Fleetwood also continued to reinvent operations, making investments that are vital to extending our position as a leader in our industries.

We have studied our plants, and made moves to modernize them and improve efficiencies. In the case of our two gasoline motor home plants, this included installing state-of-the-art paint systems. This gives us the option of applying full-body paint – an increasingly popular option for high-end motor homes – to our gas-powered products.

Six of our housing plants have been certified to produce modular homes (built to model building codes) as well as our traditional manufactured housing product (built to the federal HUD code), and all 22 plants have been certified to build ENERGY STAR qualified homes. We continue to explore ways to introduce factory-built housing to a wider audience in both traditional and non-traditional sites and markets, including inner cities, sales to developers, and other channels. In doing so, we expect to help meet the desperate demand for affordable housing with attractive, quality homes.

We are always seeking opportunities to cut our costs and improve margins, and we successfully achieved greater efficiencies during fiscal ’04. We created strategic alliances with some outstanding suppliers, including Caterpillar, Goodyear and DuPont, enabling us to lower costs and enhance quality. We consolidated all of purchasing – for Corporate, RVs, Housing and Supply – into one unit. At the same time, we sold our drapery operation in Georgia because we determined that, in this particular case, we could buy the products at lower cost than we could make them. We also completed a number of projects to consolidate suppliers of various components, resulting in improved quality and reduced pricing. Additionally, we mitigated most of the rising commodity prices, including prices for lumber, steel and aluminum, with timely surcharges.

This year’s consolidation of the Housing Group’s wholesale and retail sales and marketing teams provides synergies and an alignment of team vision and goals that we had been missing. In a similar move on the RV side, we reorganized and combined the aftermarket parts and service functions of our travel trailer and motor home divisions for better dealer service and availability. We also began to align the operations of the travel trailer and folding trailer divisions.

Information technology investments are ongoing. Recent upgrades support the speed needed in today’s world for financial reporting, product design, customer feedback, dealer relations, associate communications and more. In fact, it’s difficult to think of an area of operations that doesn’t require technological speed and reliability. And so we are currently investing in upgrading our infrastructure and introducing an entirely new enterprise system.

The magnitude of these changes has sometimes been difficult to digest, but they’re essential to us because when we complete the reinvention of our company, we will be leaner, stronger, and more nimble.

We have continued to focus on product improvement and we are proud of the consumer response to our efforts, which is reflected in our rising market share in major segments of both RVs and Housing. Through the first quarter of calendar 2004, we strengthened our lead as the nation’s largest supplier of Class A motor homes to almost 22 percent of the market and, in Housing, our progress in retail market share made us the leader in multi-section housing. In fact, throughout fiscal 2004 our overall share of the wholesale market increased year over year in every month but one, which was flat.

While our products are a major focus of the rest of this annual report, we would like to point in particular to the success of our Southwind and Pace Arrow brands, which are now first and third, respectively, among all gasoline-powered motor homes. We successfully launched a new Excursion diesel unit in March. We’re also very pleased with the launch of our GearBox, a new product offering that we estimate has already become the second-best selling activity-support travel trailer in the market. On the Housing side, the Entertainer has the continued distinction of being the bestselling house in America. We also won three design awards, the most of any manufacturer, at the Manufactured Housing Institute’s Spring Symposium. These coveted awards from MHI again underscore the strides we are making in product innovation and in reinventing the way we approach our products and view our markets.

As always, we thank our RV and housing dealers, our suppliers and you, our shareholders, for the support we’ve enjoyed while we continue to progress toward our financial goals. We also appreciate the remarkable commitment and guidance shown by our Board of Directors, and we welcome Danny Villanueva, who joined us in September. Danny is a proven business leader, and his contributions of money, time and energy back to his community, particularly in the inner city, are exemplary.

Most of all, we thank our associates. None of our accomplishments would be possible without the dedication and hard work of almost 14,000 Fleetwood employees. As a result of their efforts and abilities, we believe that we consistently provide the best value possible to our customers. These talented professionals have been the key to the progress we have made, and we anticipate their continued commitment to this great Company will enable us to meet the challenge we have set for ourselves: to build a Fleetwood that is stronger, richer, deeper, and more energized than it has ever been.

EDWARD B. CAUDILL President and CEO

THOMAS B. PITCHER Chairman of the Board