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## TO OUR SHAREHOLDERS 

## VISION 

Be GLYPH<T_h> e Leader in Retailer Metrics with Superior Value Consumer Products for Everyday Use 

## GOAL 

Create an Additional $1 Billion of Enterprise Value in GLYPH<T_h> ree Years GLYPH<T_h> rough a Combination of EBITDA Growth and Debt Reduction 

With a pivotal and successful fi  scal 2010 behind us and an outlook for even better performance in fi  scal 2011, Spectrum Brands Holdings is moving into a promising new era, building a strong foundation for continuing growth and greater value creation. 

My message is one of confi dence and opti- mism about the future of Spectrum Brands Holdings. Since becoming your new Chief Executive Officer in April 2010, we have worked diligently to develop a focused and realistic vision and plan to build a stronger Spectrum Brands. Our leadership team is tested and brings the deep experience required to steer our Company’s expansion. 

Spectrum Brands completed a solid fi scal 2010, delivering net sales growth of 3.4 percent from continuing operations and a 10.5 percent increase in adjusted EBITDA, while ending the year with a strong liquidity position. We saw signifi cant market share gains in key product categories, and all segments reported increased adjusted EBITDA. Spectrum Brands is now a $3.1 billion, global consumer products company with a broad offering of widely trusted, extendable and like brands for like retailers that provide quality, performance and value to consumers worldwide. We enjoy a true global footprint with a solid presence on six continents in more than 120 countries. 

We enter fi scal 2011 with momentum and an unwavering focus on our strategic, operational and fi nancial goals, and with compelling oppor- tunities for market share and EBITDA growth. We have the capacity to generate strong and continuous free cash fl ow built upon a diversified revenue stream, attractive margins, and the top one, two or three global market position with powerful and enduring brand names in categories with limited signifi cant competitors. 

A clear roadmap and multi-year strategy guide our efforts to drive additional shareholder value creation. Our vision is straightforward:  To be the leader in retailer metrics with superior value consumer products for everyday use.  We are on track or ahead of schedule to meet the fi nancial objectives we have developed, most importantly to create an additional $1 billion of enterprise value by the end of fi scal 2013 through a combination of adjusted EBITDA growth and aggressive debt reduction, which is already in motion. As a start, two voluntary prepayments of $50 million and $20 million in recent months have reduced our $750 million senior secured Term Loan to $680 million. 

We believe fi scal 2011 should be another year of growth and progress. We expect net sales from continuing operations to increase 3 to 4 percent, adjusted EBITDA to grow to $455-$465 million, and free cash fl ow to reach $155-$165 million. Importantly, we anticipate cumulative debt reduction on our senior secured Term Loan in fi scal 2011 of at least $200 million. 

A signifi cant fi scal 2010 achievement was our acquisition of the Russell Hobbs small appliances business, with its widely respected brands and leading market positions. Upon completion of this acquisition, our Company became Spectrum Brands Holdings from Spectrum Brands, Inc. As part of the Russell Hobbs merger, we completed a major debt refi nancing. This signifi cantly improved our Company’s fi nancial profi le by strengthening our capital structure, reducing fi nancial risk, improving our leverage 

