Letter from the Chairmen 7 Franklin Covey 2000 Annual Report • Selling these new solutions effectively through our existing channels: We are working with each of our existing channels to ensure that we leverage their strengths and capabilities in introducing these new solutions to the marketplace. As part of this effort, we have added new training centers to 12 of our existing stores. • Leveraging our strengths: We are committed to leveraging our strong brands, best-in-class content, large and loyal customer base, and other assets to form alliances and partnerships which will accelerate our development of new strengths for addressing customers’ needs.  • Re-deploying Capital Invested in Property,  Plant & Equipment: The Company currently has a substantial amount of capital invested in property, buildings and equipment. The value of these assets is increasing at a rate lower than our cost of capital. As a result, our investment in these assets is eroding shareholder value. To remedy this, we will be considering alternatives for reinvesting the capital currently tied up in these assets into higher-yielding investments. solutions under the umbrella of Productivity in the Digital Age during the second quarter of fiscal year 2001. We are excited about this new focus. While we expect that each of these new solutions will go through a period of testing and refinement, they are expected to contribute meaningfully to the growth and profitability of the Company over the coming years. The actions described in Camps 1 and 2 above will reduce costs, improve profitability and free-up capital for reinvestment, and will be an important thrust during fiscal year 2001. However, our real objective is to reestab- lish Franklin Covey as an organization which: (1) helps large numbers of individuals to meaningfully and measurably improve their lives; (2) helps large numbers of organizations to become significantly and measurably more effective; and (3) is able to grow rapidly, sustainably and profitably.  To reach this sustained growth, we expect to: Much of Franklin Covey’s past success can be traced to its ability to: (1) combine relevant, “best-in-class” content, with training and implementation tools, to help indi- viduals and organizations achieve meaningful change; and (2) effectively and powerfully bring its “solutions” to the market through its own strong sales and distribution channels. The Franklin Planner, The 7 Habits of Highly Effective People, and Premier School Agendas are all “blockbuster” examples of the successful implementation of this formula.  Advances in technology and changing customer needs, however, are changing the ways in which people work and communicate. The productivity tools they use, the ways in which people learn, and the channels through which information and learning are distributed are changing rapidly. The fundamental principles underlying Franklin Covey’s content are more relevant today than ever. Franklin Covey must translate its historical core competencies into leadership in the new digital world.  Camp 3: To Establish a Strong Defensible  Market Position for Franklin Covey in our  Chosen Markets by 2003.  Camp 4: To Establish Franklin Covey as a Company which Grows Rapidly, Sustainably and Profitably.  To meet the unmet needs of our customers, and firmly establish Franklin Covey’s position of strength, relevance and leadership in the new marketplace, our focus will  be on:  • Creating new solutions …which will combine best-in- class content and principles (ours and new relevant content from others), learning processes (including profiling and measurement); and integrated and synchronized implementation tools (including www.franklincoveyplanner.com; handheld devices; paper planners; and desktop software) to provide individuals and organizations with the knowledge, skills, and tools for achieving measurable gains in productivity and effectiveness in the new digital age. We expect to introduce the first of these new • Add measurably to our retail store base in  the U.S.  • Grow our domestic Organizational Solutions  sales force • Grow our Premier School Agendas client base  • Increase our eCommerce/Catalog revenue • Grow in our “A” countries (Canada, the U.K., Japan, and Mexico) • Grow revenues through non-Franklin-Covey channels 