P O L A R I S   A T V ' S   A T   A   G L A N C E [ BACK ] ATV Business profile Polaris introduced the first American-made ATV in 1985: an innovative utility vehicle that expanded the recreation-dominated market and drove us to the number two market share position worldwide. We offer more models than any other manufacturer, and all are competitively priced within each category. Uses range from purely recreational to utility-oriented, such as farming, ranching, hunting and commercial. Our average owner is a 39-year-old, married male, and 54 percent of owners earn more than $40,000. 1997 Overview ATVs continued to be our fastest-growing product line with 1997 sales of $473 million, up 6 percent from 1996. 445,000 ATVs were sold worldwide in 1997, and the market continues to grow. To improve dealer profitability and reduce company inventory risk, we reduced dealers' days supply of inventory throughout the year, yet still achieved the eighth consecutive year of increased retail sales. Highlights of the year: Introduced the Concentric Drive System on Scrambler 400 and 500 models, which improved durability. Introduced a new Scrambler 500 Hi Output engine, the most powerful 4-stroke ATV engine in the industry. Sportsman 500 rated best ATV in the industry by several trade publications, and continued to be the industry best-seller in its category. Unveiled 6-wheel-drive Polaris Ranger, a side-by-side, general-purpose, off-road vehicle. Outlook The ATV market-the fastest-growing segment of the motorsports/utility vehicle industry-is nowhere near maturity. We expect double-digit growth for several more years. We've been the market's innovation leader, bringing more ATV product firsts to the industry than all other manufacturers combined. While competitors try to copy us, we'll continue to lead by expanding everyday applications for additional market segments and developing new models that outperform the competition. And we'll continue to tap the long-term potential overseas, where we already have a 17 percent market share.

Forward-looking statements made herein contain certain important factors that could cause results to differ materially from those anticipated. See Management's Discussion and Analysis and Results of Operations beginning on page 11.