FABRIKAM Q4 EXECUTIVE UPDATE

Prepared by the Executive Leadership Council under the direction of Justin Thorp CFO

INTRODUCTION
The challenges we face as we move into the planning cycle are significant, but with hard work and clear thinking we are confident that we will be able to continue the strong growth path weve established over the last twelve months. Now is not the time to rest on our laurels rather it is the time to consolidate our market position and seek new markets for our products.

ORGANIZATIONAL REALIGNMENT
In order to meet our growing sales demands, and to optimize the supply chain throughout our worldwide operations Fabrikam is pleased to announce the realignment of our sales and manufacturing workforce world-wide. The new executive leadership team outlined in the table below will streamline each of our regional operations to maximize profit in the way that best suits the capabilities of the region. We can maximize our sales targets in each region, a place where we can engage our customers on familiar ground with our new structure. This will allow our global enterprise to optimize our inventory, sales management and capital investments to grow the business. This is part of the ongoing effort of the Fabrikam to demonstrate leadership, flexibility and prowess in the winter sport industry. Region North America Canada Japan Germany Italy Vice President Rich Haddock Wilson Pais Makoto Yamagishi Soren Francker Stephanie Bourne Office Locations Aspen Montreal Niseko Oberstdorf Mont Blanc Sales Offices 23 5 14 20 12

KEYS TO ONGOING SUCCESS

In the market for traditional high-quality sports equipment, the keys to success have not been significantly changed by new technology. They are not too different from what they have been for most of this century: product quality, reputation, and management.

MARKET ANALYSIS
The worldwide market for sports equipment is a very mature, very competitive market. Overall market growth for 2007 is estimated to be 7% and 9% over 2006, in revenue and units respectively. Distribution patterns vary a great deal by segment, from the mass retail distribution of the low end to the specialized distribution of the high-quality and high-price segments. Fabrikam operates in a narrow part of the market, instruments and equipment sold to professionals who insist on the highest-quality sound. Most of our customers are concert musicians.

Skis

Snow

Profit

INDUSTRY ANALYSIS
The market for outdoor equipment divides easily into several segments. Several market segments are relevant, and for this discussion we define the segments in which Fabrikam operates:

CUSTOMERS
Customers range from children learning how to ski to professional athletes in olympic settings. However, Fabrikam sells almost exclusively to professional athletes. On the Insert tab, the galleries include items that are designed to coordinate with the overall look of your document. You can use these galleries to insert tables, headers, footers, lists, cover pages, and other document building blocks. When you create pictures, charts, or diagrams, they also coordinate with your current document look. You can easily change the formatting of selected text in the document text by choosing a look for the selected text from the Quick Styles gallery on the Home tab. You can also format text directly by using the other controls on the Home tab.

TYPE-OF-EQUIPMENT
At the high end of the market, Fabrikam has an excellent reputation among athletes dedicated to more traditional gear. One of our challenges is to manage the transition to new technologies without losing our carefully guarded position with the devotees of traditional gear. So far, we have managed to create a model for that transition with our snowboard line, which is very respected among the better athletes.

On the Insert tab, the galleries include items that are designed to coordinate with the overall look of your document. You can use these galleries to insert tables, headers, footers, lists, cover pages, and other document building blocks. When you create pictures, charts, or diagrams, they also coordinate with your current document look. You can easily change the formatting of selected text in the document text by choosing a look for the selected text from the Quick Styles gallery on the Home tab. You can also format text directly by using the other controls on the Home tab. Most controls offer a choice of using the look from the current theme or using a format that you specify directly. To change the overall look of your document, choose new Theme elements on the Page Layout tab. To change the looks available in the Quick Style gallery, use the Change Current Quick Style Set command. Both the Themes gallery and the Quick Styles gallery provide reset commands so that you can always restore the look of your document to the original contained in your current template. On the Insert tab, the galleries include items that are designed to coordinate with the overall look of your document.

CHANGING THE WAY WE DO BUSINESS

Fabrikam will implement a standardized model for decision making in the next fiscal year to improve accountability and transparency throughout our corporation. This will enable others who are observing or consuming the results of decision committees to understand how decisions were made and for what reason without having to involve the members of the original team. This will especially helpfully in the

long-term, when the original team members are no longer on the project or no longer with our company. The figure below is an illustration of the new decision making process, and will serve as the basis for virtual team settings moving forward.

Locations
On the Insert tab, the galleries include items that are designed to coordinate with the overall look of your document. You can use these galleries to insert tables, headers, footers, lists, cover pages, and other document building blocks. When you create pictures, charts, or diagrams, they also coordinate with your current document look. You can easily change the formatting of selected text in the document text by choosing a look for the selected text from the Quick Styles gallery on the Home tab. 1. Aspen 2. Vale 3. Mt. Hood 4. Mt. Rainier 5. Whistler 6. Cypress Mountain You can also format text directly by using the other controls on the Home tab. Most controls offer a choice of using the look from the current theme or using a format that you specify directly. To change the overall look of your document, choose new Theme elements on the Page Layout tab. To change the looks available in the Quick Style gallery, use the Change Current Quick Style Set command. Both the Themes gallery and the Quick Styles gallery provide reset commands so that you can always restore the look of your document to the original contained in your current template. On the Insert tab, the galleries include items that are designed to coordinate with the overall look of your document. You can use these galleries to insert tables, headers, footers, lists, cover pages, and other document building blocks. When you create pictures, charts, or diagrams, they also coordinate with your current document look. You can easily change the formatting of selected text in the document text by choosing a look for the selected text from the Quick Styles gallery on the Home tab. You can also format text directly by using the other controls on the Home tab. Most controls offer a choice of using the look from the current theme or using a format that you specify directly. To change the overall look of your document, choose new Theme elements on the Page Layout tab. To change the looks available in the Quick Style gallery, use the Change Current Quick Style Set command. Both the Themes gallery and the Quick Styles gallery provide reset commands so that you can always restore the look of your document to the original contained in your current template. On the Insert tab, the galleries include items that are designed to coordinate with the overall look of your document. You can use these galleries to insert tables, headers, footers, lists, cover pages, and other document building blocks.