##### Table of Contents





SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







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

FOR THE QUARTERLY PERIOD ENDED MARCH 28, 2008

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





JOHNSONDIVERSEY HOLDINGS, INC.

(Exact name of registrant as specified in its
charter)







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|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   ̈    No  x*

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 May 2, 2008, 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.



|* | Note: As a voluntary filer not subject to filing requirements, the registrant filed all reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 3 months.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------









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INDEX



|                               |  |                                                                                                    |  |     
|------------------------------ |  | -------------------------------------------------------------------------------------------------- |  | ----
|Section                        |  | Topic                                                                                              |  | Page
|                               |  |                                                                                                   
|                               |  | Forward-Looking Statements                                                                         |  | i   
|                               | 
|PART I  FINANCIAL INFORMATION |  |                                                                                                   
|                               |  |                                                                                                   
|Item 1                         |  | Financial Statements (unaudited)                                                                   |  |     
|                               |  |                                                                                                   
|                               |  | Consolidated Balance Sheets as of March 28, 2008 and December 28, 2007                             |  | 1   
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Operations for the three months ended March 28, 2008 and March 30, 2007 |  | 2   
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Cash Flows for the three months ended March 28, 2008 and March 30, 2007 |  | 3   
|                               |  |                                                                                                   
|                               |  | Notes to Consolidated Financial Statements  March 28, 2008                                        |  | 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                                          |  | 32  
|                               |  |                                                                                                   
|Item 4                         |  | Controls and Procedures                                                                            |  | 32  
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                   
|                               |  |                                                                                                   
|Item 1                         |  | Legal Proceedings                                                                                  |  | 34  
|                               |  |                                                                                                   
|Item 6                         |  | Exhibits                                                                                           |  | 34  
|                               | 
|Signatures                     |  | 35                                                                                                



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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, including workforce reduction, achievement of cost savings, as well as plant closures
and disposition of assets;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | successful operation of outsourced functions, including information technology;
| | - |  | -------------------------------------------------------------------------------



| |  |  | changes in general economic and political conditions, interest rates and, 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).
| | - |  | -------------------------------------------------------------------------------------------------------------------



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PART I. FINANCIAL INFORMATION



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

JOHNSONDIVERSEY HOLDINGS,
INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)



|                                                                                                                                    |  |                |           |   |                   |   |           |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | - | ----------------- | - | --------- | -
|                                                                                                                                    |  | March 28, 2008 |           |   | December 28, 2007 |  
|                                                                                                                                    |  | (unaudited)    |           |   |                   |  
|ASSETS                                                                                                                              | 
|Current assets:                                                                                                                     |  |                |           |   |                   |   |           |  
|Cash and cash equivalents                                                                                                           |  | $              | 141,120   |   |                   | $ | 97,176    |  
|Accounts receivable, less allowance of $26,400 and $25,694, respectively                                                            |  |                | 605,656   |   |                   |   | 609,015   |  
|Accounts receivable  related parties                                                                                               |  |                | 20,752    |   |                   |   | 31,715    |  
|Inventories                                                                                                                         |  |                | 326,486   |   |                   |   | 286,296   |  
|Deferred income taxes                                                                                                               |  |                | 24,386    |   |                   |   | 24,597    |  
|Other current assets                                                                                                                |  |                | 148,497   |   |                   |   | 135,960   |  
|Current assets of discontinued operations                                                                                           |  |                | 3,634     |   |                   |   | 3,702     |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total current assets                                                                                                                |  |                | 1,270,531 |   |                   |   | 1,188,461 |  
|Property, plant and equipment, net                                                                                                  |  |                | 457,296   |   |                   |   | 453,625   |  
|Capitalized software, net                                                                                                           |  |                | 35,159    |   |                   |   | 36,556    |  
|Goodwill                                                                                                                            |  |                | 1,367,947 |   |                   |   | 1,296,907 |  
|Other intangibles, net                                                                                                              |  |                | 279,661   |   |                   |   | 302,075   |  
|Long-term receivables  related parties                                                                                             |  |                | 83,258    |   |                   |   | 78,954    |  
|Other assets                                                                                                                        |  |                | 85,527    |   |                   |   | 90,284    |  
|Non current assets of discontinued operations                                                                                       |  |                | 6,879     |   |                   |   | 7,947     |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total assets                                                                                                                        |  | $              | 3,586,258 |   |                   | $ | 3,454,809 |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|                                                                                                                                    |  |               
|LIABILITIES, CLASS B COMMON STOCK AND STOCKHOLDERS EQUITY                                                                          |  |                |           |   |                   |   |           |  
|Current liabilities:                                                                                                                |  |                |           |   |                   |   |           |  
|Short-term borrowings                                                                                                               |  | $              | 27,612    |   |                   | $ | 18,898    |  
|Current portion of long-term debt                                                                                                   |  |                | 13,763    |   |                   |   | 13,181    |  
|Accounts payable                                                                                                                    |  |                | 361,767   |   |                   |   | 357,458   |  
|Accounts payable  related parties                                                                                                  |  |                | 42,380    |   |                   |   | 51,927    |  
|Accrued expenses                                                                                                                    |  |                | 519,291   |   |                   |   | 491,301   |  
|Non current liabilities of discontinued operations                                                                                  |  |                | 3,338     |   |                   |   | 3,808     |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total current liabilities                                                                                                           |  |                | 968,151   |   |                   |   | 936,573   |  
|                                                                                                                                    |  |               
|Pension and other post-retirement benefits                                                                                          |  |                | 247,780   |   |                   |   | 233,677   |  
|Long-term borrowings                                                                                                                |  |                | 1,481,897 |   |                   |   | 1,454,432 |  
|Long-term payables  related parties                                                                                                |  |                | 31,964    |   |                   |   | 31,101    |  
|Deferred income taxes                                                                                                               |  |                | 95,977    |   |                   |   | 89,867    |  
|Other liabilities                                                                                                                   |  |                | 110,265   |   |                   |   | 96,127    |  
|Non current liabilities of discontinued operations                                                                                  |  |                | 4,585     |   |                   |   | 4,225     |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total liabilities                                                                                                                   |  |                | 2,940,619 |   |                   |   | 2,846,002 |  
|                                                                                                                                    |  |               
|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 |  |                | 531,290   |   |                   |   | 531,127   |  
|                                                                                                                                    |  |               
|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                                                                                                      |  |                | 10,629    |   |                   |   | 10,692    |  
|Retained deficit                                                                                                                    |  |                | (255,940  | ) |                   |   | (231,961  | )
|Accumulated other comprehensive income                                                                                              |  |                | 359,660   |   |                   |   | 298,949   |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total stockholders equity                                                                                                          |  |                | 114,349   |   |                   |   | 77,680    |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total liabilities, class B common stock and stockholders equity                                                                    |  | $              | 3,586,258 |   |                   | $ | 3,454,809 |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  

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



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JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands)



|                                                                          |  |                    |         |   |                |   |         |  
|------------------------------------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | -
|                                                                          |  | Three Months Ended |        
|                                                                          |  | March 28, 2008     |         |   | March 30, 2007 |  
|                                                                          |  | (unaudited)        |        
|Net sales:                                                                |  |                    |         |   |                |   |         |  
|Net product and service sales                                             |  | $                  | 792,585 |   |                | $ | 686,841 |  
|Sales agency fee income                                                   |  |                    | 8,457   |   |                |   | 22,387  |  
|                                                                          |  |                    |         |   |                |   |         |  
|                                                                          |  |                    | 801,042 |   |                |   | 709,228 |  
|Cost of sales                                                             |  |                    | 469,560 |   |                |   | 413,440 |  
|                                                                          |  |                    |         |   |                |   |         |  
|Gross profit                                                              |  |                    | 331,482 |   |                |   | 295,788 |  
|Selling, general and administrative expenses                              |  |                    | 278,166 |   |                |   | 278,298 |  
|Research and development expenses                                         |  |                    | 18,045  |   |                |   | 15,843  |  
|Restructuring expenses                                                    |  |                    | 6,497   |   |                |   | 2,121   |  
|                                                                          |  |                    |         |   |                |   |         |  
|Operating profit (loss)                                                   |  |                    | 28,774  |   |                |   | (474    | )
|Other (income) expense:                                                   |  |                    |         |   |                |   |         |  
|Interest expense                                                          |  |                    | 37,999  |   |                |   | 38,651  |  
|Interest income                                                           |  |                    | (1,915  | ) |                |   | (3,435  | )
|Other income, net                                                         |  |                    | (799    | ) |                |   | (307    | )
|                                                                          |  |                    |         |   |                |   |         |  
|Loss from continuing operations before income taxes                       |  |                    | (6,511  | ) |                |   | (35,383 | )
|Income tax provision                                                      |  |                    | 15,555  |   |                |   | 12,790  |  
|                                                                          |  |                    |         |   |                |   |         |  
|Loss from continuing operations                                           |  |                    | (22,066 | ) |                |   | (48,173 | )
|Income from discontinued operations, net of income taxes of $214 and $226 |  |                    | 330     |   |                |   | 336     |  
|                                                                          |  |                    |         |   |                |   |         |  
|Net loss                                                                  |  | $                  | (21,736 | ) |                | $ | (47,837 | )
|                                                                          |  |                    |         |   |                |   |         |  

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



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JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)



|                                                                                                              |  |                    |         |   |                |   |         |  
|------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | -
|                                                                                                              |  | Three Months Ended |        
|                                                                                                              |  | March 28, 2008     |         |   | March 30, 2007 |  
|                                                                                                              |  | (unaudited)        |        
|Cash flows from operating activities:                                                                         |  |                    |         |   |                |   |         |  
|Net loss                                                                                                      |  | $                  | (21,736 | ) |                | $ | (47,837 | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                     |  |                    |         |   |                |   |         |  
|Depreciation and amortization                                                                                 |  |                    | 27,414  |   |                |   | 29,584  |  
|Amortization of intangibles                                                                                   |  |                    | 5,941   |   |                |   | 7,409   |  
|Amortization of debt issuance costs                                                                           |  |                    | 1,273   |   |                |   | 1,202   |  
|Interest accreted on notes payable                                                                            |  |                    | 11,848  |   |                |   | 11,229  |  
|Interest accrued on long-term receivablesrelated parties                                                     |  |                    | (665    | ) |                |   | (634    | )
|Deferred income taxes                                                                                         |  |                    | 1,829   |   |                |   | 4,657   |  
|(Gain) loss on disposal of discontinued operations                                                            |  |                    | (8      | ) |                |   | 402     |  
|(Gain) loss from divestitures                                                                                 |  |                    | (2,481  | ) |                |   | 180     |  
|(Gain) loss on property, plant and equipment disposals                                                        |  |                    | (136    | ) |                |   | 563     |  
|Other                                                                                                         |  |                    | (12,012 | ) |                |   | 5,978   |  
|Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses: |  |                    |         |   |                |   |         |  
|Accounts receivable securitization                                                                            |  |                    | (4,400  | ) |                |   | (16,400 | )
|Accounts receivable                                                                                           |  |                    | 47,121  |   |                |   | 16,673  |  
|Inventories                                                                                                   |  |                    | (34,184 | ) |                |   | (28,023 | )
|Other current assets                                                                                          |  |                    | (7,519  | ) |                |   | (7,244  | )
|Other assets                                                                                                  |  |                    | 5,311   |   |                |   | (1,148  | )
|Accounts payable and accrued expenses                                                                         |  |                    | (27,077 | ) |                |   | (17,867 | )
|Other liabilities                                                                                             |  |                    | (294    | ) |                |   | (1,289  | )
|                                                                                                              |  |                    |         |   |                |   |         |  
|Net cash used in operating activities                                                                         |  |                    | (9,775  | ) |                |   | (42,565 | )
|Cash flows from investing activities:                                                                         |  |                    |         |   |                |   |         |  
|Capital expenditures                                                                                          |  |                    | (19,958 | ) |                |   | (17,625 | )
|Expenditures for capitalized computer software                                                                |  |                    | (2,552  | ) |                |   | (1,403  | )
|Proceeds from property, plant and equipment disposals                                                         |  |                    | 479     |   |                |   | 1,614   |  
|Acquisitions of businesses and other intangibles                                                              |  |                    |        |   |                |   | (2,696  | )
|Proceeds from divestitures, net of transaction costs                                                          |  |                    | 67,999  |   |                |   | 421     |  
|                                                                                                              |  |                    |         |   |                |   |         |  
|Net cash provided by (used in) investing activities                                                           |  |                    | 45,968  |   |                |   | (19,689 | )
|Cash flows from financing activities:                                                                         |  |                    |         |   |                |   |         |  
|Repayments of short-term borrowings                                                                           |  |                    | 6,636   |   |                |   | (2,813  | )
|Payment of debt issuance costs                                                                                |  |                    | (123    | ) |                |   |        |  
|                                                                                                              |  |                    |         |   |                |   |         |  
|Net cash provided by (used in) financing activities                                                           |  |                    | 6,513   |   |                |   | (2,813  | )
|Effect of exchange rate changes on cash and cash equivalents                                                  |  |                    | 1,238   |   |                |   | 5,875   |  
|                                                                                                              |  |                    |         |   |                |   |         |  
|Change in cash and cash equivalents                                                                           |  |                    | 43,944  |   |                |   | (59,192 | )
|Beginning balance                                                                                             |  |                    | 97,176  |   |                |   | 208,418 |  
|                                                                                                              |  |                    |         |   |                |   |         |  
|Ending balance                                                                                                |  | $                  | 141,120 |   |                | $ | 149,226 |  
|                                                                                                              |  |                    |         |   |                |   |         |  
|                                                                                                              |  |                   
|Supplemental cash flows information                                                                           |  |                    |         |   |                |   |         |  
|Cash paid during the period:                                                                                  |  |                    |         |   |                |   |         |  
|Interest                                                                                                      |  | $                  | 7,408   |   |                | $ | 10,006  |  
|Income taxes                                                                                                  |  |                    | 8,078   |   |                |   | 5,709   |  

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



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(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 leading global marketer and manufacturer of cleaning, hygiene, operational efficiency and appearance enhancing products and equipment,
and related services for the institutional and industrial cleaning and sanitation markets.

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) and the Polymer Business segment
(Polymer Business) (see Note 7).



|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 Securities and
Exchange Commission. 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 March 28, 2008 and its results of operations and cash flows for the three month period ended March 28, 2008 have been included. The results of operations for the three month period ended
March 28, 2008 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 28, 2007.

The Company has accounted for the divestiture of CMA and Polymer as discontinued operations (see Note 7), resulting in the reclassification of prior period amounts in the Companys consolidated statements of operations and consolidated
balance sheets.

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

Beginning with fiscal year 2008, the Company will change its fiscal year end date from the Friday nearest December 31 to December 31.
Accordingly, fiscal year 2008 will end on December 31, 2008.



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

In March 2008, the
Financial Accounting Standards Board (the FASB) issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an Amendment of FASB Statement No. 133(SFAS
No. 161). SFAS No. 161 requires companies to provide enhanced disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of and gains and losses on derivative contracts, and details
of credit-risk-related contingent features in their hedged positions. The statement also requires companies to disclose more information about the location and amounts of derivative instruments in financial statements; how derivatives and related
hedges are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities; and how the hedges affect the entitys financial condition, results of operations and cash flows. SFAS No. 161 is
effective prospectively for fiscal years and interim periods beginning after November 15, 2008, which for the Company is its fiscal year 2009. Early adoption is encouraged. We are currently evaluating the impact of the provisions of SFAS
No. 161.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS
No. 141(R)), which replaces SFAS No. 141, Business Combinations. SFAS No. 141(R) retains the underlying concepts of SFAS No. 141 in that all business



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



combinations are still required to be accounted for at fair value under the acquisition method of accounting, but SFAS No. 141(R) changed the method of
applying the acquisition method in a number of significant aspects. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; in-process research and development will be
recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset
valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. SFAS No. 141(R) is effective on a prospective basis for all business combinations for which the acquisition date is on or
after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for changes in valuation allowances on deferred taxes and acquired tax contingencies related to acquisitions prior to the date
of adoption of SFAS No 141 (R). Early adoption is not permitted. The provisions of SFAS No. 141(R) are effective for the fiscal year beginning on or after December 15, 2008, which for the Company is fiscal year 2009. We are currently
evaluating the impact of the provisions of SFAS No. 141(R).

In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements (SFAS No. 160), an amendment of ARB No. 51. SFAS No. 160 requires that ownership interests in subsidiaries held by parties other than the
parent, and the amount of consolidated net income, be clearly identified, labeled, and presented in the consolidated financial statements within equity, but separate from the parents equity. It also requires that once a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the parent and the interests
of the noncontrolling owners. The provisions of SFAS No. 160 are effective for the fiscal year beginning on or after December 15, 2008, which for the Company is fiscal year 2009. We are currently evaluating the impact of the provisions of
SFAS No. 160.

In January 2007, the 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 Company adopted SFAS No. 159 at the beginning fiscal
year of 2008; however, we have not elected to change the measurement attribute for any of the permitted items to fair value upon adoption. The adoption of SFAS No. 159 has not had a significant effect on its financial condition, results of
operations or cash flows.

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. Relative to SFAS
No. 157, the FASB has issued FASB Staff Position (FSP) 157-2, which delays the effective date of SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis. As required, the Company adopted SFAS No. 157 at the beginning of fiscal year 2008, for financial assets and liabilities and for nonfinancial assets and liabilities that are remeasured at
least annually, the provisions of which have not had a significant effect on our financial condition, results of operations or cash flows. We have not yet determined the impact on our financial statements from adoption of SFAS No. 157 as it
pertains to nonfinancial assets and nonfinancial liabilities for our first quarter of 2009 (See Note 14).

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 does not change the amount of net periodic benefit cost included in net earnings. The Company adopted the recognition provisions effective December 28, 2007.



5



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



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). The Company adopted such provisions at the beginning of fiscal year 2008, resulting in a $2,242 increase in pension and post-retirement benefits
and retained deficit during the quarter ended March 28, 2008.



|4. | Master Sales Agency Terminations and Umbrella Agreement
|-- | -------------------------------------------------------

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

An agency fee was paid by Unilever to the Company in exchange for its sales agency services. An additional fee was payable by
Unilever to the Company in the event that conditions for full or partial termination of the Sales Agency Agreement were met. The Company elected, and Unilever agreed, to partially terminate the Sales Agency Agreement in several territories resulting
in payment by Unilever to the Company of additional fees. In association with the partial terminations, the Company recognized sales agency fee income of $185 and $91 during the three months ended March 28, 2008 and March 30, 2007,
respectively.

In October 2007, the Company and Unilever agreed on an Umbrella Agreement (the Umbrella), to replace the
previous Sales Agency Agreement, which includes; i) a new agency agreement with terms similar to the previous Sales Agency Agreement, covering Ireland, the United Kingdom, Portugal and Brazil, and ii) a Master Sub-License Agreement (the
License Agreement) under which Unilever has agreed to grant 31 of the Companys subsidiaries a license to produce and sell professional size packs of Unilevers consumer branded cleaning products. The entities covered by the
License Agreement will also enter agreements with Unilever to distribute Unilevers consumer branded products. Except for some transitional arrangements in certain countries, the Umbrella became effective January 1, 2008, and, unless
otherwise terminated or extended, will expire on December 31, 2017.

Under the License Agreement, the Company recorded incremental net
product and service sales of $35,048 during the three month period ended March 28, 2008.



|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.



|6. | Divestitures
|-- | ------------

Auto-Chlor Master Franchise and Branch
Operations

In December 2007, in conjunction with its November 2005 Plan (see Note 11), JDI executed a sales agreement for its
Auto-Chlor Master Franchise and substantially all of its remaining Auto-Chlor branch operations in North America, a business that marketed and sold low-energy dishwashing systems, kitchen chemicals, laundry and housekeeping products and services to
foodservice, lodging, healthcare, and institutional customers, for $69,800.



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



The sales agreement was subject to the approval of the Companys Board of Directors and Unilever
consent, both of which the Company considered necessary in order to meet held for sale criteria under SFAS No. 144 Accounting for Asset Impairment. Accordingly, these assets were classified as held and
used as of December 28, 2007. The Company obtained approval from its Board of Directors and consent from Unilever in January 2008.

The transaction closed on February 29, 2008, subject to various post-closing adjustments including evaluation of potential pension related settlement charges, resulting in a net book gain approximating $2,481 after taxes and related
costs. The gain associated with these divestiture activities is included as a component of selling, general and administrative expenses in the consolidated statements of operations.

As of the divestiture date, net assets were as follows::



|                                   |  |   |       
|---------------------------------- |  | - | ------
|Inventories                        |  | $ | 8,141 
|Property, plant and equipment, net |  |   | 11,439
|Goodwill                           |  |   | 12,745
|Other intangibles, net             |  |   | 32,517
|                                   |  |   |       
|Net assets divested                |  | $ | 64,842
|                                   |  |   |       

Net sales associated with these businesses were approximately $9,882 and $14,259 for the three
month periods ended March 28, 2008 and March 30, 2007, respectively.



|7. | Discontinued Operations
|-- | -----------------------

Chemical Methods Associates

On September 30, 2006, in connection with its November 2005 Plan (see Note 11), JDI sold its equity interest in CMA to Ali SpA, an
Italian-based manufacturer of equipment for the food service industry, for $17,000. CMA was a non-core asset of the Company. In January 2007, the Company finalized and collected additional purchase price of $314 related to a working capital
adjustment. During the fiscal year ended December 29, 2006, the Company recorded an estimated gain of $2,322 ($497 after tax), net of related costs. During the three months ended March 30, 2007 the Company finalized purchase price and
recorded additional closing costs, resulting in an additional gain of $15 ($9 after tax). During the fiscal year ended December 28, 2007, the Company finalized purchase price and recorded additional closing costs, resulting in a reduction to
the gain of $262 ($300 after tax). Further adjustments are not expected to be significant.

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. During the fiscal year ended December 29, 2006, the Company recorded an estimated gain of $352,907 ($256,693 after tax), net of related
costs.

During the fiscal year ended December 28, 2007, the Company finalized and paid certain pension related adjustments, adjusted
net assets disposed and recorded additional closing costs, reducing the gain by $1,742 ($305 after tax gain) of which $684 ($411 after tax) was recorded during the three months ended March 30, 2007. During the three months ended March 28,
2008, the Company recorded and refined additional closing costs increasing the gain by $7 ($8 after tax). Further adjustments are not expected to be significant.



7



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



The assets and liabilities remaining in discontinued operations at March 28, 2008 and
December 28, 2007 relate to the Tolling Agreement. The Company recorded income from discontinued operations, net of tax, relating to the tolling agreement of $322 and $738, during the three months ended March 28, 2008 and March 30,
2007, respectively.



|8. | 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 March 28, 2008 and December 28, 2007 was $75,000.

As of March 28, 2008 and December 28, 2007, the Conduit held $49,500 and $53,900, respectively, of accounts receivable that are not included in the accounts receivable balance reflected in the Companys
consolidated balance sheet.

As of March 28, 2008 and December 28, 2007, JDI had a retained interest of $94,222 and $95,348,
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.



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

For the fiscal year ending
December 31, 2008, the Company is projecting an effective income tax rate of approximately 130%. The projected effective income tax rate for the fiscal year exceeds the statutory tax rate primarily as a result of increased valuation allowances
against net deferred tax assets and increases in global tax contingency reserves.

The Company reported an effective income tax rate of
-238.9% on pre-tax loss from continuing operations for the three month period ended March 28, 2008. The higher effective tax rate for the three month period ended March 28, 2008 is primarily attributable to pacing of pre-tax income (loss)
in certain key jurisdictions. For example, the pre-tax loss from continuing operations for the three month period ended March 28, 2008 includes a relatively high proportion of the projected annual U.S. pre-tax loss from continuing operations,
for which no income tax benefit is claimed due to the U.S. valuation allowance.

The Company is projecting a charge to income tax expense
of approximately $7,900 for the 2008 fiscal year related to uncertain income tax positions, primarily related to certain intercompany transactions. As of December 31, 2008, the Company is projecting total unrecognized tax benefits for uncertain
tax positions of $130,500, including interest and penalties and positions impacting only the timing of tax benefits, of which $51,600, 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. As of December 31, 2008, the Company is projecting accrued interest and penalties of $13,800 related to unrecognized tax
benefits, of which $3,000 is expected to be recorded as income tax expense during the fiscal year ended December 31, 2008.

The
Company is currently under audit by various state and international tax authorities. Based on the anticipated outcomes of these tax audits and the potential lapse of statutes of limitation, it is reasonably possible there could be a reduction of
$29,400 (including interest and penalties) in unrecognized tax benefits during the next twelve months.



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



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

The components of inventories
are summarized as follows:



|                             |  |                |         |                   |   |        
|---------------------------- |  | -------------- | ------- | ----------------- | - | -------
|                             |  | March 28, 2008 |         | December 28, 2007
|Raw materials and containers |  | $              | 68,941  |                   | $ | 71,367 
|Finished goods               |  |                | 257,545 |                   |   | 214,929
|                             |  |                |         |                   |   |        
|Total inventories            |  | $              | 326,486 |                   | $ | 286,296
|                             |  |                |         |                   |   |        

Inventories are stated in the consolidated balance sheets net of allowance for excess and obsolete
inventory of $33,200 and $31,599 on March 28, 2008 and December 28, 2007, 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 $6,497 for the three months ended March 28, 2008,
for the involuntary termination of 130 employees, most of which are associated with the Japanese business segment. The Company recognized liabilities of $2,121 for the three months ended March 30, 2007 for the involuntary termination of 21
employees, most of which was associated with the European business segment.

The activities associated with the November 2005 Plan for
three months ended March 28, 2008 were as follows:



|                                            |  |                  |        |   |       |   |       |       |  |   |        |  
|------------------------------------------- |  | ---------------- | ------ | - | ----- | - | ----- | ----- |  | - | ------ | -
|                                            |  | Employee-Related |        |   | Other |   |       | Total | 
|Liability balances as of December 28, 2007  |  | $                | 43,069 |   |       | $ | 3,157 |       |  | $ | 46,226 |  
|Liability recorded as restructuring expense |  |                  | 6,497  |   |       |   |      |       |  |   | 6,497  |  
|Cash paid1                                  |  |                  | (6,250 | ) |       |   | (75   | )     |  |   | (6,325 | )
|                                            |  |                  |        |   |       |   |       |       |  |   |        |  
|Liability balances as of March 28, 2008     |  | $                | 43,316 |   |       | $ | 3,082 |       |  | $ | 46,398 |  
|                                            |  |                  |        |   |       |   |       |       |  |   |        |  



|1 | Cash paid is increased by $70 due to the effects of foreign exchange.
|- | ---------------------------------------------------------------------

In connection with the November 2005 Plan, the Company recorded long-lived asset impairment charges of $3,219 and $1,102 for the three months ended
March 28, 2008 and March 30, 2007, respectively. The impairment charges are included in selling, general and administrative costs.



9



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



Total plan-to-date expense associated with the November 2005 Plan, by reporting segment is summarized
as follows:



|              |  |                   |         |                    |                |       |   |  |   |      
|------------- |  | ----------------- | ------- | ------------------ | -------------- | ----- | - |  | - | -----
|              |  | Total PlanTo-Date |         | Three Months Ended
|              |  | March 28, 2008    |         |                    | March 30, 2007
|North America |  | $                 | 26,651  |                    | $              | 789   |   |  | $ | 316  
|Europe        |  |                   | 91,381  |                    |                | (567  | ) |  |   | 683  
|Japan         |  |                   | 7,594   |                    |                | 5,043 |   |  |   | 199  
|Latin America |  |                   | 3,820   |                    |                | 387   |   |  |   | 309  
|Asia Pacific  |  |                   | 527     |                    |                | 43    |   |  |   |     
|Other         |  |                   | 22,985  |                    |                | 802   |   |  |   | 614  
|              |  |                   |         |                    |                |       |   |  |   |      
|              |  | $                 | 152,958 |                    | $              | 6,497 |   |  | $ | 2,121
|              |  |                   |         |                    |                |       |   |  |   |      

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 $152 representing contractual obligations associated with involuntary terminations during the three months ended March 28, 2008. As of
March 28, 2008, the Company had remaining exit and acquisition-related restructuring reserves of $1,285. The Company paid cash of $238 representing contractual obligations associated with involuntary terminations and lease payments on closed
facilities during the three months ended March 30, 2007.



|12. | Other Income, Net
|--- | -----------------

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



|                                         |  |                    |         |   |                |   |        |  
|---------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------ | -
|                                         |  | Three Months Ended |        
|                                         |  | March 28, 2008     |         |   | March 30, 2007 |  
|Foreign currency translation (gain) loss |  | $                  | (11,307 | ) |                | $ | (1,005 | )
|Forward contracts (gain) loss            |  |                    | 10,297  |   |                |   | 510    |  
|Other, net                               |  |                    | 211     |   |                |   | 188    |  
|                                         |  |                    |         |   |                |   |        |  
|                                         |  | $                  | (799    | ) |                | $ | (307   | )
|                                         |  |                    |         |   |                |   |        |  



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(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 months ended March 28, 2008 and March 28, 2007 are as
follows:



|                                       |  |                          |         |   |                |   |         |  
|-------------------------------------- |  | ------------------------ | ------- | - | -------------- | - | ------- | -
|                                       |  | Defined Pension Benefits |        
|                                       |  | Three Months Ended       |        
|                                       |  | March 28, 2008           |         |   | March 30, 2007 |  
|Service cost                           |  | $                        | 6,715   |   |                | $ | 7,666   |  
|Interest cost                          |  |                          | 10,240  |   |                |   | 9,218   |  
|Expected return on plan assets         |  |                          | (11,364 | ) |                |   | (10,075 | )
|Amortization of net loss               |  |                          | 1,202   |   |                |   | 1,704   |  
|Amortization of transition obligation  |  |                          | 63      |   |                |   | 100     |  
|Amortization of prior service credit   |  |                          | (230    | ) |                |   | (169    | )
|Effect of curtailments and settlements |  |                          | 45      |   |                |   | 551     |  
|                                       |  |                          |         |   |                |   |         |  
|Net periodic pension cost              |  | $                        | 6,671   |   |                | $ | 8,995   |  
|                                       |  |                          |         |   |                |   |         |  



|                                       |  |                                |       |   |                |   |       |  
|-------------------------------------- |  | ------------------------------ | ----- | - | -------------- | - | ----- | -
|                                       |  | Other Post-Employment Benefits |      
|                                       |  | Three Months Ended             |      
|                                       |  | March 28, 2008                 |       |   | March 30, 2007 |  
|Service cost                           |  | $                              | 517   |   |                | $ | 596   |  
|Interest cost                          |  |                                | 1,296 |   |                |   | 1,412 |  
|Amortization of net loss               |  |                                | 68    |   |                |   | 351   |  
|Amortization of prior service credit   |  |                                | (48   | ) |                |   | (46   | )
|Effect of curtailments and settlements |  |                                | 44    |   |                |   | (129  | )
|                                       |  |                                |       |   |                |   |       |  
|Net periodic benefit cost              |  | $                              | 1,877 |   |                | $ | 2,184 |  
|                                       |  |                                |       |   |                |   |       |  

The Company made contributions to its defined benefit pension plans of $11,202 and $8,060 during
the three months ended March 28, 2008 and March 30, 2007, respectively.



|14. | Fair Value Measurements
|--- | -----------------------

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 Company adopted SFAS No. 157 at the beginning of fiscal year 2008, for financial assets and liabilities and for nonfinancial assets and liabilities that are remeasured at
least annually. SFAS No. 157 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:



|          |  |                                                                                                                                                                                         
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 1  |  | Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1
inputs.
|          | 
|Level 2  |  | Observable prices that are based on inputs not quoted in active markets, but corroborated by market data.                                                                               
|          | 
|Level 3  |  | Unobservable inputs for which there is little or no market data available. The fair value hierarchy gives the lowest priority to Level 3 inputs.                                        



11



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



The fair value of financial assets and liabilities measured at fair value on a recurring basis was as
follows:



|                                   |  |                         |        |         |   |         |   |         |  |  
|---------------------------------- |  | ----------------------- | ------ | ------- | - | ------- | - | ------- |  | -
|                                   |  | Balance atMarch 28,2008 |        | Level 1 |   | Level 2 |   | Level 3
|Assets:                            |  |                         |        |         |   |         |   |         |  |  
|Foreign currency forward contracts |  | $                       | 3,074  |         |  |         | $ | 3,074   |  | 
|                                   |  |                         |        |         |   |         |   |         |  |  
|                                   |  |                         |        |        
|Liabilities:                       |  |                         |        |         |   |         |   |         |  |  
|Foreign currency forward contracts |  | $                       | 4,116  |         |  |         | $ | 4,116   |  | 
|Interest rate swap contracts       |  |                         | 9,268  |         |  |         |   | 9,268   |  | 
|                                   |  |                         |        |         |   |         |   |         |  |  
|                                   |  | $                       | 13,384 |         |  |         | $ | 13,384  |  | 
|                                   |  |                         |        |         |   |         |   |         |  |  

We utilize the market approach to measure fair value for our financial assets and liabilities. The
market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.



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

Comprehensive
income (loss) for the three month periods ended March 28, 2008 and March 30, 2007 was as follows:



|                                                                   |  |                    |         |   |                |   |         |  
|------------------------------------------------------------------ |  | ------------------ | ------- | - | -------------- | - | ------- | -
|                                                                   |  | Three Months Ended |        
|                                                                   |  | March 28, 2008     |         |   | March 30, 2007 |  
|Net loss                                                           |  | $                  | (21,736 | ) |                | $ | (47,837 | )
|Foreign currency translation adjustments                           |  |                    | 70,198  |   |                |   | 14,539  |  
|Adjustments to pension and post-retirement liabilities, net of tax |  |                    | (4,366  | ) |                |   |        |  
|Unrealized gains (losses) on derivatives, net of tax               |  |                    | (5,121  | ) |                |   | 408     |  
|                                                                   |  |                    |         |   |                |   |         |  
|Total comprehensive income (loss)                                  |  | $                  | 38,975  |   |                | $ | (32,890 | )
|                                                                   |  |                    |         |   |                |   |         |  



|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
| | - |  | ------------------------------------------------------



| |  |  | 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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



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.

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:



| |  |  | $727,000 in 2006;
| | - |  | -----------------



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



| |  |  | $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.

Holdings did not meet the cumulative cash
flow requirement for the measurement periods ended December 28, 2007 and December 29, 2006 and will not be required to make a contingent payment.

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.



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(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.

JDI 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, JDI does not expect to meet the minimum guaranteed payments. In accordance with the requirements of SFAS No. 5, JDI has estimated its possible range of loss as $1,943 to $3,446 and, in accordance with FASB
Interpretation No. 14, maintained a loss reserve of $1,943 at March 28, 2008 and December 28, 2007.



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 28, 2008

(unaudited)



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

Business segment
information is summarized as follows:



|                                                              |  |                                   |         |   |        |   |           |  |   |              |   |             |   |                      |  |   |              |  |   |         |   |  |   |           |  
|------------------------------------------------------------- |  | --------------------------------- | ------- | - | ------ | - | --------- |  | - | ------------ | - | ----------- | - | -------------------- |  | - | ------------ |  | - | ------- | - |  | - | --------- | -
|                                                              |  | Three Months Ended March 28, 2008 |        
|                                                              |  | NorthAmerica                      |         |   | Europe |   | Japan     |  |   | LatinAmerica |   | AsiaPacific |   | Eliminations/Other 1 |  |   | TotalCompany | 
|Net sales                                                     |  | $                                 | 181,982 |   |        | $ | 431,087   |  | $ | 72,160       |   |             | $ | 58,756               |  | $ | 63,496       |  | $ | (6,439  | ) |  | $ | 801,042   |  
|Operating profit                                              |  |                                   | 13,391  |   |        |   | 21,943    |  |   | (156         | ) |             |   | 3,280                |  |   | 2,574        |  |   | (12,258 | ) |  |   | 28,774    |  
|Depreciation and amortization                                 |  |                                   | 3,839   |   |        |   | 16,230    |  |   | 1,430        |   |             |   | 2,440                |  |   | 2,278        |  |   | 7,138   |   |  |   | 33,355    |  
|Interest expense                                              |  |                                   | 2,911   |   |        |   | 17,456    |  |   | 201          |   |             |   | 462                  |  |   | 555          |  |   | 16,414  |   |  |   | 37,999    |  
|Interest income                                               |  |                                   | 861     |   |        |   | 2,330     |  |   | 4            |   |             |   | 27                   |  |   | 141          |  |   | (1,448  | ) |  |   | 1,915     |  
|Total assets                                                  |  |                                   | 398,100 |   |        |   | 2,163,513 |  |   | 301,279      |   |             |   | 227,114              |  |   | 211,241      |  |   | 285,011 |   |  |   | 3,586,258 |  
|Goodwill                                                      |  |                                   | 136,749 |   |        |   | 889,442   |  |   | 117,703      |   |             |   | 87,369               |  |   | 68,412       |  |   | 68,272  |   |  |   | 1,367,947 |  
|Capital expenditures, including capitalized computer software |  |                                   | 3,740   |   |        |   | 10,417    |  |   | 620          |   |             |   | 2,550                |  |   | 1,641        |  |   | 3,542   |   |  |   | 22,510    |  
|Long-lived assets2                                            |  |                                   | 217,167 |   |        |   | 1,219,732 |  |   | 171,589      |   |             |   | 126,245              |  |   | 99,291       |  |   | 322,091 |   |  |   | 2,156,115 |  
|                                                              | 
|                                                              |  | Three Months Ended March 30, 2007 |        
|                                                              |  | NorthAmerica                      |         |   | Europe |   | Japan     |  |   | LatinAmerica |   | AsiaPacific |   | Eliminations/Other 1 |  |   | TotalCompany | 
|Net sales                                                     |  | $                                 | 180,607 |   |        | $ | 366,930   |  | $ | 63,729       |   |             | $ | 50,753               |  | $ | 52,448       |  | $ | (5,239  | ) |  | $ | 709,228   |  
|Operating profit (loss)                                       |  |                                   | (3,936  | ) |        |   | 14,626    |  |   | 851          |   |             |   | 4,217                |  |   | 2,658        |  |   | (18,890 | ) |  |   | (474      | )
|Depreciation and amortization                                 |  |                                   | 7,570   |   |        |   | 13,215    |  |   | 1,529        |   |             |   | 2,050                |  |   | 1,995        |  |   | 10,634  |   |  |   | 36,993    |  
|Interest expense                                              |  |                                   | 2,938   |   |        |   | 18,479    |  |   | 199          |   |             |   | 738                  |  |   | 963          |  |   | 15,334  |   |  |   | 38,651    |  
|Interest income                                               |  |                                   | 7,208   |   |        |   | 3,133     |  |   |             |   |             |   | 10                   |  |   | 144          |  |   | (7,060  | ) |  |   | 3,435     |  
|Total assets                                                  |  |                                   | 483,284 |   |        |   | 1,939,089 |  |   | 271,298      |   |             |   | 183,585              |  |   | 179,259      |  |   | 222,484 |   |  |   | 3,278,999 |  
|Goodwill                                                      |  |                                   | 173,070 |   |        |   | 755,769   |  |   | 111,214      |   |             |   | 77,418               |  |   | 61,146       |  |   | 28,614  |   |  |   | 1,207,231 |  
|Capital expenditures, including capitalized computer software |  |                                   | 3,739   |   |        |   | 7,904     |  |   | 627          |   |             |   | 1,986                |  |   | 1,877        |  |   | 2,895   |   |  |   | 19,028    |  
|Long-lived assets2                                            |  |                                   | 288,006 |   |        |   | 1,062,711 |  |   | 150,996      |   |             |   | 110,188              |  |   | 88,767       |  |   | 302,992 |   |  |   | 2,003,660 |  



|1 | Eliminations/Other includes the Companys corporate operating and holding entities, discontinued operations and
corporate level eliminations and consolidating entries.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Long-lived assets includes property, plant and equipment,
capital software, intangible items and investments in unconsolidated subsidiaries.
|- | --------------------------------------------------------------------------------------------------------------------------------------------



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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 28, 2007. This discussion should be read in conjunction with our unaudited consolidated financial statements as of, and for
the quarterly period ended, March 28, 2008, our annual report on Form 10-K for the year ended December 28, 2007, 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 an environmentally responsible, leading global marketer
and manufacturer of cleaning, hygiene, operational efficiency, appearance enhancing products, and equipment and related services for the institutional and industrial cleaning and sanitation market. We have net product and service sales (net
sales) in more than 170 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, with an increasing presence in
the emerging markets of Asia Pacific and Latin America.

Except where noted, the management discussion and analysis below, excluding the
consolidated statements of cash flows, reflects the results of continuing operations, which excludes the divestiture of Chemical Methods Associates (CMA) and the Polymer Business segment (Polymer Business) as discussed in
Note 7 to the consolidated financial statements.

In the three months ended March 28, 2008, net sales increased by $91.8 million from
the same period in the prior year. As indicated in the following table, our net sales increased 1.4% for the three months ended March 28, 2008, compared to the same period in the prior year after excluding the impact of foreign currency
exchange rates, acquisitions and divestitures, sales agency fee income (SAF), and sales from our Master Sub-License Agreement (the License Agreement). Beginning in fiscal year 2008, the License Agreement has replaced the Sales Agency
Agreement in most countries.



|                              |  |                    |         |   |                |   |         |        |  |      |  
|----------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | ------ |  | ---- | -
|                              |  | Three Months Ended |         |   |                |  
|(dollars in thousands)        |  | March 28, 2008     |         |   | March 30, 2007 |   |         | Change | 
|Net sales                     |  | $                  | 801,042 |   |                | $ | 709,228 |        |  | 12.9 | %
|                              |  |                    |        
|Variance due to:              |  |                    |         |   |                |   |         |        |  |      |  
|Foreign currency exchange     |  |                    |         |   |                |   | 66,695  |        |  |      |  
|Acquisitions and divestitures |  |                    |         |   |                |   | (6,093  | )      |  |      |  
|Sales agency fee income (SAF) |  |                    | (8,457  | ) |                |   | (22,387 | )      |  |      |  
|License Agreement revenue     |  |                    | (35,048 | ) |                |   |         |        |  |      |  
|                              |  |                    |         |   |                |   |         |        |  |      |  
|                              |  |                    | (43,505 | ) |                |   | 38,215  |        |  |      |  
|                              |  |                    |         |   |                |   |         |        |  |      |  
|                              |  | $                  | 757,537 |   |                | $ | 747,443 |        |  | 1.4  | %
|                              |  |                    |         |   |                |   |         |        |  |      |  

We continue to show net sales growth in Europe, Asia Pacific, and Latin America primarily due to a
balance of selective price increases in certain business sectors and global geographic areas and increased sales volume, which was driven by continued expansion of developing markets in Asia Pacific, Latin America, Central and Eastern Europe, Africa
and the Middle East.

As indicated below, our gross profit percentage, based on net sales as reported, declined by 30 basis points for the
first quarter of 2008 compared to the first quarter of 2007. Excluding the impact of sales agency fee income, our gross profit percentage improved 100 basis points for the first quarter of 2008 compared to the first quarter of 2007 due to success
from our Global Strategic Sourcing Initiative, the favorable impact of our cost reduction programs, and selective price increases. Our gross profit percentages for the three months ended March 28, 2008 and March 30, 2007 were as follows:



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##### Table of Contents

|                                                  |  |                |                                                        |  |                |   |  |                |  
|------------------------------------------------- |  | -------------- | ------------------------------------------------------ |  | -------------- | - |  | -------------- | -
|Margin on Net Sales as ReportedThree Months Ended |  |                | Margin on Net Sales Adjusted for SAFThree Months Ended | 
|March 28, 2008                                    |  | March 30, 2007 |                                                        |  | March 28, 2008 |   |  | March 30, 2007 |  
|41.4%                                             |  | 41.7           | %                                                      |  | 40.8           | % |  | 39.8           | %
|                                                  |  |                |                                                        |  |                |   |  |                |  

While we have been successful in improving our margin with selective price increases and cost reduction
initiatives, the current environment of rising oil, freight, and fuel, which increases other raw material costs, present significant challenges to improve or maintain the current margin.

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 first fiscal quarter of 2008, we continue to make significant progress with the operational restructuring of our Company in accordance with
the November 2005 Plan. In particular, significant activity during the quarter included the following:



| |  |  | completed the redesign phase of our European operations, initiating the transition to one centrally managed European region to strengthen the focus of our local
organizations on sales and marketing execution;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | initiated the transition of certain general ledger accounting functions in Western Europe to a third party provider;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | completed the sale of our Auto-Chlor Master Franchise and all of our remaining Auto-Chlor branch operations, which were non-core businesses of our North American
region;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | commenced activity to consolidate and streamline our Japanese sales and marketing functions into one legal entity and two business units;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | completed the divestiture of our factory and other related assets in Tsukuba (near Tokyo), Japan;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | continued the global transition of human resource information systems to new providers;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | moved our North American operation into our global headquarters building and created a financial shared service center and training facility in Sturtevant,
Wisconsin; 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 $6.5 million,
which consisted primarily of severance costs, for the fiscal quarter ended March 28, 2008. In addition, we recorded $8.1 million of period costs related to the November 2005 Plan for the fiscal quarter ended March 28, 2008. These costs
consist of $3.2 million related to long-lived asset impairments primarily related to warehouse closures in our European region and $4.9 million related to other period costs associated with restructuring activities primarily at the Corporate Center,
including human resource related costs of $2.6 million, facilities related costs of $0.6 million, temporary project-related labor costs of $0.6 million, and other costs totaling $1.1 million.

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. The following are the accounting policies that we believe are most
critical to our financial condition and results of operations and that involve managements judgment and/or evaluation of inherent uncertain factors:

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



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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.

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 separately funded pension and post-retirement plans in various countries, including the United States. 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. We use actuarial assumptions that 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 conduct an impairment review on
long-lived assets, including non-amortizing intangible assets and goodwill, 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). Based on our business approach to decision-making,
planning and resource allocation, we have determined that we have five reporting units for purposes of evaluating goodwill for impairment, which is aligned with our five geographic segments. Goodwill balances are typically recorded at the reporting
unit level; however, where applicable, balances may be allocated to reporting units based upon geographic alignment. We recorded impairment charges on certain long-lived assets of $3.2 million and $1.1 million, during the three-month periods ended
March 28, 2008, and March 30, 2007, respectively, in connection with the November 2005 Plan.



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Change in Fiscal Year End Date. Beginning with fiscal year 2008, we will change our fiscal year
end date from the Friday nearest December 31 to December 31. Accordingly, fiscal year 2008 will end on December 31, 2008.

New Accounting
Pronouncements

In March 2008, the Financial Accounting Standards Board (the FASB) issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities  an Amendment of FASB Statement No. 133(SFAS No. 161). SFAS No. 161 requires companies to provide enhanced
disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of and gains and losses on derivative contracts, and details of credit-risk-related contingent features in their hedged positions. The
statement also requires companies to disclose more information about the location and amounts of derivative instruments in financial statements; how derivatives and related hedges are accounted for under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities; and how the hedges affect the entitys financial condition, results of operations and cash flows. SFAS No. 161 is effective prospectively for years and interim periods beginning
after November 15, 2008, which for us is our fiscal year 2009. Early adoption is encouraged. We are currently evaluating the impact of the provisions of SFAS No. 161.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS No. 141(R)), which replaces SFAS
No. 141, Business Combinations. SFAS No. 141(R) retains the underlying concepts of SFAS No. 141 in that all business combinations are still required to be accounted for at fair value under the acquisition method of
accounting, but SFAS No. 141(R) changed the method of applying the acquisition method in a number of significant aspects. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the
acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to
the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. SFAS No. 141(R) is effective on a prospective basis for all business
combinations when the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for changes in valuation allowances on deferred taxes and acquired tax
contingencies related to acquisitions prior to the date of adoption of SFAS No. 141(R). Early adoption is not permitted. The provisions of SFAS No. 141(R) are effective for the fiscal year beginning on or after December 15, 2008,
which for us is our fiscal year 2009. We are currently evaluating the impact of the provisions of SFAS No. 141(R).

In December 2007,
the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (SFAS No. 160), an amendment of ARB No. 51. SFAS No. 160 requires that ownership interests in subsidiaries
held by parties other than the parent, and the amount of consolidated net income, be clearly identified, labeled, and presented in the consolidated financial statements within equity, but separate from the parents equity. It also requires that
once a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. The provisions of SFAS No. 160 are effective for the fiscal year beginning on or after December 15, 2008, which for us is our fiscal year 2009. We are currently evaluating the impact
of the provisions of SFAS No. 160.

In January 2007, the 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. We adopted SFAS No. 159 at the
beginning of fiscal year 2008; however, we have not elected to change the measurement attributes for any of the permitted items to fair value upon adoption. The adoption of SFAS No. 159 has not had a significant effect on our financial
condition, results of operations or cash flows.



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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. Relative to
SFAS No. 157, the FASB issued FASB Staff Position (FSP) 157-2, which delays the effective date of SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis. As required, we adopted SFAS No. 157 at the beginning of fiscal year 2008, for financial assets and liabilities and for nonfinancial assets and liabilities that are remeasured at least
annually, the provisions of which have not had significant effect on our financial condition, results of operations or cash flows. We are currently evaluating the impact of the provision of SFAS No. 157 as it pertains to nonfinancial assets and
nonfinancial liabilities, which will be effective for us in our fiscal year 2009. See Note 14 (Fair Value Measurements) to our consolidated financial statements, included elsewhere in this report, for further discussion.

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 does not change the amount of net periodic benefit cost
included in net earnings. We adopted the recognition provisions effective December 28, 2007.

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). We adopted such provisions at the beginning of fiscal year 2008, resulting in a
$2.2 million increase in pension and post-retirement benefits and retained deficit during the quarter ended March 28, 2008.

Three Months Ended
March 28, 2008 Compared to Three Months Ended March 30, 2007

Net Sales:



|                              |  |                    |         |                |   |         |  |   |            |   |  |       |  
|----------------------------- |  | ------------------ | ------- | -------------- | - | ------- |  | - | ---------- | - |  | ----- | -
|                              |  | Three Months Ended |         | Change         |  
|(dollars in thousands)        |  | March 28, 2008     |         | March 30, 2007 |   | Amount  |  |   | Percentage |  
|Net product and service sales |  | $                  | 792,585 |                | $ | 686,841 |  | $ | 105,744    |   |  | 15.4  | %
|Sales agency fee income       |  |                    | 8,457   |                |   | 22,387  |  |   | (13,930    | ) |  | -62.2 | %
|                              |  |                    |         |                |   |         |  |   |            |   |  |       |  
|                              |  | $                  | 801,042 |                | $ | 709,228 |  | $ | 91,814     |   |  | 12.9  | %
|                              |  |                    |         |                |   |         |  |   |            |   |  |       |  



| |  |  | Net product and service sales.The weakening of the U.S. dollar against the euro and certain other foreign currencies contributed $66.7 million to the
increase in net product and service sales.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Net product and service sales.Excluding the impact of foreign currency exchange rates, acquisitions and divestitures, sales agency fee income, and sales
under the License Agreement, our net product and service sales increased 1.4% for the three months ended March 28, 2008, compared to the same period in the prior year. The increase was due to growth in our European, Latin America, and Asia
Pacific regions. This growth was partially offset by declining sales in Japan and North America. The following is a review of the sales performance for each of our regions, which also excludes the impact of foreign currency exchange rates,
acquisitions and divestitures, sales agency fee income, and sales under the License Agreement:
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In our Europe, Africa and Middle East markets, net sales in the first quarter of 2008 increased 1.3% compared to the same period in the prior year. This growth was
driven by a combination of selective price increases in certain business sectors and geographic areas and increased sales volume, which was driven by increased application sales to existing customers and continued expansion of developing markets in
Central and Eastern Europe, Africa and the Middle East. This sales growth was offset and impacted, in part, by distributors accelerating purchases in the fourth quarter of 2007, a result of rapid growth in raw material costs and expected future
price increases.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | In Asia Pacific, net sales increased 10.5% in the first quarter of 2008 compared to the same period in the prior year despite severe weather conditions in China
during January and February, which offset this regions continued strong performance. This growth was led by top customer growth and strong sales volume throughout most countries in the region, primarily in the food and beverage as well as the
food and lodging sectors.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Latin America, net sales increased 2.0% in the first quarter of 2008 compared to the same period in the prior year, primarily driven by selective price increases
throughout the region and continued success with our indirect channel partners, offset by some start up requirements related to an ERP system launch in one of our key Latin American markets.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In North America, net sales decreased 1.0% in the first quarter of 2008 compared to the same period in the prior year, primarily due to food and beverage customer
consolidation and distributor inventory reduction.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Japan, net sales showed a slight decrease of 0.3% in the first quarter of 2008 compared to the same period in the prior year, primarily due to a transfer of food
service sales, previously recorded as direct, to a distributor, and softness in the alcoholic beverage marketplace.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sales agency fee and License Agreement.In October 2007, we reached agreement with Unilever on a new Umbrella Agreement, to replace the previous Sales Agency
Agreement, which includes; i) a new agency agreement with terms similar to the previous Sales Agency Agreement, covering Ireland, the United Kingdom, Portugal and Brazil, and ii) the License Agreement under which Unilever has agreed to grant 31 of
our subsidiaries a license to produce and sell professional size packs of Unilevers consumer brand cleaning products. The entities covered by the License Agreement will also enter agreements with Unilever to distribute Unilevers consumer
branded products. Except for some transitional arrangements in certain countries, the Umbrella Agreement became effective January 1, 2008, and unless otherwise terminated or extended, will expire on December 31, 2017.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under the License Agreement, we recorded incremental net product and service sales of $35.0 million during the three
month period ended March 28, 2008.

For the sales agency agreement, we recorded total sales agency fee income of $8.5 million,
consisting of $6.9 million under the new agency agreement, $1.4 million under transitional arrangements, and $0.2 million of termination fees. We anticipate that sales under the previous agreement will be phased out in 2008.

Gross Profit:



|                                                                                |  |                    |         |   |                |   |         |        |  |            |        |  |      |  
|------------------------------------------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | ------ |  | ---------- | ------ |  | ---- | -
|                                                                                |  | Three Months Ended |         |   | Change         |  
|(dollars in thousands)                                                          |  | March 28, 2008     |         |   | March 30, 2007 |   |         | Amount |  | Percentage |       
|Gross Profit                                                                    |  | $                  | 331,482 |   |                | $ | 295,788 |        |  | $          | 35,694 |  | 12.1 | %
|Gross profit as a percentage of net sales as reported:                          |  |                    | 41.4    | % |                |   | 41.7    | %      |  |            |        |  |      |  
|Gross profit as a percentage of net sales adjusted for sales agency fee income: |  |                    | 40.8    | % |                |   | 39.8    | %      |  |            |        |  |      |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies increased gross profit by $29.3 million for the three months ended
March 28, 2008 compared to the same period in the prior year.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, gross profit increased $6.4 million in the first quarter of fiscal year 2008 compared to the same period in
the prior year, primarily due to growth in our European, Asia Pacific, and Latin America regions mentioned above.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Based on net sales as reported, our gross profit percentage for the first quarter of 2008 declined by 30 basis points compared to the same period in the prior year.
Excluding the impact of sales agency fee income, our gross profit
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| | percentage improved 100 basis points for the first quarter of 2008 compared to the first quarter of 2007 with higher margins in Europe, North America, and
Japan. Success from our Global Strategic Sourcing Initiative, the favorable impact of our cost reduction programs, and selective price increases contributed to the increased margin.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating Expenses:



|                                               |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|---------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | ------ |  | - | ---------- | - |  | ----- | -
|                                               |  | Three Months Ended |         |   | Change         |  
|(dollars in thousands)                         |  | March 28, 2008     |         |   | March 30, 2007 |   |         | Amount |  |   | Percentage |  
|Selling, general and administrative expenses   |  | $                  | 278,166 |   |                | $ | 278,298 |        |  | $ | (132       | ) |  | 0.0   | %
|Research and development expenses              |  |                    | 18,045  |   |                |   | 15,843  |        |  |   | 2,202      |   |  | 13.9  | %
|Restructuring expenses                         |  |                    | 6,497   |   |                |   | 2,121   |        |  |   | 4,376      |   |  | 206.3 | %
|                                               |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|                                               |  | $                  | 302,708 |   |                | $ | 296,262 |        |  | $ | 6,446      |   |  | 2.2   | %
|                                               |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|                                               |  |                    |         |  
|As a percentage of reported net sales:         |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|Selling, general and administrative expenses   |  |                    | 34.7    | % |                |   | 39.2    | %      |  |   |            |   |  |       |  
|Research and development expenses              |  |                    | 2.3     | % |                |   | 2.2     | %      |  |   |            |   |  |       |  
|Restructuring expenses                         |  |                    | 0.8     | % |                |   | 0.3     | %      |  |   |            |   |  |       |  
|                                               |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|                                               |  |                    | 37.9    | % |                |   | 41.7    | %      |  |   |            |   |  |       |  
|                                               |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|                                               |  |                    |         |  
|As a percentage of net sales adjusted for SAF: |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|Selling, general and administrative expenses   |  |                    | 35.1    | % |                |   | 40.5    | %      |  |   |            |   |  |       |  
|Research and development expenses              |  |                    | 2.3     | % |                |   | 2.3     | %      |  |   |            |   |  |       |  
|Restructuring expenses                         |  |                    | 0.8     | % |                |   | 0.3     | %      |  |   |            |   |  |       |  
|                                               |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  
|                                               |  |                    | 38.2    | % |                |   | 43.1    | %      |  |   |            |   |  |       |  
|                                               |  |                    |         |   |                |   |         |        |  |   |            |   |  |       |  



| |  |  | Operating expenses.The weakening of the U.S. dollar against the euro and certain other foreign currencies increased operating expenses by $24.2 million in
the three months ended March 28, 2008 compared to the same period in the prior year.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling, general and administrative expenses. As a percentage of adjusted net sales excluding sales agency fee income, selling, general and administrative
costs were 34.1% for the first quarter of 2008 compared to 36.6% the first quarter of 2007 when period costs under the November 2005 Plan restructuring program are excluded. Excluding the impact of foreign currency and costs associated with the
November 2005 Plan, selling, general and administrative costs declined $5.0 million during the first quarter of 2008 compared to the first quarter of 2007. This was due to accelerated savings from our November 2005 Plan and controlled spending in
most of our regions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Research and development expenses.Excluding the impact of foreign currency, research and development expenses increased $1.5 million during the first
quarter of 2008 compared to the prior year period.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Restructuring expenses.Excluding the impact of foreign currency, restructuring expenses increased $4.3 million during the first quarter of 2008 compared to
the prior year period. This was primarily due to increased employee severance and other expenses related to the November 2005 Plan in Japan where we have taken action to consolidate and streamline our sales and marketing functions into one legal
entity and two business units.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Restructuring and Integration:

A summary of all costs associated with the November 2005 Plan for the three months ended March 28, 2008 and March 30, 2007, and since inception of the program in November 2005, is outlined below:



|                                                                        |  |                                  |        |   |                                  |   |         |                                     |  |   |          |  
|----------------------------------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | - | ------- | ----------------------------------- |  | - | -------- | -
|(dollars in thousands)                                                  |  | Three Months EndedMarch 28, 2008 |        |   | Three Months EndedMarch 30, 2007 |   |         | Total Project to DateMarch 28, 2008 | 
|Reserve balance at beginning of period                                  |  | $                                | 46,226 |   |                                  | $ | 70,225  |                                     |  | $ |         |  
|Restructuring costs charged to income                                   |  |                                  | 6,497  |   |                                  |   | 2,177   |                                     |  |   | 153,032  |  
|Liability adjustments                                                   |  |                                  |       |   |                                  |   | (52     | )                                   |  |   | 313      |  
|Payments of accrued costs                                               |  |                                  | (6,325 | ) |                                  |   | (13,643 | )                                   |  |   | (106,947 | )
|                                                                        |  |                                  |        |   |                                  |   |         |                                     |  |   |          |  
|Reserve balance at end of period                                        |  | $                                | 46,398 |   |                                  | $ | 58,707  |                                     |  | $ | 46,398   |  
|                                                                        |  |                                  |        |   |                                  |   |         |                                     |  |   |          |  
|Period costs classified as selling, general and administrative expenses |  | $                                | 8,152  |   |                                  | $ | 26,602  |                                     |  | $ | 237,294  |  
|Period costs classified as cost of sales                                |  |                                  | (16    | ) |                                  |   | 379     |                                     |  |   | 3,736    |  
|Capital expenditures                                                    |  |                                  | 3,460  |   |                                  |   | 3,678   |                                     |  |   | 44,458   |  



| |  |  | During the first quarter of 2008 and 2007, we recorded $6.5 million and $2.1 million, respectively, of restructuring costs related to our November 2005 Plan in our
consolidated statements of operations. Costs for the first quarter of 2008 consisted primarily of involuntary termination costs associated with our Japanese business segment, and the costs for the first quarter of 2007 consisted primarily of
involuntary termination and other costs incurred by our North American and European business segments as well as our Corporate Center. In addition, during the first quarter of 2008 and the first quarter of 2007, we recorded $8.2 million and $26.6
million, respectively, of selling, general and administrative expenses and $0 and $0.4 million, respectively, for cost of sales, of which $3.2 million and $1.1 million, respectively, related to long-lived asset impairments, $0 million and $1.9
million, respectively, related to impairment of tangible related non-cash items and $4.9 million and $24.0 million related to other period costs associated with restructuring activities. The overall decrease in these expenses over the prior year was
mainly due to a reduction in restructuring activities at our North American business segment as well as the Corporate Center.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In connection with the acquisition of the DiverseyLever business, we also recorded liabilities for the involuntary termination of former DiverseyLever employees and
other exit costs associated with former DiverseyLever facilities. During the first quarter of 2008 and 2007, we paid cash of $0.2 million and $0.2 million, respectively, representing contractual obligations associated with involuntary terminations
and lease payments on closed facilities. The restructuring reserve balances associated with the exit plans and our acquisition-related restructuring plans were $1.3 million and $2.4 as of March 28, 2008 and March 30, 2007, respectively. We
continue to make cash payments representing contractual obligations associated with involuntary terminations and lease payments on closed facilities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-Operating Results:



|                            |  |                    |        |   |                |   |        |        |  |   |            |   |  |       |  
|--------------------------- |  | ------------------ | ------ | - | -------------- | - | ------ | ------ |  | - | ---------- | - |  | ----- | -
|                            |  | Three Months Ended |        |   | Change         |  
|(dollars in thousands)      |  | March 28, 2008     |        |   | March 30, 2007 |   |        | Amount |  |   | Percentage |  
|Interest expense            |  | $                  | 37,999 |   |                | $ | 38,651 |        |  | $ | (652       | ) |  | -1.7  | %
|Interest income             |  |                    | (1,915 | ) |                |   | (3,435 | )      |  |   | 1,520      |   |  | -44.3 | %
|                            |  |                    |        |   |                |   |        |        |  |   |            |   |  |       |  
|Net interest expense        |  | $                  | 36,084 |   |                | $ | 35,216 |        |  | $ | 868        |   |  | 2.5   | %
|                            |  |                    |        |  
|Other expense (income), net |  |                    | (799   | ) |                |   | (307   | )      |  |   | (492       | ) |  | 160.3 | %



| |  |  | Net interest expense increased in the first quarter of 2008 compared to the prior year period primarily due to lower interest income during the quarter. The lower
interest income resulted from lower average cash balances and interest rates during the first quarter of 2008 as compared to the prior year period. This was partially offset by lower interest expense during the first quarter of 2008 as compared to
the prior year period, which resulted from lower interest rates.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Income Taxes:



|                                                                                |  |                    |        |   |                |   |         |        |  |            |        |  |       |  
|------------------------------------------------------------------------------- |  | ------------------ | ------ | - | -------------- | - | ------- | ------ |  | ---------- | ------ |  | ----- | -
|                                                                                |  | Three Months Ended |        |   | Change         |  
|(dollars in thousands)                                                          |  | March 28, 2008     |        |   | March 30, 2007 |   |         | Amount |  | Percentage |       
|Loss from continuing operations before income taxes and discontinued operations |  | $                  | (6,511 | ) |                | $ | (35,383 | )      |  | $          | 28,872 |  | -81.6 | %
|Provision for income taxes                                                      |  |                    | 15,555 |   |                |   | 12,790  |        |  |            | 2,765  |  | 21.6  | %
|                                                                                |  |                    |        |  
|Effective income tax rate                                                       |  |                    | -238.9 | % |                |   | -36.1   | %      |  |            |        |  |       |  



| |  |  | For the fiscal year ending December 31, 2008, we are projecting an effective income tax rate of approximately 130%. The projected effective income tax rate for
the fiscal year exceeds the statutory tax rate primarily as a result of increased valuation allowances against net deferred tax assets and increases in global tax contingency reserves.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We reported an effective income tax rate of -238.9% on the pre-tax loss from continuing operations for the three month period ended March 28, 2008.
The higher effective tax rate for the three month period ended March 28, 2008 is primarily attributable to pacing of pre-tax income (loss) in certain key jurisdictions. For example, the pre-tax loss from continuing operations for the three
month period ended March 28, 2008 includes a relatively high proportion of the projected annual U.S. pre-tax loss from continuing operations, for which no income tax benefit is claimed due to the U.S. valuation allowance.



| |  |  | We reported an effective income tax rate of -36.1% on the pre-tax loss from continuing operations for the three month period ended March 30, 2007. The negative
effective income tax rate was primarily due to increases in valuation allowances against U.S. net deferred tax assets.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Income:

Our net income increased by $26.1 million to a net loss of $21.7 million for the first quarter of 2008 compared to a net loss of $47.8
million for the first quarter of 2007, mainly due to increased operating profits of $29.2 million, offset by a $2.8 million increase in the income tax provision. The increase in operating profit was driven by a $35.7 million increase in gross profit
and controlled selling, general and administrative spending, partially offset by increased restructuring expenses of $4.4 million and increased research and development expenses of $2.2 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.



25



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##### Table of Contents

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
March 28, 2008 and March 30, 2007.



|                                                            |  |                    |         |   |                |   |         |  
|----------------------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- | -
|                                                            |  | Three Months Ended |        
|(dollars in thousands)                                      |  | March 28, 2008     |         |   | March 30, 2007 |  
|Net cash flows provided by (used in) operating activities   |  | $                  | (9,775  | ) |                | $ | (42,565 | )
|Changes in operating assets and liabilities, net of effects |  |                    | 21,042  |   |                |   | 55,298  |  
|from acquisitions and divestitures of businesses            |  |                    |         |   |                |   |         |  
|Changes in deferred income taxes                            |  |                    | (1,829  | ) |                |   | (4,657  | )
|Gain (loss) from divestitures                               |  |                    | 2,489   |   |                |   | (582    | )
|Gain (loss) on property disposals                           |  |                    | 136     |   |                |   | (563    | )
|Depreciation and amortization expense                       |  |                    | (33,355 | ) |                |   | (36,993 | )
|Amortization of debt issuance costs                         |  |                    | (1,273  | ) |                |   | (1,202  | )
|Interest accreted on notes payable                          |  |                    | (11,848 | ) |                |   | (11,229 | )
|Interest accrued on long-term receivables-related parties   |  |                    | 665     |   |                |   | 634     |  
|Other, net                                                  |  |                    | 12,012  |   |                |   | (5,978  | )
|                                                            |  |                    |         |   |                |   |         |  
|Net loss                                                    |  |                    | (21,736 | ) |                |   | (47,837 | )
|                                                            |  |                   
|Provision for income taxes                                  |  |                    | 15,769  |   |                |   | 13,016  |  
|Interest expense, net                                       |  |                    | 36,084  |   |                |   | 35,216  |  
|Depreciation and amortization expense                       |  |                    | 33,355  |   |                |   | 36,993  |  
|                                                            |  |                    |         |   |                |   |         |  
|EBITDA                                                      |  | $                  | 63,472  |   |                | $ | 37,388  |  
|                                                            |  |                    |         |   |                |   |         |  

EBITDA increased by $26.1 million for the quarter ended March 28, 2008 as compared to the
prior year first quarter, primarily due to a $14.7 million decrease in restructuring costs and period costs included in selling, general and administrative costs related to our November 2005 Plan as well as controlled selling, general and
administrative spending excluding restructuring costs.

Liquidity and Capital Resources



|                                                    |  |                    |           |   |                   |   |           |        |  |   |            |   |  |        |  
|--------------------------------------------------- |  | ------------------ | --------- | - | ----------------- | - | --------- | ------ |  | - | ---------- | - |  | ------ | -
|                                                    |  | Three Months Ended |           |   | Change            |  
|(dollars in thousands)                              |  | March 28, 2008     |           |   | March 30, 2007    |   |           | Amount |  |   | Percentage |  
|Net cash provided by (used in) operating activities |  | $                  | (9,775    | ) |                   | $ | (42,565   | )      |  | $ | 32,790     |   |  | -77.0  | %
|Net cash used in investing activities               |  |                    | 45,968    |   |                   |   | (19,689   | )      |  |   | 65,657     |   |  | -333.5 | %
|Net cash used in financing activities               |  |                    | 6,513     |   |                   |   | (2,813    | )      |  |   | 9,326      |   |  | -331.5 | %
|Capital expenditures                                |  |                    | (22,510   | ) |                   |   | (19,028   | )      |  |   | (3,482     | ) |  | 18.3   | %
|                                                    |  |                    |          
|                                                    |  |                    |           |   |                   |   |           | Change | 
|                                                    |  | March 28, 2008     |           |   | December 28, 2007 |   |           | Amount |  |   | Percentage |  
|Cash and cash equivalents                           |  | $                  | 141,120   |   |                   | $ | 97,176    |        |  | $ | 43,944     |   |  | 45.2   | %
|Working capital (1)                                 |  |                    | 548,747   |   |                   |   | 517,641   |        |  |   | 31,106     |   |  | 6.0    | %
|Total debt                                          |  |                    | 1,523,272 |   |                   |   | 1,486,511 |        |  |   | 36,761     |   |  | 2.5    | %



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



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| |  |  | The increase in cash and cash equivalents at March 28, 2008 compared to December 28, 2007 resulted primarily from cash proceeds from the divestiture of
the Auto-Chlor business in February 2008. This amount was partially offset by cash used during the quarter to fund capital expenditures.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The decrease in net cash used in operating activities during the three months ended March 28, 2008 compared to the prior year period was primarily due to a
smaller increase in working capital and a reduction in the utilization of the Asset Securitization program that was $12.0 million less than the prior year quarter.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in net cash provided by (used in) investing activities during the three months ended March 28, 2008 compared to the prior year period was
primarily due an increase in proceeds from divestitures, primarily related to the divestiture of the Auto-Chlor business in February 2008. This was partially offset by slightly higher capital expenditures in the first quarter of 2008 as compared to
the prior year quarter. Our investments tend to be in dosing and feeder equipment with new and existing customer accounts as well as ongoing expenditures in information technology and manufacturing. We may also make significant cash expenditures in
an effort to capitalize on cost savings opportunities.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in cash flow provided by (used in) financing activities during the three months ended March 28, 2008 compared to the prior year period was due to
an increase in short term borrowings in the current year quarter, as compared to a repayment of short term borrowing in the prior year quarter.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The weakening U.S. dollar contributed to the $31.1 million increase in working capital during the three months ended March 28, 2008. This included a $40.2
million increase in inventories and a $5.2 million decrease in accounts payable, partially offset by a $14.3 million decrease in accounts receivable. The increase in inventories is a result of a seasonal build in inventory levels and build from
factory closures.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 accreted at a rate of 10.67% per annum through May 15, 2007. After May 15, 2007, interest accrues on the accreted value of the senior discount notes at this rate, and is payable in cash
semiannually in arrears to the extent that JDI can distribute to us 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 us 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 us 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. We have no income from operations and no meaningful assets other than our interest in JDI. We receive all of our income from JDI and substantially all of our assets consist of our investment in JDI. The senior discount notes mature on
May 15, 2013.

In addition, on May 3, 2002, in connection with the acquisition, JDI issued its senior subordinated notes and
entered into a $1.2 billion senior secured credit facility. JDI used the proceeds of the sale of the JDI senior subordinated notes and initial borrowings under the JDI senior secured credit facilities, together with other available funds, to finance
the cash portion of the purchase price for the DiverseyLever business and the related fees and expenses and to refinance then-existing indebtedness.

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 16, 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 March 28, 2008, JDI 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.



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As of March 28, 2008, excluding indebtedness held by JDI, our only indebtedness consisted of the
senior discount notes with a book value of $386.0 million. As of March 28, 2008, our subsidiaries had total indebtedness of $1.1 billion, consisting of $656.1 million of senior subordinated notes, $438.5 million of borrowings under the senior
secured credit facilities, $15.0 million of other long-term borrowings and $27.6 million in short-term credit lines. In addition, JDI had $186.1 million in operating lease commitments, $2.8 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 the 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 our consolidated financial statements. As of the most recent actuarial estimation, we
anticipate making $47.5 million of contributions to pension plans in fiscal year 2008. Post-retirement medical claims are paid as they are submitted and are anticipated to be $3.8 million in fiscal year 2008.

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 March 28, 2008 and December 28, 2007, JDIs total potential for securitization of trade receivables was $75.0 million.

As of March 28, 2008 and December 28, 2007, the Conduits held $49.5 million and $53.9 million, respectively, of accounts receivable that are not included in the accounts receivable balance reflected in our
consolidated balance sheets.

As of March 28, 2008 and December 28, 2007, JDI had a retained interest of $94.2 million and $95.3
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.

For the three months ended March 30, 2007, JWPRCs cost of borrowing under the Receivables Facility was at a weighted average rate of
5.68% per annum.

Under the terms of the JDI senior secured credit facilities, JDI must use any net proceeds from the Receivables
Facility first to prepay loans outstanding under the JDI 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.



28



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Contractual Obligations

For the fiscal year ending December 31, 2008, we expect to increase FIN No. 48 liabilities (including interest and penalties) by $7.4 million, resulting in total FIN No. 48 liabilities (including
interest and penalties) of $42.8 million. Total FIN No. 48 liabilities (including interest and penalties) for which payments are expected in less than one year are $9.6 million. We are not able to provide a reasonably reliable estimate of the
timing of future payments relating to non-current FIN No. 48 liabilities.

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 JDI 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s 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
|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                     |  | 4.25 to 1            
|September 30, 2009                |  | 3.75 to 1            
|December 31, 2009                 |  | 3.75 to 1            
|March 31, 2010                    |  | 3.75 to 1            
|June 30, 2010                     |  | 3.75 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.

The JDI senior secured credit facilities require that JDI 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 InterestCoverage Ratio
|March 31, 2008 |  | 2.25 to 1                     
|June 30, 2008  |  | 2.25 to 1                     



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##### Table of Contents

|                                  |  |          
|--------------------------------- |  | ---------
|September 30, 2008                |  | 2.50 to 1
|December 31, 2008                 |  | 2.50 to 1
|March 31, 2009                    |  | 2.50 to 1
|June 30, 2009                     |  | 2.50 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 March 28, 2008, 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 $130 per fiscal year. To the extent that
JDI makes capital expenditures of less than the limit in any fiscal year, however, JDI may carry forward into the subsequent year the difference between the limit and the actual amount we expended, provided that the amounts JDI carries 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 March 28, 2008, JDI was in compliance with the limitation on capital
expenditures for fiscal year 2008.

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 March 28, 2008, 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 JDI senior secured credit facilities also limit JDIs 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 , JDI sold its equity interest in CMA to Ali SpA, an
Italian-based manufacturer of equipment for the food service industry, for $17.0 million. CMA was a non-core asset. In January 2007, JDI finalized and collected additional purchase price of $0.3 million related to a working capital adjustment.
During the fiscal year ended December 29, 2006, JDI recorded an estimated gain of $2.3 million ($0.5 million after tax), net of related costs. During the first quarter of 2007, JDI finalized purchase price and recorded additional closing costs,
resulting in an immaterial additional gain. During the fiscal year ended December 28, 2007, JDI finalized purchase price and recorded additional closing costs, resulting in a reduction to the gain of $0.3 million ($0.3 million after tax).
Further adjustments are not expected to be significant.

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 $470.0 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 JDI $1.5 million for the option to extend the tolling agreement by up to six months. In December 2006, JDI and BASF finalized purchase price adjustments related to the net asset value and
JDI received an additional $4.1 million. The Polymer Business



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##### Table of Contents

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 our Company and had been reported as a separate business segment. During the fiscal year ended December 29, 2006, JDI recorded an estimated gain of $352.9 million
($256.7 million after tax), net of related costs.

During the fiscal year ended December 28, 2007, JDI finalized and paid certain
pension related adjustments, adjusted net assets disposed and recorded additional closing costs, reducing the gain by $1.7 million ($0.3 million after tax gain) of which $0.7 million ($0.4 million after tax) was recorded during the three months
ended March 30, 2007. During the three months ended March 28, 2008, JDI recorded and refined additional closing costs increasing the gain by an immaterial amount. Further adjustments are not expected to be significant.

The assets and liabilities remaining in discontinued operations at March 28, 2008 and December 28, 2007 relate to the Tolling Agreement. JDI
recorded income from discontinued operations, net of tax, relating to the tolling agreement of $0.3 million and $0.7 million, during the three months ended March 28, 2008 and March 30, 2007, respectively.

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 JDIs end-users for $2.6 million. JDI previously held 9% of the outstanding shares. The transaction is not considered
material to our consolidated financial position, results of operations or cash flows.

Divestitures

Auto-Chlor Master Franchise and Branch Operations

In
December 2007, in conjunction with its November 2005 Plan, JDI executed a sales agreement for its Auto-Chlor Master Franchise and substantially all of our remaining Auto-Chlor branch operations in North America, a business that marketed and sold
low-energy dishwashing systems, kitchen chemicals, laundry and housekeeping products and services to foodservice, lodging, healthcare, and institutional customers, for $69.8 million.

The sales agreement was subject to the approval of JDIs Directors and Unilever consent, both of which we consider necessary in order to meet
held for sale criteria under SFAS No. 144 Accounting for Asset Impairment. Accordingly, these assets were classified as held and used as of December 28, 2007. JDI obtained approval from our Board
of Directors and consent from Unilever in January 2008.

The transaction closed on February 29, 2008, subject to various post closing
adjustments including evaluation of potential pension related settlement charges, resulting in a net book gain approximating $2.5 million after taxes and related costs. The gain associated with these divestiture activities is included as a component
of selling, general and administrative expenses in the consolidated statements of operations.

As of the divestiture date, net assets were
as follows (000s):



|                                   |  |   |       
|---------------------------------- |  | - | ------
|Inventories                        |  | $ | 8,141 
|Property, plant and equipment, net |  |   | 11,439
|Goodwill                           |  |   | 12,745
|Other intangibles, net             |  |   | 32,517
|                                   |  |   |       
|Net assets divested                |  | $ | 64,842
|                                   |  |   |       

Net sales associated with these businesses were approximately $9.9 million and $14.3 million for
the three month periods ended March 28, 2008 and March 30, 2007, respectively.



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##### Table of Contents

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

Interest Rate Risk

As of March 28, 2008, JDI had $438.5 million of debt outstanding under its 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, $238.5 million of the debt outstanding remained subject to variable rates. In
addition, as of March 28, 2008, JDI had $42.7 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.



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

Evaluation of
JohnsonDiversey Holdings 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.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 as such term is defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act. 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 in recording,
processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the CEO and CFO,
as appropriate, to allow timely discussions regarding required disclosure.



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Changes in Internal Control Over Financial Reporting. There has not been any change in our
internal control over financial reporting during the quarter ended March 28, 2008, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls.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.



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##### Table of Contents

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 |  | Separation and Release Agreement between JohnsonDiversey, Inc. and Thomas Gartland, dated April 1, 2008, and April 30, 2008, respectively.
|     | 
|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.                   



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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: May 8, 2008 |  | /s/ Joseph F. Smorada                                        
|                  |  | Joseph F. Smorada, Vice President and Chief Financial Officer



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JOHNSONDIVERSEY HOLDINGS, INC.

EXHIBIT INDEX



|     |  |                                                                                                                                           
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Separation and Release Agreement between JohnsonDiversey, Inc. and Thomas Gartland, dated April 1, 2008, and April 30, 2008, respectively.
|     | 
|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.                   



36