Generations of Success

Mo n a c o Co a c h Co r p o r a t i o n 2007 Annual Report Monaco Coach Corporation is one of the world’s largest manufacturers of recreational vehicles and is the leading producer of luxury diesel motorhomes. The Company offers a variety of RVs, from entry-level priced towables to high-line models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, R-Vision and Dodge brand names. Headquartered in Coburg, Oregon, with substantial manufacturing facilities in Indiana, Monaco Coach Corporation employs approximately 5,000 people.

Net Revenues Total RV Unit Sales Earnings per Share $1,500 ($ in millions) 30,000 $2.00

25,000 $1,200 $1.50 20,000 $900

15,000 $1.00

$600 10,000 $0.50 $300 5,000

0 0 0 ’03’02’04 ’05 ’06 ’07 ’03’02’04 ’05 ’06 ’07 ’03’02’04 ’05 ’06 ’07 Monaco Coach 2007 Annual Report

Committed to Excellence

De a r Fe l l o w St o c k h o l d e r s , Looking back on 2007, we are extremely pleased with we expect will generate greater profits and improve the changes we made in several areas of the Company’s quality in 2008. Unfortunately, 2007 was the third year operations and the resulting improvements to our profit- in a row of declining motorhome sales, and while we ability. Net income was up nearly twelve-fold from the can’t control these cycles, we clearly controlled our prior year, and we owe a great deal of this success to business model and fine-tuned it to operate efficiently our hard-working team. and profitably in this unstable environment.

We’ve invested an enormous amount of time analyzing Our motorized segment’s operating income improved by and reviewing our entire manufacturing footprint and over $30 million for the year on a modest increase in processes and, as a result, we instituted a series of sales, and our towables business increased its gross margin actions to cut costs, better utilize our overall capacity, by 2% of sales in the fourth quarter, despite an overall and improve operating efficiencies. As an example, we decline in revenue. We are confident the improved mar- consolidated many of our sub-component facilities into gins in the towable segment will continue into 2008. our main campuses, and we will continue to pursue Our balance sheet remained very strong; net cash other opportunities where it will improve capacity utili- generated from operating activities was $34.8 million. zation, quality of our products, and our bottom line. We continued our quarterly dividend payment of 6¢ Our management, inspired by the significant improve- per share and initiated a repurchase program for up to ments we made in 2007, is enacting new initiatives that $30 million of our common stock.

{1} Committed to Our Customers

Motorhome Segment Towable Segment Our market leadership and growth in the motorhome In the towable sector, we’ve made significant strides business reflects our investment in product development with many new product introductions throughout the as well as a closer relationship with our dealer partners year. The success of our full-sized Super Sport trailer is and coach owners. As anyone who has ever owned a making us a leader in the sizeable entry-level part of the Monaco brand coach knows, we participate extensively towable market. Though closing the Elkhart towable in club rallies and functions throughout the country. It’s facility was an extremely difficult decision, this action at these events where we gather important feedback led to an increase in our capacity utilization at both our from our coach owners and our dealers on how we can main towable campus in Warsaw, Indiana, and in our improve our products and help our owners enjoy the RV Wakarusa facility, and should lead to improved margins lifestyle even more. and profitability at these locations.

As the leader in the diesel market, we gained market Motorhome Resorts share throughout the year on the strength of developing This part of our business faced significant challenges in innovative products at different price points. Early returns 2007, including a decrease in available lot inventory for from our redesigned Monarch and Admiral gas models, sale, difficult real estate markets, and declining consumer introduced in the fall, are very encouraging. In addition, confidence. Over the past several years, the resort busi- our share in the Class C market increased due to the ness has been extremely successful and augments the introduction of a number of value-priced, smaller Class Cs. lifestyle and dreams of our customers. With a new resort In 2008, we plan to introduce a fuel-efficient Class C built coming online in Naples, Florida by the beginning of on the Dodge Sprinter chassis and a “super-C” product. the second quarter 2008, and another in La Quinta,

{2} Monaco Coach 2007 Annual Report

A Dedicated Team

California by the end of 2008, we feel confident we will We deliver 24/7 on-call customer/technical support, have the inventory necessary to sell and reach the same which is unparalleled in our industry; our MDEX level of profitability we enjoyed in 2005 and 2006. computer system is fully integrated with our dealers’ networks; and we are developing a new user-friendly, Dealer and Owner Relations front-end system for parts ordering. Each coach comes Franchise for the Future (FFTF), launched in 2005, is a with free roadside assistance with the first 12 months of comprehensive marketing effort that has forged a closer, coach ownership and we are the only one in the industry mutually beneficial, and more profitable relationship with to offer a manufacturer-sponsored, post-warranty service our dealers. The program is designed to encourage our contract. We are also the only RV manufacturer to dealers to re-invest in their businesses and in our brands, own and operate three full-service centers, located in so together we are building business partnerships for the Oregon, Indiana and Florida, designed to augment the long run. FFTF, along with our Dealer Services depart- service efforts of our dealers. ment, delivers a set of valuable tools not available from other RV manufacturers that enable dealers to enhance Looking to 2008 revenue and cut costs across their business models. We expect 2008 to be a challenging year, but we will continue to invest in product development, new tech- Service to our dealers and to our customers after the nologies and extensive testing to further separate us sale also differentiates us from other manufacturers. from our competition. With an eye toward performance,

{3} The Road in 2008

value and safety, our Company goal is to continue to build Our Monaco family is truly dedicated and passionate the most innovative, best-selling products in the industry. about building a product and delivering a lifestyle that exceeds our customers’ dreams. In an effort to recruit and retain top talent, we provide excellent healthcare and benefits to our employees. We are indebted to our Board of Directors for their The success of our Company-owned, on-site MonaCare unwavering belief in our future; to our many great Health Clinic and Pharmacy in Oregon has led to the suppliers and dealer partners; and most of all, to you, development of a similar facility in Indiana. The Clinic our stockholders, for your continued support. delivers a superb benefit to our employees and helps the Sincerely, Company manage benefit costs.

There is no other company in our industry with the breadth and scope of Monaco Coach Corporation’s products and services—from high-end diesel products to the value-priced travel trailers, premium brands, industry-leading customer care and a comprehensive package of ancillary products and services. Our Company would be nothing, of course, without the dedication of our 5,000 employees.

Kay L. Toolson John W. Nepute Chairman of the Board President and Chief Executive Officer

{4}

Board of Directors Other Officers and Corporate Information Kay L. Toolson Key Management Personnel Corporate Headquarters Chairman of the Board Patrick F. Carroll Oregon Manufacturing Facilities and Chief Executive Officer, Vice President, Product Development 91320 Industrial Way, Coburg, OR 97408 Monaco Coach Corporation T: (541) 686-8011 Martin W. Garriott www.monaco-online.com Richard E. Colliver Vice President, Oregon Manufacturing Executive Vice President, Indiana Facilities American Honda Motor Co., Inc. John B. Healey, Jr. 606 Nelson’s Parkway, Wakarusa, IN 46573 Vice President, Corporate Purchasing T: (574) 862-7211 John F. Cogan Senior Fellow, The Hoover Institution, Garth R. Herring Stanford University Vice President, Service Operations R-Vision 2666 S. Country Club Road, Warsaw, IN 46580 Robert P. Hanafee, Jr. Richard G. Kangail T: (574) 268-2111 Private Investor Vice President, Human Resources Stock Transfer Agent L. Ben Lytle April A. Lynch-Klein Wells Fargo Shareowner Services Consultant and Member of Board of Vice President, Customer Support Services St. Paul, MN Managers/Directors, Healthways Craig M. Swisher Dennis D. Oklak Vice President, Towable Operations Common stock Chairman of the Board The Company’s common stock is listed on the New and Chief Executive Officer, Irvin M. Yoder York Stock Exchange. Its trading symbol is MNC. Duke Realty Corporation Vice President, Indiana Manufacturing Employees Richard A. Rouse Ronald J. Stone 5,000 Private Investor Director, Information Services

Daniel C. Ustian Chris G. Hundt Independent Auditors Chairman of the Board, President Managing Director, Engineering PricewaterhouseCoopers LLP, Portland, OR and Chief Executive Officer, Navistar International Corporation Craig A. Wanichek Annual Meeting Director, Dealer Services and Investor Relations The 2008 annual meeting will be held Roger A. Vandenberg May 14, 2008, 1:00 p.m. local time, at the President, Cariad Capital, Inc. Jeff Abney, Gifford Akins, Thad Akins, Kurt Hyatt Regency O’Hare Hotel, Rosemont, IL. Anderson, Terri Archambault, Chris Ballinger, Joni Executive Officers Beachy, Jennifer Beck, Michael Becker, Mikeal Blommé, Dennis Bowen, Deana Brown, Vance Buell, Corporate Counsel Kay L. Toolson Steven Burkholder, Marv Burns, Roger Carlson, Wilson Sonsini Goodrich and Rosati, Chairman of the Board and Debbie Carr, Caroline Champion, Melinda Cox, Professional Corporation Chief Executive Officer Debbie Cronin, Arthur Deeds, Tim Dennig, William Palo Alto, CA Devos, Ron Ericson, Andrea Evans, Jenny Evans, John W. Nepute Mike Fink, James Fox, Paul Freet, Kurt Gabrielson, President Investor Relations Ray Gau, Jon Gawthrop, Dave Gibson, Dennis Inquiries Girod, Glen Goins, Michael Green, Dale Grose, Richard E. Bond Monaco Coach Corporation Adam Gudger, Pete Hanes, Bob Harlan, Michael Senior Vice President 91320 Industrial Way, Coburg, OR 97408 Hays, Bret Heckaman, E. Randall Henderson, Jeff and Chief Administrative Officer Attention: Investor Relations Hill, Dale Hoogenboom, Melanie Hoover-Marsh, T: (800) 634-0855 Brett Howard, John Hurd, Enoch Hutchcraft, Ames P. Martin Daley www.monaco-online.com Jacoby, Sandra Kadash, Mark Kealoha, William Vice President Kellogg, James Keough, Edgar Kinney, Marcus Konyn, and Chief Financial Officer Aaron Lafleur, Brett Larson, Ryan Lee, Scott Lilly, Form 10-K and Phillip Lord, Dan Lutz, Richard Mackin, Jack Mason, Investor Information Michael P. Snell Brian Maurer, Daryl Maurer, Donn May, Reba Copies of the Annual Report on Form 10-K filed Vice President, Sales and Marketing McClary, Brad McKinney, Gary Mehaffey, Danny with the Securities and Exchange Commission Miller, Michael Miller, Wesley Murphy, Deanna Ota, and other investor information may be obtained Charles J. Kimball Trish Parker, Eric Parkes, Ray Patterson, Harry without charge from the Company upon written Vice President, Planning/Business Development Peffley, Steven Peterson, Yvonne Reed, Steve Reser, request to its Coburg, Oregon office, attention and Corporate Controller Loren Robertson, Page Robertson, Melanie Rose, Investor Relations. Alan Schmucker, Rick Schraw, Wayne Searle, Jim Sheldon, Valerie Shirey, Allen Slagle, Michael Copyright 2008 Stanley, Gary Stanton, Lyle Stutzman, Charles Monaco Coach Corporation. All rights reserved. Tillery, Gisela Tracer, Joacim Trybom, Chris Vaughn, Charlene Walker, Rich Walter, Ken Walters, Dale Weins, Terry Welles, Mike Whitter, Scott Zimmer, Joseph Zurbuch

The letter to stockholders contains forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual

Designed by Curran & Connors, Inc. / www.curran-connors.com results, performance or achievements of the Company to differ materially from those expressed or implied by such forward-looking statements. These risks include those set forth under “Item 1A. Risk Factors” in Part I of the accompanying Annual Report on Form 10-K. Mo n a c o Co a c h Co r p o r a t i o n 91320 Industrial Way Coburg, OR 97408 541.686.8011 www.monaco-online.com