##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 29, 2007

OR



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

FOR THE TRANSITION PERIOD FROM  TO

COMMISSION FILE NUMBER 333-108853



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JOHNSONDIVERSEY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 80-0010497                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

8310 16thStreet

Sturtevant, Wisconsin 53177-0902

(Address of Principal Executive Offices, Including Zip Code)

(262) 631-4001

(Registrants Telephone Number, Including Area Code)



---

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

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

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer   x

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

There is no public trading market for the registrants common stock. As of July 3, 2007, there were 3,920 outstanding shares of the
registrants class A common stock, $0.01 par value, and there were 1,960 outstanding shares of the registrants class B common stock, $0.01 par value, which is subject to put and call options.



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##### Table of Contents

INDEX



|                               |  |                                                                                                          |  |     
|------------------------------ |  | -------------------------------------------------------------------------------------------------------- |  | ----
|Section                        |  | Topic                                                                                                    |  | Page
|                               |  | Forward-Looking Statements                                                                               |  | i   
|                               | 
|PART I  FINANCIAL INFORMATION |  |                                                                                                         
|Item 1                         |  | Financial Statements (unaudited)                                                                         |  |     
|                               |  |                                                                                                         
|                               |  | Consolidated Balance Sheets as of June 29, 2007 and December 29, 2006                                    |  | 1   
|                               |  |                                                                                                         
|                               |  | Consolidated Statements of Operations for the three and six months ended June 29, 2007 and June 30, 2006 |  | 2   
|                               |  |                                                                                                         
|                               |  | Consolidated Statements of Cash Flows for the six months ended June 29, 2007 and June 30, 2006           |  | 3   
|                               |  |                                                                                                         
|                               |  | Notes to Consolidated Financial Statements  June 29, 2007                                               |  | 4   
|                               |  |                                                                                                         
|Item 2                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                    |  | 17  
|                               |  |                                                                                                         
|Item 3                         |  | Quantitative and Qualitative Disclosure about Market Risk                                                |  | 35  
|                               |  |                                                                                                         
|Item 4                         |  | Controls and Procedures                                                                                  |  | 36  
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                         
|Item 1                         |  | Legal Proceedings                                                                                        |  | 38  
|                               |  |                                                                                                         
|Item 6                         |  | Exhibits                                                                                                 |  | 38  
|                               | 
|Signatures                     |  | 39                                                                                                      



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##### Table of Contents

Unless otherwise indicated, references to Holdings, the Company, we,
our and us in this quarterly report refer to JohnsonDiversey Holdings, Inc. and its consolidated subsidiaries, and references to JDI refer to JohnsonDiversey, Inc., a wholly owned subsidiary of Holdings.

FORWARD-LOOKING STATEMENTS

We make statements in this Form 10Q that are not historical facts. These
forward-looking statements can be identified by the use of terms such as may, intend, might, will, should, could, would, expect,
believe, estimate, anticipate, predict, project, potential, or the negative of these terms, and similar expressions. You should be aware that these forward-looking statements
are subject to risks and uncertainties that are beyond our control. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time that may cause our business not to develop as
we expect, and it is not possible for us to predict all of them. Factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following:



| |  |  | our ability to execute our business strategies;
| | - |  | -----------------------------------------------



| |  |  | our ability to successfully execute and complete our restructuring program (November 2005 Plan), including outsourcing the majority of IT support
worldwide, outsourcing of financial services in Western Europe, workforce reduction, achievement of cost savings, as well as plant closures and disposition of assets;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in general economic and political conditions, interest rates and currency movements, including, in particular, exposure to foreign currency risks;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the vitality of the institutional and industrial cleaning and sanitation market;
| | - |  | --------------------------------------------------------------------------------



| |  |  | restraints on pricing flexibility due to competitive conditions in the professional market;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | the loss or insolvency of a significant supplier or customer;
| | - |  | -------------------------------------------------------------



| |  |  | effectiveness in managing our manufacturing processes, including our inventory, fixed assets and system of internal control;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in energy costs, the costs of raw materials and other operating expenses;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | our ability and the ability of our competitors to introduce new products and technical innovations;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | the costs and effects of complying with laws and regulations relating to the environment and to the manufacture, storage, distribution and labeling of our products;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the occurrence of litigation or claims;
| | - |  | ---------------------------------------



| |  |  | changes in tax, fiscal, governmental and other regulatory policies;
| | - |  | -------------------------------------------------------------------



| |  |  | the effect of future acquisitions or divestitures or other corporate transactions;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | adverse or unfavorable publicity regarding us or our services;
| | - |  | --------------------------------------------------------------



| |  |  | the loss of, or changes in, executive management or other key personnel;
| | - |  | ------------------------------------------------------------------------



| |  |  | natural and manmade disasters, including acts of terrorism, hostilities, war, and other such events that cause business interruptions or impact our markets;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | conditions affecting the food and lodging industry, including health-related, political and weather-related; and
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | other factors listed from time to time in reports that we file with the Securities and Exchange Commission (SEC).
| | - |  | -------------------------------------------------------------------------------------------------------------------



i



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)



|                                                                                                                                    |  |               |           |   |                   |   |           |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | --------- | - | ----------------- | - | --------- | -
|                                                                                                                                    |  | June 29, 2007 |           |   | December 29, 2006 |  
|                                                                                                                                    |  | (unaudited)   |           |   |                   |  
|ASSETS                                                                                                                              |  |               |           |   |                   |   |           |  
|Current assets:                                                                                                                     |  |               |           |   |                   |   |           |  
|Cash and cash equivalents                                                                                                           |  | $             | 102,684   |   |                   | $ | 208,418   |  
|Accounts receivable, less allowance of $28,251 and $30,711, respectively                                                            |  |               | 563,140   |   |                   |   | 523,512   |  
|Accounts receivable  related parties                                                                                               |  |               | 32,153    |   |                   |   | 27,478    |  
|Inventories                                                                                                                         |  |               | 291,281   |   |                   |   | 261,015   |  
|Deferred income taxes                                                                                                               |  |               | 22,983    |   |                   |   | 35,256    |  
|Other current assets                                                                                                                |  |               | 124,796   |   |                   |   | 121,189   |  
|Current assets of discontinued operations                                                                                           |  |               | 4,012     |   |                   |   | 4,100     |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  
|Total current assets                                                                                                                |  |               | 1,141,049 |   |                   |   | 1,180,968 |  
|Property, plant and equipment, net                                                                                                  |  |               | 422,748   |   |                   |   | 421,712   |  
|Capitalized software, net                                                                                                           |  |               | 44,409    |   |                   |   | 61,040    |  
|Goodwill, net                                                                                                                       |  |               | 1,214,208 |   |                   |   | 1,196,104 |  
|Other intangibles, net                                                                                                              |  |               | 301,337   |   |                   |   | 310,413   |  
|Long-term receivables  related parties                                                                                             |  |               | 73,656    |   |                   |   | 71,392    |  
|Other assets                                                                                                                        |  |               | 70,928    |   |                   |   | 65,312    |  
|Non current assets of discontinued operations                                                                                       |  |               | 10,463    |   |                   |   | 14,369    |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  
|Total assets                                                                                                                        |  | $             | 3,278,798 |   |                   | $ | 3,321,310 |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  
|LIABILITIES, CLASS B COMMON STOCK AND STOCKHOLDERS EQUITY                                                                          |  |               |           |   |                   |   |           |  
|Current liabilities:                                                                                                                |  |               |           |   |                   |   |           |  
|Short-term borrowings                                                                                                               |  | $             | 35,815    |   |                   | $ | 35,649    |  
|Current portion of long-term debt                                                                                                   |  |               | 10,780    |   |                   |   | 12,954    |  
|Accounts payable                                                                                                                    |  |               | 348,204   |   |                   |   | 350,170   |  
|Accounts payable  related parties                                                                                                  |  |               | 51,841    |   |                   |   | 55,454    |  
|Accrued expenses                                                                                                                    |  |               | 415,611   |   |                   |   | 465,452   |  
|Non current liabilities of discontinued operations                                                                                  |  |               | 3,308     |   |                   |   | 2,943     |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  
|Total current liabilities                                                                                                           |  |               | 865,559   |   |                   |   | 922,622   |  
|Pension and other post-retirement benefits                                                                                          |  |               | 242,349   |   |                   |   | 234,659   |  
|Long-term borrowings                                                                                                                |  |               | 1,431,916 |   |                   |   | 1,407,470 |  
|Long-term payables  related parties                                                                                                |  |               | 29,889    |   |                   |   | 29,480    |  
|Deferred income taxes                                                                                                               |  |               | 64,339    |   |                   |   | 56,132    |  
|Other liabilities                                                                                                                   |  |               | 67,097    |   |                   |   | 47,167    |  
|Non current liabilities of discontinued operations                                                                                  |  |               | 3,673     |   |                   |   | 4,423     |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  
|Total liabilities                                                                                                                   |  |               | 2,704,822 |   |                   |   | 2,701,953 |  
|                                                                                                                                    |  |              
|Commitments and contingencies                                                                                                       |  |               |           |   |                   |   |           |  
|Class B common stock subject to put and call options $0.01 par value; 3,000 shares authorized; 1,960 shares issued and
outstanding |  |               | 570,801   |   |                   |   | 570,475   |  
|Stockholders equity:                                                                                                               |  |               |           |   |                   |   |           |  
|Class A common stock  $0.01 par value; 7,000 shares authorized; 3,920 shares issued and outstanding                                |  |               |          |   |                   |   |          |  
|Capital in excess of par value                                                                                                      |  |               |          |   |                   |   |          |  
|Retained deficit                                                                                                                    |  |               | (208,089  | ) |                   |   | (129,443  | )
|Accumulated other comprehensive income                                                                                              |  |               | 211,264   |   |                   |   | 178,325   |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  
|Total stockholders equity                                                                                                          |  |               | 3,175     |   |                   |   | 48,882    |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  
|Total liabilities, class B common stock and stockholders equity                                                                    |  | $             | 3,278,798 |   |                   | $ | 3,321,310 |  
|                                                                                                                                    |  |               |           |   |                   |   |           |  

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



1



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands)



|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|----------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | - | ---------------- | - | ------- | ------------- |  | - | ------------- | - |  | - | --------- | -
|                                                                                                      |  | Three Months Ended |         |   | Six Months Ended |  
|                                                                                                      |  | June 29, 2007      |         |   | June 30, 2006    |   |         | June 29, 2007 |  |   | June 30, 2006 |  
|                                                                                                      |  | (unaudited)        |         |   | (unaudited)      |  
|Net sales:                                                                                            |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Net product and service sales                                                                         |  | $                  | 773,062 |   |                  | $ | 735,052 |               |  | $ | 1,459,903     |   |  | $ | 1,405,138 |  
|Sales agency fee income                                                                               |  |                    | 22,288  |   |                  |   | 22,329  |               |  |   | 44,675        |   |  |   | 43,614    |  
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|                                                                                                      |  |                    | 795,350 |   |                  |   | 757,381 |               |  |   | 1,504,578     |   |  |   | 1,448,752 |  
|Cost of sales                                                                                         |  |                    | 460,078 |   |                  |   | 430,321 |               |  |   | 873,518       |   |  |   | 837,276   |  
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Gross profit                                                                                          |  |                    | 335,272 |   |                  |   | 327,060 |               |  |   | 631,060       |   |  |   | 611,476   |  
|Selling, general and administrative expenses                                                          |  |                    | 282,298 |   |                  |   | 282,791 |               |  |   | 560,596       |   |  |   | 593,893   |  
|Research and development expenses                                                                     |  |                    | 16,662  |   |                  |   | 14,967  |               |  |   | 32,505        |   |  |   | 29,342    |  
|Restructuring expenses                                                                                |  |                    | 4,198   |   |                  |   | 34,853  |               |  |   | 6,319         |   |  |   | 77,683    |  
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Operating profit (loss)                                                                               |  |                    | 32,114  |   |                  |   | (5,551  | )             |  |   | 31,640        |   |  |   | (89,442   | )
|Other (income) expense:                                                                               |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Interest expense                                                                                      |  |                    | 37,197  |   |                  |   | 44,783  |               |  |   | 75,848        |   |  |   | 87,934    |  
|Interest income                                                                                       |  |                    | (2,013  | ) |                  |   | (3,136  | )             |  |   | (5,448        | ) |  |   | (6,558    | )
|Other expense, net                                                                                    |  |                    | 705     |   |                  |   | 342     |               |  |   | 398           |   |  |   | 1,868     |  
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Loss from continuing operations before income taxes and minority interests                            |  |                    | (3,775  | ) |                  |   | (47,540 | )             |  |   | (39,158       | ) |  |   | (172,686  | )
|Income tax (benefit) provision                                                                        |  |                    | 27,014  |   |                  |   | (51,445 | )             |  |   | 39,804        |   |  |   | (48,941   | )
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Income (loss) from continuing operations                                                              |  |                    | (30,789 | ) |                  |   | 3,905   |               |  |   | (78,962       | ) |  |   | (123,745  | )
|Minority interests in net income (loss) of subsidiaries                                               |  |                    |        |   |                  |   | 3       |               |  |   |              |   |  |   | 5         |  
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Income (loss) from continuing operations                                                              |  |                    | (30,789 | ) |                  |   | 3,902   |               |  |   | (78,962       | ) |  |   | (123,750  | )
|Income (loss) from discontinued operations, net of income taxes of $(74), $125,679, $152 and $131,137 |  |                    | (110    | ) |                  |   | 236,151 |               |  |   | 226           |   |  |   | 241,601   |  
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  
|Net income (loss)                                                                                     |  | $                  | (30,899 | ) |                  | $ | 240,053 |               |  | $ | (78,736       | ) |  | $ | 117,851   |  
|                                                                                                      |  |                    |         |   |                  |   |         |               |  |   |               |   |  |   |           |  

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



2



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)



|                                                                                                   |  |                  |          |   |               |   |          |  
|-------------------------------------------------------------------------------------------------- |  | ---------------- | -------- | - | ------------- | - | -------- | -
|                                                                                                   |  | Six Months Ended |         
|                                                                                                   |  | June 29, 2007    |          |   | June 30, 2006 |  
|                                                                                                   |  | (unaudited)      |         
|Cash flows from operating activities:                                                              |  |                  |          |   |               |   |          |  
|Net income (loss)                                                                                  |  | $                | (78,736  | ) |               | $ | 117,851  |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |  |                  |          |   |               |   |          |  
|Depreciation and amortization                                                                      |  |                  | 61,127   |   |               |   | 86,208   |  
|Amortization of intangibles                                                                        |  |                  | 14,473   |   |               |   | 35,579   |  
|Amortization and write-off of debt issuance costs                                                  |  |                  | 2,511    |   |               |   | 3,425    |  
|Interest accrued on long-term receivables- related parties                                         |  |                  | (1,276   | ) |               |   | (1,217   | )
|Interest accreted on notes payable                                                                 |  |                  | 22,757   |   |               |   | 20,629   |  
|Deferred income taxes                                                                              |  |                  | 18,305   |   |               |   | 594      |  
|Gain on disposal of discontinued operations                                                        |  |                  | 652      |   |               |   | (225,571 | )
|(Gain) loss from divestitures                                                                      |  |                  | (479     | ) |               |   | (1,187   | )
|Gain on property, plant and equipment disposals                                                    |  |                  | (1,992   | ) |               |   | (98      | )
|Other                                                                                              |  |                  | 11,841   |   |               |   | 3,899    |  
|Changes in operating assets and liabilities, net of effects from acquisitions and                  |  |                  |          |   |               |   |          |  
|Accounts receivable securitization                                                                 |  |                  | (9,100   | ) |               |   | 900      |  
|Accounts receivable                                                                                |  |                  | (30,391  | ) |               |   | (21,286  | )
|Inventories                                                                                        |  |                  | (31,647  | ) |               |   | (16,739  | )
|Other current assets                                                                               |  |                  | (5,998   | ) |               |   | (12,038  | )
|Other assets                                                                                       |  |                  | (1,876   | ) |               |   | 1,648    |  
|Accounts payable and accrued expenses                                                              |  |                  | (43,978  | ) |               |   | (9,489   | )
|Other liabilities                                                                                  |  |                  | 4,029    |   |               |   | (6,214   | )
|                                                                                                   |  |                  |          |   |               |   |          |  
|Net cash used in operating activities                                                              |  |                  | (69,778  | ) |               |   | (23,106  | )
|Cash flows from investing activities:                                                              |  |                  |          |   |               |   |          |  
|Capital expenditures                                                                               |  |                  | (42,891  | ) |               |   | (36,545  | )
|Expenditures for capitalized computer software                                                     |  |                  | (2,417   | ) |               |   | (3,620   | )
|Proceeds from property, plant and equipment disposals                                              |  |                  | 9,876    |   |               |   | 702      |  
|Acquisitions of businesses                                                                         |  |                  | (2,696   | ) |               |   | (6,304   | )
|Proceeds from divestitures, net of transaction costs                                               |  |                  | 241      |   |               |   | 453,335  |  
|                                                                                                   |  |                  |          |   |               |   |          |  
|Net cash provided by (used in) investing activities                                                |  |                  | (37,887  | ) |               |   | 407,568  |  
|Cash flows from financing activities:                                                              |  |                  |          |   |               |   |          |  
|Proceeds from short-term borrowings                                                                |  |                  | (694     | ) |               |   | 18,731   |  
|Repayments of long-term borrowings                                                                 |  |                  | (6,413   | ) |               |   | (427,563 | )
|Payment of debt issuance costs                                                                     |  |                  | (500     | ) |               |   |         |  
|Dividends paid                                                                                     |  |                  |         |   |               |   | (49      | )
|                                                                                                   |  |                  |          |   |               |   |          |  
|Net cash provided by (used in) financing activities                                                |  |                  | (7,607   | ) |               |   | (408,881 | )
|                                                                                                   |  |                  |          |   |               |   |          |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                  | 9,538    |   |               |   | (1,979   | )
|                                                                                                   |  |                  |          |   |               |   |          |  
|Change in cash and cash equivalents                                                                |  |                  | (105,734 | ) |               |   | (26,398  | )
|Beginning balance 1                                                                                |  |                  | 208,418  |   |               |   | 162,119  |  
|                                                                                                   |  |                  |          |   |               |   |          |  
|Ending balance 2                                                                                   |  | $                | 102,684  |   |               | $ | 135,721  |  
|                                                                                                   |  |                  |          |   |               |   |          |  
|Supplemental cash flows information                                                                |  |                  |          |   |               |   |          |  
|Cash paid during the year:                                                                         |  |                  |          |   |               |   |          |  
|Interest                                                                                           |  | $                | 46,986   |   |               | $ | 62,846   |  
|Income taxes                                                                                       |  |                  | 11,520   |   |               |   | 20,744   |  

---

|1 | Includes cash and cash equivalents for discontinued operations of $3,828 at the
beginning of the six-month period ended June 30, 2006.
|- | --------------------------------------------------------------------------------------------------------------------------------------

|2 | Includes cash and cash equivalents for discontinued operations of $336 at
June 30, 2006.
|- | ----------------------------------------------------------------------------------------

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



3



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



|1. | Description of the Company
|-- | --------------------------

JohnsonDiversey
Holdings, Inc. (Holdings or the Company) directly owns all of the shares of JohnsonDiversey, Inc. (JDI), except for one share which is owned by S.C. Johnson & Son, Inc. (SCJ). The Company is a
holding company and its sole business interest is the ownership and control of JDI and its subsidiaries. JDI is a global marketer and manufacturer of commercial, industrial and institutional building maintenance and sanitation products.

Except where noted, the consolidated financial statements and related notes, excluding the consolidated statements of cash flows, reflect the results
of continuing operations excluding the divestiture of Chemical Methods Associates (CMA), the Polymer Business segment (Polymer Business), and Whitmire Micro-Gen Research Laboratories, Inc. (Whitmire) (see Note 6).



|2. | Basis of Presentation
|-- | ---------------------

The accompanying
unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the SEC.
Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary to present fairly the financial position of the
Company as of June 29, 2007 and its results of operations for the three and six month periods ended June 29, 2007 and cash flows for the six month period ended June 29, 2007 have been included. The results of operations for the three
and six month periods ended June 29, 2007 are not necessarily indicative of the results to be expected for the full fiscal year. It is recommended that the accompanying consolidated financial statements be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Companys annual report on Form 10-K for the fiscal year ended December 29, 2006.

The Company has accounted for the divestiture of CMA, Polymer and Whitmire as discontinued operations (see Note 6), resulting in the reclassification of prior period amounts in the Companys consolidated
statements of operations and consolidated balance sheets.

Certain other prior period amounts have been reclassified to conform with
current period presentation. None of these reclassifications are considered material to the Companys consolidated balance sheet, results of operations or cash flows.

Unless otherwise indicated, all monetary amounts, excluding share data, are stated in thousands.



|3. | New Accounting Standards
|-- | ------------------------

In January 2007,
the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115 (SFAS
No. 159). SFAS No. 159 is intended to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to
apply complex hedge accounting provisions. It also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. The
statement does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value, and it does not establish requirements for recognizing dividend income, interest income or interest expense. It
also does not eliminate disclosure requirements included in other accounting standards. The provisions of SFAS 159 are effective for the fiscal year beginning after November 15, 2007, which for the Company is its fiscal year 2008. The Company
is currently evaluating the impact of the provisions of SFAS No. 159.



4



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans (SFAS No. 158), an amendment of FASB Statements No. 87, 88, 106, and 132 (R). SFAS No. 158 requires an employer to recognize the over-funded or under-funded status
of a defined benefit postretirement plan as an asset or liability in its consolidated balance sheets and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS No. 158 also requires
the measurement of defined benefit plan assets and obligations as of the date of the employers fiscal year-end consolidated balance sheets (with limited exceptions). Under SFAS No. 158, the Company will also recognize the funded status of
its defined benefit postretirement plans and provide required disclosures as of December 28, 2007, at the end of its fiscal year 2007. The requirement to measure plan assets and benefit obligations as of the date of the employers fiscal
year-end consolidated balance sheets will be effective in fiscal year 2008. If the Company had adopted SFAS No. 158 at December 29, 2006, it would have recorded an increase in pension and post-retirement benefit liabilities of
approximately $67,280, substantially all of which would be offset to accumulated other comprehensive income. However, this impact could change materially as of December 28, 2007, due to changes in the discount rates used to measure plan
obligations, the actual returns on plan assets, and other factors.

In September 2006, the FASB issued SFAS No. 157, Fair
Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair
value measurements. The provisions of SFAS 157 are effective for the fiscal year beginning after November 15, 2007, which for the Company is its fiscal year 2008. The Company is currently evaluating the impact of the provisions of SFAS
No. 157.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an
Interpretation of FASB Statement No. 109(FIN No. 48) which clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with SFAS No. 109,
Accounting for Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. The Company adopted FIN No. 48 beginning in fiscal year 2007 (see Note 9).



|4. | Master Sales Agency Terminations
|-- | --------------------------------

In
connection with the May 2002 acquisition of the DiverseyLever business, JDI entered into a master sales agency agreement (the Sales Agency Agreement) with Unilever, whereby JDI acts as an exclusive sales agent in the sale of
Unilevers consumer brand products to various institutional and industrial end-users. At acquisition, JDI assigned an intangible value to the Sales Agency Agreement of $13,000.

An agency fee is paid by Unilever to JDI in exchange for its sales agency services. An additional fee is payable by Unilever to JDI in the event that
conditions for full or partial termination of the Sales Agency Agreement are met. JDI elected, and Unilever agreed, to partially terminate the Sales Agency Agreement in several territories resulting in payment by Unilever to JDI of additional fees.
In association with the partial terminations, JDI recognized sales agency fee income of $627 and $38 during the three months ended June 29, 2007 and June 30, 2006, respectively; and $718 and $75 during the six months ended June 29,
2007 and June 30, 2006 respectively.



|5. | Acquisitions
|-- | ------------

In March 2007, JDI purchased
an additional 6% interest in a North American business that provides purchasing and category management tools to certain of the Companys end-users for $2,550. JDI previously held 9% of the outstanding shares. The transaction is not considered
material to the Companys consolidated financial position, results of operations or cash flows.

In February 2006, JDI purchased the
remaining 15% of the outstanding shares of Shanghai JohnsonDiversey, Ltd., JDIs Chinese operating entity, for $3,516. JDI previously held 85% of the outstanding shares and included the holding in its consolidated financial results. Goodwill
recorded with respect to the transaction was $2,572. The acquisition was accounted for under the purchase method of accounting in accordance with step acquisition rules.



5



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



|6. | Discontinued Operations
|-- | -----------------------

Chemical Methods Associates

On September 30, 2006, in connection with its November 2005 Plan (see Note 11), the Company sold its equity interest in CMA to Ali
SpA, an Italian-based manufacturer of equipment for the food service industry, for $17,000. The purchase price was subject to various post-closing adjustments, principally with regard to changes in working capital. In December 2006, the Company
recorded additional purchase price of approximately $300 based on its preliminary assessment of closing working capital. The sale resulted in a gain of $2,322 ($497 after tax), net of related costs. CMA was a non-core asset of the Company.

During the six months ended June 29, 2007, the Company finalized and collected the closing working capital adjustment and recorded
additional closing costs, resulting in an additional gain of $13 ($8 after tax). Further adjustments are not expected to be significant.

Income, net of tax, and net sales from discontinued operations relating to CMA were $541 and $6,184, respectively, for the three months ended June 30, 2006 and $861 and $11,222, respectively, for the six months ended June 30,
2006.

Polymer Business

On
June 30, 2006, Johnson Polymer, LLC (JP) and JohnsonDiversey Holdings II B.V. (Holdings II), an indirectly owned subsidiary of JDI, completed the sale of substantially all of the assets of JP, certain of the equity
interests in, or assets of certain JP subsidiaries and all of the equity interests owned by Holdings II in Johnson Polymer B.V. (collectively, the Polymer Business) to BASF Aktiengesellschaft (BASF) for approximately $470,000
plus an additional $8,119 in connection with the parties estimate of purchase price adjustments that are based upon the closing net asset value of the Polymer Business. Further, BASF paid the Company $1,500 for the option to extend the tolling
agreement by up to six months. In December 2006, the Company and BASF finalized purchase price adjustments related to the net asset value and the Company received an additional $4,062.

The Polymer Business developed, manufactured and sold specialty polymers for use in the industrial print and packaging industry, industrial paint and
coatings industry and industrial plastics industry. The Polymer Business was a non-core asset of the Company and had been reported as a separate business segment. The sale resulted in a gain of approximately $352,907 ($235,906 after tax), net of
related costs.

The Company finalized and paid certain pension related adjustments, adjusted net assets disposed and recorded additional
closing costs, reducing the gain by $415 ($249 after tax) and $1,099 ($660 after tax), during the three and six months ended June 29, 2007, respectively. Further adjustments are not expected to be significant.

In association with the tolling agreement with BASF, the Company recorded income from discontinued operations, net of tax, of $140 and $878,
respectively, during the three and six months ended June 29, 2007.

Excluding the net gain on divestiture, income, net of tax, and net
sales, excluding sales to the Company, from discontinued operations relating to the Polymer Business were $10,163 and $98,799, respectively, for the three months ended June 30, 2006, and $15,169 and $188,385, respectively, for the six months
ended June 30, 2006.

Whitmire Micro-Gen Business

In June 2004, the Company completed the sale of Whitmire to Sorex Holdings, Ltd., a European pest-control manufacturer headquartered in the United Kingdom, for $46,000 in cash and the assumption of certain
liabilities.



6



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



The purchase agreement provided for additional earn-out provisions based on future Whitmire net
sales, for which the Company recorded $124 in the three month period ended March 31, 2006. The income is included as a component of income from discontinued operations in the consolidated statements of operations.



|7. | Accounts Receivable Securitization
|-- | ----------------------------------

JDI and
certain of its subsidiaries entered into an agreement (the Receivables Facility) whereby they sell, on a continuous basis, certain trade receivables to JWPR Corporation (JWPRC), a wholly-owned, consolidated, special purpose,
bankruptcy-remote subsidiary of JDI. JWPRC was formed for the sole purpose of buying and selling receivables generated by JDI and certain of its subsidiaries party to the Receivables Facility. JWPRC, in turn, sells an undivided interest in the
accounts receivable to a nonconsolidated financial institution (the Conduit) for an amount equal to the value of all eligible receivables (as defined under the receivables sale agreement between JWPRC and the Conduit) less the applicable
reserve. The total potential for securitization of trade receivables under this program at June 29, 2007 and December 29, 2006 was $75,000.

As of June 29, 2007 and December 29, 2006, the Conduit held $55,200 and $64,300, respectively, of accounts receivable that are not included in the accounts receivable balance reflected in the Companys
consolidated balance sheet.

As of June 29, 2007 and December 29, 2006, JDI had a retained interest of $103,815 and $78,055,
respectively, in the receivables of JWPRC. The retained interest is included in the accounts receivable balance and is reflected in the consolidated balance sheet at estimated fair value.



|8. | Indebtedness and Credit Arrangements
|-- | ------------------------------------

In
June 2007, JDIs senior secured credit facilities were amended to reduce the interest rate payable on the term B loan facility and the delayed draw term loan facility from LIBOR plus 250 basis points to LIBOR plus 200 basis points, thereby
reducing borrowing costs over the remaining life of the credit facilities. The Company incurred costs of $500 in relation to this amendment which have been capitalized and are being amortized over the remaining term of the facilities.



|9. | Income Taxes
|-- | ------------

The Company adopted the
provisions of FIN No. 48 at the beginning of the 2007 fiscal year. FIN No. 48 clarifies the accounting for uncertainty in income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being
recognized in the financial statements. As a result of adoption of FIN No. 48, an adjustment of approximately $800 was recognized as an increase to beginning retained earnings. As of the adoption date, the Company had gross unrecognized tax
benefits for uncertain tax positions of $80,100, including positions impacting only the timing of tax benefits, of which $32,700, if recognized, would favorably affect the effective income tax rate in future periods (after considering the impact of
valuation allowances). Additionally, $4,800 of unrecognized tax benefits would, if recognized, reduce goodwill. The Company recognizes interest and penalties related to the underpayment of income taxes as a component of income tax expense. As of the
beginning of the 2007 fiscal year, the Company had accrued interest and penalties of $7,100 related to unrecognized tax benefits. There have been no significant changes to these amounts during the six month period ended June 29, 2007.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and international
jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company has substantially completed tax audits for all U.S. federal income tax matters for years through 2003 and
generally concluded all other income tax matters globally for years through 2001.



7



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



The Company is currently under audit by various state and international tax authorities and it is
reasonably possible all or a portion of these audits may conclude during 2007, and it is reasonably possible a reduction in the unrecognized tax benefits may occur; however, quantification of an estimated range cannot be made at this time.

The Company reported an effective income tax rate of (101.6) % on the pre-tax loss from continuing operations for the six month
period ended June 29, 2007. The high effective income tax rate is primarily the result of increased valuation allowances against deferred tax assets for U.S. and international tax loss and credit carryforwards and increased valuation allowances
against other net deferred tax assets.



|10. | Inventories
|--- | -----------

The components of inventories
are summarized as follows:



|                             |  |               |         |                   |   |        
|---------------------------- |  | ------------- | ------- | ----------------- | - | -------
|                             |  | June 29, 2007 |         | December 29, 2006
|Raw materials and containers |  | $             | 64,998  |                   | $ | 59,530 
|Finished goods               |  |               | 226,283 |                   |   | 201,485
|                             |  |               |         |                   |   |        
|Total inventories            |  | $             | 291,281 |                   | $ | 261,015
|                             |  |               |         |                   |   |        

Inventories are stated in the consolidated balance sheets net of allowance for excess and obsolete
inventory of $32,590 and $29,865 on June 29, 2007 and December 29, 2006, respectively.



|11. | Restructuring Liabilities
|--- | -------------------------

November 2005 Restructuring
Program

On November 7, 2005, the Companys Board of Directors approved a restructuring program (November 2005
Plan), which is expected to take two to three years to implement, and includes a redesign of the Companys organization structure, the closure of a number of manufacturing and other facilities and a workforce reduction of approximately
10%, in addition to previously planned divestitures. In addition to the divestiture of the Polymer Business and CMA, the Company is considering the potential divestiture of, or exit from, certain other non-core or underperforming businesses.

In connection with the November 2005 Plan, the Company recognized liabilities of $4,216 and $5,778 for the involuntary termination of 101
and 122 employees, most of which is associated with the European business segment, and an additional $0 and $615 for other restructuring costs during the three and six months ended June 29, 2007, respectively.

In addition, and in connection with the November 2005 Plan, the Company recognized liabilities of $34,820 and $77,157 for the involuntary termination of
523 and 1,269 employees, most of which are associated with the exit from a majority of the service-oriented laundry and ware wash business in the United States, and an additional $34 and $527 for other restructuring costs, during the three and six
months ended June 30, 2006, respectively.



8



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



The activities associated with the November 2005 Plan for six months ended June 29, 2007 were as
follows:



|                                            |  |                  |         |   |       |   |       |       |  |   |         |  
|------------------------------------------- |  | ---------------- | ------- | - | ----- | - | ----- | ----- |  | - | ------- | -
|                                            |  | Employee-Related |         |   | Other |   |       | Total | 
|Liability balances as of December 29, 2006  |  | $                | 68,973  |   |       | $ | 1,252 |       |  | $ | 70,225  |  
|Liability recorded as restructuring expense |  |                  | 1,562   |   |       |   | 615   |       |  |   | 2,177   |  
|Liability adjustments 1                     |  |                  |        |   |       |   | (52   | )     |  |   | (52     | )
|Cash paid 2                                 |  |                  | (13,643 | ) |       |   |      |       |  |   | (13,643 | )
|                                            |  |                  |         |   |       |   |       |       |  |   |         |  
|Liability balances as of March 30, 2007     |  | $                | 56,892  |   |       | $ | 1,815 |       |  | $ | 58,707  |  
|                                            |  |                  |        
|Liability recorded as restructuring expense |  |                  | 4,216   |   |       |   |      |       |  |   | 4,216   |  
|Liability adjustments 3                     |  |                  |        |   |       |   | (18   | )     |  |   | (18     | )
|Cash paid 4                                 |  |                  | (14,510 | ) |       |   | (127  | )     |  |   | (14,637 | )
|                                            |  |                  |         |   |       |   |       |       |  |   |         |  
|Liability balances as of June 29, 2007      |  | $                | 46,598  |   |       | $ | 1,670 |       |  | $ | 48,268  |  

---

|1 | Liability adjustments include reductions based on clarification of original
assumptions, of which $56 resulted in reduction of restructuring expense and $4 was reclassified to other liabilities.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Cash paid is reduced by $4 due to the effects of foreign exchange.
|- | ------------------------------------------------------------------

|3 | Liability adjustments include reductions based on clarification of original
assumptions, of which $18 resulted in reduction of restructuring expense.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|4 | Cash paid is increased by $3 due to the effects of foreign exchange.
|- | --------------------------------------------------------------------

In connection with the November 2005 Plan, the Company recorded asset impairment charges of $2,317 and $3,419 for
the three and six months ended June 29, 2007, respectively. In addition, and in connection with the November 2005 Plan, the Company recorded asset impairment charges of $5,632 and $46,461 for the three and six months ended June 30, 2006,
respectively. The impairment charges are included in selling, general and administrative costs.

Exit and Acquisition-Related
Restructuring Programs

In connection with the acquisition of the DiverseyLever business, the Company recorded liabilities for the
involuntary termination of former DiverseyLever employees and other exit costs associated with former DiverseyLever facilities. The Company paid cash of $250 and $488 representing contractual obligations associated with involuntary terminations and
lease payments on closed facilities during the three and six months ended June 29, 2007. As of June 29, 2007, the Company had remaining exit and acquisition-related restructuring reserves of $2,175. The Company paid cash of $714 and $2,089
representing contractual obligations associated with involuntary terminations and lease payments on closed facilities during the three and six months ended June 30, 2006. In addition, the Company reversed $209 of reserves in association with
the revised assumptions.



|12. | Other (Income) Expense, Net
|--- | ---------------------------

The components
of other (income) expense, net in the consolidated statements of operations are as follows:



|                                  |  |                    |        |   |                  |   |         |               |  |   |               |   |  |   |        |  
|--------------------------------- |  | ------------------ | ------ | - | ---------------- | - | ------- | ------------- |  | - | ------------- | - |  | - | ------ | -
|                                  |  | Three Months Ended |        |   | Six Months Ended |  
|                                  |  | June 29, 2007      |        |   | June 30, 2006    |   |         | June 29, 2007 |  |   | June 30, 2006 |  
|Foreign currency translation gain |  | $                  | (2,939 | ) |                  | $ | (10,552 | )             |  | $ | (3,944        | ) |  | $ | (8,631 | )
|Forward contracts loss            |  |                    | 3,121  |   |                  |   | 10,989  |               |  |   | 3,631         |   |  |   | 10,377 |  
|Other, net                        |  |                    | 523    |   |                  |   | (95     | )             |  |   | 711           |   |  |   | 122    |  
|                                  |  |                    |        |   |                  |   |         |               |  |   |               |   |  |   |        |  
|                                  |  | $                  | 705    |   |                  | $ | 342     |               |  | $ | 398           |   |  | $ | 1,868  |  
|                                  |  |                    |        |   |                  |   |         |               |  |   |               |   |  |   |        |  



9



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



|13. | Defined Benefit Plans and Other Post-Employment Benefit Plans
|--- | -------------------------------------------------------------

The components of net periodic benefit costs for the Companys defined benefit pension plans and other post-employment benefit plans for the three and six months ended June 29, 2007 and June 30, 2006
are as follows:



|                                      |  |                                |         |   |                  |   |        |               |  |   |               |   |  |   |         |  
|------------------------------------- |  | ------------------------------ | ------- | - | ---------------- | - | ------ | ------------- |  | - | ------------- | - |  | - | ------- | -
|                                      |  | Defined Pension Benefits       |        
|                                      |  | Three Months Ended             |         |   | Six Months Ended |  
|                                      |  | June 29, 2007                  |         |   | June 30, 2006    |   |        | June 29, 2007 |  |   | June 30, 2006 |  
|Service cost                          |  | $                              | 7,798   |   |                  | $ | 8,293  |               |  | $ | 15,464        |   |  | $ | 16,888  |  
|Interest cost                         |  |                                | 9,370   |   |                  |   | 9,067  |               |  |   | 18,588        |   |  |   | 18,095  |  
|Expected return on plan assets        |  |                                | (10,230 | ) |                  |   | (9,277 | )             |  |   | (20,305       | ) |  |   | (18,333 | )
|Amortization of net loss              |  |                                | 1,710   |   |                  |   | 2,055  |               |  |   | 3,414         |   |  |   | 4,148   |  
|Amortization of transition obligation |  |                                | 100     |   |                  |   | 61     |               |  |   | 200           |   |  |   | 120     |  
|Amortization of prior service credit  |  |                                | (174    | ) |                  |   | (190   | )             |  |   | (343          | ) |  |   | (323    | )
|Curtailments and settlements          |  |                                | 3,800   |   |                  |   | (2,628 | )             |  |   | 4,351         |   |  |   | (2,628  | )
|                                      |  |                                |         |   |                  |   |        |               |  |   |               |   |  |   |         |  
|Net periodic pension cost             |  | $                              | 12,374  |   |                  | $ | 7,381  |               |  | $ | 21,369        |   |  | $ | 17,967  |  
|                                      |  |                                |         |   |                  |   |        |               |  |   |               |   |  |   |         |  
|                                      | 
|                                      |  | Other Post-Employment Benefits |        
|                                      |  | Three Months Ended             |         |   | Six Months Ended |  
|                                      |  | June 29, 2007                  |         |   | June 30, 2006    |   |        | June 29, 2007 |  |   | June 30, 2006 |  
|Service cost                          |  | $                              | 596     |   |                  | $ | 671    |               |  | $ | 1,192         |   |  | $ | 1,420   |  
|Interest cost                         |  |                                | 1,412   |   |                  |   | 1,298  |               |  |   | 2,824         |   |  |   | 2,635   |  
|Amortization of net loss              |  |                                | 351     |   |                  |   | 305    |               |  |   | 701           |   |  |   | 643     |  
|Amortization of prior service cost    |  |                                | (46     | ) |                  |   | (46    | )             |  |   | (93           | ) |  |   | (93     | )
|Curtailments and settlements          |  |                                |        |   |                  |   | 3,869  |               |  |   | (129          | ) |  |   | (492    | )
|                                      |  |                                |         |   |                  |   |        |               |  |   |               |   |  |   |         |  
|Net periodic benefit cost             |  | $                              | 2,313   |   |                  | $ | 6,097  |               |  | $ | 4,495         |   |  | $ | 4,113   |  
|                                      |  |                                |         |   |                  |   |        |               |  |   |               |   |  |   |         |  

The Company made contributions to its defined benefit pension plans of $9,251 and $14,582 during
the three months ended June 29, 2007 and June 30, 2006, respectively; and $17,311 and $22,834 during the six months ended June 29, 2007 and June 30, 2006, respectively.

In June 2007, and in accordance with SFAS No. 88, the Company recognized a settlement of defined benefits to former North American Professional and
Polymer employees, resulting in related losses of $3,500 and $600, respectively, during the three and six months ended June 29, 2007. The Company recorded the Professional losses, which include the effects of severance activity related to the
November 2005 Plan, in selling, general and administrative expenses in the consolidated statement of operations. The Polymer related losses were recorded as a component of discontinued operations in the consolidated statement of operations. The
Company expects to record additional settlement losses, which may be material to its consolidated results, in the three month periods ended September 28, 2007 and December 28, 2007.

Effective January 1, 2006, a new healthcare system was introduced in the Netherlands. The new system requires that all residents and non-residents
working in the Netherlands subscribe to private health insurance with an insurer of their choice, regardless of income level. In association with the new system, the Company and affected employees have negotiated a new collective bargaining
agreement that discontinues the Company sponsored postretirement medical subsidy, resulting in a curtailment gain of $4,361 during the six month period ended June 30, 2006.



10



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



|14. | Stock-Based Compensation
|--- | ------------------------

The Company has a
long-term incentive plan (the Plan) that provides for the right to purchase stock of Commercial Markets Holdco, Inc. (Holdco), the parent of the Company, for certain members of senior management of the Company. In December
2005, the Company and Holdco approved the cancellation of the Plan. In connection with this decision, Holdco commenced an offer to purchase all of its outstanding unrestricted class C common stock and options to purchase its class C common stock and
class B common stock. Those participants who chose not to accept the tender offer will continue to participate under existing Plan terms; however, the Company will not grant further awards under the Plan.

Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment
(SFAS 123(R)) using the modified-prospective-transition method. Under this transition method, compensation cost recognized includes compensation costs for all share-based payments granted prior to, but not yet vested as of
January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123(R). The Company recorded compensation expense of $129 and $224 during the three months ended June 29, 2007 and
June 30, 2006, respectively; and $258 and $314 during the six months ended June 29, 2007 and June 30, 2006, respectively.

The Company also recorded compensation expense of $12 and $70 related to restricted stock during the three months ended June 29, 2007 and June 30, 2006, respectively; and $78 and $147 for the six months ended June 29, 2007
and June 30, 2006, respectively.



|15. | Comprehensive Income (Loss)
|--- | ---------------------------

Comprehensive
income (loss) for the three and six month periods ended June 29, 2007 and June 30, 2006 was as follows:



|                                                     |  |                    |         |                  |               |   |               |  |   |               |   |  |   |        
|---------------------------------------------------- |  | ------------------ | ------- | ---------------- | ------------- | - | ------------- |  | - | ------------- | - |  | - | -------
|                                                     |  | Three Months Ended |         | Six Months Ended
|                                                     |  | June 29, 2007      |         |                  | June 30, 2006 |   | June 29, 2007 |  |   | June 30, 2006
|Net income (loss)                                    |  | $                  | (30,899 | )                |               | $ | 240,053       |  | $ | (78,736       | ) |  | $ | 117,851
|Foreign currency translation adjustments             |  |                    | 17,098  |                  |               |   | 18,292        |  |   | 31,637        |   |  |   | 33,799 
|Adjustments to minimum pension liability, net of tax |  |                    |        |                  |               |   | 22,939        |  |   |              |   |  |   | 22,939 
|Unrealized gains on derivatives, net of tax          |  |                    | 894     |                  |               |   | 304           |  |   | 1,302         |   |  |   | 1,422  
|                                                     |  |                    |         |                  |               |   |               |  |   |               |   |  |   |        
|Total comprehensive income (loss)                    |  | $                  | (12,907 | )                |               | $ | 281,588       |  | $ | (45,797       | ) |  | $ | 176,011
|                                                     |  |                    |         |                  |               |   |               |  |   |               |   |  |   |        



|16. | Stockholders Agreement and Class B Common Stock Subject to Put and Call Options
|--- | --------------------------------------------------------------------------------

In connection with the acquisition of the DiverseyLever business, the Company entered into a Stockholders Agreement with its stockholders, Holdco
and Marga B.V., as amended and restated in May 2006. The Stockholders Agreement relates to, among other things:



| |  |  | restrictions on the transfer of the Companys shares held by the stockholders;
| | - |  | ------------------------------------------------------------------------------



| |  |  | the Companys corporate governance, including board and committee representation and stockholder approval provisions;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | the put and call options and rights of first offer and refusal with respect to shares held by Marga B.V.;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | certain payments to Marga B.V. as described below; and
| | - |  | ------------------------------------------------------



11



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



| |  |  | various other rights and obligations of the Company and its stockholders, such as provisions relating to delivery of and access to financial and other information,
payment of dividends and indemnification of directors, officers and stockholders.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Marga B.V.s obligations under
the Stockholders Agreement are guaranteed by Unilever N.V

Put and Call Options. Under the Stockholders Agreement, at
any time after May 3, 2008, Unilever has the right to require the Company to purchase the shares then beneficially owned by Unilever. The Company has the option to purchase the shares beneficially owned by Unilever at any time after May 3,
2010. Any exercise by the Company of its call option must be for at least 50% of the shares beneficially owned by Unilever. Any exercise by Unilever of its put option must be for all of its shares.

Before May 3, 2010, the Companys obligations in connection with a put by Unilever are conditioned on a refinancing of JDIs and the
Companys indebtedness, including indebtedness under JDIs senior subordinated notes and JDIs senior secured credit facilities. In connection with the put, the Company must use its reasonable best efforts prior to May 3, 2009,
and its best efforts after that date, to consummate a refinancing and may be required to purchase less than all of the shares subject to the put under some circumstances. If the Company purchases less than all of the shares subject to a put,
Unilever may again put its remaining shares after a specified suspension period.

Following the exercise by Unilever of its put rights, if
the Company fails to purchase all of Unilevers shares for cash by May 3, 2010, it must issue a promissory note to Unilever in exchange for the remaining shares. The maturity date of the promissory note will be either 90 days or one year
after its issuance, depending on the level of Unilevers ownership interest in the Company at that time. The terms of the promissory note will provide Unilever with rights similar to its rights as a stockholder under the Stockholders
Agreement, including board representation, veto and access and informational rights. The promissory note will contain various subordination provisions in relation to JDIs and the Companys indebtedness.

If, after May 3, 2010, Unilever has not been paid cash with respect to its put option, Unilever may also:



| |  |  | require the Company to privately sell Unilevers shares or other shares of Holdings capital stock to a third party; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | require the Company to sell its Japan businesses or any other business or businesses that may be identified for sale by a special committee of the Companys
board of directors. The special committee is required to identify such other business or businesses after May 3, 2009 and prior to May 3, 2010 and to engage an investment banking firm to assist it with such identification and evaluation.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The exercise of these remedies, other than sales of Unilevers shares, is subject to compliance with the agreements
relating to JDIs and the Companys indebtedness.

The price for the Companys shares subject to a put or call option will
be based on the Companys enterprise value at the time the relevant option is exercised, plus its cash and minus its indebtedness. The Company enterprise value cannot be less than eight times the EBITDA of the Company and its subsidiaries, on a
consolidated basis, for the preceding four fiscal quarters, as calculated in accordance with the terms of the Stockholders Agreement. If the Company, Unilever and their respective financial advisors cannot agree on an enterprise value, the
issue will be submitted to an independent third-party for determination.

If the Company purchases less than all of the shares beneficially
owned by Unilever in connection with the exercise of the put or call option, Unilever may elect to fix the price for its remaining shares not purchased. If Unilever does not elect to fix the price, the price will float and a new price will be
determined based on the enterprise value the next time a put or call option is exercised.



12



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



Contingent Payments. Under the Stockholders Agreement, the Company may be required to
make payments to Unilever in each year from 2007 through 2010 so long as Unilever continues to beneficially own 5% or more of the Companys outstanding shares. The amount of each payment will be equal to 25% of the amount by which the
cumulative cash flows of the Company and its subsidiaries, on a consolidated basis, for the period from May 3, 2002, through the end of the fiscal year preceding the payment (not including any cash flow with respect to which Unilever received a
payment in a prior year), exceeds:



| |  |  | $975,000 in 2007;
| | - |  | -----------------



| |  |  | $1,200,000 in 2008; and
| | - |  | -----------------------



| |  |  | $1,425,000 in 2009.
| | - |  | -------------------

The aggregate
amount of all these payments cannot exceed $100,000. Payment of these amounts is subject to compliance with the agreements relating to the Company and JDIs senior indebtedness including, without limitation, the senior discount notes of the
Company, JDIs senior subordinated notes and JDIs senior secured credit facilities.

Transfer of Shares. Under the
Stockholders Agreement, a stockholder controlled by Unilever may transfer its shares of the Company to another entity of which Unilever owns at least an 80% interest, and a stockholder controlled by Holdco may transfer its shares of the
Company to another entity of which Holdco owns at least an 80% interest.

In addition, at any time after May 3, 2007, Unilever may
sell all, but not less than all, of its shares of the Company to no more than one person (an Early Sale), subject to certain restrictions, including, but not limited to, the requirement that all consents and approvals are obtained, the
sale not violating or resulting in the termination of JDIs license agreement with SCJ and the sale not constituting a change of control under the JDIs senior secured credit facilities. Further, the purchaser of the Companys shares
from Unilever cannot be a competitor of SCJ and must be approved by Holdco, which approval cannot be unreasonably withheld or delayed. If Unilever sells its shares of the Company to a third party, that third party would be entitled to the same
rights and be subject to the same obligations applicable to Unilever under the Stockholders Agreement.

From May 3, 2007 through
May 3, 2008, prior to commencing an Early Sale, Unilever must notify the Company of its intention to sell its shares and the Company has the right of first offer to purchase the shares beneficially owned by Unilever at the price and on the
terms specified by Unilever. If the Company does not elect to purchase the shares, Unilever may commence an Early Sale. Prior to completing that sale, however, Unilever must again offer the shares to the Company, and the Company has a right of first
refusal to purchase the shares. The price for the shares under the Companys right of first refusal would be the price at which the shares are offered to the third-party purchaser plus a premium equal to 3% of that third-party price, with a
maximum aggregate premium of $15 million and a minimum aggregate premium of $10 million. The maximum and minimum limitations applicable to the premium are prorated to the extent that the Company had previously purchased shares held by Unilever. The
premium would be paid by Holdco. Notwithstanding the foregoing, if Unilever has not notified the Company of its intention to sell its shares pursuant to an Early Sale prior to May 3, 2008, Unilever would be required to first exercise its put
option prior to selling its shares to a third party as described in this paragraph.

Purchase of Additional Shares from Holdco.
Under the Stockholders Agreement, on the earlier of May 3, 2010 and the date on which Unilever sells all of its shares of the Company to the Company or a third party in accordance with the terms of the Stockholders Agreement,
Unilever will have the right to buy from Holdco that number of class A common shares of the Company (the Additional Shares) equal to the lesser of (i) 1.5% of the total outstanding shares of the Company and (ii) the largest
whole number of class A common shares, the aggregate value (as determined pursuant to the Stockholders Agreement) of which does not exceed $40 million. The purchase price to be paid by Unilever to Holdco for such Additional Shares would be
$.01 per share. Unilever may then require the immediate repurchase by Holdco of the Additional Shares at a price determined in accordance with the Stockholders Agreement. The obligations to transfer the Additional Shares and repurchase those
shares are obligations solely of Holdco.



13



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



|17. | Commitments and Contingencies
|--- | -----------------------------

The Company
is subject to various legal actions and proceedings in the normal course of business. Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, the Company does not believe
the final outcome of any current litigation will have a material effect on the Companys consolidated financial position, results of operations or cash flows.

The Company has purchase commitments for materials, supplies and property, plant and equipment entered into in the ordinary course of business. In the aggregate, such commitments are not in excess of current market
prices. Additionally, the Company normally commits to some level of marketing related expenditures that extend beyond the fiscal period. These marketing expenses are necessary in order to maintain a normal course of business and the risk associated
with them is limited. It is not expected that these commitments will have a material effect on the Companys consolidated financial position, results of operations or cash flows.

The Company maintains environmental reserves for remediation; monitoring and related expenses at one of its domestic facilities. While the ultimate
exposure to further remediation expense at this site continues to be evaluated, the Company does not anticipate a material effect on its consolidated financial position or results of operations.

In connection with the acquisition of the DiverseyLever business, the Company conducted environmental assessments and investigations at DiverseyLever
facilities in various countries. These investigations disclosed the likelihood of soil and/or groundwater contamination or potential environmental regulatory matters. An estimate of costs has been made and maintained based on the expected extent of
contamination and the expected likelihood of recovery for some of these costs from Unilever under the purchase agreement for the acquisition.

The Company is a licensee of certain chemical production technology used globally. The license agreement provides for guaranteed minimum royalty payments during a term ending on December 31, 2014. Under the terms of agreement and based
on current financial projections, the Company does not expect to meet the minimum guaranteed payments. In accordance with the requirements of SFAS No. 5, the Company has estimated its possible range of loss as $1,656 to $3,446 and, in
accordance with FASB Interpretation No. 14, has recorded a contingent loss of $1,656 in selling, general and administrative expenses during the quarter ended June 29, 2007.



14



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



|18. | Segment Information
|--- | -------------------

Business segment
information is summarized as follows:



|                                                              |  |                                  |           |   |        |   |           |       |  |               |         |              |   |                         |  |   |               |  |   |          |   |  |   |           |  
|------------------------------------------------------------- |  | -------------------------------- | --------- | - | ------ | - | --------- | ----- |  | ------------- | ------- | ------------ | - | ----------------------- |  | - | ------------- |  | - | -------- | - |  | - | --------- | -
|                                                              |  | Three Months Ended June 29, 2007 |          
|                                                              |  | North America                    |           |   | Europe |   |           | Japan |  | Latin America |         | Asia Pacific |   | Eliminations /Corporate |  |   | Total Company | 
|Net sales                                                     |  | $                                | 210,213   |   |        | $ | 409,736   |       |  | $             | 70,837  |              | $ | 53,288                  |  | $ | 56,192        |  | $ | (4,916   | ) |  | $ | 795,350   |  
|Operating profit (loss)                                       |  |                                  | 12,581    |   |        |   | 32,837    |       |  |               | 4,894   |              |   | 3,862                   |  |   | 3,604         |  |   | (25,664  | ) |  |   | 32,114    |  
|Depreciation and amortization                                 |  |                                  | 8,114     |   |        |   | 13,383    |       |  |               | 1,438   |              |   | 2,159                   |  |   | 1,948         |  |   | 11,565   |   |  |   | 38,607    |  
|Interest expense                                              |  |                                  | 2,822     |   |        |   | 16,339    |       |  |               | 177     |              |   | 679                     |  |   | 803           |  |   | 16,377   |   |  |   | 37,197    |  
|Interest income 1                                             |  |                                  | (3,285    | ) |        |   | 2,330     |       |  |               | 76      |              |   | 6                       |  |   | 135           |  |   | 2,751    |   |  |   | 2,013     |  
|Total assets                                                  |  |                                  | 960,721   |   |        |   | 1,924,925 |       |  |               | 255,713 |              |   | 194,756                 |  |   | 194,089       |  |   | (251,406 | ) |  |   | 3,278,798 |  
|Goodwill, net                                                 |  |                                  | 173,404   |   |        |   | 761,708   |       |  |               | 106,601 |              |   | 80,136                  |  |   | 63,746        |  |   | 28,613   |   |  |   | 1,214,208 |  
|Capital expenditures, including capitalized computer software |  |                                  | 4,245     |   |        |   | 12,949    |       |  |               | 1,142   |              |   | 3,135                   |  |   | 2,074         |  |   | 2,735    |   |  |   | 26,280    |  
|Long Lived Assets                                             |  |                                  | 287,332   |   |        |   | 1,066,495 |       |  |               | 144,379 |              |   | 114,292                 |  |   | 92,320        |  |   | 294,873  |   |  |   | 1,999,691 |  
|                                                              | 
|                                                              |  | Three Months Ended June 30, 2006 |          
|                                                              |  | North America                    |           |   | Europe |   |           | Japan |  | Latin America |         | Asia Pacific |   | Eliminations /Corporate |  |   | Total Company | 
|Net sales                                                     |  | $                                | 219,381   |   |        | $ | 370,151   |       |  | $             | 76,578  |              | $ | 47,869                  |  | $ | 48,155        |  | $ | (4,753   | ) |  | $ | 757,381   |  
|Operating profit (loss)                                       |  |                                  | 13,888    |   |        |   | (3,392    | )     |  |               | 3,725   |              |   | 4,520                   |  |   | 1,244         |  |   | (25,536  | ) |  |   | (5,551    | )
|Depreciation and amortization                                 |  |                                  | 9,350     |   |        |   | 13,467    |       |  |               | 1,934   |              |   | 1,954                   |  |   | 1,901         |  |   | 10,872   |   |  |   | 39,478    |  
|Interest expense.                                             |  |                                  | 2,663     |   |        |   | 17,795    |       |  |               | 242     |              |   | 1,224                   |  |   | 917           |  |   | 21,942   |   |  |   | 44,783    |  
|Interest income                                               |  |                                  | 3,872     |   |        |   | 2,877     |       |  |               | 8       |              |   | 129                     |  |   | 107           |  |   | (3,857   | ) |  |   | 3,136     |  
|Total assets                                                  |  |                                  | 1,142,736 |   |        |   | 1,859,866 |       |  |               | 275,813 |              |   | 174,969                 |  |   | 163,545       |  |   | (408,775 | ) |  |   | 3,208,154 |  
|Goodwill, net                                                 |  |                                  | 175,107   |   |        |   | 725,833   |       |  |               | 115,345 |              |   | 74,460                  |  |   | 53,404        |  |   | 43,062   |   |  |   | 1,187,211 |  
|Capital expenditures, including capitalized computer software |  |                                  | 3,647     |   |        |   | 7,771     |       |  |               | 866     |              |   | 1,972                   |  |   | 1,903         |  |   | 5,426    |   |  |   | 21,585    |  
|Long Lived Assets.                                            |  |                                  | 312,769   |   |        |   | 1,029,382 |       |  |               | 158,799 |              |   | 106,090                 |  |   | 79,855        |  |   | 318,944  |   |  |   | 2,005,839 |  
|                                                              | 
|                                                              |  | Six Months Ended June 29, 2007   |          
|                                                              |  | North America                    |           |   | Europe |   |           | Japan |  | Latin America |         | Asia Pacific |   | Eliminations /Corporate |  |   | Total Company | 
|Net sales                                                     |  | $                                | 390,820   |   |        | $ | 776,666   |       |  | $             | 134,566 |              | $ | 104,042                 |  | $ | 108,640       |  | $ | (10,156  | ) |  | $ | 1,504,578 |  
|Operating profit (loss)                                       |  |                                  | 6,256     |   |        |   | 46,444    |       |  |               | 5,745   |              |   | 8,079                   |  |   | 6,262         |  |   | (41,146  | ) |  |   | 31,640    |  
|Depreciation and amortization                                 |  |                                  | 15,684    |   |        |   | 26,598    |       |  |               | 2,967   |              |   | 4,208                   |  |   | 3,943         |  |   | 22,200   |   |  |   | 75,600    |  
|Interest expense                                              |  |                                  | 5,760     |   |        |   | 34,818    |       |  |               | 376     |              |   | 1,417                   |  |   | 1,766         |  |   | 31,711   |   |  |   | 75,848    |  
|Interest income                                               |  |                                  | 3,923     |   |        |   | 5,463     |       |  |               | 76      |              |   | 16                      |  |   | 279           |  |   | (4,309   | ) |  |   | 5,448     |  
|Total assets                                                  |  |                                  | 960,721   |   |        |   | 1,924,925 |       |  |               | 255,713 |              |   | 194,756                 |  |   | 194,089       |  |   | (251,406 | ) |  |   | 3,278,798 |  
|Goodwill, net                                                 |  |                                  | 173,404   |   |        |   | 761,708   |       |  |               | 106,601 |              |   | 80,136                  |  |   | 63,746        |  |   | 28,613   |   |  |   | 1,214,208 |  
|Capital expenditures, including capitalized computer software |  |                                  | 7,984     |   |        |   | 20,853    |       |  |               | 1,769   |              |   | 5,121                   |  |   | 3,951         |  |   | 5,630    |   |  |   | 45,308    |  
|Long Lived Assets                                             |  |                                  | 287,332   |   |        |   | 1,066,495 |       |  |               | 144,379 |              |   | 114,292                 |  |   | 92,320        |  |   | 294,873  |   |  |   | 1,999,691 |  
|                                                              | 
|                                                              |  | Six Months Ended June 30, 2006   |          
|                                                              |  | North America                    |           |   | Europe |   |           | Japan |  | Latin America |         | Asia Pacific |   | Eliminations /Corporate |  |   | Total Company | 
|Net sales                                                     |  | $                                | 427,044   |   |        | $ | 700,226   |       |  | $             | 142,217 |              | $ | 94,905                  |  | $ | 95,218        |  | $ | (10,858  | ) |  | $ | 1,448,752 |  
|Operating profit (loss)                                       |  |                                  | (49,569   | ) |        |   | (3,629    | )     |  |               | 4,794   |              |   | 9,151                   |  |   | 3,638         |  |   | (53,827  | ) |  |   | (89,442   | )
|Depreciation and amortization                                 |  |                                  | 56,883    |   |        |   | 31,167    |       |  |               | 3,767   |              |   | 3,848                   |  |   | 3,723         |  |   | 22,399   |   |  |   | 121,787   |  
|Interest expense                                              |  |                                  | 5,198     |   |        |   | 34,349    |       |  |               | 441     |              |   | 2,558                   |  |   | 1,835         |  |   | 43,553   |   |  |   | 87,934    |  
|Interest income                                               |  |                                  | 7,148     |   |        |   | 6,016     |       |  |               | 8       |              |   | 231                     |  |   | 199           |  |   | (7,044   | ) |  |   | 6,558     |  
|Total assets                                                  |  |                                  | 1,142,736 |   |        |   | 1,859,866 |       |  |               | 275,813 |              |   | 174,969                 |  |   | 163,545       |  |   | (408,775 | ) |  |   | 3,208,154 |  
|Goodwill, net                                                 |  |                                  | 175,107   |   |        |   | 725,833   |       |  |               | 115,345 |              |   | 74,460                  |  |   | 53,404        |  |   | 43,062   |   |  |   | 1,187,211 |  
|Capital expenditures, including capitalized computer software |  |                                  | 6,984     |   |        |   | 16,159    |       |  |               | 1,473   |              |   | 3,205                   |  |   | 3,665         |  |   | 8,679    |   |  |   | 40,165    |  
|Long Lived Assets                                             |  |                                  | 312,769   |   |        |   | 1,029,382 |       |  |               | 158,799 |              |   | 106,090                 |  |   | 79,855        |  |   | 318,944  |   |  |   | 2,005,839 |  

---

|1 | The North American segment overcharged the Corporate center for intercompany
related interest during the three months ended March 30, 2007, resulting in a reversal of $4,464 during the three months ended June 29, 2007.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|19. | Subsequent Events
|--- | -----------------

Divestiture  Auto-Chlor
Branch Operation

On August 3, 2007, in conjunction with its November 2005 Plan, the Company divested of certain of its
Auto-Chlor branch operations in the eastern United States for $2,450, resulting in an approximate gain of $400. These businesses marketed and sold low-energy dishwashing systems, kitchen chemicals, laundry and housekeeping products and services to
foodservice, lodging, healthcare, and institutional customers. The purchase price is subject to various post-closing adjustments. The transaction will be recorded in the three months ending September 28, 2007.

Income Tax Assessment

Based on the
Companys evaluation of a preliminary income tax assessment received subsequent to June 29, 2007, and pursuant to the provisions of FIN No. 48, the Company anticipates the need to record additional income tax expense of approximately $4,000 to
$10,000 in the quarter ending September 28, 2007.



15



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2007

(unaudited)



Income Tax Assessment

Based on the Companys evaluation of a preliminary income tax assessment received subsequent to June 29, 2007, and pursuant to the provisions of FIN No. 48, the Company anticipates the need to record
additional income tax expense of approximately $4,000 to $10,000 in the quarter ending September 28, 2007.



16



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##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Executive Overview

The following discussion and analysis describes material changes in the financial
condition and results of operations of JohnsonDiversey Holdings, Inc. and its consolidated subsidiaries since December 29, 2006. This discussion should be read in conjunction with our unaudited consolidated financial statements as of, and for
the quarterly period ended, June 29, 2007, our annual report on Form 10-K for the year ended December 29, 2006, and the section entitled Forward-Looking Statements located before Part I of this report.

We operate our business through Holdings sole subsidiary, JDI, and its subsidiaries. We are a leading global marketer and manufacturer of cleaning,
hygiene and appearance enhancing products, equipment and related services for the institutional and industrial cleaning and sanitation market. We sell our products in more than 160 countries through our direct sales force, wholesalers and
third-party distributors. Our sales are balanced geographically, with our principal markets being Europe, North America and Japan.

Except
where noted, and except for discussion on the consolidated statements of cash flows, the management discussion and analysis below reflect the results of continuing operations, specifically excluding the results from operations and the divestitures
of the Chemical Methods Associates subsidiary (CMA), the former Polymer Business segment (Polymer Business), and Whitmire Micro-Gen Research Laboratories, Inc. (Whitmire) as discussed in Note 6 to the consolidated
financial statements.

In the three and six months ended June 29, 2007, net sales increased by $38.0 million and $55.8 million,
respectively, from the same periods in the prior year. As indicated in the following table, excluding the impact of foreign currency exchange rates, and acquisitions and divestitures, our net sales increased 3.2% for the three months ended
June 29, 2007 compared to the second quarter of 2006, and our 2007 year-to-date net sales increased 1.9%.



|                              |  |                    |         |               |   |         |        |                  |     |               |  |               |           |  |        |           |   |  |     |  
|----------------------------- |  | ------------------ | ------- | ------------- | - | ------- | ------ | ---------------- | --- | ------------- |  | ------------- | --------- |  | ------ | --------- | - |  | --- | -
|                              |  | Three Months Ended |         |               |   |         |        | Six Months Ended |     |               |  |              
|(dollars in thousands)        |  | June 29, 2007      |         | June 30, 2006 |   |         | Change |                  |     | June 29, 2007 |  | June 30, 2006 |           |  | Change |          
|Net sales                     |  | $                  | 795,350 |               | $ | 757,381 |        |                  | 5.0 | %             |  | $             | 1,504,578 |  | $      | 1,448,752 |   |  | 3.9 | %
|                              |  |                    |         |               |   |        
|Variance due to:              |  |                    |         |               |   |         |        |                  |     |               |  |               |           |  |        |           |   |  |     |  
|Foreign currency exchange     |  |                    |         |               |   | 27,094  |        |                  |     |               |  |               |           |  |        | 53,029    |   |  |     |  
|Acquisitions and divestitures |  |                    |         |               |   | (13,559 | )      |                  |     |               |  |               |           |  |        | (25,374   | ) |  |     |  
|                              |  |                    |         |               |   |         |        |                  |     |               |  |               |           |  |        |           |   |  |     |  
|                              |  |                    |         |               |   | 13,535  |        |                  |     |               |  |               |           |  |        | 27,655    |   |  |     |  
|                              |  |                    |         |               |   |         |        |                  |     |               |  |               |           |  |        |           |   |  |     |  
|                              |  | $                  | 795,350 |               | $ | 770,916 |        |                  | 3.2 | %             |  | $             | 1,504,578 |  | $      | 1,476,407 |   |  | 1.9 | %
|                              |  |                    |         |               |   |         |        |                  |     |               |  |               |           |  |        |           |   |  |     |  

Net sales for the three months ended June 29, 2007 and 2007 year-to-date sales were impacted
by our decision to withdraw from a majority of the service-oriented laundry and ware washing business in the United States, which we announced in March 2006. Excluding this impact as well as the impact of foreign currency exchange rates, and
acquisitions and divestitures, the growth rate was 4.4% and 4.1% for the second quarter and the first six months of 2006, respectively. Outside of North America and Japan, we continue to show net sales growth in Europe, Latin America, and Asia
Pacific driven primarily by increased sales volume, selective price increases in certain business sectors and global geographic areas, and the continued expansion of developing markets in Asia Pacific, Latin America, Central and Eastern Europe,
Africa and the Middle East.

Although our gross profit percentage declined by 100 basis points compared to the second quarter of 2006, it
improved by 50 basis points for the second quarter of 2007 compared to the first quarter of 2007 and 160 basis points compared to the fourth quarter of 2006. This was due to stabilization of raw materials prices, in part reflecting early success
from our Global Strategic Sourcing Initiative, and the favorable impact of our cost reduction programs. Our gross profit percentages for the five most recent fiscal quarters are set forth below:



|                   |  |                |  |                   |  |                    |  |              
|------------------ |  | -------------- |  | ----------------- |  | ------------------ |  | -------------
|Three Months
Ended
|June 29, 2007      |  | March 30, 2007 |  | December 29, 2006 |  | September 29, 2006 |  | June 30, 2006
|42.2%              |  | 41.7%          |  | 40.6%             |  | 42.3%              |  | 43.2%        
|                   |  |                |  |                   |  |                    |  |              



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##### Table of Contents

In November 2005, in response to structural changes in raw material markets that gave rise to significant
increases in our input costs, we announced a program (November 2005 Plan) to implement an operational restructuring of our Company. The program also considers the potential divestiture of, or exit from, certain non-core or
underperforming businesses.

During the second fiscal quarter of 2007, we continued to make significant progress with the operational
restructuring of our Company in accordance with the November 2005 Plan. In particular, activity of significance during the quarter was:



| |  |  | substantially completed the outsourcing of all IT support functions in Europe;
| | - |  | ------------------------------------------------------------------------------



| |  |  | successfully completed the closure and sale of our warehouse and other related assets in Polinya (Barcelona), Spain, resulting in a gain of $4.2 million;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | transitioned certain finance activities in Western Europe to a third party provider, and globally, began transitioning payroll and human resource information
systems to new providers;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | began consolidation of our North American warehouse operations; and
| | - |  | -------------------------------------------------------------------



| |  |  | continued progress on various supply chain optimization projects to improve capacity utilization and efficiency.
| | - |  | ----------------------------------------------------------------------------------------------------------------

In connection with the aforementioned and other activities under the November 2005 Plan, we recorded restructuring charges of approximately $4.2 million
and $6.4 million, which consisted primarily of severance costs, in the three and six months ended June 29, 2007. In addition, we recorded additional selling, general and administrative costs of approximately $17.7 million and $44.4 million in
the three and six months ended June 29, 2007, respectively. These costs consist primarily of $5.5 million related to human resource project costs, $1.9 million related to IT costs, $2.9 million related to supply chain costs, and $1.7 million
related to consulting services for the three months ended June 29, 2007, and $11.1 million related to human resource costs, $9.6 million related to IT costs, $3.1 million related to supply chain costs, and $6.9 million related to consulting
services for the six months ended June 29, 2007.

Critical Accounting Policies

The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results may differ from these
estimates under different assumptions or conditions. We believe the accounting policies that are most critical to our financial condition and results of operations and that involve managements judgment and/or evaluation of inherent uncertain
factors are as follows:

Revenue Recognition. We recognize revenue on product sales when risk of loss and title to the product is
transferred to the customer. We record an estimated reduction to revenue for customer discount programs and incentive offerings, including allowances and other volume-based incentives. If market conditions were to decline, we may take actions to
increase customer incentive offerings, possibly resulting in a reduction of gross profit margins in the period during which the incentive is offered. Revenues are reflected in the consolidated statement of operations net of taxes collected from
customers and remitted to governmental authorities.

In arriving at net sales, we estimate the amounts of sales deductions likely to be
earned by customers in conjunction with incentive programs such as volume rebates and other discounts. Such estimates are based on written agreements and historical trends and are reviewed periodically for possible revision based on changes in facts
and circumstances.



18



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##### Table of Contents

Estimating Reserves and Allowances. We estimate inventory reserves based on periodic reviews of
our inventory balances to identify slow-moving or obsolete items. This determination is based on a number of factors, including new product introductions, changes in customer demand patterns, product life cycle, and historic usage trends.

We estimate the allowance for doubtful accounts by analyzing accounts receivable balances by age, applying historical trend rates,
analyzing market conditions and specifically reserving for identified customer balances, based on known facts, which are deemed probable as uncollectible. For larger accounts greater than 90 days past due, an allowance for doubtful accounts is
recorded based on the customers ability and likelihood to pay and based on managements review of the facts and circumstances. For other customers, we recognize an allowance based on the length of time the receivable is past due based on
historical experience.

We accrue for losses associated with litigation and environmental claims based on managements best estimate
of future costs when such losses are probable and reasonably able to be estimated. We record those costs based on what management believes is the most probable amount of the liability within the ranges or, where no amount within the range is a
better estimate of the potential liability, at the minimum amount within the range. The accruals are adjusted as further information becomes available or circumstances change.

Pension and Post-Retirement Benefits. We sponsor pension and post-retirement plans in various countries, including the United States, which are
separately funded. Several statistical and judgmental factors, which attempt to anticipate future events, are used in calculating the expense and liability related to the plans. These factors include assumptions about the discount rate, expected
return on plan assets, rate of future compensation increases and healthcare cost trends, as determined by us and our actuaries. In addition, our actuarial consultants also use subjective factors, such as withdrawal and mortality rates, to estimate
these factors. The actuarial assumptions used by us may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, longer or shorter life spans of participants and changes in actual costs
of healthcare. Actual results may significantly affect the amount of pension and other post-retirement benefit expenses recorded by us.

Goodwill and Long-Lived Assets. We periodically review long-lived assets, including non-amortizing intangible assets and goodwill, for impairment and assess whether significant events or changes in business
circumstances indicate that the carrying value of the assets may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the anticipated future undiscounted cash flows expected to result from the use of the
asset and its eventual disposition. The amount of the impairment loss to be recorded, if any, is calculated by the excess of the assets carrying value over its estimated fair value. We also periodically reassess the estimated remaining useful
lives of our amortizing intangible assets and our other long-lived assets. Changes to estimated useful lives would impact the amount of depreciation and amortization expense recorded in our consolidated financial statements. We annually complete an
impairment analysis of goodwill and non-amortizing intangible assets. Moreover, where indicators of impairment are identified for long-lived assets, we prepare a future undiscounted cash flow analysis, determine any impairment impact and record, if
necessary, a reduction in the affected asset(s). We recorded impairment charges on certain intangible assets and long-lived assets of $3.4 million and $41.6 million, during the six-month periods ended June 29, 2007, and June 30, 2006,
respectively, in connection with the November 2005 Plan.

New Accounting Pronouncements

In January 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities  Including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 is intended to improve financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. It also establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. The statement does not affect any existing accounting literature that requires certain assets and liabilities to be carried at
fair value, and it does not establish requirements for recognizing dividend income, interest income or interest expense. It also does not eliminate disclosure requirements included in other accounting standards. The provisions of SFAS 159 are
effective for the fiscal year beginning after November 15, 2007, which for us is our fiscal year 2008. We are currently evaluating the impact of the provisions of SFAS No. 159.



19



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##### Table of Contents

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans (SFAS No. 158), an amendment of FASB Statements No. 87, 88, 106, and 132 (R). SFAS No. 158 requires an employer to recognize the over-funded or under-funded status
of a defined benefit postretirement plan as an asset or liability in its consolidated balance sheets and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS No. 158 also requires
the measurement of defined benefit plan assets and obligations as of the date of the employers fiscal year-end consolidated balance sheets (with limited exceptions). Under SFAS No. 158, we will also recognize the funded status of its
defined benefit postretirement plans and provide required disclosures as of December 28, 2007, at the end of its fiscal year 2007. The requirement to measure plan assets and benefit obligations as of the date of the employers fiscal
year-end consolidated balance sheets will be effective in fiscal year 2008. If we had adopted SFAS No. 158 at December 29, 2006, it would have recorded an increase in pension and post-retirement benefit liabilities of approximately $67.3
million, substantially all of which would be offset to accumulated other comprehensive income. However, this impact could change materially as of December 28, 2007, due to changes in the discount rates used to measure plan obligations, the
actual returns on plan assets, and other factors.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value
measurements. The provisions of SFAS 157 are effective for the fiscal year beginning after November 15, 2007, which for us is our fiscal year 2008. We are currently evaluating the impact of the provisions of SFAS No. 157.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB
Statement No. 109 (FIN No. 48), which clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with SFAS No. 109, Accounting for
Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We adopted FIN
No. 48 beginning in fiscal year 2007. See Note 9 (Income Taxes) to our consolidated financial statements, included elsewhere in this report, for further discussion.

Three Months Ended June 29, 2007 Compared to Three Months Ended June 30, 2006

Net Sales:



|                              |  |                    |         |               |   |         |  |   |            |   |  |      |  
|----------------------------- |  | ------------------ | ------- | ------------- | - | ------- |  | - | ---------- | - |  | ---- | -
|                              |  | Three Months Ended |         | Change        |  
|(dollars in thousands)        |  | June 29, 2007      |         | June 30, 2006 |   | Amount  |  |   | Percentage |  
|Net product and service sales |  | $                  | 773,062 |               | $ | 735,052 |  | $ | 38,010     |   |  | 5.2  | %
|Sales agency fee income       |  |                    | 22,288  |               |   | 22,329  |  |   | (41        | ) |  | -0.2 | %
|                              |  |                    |         |               |   |         |  |   |            |   |  |      |  
|                              |  | $                  | 795,350 |               | $ | 757,381 |  |   | 37,969     |   |  | 5.0  | %
|                              |  |                    |         |               |   |         |  |   |            |   |  |      |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies contributed $25.6 million to the increase in net product and service sales.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, acquisitions and divestitures, and sales agency fee income, net sales increased by 3.2% for the three
months ended June 29, 2007 compared to the same period in the prior year, primarily due to strong growth in our European, Latin America, and Asia Pacific regions where growth rates were 6% or higher. These gains were partially offset by
declining sales in Japan and North America.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Europe, which includes our African and Middle Eastern markets, net sales increased 6.2% in the second quarter compared to the same period in the prior year. This
growth was primarily due to continued higher sales volumes throughout most of the countries in our European region.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | In Latin America, net sales increased 6.3% in the second quarter of 2007 compared to the same period in the prior year, primarily due to continued strong sales
growth from a combination of higher sales volume and price increases, particularly in Brazil and Argentina, with growth from the food and beverage business and indirect channels as well as the retail and food service sectors.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Asia Pacific, net sales increased 11.5% in the second quarter of 2007 compared to the same period in the prior year, led by continued strong sales volume growth
in China and India in the building service contractor, food and beverage, lodging, retail, and quick-service restaurant sectors.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Japan, net sales decreased 2.0% in the second quarter of 2007 compared to the same period in the prior year, primarily due to the continuing effects of changing
from direct selling to a joint venture for sales and distribution to select food service customers in the Tokyo and Osaka metropolitan markets, a decline in the consumption of floor care products, and decreased equipment and lubricant sales.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In North America, net sales decreased 2.1% in the second quarter of 2007 compared to the same period in the prior year. This sales decline reflects the impact of
our withdrawal from a majority of the service-oriented laundry and ware washing business in the United States. Excluding the impact of the withdrawal from the service-oriented laundry and ware washing business, and divestitures of other non-core
businesses, our North American sales increased 2.5%, reversing the declining sales trend experienced earlier in the year from the high volume sales to distributors in December 2006.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding a $1.5 million increase from the weakening of the U.S. dollar against the euro and certain other foreign currencies, net sales under our sales agency
agreement with Unilever decreased by $1.6 million, or 6.5%, for the three month period ended June 29, 2007 compared to the same period in the prior year. The sales agency agreement with Unilever expired in May 2007; however, we are currently in
discussions with Unilever to replace this arrangement, which has been extended to provide adequate time to finalize the new arrangement.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit:



|                                           |  |                    |         |   |               |   |         |        |  |            |       |  |     |  
|------------------------------------------ |  | ------------------ | ------- | - | ------------- | - | ------- | ------ |  | ---------- | ----- |  | --- | -
|                                           |  | Three Months Ended |         |   | Change        |  
|(dollars in thousands)                     |  | June 29, 2007      |         |   | June 30, 2006 |   |         | Amount |  | Percentage |      
|Gross Profit                               |  | $                  | 335,272 |   |               | $ | 327,060 |        |  | $          | 8,212 |  | 2.5 | %
|                                           |  |                    |         |  
|Gross profit as a percentage of net sales: |  |                    | 42.2    | % |               |   | 43.2    | %      |  |            |       |  |     |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies increased gross profit by $12.1 million for the three months ended
June 29, 2007 compared to the same period in the prior year.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, gross profit in the second quarter of fiscal year 2007 compared to the second quarter of fiscal year 2006
decreased $3.9 million due to the sales decline in North America as mentioned above. In addition the impact of incremental sales volumes in the Europe, Latin America, and Asia Pacific was neutralized by an unfavorable sales mix effect, primarily in
Europe, North America, and Japan.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage declined by 100 basis points for the second quarter of 2007 compared to the second quarter of 2006, primarily due to the sales decline
in North America and the impact of the unfavorable sales mix.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



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##### Table of Contents

Operating Expenses:



|                                             |  |                    |         |   |               |   |         |        |  |   |            |   |  |       |  
|-------------------------------------------- |  | ------------------ | ------- | - | ------------- | - | ------- | ------ |  | - | ---------- | - |  | ----- | -
|                                             |  | Three Months Ended |         |   | Change        |  
|(dollars in thousands)                       |  | June 29, 2007      |         |   | June 30, 2006 |   |         | Amount |  |   | Percentage |  
|Selling, general and administrative expenses |  | $                  | 282,298 |   |               | $ | 282,791 |        |  | $ | (493       | ) |  | -0.2  | %
|Research and development expenses            |  |                    | 16,662  |   |               |   | 14,967  |        |  |   | 1,695      |   |  | 11.3  | %
|Restructuring expenses                       |  |                    | 4,198   |   |               |   | 34,853  |        |  |   | (30,655    | ) |  | -88.0 | %
|                                             |  |                    |         |   |               |   |         |        |  |   |            |   |  |       |  
|                                             |  | $                  | 303,158 |   |               | $ | 332,611 |        |  | $ | (29,453    | ) |  | -8.9  | %
|                                             |  |                    |         |   |               |   |         |        |  |   |            |   |  |       |  
|As a percentage of net sales:                |  |                    |         |   |               |   |         |        |  |   |            |   |  |       |  
|Selling, general and administrative expenses |  |                    | 35.5    | % |               |   | 37.3    | %      |  |   |            |   |  |       |  
|Research and development expenses            |  |                    | 2.1     | % |               |   | 2.0     | %      |  |   |            |   |  |       |  
|Restructuring expenses                       |  |                    | 0.5     | % |               |   | 4.6     | %      |  |   |            |   |  |       |  
|                                             |  |                    |         |   |               |   |         |        |  |   |            |   |  |       |  
|                                             |  |                    | 38.1    | % |               |   | 43.9    | %      |  |   |            |   |  |       |  
|                                             |  |                    |         |   |               |   |         |        |  |   |            |   |  |       |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies increased operating expenses by $6.6 million in the three months ended
June 29, 2007 compared to the same period in the prior year.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding costs associated with the November 2005 Plan, selling, general, and administrative costs, as a percentage of net sales were 33.3% in the three months
ended June 29, 2007 compared to 34.8% for the prior year period. Excluding the impact of foreign currency and costs associated with our restructuring programs under the November 2005 Plan, selling, general and administrative costs declined $3.5
million during the second quarter of 2007 compared to the prior year period. This reflects progress from our November 2005 Plan, which primarily affects our North American and European business segments.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, research and development expenses increased $1.4 million during the second quarter of 2007 compared to the
prior year period.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, restructuring expenses declined $32.2 million during the second quarter of 2007 compared to the prior year
period, primarily due to decreased employee severance and other expenses related to the November 2005 Plan.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Restructuring and
Integration:

A summary of all costs associated with the November 2005 Plan for the three months ended June 29, 2007 and
June 30, 2006, and since inception of the program in November 2005, is outlined below:



|                                                                        |  |                                 |         |   |                                 |   |         |                                    |  |   |         |  
|----------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------- | - | ------- | ---------------------------------- |  | - | ------- | -
|(dollars in thousands)                                                  |  | Three Months EndedJune 29, 2007 |         |   | Three Months EndedJune 30, 2006 |   |         | Total Project to DateJune 29, 2007 | 
|Reserve balance at beginning of period                                  |  | $                               | 58,707  |   |                                 | $ | 42,227  |                                    |  | $ |        |  
|Restructuring costs charged to income                                   |  |                                 | 4,216   |   |                                 |   | 34,854  |                                    |  |   | 125,689 |  
|Liability adjustments                                                   |  |                                 | (18     | ) |                                 |   |        |                                    |  |   | 313     |  
|Payments of accrued costs                                               |  |                                 | (14,637 | ) |                                 |   | (15,876 | )                                  |  |   | (77,734 | )
|                                                                        |  |                                 |         |   |                                 |   |         |                                    |  |   |         |  
|Reserve balance at end of period                                        |  | $                               | 48,268  |   |                                 | $ | 61,205  |                                    |  | $ | 48,268  |  
|                                                                        |  |                                 |         |   |                                 |   |         |                                    |  |   |         |  
|Period costs classified as selling, general and administrative expenses |  | $                               | 17,749  |   |                                 | $ | 19,508  |                                    |  | $ | 181,880 |  
|Period costs classified as cost of sales                                |  |                                 | 859     |   |                                 |   |        |                                    |  |   | 5,551   |  
|Capital expenditures                                                    |  |                                 | 6,104   |   |                                 |   | 2,276   |                                    |  |   | 28,696  |  



| |  |  | During the second quarter of 2007, we recorded $4.2 million of restructuring costs related to our November 2005 Plan in our consolidated statements of operations.
These costs consisted primarily of involuntary termination and other costs incurred throughout North America and Europe. In addition, the Company recorded $17.7 million of selling, general and administrative expenses and $0.9 for cost of sales in
the second quarter of 2007. Collectively, these costs consist of $2.3 million related to long-lived asset impairment primarily at the Corporate Center, $0.5 million related to other tangible
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| | related non-cash items primarily for North America, and $15.8 million related to other period costs associated with restructuring activities mainly at the
Corporate Center, including $5.5 million related to human resource project costs, $1.9 million related to IT costs, $2.9 million related to supply chain costs, and $1.7 million related to consulting services for the second quarter of 2007.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In 2002 and in connection with the acquisition of the DiverseyLever business, the Company also recorded liabilities for the involuntary termination of former
DiverseyLever employees and other exit costs associated with former DiverseyLever facilities. During the second quarter of 2007, the Company paid cash of $0.3 million representing contractual obligations associated with involuntary terminations and
lease payments on closed facilities. The restructuring reserve balance associated with the exit plans and the Companys acquisition-related restructuring plans was $2.2 million as of June 29, 2007.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-Operating Results:



|                       |  |                    |        |   |               |   |        |        |  |   |            |   |  |       |  
|---------------------- |  | ------------------ | ------ | - | ------------- | - | ------ | ------ |  | - | ---------- | - |  | ----- | -
|                       |  | Three Months Ended |        |   | Change        |  
|(dollars in thousands) |  | June 29, 2007      |        |   | June 30, 2006 |   |        | Amount |  |   | Percentage |  
|Interest expense       |  | $                  | 37,197 |   |               | $ | 44,783 |        |  | $ | (7,586     | ) |  | -16.9 | %
|Interest income        |  |                    | (2,013 | ) |               |   | (3,136 | )      |  |   | 1,123      |   |  | -35.8 | %
|                       |  |                    |        |   |               |   |        |        |  |   |            |   |  |       |  
|Net interest expense   |  | $                  | 35,184 |   |               | $ | 41,647 |        |  | $ | (6,463     | ) |  | -15.5 | %
|                       |  |                    |        |  
|Other expense, net     |  |                    | 705    |   |               |   | 342    |        |  |   | 363        |   |  |       |  



| |  |  | Net interest expense decreased in the second quarter of 2007 compared to the prior year period primarily due to lower average debt balances during the quarter. The
lower debt balances resulted from the June 2006 repayment of $420.0 million of term debt using the proceeds from the sale of the Polymer Business, partially offset by the drawing of the $100.0 million delayed draw term loan in July of 2006.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Income Taxes:



|                                                                                                               |  |                    |        |   |               |   |         |        |  |            |        |  |        |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ------------- | - | ------- | ------ |  | ---------- | ------ |  | ------ | -
|                                                                                                               |  | Three Months Ended |        |   | Change        |  
|(dollars in thousands)                                                                                         |  | June 29, 2007      |        |   | June 30, 2006 |   |         | Amount |  | Percentage |       
|Loss from continuing operations, including minority interests, before income taxes and discontinued operations |  | $                  | (3,775 | ) |               | $ | (47,543 | )      |  | $          | 43,768 |  | -92.1  | %
|Provision (benefit) for income taxes                                                                           |  |                    | 27,014 |   |               |   | (51,445 | )      |  |            | 78,459 |  | -152.5 | %
|                                                                                                               |  |                    |        |  
|Effective income tax rate                                                                                      |  |                    | -715.6 | % |               |   | 108.2   | %      |  |            |        |  |        |  



| |  |  | We reported an effective income tax rate of -715.6% on the pre-tax loss from continuing operations for the three month period ended June 29, 2007. The high
effective income tax rate is primarily the result of increased valuation allowances against deferred tax assets for U.S. and international tax loss and credit carryforwards and increased valuation allowances against other net deferred tax assets.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We reported an effective income tax rate of 108.2% on the pre-tax loss from continuing operations for the three month period ended June 30, 2006. The high
effective income tax rate on pre-tax loss is favorable, and is primarily the result of the Company claiming income tax benefit for a portion of year-to-date pre-tax losses to offset the gain on the sale of the Polymer Business segment. The income
tax benefit for the three month period ended June 30, 2006 was partially offset by increased valuation allowances against tax loss carryforwards from international operations and increased valuation allowance against U.S. net deferred tax
assets. The increase in the valuation allowance associated with the U.S. net deferred tax assets results from temporary differences that are currently deductible for book purposes, but will be deductible for tax purposes in the future.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Net Income:

Our net income decreased by $271.0 million, to a net loss of $30.9 million for the second quarter of 2007 compared to income of $240.1 million for the second quarter of 2006, primarily due to the divestiture of the Polymer Business in June
2006, which increased income by $235.9 million (net of tax) in the second quarter of 2006, and an increase in the income tax provision of $78.5 million in the second quarter of 2007 compared to the same period in the prior year. This was offset by a
decrease of $31.6 million in restructuring costs and other period costs associated with the November 2005 Plan in the second quarter of 2007, controlled selling, general and administrative spending (excluding restructuring costs), and a decrease of
net interest expense of $6.5 million.

EBITDA:

EBITDA is a non-U.S. GAAP financial measure, and you should not consider EBITDA as an alternative to U.S. GAAP financial measures such as (a) operating profit or net profit as a measure of our operating performance or (b) cash
flows provided by operating, investing and financing activities (as determined in accordance with U.S. GAAP) as a measure of our ability to meet cash needs.

We believe that, in addition to cash flows from operating activities, EBITDA is a useful financial measurement for assessing liquidity as it provides management, investors, lenders and financial analysts with an
additional basis to evaluate our ability to incur and service debt and to fund capital expenditures. In addition, various covenants under our senior secured credit facilities are based on EBITDA, as adjusted pursuant to the provisions of those
facilities.

In evaluating EBITDA, management considers, among other things, the amount by which EBITDA exceeds interest costs for the
period, how EBITDA compares to principal repayments on outstanding debt for the period and how EBITDA compares to capital expenditures for the period. Management believes many investors, lenders and financial analysts evaluate EBITDA for similar
purposes. To evaluate EBITDA, the components of EBITDA, such as net sales and operating expenses and the variability of such components over time, should also be considered.

Accordingly, we believe that the inclusion of EBITDA in this report permits a more comprehensive analysis of our liquidity relative to other companies
and our ability to service debt requirements. Because all companies do not calculate EBITDA identically, the presentation of EBITDA in this report may not be comparable to similarly titled measures of other companies.

EBITDA should not be construed as a substitute for, and should be considered together with, net cash flows provided by operating activities as determined
in accordance with U.S. GAAP. The following table reconciles EBITDA to net cash flows provided by operating activities, which is the U.S. GAAP measure most comparable to EBITDA for the three months ended June 29, 2007 and June 30, 2006.



24



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|                                                                                                             |  |                    |         |   |               |   |         |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------- | - | ------------- | - | ------- | -
|                                                                                                             |  | Three Months Ended |        
|(dollars in thousands)                                                                                       |  | June 29, 2007      |         |   | June 30, 2006 |  
|Net cash flows used in operating activities                                                                  |  | $                  | (27,213 | ) |               | $ | (36,618 | )
|Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses |  |                    | 63,663  |   |               |   | 99,465  |  
|Changes in deferred income taxes                                                                             |  |                    | (13,648 | ) |               |   | 2,489   |  
|Gain from divestitures                                                                                       |  |                    | 409     |   |               |   | 225,447 |  
|Gain (loss) on property disposals                                                                            |  |                    | 2,555   |   |               |   | (20     | )
|Depreciation and amortization expense                                                                        |  |                    | (38,607 | ) |               |   | (39,478 | )
|Amortization of debt issuance costs                                                                          |  |                    | (1,309  | ) |               |   | (1,690  | )
|Interest accreted on notes payable                                                                           |  |                    | (11,528 | ) |               |   | (10,396 | )
|Interest accrued on long-term receivables-related parties                                                    |  |                    | 642     |   |               |   | 612     |  
|Other                                                                                                        |  |                    | (5,863  | ) |               |   | 242     |  
|                                                                                                             |  |                    |         |   |               |   |         |  
|Net income                                                                                                   |  |                    | (30,899 | ) |               |   | 240,053 |  
|                                                                                                             |  |                   
|Minority interests in net income of subsidiaries                                                             |  |                    |        |   |               |   | 3       |  
|Provision for income taxes                                                                                   |  |                    | 26,940  |   |               |   | 74,234  |  
|Interest expense, net                                                                                        |  |                    | 35,184  |   |               |   | 41,647  |  
|Depreciation and amortization expense                                                                        |  |                    | 38,607  |   |               |   | 39,478  |  
|                                                                                                             |  |                    |         |   |               |   |         |  
|EBITDA                                                                                                       |  | $                  | 69,832  |   |               | $ | 395,415 |  
|                                                                                                             |  |                    |         |   |               |   |         |  

EBITDA decreased by $325.6 million for the quarter ended June 29, 2007 as compared to the
prior year second quarter, primarily due to the divestiture of the Polymer Business in June 2006, which increased EBITDA by $352.9 million for the quarter ended June 30, 2006. This was offset by a $33.1 million decrease in restructuring costs
and period costs included in selling, general and administrative costs related to our November 2005 Plan for the quarter ended June 29, 2007.

Six
Months Ended June 29, 2007 Compared to Six Months Ended June 30, 2006

Net Sales:



|                              |  |                  |           |               |   |           |  |            |        |  |     |  
|----------------------------- |  | ---------------- | --------- | ------------- | - | --------- |  | ---------- | ------ |  | --- | -
|                              |  | Six Months Ended |           | Change        |  
|(dollars in thousands)        |  | June 29, 2007    |           | June 30, 2006 |   | Amount    |  | Percentage |       
|Net product and service sales |  | $                | 1,459,903 |               | $ | 1,405,138 |  | $          | 54,765 |  | 3.9 | %
|Sales agency fee income       |  |                  | 44,675    |               |   | 43,614    |  |            | 1,061  |  | 2.4 | %
|                              |  |                  |           |               |   |           |  |            |        |  |     |  
|                              |  | $                | 1,504,578 |               | $ | 1,448,752 |  | $          | 55,826 |  | 3.9 | %
|                              |  |                  |           |               |   |           |  |            |        |  |     |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies contributed $50.1 million to the increase in net product and service sales.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, acquisitions and divestitures, and sales agency fee income, net sales increased by 1.9% compared to the
same period in the prior year, primarily due to strong growth in our European, Latin America, and Asia Pacific regions where growth rates were 6% or higher. These gains were partially offset by declining sales in Japan and North America.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Europe, which includes our African and Middle Eastern markets, net sales increased 6.0% in the first six months of 2007 compared to the same period in the prior
year. This growth was primarily due to higher sales volumes throughout most of the countries in our European region.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Latin America, net sales increased 6.9% in the first six months of 2007 compared to the same period in the prior year, driven by a combination of higher sales
volume and price increases, particularly in Brazil and Argentina, with growth from the food and beverage business and indirect channels as well as the retail and food service sectors.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | In Asia Pacific, net sales increased 9.7% in the first six months of 2007 compared to the same period in the prior year, led by strong sales volume growth in China
and India in the building service contractor, food and beverage, lodging, retail, and quick-service restaurant sectors.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Japan, net sales decreased 1.5% in the first six months of 2007 compared to the same period in the prior year, primarily as a result of a change from direct
selling to a joint venture for sales and distribution to select food service customers in the Tokyo and Osaka metropolitan markets, a decline in the consumption of floor care products, and decreased equipment and lubricant sales.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In North America, net sales decreased 6.4% in the first six months of 2007 compared to the same period in the prior year. This sales decline reflects the impact of
our withdrawal from a majority of the service-oriented laundry and ware washing business in the United States. Excluding the impact of the withdrawal from the service-oriented laundry and ware washing business, and divestitures of other non-core
businesses, our North American sales increased 1.6%, reversing the declining sales trend experienced earlier in the year from the high volume sales to distributors in December 2006.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding a $3.0 million increase from the weakening of the U.S. dollar against the euro and certain other foreign currencies, net sales under our sales agency
agreement with Unilever decreased by $1.9 million, or 4.1%, during the first six months of 2007 compared to the same period in the prior year. The sales agency agreement with Unilever expired in May 2007; however, we are currently in discussions
with Unilever to replace this arrangement, which has been extended to provide adequate time to finalize the new arrangement.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross
Profit:



|                                           |  |                  |         |   |               |   |         |        |  |            |        |  |     |  
|------------------------------------------ |  | ---------------- | ------- | - | ------------- | - | ------- | ------ |  | ---------- | ------ |  | --- | -
|                                           |  | Six Months Ended |         |   | Change        |  
|(dollars in thousands)                     |  | June 29, 2007    |         |   | June 30, 2006 |   |         | Amount |  | Percentage |       
|Gross Profit                               |  | $                | 631,060 |   |               | $ | 611,476 |        |  | $          | 19,584 |  | 3.2 | %
|                                           |  |                  |         |  
|Gross profit as a percentage of net sales: |  |                  | 41.9    | % |               |   | 42.2    | %      |  |            |        |  |     |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies increased gross profit by $23.5 million for the six months ended
June 29, 2007 compared to the same period in the prior year.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, gross profit for the first six months of 2007 compared to the same period in 2006 decreased $3.9 million
due to the sales decline in North America as mentioned above. In addition the impact of incremental sales volumes in the Europe, Latin America, and Asia Pacific was neutralized by an unfavorable sales mix effect, primarily in Europe, North America,
and Japan.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage for the first six months of 2007 was largely in line with the same period in 2006, due to stabilization of raw materials prices, in part
reflecting early success from our Global Strategic Sourcing Initiative, and the favorable impact of our cost reduction programs. In combination with further, selective price increases, these favorable factors partially offset the sales decline in
North America and the impact of the unfavorable sales mix.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26



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##### Table of Contents

Operating Expenses:



|                                             |  |                  |         |   |               |   |         |        |  |   |            |   |  |       |  
|-------------------------------------------- |  | ---------------- | ------- | - | ------------- | - | ------- | ------ |  | - | ---------- | - |  | ----- | -
|                                             |  | Six Months Ended |         |   | Change        |  
|(dollars in thousands)                       |  | June 29, 2007    |         |   | June 30, 2006 |   |         | Amount |  |   | Percentage |  
|Selling, general and administrative expenses |  | $                | 560,596 |   |               | $ | 593,893 |        |  | $ | (33,297    | ) |  | -5.6  | %
|Research and development expenses            |  |                  | 32,505  |   |               |   | 29,342  |        |  |   | 3,163      |   |  | 10.8  | %
|Restructuring expenses                       |  |                  | 6,319   |   |               |   | 77,683  |        |  |   | (71,364    | ) |  | -91.9 | %
|                                             |  |                  |         |   |               |   |         |        |  |   |            |   |  |       |  
|                                             |  | $                | 599,420 |   |               | $ | 700,918 |        |  | $ | (101,498   | ) |  | -14.5 | %
|                                             |  |                  |         |   |               |   |         |        |  |   |            |   |  |       |  
|As a percentage of net sales:                |  |                  |         |   |               |   |         |        |  |   |            |   |  |       |  
|Selling, general and administrative expenses |  |                  | 37.3    | % |               |   | 41.0    | %      |  |   |            |   |  |       |  
|Research and development expenses            |  |                  | 2.2     | % |               |   | 2.0     | %      |  |   |            |   |  |       |  
|Restructuring expenses                       |  |                  | 0.4     | % |               |   | 5.4     | %      |  |   |            |   |  |       |  
|                                             |  |                  |         |   |               |   |         |        |  |   |            |   |  |       |  
|                                             |  |                  | 39.9    | % |               |   | 48.4    | %      |  |   |            |   |  |       |  
|                                             |  |                  |         |   |               |   |         |        |  |   |            |   |  |       |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies increased operating expenses by $17.6 million in the six months ended
June 29, 2007 compared to the same period in the prior year.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding costs associated with the November 2005 Plan, selling, general, and administrative costs, as a percentage of net sales were 34.3% in the six months ended
June 29, 2007 compared to 35.7% for the prior year period. Excluding the impact of foreign currency and costs associated with our restructuring programs under the November 2005 Plan, selling, general and administrative costs declined $14.9
million during the second quarter of 2007 compared to the prior year period. This reflects progress from our November 2005 Plan, which primarily affects our North American and European business segments.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, research and development expenses increased $2.5 million during the second quarter of 2007 compared to the
prior year period.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, restructuring expenses declined $73.9 million during the second quarter of 2007 compared to the prior year
period, primarily due to decreased employee severance and other expenses related to the November 2005 Plan.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Restructuring and
Integration:

A summary of all costs associated with the November 2005 Plan for the six months ended June 29, 2007 and
June 30, 2006, and since inception of the program in November 2005, is outlined below:



|                                                                        |  |                                |         |   |                               |   |         |                                    |  |   |         |  
|----------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ----------------------------- | - | ------- | ---------------------------------- |  | - | ------- | -
|(dollars in thousands)                                                  |  | Six Months Ended June 29, 2007 |         |   | Six Months EndedJune 30, 2006 |   |         | Total Project to DateJune 29, 2007 | 
|Reserve balance at beginning of period                                  |  | $                              | 70,225  |   |                               | $ | 2,347   |                                    |  | $ |        |  
|Restructuring costs charged to income                                   |  |                                | 6,393   |   |                               |   | 77,684  |                                    |  |   | 125,689 |  
|Liability adjustments                                                   |  |                                | (70     | ) |                               |   |        |                                    |  |   | 313     |  
|Payments of accrued costs                                               |  |                                | (28,280 | ) |                               |   | (18,826 | )                                  |  |   | (77,734 | )
|                                                                        |  |                                |         |   |                               |   |         |                                    |  |   |         |  
|Reserve balance at end of period                                        |  | $                              | 48,268  |   |                               | $ | 61,205  |                                    |  | $ | 48,268  |  
|                                                                        |  |                                |         |   |                               |   |         |                                    |  |   |         |  
|Period costs classified as selling, general and administrative expenses |  | $                              | 44,352  |   |                               | $ | 77,146  |                                    |  | $ | 181,880 |  
|Period costs classified as cost of sales                                |  |                                | 1,237   |   |                               |   |        |                                    |  |   | 5,551   |  
|Capital expenditures                                                    |  |                                | 9,782   |   |                               |   | 4,407   |                                    |  |   | 28,696  |  



| |  |  | During the six months of 2007, we recorded $6.4 million of restructuring costs related to our November 2005 Plan in our consolidated statements of operations. These
costs consisted primarily of involuntary termination and other costs incurred throughout North America and Europe. In addition, the Company recorded $44.4 million of selling, general and administrative expenses and $1.2 million for costs of sales in
the first six months of 2007. Collectively, these costs consist
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27



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##### Table of Contents

| | of $3.4 million related to long-lived asset impairment primarily at the Corporate Center, $2.4 million related to other tangible related non-cash items for
our North American and European regions, and $39.8 million related to other period costs associated with restructuring activities mainly at the Corporate Center, including $11.1 million related to human resource costs, $9.6 million related to IT
costs, $3.1 million related to supply chain costs, and $6.9 million related to consulting services for the six months ended June 29, 2007.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In connection with the acquisition of the DiverseyLever business, the Company also recorded liabilities for the involuntary termination of former DiverseyLever
employees and other exit costs associated with former DiverseyLever facilities. During the first six months of 2007, the Company paid cash of $0.5 million representing contractual obligations associated with involuntary terminations and lease
payments on closed facilities. The restructuring reserve balance associated with the exit plans and the Companys acquisition-related restructuring plans was $2.2 million as of June 29, 2007.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-Operating Results:



|                       |  |                  |        |   |               |   |        |        |  |   |            |   |  |       |  
|---------------------- |  | ---------------- | ------ | - | ------------- | - | ------ | ------ |  | - | ---------- | - |  | ----- | -
|                       |  | Six Months Ended |        |   | Change        |  
|(dollars in thousands) |  | June 29, 2007    |        |   | June 30, 2006 |   |        | Amount |  |   | Percentage |  
|Interest expense       |  | $                | 75,848 |   |               | $ | 87,934 |        |  | $ | (12,086    | ) |  | -13.7 | %
|Interest income        |  |                  | (5,448 | ) |               |   | (6,558 | )      |  |   | 1,110      |   |  | -16.9 | %
|                       |  |                  |        |   |               |   |        |        |  |   |            |   |  |       |  
|Net interest expense   |  | $                | 70,400 |   |               | $ | 81,376 |        |  | $ | (10,976    | ) |  | -13.5 | %
|                       |  |                  |        |  
|Other expense, net     |  |                  | 398    |   |               |   | 1,868  |        |  |   | (1,470     | ) |  |       |  



| |  |  | Net interest expense decreased in the first six months of 2007 compared to the prior year period primarily due to lower average debt balances during the quarter.
The lower debt balances resulted from the June 2006 repayment of $420.0 million of term debt using the proceeds from the sale of the Polymer Business, partially offset by the drawing of the $100.0 million delayed draw term loan in July of 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Income Taxes:



|                                                                                                               |  |                  |         |   |               |   |          |        |  |            |         |  |        |  
|-------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ------------- | - | -------- | ------ |  | ---------- | ------- |  | ------ | -
|                                                                                                               |  | Six Months Ended |         |   | Change        |  
|(dollars in thousands)                                                                                         |  | June 29, 2007    |         |   | June 30, 2006 |   |          | Amount |  | Percentage |        
|Loss from continuing operations, including minority interests, before income taxes and discontinued operations |  | $                | (39,158 | ) |               | $ | (172,691 | )      |  | $          | 133,533 |  | -77.3  | %
|Provision (benefit) for income taxes                                                                           |  |                  | 39,804  |   |               |   | (48,941  | )      |  |            | 88,745  |  | -181.3 | %
|                                                                                                               |  |                  |         |  
|Effective income tax rate                                                                                      |  |                  | -101.6  | % |               |   | 28.3     | %      |  |            |         |  |        |  



| |  |  | We reported an effective income tax rate of -101.6% on the pre-tax loss from continuing operations for the six month period ended June 29, 2007. The high
effective income tax rate is primarily the result of increased valuation allowances against deferred tax assets for U.S. and international tax loss and credit carryforwards and increased valuation allowances against other net deferred tax assets.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We reported an effective income tax rate of 28.3% on the pre-tax loss from continuing operations for the six month period ended June 30, 2006. The relatively
low effective income tax rate on the pre-tax loss means that the Company was not able to claim full income tax benefit for the loss recognized in the six month period, due largely to increased valuation allowances against tax loss carryforwards from
international operations and increased valuation allowance against U.S. net deferred tax assets. The increase in the valuation allowance associated with the U.S. net deferred tax assets results from temporary differences that are currently
deductible for book purposes, but will be deductible for tax purposes in the future.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



28



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##### Table of Contents

Net Income:

Our net income decreased by $196.6 million, to a net loss of $78.7 million for the first six months of 2007 compared to income of $117.9 million for the first six months of 2006, primarily due to the divestiture of the Polymer Business in
June 2006, which increased income by $235.9 million (net of tax) in 2006, and an increase in the income tax provision of $88.8 million for the first six months of 2007 compared to the same period in the prior year. This was offset by a decrease of
$102.9 million in restructuring costs and other period costs associated with the November 2005 Plan in the second quarter of 2007, controlled selling, general and administrative spending (excluding restructuring costs), and a decrease of net
interest expense of $11.1 million.

EBITDA:

The following table reconciles EBITDA to net cash flows provided by operating activities, which is the U.S. GAAP measure most comparable to EBITDA for the six months ended June 29, 2007 and June 30, 2006.



|                                                            |  |                  |         |   |               |   |          |  
|----------------------------------------------------------- |  | ---------------- | ------- | - | ------------- | - | -------- | -
|                                                            |  | Six Months Ended |        
|(dollars in thousands)                                      |  | June 29, 2007    |         |   | June 30, 2006 |  
|Net cash flows provided by operating activities             |  | $                | (69,778 | ) |               | $ | (23,106  | )
|Changes in operating assets and liabilities, net of effects |  |                  | 118,961 |   |               |   | 63,218   |  
|from acquisitions and divestitures of businesses            |  |                  |         |   |               |   |          |  
|Changes in deferred income taxes                            |  |                  | (18,305 | ) |               |   | (594     | )
|Gain (loss) from divestitures                               |  |                  | (173    | ) |               |   | 226,758  |  
|Gain on property disposals                                  |  |                  | 1,992   |   |               |   | 98       |  
|Depreciation and amortization expense                       |  |                  | (75,600 | ) |               |   | (121,787 | )
|Amortization of debt issuance costs                         |  |                  | (2,511  | ) |               |   | (3,425   | )
|Interest accreted on notes payable                          |  |                  | (22,757 | ) |               |   | (20,629  | )
|Interest accrued on long-term receivables-related parties   |  |                  | 1,276   |   |               |   | 1,217    |  
|Other                                                       |  |                  | (11,841 | ) |               |   | (3,899   | )
|                                                            |  |                  |         |   |               |   |          |  
|Net income (loss)                                           |  |                  | (78,736 | ) |               |   | 117,851  |  
|                                                            |  |                 
|Minority interests in net income of subsidiaries            |  |                  |        |   |               |   | 5        |  
|Provision for income taxes                                  |  |                  | 39,956  |   |               |   | 82,196   |  
|Interest expense, net                                       |  |                  | 70,400  |   |               |   | 81,376   |  
|Depreciation and amortization expense                       |  |                  | 75,600  |   |               |   | 121,787  |  
|                                                            |  |                  |         |   |               |   |          |  
|EBITDA                                                      |  | $                | 107,220 |   |               | $ | 403,215  |  
|                                                            |  |                  |         |   |               |   |          |  

EBITDA decreased by $296.0 million for the six months ended June 29, 2007 as compared to the
same period in the prior year, primarily due to the divestiture of the Polymer Business in June 2006, which increased EBITDA by $352.9 million for the six months ended June 30, 2006. This was partially offset by a $64.7 million decrease in
restructuring costs and period costs included in selling, general and administrative costs related to our November 2005 Plan for the six months ended June 29, 2007.



29



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##### Table of Contents

Liquidity and Capital Resources



|                                                    |  |                  |           |   |                   |   |           |        |  |   |            |   |  |        |  
|--------------------------------------------------- |  | ---------------- | --------- | - | ----------------- | - | --------- | ------ |  | - | ---------- | - |  | ------ | -
|                                                    |  | Six Months Ended |           |   | Change            |  
|(dollars in thousands)                              |  | June 29, 2007    |           |   | June 30, 2006     |   |           | Amount |  |   | Percentage |  
|Net cash used in operating activities               |  | $                | (69,778   | ) |                   | $ | (23,106   | )      |  | $ | (46,672    | ) |  | 202.0  | %
|Net cash provided by (used in) investing activities |  |                  | (37,887   | ) |                   |   | 407,568   |        |  |   | (445,455   | ) |  | -109.3 | %
|Net cash used in financing activities               |  |                  | (7,607    | ) |                   |   | (408,881  | )      |  |   | 401,274    |   |  | -98.1  | %
|Capital expenditures                                |  |                  | 45,308    |   |                   |   | 40,165    |        |  |   | 5,143      |   |  | 12.8   | %
|                                                    |  |                  |          
|                                                    |  |                  |           |   |                   |   |           | Change | 
|                                                    |  | June 29, 2007    |           |   | December 29, 2006 |   |           | Amount |  |   | Percentage |  
|Cash and cash equivalents                           |  | $                | 102,684   |   |                   | $ | 208,418   |        |  | $ | (105,734   | ) |  | -50.7  | %
|Working capital (1)                                 |  |                  | 486,529   |   |                   |   | 406,381   |        |  |   | 80,148     |   |  | 19.7   | %
|Total debt                                          |  |                  | 1,478,511 |   |                   |   | 1,456,073 |        |  |   | 22,438     |   |  | 1.5    | %

---

|(1) | Working capital is defined as net accounts receivable, plus inventories less accounts payable.
|--- | ----------------------------------------------------------------------------------------------



| |  |  | The decrease in cash and cash equivalents at June 29, 2007 compared to December 30, 2006 resulted primarily from cash used during the first six months of
2007 to fund activities related to the November 2005 Plan and capital expenditures, and a reduction of $9.1 million in the utilization of the Asset Securitization program.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in net cash used in operating activities during the six months ended June 29, 2007 compared to the prior year period was primarily due to a
greater increase in working capital (increase in accounts receivable and inventories and a decrease in accounts payable), a larger decrease in accrued expenses compared to the prior year period, and a reduction in the utilization of the Asset
Securitization program.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The decrease in net cash used in investing activities during the six months ended June 29, 2007 compared to the prior year period was primarily due to lower
proceeds from divestitures, resulting from the divestiture of the Polymer Business in the second quarter of 2006. Other than our investment in dosing and feeder equipment with new and existing customer accounts, the characteristics of our business
do not generally require us to make significant ongoing capital expenditures.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The decrease in cash flow used in financing activities during the six months ended June 29, 2007 compared to the prior year period was due to lower repayments
on long-term debt in the current year. In the second quarter of 2006, we repaid $420.0 million of obligations under our term loan B facility using a majority of the proceeds from the divestiture of the Polymer Business.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in working capital during the six months ended June 29, 2007 was due to a $30.3 million increase in inventories resulting from a seasonal build in
inventory levels and inventory builds associated with factory closure initiatives, a $44.3 million increase in accounts receivable, and a $5.6 million decrease in accounts payable.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Debt and Contractual Obligations. As a result of the DiverseyLever acquisition, we and JDI have a significant amount of indebtedness. On
May 3, 2002, in connection with the acquisition, we issued senior discount notes with a principal amount at maturity of $406.3 million to Unilever. Under the indenture for the senior discount notes, the principal amount of the senior discount
notes accretes at a rate of 10.67% per annum through May 15, 2007. After May 15, 2007, interest will accrue on the accreted value of the senior discount notes at this rate, but will be payable in cash semiannually in arrears to the
extent that JDI can distribute to Holdings the cash necessary to make the payments in accordance with the restrictions contained in the indentures for the JDI senior subordinated notes and the JDI senior secured credit facilities. The failure by
Holdings to make all or any portion of a semiannual interest payment on the senior discount notes will not constitute an event of default under the indenture for the senior discount notes if that failure results from JDIs inability to
distribute the cash necessary to make that payment in accordance with these restrictions. Instead, interest will continue to accrue on any unpaid interest at a rate of 10.67% per annum, and the unpaid interest will be payable on the next
interest payment date on which JDI is able to distribute to Holdings the cash necessary to make the payment in accordance with the provisions contained in the indentures for the JDI senior subordinated notes and the JDI senior secured credit
facilities. Holdings has no income from operations and no meaningful assets. Holdings receives all of its income from JDI and substantially all of its assets consist of its investment in JDI. The senior discount notes mature on May 15, 2013.



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The JDI senior secured credit facilities were amended and restated in December 2005. The amended
facilities, among other things, permit the global restructuring under the November 2005 Plan and modify the financial covenants contained in our previous credit facilities. The amended facilities consist of a revolving loan facility in an aggregate
principal amount not to exceed $175 million, including a letter of credit sub-limit of $50 million and a swingline loan sub-limit of $30 million, that matures on December 16, 2010, as well as a term loan facility that matures on
December 10, 2011. In addition, the amended facilities include a committed delayed draw term facility of up to $100 million, which was fully drawn on July 14, 2006. The amended facilities also provide for an increase in the revolving
credit facility of up to $25 million under specified circumstances. As of June 29, 2007, we had $8.3 million in letters of credit outstanding under the revolving portion of the senior secured credit facilities and therefore had the ability to
borrow $166.7 million under those revolving facilities.

The JDI senior secured credit facilities were amended in June 2007. The amendment
reduced the interest rate payable on the term B loan facility and the delayed draw term loan facility from LIBOR plus 250 basis points to LIBOR plus 200 basis points, thereby reducing borrowing costs over the remaining life of the credit facilities.

As of June 29, 2007, excluding indebtedness held by JDI, our only indebtedness consisted of the senior discount notes with an
accreted value of $383.0 million. As of June 29, 2007, our subsidiaries had total indebtedness of approximately $1.1 billion, consisting of $602.6 million of senior subordinated notes, $442.9 million of borrowings under the senior secured
credit facilities, $14.2 million of other long-term borrowings and $35.8 million in short-term credit lines. In addition, we had $155.7 million in operating lease commitments, $1.7 million in capital lease commitments and $8.3 million committed
under letters of credit.

We believe that the cash flows from continuing operations, including the effects of divestures made as part of
the November 2005 Plan, together with available cash, borrowings available under our JDI senior secured credit facilities, and the proceeds from the JDI receivables securitization facility will generate sufficient cash flow to meet our liquidity
needs for the foreseeable future, including those related to the November 2005 Plan. We do not expect the divestitures of the Polymer Business and other businesses, made as part of the November 2005 Plan and included as part of continuing and
discontinuing operations, to significantly impact our future liquidity or our ability to meet our debt service obligations. With regards to the divestiture of the Polymer Business, we anticipate that the interest savings from the repayment of the
JDI term B loan with $420.0 million of proceeds from the sale will largely offset the operating cash flows that would have been generated by this business.

We have obligations related to our pension and post-retirement plans that are discussed in detail in Note 13 of the Notes to Consolidated Financial Statements. As of the most recent actuarial estimation, we anticipate
making $50.7 million of contributions to pension plans in fiscal year 2007. Post-retirement medical claims are paid as they are submitted and are anticipated to be $4.3 million in fiscal year 2007.

Off-Balance Sheet Arrangements. JDI and certain of its subsidiaries entered into an agreement (the Receivables Facility) in March
2001, as amended, whereby JDI and each participating subsidiary sell, on a continuous basis, certain trade receivables to JWPR Corporation (JWPRC), JDIs wholly owned, consolidated, special purpose, bankruptcy-remote subsidiary.
JWPRC was formed for the sole purpose of buying and selling receivables generated by JDI and certain of its subsidiaries party to the Receivables Facility. JWPRC, in turn, sells an undivided interest in the accounts receivable to nonconsolidated
financial institutions (the Conduits) for an amount equal to the value of all eligible receivables (as defined under the receivables sale agreement between JWPRC and the Conduits) less the applicable reserve. The accounts receivable
securitization arrangement is accounted for as a sale under the provisions of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of LiabilitiesA replacement of FASB Statement
No. 125.As June 29, 2007 and December 29, 2006, our total potential for securitization of trade receivables was $75.0 million.

As of June 29, 2007 and December 29, 2006, the Conduits held $55.2 million and $64.3 million, respectively, of accounts receivable that are not included in the accounts receivable balance reflected in our
consolidated balance sheets.

As of June 29, 2007 and December 29, 2006, JDI had a retained interest of $103.8 million and $78.1 million,
respectively, in the receivables of JWPRC. The retained interest is included in the accounts receivable balance and is reflected in the consolidated balance sheets at estimated fair value.



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For the six months ended June 29, 2007, JWPRCs cost of borrowing under the Receivables
Facility was at a weighted average rate of 6.35% per annum.

Under the terms of the JDI senior secured credit facilities, JDI must use
any net proceeds from the Receivables Facility second to prepay loans outstanding under the senior secured credit facilities. In addition, the net amount of trade receivables at any time outstanding under this and any other securitization facility
that JDI may enter into may not exceed $200 million in the aggregate.

Contractual Obligations

As a result of the adoption of FIN No. 48 and changes during the six month period ended June 29, 2007, we increased gross unrecognized tax
benefits by $69.1 million, resulting in total unrecognized tax benefits of $100.2 million at June 29, 2007. Total unrecognized tax benefits for which payments are expected in less than one year are $5.0 million. We are not able to provide a
reasonably reliable estimate of the timing of future payments relating to non-current unrecognized tax benefits.

Financial Covenants under the JDI
Senior Secured Credit Facilities

Under the amended terms of our senior secured credit facilities, we are subject to certain financial
covenants. The financial covenants under our senior secured credit facilities require us to meet the following targets and ratios.

Maximum Leverage Ratio. JDI is required to maintain a leverage ratio for each financial covenant period of no more than the maximum ratio specified in the senior secured credit facilities for that financial covenant period. The
maximum leverage ratio is the ratio of (1) JDIs consolidated indebtedness (excluding up to $55 million of indebtedness incurred under the Receivables Facility and indebtedness relating to specified interest rate hedge agreements) as of
the last day of a financial covenant period using a weighted-average exchange rate for the relevant fiscal three-month period to (2) JDI consolidated EBITDA, as defined in the JDI senior secured credit facilities, for that same financial
covenant period.

The JDI senior secured credit facilities require that JDI maintain a leverage ratio of no more than the ratio set forth
below for each of the financial covenant periods ending nearest the corresponding date set forth below:



|                                  |  |                      
|--------------------------------- |  | ---------------------
|                                  |  | MaximumLeverage Ratio
|June 30, 2007                     |  | 5.00 to 1            
|September 30, 2007                |  | 4.75 to 1            
|December 31, 2007                 |  | 4.75 to 1            
|March 31, 2008                    |  | 4.75 to 1            
|June 30, 2008                     |  | 4.75 to 1            
|September 30, 2008                |  | 4.25 to 1            
|December 31, 2008                 |  | 4.25 to 1            
|March 31, 2009                    |  | 4.25 to 1            
|June 30, 2009                     |  | 3.25 to 1            
|September 30, 2009                |  | 3.25 to 1            
|December 31, 2009                 |  | 3.25 to 1            
|March 31, 2010                    |  | 3.25 to 1            
|June 30, 2010                     |  | 3.25 to 1            
|September 30, 2010 and thereafter |  | 3.50 to 1            

Minimum Interest Coverage Ratio. JDI is required to maintain an interest coverage ratio for
each financial covenant period of no less than the minimum ratio specified in the JDI senior secured credit facilities for that financial covenant period. The minimum interest coverage ratio is the ratio of (1) JDIs consolidated EBITDA,
as defined in the JDI senior secured credit facilities, for a financial covenant period to (2) JDIs cash interest expense for the same financial covenant period.



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The JDI senior secured credit facilities require that we maintain an interest coverage ratio of no less
than the ratio set forth below for each of the financial covenant periods ending nearest the corresponding date set for the below:



|                                  |  |                                
|--------------------------------- |  | -------------------------------
|                                  |  | Minimum Interest Coverage Ratio
|June 30, 2007                     |  | 2.00 to 1                      
|September 30, 2007                |  | 2.25 to 1                      
|December 31, 2007                 |  | 2.25 to 1                      
|March 31, 2008                    |  | 2.25 to 1                      
|June 30, 2008                     |  | 2.25 to 1                      
|September 30, 2008                |  | 2.50 to 1                      
|December 31, 2008                 |  | 2.50 to 1                      
|March 31, 2009                    |  | 2.50 to 1                      
|June 30, 2009                     |  | 2.75 to 1                      
|September 30, 2009                |  | 2.75 to 1                      
|December 31, 2009                 |  | 2.75 to 1                      
|March 31, 2010                    |  | 2.75 to 1                      
|June 30, 2010                     |  | 2.75 to 1                      
|September 30, 2010 and thereafter |  | 3.00 to 1                      

Compliance with Maximum Leverage Ratio and Minimum Interest Coverage Ratio. For JDIs
financial covenant period ended on June 29, 2007, JDI was in compliance with the maximum leverage ratio and minimum interest coverage ratio covenants contained in the JDI senior secured credit facilities.

Capital Expenditures. Capital expenditures are limited under the JDI senior secured credit facilities to $150 million in fiscal year 2006 and to
$130 million for subsequent fiscal years. To the extent that JDI makes capital expenditures of less than the limit in any fiscal year, however, JDI carries forward into the subsequent year the difference between the limit and the actual amount we
expended, provided that the amounts we carry forward from the previous year will be allocated to capital expenditures in the current fiscal year only after the amount allocated to the current fiscal year is exhausted. As of June 29, 2007, JDI
was in compliance with the limitation on capital expenditures for fiscal year 2007.

Restructuring Charges. The JDI senior secured
credit facilities limit the amount of cash payments (i) arising in connection with the November 2005 Plan at any time from fiscal year 2006 through the end of fiscal year 2009 to $355 million in the aggregate and (ii) arising in connection
with permitted divestitures at any time from fiscal year 2006 through the end of fiscal year 2008 to $45 million. As of June 29, 2007, JDI was in compliance with the limitation on spending for restructuring and permitted divestiture-related
activities.

In addition, the JDI senior secured credit facilities contain covenants that restrict JDIs ability to declare dividends
and to redeem and repurchase capital stock. The senior secured credit facilities also limit our ability to incur additional liens, engage in sale-leaseback transactions and incur additional indebtedness and make investments.

Discontinued Operations

Chemical Methods Associates

On September 30, 2006, in connection with its November 2005 Plan , we sold our equity interest in CMA to Ali SpA, an Italian-based
manufacturer of equipment for the food service industry, for $17.0 million. The purchase price was subject to various post-closing adjustments, principally with regard to changes in working capital. In December 2006, we recorded additional purchase
price of approximately $0.3 million based on the preliminary assessment of closing working capital. The sale resulted in a gain of $2.3 million ($0.5 million after tax), net of related costs. CMA was a non-core asset of the Company.



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During the six months ended June 29, 2007, we finalized and collected the closing working capital
adjustment and recorded additional closing costs, resulting in an immaterial additional gain. Further adjustments are not expected to be significant.

Income, net of tax, and net sales from discontinued operations relating to CMA were $0.5 million and $6.2 million, respectively, for the three months ended June 30, 2006 and $0.9 million and $11.2 million,
respectively, for the six months ended June 30, 2006.

Polymer Business

On June 30, 2006, Johnson Polymer, LLC (JP) and JohnsonDiversey Holdings II B.V. (Holdings II), our indirectly owned
subsidiary, completed the sale of substantially all of the assets of JP, certain of the equity interests in, or assets of certain JP subsidiaries and all of the equity interests owned by Holdings II in Johnson Polymer B.V. (collectively, the
Polymer Business) to BASF Aktiengesellschaft (BASF) for approximately $470.0 million plus an additional $8.1 million in connection with the parties estimate of purchase price adjustments that are based upon the closing
net asset value of the Polymer Business. Further, BASF paid us $1.5 million for the option to extend the tolling agreement by up to six months. In December 2006, we and BASF finalized purchase price adjustments related to the net asset value and we
received an additional $4.1 million.

The Polymer Business developed, manufactured and sold specialty polymers for use in the industrial
print and packaging industry, industrial paint and coatings industry and industrial plastics industry. The Polymer Business was a non-core asset and had been reported as a separate business segment. The sale resulted in a gain of approximately
$352.9 million ($235.9 million after tax), net of related costs.

We finalized and paid certain pension related adjustments, adjusted net
assets disposed and recorded additional closing costs, reducing the gain by $0.4 million ($0.2 million after tax) and $1.1 million ($0.7 million after tax), during the three and six months ended June 29, 2007, respectively. Further adjustments
are not expected to be significant.

In association with the tolling agreement with BASF, we recorded income from discontinued operations,
net of tax, of $0.1 million and $0.9 million, respectively, during the three and six months ended June 29, 2007.

Excluding the net
gain on divestiture, income, net of tax, and net sales, excluding sales to the Company, from discontinued operations relating to the Polymer Business were $10.2 million and $98.8 million, respectively, for the three months ended June 30, 2006,
and $15.2 million and $188.4 million, respectively, for the six months ended June 30, 2006.

Whitmire Micro-Gen Business

In June 2004, we completed the sale of Whitmire to Sorex Holdings, Ltd., a European pest-control manufacturer headquartered in the United Kingdom, for
$46.0 million in cash and the assumption of certain liabilities.

The purchase agreement provided for additional earn-out provisions based
on future Whitmire net sales, for which we recorded $0.1 million in the three month period ended March 31, 2006. The income is included as a component of income from discontinued operations in the consolidated statements of operations.

Acquisitions

In March 2007, we
purchased an additional 6% interest in a North American business that provides purchasing and category management tools to certain of our end-users for $2.6 million. We previously held 9% of the outstanding shares. The transaction is not considered
material to our consolidated financial position, results of operations or cash flows.



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In February 2006, we purchased the remaining 15% of the outstanding shares of Shanghai JohnsonDiversey,
Ltd., our Chinese operating entity, for $3.5 million. We previously held 85% of the outstanding shares and included the holding in our consolidated financial results. Goodwill recorded with respect to the transaction was $2.6 million. The
acquisition was accounted for under the purchase method of accounting in accordance with step acquisition rules.

Subsequent Events

Divestiture  Auto-Chlor Operation

On
August 3, 2007, in conjunction with the November 2005 Plan, we divested of certain Auto-Chlor branch operations in the eastern United States for $2.5 million, resulting in an approximate gain of $0.4 million. These businesses marketed and sold
low-energy dishwashing systems, kitchen chemicals, laundry and housekeeping products and services to foodservice, lodging, healthcare, and institutional customers. The purchase price is subject to various post-closing adjustments. The transaction
will be recorded in the three months ending September 28, 2007.

Income Tax Assessment

Based on our evaluation of a preliminary income tax assessment received subsequent to June 29, 2007, and pursuant to the provisions of FIN
No. 48, we anticipate the need to record additional income tax expense of approximately $4.0 million to $10.0 million in the quarter ending September 28, 2007.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|------- | ---------------------------------------------------------

Interest Rate Risk

As of June 29, 2007, JDI had $442.9 million of debt outstanding under the JDI senior secured credit facilities.
After giving effect to the interest rate swap transactions that JDI has entered into with respect to some of the borrowings under our credit facilities, $242.9 million of the debt outstanding remained subject to variable rates. In addition, as of
June 29, 2007, JDI had $50.0 million of debt outstanding under foreign lines of credit, all of which were subject to variable rates. Accordingly, our earnings and cash flows are affected by changes in interest rates. At the above level of
variable rate borrowings, we do not anticipate a significant impact on earnings in the event of a reasonable change in interest rates. In the event of an adverse change in interest rates, management would likely take actions that would mitigate our
exposure to interest rate risk; however, due to the uncertainty of the actions and their possible effects, this analysis assumes no such action. Further, this analysis does not consider the effects of the change in the level of the overall economic
activity that could exist in such an environment.

Foreign Currency Risk

Through JDI and its subsidiaries, we conduct our business in various regions of the world and export and import products to and from many countries. Our
operations may, therefore, be subject to volatility because of currency fluctuations, inflation changes and changes in political and economic conditions in these countries. Sales and expenses are frequently denominated in local currencies, and
results of operations may be affected adversely as currency fluctuations affect product prices and operating costs. We engage in hedging operations, including forward foreign exchange contracts, to reduce the exposure of our cash flows to
fluctuations in foreign currency rates. All hedging instruments are designated and effective as hedges, in accordance with U.S. GAAP. Other instruments that do not qualify for hedge accounting are marked to market with changes recognized in current
earnings. We do not engage in hedging for speculative investment reasons. There can be no assurance that our hedging operations will eliminate or substantially reduce risks associated with fluctuating currencies.

Based on our overall foreign exchange exposure, we estimate that a 10% change in the exchange rates would not materially affect our financial position and liquidity. The
effect on our results of operations would be substantially offset by the impact of the hedged items.



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|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation of
JohnsonDiversey Holdings Disclosure Controls and Internal Controls. As of the end of the period covered by this quarterly report, we evaluated the effectiveness of the design and operation of our disclosure controls and
procedures (Disclosure Controls). The controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer (CEO) and Chief Financial Officer
(CFO).

CEO & CFO Certifications. Attached as exhibits 31.1 and 31.2 to this quarterly report are
certifications of the CEO and the CFO required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the Exchange Act). This portion of our quarterly report includes the information concerning the controls
evaluation referred to in the certifications and should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Disclosure Controls. Disclosure Controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this
quarterly report, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and
communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our Disclosure Controls include those components of our internal control over financial reporting that are designed to
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with U.S. GAAP. To the extent that components of our internal control over financial reporting are included in
our Disclosure Controls, they are included in the scope of our quarterly evaluation of Disclosure Controls.

Limitations on the
Effectiveness of Controls. Our Disclosure Controls were designed to provide reasonable assurance that the controls and procedures would meet their objectives. Our management, including the CEO and CFO, does not expect that our Disclosure
Controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable assurance of achieving the designed control objectives, and management is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may
occur and not be detected.

Scope of the Controls Evaluation. The evaluation of our Disclosure Controls included a review of the
controls objectives and design, our implementation of the controls and the effect of the controls on the information generated for use in this quarterly report. In the course of the controls evaluation, we sought to identify data errors,
control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were undertaken. This evaluation is done on a quarterly basis so that the conclusions of management, including the CEO and the CFO,
concerning the effectiveness of the controls can be reported in our quarterly reports on Form 10-Q and our annual report on Form 10-K. Many of the components of our Disclosure Controls are also evaluated on an ongoing basis by our internal audit
department and by other personnel in our finance organization, as well as our independent registered public accounting firm in connection with their audit and review activities. The overall goals of these various evaluation activities are to monitor
our Disclosure Controls and to make modifications as necessary; our intent in this regard is that the Disclosure Controls will be maintained as dynamic systems that change (including with improvements and corrections) as conditions warrant.

Among other matters, we sought in our evaluation to determine whether there were any significant deficiencies or
material weaknesses in our internal control over financial reporting, or whether we had identified any acts of fraud involving personnel who have a significant role in our internal control over financial reporting. This information was
important both for our controls evaluation and for Rule 13a-14 of the Exchange Act, which requires that the CEO and CFO disclose that information to our Audit Committee



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and to our independent registered public accounting firm, and report on that information and related matters in this section of the quarterly report. A
significant deficiency is defined in professional accounting literature as a control issue that could have a significant adverse effect on our ability to record, process, summarize and report financial data in the consolidated financial
statements. A material weakness is defined in professional accounting literature as a particularly serious reportable condition whereby the internal control does not reduce to a relatively low level the risk that misstatements caused by
error or fraud may occur in amounts that would be material in relation to the financial statements and not be detected within a timely period by employees in the normal course of performing their assigned functions. We also sought to deal with other
control matters in the controls evaluation, and in each case, if an issue was identified, we considered what revision, improvement and/or correction to make in accordance with our on-going procedures.

Conclusions. Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this quarterly
report, our Disclosure Controls are effective to ensure that material information relating to JohnsonDiversey Holdings, Inc. and its consolidated subsidiaries is made known to management, including the CEO and CFO, particularly during the period
when our periodic reports are being prepared, and that our internal controls are effective in providing reasonable assurance that our financial statements are fairly presented in conformity with U.S. GAAP. In addition, no change in our internal
control over financial reporting has occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

We and JDI are party to various
legal proceedings in the ordinary course of our business which may, from time to time, include product liability, intellectual property, contract, environmental and tax claims as well as government or regulatory agency inquiries or investigations.
We believe that, taking into account our insurance and reserves and the valid defenses with respect to legal matters currently pending against us and JDI, the ultimate resolution of these proceedings will not, individually or in the aggregate, have
a material adverse effect on our business, financial condition, results of operations or cash flows.



|ITEM 6. | EXHIBITS
|------- | --------



|                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1                                                                                                                                                                                       |  | Amendment No. 1 to Amended and Restated Credit Agreement, dated as of June 25, 2007 among JohnsonDiversey, Inc., as borrower, JohnsonDiversey Holdings, Inc., and Citicorp USA, Inc., as
Administrative Agent, on behalf each Lender executing a Lender Consent (amends the Amended and Restated Credit Agreement, dated as of December 16, 2005).*
|                                                                                                                                                                                           | 
|10.2                                                                                                                                                                                       |  | Employment Agreement between JohnsonDiversey, Inc. and Jim Larson, dated May 1, 2007.*                                                                                                                                                                                                                                                             
|                                                                                                                                                                                           | 
|10.3                                                                                                                                                                                       |  | Separation Agreement between JohnsonDiversey, Inc. and Sanjib Choudhuri, dated May 4, 2007.*                                                                                                                                                                                                                                                       
|                                                                                                                                                                                           | 
|31.1                                                                                                                                                                                       |  | Principal Executive Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                            
|                                                                                                                                                                                           | 
|31.2                                                                                                                                                                                       |  | Principal Financial Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                            
|                                                                                                                                                                                           | 
|32.1                                                                                                                                                                                       |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                            
|                                                                                                                                                                                          
|*  Certain schedules and
other attachments to this exhibit were omitted. We agree to furnish supplementally a copy of any omitted schedules or attachments to the Commission upon request.



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SIGNATURES

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





|                     |  |  |  |                                                              
|-------------------- |  |  |  | -------------------------------------------------------------
|                     |  |  |  | JOHNSONDIVERSEY HOLDINGS, INC.                               
|                     |  | 
|Date: August 9, 2007 |  |  |  | /s/ Joseph F. Smorada                                        
|                     |  |  |  | Joseph F. Smorada, Vice President and Chief Financial Officer



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JOHNSONDIVERSEY HOLDINGS, INC.

EXHIBIT INDEX



|     |  |                                                                                                                                                                                                                                                                                                                                                    
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Amendment No. 1 to Amended and Restated Credit Agreement, dated as of June 25, 2007 among JohnsonDiversey, Inc., as borrower, JohnsonDiversey Holdings, Inc., and Citicorp USA, Inc., as
Administrative Agent, on behalf each Lender executing a Lender Consent (amends the Amended and Restated Credit Agreement, dated as of December 16, 2005).*
|     | 
|10.2 |  | Employment Agreement between JohnsonDiversey, Inc. and Jim Larson, dated May 1, 2007.*                                                                                                                                                                                                                                                             
|     | 
|10.3 |  | Separation Agreement between JohnsonDiversey, Inc. and Sanjib Choudhuri, dated May 4, 2007.*                                                                                                                                                                                                                                                       
|     | 
|31.1 |  | Principal Executive Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                            
|     | 
|31.2 |  | Principal Financial Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                            
|     | 
|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                            

---

|* | Certain schedules and other attachments to this exhibit were omitted. We agree to furnish supplementally a copy of any omitted schedules or attachments to the Commission upon
request.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



40