                           |  | $            | 19.7  |  | $            | (99.2  | ) |  | $ | 13.3   
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|                                     | 
|                                     |  | Three month period ended June 30, 2005
|                                     |  | Parent                                 |       |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  | Eliminations |       |  | Consolidated
|Net sales                            |  | $                                      |      |   |                       | $ | 613.4   |                           |  | $            | 219.6 |  | $            | (78.6  | ) |  | $ | 754.4  
|Costs and expenses                   |  |                                        | 17.5  |   |                       |   | 552.0   |                           |  |              | 192.3 |  |              | (79.4  | ) |  |   | 682.4  
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Operating (loss) earnings            |  |                                        | (17.5 | ) |                       |   | 61.4    |                           |  |              | 27.3  |  |              | 0.8    |   |  |   | 72.0   
|Other expense, net                   |  |                                        | 36.7  |   |                       |   | (1.3    | )                         |  |              | 3.8   |  |              |       |   |  |   | 39.2   
|Equity in the income of subsidiaries |  |                                        | 87.0  |   |                       |   | 23.1    |                           |  |              |      |  |              | (110.1 | ) |  |   |       
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Net income (loss)                    |  | $                                      | 32.8  |   |                       | $ | 85.8    |                           |  | $            | 23.5  |  | $            | (109.3 | ) |  | $ | 32.8   
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|                                     | 
|                                     |  | Six month period ended June 30, 2006  
|                                     |  | Parent                                 |       |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  | Eliminations |       |  | Consolidated
|Net sales                            |  | $                                      |      |   |                       | $ | 1,317.9 |                           |  | $            | 548.4 |  | $            | (112.6 | ) |  | $ | 1,753.7
|Costs and expenses                   |  |                                        | 37.9  |   |                       |   | 1,213.7 |                           |  |              | 500.8 |  |              | (112.6 | ) |  |   | 1,639.8
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Operating (loss) earnings            |  |                                        | (37.9 | ) |                       |   | 104.2   |                           |  |              | 47.6  |  |              |       |   |  |   | 113.9  
|Other expense, net                   |  |                                        | 70.3  |   |                       |   | 8.8     |                           |  |              | 15.8  |  |              |       |   |  |   | 94.9   
|Equity in the income of subsidiaries |  |                                        | 127.2 |   |                       |   | 30.3    |                           |  |              |      |  |              | (157.5 | ) |  |   |       
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Net income (loss)                    |  | $                                      | 19.0  |   |                       | $ | 125.7   |                           |  | $            | 31.8  |  | $            | (157.5 | ) |  | $ | 19.0   
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|                                     | 
|                                     |  | Six month period ended June 30, 2005  
|                                     |  | Parent                                 |       |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  | Eliminations |       |  | Consolidated
|Net sales                            |  | $                                      |      |   |                       | $ | 1,011.9 |                           |  | $            | 364.4 |  | $            | (100.6 | ) |  | $ | 1,275.7
|Costs and expenses                   |  |                                        | 33.2  |   |                       |   | 928.7   |                           |  |              | 321.3 |  |              | (100.6 | ) |  |   | 1,182.6
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Operating (loss) earnings            |  |                                        | (33.2 | ) |                       |   | 83.2    |                           |  |              | 43.1  |  |              |       |   |  |   | 93.1   
|Other expense, net                   |  |                                        | 47.7  |   |                       |   | 2.0     |                           |  |              | 10.6  |  |              |       |   |  |   | 60.3   
|Equity in the income of subsidiaries |  |                                        | 113.7 |   |                       |   | 32.1    |                           |  |              |      |  |              | (145.8 | ) |  |   |       
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        
|Net income (loss)                    |  | $                                      | 32.8  |   |                       | $ | 113.3   |                           |  | $            | 32.5  |  | $            | (145.8 | ) |  | $ | 32.8   
|                                     |  |                                        |       |   |                       |   |         |                           |  |              |       |  |              |        |   |  |   |        



19



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##### Table of Contents

Condensed Consolidating Balance Sheet (in millions):



|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|------------------------------------------ |  | ----------------------- | ------- | --------------------- | - | ------------------------- |  | ------------ | ----- |  | ------------ | -------- | - |  | - | -------
|                                           |  | As of June 30, 2006    
|                                           |  | Parent                  |         | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  | Eliminations |       |  | Consolidated
|Assets                                     |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Current assets                             |  | $                       | 27.6    |                       | $ | 1,032.7                   |  | $            | 380.6 |  | $            | 0.4      |   |  | $ | 1,441.3
|Investment in subsidiaries                 |  |                         | 2,845.2 |                       |   | 222.2                     |  |              |      |  |              | (3,067.4 | ) |  |   |       
|Non-current assets                         |  |                         | 114.8   |                       |   | 2,194.1                   |  |              | 250.8 |  |              | (427.5   | ) |  |   | 2,132.2
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Total assets                               |  | $                       | 2,987.6 |                       | $ | 3,449.0                   |  | $            | 631.4 |  | $            | (3,494.5 | ) |  | $ | 3,573.5
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Liabilities and stockholders equity       |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Current liabilities                        |  | $                       | 131.4   |                       | $ | 406.8                     |  | $            | 222.7 |  | $            | (11.8    | ) |  | $ | 749.1  
|Non-current liabilities                    |  |                         | 1,850.2 |                       |   | 215.6                     |  |              | 167.9 |  |              | (415.3   | ) |  |   | 1,818.4
|Stockholders equity                       |  |                         | 1,006.0 |                       |   | 2,826.6                   |  |              | 240.8 |  |              | (3,067.4 | ) |  |   | 1,006.0
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Total liabilities and stockholders equity |  | $                       | 2,987.6 |                       | $ | 3,449.0                   |  | $            | 631.4 |  | $            | (3,494.5 | ) |  | $ | 3,573.5
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|                                           | 
|                                           |  | As of December 31, 2005
|                                           |  | Parent                  |         | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  | Eliminations |       |  | Consolidated
|Assets                                     |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Current assets                             |  | $                       | 226.0   |                       | $ | 958.0                     |  | $            | 303.9 |  | $            | (23.5    | ) |  | $ | 1,464.4
|Investment in subsidiaries                 |  |                         | 2,762.4 |                       |   | 104.1                     |  |              |      |  |              | (2,866.5 | ) |  |   |       
|Non-current assets                         |  |                         | 32.8    |                       |   | 2,387.0                   |  |              | 245.9 |  |              | (605.5   | ) |  |   | 2,060.2
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Total assets                               |  | $                       | 3,021.2 |                       | $ | 3,449.1                   |  | $            | 549.8 |  | $            | (3,495.5 | ) |  | $ | 3,524.6
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Liabilities and stockholders equity       |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Current liabilities                        |  | $                       | 93.4    |                       | $ | 408.0                     |  | $            | 212.2 |  | $            | 0.9      |   |  | $ | 714.5  
|Non-current liabilities                    |  |                         | 1,924.0 |                       |   | 293.8                     |  |              | 218.4 |  |              | (629.9   | ) |  |   | 1,806.3
|Stockholders equity                       |  |                         | 1,003.8 |                       |   | 2,747.3                   |  |              | 119.2 |  |              | (2,866.5 | ) |  |   | 1,003.8
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        
|Total liabilities and stockholders equity |  | $                       | 3,021.2 |                       | $ | 3,449.1                   |  | $            | 549.8 |  | $            | (3,495.5 | ) |  | $ | 3,524.6
|                                           |  |                         |         |                       |   |                           |  |              |       |  |              |          |   |  |   |        



20



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##### Table of Contents

Condensed Consolidating Statement of Cash Flows (in millions):



|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|-------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---------------------- | - | ------ | -------------------------- |  | - | ------------ | - | ------------ | - | - |  | - | ------ | -
|                                                         |  | Six month period ended June 30, 2006 |       
|                                                         |  | Parent                               |        |   | Guarantor Subsidiaries |   |        | Non-Guarantor Subsidiaries |  |   | Eliminations |   | Consolidated |  
|Net cash (used in) provided by operating activities      |  | $                                    | (23.2  | ) |                        | $ | (239.3 | )                          |  | $ | 199.0        |   |              | $ |  |  | $ | (63.5  | )
|Financing activities:                                    |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Proceeds from revolving credit borrowings                |  |                                      | 183.6  |   |                        |   |       |                            |  |   |             |   |              |   |  |  |   | 183.6  |  
|Payments on revolving credit borrowings                  |  |                                      | (104.3 | ) |                        |   |       |                            |  |   |             |   |              |   |  |  |   | (104.3 | )
|(Payments) proceeds (to) from intercompany transactions  |  |                                      | (83.5  | ) |                        |   | 276.4  |                            |  |   | (192.9       | ) |              |   |  |  |   |       |  
|Payments on senior debt                                  |  |                                      | (60.0  | ) |                        |   |       |                            |  |   |             |   |              |   |  |  |   | (60.0  | )
|Net borrowings from foreign lines of credit              |  |                                      |       |   |                        |   |       |                            |  |   | 7.2          |   |              |   |  |  |   | 7.2    |  
|Proceeds from issuance of stock, net of transaction fees |  |                                      | 3.5    |   |                        |   |       |                            |  |   |             |   |              |   |  |  |   | 3.5    |  
|Repurchase of common stock                               |  |                                      | (50.0  | ) |                        |   |       |                            |  |   |             |   |              |   |  |  |   | (50.0  | )
|Debt issuance costs                                      |  |                                      | (2.2   | ) |                        |   |        |                            |  |   |             |   |              |   |  |  |   | (2.2   | )
|Other                                                    |  |                                      | (0.8   | ) |                        |   |       |                            |  |   | (0.1         | ) |              |   |  |  |   | (0.9   | )
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Net cash (used in) provided by financing activities      |  |                                      | (113.7 | ) |                        |   | 276.4  |                            |  |   | (185.8       | ) |              |   |  |  |   | (23.1  | )
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Investing Activities:                                    |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Additions to property, plant and equipment               |  |                                      |       |   |                        |   | (24.2  | )                          |  |   | (7.0         | ) |              |   |  |  |   | (31.2  | )
|Acquisition of business, net of cash acquired            |  |                                      | (43.2  | ) |                        |   | (10.8  | )                          |  |   |             |   |              |   |  |  |   | (54.0  | )
|Other                                                    |  |                                      |       |   |                        |   |       |                            |  |   | (0.2         | ) |              |   |  |  |   | (0.2   | )
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Net cash used in investing activities                    |  |                                      | (43.2  | ) |                        |   | (35.0  | )                          |  |   | (7.2         | ) |              |   |  |  |   | (85.4  | )
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Effect of exchange rate changes on cash                  |  |                                      |       |   |                        |   |       |                            |  |   | 0.2          |   |              |   |  |  |   | 0.2    |  
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Net (decrease) increase in cash and cash equivalents     |  |                                      | (180.1 | ) |                        |   | 2.1    |                            |  |   | 6.2          |   |              |   |  |  |   | (171.8 | )
|Cash and cash equivalents at beginning of period         |  |                                      | 184.5  |   |                        |   | (4.6   | )                          |  |   | 57.2         |   |              |   |  |  |   | 237.1  |  
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Cash and cash equivalents at end of period               |  | $                                    | 4.4    |   |                        | $ | (2.5   | )                          |  | $ | 63.4         |   |              | $ |  |  | $ | 65.3   |  
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|                                                         | 
|                                                         |  | Six month period ended June 30, 2005 |       
|                                                         |  | Parent                               |        |   | Guarantor Subsidiaries |   |        | Non-Guarantor Subsidiaries |  |   | Eliminations |   | Consolidated |  
|Net cash (used in) provided by operating activities      |  | $                                    | (88.5  | ) |                        | $ | 33.0   |                            |  | $ | (6.8         | ) |              | $ |  |  | $ | (62.3  | )
|Financing activities:                                    |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Proceeds from revolving credit borrowings                |  |                                      | 63.7   |   |                        |   |       |                            |  |   |             |   |              |   |  |  |   | 63.7   |  
|Payments on revolving credit borrowings                  |  |                                      | (51.3  | ) |                        |   |       |                            |  |   |             |   |              |   |  |  |   | (51.3  | )
|(Payments) proceeds (to) from intercompany transactions  |  |                                      | (15.5  | ) |                        |   | 7.3    |                            |  |   | 8.2          |   |              |   |  |  |   |       |  
|Proceeds from issuance of long-term debt                 |  |                                      | 950.0  |   |                        |   |       |                            |  |   |             |   |              |   |  |  |   | 950.0  |  
|Payments on long-term debt                               |  |                                      | (307.4 | ) |                        |   |       |                            |  |   |             |   |              |   |  |  |   | (307.4 | )
|Proceeds from issuance of stock, net of transaction fees |  |                                      | 350.4  |   |                        |   |       |                            |  |   |             |   |              |   |  |  |   | 350.4  |  
|Debt issuance costs                                      |  |                                      | (17.6  | ) |                        |   |       |                            |  |   |             |   |              |   |  |  |   | (17.6  | )
|Other                                                    |  |                                      |       |   |                        |   | (0.5   | )                          |  |   | 2.1          |   |              |   |  |  |   | 1.6    |  
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Net cash provided by financing activities                |  |                                      | 972.3  |   |                        |   | 6.8    |                            |  |   | 10.3         |   |              |   |  |  |   | 989.4  |  
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Investing Activities:                                    |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Additions to property, plant and equipment               |  |                                      | (0.2   | ) |                        |   | (21.8  | )                          |  |   | (2.7         | ) |              |   |  |  |   | (24.7  | )
|Acquisition of business, net of cash acquired            |  |                                      | (844.3 | ) |                        |   | (16.3  | )                          |  |   | 42.5         |   |              |   |  |  |   | (818.1 | )
|Other                                                    |  |                                      |       |   |                        |   |       |                            |  |   | (1.1         | ) |              |   |  |  |   | (1.1   | )
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Net cash (used in) provided by investing activities      |  |                                      | (844.5 | ) |                        |   | (38.1  | )                          |  |   | 38.7         |   |              |   |  |  |   | (843.9 | )
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Net increase in cash and cash equivalents                |  |                                      | 39.3   |   |                        |   | 1.7    |                            |  |   | 42.2         |   |              |   |  |  |   | 83.2   |  
|Cash and cash equivalents at beginning of period         |  |                                      | 16.5   |   |                        |   | (0.7   | )                          |  |   | 4.9          |   |              |   |  |  |   | 20.7   |  
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  
|Cash and cash equivalents at end of period               |  | $                                    | 55.8   |   |                        | $ | 1.0    |                            |  | $ | 47.1         |   |              | $ |  |  | $ | 103.9  |  
|                                                         |  |                                      |        |   |                        |   |        |                            |  |   |              |   |              |   |   |  |   |        |  

The amounts reflected as (payments) proceeds (to) from intercompany transactions represent cash flows originating
from transactions conducted between guarantor subsidiaries, non-guarantor subsidiaries and parent in the normal course of business operations.



21



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##### Table of Contents

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

Forward-Looking
Information

From time to time, we may make or publish forward-looking statements relating to such matters as anticipated financial performance,
business prospects, technological developments, new products and similar matters. Such statements are necessarily estimates reflecting managements best judgment based on current information. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. Such statements are usually identified by the use of words or phrases such as believes, anticipates, expects, estimates, planned,
outlook and goal. Because forward-looking statements involve risks and uncertainties, our actual results could differ materially. In order to comply with the terms of the safe harbor, we note that a variety of factors could
cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in forward-looking statements.

Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially
from past results and those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements.

We
undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-Q,
8-K and 10-K reports to the Securities and Exchange Commission. Please see our Companys Annual Report on Form 10-K for 2005 for a list of risk factors which could cause our Companys actual results to differ materially from those
projected in our Companys forward-looking statements and certain risks and uncertainties that may affect the operations, performance and results of our business. You should understand that it is not possible to predict or identify all such
factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

The following
Overview section is a brief summary of the significant items addressed in Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A). Investors should read the relevant sections of
this MD&A for a complete discussion of the items summarized below.

Overview

Jarden Corporation is a leading provider of primarily niche consumer products used in and around the home. Jarden currently operates in three primary business segments: Branded consumables, Consumer solutions, and
Outdoor solutions. During the six months ended June 30, 2006, management changed the Companys reportable segments to reflect the new structure of the organization and the manner in which the chief operating decision maker regularly
assesses information for decision-making purposes, including the allocation of resources. As a result, the First Alert business was moved from the Consumer solutions segment to the Branded consumables segment. During the second quarter 2006, the
Company changed the manner in which it measures segment operating performance to be segment earnings. All prior periods have been reclassified to conform to current reporting structure and performance measures. For comparative prior year
annual data, see Exhibit 99.1 filed herewithin.

In the Branded consumables segment, the Company markets, distributes and in certain cases manufactures a
broad line of branded products that includes arts and crafts, paintbrushes, childrens card games, clothespins, collectible tins, food preparation kits, home canning jars, jar closures, kitchen matches, other craft items, plastic cutlery,
playing cards and card accessories, rope, cord and twine, storage and workshop accessories, toothpicks and other accessories marketed under the Aviator ®, Ball®, Bee ®, Bernardin ®,
Bicycle ®, Crawford ®, Diamond ®, Forster ®, Hoyle ®, Kerr ®, Lehigh ®,
Leslie-Locke ® and Loew-Cornell ® brand names, among others.

In the Consumer solutions segment, the Company manufactures or sources, markets and distributes an array of innovative kitchen and other household products that includes
bedding, blenders, coffee makers, heating pads, home vacuum packaging machines, smoke and carbon monoxide alarms, personal and animal grooming products, and warming blankets, as well as related consumable products. The segments leading brands
include Bionaire ®, Crock-Pot ®, First Alert ®, FoodSaver ®, Harmony ®, Health o meter ®, Holmes ®, Mr. Coffee ®, Oster ®, Patton
®, Rival ®, Seal-a-Meal ®, Sunbeam ®, VillaWare ® and White Mountain. As discussed in Note 5, the JCS portion of this business was purchased with the AHI Acquisition effective January 24, 2005, and the Holmes portion of this
business was purchased with the THG Acquisition, effective July 18, 2005.

In the Outdoor solutions segment, the Company manufactures or sources,
markets and distributes outdoor leisure products worldwide under the Campingaz ® and Coleman ® brand
names for use outside the home or away from the home, such as products for camping, backpacking, tailgating, backyard grilling and other outdoor activities.

The Process solutions segment (formerly referred to as the Other segment) primarily consists of a plastic consumables business which manufactures, markets and distributes a wide variety of consumer and medical plastic products,
including products sold to retailers by the Companys Branded consumables segment (plastic cutlery) and Consumer solutions segment (containers). The Process solutions segment also includes a producer of zinc strip.

Acquisition Activity

On July 18, 2005, the Company completed
its acquisition of Holmes for approximately $420 million in cash and 6.15 million shares of our common stock. Holmes is a leading manufacturer and distributor of select home environment and small kitchen electrics under well-recognized brand
names such as Bionaire ®, Crock-Pot ®, Harmony ®, Holmes ®, Patton ®, Rival ®, Seal-a-Meal ® and White Mountain. The aggregate purchase price was approximately $681 million, including transaction expenses. The cash portion of the THG Acquisition purchase price was financed with the issuance of an
additional $380 million of term debt under the Senior Credit Facility, cash on hand and revolver borrowings.

On January 24, 2005, the Company
completed its acquisition of AHI, a privately held company, for approximately $746 million for the equity and the repayment of approximately $100 million of indebtedness. AHI is the parent of The Coleman Company, Inc. (Coleman) and
Sunbeam Products, Inc. (which we refer to as Jarden Consumer Solutions or JCS), leading producers of global consumer products through brands such as BRK ®, Campingaz ®, Coleman ®, First Alert ®, Health o meter®,
Mr. Coffee ®, Oster ® and Sunbeam ® . Of the equity portion of the purchase price, $40 million was held back by the
Company to cover potential indemnification claims against the sellers of AHI and has not been accrued as a liability or considered part of the purchase price since the outcome of this contingency remains uncertain.

The Company financed the AHI Acquisition with the issuance of $350 million of equity securities and a new $1.05 billion senior credit facility (Senior Credit
Facility), consisting of a term loan facility (Term Loan) in the aggregate principal amount of $850 million and a revolving credit facility (Revolver) with an aggregate commitment of $200 million. This facility replaced
the Companys Second Amended Credit Agreement (Second Amended Credit Agreement).

The AHI Acquisition and THG Acquisition represent
significant elements in advancing the Companys strategy of acquiring branded consumer products businesses with leading market positions in markets for products used in and around the home and home away from home.

As discussed further hereafter, the results of operations for the six month periods ended June 30, 2006 versus June 30, 2005 include the results of THG and AHI
from their respective acquisition dates. The differences in operating results in 2006 versus 2005 are primarily due to these acquisitions (the Acquisitions).

During the second quarter 2006, the Company changed the manner in which it measures operating performance of segments to be segment earnings. Segment earnings is the primary measure used by the chief
operating decision maker and the segment information in the table below reconciles segment earnings to operating earnings (loss).



22



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##### Table of Contents

|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|-------------------------------------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | ---------------- |  | - | ---------------- | - |  | ------------------------ | ---- | - | ---------------------- | - | ----- | --------------------- |  | - | ------------ | - |  | - | ----- | - |  | - | ----- | -
|(in millions)                                                  |  | BrandedConsumables |       |   | ConsumerSolutions |   |       | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |      |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Three months ended June 30, 2006                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Net sales                                                      |  | $                  | 206.5 |   |                   | $ | 359.5 |                  |  | $ | 331.9            |   |  | $                        | 81.0 |   |                        | $ | (16.9 | )                     |  | $ | 962.0        |   |  |   |      |   |  | $ | 962.0 |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Segment earnings (loss)                                        |  |                    | 34.9  |   |                   |   | 30.6  |                  |  |   | 47.9             |   |  |                          | 9.7  |   |                        |   |      |                       |  |   | 123.1        |   |  |   | (17.8 | ) |  |   | 105.3 |  
|Adjustments to reconcile to reported operating earnings(loss): |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Reorganization and acquisition-related integration costs, net  |  |                    | (1.0  | ) |                   |   | (4.6  | )                |  |   | 0.4              |   |  |                          |     |   |                        |   |      |                       |  |   | (5.2         | ) |  |   | (0.4  | ) |  |   | (5.6  | )
|Other integration-related costs                                |  |                    |      |   |                   |   | (0.9  | )                |  |   |                 |   |  |                          |     |   |                        |   |      |                       |  |   | (0.9         | ) |  |   |      |   |  |   | (0.9  | )
|Stock-based compensation                                       |  |                    |      |   |                   |   |      |                  |  |   |                 |   |  |                          |     |   |                        |   |      |                       |  |   |             |   |  |   | (4.3  | ) |  |   | (4.3  | )
|Depreciation and amortization                                  |  |                    | (2.9  | ) |                   |   | (5.4  | )                |  |   | (4.2             | ) |  |                          | (2.3 | ) |                        |   |      |                       |  |   | (14.8        | ) |  |   | (0.3  | ) |  |   | (15.1 | )
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Operating earnings (loss)                                      |  | $                  | 31.0  |   |                   | $ | 19.7  |                  |  | $ | 44.1             |   |  | $                        | 7.4  |   |                        |   |      |                       |  | $ | 102.2        |   |  | $ | (22.8 | ) |  | $ | 79.4  |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|                                                               |  |                    |       |   |                   |   |       |                 
|(in millions)                                                  |  | BrandedConsumables |       |   | ConsumerSolutions |   |       | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |      |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Three months ended June 30, 2005 (Reclassified)                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Net sales                                                      |  | $                  | 193.8 |   |                   | $ | 217.5 |                  |  | $ | 298.6            |   |  | $                        | 63.4 |   |                        | $ | (18.9 | )                     |  | $ | 754.4        |   |  |   |      |   |  | $ | 754.4 |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Segment earnings (loss)                                        |  |                    | 28.6  |   |                   |   | 14.6  |                  |  |   | 45.5             |   |  |                          | 9.0  |   |                        |   |      |                       |  |   | 97.7         |   |  |   | (6.5  | ) |  |   | 91.2  |  
|Adjustments to reconcile to reported operating earnings(loss): |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Reorganization and acquisition-related integration costs       |  |                    | (1.3  | ) |                   |   | (3.6  | )                |  |   | (0.4             | ) |  |                          |     |   |                        |   |      |                       |  |   | (5.3         | ) |  |   | (0.6  | ) |  |   | (5.9  | )
|Depreciation and amortization                                  |  |                    | (2.4  | ) |                   |   | (4.1  | )                |  |   | (4.4             | ) |  |                          | (2.3 | ) |                        |   |      |                       |  |   | (13.2        | ) |  |   | (0.1  | ) |  |   | (13.3 | )
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  
|Operating earnings (loss)                                      |  | $                  | 24.9  |   |                   | $ | 6.9   |                  |  | $ | 40.7             |   |  | $                        | 6.7  |   |                        |   |      |                       |  | $ | 79.2         |   |  | $ | (7.2  | ) |  | $ | 72.0  |  
|                                                               |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |      |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |       |  



23



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##### Table of Contents

|                                                                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|--------------------------------------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | ---------------- |  | - | ---------------- | - |  | ------------------------ | ----- | - | ---------------------- | - | ----- | --------------------- |  | - | ------------ | - |  | - | ----- | - |  | - | ------- | -
|(in millions)                                                   |  | BrandedConsumables |       |   | ConsumerSolutions |   |       | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |       |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Six months ended June 30, 2006                                  |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Net sales                                                       |  | $                  | 361.3 |   |                   | $ | 711.0 |                  |  | $ | 560.0            |   |  | $                        | 156.1 |   |                        | $ | (34.7 | )                     |  | $ | 1,753.7      |   |  |   |      |   |  | $ | 1,753.7 |  
|                                                                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Segment earnings (loss)                                         |  |                    | 52.5  |   |                   |   | 59.8  |                  |  |   | 69.2             |   |  |                          | 19.4  |   |                        |   |      |                       |  |   | 200.9        |   |  |   | (29.3 | ) |  |   | 171.6   |  
|Adjustments to reconcile to reported operating earnings (loss): |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Reorganization and acquisition-related integration costs, net   |  |                    | (4.3  | ) |                   |   | (9.7  | )                |  |   | (0.3             | ) |  |                          |      |   |                        |   |      |                       |  |   | (14.3        | ) |  |   | (0.7  | ) |  |   | (15.0   | )
|Inventory write-off                                             |  |                    |      |   |                   |   |      |                  |  |   | (0.3             | ) |  |                          |      |   |                        |   |      |                       |  |   | (0.3         | ) |  |   |      |   |  |   | (0.3    | )
|Other integration-related costs                                 |  |                    |      |   |                   |   | (1.8  | )                |  |   |                 |   |  |                          |      |   |                        |   |      |                       |  |   | (1.8         | ) |  |   |      |   |  |   | (1.8    | )
|Stock-based compensation                                        |  |                    |      |   |                   |   |      |                  |  |   |                 |   |  |                          |      |   |                        |   |      |                       |  |   |             |   |  |   | (9.7  | ) |  |   | (9.7    | )
|Depreciation and amortization                                   |  |                    | (5.6  | ) |                   |   | (11.6 | )                |  |   | (8.4             | ) |  |                          | (4.7  | ) |                        |   |      |                       |  |   | (30.3        | ) |  |   | (0.6  | ) |  |   | (30.9   | )
|                                                                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Operating earnings (loss)                                       |  | $                  | 42.6  |   |                   | $ | 36.7  |                  |  | $ | 60.2             |   |  | $                        | 14.7  |   |                        |   |      |                       |  | $ | 154.2        |   |  | $ | (40.3 | ) |  | $ | 113.9   |  
|                                                                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|                                                                |  |                    |       |   |                   |   |       |                 
|(in millions)                                                   |  | BrandedConsumables |       |   | ConsumerSolutions |   |       | OutdoorSolutions |  |   | ProcessSolutions |   |  | IntercompanyEliminations |       |   | TotalOperatingSegments |   |       | Corporate/Unallocated |  |   | Consolidated |  
|Six months ended June 30, 2005                                  |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|(Reclassified)                                                  |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Net sales                                                       |  | $                  | 329.2 |   |                   | $ | 384.6 |                  |  | $ | 481.5            |   |  | $                        | 115.1 |   |                        | $ | (34.7 | )                     |  | $ | 1,275.7      |   |  |   |      |   |  | $ | 1,275.7 |  
|                                                                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Segment earnings (loss)                                         |  |                    | 46.3  |   |                   |   | 27.2  |                  |  |   | 69.4             |   |  |                          | 15.2  |   |                        |   |      |                       |  |   | 158.1        |   |  |   | (14.4 | ) |  |   | 143.7   |  
|Adjustments to reconcile to reported operating earnings (loss): |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Manufacturers profit in inventory                              |  |                    | (0.2  | ) |                   |   |      |                  |  |   |                 |   |  |                          |      |   |                        |   |      |                       |  |   | (0.2         | ) |  |   | (16.2 | ) |  |   | (16.4   | )
|Reorganization and acquisition-related integration costs        |  |                    | (1.3  | ) |                   |   | (4.2  | )                |  |   | (0.8             | ) |  |                          |      |   |                        |   |      |                       |  |   | (6.3         | ) |  |   | (2.5  | ) |  |   | (8.8    | )
|Depreciation and amortization                                   |  |                    | (5.1  | ) |                   |   | (7.1  | )                |  |   | (8.5             | ) |  |                          | (4.6  | ) |                        |   |      |                       |  |   | (25.3        | ) |  |   | (0.1  | ) |  |   | (25.4   | )
|                                                                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  
|Operating earnings (loss)                                       |  | $                  | 39.7  |   |                   | $ | 15.9  |                  |  | $ | 60.1             |   |  | $                        | 10.6  |   |                        |   |      |                       |  | $ | 126.3        |   |  | $ | (33.2 | ) |  | $ | 93.1    |  
|                                                                |  |                    |       |   |                   |   |       |                  |  |   |                  |   |  |                          |       |   |                        |   |       |                       |  |   |              |   |  |   |       |   |  |   |         |  

---

|(a) | Intersegment sales are recorded at cost plus an agreed upon profit on sales.
|--- | ----------------------------------------------------------------------------

|(b) | For the three and six month periods ended June 30, 2006, unallocated costs include $0.4
million and $0.7 million of reorganization and acquisition-related integration costs, net, respectively, and $4.3 million and $9.7 million of non-cash compensation costs, respectively, related to the issuance of stock options and restricted shares
of the Companys common stock to employees and Directors of the Company (see Note 2). For the six months ended June 30, 2005, unallocated costs include a purchase accounting adjustment for the elimination of manufacturers profit in
inventory of $16.2 million related to the AHI acquisition. For the three and six month periods ended June 30, 2005, unallocated costs include $0.6 million and $2.5 million of reorganization and acquisition-related integration costs,
respectively, and $0.6 million and $0.8 million of non-cash compensation, respectively, related to the issuance of restricted shares of Company common stock.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



24



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##### Table of Contents

Results of Operations



|                             |  |                          |       |   |                          |   |       |               |  |   |               |   |  |   |      |  
|---------------------------- |  | ------------------------ | ----- | - | ------------------------ | - | ----- | ------------- |  | - | ------------- | - |  | - | ---- | -
|                             |  | Net Sales                |       |   | Segment Earnings         |  
|                             |  | Three month period ended |       |   | Three month period ended |  
|                             |  | June 30, 2006            |       |   | June 30, 2005            |   |       | June 30, 2006 |  |   | June 30, 2005 |  
|Branded consumables          |  | $                        | 206.5 |   |                          | $ | 193.8 |               |  | $ | 34.9          |   |  | $ | 28.6 |  
|Consumer solutions           |  |                          | 359.5 |   |                          |   | 217.5 |               |  |   | 30.6          |   |  |   | 14.6 |  
|Outdoor solutions            |  |                          | 331.9 |   |                          |   | 298.6 |               |  |   | 47.9          |   |  |   | 45.5 |  
|Process solutions            |  |                          | 81.0  |   |                          |   | 63.4  |               |  |   | 9.7           |   |  |   | 9.0  |  
|Unallocated                  |  |                          |      |   |                          |   |      |               |  |   | (17.8         | ) |  |   | (6.5 | )
|Intercompany eliminations(1) |  |                          | (16.9 | ) |                          |   | (18.9 | )             |  |   |              |   |  |   |     |  
|                             |  |                          |       |   |                          |   |       |               |  |   |               |   |  |   |      |  
|                             |  | $                        | 962.0 |   |                          | $ | 754.4 |               |  | $ | 105.3         |   |  | $ | 91.2 |  
|                             |  |                          |       |   |                          |   |       |               |  |   |               |   |  |   |      |  

---

|(1) | Intersegment sales are recorded at cost plus an agreed upon intercompany profit on
intersegment sales.
|--- | ------------------------------------------------------------------------------------------------------

Net sales for the three months ended June 30, 2006 increased approximately $208 million, or 28%, to $962 million
versus the same period in the prior year. The increase was primarily due to the THG Acquisition and organic increases across all segments. Consumer solutions and Outdoor solutions organic increases were primarily due to new product introductions and
favorable point of sale promotional activity. Branded consumable organic increases were primarily due to increased demand in plastic cutlery and other serviceware, smoke and carbon monoxide alarms, and arts and crafts. Net sales increased in the
Process solutions segment primarily due to increased metal pricing, including zinc, copper and nickel, as well as new customers and new products at both the zinc and plastic operations.

Cost of sales increased approximately $172 million for the three months ended June 30, 2006 versus the same period in the prior year, primarily due to the increase in sales volume due to the THG Acquisition. Cost
of sales as a percentage of net sales increased from 74% in 2005 to 76% in 2006, primarily due to unfavorable product mix and the higher cost of raw materials.

Selling, general and administrative expenses increased $28.5 million to $147 million for the three months ended June 30, 2006 versus the same period in the prior year. The increase was primarily due to the THG Acquisition, increased
expenses to support higher sales volume and the incremental non-cash stock based compensation expense related to the fair value of equity awards ($4.3 million). Selling, general and administrative expenses as a percentage of net sales improved from
16% in 2005 to 15% in 2006, primarily due to the benefits achieved from reorganization and cost reduction activities initiated in 2005 and an adjustment to the Companys warranty reserve, primarily in the Consumer solutions and Outdoor
solutions segments. These savings were partially offset by the items noted above.

Reorganization and acquisition-related integration costs, net declined
by $0.3 million to $5.6 million for the three months ended June 30, 2006 versus the same period in the prior year. These charges primarily relate to integration-related activities as the Company rationalizes its manufacturing and administrative
platforms principally as a result of the THG Acquisition.

Net interest expense increased by $9.2 million to $28.3 million for the three months ended
June 30, 2006 versus the same period in the prior year. This increase was principally due to higher levels of outstanding debt in the second quarter of 2006 compared to the same period in 2005, resulting from the additional debt financing
required to fund the THG Acquisition. In addition, our weighted average interest rate increased from 6.1% in the second quarter of 2005 to 7.3% in the second quarter of 2006.

For the three months ended June 30, 2006, the Companys tax rate was 74% versus 38% for the same period in the prior year. The increase was due to a deferred tax provision of $19.1 million recorded in 2006
in conjunction with the legal entity reorganization of the Companys domestic Consumer solutions segment.

Net earnings available to common
stockholders for the three months ended June 30, 2006 increased $7.6 million to $13.3 million versus the same period in the prior year. For the three months ended June 30, 2006 earnings per share were $0.20 per diluted share versus $0.12
per diluted share for the three months ended June 30, 2005. The increase in net earnings was primarily due to charges recorded in 2005 related to the conversion of the Companys Series B and C preferred stock ($25.2 million). Improved
operating results for the period were also attributable to increased volumes related to the Acquisitions and benefits achieved from prior year integration initiatives, partially offset by increased stock-based compensation costs.



|                             |  |                        |         |   |                        |   |         |               |  |   |               |   |  |   |       |  
|---------------------------- |  | ---------------------- | ------- | - | ---------------------- | - | ------- | ------------- |  | - | ------------- | - |  | - | ----- | -
|                             |  | Net Sales              |         |   | Segment Earnings       |  
|                             |  | Six month period ended |         |   | Six month period ended |  
|                             |  | June 30, 2006          |         |   | June 30, 2005          |   |         | June 30, 2006 |  |   | June 30, 2005 |  
|Branded consumables          |  | $                      | 361.3   |   |                        | $ | 329.2   |               |  | $ | 52.5          |   |  | $ | 46.3  |  
|Consumer solutions           |  |                        | 711.0   |   |                        |   | 384.6   |               |  |   | 59.8          |   |  |   | 27.2  |  
|Outdoor solutions            |  |                        | 560.0   |   |                        |   | 481.5   |               |  |   | 69.2          |   |  |   | 69.4  |  
|Process solutions            |  |                        | 156.1   |   |                        |   | 115.1   |               |  |   | 19.4          |   |  |   | 15.2  |  
|Unallocated                  |  |                        |        |   |                        |   |        |               |  |   | (29.3         | ) |  |   | (14.4 | )
|Intercompany eliminations(1) |  |                        | (34.7   | ) |                        |   | (34.7   | )             |  |   |              |   |  |   |      |  
|                             |  |                        |         |   |                        |   |         |               |  |   |               |   |  |   |       |  
|                             |  | $                      | 1,753.7 |   |                        | $ | 1,275.7 |               |  | $ | 171.6         |   |  | $ | 143.7 |  
|                             |  |                        |         |   |                        |   |         |               |  |   |               |   |  |   |       |  

---

|(1) | Intersegment sales are recorded at cost plus an agreed upon intercompany profit on
intersegment sales.
|--- | ------------------------------------------------------------------------------------------------------

Net sales for the six months ended June 30, 2006 increased approximately $478 million, or 37%, to $1,754 million
versus the same period in the prior year. The increase was primarily due to the Acquisitions and volume increases across all segments. Consumer solutions and Outdoor solutions volume increases were primarily due to new product introductions and
favorable point of sale promotional activity. Branded consumable volume increases were primarily due to increased demand in plastic cutlery and other serviceware, smoke and carbon monoxide alarms, arts and crafts. Net sales increased in the Process
solutions segment primarily due to increased metal pricing, including zinc, copper and nickel, as well as new customers and new products at both the zinc and plastic operations.

Cost of sales increased approximately $378 million to approximately $1,336 for the six months ended June 30, 2006 versus the same period in the prior year, primarily due to the increase in sales volume due to the
Acquisitions. Cost of sales as a percentage of net sales marginally increased from 75% in 2005 to 76% in 2006. When adjusted for the $16.4 million charge related to the purchase accounting adjustment for the elimination of manufacturers profit
in inventory related to the AHI acquisition which is included in cost of sales for the six months ended June 30, 2005, cost of sales as a percentage of net sales was 74% in 2005.



25



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##### Table of Contents

Selling, general and administrative expenses increased $73.4 million to approximately $289 million for the six months
ended June 30, 2006 versus the same period in the prior year. The increase was primarily due to the Acquisitions, increased expenses to support higher sales volume and the incremental non-cash stock based compensation expense related to the
fair value of equity awards ($9.7 million). Selling, general and administrative expenses as a percentage of net sales improved from 17% in 2005 to 16% in 2006, primarily due to the benefits achieved from reorganization and cost reduction activities
initiated in 2005, primarily in the Consumer solutions and Outdoor solutions segments.

Reorganization and acquisition-related integration costs, net
increased by $6.2 million to $15 million for the six months ended June 30, 2006 versus the same period in the prior year. These charges primarily relate to integration-related activities as the Company rationalizes its manufacturing and
administrative platforms principally as a result of the Acquisitions.

Net interest expense increased by $19.8 million to $53.9 million for the six months
ended June 30, 2006 versus the same period in the prior year. This increase was principally due to higher levels of outstanding debt in the first half of 2006 compared to the same period in 2005, resulting from the additional debt financing
required to fund the Acquisitions. In addition, our weighted average interest rate increased from 6.1% for the six months ended June 30, 2005 versus 7.1% for the same period in 2006.

The Companys tax rate for the six months ended June 30, 2006 and 2005 was approximately 68% and 38%, respectively. The increase in the tax rate results principally from a $19.1 million deferred tax charge
recorded in association with the legal reorganization of the domestic Consumer solutions businesses, offset by lower tax rates assessed on a greater percentage of foreign earnings.

Net earnings available to common stockholders for the six months ended June 30, 2006 increased $33.4 million to $19 million versus the same period in the prior year. For the six months ended June 30, 2006
earnings per share were $0.29 per diluted share versus a net loss of $(0.33) per diluted share for the six months ended June 30, 2005. The increase in net earnings was primarily due to charges recorded in 2005 related to the loss on early
extinguishment of debt ($6.1 million), the conversion of the Companys Series B and C preferred stock ($47.2 million) and the adjustment for the fair value of inventory and backlog related to the AHI acquisition ($16.4 million). Improved
operating results for the period were also attributable to increased volumes related to the Acquisitions and benefits achieved from prior year integration initiatives, partially offset by increased reorganization and stock-based compensation costs.



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LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY

The Company believes that its cash and cash equivalents, cash generated from operations and the
availability under the senior credit facility provide sufficient liquidity to support working capital requirements, planned capital expenditures, completion of current and future reorganization and acquisition-related integration programs, and
servicing debt obligations. The Company may elect to repurchase additional shares of its common stock from time to time based upon market conditions, subject to limitations contained in its debt agreements.

Net cash used in operating activities was $63.5 million for the six months ended June 30, 2006, compared to net cash used by operating activities of $62.3 million
for the same period last year. The decline is primarily due to higher costs of raw materials and seasonal build of inventories, coupled with increased cash payments of reorganization and acquisition-related integration costs substantially offset by
increased accounts receivable collection activity.

Net cash used in financing activities for the six months ended June 30, 2006 was $23.1 million
compared to net cash provided of approximately $989 million for the same period in 2005. The decrease was principally driven by the repurchase of 2 million shares of the Companys common stock in March 2006 through a privately negotiated
transaction for $50 million, as well as proceeds received in 2005 related to the AHI Acquisition of $850 million from the Term Loan and $350 million of equity securities issued. The Company has never paid cash dividends on its common shares and
currently does not plan to do so for the foreseeable future.

Net cash used in investing activities for the six months ended June 30, 2006 was $85.4
million versus approximately $844 million for the six months ended June 30, 2005. For the six months ended June 30, 2006, capital expenditures were $31.2 million versus $24.7 million for the six months ended June 30, 2005. The Company
has historically attempted to limit capital expenditures to 2% of net sales. Currently, the Company believes capital expenditures for 2006 and 2007 may slightly exceed 2% of net sales and then return below this threshold in 2008. During the six
months ended June 30, 2005, we used approximately $818 million to fund the cash portion of the AHI Acquisition.

CAPITAL RESOURCES

As of June 30, 2006, the Company had $1,204 million outstanding under its Term Loans and $79.3 million outstanding under its Revolver (consisting of domestic
revolver and swing line borrowings). As of June 30, 2006, the Companys net availability under the credit agreement was approximately $90.3 million, after deducting $30.4 million of issued letters of credit. The Company is required to pay
commitment fees on the unused balance of the revolving credit facility.

On February 24, 2006, the Company executed an amendment to its Senior Credit
Facility which modified certain covenants and permitted the Company to increase its repurchases of common stock. In connection with this amendment, the Company agreed to repay $26 million of principal outstanding under its Senior Credit Facility
Term Loans and certain Foreign Senior Debt, which was repaid in March 2006 and accordingly classified as Short-term debt and current portion of long-term debt on the Condensed Consolidated Balance Sheets as of December 31, 2005. In
March 2006, in accordance with the Senior Credit Facility agreement, the Company was required to repay $2.4 million of its Senior Credit Facility Term Loans and Foreign Senior Debt based on a calculation of Excess Cash Flow as defined in
the Senior Credit Facility, which along with a voluntary repayment on its Senior Credit Facility Term Loans of $25 million, was made in April 2006.

On
March 1, 2006, pursuant to the new stock repurchase program, the Company repurchased 2 million shares of our common stock for $50 million through a privately negotiated transaction.

The Company was in compliance with all its debt covenants as of June 30, 2006.

Risk Management

The Company does not invest or trade in any significant derivative financial or commodity instruments nor does it invest in
any foreign financial instruments. The Company does not use derivative instruments for speculative purposes.

The Company is exposed to interest rate risk
on its variable rate debt and price risk on its fixed rate debt. As such, the Company monitors the interest rate environment and uses interest rate swap agreements to manage its interest rate risk and price risk by balancing its exposure to fixed
and variable interest rates while attempting to minimize interest costs.

At June 30, 2006, the interest rate on approximately 46% of the
Companys debt obligations, excluding the amortizing non-debt balances arising from interest rate swap transactions, was fixed by either the nature of the obligation or through interest rate swap contracts. As of June 30, 2006, the Company
has six interest rate swaps which convert an aggregate notional principal amount of $625 million from floating rate interest payments (excluding the Companys applicable margin) under its term loan facility to fixed interest rate
obligations. The variable rate of interest is based on three-month LIBOR. The fixed rates range from 4.73% to 4.805%.

The Company also has two
swaps in a notional principal amount totaling $105 million to receive a fixed rate of interest and pay a variable rate of interest based upon six-month LIBOR in arrears, plus a spread of 523 to 528 basis points.

The Company also maintains a cross-currency interest rate swap that fixes the exchange rate of the amortizing loan balance for a $42.7 million notional principal amount
Canadian loan denominated in U.S. dollars. The swap instrument exchanges the variable interest rate bases of the U.S. dollar balance (3-month U.S. LIBOR plus a spread of 175 basis points) and the equivalent Canadian dollar balance (3-month CAD BA
plus a spread of 192 basis points).

The Company regularly uses forward foreign exchange contracts to reduce exposure to foreign currency movements related
to borrowings, sales, purchases, revenues, expenses or other transactions at its foreign subsidiaries that are not denominated in the local currency of the operating unit. The Company may enter into foreign currency forward contracts to hedge the
currency risk. As of June 30, 2006, the aggregate U.S. dollar equivalent notional amount of outstanding forward contracts was approximately $113.8 million. The unrealized change in the fair values of open Forward Contracts from
December 31, 2005 to June 30, 2006 was a net loss of $1.7 million, of which $1.5 million of net losses was included as a component of Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets and the
remainder is reflected in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

Contingencies

The Company is involved in various legal disputes and other legal proceedings that arise from time to time in the ordinary
course of business. In addition, the Company or various of its subsidiaries have been identified by the United States Environmental Protection Agency or a state environmental agency as a Potentially Responsible Party pursuant to the federal
Superfund Act and/or state Superfund laws comparable to the federal law at various sites. Based on currently available information, we do not believe that the disposition of any of the legal or environmental disputes our Company is currently
involved in will require material capital or operating expenses or will otherwise have a material adverse effect upon the financial condition, results of operations, cash flows or competitive position of our Company. It is possible, that as
additional information becomes available, the impact on our Company of an adverse determination could have a different effect.



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Securities and Related Litigation

In January and February 2006, purported class action lawsuits were filed in the Federal District Court for the Southern District of New York against the Company and certain Company officers alleging violations of the
federal securities laws. The actions purport to be filed on behalf of purchasers of the Companys common stock during the period from June 29, 2005 (the date the Company announced the signing of the agreement to acquire Holmes) through
January 12, 2006.

The complaints, which are substantially similar to one another, allege, among other things, that the plaintiffs were injured by
reason of certain allegedly false and misleading statements made by the Company relating to the expected benefits of the THG Acquisition. Joint lead plaintiffs were appointed on June 9, 2006. No class has been certified in the actions. The lead
plaintiffs are to file an amended complaint by August 11, 2006.

In February 2006, a derivative complaint was filed against certain Company officers
and the Board of Directors of the Company in the United States District Court for the Southern District of New York. The Company is named as a nominal defendant. The complaint alleges, among other things, that the individual defendants violated
their fiduciary duties by failing to disclose material information and/or by misleading the investing public about the Companys business and financial condition relating to the THG Acquisition. The complaint seeks damages and other monetary
relief against the individual defendants. The Company and the individual defendants filed a motion to dismiss the complaint on June 15, 2006.

These
actions are in the early stages of litigation and an outcome cannot be predicted. Management does not believe that the outcome of this litigation will have a material adverse effect on the financial position, results of operations or cash flows of
the Company. The Company intends to defend itself vigorously in these actions.



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Item 3. Quantitative and Qualitative Disclosures About Market Risk

In general, business enterprises can be exposed to
market risks including fluctuations in commodity prices, foreign currency values, and interest rates that can affect the cost of operating, investing and financing. The Companys exposures to these risks are low. The Companys plastic
consumables business purchases resin from regular commercial sources of supply and, in most cases, multiple sources. The supply and demand for plastic resins is subject to cyclical and other market factors. With many of our external customers, we
have the ability to pass through price increases with an increase in our selling price and certain of our external customers purchase the resin used in products we manufacture for them. The Companys zinc business has sales arrangements with a
majority of its customers such that sales are priced either based upon supply contracts that provide for fluctuations in the price of zinc to be passed on to the customer or are conducted on a tolling basis whereby customers supply zinc to the
Company for processing. Such arrangements as well as the zinc business utilizing forward buy contracts reduce the exposure of this business to changes in the price of zinc.

The Company, from time to time, invests in short-term financial instruments with original maturities usually less than fifty days. The Company is exposed to short-term interest rate variations with respect to
Eurodollar or Base Rate on certain of its term and revolving debt obligations and six-month LIBOR in arrears on certain of its interest rate swaps. The spreads on the interest rate swaps range from 523 to 528 basis points. Settlements on the
interest rate swaps are made on May 1 and November 1. The Company is exposed to credit loss in the event of non-performance by the other party to its current existing swaps, a large financial institution. However, the Company does not
anticipate non-performance by the other party.

Changes in variable interest rates (primarily LIBOR, Prime and equivalent international rates) would affect
the earnings of the Company either positively or negatively depending on the direction of the change. Assuming that our variable interest rates each increased 100 basis points over period end rates on the variable rate indebtedness and swaps,
the Companys interest expense would have increased by approximately $3.2 million and $1.5 million for the three month periods ended June 30, 2006 and June 30, 2005, respectively, and $5.9 million and $2.7 million for the six month
periods ended June 30, 2006 and June 30, 2005, respectively. The amount was determined by considering the impact of the hypothetical interest rates on the Companys borrowing cost, short-term investment rates, interest rate swaps
and estimated cash flow. Actual changes in rates may differ from the assumptions used in computing this exposure.

The Company does not invest or
trade in any significant derivative financial or commodity instruments, nor does it invest in any foreign financial instruments other than for hedging of foreign denominated currency transactions.



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Item 4. Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, the Companys management,
including the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of its disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of the end of the period covered by this quarterly
report.

As required by Rule 13a-15(d) under the Exchange Act, the Companys management, including the Companys Chief Executive Officer and
Chief Financial Officer, has evaluated the Companys internal control over financial reporting to determine whether any changes occurred during the quarter covered by this quarterly report that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting. Based on that evaluation, there have been no such changes during the quarter covered by this quarterly report.

On July 18, 2005, the Company completed the acquisition of Holmes, a privately held company. The Company considers the acquisition of Holmes material to the results of its operations, financial position and cash
flows from the date of acquisition through June 30, 2006 and considers the controls and procedures of Holmes to be reasonably likely to materially affect the Companys internal controls over financial reporting. The Company has excluded
from its assessment of and conclusion on the effectiveness of internal control over financial reporting Holmes internal controls over financial reporting for fiscal year 2005.



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Part II. Other Information

Item 1. Legal Proceedings

The Company is involved in various legal disputes and other legal proceedings that arise from
time to time in the ordinary course of business. In addition, the Company or various of its subsidiaries have been identified by the United States Environmental Protection Agency or a state environmental agency as a Potentially Responsible Party
pursuant to the federal Superfund Act and/or state Superfund laws comparable to the federal law at various sites. Based on currently available information, the Company does not believe that the disposition of any of the legal or environmental
disputes the Company is currently involved in will have a material adverse effect upon the financial condition, results of operations, cash flows or competitive position of the Company. It is possible, that as additional information becomes
available, the impact on the Company of an adverse determination could have a different effect.

Securities and Related Litigation

In January and February 2006, purported class action lawsuits were filed in the Federal District Court for the Southern District of New York
against the Company and certain Company officers alleging violations of the federal securities laws. The actions purport to be filed on behalf of purchasers of the Companys common stock during the period from June 29, 2005 (the date the
Company announced the signing of the agreement to acquire Holmes) through January 12, 2006.

The complaints, which are substantially similar to one
another, allege, among other things, that the plaintiffs were injured by reason of certain allegedly false and misleading statements made by the Company relating to the expected benefits of the THG Acquisition. Joint lead plaintiffs were appointed
on June 9, 2006. No class has been certified in the actions. The lead plaintiffs are to file an amended complaint by August 11, 2006.

In
February 2006, a derivative complaint was filed against certain Company officers and the Board of Directors of the Company in the United States District Court for the Southern District of New York. The Company is named as a nominal defendant. The
complaint alleges, among other things, that the individual defendants violated their fiduciary duties by failing to disclose material information and/or by misleading the investing public about the Companys business and financial condition
relating to the THG Acquisition. The complaint seeks damages and other monetary relief against the individual defendants. The Company and the individual defendants filed a motion to dismiss the complaint on June 15, 2006.

These actions are in the early stages of litigation and an outcome cannot be predicted. Management does not believe that the outcome of this litigation will have a
material adverse effect on the financial position, results of operations or cash flows of the Company. The Company intends to defend itself vigorously in these actions.

Item 1A. Risk Factors

There has not been any material change in the risk factors disclosure from that contained in the
Companys 2005 10-K for the fiscal year ended December 31, 2005.

Item 4. Submission of Matters to a Vote of Security Holders

We held our annual meeting of stockholders on May 19,
2006. Of the 66,456,584 shares of common stock entitled to vote at the annual meeting of stockholders, 59,961,436 shares were present in person or by proxy and entitled to vote. Such number of shares represented approximately 90.23% of our
outstanding shares of common stock. Listed below are the matters voted upon at our annual meeting of stockholders and the respective voting results:



|                                                                                                                                                |  |            |  |              |  |                                     
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- |  | ------------ |  | ------------------------------------
|                                                                                                                                                |  | Voted FOR  |  | Withheld     |  | Abstained/ BrokerNon-Votes          
|Election of two Class I Directors for three-year terms expiring in 2009                                                                         |  |            |  |              |  |                                     
|Martin E. Franklin                                                                                                                              |  | 59,448,509 |  | 512,927      |  |                                    
|René-Pierre Azria                                                                                                                               |  | 59,836,090 |  | 125,346      |  |                                    
|                                                                                                                                                |  |            | 
|                                                                                                                                                |  | Voted FOR  |  | VotedAGAINST |  | Withheld/ Abstained/ BrokerNon-Votes
|Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting form for the year ending
December 31, 2006 |  | 59,845,290 |  | 104,791      |  | 11,354                              

Our board of directors is currently comprised of each of the Class I Directors listed in the table above,
including Martin E. Franklin and René-Pierre Azria, the Class II Directors, including Ian G.H. Ashken, Richard L. Molen, and Charles R. Kaye, and the Class III Directors, including Douglas W. Huemme, Robert L. Wood, and Irwin D. Simon.



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Item 6. Exhibits

The following exhibits are filed as part of this quarterly report on Form 10-Q:



|        |  |                                                                                                                                                                                                                                                  
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                                                                                                                                      
|3.1     |  | Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Companys Annual Report on Form 10-K, filed with the Commission on March 27, 2002, and incorporated herein by reference).                                      
|        | 
|3.2     |  | Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed as Exhibit 3.2 to the Companys Current Report on Form 8-K, filed with the Commission on June 4,
2002, and incorporated herein by reference).            
|        | 
|3.3     |  | Certificate of Amendment to the Restated Certificate of Incorporation of Jarden Corporation (filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the Commission on
June 15, 2005, and incorporated herein by reference).
|        | 
|3.4     |  | Bylaws of the Company (filed as Exhibit C to the Companys Definitive Proxy Statement, filed with the Commission on November 26, 2001, and incorporated herein by
reference).                                                                    
|        | 
|*31.1   |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                        
|        | 
|*31.2   |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                        
|        | 
|*32.1   |  | Certifications Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                          
|        | 
|*99.1   |  | Reclassified Segment Information for the years ended December 31, 2005, 2004 and 2003.                                                                                                                                                           

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|* | Filed herewith.
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SIGNATURE

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

Date: July 28, 2006



JARDEN CORPORATION(Registrant)By:

/s/ Ian G.H. AshkenName:

Ian G.H. AshkenTitle:

Vice Chairman, Chief Financial Officer and Secretary(Principal Financial Officer)




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EXHIBIT INDEX



|       |  |                                                                                                                                          
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------
|* 31.1 |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|       | 
|*31.2  |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|       | 
|*32.1  |  | Certifications Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                  
|       | 
|*99.1  |  | Reclassified Segment Information for the years ended December 31, 2005, 2004 and 2003.                                                   

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|* | Filed herewith
|- | --------------