BALANCE SHEETS | OPERATIONS | SHAREHOLDERS' EQUITY | CASH FLOWS
			in thousands, except per share data
		For the Years Ended December 31, 1998 1997     1996 Sales $ 1,175,520 $ 1,048,296   $ 1,191,901 Cost of Sales   897,233   785,758     928,085         Gross profit   278,287   262,538     263,816         Gross profit percent   23.7 %                25.0 %                  22.1 % Operating Expenses     Selling and marketing   118,688   112,978     112,146     Research and development   28,387   26,722     28,270     General and administrative   31,106   29,736     25,983         Total operating expenses   178,181   169,436     166,399         Operating income   100,106   93,102     97,417 Nonoperating Expense (income)     Interest expense   2,959   2,829     4,339     Equity in (income) of affiliates   (7,819 ) (6,718 )   (3,107 )     Other expense (income), net   (4,805 ) (5,171 )   (1,148 )     Provision for litigation loss (Note 2)                         61,409   --     --         Income before income taxes   48,362   102,162     97,333 Provision for income taxes   17,347   36,779     35,040         Net income $ 31,015 $ 65,383   $ 62,293 Basic Net Income Per Share   1.20   2.45     2.24   Diluted Net Income Per Share $ 1.19 $ 2.45   $ 2.24   The accompanying notes are an integral part of these consolidated balance sheets. © 1999 Polaris Industries Inc.