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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K

(MARK ONE) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
/X/ OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE
REQUIRED)
For the fiscal year ended April 26, 1998

OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE
REQUIRED)
For the transition period from to

COMMISSION FILE NUMBER 1-7699

FLEETWOOD ENTERPRISES, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 95-1948322
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

3125 MYERS STREET, RIVERSIDE, CALIFORNIA 92503-5527
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (909) 351-3500

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
-------------------------------- ---------------------------------
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
PACIFIC EXCHANGE, INC.

PREFERRED SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE, INC.
PACIFIC EXCHANGE, INC.

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

NONE
(TITLE OF CLASS)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES __X__ NO _____

AGGREGATE MARKET VALUE OF COMMON STOCK HELD BY NON-AFFILIATES ON JUNE 22,
1998: $1,144,475,000 (29,066,030 SHARES AT CLOSING PRICE ON NEW YORK STOCK
EXCHANGE OF $39.375). FOR THIS PURPOSE ALL SHARES HELD BY OFFICERS AND DIRECTORS
ARE CONSIDERED TO BE HELD BY AFFILIATES, BUT NEITHER THE REGISTRANT NOR SUCH
PERSONS CONCEDE THAT THEY ARE AFFILIATES OF THE REGISTRANT.

COMMON STOCK OUTSTANDING ON JUNE 22, 1998: 31,687,439 SHARES

DOCUMENTS INCORPORATED BY REFERENCE:

THE COMPANY'S PROXY STATEMENT WITH RESPECT TO ITS 1998 ANNUAL MEETING.

FLEETWOOD ENTERPRISES, INC.
PART I

ITEM 1. BUSINESS
GENERAL

Fleetwood Enterprises, Inc. is one of the nation's largest producers of
manufactured housing and the nation's largest manufacturer of recreational
vehicles (motor homes, travel trailers, folding trailers and slide-in truck
campers). Fleetwood had a 4.3 percent share of the single-family housing market
in 1997 and an 18.1 percent share of the manufactured housing market. In its
fiscal year ended April 1998, Fleetwood sold 65,544 manufactured homes and was
the largest producer of HUD-Code homes in the United States in terms of units
sold (a distinction Fleetwood has held since 1981). In 1997, Fleetwood had a
26.6 percent share of the overall recreational vehicle market, a 29.1 percent
share of the motor home market, a 21.7 percent share of the travel trailer
market and a 35.4 percent share of the folding trailer market. In its fiscal
year ended April 1998, Fleetwood sold 69,494 recreational vehicles and held the
leading market share in each of these three product categories.

The Company's principal manufacturing activities are conducted in 18 states
within the U.S., and to a much lesser extent in Canada. In addition, the Company
operates three supply companies which produce components for its primary
manufacturing operations, while also generating outside sales. Fleetwood Credit
Corp. (FCC), the Company's wholly owned RV finance subsidiary, was sold in May
1996. Finance revenues from FCC have been excluded from revenues, and results of
operations have been classified as discontinued operations.

Fleetwood's business began in 1950 through the formation of a California
corporation. The present company was incorporated in Delaware in September 1977,
and succeeded by merger to all the assets and liabilities of the predecessor
company. The Company's principal executive offices are located in Riverside,
California. As used herein, the terms "Fleetwood" or "Company" mean Fleetwood
Enterprises, Inc. and its subsidiaries, unless otherwise indicated by the
context.

The following table sets forth revenues by business segment and the relative
contribution of such revenues to total revenues for the past three fiscal years.
Information with respect to operating profit (loss) and identifiable assets by
industry segment is shown in the Notes to Consolidated Financial Statements in
Part II of this Form 10-K.



YEARS ENDED APRIL
-------------------------------------------------------------------------
1998 % 1997 % 1996 %
------------ --- ------------ --- ------------ ---
(DOLLARS IN THOUSANDS)

Manufactured housing............................. $ 1,487,650 49% $ 1,426,940 50% $ 1,443,016 51%
------------ --- ------------ --- ------------ ---
Recreational vehicles:
North American sales--
Motor homes.................................. 904,574 30 855,214 30 720,186 26
Travel trailers.............................. 503,762 16 453,274 16 458,159 16
Folding trailers............................. 109,827 4 86,675 3 87,208 3
European sales................................. -- -- -- -- 51,941 2
------------ --- ------------ --- ------------ ---
1,518,163 50 1,395,163 49 1,317,494 47
------------ --- ------------ --- ------------ ---
Supply operations................................ 44,754 1 52,323 1 48,767 2
------------ --- ------------ --- ------------ ---
$ 3,050,567 100% $ 2,874,426 100% $ 2,809,277 100%
------------ --- ------------ --- ------------ ---
------------ --- ------------ --- ------------ ---


1

MANUFACTURED HOUSING

Fleetwood has been the leading producer of HUD-Code manufactured housing in
the United States since 1981, and distributes its products primarily through a
network of approximately 1,400 independent retailers in 49 states. Fleetwood's
share of the manufactured housing market, based upon shipments to retailers, was
18.1 percent in calendar year 1997. A manufactured home is a single-family house
constructed entirely in a factory environment, rather than at the home site, and
is constructed in accordance with HUD construction and safety standards. There
are two basic categories of manufactured housing-- single-section and
multi-section--and Fleetwood is a leading producer of both types. Fleetwood
produces manufactured housing using efficient, assembly-line techniques and
generally the same materials as are found in site-built homes.

About 68 percent of the manufactured homes produced in the United States are
placed on individually owned lots; the balance are located on leased sites in
manufactured housing communities. Most manufactured housing is sold in rural
regions and towns outside of major urban areas.

The quality of manufactured homes has increased significantly over the past
20 years. Today's manufactured homes offer customers similar quality to many
site-built homes at a much more affordable price. Manufactured homes are
constructed in a factory environment utilizing assembly line techniques, which
allow for volume purchases of materials and components and more efficient use of
labor. Manufactured home producers offer most of the amenities of site-built
housing and generally build homes with the same materials as used in site-built
homes. Standard features typically included in manufactured homes are central
heating, name brand appliances, carpeting, cabinets, walk-in closets, vaulted
ceilings, wall coverings and porches. In addition, optional features include
such amenities as fireplaces, wet bars, spa tubs and garages, as well as
retailer-installed options such as central air conditioning and furniture
packages.

The manufactured housing industry has grown significantly since 1991.
According to the Manufactured Housing Institute, domestic shipments increased
from 170,173 homes in 1991 to 353,676 homes in 1997, while total retail sales
increased from approximately $4.7 billion to over $14.0 billion over the same
period. In addition, the manufactured housing industry's share of new
single-family housing has increased significantly in recent years, from about 17
percent in 1991 to nearly 25 percent in 1997. The Company believes that these
increases have resulted from increasing consumer acceptance of and preference
for manufactured housing, which has been driven by the following: (i) improved
product quality and design and enhanced features; (ii) the significant disparity
in the average price per square foot between site-built housing and manufactured
housing; (iii) favorable demographic and regional economic trends; (iv)
improving business practices in the manufactured home retail industry; and (v)
increased attractiveness of financing terms available to manufactured housing
retailers and consumers. As acceptance of manufactured housing has increased
among higher income buyers, demand has shifted toward larger, multi-section
homes, which accounted for 58 percent of industry shipments in 1997, up from 47
percent in 1991.

Fleetwood held a 19.4 percent share of the single-section manufactured
housing market in calendar 1997, as measured by shipments to retailers.
Fleetwood's single-section homes range in size from 460 square feet to 1,230
square feet. Fleetwood's average single-section home retailed for approximately
$24,000 (excluding land costs) in fiscal 1998. Single-section homes represented
approximately 44 percent of Fleetwood's manufactured housing unit shipments and
approximately 30 percent of manufactured housing sales in its fiscal year ended
April 1998. A majority of Fleetwood's single-section homes retail for under
$28,000 (excluding land costs) and are designed for the affordable housing
market which includes first-time, retiree and value-oriented buyers.

Fleetwood held a 17.1 percent share of the multi-section manufactured
housing market in calendar 1997, as measured by shipments to retailers.
Fleetwood's multi-section homes range in size from 940 square feet to 2,550
square feet, and sold for an average retail price of approximately $43,000
(excluding land costs) in fiscal 1998. Multi-section homes represented
approximately 56 percent of Fleetwood's

2

manufactured housing unit shipments and approximately 70 percent of manufactured
housing sales in fiscal 1998.

MANUFACTURED HOUSING--RETAIL

With the exception of several vertically integrated entities, most companies
in the manufactured housing industry, including Fleetwood, have traditionally
marketed their homes through independent retailers. Recently, however, certain
manufactured housing producers have begun to acquire retailers. These
acquisitions have occurred for a variety of reasons, including manufacturers'
desire to (i) control retail distribution; (ii) upgrade marketing and
merchandising efforts, including brand name development; and (iii) provide an
exit vehicle for family-owned retail businesses. Additionally, a number of
financial consolidators and residential developers have entered the manufactured
housing industry by acquiring retailers. In the first half of calendar 1998,
certain competing manufacturers announced acquisitions of several important
Fleetwood retailers, which collectively accounted for approximately $277 million
in purchases from Fleetwood. These developments have created a risk that
independent distribution channels for Fleetwood homes may not be as readily
available as they have been in the past, which has prompted the Company to
modify the way it will market its homes in the future.

In order to protect its distribution channels and to take advantage of the
business opportunities in the manufactured housing retail industry, Fleetwood
has agreed to acquire HomeUSA, Inc. ("HomeUSA"), the nation's largest
independent retailer of manufactured homes. This entity has 65 retail locations
and calendar 1997 pro-forma sales of $205 million. The HomeUSA acquisition is
expected to close in August 1998. Concurrent with the announcement of the
HomeUSA acquisition, Fleetwood acquired the remaining interest in Expression
Homes, Inc. ("Expression Homes") that it did not already own. Expression Homes
was jointly formed with Pulte Corporation in 1997 for the purpose of entering
the manufactured housing retail business, initially through selected
acquisitions and later through new startup operations. Fleetwood has continued
with these acquisition efforts, and has begun closing several key acquisitions
of independent retailers early in fiscal 1999. Also in fiscal 1999, Fleetwood
plans to expand its Company-owned retail network through the development of new
"greenfield" locations. This latter strategy will be Fleetwood's primary focus
in future years.

RECREATIONAL VEHICLES

Fleetwood has been the leading producer of recreational vehicles in the
United States since 1973 and distributes its products through a network of
approximately 1,200 independent retailers in 49 states. Recreational vehicles
are either driven or towed and are primarily used for vacations, camping trips
and other leisure activities. The general categories of recreational vehicles
are motor homes, travel trailers and folding trailers.

Fleetwood manufactures motor homes under the brand names Bounder, Southwind,
Southwind Storm, Pace Arrow, Pace Arrow Vision, Flair, Discovery, American
Eagle, American Dream, American Tradition, Tioga and Jamboree. A motor home
consists of a truck or bus chassis with a living unit built onto it. The
interior typically includes a driver area and kitchen, bathroom, dining and
sleeping areas. Fleetwood's conventional ("Class A") motor homes are fully
self-contained, having sleeping accommodations for four to eight people and such
optional features as air conditioning, an auxiliary power generator and home
electronics such as a stereo, television and VCR. Fleetwood's Class A motor
homes are available in a variety of models ranging in length from 27 to 40 feet
and retail for an average price of approximately $85,000. Fleetwood also
manufactures more compact ("Class C") motor homes built on a cut-away van
chassis with basically the same features and options as Class A products. These
units are available in various models ranging in length from 19 to 31 feet and
retail for an average price of approximately $50,000. Five of the industry's ten
top-selling Class A motor homes are manufactured by Fleetwood, as well as two of
the top five Class C motor homes.

3

Fleetwood manufactures a variety of travel trailers under the Prowler,
Terry, Wilderness, Mallard, Savanna, Avion and Westport brand names. Fleetwood's
travel trailers are designed to be towed by pickup trucks, vans or other tow
vehicles, and are similar to motor homes in use and features. All of Fleetwood's
travel trailers include sleeping, eating and bathroom facilities and are
self-contained units with their own lighting, heating, refrigeration, fresh
water storage tanks and sewage holding tanks so that they can be used for short
periods without being attached to utilities. Most of Fleetwood's travel trailers
are 8 feet wide, vary in length from 20 to 39 feet (including trailer hitch) and
retail for an average price of approximately $18,000. Four of the industry's ten
top-selling travel trailers are manufactured by Fleetwood.

Fleetwood is the largest manufacturer of folding trailers under the
industry-leading Coleman-Registered Trademark- brand. Folding trailers are a
lower cost alternative to travel trailers and are lighter and easier to tow.
Fleetwood's folding trailers have eating and sleeping facilities, range in
length from 17 to 25 feet and retail for an average price of approximately
$6,800.

SUPPLY OPERATIONS AND OTHER BUSINESSES

Fleetwood's supply operations include two fiberglass manufacturing companies
and a lumber milling operation. These operations provide a reliable source of
quality components for Fleetwood's principal manufacturing businesses, while
also generating outside sales. In the fiscal year ended April 1998,
approximately 46 percent of the product volume of these operations was used by
Fleetwood internally, and the remaining 54 percent was sold to third parties.
The supply operations also include a lumber brokerage and a component import
business, each of which provides Fleetwood's manufactured housing and
recreational vehicle businesses with reliable sources of quality raw materials
and components.

DISCONTINUED OPERATIONS

In May 1996, the Company completed the sale of its wholly owned RV finance
subsidiary, Fleetwood Credit Corp., to Associates First Capital Corporation. The
sale was a cash transaction for $156.6 million, resulting in an after-tax gain
of $33.9 million, which was recognized in the first quarter of fiscal 1997. In
addition, net income of $887,000 from FCC's operations through the date of sale
was recorded in the first quarter of fiscal 1997 as income from discontinued
operations. In connection with the sale, an agreement was signed to assure
continuing cooperation between the Company and Associates.

SALES AND DISTRIBUTION

Fleetwood sells its manufactured housing and recreational vehicles to
retailers operating approximately 2,600 locations in 49 states and Canada.
Fleetwood currently distributes its manufactured homes primarily through a
network of approximately 1,400 independent retailers in 49 states. In 1997,
approximately 74 percent of Fleetwood's manufactured homes were shipped to
retailers in the 15 states with the highest retail sales, including Texas, North
Carolina, South Carolina and Georgia. In addition, Fleetwood was the market
share leader in terms of units shipped in 1997 in 12 of the 15 largest
manufactured housing states. Fleetwood distributes its recreational vehicles
through a network of approximately 1,200 independent retailers in 49 states and
Canada. In the model year ended July 1997, approximately 77 percent of
Fleetwood's recreational vehicles were shipped to retailers in the 25 states
with the highest retail sales, including California, Texas, Michigan, Florida
and Oregon. In the same period, Fleetwood was the market share leader in terms
of units sold in each of the top 25 recreational vehicle states.

Consistent with industry practice, Fleetwood has historically marketed its
products through many independent retailers, none of which individually
accounted for a material part of Fleetwood's total sales. Fleetwood expects this
industry practice to continue with respect to recreational vehicles; however,
the recent acquisition activity in the retail sector of the manufactured housing
industry has prompted Fleetwood to modify its manufactured housing sales and
distribution strategies. The Company has

4

responded to this industry trend by upgrading its manufactured home retail
distribution network, developing alternatives to replace retailers purchased by
competitors, and promoting and expanding Fleetwood brand name recognition
through exclusive "Fleetwood Home Centers" and through its own retail
strategies, including the acquisition of HomeUSA, the Expression Homes
initiative and the opening of Company-owned stores.

As part of the sales process, Fleetwood offers most purchasers of its
manufactured homes and recreational vehicles comprehensive one-year warranties
against defects in materials and workmanship, excluding only certain components
separately warranted by a supplier. With respect to manufactured homes,
Fleetwood's warranty is extended to five years for structural, plumbing, heating
and electrical system failures. The warranty period for motor homes is one year
or until the unit has been driven 15,000 miles, whichever occurs first, except
for structural items, which are covered for three years. Annual expenses under
such warranties were approximately $109.4 million in fiscal year 1998 and $104.6
million in fiscal year 1997. Fleetwood believes that its warranty program is an
investment that enhances its reputation for quality.

Although the businesses in which Fleetwood operates are highly competitive,
Fleetwood believes that it has certain advantages over its competitors, as
described below.

COMMITMENT TO QUALITY AND CUSTOMER SATISFACTION. In its fiscal year ended
April 1992, Fleetwood formalized its quality improvement program, focusing on
increasing customer satisfaction by improving the quality and design of
Fleetwood's products and enhancing the customer's shopping experience. In
implementing its quality program, Fleetwood has developed a number of ongoing
processes, including (i) designing its products with materials that frequently
exceed government requirements and industry standards, (ii) training both its
employees and its retailers' employees in customer satisfaction techniques and
quality improvement procedures, (iii) providing additional services, such as
comprehensive training of its retailers' employees and contractors regarding
proper installation techniques for manufactured homes, (iv) offering some of the
most extensive warranties in the manufactured housing and recreational vehicle
industries and (v) responding quickly and effectively to customer inquiries and
concerns.

Fleetwood's quality improvement process is facilitated by the use of
independent consumer surveys to determine whether retail customers are satisfied
with the quality of their Fleetwood product and the level of service provided by
Fleetwood and the retailer. An independent consumer research firm conducts
telephone surveys and communicates customer responses to Fleetwood's
manufacturing entities and retailers to reinforce quality performance and
eliminate customer problems. Each year, specific customer satisfaction goals are
established for Fleetwood's manufacturing operations and independent retailers.
Retailers who meet these performance standards are recognized with Fleetwood's
Circle of Excellence Award, and Fleetwood manufacturing centers are similarly
honored for meeting targeted levels of customer satisfaction. Fleetwood believes
that these efforts have resulted in increased awareness by Fleetwood employees
and retailers of the importance of product quality and service, which in turn
has significantly improved Fleetwood's customer satisfaction ratings.

PROVIDE THE BEST PRODUCT VALUE TO THE CUSTOMER. Fleetwood is committed to
offering the best product value in each of its market segments. Fleetwood
intends to achieve this by providing competitively-priced products which meet
high standards of quality and product performance. Fleetwood is also committed
to being the low-cost producer in each market segment. To accomplish this,
Fleetwood (i) continuously improves its manufacturing processes, (ii) generates
economies of scale through high volume levels that reduce the impact of fixed
costs, and (iii) purchases materials and components in large quantities to
obtain volume discounts.

UPGRADE AND EXPAND FLEETWOOD'S RETAIL DISTRIBUTION NETWORKS. Since 1991,
Fleetwood has reduced the number of retail distribution centers approved to sell
Fleetwood manufactured housing products from approximately 1,800 to
approximately 1,400. Fleetwood believes that this action has allowed it to focus
its

5

efforts on larger retailers that share Fleetwood's approach to merchandising
homes and customer satisfaction. Historically, Fleetwood had not focused on
exclusive retailer arrangements and most retailers sold competitive lines;
however, in recent years, Fleetwood has begun to develop exclusive retailer
arrangements. Currently, approximately 40 percent of Fleetwood's manufactured
housing retailers are exclusive, up from approximately 30 percent two years ago.
Fleetwood has increased its efforts to develop and implement retail "best
practices" for its retailers through Fleetwood sponsored training programs and
manuals. Topics of recent training seminars have included professional selling
techniques and proper home installation procedures. Fleetwood actively seeks to
expand its manufactured housing retail network by adding retailers that meet
Fleetwood's criteria.

With respect to recreational vehicles, Fleetwood is actively implementing
"best practices" across its retail network and developing programs to increase
the proportion of Fleetwood products sold by its independent retailers. This
last initiative also includes increasing the number of exclusive Fleetwood
recreational vehicle retailers. In addition, Fleetwood is developing private
label recreational vehicle programs to expand retail sales through distribution
channels that traditionally have not sold recreational vehicles.

PROMOTE AND EXPAND "FLEETWOOD" BRAND NAME RECOGNITION. Fleetwood seeks to
expand consumer awareness of the "Fleetwood" name in both its manufactured
housing and recreational vehicle operations. Beginning in its fiscal year ended
April 1997, Fleetwood began working with selected manufactured housing retailers
to develop "Fleetwood Home Centers," which exclusively carry Fleetwood products,
have consistent signage identifying the location as a Fleetwood Home Center and
meet Fleetwood's highest standards for home presentation and customer
satisfaction. Fleetwood facilitated the opening of 58 Fleetwood Home Centers
through the end of fiscal 1998. Current plans call for the opening of additional
centers in 1999, some of which will be independent and some Company-owned. In
addition, the Company initiated in April 1998 a $20 million national advertising
campaign for manufactured homes. The Fleetwood Homes "Quality for Life" theme is
being promoted through television, radio, direct marketing, print advertising
and billboards/outdoor advertising. In the recreational vehicle group, Fleetwood
has leading brand names in each segment; however, Fleetwood seeks to promote
each individual brand as a part of the Fleetwood family of recreational
vehicles. As an example, Fleetwood is sponsoring a NASCAR driver and team, Dale
Jarrett and the Robert Yates Racing Team. As part of the sponsorship
arrangement, Fleetwood has its logo on Dale Jarrett's race car and equipment.
Fleetwood believes that the NASCAR racing circuit has a large audience,
estimated at 90 million, that aligns with Fleetwood's targeted customer
categories for recreational vehicles.

PRODUCT FINANCING

Sales of recreational vehicles and manufactured housing are generally made
to retailers under commitments by financial institutions which have agreed to
finance retailer purchases. Product financing is currently readily available
from a variety of sources including commercial banks, savings and loan
institutions, credit unions and consumer finance companies. With respect to
manufactured housing, Associates First Capital Corporation ("Associates"), Green
Tree Financial Corp. ("Green Tree") and BankAmerica Housing Services provide a
substantial portion of the financing available for wholesale and retail
purchases of manufactured homes.

Since 1991, Fleetwood has had an alliance with Associates, which has
provided special wholesale and retail finance programs for Fleetwood
manufactured housing retailers under the name "Fleetwood Finance by the
Associates." From time to time, when necessary to enhance sales or financing
terms, Fleetwood has subsidized the offering of below-market interest rates by
Associates and other lenders. Fleetwood currently has cooperative relationships
with Associates and Green Tree, but no such subsidies are being paid by
Fleetwood to either organization.

6

Until May 1996, Fleetwood owned Fleetwood Credit Corp., which provided a
substantial portion of the wholesale and retail financing for sales of
Fleetwood's recreational vehicles. Fleetwood sold Fleetwood Credit Corp. to
Associates in May 1996. In connection with the sale, an agreement was signed to
assure continuing cooperation between Fleetwood and Associates and to facilitate
wholesale and retail financing for Fleetwood retailers and customers. Under the
agreement, Fleetwood agreed not to promote any other finance company's
recreational vehicle financing programs so long as Fleetwood Credit Corp.
remains competitive. Fleetwood also agreed to continue subsidizing Fleetwood
Credit Corp.'s wholesale financing for Fleetwood's recreational vehicle
retailers until the end of fiscal 1998, although at gradually reduced rates. The
aggregate cost of wholesale finance subsidies was $1.5 million in fiscal 1998
and $3.8 million in fiscal 1997.

ENGINEERING AND PRODUCT DEVELOPMENT

Fleetwood develops new products and product enhancements through an
integrated product development process that involves cross-functional teams
including engineering, manufacturing and marketing personnel. Fleetwood also
integrates feedback received through its customer surveys into its product
development process. As a result, Fleetwood believes that it is able to
proactively design and manufacture products that address both industry trends
and specific customer requirements in an efficient cost-effective and timely
manner. Product development with respect to recreational vehicles is done on a
national basis while manufactured housing is done on a regional basis in order
to reflect regional preferences and trends. Amounts spent on engineering and
product development totaled $16.8 million in fiscal year 1998 and $17.2 million
in fiscal year 1997.

REGULATORY MATTERS

The Company's manufactured housing operations are subject to provisions of
the Housing and Community Development Act of 1974, under which the U.S.
Department of Housing and Urban Development establishes construction and safety
standards for manufactured homes, and also may require manufactured housing
producers to send notifications to customers of noncompliances with standards or
to repair or replace manufactured homes that contain certain hazards or defects.
The Company's recreational vehicle manufacturing operations are subject to a
variety of Federal, state and local regulations, including the National Traffic
and Motor Vehicle Safety Act, under which the National Highway Traffic Safety
Administration may require manufacturers to recall recreational vehicles that
contain safety-related defects, and numerous state consumer protection laws and
regulations relating to the operation of motor vehicles, including so-called
"Lemon Laws." Amendments to any of these regulations and the implementation of
new regulations could significantly increase the costs of manufacturing,
purchasing, operating or selling the Company's products and could have a
material adverse effect on the Company's results of operations.

The failure of the Company to comply with present or future regulations
could result in fines being imposed on the Company, potential civil and criminal
liability, suspension of sales or production, or cessation of operations. In
addition, a major product recall could have a material adverse effect on the
Company's results of operations.

Certain U.S. tax laws currently afford favorable tax treatment for the
purchase and sale of recreational vehicles that are financed through mortgage
borrowings. These laws and regulations have historically been amended
frequently, and it is likely that further amendments and additional regulations
will be applicable to the Company and its products in the future. Amendments to
these laws and regulations and the implementation of new regulations could have
a material adverse effect on the Company's results of operations.

7

The Company's operations are subject to a variety of Federal and state
environmental regulations relating to the use, generation, storage, treatment,
emission and disposal of hazardous materials and wastes and noise pollution.
Although the Company believes that it is currently in material compliance with
applicable environmental regulations, the failure of the Company to comply with
present or future regulations could result in fines being imposed on the
Company, potential civil and criminal liability, suspension of production or
operations, alterations to the manufacturing process, or costly cleanup or
capital expenditures.

EMPLOYEE RELATIONS

As of April 26, 1998, the Company and its subsidiaries had approximately
19,000 employees. Most full-time employees are provided with paid annual
vacations, group life insurance, medical and hospitalization benefits, a
retirement plan and other fringe benefits. Approximately 600 of these employees
hold management or supervisory positions and work pursuant to written contracts.
Pursuant to these contracts, such employees may receive incentive compensation
depending on the financial performance of the employer entity, which can
represent a substantial part of their total compensation.

As of April 26, 1998, collective bargaining agreements were in effect at two
of Fleetwood's manufacturing locations covering a total of approximately 900
employees. Expiration dates for these agreements are in November 1999 and
September 2000. Except for employees at these plants, no other Company employees
are represented by a certified labor organization. The Company is currently
experiencing labor union organizing activity at one other manufacturing location
which employs approximately 500 people. An employee vote on union representation
is scheduled for July 17, 1998.

COMPETITION AND BUSINESS RISKS

CYCLICALITY OF THE COMPANY'S BUSINESSES; FLUCTUATIONS IN OPERATING
RESULTS. The industries in which the Company operates are highly cyclical.
Companies within both the manufactured housing and recreational vehicle
industries are subject to volatility in operating results due to external
factors such as economic, demographic and political changes. Factors affecting
the manufactured housing industry include availability of financing, interest
rates, availability of manufactured home sites, employment trends, consumer
confidence and general economic conditions. Factors affecting the recreational
vehicle industry include general economic conditions, overall consumer
confidence, the level of discretionary consumer spending, interest rates,
employment trends, fuel availability and fuel prices. Because of these and other
factors, there can be substantial fluctuations in the Company's operating
results and the results for any prior period may not be indicative of results
for any future period.

COMPETITION IN THE COMPANY'S BUSINESSES. The manufactured housing industry
is highly competitive. As of December 31, 1997, there were approximately 100
manufacturers and over 6,000 retail sales centers. The ten largest manufacturers
accounted for approximately 75 percent of the wholesale manufactured housing
market in 1997, including the Company's sales, which represented 18.1 percent of
the market. The manufactured home retail market is much more fragmented, with
the four largest companies accounting for only ten percent of the retail market
in 1997. Manufactured homes compete with new and existing site-built homes,
apartments, townhouses and condominiums. The supply of such housing has
increased in recent years with the increased availability of construction
financing. Competition exists on both the manufacturing and retail levels and is
based primarily on price, product features, reputation for service and quality,
retail inventory, sales promotions, merchandising and terms and availability of
wholesale and retail customer financing. Recent growth in manufacturing capacity
in the southern United States has increased competition at both the
manufacturing and retail levels and has resulted in both regional and national
competitors increasing their presence in the region. Overproduction of
manufactured housing in this region could lead to greater competition and result
in decreased margins, which could have a material adverse effect on the
Company's results of operations.

8

The market for recreational vehicles is also highly competitive, and the
Company has numerous competitors and potential competitors in this industry. The
five largest manufacturers represented approximately 68 percent of the market in
1997, including the Company's sales, which represented 26.6 percent of the
market. There can be no assurance that either existing or new competitors will
not develop products that are superior to the Company's recreational vehicles or
achieve better consumer acceptance.

FACTORS AFFECTING THE COMPANY'S MANUFACTURED HOUSING MARKET SHARE. The
Company's market share in the manufactured housing market, based on unit
shipments, declined from 21.6 percent in 1994 to 18.1 percent in 1997, in part
because the Company reduced its retail distribution points from approximately
1,800 to 1,400 during the period from January 1994 through December 1997, in
order to concentrate on larger dealers that share the Company's approach to
merchandising and customer satisfaction. However, the Company has also, from
time to time in the past, lost certain significant retailers to competitors. In
addition, the recent acquisitions of manufactured housing retailers by the
Company's competitors may reduce the Company's retail distribution network and
market share, as these retail outlets may choose not to sell the Company's
products. There can be no assurance that the Company will be able to adequately
replace retailers purchased by competitors if they cease selling the Company's
manufactured homes or that the Company will be able to maintain its sales volume
or market share in these competitive markets.

RISKS RELATED TO ENTRY INTO RETAIL DISTRIBUTION. The Company has responded
to the consolidation in the manufactured housing sector by agreeing to a merger
with HomeUSA in order to bolster its retail distribution network. In addition,
the Company has purchased a 100 percent interest in Expression Homes and
commenced building a number of new retail outlets directly. However, the Company
has no prior direct experience running retail operations and will rely
significantly on HomeUSA and Expression Homes personnel to evaluate retail
acquisitions and administer its retail operations. There can be no assurance
that the merger with HomeUSA will be completed or that the Company will be able
to successfully integrate HomeUSA's retail distribution network. Even if the
Company is able to successfully integrate HomeUSA's retail distribution network,
there can be no assurance that such successful integration combined with the
Company's other retail initiatives will enable the combined company to capture
an adequate portion of the retail distribution market.

MANUFACTURED HOUSING GEOGRAPHIC MARKET CONCENTRATION. The market for the
Company's manufactured homes is geographically concentrated, with the top 15
states accounting for approximately 70 percent of the industry's total shipments
in 1997. The southern United States accounts for a significant portion of the
Company's manufactured housing sales. A downturn in this region's economic
conditions could have a material adverse effect on the Company's results of
operations. There can be no assurance that the demand for manufactured homes
will not decline in the southern United States or other areas in which the
Company experiences high product sales and any such decline could have a
material adverse effect on the Company's results of operations.

SEASONALITY OF THE COMPANY'S BUSINESSES. The Company has experienced and
expects to continue to experience significant variability in sales, production
and net income as a result of seasonality in the Company's businesses. Demand in
both the manufactured housing and recreational vehicle industries generally
declines during the winter season, while sales and profits are generally highest
during the spring and summer months. In addition, unusually severe weather
conditions in certain markets may delay the timing of purchases and shipments
from one quarter to another.

POTENTIAL CHANGES IN CONSUMER PREFERENCES; NEW PRODUCT INTRODUCTIONS. There
can be no assurance that historical consumer preferences for the Company's
products in general, and recreational vehicles in particular, will remain
unchanged. The Company believes that, with respect to its recreational vehicle
operations, the introduction of new features and new models will be critical to
its future success. Delays in the introduction of new models or product
features, or a lack of market acceptance of new models or features, could have a
material adverse effect on the Company's business. There also can be no
assurance

9

that new product introductions will not reduce revenues from existing models and
adversely affect results of operations.

WARRANTY CLAIMS AND PRODUCTS LIABILITY. The Company is subject to warranty
claims in the ordinary course of its business. Although the Company maintains
reserves for such claims, which to date have been adequate, there can be no
assurance that warranty expense levels will remain at current levels or that
such reserves will continue to be adequate. A large number of warranty claims
exceeding the Company's current warranty expense levels could have a material
adverse effect on the Company's results of operations.

The Company partially self-insures its products liability claims and
purchases excess products liability insurance in the commercial insurance
market. Although the Company believes that its products liability insurance
coverage is adequate, there can be no assurance that such coverage will be
sufficient to cover all future products liability claims. Successful assertion
against the Company of one or a series of claims exceeding the Company's
insurance could have a material adverse effect on the Company's results of
operations.

CONTINGENT REPURCHASE OBLIGATIONS. In accordance with customary practice in
the manufactured housing and recreational vehicle industries, the Company enters
into repurchase agreements with various financial institutions pursuant to which
the Company agrees, under certain circumstances, to repurchase manufactured
homes and recreational vehicles sold to independent retailers in the event of a
default by an independent retailer in its obligation to such credit sources.
Under the terms of such repurchase agreements, the Company agrees to repurchase
manufactured homes and recreational vehicles at declining prices over the period
of the agreements (which generally range from 12 to 18 months). Although losses
with respect to these contingent repurchase obligations have not been
significant, if the Company were obligated to repurchase a substantial number of
manufactured homes or recreational vehicles in the future, this could have a
material adverse effect on the Company's results of operations.

AVAILABILITY OF WHOLESALE AND RETAIL FINANCING. The Company's retailers, as
well as retail buyers of the Company's products, generally secure financing from
third party lenders. Reduced availability of such financing, or increased
interest rates and other costs, could have an adverse impact on the Company's
sales. These factors are dependent on the lending practices of financial
institutions, governmental policies and economic conditions, all of which are
beyond the control of the Company. With respect to the Company's housing
business, most states classify manufactured homes as personal property rather
than real property for purposes of taxation, lien perfection and length of loan
terms. Interest rates for manufactured homes are generally higher and the terms
of the loans shorter than for site-built homes. At times, financing for the
purchase of manufactured homes is more difficult to obtain than conventional
home mortgages. There can be no assurance that affordable wholesale or retail
financing for either manufactured homes or recreational vehicles will continue
to be available on a widespread basis. If such financing were to become
unavailable, this could have a material adverse effect on the Company's results
of operations.

AVAILABILITY AND PRICING OF MANUFACTURING COMPONENTS AND LABOR. The
Company's results of operations may be significantly affected by the
availability and pricing of manufacturing components and labor. Although the
Company attempts to offset the effect of any escalation in components and labor
costs by increasing the sales prices of its products, there can be no assurance
that the Company will be able to do so without adversely impacting demand for
its products. Even if the Company were able to offset higher manufacturing costs
by increasing the sales prices of its products, the realization of any such
increases often lags the rise in manufacturing costs--especially in its
manufactured housing operations--due in part to the Company's commitment to
price-protect its retailers with respect to previously placed customer orders.
The inability of the Company to successfully offset increases in manufacturing
costs could have a material adverse effect on the Company's results of
operations.

10

IMPORTANCE OF CERTAIN SUPPLIERS. Most recreational vehicle and manufactured
home components are readily available from a variety of sources. However,
certain components are produced by only a small group of quality suppliers which
have the capacity to supply large quantities on a national basis. This is
especially true in the case of motor home chassis, where Ford Motor Company and
General Motors Corporation are the dominant suppliers. Shortages, production
delays or work stoppages by the employees of such suppliers could have a
material adverse effect on Fleetwood's businesses. The inability of the Company
to obtain an adequate chassis supply could have a material adverse effect on the
Company's results of operations.

ZONING; PLACEMENT AND AVAILABILITY OF MANUFACTURED HOUSING SITES. Any
limitation on the growth of the number of sites available for manufactured homes
or on the operation of manufactured housing communities could adversely affect
the Company's manufactured housing business. Manufactured housing communities
and individual home placements are subject to local zoning ordinances and other
local regulations relating to utility service and construction of roadways. In
the past, there has been resistance by property owners to the adoption of zoning
ordinances permitting the location of manufactured homes in residential areas,
which resistance the Company believes has adversely affected the growth of the
industry. There can be no assurance that manufactured homes will receive
widespread acceptance or that localities will adopt zoning ordinances permitting
the location of manufactured home areas. The inability of the manufactured home
industry to gain such acceptance and zoning ordinances could have a material
adverse effect on the Company's results of operations.

AVAILABILITY AND PRICE OF GASOLINE AND DIESEL FUEL. Gasoline or diesel fuel
is required for the operation of motor homes and most vehicles used to tow
travel trailers and folding trailers. There can be no assurance that the supply
of these petroleum products will continue uninterrupted, that rationing will not
be imposed or that the price of or tax on these petroleum products will not
significantly increase in the future.

ITEM 2. PROPERTIES

The Company owns its executive offices which are located at 3125 Myers
Street in Riverside, California. The administrative offices, which occupy
173,500 square feet, are situated on Company-owned parcels of land totaling
approximately 18.1 acres. The following table describes additional property and
buildings utilized for manufacturing, research and development, administrative
purposes and retail distribution as of April 26, 1998. For the most part, these
properties and buildings are owned by the Company except as noted below.



APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- - ------------------------------------------------------------------------------------ --------------- --------------

Plants Producing Manufactured Housing:
Glendale, Arizona........................................................... 41.5 120,900
Riverside, California....................................................... 18.8 97,600
Woodland, California........................................................ 15.8 143,500
Auburndale, Florida......................................................... 13.7 97,200
Plant City, Florida(1)...................................................... 11.5 85,800
Alma, Georgia............................................................... 43.6 221,700
Broxton, Georgia............................................................ 20.0 129,200
Douglas, Georgia............................................................ 25.7 273,600
Douglas, Georgia............................................................ 20.7 134,100
Fitzgerald, Georgia......................................................... 18.6 120,900
Pearson, Georgia............................................................ 13.3 133,200
Pearson, Georgia............................................................ 16.2 141,700
Willacoochee, Georgia....................................................... 33.2 131,500


11



APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- - ------------------------------------------------------------------------------------ --------------- --------------

Nampa, Idaho................................................................ 19.8 153,500
Nampa, Idaho................................................................ 11.4 75,700
Garrett, Indiana............................................................ 22.1 120,800
Garrett, Indiana............................................................ 20.4 104,900
Lexington, Mississippi...................................................... 51.6 270,000
Lexington, Mississippi...................................................... 30.5 109,000
Lumberton, North Carolina................................................... 52.0 115,100
Mooresville, North Carolina................................................. 21.8 119,300
Pembroke, North Carolina.................................................... 32.4 208,900
Roxboro, North Carolina..................................................... 20.0 94,700
Woodburn, Oregon............................................................ 22.4 197,300
Woodburn, Oregon............................................................ 29.2 56,500
Elizabethtown, Pennsylvania................................................. 19.7 112,400
Gallatin, Tennessee......................................................... 18.2 194,100
Lafayette, Tennessee........................................................ 43.3 133,000
Westmoreland, Tennessee..................................................... 38.6 146,900
Westmoreland, Tennessee..................................................... 20.6 114,800
Belton, Texas............................................................... 53.1 283,600
Waco, Texas................................................................. 18.1 120,000
Waco, Texas................................................................. 8.6 78,700
Waco, Texas................................................................. 19.4 97,200
Waco, Texas................................................................. 13.0 114,600
Wichita Falls, Texas........................................................ 31.5 118,900
Rocky Mount, Virginia....................................................... 13.8 83,400
Rocky Mount, Virginia....................................................... 26.3 135,000
Woodland, Washington........................................................ 18.0 156,500
Plants Producing Recreational Vehicles:
Motor Homes:
Chico, California........................................................... 28.6 153,300
Riverside, California....................................................... 24.5 163,800
Decatur, Indiana............................................................ 90.0 340,000
Decatur, Indiana............................................................ 25.3 179,300
Paxinos, Pennsylvania....................................................... 71.6 206,200
Motor Home Service Facilities:
Riverside, California....................................................... 9.5 66,000
Decatur, Indiana............................................................ 34.8 176,600
Travel Trailers:
Rialto, California(2)....................................................... 18.8 115,700
Riverside, California....................................................... 18.5 68,400
Crawfordsville, Indiana..................................................... 15.0 131,500
Hancock, Maryland........................................................... 20.5 102,900
Williamsport, Maryland(3)................................................... 45.1 78,500
Omaha, Nebraska............................................................. 22.3 112,100
Edgerton, Ohio.............................................................. 16.6 92,700
LaGrande, Oregon............................................................ 32.0 98,000
Pendleton, Oregon........................................................... 20.8 198,700
Longview, Texas(4).......................................................... 46.7 313,100
Winchester, Virginia........................................................ 20.6 122,700
Lindsay, Ontario, Canada.................................................... 9.2 140,800


12



APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- - ------------------------------------------------------------------------------------ --------------- --------------

Folding Trailers:
Somerset, Pennsylvania...................................................... 42.6 392,500
Plants Producing Components:
Fontana, California......................................................... 11.9 83,000
Riverside, California....................................................... 10.0 111,000
Hauser Lake, Idaho.......................................................... 28.0 81,000
Decatur, Indiana............................................................ 32.1 216,500
Division Offices and Research and Development Facilities:
Riverside, California....................................................... 21.9 234,300
Retail Distribution Centers for Manufactured Housing:
Las Vegas, Nevada(5)........................................................ 2.8 700
Pahrump, Nevada(5).......................................................... 2.3 1,800
Raleigh, North Carolina(5).................................................. 3.3 3,800


IDLE FACILITIES

There were six idle manufacturing facilities at the end of fiscal 1998 and
four at the end of fiscal 1997. During fiscal 1998, the idle travel trailer
facility in Williamsport, Maryland was activated due to the need for additional
capacity. The idle manufactured housing facility in Haines City, Florida and the
idle travel trailer facility in Benton Harbor, Michigan were sold. One of two
existing motor home manufacturing facilities in Riverside, California was closed
as two operations were consolidated into one facility. The existing travel
trailer facility in Longview, Texas was closed because the existing
manufacturing operation was moved into a newly-acquired larger facility. One of
the two existing manufactured housing facilities in Elizabethtown, Pennsylvania
was closed as the operations were combined into one facility. A manufactured
housing facility in Hamilton, Alabama was also closed. The construction of a
second facility in Roxboro, North Carolina was completed during fiscal 1998, but
it has not yet been opened.

The following Company-owned manufacturing facilities (and one service
facility) were not in operation as of April 26, 1998.



APPROXIMATE APPROXIMATE
FACILITY AND LOCATION ACREAGE SQUARE FOOTAGE
- - ------------------------------------------------------------------------------------ --------------- --------------

Hamilton, Alabama(6)................................................................ 10.2 128,500
Riverside, California(6)............................................................ 12.3 162,100
Roxboro, North Carolina(7).......................................................... 31.8 114,500
Elizabethtown, Pennsylvania(6)...................................................... 17.5 101,000
Paxinos, Pennsylvania(8)............................................................ 7.1 39,600
Longview, Texas(6).................................................................. 42.8 157,700
Lindsay, Ontario, Canada............................................................ 20.0 72,000


- - ---------

(1) Facility closed subsequent to year end.

(2) Includes 4.0 acres and 27,100 square foot building leased from unaffiliated
outside party.

(3) Manufacturing facility activated in fiscal 1998.

(4) Existing operation moved into newly acquired facility in fiscal 1998.

(5) Land is leased from third parties and buildings and improvements are owned
by the Company.

(6) Manufacturing facility deactivated in fiscal 1998.

(7) New manufacturing facility completed in fiscal 1998 was not opened as
planned.

(8) Service facility closed in fiscal 1997.

13

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in various legal proceedings, most of which are
routine litigation incident to its business, and some of which are covered in
whole or in part by insurance. In the opinion of management, none of the
uninsured cases involve realistic claims which are material in amount.

The Company, one of its subsidiaries and the manufacturer of
Cladwood-Registered Trademark- siding currently are defendants in the case of
SECHLER V. SMURFIT NEWSPRINT CORPORATION ET AL. in Georgia. The complaint
purports to establish a class of Georgia owners of manufactured homes that
contain Cladwood-Registered Trademark- siding, alleges that such siding is
defective, and requests damages and attorneys' fees. No class has been certified
and motions to dismiss are pending. A similar complaint against the siding
manufacturer, which does not name the Company or any of its subsidiaries as a
defendant, has been certified as a class action of Oregon and Washington
homeowners by a state court judge in King County, Washington.

The Company is also subject to other litigation from time to time in the
ordinary course of business, certain of which is covered in whole or in part by
insurance. Although the amount of any liability with respect to any of the above
litigation cannot presently be determined, in the opinion of management such
liability is not expected to have a material adverse effect on the Company's
financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the shareholders of the Company
during the fourth quarter of fiscal year 1998.

MANAGEMENT

The executive officers of the Company are set forth below:



NAME TITLE AGE
- - -------------------------------------------------------------------------- ---

Glenn F. Kummer Chairman of the Board and Chief Executive Officer 64

Nelson W. Potter President, Chief Operating Officer and Director 55

Paul M. Bingham Senior Vice President-Finance and Chief Financial Officer 56

Mallory S. Smith Senior Vice President-Housing Group 56

Richard E. Parks Senior Vice President-Recreational Vehicle Group 51

William H. Lear Senior Vice President-General Counsel and Secretary 58

John G. Pollis Senior Vice President-Retail Housing Division 58

Carl D. Betcher Vice President-Travel Trailers 51

John R. Weiss Vice President-Motor Homes 46

Larry L. Mace Vice President-Supply Subsidiaries and Administration 55

Lyle N. Larkin Treasurer and Assistant Secretary 53


GLENN F. KUMMER has been with the Company since 1965. He was appointed to
his current position on January 12, 1998 and served as the Company's President
and Chief Operating Officer since 1982.

14

NELSON W. POTTER was appointed to his current position on January 12, 1998.
Previously, he served as the Company's Executive Vice President-Operations since
February 1997 and Vice President-Planning and Corporate Development since 1992.
He has been employed by the Company since 1978.

PAUL M. BINGHAM has been employed by the Company since 1970 and was
appointed Chief Financial Officer in 1987. He was appointed to his current
position as Senior Vice President in February 1997. Previously, he served as
Financial Vice President.

MALLORY S. SMITH has been with the Company since 1967 and was appointed to
his current position in May 1997. Previously, he served as Vice
President-Housing Group Operations from February 1988 until January 1996 when he
was appointed Vice President-Housing Group Eastern Region.

RICHARD E. PARKS has been with the Company since 1983 and was appointed to
his current position in April 1997. Previously, he was General Manager of a
Company motor home manufacturing plant until he was promoted to the position of
Vice President-Motor Homes in April 1995.

WILLIAM H. LEAR joined the Company in 1971 as Secretary and General Counsel.
He became a Vice President in 1978 and was appointed to his current position in
March 1998.

JOHN G. POLLIS joined the Company in 1981 as Director-Marketing in the
Company's Housing Group. In May 1996 he was appointed Vice President-Marketing
and he received his current assignment in February 1998.

CARL D. BETCHER has been with the Company since 1973 and was appointed to
his current position in August 1997. Previously, he served as General Manager of
two different Company manufacturing centers from 1992 until 1997.

JOHN R. WEISS was appointed to his current position in April 1997. He has
been employed by the Company since 1975. He previously served as General Manager
of a motor home manufacturing operation from 1993 to 1995 when he became
Director-Product Planning and Sales in the motor home division.

LARRY L. MACE joined the Company in 1973 and was appointed to his current
position in January 1998. Previously he served as Vice President-Supply
Subsidiaries from 1989.

LYLE N. LARKIN has served in his current capacity since 1990. He joined the
Company in 1979.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

The following table lists the high and low sales prices for Fleetwood's
Common stock during the past two fiscal years as reported on the New York Stock
Exchange Composite Tape, along with information on dividends paid per share
during the same periods. The Company's Common stock is listed on the New

15

York and the Pacific stock exchanges and traded on various regional exchanges
(Ticker Symbol: FLE). Call options are traded on the American Stock Exchange.



DIVIDENDS
QUARTER HIGH LOW PAID
- - --------------------------------------------- ------- ------- --------

Fiscal 1998
First.................................... $31 $25 1/8 $.16
Second................................... 35 1/8 29 5/8 .17
Third.................................... 42 13/16 28 1/8 .17
Fourth................................... 48 39 3/8 .17
Fiscal 1997
First.................................... $31 1/2 $24 1/8 $.15
Second................................... 34 3/4 27 1/8 .16
Third.................................... 37 1/4 24 3/4 .16
Fourth................................... 27 3/4 24 3/8 .16


On April 26, 1998, there were approximately 1,500 shareholders of record of
the Company's Common stock.

The declaration and payment of dividends on Fleetwood Common stock is at the
discretion of the Fleetwood Board and depends on Fleetwood's results of
operations, financial condition, capital requirements and such other factors as
the Fleetwood Board deems relevant. On June 9, 1998, the Fleetwood Board
declared a dividend of $.18 per share to stockholders of record on July 7, 1998,
payable to stockholders on August 12, 1998.

16

ITEM 6. SELECTED FINANCIAL DATA

FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
YEARS ENDED APRIL



1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

INCOME STATEMENT DATA:
Sales.......................................... $ 3,050,567 $ 2,874,426 $ 2,809,277 $ 2,807,862 $ 2,332,184
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Income from continuing operations before income
taxes........................................ $ 174,949 $ 147,050 $ 110,993 $ 127,447 $ 99,516
Provision for income taxes..................... (66,404) (56,998) (41,543) (52,254) (40,717)
Minority interest in net loss of subsidiary.... -- -- 451 805 1,254
----------- ----------- ----------- ----------- -----------
Income from continuing operations.............. 108,545 90,052 69,901 75,998 58,553*
Income from discontinued operations:
Income from operations of finance
subsidiary................................. -- 887 9,708 8,635 7,375
Gain on sale of finance subsidiary......... -- 33,891 -- -- --
----------- ----------- ----------- ----------- -----------
-- 34,778 9,708 8,635 7,375
----------- ----------- ----------- ----------- -----------
Net income for basic earnings per share........ 108,545 124,830 79,609 84,633 65,928
----------- ----------- ----------- ----------- -----------
Distributions on convertible preferred stock,
net of income taxes.......................... 2,499 -- -- -- --
----------- ----------- ----------- ----------- -----------
Net income for diluted earnings per share...... $ 111,044 $ 124,830 $ 79,609 $ 84,633 $ 65,928
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Earnings per shared--diluted:
Continuing operations........................ $ 3.01 $ 2.30 $ 1.50 $ 1.63 $ 1.27*
Discontinued operations:
Income from operations of finance
subsidiary............................... -- .02 .21 .19 .16
Gain on sale of finance subsidiary......... -- .87 -- -- --
----------- ----------- ----------- ----------- -----------
$ 3.01 $ 3.19 $ 1.71 $ 1.82 $ 1.43
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Weighted average Common shares--diluted........ 36,933 39,162 46,469 46,531 46,207
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
BALANCE SHEET DATA:
Cash and investments........................... $ 305,722 $ 110,434 $ 287,930 $ 102,866 $ 98,093
Property, plant and equipment.................. 277,211 278,331 266,587 262,640 220,154
Total assets................................... 1,129,480 871,547 1,108,932 940,374 845,219
Long-term debt................................. 55,000 55,000 80,000 -- --
Capital Trust preferred securities............. 287,500 -- -- -- --
Shareholders' equity........................... 376,026 443,095 649,137 608,143 546,466

OTHER DATA:
Gross profit margin............................ 19.5% 18.8% 19.0% 18.5% 18.3%
Operating income margin........................ 5.6 4.9 4.7 4.4 3.9
Depreciation and amortization.................. $ 27,799 $ 27,579 $ 27,084 $ 23,797 $ 20,083
Capital expenditures........................... 37,809 56,184 32,916 67,864 72,543
EBITDA**....................................... 197,994 167,138 158,616 146,026 111,932


- - ----------

* After deduction of $1.5 million or three cents per share for change in
accounting for income taxes.

** EBITDA is defined as operating income plus depreciation and amortization
expense. While EBITDA should not be considered as a substitute for net
income, cash flows from operating activities, or other income statement data
or cash flow statement data prepared in accordance with GAAP, or as a
measure of profitability or liquidity, management understands that EBITDA is
customarily used as a measurement in evaluating companies.

17

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

SELECTED SEGMENT DATA
(Dollars in thousands)



FISCAL YEARS ENDED APRIL
--------------------------------------------------------------------
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------

OPERATING REVENUES:
Manufactured housing....................... $ 1,487,650 $ 1,426,940 $ 1,443,016 $ 1,370,293 $ 1,054,267
Recreational vehicles...................... 1,518,163 1,395,163 1,317,494 1,387,919 1,241,416
Supply operations.......................... 44,754 52,323 48,767 49,650 36,501
------------ ------------ ------------ ------------ ------------
$ 3,050,567 $ 2,874,426 $ 2,809,277 $ 2,807,862 $ 2,332,184
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
OPERATING INCOME:
Manufactured housing....................... $ 75,896 $ 72,980 $ 106,433 $ 81,204 $ 56,860
Recreational vehicles...................... 76,809 77,641 34,086 45,542 43,883
Supply operations.......................... 15,437 2,170 2,971 5,855 4,969
Corporate and other........................ 2,053 (13,232) (11,958) (10,372) (13,863)
------------ ------------ ------------ ------------ ------------
$ 170,195 $ 139,559 $ 131,532 $ 122,229 $ 91,849
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
UNITS SHIPPED:
Manufactured housing....................... 65,544 65,354 68,990 68,847 56,753
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Recreational vehicles--
Motor homes.............................. 13,525 14,345 13,412 15,370 15,062
Travel trailers.......................... 33,758 31,190 32,387 35,804 33,218
Folding trailers......................... 20,960 18,524 20,407 19,571 18,421
Slide-in truck campers................... 1,251 1,184 1,928 1,645 1,765
European shipments....................... -- -- 557 626 301
------------ ------------ ------------ ------------ ------------
69,494 65,243 68,691 73,016 68,767
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------


1998 COMPARED TO 1997

CONSOLIDATED RESULTS:

Earnings from continuing operations reached an all-time high in fiscal 1998,
rising 21 percent to $108.5 million compared to $90.1 million last year. Diluted
earnings per share from continuing operations improved an even greater 31
percent to $3.01 compared to $2.30 in the prior year, due to significant share
repurchases over the past two years. The current year per share amount gives
effect to the dilutive impact of convertible preferred stock issued by the
Company in February 1998.

Current year earnings include a non-recurring after-tax gain of $10.4
million or 28 cents per share recognized in the first quarter from a significant
insurance transaction as explained below (see Change in Estimate of Insurance
Reserves). Earnings in the prior year totaled $124.8 million or $3.19 per share
on a diluted basis, and included a gain of $33.9 million or 87 cents per share
on the sale of the Company's RV finance subsidiary.

Sales for fiscal 1998 reached a record $3.05 billion, a six percent gain
over last year's $2.87 billion, due to a four percent rise in manufactured
housing sales and a nine percent increase in recreational vehicle volume.

Gross profit margin for fiscal 1998 rose to 19.5 percent from 18.8 percent
last year. Improved housing margins more than offset the effect of lower RV
margins, which were impacted by higher motor home production costs.

18

Operating expenses, which included the effect of the change in estimate of
insurance reserves, rose six percent to $424.1 million, but was unchanged from
the prior year as a percentage of sales at 13.9 percent. As a percentage of
sales, selling expenses were up from 6.3 percent a year ago to 6.9 percent,
while general and administrative expenses fell from 7.6 percent to 7.0 percent
this year. Selling expenses increased 16 percent to $210.2 million, primarily
reflecting higher advertising expenses as well as increases for sales promotion
and product warranty costs. General and administrative expenses were down two
percent to $213.9 million largely due to the change in estimate of insurance
reserves, which more than offset the effect of higher management incentive
compensation stemming from improved profits.

Non-operating income of $4.8 million in fiscal 1998 was off 37 percent from
the prior year due to the accrual of the quarterly distribution on convertible
preferred securities, payable on May 15, 1998. Investment income totaled $12.5
million in fiscal 1998, two percent ahead of the prior year, primarily
reflecting higher invested balances in the second half of the year.

MANUFACTURED HOUSING:

Manufactured housing revenues reached an all-time high of $1.49 billion in
fiscal 1998, up four percent from the prior year. Although unit shipments of
65,544 were up less than one percent from the prior year, the number of sections
increased four percent to 103,369, reflecting the continuing shift toward
greater sales of multi-section homes. Consistent with industry trends, Company
sales of multi-section homes rose from 50 percent of home sales in 1997 to 56
percent in 1998.

Housing group operating income increased four percent to $75.9 million in
fiscal 1998, primarily due to higher sales volume and lower raw material costs
as a percentage of sales. Operating margin in 1998 was unchanged from the prior
year at 5.1 percent of sales. Selling price increases, part of which were
implemented to cover a national advertising program, and more efficient use of
raw materials led to higher gross margins. Housing group operating profits in
fiscal 1998 would have been approximately $5.4 million higher were it not for a
change in the method of allocating intercompany supply group profits as
explained below.

RECREATIONAL VEHICLES:

Total RV sales for fiscal 1998 rose nine percent to a new high of $1.52
billion, up from $1.40 billion in fiscal 1997. The Company's motor home division
generated a six percent sales increase to a record $905 million on the strength
of healthy demand for Fleetwood's popular Class A products. The shift in product
mix toward higher-priced and more fully-featured Class A motor homes more than
offset the effect of lower unit volume, which fell six percent to 13,525 units.
Towable products fared well in fiscal 1998 as both travel trailer and folding
trailer divisions achieved record sales. Travel trailer revenues increased 11
percent to nearly $504 million as shipments rose eight percent to 35,009 units.
Folding trailer sales jumped 27 percent to $110 million on a 13 percent rise in
unit shipments to 20,960. The average selling price of folding trailer units
rose 12 percent, reflecting a move toward larger, more fully-featured models.

RV operating income was $76.8 million in fiscal 1998, off one percent from
the prior year. As a percentage of sales, operating income fell from 5.6 percent
to 5.1 percent this year. Despite the rise in RV sales volume, margins decreased
because of a decline in profitability in the Company's motor home division.
Motor home profits in fiscal 1998 were impacted by higher production costs due
to a major initiative designed to realign factory production and increase
capacity for the manufacture of popular upscale Class A models. RV group
operating income was reduced approximately $3.9 million in fiscal 1998 by a
change in the method of allocating intercompany supply group profits as
explained below.

19

SUPPLY OPERATIONS:

The Company's supply group contributed revenues of nearly $45 million for
fiscal 1998 compared to $52 million last year. Operating income, however,
increased over seven-fold to $15.4 million. Approximately 70 percent of this
increase was due to a change in the method of allocating intercompany profits
from the supply group to the housing and RV businesses. Prior to fiscal 1998,
income from lumber brokerage and import operations was allocated back to the
Company's core businesses that use these supply group services. Beginning in
fiscal 1998, the lumber and import operations were set up as separate profit
centers. Prior year profits by segment were not restated to reflect this change.

CHANGE IN ESTIMATE OF INSURANCE RESERVES:

The Company self insures its primary layer of products liability risk.
Products liability reserves are based upon claims projections from an
independent actuarial study. There can be significant variability in claims
experience from year to year, and there is typically a long loss development
period for products cases. Accordingly, actuarial projections are updated
annually to reflect current loss development trends, which results in frequent
adjustments to reserves for prior years' cases. Because of the variability and
long loss development of products liability claims, the Company actuary has
consistently followed conservative reserving practices. In July 1997, after
several years of favorable claims experience, the Company was able to lower its
self-insured retention (i.e., deductible) from $47.5 million to $18.7 million
(of which losses of $9.3 million have been paid) for a five-year underwriting
period between 1991 and 1995 by entering into a commercial insurance contract.
Prior to entering into the insurance contract, the Company carefully reviewed
the economics of the transaction and its implications as to current reserve
levels. The Company concluded that, based upon recent favorable loss development
trends (a factor that was clearly confirmed by the proposed insurance
arrangement), a change in estimate of reserves was appropriate. The outcome was
a $19.3 million adjustment to estimated reserves, offset by a $3.1 million
premium for the outside insurance. This resulted in an addition to operating
income of $16.2 million before taxes, and an increase to after-tax earnings of
$10.4 million or 28 cents per share.

1997 COMPARED TO 1996

CONSOLIDATED RESULTS:

A strong recovery in RV profits and a gain on the sale of the Company's RV
finance subsidiary led to record earnings in fiscal 1997. Net income increased
57 percent to $124.8 million from $79.6 million a year ago. Earnings per share
increased 87 percent to $3.19 from $1.71 due to substantial share repurchases
made during fiscal 1997. Included in net income was a one-time gain of $33.9
million or 87 cents per share on the sale of Fleetwood Credit Corp. in May 1996.
The gain from this transaction and earnings from one month of operations prior
to the sale were classified as discontinued operations.

Income from continuing operations rose 29 percent to $90.1 million from
$69.9 million, and earnings per share rose 53 percent to $2.30 in fiscal 1997
from $1.50 in fiscal 1996. Fiscal 1996 earnings were reduced by a loss on the
divestiture of the Company's German RV operation and a revaluation of an
investment in Southern California real estate. Excluding these unusual items,
earnings per share from continuing operations increased 24 percent.

Total revenues for fiscal 1997 increased two percent to a record $2.87
billion on the strength of higher recreational vehicle sales.

Gross profit declined to 18.8 percent of sales, down from 19.0 percent in
the prior fiscal year. RV margins were higher in fiscal 1997 due to increased
operating efficiencies and a sales mix that favored higher-margin motor home
products. However, this margin improvement was more than offset by lower
manufactured housing profit margins that were affected by more competitive
pricing and new plant start-up costs.

20

Operating expenses in fiscal 1997 declined slightly to $400.0 million and
dropped as a percentage of sales from 14.3 to 13.9 percent. Selling expenses of
$181.7 million in 1997 were down five percent, and were also lower as a
percentage of sales, declining to 6.3 percent from 6.8 percent. Virtually all of
the reduction in selling costs came in the RV group, largely due to lower
product financing and sales promotion costs. The RV reductions were
substantially offset by higher costs in the manufactured housing group, mainly
attributable to increases in product warranty and sales promotion expenses.
General and administrative expenses rose three percent to $218.3 million, and
increased as a percentage of sales to 7.6 percent from 7.4 percent. Most of the
increase occurred in the RV group which experienced higher management incentive
compensation costs due to substantially improved profits. Cost increases in the
manufactured housing group were attributable to organizational changes and
start-up costs at new plants.

Non-operating income was $7.5 million compared to a loss of $20.5 million in
the prior year. The loss on the divestiture of the German RV operation and the
real estate revaluation adjustment resulted in special charges totaling $16.4
million or 35 cents per share after taxes in fiscal 1996. Investment income of
$12.3 million in 1997 was off 12 percent from $14.0 million in the prior year as
funds available for investment were substantially reduced due to share
repurchases. Interest expense rose to $4.0 million from $1.4 million last year
as a result of the assumption of $80.0 million of long-term debt from Fleetwood
Credit Corp.

The combined Federal and state income tax rate was 38.8 percent in fiscal
1997 compared to 37.4 percent in fiscal 1996. The lower fiscal 1996 tax rate
reflects cumulative tax benefits related to the loss on disposition of the
German RV operation.

MANUFACTURED HOUSING:

Manufactured housing sales were $1.43 billion in fiscal 1997, off one
percent from the record sales of $1.44 billion achieved in fiscal 1996. Although
housing shipments in 1997 dropped five percent to 65,354 homes, the volume of
floors shipped fell only one percent to 99,378, reflecting a shift to greater
sales of multi-section homes.

Fiscal 1997 operating profit for the manufactured housing group declined
$33.4 million or 31 percent to $73.0 million from $106.4 million in fiscal 1996.
In addition to lower sales, profits were impacted by lower gross margins,
reflecting an increasingly competitive pricing environment. Higher operating
expenses also contributed to the lower profits. Influencing these costs were the
addition of four new manufacturing plants, administrative expenses associated
with the restructuring of the sales and marketing and regional management
organizations, as well as costs incurred for a sales promotion program designed
to boost sales and reduce slow-moving retailer inventories.

RECREATIONAL VEHICLES:

RV sales increased six percent to $1.40 billion compared to $1.32 billion in
the prior year, driven by a 19 percent rise in motor home sales. Fiscal 1996 RV
sales included $52 million from the Company's German RV subsidiary, which was
sold in May 1996. Excluding European sales from the comparison, RV revenues grew
ten percent in fiscal 1997. Motor home sales increased to a record $855 million
as unit volume rose seven percent to 14,345, and sales mix shifted to larger,
higher-priced products. Travel trailer sales of $453 million were off one
percent from the prior fiscal year with unit volume slipping six percent to
32,374. The Company's folding trailer division generated sales of nearly $87
million, off one percent due to a nine percent decline in shipments to 18,524
units, which was consistent with industry trends.

Fiscal 1997 operating income for the RV group rose $43.5 million or 128
percent compared to the prior fiscal year. Increased revenues and a favorable
mix of products with a higher percentage of more profitable motor home shipments
were largely responsible for the improved results. Lower financing subsidies,
resulting from the sale of Fleetwood Credit Corp., also enhanced profitability.

21

SUPPLY OPERATIONS:

Supply revenues in fiscal 1997 increased seven percent to $52 million due
primarily to higher sales of lumber products. Operating profit for the same
period, however, was down 27 percent to $2.2 million from $3.0 million,
primarily as a result of losses related to discontinuation of certain products
and lower margins related to higher tariffs on raw lumber supplies imported from
Canada.

LIQUIDITY AND CAPITAL RESOURCES

The Company generally relies upon internally generated cash flows to satisfy
working capital needs and to fund capital expenditures. Positive cash flows were
generated from internal sources in fiscal years 1998 and 1997 to support
manufacturing operations and to fund capital expenditures and shareholder
dividends. Cash generated from operations improved to $118.2 million compared to
$85.1 million last year. The Company maintained a strong cash position in both
years, with cash and investments totaling $305.7 million in 1998 and $110.4
million in 1997. Cash equivalents received a boost late in fiscal 1998 from the
proceeds of a $287.5 million convertible preferred securities offering.

Fiscal 1997 cash flows included $132.2 million, net of income taxes,
received from the sale of Fleetwood Credit Corp. These proceeds, along with cash
from the sale of investment securities, were used to make significant share
repurchases as explained below.

Cash outflows in fiscal 1998 included $177.2 million for the purchase of 5.2
million shares of Common stock from the Company's founder and former Chairman of
the Board. Other cash uses included capital expenditures of $37.8 million and
dividends to Common shareholders of $23.7 million.

Cash outflows in fiscal 1997 included $311.7 million for the purchase of 23
percent of the Company's outstanding Common stock. During the first quarter of
fiscal 1997, the Company completed a Dutch Auction tender offer that resulted in
the purchase of 7.7 million shares at a cost of $240.5 million. In the second
quarter, the Company acquired an additional 2.6 million shares at a cost of
$71.2 million, which included 2.4 million shares from the Company's founder.
Cash outflows in fiscal 1997 also included capital expenditures of $56.2
million, dividends to stockholders of $24.4 million and a long-term debt
repayment of $25.0 million.

Capital expenditures in fiscal 1998 and fiscal 1997 included the addition of
new manufactured housing plants and the normal replacement of machinery and
equipment. In 1998, a new travel trailer factory was added to replace an older
existing facility. During fiscal 1997, four new manufactured housing plants were
added and two were substantially completed, one of which became operational
early in fiscal 1998.

Capital expenditures for manufacturing capacity in fiscal 1999 are expected
to be below the levels experienced in recent years because, with few exceptions,
the Company believes it now has ample manufacturing capacity to satisfy expected
levels of consumer demand for its products. Such expenditures are expected to be
in the range of $25 to $35 million, and will include modifications at several
existing locations along with the normal replacement of machinery and equipment.

In February 1998, the Company announced its intention to acquire HomeUSA,
the nation's largest independent retailer of manufactured housing. A combination
of cash and Common stock will be used to fund this acquisition, which is
scheduled for completion in August 1998. The Company estimates that
approximately 49 percent or $80 million of the purchase price will be satisfied
in cash. Additionally, the Company is in the process of completing a number of
smaller retailer acquisitions which will be partially paid for in cash. Part of
the Company's housing retail strategy includes the development of new Company-
owned Fleetwood Home Centers, which will also require cash outlays. Although a
definitive capital budget for these various retail initiatives has not yet been
finalized, it is the opinion of management that these capital expenditures can
be funded with a combination of existing resources and expected future cash
flows.

22

During the seasonally slow winter months (typically November through
February), the Company has historically built inventories of RV's in order to
meet the peak demand for these products in the spring. This is usually
accomplished without the use of debt financing; however, there have been
occasions when the Company has required the use of bank credit lines. This
situation occurred in the third quarter of fiscal 1997, during the month of
January when the Company used uncommitted bank credit lines to borrow $21.0
million for several days to meet working capital needs. All borrowings were
repaid during the fourth quarter. The Company has uncommitted credit lines with
its principal bank and another bank which are currently being used only to
support letters of credit. The Company anticipates that a combination of cash
flow from operating activities, existing financial resources and a portion of
the proceeds from the aforementioned preferred stock offering will be adequate
to satisfy its currently foreseeable liquidity requirements, including its
capital expenditure requirements for manufacturing and the housing retail
business.

OTHER

In 1997, the Financial Accounting Standards Board ("FASB") issued Statement
No. 130, "Reporting Comprehensive Income." This statement, which must be adopted
by the Company in fiscal 1999, establishes standards for the reporting and
display of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. Also in 1997,
the FASB issued Statement No. 131, "Disclosures About Segments of an Enterprise
and Related Information," which establishes standards for the way that companies
report information about operating segments in annual financial statements, and
requires that those companies report selected information about operating
segments in interim financial reports issued to shareholders. This statement
must also be adopted in fiscal 1999. The Company believes that the adoption of
these two new standards will not have a material impact on its reported results
of operations.

The Company is dependent on a cluster of centralized computers to provide
data in support of vital company-wide operational and accounting functions. Many
of the computer processes used to generate this data were programmed in-house,
following the common practice of using only two digits to designate a year. As a
consequence, as the year 2000 approaches, programs with date-related logic will
not be able to distinguish between the years 1900 and 2000, potentially causing
software and hardware to fail, generate erroneous calculations or present
information in an unusable form. In recognition of this potential, the Company
launched a "Year 2000" conversion project in February 1996 to correct and fully
test all offending computer code by mid-1998. At this date, the project is
progressing as planned and is expected to be completed on schedule. Given these
efforts, management does not anticipate any appreciable impact on Company
operations related to the use of the Company's computer systems in the new
millennium. The estimated amount the Company plans to spend on the year 2000
project will not have a material effect on results of operations, liquidity or
capital resources.

23

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of

Fleetwood Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of FLEETWOOD
ENTERPRISES, INC., (a Delaware Corporation) and subsidiaries as of April 26,
1998 and April 27, 1997, and the related consolidated statements of income,
changes in shareholders' equity, and cash flows for each of the three years in
the period ended April 26, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Fleetwood
Enterprises, Inc. and subsidiaries as of April 26, 1998 and April 27, 1997, and
the results of their operations and their cash flows for each of the three years
in the period ended April 26, 1998 in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Orange County, California
June 22, 1998

24

FLEETWOOD ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)



YEARS ENDED APRIL
----------------------------------------
1998 1997 1996
---------- ---------- ----------

Sales............................................................. $3,050,567 $2,874,426 $2,809,277
Cost of products sold............................................. 2,456,288 2,334,840 2,276,595
---------- ---------- ----------
Gross profit.................................................. 594,279 539,586 532,682

Operating expenses................................................ 424,084 400,027 401,150
---------- ---------- ----------
Operating income.............................................. 170,195 139,559 131,532

Other income (expense):
Loss on disposition of European subsidiary -- -- (28,000)
Investment income............................................. 12,542 12,298 14,032
Interest expense.............................................. (3,567) (4,035) (1,429)
Distribution on preferred securities of Fleetwood Capital
Trust....................................................... (3,936) -- --
Other......................................................... (285) (772) (5,142)
---------- ---------- ----------
4,754 7,491 (20,539)
---------- ---------- ----------
Income from continuing operations before provision for income
taxes and minority interest..................................... 174,949 147,050 110,993
Provision for income taxes........................................ (66,404) (56,998) (41,543)
Minority interest in net loss of subsidiary....................... -- -- 451
---------- ---------- ----------
Income from continuing operations................................. 108,545 90,052 69,901
Income from discontinued operations, net of income taxes:
Income from operations of finance subsidiary.................. -- 887 9,708
Gain on sale of finance subsidiary............................ -- 33,891 --
---------- ---------- ----------
Net income.................................................. $ 108,545 $ 124,830 $ 79,609
---------- ---------- ----------
---------- ---------- ----------

Earnings per share:




BASIC DILUTED BASIC DILUTED BASIC DILUTED
----- ------- ----- ------- ----- -------

Continuing operations......................................... $3.09 $3.01 $2.36 $2.30 $1.52 $1.50
Discontinued operations:
Income from operations of finance subsidiary................ -- -- .02 .02 .22 .21
Gain on sale of finance subsidiary.......................... -- -- .88 .87 -- --
-------------- -------------- --------------
Total......................................................... $3.09 $3.01 $3.26 $3.19 $1.74 $1.71
-------------- -------------- --------------
-------------- -------------- --------------




Weighted average Common shares--basic............................. 35,090 38,238 45,856
-------------- -------------- --------------
-------------- -------------- --------------
Weighted average Common shares--diluted........................... 36,933 39,162 46,469
-------------- -------------- --------------
-------------- -------------- --------------


The accompanying notes are an integral part of these statements.

25

FLEETWOOD ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS)



APRIL 26, APRIL 27,
1998 1997
------------ ----------

ASSETS
Cash.................................................................................... $ 28,143 $ 37,890
Marketable investments.................................................................. 255,919 45,503
Receivables............................................................................. 195,388 181,085
Inventories:
Raw materials....................................................................... 111,875 101,794
Work in process and finished products............................................... 41,871 43,719
Deferred tax benefits--current.......................................................... 30,212 26,580
Other current assets.................................................................... 19,443 21,704
------------ ----------
Total current assets.............................................................. 682,851 458,275

Marketable investments maturing after one year.......................................... 21,660 27,041
Property, plant and equipment........................................................... 277,211 278,331
Deferred tax benefits--non-current...................................................... 45,042 44,705
Cash value of Company-owned life insurance.............................................. 63,355 46,834
Other assets............................................................................ 39,361 16,361
------------ ----------
$ 1,129,480 $ 871,547
------------ ----------
------------ ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable........................................................................ $ 118,481 $ 106,749
Employee compensation and benefits...................................................... 74,435 63,079
Federal and state income taxes.......................................................... 8,800 4,046
Other current liabilities............................................................... 124,086 103,293
------------ ----------
Total current liabilities......................................................... 325,802 277,167

Deferred compensation and retirement benefits........................................... 58,272 51,904
Insurance reserves...................................................................... 26,880 44,381
Long-term debt.......................................................................... 55,000 55,000
------------ ----------
Total liabilities................................................................. 465,954 428,452
------------ ----------

Contingent liabilities

Company-obligated manditorily redeemable convertible preferred securities of Fleetwood
Capital Trust holding solely 6% convertible subordinated debentures of the Company.... 287,500 --

Shareholders' equity:
Preferred stock, $1 par value, authorized 10,000,000 shares, none outstanding....... -- --
Common stock, $1 par value, authorized 75,000,000 shares, outstanding 31,451,000 at
April 26, 1998 and 35,747,000 at April 27, 1997................................... 31,451 35,747
Capital surplus..................................................................... 54,340 37,684
Retained earnings................................................................... 291,696 370,653
Foreign currency translation adjustment............................................. (1,759) (1,163)
Investment securities valuation adjustment.......................................... 298 174
------------ ----------
376,026 443,095
------------ ----------
$ 1,129,480 $ 871,547
------------ ----------
------------ ----------


The accompanying notes are an integral part of these balance sheets.

26

FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)



YEARS ENDED APRIL
---------------------------------------
1998 1997 1996
----------- ----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................ $ 108,545 $ 124,830 $ 79,609
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation expense................ 27,538 25,581 25,857
Amortization of intangibles and
goodwill.......................... 261 1,998 1,227
Losses on sales of property, plant
and equipment..................... 284 772 1,036
Gain on sale of finance
subsidiary........................ -- (33,891) --
Loss on disposition of European
subsidiary........................ -- -- 28,000
Revaluation of real estate.......... -- -- 4,106
Changes in assets and liabilities-
Increase in receivables........... (14,303) (7,705) (21,170)
(Increase) decrease in
inventories..................... (8,233) (7,614) 77,394
Increase in deferred tax
benefits........................ (3,969) (6,061) (4,376)
Increase in cash value of
Company-owned life insurance.... (16,521) (15,881) (27,253)
(Increase) decrease in other
assets.......................... (12,952) 9,452 271
Increase in accounts payable...... 11,732 1,899 8,422
Increase (decrease) in other
liabilities..................... 25,770 (8,242) 11,142
----------- ----------- -----------
Net cash provided by operating
activities.......................... 118,152 85,138 184,265
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities:
Held-to-maturity.................... (6,785,086) (4,666,426) (4,148,530)
Available-for-sale.................. (68,384) (1,540,292) (537,364)
Proceeds from maturity of investment
securities:
Held-to-maturity.................... 6,578,453 4,681,526 4,131,823
Available-for-sale.................. 15,480 1,461,573 201,425
Proceeds from sale of
available-for-sale investment
securities.......................... 54,626 263,202 173,799
Purchases of property, plant and
equipment........................... (37,809) (56,184) (32,916)
Proceeds from sales of property, plant
and equipment....................... 11,107 18,087 2,076
Investment in land held for sale...... -- -- (38)
Change in net assets of discontinued
operation........................... -- (887) (9,708)
Proceeds from sale of finance
subsidiary.......................... -- 132,222 --
----------- ----------- -----------
Net cash provided by (used in)
investing activities................ (231,613) 292,821 (219,433)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Trust
preferred securities................ 287,500 -- --
Cost of issuance of Trust preferred
securities.......................... (8,048) -- --
Assumption of long-term debt.......... -- -- 80,000
Repayment of long-term debt........... -- (25,000) --
Dividends to Common shareholders...... (23,744) (24,408) (27,551)
Proceeds from exercise of stock
options............................. 25,770 5,502 1,781
Purchase of Common stock.............. (177,168) (311,738) (11,505)
----------- ----------- -----------
Net cash provided by (used in)
financing activities................ 104,310 (355,644) 42,725
----------- ----------- -----------
Foreign currency translation
adjustment............................ (596) (217) (1,175)
----------- ----------- -----------
Increase (decrease) in cash............. (9,747) 22,098 6,382
Cash at beginning of year............... 37,890 15,792 9,410
----------- ----------- -----------
Cash at end of year..................... $ 28,143 $ 37,890 $ 15,792
----------- ----------- -----------
----------- ----------- -----------
Supplementary disclosures:
Income taxes paid..................... $ 56,813 $ 67,330 $ 51,670
Interest paid......................... 3,084 4,039 1,222
----------- ----------- -----------
----------- ----------- -----------


The accompanying notes are an integral part of these statements.

27

FLEETWOOD ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)



COMMON STOCK FOREIGN INVESTMENT
---------------------- CURRENCY SECURITIES TOTAL
NUMBER CAPITAL RETAINED TRANSLATION VALUATION SHAREHOLDERS'
OF SHARES AMOUNT SURPLUS EARNINGS ADJUSTMENT ADJUSTMENT EQUITY
---------- ---------- ---------- ----------- ----------- ------------- -------------

BALANCE APRIL 30, 1995........... 46,062 $ 46,062 $ 41,561 $ 519,941 $ 229 $ 350 $ 608,143
ADD (DEDUCT)--
Net income................... -- -- -- 79,609 -- -- 79,609
Cash dividends declared on
Common stock............... -- -- -- (27,551) -- -- (27,551)
Stock options exercised
(including related tax
benefits).................. 105 105 1,676 -- -- -- 1,781
Stock repurchased............ (527) (527) (479) (10,499) -- -- (11,505)
Net adjustment from foreign
currency translation....... -- -- -- -- (1,175) -- (1,175)
Investment securities
valuation adjustment....... -- -- -- -- -- (165) (165)
---------- ---------- ---------- ----------- ----------- ----- -------------
BALANCE APRIL 28, 1996........... 45,640 45,640 42,758 561,500 (946) 185 649,137
ADD (DEDUCT)--
Net income................... -- -- -- 124,830 -- -- 124,830
Cash dividends declared on
Common stock............... -- -- -- (24,408) -- -- (24,408)
Stock options exercised
(including related tax
benefits).................. 393 393 5,109 -- -- -- 5,502
Stock repurchased............ (10,286) (10,286) (10,183) (291,269) -- -- (311,738)
Net adjustment from foreign
currency translation....... -- -- -- -- (217) -- (217)
Investment securities
valuation adjustment....... -- -- -- -- -- (11) (11)
---------- ---------- ---------- ----------- ----------- ----- -------------
BALANCE APRIL 27, 1997........... 35,747 35,747 37,684 370,653 (1,163) 174 443,095
ADD (DEDUCT)--
Net income................... -- -- -- 108,545 -- -- 108,545
Cash dividends declared on
Common stock............... -- -- -- (23,744) -- -- (23,744)
Stock options exercised
(including related tax
benefits).................. 907 907 24,863 -- -- -- 25,770
Stock repurchased............ (5,203) (5,203) (8,207) (163,758) -- -- (177,168)
Net adjustment from foreign
currency translation....... -- -- -- -- (596) -- (596)
Investment securities
valuation adjustment....... -- -- -- -- -- 124 124
---------- ---------- ---------- ----------- ----------- ----- -------------
BALANCE APRIL 26, 1998........... 31,451 $ 31,451 $ 54,340 $ 291,696 $ (1,759) $ 298 $ 376,026
---------- ---------- ---------- ----------- ----------- ----- -------------
---------- ---------- ---------- ----------- ----------- ----- -------------


The accompanying notes are an integral part of these statements.

28

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) PRINCIPLES OF CONSOLIDATION:

The consolidated financial statements include the accounts of Fleetwood
Enterprises, Inc. and its majority owned subsidiaries. The term "Company" used
herein means Fleetwood Enterprises, Inc. and its subsidiaries, unless otherwise
indicated by the context. All material intercompany accounts and transactions
have been eliminated.

The financial statements for prior years have been restated to show the
operations of Fleetwood Credit Corp., the Company's wholly owned finance
subsidiary, as a discontinued operation. The subsidiary was sold in May 1996 as
explained in Note 4.

(B) REVENUE RECOGNITION:

Sales are recorded when products are shipped from factories to the Company's
dealers. The vast majority of sales are made for cash; however, most dealers
finance their purchases under flooring arrangements with banks or finance
companies. Products are not sold on consignment and dealers do not have the
right to return products.

(C) FOREIGN CURRENCY TRANSLATION:

Exchange adjustments resulting from foreign currency transactions are
recognized currently in income, whereas adjustments resulting from the
translation of financial statements are reflected as a separate component of
shareholders' equity. The assets and liabilities of the Canadian operation
(which are not material) are translated to U.S. dollars at current exchange
rates. Revenues and expenses are translated at the average exchange rates for
the year. Gains or losses on foreign currency transactions in fiscal years 1998,
1997 and 1996 were not material.

(D) INVENTORY VALUATION:

Inventories are valued at the lower of cost (first-in, first-out) or market.
Cost includes materials, labor and manufacturing overhead.

(E) LONG-LIVED ASSETS:

The Company assesses the recoverability of its long-lived assets by
determining whether the net book value can be recovered through projected cash
flows over the remaining life. If projections indicate that long-lived assets
will not be recovered, an adjustment is made to reduce the net asset to an
amount consistent with future cash flows discounted at the Company's incremental
borrowing rate. Cash flow projections, although subject to a degree of
uncertainty, are based on trends of historical performance and management's
estimate of future performance, giving consideration to existing and anticipated
competitive and economic conditions.

(F) DEPRECIATION:

Depreciation is provided using straight-line or accelerated methods based on
the following estimated useful lives:

- Buildings and improvements--10-40 years

- Machinery and equipment--3-15 years

(G) WARRANTY COSTS AND DEALER VOLUME REBATES:

Estimated costs related to product warranties and dealer volume rebates are
accrued at the time products are sold.

29

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(H) RESEARCH AND DEVELOPMENT COSTS AND ADVERTISING EXPENSE:

The Company follows the policy of charging research and development costs
against income in the periods incurred. Expenditures for product research and
development activities were $16.8 million in 1998, $17.2 million in 1997 and
$19.2 million in 1996. Advertising expenditures, which were not material in any
of the periods presented, were also charged against income in the periods
incurred.

(I) EARNINGS PER SHARE:

The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings Per Share," in fiscal year 1998. The Consolidated Statements
of Income reflect both basic and diluted earnings per share as required by SFAS
128. See additional information in Note 14.

(J) ACCOUNTING PERIOD:

The Company's fiscal year ends on the last Sunday in April. The year-ending
dates for the past three fiscal years were April 26, 1998, April 27, 1997 and
April 28, 1996, respectively.

(K) CASH FLOW STATEMENTS:

For purposes of these statements, cash includes cash on hand and cash in
banks in demand deposit accounts.

(L) INSURANCE RESERVES:

Insurance reserves primarily represent estimated liabilities for products
liability and workers' compensation claims. Workers' compensation reserves
mainly consist of estimated case reserves on known claims, as well as a factor
for incurred, but not reported claims. Products liability reserves include both
case reserves on known claims as well as estimated liabilities for claims which
have not been reported. Products reserves include estimated amounts for unpaid
claims and claim adjustment expenses, which are based on historical experience
and independent actuarial calculations.

(M) USE OF ESTIMATES:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(2) SUPPLEMENTAL INFORMATION ON INSURANCE AND REAL ESTATE SUBSIDIARIES

The insurance subsidiary was formed primarily for the purpose of insuring
products liability risks of the parent company and its subsidiaries. The real
estate subsidiaries were formed for the purposes of participating in site-built
housing construction or in the development of planned communities using
manufactured housing. As of April 26, 1998, the investment in real estate
consisted of raw land, and there

30

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

were no real estate development activities in process. Condensed financial
information for these subsidiaries, excluding intercompany eliminations, is as
follows:



1998 1997 1996
------- ------- -------
(AMOUNTS IN THOUSANDS)

Insurance subsidiary:
Investments................................... $51,482 $53,620 $73,488
Other assets.................................. 10,197 3,429 6,023
Reserves for losses........................... 26,339 43,332 46,839
Other liabilities............................. 12,919 9,137 8,821
Net premiums.................................. 2,524 8,384 10,813
Underwriting income........................... 23,780 8,603 5,844
Investment income............................. 3,610 5,458 6,336
Net income.................................... 17,468 9,929 7,688
Real estate subsidiaries:
Land.......................................... $ 2,800 $ 2,800 $ 2,800
Other assets.................................. 1,078 1,082 2,860
Notes payable-parent company.................. -- -- 795
Loss on revaluation of land................... -- -- (4,106)
Net loss...................................... (5) (22) (2,421)


(3) INVESTMENTS

The Company has a cash management program which provides for the investment
of excess cash balances primarily in short-term money market instruments and
intermediate-term debt instruments. Investments consist of time deposits, U.S.
Treasury obligations, tax-exempt instruments and other non-equity type
investments stated at cost, which approximates market.

FAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," requires that all applicable investments be classified as trading
securities, available-for-sale securities or held-to-maturity securities. The
Company did not have any investments classified as trading securities during the
periods presented. The statement further requires that held-to-maturity
securities be reported at amortized cost and available-for-sale securities be
reported at fair value, with unrealized gains and losses excluded from earnings
but reported in a separate component of shareholders' equity (net of the effect
of income taxes) until they are sold. At the time of sale, any gains or losses,
calculated by the specific identification method, will be recognized as a
component of operating results.

31

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The following is a summary of investment securities as of April 26, 1998 and
April 27, 1997:



GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
(AMOUNTS IN THOUSANDS)

APRIL 26, 1998
AVAILABLE-FOR-SALE SECURITIES:
U.S. Treasury securities and obligations of U.S. government
agencies.................................................. $ 13,671 $ 82 $ 5 $ 13,748
U.S. corporate securities................................... 41,244 229 71 41,402
Foreign government obligations.............................. 3,136 10 1 3,145
Other debt securities....................................... 2,221 54 -- 2,275
--------- ----- ----- ---------
$ 60,272 $375 $ 77 $ 60,570
--------- ----- ----- ---------
--------- ----- ----- ---------
APRIL 27, 1997
AVAILABLE-FOR-SALE SECURITIES:
U.S. Treasury securities and obligations of U.S. government
agencies.................................................. $ 26,092 $ 3 $367 $ 25,728
Foreign government obligations.............................. 1,846 27 -- 1,873
Other debt securities....................................... 34,056 551 40 34,567
--------- ----- ----- ---------
$ 61,994 $581 $407 $ 62,168
--------- ----- ----- ---------
--------- ----- ----- ---------


The amortized cost and estimated fair value of the securities at April 26,
1998, by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because the issuers of the securities may have the
right to prepay obligations without prepayment penalties.



FAIR
COST VALUE
-------- --------
(AMOUNTS IN
THOUSANDS)

APRIL 26, 1998
AVAILABLE-FOR-SALE:
Due in one year or less..................................... $ 38,946 $ 38,910
Due after one year through five years....................... 13,377 13,549
Due after five years through ten years...................... 7,949 8,111
-------- --------
$ 60,272 $ 60,570
-------- --------
-------- --------
HELD-TO-MATURITY:
All due in one year or less................................. $217,009 $217,009
-------- --------
-------- --------


Investment income for fiscal years 1998, 1997 and 1996 consisted of the
following (amounts in thousands):



1998 1997 1996
-------- -------- --------

Interest income...................................................... $ 12,407 $ 11,939 $ 11,824
Gross realized gains................................................. 284 1,077 2,476
Gross realized losses................................................ (4) (461) (8)
Investment management fees........................................... (145) (257) (260)
-------- -------- --------
$ 12,542 $ 12,298 $ 14,032
-------- -------- --------
-------- -------- --------


32

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(4) DISCONTINUED OPERATIONS

In May 1996, the Company completed the sale of Fleetwood Credit Corp., a
wholly owned RV finance subsidiary, to Associates First Capital Corporation.
Under the terms of the agreement, Associates acquired all of the outstanding
stock of Fleetwood Credit Corp. for $156.6 million (before income taxes) in
cash. As part of the transaction, Fleetwood and Associates entered into an
agreement to assure long-term cooperation between the parties and to facilitate
wholesale and retail financing for Fleetwood dealers and customers.

Income from the discontinued operation of the finance company was $887,000
in 1997 and $9,708,000 in 1996, net of income taxes of $511,000 and $6,786,000,
respectively. The gain on the sale of the finance subsidiary recorded in 1997
was $33,891,000, which is net of $19,607,000 for income taxes.

(5) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost and consists of the
following:



1998 1997
---------- ----------
(AMOUNTS IN THOUSANDS)

Land.................................................. $ 17,304 $ 18,464
Buildings and improvements............................ 291,075 301,354
Machinery and equipment............................... 132,428 125,889
Idle facilities, net of accumulated depreciation...... 20,784 5,886
---------- ----------
461,591 451,593
Less accumulated depreciation......................... (184,380) (173,262)
---------- ----------
$ 277,211 $ 278,331
---------- ----------
---------- ----------


Idle facilities include closed plants and certain other properties which are
not in current use by the Company. There were six idle plant facilities at the
end of 1998 and four idle plant facilities at the end of 1997. During the year,
one idle facility was activated, two others were sold and four existing
facilities were inactivated. Also, one new facility was constructed and was not
opened as planned.

The carrying value of idle facilities was $20,784,000 at April 26, 1998 and
$5,886,000 at April 27, 1997, net of accumulated depreciation of $8,881,000 and
$2,716,000, respectively. In the opinion of management, the carrying values of
idle facilities are not in excess of net realizable value.

(6) LONG-TERM DEBT

On April 22, 1996, the Company assumed from the discontinued finance
subsidiary $80,000,000 in notes payable to The Prudential Insurance Company of
America. The debt is subject to certain financial covenants as defined in the
loan agreement. One $25,000,000 note matured and was paid off on schedule in
August 1996. The other two notes have floating interest rates and mature in
November 2001 and June 2005. The floating rates are based on the three-month
LIBOR rate. Interest expense on these notes totaled $3.6 million for fiscal
1998, $4.0 million in fiscal 1997 and $89,000 in fiscal 1996.



AMOUNTS CURRENT
MATURITY (IN THOUSANDS) INTEREST RATE
- - -------------------------------------------- -------------- -------------

Due in 2001................................. $30,000 6.246%
Due in 2005................................. 25,000 6.226
-------
$55,000
-------
-------


33

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) CONVERTIBLE TRUST PREFERRED SECURITIES

On February 10, 1998, Fleetwood Capital Trust, a Delaware business trust
wholly owned by the Company (the Trust), completed a $287.5 million private
placement of 5,750,000 shares of 6% Convertible Trust Preferred Securities (the
Securities) with a liquidation value of $50 per security. The combined proceeds
from the issuance of the Securities and the purchase by the Company of the
common securities of the Trust were invested by the Trust in 6% convertible
subordinated debentures in the aggregate principal amount of $296.4 million, due
February 15, 2028 (the Debentures), issued by the Company. The Debentures are
the sole assets of the Trust and eliminate in consolidation.

Distributions on the Securities are cumulative and will be paid quarterly in
arrears at an annual rate of 6%. The Company has guaranteed, on a subordinated
basis, distributions and other payments on the Securities. The Company has the
option to defer payment of the distributions for an extended period of up to 20
consecutive quarters, so long as the Company is not in default in the payment of
interest on the Debentures.

The Securities are convertible, at the option of the holder, at any time at
the rate of 1.02627 shares of Fleetwood Common stock (i.e., a conversion price
of $48.72 per Common share), subject to adjustment in certain circumstances. The
Debentures will be redeemable in whole or in part, at the option of the Company,
on or after February 15, 2001, at a price equal to 103.75 percent of the
principal amount plus accrued and unpaid interest, declining annually to par if
redeemed on or after February 15, 2006. The Securities are subject to mandatory
redemption to the extent of any early redemption of the Debentures and upon
maturity of the Debentures on February 15, 2028.

(8) RETIREMENT AND DEFERRED COMPENSATION PLANS

The Company has qualified defined contribution retirement plans covering
substantially all employees. There are no prior service costs associated with
these plans. The Company follows the policy of funding qualified retirement plan
contributions as accrued. The Company also maintains non-qualified plans to
accrue retirement benefits subject to Internal Revenue Code limitations. The
costs associated with these retirement plans are summarized as follows:



QUALIFIED NON-QUALIFIED
PLANS PLANS TOTAL
--------- ------------- -------
(AMOUNTS IN THOUSANDS)

1998....................................... $ 20,400 $3,045 $23,445
1997....................................... 21,244 2,081 23,325
1996....................................... 18,756 1,984 20,740


In addition to non-qualified retirement plans, the Company has a deferred
compensation plan that allows for the voluntary deferral of a portion of
managers' compensation. Participant balances in the various non-qualified plans
are credited with interest at a rate set at the discretion of the Company which,
for the three years ended April 1998, was the prime rate as published by a major
U.S. bank. To enhance security for the benefits payable under these plans, the
Company has established a "Rabbi Trust," funded with Company-owned life
insurance (COLI) policies on the lives of participants. The assets of the trust
are not generally available to the Company or its creditors except in the event
of the Company's insolvency. COLI premium payments to the trust were $15.8
million in 1998, $15.8 million in 1997 and $27.6 million in 1996. The total
liability for benefits accrued under the non-qualified plans at the end of 1998
and 1997 totaled $58.3 million and $51.9 million, respectively. The cash values
of the related trust assets reflected in the accompanying balance sheets were
$63.4 million and $46.8 million, respectively, at those same dates.

34

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(9) INCOME TAXES

The provision for income taxes for each of the three years in the period
ended April 26, 1998 is summarized below:



1998 1997 1996
-------- ------- -------
(AMOUNTS IN THOUSANDS)

Current:
U.S. Federal.................................... $ 55,982 $51,729 $36,779
Foreign......................................... 1,888 1,020 1,034
State........................................... 12,503 10,310 8,106
-------- ------- -------
70,373 63,059 45,919
-------- ------- -------
Deferred, principally Federal:
Insurance reserves.............................. (7,182) 3,053 (2,561)
Other........................................... 3,213 (9,114) (1,815)
-------- ------- -------
(3,969) (6,061) (4,376)
-------- ------- -------
$ 66,404 $56,998 $41,543
-------- ------- -------
-------- ------- -------


The provision for income taxes computed by applying the Federal statutory
rate to income before taxes is reconciled to the actual provisions for fiscal
years 1998, 1997 and 1996 as follows:



1998 1997 1996
--------------- --------------- ---------------
AMOUNT % AMOUNT % AMOUNT %
-------- ----- -------- ----- -------- -----
(AMOUNTS IN THOUSANDS)

Income before provision for income taxes:
U.S. Federal............................................ $171,938 98.3% $144,813 98.5% $114,400 103.1%
Foreign................................................. 3,011 1.7 2,237 1.5 (3,407) (3.1)
-------- ----- -------- ----- -------- -----
$174,949 100.0% $147,050 100.0% $110,993 100.0%
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----
Computed statutory tax...................................... $ 61,232 35.0% $ 51,468 35.0% $ 38,848 35.0%
State income taxes, net..................................... 7,468 4.3 6,209 4.2 5,755 5.2
Tax-exempt income........................................... -- -- (240) (.1) (333) (.3)
Other items, net............................................ (2,296) (1.3) (439) (.3) (2,727) (2.5)
-------- ----- -------- ----- -------- -----
$ 66,404 38.0% $ 56,998 38.8% $ 41,543 37.4%
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----


The components of the Company's deferred income tax benefits (liabilities)
as of April 26, 1998 and April 27, 1997 were as follows:



1998 1997
------- -------
(AMOUNTS IN
THOUSANDS)

Insurance reserves.......................................... $16,063 $23,245
Deferred compensation....................................... 22,437 20,243
Product warranty reserves................................... 20,237 18,781
Dealer volume rebates....................................... 5,741 5,238
Depreciation................................................ (2,336) (3,075)
Other financial accruals.................................... 13,112 6,853
------- -------
$75,254 $71,285
------- -------
------- -------


The net deferred tax asset summarized above is considered realizable;
however, the amount could be reduced if tax rates are reduced in the future.

35

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(10) OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:



1998 1997
---------- ----------
(AMOUNTS IN THOUSANDS)

Dividends payable to shareholders................................... $ 5,335 $ 5,716
Dealer volume rebates............................................... 25,630 21,322
Product warranty reserves........................................... 52,232 48,291
Other............................................................... 40,889 27,964
---------- ----------
$ 124,086 $ 103,293
---------- ----------
---------- ----------


(11) FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has estimated the fair value of its financial instruments in
compliance with Financial Accounting Standard No. 107, "Disclosure About Fair
Value of Financial Instruments." The estimates were made as of April 26, 1998
based on relevant market information. Financial instruments include cash,
investments, debt and convertible preferred securities. See Note 3 regarding
discussion on investments. The estimated fair value of financial instruments and
the valuation techniques used to estimate the fair value were as follows
(amounts in thousands):



APRIL 26, 1998
-----------------------
ESTIMATED
BOOK VALUE FAIR VALUE
----------- ----------

Cash................................................................. $ 28,143 $ 28,143
Long-term debt....................................................... 55,000 55,000
Convertible preferred securities..................................... 287,500 287,500


CASH: The fair value approximates book value.

TERM DEBT AND CONVERTIBLE PREFERRED SECURITIES: The fair values of term
debt and convertible preferred securities were estimated based on a present
value discounted cash flow analysis using rates the Company would have to pay
currently to acquire similar financing for similar remaining terms.

(12) CONTINGENT LIABILITIES

As is customary in the manufactured housing and recreational vehicle
industries, the Company is contingently liable at April 26, 1998 under the terms
of repurchase agreements with many financial institutions providing inventory
financing for retailers of the Company's products. The contingent liability
under these agreements approximates the amount financed, reduced by the resale
value of any products which may be repurchased, and the risk of loss is spread
over numerous retailers and financial institutions. Losses under these
agreements have not been significant in the past.

36

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(13) RESULTS BY QUARTER (UNAUDITED)

The unaudited results by quarter for fiscal years 1998 and 1997 are shown
below:



FIRST SECOND THIRD FOURTH
FISCAL YEAR ENDED APRIL 1998: QUARTER QUARTER QUARTER QUARTER
- - ----------------------------------------------------------------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Revenues......................................................... $ 728,454 $ 769,089 $ 710,620 $ 842,404
Operating income................................................. 49,074 44,450 32,073 44,598
Income before taxes.............................................. 50,344 45,862 34,664 44,079
Net income for basic earnings per share.......................... 30,942 28,124 21,149 28,330
Net income for diluted earnings per share........................ 30,942 28,124 21,149 30,829
Earnings per share:
Basic.......................................................... $ .86 $ .78 $ .58 $ .88
Diluted........................................................ .84 .77 .57 .81
Weighted average Common shares:
Basic.......................................................... 35,843 35,948 36,256 32,313
Diluted........................................................ 36,668 36,514 36,884 37,859




FIRST SECOND THIRD FOURTH
FISCAL YEAR ENDED APRIL 1997: QUARTER QUARTER QUARTER QUARTER
- - ----------------------------------------------------------------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Revenues......................................................... $ 751,245 $ 748,780 $ 627,961 $ 746,440
Operating income................................................. 44,678 40,927 21,265 32,689
Income before taxes.............................................. 48,602 42,376 22,681 33,391
Income from continuing operations................................ 29,332 25,772 13,779 21,169
Income from discontinued operations.............................. 34,778 -- -- --
Net income....................................................... 64,110 25,772 13,779 21,169
Earnings per share from continuing operations:
Basic.......................................................... $ .65 $ .70 $ .39 $ .59
Diluted........................................................ .64 .68 .38 .58
Earnings per share from discontinued operations (Note):
Basic.......................................................... $ .78 -- -- --
Diluted........................................................ .76 -- -- --
Total earnings per share:
Basic.......................................................... $ 1.43 $ .70 $ .39 $ .59
Diluted........................................................ 1.40 .68 .38 .58
Weighted average Common shares:
Basic.......................................................... 44,854 36,606 35,562 35,675
Diluted........................................................ 45,916 37,837 36,556 36,357


Note: The first quarter amount is different from the total for the fiscal year
because of the accretive effect of approximately 13 cents per share due to
share repurchases in the first half of fiscal 1997.

(14) EARNINGS PER SHARE

Basic earnings per share is computed by dividing income available to Common
stockholders by the weighted average number of Common shares outstanding.
Diluted earnings per share includes the effect of potential shares outstanding
from dilutive stock options and dilutive preferred securities. After-tax
distributions on preferred securities are added to net income to arrive at
earnings used in the diluted

37

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

earnings per share calculation. The table below shows the calculation components
of earnings per share from continuing operations for both basic and diluted
earnings per share.



1998 1997 1996
--------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
INCOME SHARES INCOME SHARES INCOME SHARES
---------- --------- --------- --------- --------- ---------
(AMOUNTS IN THOUSANDS)

Basic earnings per share...................... $ 108,545 35,090 $ 90,052 38,238 $ 69,901 45,856
Effect of dilutive securities:
Stock options............................... -- 627 -- 924 -- 613
Preferred securities........................ 2,499 1,216 -- -- -- --
---------- --------- --------- --------- --------- ---------
Diluted earnings per share.................... $ 111,044 36,933 $ 90,052 39,162 $ 69,901 46,469
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------


(15) STOCK-BASED INCENTIVE COMPENSATION PLANS

Under the Company's 1992 Stock-Based Incentive Compensation Plan, stock
options may be granted to officers and other key employees of the Company for
the purchase of up to 4,900,000 shares of the Company's Common stock. Expiration
dates for the options may not exceed ten years from the date of grant. A similar
plan adopted in 1982 expired in June 1992; however, exercisable options
representing 122,800 shares still remain outstanding at April 26, 1998. Under a
separate plan for non-employee directors adopted during fiscal 1993, up to
100,000 shares have been authorized for distribution of options. Automatic
grants are made annually under this plan. The Company accounts for these plans
under the provisions of APB Opinion 25, under which no compensation cost is
recognized for stock option grants as the options are granted at fair market
value at date of grant.

Had compensation costs for these plans been determined consistent with
Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation," the Company's net income and earnings per share would have been
reduced to the following pro forma amounts:



1998 1997 1996
---------- ---------- ---------
(AMOUNTS IN THOUSANDS
EXCEPT PER SHARE DATA)

Net income: As reported...................... $ 108,545 $ 124,830 $ 79,609
Pro forma........................ 106,014 122,241 78,301

Diluted earnings per share: As reported...................... $ 3.01 $ 3.19 $ 1.71
Pro forma........................ 2.87 3.12 1.69


Because the SFAS No. 123 method of accounting has not been applied to
options granted prior to May 1, 1995, the resulting pro forma compensation cost
may not be representative of that to be expected in future years.

38

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The following is a summary of the stock option activity (including those
from the expired plan) for employees and non-employee directors for fiscal years
1998, 1997 and 1996.



1998 1997 1996
----------------------- ----------------------- -----------------------
WTD. AVG. WTD. AVG. WTD. AVG.
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
---------- ----------- ---------- ----------- ---------- -----------

Outstanding at beginning of year......... 2,606,524 $ 19.95 2,531,224 $ 17.47 2,293,366 $ 16.20
Granted.................................. 481,300 28.10 476,400 28.27 343,658 25.72
Exercised................................ (907,400) 18.72 (392,600) 14.45 (105,800) 18.43
Forfeited................................ (17,000) 27.46 (8,500) 28.38 -- --
---------- ----------- ---------- ----------- ---------- -----------
Outstanding at end of year............... 2,163,424 $ 22.19 2,606,524 $ 19.95 2,531,224 $ 17.47
---------- ----------- ---------- ----------- ---------- -----------
---------- ----------- ---------- ----------- ---------- -----------
Exercisable at end of year............... 1,976,224 $ 21.62 2,523,624 $ 19.65 2,148,224 $ 16.18
---------- ----------- ---------- ----------- ---------- -----------
---------- ----------- ---------- ----------- ---------- -----------
Weighted average fair value of options
granted................................ $ 9.01 $ 9.30 $ 8.10
----------- ----------- -----------
----------- ----------- -----------


The 2,163,424 options outstanding at April 26, 1998 have exercise prices
ranging from $8.06 to $32.94, with an average exercise price of $22.19 and a
weighted average remaining contractual life of 6.8 years.

The fair value of each option granted is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted-average
assumptions used for grants in fiscal years 1998, 1997 and 1996, respectively:
risk-free interest rates of 6.0 percent, 6.0 percent and 5.6 percent; an
expected dividend yield of 3.0 percent, 2.5 percent and 2.5 percent; expected
lives of six, seven and five years; and, expected volatility of 34 percent, 35
percent and 31 percent.

(16) STOCKHOLDER RIGHTS PLAN

On November 10, 1988, the Company's Board of Directors adopted a stockholder
rights agreement, granting certain new rights to holders of the Company's Common
stock. Under the agreement, one right was granted for each share of Common stock
held as of November 23, 1988, and one right will be granted for each share
subsequently issued. Each right entitles the holder, in an unfriendly takeover
situation, and after paying the exercise price (currently $75), to purchase
Fleetwood Common stock having a market value equal to two times the exercise
price. Also, if the Company is merged into another corporation, or if 50 percent
or more of the Company's assets are sold, then rightholders are entitled, upon
payment of the exercise price, to buy common shares of the acquiring corporation
at a 50 percent discount from their then-current market value. In either
situation, these rights are not available to the acquiring party. However, these
exercise features will not be activated if the acquiring party makes an offer to
acquire all of the Company's outstanding shares at a price which is judged by
the Board of Directors to be fair to all Fleetwood stockholders. The rights may
be redeemed by the Company under certain circumstances at the rate of $.02 per
right. The rights will expire on November 9, 1998.

(17) CHANGE IN ESTIMATE OF INSURANCE RESERVES

In July 1997, the Company recorded a $19.3 million change in estimate in its
products liability reserves and concurrently paid a $3.1 million premium to an
outside insurance company to lower its self-insured retention (i.e., deductible)
on its products liability insurance. The net effect of these transactions was an
addition to operating income of $16.2 million ($10.4 million after tax or 28
cents per share).

39

FLEETWOOD ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(18) INDUSTRY SEGMENT INFORMATION

The Company conducts manufacturing operations principally in two
industries--manufactured housing and recreational vehicles. On a smaller scale,
the Company operates supply companies which provide fiberglass parts, lumber and
other wood components to its primary businesses, while also generating outside
sales. Manufacturing operations are conducted in the United States and to a much
lesser extent in Canada. The operations of the Company's wholly owned insurance
and real estate subsidiaries have been included in the "Corporate and Other"
category because the impact on consolidated operating income is not material.
Operating profit is total revenue less cost of sales and operating expenses.
None of the following items have been included in the computation of operating
profit for the individual operating segments: corporate expenses, non-operating
income and expenses and income taxes. 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 idle facilities. Information with respect to
industry segments as of April 26, 1998, April 27, 1997 and April 28, 1996, and
for each of the years then ended is set forth as follows:



ADJUSTMENTS
MANUFACTURED RECREATIONAL SUPPLY CORPORATE AND
HOUSING VEHICLES OPERATIONS AND OTHER ELIMINATIONS TOTAL
------------- ------------ ----------- ---------- ------------ ------------
(AMOUNTS IN THOUSANDS)

1998
Operating revenues................ $ 1,487,650 $ 1,518,163 $ 44,754 $ 2,524 $ (2,524) $ 3,050,567
Operating profit (loss)........... 75,896 76,809 15,437 2,053 -- 170,195
Identifiable assets............... 286,308 308,420 35,985 498,767 -- 1,129,480
Depreciation...................... 14,195 9,029 2,134 2,180 -- 27,538
Capital expenditures.............. 12,127 18,968 1,338 5,376 -- 37,809

1997
Operating revenues................ $ 1,426,940 $ 1,395,163 $ 52,323 $ 8,384 $ (8,384) $ 2,874,426
Operating profit (loss)........... 72,980 77,641 2,170 (13,232) -- 139,559
Identifiable assets............... 286,081 280,345 39,551 265,570 -- 871,547
Depreciation...................... 12,628 8,774 2,070 2,109 -- 25,581
Capital expenditures.............. 40,444 8,868 2,156 4,716 -- 56,184

1996
Operating revenues................ $ 1,443,016 $ 1,317,494 $ 48,767 $ 10,811 $ (10,811) $ 2,809,277
Operating profit (loss)........... 106,433 34,086 2,971 (11,958) -- 131,532
Identifiable assets............... 249,734 269,804 42,862 546,754 (222) 1,108,932
Depreciation...................... 11,370 10,132 1,905 2,450 -- 25,857
Capital expenditures.............. 19,161 10,732 1,185 1,838 -- 32,916


40

ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
MATTERS

None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding directors and executive officers as required by
Item 401 of Regulation S-K is set forth in Part I of this report under the
caption "Executive Officers of the Company" and on page three of the Company's
proxy statement which will be filed with the Securities and Exchange Commission
not later than 120 days after April 26, 1998, and by this reference is
incorporated herein.

ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS

The information required by Item 402 of Regulation S-K is set forth under
the caption "Executive Compensation" in the Company's proxy statement which will
be filed with the Securities and Exchange Commission not later than 120 days
after April 26, 1998, and by this reference is incorporated herein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 403 of Regulation S-K is set forth under
the captions "Director and Officer Stock Ownership" and "Stock Ownership of
Certain Beneficial Owners" in the Company's proxy statement which will be filed
with the Securities and Exchange Commission not later than 120 days after April
26, 1998, and by this reference is incorporated herein.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information regarding certain relationships and related transactions as
required by Item 404 of Regulation S-K, if any, is set forth in the Company's
proxy statement which will be filed with the Securities and Exchange Commission
not later than 120 days after April 26, 1998, and by this reference is
incorporated herein.

41

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

PAGE
REFERENCE
---------
(a) Financial Statements
(1) Financial Statements included in Part II of this report:
Report of Independent Public Accountants 24
Consolidated Statements of Income for each of the three
years in the period ended April 26, 1998 25
Consolidated Balance Sheets at April 26, 1998 and April 26
27, 1997
Consolidated Statements of Cash Flows for each of the
three years in the period ended April 26, 1998 27
Consolidated Statements of Changes in Shareholders' Equity
for each of the three years in the period ended April 28
26, 1998
Notes to Consolidated Financial Statements 29
(2) Financial Statement Schedules
Financial statement schedules not filed have been omitted
for the reason that the required information is shown in
the financial statements or notes thereto, the amounts
involved are not significant, or the required matter is
not present.
(3) Exhibits and Index to Exhibits*:
3. (a) Restated Certificate of Incorporation.
(b) Amendment to Restated Certificate of
Incorporation.
(c) Restated Bylaws of the Company.
4. (a) Rights Agreement dated November 10, 1988,
between the Company and the First National Bank
of Boston used in connection with a stockholder
rights plan.
(b) Certificate of Designation, Preferences and
Rights of Series A Junior Participating
Preferred Stock filed November 23, 1988.
(c) Amended and Restated Declaration of Trust of
Fleetwood Capital Trust dated as of February 10,
1998, by and among Fleetwood and individual
trustees of the Trust.
(d) Indenture dated as of February 10, 1998, by and
between Fleetwood and The Bank of New York, as
Trustee, used in connection with Fleetwood's 6%
Convertible Subordinated Debentures due 2028.
(e) Registration Rights Agreement dated February 10,
1998, by and among Fleetwood Capital Trust,
Fleetwood and PaineWebber Incorporated.
(f) Preferred Securities Guarantee Agreement dated
as of February 10, 1998, by and between
Fleetwood and The Bank of New York, as preferred
guarantee trustee.
9. Not applicable.
10. Material Contracts.
(a) Form of employment agreement between the Company
and each of its officers.
(b) Amended and Restated Deferred Compensation Plan.
(c) Amended and Restated Supplemental Benefit Plan.
(d) Amended and Restated Long-Term Incentive
Compensation Plan.
(e) 1982 Stock Option Plan.

42


PAGE
REFERENCE
---------
(f) Amended and Restated Benefit Restoration Plan.
(g) Dividend Equivalent Plan.
(h) Amended and Restated 1992 Stock-Based Incentive
Compensation Plan.
(i) The 1992 Non-Employee Director Stock Option
Plan.
(j) Senior Executive Incentive Compensation Plan.
(k) Operating Agreement between Fleetwood
Enterprises, Inc. and Fleetwood Credit Corp.
11. Not applicable.
12. Not applicable.
13. Not applicable.
18. Not applicable.
19. Not applicable.
21. Subsidiaries of the Registrant.
22. Not applicable.
23. Consent of independent public accountants.
24. Not applicable.
27. Not applicable.
(b) Reports on Form 8-K
On February 19, 1998, the Company filed a report on Form 8-K
regarding two public announcements. The first related to
completion of a $287.5 million private placement of convertible
preferred securities. The second announcement covered the
Company's plan to acquire HomeUSA, Inc. and the modification of
its retail venture with Pulte Corporation.

- - ---------

*These documents were included with previous filings as shown below and are
hereby incorporated by reference:

Item 3(a): Filed with the Company's 10-K Annual Report for the year ended
April 28, 1985.
Items 3(b)
and 3(c): Filed with the Company's 10-K Annual Report for the year ended
April 26, 1987.
Items 4(a)
and 4(b): Filed with the Company's report on Form 8-K on November 10, 1988.
Items 4(c),
4(d), 4(e)
and 4(f): Incorporated by reference to Exhibits 4.2, 4.3, 4.4 and 4.5 to
the Company's Registration Statement on Form S-3, Commission File
No. 333-51873
Item 10(a): Filed with the Company's 10-K Annual Report for the year ended
April 26, 1992.
Items 10(b),
10(c),
10(d),
10(f) and
10(h): Filed with the Company's 10-K Annual Report for the year ended
April 28, 1996.
Item 10(e): Filed with the Company's 10-K Annual Report for the year ended
April 26, 1987.
Item 10(g): Filed with the Company's 10-K Annual Report for the year ended
April 29, 1990.
Item 10(i): Filed with the Company's 10-K Annual Report for the year ended
April 26, 1992.
Item 10(j): Filed with the Company's 10-K Annual Report for the year ended
April 24, 1994.
Item 10(k): Filed with the Company's report on Form 8-K on June 7, 1996.

43

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

FLEETWOOD ENTERPRISES, INC.
REGISTRANT

BY /S/ PAUL M. BINGHAM

-------------------------------------
PAUL M. BINGHAM
SENIOR VICE PRESIDENT-FINANCE

Date: July 16, 1998

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE TITLE DATE
- - ------------------------------ ------------------------------ ----------------

/s/ GLENN F. KUMMER Chairman of the Board and July 16, 1998
- - ------------------------------ Chief Executive Officer
GLENN F. KUMMER

/s/ NELSON W. POTTER President, Chief Operating July 16, 1998
- - ------------------------------ Officer and Director
NELSON W. POTTER

/s/ PAUL M. BINGHAM Chief Financial Officer and July 16, 1998
- - ------------------------------ Principal Accounting Officer
PAUL M. BINGHAM

/s/ DOUGLAS M. LAWSON Director July 16, 1998
- - ------------------------------
DOUGLAS M. LAWSON

/s/ WALTER F. BERAN Director July 16, 1998
- - ------------------------------
WALTER F. BERAN

/s/ THOMAS A. FUENTES Director July 16, 1998
- - ------------------------------
THOMAS A. FUENTES

/s/ JAMES L. DOTI Director July 16, 1998
- - ------------------------------
JAMES L. DOTI

44