##### Table of Contents



SECURITIES
    AND EXCHANGE COMMISSION
 Washington, D.C.
    20549
 FORM 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 or 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 2, 2006ORo

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
    _
    _ to _
    _   Commission File Number 1-11024
      DELAWARE

36-0922490(State or other jurisdiction of
    incorporation or organization)

(I.R.S. EmployerIdentification 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 exchangeTitle of each class

on which registeredCommon Stock, par value
    $1.00 per share

New York Stock ExchangePreferred Stock Purchase Rights

New York Stock Exchange         þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  þ o o
  Rule 12b-2).  Yes o þ




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##### 



TABLE OF
    CONTENTS
  PART IItem 1.


Description of Business


2Item 1A.


Risk Factors


7Item 1B.


Unresolved Staff Comments


10Item 2.


Properties


10Item 3.


Legal Proceedings


12Item 4.


Submission of Matters to a Vote of
    Security Holders


12Additional
    Item


Executive Officers


13PART IIItem 5.


Market for the Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchase
    of Equity Securities


14Item 6.


Selected Financial Data


15Item 7.


Managements Discussion and
    Analysis of Financial Condition and Results of Operations


15Item 7A.


Quantitative and Qualitative
    Disclosures About Market Risk


27Item 8.


Financial Statements and
    Supplementary Data


27Item 9.


Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure


27Item 9A.


Controls and Procedures


27Item 9B.


Other Information


28PART IIIItem 10.


Directors and Executive Officers
    of the Registrant


28Item 11.


Executive Compensation


28Item 12.


Security Ownership of Certain
    Beneficial Owners and Management and Related Stockholder Matters


28Item 13.


Certain Relationships and Related
    Transactions


28Item 14.


Principal Accountant Fees and
    Services


29PART IVItem 15.


Exhibits and Financial Statement
    Schedules


29SIGNATURES


31Form of Stock Option AgreementForm of Restricted Stock AgreementSummary of Compensation Paid to Non-Employee Directors and Named Executive OfficersComputation of Certain RatiosThe "11-Year Financial Review"Subsidiaries of the RegistrantConsent of Independent Registered Public Accounting FirmCertification of Norman E. JohnsonCertification of Bruce A. KleinSection 1350 Certification of Norman E. JohnsonSection 1350 Certification of Bruce A. Klein




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##### Table of Contents



PART I  Item 1.
    Description
    of Business.  (a) General
    Development of Business
    Form 10-K,
  Certain
    Significant Developments.
  Acquisitions
  Form 10-Q
  EDS
    Litigation
        HVAC
    Production Restructuring
   2




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##### Table of Contents



(b) Financial
    Information About Industry Segments
  Form 10-K Form 10-K).
  (c) Narrative
    Description of the Business
  Engine/Mobile
    Filtration
      Industrial/Environmental
    Filtration
        Packaging
     3




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Distribution
    U.S.-based non-U.S. automotive
    Class of
    Products
    Raw
    Materials
    Patents,
    Trademarks and Tradenames
     4




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Customers
          Backlog
    Competition
        Product
    Development
       5




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##### Table of Contents



®
  Environmental
    Factors
    and/or
      Employees
    (d) Financial
    Information About Foreign and Domestic Operations and Export
    Sales
  Form 10-K.
  Internet
    Website
  Form 10-K, Form 10-Q, Form 8-K
 6




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##### Table of Contents



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
    2006
    Form 10-K.
  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. environmental
  Our
    operations outside of the United States are subject to
    political, investment and local business risks.
    
    local political and social conditions, including potential
    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; 7




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##### Table of Contents




    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;
    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,
    transportation, health care 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 we may fail to meet the needs of customers on a timely or
    cost-effective basis.
   8




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##### Table of Contents



The
    introduction of new and improved products and services could
    reduce our future sales.
    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. acquisitions.
   9




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##### Table of Contents



We are
    a decentralized company, which presents certain
    risks.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.      Corporate
    Headquarters.
    Engine/Mobile
    Filtration
    Segment.
  United
    States Facilities
  Location

Approximate Size

Owned or LeasedGothenburg, NE

19 acre site with 100,000 sq
    ft of manufacturing space

OwnedKearney, 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

OwnedLancaster, PA

11.4 acre site with 168,000
    sq ft of manufacturing and office space

OwnedYankton, SD

20 acre site with 170,000 sq
    ft of manufacturing space

Owned  10




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##### Table of Contents



International
    Facilities
  Location

Approximate Size

Owned or LeasedWarrington, Cheshire, England

4 acre site with two
    facilities totaling 71,000 sq feet for manufacturing,
    warehousing and offices

OwnedWeifang, Peoples Republic of
    China*

14 buildings, constituting 300,000
    sq ft of manufacturing, warehousing and administrative space

Leased     *
    
    The Company officially took occupancy of this facility on or
    about December 5, 2006. Previously, the Company occupied a
    nearby series of buildings totaling 180,000 square feet of
    manufacturing, warehousing and administrative space.  and/or
  Industrial/Environmental
    Filtration
    Segment.
  United
    States Facilities
  Location

Approximate Size

Owned or LeasedAuburn Hills, MI

55,000 sq ft of warehousing and
    office space

LeasedBirmingham, AL

9,000 sq ft of warehouse space

OwnedBlue Ash, OH

17 acre site with 157,000 sq
    ft of manufacturing and office space

OwnedCampbellsville, KY

100 acre site with 290,000 sq
    ft of manufacturing and office space

OwnedCorona, CA

84,000 sq feet of manufacturing,
    warehousing and office space

LeasedDallas, TX

83,500 sq feet of manufacturing,
    warehousing and office space

LeasedGoodlettsville, TN

33,000 sq ft of warehouse space

OwnedGreensboro, NC

21 acre site with 88,000 sq
    ft of manufacturing, warehousing and office space

Owned97,000 sq ft of manufacturing,
    warehousing and office space

OwnedHenderson, NC

226,000 sq feet of manufacturing,
    warehousing and office space

Leased25 acres with 235,000 sq feet
    of manufacturing, warehousing and office space

OwnedHouston, TX

88,000 sq ft of manufacturing,
    warehousing and office space

LeasedJeffersontown, KY

7.5 acre site with 100,000 sq
    ft of manufacturing and office space

OwnedLouisville, KY

99,000 sq feet of manufacturing,
    warehousing and office space

LeasedMineola, NY

5 buildings totaling approx 31,000
    sq ft of manufacturing and office space

LeasedNew Albany, IN

142,000 sq feet of manufacturing,
    warehousing and office space

Leased 11




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##### Table of Contents



Location

Approximate Size

Owned or LeasedOttawa, KS

41,000 sq ft of manufacturing and
    office space

OwnedRockford, IL

83,000 sq feet of manufacturing,
    warehousing and office space

LeasedPittston, PA

250,000 sq feet of manufacturing,
    warehousing and office space

LeasedSacramento, CA

108,000 sq feet of manufacturing,
    warehousing and office space

Leased40,000 sq feet of manufacturing,
    warehousing and office space

OwnedShelby, NC

48,000 sq ft of manufacturing,
    warehousing and office space

OwnedTulsa, OK

16 acre site with 142,000 sq
    ft of manufacturing and office space

Owned   International
    Facilities
  Location

Size

Owned or LeasedSt. 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.)

LeasedLa Coruña, Spain

4 acre site with 61,000 sq ft
    of manufacturing and office space

Owned   and/or United States: International:
  Packaging
    Segment.
  Location

Size

Owned or LeasedRockford, IL

Approx 34 acre site with
    buildings totaling 394,000 sq ft of manufacturing, warehousing
    and office space

OwnedLancaster, PA

Approx 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.   12




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ADDITIONAL
    ITEM: Executive Officers of the Registrant
    Age at

Year ElectedName

12/2/06

to OfficeSam Ferrise


50



2003President, 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.Norman E. Johnson


58



2000Chairman 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


59



1995Vice President-Finance and Chief
    Financial Officer. Mr. Klein was employed by the Company
    and elected Vice President-Finance and Chief Financial Officer
    in 1995. Mr. Klein also assumed the role of the
    Companys principal accounting officer when the
    Companys former Controller retired in March of 2006.Richard C. Larson


57



2006President, Industrial/
    Environmental Filtration. Mr. Larson was appointed
    President of United Air Specialists, Inc. in 2001, President of
    Clark Filter, Inc. in 2002 and President of CLARCOR Air
    Filtration Products, Inc. in 2006. He became an executive
    officer of the Company in 2006 while retaining all of the
    foregoing titles and positions.David J. Lindsay


51



1995Vice 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.Richard M. Wolfson


40



2006Vice President-General Counsel and
    Secretary. Mr. Wolfson was employed by the Company and
    elected Vice President, General Counsel and Secretary in January
    of 2006. Prior to joining the Company, he was a principal of the
    InterAmerican Group, an advisory services and private equity
    firm, from 2001 until 2006.    13




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##### Table of Contents



PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchase of Equity Securities.      Market PriceQuarter Ended

High


Low


DividendsMarch 4, 2006

$
34.82


$
29.17


$
0.06750June 3, 2006


36.72



31.10



0.06750September 2, 2006


33.22



26.87



0.06750December 2, 2006


34.55



29.38



0.07250Total Dividends









$
0.27500   Market PriceQuarter Ended

High


Low


DividendsFebruary 26, 2005

$
28.55


$
24.60


$
0.06375May 28, 2005


28.66



24.75



0.06375August 27, 2005


31.79



26.61



0.06375December 3, 2005


31.98



25.89



0.06750Total Dividends









$
0.25875          14




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##### Table of Contents



COMPANY
    PURCHASES OF EQUITY SECURITIES(1)
  Maximum ApproximateTotal Number of Shares


Dollar Value ofPurchased as Part of


Shares that may yetTotal Number of


Average Price Paid


the Companys Publicly


be Purchased underPeriod

Shares Purchased


per Share


Announced Plan


the PlanSept 3 - Sept 30,
    2006


0



0



0


$
110,629,836Oct. 1 - Oct. 31,
    2006


0



0



0


$
110,629,836Nov. 1 - Dec. 2,
    2006


0



0



0


$
110,629,836Total


0










$
110,629,836     (1)
    
    Purchase Plan announced June 20, 2005 for aggregate
    purchases up to $150 million. Program expires
    June 16, 2007.  Item 6.
    Selected
    Financial Data.  Form 10-K.
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation.    EXECUTIVE
    SUMMARY
  Management
    Discussion Snapshot
    (Dollars in millions except per share data)
  Year to





Year to2006


2005


Year %


2004


Year %Years Ended November 30

(52 Week Year)


(53 Week Year)


Change


(52 Week Year)


ChangeNet Sales

$
904.3


$
874.0



3.5
%

$
787.7



11.0
%Operating Profit


126.3



118.5



6.6
%


98.2



20.7
%Operating Margin


14.0
%


13.6
%


0.4
pts.


12.5
%


1.1
pts.Other Income/(Expense)


0.6



(0.6
)


200.0
%


0.9



(166.7
)%Provision for Income Taxes


43.8



41.0



6.8
%


34.7



18.2
%Net Earnings


82.7



76.4



8.3
%


64.0



19.4
%Diluted Earnings per Share

$
1.59


$
1.46



8.9
%

$
1.24



17.7
%Average Diluted
    Shares Outstanding


52,176,515



52,215,689



(0.1
)%


51,506,738



1.4
%   52-week 53-week
 15




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##### Table of Contents




    The Company began a three-year restructuring program for its
    heating, ventilating and air conditioning (HVAC) operations,
    primarily to rationalize and relocate certain HVAC manufacturing
    plants to improve operating efficiencies and reduce
    manufacturing and transportation costs. Although there was very
    little impact on 2006 results, the Company expects to realize
    significant cost savings beginning in 2007 and continuing over
    the next several years. See a further discussion of this program
    in the Operating Profit section of this analysis.
    During fiscal 2006, the Company recorded a $2.7 million
    charge to operating profit related to a customers refusal
    to pay for products it had ordered and used. In addition, the
    Company terminated a $10 million annual sales contract with
    this customer.
    CLARCOR recognized stock option expense of $1.8 million
    pre-tax, or approximately $0.02 per share, in 2006. No
    stock option expense was recorded in prior years.
    In fiscal 2005 and 2004, one-time tax benefits in each year of
    approximately $1.2 million, or $0.02 per diluted
    share, reduced income tax expense. The 2005 benefit in the third
    quarter resulted from the favorable settlement of a tax position
    related to a foreign subsidiary. The 2004 fourth quarter benefit
    was due to the reversal of a foreign tax credit valuation
    allowance as a result of the American Jobs Creation Act of 2004.  OPERATING
    RESULTS
  SALES
      2006 vs. 2005ChangeNET SALES

2006


% Total


$


%Engine/Mobile Filtration

$
399.1



44.1
%

$
30.9



8.4
%Industrial/Environmental Filtration


420.4



46.5
%


(7.1
)


−1.6
%Packaging


84.8



9.4
%


6.5



8.3
%Total

$
904.3



100.0
%

$
30.3



3.5
%   2005 vs. 2004ChangeNET SALES

2005


% Total


$


%Engine/Mobile Filtration

$
368.2



42.1
%

$
48.1



15.0
%Industrial/Environmental Filtration


427.5



48.9
%


30.9



7.8
%Packaging


78.3



9.0
%


7.3



10.3
%Total

$
874.0



100.0
%

$
86.3



11.0
%  16




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17




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##### Table of Contents



Operating
    Profit
        2006 vs. 2005ChangeOPERATING PROFIT

2006


% Total


$


%Engine/Mobile Filtration

$
92.6



73.3
%

$
12.2



15.2
%Industrial/Environmental Filtration


25.5



20.2
%


(5.8
)


−18.3
%Packaging


8.2



6.5
%


1.4



20.2
%Total

$
126.3



100.0
%

$
7.8



6.6
%   2005 vs. 2004ChangeOPERATING PROFIT

2005


% Total


$


%Engine/Mobile Filtration

$
80.4



67.9
%

$
13.9



20.8
%Industrial/Environmental Filtration


31.3



26.4
%


2.6



9.1
%Packaging


6.8



5.7
%


1.6



32.2
%Relocation Costs










2.2



Total

$
118.5



100.0
%

$
20.3



20.7
%   OPERATING MARGIN AS A PERCENT OF NET SALES

2006


2005


2004Engine/Mobile Filtration


23.2
%


21.8
%


20.8
%Industrial/Environmental Filtration


6.1
%


7.3
%


7.2
%Packaging


9.7
%


8.7
%


7.3
%Total


14.0
%


13.6
%


12.5
%    18




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##### Table of Contents



19




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OTHER
    INCOME(EXPENSE)
    PROVISION
    FOR INCOME TAXES
      NET
    EARNINGS AND EARNINGS PER SHARE
   20




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##### Table of Contents



Same-Weeks
    Comparison
    Year to





Year to2005


Year % on





Year % on2006


2005


One Week


on a Same


a Same


2004


a Same(52 Week Year)


(53 Week Year)


of 2005


Weeks Basis


Weeks Basis


(52 Week Year)


Weeks Basis(Dollars in millions except per share data)Net Sales

$
904.3


$
874.0


$
17.0


$
857.0



5.5
%

$
787.7



18.8
%Operating Profit


126.3



118.5



2.0



116.5



8.6
%


98.2



18.6
%Operating Margin


14.0
%


13.6
%


11.8
%


13.6
%


0.4
pts.


12.5
%


1.1
pts.Other Income/(Expense)


0.6



(0.6
)






(0.6
)


200.0
%


0.9



−166.7
%Provision for Income Taxes


43.8



41.0



1.0



40.0



9.5
%


34.7



15.3
%Net Earnings


82.7



76.4



1.0



75.4



9.7
%


64.0



17.8
%Diluted Earnings per Share

$
1.59


$
1.46


$
0.03


$
1.43



11.2
%

$
1.24



15.3
%   Year to





Year to2006


2005





2005


Year % on


2004


Year % on(52 Week


(53 Week


One Week


on a Same


a Same


(52 Week


a SameYear)


Year)


of 2005


Weeks Basis


Weeks Basis


Year)


Weeks Basis(Dollars in millions)Net Sales by SegmentEngine/Mobile

$
399.1


$
368.2


$
7.0


$
361.2



10.5
%

$
320.1



12.8
%Industrial/Environmental


420.4



427.5



8.0



419.5



0.3
%


396.6



5.8
%Packaging


84.8



78.3



2.0



76.3



10.4
%


71.0



7.5
%$
904.3


$
874.0


$
17.0


$
857.0



5.5
%

$
787.7



8.8
%Operating Profit by
    SegmentEngine/Mobile

$
92.6


$
80.4


$
1.5


$
78.9



17.3
%

$
66.5



18.6
%Industrial/Environmental


25.5



31.3



0.5



30.8



−16.7
%


28.7



7.3
%Packaging


8.2



6.8







6.8



20.2
%


5.2



82.2
%Relocation costs






















(2.2
)


−100.0
%$
126.3


$
118.5


$
2.0


$
116.5



8.6
%

$
98.2



18.6
%  21




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##### Table of Contents



FINANCIAL
    CONDITION
  LIQUIDITY
    AND CAPITAL RESOURCES
           22




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##### Table of Contents



state-of-the-art
      Payments Due by PeriodLess than


1-3


3-5


More thanTotal


1 Year


Years


Years


5 YearsLong-Term Debt

$
16.0


$
0.1


$
0.1


$
0.0


$
15.8Operating Leases


41.2



9.9



13.3



7.1



10.9Total

$
57.2


$
10.0


$
13.4


$
7.1


$
26.7   Off-Balance
    Sheet Arrangements
    OTHER
    MATTERS
  QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   23




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##### Table of Contents



CRITICAL
    ACCOUNTING ESTIMATES
      
    Goodwill and Indefinite-lived Intangible Assets  The
    Company periodically reviews goodwill and indefinite-lived
    intangible assets for impairment. These reviews of fair value
    involve judgment and estimates of discount rates, transaction
    multiples and future cash flows for the reporting units that may
    be impacted by future sales and operating results for the
    reporting units, market conditions and worldwide economic
    conditions. The Company analyzed various discount rates,
    transaction multiples and cash flows for aggregated reporting
    units. A sensitivity analysis was prepared which indicated that
    if these assumptions were individually changed by 20%, there was
    no indication of impairment.
    Allowance for Losses on Accounts Receivable 
    Allowances for losses on customer accounts receivable balances
    are estimated based on economic conditions in the industries to
    which the Company sells and on historical experience by
    evaluating specific customer accounts for risk of loss,
    fluctuations in amounts owed and current payment trends. The
    Companys concentration of risk is also monitored and at
    year-end 2006, the largest outstanding customer account balance
    was $4.3 million and the five largest account balances
    totaled $16.4 million. The allowances provided are
    estimates that may be impacted by economic and market conditions
    which could have an effect on future allowance requirements and
    results of operations.
    Pensions  The Companys pension obligations are
    determined using estimates including those related to discount
    rates, asset values and changes in compensation. The 5.75%
    discount rate used for the qualified plan for
    U.S. employees was determined based on the Citigroup
    Pension Discount Curve for cash flows at the plans
    estimated liability duration of 13.5 years. This rate was
    selected as the best estimate of the rate at which the benefit
    obligations could be effectively settled on the measurement date
    taking into account the nature and duration of the benefit
    obligations of the plan using high-quality fixed-income
    investments currently available (rated Aa or better) and
    expected to be available during the period to maturity of the
    benefits. The 8.0% expected return on plan assets was determined
    based on historical long-term investment returns as well as
    future expectations given target investment asset allocations
    and current economic conditions. The 4.0% rate of compensation
    increase represents the long-term assumption for expected
    increases in salaries among continuing active participants
    accruing benefits. The assumptions are similarly determined for
    each pension obligation. Actual results and future obligations
    will vary based on changes in interest rates, stock and bond
    market valuations and employee compensation. In 2007, a
    reduction in the expected return on plan assets of 0.25% would
    result in additional expense in fiscal 2007 of approximately 24




---



##### Table of Contents



$0.2 million, while a reduction in the discount rate of
    0.25% would result in additional expense of approximately
    $0.3 million for the Companys qualified defined
    benefit pension plan for U.S. covered employees. Interest
    rates and pension plan valuations may vary significantly based
    on worldwide economic conditions and asset investment decisions.
    The unrecognized net actuarial loss of $28.4 million at
    year-end 2006 is due primarily to prior changes in assumptions
    related to discount rates and expected asset returns and this
    actuarial loss will be recognized as pension expense in the
    future over the average remaining service period of the
    employees in the plans in accordance with SFAS No. 87.  
    Income Taxes  The Company is required to estimate and
    record income taxes payable for each of the U.S. and
    international jurisdictions in which the Company operates. This
    process involves estimating actual current tax expense and
    assessing temporary differences resulting from differing
    accounting treatment between tax and book which result in
    deferred tax assets and liabilities. In addition, accruals are
    also estimated for federal, state and international tax matters
    for which deductibility is subject to interpretation. Taxes
    payable and the related deferred tax differences may be impacted
    by changes to tax laws, changes in tax rates and changes in
    taxable profits and losses.  RECENT
    RELEVANT ACCOUNTING PRONOUNCEMENTS
        OUTLOOK
   25




---



##### Table of Contents



26




---



##### Table of Contents



FORWARD-LOOKING
    STATEMENTS
  Form 10-K Form 10-K,
  
    statements and assumptions relating to future growth, earnings,
    earnings per share and other financial performance measures, as
    well as managements short-term and long-term performance
    goals;
    statements relating to the anticipated effects on results of
    operations or financial condition from recent and expected
    developments or events;
    statements relating to the Companys business and growth
    strategies; and
    any other statements or assumptions that are not historical
    facts.  Form 10-K.
  Form 10-K. Form 10-K, Form 10-K.
   Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk.  Form 10-K,
   Item 8.
    Financial
    Statements and Supplementary Data.  Form 10-K
   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
  Rule 13a-15(e)
 27




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##### Table of Contents



Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f), Internal Control  Integrated Framework
  Form 10-K.
  Item 9B.
    Other
    Information.   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant.    Section 303A-12(a) Form 10-K form 10-K
  Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions.   28




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services.   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.  (a)(1) Financial Statements
  Page No.Report of
    Independent Registered Public Accounting Firm


F-1Consolidated
    Balance Sheets at November 30, 2006 and 2005


F-3Consolidated
    Statements of Earnings for the years ended November 30,
    2006, 2005 and 2004


F-4Consolidated
    Statements of Shareholders Equity for the years ended
    November 30, 2006, 2005 and 2004


F-5Consolidated
    Statements of Cash Flows for the years ended November 30,
    2006, 2005 and 2004


F-6Notes to
    Consolidated Financial Statements


F-7(a)(2) Financial Statement
    ScheduleII. Valuation and
    Qualifying Accounts


S-1     (a)(3) Exhibits
  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, 2005.3
.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
.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.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. + 29




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##### Table of Contents



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

Form of Amended and Restated
    Employment Agreement with each of 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(a)

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(b)

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(c)

Trust Agreement dated
    December 1, 1997. Incorporated by reference to
    Exhibit 10.4(d) to the 1997
    10-K. +10
.4(d)

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

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
.7

Form of Stock Option Agreement
    used by Company for all employees receiving stock option awards,
    including executive officers.*10
.7(a)

Form of Restricted Stock Agreement
    used by Company for all employees receiving restricted stock
    units, including executive officers.*10
.8

Summary of Compensation Paid to
    Non-Employee
    Directors and Named Executive Officers*12
.1

Computation of Certain Ratios.*13


The
    11-Year
    Financial Review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. 30




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##### Table of Contents



SIGNATURES
        By: /s/
    Norman E.
    Johnson   Chairman of the Board, President &
 Chief Executive Officer
    Date: February 1, 2007

By:

/s/  Norman
    E.
    JohnsonNorman E. JohnsonChairman of the Board, President & 
    Chief Executive Officer and DirectorDate: February 1, 2007

By:

/s/  Bruce
    A.
    KleinBruce A. KleinVice President  Finance & 
    Chief Financial Officer &
    Chief Accounting OfficerDate: February 1, 2007

By:

/s/  J.
    Marc
    AdamJ. Marc Adam DirectorDate: February 1, 2007

By:

/s/  James
    W. Bradford,
    Jr.James W. Bradford, Jr.DirectorDate: February 1, 2007

By:

/s/  Robert
    J.
    BurgstahlerRobert J. BurgstahlerDirectorDate: February 1, 2007

By:

/s/  Paul
    DonovanPaul DonovanDirectorDate: February 1, 2007

By:

/s/  Robert
    H.
    JenkinsRobert H. Jenkins DirectorDate: February 1, 2007

By:

/s/  Philip
    R. Lochner,
    Jr.Philip R. Lochner, Jr.DirectorDate: February 1, 2007

By:

/s/  James
    L.
    PackardJames L. PackardDirector  31




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##### Table of Contents



CLARCOR
    Inc.
  CONSOLIDATED
    FINANCIAL STATEMENTS
  For the
    years ended November 30,
    2006, 2005 and 2004
  32




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##### Table of Contents



TABLE OF
    CONTENTS
  PagesReport of Independent Registered
    Public Accounting Firm


F-1Financial Statements:Consolidated Balance Sheets


F-3Consolidated Statements of Earnings


F-4Consolidated Statements of
    Shareholders Equity


F-5Consolidated Statements of Cash
    Flows


F-6Notes to Consolidated Financial
    Statements


F-7  33




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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



F-2




---



##### Table of Contents



CLARCOR
    Inc.
  CONSOLIDATED
    BALANCE SHEETS
 November 30, 2006 and 2005
 (Dollars in thousands except per share data)
  2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
29,051


$
18,502Restricted cash


1,619



Short-term investments


32,195



10,400Accounts receivable, less
    allowance for losses of $12,548 for 2006 and $9,775 for 2005


158,157



152,755Inventories


129,673



117,508Prepaid expenses and other current
    assets


8,306



7,253Deferred income taxes


21,339



18,515Total current assets


380,340



324,933Plant assets, at cost less
    accumulated depreciation


146,529



149,505Goodwill


116,032



114,278Acquired intangibles, less
    accumulated amortization


53,001



53,898Pension assets


19,851



22,069Deferred income taxes


829



521Other noncurrent assets


10,934



10,068Total assets

$
727,516


$
675,272LIABILITIESCurrent liabilities:Current portion of long-term debt

$
58


$
233Accounts payable and accrued
    liabilities


107,129



108,693Income taxes


11,241



12,544Total current liabilities


118,428



121,470Long-term debt, less current
    portion


15,946



16,009Postretirement health care benefits


4,466



4,239Long-term pension liabilities


17,476



16,287Deferred income taxes


27,159



26,184Other long-term liabilities


4,876



6,267Minority interests


1,656



1,983Total liabilities


190,007



192,439ContingenciesSHAREHOLDERS
    EQUITYCapital stock:Preferred, par value $1,
    authorized 5,000,000 shares, none issued






Common, par value $1, authorized
    60,000,000 shares, issued 51,082,083 in 2006 and 51,594,781
    in 2005


51,082



51,595Capital in excess of par value


3,400



21,458Accumulated other comprehensive
    earnings (loss)


103



(4,637
)Retained earnings


482,924



414,417Total shareholders equity


537,509



482,833Total liabilities and
    shareholders equity

$
727,516


$
675,272    F-3




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##### Table of Contents



CLARCOR
    Inc.
  CONSOLIDATED
    STATEMENTS OF EARNINGS
 for the years ended November 30, 2006, 2005 and
    2004
 (Dollars in thousands except per share data)
  2006


2005


2004Net sales

$
904,347


$
873,974


$
787,686Cost of sales


628,864



608,242



547,058Gross profit


275,483



265,732



240,628Selling and administrative expenses


149,155



147,240



142,451Operating profit


126,328



118,492



98,177Other income (expense):Interest expense


(814
)


(636
)


(446
)Interest income


1,727



928



385Other, net


(300
)


(862
)


944613



(570
)


883Earnings before income taxes and
    minority interests


126,941



117,922



99,060Provision for income taxes


43,795



40,968



34,717Earnings before minority interests


83,146



76,954



64,343Minority interests in earnings of
    subsidiaries


(436
)


(561
)


(346
)Net earnings

$
82,710


$
76,393


$
63,997Net earnings per common share:Basic

$
1.60


$
1.48


$
1.26Diluted

$
1.59


$
1.46


$
1.24Average number of common shares
    outstanding:Basic


51,570,165



51,658,347



50,984,314Diluted


52,176,515



52,215,689



51,506,738    F-4




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##### Table of Contents



CLARCOR
    Inc.
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
 for the years ended November 30, 2006, 2005 and
    2004
 (Dollars in thousands except per share data)
  Common Stock





AccumulatedIssued


In Treasury


Capital in


OtherNumber





Number





Excess of


Comprehensive


Retainedof Shares


Amount


of Shares


Amount


Par Value


(Loss) Earnings


Earnings


TotalBalance, November 30, 2003


50,618,254


$
25,309






$



$
19,998


$
(936
)

$
326,021


$
370,392Net earnings


























63,997



63,997Other comprehensive earnings, net
    of tax:Minimum pension liability adjustment






















(1,229
)






(1,229
)Translation adjustments






















3,836







3,836Total comprehensive earnings






























66,604Stock options exercised


530,082



265











(2,667
)










(2,402
)Tax benefit applicable to stock
    options


















5,378











5,378Issuance of stock under award plans


74,718



38











1,286











1,324Cash 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



428,462Net earnings


























76,393



76,393Other comprehensive earnings, net
    of tax:Minimum pension liability adjustment






















(2,110
)






(2,110
)Translation adjustments






















(4,198
)






(4,198
)Total comprehensive earnings






























70,085Stock options exercised


602,897



479











(1,669
)










(1,190
)Tax benefit applicable to stock
    options


















6,789











6,789Issuance of stock under award plans


137,030



97











2,436











2,533Stock 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



482,833Net earnings


























82,710



82,710Other comprehensive earnings, net
    of tax:Minimum pension liability adjustment






















166







166Translation adjustments






















4,574







4,574Total comprehensive earnings






























87,450Stock options exercised


388,492



388











1,974











2,362Tax benefit applicable to stock
    options


















3,540











3,540Issuance of stock under award plans


98,810



99











2,474











2,573Purchase treasury stock










(1,000,000
)


(28,909
)














(28,909
)Retire treasury stock


(1,000,000
)


(1,000
)


1,000,000



28,909



(27,909
)










Stock option expense


















1,863











1,863Cash dividends  $0.2750
    per common share


























(14,203
)


(14,203
)Balance, November 30, 2006


51,082,083


$
51,082






$



$
3,400


$
103


$
482,924


$
537,509    F-5




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##### Table of Contents



CLARCOR
    Inc.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 for the years ended November 30, 2006, 2005 and
    2004
 (Dollars in thousands)
  2006


2005


2004Cash flows from operating
    activities:Net earnings

$
82,710


$
76,393


$
63,997Adjustments to reconcile net
    earnings to net cash provided by operations:Depreciation


20,891



19,749



18,241Amortization


2,188



1,338



910Minority interests in earnings of
    subsidiaries


436



561



346Net loss (gain) on dispositions of
    plant assets


433



(53
)


(522
)Stock-based compensation expense


2,597



836



770Excess tax benefit from
    stock-based compensation


(3,490
)






Changes in assets and liabilities,
    net of business acquisitions:Restricted cash


(1,619
)






Short-term investments


(21,795
)


(5,300
)


(2,600
)Accounts receivable


(4,702
)


(7,957
)


(13,152
)Inventories


(11,384
)


(395
)


(11,303
)Prepaid expenses and other current
    assets


(1,037
)


(2,081
)


831Other noncurrent assets


(312
)


(661
)


1,056Accounts payable and accrued
    liabilities


(5,167
)


(8,148
)


7,123Pension assets and liabilities, net


4,057



4,059



(2,936
)Income taxes


2,237



11,271



4,994Deferred income taxes


(2,462
)


(266
)


4,051Net cash provided by operating
    activities


63,581



89,346



71,806Cash flows from investing
    activities:Additions to plant assets


(17,588
)


(24,032
)


(22,352
)Business acquisitions, net of cash
    acquired


(4,627
)


(28,133
)


(41,893
)Dispositions of plant assets


373



653



2,071Other, net


500







(35
)Net cash used in investing
    activities


(21,342
)


(51,512
)


(62,209
)Cash flows from financing
    activities:Proceeds (payments) under
    multicurrency revolving credit agreements






(7,500
)


7,500Payments on long-term debt


(554
)


(811
)


(519
)Sales of capital stock under stock
    option and employee purchase plans


6,535



5,790



2,703Excess tax benefit from
    stock-based compensation


3,490







Purchase of treasury stock


(28,909
)


(10,461
)


Cash dividends paid


(14,203
)


(13,385
)


(12,834
)Other, net






(9,332
)


4,213Net cash provided by (used in)
    financing activities


(33,641
)


(35,699
)


1,063Net effect of exchange rate
    changes on cash


1,951



(1,053
)


912Net change in cash and cash
    equivalents


10,549



1,082



11,572Cash and cash equivalents,
    beginning of year


18,502



17,420



5,848Cash and cash equivalents, end of
    year

$
29,051


$
18,502


$
17,420    F-6




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##### 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, Restricted Cash and Short-term
    Investments
        Foreign
    Currency Translation
   F-7




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
   Derivatives
  time-to-time,
    Comprehensive
    Earnings
      2006


2005


2004Minimum pension liability, net of
    tax

$
(3,778
)

$
(3,944
)

$
(1,834
)Translation adjustments, net of tax


3,881



(693
)


3,505Accumulated other comprehensive
    earnings / (loss)

$
103


$
(4,637
)

$
1,671     Stock-based
    Compensation
     F-8




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
      2005


2004Net earnings, as reported

$
76,393


$
63,997Add stock-based compensation
    expense, net of tax, included in net earnings


531



489Less total stock-based
    compensation expense under the fair value-based method, net of
    tax


(8,486
)


(4,362
)Pro forma net earnings

$
68,438


$
60,124Basic EPS, as reported

$
1.48


$
1.26Pro forma basic EPS

$
1.32


$
1.18Diluted EPS, as reported

$
1.46


$
1.24Pro forma diluted EPS

$
1.31


$
1.17     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
    Exit
    or Disposal Activities
    Income
    Taxes
    Revenue
    Recognition
    Product
    Warranties
   F-10




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
   Research
    and Development
    Self-Insurance
    Guarantees
      Asset
    Retirement Obligations
  and/or and/or and/or
  New
    Pronouncements
   F-11




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
         B.
    Acquisitions
    and Purchase of Minority Interest         F-12




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
        Cash

$
244Accounts receivable, less
    allowance for losses


1,312Inventory, net


468Prepaid assets


59Plant assets


3,493Goodwill


9,231Other acquired intangibles


10,567Total assets acquired


25,374Accounts payable and accrued
    liabilities


(369
)Net assets acquired

$
25,005        F-13




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
      Cash

$
2Accounts receivable, less
    allowance for losses


2,980Inventory, net


3,679Prepaid assets


62Plant assets


9,555Goodwill


16,639Other acquired intangibles


5,782Total assets acquired


38,699Accounts payable and accrued
    liabilities


(1,569
)Net assets acquired

$
37,130     C.
    Inventories  first-in,
  2006


2005Raw materials

$
45,986


$
42,205Work in process


19,987



17,057Finished products


63,700



58,246$
129,673


$
117,508  F-14




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
  D.
    Plant
    Assets    2006


2005Land

$
7,156


$
7,153Buildings and building fixtures


87,561



81,587Machinery and equipment


255,760



253,191Construction in process


10,000



13,285360,477



355,216Less accumulated depreciation


213,948



205,711$
146,529


$
149,505   E.
    Goodwill
    and Acquired Intangibles    Industrial/Engine/Mobile


EnvironmentalFiltration


Filtration


Packaging


TotalBalance at November 30, 2004

$
16,249


$
86,925


$



$
103,174Acquisitions






11,560







11,560Currency translation adjustments


(571
)


115







(456
)Balance at November 30, 2005


15,678



98,600







114,278Acquisitions


303



599







902Currency translation adjustments


766



86







852Balance at November 30, 2006

$
16,747


$
99,285


$



$
116,032     Industrial/Engine/Mobile


EnvironmentalFiltration


Filtration


Packaging


TotalBalance at November 30, 2005:Trademarks, gross

$
603


$
29,158


$



$
29,761Less accumulated amortization














Trademarks, net

$
603


$
29,158


$



$
29,761Customer relationships, gross

$
943


$
16,500


$



$
17,443Less accumulated amortization


283



1,214







1,497Customer relationships, net

$
660


$
15,286


$



$
15,946Other acquired intangibles, gross

$
207


$
12,724


$



$
12,931Less accumulated amortization


193



4,547







4,740Other acquired intangibles, net

$
14


$
8,177


$



$
8,191   F-15




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
  Industrial/Engine/Mobile


EnvironmentalFiltration


Filtration


Packaging


TotalBalance at November 30, 2006:Trademarks, gross

$
603


$
29,157


$



$
29,760Less accumulated amortization






14







14Trademarks, net

$
603


$
29,143


$



$
29,746Customer relationships, gross

$
1,970


$
16,666


$



$
18,636Less accumulated amortization


408



2,340







2,748Customer relationships, net

$
1,562


$
14,326


$



$
15,888Other acquired intangibles, gross

$
241


$
12,782


$



$
13,023Less accumulated amortization


214



5,442







5,656Other acquired intangibles, net

$
27


$
7,340


$



$
7,367         F.
    Accounts
    Payable and Accrued Liabilities    2006


2005Accounts payable

$
50,273


$
49,239Accrued salaries, wages and
    commissions


14,147



16,649Compensated absences


7,333



7,632Accrued insurance liabilities


11,799



12,053Other accrued liabilities


23,577



23,120$
107,129


$
108,693    F-16




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
     Balance at November 30, 2005

$
1,122Accruals for warranties issued
    during the period


1,023Accruals related to pre-existing
    warranties


(22
)Settlements made during the period


(789
)Other adjustments, primarily
    currency translation


152Balance at November 30, 2006

$
1,486   G.
    Restructuring
    Charges      H.
    Long-Term
    Debt    2006


2005Industrial Revenue Bonds, at
    weighted average interest rates of 3.62% and 3.11% at year-end

$
15,820


$
15,820Other


184



42216,004



16,242Less current portion


58



233$
15,946


$
16,009      F-17




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
            I.
    Leases    J.
    Pension
    and Other Postretirement Plans      non-U.S. pension non-U.S. plan
 F-18




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
     OtherPension Benefits


Postretirement Benefits2006


2005


2006


2005Change in benefit obligation:Benefit obligation at beginning of
    year

$
126,967


$
116,520


$
1,770


$
1,994Currency translation


1,264



(754
)






Service cost


3,329



3,755



20



30Interest cost


6,352



6,236



82



103Plan participants
    contributions


510



90







Actuarial (gains) / losses


(1,851
)


6,027



(258
)


(295
)Benefits paid


(5,333
)


(4,907
)


(602
)


(881
)Retiree contributions










467



819Benefit obligation at end of year

$
131,238


$
126,967


$
1,479


$
1,770Change in plan assets:Fair value of plan assets at
    beginning of year

$
100,131


$
96,531


$



$
Currency translation


956



(563
)






Actual return on plan assets


14,043



8,519







Employer contribution


189



201







Plan participants
    contributions


87



90







Benefits paid


(5,059
)


(4,647
)






Fair value of plan assets at end of
    year

$
110,347


$
100,131


$



$
Reconciliation of funded status:Accumulated benefit obligation

$
123,965


$
115,890


$
n / a


$
n / aAdditional benefit obligation for
    future salary increases


7,273



11,077



n / a



n / aBenefit obligation


131,238



126,967



1,479



1,770Fair value of plan assets


110,347



100,131







Funded status


(20,891
)


(26,836
)


(1,479
)


(1,770
)Unrecognized prior service cost


929



1,216



(1,463
)


(1,586
)Unrecognized net actuarial loss /
    (gain)


28,370



38,099



(1,314
)


(1,160
)Net amount recognized

$
8,408


$
12,479


$
(4,256
)

$
(4,516
)Amounts recognized in the
    Consolidated Balance Sheets include:Prepaid benefit cost

$
19,851


$
22,069


$



$
Accrued benefit liability


(18,289
)


(16,893
)


(4,256
)


(4,516
)Other noncurrent assets


826



986







Accumulated other comprehensive
    loss, pretax


6,020



6,317







Net amount recognized

$
8,408


$
12,479


$
(4,256
)

$
(4,516
)Assumptions:Discount rate-qualified plans


5.75
%


5.50
%


5.50
%


5.00
%Discount rate-nonqualified plan


5.25
%


5.00
%


n / a



n / aRate of compensation
    increase-qualified plans


4.00
%


4.00
%


n / a



n / aRate of compensation
    increase-nonqualified plan


0.00
%


6.50
%


n / a



n / aMeasurement date


11/01/06



11/01/05



11/01/06



11/01/05  F-19




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
  non-U.S. plan non-U.S. plan.
    year-to-year
    2006


2005Equity securities


70.6
%


71.9
%Debt securities


23.4
%


24.8
%Real estate and other


6.0
%


3.3
%100.0
%


100.0
%     OtherPension


PostretirementBenefits


Benefits2007

$
5,398


$
2792008


16,340



2512009


5,867



2142010


11,079



1812011


6,256



1512012-2016


35,314



458  F-20




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
    Pension Benefits2006


2005


2004Components of net periodic benefit
    cost:Service cost

$
3,329


$
3,755


$
3,473Interest cost


6,352



6,236



5,906Expected return on plan assets


(7,448
)


(7,483
)


(6,963
)Amortization of unrecognized:Prior service cost


158



146



158Net actuarial loss


2,031



2,105



1,375Net periodic benefit cost

$
4,422


$
4,759


$
3,949Assumptions:Discount rate-qualified plans


5.50
%


5.50
%


6.00
%Discount rate-nonqualified plan


5.00
%


5.50
%


6.00
%Expected return on plan assets


8.00
%


8.00
%


8.25
%Rate of compensation
    increase-qualified plans


4.00
%


4.00
%


4.00
%Rate of compensation
    increase-nonqualified plan


6.50
%


6.50
%


6.50
%Measurement date


11/01/05



11/01/04



11/01/03       Other Postretirement Benefits2006


2005


2004Components of net periodic benefit
    cost:Service cost

$
20


$
30


$
124Interest cost


82



103



217Amortization of unrecognized:Prior service cost


(122
)


(122
)


Net actuarial gain


(105
)


(77
)


(32
)Net periodic benefit cost

$
(125
)

$
(66
)

$
309Assumptions:Discount rate


5.00
%


5.50
%


6.00
%Measurement date


11/01/05



11/01/04



11/01/03  F-21




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
      K.
    Income
    Taxes    2006


2005


2004Current:Federal

$
38,614


$
33,608


$
25,551State


2,574



4,057



3,043Foreign


5,002



3,885



2,362Deferred


(2,395
)


(582
)


3,761$
43,795


$
40,968


$
34,717       2006


2005


2004Domestic income

$
110,956


$
106,162


$
90,770Foreign income


15,985



11,760



8,290$
126,941


$
117,922


$
99,060     Percent of Pretax Earnings2006


2005


2004Statutory U.S. tax rates


35.0
%


35.0
%


35.0
%State income taxes, net of federal
    benefit


2.0



2.1



2.1Foreign sales


(0.4
)


(0.6
)


(0.8
)Tax credits


(0.8
)


(0.9
)


(2.5
)Foreign taxes at different rates


(0.1
)


(0.8
)


(0.1
)Domestic production activities
    deduction


(0.8
)






Other, net


(0.4
)


(0.1
)


1.3Consolidated effective income tax
    rate


34.5
%


34.7
%


35.0
%  F-22




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
    2006


2005Deferred tax assets:Deferred compensation

$
4,991


$
4,261Other postretirement benefits


989



1,094Tax credits and foreign loss
    carryforwards


1,120



1,523Accounts receivable


6,001



4,682Inventories


4,473



4,002Accrued liabilities and other


5,407



5,436Valuation allowance


(754
)


(896
)Total deferred tax assets, net


22,227



20,102Deferred tax liabilities:Pensions


(71
)


(2,192
)Plant assets


(16,283
)


(16,547
)Intangibles


(10,864
)


(8,511
)Total deferred tax liabilities


(27,218
)


(27,250
)Deferred tax liability, net

$
(4,991
)

$
(7,148
)         L.
    Gain
    on Insurance Settlement   F-23




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
   M.
    Relocation
    Costs    N.
    Contingencies  and/or
        O.
    Preferred
    Stock Purchase Rights    P.
    Incentive
    Plan    Stock
    Options
   F-24




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
     2006


2005


2004Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOutstanding at beginning of year


3,885,915


$
20.63



3,676,306


$
15.42



3,831,868


$
11.84Granted


61,550



35.08



1,374,865



27.50



1,048,738



22.54Exercised


(627,656
)


16.98



(1,105,778
)


11.98



(1,148,694
)


10.12Surrendered


(66,750
)


22.59



(59,478
)


18.52



(55,606
)


14.44Outstanding at end of year


3,253,059


$
21.56



3,885,915


$
20.63



3,676,306


$
15.42Options exercisable at end of year


2,935,709


$
21.64



3,511,015


$
20.63



2,725,328


$
14.52       2006


2005


2004Fair value of options exercised

$
2,649


$
3,444


$
2,979Total intrinsic value of options
    exercised


10,557



18,098



14,415Cash received upon exercise of
    options


4,388



3,628



1,696Tax benefit realized from exercise
    of options


3,540



6,789



5,378     Options Outstanding


Options ExercisableWeighted





Weighted





Weighted





WeightedAverage





Average





Average





AverageRange of




Exercise


Intrinsic


Remaining





Exercise


Intrinsic


RemainingExercise Prices

Number


Price


Value


Life in Years


Number


Price


Value


Life in Years$7.21 - $9.79


342,376


$
9.16


$
8,132,866



3.32



342,376


$
9.16


$
8,132,866



3.32$10.53 - $13.75


266,813



13.22



5,252,795



4.97



266,813



13.22



5,252,795



4.97$16.01 - $22.80


1,381,129



20.37



17,314,052



5.55



1,071,579



20.32



13,493,899



5.15$25.89 - $35.66


1,262,741



27.99



6,213,499



7.74



1,254,941



27.97



6,201,761



7.733,253,059


$
21.56


$
36,913,212



6.11



2,935,709


$
21.64


$
33,081,321



6.02  F-25




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
    2006


2005


2004Risk-free interest rate


4.74
%


4.05
%


3.67
%Expected dividend yield


0.96
%


1.06
%


1.29
%Expected volatility factor


20.72
%


21.48
%


22.80
%Expected option term (in years):Original grants without reloads


6.9



6.4



7.0Original grants with reloads


n / a



5.0



5.0     Restricted
    Share Unit Awards
    2006


2005


2004Weighted





Weighted





WeightedAverage





Average





AverageGrant Date





Grant Date





Grant DateUnits


Fair Value


Units


Fair Value


Units


Fair ValueNonvested at beginning of year


110,441


$
23.32



107,543


$
16.92



83,357


$
13.57Granted










60,285



27.34



37,832



22.80Vested


(43,259
)


20.86



(57,387
)


15.55



(13,646
)


12.77Surrendered


(8,716
)


25.91















Nonvested at end of year


58,466


$
24.75



110,441


$
23.32



107,543


$
16.92      F-26




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
   Directors
    Restricted Stock Compensation
    Employee
    Stock Purchase Plan
    Q.
    Earnings
    Per Share, Treasury Transactions and Stock Split    2006


2005


2004Net Earnings

$
82,710


$
76,393


$
63,997Basic EPS:Weighted average number of common
    shares outstanding


51,570,165



51,658,347



50,984,314Basic per share amount

$
1.60


$
1.48


$
1.26Diluted EPS:Weighted average number of common
    shares outstanding


51,570,165



51,658,347



50,984,314Dilutive effect of stock-based
    arrangements


606,350



557,342



522,424Diluted weighted average number of
    common shares outstanding


52,176,515



52,215,689



51,506,738Diluted per share amount

$
1.59


$
1.46


$
1.24       two-for-one
 F-27




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
    R.
    Segment
    Information              2006


2005


2004Net sales:Engine/Mobile Filtration

$
399,090


$
368,183


$
320,042Industrial/Environmental Filtration


420,435



427,448



396,629Packaging


84,822



78,343



71,015$
904,347


$
873,974


$
787,686Operating profit:Engine/Mobile Filtration

$
92,598


$
80,414


$
66,564Industrial/Environmental Filtration


25,541



31,266



28,671Packaging


8,189



6,812



5,151Relocation costs










(2,209
)126,328



118,492



98,177Other income (expense)


613



(570
)


883Earnings before income taxes and
    minority interests

$
126,941


$
117,922


$
99,060   F-28




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
  2006


2005


2004Identifiable assets:Engine/Mobile Filtration

$
215,539


$
193,701


$
181,611Industrial/Environmental Filtration


380,955



372,120



352,093Packaging


43,952



43,551



41,474Corporate


87,070



65,900



52,619$
727,516


$
675,272


$
627,797Additions to plant assets:Engine/Mobile Filtration

$
8,861


$
10,350


$
7,943Industrial/Environmental Filtration


6,345



8,776



12,274Packaging


2,288



3,846



1,204Corporate


94



1,060



931$
17,588


$
24,032


$
22,352Depreciation and amortization:Engine/Mobile Filtration

$
8,307


$
7,404


$
7,272Industrial/Environmental Filtration


11,476



10,316



8,493Packaging


2,503



2,533



2,624Corporate


793



834



762$
23,079


$
21,087


$
19,151     2006


2005


2004Net sales:United States

$
698,026


$
682,672


$
620,337Europe


93,750



87,853



80,441Other international


112,571



103,449



86,908$
904,347


$
873,974


$
787,686Plant assets, at cost, less
    accumulated depreciation:United States

$
138,754


$
141,374


$
133,361Europe


5,914



5,784



6,626Other international


1,861



2,347



2,255$
146,529


$
149,505


$
142,242  F-29




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share
    data)  (Continued)
  S.
    Quarterly
    Financial Data (Unaudited)    First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter


Total2006:Net sales

$
213,183


$
227,076


$
231,510


$
232,578


$
904,347Gross profit


63,774



67,117



71,821



72,771



275,483Net earnings


16,201



16,805



22,963



26,741



82,710Net earnings per common share:Basic

$
0.31


$
0.32


$
0.45


$
0.52


$
1.60Diluted

$
0.31


$
0.32


$
0.44


$
0.52


$
1.592005:Net sales

$
196,261


$
219,786


$
216,403


$
241,524


$
873,974Gross profit


57,019



66,086



67,400



75,227



265,732Net earnings


13,154



17,346



20,855



25,038



76,393Net earnings per common share:Basic

$
0.26


$
0.34


$
0.40


$
0.48


$
1.48Diluted

$
0.25


$
0.33


$
0.40


$
0.48


$
1.46    F-30




---



##### Table of Contents



CLARCOR
    Inc.
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
  for the
    years ended November 30, 2006, 2005, and 2004
 (Dollars
    in thousands)
  Column A

Column B


Column C


Column D


Column EAdditions(1)


(2)Balance at


Charged to


Charged to





Balance atbeginning


costs and


other





end ofDescription

of period


expenses


accounts


Deductions


Period2006:Allowance for losses on accounts
    receivable

$
9,775


$
3,271


$
15
(A)

$
513
(B)

$
12,5482005:Allowance for losses on accounts
    receivable

$
9,557


$
1,293


$
(127
)(A)

$
948
(B)

$
9,7752004:Allowance for losses on accounts
    receivable

$
9,106


$
2,302


$
166
(A)

$
2,017
(B)

$
9,557     S-1