##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-K


|                                           |                                                                                           |   
|------------------------------------------ | ----------------------------------------------------------------------------------------- | --
|(Mark One)                                
|[x]                                        | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) 
OF THE
    SECURITIES EXCHANGE ACT OF 1934
|                                          
|For the fiscal year ended December 3, 2005
|                                           |                                                                                           | OR
|                                          
|[  ]                                       | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934
|                                          
|For the transition period
    from

to    

Commission File Number 1-11024









|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|DELAWARE                                                           |  | 36-0922490                              
|
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|840 Crescent Centre Drive, Suite 600, Franklin, TN                 |  | 37067                                   
|(Address of principal executive offices)                           |  | (Zip Code)                              
|                                                                  
|Registrants telephone number, including area code:                |  | 615-771-3100                            



|                                        |  |                        
|--------------------------------------- |  | -----------------------
|                                        |  | Name of each exchange  
|Title of each class                     |  | on which registered    
|                                        |  |                        
|Common Stock, par value $1.00 per share |  | New York Stock Exchange
|Preferred Stock Purchase Rights         |  | New York Stock Exchange










X


X


X


S-K 10-K 10-K.


12b-2




12b-2)  X










---



##### 










TABLE OF CONTENTS


|                                                            |  |                                                                                                                          |  |   
|----------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | --
|PART I                                                     
|Item 1.                                                     |  | Description of Business                                                                                                  |  | 2 
|Item 1A.                                                    |  | Risk Factors                                                                                                             |  | 6 
|Item 1B.                                                    |  | Unresolved Staff Comments                                                                                                |  | 10
|Item 2.                                                     |  | Properties                                                                                                               |  | 10
|Item 3.                                                     |  | Legal Proceedings                                                                                                        |  | 12
|Item 4.                                                     |  | Submission of Matters to a Vote of Security
    Holders                                                                  |  | 12
|Additional Item                                             |  | Executive Officers                                                                                                       |  | 12
|                                                           
|PART II                                                    
|Item 5.                                                     |  | Market for the Registrants Common
    Equity, Related Stockholder Matters and Issuer Purchases of
    Equity Securities |  | 14
|Item 6.                                                     |  | Selected Financial Data                                                                                                  |  | 15
|Item 7.                                                     |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                |  | 15
|Item 7A.                                                    |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                           |  | 15
|Item 8.                                                     |  | Financial Statements and Supplementary
    Data                                                                          |  | 15
|Item 9.                                                     |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                                 |  | 15
|Item 9A                                                     |  | Controls and Procedures                                                                                                  |  | 15
|Item 9B.                                                    |  | Other Information                                                                                                        |  | 16
|                                                           
|PART III                                                   
|Item 10.                                                    |  | Directors and Executive Officers of
    Registrant                                                                       |  | 16
|Item 11.                                                    |  | Executive Compensation                                                                                                   |  | 16
|Item 12.                                                    |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                       |  | 17
|Item 13.                                                    |  | Certain Relationships and Related
    Transactions                                                                       |  | 17
|Item 14.                                                    |  | Principal Accounting Fees and Services                                                                                   |  | 17
|                                                           
|PART IV                                                    
|Item 15.                                                    |  | Exhibits, Financial Statement Schedules                                                                                  |  | 17
|SIGNATURES                                                  |  | 20                                                                                                                      
|Computation of Certain Ratios                              
|The "11-Year Financial Review"                             
|Management's Discussion and Analysis of Financial Condition
|Subsidiaries of the Registrant                             
|Consent of Independent Registered Public Accounting Firm   
|Certification of Chairman, President and CEO               
|Certification of VP-Finance and CFO                        
|Certification of Chiarman, President and CEO               
|Certification of VP-Finance and CFO                        







---



##### Table of Contents






PART I







|        |                         
|------- | ------------------------
|Item 1. | Description of Business.

(a) General Development of
Business




10-K,


Certain Significant
Developments.




® tm




non-U.S. 10-K


(b) Financial Information About Industry Segments


F-27 F-28 10-K 10-K).


(c) Narrative Description of the Business


Engine/Mobile Filtration




2



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##### Table of Contents





Industrial/Environmental Filtration








Packaging








Distribution






3



---



##### Table of Contents







Class of Products




Raw Materials




Patents, Trademarks and Tradenames






Customers










4



---



##### Table of Contents



Backlog




Competition








Product Development








Environmental Factors






5



---



##### Table of Contents









Employees




(d) Financial
Information About Foreign and Domestic Operations and Export
Sales


F-28 10-K.


Internet Website


10-K, 10-Q, 8-K







|         |              
|-------- | -------------
|Item 1A. | Risk Factors.

Our business faces a variety of risks. These risks include
those described below and may include additional risks and
uncertainties not presently known to us or that we currently
deem immaterial. If any of the events or circumstances described
in the following risk factors occur, our business, financial
condition or results of operations may suffer, and the trading
price of our common stock could decline. These risk factors
should be read in conjunction with the other information in this
2005 Form 10-K.


6



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##### Table of Contents





| |                                                                    
| | -------------------------------------------------------------------
| | Our business is affected by the health of the markets we
    serve.





| |                                                                           
| | --------------------------------------------------------------------------
| | Our manufacturing operations are dependent upon
    third-party suppliers.





| |                                                                          
| | -------------------------------------------------------------------------
| | We could be adversely impacted by environmental laws and
    regulations.

non-U.S.




| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Our operations outside of the United States are subject to
    political, investment and local business risks.





| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | local political and social conditions, including
    hyperinflationary conditions and political instability in
    certain countries;                        
|
| |  | imposition of limitations on the remittance of dividends and
    payments by foreign subsidiaries;                                                           
|
| |  | adverse currency exchange rate fluctuations, including
    significant devaluations of currencies;                                                           
|
| |  | tax-related risks, including the imposition of taxes and the
    lack of beneficial treaties, that result in a higher effective
    tax rate for the Company;
|
| |  | difficulties in enforcing agreements and collecting receivables
    through certain foreign local systems;                                                   
|
| |  | domestic and foreign customs, tariffs and quotas or other trade
    barriers;                                                                                
|
| |  | increased costs for transportation and shipping;                                                                                                             
|
| |  | difficulties in protecting intellectual property;                                                                                                            
|
| |  | risk of nationalization of private enterprises by foreign
    governments;                                                                                   
|
| |  | managing and obtaining support and distribution channels for
    overseas operations;                                                                        

7



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##### Table of Contents





| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | hiring and retaining qualified management personnel for our
    overseas operations;                                                                               
|
| |  | imposition or increase of restrictions on investment; and                                                                                                          
|
| |  | required compliance with a variety of local laws and regulations
    which may be materially different than those to which we are
    subject in the United States.





| |                                                             
| | ------------------------------------------------------------
| | We face significant competition in the markets we
    serve.





| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | Increasing costs for manufactured components, raw
    materials and energy prices may adversely affect our
    profitability.





| |                                                                               
| | ------------------------------------------------------------------------------
| | We face heightened legal challenges with respect to
    intellectual property.





| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our success depends in part on our development of improved
    products, and our efforts may fail to meet the needs of
    customers on a timely or cost-effective basis.





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | The introduction of new and improved products and services
    could reduce our future sales.



8



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| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | Our ability to operate our company effectively could be
    impaired if we fail to attract and retain key personnel.





| |                                              
| | ---------------------------------------------
| | Our acquisition strategy may be unsuccessful.





| |   |                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the focus of managements attention to the assimilation of
    the acquired companies and their employees and on the management
    of expanding operations;
|
| |  | the incorporation of acquired products into our product line;                                                                                               
|
| |  | the increasing demands on our operational and information
    technology systems;                                                                           
|
| |  | the failure to realize expected synergies;                                                                                                                  
|
| |  | the potential loss of customers as a result of changes in
    control;                                                                                      
|
| |  | the possibility that we have acquired substantial undisclosed
    liabilities; and                                                                          
|
| |  | the loss of key employees of the acquired businesses.                                                                                                       

non-U.S.






| |                                                                  
| | -----------------------------------------------------------------
| | We are a decentralized company, which presents certain
    risks.



9



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|         |                           
|-------- | --------------------------
|Item 1B. | Unresolved Staff Comments.








|        |            
|------- | -----------
|Item 2. | Properties.





Corporate Headquarters




Engine/ Mobile Filtration Segment.


United States Facilities


|               |  |                                                                                                                                                                  |  |                 |       | 
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ----- | 
|Location       |  | Size                                                                                                                                                             |  | Owned or Leased
|               |  |                                                                                                                                                                  |  |                
|Gothenburg, NE |  | 19 acre site with 100,000 sq ft of manufacturing space                                                                                                           |  |                 | Owned | 
|Kearney, NE    |  | 42 acre site with 516,000 sq ft of manufacturing and
    warehousing space, 25,000 sq ft of research and development
    space, and 40,000 sq ft of office space |  |                 | Owned | 
|Lancaster, PA  |  | 11.4 acre site with 168,000 sq ft of manufacturing and
    office space                                                                                          |  |                 | Owned | 
|Yankton, SD    |  | 20 acre site with 170,000 sq ft of manufacturing space                                                                                                           |  |                 | Owned | 

International Facilities


|                                       |  |                                                                                                            |  |                 |        | 
|-------------------------------------- |  | ---------------------------------------------------------------------------------------------------------- |  | --------------- | ------ | 
|Location                               |  | Size                                                                                                       |  | Owned or Leased
|                                       |  |                                                                                                            |  |                
|Warrington, Cheshire, England          |  | 4 acre site with two facilities totaling 71,000 sq feet
    of manufacturing, warehousing and office space |  |                 | Owned  | 
|Weifang, Peoples Republic of China(1) |  | 8 buildings, constituting 180,000 sq ft of manufacturing and
    administrative space                      |  |                 | Leased | 






|    |                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company recently consented to a relocation of this facility
    by the local Chinese government under favorable terms and at
    little cost to the Company and with no anticipated material
    interruption to the Companys operations in China. It is
    anticipated that this relocation will occur in late 2006.



10



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Industrial/Environmental Filtration Segment.


United States Facilities


|                   |  |                                                                                   |  |                 |        | 
|------------------ |  | --------------------------------------------------------------------------------- |  | --------------- | ------ | 
|Location           |  | Size                                                                              |  | Owned or Leased
|                   |  |                                                                                   |  |                
|Auburn Hills, MI   |  | 55,000 sq ft of warehousing and office space                                      |  |                 | Leased | 
|Birmingham, AL     |  | 9,000 sq ft of warehouse space                                                    |  |                 | Owned  | 
|Blue Ash, OH       |  | 17 acre site with 157,000 sq ft of manufacturing and office
    space             |  |                 | Owned  | 
|Campbellsville, KY |  | 100 acre site with 290,000 sq ft of manufacturing and
    office space            |  |                 | Owned  | 
|Corona, CA         |  | 84,000 sq feet of manufacturing, warehousing and office space                     |  |                 | Leased | 
|Dallas, TX         |  | 83,500 sq feet of manufacturing, warehousing and office space                     |  |                 | Leased | 
|Goodlettsville, TN |  | 33,000 sq ft of warehouse space                                                   |  |                 | Owned  | 
|Greensboro, NC     |  | 21 acre site with 88,000 sq ft of manufacturing,
    warehousing and office space |  |                 | Owned  | 
|                   |  | 97,000 sq ft of manufacturing, warehousing and office space                       |  |                 | Owned  | 
|Henderson, NC      |  | 226,000 sq feet of manufacturing, warehousing and office space                    |  |                 | Leased | 
|                   |  | 25 acres with 235,000 sq feet of manufacturing, warehousing
    and office space  |  |                 | Owned  | 
|Houston, TX        |  | 88,000 sq ft of manufacturing, warehousing and office space                       |  |                 | Leased | 
|Jeffersontown, KY  |  | 7.5 acre site with 100,000 sq ft of manufacturing and
    office space            |  |                 | Owned  | 
|Kenly, NC          |  | 50,000 sq feet of manufacturing and office space                                  |  |                 | Owned  | 
|Louisville, KY     |  | 99,000 sq feet of manufacturing, warehousing and office space                     |  |                 | Leased | 
|Mineola, NY        |  | 5 buildings totaling approx 31,000 sq ft of manufacturing and
    office space    |  |                 | Leased | 
|New Albany, IN     |  | 142,000 sq feet of manufacturing, warehousing and office space                    |  |                 | Leased | 
|Ottawa, KS         |  | 41,000 sq ft of manufacturing and office space                                    |  |                 | Owned  | 
|Rockford, IL       |  | 83,000 sq feet of manufacturing, warehousing and office space                     |  |                 | Leased | 
|Sacramento, CA     |  | 108,000 sq feet of manufacturing, warehousing and office space                    |  |                 | Leased | 
|                   |  | 40,000 sq feet of manufacturing, warehousing and                                  |  |                 | Owned  | 
|                   |  | office space                                                                      |  |                 |        | 
|Shelby, NC         |  | 48,000 sq ft of manufacturing, warehousing and office space                       |  |                 | Owned  | 
|Tulsa, OK          |  | 16 acre site with 142,000 sq ft of manufacturing and office
    space             |  |                 | Owned  | 

11



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##### Table of Contents



International Facilities


|                                |  |                                                                                                                |  |                 |        | 
|------------------------------- |  | -------------------------------------------------------------------------------------------------------------- |  | --------------- | ------ | 
|Location                        |  | Size                                                                                                           |  | Owned or Leased
|                                |  |                                                                                                                |  |                
|St. Catharines, Ontario, Canada |  | 25,000 sq ft of warehouse space. Right to occupy 40,000 sq ft
    total (15,000 sq ft currently being sublet.) |  |                 | Leased | 
|La Coruña, Spain                |  | 4 acre site with 61,000 sq ft of manufacturing and office
    space                                            |  |                 | Owned  | 

United States: International:


Packaging Segment.


|              |  |                                                                                                       |  |                 |       | 
|------------- |  | ----------------------------------------------------------------------------------------------------- |  | --------------- | ----- | 
|Location      |  | Size                                                                                                  |  | Owned or Leased
|              |  |                                                                                                       |  |                
|Rockford, IL  |  | 34 acre site with buildings totaling 394,000 sq ft of
    manufacturing, warehousing and office space |  |                 | Owned | 
|Lancaster, PA |  | 11 acre site with 243,500 sq ft of manufacturing and office
    space                                 |  |                 | Owned | 








|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.








|        |                                                     
|------- | ----------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders.






ADDITIONAL ITEM: Executive Officers of the Registrant




|                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         |    |              |  |  |      |  | 
|----------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | -- | ------------ |  |  | ---- |  | 
|                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Age at  |    | Year Elected
|Name              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 12/3/05 |    | to Office   
|                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         |    |             
|Norman E. Johnson |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         | 57 |              |  |  | 2000 | 
|                  | Chairman of the Board, President and Chief Executive Officer.
    Mr. Johnson has been employed by the Company since 1990. He
    was elected President-Baldwin Filters, Inc. in 1990, Vice
    President-CLARCOR in 1992, Group Vice President-Filtration
    Products Group in 1993, President and Chief Operating Officer in
    1995 and Chairman, President and Chief Executive Officer in
    2000. Mr. Johnson has been a Director of the Company since
    June 1996. |         |    |              |  |  |      |  | 
|                 
|Bruce A. Klein    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         | 58 |              |  |  | 1995 | 
|                  | Vice President-Finance and Chief Financial Officer.
    Mr. Klein was employed by the Company and elected Vice
    President-Finance and Chief Financial Officer on January 3,
    1995.                                                                                                                                                                                                                                                                                      |         |    |              |  |  |      |  | 

12



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##### Table of Contents



|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         |    |              |  |  |      |  | 
|------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------- | -- | ------------ |  |  | ---- |  | 
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Age at  |    | Year Elected
|Name               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 12/3/05 |    | to Office   
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         |    |             
|Sam Ferrise        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         | 49 |              |  |  | 2003 | 
|                   | President, Baldwin Filters, Inc. Mr. Ferrise was appointed
    President of Baldwin Filters, Inc. in 2000. He became an
    executive officer of the Company in 2003 while retaining the
    same title with Baldwin Filters, Inc.                                                                                                                                                                                                                                                                                                                                       |         |    |              |  |  |      |  | 
|                  
|David J. Lindsay   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         | 50 |              |  |  | 1995 | 
|                   | Vice President-Administration and Chief Administrative Officer.
    Mr. Lindsay has been employed by the Company in various
    administrative positions since 1987. He was elected Vice
    President-Group Services in 1991, Vice President-Administration
    in 1994 and Vice President-Administration and Chief
    Administrative Officer in 1995.                                                                                                                                                                                                                 |         |    |              |  |  |      |  | 
|                  
|Marcia S. Blaylock |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         | 49 |              |  |  | 2000 | 
|                   | Vice President, Controller. Ms. Blaylock has been an
    employee of the Company since 1974. She was elected Assistant
    Secretary in 1994, Corporate Secretary in 1995, Vice President
    and Corporate Secretary in 1996, Vice President, Controller and
    Corporate Secretary in 1997 and Vice President, Controller in
    2000.                                                                                                                                                                                                                                |         |    |              |  |  |      |  | 
|                  
|Richard M. Wolfson |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         | 39 |              |  |  | 2006 | 
|                   | Vice President, General Counsel and Secretary. Mr. Wolfson
    became an employee of the Company in 2006. He was elected Vice
    President, General Counsel and Secretary in 2006. He was a
    principal of the InterAmerican Group, an advisory services and
    private equity firm, from 2001 until 2006. He served as a Vice
    President and then as an Executive Vice President of Education
    Networks of America, Inc. (ENA) from 2000 to 2001.
    Prior to joining ENA, he was a partner in the Chicago office of
    the law firm of Baker & McKenzie. |         |    |              |  |  |      |  | 



13



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PART II







|        |                                                                                                                          
|------- | -------------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities.



2-for-1 2-for-1




|                  |  |              |       |  |     |   |       |           |  |   |         | 
|----------------- |  | ------------ | ----- |  | --- | - | ----- | --------- |  | - | ------- | 
|                  |  | Market Price |       |  |    
|                  |  |              |       |  |    
|Quarter Ended     |  | High         |       |  | Low |   |       | Dividends | 
|                  |  |              |       |  |     |   |       |           | 
|February 26, 2005 |  | $            | 28.55 |  |     | $ | 24.60 |           |  | $ | 0.06375 | 
|May 28, 2005      |  |              | 28.66 |  |     |   | 24.75 |           |  |   | 0.06375 | 
|August 27, 2005   |  |              | 31.79 |  |     |   | 26.61 |           |  |   | 0.06375 | 
|December 3, 2005  |  |              | 31.98 |  |     |   | 25.89 |           |  |   | 0.06750 | 
|                  |  |              |       |  |     |   |       |           | 
|Total Dividends   |  |              |       |  |     |   |       |           |  | $ | 0.25875 | 
|                  |  |              |       |  |     |   |       |           | 

|                  |  |              |       |  |     |   |       |          |  |   |         | 
|----------------- |  | ------------ | ----- |  | --- | - | ----- | -------- |  | - | ------- | 
|                  |  | Market Price |       |  |    
|                  |  |              |       |  |    
|Quarter Ended     |  | High         |       |  | Low |   |       | Dividend | 
|                  |  |              |       |  |     |   |       |          | 
|February 28, 2004 |  | $            | 22.91 |  |     | $ | 20.60 |          |  | $ | 0.06250 | 
|May 29, 2004      |  |              | 22.73 |  |     |   | 20.08 |          |  |   | 0.06250 | 
|August 28, 2004   |  |              | 22.92 |  |     |   | 21.16 |          |  |   | 0.06250 | 
|November 27, 2004 |  |              | 26.30 |  |     |   | 21.83 |          |  |   | 0.06375 | 
|                  |  |              |       |  |     |   |       |          | 
|Total Dividends   |  |              |       |  |     |   |       |          |  | $ | 0.25125 | 
|                  |  |              |       |  |     |   |       |          | 







14



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COMPANY PURCHASES OF EQUITY SECURITIES(1)


|                       |  |                  |         |  |                    |                        |       |                        |                        |  |                     |  |  |   |             | 
|---------------------- |  | ---------------- | ------- |  | ------------------ | ---------------------- | ----- | ---------------------- | ---------------------- |  | ------------------- |  |  | - | ----------- | 
|                       |  |                  |         |  |                    |                        |       | Maximum Approximate    |                       
|                       |  |                  |         |  |                    | Total Number of Shares |       |                        | Dollar Value of Shares | 
|                       |  |                  |         |  |                    | Purchased as Part of   |       |                        | that may yet be        | 
|                       |  | Total Number of  |         |  | Average Price Paid |                        |       | the Companys Publicly |                        |  | Purchased under the | 
|Period                 |  | Shares Purchased |         |  | per Share          |                        |       | Announced Plan         |                        |  | Plan                | 
|                       |  |                  |         |  |                    |                        |       |                        |                        |  |                     | 
|Sept 1  Sept 30, 2005 |  |                  | 250,000 |  |                    | $                      | 28.42 |                        |                        |  | 250,000             |  |  | $ | 140,909,090 | 
|Oct. 1  Oct. 31, 2005 |  |                  | 50,000  |  |                    |                        | 27.41 |                        |                        |  | 50,000              |  |  | $ | 139,538,836 | 
|Nov. 1  Dec. 3, 2005  |  |                  | 0       |  |                    |                        |       |                        |                        |  |                     |  |  | $ | 139,538,836 | 
|Total                  |  |                  | 300,000 |  |                    |                        |       |                        |                        |  |                     |  |  |   |             | 






|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(1) | Purchase Plan announced June 20, 2005 for aggregate
    purchases up to $150 million. Program expires June 16,
    2007.






|        |                         
|------- | ------------------------
|Item 6. | Selected Financial Data.

10-K.







|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operation.

10-K.







|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures about Market
    Risk.

10-K.







|        |                                             
|------- | --------------------------------------------
|Item 8. | Financial Statements and Supplementary Data.

10-K F-1 F-28.







|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on Accounting
    and Financial Disclosure.








|         |                         
|-------- | ------------------------
|Item 9A. | Controls and Procedures.

Conclusion Regarding the Effectiveness of Disclosure Controls
and Procedures


13a-15(e)


15



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##### Table of Contents



Managements Report on Internal Control Over Financial
Reporting


13a-15(f), Internal Control  Integrated Framework




10-K.







|         |                   
|-------- | ------------------
|Item 9B. | Other Information.






PART III







|         |                                                    
|-------- | ---------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant.



10-K 10-K







|         |                        
|-------- | -----------------------
|Item 11. | Executive Compensation.



16



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##### Table of Contents








|         |                                                                                                    
|-------- | ---------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters.








|         |                                                
|-------- | -----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions.








|         |                                        
|-------- | ---------------------------------------
|Item 14. | Principal Accounting Fees and Services.






PART IV







|         |                                         
|-------- | ----------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements


|                                                                                                         |  |          |     | 
|-------------------------------------------------------------------------------------------------------- |  | -------- | --- | 
|                                                                                                         |  | Page No. |    
|                                                                                                         |  |          |    
|Report of Independent Registered Public Accounting Firm                                                  |  |          | F-1 | 
|Consolidated Balance Sheets at November 30, 2005 and 2004                                                |  |          | F-3 | 
|Consolidated Statements of Earnings for the years ended
    November 30, 2005, 2004 and 2003             |  |          | F-4 | 
|Consolidated Statements of Shareholders Equity for the
    years ended November 30, 2005, 2004 and 2003 |  |          | F-5 | 
|Consolidated Statements of Cash Flows for the years ended
    November 30, 2005, 2004 and 2003           |  |          | F-6 | 
|Notes to Consolidated Financial Statements                                                               |  |          | F-7 | 
|                                                                                                        
|(a)(2) Financial Statement
    Schedule                                                                  |  |          |     | 
|                                                                                                        
|II. Valuation and Qualifying Accounts                                                                    |  |          | S-1 | 



(a)(3)


| |   |       |  |                                                                                                                                                                                                                                               
| | - | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3 | .1    |  | The registrants Second Restated Certificate of
    Incorporation. Incorporated by reference to Exhibit 3.1 to
    the Companys Annual Report on Form 10-K for the
    fiscal year ended November 30, 1998.                                  
|
| | 3 | .1(a) |  | Amendment to ARTICLE FOURTH of the Second Restated
    Certificate of Incorporation. Incorporated by reference to the
    Companys Proxy Statement dated February 18, 1999 for
    the Annual Meeting of Shareholders held on March 23, 1999.
|
| | 3 | .1(b) |  | Amendment to ARTICLE FOURTH of the Second Restated
    Certificate of Incorporation. Incorporated by reference to the
    Companys Proxy Statement dated February 17, 2005 for
    the Annual Meeting of Shareholders held on March 21, 2005.

17



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##### Table of Contents



| |    |          |  |                                                                                                                                                                                                                                                                                                                                         
| | -- | -------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3  | .2       |  | The registrants By-laws, as amended. Incorporated by
    reference to Exhibit 3.2 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    November 30, 1995.                                                                                                                                                     
|
| | 3  | .3       |  | Certificate of Designation of Series B Junior Participating
    Preferred Stock of CLARCOR as filed with the Secretary of State
    of the State of Delaware on April 2, 1996. Incorporated by
    reference to Exhibit 4.5 to the Registration Statement on
    Form 8-A filed April 3, 1996.                                          
|
| | 4  | .1       |  | Stockholder Rights Agreement dated as of March 28, 1996
    between the registrant and the First Chicago Trust of New York.
    Incorporated by reference to Exhibit 4 to the
    Companys Current Report on Form 8-K filed
    April 3, 1996.                                                                                         
|
| | 4  | .1(a)    |  | First Amendment to Stockholders Rights Agreement dated as of
    March 23, 1999. Incorporated by reference to Exhibit 4
    to the Companys Form 8-A/ A filed March 29, 1999.                                                                                                                                                          
|
| | 4  | .2       |  | Certain instruments defining the rights of holders of long-term
    debt securities of CLARCOR and its subsidiaries are omitted
    pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K.
    CLARCOR hereby agrees to furnish copies of these instruments to
    the SEC upon request.                                                 
|
| | 4  | .2(c)    |  | Credit Agreement dated as of April 8, 2003 among CLARCOR
    Inc., the Lenders and Bank One, NA, as Agent. Incorporated by
    reference to Exhibit 4 to the Companys Quarterly
    Report on Form 10-Q filed June 27, 2003.                                                                                                           
|
| | 10 | .1       |  | The registrants Deferred Compensation Plan for Directors.
    Incorporated by reference to Exhibit 10.1 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended November 30, 1984 (the
    1984 10-K). +                                                                                                       
|
| | 10 | .2       |  | The registrants Supplemental Retirement Plan. Incorporated
    by reference to Exhibit 10.2 to the 1984 10-K. +                                                                                                                                                                                                                        
|
| | 10 | .2(a)    |  | The registrants 1994 Executive Retirement Plan.
    Incorporated by reference to Exhibit 10.2(a) to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 3, 1994 (1994 10-K). +                                                                                                                       
|
| | 10 | .2(b)    |  | The registrants 1994 Supplemental Pension Plan.
    Incorporated by reference to Exhibit 10.2(b) to the
    1994 10-K. +                                                                                                                                                                                                               
|
| | 10 | .2(c)    |  | The registrants Supplemental Retirement Plan (as amended
    and restated effective December 1, 1994). Incorporated by
    reference to Exhibit 10.2(c) to the 1994 10-K. +                                                                                                                                                            
|
| | 10 | .3       |  | The registrants 1984 Stock Option Plan. Incorporated by
    reference to Exhibit A to the Companys Proxy
    Statement dated March 2, 1984 for the Annual Meeting of
    Shareholders held on March 31, 1984. +                                                                                                                       
|
| | 10 | .4       |  | Employment Agreements with certain officers. Incorporated by
    reference to Exhibit 5 to the Companys Current Report
    on Form 8-K filed July 25, 1989. +                                                                                                                                                                          
|
| | 10 | .4(a)(1) |  | Form of Amended and Restated Employment Agreement with each of
    Marcia S. Blaylock, Sam Ferrise, Bruce A. Klein, David J.
    Lindsay and Richard M. Wolfson. Incorporated by Reference to
    Exhibit 10.4(a)(1) to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 2, 2000
    (the 2000 10-K). +
|
| | 10 | .4(c)    |  | Employment Agreement with Norman E. Johnson dated July 1,
    1997. Incorporated by reference to Exhibit 10.4(c) to the
    1997 10-K. +                                                                                                                                                                                                
|
| | 10 | .4(c)(1) |  | Amended and Restated Employment Agreement with Norman E. Johnson
    dated as of December 17, 2000. Incorporated by Reference to
    Exhibit 10.4(c)(1) to the 2000 10-K. +                                                                                                                                                             
|
| | 10 | .4(d)    |  | Trust Agreement dated December 1, 1997. Incorporated
    by reference to Exhibit 10.4(d) to the 1997 10-K. +                                                                                                                                                                                                                            

18



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##### Table of Contents



| |     |       |  |                                                                                                                                                                                                                                                                                                           |                                                                                          
| | --- | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
| | 10  | .4(e) |  | Executive Benefit Trust Agreement dated December 22,
    1997. Incorporated by reference to Exhibit 10.4(e) to the
    1997 10-K. +                                                                                                                                                                      
|
| | 10  | .5    |  | The registrants 1994 Incentive Plan (the 1994
    Plan) as amended through June 30, 2000. Incorporated
    by Reference to Exhibit 10.5 to the 2000 10-K. +                                                                                                                                           
|
| | 10  | .5(a) |  | Amendment to the 1994 Plan adopted December 18, 2000.
    Incorporated by Reference to Exhibit 10.5(a) to the
    2000 10-K. +                                                                                                                                                                           
|
| | 10  | .5(b) |  | The registrants 2004 Incentive Plan (the 2004
    Plan). Incorporated by reference to Exhibit A to the
    Companys Proxy Statement dated February 20, 2003 for
    the Annual Meeting of Shareholders held on March 24, 2003. +                                                                     
|
| | 10  | .5(c) |  | Amendment to the 1994 Plan and to the 2004 Plan. Incorporated by
    reference to Exhibit 10.5(c) to the Companys Annual
    Report for the fiscal year ended November 29, 2003 (the
    2003 10-K). +                                                                                                
|
| | 10  | .6    |  | Stock Purchase Agreement dated as of October 19, 2005,
    among the Company, MKI Acquisition Company, Martin
    Kurz & Co., Inc. and the Stockholders of Martin
    Kurz & Co., Inc. Incorporated by reference to
    Exhibit 2 of the Companys Current Report on
    Form 8-K filed October 21, 2005.
|
| | *12 | .1    |  | Computation of Certain Ratios.                                                                                                                                                                                                                                                                           
|
| | *13 | (a)   |  | The following items are included as Exhibits to this Annual
    Report on Form 10-K:                                                                                                                                                                                                                     
|
| |     | (i)   |  |                                                                                                                                                                                                                                                                                                           | The 11-Year Financial Review; and                                                      
|
| |     | (ii)  |  |                                                                                                                                                                                                                                                                                                           | Managements Discussion and Analysis of Financial Condition
    and Results of Operation.
|
| | 14  |       |  | Code of Ethics for Chief Executive Officer and Senior Financial
    Officers. Incorporated by reference to Exhibit 14 to the
    2003 10-K.                                                                                                                                                              
|
| | *21 |       |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                          
|
| | *23 |       |  | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                                
|
| | *31 | .1    |  | Certification of Norman E. Johnson, Chairman, President and
    Chief Executive Officer of the Company, pursuant to
    Rule 13a-14(a) of the Exchange Act.                                                                                                                                              
|
| | *31 | .2    |  | Certification of Bruce A. Klein, Vice President 
    Finance and Chief Financial Officer of the Company, pursuant to
    Rule 13a-14(a) of the Exchange Act.                                                                                                                                            
|
| | *32 | .1    |  | Certification of Norman E. Johnson, Chairman, President and
    Chief Executive Officer of the Company, pursuant to
    Section 1350 of Chapter 63 of Title 18 of the
    United States Code.                                                                                                            
|
| | *32 | .2    |  | Certification of Bruce A. Klein, Vice President 
    Finance and Chief Financial Officer of the Company, pursuant to
    Section 1350 of Chapter 63 of Title 18 of the
    United States Code.                                                                                                          






|  |                
|- | ---------------
|* | Filed herewith.



|  |                                                         
|- | --------------------------------------------------------
|+ | Management contract or compensatory plan or arrangement.

19



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##### Table of Contents






SIGNATURES






| |                                   
| | ----------------------------------
| | CLARCOR Inc.                      
| | (Registrant)                      
|
| | By: /s/ Norman E.
    Johnson     
| |                                   
| | Norman E. Johnson                 
| | Chairman of the Board, President &
| | Chief Executive Officer           



|                       |  |     |  |                                                                                                                  
|---------------------- |  | --- |  | -----------------------------------------------------------------------------------------------------------------
|Date: February 9, 2006 |  | By: |  | /s/ Norman E. JohnsonNorman E. JohnsonChairman of the Board, President &
    Chief Executive Officer and Director
|                      
|Date: February 9, 2006 |  | By: |  | /s/ Bruce A. KleinBruce A. KleinVice President  Finance &
    Chief Financial Officer                           
|                      
|Date: February 9, 2006 |  | By: |  | /s/ Marcia S. BlaylockMarcia S. BlaylockVice President, Controller &
    Chief Accounting Officer                
|                      
|Date: February 9, 2006 |  | By: |  | /s/ J. Marc AdamJ. Marc AdamDirector                                                                             
|                      
|Date: February 9, 2006 |  | By: |  | James W. Bradford, Jr.Director                                                                                   
|                      
|Date: February 9, 2006 |  | By: |  | /s/ Robert J.
    BurgstahlerRobert J. BurgstahlerDirector                                                       
|                      
|Date: February 9, 2006 |  | By: |  | /s/ Paul DonovanPaul DonovanDirector                                                                             

20



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|                       |  |     |  |                                                             
|---------------------- |  | --- |  | ------------------------------------------------------------
|                      
|Date: February 9, 2006 |  | By: |  | /s/ Robert H. JenkinsRobert H. JenkinsDirector              
|                      
|Date: February 9, 2006 |  | By: |  | /s/ Philip R. Lochner,
    Jr.Philip R. Lochner, Jr.Director
|                      
|Date: February 9, 2006 |  | By: |  | /s/ James L. PackardJames L. PackardDirector                

21



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TABLE OF CONTENTS


|                                                            |                                                     |       |     |     | 
|----------------------------------------------------------- | --------------------------------------------------- | ----- | --- | --- | 
|                                                            |                                                     | Pages |    
|                                                            |                                                     |       |    
|Report of Independent Registered Public
    Accounting Firm |                                                     |       | F-1 |    
|Financial Statements:                                       |                                                     |       |     |    
|                                                            | Consolidated Balance Sheets                         |       |     | F-3 | 
|                                                            | Consolidated Statements of Earnings                 |       |     | F-4 | 
|                                                            | Consolidated Statements of
    Shareholders Equity |       |     | F-5 | 
|                                                            | Consolidated Statements of Cash Flows               |       |     | F-6 | 
|                                                            | Notes to Consolidated Financial
    Statements      |       |     | F-7 | 

22



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##### Table of Contents






REPORT OF INDEPENDENT REGISTERED


PUBLIC ACCOUNTING FIRM








Consolidated financial statements and financial statement
schedule




Internal control over financial reporting


Internal Control  Integrated Framework Internal Control 
Integrated Framework




F-1



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##### Table of Contents











| |                               
| | ------------------------------
| | /s/ PricewaterhouseCoopers LLP





F-2



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##### Table of Contents



CLARCOR Inc.





CONSOLIDATED BALANCE SHEETS


November 30, 2005 and 2004


(Dollars in thousands except per share data)


|                                                    |                                                                                                          |                                            |         |         |         |  |         |         |         | 
|--------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------- | ------- |  | ------- | ------- | ------- | 
|                                                    |                                                                                                          | 2005                                       |         |         | 2004    | 
|                                                    |                                                                                                          |                                            |         |         |         | 
|ASSETS                                             
|Current assets:                                     |                                                                                                          |                                            |         |         |         |  |         |        
|                                                    | Cash and cash equivalents                                                                                |                                            | $       | 18,502  |         |  | $       | 17,420  |        
|                                                    | Short-term investments                                                                                   |                                            |         | 10,400  |         |  |         | 5,100   |        
|                                                    | Accounts receivable, less allowance for losses of $9,775 for
    2005 and $9,557 for 2004                |                                            |         | 152,755 |         |  |         | 143,719 |        
|                                                    | Inventories                                                                                              |                                            |         | 117,508 |         |  |         | 115,571 |        
|                                                    | Prepaid expenses and other current assets                                                                |                                            |         | 7,253   |         |  |         | 5,111   |        
|                                                    | Deferred income taxes                                                                                    |                                            |         | 18,515  |         |  |         | 17,069  |        
|                                                    |                                                                                                          |                                            |         |         |         | 
|                                                    |                                                                                                          | Total current assets                       |         |         | 324,933 |  |         |         | 303,990 | 
|                                                    |                                                                                                          |                                            |         |         |         | 
|Plant assets, at cost less accumulated depreciation |                                                                                                          |                                            | 149,505 |         |         |  | 142,242 |        
|Acquired intangibles, less accumulated amortization |                                                                                                          |                                            | 168,176 |         |         |  | 147,789 |        
|Pension assets                                      |                                                                                                          |                                            | 22,069  |         |         |  | 24,574  |        
|Deferred income taxes                               |                                                                                                          |                                            | 521     |         |         |  | 614     |        
|Other noncurrent assets                             |                                                                                                          |                                            | 10,068  |         |         |  | 8,588   |        
|                                                    |                                                                                                          |                                            |         |         |         | 
|                                                    |                                                                                                          | Total assets                               |         | $       | 675,272 |  |         | $       | 627,797 | 
|                                                    |                                                                                                          |                                            |         |         |         | 
|                                                   
|LIABILITIES                                        
|Current liabilities:                                |                                                                                                          |                                            |         |         |         |  |         |        
|                                                    | Current portion of long-term debt                                                                        |                                            | $       | 233     |         |  | $       | 420     |        
|                                                    | Accounts payable and accrued liabilities                                                                 |                                            |         | 108,693 |         |  |         | 117,859 |        
|                                                    | Income taxes                                                                                             |                                            |         | 12,544  |         |  |         | 7,993   |        
|                                                    |                                                                                                          |                                            |         |         |         | 
|                                                    |                                                                                                          | Total current liabilities                  |         |         | 121,470 |  |         |         | 126,272 | 
|                                                    |                                                                                                          |                                            |         |         |         | 
|Long-term debt, less current portion                |                                                                                                          |                                            | 16,009  |         |         |  | 24,130  |        
|Postretirement health care benefits                 |                                                                                                          |                                            | 4,239   |         |         |  | 4,380   |        
|Long-term pension liabilities                       |                                                                                                          |                                            | 16,287  |         |         |  | 11,256  |        
|Deferred income taxes                               |                                                                                                          |                                            | 26,184  |         |         |  | 26,778  |        
|Other long-term liabilities                         |                                                                                                          |                                            | 6,267   |         |         |  | 4,874   |        
|Minority interests                                  |                                                                                                          |                                            | 1,983   |         |         |  | 1,645   |        
|                                                   
|Contingencies                                       |                                                                                                          |                                            |         |         |         |  |         |        
|                                                   
|SHAREHOLDERS EQUITY                               
|Capital stock:                                      |                                                                                                          |                                            |         |         |         |  |         |        
|                                                    | Preferred, par value $1, authorized 5,000,000 shares, none
    issued                                    |                                            |         |        |         |  |         |        |        
|                                                    | Common, par value $1, authorized 60,000,000 shares, issued
    51,594,781 in 2005 and 51,223,054 in 2004 |                                            |         | 51,595  |         |  |         | 25,612  |        
|                                                    | Capital in excess of par value                                                                           |                                            |         | 21,458  |         |  |         | 23,995  |        
|                                                    | Accumulated other comprehensive (loss) earnings                                                          |                                            |         | (4,637  | )       |  |         | 1,671   |        
|                                                    | Retained earnings                                                                                        |                                            |         | 414,417 |         |  |         | 377,184 |        
|                                                    |                                                                                                          |                                            |         |         |         | 
|                                                    |                                                                                                          | Total shareholders equity                 |         |         | 482,833 |  |         |         | 428,462 | 
|                                                    |                                                                                                          |                                            |         |         |         | 
|                                                    |                                                                                                          | Total liabilities and shareholders equity |         | $       | 675,272 |  |         | $       | 627,797 | 
|                                                    |                                                                                                          |                                            |         |         |         | 



F-3



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##### Table of Contents



CLARCOR Inc.





CONSOLIDATED STATEMENTS OF EARNINGS


for the years ended November 30, 2005, 2004 and 2003


(Dollars in thousands except per share data)


|                                               |                  |                                                     |         |      |            |   |         |      |            |   |         |        |            | 
|---------------------------------------------- | ---------------- | --------------------------------------------------- | ------- | ---- | ---------- | - | ------- | ---- | ---------- | - | ------- | ------ | ---------- | 
|                                               |                  | 2005                                                |         |      | 2004       |   |         | 2003 |           
|                                               |                  |                                                     |         |      |            |   |         |      |           
|Net sales                                      |                  | $                                                   | 873,974 |      |            | $ | 787,686 |      |            | $ | 741,358 |       
|Cost of sales                                  |                  |                                                     | 608,242 |      |            |   | 547,058 |      |            |   | 519,667 |       
|                                               |                  |                                                     |         |      |            |   |         |      |           
|                                               |                  | Gross profit                                        |         |      | 265,732    |   |         |      | 240,628    |   |         |        | 221,691    | 
|Selling and administrative expenses            |                  |                                                     | 147,240 |      |            |   | 142,451 |      |            |   | 134,629 |       
|                                               |                  |                                                     |         |      |            |   |         |      |           
|                                               |                  | Operating profit                                    |         |      | 118,492    |   |         |      | 98,177     |   |         |        | 87,062     | 
|                                               |                  |                                                     |         |      |            |   |         |      |           
|Other income (expense):                        |                  |                                                     |         |      |            |   |         |      |            |   |         |       
|                                               | Interest expense |                                                     |         | (636 | )          |   |         | (446 | )          |   |         | (1,767 | )         
|                                               | Interest income  |                                                     |         | 928  |            |   |         | 385  |            |   |         | 235    |           
|                                               | Other, net       |                                                     |         | (862 | )          |   |         | 944  |            |   |         | 529    |           
|                                               |                  |                                                     |         |      |            |   |         |      |           
|                                               |                  |                                                     | (570    | )    |            |   | 883     |      |            |   | (1,003  | )     
|                                               |                  |                                                     |         |      |            |   |         |      |           
|                                               |                  | Earnings before income taxes and minority interests |         |      | 117,922    |   |         |      | 99,060     |   |         |        | 86,059     | 
|Provision for income taxes                     |                  |                                                     | 40,968  |      |            |   | 34,717  |      |            |   | 31,371  |       
|                                               |                  |                                                     |         |      |            |   |         |      |           
|                                               |                  | Earnings before minority interests                  |         |      | 76,954     |   |         |      | 64,343     |   |         |        | 54,688     | 
|Minority interests in earnings of subsidiaries |                  |                                                     | (561    | )    |            |   | (346    | )    |            |   | (136    | )     
|                                               |                  |                                                     |         |      |            |   |         |      |           
|Net earnings                                   |                  | $                                                   | 76,393  |      |            | $ | 63,997  |      |            | $ | 54,552  |       
|                                               |                  |                                                     |         |      |            |   |         |      |           
|Net earnings per common share:                 |                  |                                                     |         |      |            |   |         |      |            |   |         |       
|                                               |                  | Basic                                               |         | $    | 1.48       |   |         | $    | 1.26       |   |         | $      | 1.09       | 
|                                               |                  | Diluted                                             |         | $    | 1.46       |   |         | $    | 1.24       |   |         | $      | 1.08       | 
|                                               |                  |                                                     |         |      |            |   |         |      |           
|Average number of common shares outstanding:   |                  |                                                     |         |      |            |   |         |      |            |   |         |       
|                                               |                  | Basic                                               |         |      | 51,658,347 |   |         |      | 50,984,314 |   |         |        | 50,213,122 | 
|                                               |                  | Diluted                                             |         |      | 52,215,689 |   |         |      | 51,506,738 |   |         |        | 50,745,612 | 
|                                               |                  |                                                     |         |      |            |   |         |      |           



F-4



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##### Table of Contents



CLARCOR Inc.





CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


for the years ended November 30, 2005, 2004 and 2003


(Dollars in thousands except per share data)


|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |        |   |   |         |   |  |   |         |        |  
|----------------------------------------- | ------------------------------------ | ------------ | ---------- | - | ----------- | - | ------ | ---------- |  |  | ----------- | --- |  | ----- | ------------- | - | --------------- | -------- | ------- | -------- |  | - | ------ | ------ | - | - | ------- | - |  | - | ------- | ------ | -
|                                          |                                      | Common Stock |            |   |             |   |        |            |  |  |            
|                                          |                                      |              |            |   |             |   |        |            |  |  |            
|                                          |                                      | Issued       |            |   | In Treasury |   |        | Capital in |  |  | Accumulated |     |  |       |               |  
|                                          |                                      |              |            |   |             |   |        | Excess of  |  |  | Other       |     |  |       |               |  
|                                          |                                      | Number       |            |   |             |   | Number |            |  |  |             | Par |  |       | Comprehensive |   |                 | Retained |         |          | 
|                                          |                                      | of Shares    |            |   | Amount      |   |        | of Shares  |  |  | Amount      |     |  | Value |               |   | (Loss) Earnings |          |         | Earnings |  |   | Total  |       
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Balance, November 30, 2002                |                                      |              | 49,837,228 |   |             | $ | 24,919 |            |  |  |            |     |  | $     |              |   |                 | $        | 12,854  |          |  | $ | (6,187 | )      |   | $ | 283,875 |   |  | $ | 315,461 |       
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Net earnings                              |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   | 54,552  |   |  |   | 54,552  |       
|Other comprehensive earnings, net of tax: |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |        |   |   |         |   |  |   |         |       
|                                          | Minimum pension liability adjustment |              |            |  |             |   |        |           |  |  |             |    |  |       |               |  |                 |          |         |         |  |   |        | 517    |   |   |         |  |  |   |         | 517    |  
|                                          | Translation adjustments              |              |            |  |             |   |        |           |  |  |             |    |  |       |               |  |                 |          |         |         |  |   |        | 4,734  |   |   |         |  |  |   |         | 4,734  |  
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|                                          | Total comprehensive earnings         |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |        |   |   |         |   |  |   |         | 59,803 |  
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Stock options exercised                   |                                      |              | 770,340    |   |             |   | 385    |            |  |  |            |     |  |       |              |   |                 |          | 2,097   |          |  |   |       |        |   |   |        |   |  |   | 2,482   |       
|Tax benefit applicable to stock options   |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          | 4,494   |          |  |   |       |        |   |   |        |   |  |   | 4,494   |       
|Issuance of stock under award plans       |                                      |              | 23,826     |   |             |   | 12     |            |  |  |            |     |  |       |              |   |                 |          | 553     |          |  |   |       |        |   |   |        |   |  |   | 565     |       
|Forfeiture of stock under award plans     |                                      |              | (13,140    | ) |             |   | (7     | )          |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   |        |   |  |   | (7      | )     
|Cash dividends  $0.2463 per common share |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   | (12,406 | ) |  |   | (12,406 | )     
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Balance, November 30, 2003                |                                      |              | 50,618,254 |   |             |   | 25,309 |            |  |  |            |     |  |       |              |   |                 |          | 19,998  |          |  |   | (936   | )      |   |   | 326,021 |   |  |   | 370,392 |       
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Net earnings                              |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   | 63,997  |   |  |   | 63,997  |       
|Other comprehensive earnings, net of tax: |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |        |   |   |         |   |  |   |         |       
|                                          | Minimum pension liability adjustment |              |            |  |             |   |        |           |  |  |             |    |  |       |               |  |                 |          |         |         |  |   |        | (1,229 | ) |   |         |  |  |   |         | (1,229 | )
|                                          | Translation adjustments              |              |            |  |             |   |        |           |  |  |             |    |  |       |               |  |                 |          |         |         |  |   |        | 3,836  |   |   |         |  |  |   |         | 3,836  |  
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|                                          | Total comprehensive earnings         |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |        |   |   |         |   |  |   |         | 66,604 |  
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Stock options exercised                   |                                      |              | 530,082    |   |             |   | 265    |            |  |  |            |     |  |       |              |   |                 |          | (2,667  | )        |  |   |       |        |   |   |        |   |  |   | (2,402  | )     
|Tax benefit applicable to stock options   |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          | 5,378   |          |  |   |       |        |   |   |        |   |  |   | 5,378   |       
|Issuance of stock under award plans       |                                      |              | 74,718     |   |             |   | 38     |            |  |  |            |     |  |       |              |   |                 |          | 1,286   |          |  |   |       |        |   |   |        |   |  |   | 1,324   |       
|Cash dividends  $0.2513 per common share |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   | (12,834 | ) |  |   | (12,834 | )     
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Balance, November 30, 2004                |                                      |              | 51,223,054 |   |             |   | 25,612 |            |  |  |            |     |  |       |              |   |                 |          | 23,995  |          |  |   | 1,671  |        |   |   | 377,184 |   |  |   | 428,462 |       
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Net earnings                              |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   | 76,393  |   |  |   | 76,393  |       
|Other comprehensive earnings, net of tax: |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |        |   |   |         |   |  |   |         |       
|                                          | Minimum pension liability adjustment |              |            |  |             |   |        |           |  |  |             |    |  |       |               |  |                 |          |         |         |  |   |        | (2,110 | ) |   |         |  |  |   |         | (2,110 | )
|                                          | Translation adjustments              |              |            |  |             |   |        |           |  |  |             |    |  |       |               |  |                 |          |         |         |  |   |        | (4,198 | ) |   |         |  |  |   |         | (4,198 | )
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|                                          | Total comprehensive earnings         |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |        |   |   |         |   |  |   |         | 70,085 |  
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Stock options exercised                   |                                      |              | 602,897    |   |             |   | 479    |            |  |  |            |     |  |       |              |   |                 |          | (1,669  | )        |  |   |       |        |   |   |        |   |  |   | (1,190  | )     
|Tax benefit applicable to stock options   |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          | 6,789   |          |  |   |       |        |   |   |        |   |  |   | 6,789   |       
|Issuance of stock under award plans       |                                      |              | 137,030    |   |             |   | 97     |            |  |  |            |     |  |       |              |   |                 |          | 2,436   |          |  |   |       |        |   |   |        |   |  |   | 2,533   |       
|Stock split                               |                                      |              |           |   |             |   | 25,775 |            |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   | (25,775 | ) |  |   |        |       
|Purchase treasury stock                   |                                      |              |           |   |             |   |       |            |  |  | (368,200    | )   |  |       | (10,461       | ) |                 |          |        |          |  |   |       |        |   |   |        |   |  |   | (10,461 | )     
|Retire treasury stock                     |                                      |              | (368,200   | ) |             |   | (368   | )          |  |  | 368,200     |     |  |       | 10,461        |   |                 |          | (10,093 | )        |  |   |       |        |   |   |        |   |  |   |        |       
|Cash dividends  $0.2588 per common share |                                      |              |           |   |             |   |       |            |  |  |            |     |  |       |              |   |                 |          |        |          |  |   |       |        |   |   | (13,385 | ) |  |   | (13,385 | )     
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       
|Balance, November 30, 2005                |                                      |              | 51,594,781 |   |             | $ | 51,595 |            |  |  |            |     |  | $     |              |   |                 | $        | 21,458  |          |  | $ | (4,637 | )      |   | $ | 414,417 |   |  | $ | 482,833 |       
|                                          |                                      |              |            |   |             |   |        |            |  |  |             |     |  |       |               |   |                 |          |         |          |  |   |        |       



F-5



---



##### Table of Contents



CLARCOR Inc.





CONSOLIDATED STATEMENTS OF CASH FLOWS


for the years ended November 30, 2005, 2004 and 2003


(Dollars in thousands)


|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |        |         |         |         |        |        |         |  
|------------------------------------------------------- | ----------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------------- | --------------------------------------------------- | ------ | ------ | ------- | ------- | ------ | ------- | ------- | ------- | ------ | ------ | ------- | -
|                                                        |                                                                               | 2005                                                             |                                           |                                                     | 2004   |        |         | 2003    |       
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|Cash flows from operating activities:                   |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |        |         |         |        
|                                                        | Net earnings                                                                  |                                                                  | $                                         | 76,393                                              |        |        | $       | 63,997  |        |         | $       | 54,552  |       
|                                                        | Adjustments to reconcile net earnings to net cash provided by
    operations: |                                                                  |                                           |                                                     |        |        |         |         |        |         |         |         |       
|                                                        |                                                                               | Depreciation                                                     |                                           |                                                     | 19,749 |        |         |         | 18,241 |         |         |         | 18,078 |       
|                                                        |                                                                               | Amortization                                                     |                                           |                                                     | 1,338  |        |         |         | 910    |         |         |         | 907    |       
|                                                        |                                                                               | Minority interests in earnings of subsidiaries                   |                                           |                                                     | 561    |        |         |         | 346    |         |         |         | 136    |       
|                                                        |                                                                               | Net (gain)/ loss on dispositions of plant assets                 |                                           |                                                     | (53    | )      |         |         | (522   | )       |         |         | 105    |       
|                                                        |                                                                               | Changes in assets and liabilities, net of business acquisitions: |                                           |                                                     |        |        |         |         |        |         |         |         |        |       
|                                                        |                                                                               |                                                                  | Short-term investments                    |                                                     |        | (5,300 | )       |         |        | (2,600  | )       |         |        | (2,500 | )      
|                                                        |                                                                               |                                                                  | Accounts receivable                       |                                                     |        | (7,957 | )       |         |        | (13,152 | )       |         |        | (4,392 | )      
|                                                        |                                                                               |                                                                  | Inventories                               |                                                     |        | (395   | )       |         |        | (11,303 | )       |         |        | 3,572  |        
|                                                        |                                                                               |                                                                  | Prepaid expenses and other current assets |                                                     |        | (2,081 | )       |         |        | 831     |         |         |        | (332   | )      
|                                                        |                                                                               |                                                                  | Other noncurrent assets                   |                                                     |        | (661   | )       |         |        | 1,056   |         |         |        | (862   | )      
|                                                        |                                                                               |                                                                  | Accounts payable and accrued liabilities  |                                                     |        | (7,312 | )       |         |        | 7,893   |         |         |        | 5,879  |        
|                                                        |                                                                               |                                                                  | Pension assets and liabilities, net       |                                                     |        | 4,059  |         |         |        | (2,936  | )       |         |        | 1,817  |        
|                                                        |                                                                               |                                                                  | Income taxes                              |                                                     |        | 11,271 |         |         |        | 4,994   |         |         |        | 4,810  |        
|                                                        |                                                                               |                                                                  | Deferred income taxes                     |                                                     |        | (266   | )       |         |        | 4,051   |         |         |        | 3,626  |        
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|                                                        |                                                                               |                                                                  |                                           | Net cash provided by operating activities           |        |        | 89,346  |         |        |         | 71,806  |         |        |        | 85,396  |  
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|Cash flows from investing activities:                   |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |        |         |         |        
|                                                        | Additions to plant assets                                                     |                                                                  |                                           | (24,032                                             | )      |        |         | (22,352 | )      |         |         | (13,042 | )     
|                                                        | Business acquisitions, net of cash acquired                                   |                                                                  |                                           | (28,133                                             | )      |        |         | (41,893 | )      |         |         |        |       
|                                                        | Dispositions of plant assets                                                  |                                                                  |                                           | 653                                                 |        |        |         | 2,071   |        |         |         | 7       |       
|                                                        | Other, net                                                                    |                                                                  |                                           |                                                    |        |        |         | (35     | )      |         |         | 49      |       
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|                                                        |                                                                               |                                                                  |                                           | Net cash used in investing activities               |        |        | (51,512 | )       |        |         | (62,209 | )       |        |        | (12,986 | )
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|Cash flows from financing activities:                   |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |        |         |         |        
|                                                        | Proceeds (payments) under multicurrency revolving credit
    agreements       |                                                                  |                                           | (7,500                                              | )      |        |         | 7,500   |        |         |         | (62,473 | )     
|                                                        | Payments on long-term debt                                                    |                                                                  |                                           | (811                                                | )      |        |         | (519    | )      |         |         | (11,044 | )     
|                                                        | Sales of capital stock under stock option and employee purchase
    plans     |                                                                  |                                           | 5,790                                               |        |        |         | 2,703   |        |         |         | 5,254   |       
|                                                        | Purchase of treasury stock                                                    |                                                                  |                                           | (10,461                                             | )      |        |         |        |        |         |         |        |       
|                                                        | Cash dividends paid                                                           |                                                                  |                                           | (13,385                                             | )      |        |         | (12,834 | )      |         |         | (12,406 | )     
|                                                        | Other, net                                                                    |                                                                  |                                           | (9,332                                              | )      |        |         | 4,213   |        |         |         |        |       
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|                                                        |                                                                               |                                                                  |                                           | Net cash provided by (used in) financing activities |        |        | (35,699 | )       |        |         | 1,063   |         |        |        | (80,669 | )
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|Net effect of exchange rate changes on cash             |                                                                               |                                                                  | (1,053                                    | )                                                   |        |        | 912     |         |        |         | 360     |        
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|Net change in cash and short-term cash investments      |                                                                               |                                                                  | 1,082                                     |                                                     |        |        | 11,572  |         |        |         | (7,899  | )      
|Cash and short-term cash investments, beginning of year |                                                                               |                                                                  | 17,420                                    |                                                     |        |        | 5,848   |         |        |         | 13,747  |        
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       
|Cash and short-term cash investments, end of year       |                                                                               | $                                                                | 18,502                                    |                                                     |        | $      | 17,420  |         |        | $       | 5,848   |        
|                                                        |                                                                               |                                                                  |                                           |                                                     |        |        |         |         |       



F-6



---



##### Table of Contents






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share data)




|   |                    
|-- | -------------------
|A. | Accounting Policies

Principles of Consolidation




Use of Managements Estimates




Accounting Period




Reclassifications




Cash and Cash Equivalents and Short-term
Investments






Foreign Currency Translation




F-7



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)


Derivatives


time-to




Comprehensive Earnings






|                                                 |  |      |        |   |      |   |        |      |  |   |      |  
|------------------------------------------------ |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ---- | -
|                                                 |  | 2005 |        |   | 2004 |   |        | 2003 | 
|                                                 |  |      |        |   |      |   |        |      | 
|Minimum pension liability, net of tax            |  | $    | (3,944 | ) |      | $ | (1,834 | )    |  | $ | (605 | )
|Translation adjustments                          |  |      | (693   | ) |      |   | 3,505  |      |  |   | (331 | )
|                                                 |  |      |        |   |      |   |        |      | 
|Accumulated other comprehensive earnings/ (loss) |  | $    | (4,637 | ) |      | $ | 1,671  |      |  | $ | (936 | )
|                                                 |  |      |        |   |      |   |        |      | 



Stock-based Compensation






F-8



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|                                                                                              |  |      |        |   |      |   |        |      |  |   |        |  
|--------------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                              |  | 2005 |        |   | 2004 |   |        | 2003 | 
|                                                                                              |  |      |        |   |      |   |        |      | 
|Net earnings, as reported                                                                     |  | $    | 76,393 |   |      | $ | 63,997 |      |  | $ | 54,552 |  
|Add stock-based compensation expense, net of tax, included in
    net earnings                |  |      | 531    |   |      |   | 489    |      |  |   | 361    |  
|Less total stock-based compensation expense under the fair
    value-based method, net of tax |  |      | (8,486 | ) |      |   | (4,362 | )    |  |   | (2,668 | )
|                                                                                              |  |      |        |   |      |   |        |      | 
|Pro forma net earnings                                                                        |  | $    | 68,438 |   |      | $ | 60,124 |      |  | $ | 52,245 |  
|                                                                                              |  |      |        |   |      |   |        |      | 
|Basic EPS, as reported                                                                        |  | $    | 1.48   |   |      | $ | 1.26   |      |  | $ | 1.09   |  
|Pro forma basic EPS                                                                           |  | $    | 1.32   |   |      | $ | 1.18   |      |  | $ | 1.04   |  
|Diluted EPS, as reported                                                                      |  | $    | 1.46   |   |      | $ | 1.24   |      |  | $ | 1.08   |  
|Pro forma diluted EPS                                                                         |  | $    | 1.31   |   |      | $ | 1.17   |      |  | $ | 1.03   |  





Accounts Receivable and Allowance for Losses




Plant Assets




F-9



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)


Goodwill and Other Intangible Assets






Impairment of Long-Lived Assets




Income Taxes




Revenue Recognition




Product Warranties




Research and Development




Self-Insurance




F-10



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




Guarantees








New Pronouncements








|   |             
|-- | ------------
|B. | Acquisitions



F-11



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)






|                                               |                       |   |        |        | 
|---------------------------------------------- | --------------------- | - | ------ | ------ | 
|Cash                                           |                       | $ | 244    |       
|Accounts receivable, less allowance for losses |                       |   | 1,312  |       
|Inventory, net                                 |                       |   | 468    |       
|Prepaid assets                                 |                       |   | 59     |       
|Plant assets                                   |                       |   | 3,580  |       
|Goodwill                                       |                       |   | 9,114  |       
|Other acquired intangibles                     |                       |   | 10,567 |       
|                                               |                       |   |       
|                                               | Total assets acquired |   |        | 25,344 | 
|Accounts payable and accrued liabilities       |                       |   | (479   | )     
|                                               |                       |   |       
|                                               | Net assets acquired   |   | $      | 24,865 | 
|                                               |                       |   |       





F-12



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)






|                                               |                       |   |        |        | 
|---------------------------------------------- | --------------------- | - | ------ | ------ | 
|Cash                                           |                       | $ | 2      |       
|Accounts receivable, less allowance for losses |                       |   | 2,980  |       
|Inventory, net                                 |                       |   | 3,679  |       
|Prepaid assets                                 |                       |   | 62     |       
|Plant assets                                   |                       |   | 9,555  |       
|Goodwill                                       |                       |   | 16,639 |       
|Other acquired intangibles                     |                       |   | 5,782  |       
|                                               |                       |   |       
|                                               | Total assets acquired |   |        | 38,699 | 
|Accounts payable and accrued liabilities       |                       |   | (1,569 | )     
|                                               |                       |   |       
|                                               | Net assets acquired   |   | $      | 37,130 | 
|                                               |                       |   |       





|   |            
|-- | -----------
|C. | Inventories

first-in, first-out


|                  |  |      |         |  |      |   |         | 
|----------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                  |  | 2005 |         |  | 2004 |  
|                  |  |      |         |  |      |  
|Raw materials     |  | $    | 42,205  |  |      | $ | 39,630  | 
|Work in process   |  |      | 17,057  |  |      |   | 14,432  | 
|Finished products |  |      | 58,246  |  |      |   | 61,509  | 
|                  |  |      |         |  |      |  
|                  |  | $    | 117,508 |  |      | $ | 115,571 | 
|                  |  |      |         |  |      |  

F-13



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|   |             
|-- | ------------
|D. | Plant Assets



|                                |  |      |         |  |      |   |         | 
|------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                |  | 2005 |         |  | 2004 |  
|                                |  |      |         |  |      |  
|Land                            |  | $    | 7,153   |  |      | $ | 6,934   | 
|Buildings and building fixtures |  |      | 81,587  |  |      |   | 80,395  | 
|Machinery and equipment         |  |      | 253,191 |  |      |   | 233,655 | 
|Construction in process         |  |      | 13,285  |  |      |   | 10,186  | 
|                                |  |      |         |  |      |  
|                                |  |      | 355,216 |  |      |   | 331,170 | 
|Less accumulated depreciation   |  |      | 205,711 |  |      |   | 188,928 | 
|                                |  |      |         |  |      |  
|                                |  | $    | 149,505 |  |      | $ | 142,242 | 
|                                |  |      |         |  |      |  



|   |                     
|-- | --------------------
|E. | Acquired Intangibles



|                             |                                  |               |        |             |               |   |        |           |  |                |   |   |  |   |         |        |  
|---------------------------- | -------------------------------- | ------------- | ------ | ----------- | ------------- | - | ------ | --------- |  | -------------- | - | - |  | - | ------- | ------ | -
|                             |                                  |               |        | Industrial/ |               |   |        |           | 
|                             |                                  | Engine/Mobile |        |             | Environmental |   |        |           |  |               
|                             |                                  | Filtration    |        |             | Filtration    |   |        | Packaging |  | Total Goodwill |  
|                             |                                  |               |        |             |               |   |        |           |  |                |  
|Balance at November 30, 2003 |                                  | $             | 12,170 |             |               | $ | 70,550 |           |  | $              |  |   |  | $ | 82,720  |       
|                             | Acquisitions                     |               |        | 3,598       |               |   |        | 16,357    |  |                |   |  |  |   |         | 19,955 |  
|                             | Currency translation adjustments |               |        | 481         |               |   |        | 18        |  |                |   |  |  |   |         | 499    |  
|                             |                                  |               |        |             |               |   |        |           |  |                |   |  
|Balance at November 30, 2004 |                                  |               | 16,249 |             |               |   | 86,925 |           |  |                |  |   |  |   | 103,174 |       
|                             | Acquisitions                     |               |        |            |               |   |        | 11,560    |  |                |   |  |  |   |         | 11,560 |  
|                             | Currency translation adjustments |               |        | (571        | )             |   |        | 115       |  |                |   |  |  |   |         | (456   | )
|                             |                                  |               |        |             |               |   |        |           |  |                |   |  
|Balance at November 30, 2005 |                                  | $             | 15,678 |             |               | $ | 98,600 |           |  | $              |  |   |  | $ | 114,278 |       
|                             |                                  |               |        |             |               |   |        |           |  |                |   |  



|                              |                                   |                                 |   |             |               |  |   |           |       |       |   |   |   |  |   |        |       | 
|----------------------------- | --------------------------------- | ------------------------------- | - | ----------- | ------------- |  | - | --------- | ----- | ----- | - | - | - |  | - | ------ | ----- | 
|                              |                                   |                                 |   | Industrial/ |               |  |   |           |      
|                              |                                   | Engine/Mobile                   |   |             | Environmental |  |   |           |       |      
|                              |                                   | Filtration                      |   |             | Filtration    |  |   | Packaging |       | Total |  
|                              |                                   |                                 |   |             |               |  |   |           |       |       |  
|Balance at November 30, 2004: |                                   |                                 |   |             |               |  |   |           |       |       |   |   |   |  |   |       
|                              | Trademarks                        |                                 | $ | 603         |               |  | $ | 28,891    |       |       | $ |  |   |  | $ | 29,494 |      
|                              |                                   |                                 |   |             |               |  |   |           |       |       |   |  
|                              | Customer relationships, gross     |                                 | $ | 943         |               |  | $ | 7,844     |       |       | $ |  |   |  | $ | 8,787  |      
|                              |                                   | Less accumulated amortization   |   |             | 188           |  |   |           | 754   |       |   |   |  |  |   |        | 942   | 
|                              |                                   |                                 |   |             |               |  |   |           |       |       |   |  
|                              |                                   | Customer relationships, net     |   | $           | 755           |  |   | $         | 7,090 |       |   | $ |  |  |   | $      | 7,845 | 
|                              |                                   |                                 |   |             |               |  |   |           |       |       |   |  
|                              | Other acquired intangibles, gross |                                 | $ | 209         |               |  | $ | 11,024    |       |       | $ |  |   |  | $ | 11,233 |      
|                              |                                   | Less accumulated amortization   |   |             | 136           |  |   |           | 3,821 |       |   |   |  |  |   |        | 3,957 | 
|                              |                                   |                                 |   |             |               |  |   |           |       |       |   |  
|                              |                                   | Other acquired intangibles, net |   | $           | 73            |  |   | $         | 7,203 |       |   | $ |  |  |   | $      | 7,276 | 
|                              |                                   |                                 |   |             |               |  |   |           |       |       |   |  

F-14



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)


|                              |                                   |                                 |   |             |               |  |   |           |        |       |   |   |   |  |   |        |        | 
|----------------------------- | --------------------------------- | ------------------------------- | - | ----------- | ------------- |  | - | --------- | ------ | ----- | - | - | - |  | - | ------ | ------ | 
|                              |                                   |                                 |   | Industrial/ |               |  |   |           |       
|                              |                                   | Engine/Mobile                   |   |             | Environmental |  |   |           |        |      
|                              |                                   | Filtration                      |   |             | Filtration    |  |   | Packaging |        | Total |  
|                              |                                   |                                 |   |             |               |  |   |           |        |       |  
|Balance at November 30, 2005: |                                   |                                 |   |             |               |  |   |           |        |       |   |   |   |  |   |       
|                              | Trademarks                        |                                 | $ | 603         |               |  | $ | 29,158    |        |       | $ |  |   |  | $ | 29,761 |       
|                              |                                   |                                 |   |             |               |  |   |           |        |       |   |  
|                              | Customer relationships, gross     |                                 | $ | 943         |               |  | $ | 16,500    |        |       | $ |  |   |  | $ | 17,443 |       
|                              |                                   | Less accumulated amortization   |   |             | 283           |  |   |           | 1,214  |       |   |   |  |  |   |        | 1,497  | 
|                              |                                   |                                 |   |             |               |  |   |           |        |       |   |  
|                              |                                   | Customer relationships, net     |   | $           | 660           |  |   | $         | 15,286 |       |   | $ |  |  |   | $      | 15,946 | 
|                              |                                   |                                 |   |             |               |  |   |           |        |       |   |  
|                              | Other acquired intangibles, gross |                                 | $ | 207         |               |  | $ | 12,724    |        |       | $ |  |   |  | $ | 12,931 |       
|                              |                                   | Less accumulated amortization   |   |             | 193           |  |   |           | 4,547  |       |   |   |  |  |   |        | 4,740  | 
|                              |                                   |                                 |   |             |               |  |   |           |        |       |   |  
|                              |                                   | Other acquired intangibles, net |   | $           | 14            |  |   | $         | 8,177  |       |   | $ |  |  |   | $      | 8,191  | 
|                              |                                   |                                 |   |             |               |  |   |           |        |       |   |  









|   |                                         
|-- | ----------------------------------------
|F. | Accounts Payable and Accrued Liabilities



|                                        |  |      |         |  |      |   |         | 
|--------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                        |  | 2005 |         |  | 2004 |  
|                                        |  |      |         |  |      |  
|Accounts payable                        |  | $    | 49,239  |  |      | $ | 63,605  | 
|Accrued salaries, wages and commissions |  |      | 16,649  |  |      |   | 16,226  | 
|Compensated absences                    |  |      | 7,632   |  |      |   | 7,542   | 
|Accrued insurance liabilities           |  |      | 12,053  |  |      |   | 10,872  | 
|Accrued pension liabilities             |  |      | 606     |  |      |   | 680     | 
|Warranties                              |  |      | 1,122   |  |      |   | 1,200   | 
|Other accrued liabilities               |  |      | 21,392  |  |      |   | 17,734  | 
|                                        |  |      |         |  |      |  
|                                        |  | $    | 108,693 |  |      | $ | 117,859 | 
|                                        |  |      |         |  |      |  



F-15



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|                             |                                                   |   |       |        |  
|---------------------------- | ------------------------------------------------- | - | ----- | ------ | -
|Balance at November 30, 2004 |                                                   | $ | 1,200 |       
|                             | Accruals for warranties issued during the period  |   |       | 1,071  |  
|                             | Accruals related to pre-existing warranties       |   |       | 29     |  
|                             | Settlements made during the period                |   |       | (1,160 | )
|                             | Other adjustments, primarily currency translation |   |       | (18    | )
|                             |                                                   |   |      
|Balance at November 30, 2005 |                                                   | $ | 1,122 |       
|                             |                                                   |   |      



|   |               
|-- | --------------
|G. | Long-Term Debt



|                                                                                                                       |  |      |        |  |      |   |        | 
|---------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                                                                                                       |  | 2005 |        |  | 2004 |  
|                                                                                                                       |  |      |        |  |      |  
|Multicurrency revolving credit agreements, interest payable at
    the end of each funding period at an adjusted LIBOR |  | $    |       |  |      | $ | 7,500  | 
|Industrial Revenue Bonds, at weighted average interest rates of
    3.11% and 1.81% at year end                        |  |      | 15,820 |  |      |   | 16,638 | 
|Other                                                                                                                  |  |      | 422    |  |      |   | 412    | 
|                                                                                                                       |  |      |        |  |      |  
|                                                                                                                       |  |      | 16,242 |  |      |   | 24,550 | 
|Less current portion                                                                                                   |  |      | 233    |  |      |   | 420    | 
|                                                                                                                       |  |      |        |  |      |  
|                                                                                                                       |  | $    | 16,009 |  |      | $ | 24,130 | 
|                                                                                                                       |  |      |        |  |      |  













F-16



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|   |       
|-- | ------
|H. | Leases





|   |                                       
|-- | --------------------------------------
|I. | Pension and Other Postretirement Plans





non-U.S. non-U.S.




|                                        |  |                  |         |                      |          |   |         |      |  |   |       |   |  |   |        |  
|--------------------------------------- |  | ---------------- | ------- | -------------------- | -------- | - | ------- | ---- |  | - | ----- | - |  | - | ------ | -
|                                        |  |                  |         | Other Postretirement |         
|                                        |  | Pension Benefits |         |                      | Benefits |  
|                                        |  |                  |         |                      |          |  
|                                        |  | 2005             |         |                      | 2004     |   |         | 2005 |  |   | 2004  |  
|                                        |  |                  |         |                      |          |   |         |      |  |   |       |  
|Change in benefit obligation:           |  |                  |         |                      |          |   |         |      |  |   |       |   |  |   |        |  
|Benefit obligation at beginning of year |  | $                | 116,520 |                      |          | $ | 100,509 |      |  | $ | 1,994 |   |  | $ | 3,750  |  
|Currency translation                    |  |                  | (754    | )                    |          |   | 731     |      |  |   |      |   |  |   |       |  
|Service cost                            |  |                  | 3,755   |                      |          |   | 3,473   |      |  |   | 30    |   |  |   | 124    |  
|Interest cost                           |  |                  | 6,236   |                      |          |   | 5,906   |      |  |   | 103   |   |  |   | 217    |  
|Plan participants contributions        |  |                  | 90      |                      |          |   | 78      |      |  |   |      |   |  |   |       |  
|Amendments                              |  |                  |        |                      |          |   | (138    | )    |  |   |      |   |  |   | (1,708 | )
|Actuarial losses/ (gains)               |  |                  | 6,027   |                      |          |   | 10,765  |      |  |   | (295  | ) |  |   | (156   | )
|Benefits paid                           |  |                  | (4,907  | )                    |          |   | (4,804  | )    |  |   | (62   | ) |  |   | (233   | )
|                                        |  |                  |         |                      |          |   |         |      |  |   |       |  
|Benefit obligation at end of year       |  | $                | 126,967 |                      |          | $ | 116,520 |      |  | $ | 1,770 |   |  | $ | 1,994  |  
|                                        |  |                  |         |                      |          |   |         |      |  |   |       |  

F-17



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)


|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |          |   |   |        |          |  
|-------------------------------------------------------------- | ------------------------------------------------ | ---------------- | ------- | -------- | ----------------------------- | - | ------- | -------- | - | - | ------ | -------- | - | - | ------ | -------- | -
|                                                               |                                                  | Pension Benefits |         |          | Other Postretirement Benefits |  
|                                                               |                                                  |                  |         |          |                               |  
|                                                               |                                                  | 2005             |         |          | 2004                          |   |         | 2005     |   |   | 2004   |         
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Change in plan assets:                                         |                                                  |                  |         |          |                               |   |         |          |   |   |        |          |   |   |        |         
|Fair value of plan assets at beginning of year                 |                                                  | $                | 96,531  |          |                               | $ | 86,582  |          |   | $ |       |          |   | $ |       |         
|Currency translation                                           |                                                  |                  | (563    | )        |                               |   | 541     |          |   |   |       |          |   |   |       |         
|Actual return on plan assets                                   |                                                  |                  | 8,519   |          |                               |   | 7,207   |          |   |   |       |          |   |   |       |         
|Employer contribution                                          |                                                  |                  | 201     |          |                               |   | 6,667   |          |   |   |       |          |   |   |       |         
|Plan participants contributions                               |                                                  |                  | 90      |          |                               |   | 78      |          |   |   |       |          |   |   |       |         
|Benefits paid                                                  |                                                  |                  | (4,647  | )        |                               |   | (4,544  | )        |   |   |       |          |   |   |       |         
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Fair value of plan assets at end of year                       |                                                  | $                | 100,131 |          |                               | $ | 96,531  |          |   | $ |       |          |   | $ |       |         
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Reconciliation of Funded Status:                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |          |   |   |        |         
|Accumulated benefit obligation                                 |                                                  | $                | 115,890 |          |                               | $ | 106,668 |          |   | $ | n/a    |          |   | $ | n/a    |         
|Additional benefit obligation for future salary                |                                                  |                  |         |          |                               |   |         |          |   |   |        |          |   |   |        |         
|increases                                                      |                                                  |                  | 11,077  |          |                               |   | 9,852   |          |   |   | n/a    |          |   |   | n/a    |         
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Benefit obligation                                             |                                                  |                  | 126,967 |          |                               |   | 116,520 |          |   |   | 1,770  |          |   |   | 1,994  |         
|Fair value of plan assets                                      |                                                  |                  | 100,131 |          |                               |   | 96,531  |          |   |   |       |          |   |   |       |         
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Funded status                                                  |                                                  |                  | (26,836 | )        |                               |   | (19,989 | )        |   |   | (1,770 | )        |   |   | (1,994 | )       
|Unrecognized prior service cost                                |                                                  |                  | 1,216   |          |                               |   | 1,066   |          |   |   | (1,586 | )        |   |   | (1,708 | )       
|Unrecognized net actuarial loss/ (gain)                        |                                                  |                  | 38,099  |          |                               |   | 35,630  |          |   |   | (1,160 | )        |   |   | (943   | )       
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Net amount recognized                                          |                                                  | $                | 12,479  |          |                               | $ | 16,707  |          |   | $ | (4,516 | )        |   | $ | (4,645 | )       
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Amounts recognized in the Consolidated Balance Sheets include: |                                                  |                  |         |          |                               |   |         |          |   |   |        |          |   |   |        |         
|                                                               | Prepaid benefit cost                             |                  | $       | 22,069   |                               |   | $       | 24,574   |   |   | $      |         |   |   | $      |         |  
|                                                               | Accrued benefit liability                        |                  |         | (16,893  | )                             |   |         | (11,936  | ) |   |        | (4,516   | ) |   |        | (4,645   | )
|                                                               | Other noncurrent assets                          |                  |         | 986      |                               |   |         | 1,146    |   |   |        |         |   |   |        |         |  
|                                                               | Accumulated other comprehensive loss, pretax     |                  |         | 6,317    |                               |   |         | 2,923    |   |   |        |         |   |   |        |         |  
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|                                                               | Net amount recognized                            |                  | $       | 12,479   |                               |   | $       | 16,707   |   |   | $      | (4,516   | ) |   | $      | (4,645   | )
|                                                               |                                                  |                  |         |          |                               |   |         |          |   |   |        |         
|Assumptions:                                                   |                                                  |                  |         |          |                               |   |         |          |   |   |        |          |   |   |        |         
|                                                               | Discount rate-qualified plans                    |                  |         | 5.50     | %                             |   |         | 5.50     | % |   |        | 5.00     | % |   |        | 5.50     | %
|                                                               | Discount rate-nonqualified plan                  |                  |         | 5.00     | %                             |   |         | 5.50     | % |   |        | n/a      |   |   |        | n/a      |  
|                                                               | Rate of compensation increase-qualified plans    |                  |         | 4.00     | %                             |   |         | 4.00     | % |   |        | n/a      |   |   |        | n/a      |  
|                                                               | Rate of compensation increase-nonqualified plans |                  |         | 6.50     | %                             |   |         | 6.50     | % |   |        | n/a      |   |   |        | n/a      |  
|                                                               | Measurement date                                 |                  |         | 11/01/05 |                               |   |         | 11/01/04 |   |   |        | 11/01/05 |   |   |        | 11/01/04 |  

non-U.S.


F-18



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)


non-U.S.




year-to




|                      |  |      |       |   |      |  |       |  
|--------------------- |  | ---- | ----- | - | ---- |  | ----- | -
|                      |  | 2005 |       |   | 2004 | 
|                      |  |      |       |   |      | 
|Equity securities     |  |      | 71.9  | % |      |  | 69.0  | %
|Debt securities       |  |      | 24.8  | % |      |  | 30.6  | %
|Real estate and other |  |      | 3.3   | % |      |  | 0.4   | %
|                      |  |      |       |   |      | 
|Total                 |  |      | 100.0 | % |      |  | 100.0 | %
|                      |  |      |       |   |      | 



|          |  |          |        |       |                |   |     | 
|--------- |  | -------- | ------ | ----- | -------------- | - | --- | 
|          |  |          |        | Other |               
|          |  | Pension  |        |       | Postretirement |  
|          |  | Benefits |        |       | Benefits       |  
|          |  |          |        |       |                |  
|2006      |  | $        | 5,052  |       |                | $ | 277 | 
|2007      |  |          | 5,177  |       |                |   | 290 | 
|2008      |  |          | 18,605 |       |                |   | 262 | 
|2009      |  |          | 5,768  |       |                |   | 222 | 
|2010      |  |          | 13,124 |       |                |   | 189 | 
|2011-2015 |  |          | 34,704 |       |                |   | 589 | 

F-19



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|                                         |                                                 |                    |   |          |       |  |   |          |       |  |   |          |       | 
|---------------------------------------- | ----------------------------------------------- | ------------------ | - | -------- | ----- |  | - | -------- | ----- |  | - | -------- | ----- | 
|                                         |                                                 | Pension Benefits   |  
|                                         |                                                 |                    |  
|                                         |                                                 | 2005               |   |          | 2004  |  |   | 2003     |      
|                                         |                                                 |                    |   |          |       |  |   |          |      
|Components of net periodic benefit cost: |                                                 |                    |   |          |       |  |   |          |       |  |   |         
|                                         | Service cost                                    |                    | $ | 3,755    |       |  | $ | 3,473    |       |  | $ | 4,327    |      
|                                         | Interest cost                                   |                    |   | 6,236    |       |  |   | 5,906    |       |  |   | 5,820    |      
|                                         | Expected return on plan assets                  |                    |   | (7,483   | )     |  |   | (6,963   | )     |  |   | (6,001   | )    
|                                         | Amortization of unrecognized:                   |                    |   |          |       |  |   |          |       |  |   |          |      
|                                         |                                                 | Prior service cost |   |          | 146   |  |   |          | 158   |  |   |          | 140   | 
|                                         |                                                 | Net actuarial loss |   |          | 2,105 |  |   |          | 1,375 |  |   |          | 1,689 | 
|                                         | Settlement costs for a terminated plan          |                    |   |         |       |  |   |         |       |  |   | 69       |      
|                                         |                                                 |                    |   |          |       |  |   |          |      
|                                         | Net periodic benefit cost                       |                    | $ | 4,759    |       |  | $ | 3,949    |       |  | $ | 6,044    |      
|                                         |                                                 |                    |   |          |       |  |   |          |      
|Assumptions:                             |                                                 |                    |   |          |       |  |   |          |       |  |   |         
|                                         | Discount rate-qualified plans                   |                    |   | 5.50     | %     |  |   | 6.00     | %     |  |   | 6.75     | %    
|                                         | Discount rate-nonqualified plan                 |                    |   | 5.50     | %     |  |   | 6.00     | %     |  |   | 6.75     | %    
|                                         | Expected return on plan assets                  |                    |   | 8.00     | %     |  |   | 8.25     | %     |  |   | 8.50     | %    
|                                         | Rate of compensation increase-qualified plans   |                    |   | 4.00     | %     |  |   | 4.00     | %     |  |   | 5.00     | %    
|                                         | Rate of compensation increase-nonqualified plan |                    |   | 6.50     | %     |  |   | 6.50     | %     |  |   | 6.50     | %    
|                                         | Measurement date                                |                    |   | 11/01/04 |       |  |   | 11/01/03 |       |  |   | 11/01/02 |      





F-20



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|                                         |                               |                               |   |          |      |   |   |          |     |   |   |          |     |  
|---------------------------------------- | ----------------------------- | ----------------------------- | - | -------- | ---- | - | - | -------- | --- | - | - | -------- | --- | -
|                                         |                               | Other Postretirement Benefits |  
|                                         |                               |                               |  
|                                         |                               | 2005                          |   |          | 2004 |   |   | 2003     |    
|                                         |                               |                               |   |          |      |   |   |          |    
|Components of net periodic benefit cost: |                               |                               |   |          |      |   |   |          |     |   |   |         
|                                         | Service cost                  |                               | $ | 30       |      |   | $ | 124      |     |   | $ | 114      |    
|                                         | Interest cost                 |                               |   | 103      |      |   |   | 217      |     |   |   | 237      |    
|                                         | Amortization of unrecognized: |                               |   |          |      |   |   |          |     |   |   |          |    
|                                         |                               | Prior service cost            |   |          | (122 | ) |   |          |    |   |   |          |    |  
|                                         |                               | Net actuarial gain            |   |          | (77  | ) |   |          | (32 | ) |   |          | (20 | )
|                                         |                               |                               |   |          |      |   |   |          |    
|                                         | Net periodic benefit cost     |                               | $ | (66      | )    |   | $ | 309      |     |   | $ | 331      |    
|                                         |                               |                               |   |          |      |   |   |          |    
|Assumptions:                             |                               |                               |   |          |      |   |   |          |     |   |   |         
|                                         | Discount rate                 |                               |   | 5.50     | %    |   |   | 6.00     | %   |   |   | 6.75     | %  
|                                         | Measurement date              |                               |   | 11/01/04 |      |   |   | 11/01/03 |     |   |   | 11/01/02 |    







|   |             
|-- | ------------
|J. | Income Taxes



|         |         |      |        |        |      |   |        |        |  |   |        |        | 
|-------- | ------- | ---- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|         |         | 2005 |        |        | 2004 |   |        | 2003   | 
|         |         |      |        |        |      |   |        |        | 
|Current: |         |      |        |        |      |   |        |        |  |   |        |       
|         | Federal |      | $      | 33,608 |      |   | $      | 25,551 |  |   | $      | 24,433 | 
|         | State   |      |        | 4,057  |      |   |        | 3,043  |  |   |        | 2,066  | 
|         | Foreign |      |        | 3,885  |      |   |        | 2,362  |  |   |        | 2,938  | 
|Deferred |         |      | (582   | )      |      |   | 3,761  |        |  |   | 1,934  |       
|         |         |      |        |        |      |   |        |        | 
|         |         | $    | 40,968 |        |      | $ | 34,717 |        |  | $ | 31,371 |       
|         |         |      |        |        |      |   |        |        | 





|                |  |      |         |  |      |   |        |      |  |   |        | 
|--------------- |  | ---- | ------- |  | ---- | - | ------ | ---- |  | - | ------ | 
|                |  | 2005 |         |  | 2004 |   |        | 2003 | 
|                |  |      |         |  |      |   |        |      | 
|Domestic income |  | $    | 106,162 |  |      | $ | 90,770 |      |  | $ | 77,779 | 
|Foreign income  |  |      | 11,760  |  |      |   | 8,290  |      |  |   | 8,280  | 
|                |  |      |         |  |      |   |        |      | 
|                |  | $    | 117,922 |  |      | $ | 99,060 |      |  | $ | 86,059 | 
|                |  |      |         |  |      |   |        |      | 

F-21



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|                                           |  |                   |      |   |      |  |      |      |  |  |      |  
|------------------------------------------ |  | ----------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                           |  | Percent of Pretax |     
|                                           |  | Earnings          |     
|                                           |  |                   |     
|                                           |  | 2005              |      |   | 2004 |  |      | 2003 | 
|                                           |  |                   |      |   |      |  |      |      | 
|Statutory U.S. tax rates                   |  |                   | 35.0 | % |      |  | 35.0 | %    |  |  | 35.0 | %
|State income taxes, net of federal benefit |  |                   | 2.1  |   |      |  | 2.1  |      |  |  | 1.7  |  
|Foreign sales                              |  |                   | (0.6 | ) |      |  | (0.8 | )    |  |  | (0.8 | )
|Tax credits                                |  |                   | (0.9 | ) |      |  | (2.5 | )    |  |  | (1.1 | )
|Foreign taxes at different rates           |  |                   | (0.8 | ) |      |  | (0.1 | )    |  |  | 1.2  |  
|Other, net                                 |  |                   | (0.1 | ) |      |  | 1.3  |      |  |  | 0.5  |  
|                                           |  |                   |      |   |      |  |      |      | 
|Consolidated effective income tax rate     |  |                   | 34.7 | % |      |  | 35.0 | %    |  |  | 36.5 | %
|                                           |  |                   |      |   |      |  |      |      | 



|                               |                                            |      |         |         |      |   |         |         |  
|------------------------------ | ------------------------------------------ | ---- | ------- | ------- | ---- | - | ------- | ------- | -
|                               |                                            | 2005 |         |         | 2004 |  
|                               |                                            |      |         |         |      |  
|Deferred tax assets:           |                                            |      |         |         |      |   |         |        
|                               | Deferred compensation                      |      | $       | 4,261   |      |   | $       | 4,206   |  
|                               | Other postretirement benefits              |      |         | 1,094   |      |   |         | 1,132   |  
|                               | Tax credits and foreign loss carryforwards |      |         | 1,523   |      |   |         | 2,699   |  
|                               | Accounts receivable                        |      |         | 4,682   |      |   |         | 4,529   |  
|                               | Inventories                                |      |         | 4,002   |      |   |         | 3,626   |  
|                               | Accrued liabilities and other              |      |         | 5,436   |      |   |         | 5,056   |  
|                               | Valuation allowance                        |      |         | (896    | )    |   |         | (1,230  | )
|                               |                                            |      |         |         |      |  
|Total deferred tax assets, net |                                            |      | 20,102  |         |      |   | 20,018  |        
|                               |                                            |      |         |         |      |  
|Deferred tax liabilities:      |                                            |      |         |         |      |   |         |        
|                               | Pensions                                   |      |         | (2,192  | )    |   |         | (6,207  | )
|                               | Plant assets                               |      |         | (16,547 | )    |   |         | (16,500 | )
|                               | Intangibles                                |      |         | (8,511  | )    |   |         | (6,406  | )
|                               |                                            |      |         |         |      |  
|Total deferred tax liabilities |                                            |      | (27,250 | )       |      |   | (29,113 | )      
|                               |                                            |      |         |         |      |  
|Deferred tax liability, net    |                                            | $    | (7,148  | )       |      | $ | (9,095  | )      
|                               |                                            |      |         |         |      |  





F-22



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)






|   |                 
|-- | ----------------
|K. | Relocation Costs





|   |              
|-- | -------------
|L. | Contingencies











|   |                                
|-- | -------------------------------
|M. | Preferred Stock Purchase Rights







F-23



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|   |               
|-- | --------------
|N. | Incentive Plan





Stock Options






|                                   |  |        |            |          |       |   |       |        |          |  |            |   |  |          |       |  |       |  |            |   |  |   |       | 
|---------------------------------- |  | ------ | ---------- | -------- | ----- | - | ----- | ------ | -------- |  | ---------- | - |  | -------- | ----- |  | ----- |  | ---------- | - |  | - | ----- | 
|                                   |  | 2005   |            |          | 2004  |   |       | 2003   |         
|                                   |  |        |            |          |       |   |       |        |         
|                                   |  |        |            | Weighted |       |   |       |        | Weighted |  |            |   |  | Weighted |      
|                                   |  |        |            | Average  |       |   |       |        | Average  |  |            |   |  | Average  |      
|                                   |  |        |            | Exercise |       |   |       |        | Exercise |  |            |   |  | Exercise |      
|                                   |  | Shares |            |          | Price |   |       | Shares |          |  | Price      |   |  | Shares   |       |  | Price | 
|                                   |  |        |            |          |       |   |       |        |          |  |            |   |  |          |       |  |       | 
|Outstanding at beginning of year   |  |        | 3,676,306  |          |       | $ | 15.42 |        |          |  | 3,831,868  |   |  | $        | 11.84 |  |       |  | 4,092,536  |   |  | $ | 9.69  | 
|Granted                            |  |        | 1,374,865  |          |       |   | 27.50 |        |          |  | 1,048,738  |   |  |          | 22.54 |  |       |  | 1,019,442  |   |  |   | 16.83 | 
|Exercised                          |  |        | (1,105,778 | )        |       |   | 11.98 |        |          |  | (1,148,694 | ) |  |          | 10.12 |  |       |  | (1,228,634 | ) |  |   | 8.84  | 
|Surrendered                        |  |        | (59,478    | )        |       |   | 18.52 |        |          |  | (55,606    | ) |  |          | 14.44 |  |       |  | (51,476    | ) |  |   | 11.65 | 
|                                   |  |        |            |          |       |   |       |        |          |  |            |   |  |          |       |  |       | 
|Outstanding at end of year         |  |        | 3,885,915  |          |       | $ | 20.63 |        |          |  | 3,676,306  |   |  | $        | 15.42 |  |       |  | 3,831,868  |   |  | $ | 11.84 | 
|                                   |  |        |            |          |       |   |       |        |          |  |            |   |  |          |       |  |       | 
|Options exercisable at end of year |  |        | 3,511,015  |          |       | $ | 20.63 |        |          |  | 2,725,328  |   |  | $        | 14.52 |  |       |  | 2,698,080  |   |  | $ | 11.40 | 
|                                   |  |        |            |          |       |   |       |        |          |  |            |   |  |          |       |  |       | 



|                |  |                     |           |                     |       |   |           |               |  |        |          |  |           |  |  |   |       | 
|--------------- |  | ------------------- | --------- | ------------------- | ----- | - | --------- | ------------- |  | ------ | -------- |  | --------- |  |  | - | ----- | 
|                |  | Options Outstanding |           | Options Exercisable |      
|                |  |                     |           |                     |      
|                |  |                     |           | Weighted            |       |   | Weighted  |               |  |        | Weighted | 
|                |  |                     |           | Average             |       |   | Average   |               |  |        | Average  | 
|Range of        |  |                     |           | Exercise            |       |   | Remaining |               |  |        | Exercise | 
|Exercise Prices |  | Number              |           |                     | Price |   |           | Life in Years |  | Number |          |  | Price     | 
|                |  |                     |           |                     |       |   |           |               |  |        |          |  |           | 
|$7.21 - $9.79   |  |                     | 520,126   |                     |       | $ | 9.10      |               |  | 3.74   |          |  | 520,126   |  |  | $ | 9.10  | 
|$10.53 - $15.15 |  |                     | 346,795   |                     |       | $ | 13.31     |               |  | 5.69   |          |  | 346,795   |  |  | $ | 13.31 | 
|$16.01 - $22.80 |  |                     | 1,665,629 |                     |       | $ | 20.07     |               |  | 6.07   |          |  | 1,290,729 |  |  | $ | 19.91 | 
|$25.89 - $29.45 |  |                     | 1,353,365 |                     |       | $ | 27.62     |               |  | 8.30   |          |  | 1,353,365 |  |  | $ | 27.62 | 



F-24



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|                                 |                                 |      |       |     |      |  |       |      |  |  |       |     | 
|-------------------------------- | ------------------------------- | ---- | ----- | --- | ---- |  | ----- | ---- |  |  | ----- | --- | 
|                                 |                                 | 2005 |       |     | 2004 |  |       | 2003 | 
|                                 |                                 |      |       |     |      |  |       |      | 
|Risk-free interest rate          |                                 |      | 4.05  | %   |      |  | 3.67  | %    |  |  | 3.87  | %  
|Expected dividend yield          |                                 |      | 1.06  | %   |      |  | 1.29  | %    |  |  | 1.58  | %  
|Expected volatility factor       |                                 |      | 21.48 | %   |      |  | 22.80 | %    |  |  | 23.00 | %  
|Expected option term (in years): |                                 |      |       |     |      |  |       |      |  |  |       |    
|                                 | Original grants without reloads |      |       | 6.4 |      |  |       | 7.0  |  |  |       | 7.0 | 
|                                 | Original grants with reloads    |      |       | 5.0 |      |  |       | 5.0  |  |  |       | 7.0 | 

Restricted Stock Awards




Directors Restricted Stock Compensation






|   |                                                              
|-- | -------------------------------------------------------------
|O. | Stock Split, Earnings Per Share and Treasury
    Transactions





F-25



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)




|             |                                                      |                                                              |        |            |            |   |        |            |            |   |        |            |            | 
|------------ | ---------------------------------------------------- | ------------------------------------------------------------ | ------ | ---------- | ---------- | - | ------ | ---------- | ---------- | - | ------ | ---------- | ---------- | 
|             |                                                      | 2005                                                         |        |            | 2004       |   |        | 2003       |           
|             |                                                      |                                                              |        |            |            |   |        |            |           
|Net Earnings |                                                      | $                                                            | 76,393 |            |            | $ | 63,997 |            |            | $ | 54,552 |           
|Basic EPS:   |                                                      |                                                              |        |            |            |   |        |            |            |   |        |           
|             | Weighted average number of common shares outstanding |                                                              |        | 51,658,347 |            |   |        | 50,984,314 |            |   |        | 50,213,122 |           
|             |                                                      | Basic per share amount                                       |        | $          | 1.48       |   |        | $          | 1.26       |   |        | $          | 1.09       | 
|             |                                                      |                                                              |        |            |            |   |        |            |           
|Diluted EPS: |                                                      |                                                              |        |            |            |   |        |            |            |   |        |           
|             | Weighted average number of common shares outstanding |                                                              |        | 51,658,347 |            |   |        | 50,984,314 |            |   |        | 50,213,122 |           
|             | Dilutive effect of stock options                     |                                                              |        | 557,342    |            |   |        | 522,424    |            |   |        | 532,490    |           
|             |                                                      |                                                              |        |            |            |   |        |            |           
|             |                                                      | Diluted weighted average number of common shares outstanding |        |            | 52,215,689 |   |        |            | 51,506,738 |   |        |            | 50,745,612 | 
|             |                                                      | Diluted per share amount                                     |        | $          | 1.46       |   |        | $          | 1.24       |   |        | $          | 1.08       | 
|             |                                                      |                                                              |        |            |            |   |        |            |           







|   |                                   
|-- | ----------------------------------
|P. | Unaudited Quarterly Financial Data



|      |                                |         |   |         |         |  |   |         |      |  |         |         |      |       |   |         |      |  |   |         |      | 
|----- | ------------------------------ | ------- | - | ------- | ------- |  | - | ------- | ---- |  | ------- | ------- | ---- | ----- | - | ------- | ---- |  | - | ------- | ---- | 
|      |                                | First   |   |         | Second  |  |   | Third   |      |  | Fourth  |         |      |      
|      |                                | Quarter |   |         | Quarter |  |   | Quarter |      |  | Quarter |         |      | Total |  
|      |                                |         |   |         |         |  |   |         |      |  |         |         |      |       |  
|2005: |                                |         |   |         |         |  |   |         |      |  |         |         |      |       |   |         |      |  |   |        
|      | Net sales                      |         | $ | 196,261 |         |  | $ | 219,786 |      |  | $       | 216,403 |      |       | $ | 241,524 |      |  | $ | 873,974 |     
|      | Gross profit                   |         |   | 57,019  |         |  |   | 66,086  |      |  |         | 67,400  |      |       |   | 75,227  |      |  |   | 265,732 |     
|      | Net earnings                   |         |   | 13,154  |         |  |   | 17,346  |      |  |         | 20,855  |      |       |   | 25,038  |      |  |   | 76,393  |     
|      | Net earnings per common share: |         |   |         |         |  |   |         |      |  |         |         |      |       |   |         |      |  |   |         |     
|      |                                | Basic   |   | $       | 0.26    |  |   | $       | 0.34 |  |         | $       | 0.40 |       |   | $       | 0.48 |  |   | $       | 1.48 | 
|      |                                | Diluted |   | $       | 0.25    |  |   | $       | 0.33 |  |         | $       | 0.40 |       |   | $       | 0.48 |  |   | $       | 1.46 | 
|2004: |                                |         |   |         |         |  |   |         |      |  |         |         |      |       |   |         |      |  |   |        
|      | Net sales                      |         | $ | 175,272 |         |  | $ | 198,712 |      |  | $       | 206,209 |      |       | $ | 207,493 |      |  | $ | 787,686 |     
|      | Gross profit                   |         |   | 51,484  |         |  |   | 61,099  |      |  |         | 63,234  |      |       |   | 64,811  |      |  |   | 240,628 |     
|      | Net earnings                   |         |   | 11,661  |         |  |   | 14,914  |      |  |         | 15,875  |      |       |   | 21,547  |      |  |   | 63,997  |     
|      | Net earnings per common share: |         |   |         |         |  |   |         |      |  |         |         |      |       |   |         |      |  |   |         |     
|      |                                | Basic   |   | $       | 0.23    |  |   | $       | 0.30 |  |         | $       | 0.31 |       |   | $       | 0.42 |  |   | $       | 1.26 | 
|      |                                | Diluted |   | $       | 0.23    |  |   | $       | 0.29 |  |         | $       | 0.31 |       |   | $       | 0.42 |  |   | $       | 1.24 | 

F-26



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)






|   |                    
|-- | -------------------
|Q. | Segment Information













|           |                                      |      |         |         |      |   |         |         |  |   |         |         | 
|---------- | ------------------------------------ | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|           |                                      | 2005 |         |         | 2004 |   |         | 2003    | 
|           |                                      |      |         |         |      |   |         |         | 
|Net sales: |                                      |      |         |         |      |   |         |         |  |   |         |        
|           | Engine/ Mobile Filtration            |      | $       | 368,183 |      |   | $       | 320,042 |  |   | $       | 287,797 | 
|           | Industrial/ Environmental Filtration |      |         | 427,448 |      |   |         | 396,629 |  |   |         | 386,275 | 
|           | Packaging                            |      |         | 78,343  |      |   |         | 71,015  |  |   |         | 67,286  | 
|           |                                      |      |         |         |      |   |         |         | 
|           |                                      | $    | 873,974 |         |      | $ | 787,686 |         |  | $ | 741,358 |        
|           |                                      |      |         |         |      |   |         |         | 

F-27



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands except per share
data)  (Continued)


|                                                    |                                      |      |         |         |      |   |         |         |   |   |         |         | 
|--------------------------------------------------- | ------------------------------------ | ---- | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | 
|                                                    |                                      | 2005 |         |         | 2004 |   |         | 2003    |  
|                                                    |                                      |      |         |         |      |   |         |         |  
|Operating profit:                                   |                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                    | Engine/ Mobile Filtration            |      | $       | 80,414  |      |   | $       | 66,564  |   |   | $       | 58,299  | 
|                                                    | Industrial/ Environmental Filtration |      |         | 31,266  |      |   |         | 28,671  |   |   |         | 24,171  | 
|                                                    | Packaging                            |      |         | 6,812   |      |   |         | 5,151   |   |   |         | 4,592   | 
|                                                    | Relocation costs                     |      |         |        |      |   |         | (2,209  | ) |   |         |        | 
|                                                    |                                      |      |         |         |      |   |         |         |  
|                                                    |                                      |      | 118,492 |         |      |   | 98,177  |         |   |   | 87,062  |        
|Other income (expense)                              |                                      |      | (570    | )       |      |   | 883     |         |   |   | (1,003  | )      
|                                                    |                                      |      |         |         |      |   |         |         |  
|Earnings before income taxes and minority interests |                                      | $    | 117,922 |         |      | $ | 99,060  |         |   | $ | 86,059  |        
|                                                    |                                      |      |         |         |      |   |         |         |  
|Identifiable assets:                                |                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                    | Engine/ Mobile Filtration            |      | $       | 193,701 |      |   | $       | 181,611 |   |   | $       | 153,621 | 
|                                                    | Industrial/ Environmental Filtration |      |         | 372,120 |      |   |         | 352,093 |   |   |         | 297,219 | 
|                                                    | Packaging                            |      |         | 43,551  |      |   |         | 41,474  |   |   |         | 39,733  | 
|                                                    | Corporate                            |      |         | 65,900  |      |   |         | 52,619  |   |   |         | 47,664  | 
|                                                    |                                      |      |         |         |      |   |         |         |  
|                                                    |                                      | $    | 675,272 |         |      | $ | 627,797 |         |   | $ | 538,237 |        
|                                                    |                                      |      |         |         |      |   |         |         |  
|Additions to plant assets:                          |                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                    | Engine/ Mobile Filtration            |      | $       | 10,350  |      |   | $       | 7,943   |   |   | $       | 3,637   | 
|                                                    | Industrial/ Environmental Filtration |      |         | 8,776   |      |   |         | 12,274  |   |   |         | 4,825   | 
|                                                    | Packaging                            |      |         | 3,846   |      |   |         | 1,204   |   |   |         | 3,284   | 
|                                                    | Corporate                            |      |         | 1,060   |      |   |         | 931     |   |   |         | 1,296   | 
|                                                    |                                      |      |         |         |      |   |         |         |  
|                                                    |                                      | $    | 24,032  |         |      | $ | 22,352  |         |   | $ | 13,042  |        
|                                                    |                                      |      |         |         |      |   |         |         |  
|Depreciation and amortization:                      |                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                    | Engine/ Mobile Filtration            |      | $       | 7,404   |      |   | $       | 7,272   |   |   | $       | 7,335   | 
|                                                    | Industrial/ Environmental Filtration |      |         | 10,316  |      |   |         | 8,493   |   |   |         | 8,075   | 
|                                                    | Packaging                            |      |         | 2,533   |      |   |         | 2,624   |   |   |         | 2,861   | 
|                                                    | Corporate                            |      |         | 834     |      |   |         | 762     |   |   |         | 714     | 
|                                                    |                                      |      |         |         |      |   |         |         |  
|                                                    |                                      | $    | 21,087  |         |      | $ | 19,151  |         |   | $ | 18,985  |        
|                                                    |                                      |      |         |         |      |   |         |         |  



|                                                      |                     |      |         |         |      |   |         |         |  |   |         |         | 
|----------------------------------------------------- | ------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                                      |                     | 2005 |         |         | 2004 |   |         | 2003    | 
|                                                      |                     |      |         |         |      |   |         |         | 
|Net sales:                                            |                     |      |         |         |      |   |         |         |  |   |         |        
|                                                      | United States       |      | $       | 682,672 |      |   | $       | 620,337 |  |   | $       | 599,843 | 
|                                                      | Europe              |      |         | 87,853  |      |   |         | 80,441  |  |   |         | 70,023  | 
|                                                      | Other international |      |         | 103,449 |      |   |         | 86,908  |  |   |         | 71,492  | 
|                                                      |                     |      |         |         |      |   |         |         | 
|                                                      |                     | $    | 873,974 |         |      | $ | 787,686 |         |  | $ | 741,358 |        
|                                                      |                     |      |         |         |      |   |         |         | 
|Plant assets, at cost, less accumulated depreciation: |                     |      |         |         |      |   |         |         |  |   |         |        
|                                                      | United States       |      | $       | 141,374 |      |   | $       | 133,361 |  |   | $       | 120,719 | 
|                                                      | Europe              |      |         | 5,784   |      |   |         | 6,626   |  |   |         | 6,423   | 
|                                                      | Other international |      |         | 2,347   |      |   |         | 2,255   |  |   |         | 2,430   | 
|                                                      |                     |      |         |         |      |   |         |         | 
|                                                      |                     | $    | 149,505 |         |      | $ | 142,242 |         |  | $ | 129,572 |        
|                                                      |                     |      |         |         |      |   |         |         | 

F-28



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##### Table of Contents



CLARCOR Inc.


SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES


for the years ended November 30, 2005, 2004, and 2003


(Dollars in thousands)


|                                            |  |            |       |           |            |   |       |            |  |   |            |      |            |        |       |     |  |   |       | 
|------------------------------------------- |  | ---------- | ----- | --------- | ---------- | - | ----- | ---------- |  | - | ---------- | ---- | ---------- | ------ | ----- | --- |  | - | ----- | 
|Column A                                    |  | Column B   |       |           | Column C   |   |       | Column D   |  |   | Column E   |     
|                                            |  |            |       |           |            |   |       |            |  |   |            |     
|                                            |  |            |       | Additions |            |   |       |            | 
|                                            |  |            |       |           |            |   |       |            | 
|                                            |  |            |       | (1)       |            |   | (2)   |            |  |   |            |     
|                                            |  | Balance at |       |           | Charged to |   |       | Charged to |  |   |            |      | Balance at |       
|                                            |  | beginning  |       |           | costs and  |   |       | other      |  |   |            |      | end of     |       
|Description                                 |  | of period  |       |           | expenses   |   |       | accounts   |  |   | Deductions |      |            | period |      
|                                            |  |            |       |           |            |   |       |            |  |   |            |      |            |        |      
|2005:                                       |  |            |       |           |            |   |       |            |  |   |            |      |            |        |       |     |  |   |       | 
|Allowance for losses on accounts receivable |  | $          | 9,557 |           |            | $ | 1,293 |            |  | $ | (127       | )(A) |            | $      | 948   | (B) |  | $ | 9,775 | 
|                                            |  |            |       |           |            |   |       |            |  |   |            |      |            |        |      
|2004:                                       |  |            |       |           |            |   |       |            |  |   |            |      |            |        |       |     |  |   |       | 
|Allowance for losses on accounts receivable |  | $          | 9,106 |           |            | $ | 2,302 |            |  | $ | 166        | (A)  |            | $      | 2,017 | (B) |  | $ | 9,557 | 
|                                            |  |            |       |           |            |   |       |            |  |   |            |      |            |        |      
|2003:                                       |  |            |       |           |            |   |       |            |  |   |            |      |            |        |       |     |  |   |       | 
|Allowance for losses on accounts receivable |  | $          | 7,020 |           |            | $ | 3,407 |            |  | $ | 994        | (A)  |            | $      | 2,315 | (B) |  | $ | 9,106 | 
|                                            |  |            |       |           |            |   |       |            |  |   |            |      |            |        |      





|    |  |                                                      
|--- |  | -----------------------------------------------------
|(A) |  | Due to business acquisitions and reclassifications.  
|   
|(B) |  | Bad debts written off during year, net of recoveries.

S-1