UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 25, 200431, 2005

OR

For the Transitiontransition period fromto

Commission file number 1-11657

TUPPERWARE BRANDS CORPORATION

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (407) 826-5050

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x¨

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

Large accelerated filer    x                        Accelerated filer    ¨                        Non-accelerated filer    ¨

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

    No  x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price ($19.00)23.38) of such common equity on the New York Stock Exchange-Composite Transaction Listing on June 25, 2004,July 1, 2005, the last business day of the registrant’s most recently completed second fiscal quarter: $1,087,019,925.

$1,368,673,429.76.

As of March 7, 2005, 59,374,5178, 2006, 60,593,279 shares of the Common Stock, $0.01 par value, of the Registrant were outstanding.

Documents Incorporated by Reference:

Portions of the Proxy Statement relating to the Annual Meeting of Shareholders to be held May 11, 200517, 2006 are incorporated by reference into Part III of this Report.

PART I

Item 1. Business

(a) General Development of Business

Tupperware Brands Corporation (“Registrant”, “Tupperware” or “Tupperware”the “Company”), is a $1.2 billion multinational company, is oneglobal direct seller of the world’s leading direct sellers, supplying premium, foodinnovative products across multiple brands and categories through an independent sales force of approximately 1.9 million. Product brands and categories include design-centric preparation, storage preparation and serving items to consumers in almost 100 countriessolutions for the kitchen and home through its Tupperware*the Tupperware brand and premium beauty and skinpersonal care products through its BeautiControl* brand in North America, Latin AmericaAvroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo and Asia Pacific.Swissgarde brands. The Registrant is a Delaware corporation that was organized on February 8, 1996 in connection with the corporate reorganization of Premark International, Inc. (“Premark”). In the reorganization, thecertain businesses of the Registrant and certain other assets and liabilities of Premark and its subsidiaries were transferred to the Registrant. On May 31, 1996, the Registrant became a publicly held company through the pro rata distribution by Premark to its shareholders of all of the then outstanding shares of common stock of the Registrant. Prior to December 5, 2005, the Registrant’s name was Tupperware Corporation. On October 18, 2000, the Registrant acquired 100 percent of the stock of BeautiControl, Inc. (“BeautiControl”) and on December 5, 2005, the Registrant acquired the direct selling businesses of Sara Lee Corporation (“International Beauty group”).

(b) New York Stock Exchange – Exchange—Required Disclosures

General. The address of the Registrant’s principal office is 14901 S. Orange Blossom Trail, Orlando, Florida 32837. The names of the Registrant’s directors are Catherine A. Bertini, Rita Bornstein, Kriss Cloninger, III, E.V. Goings, Clifford J. Grum, Joe R. Lee, Angel R. Martinez, Bob Marbut, Robert J. Murray, David R. Parker, Joyce M. Roché, J. Patrick Spainhour and M. Anne Szostak. Members of the Audit and Corporate Responsibility Committee of the Board of Directors are Dr. Bornstein and Messrs. Cloninger, Grum (Chair), Martinez, Murray and Murray.Spainhour. The members of the Compensation and Governance Committee of the Board of Directors are Ms. Bertini, Ms. Roché, Ms. Szostak (Chair), and Messrs. Lee, Marbut and Parker. The members of the Executive Committee of the Board of Directors are Ms. Szostak and Messrs. Goings (Chair), Grum and Lee. The Registrant’s officers and the number of its employees are set forth below in Part I of this Annual Report on Form 10-K.Report. The name and address of the Registrant’s transfer agent and registrar is Wells Fargo Bank, N.A., c/o Wells Fargo Shareowner Services, 161 North Concord Exchange, South St. Paul, MN 55075. The number of the Registrant’s shareholders is set forth below in Part II, Item 5 of this Annual Report on Form 10-K.Report. The Registrant is satisfying its annual distribution requirement to shareholders under the New York Stock Exchange (“NYSE”) rules by the distribution of its Annual Report on Form 10-K as filed with the SEC in lieu of a separate annual report.

Corporate Governance. Investors can obtain access to periodic reports and corporate governance documents, including board committee charters, corporate governance principles and codes of conduct and ethics for financial executives, and the Registrant’s transfer agent and registrar through the Registrant’s website free of charge (as soon as reasonably practicable after reports are filed with the Securities and Exchange Commission (“SEC”) in the case of periodic reports) by going towww.tupperware.com and searching under Company/Investor Relations/Shareholder Information. Such information, which is provided for convenience but is not incorporated by reference into this filed document,Report, is available in print to any shareholder who requests it in writing from the Corporate Secretary’s Department, Tupperware Brands Corporation, P.O. Box 2353, Orlando, Florida 32802-2353. The chief executive officer of the Registrant has certified to the NYSE that he is not aware of any violation by the Registrant of NYSE corporate governance listing standards. The Registrant’s Chief Executive Officer and Chief Financial Officer have filed with the Securities and Exchange CommissionSEC their respective certifications in Exhibits 31.1 and 31.2 of the Annualthis Report on Form 10-K in response to Section 302 of the Sarbanes-Oxley Act of 2002.

BUSINESS OF TUPPERWARE BRANDS CORPORATION

The Registrant is a worldwide direct selling consumer products company engaged in the manufacture and sale of Tupperware products and BeautiControl cosmetics and personal care products.products under a variety of trade names, including

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BeautiControl, Fuller*, Nutrimetics*, NatureCare*, Avroy Shlain*, Swissgarde* and Nuvo* Cosmetics. Each business manufactures andand/or markets a broad line of high quality products.

I. PRINCIPAL PRODUCTS

Tupperware. The core of Tupperware’s product line consists of food storage, serving and preparation products. Tupperware also has an established line of kitchen gadgets, children’s educational toys, microwave products and gifts. The line of Tupperware products has expanded over the years with products such as Modular Mates*, FridgeSmart* One Touch* canisters, the Rock ‘N Serve* microwave line, OvenWorks* and silicon baking forms for microwave or oven use, Open House and Elegant serving lines, the Chef Series* knives and cookware, Flat Out*, Stuffables* and CheeseSmart* storage containers, plus many specialized products for kitchen and home.

(Words followed by * are registered and unregistered Trademarks of the Registrant.)

Tupperware continues to introduce new designs, colors and decoration in its product lines, to vary its product offerings by season and to extend existing products into new markets around the world. The development of new products varies in different

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markets in order to address differences in cultures, lifestyles, tastes and needs of the markets. New products introduced in 20042005 included a wide range of products in all four of Tupperware’s geographic areas, covering both core business areas and new categories. Some of the new products and categories are spices and seasonings and its new Flatout*, Heat and Serve and CheeseSmart* containers. New product development and introduction will continue to be an important part of Tupperware’s strategy. Tupperware’s licensing business continues with existing partners such as The Walt Disney Company, Mattel, Warner Bros. and the National Football League.

BeautiControl. BeautiControl manufactures and distributes skin care products, cosmetics, bath and body care, toiletries, fragrances and related products. New products introduced in 20042005 included reformulated Regeneration Gold* skin care products, reformulated and repackaged Skinlogics* basicSkin Strategies* men’s skin care line and Therma del Sol,* a line of in-home spa quality body treatments.the new Beauti* color line. BeautiControl sells its products through independent sales persons called directors and consultants, who purchase the products from BeautiControl and then sell them directly to consumers in the home or workplace. Outside the United States and Canada, BeautiControl products are sold within the Tupperware organization structure.

International Beauty.The International Beauty group manufactures and/or distributes skin care products, cosmetics, bath and body care products, toiletries, fragrances, household products, nutritional products and apparel. Sales of products are made through independent sales persons called directors and consultants, who purchase products from the International Beauty group and then sell them directly to consumers in the home or workplace.

(Words followed by * are registered or unregistered Trademarks of the Registrant.)

II. MARKETS

Tupperware. Tupperware’s business is operated on the basis of four geographic markets: Europe (Europe, Africa and the Middle East), Asia Pacific, Latin America and North America. Tupperware products are sold in almost 100 foreign countries and in the United States and it has operations in the majoritymany of such countries. For the past five fiscal years, sales in foreign countries represented, on average, approximately 8081 percent of total revenues from the sale of Tupperware products.

Market penetration varies throughout the world. Several “developing” areas that have low penetration, such as Latin America, Asia and Eastern and Central Europe, provide significant growth potential for Tupperware. Tupperware’s strategy continues to include expansion and greater penetration into new markets throughout the world.

BeautiControlBeauty.. BeautiControl’s Beauty products and image services are provided to clients via an independent sales force in North America, Latin America22 markets throughout the world with particularly high shares of the direct selling and/or beauty market in Mexico, South Africa, the Philippines and Asia Pacific.Australia.

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III. DISTRIBUTION OF PRODUCTS

Tupperware. Tupperware’s products are distributed worldwide primarily through the “direct selling” method of distribution, inunder which products are sold to consumers outside traditional retail store channels. The distributorship system facilitates the timely distribution of products to consumers, without having to work through intermediaries, and establishes uniform practices regarding the use of Tupperware trademarks and administrative arrangements with Tupperware, such as order entering, delivering and paying along with recruiting and training dealers.

Tupperware products distributed under the direct selling method are primarily sold directly to distributors, ordirectors, managers and dealers (“Sales Force”) throughout the world. DistributorsWhere distributorships are granted, they have the right to market Tupperware products using parties and other non-traditional retail methods and to utilize the Tupperware trademark. The vast majority of Tupperware’s distribution systemthe sales force is composed of distributors, managers and dealers (known in North America as consultants) who are independent contractors and not employees of Tupperware. In certain limited circumstances, Tupperware acquires ownership of distributorships for a period of time, until an independent distributor can be installed, in order to maintain market presence. During 2004,2005, Tupperware begancompleted the introductionimplementation of a new multi-tiered compensation plan in the United States for the benefit of its independent sales force members.

In addition to the introduction of new products and development of new geographic markets, a key element of Tupperware’s strategy is expanding its business by increasing the numbersize of dealers, managers and distributors.its Sales Force. Under the Tupperware system, distributors and directors recruit, train, and motivate a large sales force.number of dealers. Managers are developed from among the dealer group and promoted by distributors and directors to assist the distributors in recruiting, training and motivating dealers, while continuing to hold their own parties. Over the past several years in Tupperware’s United States business, its distributors have transitioned to operate under a new business model, in which many administrative tasks are performed by Tupperware since sales force orders and payments are made directly to the Company. This allows the distributor to concentrate on recruiting, training and motivating sales forces.

As of December 25, 2004,31, 2005, the Tupperware distribution system had approximately 1,9001,600 distributors, 58,60052,000 managers, and 886,000908,000 dealers worldwide.

During the year approximately 11.9 million Tupperware demonstrations took place worldwide.

Tupperware relies primarily on the “party” method of sales, which is designed to enable the purchaser to appreciate through demonstration the features and benefits of Tupperware products. Demonstrations, which are sometimes referred to as “Tupperware parties,” are held in homes, offices, social clubs and other locations. Tupperware products are also promoted through brochures mailed to persons invited to attend Tupperware parties and various other types of demonstrations. Sales of Tupperware products are supported by Tupperware through a program of sales promotions, sales and training aids and motivational conferences for the independent sales force. In addition, to support its sales force, Tupperware utilizes catalogs, television and magazine advertising, which help increase its sales levels with hard-to-reach customers and generate sales force leads for parties and new dealers.

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In 2004,2005, Tupperware continued the implementation around the world of its integrated direct access strategies to allow consumers to obtain Tupperware products other than by attending a Tupperware party and to enhance its core party plan business. These strategies include retail access points, Internet selling (which includes the option of personal websites for the North AmericaUnited States sales force), and television shopping. In addition, Tupperware enters into business-to-business transactions, in which Tupperware sells products to a partner company, whose products are combined with Tupperware products and sold through the partner’s distribution channel, with a link back to Tupperware’s party plan business to generate additional Tupperware parties.

The distribution of products to consumers is primarily the responsibility of distributors, who often maintain their own inventory of Tupperware products, the necessary warehouse facilities, and delivery systems; however, in some situations, Tupperware performs warehousing and selling functions and pays the distributor a commission for sales activity. In certain markets, Tupperware offers distributors the use of a delivery system of direct product shipment to consumers or dealers, which can further reduce distributors’ costs and leaves them more time to recruit, train and motivate their sales forces.

BeautiControl. BeautiControl’s skin care, cosmetics and related products are sold through consultants and directors who are independent contractors, not employees of BeautiControl. As of December 25, 2004, the31, 2005 BeautiControl’s total sales force count was approximately 85,800.103,000.

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The BeautiControl sales force reaches customers in group settings and through home demonstrations called Spa ESCAPEs or Image Parties.ESCAPEs. Introduced in 2003, Spa ESCAPEs provide the rejuvenating and relaxing benefits of a day spa while the customers learn the benefits of BeautiControl products and learn how to affordably duplicate the spa experience in their homes. Additionally, the sales force is encouraged to market the products through personal consultations, product brochures and, in the United States, company-developed and -sponsored personal internet web pages called BeautiPage* in order to utilize multiple selling opportunities.

In order to provide immediate product delivery, the sales force may maintain a small inventory of products.

In the United States, BeautiControl maintains BeautiControl.com through which consumers can order products, and in the United States and Canada, it maintains BeautiNet* through which the sales force can place orders and recruit.

International Beauty.The International Beauty group’s products are sold through consultants and directors who are independent contractors, not employees, except in certain markets. As of December 31, 2005, the International Beauty group’s total independent contractor sales force was approximately 884,000.

IV. COMPETITION

Tupperware. There are two primary competitive factors which affect the Registrant’s business: (i) competition with other “direct sales” companies for sales personnel and demonstration dates; and (ii) competition in the markets for food storage, serving and preparation containers, toys and gifts in general. Also, Tupperware has differentiated itself from its competitors through price, quality of products (lifetime warranty on most Tupperware products) and new products. Tupperware believes it holds a significant market share in each of these markets in many countries.

BeautiControl.Beauty. There are many competitors in the cosmetics business and the principal bases of competition generally are marketing, price, quality and newnessinnovation of products. BeautiControl has differentiated itselfproducts, as well as competition with other “direct sales” companies for sales personnel and itsdemonstration dates. The beauty businesses work to differentiate themselves and their products from the industry in general through the use of a number of value-added services, technological sophistication, brand development, new product introductions and by being technologically at the forefront of the industry.sales force training, motivation and compensation arrangements.

V. EMPLOYEES

The Registrant employs approximately 5,90011,700 people, of whom approximately 1,200900 are based in the United States.

VI. RESEARCH AND DEVELOPMENT

The Registrant incurred expenses of approximately $13.9 million, $13.0 million $13.6million and $12.0$13.6 million for fiscal years ended 2005, 2004 2003 and 2002,2003, respectively, on research and development activities for new products.

VII. RAW MATERIALS

Tupperware. Products manufactured by Tupperware require plastic resins meeting its specifications. These resins are purchased through various arrangements with a number of large chemical companies located throughout Tupperware’s markets. As a result, Tupperware has not experienced difficulties in obtaining adequate supplies and generally has been successful in obtaining favorable resin prices on a relative basis. Research and development relating to resins used in Tupperware products are performed by both Tupperware and its suppliers.

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BeautiControl.Beauty. Materials used in BeautiControl’sthe beauty businesses’ skin care, cosmetic and bath and body care products consist primarily of readily available ingredients, containers and packaging materials. Such raw materials and components used in goods manufactured and assembled by BeautiControlthe beauty businesses and through outsource arrangements are available from a number of sources. To date, BeautiControl hasthe beauty businesses have been able to secure an adequate supply of raw materials and components for its manufacturing,products, and it endeavors to maintain relationships with backup suppliers in an effort to ensure that no interruptions occur in its operations.

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VIII. TRADEMARKS AND PATENTS

Tupperware.Tupperware considers its trademarks and patents to be of material importance to its business; however, except for the Tupperware* trademark,, Fuller* and BeautiControl* trademarks, Tupperware is not dependent upon any single patent or trademark, or group of patents or trademarks. The Tupperware* trademark is, Fuller* and BeautiControl* trademarks are registered on a country-by-country basis. The current duration for such registration ranges from five years to ten years; however, each such registration may be renewed an unlimited number of times. The patents and trademarks used in Tupperware’s business are registered and maintained on a worldwide basis, with a variety of durations. Tupperware has followed the practice of applying for design and utility patents with respect to most of its significant patentable developments. The licensed characters from the licensors referenced under the caption “Principal Products” have become an important part of Tupperware’s business and those licenses have various durations.

BeautiControl. BeautiControl has registered its trademarks and servicemarks in the United States and has(Words followed by * are registered or is inunregistered Trademarks of the process of registering its principal trademarks and servicemarks in many other countries. Registrant.)

The Company has a patent on the formulae for its “REGENERATION”* and “REGENERATION²”* alpha-hydroxy acid-based products.

IX. ENVIRONMENTAL LAWS

Compliance with federal, state and local environmental protection laws has not had in the past, and is not expected to have in the future, a material effect upon the Registrant’s capital expenditures, liquidity, earnings or competitive position.

X. OTHER

Tupperware.Sales do not vary significantly on a quarterly basis; however, third quarter sales are generally lower than the other quarters in any year due to vacations by Tupperware’s dealers and their customers, as well as Tupperware’s reduced promotional activities during such quarter. Sales generally increase in the fourth quarter as it includes traditional gift-giving occasions in many of Tupperware’s markets and as children return to school and households refocus on activities that include the use of Tupperware’s products along with increased promotional activities supporting these opportunities.

BeautiControl. BeautiControl is not subject to seasonality to any significant extent.

General.Generally, there are no working capital practices or backlog conditions which are material to an understanding of the Registrant’s business. The Registrant’s business is not dependent on a small number of customers, nor is any of its business subject to renegotiation of profits or termination of contracts or subcontracts at the election of the United States government.

XI. EXECUTIVE OFFICERS OF THE REGISTRANT

Following is a list of the names and ages of all the Executive Officers of the Registrant, indicating all positions and offices with the Registrant held by each such person, and each such person’s principal occupations or employment during the past five years. Each such person has been elected to serve until the next annual election of officers of the Registrant (expected to occur on May 11, 2005)17, 2006).

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Positions and Offices Held and Principal Occupations

of Employment During Past Five Years

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Item 1A. Risk Factors.

Reference is made to the information set forth under the caption “Forward-Looking Information” in Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of this Report for a discussion of the Company’s risk factors.

Item 1B. Unresolved Staff Comment.

None.

Item 2. Properties

The principal executive office of the Registrant is owned by the Registrant and is located in Orlando, Florida. The Registrant owns and maintains Tupperware manufacturing plants in Belgium, Brazil, France, Greece, Japan, Korea, Mexico, New Zealand, the Philippines, Portugal, South Africa and the United States, and leases manufacturing and distribution facilities in China, India, and Venezuela. The Registrant owns and maintains the BeautiControl headquarters in Texas and leases its manufacturing and distribution facilities in Texas. The Registrant conducts a continuing program of new product design and development at its facilities in Florida, Texas, Japan, Mexico, New Zealand and Belgium. None of the owned principal properties is subject to any encumbrance material to the consolidated operations of the Registrant.Registrant except for the Registrant’s United States properties. The Registrant considers the condition and extent of utilization of its plants, warehouses and other properties to be good, the capacity of its plants and warehouses generally to be adequate for its needs, and the nature of the properties to be suitable for its needs.

In addition to the above-described improved properties, the Registrant owns approximately 450350 acres of unimproved real estate surrounding its corporate headquarters in Orlando, Florida, which have been prepared for a variety of development purposes. The Registrant began selling portions of this property in 2002, and this project is expected to continue through 2007.2009.

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Item 3. Legal Proceedings

A number of ordinary-course legal and administrative proceedings against the Registrant are pending. In addition to such proceedings, there are certain proceedings that involve the discharge of materials into or otherwise relating to the protection of the environment. Certain of such proceedings involve federal

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environmental laws such as the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as well as state and local laws. The Registrant establishes reserves with respect to certain of such proceedings. Because of the involvement of other parties and the uncertainty of potential environmental impacts, the eventual outcomes of such actions and the cost and timing of expenditures cannot be determined with certainty. It is not expected that the outcome of such proceedings, either individually or in the aggregate, will have a materially adverse effect upon the Registrant.

As part of the 1986 reorganization involving the formation of Premark, International, Inc., Premark was spun-off by Dart & Kraft, Inc., and Kraft Foods, Inc. assumed any liabilities arising out of any legal proceedings in connection with certain divested or discontinued former businesses of Dart Industries Inc., a subsidiary of the Registrant, including matters alleging product and environmental liability. The assumption of liabilities by Kraft Foods, Inc. remains effective subsequent to the distribution of the equity of the Registrant to Premark shareholders.shareholders in 1996. As part of the acquisition of the International Beauty group, Sara Lee Corporation indemnified the Registrant for any liabilities arising out of any existing litigation at the time of the acquisition and for certain legal matters arising out of circumstances which might relate to periods before or after the date of the acquisition.

Item 4. Submission of Matters to a Vote of Security Holders

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Registrant has not sold any securities in 20022003 through 20042005 which were not registered under the Securities Act of 1933. As of March 1, 2005,8, 2006, the Registrant had 61,93339,619 shareholders of record and beneficial holders. The principal United States market on which the Registrant’s common stock is being traded is the New York Stock Exchange. The stock price and dividend information set forth in Note 1516 to the consolidated financial statements, entitled “Quarterly Financial Summary (Unaudited),” and the rights agreements information set forth in Note 1617 to the consolidated financial statements, entitled “Rights Agreement” is included in Item 8 of Part II of this Report.

Report and is incorporated by reference into this Item 5.

The following information relates to the repurchaserepurchased of the Registrant’s equity securities by the Registrant during any month within the fourth quarter of the Registrant’s fiscal year covered by this Report:report:

As discussed above. In 2003,in Note 1 to the increase was primarily due to higher commission expense of about $20 millionconsolidated financial statements, the Company includes costs related to the business model changedistribution of its products in delivery, sales and administrative expense. As a result, the United States and increased salesCompany’s gross margin may not be comparable with other companies that include these costs in BeautiControl North America. Also contributing to the increase were higher domestic pension and retiree medical expenses and the favorable resolutioncost of a pre-acquisition contingency in BeautiControl North America in 2002. Partially offsetting these increases was reduced promotional spending in 2003, as 2002 included promotional investments made in Europe, Japan, Korea and Mexico in an effort to maintain sales force activity. While the European investments largely stabilized in 2002, the others continued into 2003, although at a reduced level.products sold.

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Re-engineering Costs (Gains).Costs. As the Company continuously evaluates its operating structure in light of current business conditions and strives to maintain the most efficient possible cost structure, it periodically implements various

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actions designed to reduce costs and to improve operating efficiency. These actions may result in re-engineering costs related to facility downsizing and closure as well as related asset write downs and other costs that may be necessary in light of the revised operating landscape. In addition, the Company may recognize gains upon disposal of closed facilities. Over the past three years, the Company has incurred such costs (gains) as detailed below that were included in the following income statement captions (in millions):

In 2005, re-engineering and impairment charges of $16.7 million included $10.2 million primarily related to severance costs incurred to reduce headcount in the Company’s South Carolina, Orlando, Australian mold making, Belgium, France and Portugal operations. In December 2004, the Company reached a decision to restructure its manufacturing facility, in Hemingway, South Carolina. In 2005, the Company implemented its plans related to the Hemingway facility, which resulted in the elimination of 269 positions and pretax severance and outplacement costs of approximately $7.2 million. An additional $0.9 million of severance was recorded for the elimination of 43 positions in the Company’s United States sales operation. The balance of the $16.7 million charge was largely related to impairment charges recorded to write down the value of certain of the Company’s United States warehousing and distribution capacity and related equipment, as well as a former manufacturing facility in Halls, Tennessee. In addition to headcount reductions, an additional $3.2 million of pretax costs were incurred to relocate equipment to other facilities. As a result of the capacity shift, the Company also realized a $5.6 million net reduction of its reserve for United States produced inventory that is accounted for under the last-in first-out (LIFO) method as that inventory was sold. Both of these items were recorded in cost of goods sold.

In 2004, the re-engineering and impairment charges included severance costs of approximately $3.3 million primarily related to headcount reductions in the United States, Japan and the Philippines. The Philippines action also resulted in an asset impairment charge of approximately $0.7 million. Also included in 2004 charges was a pretax $3.2 million write off of currency translation adjustments related to the Company’s decision to liquidate a foreign subsidiary during the year, which was previously classified in other comprehensive income. InThe decision in December of 2004 the Company reached a decision to restructure itsthe manufacturing facility in Hemingway, South Carolina. The Company determined that the best way to balance the requirements of cost effectiveness and utilization of worldwide manufacturing capacity was for the Hemingway facility to be a center of excellence for high tech production and distribution. This decisionCarolina in early 2005 resulted in an asset impairment charge of approximately $0.4 million in the fourth quarter of 2004. Partially offsetting these charges was the reversal of approximately $0.8 million of prior accruals primarily due to lower than estimated severance costs in Europe as all activities were concluded. In January 2005, the Company announced its plans related to the Hemingway facility which will result in the elimination of approximately 250 positions and pretax severance and outplacement costs of approximately $6.8 million that are expected to be recorded in the first quarter of 2005. In addition to these costs, the Company expects to incur approximately $2.4 million of pretax costs to relocate equipment to other facilities. Finally, the Company expects to realize a reduction of its reserve for United States produced inventory that is accounted for under the last-in first-out (LIFO) method as that inventory is sold. In 2005, this reduction is expected to be in the high single digit millions of dollars and begin being realized in the second quarter of 2005.

In 2003, the re-engineering and impairment charges included net severance costs of approximately $2.0 million primarily related to downsizing North American and Brazilian operations and to a lesser degree, the Mexican and Corporate Headquarters staffs. In addition, it incurredthere were impairment charges of approximately $4.8 million primarily related to a write-down of the Company’s former Halls, Tennessee manufacturing facility as well a write-down of its net investment in Argentina as a result of a decision to liquidate its legal entity and operate strictly under a strictlyan importer model. The delivery, sales and administrative expense related to a charge for bad debts related to an adjustment to the Brazilian business model in connection with the downsizing.

Included in 2002 costs were re-engineering and impairment charges of $20.8 million that provided for severance and other exit costs related to the decision to consolidate European operations related to finance, marketing and information technology and the establishment of regional areas. Also included were severance and impairment charges related to the downsizing of European, Latin American and Japanese manufacturing operations as well as the downsizing of marketing operations in Mexico, Japan, the United Kingdom and BeautiControl. Included in operating expenses was $0.1 million incurred for internal and external consulting costs to design and execute the re-engineering actions as well as $3.4 million other operating expenses related to the write-down of inventory and reserves for receivables as a result of marketing office restructuring. As part of the program, the Company sold its Spanish manufacturing facility, its Convention Center complex in Orlando, Florida and one of its manufacturing/distribution facilities in Japan and recognized pretax gains totaling $39.4 million.

For further details of the re-engineering actions, refer to Note 23 to the consolidated financial statements.

Tax Rate. The effective tax rates for 2005, 2004, and 2003 were (31.2), 14.8, and 2002, were 14.8, 15.3 and 23.3 percent, respectively. The ratesIn 2005, the Company reached a settlement with its former parent company resulting in a cash receipt of approximately $46 million including interest related to pre-June 1996 tax liabilities. This generated a net tax benefit of approximately $25 million after considering amounts previously recorded as a receivable on the

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Company’s balance sheet and a provision for taxes related to the interest portion of the settlement. This transaction, together with various audit settlements and year-end tax planning transactions, resulted in the negative provision for income taxes for 2005. In 2004, the rate reflected the impact of re-engineering actions and gains on property dispositions, including the hurricane related insurance gain discussed earlier, as well as the net favorable resolution of domestic and international tax audit contingencies in 2004.contingencies. In addition, the 2003 rate reflected a significant tax benefit related to the liquidation of the Company’s Argentine legal entity. Excluding the impact of re-engineering and impairment costs, portions of which did not result in a tax benefit, and gains on property disposition which reflected a tax expense at a higher domestic tax rate, the effective tax rates were 13.1, 18.5 and 19.5 percent in 2004, 2003 and 2002, respectively. The decrease in 2004 from 2003, excluding the impact of re-engineering and impairment charges and gains on property disposition, was primarily due to the favorable contingency resolution mentioned above. Also contributing to the decline was a more favorable mix

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of income toward lower tax jurisdictions as well as the establishment of deferred tax assets related to the expected future utilization of foreign income tax credits in the United States. The Company has recognized these deferred tax assets based upon its analysis of the likelihood of realizing the benefits inherent in them and where it has concluded that it is more likely than not that the benefits would ultimately be realized and as such, no valuation allowance was necessary. This assessment was based upon expectations of improving domestic operating results as well as anticipated gains related to the Company’s sales of land held for development near its Orlando, Florida headquarters. In addition, certain tax planning transactions may be entered into to facilitate realization of these benefits. Refer to the critical accounting policies section for additional discussion of the Company’s methodology for evaluating deferred tax assets. The decrease from 2002 to 2003, excluding the impact of re-engineering and impairment charges and gains on property disposition was largely due to the impact of

Management expects a more favorable mix of income as discussed above. A tax rate of approximately 2224 percent is expected for 20052006 based upon anticipated improvement in domestic operating results, the inclusion of International Beauty operations for the full year and the absence of the 2005 benefit fromfor resolution of tax contingency resolution.

contingencies as outlined above.

Net Interest. The Company incurred $45.1 million of net interest expense compared with $13.0 million of net interest expense in 2004 compared withand $13.8 million in 20032003. The sharp increase in 2005 was due to slightly higher interest rates in 2005 along with the requirement to pay a make-whole payment of $21.9 million for the call of the Company’s $150 million notes in connection with entering into new financing arrangements for the acquisition of International Beauty and $21.8$6.0 million for the discharge of obligations related to $100 million of bonds due in 2002. 2006. Issuance costs of approximately $0.8 million related to retired debt were also written off as part of interest expense. A credit of $3.2 million to recognize net deferred gains on an interest rate swaps related to these debt agreements that were previously closed offset some of this expense. Interest expense also included a $3.1 million payment to close an interest rate hedge the Company previously entered to lock in the base interest rate on the previously expected refinancing of its 2006 notes. As the Company’s progress in its acquisition of International Beauty made it no longer probable in the third quarter of 2005 that the debt would be refinanced, this agreement was no longer an effective hedge. See additional discussion in Liquidity and Capital Resources.

The decline in 2004 reflectsreflected the Company’s entranceentering into two interest rate swap agreements discussed below and the lower resulting interest rates during 2004. Also contributing to the decline werewas lower debt levels during the year. Offsetting the impacts of these items was the absence of a 2003 adjustment related to prior hedging activity. The decline in 2003 was due to lower debt levels, the decision to discontinue the Company’s foreign income hedging program as discussed in the net income section and net gains on a Japanese yen interest rate swap. Also contributing to the decline was the 2003 adjustment related to prior hedging activity and the benefit of lower short-term interest rates. As of the end of 2004, the Company carried about 46 percent of its debt in floating interest rates based upon the terms and the utilization of swap agreements.

On July 1, 2003, the Company entered into two interest rate swap agreements on a portion of its long-term debt effective September 29, 2003. The Company received premiums totaling approximately $0.8 million for both agreements. The swap agreements totaltotaled a notional amount of $150 million and were to expire in 2011. The Company receivesreceived semi-annual interest payments at 7.91 percent and makesmade floating rate interest payments based on the six-month LIBOR rate plus a spread of about 3.7 percentage points.

These interest rate swap agreements were terminated in conjunction with the acquisition financing for International Beauty as discussed above.

Reflecting current interest rates, and projected borrowings and their effective term structure, and additional debt outstanding due to the CompanyInternational Beauty acquisition, management anticipates that 20052006 net interest expense will be approximately $13 to $14$45 million.

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Regional Results 2005 vs. 2004

Europe

The slight increase in European sales was primarily due to higher business-to-business sales of $11.5 million at exchange rates consistent with 2004. The Company only pursues business-to-business relationships that benefit its core party plan business; consequently, activity in one period may not be indicative of future periods. The emerging markets of Russia, Turkey and Poland had strong increases in 2005 with growth of 41 percent from last year. The largest sales growth contribution came from Russia, which was up over 50 percent and contributed the largest dollar increase from last year of all markets in the segment. South Africa and France also contributed nicely to sales growth from 2004 due to larger total and active sales forces. These positive results were partially offset by large sales declines in the Nordics, Netherlands, Austria and Germany.

The segment’s largest market, Germany, was down eight percent from last year. While it ended the year with a larger sales force size, for most of the year it operated at a sales force size disadvantage. Additionally, a sales force size advantage for most of the fourth quarter did not offset lower sales force productivity due to a difficult consumer environment. Sales in 2005 in Germany totaled $231.0 million, as compared with $251.1 million in 2004, translated at 2005 exchange rates. The German market also accounts for a substantial portion of the segment’s profit.

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The segment overall ended the year with a 13 percent sales force size advantage and achieved a six percent average active sales force size advantage in the fourth quarter of 2005 versus 2004.

Overall, the segment’s sales decline absent the business-to-business impact noted above was due to lower sales volume, partially offset by a slight increase in overall pricing. The average pricing increase was negatively impacted by the mix of products sold. There was also a negative impact from the mix of markets generating sales. The emerging markets tend to sell products with lower average price points than those of Western Europe.

Although local currency sales increased slightly, profit was down 13 percent as reported and 12 percent in local currency primarily due to a lower gross margin and higher operating expenses. The lower gross margin was a result of higher resin costs, which were not totally offset by price increases, and a less favorable sales mix. The increased operating expenses were primarily for higher promotional expenses in Germany to increase the size of the sales force.

Management expects 2006 European sales to be about even with 2005 in local currency. Continued growth in emerging and developing markets will be offset by a difficult comparison from high business-to-business sales in 2005. The return on sales is expected to remain at about 20 percent.

Asia Pacific

Net sales for the year increased slightly both as reported and in local currency. This comparison benefited from the inclusion in 2004 of a product recall in Japan of $5.5 million, at the 2005 foreign exchange rate. Excluding this benefit, local currency sales would have been flat. Significant sales increases in China and Korea combined with a strong increase in Australia were partially offset by significant sales declines in Japan and the Philippines.

In China, direct selling has been limited by law, and the Company reaches consumers through independent store fronts. China sales grew over 70 percent and contributed the largest dollar increase in the Asia Pacific segment during 2005 with almost 2,000 storefronts operating at the end of 2005, which was up over 50 percent from last year. Storefront sales productivity was up as well.

Korea benefited from higher business-to-business transactions and core sales during the year, while Australia grew sales through a higher active and more productive sales force.

Although sales declined in Japan, strategic progress was made through focus on the product and the party. More specifically, in 2005, the product mix was rebalanced to obtain more sales from full-price products versus discounted items, which resulted in a better gross margin. Promotional programs encouraged the sales force to sell product benefits rather than sell at a discount. Additionally, the selling process was improved along with the catalogues and brochures to appeal more to the end consumer. These actions all support moving toward a direct selling sales force rather than a wholesale buyers club. In the second half of the year in Japan, the year-over-year average active sales force size declines stabilized and sales force productivity turned positive.

The Philippines had a large decline in active sales force size, which resulted in a significant sales decline partially due to the poor economic and political climate in this market.

Asia Pacific had a small decline in overall sales volume for the year, but was able to offset that with a more favorable mix of products sold as well as lower overall sales discounting as noted above in the Japan commentary.

In spite of a slight sales increase, both reported and local currency profit declined moderately reflecting results in Japan and the Philippines, including increased promotional spending in the Philippines in an attempt to stimulate sales force growth and sales in 2005 while competing in a difficult economic environment. The product recall in Japan mentioned earlier had no impact on the profitability comparison as the vendor reimbursed the Company for lost profit and costs related to the recall.

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Effective January 1, 2006, the Company will change its reporting segments to incorporate the management structure put in place following the International Beauty acquisition. Asia Pacific will be reported along with Mexico, and the Philippines will be included in the International Beauty segment.

Management expects local currency sales and profit for Asia Pacific and Mexico to be up by low-single digit percentages in 2006, reflecting continued growth in Australia, Mexico and China and weakness in Japan.

Latin America

Latin America had a strong increase in sales for the year that included a slight benefit from a weaker U.S. dollar. Local currency sales increased 11 percent driven by improvements in all areas, particularly Mexico. The sales increase in Mexico was driven by an increase in the total and active sales force count along with continued growth in the sale of BeautiControl products. Beauty sales grew 20 percent compared with 2004 and accounted for 10 percent of Mexican sales. Venezuela and Brazil also contributed to the increase for the year. In Brazil, the sales force was smaller but more productive than the prior year, as there was an increase in volume as well as improved pricing. Venezuela’s sales force advantage led to the current year increase, which was mostly driven by higher volume and, to a lesser extent, improved pricing. This segment had sequential improvement every quarter in the average active sales force size and finished the year with a fourth quarter advantage of nine percent.

The overall sales increase was driven largely by lower product discounting that led to higher average price points. As expected, the reduced discounting did lead to some erosion of sales volume.

Segment profit improved slightly due to sales growth in this segment. However, profit growth was less than sales growth due to strategic investments made to expand BeautiControl’s sales contribution in Mexico. Additionally, an unfavorable sales mix impacted profit.

Effective January 1, 2006, all Tupperware markets in Latin America, except Mexico, will be reported in the International Beauty segment reflecting a new management structure designed to capitalize on the catalog merchandising programs that work well in South America, as well as to gain back-end synergies. The 2006 outlook for the Latin American markets is included within the segment they will be reported under going forward.

North America

North America had a substantial decline in sales in 2005 as sales volume declined and was only partially offset by an improved product mix that included fewer sales force support items. This was due almost exclusively to the performance in the United States, which continued to struggle and had a 28 percent decline in the number of average active sellers in 2005 versus 2004. The Company is seeking to improve its U.S. business through a refreshed, interactive party format, continuing to introduce innovative and fashion forward products, public relations activities to ensure a broad understanding of the Company’s current product categories, innovations and fashionability and a better balance between its emphasis on products and its sales force earnings opportunity. In April 2005, the Company completed its implementation of a multi-tier compensation system for its sales force. The new system is more competitive in the U.S. market than the previous format and emphasizes building one’s business through recruiting. The Company is currently training its independent sales force to operate successfully under this new model. The new model offers life-time rather than temporary commissions on the sales of people within a consultant’s “downline” organization, removes geographic boundaries for recruiting within the nation and provides everyone within the sales force the opportunity to reach the top level of the organization without significant monetary investment.

There was a significant decrease in the segment loss for the year in spite of the substantial sales decline, also from the United States results. This was largely due to value chain improvements implemented during 2004 and 2005 including a restructure of its manufacturing operations in Hemingway, South Carolina to source the

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majority of its products from the Company’s other manufacturing facilities. The Company also realized a net benefit of $7.2 million from reduced LIFO reserve needs as United States-produced inventory was sold. Additionally, the United States benefited from an approximate $4 million reallocation of corporate overhead charges.

During the fourth quarter of 2005, there was $5.6 million of restructuring costs recorded for the U.S. market primarily related to warehousing and distribution. Going into 2006, the focus will continue to be on improving the value chain, including the cost base, in expectation of a lower loss in 2006, although management expects sales to be down by a single-digit percentage.

BeautiControl North America

BeautiControl North America had substantial increases in both sales and segment profit again in 2005 which were largely volume related. A higher proportion of sales of low priced items to support increased recruiting resulted in a slightly lower average selling price. The improved performance was a result of substantial increases in both the total and active sales forces during the year with the business closing 2005 with a 20 percent advantage in the total sales force. BeautiControl has now had 17 consecutive quarters of sales increases.

The sales force growth was fueled by both a strong earnings opportunity and an easy, replicable interactive party experience, the “Spa ESCAPE”. Both of these drivers permit a natural flow to recruiting as party attendees are drawn by the experience to inquire as to the earnings opportunity, which is also a very powerful motivator. These factors, when combined with continued sales force leadership development, all provide the impetus for continued growth.

The sales growth was the primary reason for the profit improvement along with the absence of an approximate $2.5 million charge in the first quarter of 2004 related to an accrual for legal matters and an executive retirement.

Management expects sales in 2006 to increase by a double-digit percentage and to generate an improved return on sales.

International Beauty

International Beauty sales and profit were included in the Company’s results beginning on December 5, 2005 with the closing of the acquisition of Sara Lee Corporation’s direct selling businesses. The sales and profit were $37.9 million and $0.9 million, respectively, including $1.8 million of purchase accounting amortization.

Sales and profit were strong in Mexico and South Africa, partially offset by some weakness in Australia and the Philippines. After considering incremental interest expense related to the acquisition, this segment had little net impact on 2005 earnings.

Going forward, this segment will include the acquired businesses along with Tupperware Central and South America and the Philippines. In 2006, management expects local currency sales to increase organically by 3 to 5 percent, with greater growth in profit from continuing good results in Mexico and a lower investment in South America.

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Regional Results 2004 vs. 2003

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