<HTML> <HEAD> <TITLE>The Andersons, Inc. 10-Q Period End 3-31-2000</TITLE> </HEAD> <BODY bgcolor="#FFFFFF"> <!-- PAGEBREAK --> <!-- TOC --> <A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A> <P><CENTER> <TABLE border="0" width="90%" cellpadding="0" cellspacing="0"> <TR> <TD width="3%"></TD> <TD width="3%"></TD> <TD width="3%"></TD> <TD width="3%"></TD> <TD width="3%"></TD> <TD width="3%"></TD> <TD width="3%"></TD> <TD width="3%"></TD> <TD width="76%"></TD> </TR> <TR><TD colspan="9"><A HREF="#000"><B>Item 1. Financial Statements</B></A></TD></TR> <TR><TD colspan="9"><A HREF="#001">CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</A></TD></TR> <TR><TD colspan="9"><A HREF="#002">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</A></TD></TR> <TR><TD colspan="9"><A HREF="#003">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR> <TR><TD colspan="9"><A HREF="#004"><B>Item 2. Management’s Discussion</B></A></TD></TR> <TR><TD colspan="9"><A HREF="#005"><B>Item 3. Quantitative and Qualitative Disclosure of Market Risk</B></A></TD></TR> <TR><TD colspan="9"><A HREF="#006"><B>Item 6. Exhibits and Reports on Form 8-K</B></A></TD></TR> <TR><TD colspan="9"><A HREF="#007"><B>SIGNATURES</B></A></TD></TR> </TABLE> </CENTER> <!-- /TOC --> <P><HR noshade><P> <P align="center">SECURITIES AND EXCHANGE COMMISSION<BR> Washington, D.C. 20549 <P align="center">FORM 10-Q <P align="center">[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)<BR> OF THE SECURITIES EXCHANGE ACT OF 1934 <P align="center">For the quarterly period ended March 31, 2000 <P align="center">[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)<BR> OF THE SECURITIES EXCHANGE ACT OF 1934 <P align="center">For the transition period from ________ to _________ <P align="center">Commission file number 000-20557 <P align="center">THE ANDERSONS, INC.<BR> (Exact name of registrant as specified in its charter) <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center"> <TR valign="bottom"> <TD width="52%"> </TD> <TD width="5%"> </TD> <TD width="43%"> </TD> </TR> <TR valign="bottom"> <TD align="center" valign="top"><FONT size="3">OHIO</FONT></TD> <TD></TD> <TD align="center" valign="top"><FONT size="3">34-1562374</FONT></TD> </TR> <TR valign="bottom"> <TD align="center" valign="top"><FONT size="3">(State of incorporation or organization)</FONT></TD> <TD></TD> <TD align="center" valign="top"><FONT size="3">(I.R.S. Employer Identification No.)</FONT></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD align="center" valign="top"><FONT size="3">480 W. Dussel Drive, Maumee, Ohio</FONT></TD> <TD></TD> <TD align="center" valign="top"><FONT size="3">43537</FONT></TD> </TR> <TR valign="bottom"> <TD align="center" valign="top"><FONT size="3">(Address of principal executive offices)</FONT></TD> <TD></TD> <TD align="center" valign="top"><FONT size="3">(Zip Code)</FONT></TD> </TR> </TABLE> </CENTER> <P align="center">(419) 893-5050<BR> (Telephone Number) <P align="center">(Former name, former address and former fiscal year,<BR> if changed since last report.) <P>Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. <P align="center">Yes <U> X </U> No <U> </U> <P>The registrant had 7,554,469 Common shares outstanding, no par value, at May 1, 2000. <P align="center"> <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <P align="center">THE ANDERSONS, INC. <P align="center">INDEX <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center"> <TR valign="bottom"> <TD width="5%"> </TD> <TD width="5%"> </TD> <TD width="5%"> </TD> <TD width="77%"> </TD> <TD width="5%"> </TD> <TD width="1%"> </TD> <TD width="1%"> </TD> <TD width="1%"> </TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Page No.</B></FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="3"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"><FONT size="2">PART I. FINANCIAL INFORMATION</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Item 1. Financial Statements</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Condensed Consolidated Balance Sheets —</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD><FONT size="2">March 31, 2000 and December 31, 1999</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Condensed Consolidated Statements of Operations -</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD><FONT size="2">Three months ended March 31, 2000 and 1999</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">5</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Condensed Consolidated Statements of Cash Flows -</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD><FONT size="2">Three months ended March 31, 2000 and 1999</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">6</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Notes to Condensed Consolidated Financial Statements</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">7</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">8</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Item 3. Quantitative and Qualitative Disclosures About Market Risk</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">11</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="4"><FONT size="2">PART II. OTHER INFORMATION</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Item 6. Exhibits and Reports on Form 8-K</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">12</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Signatures</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">13</FONT></TD> <TD></TD> </TR> </TABLE> </CENTER> <P align="center">2 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <P align="center"><B>PART I. FINANCIAL INFORMATION</B> <!-- link1 "<B>Item 1. Financial Statements</B>" --> <DIV align="left"><A NAME="000"></A></DIV> <P align="left"><B>Item 1. Financial Statements</B> <P align="center">THE ANDERSONS, INC.<BR> CONDENSED CONSOLIDATED BALANCE SHEETS<BR> (UNAUDITED)(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center"> <TR valign="bottom"> <TD width="5%"> </TD> <TD width="5%"> </TD> <TD width="5%"> </TD> <TD width="59%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>March 31</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>December 31</B></FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"><FONT size="2">Current assets</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Cash and cash equivalents</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">6,047</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">25,614</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Accounts and notes receivable:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Trade accounts — net</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">77,894</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">51,812</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Margin deposits</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">5,178</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,339</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">83,072</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">53,151</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Inventories:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Grain</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">91,865</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">83,796</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Agricultural fertilizer and supplies</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">25,931</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">17,766</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD><FONT size="2">Agriculture</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">117,796</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">101,562</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Retail</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">34,423</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">29,540</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Processing</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">25,717</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">28,386</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Manufacturing</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">22,914</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">17,365</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD colspan="2"><FONT size="2">Other</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">587</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,470</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">201,437</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">178,323</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Deferred income taxes</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">5,105</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">5,641</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Prepaid expenses</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">4,887</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">5,796</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"><FONT size="2">Total current assets</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">300,548</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">268,525</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="4"><FONT size="2">Other assets:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Notes receivable (net) and other assets</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">4,984</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">4,640</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Investments in and advances to affiliates</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">975</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">954</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">5,959</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">5,594</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="4"><FONT size="2">Property, plant and equipment:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Land</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">11,885</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">12,237</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Land improvements and leasehold improvements</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">26,699</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">27,266</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Buildings and storage facilities</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">91,382</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">91,374</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Machinery and equipment</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">121,497</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">118,872</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Software</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3,606</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3,555</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Construction in progress</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">7,747</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">8,895</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">262,816</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">262,199</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="3"><FONT size="2">Less allowances for depreciation and amortization</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">160,083</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">159,542</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">102,733</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">102,657</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="4"></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">409,240</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">376,776</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> </TABLE> </CENTER> <P align="left">See notes to condensed consolidated financial statements. <P align="center">3 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <P align="center">THE ANDERSONS, INC.<BR> CONDENSED CONSOLIDATED BALANCE SHEETS — (continued)<BR> (UNAUDITED)(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center"> <TR valign="bottom"> <TD width="5%"> </TD> <TD width="71%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>March 31</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>December 31</B></FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Current liabilities</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Notes payable</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">88,800</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">45,000</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Accounts payable for grain</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">32,417</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">68,883</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Other accounts payable</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">95,690</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">65,079</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Accrued expenses</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">15,869</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">17,465</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Current maturities of long-term debt</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">4,447</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">4,159</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Total current liabilities</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">237,223</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">200,586</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Deferred income</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3,374</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">4,026</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Pension and postretirement benefits</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3,347</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3,255</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Long-term debt</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">73,003</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">74,127</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Deferred income taxes</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">7,429</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">8,742</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Minority interest</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">229</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,235</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Shareholders’ equity:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Common stock (25,000 shares authorized, stated value $.01 per share, 7,594 and 7,707 outstanding at 3/31/00 and 12/31/99, respectively)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">84</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">84</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Additional paid-in capital</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">67,131</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">67,227</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Treasury stock (836 and 723 shares at 3/31/00 and 12/31/99, respectively; at cost)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(7,895</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(7,158</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Accumulated other comprehensive income</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(144</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(144</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Unearned compensation</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(259</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(158</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Retained earnings</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">25,718</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">24,954</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">84,635</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">84,805</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">409,240</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">376,776</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> </TABLE> </CENTER> <P align="left">See notes to condensed consolidated financial statements. <P align="center">4 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <!-- link1 "CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS" --> <DIV align="left"><A NAME="001"></A></DIV> <P align="center">THE ANDERSONS, INC.<BR> CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS<BR> (UNAUDITED)(IN THOUSANDS, EXCEPT PER SHARE DATA) <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center"> <TR valign="bottom"> <TD width="5%"> </TD> <TD width="69%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="7"><FONT size="2"><B>Three Months Ended March 31</B></FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Sales and merchandising revenues</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">196,948</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">199,965</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Other income</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,918</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">790</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">198,866</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">200,755</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Cost of sales and merchandising revenues</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">154,820</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">161,889</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Gross profit</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">44,046</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">38,866</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Operating, administrative and general expenses</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">39,531</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">36,734</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Interest expense</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,676</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,066</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">42,207</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">38,800</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Income before income taxes</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,839</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">66</FONT></TD> <TD></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Income tax expense</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">617</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">22</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Net income</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">1,222</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">44</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Per common share:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Basic</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">0.16</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">0.01</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Diluted</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">0.16</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">0.01</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> <TR valign="bottom"> <TD></TD> <TD><FONT size="2">Dividends paid</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">0.06</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">0.05</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Weighted average common shares outstanding – basic</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">7,670</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">8,157</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> <TR valign="bottom"> <TD colspan="2"><FONT size="2">Weighted average common shares outstanding – diluted</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">7,674</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">8,302</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD colspan="2"></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> </TABLE> </CENTER> <P align="left">See notes to condensed consolidated financial statements. <P align="center">5 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <!-- link1 "CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS" --> <DIV align="left"><A NAME="002"></A></DIV> <P align="center">THE ANDERSONS, INC.<BR> CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<BR> (UNAUDITED)(IN THOUSANDS) <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center"> <TR valign="bottom"> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="70%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="7"><FONT size="2"><B>Three Months Ended March 31</B></FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2"><B>Operating activities</B></FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Net income</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">1,222</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">44</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Adjustments to reconcile net income to net cash used in operating activities:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="2"><FONT size="2">Depreciation and amortization</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3,094</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,702</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="2"><FONT size="2">Provision for losses on accounts and notes receivable</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">46</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">314</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="2"><FONT size="2">Deferred income tax</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(777</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(1,039</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="2"><FONT size="2">Gain on sale of business and property, plant & equipment</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(950</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(2</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="2"><FONT size="2">Other</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(22</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">30</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD></TD> <TD colspan="2"><FONT size="2">Cash provided by operations before changes in operating assets and liabilities</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,613</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,049</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD colspan="2"><FONT size="2">Changes in operating assets and liabilities:</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD><FONT size="2">Accounts receivable</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(30,118</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(23,779</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD><FONT size="2">Inventories</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(23,825</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(7,748</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD><FONT size="2">Prepaid expenses</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">190</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,365</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD><FONT size="2">Accounts payable for grain</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(36,466</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(52,010</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD></TD> <TD></TD> <TD><FONT size="2">Other accounts payable and accrued expenses</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">29,191</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">11,366</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Net cash used in operating activities</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(58,415</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(68,757</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2"><B>Investing activities</B></FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Purchases of property, plant and equipment</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(4,855</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(2,470</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Proceeds from sale of business & property, plant and equipment</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,200</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">21</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Net cash used in investing activities</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(2,655</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(2,449</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2"><B>Financing activities</B></FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Net increase in short-term borrowings</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">43,800</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">76,300</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Proceeds from issuance of long-term debt</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">45,050</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">26,574</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Payments of long-term debt</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(45,886</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(26,707</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Purchase of common stock for the treasury</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(1,317</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(432</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Proceeds from sale of treasury stock to employees</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">321</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">346</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Dividends paid</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(465</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(410</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Net cash provided by financing activities</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">41,503</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">75,671</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Increase (decrease) in cash and cash equivalents</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(19,567</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">4,465</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Cash and cash equivalents at beginning of period</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">25,614</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">3,253</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="1"></TD> </TR> <TR valign="bottom"> <TD colspan="3"><FONT size="2">Cash and cash equivalents at end of period</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">6,047</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">7,718</FONT></TD> <TD></TD> </TR> <TR valign="bottom"> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD colspan="7"><HR size="4" noshade></TD> </TR> </TABLE> </CENTER> <P>See notes to condensed consolidated financial statements. <P align="center">6 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <!-- link1 "NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS" --> <DIV align="left"><A NAME="003"></A></DIV> <P align="center">THE ANDERSONS, INC.<BR> NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS <P> <TABLE width="100%" border="0" cellpadding="0" cellspacing="0"> <TR> <TD width="9%"></TD> <TD width="91%"></TD> </TR> <TR valign="top"> <TD>Note A –</TD> <TD>In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of operations for the periods indicated have been made.</TD> </TR> <TR> <TD> </TD> </TR> <TR valign="top"> <TD> </TD> <TD>The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles.</TD> </TR> <TR> <TD> </TD> </TR> <TR valign="top"> <TD> </TD> <TD>The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in The Andersons, Inc. Annual Report on Form 10-K for the year ended December 31, 1999.</TD> </TR> <TR> <TD> </TD> </TR> <TR valign="top"> <TD>Note B –</TD> <TD>Total comprehensive income was $1.2 million for the three months ended March 31, 2000 and $44 thousand for the three months ended March 31, 1999.</TD> </TR> <TR> <TD> </TD> </TR> <TR valign="top"> <TD>Note C –</TD> <TD>The Retail segment was restated for the addition of a retail store selling lawn and garden equipment (the “Mower Center”). The results of this operation were previously reported in Other.</TD> </TR> </TABLE> <P align="center"><B>Results of Operations – Segment Disclosures</B><BR> (in thousands) <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center"> <TR valign="bottom"> <TD width="30%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="5%"> </TD> </TR> <TR valign="bottom"> <TD nowrap align="left"><FONT size="2"><B>First Quarter, 2000</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Agriculture</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Manufacturing</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Processing</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Retail</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Other</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD><FONT size="2">Revenues from external customers</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">118,614</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">6,473</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">34,182</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">35,190</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">2,489</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">196,948</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Inter-segment sales</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,192</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">240</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">659</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">—</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">—</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,091</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Other income</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">266</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">136</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">92</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">106</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,318</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,918</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Interest expense (credit) (a)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,638</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">313</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">606</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">458</FONT></TD> <TD></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(339</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,676</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Operating income (loss)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,415</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">481</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,701</FONT></TD> <TD></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(2,169</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">411</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,839</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Identifiable assets</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">211,592</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">36,746</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">75,650</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">65,194</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">20,058</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">409,240</FONT></TD> <TD></TD> </TR> </TABLE> </CENTER> <P align="center">7 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center"> <TR valign="bottom"> <TD width="30%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="4%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> <TD width="3%"> </TD> <TD width="4%"> </TD> <TD width="1%"> </TD> <TD width="5%"> </TD> </TR> <TR valign="bottom"> <TD nowrap align="left"><FONT size="2"><B>First Quarter, 1999</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Agriculture</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Manufacturing</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Processing</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Retail</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Other</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD><FONT size="2">Revenues from external customers</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">126,601</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">6,627</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">29,867</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">34,350</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">2,520</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">199,965</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Inter-segment sales</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,635</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">250</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">670</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">—</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">—</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,555</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Other income</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">193</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">34</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">78</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">85</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">400</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">790</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Interest expense (credit) (a)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">1,360</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">286</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">391</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">421</FONT></TD> <TD></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(392</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,066</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Operating income (loss)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(1,118</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">761</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2,577</FONT></TD> <TD></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(2,142</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(12</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">66</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Identifiable assets</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">215,302</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">30,786</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">59,345</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">64,350</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">25,880</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">395,663</FONT></TD> <TD></TD> </TR> </TABLE> </CENTER> <P> <TABLE width="100%" border="0" cellpadding="0" cellspacing="0"> <TR valign="top"> <TD width="1%" align="left">(a)</TD> <TD width="3%"> </TD> <TD width="96%">The other category of interest expense includes net interest income at the company level, representing the rate differential between the interest rate on which interest is allocated to the operating segments and the actual rate at which borrowings were made.</TD> </TR> </TABLE> <!-- link1 "<B>Item 2. Management’s Discussion</B>" --> <DIV align="left"><A NAME="004"></A></DIV> <P align="left"><B>Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations</B> <P align="center"><B>Comparison of the three months ended March 31, 2000 with the three months ended<BR> March 31, 1999:</B> <P> Sales and merchandising revenues for the three months ended March 31, 2000 totaled $196.9 million, a decrease of $3 million, or 2%, from 1999. Sales in the Agriculture Segment were down $9.1 million, or 8%, due to an 18% volume decrease in grain offset by a 5% increase in the average price per bushel sold. Fertilizer sales were up $3 million, or 10%, due to a 23% increase in volume, offset by a 10% decrease in the average price per ton sold. In addition, merchandising revenues for the Agriculture Group were up $1.1 million, or 14%, due primarily to increases in income from storing grain and fertilizer for others, fees for custom application and favorable basis movement in the grain business. This was offset by a significant decrease in drying and mixing income due to the generally good quality of grain received from the last harvest. In the first quarter of 2000, the Company operated one additional fertilizer manufacturing and distribution facility when compared to the same quarter in 1999. <P> The Manufacturing Segment had a slight sales decrease of $.2 million, or 2%. Total revenues in the railcar repair and fabrication shops were down $.2 million, and there were no railcar sales or financings completed during the first quarter of 2000, but lease fleet income was up $1.8 million or 47%. This fleet income growth was due to additional railcars and locomotives controlled and in service. <P> The Processing Segment had a $4.3 million, or 14%, increase in sales. All of this increase was attributable to increased volumes and price per ton sold in the lawn fertilizer division. The cob-based businesses experienced a reduction of volume partially offset by a 2% increase in the average price per ton sold. There are two additional lawn fertilizer blending facilities being operated in the first quarter of 2000 when compared to the first quarter of 1999. They are located in Montgomery, Alabama and Pottstown, Pennsylvania. The Processing Segment has signed a definitive purchase agreement for the purchase of the Scott’s Pro Turf business. Closing is scheduled for the second quarter. The Company anticipates that this acquisition will significantly increase revenues for the segment. <P align="center">8 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <P> The Retail Segment experienced a $.8 million, or 2%, increase in sales, with five of the six stores and the Mower Center showing increases. The majority of the increase related to strong lawn and garden sales in March. <P> Gross profit for the first quarter of 2000 totaled $44 million, an increase of $5.2 million, or 13%, from the first quarter of 1999. Included in this amount is a $.9 million gain on the sale of the Company’s investment in The Andersons-Tireman joint venture. The Agriculture Segment had a gross profit increase of $2.9 million, or 21%, due to the $1.1 million increase in merchandising revenues described previously and additional fertilizer gross profit related to increases in volume and margin per ton. <P> Gross profit in the Manufacturing Segment decreased $.4 million, or 11%, from the prior year. This was due primarily to the timing of and margins on railcar sales. <P> Gross profit for the Processing Segment increased $1.3 million, or 13%, from the first quarter of 1999. As a whole, this segment experience both improved volume and gross profit per ton. The lawn fertilizer businesses experienced increases that were partially offset by decreases in the cob-based businesses. <P> Gross profit in the Retail Segment improved by $.2 million, or 2%, from the first quarter of 1998. This was due primarily to the increased sales noted previously. Gross margin percentages were the same in both quarters. <P> Operating, administrative and general expenses for the first quarter of 2000 totaled $39.5 million, a $2.8 million, or 8%, increase from the first quarter of 1999. Full time employees increased 4% from the first quarter of 1999 with the majority of the increase due to acquisitions or added capacity in the Processing Segment. Included in the total increase are additional labor and benefits charges of $1.2 million and additional occupancy costs of $.7 million. These increases primarily reflect planned growth in the Processing Segment. Additional operating expenses relating specifically to facilities added after the first quarter of 1999 were $1.4 million. <P> Interest expense for the first quarter of 2000 was $2.7 million, a $.6 million, or 30%, increase from the first quarter of 1999. Average short-term borrowings were approximately 26% higher in the first quarter of 2000 when compared to the first quarter of 1999 and the effective short-term interest rate increased almost a full percentage point. <P> Income before income taxes of $1.8 million was a significant improvement from the 1999 first quarter pretax income of $66 thousand. Tax expense has been provided at 33.5%, the Company’s expected effective tax rate for 2000. <P align="center">9 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <P> Net income of $1.2 million also improved significantly from the 1999 first quarter net income of $44 thousand. Basic and diluted earnings per share were $.16, a $.15 increase from the 1999 first quarter earnings per share of $.01. <P align="center"><B>Liquidity and Capital Resources</B> <P> The Company’s operations (before changes in working capital) provided cash of $2.6 million in the first quarter of 2000, an increase of $.6 million from the first quarter of 1999. Working capital at March 31, 2000 was $63.3 million, a $4.6 million decrease from December 31, 1999. Working capital at March 31, 1999 was $66.6. <P> The Company utilizes its short-term lines of credit to finance working capital, primarily inventories and accounts receivable. Lines of credit available on March 31, 2000 were $175 million. The Company had drawn $88.8 million on its short-term lines of credit at March 31, 2000, an increase of $43.8 million from December 31, 1999. The Company’s peak short-term borrowing occurred on March 23, 2000 and amounted to $113.8 million. Typically, the Company’s highest borrowing occurs in the spring due to seasonal inventory requirements in the fertilizer and retail businesses, credit sales of fertilizer and a customary reduction in grain payables due to cash needs and market strategies of grain customers. <P> A quarterly cash dividend of $0.06 per common share was paid in the first quarter of 2000. A cash dividend of $0.06 per common share was declared on April 1, 2000 and was paid on April 21, 2000. Cash dividends of $0.05 per common share were paid quarterly in 1999. The Company made income tax payments of $.1 million in the first quarter and expects to make payments totaling approximately $4.2 million for the remainder of 2000. Also, in the first quarter, the Company issued 58,476 shares to its employees under stock compensation plans and purchased 171,500 of its common shares on the open market at an average of $7.68 per share. <P> Total capital expenditures for 2000 are expected to approximate $25 million and include $8 million for additional facilities and businesses in the Processing Segment, $5.2 million for the acquisition of additional railcars and $.9 million to replace information systems hardware and software. Funding for these expenditures is expected to come from cash generated from operations and additional debt. Capital expenditures may be curtailed if cash generated from operations is less than expected. <P> Certain of the Company’s long-term debt is secured by first mortgages on various facilities. Some of the long-term borrowings include provisions that impose minimum levels of working capital and equity, limitations on additional debt and require the Company to be substantially hedged in its grain transactions. <P> The Company’s liquidity is enhanced by the fact that grain inventories are readily marketable. In the opinion of management, the Company’s liquidity is adequate to meet short-term and long-term needs. <P align="center">10 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <P align="center"><B>Impact of Year 2000</B> <P> In prior years, the Company discussed the nature and progress of its plans to become Year 2000 ready. In late 1999, the Company completed its remediation and testing of systems. As a result of those planning and implementation efforts, the Company experienced no significant disruptions in information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company is not aware of any material problems resulting from Year 2000 issues, either with its products, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly. <P align="center"><B>Forward Looking Statements</B> <P> The preceding Management’s Discussion and Analysis contains various “forward-looking statements” which reflect the Company’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties, including but not limited to those identified below, which could cause actual results to differ materially from historical results or those anticipated. The words “believe,” “expect,” “anticipate” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. <P> The following factors could cause actual results to differ materially from historical results or those anticipated; weather, supply and demand of commodities including grains, fertilizer and other basic raw materials, market prices for grains and the potential for increased margin requirements, competition, economic conditions, risks associated with acquisitions, interest rates and income taxes. <!-- link1 "<B>Item 3. Quantitative and Qualitative Disclosure of Market Risk</B>" --> <DIV align="left"><A NAME="005"></A></DIV> <P align="left"><B>Item 3. Quantitative and Qualitative Disclosure of Market Risk</B> <P align="center"><B>Market Risk Sensitive Instruments and Positions</B> <P> The market risk inherent in the Company’s market risk sensitive instruments and positions is the potential loss arising from adverse changes in commodity prices and interest rates as discussed below. <P align="left"><I>Commodities</I><BR> The availability and price of agricultural commodities are subject to wide fluctuations due to unpredictable factors such as weather, plantings, government (domestic and foreign) farm programs and policies, changes in global demand created by population growth and higher standards of living, and global production of similar and competitive crops. To reduce price risk caused by market fluctuations, the Company follows a policy of hedging its <P align="center">11 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <P>inventories and related purchase and sale contracts. The instruments used are readily marketable exchange-traded futures contracts that are designated as hedges. To a lesser degree, the Company uses exchange-traded option contracts, also designated as hedges. The changes in market value of such contracts have a high correlation to the price changes of the hedged commodity. The Company’s accounting policy for these hedges, as well as the underlying inventory positions, and purchase and sale contracts is to mark them to the market daily and include gains and losses in the statement of income in sales and merchandising revenues. <P> A sensitivity analysis has been prepared to estimate the Company’s exposure to market risk of its commodity position. The Company’s daily net commodity position consists of inventories, related purchase and sale contracts and exchange traded contracts. The fair value of such position is a summation of the fair values calculated for each commodity by valuing each net position at quoted futures market prices. Market risk is estimated as the potential loss in fair value resulting from a hypothetical 10% adverse change in such prices. The result of this analysis, which may differ from actual results, is as follows: <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center"> <TR valign="bottom"> <TD width="71%"> </TD> <TD width="5%"> </TD> <TD width="2%"> </TD> <TD width="1%"> </TD> <TD width="2%"> </TD> <TD width="5%"> </TD> <TD width="6%"> </TD> <TD width="1%"> </TD> <TD width="7%"> </TD> </TR> <TR valign="bottom"> <TD nowrap align="center"><FONT size="2">(in thousands)</FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>March 31, 2000</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>December 31, 1999</B></FONT></TD> </TR> <TR valign="bottom"> <TD nowrap align="center"></TD> <TD></TD> <TD colspan="3"><HR size="1" noshade></TD> <TD><HR size="1" noshade></TD> <TD colspan="3"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD><FONT size="2">Net long (short) position</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">19</FONT></TD> <TD></TD> <TD></TD> <TD nowrap align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">(153</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Market risk</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">2</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">15</FONT></TD> <TD></TD> </TR> </TABLE> </CENTER> <P align="left"><I>Interest</I><BR> The fair value of the Company’s long-term debt is estimated using quoted market prices or discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Such fair value exceeded the long-term debt carrying value. In addition, the Company has off-balance sheet interest rate contracts established as hedges. The fair value of these contracts is estimated based on quoted market termination values. Market risk, which is estimated as the potential increase in fair value resulting from a hypothetical one-half percent decrease in interest rates, is summarized below: <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center"> <TR valign="bottom"> <TD width="76%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> <TD width="5%"> </TD> <TD width="3%"> </TD> <TD width="1%"> </TD> <TD width="3%"> </TD> </TR> <TR valign="bottom"> <TD nowrap align="center"><FONT size="2">(in thousands)</FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>March 31, 2000</B></FONT></TD> <TD></TD> <TD nowrap align="center" colspan="3"><FONT size="2"><B>December 31, 1999</B></FONT></TD> </TR> <TR valign="bottom"> <TD nowrap align="center"></TD> <TD></TD> <TD colspan="3"><HR size="1" noshade></TD> <TD><HR size="1" noshade></TD> <TD colspan="3"><HR size="1" noshade></TD> </TR> <TR valign="bottom"> <TD><FONT size="2">Fair value of long-term debt and interest rate contracts</FONT></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">76,995</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">$</FONT></TD> <TD align="right"><FONT size="2">77,964</FONT></TD> <TD></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Fair value in excess of (less than) carrying value</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(455</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> <TD></TD> <TD nowrap align="right"></TD> <TD align="right"><FONT size="2">(322</FONT></TD> <TD nowrap><FONT size="2">)</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD><FONT size="2">Market risk</FONT></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">421</FONT></TD> <TD></TD> <TD></TD> <TD></TD> <TD align="right"><FONT size="2">595</FONT></TD> <TD></TD> </TR> </TABLE> </CENTER> <P align="center"><B>PART II. OTHER INFORMATION</B> <!-- link1 "<B>Item 6. Exhibits and Reports on Form 8-K</B>" --> <DIV align="left"><A NAME="006"></A></DIV> <P align="left"><B>Item 6. Exhibits and Reports on Form 8-K</B> <P> (b) Reports on Form 8-K. A report on Form 8-K was filed with the SEC on February 25, 2000 announcing a change in audit firms. <P align="center">12 <!-- PAGEBREAK --> <P><HR noshade><P> <H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P> <!-- link1 "<B>SIGNATURES</B>" --> <DIV align="left"><A NAME="007"></A></DIV> <P align="center"><B>SIGNATURES</B> <P>Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. <CENTER> <TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center"> <TR valign="bottom"> <TD width="10%"> </TD> <TD width="5%"> </TD> <TD width="7%"> </TD> <TD width="11%"> </TD> <TD width="17%"> </TD> <TD width="5%"> </TD> <TD width="45%"> </TD> </TR> <TR valign="bottom"> <TD valign="top"></TD> <TD></TD> <TD nowrap align="right" valign="top"></TD> <TD align="right" valign="top"><FONT size="3"></FONT></TD> <TD valign="top"></TD> <TD></TD> <TD align="left" valign="top"><FONT size="3">THE ANDERSONS, INC.</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD valign="top"></TD> <TD></TD> <TD nowrap align="right" valign="top"></TD> <TD align="right" valign="top"><FONT size="3"></FONT></TD> <TD valign="top"></TD> <TD></TD> <TD align="left" valign="top"><FONT size="3">(Registrant)</FONT></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="3" valign="top"><FONT size="3">Date: May 12, 2000</FONT></TD> <TD align="right" valign="top"><FONT size="3"></FONT></TD> <TD valign="top"></TD> <TD></TD> <TD align="left" valign="top"><FONT size="3">By /s/ Michael J. Anderson</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD valign="top"></TD> <TD></TD> <TD nowrap align="right" valign="top"></TD> <TD align="right" valign="top"><FONT size="3"></FONT></TD> <TD valign="top"></TD> <TD></TD> <TD align="left" valign="top"><FONT size="3">Michael J. Anderson<BR> President and Chief Executive Officer</FONT></TD> </TR> <TR> <TD> </TD> </TR> <TR valign="bottom"> <TD colspan="3" valign="top"><FONT size="3">Date: May 12, 2000</FONT></TD> <TD align="right" valign="top"><FONT size="3"></FONT></TD> <TD valign="top"></TD> <TD></TD> <TD align="left" valign="top"><FONT size="3">By /s/ Richard R. George</FONT></TD> </TR> <TR><TD><TR><TD><TR><TD><TR><TD> <TR valign="bottom"> <TD valign="top"></TD> <TD></TD> <TD nowrap align="right" valign="top"></TD> <TD align="right" valign="top"><FONT size="3"> </FONT></TD> <TD valign="top"></TD> <TD></TD> <TD align="left" valign="top"><FONT size="3">Richard R. George<BR> Vice President and Controller (Principal<BR> Accounting Officer)</FONT></TD> </TR> </TABLE> </CENTER> <P align="center">13 </BODY> </HTML>