UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the Quarterly Period Ended June 30, 2007

Commission File Number 001-08454

ACCO Brands Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization) 36-2704017
(I.R.S. Employer
Identification Number)

300 Tower Parkway
Lincolnshire, Illinois 60069
(Address of Registrant’s Principal Executive Office, Including Zip Code)

(847) 541-9500
(Registrant’s Telephone Number, Including Area Code)

N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule
 12b-2 of the Act).

Large accelerated filer þ      Accelerated filer o      Non-accelerated filer o

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

As of August 1, 2007, the registrant had outstanding 54,074,606 shares of Common Stock.

     This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results of operations of the registrant could differ materially from those projected in the forward-looking statements as a result of a number of important factors. For a discussion of important factors that could affect our results, please refer to PART I, ITEM 1A. Risk Factors, contained in the Company’s annual report on Form 10-K for the year ended December 31, 2006, and discussions set forth in PART I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, below.

     Unless the context otherwise requires, the terms “ACCO Brands,” “we,” “us,” “our,” “the Company” and other similar terms refer to ACCO Brands Corporation and its consolidated subsidiaries.

Website Access To Securities and Exchange Commission Reports

     The Company’s Internet website can be found at www.accobrands.com. The Company makes available free of charge on or through its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as practicable after the Company files them with, or furnishes them to, the Securities and Exchange Commission.

     It is suggested that the condensed consolidated financial statements included herein in PART I, ITEM 1. Financial Information, be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2006.

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TABLE OF CONTENTS

Certification

Certification

Certification

Certification

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCO Brands Corporation and Subsidiaries
Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2007			2006
(in millions of dollars)	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	35.9		$	50.0
Accounts receivable, net		393.0			427.4
Inventories, net		315.1			277.6
Deferred income taxes		37.6			37.2
Other current assets		36.7			30.0
Total current assets		818.3			822.2
Property, plant and equipment, net		215.7			217.2
Deferred income taxes		81.7			79.2
Goodwill		444.8			438.3
Identifiable intangibles, net		230.7			233.6
Other assets		72.0			59.1
Total assets	$	1,863.2		$	1,849.6
Liabilities and Stockholders’ Equity
Current liabilities:
Notes payable to banks	$	22.7		$	4.7
Current portion of long-term debt		9.3			0.1
Accounts payable		191.6			189.2
Accrued compensation		28.6			36.5
Accrued customer program liabilities		104.5			121.9
Other current liabilities		129.6			143.7
Total current liabilities		486.3			496.1
Long-term debt		793.8			800.3
Deferred income taxes		96.7			99.7
Postretirement and other liabilities		78.3			69.5
Total liabilities		1,455.1			1,465.6
Commitments and Contingencies — Note 12
Common stock		0.6			0.6
Treasury stock		(1.1	)		(1.1	)
Paid-in capital		1,385.5			1,374.6
Accumulated other comprehensive loss		(41.6	)		(50.1	)
Accumulated deficit		(935.3	)		(940.0	)
Total stockholders’ equity		408.1			384.0
Total liabilities and stockholders’ equity	$	1,863.2		$	1,849.6

See notes to condensed consolidated financial statements.

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ACCO Brands Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions of dollars, except per share data)	2007			2006			2007			2006
Net sales	$	464.9		$	462.6		$	910.8		$	931.2
Cost of products sold		326.2			336.6			642.9			674.7
Advertising, selling, general and administrative expenses		113.2			109.6			226.1			217.1
Amortization of intangibles		2.7			3.5			5.3			6.0
Restructuring and asset impairment charges		2.4			13.0			3.1			19.8
Operating income (loss)		20.4			(0.1	)		33.4			13.6
Interest expense, net		16.0			15.3			30.9			30.7
Other income, net		(1.6	)		(0.2	)		(2.5	)		(1.7	)
Income (loss) before income taxes and minority interest		6.0			(15.2	)		5.0			(15.4	)
Income taxes		1.3			(5.4	)		—			(5.6	)
Minority interest		0.2			—			0.3			0.1
Net income (loss)	$	4.5		$	(9.8	)	$	4.7		$	(9.9	)
Basic earnings per common share	$	0.08		$	(0.18	)	$	0.09		$	(0.18	)
Diluted earnings per common share:	$	0.08		$	(0.18	)	$	0.09		$	(0.18	)
Weighted average number of shares outstanding:
Basic		54.0			53.4			53.9			53.2
Diluted		55.1			53.4			55.0			53.2

See notes to condensed consolidated financial statements.

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ACCO Brands Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	Six Months Ended
	June 30,
(in millions of dollars)	2007			2006
Operating activities
Net income (loss)	$	4.7		$	(9.9	)
Restructuring, impairment and other non-cash charges		0.7			2.4
Loss on sale of assets		0.3			0.1
Depreciation		16.4			19.5
Amortization of debt issuance costs		2.2			2.1
Amortization of intangibles		5.3			6.0
Stock-based compensation		7.8			9.6
Changes in balance sheet items:
Accounts receivable		40.1			41.0
Inventories		(33.6	)		(32.5	)
Other assets		(7.8	)		(14.2	)
Accounts payable		(0.7	)		29.7
Accrued expenses and other liabilities		(42.9	)		(14.4	)
Income taxes		(5.2	)		(7.9	)
Other operating activities, net		(1.8	)		0.3
Net cash (used) provided by operating activities		(14.5	)		31.8
Investing activities
Additions to property, plant and equipment		(21.9	)		(12.1	)
Proceeds from the disposition of assets		0.3			0.8
Net cash used by investing activities		(21.6	)		(11.3	)
Financing activities
Repayments of long-term debt		—			(79.7	)
Borrowings (repayments) of short-term debt, net		17.9			(1.9	)
Proceeds from the exercise of stock options		3.1			9.1
Other financing activities		—			(0.1	)
Net cash provided (used) by financing activities		21.0			(72.6	)
Effect of foreign exchange rate changes on cash		1.0			2.2
Net decrease in cash and cash equivalents		(14.1	)		(49.9	)
Cash and cash equivalents
Beginning of period		50.0			91.1
End of period	$	35.9		$	41.2

See notes to condensed consolidated financial statements.

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ACCO Brands Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

     The management of ACCO Brands Corporation is responsible for the accuracy and internal consistency of the preparation of the consolidated financial statements and footnotes contained in this quarterly report on Form 10-Q.

     Certain reclassifications have been made in the prior period’s financial statements to conform to the current year presentation.

     The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Although the Company believes the disclosures are adequate to make the information presented not misleading, certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to those rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2006.

     The condensed consolidated balance sheet as of June 30, 2007, the related condensed consolidated statements of income for the three and six months ended June 30, 2007 and 2006, and the related condensed consolidated statements of cash flows for the six months ended June 30, 2007 and 2006 are unaudited. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required annually by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments consisting of only normal recurring adjustments necessary for a fair presentation of the financial statements have been included. Interim results may not be indicative of results for a full year.

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

     During the three months ended March 31, 2007, the Company identified certain customer program costs aggregating $1.7 million that were not correctly accrued as of December 31, 2006. Management assessed the impact of this error on prior-period annual and quarterly financial statements, as well as its estimate of current year earnings, and determined that the required adjustments were not material to any of the periods. Accordingly, the Company recorded an adjustment during the three months ended March 31, 2007 to correct the error, resulting in a reduction to net sales and pre-tax income of $1.7 million.

     On January 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. As a result of the implementation of FIN 48, the Company did not recognize an increase or decrease in the liability for unrecognized tax benefits.

     Effective January 1, 2007, the Company realigned and reclassified certain businesses, resulting in a change in the Company’s reportable segments. Prior year amounts included herein have been restated to conform to the current year presentation.

2. Significant Accounting Policies

          Income Taxes

     In accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, deferred tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred tax assets to an amount that is more likely than not to be realized.

     The amount of income taxes that we pay is subject to ongoing audits by federal, state and foreign tax authorities. The Company’s estimate of the potential outcome of any uncertain tax position is subject to management’s assessment of relevant risks, facts and circumstances existing at each reporting date. Tax positions are recognized as the largest amount of tax benefit that is greater than 50

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percent likely of being realized upon ultimate settlement with a taxing authority, when it is more likely than not, based on technical merits, that the position will be sustained upon examination. Any differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for income taxes payable or a reduction of an income tax refund receivable; a reduction in a deferred tax asset or an increase in a deferred tax liability; or both.

     The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes in its results of operations.

3. Information on Business Segments

     As of January 1, 2007, the Company realigned and reclassified certain businesses, resulting in the following changes:

• The Company created a new business segment, the Document Finishing Group, which consists of the following businesses:

o the businesses comprising its former Other Commercial segment (consisting of the Document Finishing and Day-Timers businesses);

o the Company’s document communication business, which was transferred from the Office Products Group; and

o the Company’s high speed and other binding business, which was transferred from the former Industrial Print Finishing Group (“IPFG”) business segment.

• In addition, the remaining components of the former IPFG business segment began reporting as the Commercial Laminating Solutions Group business segment to more appropriately reflect the remaining operations.

     The Company’s realigned business segments are further described below.

  Office Products Group

     The Office Products Group includes three broad consumer-focused product groupings throughout our global operations. These product groupings are: Workspace Tools (stapling and punch products and supplies), Visual Communication (dry erase boards, easels, laser pointers, overhead projectors and supplies) and Storage and Organization (storage bindery, filing systems, and business essentials). Our businesses, principally in North America, Europe and Asia-Pacific, distribute and sell such products on a regional basis.

     Our office products are manufactured internally or sourced from outside suppliers. The customer base to which our office products are sold is made up of large global and regional resellers of our product. It is through these large resellers that the Company’s office products reach the end consumer.

  Document Finishing Group

     The Document Finishing Group provides document solutions throughout a document’s lifecycle. Primary solutions include Finishing (binding, lamination and punching equipment, binding and lamination supplies, report covers, and custom and stock binders and folders), Archival (report covers), Destruction (shredders) and Services (machine maintenance and repair services). Also included in this business is our Personal Planning Solutions business (personal organization tools, including time management products), primarily under the Day-Timer® brand name.

     Document Finishing products are manufactured both internally and by third party manufacturing partners. Products are sold directly to high volume end-users, commercial reprographic centers and indirectly to lower volume consumers worldwide.

     Our Day-Timers business includes U.S., New Zealand and U.K. operating companies, which sell products regionally to consumers, primarily utilizing their own manufacturing, customer service and distribution structures. Approximately two-thirds of the Day-Timers business is through the direct channel, which markets product through periodic sales catalogs and ships product directly to our end-user customers. The remainder of the business sells to large resellers and commercial dealers.

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  Computer Products Group

     The Computer Products Group designs, distributes, markets and sells accessories for laptop and desktop computers and Apple® iPod® products. These accessories primarily include security locks, power adapters, input devices such as mice and keyboards, computer carrying cases, hubs and docking stations and technology accessories for iPods®. The Computer Products Group sells mostly under the Kensington brand name, with the majority of its revenue coming from the U.S. and Western Europe.

     All of our computer products are manufactured to our specifications by third party suppliers, principally in Asia, and are stored and distributed from our regional facilities. Our computer products are sold primarily to consumer electronic retailers, information technology value-added resellers, original equipment manufacturers and office products retailers.

 Commercial Laminating Solutions Group

     The Commercial Laminating Solutions Group (“CLSG”) targets book publishers, “print-for-pay” and other finishing customers who use our professional grade finishing equipment and supplies. CLSG’s primary products include thermal and pressure-sensitive laminating films, mid-range and commercial high-speed laminators and large-format digital print laminators. CLSG’s products and services are sold worldwide through direct, dealer and other channels.

     Financial information by reportable segment is set forth below. All prior year information has been restated to reflect the January 1, 2007 changes in business segments.

     Net sales by business segment are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions of dollars)	2007		2006		2007		2006
Office Products Group	$	228.3	$	231.9	$	445.6	$	462.4
Document Finishing Group		139.0		135.6		276.7		277.2
Computer Products Group		53.3		51.2		102.7		103.1
Commercial Laminating Solutions Group		44.3		43.9		85.8		88.5
Net sales	$	464.9	$	462.6	$	910.8	$	931.2

     Operating income by business segment is as follows (a):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions of dollars)	2007			2006			2007			2006
Office Products Group	$	12.6		$	(6.4	)	$	24.0		$	(0.6	)
Document Finishing Group		5.5			4.4			9.2			10.3
Computer Products Group		9.9			6.5			15.5			14.8
Commercial Laminating Solutions Group		—			4.0			0.6			7.2
Subtotal		28.0			8.5			49.3			31.7
Corporate		(7.6	)		(8.6	)		(15.9	)		(18.1	)
Operating income (loss)		20.4			(0.1	)		33.4			13.6
Interest expense		16.0			15.3			30.9			30.7
Other income		(1.6	)		(0.2	)		(2.5	)		(1.7	)
Income (loss) before income taxes and minority interest	$	6.0		$	(15.2	)	$	5.0		$	(15.4	)

(a) Operating income as presented in the segment table above is defined as i) net sales; ii) less cost of products sold; iii) less advertising, selling, general and administrative expenses; iv) less amortization of intangibles; and v) less restructuring charges.

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     Segment assets:

     The following table presents the measure of segment assets used by the Company’s chief operating decision maker (b), as required by Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information.

	June 30,		December 31,
(in millions of dollars)	2007		2006
Office Products Group	$	511.4	$	492.4
Document Finishing Group		277.5		280.3
Computer Products Group		99.5		100.4
Commercial Laminating Solutions Group		87.0		84.5
Total segment assets		975.4		957.6
Unallocated assets		883.2		889.0
Corporate		4.6		3.0
Total assets	$	1,863.2	$	1,849.6

(b) Represents total assets, excluding: goodwill and identifiable intangibles resulting from business acquisitions, intercompany balances, cash, deferred taxes, prepaid pension assets, prepaid debt issuance costs and joint ventures accounted for on the equity basis.

     As a supplement to the presentation of segment assets presented above, the table below presents segment assets, including the allocation of identifiable intangible assets and goodwill resulting from business combinations (c).

	June 30,		December 31,
(in millions of dollars)	2007		2006
Office Products Group	$	850.2	$	828.4
Document Finishing Group		462.7		464.5
Computer Products Group		117.3		118.2
Commercial Laminating Solutions Group		220.7		218.4
Total segment assets		1,650.9		1,629.5
Unallocated assets		207.7		217.1
Corporate		4.6		3.0
Total assets	$	1,863.2	$	1,849.6

(c) Represents total assets, excluding: intercompany balances, cash, deferred taxes, prepaid pension assets, prepaid debt issuance costs and joint ventures accounted for on the equity basis.

4. Restructuring and Restructuring-Related Charges

     In March, 2005, the Company announced its plan to merge with General Binding Corporation (“GBC”) and took certain restructuring actions in preparation for the merger. Subsequent to the merger, significant restructuring actions have been initiated, which have resulted in the closure or consolidation of facilities that are engaged in manufacturing and distributing the Company’s products, primarily in North America and Europe. The Company recorded pre-tax restructuring and asset impairment charges of $2.4 million and $13.0 million during the three months ended June 30, 2007 and 2006, respectively, and $3.1million and $19.8 million during the six months ended June 30, 2007 and 2006, respectively, related to these actions. Additional charges are expected to be incurred throughout 2007 and 2008 as the Company continues to identify and implement the specific phases of its strategic and business integration plans.

     A summary of the activity in the restructuring accounts and a reconciliation of the liability for, and as of, the six months ended June 30, 2007 are as follows:

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	Balance at							Non-cash			Balance at
	December 31,				Cash			Write-offs/			June 30,
(in millions of dollars)	2006		Total Provision		Expenditures			Currency Change			2007
Employee termination costs	$	18.0	$	2.7	$	(4.6	)	$	0.3		$	16.4
Termination of lease agreements		4.5		0.1		(2.5	)		—			2.1
Subtotal		22.5		2.8		(7.1	)		0.3			18.5
Asset impairments(1)		—		0.3		—			(0.3	)		—
Net loss on disposal of assets resulting from restructuring activities		0.1		—		—			(0.1	)		—
Total rationalization of operations	$	22.6	$	3.1	$	(7.1	)	$	(0.1	)	$	18.5

(1) Included in the total restructuring provision recognized during the six months ended June 30, 2007 is a pre-tax charge of $0.3 million related to the exit of a facility meeting the criteria for recognition as an impaired disposal group as defined by SFAS 144, Impairment or Disposal of Long-Lived Assets. The decision to exit the facility was a part of the restructuring actions undertaken subsequent to the Company’s merger with GBC.

     Of the 1,081 positions planned for elimination under restructuring initiatives provided for through June 30, 2007, 610 had been eliminated as of the balance sheet date.

     Management expects the $16.4 million employee termination costs balance to be substantially paid within the next twelve months. Lease costs included in the $2.1 million balance are expected to continue until the last lease terminates in 2013.

     In association with the Company’s restructuring activities, certain restructuring-related costs were expensed to cost of products sold and advertising, selling, general and administrative expense in the income statement. These charges were principally related to the implementation of the new company footprint, including internal and external project management costs and to strategic product category exits. For the six months ended June 30, 2007 and 2006 these charges totaled $15.5 million and $6.8 million, respectively. The Company expects to record additional amounts as it continues its restructuring initiatives. In addition, the final charges related to planning for the integration of ACCO Brands and GBC businesses of $0.8 million were recorded during the six months ended June 30, 2006 and were classified in advertising, selling, general and administrative expense in the income statement.

5. Acquisition and Merger

     On August 17, 2005, ACCO Brands acquired 100% of the outstanding common stock of GBC. The results of GBC’s operations have been included in ACCO Brands’ consolidated financial statements since the merger date.

     The determination of goodwill required in the purchase price allocation related to the acquisition included accruals for certain estimated costs, including those related to the closure of GBC facilities, the termination of GBC lease agreements and to GBC employee-related severance arrangements. The amount provided for these costs as of the date of acquisition was $33.7 million.

     The following table provides a reconciliation of the activity by cost category from December 31, 2006 through June 30, 2007.

									Non-cash
	Balance at		Additions and						Write-offs/		Balance at
	December 31,		Adjustments to			Cash			Currency		June 30,
(in millions of dollars)	2006		Reserve			Expenditures			Change		2007
Employee termination costs	$	7.7	$	(0.4	)	$	(2.4	)	$	—	$	4.9
Termination of lease agreements		8.2		(0.1	)		(1.0	)		0.1		7.2
Other		1.7		—			(0.2	)		0.1		1.6
Total	$	17.6	$	(0.5	)	$	(3.6	)	$	0.2	$	13.7

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6. Stock -Based Compensation

     The following table summarizes the Company’s stock-based compensation (including stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”)) for the three and six months ended June 30, 2007 and 2006.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions of dollars)	2007		2006		2007		2006
Stock option compensation expense	$	1.4	$	3.2	$	3.6	$	6.3
RSU compensation expense		1.5		1.2		2.3		1.9
PSU compensation expense		1.2		0.7		1.9		1.4
Total	$	4.1	$	5.1	$	7.8	$	9.6

     Unrecognized compensation cost related to unvested stock options, RSUs and PSUs was approximately $6.4 million, $8.6 million and $8.6 million, respectively, as of June 30, 2007.

     On March 16, 2007, the Company’s Board of Directors approved a stock compensation grant, which consisted of 301,250 stock options, 145,700 RSUs and 287,750 PSUs. The Company’s Board of Directors approved an additional grant of 143,975 RSUs on May 16, 2007.

7. Inventories

     Inventories are stated at the lower of cost or market value. The components of inventories were as follows:

	June 30,		December 31,
(in millions of dollars)	2007		2006
Raw materials	$	37.4	$	37.0
Work in process		11.2		10.8
Finished goods		266.5		229.8
Total inventories	$	315.1	$	277.6

8. Goodwill and Intangibles

     Goodwill

     As discussed in Note 3, as of January 1, 2007, the Company realigned and reclassified certain businesses and began reporting under this new structure in the first quarter of 2007. The December 31, 2006 goodwill balances presented below have been reallocated to the new reportable business segments to reflect this new structure. The goodwill balances by business segment as of June 30, 2007 and December 31, 2006 are as follows:

(in millions of dollars)	Balance at		Translation		Balance at
Reportable Segment	December 31, 2006		and Other		June 30, 2007
Office Products Group	$	204.4	$	3.7	$	208.1
Document Finishing Group		133.7		2.0		135.7
Computer Products Group		6.9		—		6.9
Commercial Laminating Solutions Group		93.3		0.8		94.1
Total	$	438.3	$	6.5	$	444.8

     Identifiable Intangible Assets

     The gross carrying value and accumulated amortization by class of identifiable intangible assets as of June 30, 2007 and December 31, 2006 are as follows:

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	June 30, 2007							December 31, 2006
	Gross					Net		Gross					Net
	Carrying		Accumulated			Book		Carrying		Accumulated			Book
(in millions of dollars)	Amounts		Amortization			Value		Amounts		Amortization			Value
Indefinite-lived intangible assets:
Trade names	$	193.4	$	(44.5	)(1)	$	148.9	$	192.3	$	(44.5	)(1)	$	147.8
Amortizable intangible assets:
Trade names		71.3		(25.7	)		45.6		69.8		(23.9	)		45.9
Customer and contractual relationships		40.1		(13.1	)		27.0		39.4		(9.7	)		29.7
Patents/proprietary technology		11.8		(2.6	)		9.2		12.1		(1.9	)		10.2
Subtotal		123.2		(41.4	)		81.8		121.3		(35.5	)		85.8
Total identifiable intangibles	$	316.6	$	(85.9	)	$	230.7	$	313.6	$	(80.0	)	$	233.6

(1) Accumulated amortization prior to the adoption of SFAS No. 142, Goodwill and Other Intangible Assets.

     The Company’s intangible amortization was $2.7 million and $3.5 million for the three months ended June 30, 2007 and 2006, respectively, and $5.3 million and $6.0 million for the six months ended June 30, 2007 and 2006, respectively. Estimated 2007 amortization is $10.4 million, and is expected to decline by approximately $1.0 million for each of the five years following.

     As more fully described in the Company’s 2006 annual report on Form 10-K, the Company must complete an annual assessment of the carrying value of its goodwill. The Company performed this assessment during the second quarter and concluded that no impairment exists.

     As a part of the annual impairment review, the Company concluded that the fair value of the units in the CLSG operating segment marginally exceeded book value. Management does not believe that an impairment is probable at this time. However, the near term CLSG profitability forecast is expected to be less than that experienced in the prior year, and will require improvement in future periods to sustain its carrying value. If the performance of the segment does not meet or exceed those expectations, a future impairment could result for a portion or all of the goodwill valued at $94.1 million as of June 30, 2007. The quantification of any impairment would be dependent on the performance of the segment, which is dependent upon a number of variables that cannot be predicted with certainty.

9. Pension and Other Retiree Benefits

     The components of net periodic benefit cost for pension and postretirement plans for the three and six months ended June 30, 2007 and 2006 are as follows:

	Three Months Ended June 30,
	Pension Benefits												Postretirement
	U.S.						International
(in millions of dollars)	2007			2006			2007			2006			2007			2006
Service cost	$	2.2		$	2.0		$	1.3		$	1.2		$	0.1		$	0.1
Interest cost		2.1			3.0			3.9			3.1			0.3			0.2
Expected return on plan assets		(2.8	)		(4.2	)		(4.9	)		(4.1	)		—			—
Amortization of prior service cost		(0.1	)		(0.1	)		0.2			0.3			—			—
Amortization of net loss (gain)		0.4			0.5			0.8			0.7			(0.2	)		(0.2	)
Total net periodic benefit cost	$	1.8		$	1.2		$	1.3		$	1.2		$	0.2		$	0.1

	Six Months Ended June 30,
	Pension Benefits												Postretirement
	U.S.						International
(in millions of dollars)	2007			2006			2007			2006			2007			2006
Service cost	$	4.4		$	3.3		$	2.9		$	2.4		$	0.2		$	0.1
Interest cost		4.2			5.0			7.5			6.0			0.5			0.5
Expected return on plan assets		(5.6	)		(7.0	)		(9.8	)		(8.0	)		—			—
Amortization of prior service cost		(0.1	)		(0.1	)		0.3			0.6			—			—
Amortization of net loss (gain)		0.7			0.9			1.5			1.3			(0.4	)		(0.3	)
Total net periodic benefit cost	$	3.6		$	2.1		$	2.4		$	2.3		$	0.3		$	0.3

     The Company expects to contribute approximately $10.0 million to its pension plans in 2007. For the six months ended June 30, 2007, the Company has contributed approximately $3.3 million.

13

10. Long-term Debt and Short-term Borrowings

     Notes payable and long-term debt consisted of the following at June 30, 2007 and December 31, 2006:

	June 30,			December 31,
(in millions of dollars)	2007			2006
U.S. Dollar Senior Secured Term Loan Credit Facility (weighted-average floating interest rate of 7.11% at June 30, 2007 and 7.12% at December 31, 2006)	$	316.0		$	316.0
British Pound Senior Secured Term Loan Credit Facility (weighted-average floating interest rate of 7.49% at June 30, 2007 and 7.20% at December 31, 2006)		67.6			66.3
Euro Senior Secured Term Loan Credit Facility (weighted-average floating interest rate of 5.83% at June 30, 2007 and 5.61% at December 31, 2006)		68.9			67.5
U.S. Dollar Senior Secured Revolving Credit Facility (floating interest rate of 7.07% at June 30, 2007)		5.0			—
Euro Senior Secured Revolving Credit Facility (floating interest rate of 5.86% at June 30, 2007)		13.4			—
U.S. Dollar Senior Subordinated Notes, due 2015 (fixed interest rate of 7.625%)		350.0			350.0
Other borrowings		4.9			5.3
Total debt		825.8			805.1
Less: current portion		(32.0	)		(4.8	)
Total long-term debt	$	793.8		$	800.3

     As more fully described in the Company’s 2006 annual report on Form 10-K, the Company must meet certain restrictive debt covenants under the senior secured credit facilities. The indenture governing the senior subordinated notes also contains certain covenants. As of and for the periods ended June 30, 2007 and December 31, 2006, the Company was in compliance with all applicable covenants.

11. Earnings per Share

     Total outstanding shares as of June 30, 2007 and 2006 were 54.0 million and 53.5 million, respectively. The calculation of basic earnings per common share is based on the weighted average number of common shares outstanding in the year, or period, over which they were outstanding. The Company’s diluted earnings per common share assume that any common shares outstanding were increased by shares that would be issued upon exercise of those stock units for which the average market price for the period exceeds the exercise price; less, the shares that could have been purchased by the Company with the related proceeds, including compensation expense measured but not yet recognized, net of tax.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2007		2006(1)		2007(1)		2006(1)
Weighted average number of common shares outstanding — basic		54.0		53.4		53.9		53.2
Employee stock options		0.9		—		0.9		—
Restricted stock units		0.2		—		0.2		—
Adjusted weighted-average shares and assumed conversions — diluted		55.1		53.4		55.0		53.2

(1) The Company has dilutive shares related to stock options and restricted stock units that were granted under the Company’s stock compensation plans. As of June 30, 2007 the company had anti-dilutive shares of 1.7 million. As the Company had a net loss for the three and six months ended June 30, 2006, potentially dilutive shares (approximately 1.0 million) were not included in the 2006 diluted earnings per share calculations as they would have been anti-dilutive.

12. Commitments and Contingencies

  Pending Litigation

     The Company and its subsidiaries are defendants in various claims and legal proceedings associated with their business and operations. It is not possible to predict the outcome of the pending actions, but management believes that there are meritorious defenses to these actions and that these actions if adjudicated or settled in a manner adverse to the Company, would not have a material adverse effect upon the results of operations, cash flows or financial condition of the Company.

  Environmental

14

     The Company is subject to laws and regulations relating to the protection of the environment. While it is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that the Company’s subsidiaries may undertake in the future, in the opinion of management, compliance with the present environmental protection laws, before taking into account any estimated recoveries from third parties, will not have a material adverse effect upon the results of operation, cash flows or financial condition of the Company.

13. Comprehensive Income

     Comprehensive income is defined as net income and other changes in stockholders’ equity from transactions and other events from sources other than stockholders, including currency translation gains and losses. Total comprehensive income (loss) recognized during the three months ended June 30, 2007 and 2006 was $11.7 million and $(13.9) million, respectively, and during the six months ended June 30, 2007 and 2006, was $ 13.2 million and $(19.8) million, respectively. The total comprehensive income recognized in the current year was principally due to foreign currency translation adjustments.

14. Income Taxes

     For the six months ended June 30, 2007, the Company recorded no income tax expense versus a tax benefit of $5.6 million in the prior year. The absence of any tax expense in the current year was principally due to the tax benefit of the restructuring and restructuring related charges and an excess foreign tax credit associated with dividends received during the first six months.

     The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. All tax returns filed by ACCO Brands legacy entities for tax years ended on or before August 15, 2005 are subject to a tax indemnification agreement between the Company and Fortune Brands, Inc. (“Fortune Brands”). Pursuant to that agreement, Fortune Brands will reimburse ACCO Brands for cumulative taxes, interest, penalties, and out of pocket expenses incurred in excess of $1 million related to the examination of such tax returns.

     The U.S. federal statute of limitations remains open for the year 2005 and onward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 3 to 5 years. Years still open to examination by foreign tax authorities in major jurisdictions include Canada (2000 onward) and the United Kingdom (2005 onward). The Company is currently under examination in various foreign jurisdictions.

     On January 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. As a result of the implementation of FIN 48, the Company recognized no increase or decrease in the liability for unrecognized tax benefits. The amount of unrecognized tax benefits as of January 1, 2007 is $6.5 million, of which $4.5 million would affect the Company’s effective tax rate, if recognized. As of June 30, 2007 the amount of unrecognized tax benefits decreased to $5.0 million, of which $3.5 million would affect the Company’s effective tax rate, if recognized. The Company expects the amount of unrecognized tax benefits to change within the next twelve months but these changes are not expected to have a significant impact on the Company’s results of operations or financial position.

     The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes in its results of operations. As of January 1, 2007, the Company had no net amount accrued for interest and penalties.

15. Condensed Consolidated Financial Information

     The Company’s 100% owned domestic subsidiaries have jointly and severally, fully and unconditionally, guaranteed certain outstanding notes issued by the Company. Rather than filing separate financial statements for each guarantor subsidiary with the Securities and Exchange Commission, the Company has elected to present the following consolidating financial statements, which detail the results of operations for the three and six months ended June 30, 2007 and 2006, cash flows for the six months ended June 30, 2007 and 2006 and financial position as of June 30, 2007 and December 31, 2006 of the Company and its guarantor and non-guarantor subsidiaries (in each case carrying investments under the equity method), and the eliminations necessary to arrive at the reported consolidated financial statements of the Company.

15

Condensed Consolidating Balance Sheets (Unaudited)

	June 30, 2007
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	5.2		$	1.1		$	29.6		$	—		$	35.9
Accounts receivable, net		—			179.5			213.5			—			393.0
Inventory, net		—			153.6			161.5			—			315.1
Receivables from affiliates		384.7			17.1			9.7			(411.5	)		—
Deferred income taxes		19.0			9.1			9.5			—			37.6
Other current assets		0.3			18.3			18.1			—			36.7
Total current assets		409.2			378.7			441.9			(411.5	)		818.3
Property, plant and equipment, net		0.3			102.3			113.1			—			215.7
Deferred income taxes		16.6			15.5			49.6			—			81.7
Goodwill		—			266.2			178.6			—			444.8
Identifiable intangibles, net		70.2			96.5			64.0			—			230.7
Other assets		17.3			20.2			34.5			—			72.0
Investment in, long-term receivable from, affiliates		856.0			812.4			199.9			(1,868.3	)		—
Total assets	$	1,369.6		$	1,691.8		$	1,081.6		$	(2,279.8	)	$	1,863.2
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable to banks	$	5.0		$	—		$	17.7		$	—		$	22.7
Current portion of long-term debt		—			—			9.3			—			9.3
Accounts payable		—			106.5			85.1			—			191.6
Accrued customer program liabilities		—			47.8			56.7			—			104.5
Other current liabilities		5.4			65.6			87.2			—			158.2
Payables to affiliates		64.0			600.5			247.9			(912.4	)		—
Total current liabilities		74.4			820.4			503.9			(912.4	)		486.3
Long-term debt		666.0			—			127.8			—			793.8
Long-term notes payable to affiliates		178.2			99.3			25.2			(302.7	)		—
Deferred income taxes		12.8			11.9			72.0			—			96.7
Postretirement and other liabilities		30.1			17.7			30.5			—			78.3
Total liabilities		961.5			949.3			759.4			(1,215.1	)		1,455.1
Stockholders’ equity
Common stock		0.6			600.9			33.2			(634.1	)		0.6
Treasury stock		(1.1	)		—			—			—			(1.1	)
Paid-in capital		1,385.5			623.8			243.1			(866.9	)		1,385.5
Accumulated other comprehensive income (loss)		(41.6	)		(24.9	)		(1.9	)		26.8			(41.6	)
Accumulated (deficit) retained earnings		(935.3	)		(457.3	)		47.8			409.5			(935.3	)
Total stockholders’ equity		408.1			742.5			322.2			(1,064.7	)		408.1
Total liabilities and stockholders’ equity	$	1,369.6		$	1,691.8		$	1,081.6		$	(2,279.8	)	$	1,863.2

16

Condensed Consolidating Balance Sheets

	December 31, 2006
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	2.6		$	6.5		$	40.9		$	—		$	50.0
Accounts receivable, net		—			204.9			222.5			—			427.4
Inventory, net		—			139.2			138.4			—			277.6
Receivables from affiliates		339.4			48.9			28.8			(417.1	)		—
Deferred income taxes		9.6			24.2			3.4			—			37.2
Other current assets		0.9			14.9			14.2			—			30.0
Total current assets		352.5			438.6			448.2			(417.1	)		822.2
Property, plant and equipment, net		0.2			95.0			122.0			—			217.2
Deferred income taxes		37.5			26.7			15.0			—			79.2
Goodwill		—			265.1			173.2			—			438.3
Identifiable intangibles, net		70.2			103.9			59.5			—			233.6
Other assets		19.1			9.1			30.9			—			59.1
Investment in, long-term receivable from, affiliates		820.6			838.7			247.0			(1,906.3	)		—
Total assets	$	1,300.1		$	1,777.1		$	1,095.8		$	(2,323.4	)	$	1,849.6
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable to banks	$	—		$	—		$	4.7		$	—		$	4.7
Current portion of long-term debt		—			—			0.1			—			0.1
Accounts payable		—			99.7			89.5			—			189.2
Accrued customer program liabilities		—			66.1			55.8			—			121.9
Other current liabilities		11.3			81.1			87.8			—			180.2
Payables to affiliates		8.6			628.2			310.4			(947.2	)		—
Total current liabilities		19.9			875.1			548.3			(947.2	)		496.1
Long-term debt		666.0			—			134.3			—			800.3
Long-term notes payable to affiliates		178.2			102.0			13.7			(293.9	)		—
Deferred income taxes		25.6			45.7			28.4			—			99.7
Postretirement and other liabilities		26.4			16.4			26.7			—			69.5
Total liabilities		916.1			1,039.2			751.4			(1,241.1	)		1,465.6
Stockholders’ equity
Common stock		0.6			600.9			33.4			(634.3	)		0.6
Treasury stock		(1.1	)		—			—			—			(1.1	)
Paid-in capital		1,374.6			611.2			262.1			(873.3	)		1,374.6
Accumulated other comprehensive income (loss)		(50.1	)		(23.8	)		(7.7	)		31.5			(50.1	)
Accumulated (deficit) retained earnings		(940.0	)		(450.4	)		56.6			393.8			(940.0	)
Total stockholders’ equity		384.0			737.9			344.4			(1,082.3	)		384.0
Total liabilities and stockholders’ equity	$	1,300.1		$	1,777.1		$	1,095.8		$	(2,323.4	)	$	1,849.6

17

Condensed Consolidating Income Statements (Unaudited)

	Three months ended June 30, 2007
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors		Eliminations			Consolidated
Unaffiliated sales	$	—		$	245.9		$	219.0	$	—		$	464.9
Affiliated sales		—			15.7			10.0		(25.7	)		—
Net sales		—			261.6			229.0		(25.7	)		464.9
Cost of products sold		—			192.8			159.1		(25.7	)		326.2
Advertising, selling, general and administrative expenses		9.6			54.5			49.1		—			113.2
Amortization of intangibles		—			1.4			1.3		—			2.7
Restructuring and asset impairment charges		—			0.7			1.7		—			2.4
Operating (loss) income		(9.6	)		12.2			17.8		—			20.4
Interest (income) expense from affiliates		(1.1	)		(0.4	)		1.5		—			—
Interest expense		10.4			2.7			2.9		—			16.0
Other (income) expense, net		(0.2	)		(2.2	)		0.8		—			(1.6	)
(Loss) income before taxes, minority interest and earnings (losses) of wholly owned subsidiaries		(18.7	)		12.1			12.6		—			6.0
Income taxes		(1.5	)		(3.2	)		6.0		—			1.3
Minority interest		—			—			0.2		—			0.2
(Loss) income before earnings (losses) of wholly owned subsidiaries		(17.2	)		15.3			6.4		—			4.5
Earnings (losses) of wholly owned subsidiaries		21.7			(0.6	)		—		(21.1	)		—
Net income (loss)	$	4.5		$	14.7		$	6.4	$	(21.1	)	$	4.5

	Three months ended June 30, 2006
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors			Eliminations			Consolidated
Unaffiliated sales	$	—		$	254.9		$	207.7		$	—		$	462.6
Affiliated sales		—			18.1			18.5			(36.6	)		—
Net sales		—			273.0			226.2			(36.6	)		462.6
Cost of products sold		—			215.4			157.8			(36.6	)		336.6
Advertising, selling, general and administrative expenses		11.1			53.0			45.5			—			109.6
Amortization of intangibles		—			2.2			1.3			—			3.5
Restructuring and asset impairment charges		—			3.1			9.9			—			13.0
Operating (loss) income		(11.1	)		(0.7	)		11.7			—			(0.1	)
Interest (income) expense from affiliates		(0.4	)		(0.6	)		1.0			—			—
Interest expense (income)		12.4			(0.4	)		3.0			0.3			15.3
Other (income) expense, net		0.7			(6.3	)		5.7			(0.3	)		(0.2	)
(Loss) income before taxes and earnings (losses) of wholly owned subsidiaries		(23.8	)		6.6			2.0			—			(15.2	)
Income taxes		(5.6	)		0.9			(0.7	)		—			(5.4	)
Minority interest		—			—			—			—			—
(Loss) income before earnings (losses) of wholly owned subsidiaries		(18.2	)		5.7			2.7			—			(9.8	)
Earnings (losses) of wholly owned subsidiaries		8.4			4.7			—			(13.1	)		—
Net (loss) income	$	(9.8	)	$	10.4		$	2.7		$	(13.1	)	$	(9.8	)

18

Condensed Consolidating Income Statements (Unaudited)

	Six months ended June 30, 2007
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors		Eliminations			Consolidated
Unaffiliated sales	$	—		$	469.1		$	441.7	$	—		$	910.8
Affiliated sales		—			31.7			21.4		(53.1	)		—
Net sales		—			500.8			463.1		(53.1	)		910.8
Cost of products sold		—			369.7			326.3		(53.1	)		642.9
Advertising, selling, general and administrative expenses		20.0			109.6			96.5		—			226.1
Amortization of intangibles		—			2.9			2.4		—			5.3
Restructuring and asset impairment charges		—			0.6			2.5		—			3.1
Operating (loss) income		(20.0	)		18.0			35.4		—			33.4
Interest (income) expense from affiliates		(1.4	)		(0.8	)		2.2		—			—
Interest expense		20.5			5.4			5.0		—			30.9
Other (income) expense, net		(1.0	)		(4.6	)		3.1		—			(2.5	)
(Loss) income before taxes, minority interest and earnings (losses) of wholly owned subsidiaries		(38.1	)		18.0			25.1		—			5.0
Income taxes		(6.4	)		(2.8	)		9.2		—			—
Minority interest		—			—			0.3		—			0.3
(Loss) income before earnings (losses) of wholly owned subsidiaries		(31.7	)		20.8			15.6		—			4.7
Earnings (losses) of wholly owned subsidiaries		36.4			3.4			—		(39.8	)		—
Net income (loss)	$	4.7		$	24.2		$	15.6	$	(39.8	)	$	4.7

	Six months ended June 30, 2006
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors		Eliminations			Consolidated
Unaffiliated sales	$	—		$	501.1		$	430.1	$	—		$	931.2
Affiliated sales		—			34.9			31.7		(66.6	)		—
Net sales		—			536.0			461.8		(66.6	)		931.2
Cost of products sold		—			414.7			326.6		(66.6	)		674.7
Advertising, selling, general and administrative expenses		22.9			104.8			89.4		—			217.1
Amortization of intangibles		—			3.5			2.5		—			6.0
Restructuring and asset impairment charges		0.1			5.5			14.2		—			19.8
Operating (loss) income		(23.0	)		7.5			29.1		—			13.6
Interest (income) expense from affiliates		(0.7	)		(0.6	)		1.3		—			—
Interest expense (income)		25.3			(0.3	)		5.7		—			30.7
Other (income) expense, net		(0.6	)		(6.0	)		4.9		—			(1.7	)
(Loss) income before taxes and earnings (losses) of wholly owned subsidiaries		(47.0	)		14.4			17.2		—			(15.4	)
Income taxes		(9.6	)		(0.3	)		4.3		—			(5.6	)
Minority interest		—			—			0.1		—			0.1
(Loss) income before earnings (losses) of wholly owned subsidiaries		(37.4	)		14.7			12.8		—			(9.9	)
Earnings (losses) of wholly owned subsidiaries		27.5			9.8			—		(37.3	)		—
Net (loss) income	$	(9.9	)	$	24.5		$	12.8	$	(37.3	)	$	(9.9	)

19

Condensed Consolidating Statement of Cash Flows (Unaudited)

	Six Months Ended June 30, 2007
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors			Consolidated
Net cash (used) provided by operating activities	$	(29.6	)	$	9.3		$	5.8		$	(14.5	)
Investing activities:
Additions to property, plant and equipment		—			(15.9	)		(6.0	)		(21.9	)
Proceeds from the disposition of assets		—			0.2			0.1			0.3
Net cash used by investing activities		—			(15.7	)		(5.9	)		(21.6	)
Financing activities:
Intercompany financing		22.7			(6.5	)		(16.2	)		—
Intercompany dividends received (paid)		1.4			7.5			(8.9	)		—
Borrowings of short-term debt		5.0			—			12.9			17.9
Proceeds from the exercise of stock options		3.1			—			—			3.1
Net cash provided (used) by financing activities		32.2			1.0			(12.2	)		21.0
Effect of foreign exchange rate changes on cash		—			—			1.0			1.0
Net increase (decrease) in cash and cash equivalents		2.6			(5.4	)		(11.3	)		(14.1	)
Cash and cash equivalents at the beginning of the period		2.6			6.5			40.9			50.0
Cash and cash equivalents at the end of the period	$	5.2		$	1.1		$	29.6		$	35.9

	Six Months Ended June 30, 2006
							Non-
(in millions of dollars)	Parent			Guarantors			Guarantors			Consolidated
Net cash (used) provided by operating activities	$	(36.7	)	$	41.1		$	27.4		$	31.8
Investing activities:
Additions to property, plant and equipment		—			(6.6	)		(5.5	)		(12.1	)
Proceeds from the disposition of assets		—			0.4			0.4			0.8
Net cash used by investing activities		—			(6.2	)		(5.1	)		(11.3	)
Financing activities:
Intercompany financing		73.7			(50.8	)		(22.9	)		—
Repayments on long-term debt		(59.0	)		—			(20.7	)		(79.7	)
Repayments on short-term debt		—			—			(1.9	)		(1.9	)
Proceeds from the exercise of stock options		9.1			—			—			9.1
Other financing activities		(0.1	)		—			—			(0.1	)
Net cash provided (used) by financing activities		23.7			(50.8	)		(45.5	)		(72.6	)
Effect of foreign exchange rate changes on cash		—			—			2.2			2.2
Net decrease in cash and cash equivalents		(13.0	)		(15.9	)		(21.0	)		(49.9	)
Cash and cash equivalents at the beginning of the period		17.9			24.2			49.0			91.1
Cash and cash equivalents at the end of the period	$	4.9		$	8.3		$	28.0		$	41.2

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

     ACCO Brands Corporation is a world leader in select categories of branded office products (excluding furniture, computers, printers and bulk paper) to the office products resale industry. We design, develop, manufacture and market a wide variety of traditional and computer-related office products, supplies, binding and laminating equipment and consumable supplies, personal computer accessory products, paper-based time management products, presentation aids and label products. We have leading market positions and brand names, including Swingline®, GBC®, Kensington®, Quartet®, Rexel®, Day-Timer® and Wilson Jones®, among others.

     We also manufacture and market specialized laminating films for book printers, packaging and digital print lamination, as well as high-speed laminating and binding equipment targeted at commercial consumers.

     Our customers include commercial contract stationers (such as Office Depot, Staples, Corporate Express and OfficeMax), retail superstores, wholesalers, distributors, mail order catalogs, mass merchandisers, club stores and dealers. We also supply our products to commercial and industrial end-users and to the educational market.

     We seek to enhance shareholder value by building our leading brands to generate sales, earn profits and create cash flow. We do this by targeting the premium end of select categories, which are characterized by high brand equity, high customer loyalty and a reasonably high price gap between branded and private label products. Our participation in private label or value categories is limited to areas where we believe we have an economic advantage or where it is necessary to merchandise a complete category.

     We completed the sale of our storage box business during the third quarter of 2006, announced the discontinuance of the Computer Products’ cleaning product category as of the end of the first quarter of 2006, and discontinued certain other low-margin products in the Office Products and Document Finishing Groups in 2006. In aggregate, these businesses and products represented approximately $70 million of annual net sales. The impact of the divestiture and exits on these segments is expected to continue throughout 2007, with a negative impact on net sales, but a positive impact on margins.

     Through a focus on research, marketing and innovation, we seek to develop new products that meet the needs of our consumers and commercial end-users. In addition, we provide value-added features or benefits that enhance product appeal to our customers. This focus, we believe, increases the premium product positioning of our brands.

     Our strategy centers on maximizing profitability and high-return growth. Specifically, we seek to leverage our platform for organic growth through greater consumer understanding, product innovation, marketing and merchandising, disciplined category expansion, including possible strategic transactions, and continued cost realignment.

     In the near term, we continue to focus on realizing synergies from our merger with GBC. Opportunities for significant potential savings include cost reductions attributable to efficiencies and synergies expected to be derived from facility integration, headcount reduction, supply chain optimization and revenue enhancement. Our near-term priorities for the use of cash flow are to fund integration and restructuring-related activities and to pay down acquisition-related debt.

     The following discussion of historical results includes the consolidated financial results of ACCO Brands Corporation for the three months and six months ended June 30, 2007 and 2006. The discussion of operating results at the consolidated level is followed by a more detailed discussion of operating results by segment. As more fully described in the Segment Discussion section, as of January 1, 2007, the Company realigned and reclassified certain business segments. Segment information for the 2006 period has been restated based on the segment structure effective January 1, 2007.

     Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.

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Overview

     ACCO Brands’ results are dependent upon a number of factors affecting sales, pricing and competition. Historically, key drivers of demand in the office products industry have included trends in white collar employment levels, gross domestic product (GDP) and growth in the number of small businesses and home offices together with increasing usage of personal computers. Pricing and demand levels for office products have also reflected a substantial consolidation within the global resellers of office products. This has led to multiple years of industry pricing pressure and a more efficient level of asset utilization by customers, resulting in lower sales volumes for suppliers. We sell products in highly competitive markets, and compete against large international and national companies, regional competitors and against our own customers’ direct and private-label sourcing initiatives.

     As much of our business is conducted in foreign markets (approximately 47% of revenues for the fiscal year ended December 31, 2006), foreign currency plays a major role in our reported results. During the first half of 2007, the U.S. dollar weakened relative to certain currencies. This benefited ACCO Brands as the same amount of foreign (e.g. local) currency units were translated into more U.S. dollars. The impact of the weakened U.S. dollar benefited ACCO Brands in inventory purchase transactions made by its foreign operations. Our foreign operations’ purchases of outsourced products are primarily denominated in U.S. dollars, and as a result their costs of goods sold decreased as the value of the U.S. dollar has weakened. A significant portion of the purchases are hedged with forward currency contracts which delays much of the effect of the weakening U.S. dollar in the short term.

     We have completed our integration planning for the Office Products Group and Document Communication component of the Document Finishing Group. In addition, during the first quarter of 2007 we initiated the realignment of the former GBC commercial businesses (now reported within the Commercial Laminating Solutions Group and the Document Finishing Group). During the second quarter the Company began the integration of the European distribution locations and the consolidations of certain operations into the shared services facility in the Netherlands. The Company has made significant progress toward relocating our people, aligning our customer relationships and upgrading information technology systems. Since the acquisition of GBC we have announced and moved ahead with plans to close, consolidate, downsize, or relocate more than 30 manufacturing, distribution and administrative operations. In addition, the Company has successfully integrated key information technology systems in the U.S., Canada and Mexico, creating a common technology platform for its office products businesses, and consolidated its European office products sales force. Collectively, these actions are expected to ultimately account for $40 million of targeted annual cost synergies by the end of 2008 and an additional $20 million by the end of 2009 from the consolidation of the former GBC commercial businesses and additional outsourcing of production. This results in a total of $60 million in targeted annualized synergies expected to be realized by the end of 2009.

     During the three months ended March 31, 2007, the Company identified certain customer program costs aggregating $1.7 million that were not correctly accrued as of December 31, 2006. Management assessed the impact of this error on prior-period annual and quarterly financial statements, as well as its estimate of current year earnings, and determined that the required adjustments were not material to any of the periods. Accordingly, the Company recorded an adjustment during the three months ended March 31, 2007 to correct the error, resulting in a reduction to net sales and pre-tax income of $1.7 million.

     Cash payments related to the Company’s restructuring and integration activities amounted to $12.9 million (excluding capital expenditures) during the second quarter of 2007, and $25.7 million during the first six months of 2007. It is expected that additional disbursements of approximately $60 million will be substantially completed by the end of 2008 as the Company continues to implement phases of its strategic and business integration plans. The Company has adequate resources to finance the anticipated requirements.

Three Months Ended June 2007 versus 2006

Results

     The following table presents the Company’s results for the three months ended June 30, 2007 and 2006. Restructuring and restructuring-related expenses have been noted where appropriate, as management believes that a comparative review of these costs and their relative impact on operating income allows for a better understanding of the underlying business performance from period to period. Restructuring-related expenses represent costs related to restructuring projects which cannot be reported as restructuring under U.S. GAAP (e.g., losses on inventory disposal related to product category exits, manufacturing inefficiencies following the start of manufacturing operations at a new facility following closure of the old facility, SG&A reorganization and implementation costs, dedicated consulting, stay bonuses, etc.).

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	Three Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	464.9		$	462.6		$	2.3		NM
Gross profit		138.7			126.0			12.7			10	%
Gross profit margin		29.8	%		27.2	%				2.6 pts
Advertising, selling, general and administrative expenses		113.2			109.6			3.6			3	%
Restructuring and asset impairment charges		2.4			13.0			(10.6	)		(82	)%
Operating income		20.4			(0.1	)		20.5		NM
Operating income margin		4.4	%		—	%				4.4 pts
Interest expense, net		16.0			15.3			0.7			5	%
Other income		1.6			0.2			1.4		NM
Income taxes		1.3			(5.4	)		6.7		NM
Effective tax rate		21.7	%		35.5	%				13.8 pts
Net income (loss)		4.5			(9.8	)		14.3		NM
Restructuring-related expense included in cost of products sold		4.1			2.0			2.1			105	%
Restructuring-related expense included in SG&A		4.6			2.8			1.8			64	%

  Net Sales

     Net sales increased $2.3 million to $464.9 million. The increase was driven by the positive impact of $13.5 million in currency translation as well as pricing increases implemented in North America and Europe in early 2007. These favorable impacts were partially offset by planned business exits and the divestiture of non-strategic business in the Office Products segment, associated with the Company’s strategic intent to focus on the premium end of its product categories and volume decreases in the Office Product and Document Finishing segments.

  Gross Profit

     Gross profit increased $12.7 million, or 10%, to $138.7 million, while gross profit margin increased to 29.8% from 27.2%. Currency translation resulted in a $5.8 million increase in gross profit. Excluding the impact of currency, the increase in gross profit was primarily the result of price increases and merger integration synergies, net of cost increases, in the Office Products and Document Finishing Groups, offset by a decrease in gross profit for the laminating business caused by adverse business mix and lower pricing.

  SG&A (Advertising, selling, general and administrative expenses)

     SG&A increased $3.6 million, or 3%, to $113.2 million, and as a percentage of sales to 24.3% from 23.7%. Currency translation accounted for $3.1 million of the increase and restructuring related expense increased $1.8 million, principally consisting of outside consulting fees related to SG&A reduction initiatives. Excluding the impact of currency and restructuring related expenses, the decrease was related to lower stock compensation costs and other G&A, partially offset by continued investment in marketing and product development initiatives, primarily within the Document Finishing Group.

  Operating Income

     Operating income increased to $20.4 million from an operating loss of $0.1 million, and increased to 4.4%, from 0%, as a percentage of sales. The increase in operating income was driven by a decrease of $6.7 million in restructuring, asset impairment and restructuring-related charges during 2007, favorable currency rates, price increases and the realization of merger integration synergies. These positive impacts were partially offset by continued investment in marketing and product development initiatives.

  Interest Expense and Other Income

     Interest expense increased $0.7 million to $16.0 million. The increase was a result of higher interest rates, partially offset by lower debt levels.

     Other income increased $1.4 million to $1.6 million principally due to income from our unconsolidated Australian joint-venture.

23

  Income Taxes

     For the quarter ended June 30, 2007, the Company recorded an income tax expense of $1.3 million versus a tax benefit of $5.4 million recorded in the prior year quarter. The effective tax rate for the quarter ended June 30, 2007 was 21.7% compared to 35.5% for the quarter ended June 30, 2006. The lower effective tax rate in the quarter was related to the tax benefit of the restructuring and restructuring related charges during the quarter.

  Net Income

     Net income increased to $4.5 million, or $0.08 per diluted share, from a net loss of $9.8 million, or $0.18 per diluted share, in the prior year. The increase was due to the increase in operating income, offset by the increase in tax expense, both of which are discussed above.

Segment Discussion

     As of January 1, 2007, the Company realigned and reclassified certain businesses, resulting in the following changes:

• The Company created a new business segment, the Document Finishing Group, which consists of the following businesses:

o the businesses comprising its former Other Commercial segment (consisting of the Document Finishing and Day-Timers businesses)

o the Company’s document communication business, which was transferred from the Office Products Group; and

o the Company’s high speed and other binding business, which was transferred from the former Industrial Print Finishing Group (“IPFG”) business segment.

• In addition, the remaining components of the former IPFG business segment began reporting as the Commercial Laminating Solutions Group business segment to more appropriately reflect the remaining operations.

     All segment information for the three months ended June 30, 2006 has been restated to reflect the realigned segment structure.

  Office Products Group

Results

	Three Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	228.3		$	231.9		$	(3.6	)		(2	)%
Operating income (loss)		12.6			(6.4	)		19.0		NM
Operating income margin		5.5	%		(2.8	)%				8.3 pts
Restructuring and related charges		6.3			13.1			(6.8	)		(52	)%

     Office Products net sales decreased $3.6 million, or 2%, to $228.3 million. The decrease is primarily the result of the exit and divestiture of certain non-strategic business or low margin product lines (including the storage box business sale and other non-strategic product exits in North America and Europe) amounting to approximately $15 million and volume declines principally caused by customer demand volatility associated with channel inventory adjustments and reduced end consumer demand. These negative impacts were partially offset by price increases and by $6.5 million of favorable foreign currency translation.

     Office Products operating income increased $19.0 million to $12.6 million and operating income margin increased to 5.5% from (2.8)%. The increases in operating income and margin were primarily related to improved gross margin resulting from price increases and an increase in product outsourcing to Asia. In addition, savings from integration activities and a reduction in restructuring, asset impairment and restructuring-related costs contributed to the increase. These positive operating income impacts were partially offset by sales volume declines, continued investment in the Company’s transition to a pan-European business model and by increased investment in marketing and product development.

24

     Document Finishing Group

Results

	Three Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$		%
Net sales	$	139.0		$	135.6		$	3.4		3	%
Operating income		5.5			4.4			1.1		25	%
Operating income margin		4.0	%		3.2	%			0.8 pts
Restructuring and related charges		3.0			2.1			0.9		43	%

     Document Finishing net sales increased $3.4 million, or 3%, to $139.0 million. Currency translation positively impacted net sales by $4.3 million. Excluding the impact of currency translation, Document Finishing sales decreased, primarily related to lower volumes in the indirect sales channel principally caused by demand volatility associated with channel inventory adjustments and reduced U.S. end consumer demand together with continued small share loss to our customers direct sourcing private label initiatives. Segment sales declines were partially offset by the implementation of price increases in 2007.

     Document Finishing operating income increased $1.1 million, or 25%, to $5.5 million, and operating income margin increased to 4.0% from 3.2%. Operating income and margin improvement resulted from realization of synergy savings, price increases and an increase in product outsourcing to Asia. These positive factors were partially offset by lower sales volumes and continued increased investment in marketing and product development initiatives.

     Computer Products Group

Results

	Three Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	53.3		$	51.2		$	2.1			4	%
Operating income		9.9			6.5			3.4			52	%
Operating income margin		18.6	%		12.7	%				5.9 pts
Restructuring and related charges		1.2			1.3			(0.1	)		(8	)%

     Computer Products sales increased $2.1 million, or 4%, to $53.3 million. The increase was primarily due to $1.6 million of favorable currency translation impact, increased sales volumes in Europe and Asia and reduced customer rebate programs, partially offset by lower U.S. sales volume. A reduction in sales resulting from the exit of the non-strategic cleaning business also partially offset these increases.

     Operating income increased $3.4 million, or 52%, to $9.9 million, and operating income margin increased to 18.6% from 12.7%. Operating income and margin increases were primarily attributable to product mix, reduced customer rebate programs, reduced spending and favorable foreign exchange.

25

     Commercial Laminating Solutions Group

Results

	Three Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	44.3		$	43.9		$	0.4			1	%
Operating income		—			4.0			(4.0	)		(100	)%
Operating income margin		—	%		9.1	%				(9.1) pts
Restructuring and related charges		0.3			—			0.3			100	%

     Commercial Laminating Solutions net sales increased $0.4 million, or 1%, to $44.3 million. Favorable currency translation impacted sales by $1.1 million, and was partially offset by reduced pricing to prevent share erosion to lower priced imports of high-speed laminating film products and adverse product mix.

     Operating results were breakeven, compared to operating income of $4.0 million in the prior year quarter. The decrease was primarily driven by the combination of reduced prices to retain market share as described above, adverse product mix and higher raw material costs.

Six Months Ended June 2007 versus 2006

Results

     The following table presents the Company’s results for the six months ended June 30, 2007 and 2006. Restructuring and restructuring-related expenses have been noted where appropriate, as management believes that a comparative review of these costs and their relative impact on operating income allows for a better understanding of the underlying business performance from period to period. Restructuring-related expenses represent costs related to restructuring projects which cannot be reported as restructuring under U.S. GAAP (e.g., losses on inventory disposal related to product category exits, manufacturing inefficiencies following the start of manufacturing operations at a new facility following closure of the old facility, SG&A reorganization and implementation costs, dedicated consulting, stay bonuses, etc.).

26

	Six Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	910.8		$	931.2		$	(20.4	)		(2	)%
Gross profit		267.9			256.5			11.4			4	%
Gross profit margin		29.4	%		27.5	%				1.9 pts
Advertising, selling, general and administrative expenses		226.1			217.1			9.0			4	%
Restructuring and asset impairment charges		3.1			19.8			(16.7	)		(84	)%
Operating income		33.4			13.6			19.8			146	%
Operating income margin		3.7	%		1.5	%				2.2 pts
Interest expense, net		30.9			30.7			0.2			1	%
Other income		2.5			1.7			0.8			47	%
Income taxes		—			(5.6	)		5.6			100	%
Effective tax rate		—	%		(36.4	)%				36.4 pts
Net income (loss)		4.7			(9.9	)		14.6		NM
Restructuring-related expense included in cost of products sold		7.1			2.4			4.7			196	%
Restructuring-related expense included in SG&A		8.4			5.2			3.2			62	%

  Net Sales

     Net sales decreased $20.4 million, or 2%, to $910.8 million. The decrease was driven by planned business exits and a divestiture from non-strategic business in the Office Products segment associated with the Company’s intent to focus on the premium end of its product categories and reductions in volume for all business segments. These negative impacts on sales were partially offset by the positive impact of currency translation of $26.9 million as well as the impact of price increases implemented in North America and Europe.

     Sales for the six months ended June 30, 2007 were also negatively impacted by the one-time adjustment of $1.7 million related to the prior-period correction in accounting for certain customer program costs that did not relate to either the current or 2006 reporting period.

  Gross Profit

     Gross profit increased $11.4 million, or 4%, to $267.9 million, and gross profit margin increased to 29.4% from 27.5%. Currency translation resulted in an $11.1 million increase in gross profit. Excluding the impact of currency, the increase in gross profit was primarily the result of the Company’s price increases and integration synergies offset by lower sales, and an increase of $4.7 million in restructuring-related charges impacting cost of products sold. In addition, the reduction in sales related to the $1.7 million one-time adjustment for a prior-period correction in accounting for certain customer program costs had a $1.7 million negative impact on gross profit and margin.

  SG&A (Advertising, selling, general and administrative expenses)

     SG&A increased $9.0 million, or 4%, to $226.1 million, and as a percentage of sales to 24.8% from 23.3%. Currency translation accounted for $6.2 million of the increase. Excluding the impact of currency, the increase was primarily related to continued investment in marketing and product development initiatives, primarily within the Document Finishing Group, and an increase in restructuring-related costs, which principally consisted of outside consulting fees related to SG&A reduction initiatives. These negative impacts were partially offset by SG&A savings related to integration activities in North America that were completed during 2006.

  Operating Income

     Operating income increased $19.8 million, or 146%, to $33.4 million, and to 3.7% from 1.5%, as a percentage of sales. The increase in operating income was driven by a decrease of $8.8 million in restructuring, asset impairment and restructuring related charges during 2007, price increases and the realization of integration synergies. These positive impacts were partially offset by the impact of lower sales and continued investment in marketing initiatives.

27

  Interest Expense and Other Income

     Interest expense increased $0.2 million to $30.9 million. The increase was a result of higher interest rates partially offset by the Company’s reduced 2007 debt levels.

     Other income increased $0.8 million to $2.5 million and principally resulted higher income from our unconsolidated Australian joint-venture.

  Income Taxes

     For the six months ended June 30, 2007, the Company had no income tax expense, compared with an income tax benefit of $5.6 million recorded in the prior year period. The 2007 effective tax rate was related to the tax benefit of the restructuring and restructuring related charges and an excess foreign tax credit associated with dividends received during the first six months.

  Net Income

     Net income increased to $4.7 million, or $0.09 per diluted share, from a loss of $9.9 million, or $0.18 per diluted share, in the prior year. The increase was due to the higher operating income and favorable tax expense discussed above.

Segment Discussion

     As of January 1, 2007, the Company realigned and reclassified certain businesses as discussed earlier under Segment Discussion for our second quarter results.

     All segment information for the six months ended June 30, 2006 has been restated to reflect the realigned segment structure.

  Office Products Group

Results

	Six Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	445.6		$	462.4		$	(16.8	)		(4	)%
Operating income (loss)		24.0			(0.6	)		24.6		NM
Operating income margin		5.4	%		(0.1	)%				5.5 pts
Restructuring and related charges		12.2			19.9			(7.7	)		(39	)%

     Office Products net sales decreased $16.8 million, or 4%, to $445.6 million. The decrease is primarily the result of the exit from and divestiture of certain non-strategic business (including the storage box business sale and other non-strategic product exits in North America and Europe) amounting to approximately $30.5 million and volume declines principally caused by demand volatility associated with channel inventory adjustments and reduced end-consumer demand. These negative impacts were partially offset by the impact of foreign currency translation of $13.2 million and the segment’s implementation of price increases.

     Office Products sales were also negatively impacted by a one-time sales adjustment related to the prior-period correction in accounting for certain customer program costs. Office Products sales were reduced by $1.5 million as a result of the adjustment.

     Office Products operating income increased $24.6 million to $24.0 million and operating income margin increased to 5.4% from (0.1)%. The increases in operating income and margin were primarily related to savings from merger integration activities, price increases and a reduction in restructuring and related costs. The positive operating income impacts were partially offset by continued investment in the Company’s transition to a pan-European business model and by increased investment in marketing and product development.

28

     Document Finishing Group

Results

	Six Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	276.7		$	277.2		$	(0.5	)		—	%
Operating income		9.2			10.3			(1.1	)		(11	)%
Operating income margin		3.3	%		3.7.	%				(0.4) pts
Restructuring and related charges		5.1			3.6			1.5			42	%

     Document Finishing net sales decreased $0.5 million to $276.7 million. The decrease in Document Finishing sales was primarily related to lower volumes in the indirect sales channel. In addition, 2007 sales were negatively impacted by the exit in 2006 from certain non-strategic business. Segment sales declines were partially offset by the implementation of price increases and the favorable impact of currency translation of $8.3 million.

     Document Finishing operating income decreased $1.1 million, or 11% to $9.2 million, and operating income margin declined to 3.3% from 3.7%. Continued increased investment in marketing and product development initiatives together with lower volume outweighed the impact of favorable price increases and the realization of synergy savings.

     Computer Products Group

Results

	Six Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	102.7		$	103.1		$	(0.4	)		—	%
Operating income		15.5			14.8			0.7			5	%
Operating income margin		15.0	%		14.4	%				0.6 pts
Restructuring and related charges		2.2			1.3			0.9			69	%

     Computer Products sales decreased $0.4 million to $102.7 million. The decline was primarily due to the exit of the non-strategic cleaning business. Increased sales volumes in Europe and Asia were partly offset by volume declines in the U.S. caused by a continued shift in U.S. distribution channels from OEM, where the Company has significant market share, to retail. The decline was partially offset by a favorable currency impact from international operations of $3.2 million.

     Operating income increased $0.7 million, or 5%, to $15.5 million, and operating income margin increased to 15.0% from 14.4%. Operating income benefited from favorable sales mix, reduced marketing spending and favorable foreign exchange rates. These factors were only partially offset by higher restructuring and related activity.

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  Commercial Laminating Solutions Group

Results

	Six Months Ended
	June 30,						Amount of Change
(in millions of dollars)	2007			2006			$			%
Net sales	$	85.8		$	88.5		$	(2.7	)		(3	)%
Operating income		0.6			7.2			(6.6	)		(92	)%
Operating income margin		0.7	%		8.1	%				(7.4) pts
Restructuring and related charges		0.5			—			0.5		NM

     Commercial Laminating Solutions net sales decreased $2.7 million, or 3%, to $85.8 million. Volumes for the first six months of 2007 declined primarily due to loss of market share and reduced pricing caused by increased competition from lower-cost imports of high-speed laminating films. Pricing and volume reductions were partially offset by a favorable impact from currency translation of $2.2 million.

     Operating income decreased $6.6 million, or 92%, to $0.6 million. The decrease was primarily driven by reduced pricing, increased raw material costs and the small loss of market share.

     In the near term it is expected that the overall profitability of this segment will be lower than prior years. The Company is addressing longer term solutions to reduce the cost of films currently manufactured in the U.S., the Netherlands and Korea.

     As a part of the annual impairment review, the Company concluded that the fair value of the units in the CLSG operating segment marginally exceeded book value. Management does not believe that an impairment is probable at this time. However, the near term CLSG profitability forecast is expected to be less than that experienced in the prior year, and will require improvement in future periods to sustain its carrying value. If the performance of the segment does not meet or exceed those expectations, a future impairment could result for a portion or all of the goodwill valued at $94.1 million as of June 30, 2007. The quantification of any impairment would be dependent on the performance of the segment, which is dependent upon a number of variables that cannot be predicted with certainty.

Liquidity and Capital Resources

     Our primary liquidity needs are to fund capital expenditures, service indebtedness and support working capital requirements. Our principal sources of liquidity are cash flows from operating activities and borrowings under our credit agreements and long-term notes. We maintain adequate financing arrangements at competitive rates. Our priority for cash flow over the near term, after internal growth, is to fund integration and restructuring-related activities and the reduction of debt.

  Cash Flow from Operating Activities

     In the six months ended June 30, 2007, cash used by operating activities was $14.5 million, compared to $31.8 million of cash provided by operating activities in the prior year. Net income in the current six months was $4.7 million, compared to a net loss of $(9.9) million in the 2006 period. Non-cash adjustments to net income were $32.7 million in 2007, compared to $39.7 million in 2006, on a pre-tax basis. However, the improvement in net income was offset by the following cash operating activities:

• Increased payments to vendors and suppliers, which was primarily attributable to lower payments in the first quarter of 2006, resulting from a one-time benefit from extended payment terms, as well as other cash management initiatives in the prior year period.

• Higher payments for restructuring and restructuring-related activities, incentive compensation and customer rebate programs.

• Higher levels of inventory resulting from the build-up of safety stock to support business integration activities.

  Cash Flow from Investing Activities

     Cash used by investing activities was $21.6 million and $11.3 million for the six months ended June 30, 2007 and 2006, respectively. Gross capital expenditure was $21.9 million in 2007 and $12.1 million in 2006. The increase was driven by the cost of new distribution footprint infrastructures associated with ongoing restructuring and business integration efforts.

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     Cash Flow from Financing Activities

     Cash provided by financing activities was $21.0 million in the first six months of 2007, whereas cash used by financing activities was $72.6 million for the same period in 2006. During the first half of 2006, the Company paid all required 2006 debt service totaling $24.7 million, and reduced its Senior Secured Term Loan Facilities by $55.0 million.

  Capitalization

     The Company’s total debt at June 30, 2007 was $825.8 million. The ratio of debt to stockholders’ equity at June 30, 2007 was 2.0 to 1.

     As of June 30, 2007 the amount available for borrowings under our revolving credit facilities was $118.1 million (allowing for $18.4 million drawn and $13.5 million of letters of credit outstanding on that date).

     As of and for the period ended June 30, 2007, the Company was in compliance with all applicable loan covenants.

  Adequacy of Liquidity Sources

     The Company believes that its internally generated funds, together with revolver availability under its senior secured credit facilities and its access to global credit markets, provide adequate liquidity to meet both its long-term and short-term capital needs with respect to operating activities, capital expenditures and debt service requirements. The Company’s existing credit facilities would not be affected by a change in its credit rating.

Critical Accounting Policies

  Income Taxes

     In accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, deferred tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred tax assets to an amount that is more likely than not to be realized.

     The amount of income taxes that we pay is subject to ongoing audits by federal, state and foreign tax authorities. The Company’s estimate of the potential outcome of any uncertain tax position is subject to management’s assessment of relevant risks, facts and circumstances existing at each reporting date. Tax positions are recognized as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority, when it is more likely than not, based on technical merits, that the position will be sustained upon examination. Any differences between tax positions taken in a tax return and amounts recognized in our financial statements results in an increase in a liability for income taxes payable or a reduction of an income tax refund receivable; a reduction in a deferred tax asset or an increase in a deferred tax liability; or both.

     Interest and penalties recognized in the Company’s results of operations are classified as income tax expense.

Recent Accounting Pronouncements

     In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 establishes a two-step process consisting of (a) recognition and (b) measurement for evaluating a tax position. The interpretation provides that a position should be recognized if it is more likely than not that a tax position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Any differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for income taxes payable or a reduction of an income tax refund receivable; a reduction in a deferred tax asset or an increase in a deferred tax liability; or both. This interpretation is effective for fiscal years beginning after December 15, 2006. The Company applied the provisions of the Interpretation to all tax positions upon initial adoption on January 1, 2007. The implementation of this interpretation did not result in an increase or decrease in the Company’s liability for unrecognized tax benefits.

31

Forward-Looking Statements

     “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report contain, and other periodic reports and press releases of the Company may contain, certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. These forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “will”, “believe,” “expect,” “intend,” “anticipate,” “estimate,” “forecast,” “project,” “plan,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Because actual results may differ from those predicted by such forward-looking statements, you should not rely on such forward-looking statements when deciding whether to buy, sell or hold the Company’s securities. The Company undertakes no obligation to update these forward-looking statements in the future. Among the factors that could cause plans, actions and results to differ materially from current expectations are: fluctuations in cost and availability of raw materials; competition within the markets in which the Company operates; the effects of both general and extraordinary economic, political and social conditions; the dependence of the Company on certain suppliers of manufactured products; the effect of consolidation in the office products industry; the risk that businesses that have been combined into the Company as a result of the merger with General Binding Corporation will not be integrated successfully; the risk that targeted cost savings and synergies from the aforesaid merger and other previous business combinations may not be fully realized or take longer to realize than expected; disruption from business combinations making it more difficult to maintain relationships with the Company’s customers, employees or suppliers; foreign exchange rate fluctuations; the development, introduction and acceptance of new products; the degree to which higher raw material costs, and freight and distribution costs, can be passed on to customers through selling price increases and the effect on sales volumes as a result thereof; increases in health care, pension and other employee welfare costs; as well as other risks and uncertainties detailed from time to time in the Company’s SEC filings.

ITEM 3. QUANTITIATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     See Item 7A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. There has been no material change to disclosures made therein on Foreign Exchange Risk Management or Interest Rate Risk Management through the period ended June 30, 2007 or through the date of this report.

ITEM 4. CONTROLS AND PROCEDURES

  (a) Evaluation of Disclosure Controls and Procedures.

     As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision of, and with the participation of the Company’s Disclosure Committee, the Company’s management, and including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective.

  (b) Changes in Internal Control Over Financial Reporting.

     There has been no change in the Company’s internal control over financial reporting that occurred during the three month period ending June 30, 2007 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     The Company and its subsidiaries are defendants in various claims and legal proceedings associated with their business and operations. It is not possible to predict the outcome of the pending actions, but management believes that there are meritorious defenses to these actions and that these actions if adjudicated or settled in a manner adverse to the Company, would not have a material adverse effect upon the results of operations, cash flows or financial condition of the Company.

ITEM 1A. RISK FACTORS

     In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2006. Those risk factors described in that annual report could materially adversely affect our business, financial condition or future results. The risks described in that annual report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently consider immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          A total of 48,047,014 of the Company’s shares of common stock were present or represented by proxy at the Company’s Annual Meeting of Stockholders held on May 15, 2007 (the “2007 Annual Meeting”). This represented more than 89% of the Company’s shares outstanding. Two management proposals were voted upon at the 2007 Annual Meeting and both were approved.

Proposal 1 Election of Directors.

          The terms of office of three current directors, Gordon R. Lohman, Dr. Patricia O. Ewers and George V. Bayly, expired at the 2007 Annual Meeting and all were re-elected to a three-year term. The results of the voting were as follows:

	For		Withheld
Gordon R. Lohman		47,145,285		901,729
Dr. Patricia O. Ewers		47,284,510		762,504
George V. Bayly		47,425,793		621,221

          Other directors whose terms continued after the meeting were David D. Campbell, G. Thomas Hargrove, Robert J. Keller, Robert H. Jenkins, Pierre E. Leroy, and Norman H. Wesley.

Proposal 2 Ratification of the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for 2007.

For	Against	Abstain
47,916,194	99,680	31,140

ITEM 5. OTHER INFORMATION

     None.

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ITEM 6. EXHIBITS

Number	Description
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

*	Filed herewith.
**	Furnished herewith

34

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) 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.

REGISTRANT:
ACCO BRANDS CORPORATION
By:	/s/ David D. Campbell
David D. Campbell
Chairman of the Board and
Chief Executive Officer
(principal executive officer)
By:	/s/ Neal V. Fenwick
Neal V. Fenwick
Executive Vice President
and Chief Financial Officer
(principal financial officer)
By:	/s/ Thomas P. O’Neill, Jr.
Thomas P. O’Neill, Jr.
Vice President, Finance and Accounting
(principal accounting officer)

August 9, 2007

35

EXHIBIT INDEX

Number	Description
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

*	Filed herewith.
**	Furnished herewith

36