Enhancing the Shareholder Value Proposition

In 2010, Newell Rubbermaid delivered core sales growth in all three operating segments. Consumer-driven innovation and strategic brand-building investments led to increases in market share and expanded our reach into new geographies and new categories. Our core mission remains to continue to build shareholder value by leveraging top-line growth to achieve sustainable earnings growth. Realizing these objectives requires an intense focus on cost at every level of the enterprise.

In 2010 we made continued progress in creating a leaner, more profitable and more competitive organization. Three key strategic initiatives, in particular, contributed meaningfully to these efforts and will continue to generate future benefits.

Capital Structure Optimization Plan: This plan created a simpler, more shareholder-friendly capital structure and allowed the Company to take advantage of a historically low interest rate environment. The initiative lowered Newell Rubbermaid's interest expense and largely eliminated potential future share dilution associated with our convertible notes.

European Transformation Plan: This targeted initiative is designed to simplify our business and improve profitability in our European operations, with the goal of a 10 percent or higher operating margin in Europe by the end of 2012. We are already reaping the benefits of key productivity projects that helped push our normalized operating margin in the region to 7 percent in 2010*. By centralizing decision making in our new European headquarters in Geneva, Switzerland, and streamlining our business structure, the European Transformation Plan will result in a stronger, more profitable business model. Continued improvements in key areas such as pricing architecture, organizational structure and other profit-enhancing initiatives will drive further increases in operating margin in 2011 and again in 2012. Once fully implemented in 2012, the plan is expected to generate $55–$65 million in annual profitability improvement.

Project Acceleration: Completed in 2010, this global, multi-year restructuring program was designed to consolidate and streamline our manufacturing and supply chain operations to achieve greater efficiency and best cost. Project Acceleration helped enable 700 basis points of gross margin expansion over the past five years and will deliver in excess of $220 million in annualized savings by the end of 2011.

Looking ahead, we will continue to invest behind operating efficiency and best-in-class business processes to drive higher productivity, increased earnings and enhanced shareholder value.

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