FLIR Systems, Inc.

Nature of Business Design and manufacture thermal imaging and infrared camera systems Sell to commercial, industrial and government markets Thermography – cameras that measure temperature/moisture –Used for commercial and industrial purposes such as building inspections. Imaging – night vision systems –Mainly government/military use.

Letter from Chairman, President and CEO Earl R. Lewis Sales increased by 55% to $483 million Net earnings up by 60% from 2003 Building inspection camera line lead the way into new markets. New manufacturing plants in Sweden and Boston Purchased Indigo Systems Corp. (imaging company) and led to growth in this industry of 65% Invested $64 million in R & D. For looking to lower production costs to reach cost sensitive markets

Independent Auditor KPMG, LLP from Portland, Oregon Unqualified opinion