BALANCE SHEETS | OPERATIONS | SHAREHOLDERS' EQUITY | CASH FLOWS
			in thousands, except per share data
		December 31, 1998 1997   ASSETS   Current Assets      Cash and cash equivalents $ 1,466        $ 1,233      Trade receivables 43,035 42,593      Inventories 107,436 139,544      Prepaid expenses and other 2,903 5,088      Deferred tax assets 29,000 29,000           Total current assets 183,840 217,458   Deferred Tax Assets 21,000 26,000   Property and Equipment      Land, buildings and improvements                                                                      37,226 31,367      Equipment and tooling 192,255 153,005 229,481 184,372      Less-accumulated depreciation (105,227 )            (86,352 )           Total property and equipment 124,254 98,020   Investments in Affiliates 26,636 19,767   Intangible Assets, net 22,967 23,501 $ 378,697 $ 384,746     LIABILITIES AND SHAREHOLDERS' EQUITY   Current Liabilities     Accounts payable $ 77,258   $ 61,027     Accrued expenses:         Compensation   41,664     40,240         Warranties   37,921     35,594         Other   41,110     38,033     Income taxes payable 7,011   16,217         Total current liabilities   204,964               191,111   Borrowings under credit agreement   20,500     24,400   Commitments and Contingencies (Notes 1,3,5,7 and 8)                       Shareholders' Equity     Preferred stock $0.01 par value, 20,000 shares authorized,         no shares issued and outstanding   --     --     Common stock $0.01 par value, 80,000 shares authorized,         25,355 and 26,014 shares issued and outstanding   253     260     Additional paid-in capital   48,622     72,955     Deferred compensation   (6,726 )                      (3,133 )     Compensation payable in common stock   6,844   7,346     Retained earnings   104,240   91,807         Total shareholders' equity 153,233 169,235   $ 378,697   $ 384,746   The accompanying notes are an integral part of these consolidated balance sheets. © 1999 Polaris Industries Inc.