ratio and extending debt maturities, while enhancing liquidity and increasing capital available for growth. 

The Russell Hobbs integration is on track, and we remain confi dent of achieving, and possibly exceeding, the $25-$30 million of cost synergies we have projected over the next few years. There are additional opportunities to capture revenue and new product development synergies as we begin leveraging each company’s regional strengths in complementary categories. Beyond Russell Hobbs, important integrations are occurring within our Global Pet and Home & Garden businesses, even as we have completed the relocation of our corporate headquarters from Atlanta back to Madison, Wisconsin. In short, Spectrum Brands now has a streamlined organization aligned along global business units, and connected through a shared services platform. 

In addition to organic growth in our business segments, and a focus on driving more volume through our plants to improve capacity utiliza- tion rates, we look to grow our Global Pet and Home & Garden segments through small, bolt- on acquisitions. To that end, our Global Pet business recently completed an accretive $12.5 million acquisition of Seed Resources, a leader in the domestic wild bird seed cake business with its well-known Birdola ®  premium brand. 

Our Spectrum Value Model is at the heart of our operating approach. As the accompanying chart shows, this model emphasizes providing value to the consumer with products that work as well as or better than our competition for a lower cost. We do this while also delivering higher retailer margins. We concentrate our efforts to win at point of sale and on creating and maintaining a low-cost, effi cient operating struc- ture that allows our top-line growth to contribute directly to our profi tability. This operating model permeates our businesses. We live it every day. 

We believe our superior value brand strategy is working well. We are maintaining or growing share in most of our key product categories. We continue to target driving our cost structure down and intend to move rapidly to strengthen our balance sheet with further and regular debt reduction payments. 

The result is a more accountable, agile and competitive Spectrum Brands – a business much better positioned to generate steady and profi table margins. Although market conditions change constantly, our brand fundamentals – from manufacturing and distribution to product development and market position – are solid. As a result, we are confi dent in the ability of our focused businesses to more fully realize their potential going forward as businesses designed to deliver strong, consistent cash fl ow. 

## GLYPH<T_h> e “Spectrum Value Model” di ff erentiates Spectrum Brands and provides stability and sustainable earnings. { Spectrum Va l u e Model “SAME PERFORMANCE, LESS PRICE, BETTER VALUE” 

## MARKET POSITIONING 

Focus on #2 brands in markets with high barriers to entry 

## 1 

## Product Performance 

Match or exceed competitor product performance 

## 2 

## Focused Investment 

Invest in product performance, R&D and cost improvement 

## VALUE TO RETAILERS 

Best retailer margin; category management; merchandising 

## 3 

## Control Costs 

Shared services, global new product development and common platforms 

## 4 

## Point of Sale Focus 

Win at point of sale, not through brand advertising 

