<PAGE>
                                                               EXHIBIT 13(a)(vi)





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

A. ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include all domestic and foreign
subsidiaries that are more than 50% owned and controlled. CLARCOR Inc. and its
subsidiaries are hereinafter collectively referred to as the "Company" or
CLARCOR. The Company has three reportable segments: Engine/Mobile Filtration,
Industrial/Environmental Filtration and Packaging. Certain reclassifications
have been made to conform prior years' data to the current presentation. These
reclassifications had no effect on reported earnings.

USE OF MANAGEMENT'S ESTIMATES

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent 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.

ACCOUNTING PERIOD

The Company's fiscal year ends on the Saturday closest to November 30. The
fiscal years ended November 29, 2003, November 30, 2002, and December 1, 2001
were comprised of fifty-two weeks. In the consolidated financial statements, all
fiscal years are shown to begin as of December 1 and end as of November 30 for
clarity of presentation.

CASH EQUIVALENTS

All highly liquid investments with a maturity of three months or less when
purchased or that are readily saleable are considered to be short-term cash
equivalents. The carrying amount of the investments approximates fair value.

FOREIGN CURRENCY TRANSLATION

Financial statements of foreign subsidiaries are translated into U.S. dollars at
current rates, except that revenues, costs and expenses are translated at
average rates during each reporting period. Net exchange gains or losses
resulting from the translation of foreign financial statements are accumulated
with other comprehensive earnings as a separate component of shareholders'
equity and are presented in the Consolidated Statements of Shareholders' Equity.

DERIVATIVES

The Company makes limited use of derivative financial instruments to manage
certain interest rate and foreign currency risks. Interest rate swap agreements
are utilized to convert certain floating rate debt into fixed rate debt. Cash
flows related to interest rate swap agreements are included in interest expense
over the terms of the agreements.

The Company documents all relationships between hedging instruments and hedged
items, as well as its risk-management objective and strategy for undertaking
various hedge transactions. In addition, the Company assesses (both at the
hedge's inception and on an ongoing basis) the effectiveness of the derivatives
that are used in hedging transactions. If it is determined that a derivative is
not (or has ceased to be) effective as a hedge, the Company would discontinue
hedge accounting prospectively. Ineffective portions of changes in the fair
value of cash flow hedges are recognized in earnings.

COMPREHENSIVE EARNINGS

Foreign currency translation adjustments, unrealized gains and losses on
derivative instruments and minimum pension liability adjustments are included in
other comprehensive earnings, net of tax.

STOCK-BASED COMPENSATION

In accordance with Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation," the Company accounts for stock-based
compensation using the intrinsic value method as prescribed under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
related Interpretations and provides the disclosure-only provisions of SFAS No.
123. In December 2002, the Financial Accounting Standards Board issued SFAS No.
148, "Accounting for Stock-Based Compensation - Transition and Disclosure,"
which amends SFAS No. 123, providing alternative methods of accounting and
requiring more prominent and frequent disclosures of the effects of stock-based
compensation under the fair value-based method.

If the Company had determined compensation expense for its stock-based
compensation plans based on the fair value at the grant dates consistent with
the method of SFAS No. 123 and SFAS No. 148, the Company's pro forma net
earnings and basic and diluted earnings per share (EPS) would have been as
follows. (See Note M.)

<TABLE>
<CAPTION>
                                           2003         2002         2001
                                        ----------   ----------   ----------
<S>                                     <C>          <C>          <C>
Net earnings, as reported.............  $   54,552   $   46,601   $   41,893
Less total stock-based compensation
   expense under the fair value-based
   method, net of tax.................      (2,307)      (1,487)      (1,133)
                                        ----------   ----------   ----------
Pro forma net earnings................  $   52,245   $   45,114   $   40,760
                                        ==========   ==========   ==========
Basic EPS, as reported................  $     2.17   $     1.88   $     1.71
Pro forma basic EPS...................  $     2.08   $     1.82   $     1.66

Diluted EPS, as reported..............  $     2.15   $     1.85   $     1.68
Pro forma diluted EPS.................  $     2.06   $     1.79   $     1.64
</TABLE>

PLANT ASSETS

Depreciation is determined primarily by the straight-line method for financial
statement purposes and by the accelerated method for tax purposes. The provision
for depreciation is based on the estimated useful lives of the assets (15 to 40
years for buildings and improvements and 3 to 15 years for machinery and
equipment). It is the policy of the Company to capitalize renewals and
betterments and to charge to expense the cost of current maintenance and
repairs. When property or equipment is retired or otherwise disposed of, the net
book value of the asset is removed from the Company's books and the resulting
gain or loss is reflected in earnings.

GOODWILL AND OTHER INTANGIBLE ASSETS

The Company recognizes the excess of the cost of an acquired entity over the net
amount assigned to assets acquired and liabilities assumed as goodwill. Goodwill
is tested for impairment on an annual basis and between annual tests in certain
circumstances. Impairment losses would be recognized whenever the implied fair
value of goodwill is less than its carrying value. Prior to December 1, 2001,
goodwill was amortized over a forty-year period using the straight-line method.
Beginning December 1, 2001, goodwill is no longer amortized in accordance with
SFAS No. 142, "Goodwill and Other Intangible Assets."

16 CLARCOR

<PAGE>

                                                   [A WORLD OF OPPORTUNITY LOGO]

The Company recognizes an acquired intangible apart from goodwill whenever the
asset arises from contractual or other legal rights, or whenever it is capable
of being separated or divided from the acquired entity and sold, transferred,
licensed, rented, or exchanged, either individually or in combination with a
related contract, asset or liability. An intangible other than goodwill is
amortized over its estimated useful life unless that life is determined to be
indefinite. The Company's trade names and trademarks have indefinite useful
lives and are subject to impairment testing under SFAS No. 142. Prior to
December 1, 2001, the trademarks were amortized over a forty-year life. All
other acquired intangible assets, including patents (average fourteen year life)
and other identifiable intangible assets with lives ranging from one to thirty
years, are being amortized using the straight-line method over the estimated
periods to be benefited. The Company reviews the lives of its definite-lived
intangibles annually and if necessary, impairment losses would be recognized if
the carrying amount of an intangible subject to amortization is not recoverable
from expected future cash flows and its carrying amount exceeds its fair value.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company determines any impairment losses based on underlying cash flows
related to specific groups of acquired long-lived assets, including associated
identifiable intangibles and goodwill, when events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.

INCOME TAXES

The Company provides for income taxes and recognizes deferred tax liabilities
and assets for the expected future tax consequences of temporary differences
between the financial statement carrying amounts and the tax basis of assets and
liabilities.

REVENUE RECOGNITION

Revenue is recognized when product ownership and risk of loss has transferred to
the customer or performance of services is complete and the Company has no
remaining obligations regarding the transaction. Estimated discounts and rebates
are recorded as a reduction of sales in the same period revenue is recognized.
Shipping and handling costs are recorded as revenue when billed to customers.

PRODUCT WARRANTIES

The Company provides for estimated warranty costs when the related products are
recorded as sales or for specific items at the time their existence is known and
the amounts are reasonably determinable.

RESEARCH AND DEVELOPMENT

The Company charges research and development costs relating to the development
of new products or the improvement or redesign of its existing products to
expense when incurred. These costs totaled approximately $7,403 in 2003, $6,482
in 2002 and $5,365 in 2001.

NEW PRONOUNCEMENT

In November 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45 (FIN 45), "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others." FIN 45 requires that certain guarantees be recognized as liabilities at
fair value at their inception date and requires certain disclosures by the
guarantor in its financial statements about its obligations. The provisions of
FIN 45, which were effective for qualifying guarantees entered into or modified
after December 31, 2002, did not have a material impact on the Company's
financial statements. The disclosure requirements were effective for the quarter
ended March 1, 2003.

The Company has provided letters of credit totaling approximately $23,219 to
various government agencies, primarily related to industrial revenue bonds and
to insurance companies and other entities in support of its obligations. The
Company believes that no payments will be required resulting from these
accommodation obligations.

In the ordinary course of business, the Company also provides routine
indemnifications and other guarantees whose terms range in duration and often
are not explicitly defined. The Company does not believe these will have a
material impact on the results of operations or financial condition of the
Company.

The Company has a majority ownership interest in a consolidated affiliate in
which the Company has agreed, under certain conditions, to buy out the minority
owners' interest for an amount estimated not to exceed $850.

B. ACQUISITIONS

On June 5, 2002, the Company acquired CLARCOR UK (formerly Locker Filtration
Limited), a Warrington, England manufacturer of heavy-duty air filters, diesel
and gas turbine air intake system filters and specialty filters. The Company
acquired Total Filter Technology (TFT), a process liquid filtration manufacturer
based in North Chelmsford, Massachusetts during third quarter 2002 and
FilterSource, an air filtration distributor based in California during fourth
quarter 2002. The three acquisitions were purchased for approximately $10,371 in
cash and their results were included in the Company's consolidated results of
operations from the dates of acquisition. The combined sales for CLARCOR UK, TFT
and FilterSource in the most recent twelve-month period prior to acquisition
were approximately $16,500. CLARCOR UK is included in the Engine/Mobile
Filtration segment. TFT and FilterSource are included in the
Industrial/Environmental Filtration segment. An allocation of the purchase price
has been made to major categories of assets and liabilities for each
acquisition. The acquisitions are not material to the results of the Company.
The preliminary allocation of the purchase price over the preliminary estimated
fair value of the tangible and identifiable intangible assets acquired for
CLARCOR UK, TFT and FilterSource resulted in $2,713, $2,086 and $439 recorded as
goodwill for each acquisition, respectively. The Company recognized $943 for a
CLARCOR UK customer relationship that will be amortized over ten years. In
connection with the TFT and FilterSource acquisitions, the Company recorded $228
as indefinite-lived trademarks and $1,375 as other acquired intangibles which
will be amortized over a weighted average life of eight years. During fiscal
2003, the appraisal and other purchase accounting adjustments for TFT and
FilterSource were finalized resulting in an increase to goodwill of $413, a
decrease to trademarks of $7, and a decrease to other identifiable
definite-lived intangibles of $326. No additional purchase accounting entries
associated with the 2002 acquisitions are expected.

On June 4, 2001, the Company acquired the stock of several filtration management
companies for approximately $29,258, net of cash received, including acquisition
expenses. As a result of the acquisition, the companies were combined into one
company, Total Filtration Services, Inc. (TFS), and included in the
Industrial/Environmental Filtration segment from the date of acquisition. The
initial purchase price was based on the net assets of the businesses acquired as
shown on a June 4, 2001 balance sheet subject to a final adjustment. During
first quarter 2002, the purchase price was finalized resulting in a $3,694
payment

                                                                      CLARCOR 17

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

by the seller to the Company. A decrease to goodwill of $3,954 was recorded
primarily as a result of the net settlement payment and entries associated with
deferred income taxes, the valuation of inventory acquired, and preacquisition
contingencies related to contract matters. No additional purchase accounting
entries associated with the TFS acquisition are expected. Unaudited pro forma
net sales for the Company including TFS would have been approximately $695,700
for the year ended November 30, 2001. Net earnings and earnings per share for
fiscal year 2001 would not have been significantly affected.

C. INVENTORIES

Inventories are stated at the lower of cost or market. During the fourth quarter
of 2003, the Company changed its method of inventory costing on certain
inventory from last-in, first-out (LIFO) to first-in, first-out (FIFO).
Approximately 43% of the Company's November 30, 2002 inventories were on LIFO;
however, only 7% of that inventory created a LIFO reserve which was $456 at the
end of fiscal 2002. Increased productivity gains and a continued decline in
factor input prices render the LIFO method outmoded for the Company and not
reflective of current or expected manufacturing costs. For more than five years,
the Company has seen declining costs for its primary inputs, including labor,
filter media and paper. The Company expects this trend to continue in the future
and believes this disparity will grow with future cost reduction initiatives. In
addition, FIFO appears to be more commonly used in similar industries. The
change increased net income in 2003 by $289 or $.01 per diluted share. Prior
years were not restated as the impact of the change was immaterial to each year.
The FIFO method approximates current cost. Inventories are summarized as
follows:

<TABLE>
<CAPTION>
                                  2003       2002
                                --------   --------
<S>                             <C>        <C>
Raw materials                   $ 34,174   $ 34,496
Work in process                   11,866     11,022
Finished products                 53,633     56,784
                                -------------------
Total at FIFO                     99,673    102,302
Less excess of FIFO over LIFO         --        456
                                -------------------
                                $ 99,673   $101,846
                                ===================
</TABLE>

D. PLANT ASSETS AND IMPAIRMENT LOSS

Plant assets at November 30, 2003 and 2002 were as follows:

<TABLE>
<CAPTION>
                                    2003       2002
                                  --------   --------
<S>                               <C>        <C>
Land                              $  6,656   $  5,410
Buildings and building fixtures     76,517     75,520
Machinery and equipment            215,398    202,697
Construction in process              6,321      6,675
                                  -------------------
                                   304,892    290,302
Less accumulated depreciation      175,320    157,410
                                  -------------------
                                  $129,572   $132,892
                                  ===================
</TABLE>

During the first quarter of 2001, the Company recognized an impairment loss in
its Packaging segment of $2,422 related to certain plant assets used exclusively
in the manufacture of plastic closures for a customer which terminated a
manufacturing contract. The loss is included in the cost of sales and was
calculated under the guidelines of SFAS No. 121.

E. ACQUIRED INTANGIBLES

The following table summarizes the activity for acquired intangibles by
reporting unit for fiscal year 2003:

<TABLE>
<CAPTION>
                                                                     Currency
                                       Beginning                   Translation                      End of
                                        of Year     Acquisitions   Adjustments    Amortization       Year
-------------------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>            <C>            <C>            <C>
Goodwill:
    Engine/Mobile
      Filtration..................   $     11,528   $          -   $        642   $          -   $     12,170
    Industrial/Environmental......
      Filtration..................         70,130            413              7              -         70,550
    Packaging.....................              -              -              -              -              -
                                     ------------------------------------------------------------------------
                                     $     81,658   $        413   $        649   $          -   $     82,720
                                     ========================================================================
Trademarks and trade names:
    Engine/Mobile.................
      Filtration..................   $        603   $          -   $          -   $         -    $        603
    Industrial/Environmental
      Filtration..................         28,880             (7)             -             -          28,873
    Packaging.....................              -              -              -             -               -
                                     ------------------------------------------------------------------------
                                     $     29,483   $         (7)  $          -   $         -    $     29,476
                                     ========================================================================
Other acquired intangibles, gross:
    Engine/Mobile
      Filtration..................   $      1,040   $          -   $          -           $  -   $      1,040
    Industrial/Environmental
      Filtration..................         13,430           (326)             -              -         13,104
    Packaging.....................              -              -              -              -              -
                                     ------------------------------------------------------------------------
                                           14,470           (326)             -              -         14,144
Less accumulated
      amortization................          3,082              -              -            907          3,989
                                     ------------------------------------------------------------------------
Other acquired
    intangibles, net..............   $     11,388   $       (326)  $          -   $        907   $     10,155
                                     ========================================================================
</TABLE>

As a result of adopting SFAS No. 142, the Company completed the transitional
goodwill impairment reviews required by the new standard during the first
quarter of 2002 and subsequently completed the annual impairment reviews at each
year end, with no indications of impairment of goodwill. In performing the
impairment reviews, the Company estimated the fair values of the reporting units
using a present value method that discounted future cash flows. Such valuations
are sensitive to assumptions associated with cash flow growth, discount rates,
terminal value and the aggregation of reporting unit components. The Company
further assessed the reasonableness of these estimates by using valuation
methods based on market multiples and recent capital market transactions.

The Company performed the annual impairment tests on its indefinite-lived
intangibles as of December 1, 2001 and November 30, 2003 and 2002 using the
relief-from-royalty method to determine the fair value of its trademarks and
trade names. There was no impairment as the fair value was greater than the
carrying value for these indefinite-lived intangibles as of these dates.

In connection with adopting SFAS No. 142, the Company also reassessed the useful
lives and classification of identifiable finite-lived intangible assets and
determined that they continue to be appropriate. Amortization expense during the
fiscal years ended November 30, 2002 and 2001 for amortized intangibles was $761
and $756, respectively. The estimated amounts of amortization expense for the
next five years are: $759 in 2004, $755 in 2005, $721 in 2006, $708 in 2007 and
$653 in 2008.

The following table presents net earnings and earnings per share assuming the
non-amortization provisions of SFAS No. 142 were applied in each fiscal year:

18 CLARCOR

<PAGE>

                                                   [A WORLD OF OPPORTUNITY LOGO]

<TABLE>
<CAPTION>
                                                        2003         2002         2001
                                                     ------------------------------------
<S>                                                  <C>          <C>          <C>
Reported net earnings ............................   $   54,552   $   46,601   $   41,893
 Goodwill amortization, net of income taxes ......            -            -        1,375
 Other amortization, net of income taxes .........            -            -          475
                                                     ------------------------------------
Adjusted net earnings ............................   $   54,552   $   46,601   $   43,743
                                                     ====================================
Basic EPS:

 Basic as reported ...............................   $     2.17   $     1.88   $     1.71
 Goodwill amortization, net of income taxes ......            -            -         0.06
 Other amortization, net of income taxes .........            -            -         0.02
                                                     ------------------------------------
Adjusted basic earnings per share ................   $     2.17   $     1.88   $     1.79
                                                     ====================================
Diluted EPS:

 Diluted as reported .............................   $     2.15   $     1.85   $     1.68
 Goodwill amortization, net of income taxes ......            -            -         0.05
 Other amortization, net of income taxes .........            -            -         0.02
                                                     ------------------------------------
Adjusted diluted earnings per share ..............   $     2.15   $     1.85   $     1.75
                                                     ====================================
</TABLE>

F. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at November 30, 2003 and 2002 were as
follows:

<TABLE>
<CAPTION>
                                                    2003       2002
                                                  ------------------
<S>                                               <C>       <C>
Accounts payable ..............................   $ 49,256  $ 50,350
Accrued salaries, wages and commissions .......     16,068    15,283
Compensated absences ..........................      7,332     6,874
Accrued insurance liabilities .................      9,431     6,892
Accrued pension liabilities ...................        518       269
Warranties ....................................      1,789     1,873
Other accrued liabilities .....................     17,928    16,197
                                                  ------------------
                                                  $102,322  $ 97,738
                                                  ==================
</TABLE>

Warranties are recorded as a liability on the balance sheet and as charges to
current expense for estimated normal warranty costs and, if applicable, for
specific performance issues known to exist on products already sold. The
expenses estimated to be incurred are provided at the time of sale and adjusted
as needed, based primarily upon experience.

Changes in the Company's warranty accrual during the year ended November 30,
2003 are as follows:

<TABLE>
<S>                                                         <C>
Balance at November 30, 2002 .............................  $ 1,873
 Accruals for warranties issued during the period ........      641
 Accruals related to pre-existing warranties .............     (532)
 Settlements made during the period ......................     (355)
 Other adjustments, primarily currency translation .......      162
                                                            -------
Balance at November 30, 2003 .............................  $ 1,789
                                                            =======
</TABLE>

G. LONG-TERM DEBT

Long-term debt at November 30, 2003 and 2002 consisted of the following:

<TABLE>
<CAPTION>
                                                      2003     2002
                                                    -----------------
<S>                                                 <C>       <C>
Multicurrency revolving credit agreements,
 interest payable at the end of each
 funding period at an adjusted LIBOR .............  $     -   $62,833
Promissory note, interest payable
 semi-annually at 6.69% ..........................        -    10,000
Industrial Revenue Bonds,
 at .85% to 1.75% interest rates .................   16,968    17,460
Other ...........................................       619       811
                                                    -----------------
                                                     17,587    91,104
Less current portion ............................       674    68,456
                                                    -----------------
                                                    $16,913   $22,648
                                                    =================
</TABLE>

A fair value estimate of $17,359 and $90,406 for long-term debt in 2003 and
2002, respectively, is based on the current interest rates available to the
Company for debt with similar remaining maturities.

In April 2003, the Company entered into a five-year multicurrency revolving
credit agreement with a group of participating financial institutions under
which it may borrow up to $165,000. This credit facility replaced a $185,000
agreement that was to expire in September 2003. The replacement agreement
provides that loans may be made under a selection of currencies and rate
formulas. The interest rate is based upon either a defined Base Rate or the
London Interbank Offered Rate (LIBOR) plus or minus applicable margins. Facility
fees and other fees on the entire loan commitment are payable for the duration
of this facility. At November 30, 2003, there were no outstanding amounts under
this agreement.

Borrowings under the credit facility are unsecured but are guaranteed by
subsidiaries of the Company. The agreement related to this borrowing includes
certain restrictive covenants that include maintaining minimum consolidated net
worth, limiting new borrowings, maintaining a minimum interest coverage and
restricting certain changes in ownership. The Company was in compliance with
these covenants throughout fiscal year 2003. This agreement also includes a
$40,000 letter of credit line sub-line, against which $14,095 in letters of
credit had been issued at November 30, 2003.

At November 30, 2002, $62,833 was outstanding under the $185,000 revolving
credit agreement and the related LIBOR, including the spread, was 1.97%. The
amount outstanding at November 30, 2002 was classified as current debt as the
credit agreement was to expire in 2003. This agreement also included a letter of
credit facility, against which $12,743 in letters of credit had been issued as
of November 30, 2002. Borrowings under the credit facility in place at November
30, 2002 were unsecured but were guaranteed by certain of the Company's
subsidiaries. The Company was in compliance with restrictive covenants related
to the borrowings under the credit facility throughout fiscal years 2003 and
2002.

On May 1, 2001, the Company, in cooperation with the Campbellsville-Taylor
County Industrial Development Authority (Kentucky), issued $8,000 of Industrial
Revenue Bonds, that are due May 1, 2031, with a variable rate of interest that
is reset weekly. In connection with the issuance of these bonds, the Company
holds in trust certain restricted investments committed for the acquisition of
plant equipment. At November 30, 2003, the restricted asset balance was $1,268
and is included in other noncurrent assets. The Company has other industrial
revenue bonds, including $8,410 issued in cooperation with the South Dakota
Economic Development Finance Authority due February 1, 2016 with a variable rate
of interest that is reset weekly and additional bonds of $558 and $1,050
outstanding as of November 30, 2003 and 2002, respectively, which mature in
2005.

During 2003, the Company prepaid $5,000 that would have been due July 2004 on
the 6.69% promissory note, including $183 of interest paid as a prepayment
penalty.

Principal maturities of long-term debt for the next five fiscal years ending
November 30 approximates: $674 in 2004, $306 in 2005, $197 in 2006, $0 in 2007,
$0 in 2008 and $16,410 thereafter.

During 2000, the Company entered into interest rate agreements to manage its
interest exposure related to the multicurrency credit revolver. The agreement
in place at November 30, 2001 provided for the Company to pay a 7.34% fixed
interest

                                                                      CLARCOR 19

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

rate on a notional amount of $60,000. The agreement expired September 11, 2002.
Under the agreement the Company received interest at floating rates based on
LIBOR. This derivative instrument was designated as a cash flow hedge and
determined to be effective. Therefore, there was no adjustment to net earnings
during 2002 or 2001. During fiscal year 2001, the net loss included in other
comprehensive earnings was $1,137 (or $1,750 pretax). The net gain included in
other comprehensive earnings for the twelve months ended November 30, 2002 was
$1,906 (or $2,932 pretax). Such derivative gains and losses were reclassified
into earnings as payments were made on its variable rate interest debt.
Approximately $1,983 and $711 was reclassified into earnings during the fiscal
years ended November 30, 2002 and 2001, respectively.

Interest paid totaled $1,868, $7,482 and $10,666 during 2003, 2002 and 2001,
respectively.

H. LEASES

The Company has various lease agreements for offices, warehouses, manufacturing
plants, and equipment that expire on various dates through December 2015 and
contain renewal options. Some of these leases provide for payment of property
taxes, utilities and certain other expenses. Commitments for minimum rentals
under noncancelable leases at November 30, 2003 for the next five years are:
$8,229 in 2004, $5,636 in 2005, $4,301 in 2006, $3,228 in 2007, and $2,704 in
2008. Rent expense totaled $9,999, $9,879 and $9,670 for the years ended
November 30, 2003, 2002 and 2001, respectively.

I. PENSION AND OTHER POSTRETIREMENT PLANS

The Company has defined benefit pension plans and postretirement health care
plans covering certain employees and retired employees. In addition to the plan
assets related to qualified plans, the Company has funded approximately $1,682
and $1,796 at November 30, 2003 and 2002, respectively, in restricted trusts for
its nonqualified plans. These trusts are included in other noncurrent assets in
the Company's Consolidated Balance Sheets.

Effective January 1, 2004, the Company froze participation in one of its defined
benefit plans. Certain current plan participants will continue to participate in
the plan while others will not accrue future benefits under the plan but will
participate in an enhanced defined contribution plan which offers an increased
company match.

The following table shows reconciliations of the pension plans and other
postretirement plan benefits as of November 30, 2003 and 2002. The accrued
pension benefit liability includes an unfunded benefit obligation of $9,189 and
$6,128 as of November 30, 2003 and 2002, respectively, related to non-qualified
plans. The Company contributed $3,000 and $5,000 to the qualified U.S. pension
plan in fiscal years 2003 and 2002, respectively. The obligations for the U.S.
pension plans have been determined with a weighted average discount rate of 6.0%
and 6.75%, a rate of increase in future compensation of primarily 4.0% and 5.0%
and an expected weighted average long-term rate of return on plan assets of 8.5%
and 9.0% in 2003 and 2002, respectively. The Company expects to lower the
long-term rate of return assumption to 8.25% in fiscal year 2004. The non-U.S.
pension plan obligation was determined with a weighted average discount rate of
5.75% and an expected weighted average long-term rate of return assumption of
7.5% for both years and a rate of increase in future compensation of 3.3% and
3.75% for 2003 and 2002, respectively.

<TABLE>
<CAPTION>
                                                   Pension                    Postretirement
                                                   Benefits                      Benefits
                                         ---------------------------------------------------------
                                             2003           2002           2003           2002
                                         ---------------------------------------------------------
<S>                                      <C>            <C>            <C>            <C>
Change in benefit obligation:
Benefit obligation
  at beginning of year ...............   $     89,116   $     76,423   $      3,661   $      3,535
Addition of non-U.S. plan ............              -          6,323              -              -
Service cost .........................          4,332          3,884            114            112
Interest cost ........................          5,828          5,755            237            247
Plan participants' contributions .....             62             57              -              -
Amendments ...........................         (4,014)           225              -              -
Actuarial losses / (gains) ...........         11,025          1,240           (180)          (105)
Benefits paid ........................         (6,557)        (4,791)           (82)          (128)
Foreign currency exchange rate
  changes ............................            717              -              -              -
                                         ---------------------------------------------------------
Benefit obligation at end of year ....        100,509         89,116          3,750          3,661
                                         ---------------------------------------------------------
Change in plan assets:
Fair value of plan assets
  at beginning of year ...............         72,969         70,505              -              -
Addition of non-U.S. plan ............              -          5,405              -              -
Actual return on plan assets .........         14,815         (3,566)             -              -
Employer contributions ...............          3,103          5,092              -              -
Plan participants' contributions .....             62             57              -              -
Benefits paid ........................         (4,833)        (4,524)             -              -
Foreign currency exchange rate
  changes ............................            466              -              -              -
                                         ---------------------------------------------------------
Fair value of plan assets
  at end of year .....................         86,582         72,969              -              -
                                         ---------------------------------------------------------

Funded status ........................        (13,927)       (16,147)        (3,750)        (3,661)
Unrecognized prior service cost ......          1,362          1,411              -              -
Unrecognized net
  actuarial loss / (gain) ............         26,359         30,203           (819)          (659)
                                         ---------------------------------------------------------
Net amount recognized ................   $     13,794   $     15,467   $     (4,569)  $     (4,320)
                                         =========================================================

Amounts recognized in the
  Consolidated Balance Sheets include:
  Prepaid benefit cost ...............   $     20,153   $     21,771   $          -   $          -
  Accrued benefit liability ..........         (8,331)        (8,092)        (4,569)        (4,320)
  Other noncurrent assets ............          1,008              -              -              -
  Accumulated other
    comprehensive income, pretax .....            964          1,788              -              -
                                         ---------------------------------------------------------
Net amount recognized ................   $     13,794   $     15,467   $     (4,569)  $     (4,320)
                                         =========================================================
</TABLE>

The components of net periodic benefit cost for pensions are shown below.

<TABLE>
<CAPTION>

                                                      Pension Benefits
                                                ---------------------------
                                                  2003      2002     2001
                                                ---------------------------
<S>                                             <C>       <C>       <C>
Components of net periodic benefit cost:
  Service cost ..............................   $ 4,327   $ 3,887   $ 3,142
  Interest cost .............................     5,820     5,759     5,114
  Expected return on plan assets ............    (6,001)   (6,793)   (7,527)
  Amortization of unrecognized:
   Prior service cost .......................       140       134        22
   Net actuarial loss .......................     1,689       628         5
Settlement cost for a terminated plan .......        69         -       669
                                                ---------------------------
Net periodic benefit cost ...................   $ 6,044   $ 3,615   $ 1,425
                                                ===========================
</TABLE>

The postretirement obligations represent a fixed dollar amount per retiree. The
Company has the right to modify or terminate these benefits. The participants
will assume substantially all future health care benefit cost increases, and
future increases in health care costs will not increase the postretirement
benefit obligation or cost to the Company. Therefore, the Company has not
assumed any annual rate of increase in the per capita cost

20 CLARCOR

<PAGE>

                                                   [A WORLD OF OPPORTUNITY LOGO]

of covered health care benefits for future years. The components of net periodic
benefit cost for postretirement health care benefits are shown below.

<TABLE>
<CAPTION>
                                              Postretirement Benefits
                                              -----------------------
                                              2003    2002      2001
                                              -----------------------
<S>                                           <C>     <C>      <C>
Components of net periodic benefit cost:
 Service cost .............................   $ 114   $ 112    $ 107
 Interest cost ............................     237     247      305
 Net actuarial gain .......................     (20)    (16)       -
                                              ----------------------
Net periodic benefit cost .................   $ 331   $ 343    $ 412
                                              ======================
</TABLE>

The Company also sponsors various defined contribution plans that provide
employees with an opportunity to accumulate funds for their retirement. The
Company matches the contributions of participating employees based on the
percentages specified in the respective plans. The Company recognized expense
related to these plans of $1,471, $1,460 and $1,395 in 2003, 2002 and 2001,
respectively.

J. INCOME TAXES

The provision for income taxes consisted of:

<TABLE>
<CAPTION>
                   2003           2002         2001
               ----------------------------------------
<S>            <C>           <C>           <C>
Current:
 Federal ...   $     24,433  $     21,134  $     22,142
 State .....          2,066         1,699         2,253
 Foreign ...          2,938         1,380         1,460
Deferred ...          1,934           560        (2,051)
               ----------------------------------------
               $     31,371  $     24,773  $     23,804
               ========================================
</TABLE>


Income taxes paid, net of refunds, totaled $22,607, $17,678 and $26,858 during
2003, 2002 and 2001, respectively.

Earnings before income taxes and minority interests included the following
components:

<TABLE>
<CAPTION>
                              2003         2002       2001
                           ----------------------------------
<S>                        <C>         <C>         <C>
Domestic income........    $  77,779   $  69,748   $   61,381
Foreign income.........        8,280       1,702        4,353
                           ----------------------------------
                           $  86,059   $  71,450   $   65,734
                           ==================================
</TABLE>

The provision for income taxes resulted in effective tax rates that differ from
the statutory federal income tax rates. The reasons for these differences are as
follows:

<TABLE>
<CAPTION>
                                                             Percent of Pretax Earnings
                                                   --------------------------------------------
                                                       2003            2002            2001
                                                   --------------------------------------------
<S>                                                <C>                 <C>             <C>
Statutory U.S. tax rates .......................           35.0%           35.0%           35.0%
State income taxes, net of federal benefit .....            1.7             1.6             2.1
Foreign sales ..................................           (0.8)           (1.0)           (1.1)
Tax credits ....................................           (1.1)           (2.8)           (0.6)
Other, net .....................................            1.7             1.9             0.8
                                                   --------------------------------------------
Consolidated effective income tax rate .........           36.5%           34.7%           36.2%
                                                   ============================================
</TABLE>

The components of the net deferred tax liability as of November 30, 2003 and
2002 were as follows:

<TABLE>
<CAPTION>
                                                 2003        2002
                                               -------------------
<S>                                            <C>        <C>
Deferred tax assets:
 Deferred compensation .....................   $  4,333   $  5,654
 Other postretirement benefits .............      1,115      1,025
 Foreign net operating loss carryforwards ..      2,039        839
 Accounts receivable .......................      4,193      3,501
 Inventories ...............................      3,594      3,522
 Accrued liabilities and other .............      5,020      5,815
 Valuation allowance .......................     (2,039)      (585)
                                               -------------------
Total deferred tax assets, net .............     18,255     19,771
                                               -------------------
Deferred tax liabilities:
 Pensions ..................................     (4,384)    (4,977)
 Plant assets ..............................    (15,115)   (14,023)
 Intangibles ...............................     (4,530)    (2,721)
                                               -------------------
Total deferred tax liabilities .............    (24,029)   (21,721)
                                               -------------------
Net deferred tax liability .................   $ (5,774)  $ (1,950)
                                               ===================
</TABLE>

The valuation allowance was recorded to reflect the estimated amount of deferred
tax assets that may not be realized due to carryforward limitations on foreign
tax credits and foreign net operating losses. Approximately $1,225 of foreign
tax credit carryforwards will expire in 2007 and 2008. Approximately $814 of
foreign net operating loss carryforwards will expire between 2008 and 2013.
Recognition of such items will be achieved either when the benefits are realized
or when it is determined that it is more likely than not that such benefits will
be realized. The Company expects to realize the remaining deferred tax assets
through the reversal of taxable temporary differences and future earnings.

As of November 30, 2003, the Company has not provided taxes on unremitted
foreign earnings of approximately $9,760 that are intended to be indefinitely
reinvested to finance operations and expansion outside the United States. If
such earnings were distributed beyond the amount for which taxes have been
provided, foreign tax credits would substantially offset any incremental U.S.
tax liability.

K. CONTINGENCIES

The Company is involved in legal actions arising in the normal course of
business. Additionally, the Company is party to various proceedings relating to
environmental issues. The U.S. Environmental Protection Agency (EPA) and/or
other responsible state agencies have designated the Company as a potentially
responsible party (PRP), along with other companies, in remedial activities for
the cleanup of waste sites under the federal Superfund statute.

Although it is not certain what future environmental claims, if any, may be
asserted, the Company currently believes that its potential liability for known
environmental matters does not exceed its present accrual of $50. However,
environmental and related remediation costs are difficult to quantify for a
number of reasons, including the number of parties involved, the difficulty in
determining the extent of the contamination, the length of time remediation may
require, the complexity of the environmental regulation and the continuing
advancement of remediation technology. Applicable federal law may impose joint
and several liability on each PRP for the cleanup.

It is the opinion of management, after consultation with legal counsel that
additional liabilities, if any, resulting from these legal or environmental
issues, are not expected to have a material adverse effect on the Company's
financial condition or consolidated results of operations.

                                                                   CLARCOR 21

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

In the event of a change in control of the Company, termination benefits may be
required for certain executive officers and other key employees.

L. PREFERRED STOCK PURCHASE RIGHTS

In March 1996, the Board of Directors of CLARCOR adopted a Shareholder Rights
Plan to replace an existing plan that expired on April 25, 1996. Under the terms
of the Plan, each shareholder received rights to purchase shares of CLARCOR
Series B Junior Participating Preferred Stock. The rights become exercisable
only after the earlier to occur of (i) 10 business days after the first public
announcement that a person or group (other than a CLARCOR-related entity) has
become the beneficial owner of 15% or more of the outstanding shares of CLARCOR
Common Stock; or (ii) 10 business days (unless extended by the CLARCOR Board in
accordance with the Rights Agreement) after the commencement of, or the
intention to make, a tender or exchange offer, the consummation of which would
result in any person or group (other than a CLARCOR-related entity) becoming
such a 15% beneficial owner. Each right entitles the holder to buy one-hundredth
of a share of such preferred stock at an exercise price of $80 subject to
certain adjustments.

Once the rights become exercisable, each right will entitle the holder, other
than the acquiring person or group, to purchase a number of CLARCOR common
shares at a 50% discount to the then-market price of CLARCOR Common Stock. In
addition, under certain circumstances, if the rights become exercisable, the
holder will be entitled to purchase the stock of the acquiring individual or
group at a 50% discount. The Board may also elect to redeem the rights at $.01
per right. The rights expire on April 25, 2006.

The authorized preferred stock includes 300,000 shares designated as Series B
Junior Participating Preferred Stock.

M. INCENTIVE PLAN

In 1994, the shareholders of CLARCOR adopted the 1994 Incentive Plan, which
allows the Company to grant stock options, restricted stock and performance
awards to officers, directors and key employees. The 1994 Incentive Plan
incorporates the various incentive plans in existence prior to March 1994.

The 1994 Incentive Plan, as amended on March 25, 2000, allows grants and awards
of up to 1.5% of the outstanding common stock as of January 1 of each calendar
year. In addition, the Compensation Committee of the Company's Board of
Directors may approve an additional 1% of outstanding common stock to be awarded
during any calendar year. Any portion that is not granted in a given year is
available for future grants. After the close of fiscal year 2003, 312,316 shares
were granted, including the restricted stock units discussed hereafter.

On March 24, 2003, the shareholders of CLARCOR approved the 2004 Incentive Plan,
which replaces the 1994 Incentive Plan on its termination date of December 14,
2003. The 2004 Incentive Plan provides for similar types of awards and grants as
were permitted by the 1994 Incentive Plan for up to 1,500,000 shares.

The following is a description and a summary of key provisions related to
outstanding grants under the 1994 Incentive Plan.

STOCK OPTIONS

Nonqualified stock options may, at the discretion of the Board of Directors, be
granted at the fair market value at the date of grant or at an exercise price
less than the fair market value at the date of grant. Options granted to key
employees vest primarily 25% per year beginning at the end of the first year;
therefore, they become fully exercisable at the end of four years. Options
granted to non-employee directors vest immediately. All options expire ten years
from the date of grant unless otherwise terminated.

The following table summarizes the activity under the nonqualified stock option
plans.

<TABLE>
<CAPTION>
                                           2003                          2002                          2001
                               ---------------------------------------------------------------------------------------
                                                WEIGHTED                      Weighted                      Weighted
                                                AVERAGE                       Average                        Average
                                                EXERCISE                      Exercise                      Exercise
                                  SHARES         PRICE          Shares         Price          Shares         Price
                               ---------------------------------------------------------------------------------------
<S>                               <C>         <C>               <C>         <C>               <C>         <C>
Outstanding
  at beginning of year .....      2,046,268   $      19.38      2,324,130   $      16.83      2,286,026   $      14.53
Granted at fair market value
  on dates of grants .......        509,721          33.66        356,925          28.19        449,366          19.93
Exercised/surrendered ......       (640,055)         17.90       (634,787)         15.00       (411,262)         14.15
                               ---------------------------------------------------------------------------------------
Outstanding
  at end of year ...........      1,915,934   $      23.67      2,046,268   $      19.38      2,324,130   $      16.83
                               =======================================================================================
Options exercisable
  at end of year ...........      1,349,040   $      22.80      1,381,858   $      18.52      1,531,152   $      16.06
                               =======================================================================================
</TABLE>

The following table summarizes information about the options at November 30,
2003.

<TABLE>
<CAPTION>
                               Options Outstanding                Options Exercisable
                       -----------------------------------------------------------------
                                    Weighted     Weighted                       Weighted
   Range of                          Average     Average                        Average
   Exercise                         Exercise    Remaining                       Exercise
    Prices               Number      Price    Life in Years       Number         Price
----------------------------------------------------------------------------------------
<S>                    <C>          <C>       <C>                 <C>           <C>
$12.58 - $17.94        439,295       $ 16.18     4.32             322,706       $ 15.55
$18.38 - $25.55        669,955       $ 19.10     5.79             562,287       $ 19.16
$27.50 - $38.80        806,684       $ 31.55     7.28             464,047       $ 32.26
</TABLE>

The weighted average fair value per option at the date of grant for options
granted in 2003, 2002 and 2001 was $7.80, $7.87 and $5.12, respectively. The
fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions by grant year. Adjustments for forfeitures are made as they occur.

<TABLE>
<CAPTION>
                                             2003       2002     2001
                                            -------------------------
<S>                                         <C>        <C>      <C>
Risk-free interest rate ...............        3.87%    4.70%    5.53%
Expected dividend yield ...............        1.58%    1.91%    2.50%
Expected volatility factor ............       23.00%   25.50%   25.50%
Expected option term (in years) .......         7.0      7.0      7.0
</TABLE>

RESTRICTED STOCK AWARDS

During 2003, 2002 and 2001, respectively, the Company granted 22,645, 25,436 and
44,404 restricted units of Company common stock with a fair value of $32.30,
$27.50 and $18.50 per share, the respective market price of the stock at the
date granted. The restricted share units require no payment from the employee
and compensation cost is recorded based on the market price on the grant date
and is recorded equally over the vesting period of four years. During the
vesting period, officers and key employees receive compensation equal to
dividends declared on common shares. Upon vesting, the employee may elect to
defer receipt of their shares. Subsequent to the end of fiscal year 2003, the
Company granted 18,916 restricted stock units in December 2003 at the
then-market price of $45.59.

22 CLARCOR

<PAGE>

                                                   [A WORLD OF OPPORTUNITY LOGO]

Compensation expense related to restricted stock awards and long range
performance stock awards totaled $569, $426 and $618 in 2003, 2002 and 2001,
respectively. There have been no grants of long range shares or units since
December 1999 and no future awards of long range performance shares or units are
expected to be granted.

DIRECTORS' RESTRICTED STOCK COMPENSATION

The amended 1994 Incentive Plan provides for grants of shares of common stock to
all non-employee directors equal to a one-year annual retainer in lieu of cash.
The directors' rights to the shares vest immediately on the date of grant. In
2003, 2002 and 2001, respectively, 7,176, 8,120 and 10,618 shares of Company
common stock were issued under the amended plan. Compensation expense for the
plan totaled $260 for each year 2003, 2002 and 2001.

N. EARNINGS PER SHARE

The Company calculates and presents basic earnings per share by dividing net
earnings by the weighted average number of shares outstanding. Diluted earnings
per share reflects the impact of outstanding stock options if exercised during
the periods presented using the treasury stock method. The following table
provides a reconciliation of the denominators utilized in the calculation of
basic and diluted earnings per share:

<TABLE>
<CAPTION>
                                              2003         2002          2001
                                          ---------------------------------------
<S>                                       <C>           <C>           <C>
Net Earnings ..........................   $    54,552   $    46,601   $    41,893

Basic EPS:
  Weighted average number of common
  shares outstanding ..................    25,106,561    24,839,812    24,535,199
    Basic per share amount ............   $      2.17   $      1.88   $      1.71
                                          =======================================
Diluted EPS:
  Weighted average number of common
  shares outstanding ..................    25,106,561    24,839,812    24,535,199
  Dilutive effect of stock options.....       266,245       332,119       356,863
                                          ---------------------------------------
   Diluted weighted average number of
    common shares outstanding .........    25,372,806    25,171,931    24,892,062
   Diluted per share amount ...........   $      2.15   $      1.85   $      1.68
                                          =======================================
</TABLE>

For fiscal years ended November 30, 2003, 2002 and 2001, respectively, 7,773,
55,458 and 28,491 stock options with a weighted average exercise price of
$38.80, $31.66 and $25.97 were not included in the computation of diluted
earnings per share as the exercise prices of the options were greater than the
average market price of the common shares during the respective periods.

O. UNAUDITED QUARTERLY FINANCIAL DATA

The unaudited quarterly data for 2003 and 2002 were as follows:

<TABLE>
<CAPTION>
                      First     Second      Third     Fourth
                     Quarter   Quarter     Quarter   Quarter     Total
                    ----------------------------------------------------
<S>                 <C>        <C>        <C>        <C>        <C>
2003:
 NET SALES ......   $171,494   $185,775   $190,647   $193,442   $741,358
 GROSS PROFIT ...     48,349     56,599     56,154     60,589    221,691
 NET EARNINGS ...      9,596     13,047     14,304     17,605     54,552
 NET EARNINGS
  PER COMMON SHARE:
    BASIC .......   $   0.39   $   0.52   $   0.57   $   0.70   $   2.17
    DILUTED .....   $   0.38   $   0.51   $   0.56   $   0.68   $   2.15
</TABLE>

<TABLE>
<S>                 <C>        <C>        <C>        <C>        <C>
2002:
 Net sales ......   $158,262   $176,510   $189,368   $191,423   $715,563
 Gross profit ...     44,710     51,300     53,558     57,722    207,290
 Net earnings ...      7,998     10,607     12,185     15,811     46,601
 Net earnings
  per common share:
    Basic .......   $   0.32   $   0.43   $   0.49   $   0.63   $   1.88
    Diluted .....   $   0.32   $   0.42   $   0.48   $   0.62   $   1.85
</TABLE>

During the fourth quarter of 2003, the Company changed its method of accounting
for inventory as described in Note C which increased gross profit by $456, net
earnings by $289 and diluted EPS by $0.01. The Company recorded a research and
experiment tax credit during the fourth quarter of 2002 that decreased income
taxes $1,000 and increased diluted EPS by $0.04.

P. SEGMENT INFORMATION

Based on the economic characteristics of the Company's business activities, the
nature of products, customers and markets served, and the performance evaluation
by management and the Company's Board of Directors, the Company has identified
three reportable segments: Engine/Mobile Filtration, Industrial/Environmental
Filtration and Packaging.

The Engine/Mobile Filtration segment manufactures and markets a complete line of
filters used in the filtration of oils, air, fuel, coolant, hydraulic and
transmission fluids in both domestic and international markets. The
Engine/Mobile Filtration segment provides filters for certain types of
transportation equipment including automobiles, heavy-duty and light trucks,
buses and locomotives, marine and mining equipment, industrial equipment and
heavy-duty construction and agricultural equipment. The products are sold to
aftermarket distributors, original equipment manufacturers and dealer networks,
private label accounts and directly to truck service centers and large national
accounts.

The Industrial/Environmental Filtration segment manufactures and markets a
complete line of filters, cartridges, dust collectors and filtration systems
used in the filtration of air and industrial fluid processes in both domestic
and international markets. The filters and filter systems are used in commercial
and industrial buildings, hospitals, manufacturing processes, pharmaceutical
processes, clean rooms, airports, shipyards, refineries, power generation plants
and residences. The products are sold to commercial and industrial distributors,
original equipment manufacturers and dealer networks, private label accounts,
retailers and directly to large national accounts.

The Packaging segment manufactures and markets consumer and industrial packaging
products including custom-designed plastic and metal containers and closures and
lithographed

                                                                      CLARCOR 23

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

metal sheets in both domestic and international markets. The products are sold
directly to consumer and industrial packaging customers. In fiscal 2001, the
Company received a settlement payment of $7,000 for the early termination of a
supply and license agreement and in connection therewith recognized an
impairment loss in its Packaging segment of $2,422 related to certain plant
assets as discussed in Note D. The segment's sales of plastic closures were
reduced in 2001 as a result of the termination of the agreement.

Net sales represent sales to unaffiliated customers. No single customer or class
of product accounted for 10% or more of the Company's consolidated 2003 sales.
Intersegment sales are not material. Assets are those assets used in each
business segment. Corporate assets consist of cash and short-term cash
investments, deferred income taxes, headquarters facility and equipment, pension
assets and various other assets that are not specific to an operating segment.
Unallocated amounts include interest income and expense and other non-operating
income and expense items.

The segment data for the years ended November 30, 2003, 2002 and 2001 were as
follows:

<TABLE>
<CAPTION>
                                          2003         2002          2001
                                        -----------------------------------
<S>                                     <C>          <C>          <C>
Net sales:
Engine/Mobile Filtration ............   $ 287,797    $ 263,512    $ 250,960
Industrial/Environmental Filtration..     386,275      383,613      346,394
Packaging ...........................      67,286       68,438       69,610
                                        -----------------------------------
                                        $ 741,358    $ 715,563    $ 666,964
                                        ===================================

Operating profit:
Engine/Mobile Filtration ............   $  58,299    $  52,779    $  51,785
Industrial/Environmental Filtration..      24,171       20,670       16,761
Packaging ...........................       4,592        4,326        7,264
                                        -----------------------------------
                                           87,062       77,775       75,810
Other income (expense) ..............      (1,003)      (6,325)     (10,076)
                                        -----------------------------------
Earnings before income taxes
 and minority interests .............   $  86,059    $  71,450    $  65,734
                                        ===================================

Identifiable assets:
Engine/Mobile Filtration ............   $ 153,621    $ 152,209    $ 135,265
Industrial/Environmental Filtration..     297,219      306,206      303,901
Packaging ...........................      39,733       42,114       41,652
Corporate ...........................      47,664       45,590       49,799
                                        -----------------------------------
                                        $ 538,237    $ 546,119    $ 530,617
                                        ===================================

Additions to plant assets:
Engine/Mobile Filtration ............   $   3,637    $   4,208    $   3,852
Industrial/Environmental Filtration..       4,825        5,386        8,746
Packaging ...........................       3,284        2,242        5,404
Corporate ...........................       1,296          368          202
                                        -----------------------------------
                                        $  13,042    $  12,204    $  18,204
                                        ===================================

Depreciation and amortization:
Engine/Mobile Filtration ............   $   7,335    $   7,328    $   7,725
Industrial/Environmental Filtration..       8,075        8,642       10,711
Packaging ...........................       2,861        3,096        2,725
Corporate ...........................         714          694          689
                                        -----------------------------------
                                        $  18,985    $  19,760    $  21,850
                                        ===================================
</TABLE>


As discussed in Note C, the Company changed its method of inventory costing to
FIFO in fiscal year 2003. This increased operating profit $397 in the Packaging
segment and had an immaterial impact on the Engine/Mobile and Industrial/
Environmental segments. As discussed in Note A with the adoption of SFAS No.
142, the Company no longer amortizes goodwill or trademarks. Nonrecurring
amortization expense recorded in operating profit in 2001 was $443 in the
Engine/Mobile Filtration segment and $2,464 in the Industrial/Environmental
segment. The Packaging segment operating profit did not include any nonrecurring
amortization in 2001.

Financial data relating to the geographic areas in which the Company operates
are shown for the years ended November 30, 2003, 2002 and 2001. Net sales by
geographic area are based on sales to final customers within that region.

<TABLE>
<CAPTION>
                                      2003       2002       2001
                                    ------------------------------
<S>                                 <C>        <C>        <C>
Net sales:
United States ...................   $599,843   $599,937   $549,210
Europe ..........................     70,023     56,130     58,490
Other international .............     71,492     59,496     59,264
                                    ------------------------------
                                    $741,358   $715,563   $666,964
                                    ==============================
Plant assets, at cost,
   less accumulated depreciation:
United States ...................   $120,719   $125,508   $131,171
Europe ..........................      6,423      6,239      5,144
Other international .............      2,430      1,145      1,001
                                    ------------------------------
                                    $129,572   $132,892   $137,316
                                    ==============================
</TABLE>

24 CLARCOR