The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company's consolidated results of operations and financial condition. The discussion should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and Notes thereto.

Business Overview

Newell Rubbermaid is a global marketer of consumer and commercial products that touch the lives of people where they work, live and play. With 2008 annual sales of approximately $6.5 billion, the Company's products are marketed under a strong portfolio of brands, including Rubbermaid®, Graco®, Aprica®, Levolor ®, Calphalon®, Goody®, Sharpie®, Paper Mate®, Dymo ®, Parker®, Irwin®, Lenox® and Technical ConceptsTM. The Company's multi-product offering consists of well-known name-brand consumer and commercial products in three business segments: Home & Family; Office Products; and Tools, Hardware & Commercial Products.

Business Strategy

Newell Rubbermaid's vision is to become a global company of Brands That Matter™ and great people, known for best-in-class results. The Company is committed to building consumer-meaningful brands through understanding the needs of consumers and using those insights to create innovative, highly differentiated product solutions that offer performance and value. To support its multi-year transformation into a best-in-class global consumer branding and marketing organization, the Company has adopted a strategy that focuses on optimizing the business portfolio, building consumer-meaningful brands on a global scale, and achieving best cost and efficiency in its operations.

Market Overview

The Company operates in the consumer and commercial products markets, which are generally impacted by overall economic conditions in the regions in which the Company operates. The Company's results-to-date in 2009 have been impacted by weakness in consumer confidence and consumer spending due to the deterioration in worldwide economic conditions. The Company's results for the first six months of 2009 have been impacted by the following factors:

• Lower consumer confidence and corresponding lower demand, which has resulted in reduced consumer foot traffic and destocking of inventory, negatively impacting sales and contributing to an overall year-over-year core sales decline of approximately 9%. Core sales represent net sales excluding the impacts of acquisitions, currency and product line exits. The primary drivers of the core sales decline were continued weakness in economic conditions internationally, which resulted in a year-over-year core sales decline of approximately 13% in the Company's international businesses excluding the impact of currency and weaker economic conditions and lower demand in the commercial and industrial channels, which contributed to a year-over-year core sales decline of approximately 19% in the Company's Tools, Hardware & Commercial Products segment.

• Less volatile commodities markets, which has resulted in lower input costs relative to last year, as the Company's input costs last year were higher due to dramatic raw material inflation.

• Continued volatility in the credit markets, which has contributed to the decline in consumer demand and has resulted in reductions in available capital and financing for businesses and increases in costs associated with capital and financing, when available.

In response to these conditions, the Company took the following actions:

• Managed working capital to improve operating cash flows, with a particular focus on reducing inventory levels. During the first six months of 2009, the Company focused on optimizing its production capacity and sourcing of finished goods to correspond to anticipated reductions in demand. The Company reduced inventory levels and realized cash flows from such reductions of $78 million in the first six months of 2009, compared to approximately $133 million invested in inventory in the first half of 2008, which contributed to operating cash flows of $88 million in the first half of 2009 compared to a use of $(121) million in the first half of 2008.

• Continued implementing its strategy to exit low-margin product categories where demand is not responsive to innovation and input costs are subject to volatile commodities markets. The Company expects to make significant progress on these exits by the end of 2009, and to date, the product line exits have resulted in an approximate 5% year-over-year sales decline.

• Continued to improve the cost structure of the business by reducing and streamlining structural selling, general and administrative ("SG&A") costs, including consolidating the segment structure from four to three. The Company also implemented selected contingency plans to eliminate or delay costs where possible due to lower than expected sales. The Company plans to increase investment in strategic SG&A through the remainder of 2009 in selective areas to drive sales and enhance its new product pipeline and develop growth platforms for 2010 and beyond. The Company expects to target such investments in areas with the highest near-term sales growth potential, including the Home & Family businesses and certain Office Products categories. The Company expects to calibrate its investment in the back half of 2009 to the overall sales environment.

• Outlined and began implementing an initiative with a focus on continuing to reduce structural overhead costs by simplifying work, improving cash flow, and optimizing opportunities to invest in strategic brand building and gain market share despite economic conditions. During the first half of 2009, the Company's selective investments in strategic brand-building and consumer demand creation were evident in market share gains realized, as follows: the Sharpie® brand as a result of its "Uncap What's Inside" campaign; Calphalon as a result of the introduction of the UnisonTMline of non-stick, dishwasher safe gourmet cookware; Rubbermaid Food & Home as a result of the expansion of its food storage product line to include Lock-ItsTM storage containers with locking lid tabs; and Graco in certain product categories due to new product introductions such as the BlossomTM 4 in 1 feeding chair and the Pack 'n Play ® Playard with its Newborn NapperTM feature.

• Raised approximately $590 million in the public debt markets (after transaction costs and net costs associated with the convertible note hedge transactions) and completed tender offers for $325 million principal amount of medium-term notes to improve liquidity, reduce short-term financing needs and improve the overall capital structure.

• Reduced the dividend payable on its common stock from $0.84 per year to $0.20 per year. The new dividend policy better positions the Company to protect its investment grade credit rating and allows the Company to retain approximately $180 million of cash flows annually for the repayment of debt.

Ongoing Initiatives

Project Acceleration

Through the Project Acceleration restructuring program and other initiatives, the Company has made significant progress in improving capacity utilization rates to deliver productivity savings and increasing the use of strategic sourcing partners. In the first half of 2009, the Company began implementing a number of restructuring programs as part of Project Acceleration to reduce and realign its manufacturing footprint, including two programs in its Home & Family segment in North America, one program in its Tools, Hardware & Commercial Products segment in the Asia Pacific region, and two programs in its Office Products segment's international operations. Since the inception of Project Acceleration, the Company has reduced its manufacturing footprint by more than 40%, including the closure of 17 manufacturing facilities associated with Project Acceleration programs and the transfer of 19 manufacturing facilities to purchasers in connection with divestitures of businesses.

The Company continues to evaluate its supply chain to identify opportunities to realize efficiencies in purchasing, distribution and transportation. In the first half of 2009, the Company began consolidating its southeast U.S. distribution operations into a southeast U.S. distribution center, which includes the closures of multiple distribution facilities throughout that region of the U.S. The Company also continues to focus on rationalizing its use of multiple third party distribution and logistics service providers, consolidating such operations into Company-owned facilities where possible.

In an effort to align the business with the global business unit structure and achieve best total cost, the Company continues to evaluate and optimize its overall organizational structure and consolidate activities. In this regard, the Company has reduced its worldwide headcount by approximately 10%, or 2,500 employees, over the last twelve months excluding the impact of acquisitions, including a 1,400 employee reduction during the first half of 2009.

The Company incurred $60 million of restructuring costs during the six months ended June 30, 2009 and expects to incur restructuring costs between $100 and $150 million ($80 and $120 million after-tax) for the year ending December 31, 2009. The Company expects to have completed implementation of its Project Acceleration restructuring initiative by the end of 2010, and the total costs expected to be incurred over the life of the initiative are expected to be between $475 and $500 million. As of June 30, 2009, the remaining costs expected to be incurred to complete Project Acceleration are between $100 and $125 million. Cumulative annualized savings expected to be realized from the implementation of Project Acceleration are between $175 and $200 million once completed, with more than $100 million in annualized savings realized to date.

One Newell Rubbermaid

The Company strives to leverage the common business activities and best practices of its business units, and to build one common culture of shared values with a focus on collaboration and teamwork. Through this initiative, the Company has established regional shared service centers to leverage non-market facing functional capabilities to reduce costs. The Company is migrating multiple legacy systems and users to a common SAP global information platform in a phased, multi-year rollout. SAP is expected to enable the Company to integrate and manage its worldwide business and reporting processes more efficiently. To date, certain North American operations of its Home & Family and Office Products segments have successfully gone live with their SAP implementation efforts.

Results of Operations

The following table sets forth for the periods indicated items from the
Condensed Consolidated Statements of Income as reported and as a percentage of
net sales for the three and six months ended June 30, (in millions, except
percentages):



                                            Three Months Ended June 30,                      Six Months Ended June 30,
                                           2009                    2008                   2009                     2008

Net sales                             $ 1,504.3   100.0 %    $ 1,825.1   100.0 %    $ 2,708.2   100.0 %    $ 3,258.8      100.0%
Cost of products sold                     946.0    62.9        1,201.9    65.9        1,727.1    63.8        2,145.1       65.8

Gross margin                              558.3    37.1          623.2    34.1          981.1    36.2        1,113.7       34.2
Selling, general and
administrative expenses                   329.3    21.9          392.9    21.5          640.8    23.7          753.9       23.1
Restructuring costs                        29.5     2.0           69.4     3.8           60.0     2.2           87.8        2.7

Operating income                          199.5    13.3          160.9     8.8          280.3    10.4          272.0        8.3
Nonoperating expenses:
Interest expense, net                      40.3     2.7           38.7     2.1           70.9     2.6           64.5        2.0
Other expense, net                          1.2     0.1            0.4       -            1.9     0.1            0.2        0.0

Net nonoperating expenses                  41.5     2.8           39.1     2.1           72.8     2.7           64.7        2.0

Income from continuing operations
before income taxes                       158.0    10.5          121.8     6.7          207.5     7.7          207.3        6.4
Income taxes                               52.3     3.5           28.9     1.6           68.1     2.5           56.6        1.7

Income from continuing operations         105.7     7.0           92.9     5.1          139.4     5.1          150.7        4.6
Loss from discontinued
operations, net of tax                        -       -              -       -              -       -           (0.5 )       -

Net income                                105.7     7.0           92.9     5.1          139.4     5.1          150.2
Net income noncontrolling
interests                                     -       -            0.4       -              -       -            0.8         -

Net income controlling interests      $   105.7     7.0 %    $    92.5     5.1 %    $   139.4     5.1 %    $   149.4        4.6%

Three Months Ended June 30, 2009 vs. Three Months Ended June 30, 2008

Consolidated Operating Results:

Net sales for the three months ended June 30, 2009 were $1,504.3 million, representing a decrease of $320.8 million, or 17.6%, from $1,825.1 million for the three months ended June 30, 2008. Core sales declined 7.7% compared to the prior year resulting from the weaker consumer sales environment as well as inventory destocking, primarily in the industrial and commercial channels. Planned product line exits and foreign currency contributed an additional 6.0% and 3.9% to the year-over-year sales decline, respectively.

Gross margin, as a percentage of net sales, for the three months ended June 30, 2009 was 37.1%, or $558.3 million, versus 34.1% of net sales, or $623.2 million, for the three months ended June 30, 2008. The primary drivers of the 300 basis point gross margin expansion included benefits realized from product line exits, favorable input costs compared to the inflation experienced in the three months ended June 30, 2008, and the impact of pricing actions taken in the second half of 2008. These improvements more than offset the impact from unfavorable customer and product mix and lower production volumes in the Company's manufacturing facilities caused by the sales decline and the Company's management of inventory levels in response to lower demand, which combined adversely impacted gross margins by 200 basis points.

SG&A expenses for the three months ended June 30, 2009 were 21.9% of net sales, or $329.3 million, versus 21.5% of net sales, or $392.9 million, for the three months ended June 30, 2008. The $63.6 million decrease was primarily driven by the Company's continued management of structural and strategic SG&A spending resulting from the implementation of selected contingency plans during 2009 to mitigate the negative impact of the decline in sales. Foreign currency translation represented $18.5 million of the $63.6 million decline.

The Company recorded restructuring costs of $29.5 million and $69.4 million for the three months ended June 30, 2009 and 2008, respectively. The decrease in restructuring costs for 2009 compared to the prior year is primarily attributable to $36.0 million of asset impairment charges recorded in 2008 associated with the Company's plan to divest, downsize or exit certain product categories where resin is the primary component of cost of products sold. The restructuring costs for the three months ended June 30, 2009 included $8.7 million of facility and other exit costs, $11.5 million of employee severance, termination benefits and employee relocation costs, and $9.3 million of exited contractual commitments and other restructuring costs. The restructuring costs for the three months ended June 30, 2008 included $50.2 million of facility and other exit costs, including the $36.0 million of asset impairment charges noted above, $12.3 million of employee severance, termination benefits and employee relocation costs and $6.9 million of exited contractual commitments and other restructuring costs. See Footnote 3 of the Notes to Condensed Consolidated Financial Statements for further information.

Operating income for the three months ended June 30, 2009 was 13.3% of net sales, or $199.5 million, versus 8.8% of net sales, or $160.9 million for the three months ended June 30, 2008. The $38.6 million increase in operating income is primarily attributable to savings realized from reduced SG&A spending and a decrease in restructuring costs, partially offset by the gross margin impact of lower sales.

Net nonoperating expenses for the three months ended June 30, 2009 were $41.5 million versus $39.1 million for the three months ended June 30, 2008. The increase in net nonoperating expenses is attributable to increased interest expense for the three months ended June 30, 2009 as a result of marginally higher average borrowing rates in 2009 as well as $4.7 million of costs incurred associated with the completion of tender offers to repurchase $325.0 million principal amount of medium-term notes.

The Company recognized income tax expense of $52.3 million for the three months ended June 30, 2009, compared to $28.9 million for the three months ended June 30, 2008. The increase in tax expense was primarily a result of changes in the geographic mix of earnings, as well as the effect of lower tax rates applied to various discrete period expenses in 2009, including restructuring charges. Based on the accounting required for the income tax impacts associated with stock-based compensation, the Company's effective tax rate in future periods may be adversely impacted as a result of cancellations and exercises of employee stock options and vestings of restricted stock awards and restricted stock units. See Footnote 9 of the Notes to Condensed Consolidated Financial Statements for further information.

Business Segment Operating Results:

Net sales by segment were as follows for the three months ended June 30, (in
millions, except percentages):



                                                  2009       2008       % Change

      Home & Family                             $   617.2   $   717.6    (14.0)%
      Office Products                               496.9       609.2   (18.4)
      Tools, Hardware & Commercial Products         390.2       498.3   (21.7)

      Total Net Sales                           $ 1,504.3   $ 1,825.1    (17.6)%

Operating income (loss) by segment was as follows for the three months ended June 30, (in millions, except percentages):

                                                2009          2008       % Change

     Home & Family                             $  80.4      $  69.6          15.5%
     Office Products                              99.2        101.7         (2.5)
     Tools, Hardware & Commercial Products        67.6         80.2        (15.7)
     Corporate                                   (18.2 )      (21.2)        14.2
     Restructuring costs                         (29.5 )      (69.4)

     Total Operating Income                    $ 199.5      $ 160.9          24.0%

Home & Family

Net sales for the three months ended June 30, 2009 were $617.2 million, a decrease of $100.4 million, or 14.0%, from $717.6 million for the three months ended June 30, 2008. Core sales declined 1.5% as mid single digit core sales growth in the Baby & Parenting Essentials and Culinary Lifestyles global business units was offset by softness in the Décor, Rubbermaid Food & Home Products, and Beauty & Style global business units. Net sales declined an additional 10.2% due to decreased sales in certain Rubbermaid Food & Home Products categories that the Company plans to substantially exit before the end of 2009 and 2.3% due to unfavorable foreign currency impacts.

Operating income for the three months ended June 30, 2009 was $80.4 million, or 13.0% of sales, an increase of $10.8 million, or 15.5%, from $69.6 million, or 9.7% of sales, for the three months ended June 30, 2008. Operating income improved primarily due to

favorable input costs, lower SG&A expenses and product line exits. The favorable impacts more than offset the adverse impacts of the core sales decline, unfavorable mix and lower production volumes in the Company's manufacturing facilities, which combined reduced operating income by approximately $10.0 million.

Office Products

Net sales for the three months ended June 30, 2009 were $496.9 million, a decrease of $112.3 million, or 18.4%, from $609.2 million for the three months ended June 30, 2008. Core sales declined 7.0%, which was primarily attributable to continued weakness in the office products category, both domestically and internationally. Reduced sales relating to product line exits and unfavorable foreign currency contributed an additional 5.6% and 5.8%, respectively, to the decline.

Operating income for the three months ended June 30, 2009 was $99.2 million, a decrease of $2.5 million, or 2.5%, from $101.7 million for the three months ended June 30, 2008. Operating income as a percentage of sales improved to 20.0% for the three months ended June 30, 2009, compared to 16.7% for the three months ended June 30, 2008. The 330 basis point improvement reflects SG&A cost management, which contributed year-over-year operating income improvements of $25.0 million in constant currency, as well as the benefit from product line exits.

Tools, Hardware & Commercial Products

Net sales for the three months ended June 30, 2009 were $390.2 million, a decrease of $108.1 million, or 21.7%, from $498.3 million for the three months ended June 30, 2008. Core sales declined 17.7% as sustained weakness in the U.S. residential construction market and continued softness in industrial and commercial channels negatively impacted sales volumes. Unfavorable foreign currency contributed an additional 4.0% to the sales decline.

Operating income for the three months ended June 30, 2009 was $67.6 million, or 17.3% of sales, a decrease of $12.6 million, or 15.7%, from $80.2 million, or 16.1% of sales, for the three months ended June 30, 2008. The impacts of core sales declines and lower production volumes, which combined adversely impacted operating income by approximately $34.0 million, were partially offset by reduced SG&A costs resulting from management of SG&A spending. The lower production volumes were due to aggressive management of inventory levels.

Six Months Ended June 30, 2009 vs. Six Months Ended June 30, 2008

Consolidated Operating Results:

Net sales for the six months ended June 30, 2009 were $2,708.2 million, representing a decrease of $550.6 million, or 16.9%, from $3,258.8 million for the six months ended June 30, 2008. Core sales declined 8.9% compared to the prior year resulting from lower consumer foot traffic and corresponding lower product demand as well as inventory destocking at the retail level. Planned product line exits and foreign currency contributed an additional 5.3% and 4.3% to the year-over-year sales decline, respectively. The impacts of the Technical Concepts and Aprica acquisitions increased sales 1.6% over the prior year.

Gross margin, as a percentage of net sales, for the six months ended June 30, 2009 was 36.2%, or $981.1 million, versus 34.2% of net sales, or $1,113.7 million, for the six months ended June 30, 2008. The 200 basis point year-over-year improvement was primarily driven by the positive impact from planned product line exits, favorable input costs, and pricing actions taken in the second half of 2008, which more than offset the negative effect of reduced production volumes in the Company's manufacturing facilities and unfavorable mix.

SG&A expenses for the six months ended June 30, 2009 were 23.7% of net sales, or $640.8 million, versus 23.1% of net sales, or $753.9 million, for the six months ended June 30, 2008. The decrease was primarily driven by the Company's management of structural and strategic SG&A spending to mitigate the negative impact of the decline in sales, which resulted in a $94.2 million year-over-year decline in constant currency. Foreign currency represented an additional $40.1 million of the decline, and the impacts of these items were partially offset by $21.2 million of incremental SG&A costs resulting from the Technical Concepts and Aprica acquisitions.

The Company recorded restructuring costs of $60.0 million and $87.8 million for the six months ended June 30, 2009 and 2008, respectively. The decrease in restructuring costs for the six months ended June 30, 2009 compared to the prior year is primarily attributable to $36.0 million of asset impairment charges recorded in 2008 associated with the Company's plan to divest, downsize or exit certain product categories where resin is the primary component of cost of products sold. The restructuring costs for the six months ended June 30, 2009 included $13.3 million of facility and other exit costs, $32.4 million of employee severance, termination benefits and employee relocation costs, and $14.3 million of exited contractual commitments and other restructuring costs. The restructuring costs for the six months ended June 30, 2008 included $46.4 million of facility and other exit costs, including the $36.0 million of asset impairment charges noted above, $30.3 million of employee severance, termination benefits and employee relocation

costs and $11.1 million of exited contractual commitments and other restructuring costs, of which $1.4 million relates to the Company's 2001 Restructuring Plan. See Footnote 3 of the Notes to Condensed Consolidated Financial Statements for further information.

Operating income for the six months ended June 30, 2009 was 10.4% of net sales, or $280.3 million, versus 8.3% of net sales, or $272.0 million, for the six months ended June 30, 2008. The $8.3 million increase in operating income is primarily attributable to savings realized from reduced SG&A spending and a decrease in restructuring costs during the six months ended June 30, 2009, partially offset by the gross margin impact of lower sales.

Net nonoperating expenses for the six months ended June 30, 2009 were $72.8 million versus $64.7 million for the six months ended June 30, 2008. The $8.1 million increase in net nonoperating expenses is primarily attributable to increased interest expense during the six months ended June 30, 2009 due to higher year-over-year average borrowings, as the Company issued $750.0 million in medium-term notes during the first half of 2008 to finance the acquisitions . . .