P O L A R I S   S N O W M O B I L E S   A T   A   G L A N C E [ BACK ] Snowmobile Business Profile Polaris pioneered snowmobiles 43 years ago, and we've been the worldwide market share leader since the 1990-91 season. We attained and maintain our leadership position by offering continual innovations through a full range of competitively priced models covering all market segments: sport, high-performance, utility and economy. Our performance-oriented buyers are younger than the industry average: age 38 vs. the industry 41. They have an average income of $61,000, and 65 percent own more than one Polaris sled. 1997 Overview 261,000 units were sold worldwide during the season ended March 31, 1997, and while industrywide retail sales for the 1997-98 season aren't available yet, we anticipate they'll remain flat or be down slightly. The industry pause was expected; it reflects an absorption of the extraordinary 18 percent average annual growth that occurred between the 1993-94 and 1995-96 seasons. In anticipation of the industry slowdown we reduced our 1997 build, continuing the effort to reduce field inventories and more closely match supply with consumer demand. Sales of $443 million were down 13 percent from 1996. Highlights of the year: Expanded use of all-U.S. engines, which have been well received and set the new standard for performance. Improved handling with a new trailing arm on independent front suspension. Indy 700 RMK named SnoWest 1997 "Sled of the Year." Indy 440 XCR dominated 1996-97 Snow Cross and Cross Country racing events. Outlook We expect the industry to resume its long-term trend of 5 to 7 percent average annual growth during the 1998-99 season. We'll continue to demonstrate our leadership position with a 1999 lineup of 23 new models-the largest number we've ever introduced in one year in our 44-year history. The line-up includes two new body styles, five new engines, and numerous new suspension and comfort features. We'll remain the market share leader through innovative product development, and aggressive pricing and promotions. And we'll continue to improve profitability of the line through cost-reduction efforts that include expanded use of U.S.-built engines.

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.