NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) Industry Segment Information

Fleetwood conducts operations principally in two industries, recreational vehicles and manufactured housing. Fleetwood is organized into four segments: the RV Group, the Housing Group, the Supply Group and Corporate.

The RV Group, which consists of the motor home, travel trailer and folding trailer divisions, is a manufacturer of recreational vehicles, primarily selling products to a network of independent dealers. The Housing Group builds manufactured homes, selling products to a combination of independent dealers and, prior to their sale in August 2005, company-owned stores of the retail housing division. The retail business along with the financial services business are included in discontinued operations and have been excluded from the industry segment information. Identifiable assets exclude assets from the retail and financial services businesses in the amount of $145.8 million for fiscal year 2005. Information about those businesses can be found in Note 11. The Supply Group operations provide fiberglass, parts, lumber and other components to our primary businesses while also generating third-party sales. The operations of Fleetwood’s wholly owned insurance subsidiary have been included in the Corporate segment because the impact on consolidated operating income is not material. Intercompany sales and profits have been eliminated from the reported segment information.

Operating income (loss) is total revenues less cost of sales, operating expenses and other, net. The adjustments and eliminations include intercompany revenues of the Housing and Supply Groups and revenues of the wholly owned insurance subsidiary included in Corporate, as well as the elimination of intercompany profits on inventories held by the retail business. None of the following items have been included in the computation of operating income (loss) for the individual operating segments: certain corporate expenses, non-operating income and expenses, and income taxes. Goodwill for the acquisition of the folding trailer division is included in total assets of the RV Group. Identifiable assets are those assets used in the operation of each industry segment. Corporate assets primarily consist of cash, investments, deferred tax benefits, cash value of company-owned life insurance, other assets and some idle facilities. Information with respect to industry segments as of April 29, 2007, April 30, 2006, and April 24, 2005, and for each of the years then ended is set forth as follows:

	(Amounts in thousands)
	RV Group				Housing Group				Supply Group				Corporate and Other				Adjustments and Eliminations		Total
2007 Operating revenues	$	1,441,810		$	518,258		$	161,246		$	—		$	(113,392	)	$	2,007,922
Operating income (loss)	$	(62,416	)	$	(2,614	)	$	1,655		$	(3,641	)	$	—		$	(67,016	)
Identifiable assets	$	325,983		$	132,903		$	30,719		$	213,566		$	—		$	703,171
Depreciation		8,486			6,638			1,345			6,114			—			22,583
Amortization of financing costs		—			—			—			3,549			—			3,549
Capital expenditures		3,618			2,681			1,146			814			—			8,259
2006 Operating revenues	$	1,612,217		$	795,596		$	209,731		$	6,353		$	(191,497	)	$	2,432,400
Operating income (loss)	$	216		$	38,818		$	2,244		$	(10,509	)	$	(1,264	)	$	29,505
Identifiable assets	$	426,560		$	198,653		$	37,834		$	198,988		$	—		$	862,035
Depreciation		8,297			7,000			1,279			6,630			—			23,206
Amortization of financing costs		—			—			—			1,476			—			1,476
Capital expenditures		7,745			5,132			642			2,323			—			15,842
2005 Operating revenues	$	1,659,882		$	785,547		$	232,846		$	7,672		$	(311,235	)	$	2,374,712
Operating income (loss)	$	(39,169	)	$	6,387		$	3,816		$	(14,616	)	$	44		$	(43,538	)
Identifiable assets	$	465,245		$	212,251		$	42,526		$	144,441		$	—		$	864,463
Depreciation		7,647			6,802			1,527			6,182			—			22,158
Amortization of financing costs		—			—			—			1,418			—			1,418
Capital expenditures		23,979			4,707			1,233			3,805			—			33,724