<PAGE>

     As Filed With The Securities And Exchange Commission On April 1, 2002
================================================================================
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                               -----------------
                                   FORM 10-K

                 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
           SECTIONS 13 OR 15D OF THE SECURITIES EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15D OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 2001
                                      OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                            SECURITIES ACT OF 1934
                 For the Transition period from        to

                       Commission File Number: 333-81235
                          --
                              ROYSTER-CLARK, INC.
            (Exact name of registrant as specified in its charter)

<TABLE>
<S>                       <C>                          <C>
        Delaware                     2875                     76-0329525
     (State or other      (Primary Standard Industrial     (I.R.S. Employer
      jurisdiction
   of incorporation or        Classification Code         Identification No.)
      organization)                 Number)
</TABLE>
                               -----------------
           600 FIFTH AVENUE 25/TH FLOOR , NEW YORK, NEW YORK 10020 /
                                (212) 332-2965
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)

                               -----------------
                   SEE TABLE OF ADDITIONAL REGISTRANTS BELOW
                               -----------------
                            FRANCIS P. JENKINS, JR.
               CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ROYSTER-CLARK, INC. , 600 FIFTH AVENUE 25/TH FLOOR , NEW YORK, NEW YORK 10020 /
                                (212) 332-2965
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                               -----------------
                                With Copies to:
                           PETER A. BASILEVSKY, ESQ.
                      SATERLEE STEPHENS BURKE & BURKE LLP
          230 PARK AVENUE, SUITE 1130 , NEW YORK, NEW YORK 10169-0079
                                (212) 818-9200
                               -----------------
                              TITLE OF EACH CLASS
                     10 1/4% First Mortgage Notes Due 2009
          Securities registered pursuant to Section 12(b) of the Act:
                                     None
          Securities registered pursuant to Section 12(g) of the Act:
                                     None

--------------------------------------------------------------------------------
   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. Yes [X ] No [ ]

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ] Not applicable

   State the aggregate market value of the voting and non-voting common equity
held by non-affiliates of the Registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of a specified date
within 60 days prior to the date of filing (see definition of affiliate in Rule
12b-2 of the Exchange Act.) Not applicable

   Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date. Not applicable
                   DOCUMENTS INCORPORATED BY REFERENCE: NONE
================================================================================

<PAGE>

                              ROYSTER-CLARK, INC.

                                   FORM 10-K

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<C>        <S>                                                                                   <C>
PART I.
Item 1.    Business.............................................................................   1
Item 2.    Properties...........................................................................   9
Item 3.    Legal Proceedings....................................................................  10
Item 4.    Submission of Matters to a Vote of Security Holders..................................  10

Part II.
Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters................  11
Item 6.    Selected Financial Data..............................................................  11
Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations  12
Item 7a.   Quantitative and Qualitative Disclosures about Market Risk...........................  22
Item 8.    Financial Statements and Supplementary Data..........................................  24
Item 9.    Changes In and Disagreements with Accountants on Accounting and Disclosure...........  57

Part III.
Item 10.   Directors and Executive Officers of the Registrant...................................  58
Item 11.   Executive Compensation...............................................................  61
Item 12    Security Ownership of Beneficial Owners and Management and RelatedStockholder Matters  64
Item 13.   Certain Relationships and Related Transactions.......................................  66

Part IV.
Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....................  67

Signatures                                                                                        69
</TABLE>

                                      ii

<PAGE>

                          FORWARD-LOOKING STATEMENTS

   This Form 10-K contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this Report, the
words "estimate," "project," "anticipate," "expect," "intend," "believe,"
"hope," "may" and similar expressions, as well as "will," "shall" and other
indications of future tense, are intended to identify forward-looking
statements. Similarly, statements that describe the Company's future plans,
objectives, targets or goals are also forward-looking statements. The
forward-looking statements are based on our current expectations and speak only
as of the date made. These forward-looking statements involve known and unknown
risks, uncertainties and other factors that in some cases have affected our
historical results and could cause actual results in the future to differ
significantly from the results anticipated in forward-looking statements made
in this Report. Important factors that could cause a material difference
include, but are not limited to, (i) changes in matters which affect the global
supply and demand of fertilizer products, (ii) the volatility of the natural
gas markets, (iii) a variety of conditions in the agricultural industry such as
grain prices, planted acreage, projected grain stocks, U.S. government
policies, weather and changes in agricultural production methods, (iv) possible
unscheduled plant outages and other operating difficulties, (v) price
competition and capacity expansions and reductions from both domestic and
international producers, (vi) the relative unpredictability of national and
local economic conditions within the markets we serve, specifically in light of
the September 11, 2001 terrorist attacks and their related aftermath, (viii)
environmental regulations, (ix) other important factors affecting the
fertilizer industry, (x) fluctuations in interest rates and (xi) other factors
referenced in the Company's Reports and registration statements filed with the
Securities and Exchange Commission. You are cautioned not to place undue
reliance on the forward-looking statements.

   Few of the forward-looking statements in this Report deal with matters that
are within our unilateral control. Acquisition, financing and other agreements
and arrangements must be negotiated with independent third parties and, in some
cases, must be approved by governmental agencies. These third parties generally
have interests that do not coincide with ours and may conflict with our
interests. Unless the third parties and we are able to compromise their various
objectives in a mutually acceptable manner, agreements and arrangements will
not be consummated.



                                      iii

<PAGE>

                                    PART I

Item 1.  Business.

General

   We believe we are one of the largest independent retail and wholesale
distributors, in terms of retail sales, of agricultural fertilizer, seed, crop
protection products and agronomic services to farmers in the United States. We
primarily focus on major farming regions in the East, South and Midwest of the
United States. Our distribution business supplies a full range of products and
services to our retail and wholesale customers through approximately 400
facilities, including retail farm centers ("Farmarkets"), granulation, blending
and seed processing plants, and an integrated network of storage and
distribution terminals and warehouses. In addition, we operate two
nitrogen-manufacturing plants that supply our distribution business with
nitrogen fertilizer products. We operate as a retailer and wholesaler of a
complete package of products and services to help farmers become more
profitable, efficient and environmentally sound. In 2001 we generated revenues
of $953.8 million and EBITDA of $48.8 million.

   Royster-Clark, Inc. has a long history. W.S. Clark & Sons, Inc. began
operations in 1872 as a general mercantile company. The corporate antecedents
of Royster-Clark, Inc. were formed in 1881 to utilize natural fertilizer
resources from South America. Royster-Clark, Inc. was formed in 1992 through
the merger of these two companies. The current management team assumed active
control at Royster-Clark in the summer of 1995.

   On April 22, 1999, 399 Venture Partners, Inc., an affiliate of Citicorp
Venture Capital Ltd., through its newly formed company Royster-Clark Group,
Inc. ("Royster-Clark Group" or "RCG"), acquired all of the outstanding shares
of Royster-Clark, Inc. (predecessor) from some members of its management.
Royster-Clark, Inc. (successor) then acquired all of the outstanding shares of
three operating subsidiaries, IMC AgriBusiness, Inc., IMC Nitrogen Company and
Hutson's AG Service, Inc. from IMC Global, Inc. These three IMC entities are
referred to as "AgriBusiness."

   In order to finance the acquisition of AgriBusiness and re-structure the
Company's debt, the Company used proceeds from equity contributions by 399
Venture Partners, Inc. of $59.0 million, management rollover equity of $19.6
million; issuance of $10.0 million of Royster-Clark Group junior subordinated
notes payable maturing in 2010, owned by IMC Global, Inc.; the issuance of
$200.0 million principal amount of 10.25% First Mortgage Notes due 2009 held by
various financial institutions ("Noteholders"); and proceeds from the Senior
Secured Credit Facility ("credit facility") created on April 22, 1999. As a
result of these transactions and subsequent issuance of stock, 399 Ventures and
affiliates owns approximately 37.3% of the outstanding voting stock and 70.3%
of the total outstanding stock of Royster-Clark Group, members of our
management own approximately 50.0% of the outstanding voting stock and 22.9% of
the total outstanding stock of Royster-Clark Group and have the right to
acquire an additional 10% of the voting stock through a new stock purchase
plan. Royster-Clark Group owns all of the outstanding stock of Royster-Clark,
Inc.

   AgriBusiness was initially formed in the mid-1980s as Vigoro Industries,
Inc. through the leveraged buy-out of Kaiser Agricultural Chemicals and Estech
Branded Fertilizer, both retailers of agricultural inputs. AgriBusiness
acquired the East Dubuque nitrogen facility in 1987. Vigoro merged with IMC
Global in 1996 and then AgriBusiness was formed, combining the Farmarket retail
and nitrogen businesses of Vigoro and the Rainbow business of IMC Global.
AgriBusiness expanded its retail and wholesale distribution system with the
1997 acquisition of Hutson's Ag Service, Inc., a Kentucky-based crop production
input distributor with approximately 25 retail stores.

                                      1

<PAGE>

Risk Factors

   Risk factors to our business include, but are not limited to, the following:

  .   Poor weather conditions can lead to a decline in our revenues.

  .   Price volatility of materials we purchase for resale could affect our
      profitability.

  .   Increases in the price of natural gas could affect the profitability of
      our sales of manufactured nitrogen products.

  .   Downturns in the nitrogen industry or changes in end user market demands
      could reduce the revenues and profitability of our business.

  .   Interest rates could change substantially, materially impacting our
      profitability.

  .   Our industry is very competitive and the actions of our competitors could
      reduce the value of an investment in our company.

  .   Our success depends on a limited number of key executives who we may not
      be able to adequately replace in the event they leave the company.

  .   Our operations have risks that may result in liability for environmental
      conditions and other damage not covered by insurance or which exceed our
      insurance coverage.

  .   We have a long-term supply contract with IMC Global and their failure to
      perform under this contract could disrupt our operations.

  .   Government regulations and agricultural policy may affect our customers
      and markets.

  .   We may have claims and liabilities under environmental health and safety
      laws and regulations.

  .   Our indebtedness could adversely affect our financial health and limit
      our ability to grow and compete.

  .   We may not be able to generate the necessary amount of cash to service
      our existing debt, which may require us to refinance our debt or default
      on our scheduled debt payments.

Business Operations

  Agricultural Infrastructure

   We have an extensive agricultural product infrastructure of approximately
400 facilities, including Farmarkets, granulation, blending and seed processing
facilities and an integrated network of storage and distribution terminals and
warehouses. In addition, we operate two nitrogen-manufacturing plants that
supply our distribution business with nitrogen fertilizer products. This
infrastructure allows us to efficiently process, distribute and store product
close to the end-user and supply our customers on a timely basis during the
planting seasons. In addition, we use port facilities on the Atlantic Ocean and
the Mississippi River system to provide flexibility in product purchasing,
including the ability to access overseas markets when they offer lower prices
than domestic markets. Our widespread geographical presence in some of the
country's most important farming regions provides diversity that helps to
insulate our overall business from difficult farming conditions in any one
particular area as a result of poor weather or adverse market conditions for
specific crops. Our facilities cover the major farming markets in the East,
South and Midwest. We believe that this market presence provides a number of
competitive advantages as described below:

  .   We are located to supply some of the country's largest buyers of crop
      production inputs,

  .   We have the opportunity to distribute product for some of the major,
      leading farm input producers who are seeking broad distribution of their
      products; and

  .   We have market diversity that helps to insulate the overall business from
      difficult farming conditions as a result of poor weather in any one
      particular market or adverse market conditions for a specific crop.

                                      2

<PAGE>

   Over 90% of our revenues relate to the distribution of crop production
inputs purchased from third parties and resold to retail and wholesale
customers. Therefore, we are only partially exposed to fluctuations in nitrogen
fertilizer prices. Less than 10% of our sales come from manufacturing nitrogen
fertilizer products.

   We have instituted central management controls and utilize our logistical
expertise and enterprise information technology systems to manage our
facilities network. We understand the importance of flexibility at the local
level to adapt to local conditions. We aim to achieve the proper balance of
central control and direction with local flexibility by utilizing team
management and appropriate incentive programs.

  Retail Distribution

   We operate approximately 280 Farmarket retail farm centers, including
approximately twenty third-party commission sales stores, making us one of the
largest retailers of crop production inputs to farmers in North America.
Farmarkets market their products and services primarily to end users, the
farmers. Farmarkets typically service farmers within a 15 to 25 mile radius of
their locations. We operate centers predominantly in the Midwest to service
corn and soybean farmers and in the Southeast to service farmers focused on
higher management crops, including cotton, peanuts, tobacco and vegetables.

   We sell a complete line of products to farmers, including fertilizer, seed
and crop protection products. Each Farmarket tailors its product offering to
the specific needs of farmers within its service area. While we provide a
complete line of products and services, fertilizer represents the majority of
the typical Farmarket's business. We offer both blended fertilizer and our own
premium branded granulated fertilizer products at most of our Farmarkets.

   We also distribute a full range of crop protection products at our
Farmarkets. For the convenience of our customers, Farmarkets carry inventories
of herbicides, insecticides, fungicides and other products, which target pest
problems affecting crops. This capability allows our retail centers to be a
"one-stop supplier" for farmers who need a complete package of crop protection
services, including technical advice, delivery services and field application.
The Farmarket receives crop protection products from our network of
strategically located distribution centers. We receive distributor and dealer
cash rebates based on the volume and type of products that we sell. Cash
rebates are typically paid near the end of the calendar year but may also be
advanced monthly, as sales are made.

   We also contract with area farmers to grow certified seed products that are
processed and bagged in a number of seed processing facilities. As such, we
have placed an emphasis on new seed technology and provide a complete range of
seed to farmers through local retail centers. Increasingly, our seed product is
processed for leading seed companies, and sold under their private labels. For
example, we were one of the first outside companies to grow, process, bag and
distribute Roundup Ready soybeans for Monsanto. Roundup Ready is a popular
biotechnology product that allows the soybean to tolerate Roundup, a popular
crop protection product. Even with recent published stories concerning the
commingling of crops produced from biotechnologically modified seed with
conventional seed, we continue to believe that seed technology based on genetic
engineering may be an important growth area for agriculture. In addition the
Company produces and markets its own proprietary Vigoro Seed brand.

   In addition to selling physical crop production inputs, Farmarket personnel
provide agronomic services to farmers. These services range from the custom
blending and application of crop nutrients to meet the needs of individual
farmers, to more sophisticated and technologically advanced services on a fee
basis such as soil sampling, pest level monitoring and yield monitoring using
global position systems satellites and satellite-linked variable rate spreaders
and applicators to take advantage of the data.

   We operate point-of-sale computer systems at each of our Farmarkets that
provide data daily for inventory control, budgeting, forecasting, working
capital management, material requirements planning and internal

                                      3

<PAGE>

controls. Modern management concepts such as organizing field sales by relying
on teams of Farmarket managers are also utilized.

  Wholesale Distribution

   Our wholesale distribution operation supplies a full range of fertilizer,
seed and crop protection products to customers in the Southeast and Midwest.
Our primary wholesale business includes the purchase of nitrogen, phosphate and
potash, three essential nutrients for plant growth, for resale to wholesale
customers. We process the majority of these crop nutrients into blended and
granulated fertilizer products and then sell them as mixed fertilizers.

   We believe we are one of the largest North American producers of
agricultural granulated fertilizer. In terms of number of plants, we have been
a leading manufacturer and distributor of premium, branded agricultural
granulated fertilizers with our primary market focus in the Southeastern
farming regions. These products are marketed under the Super Rainbow, Rainbow,
International, and Bonanza brand names. Granulated fertilizer products are
primarily used by farmers who produce specialty crops, such as citrus fruits,
vegetables, tobacco, peanuts and cotton. Farmers growing these crops are
willing to invest more in premium crop nutrients, such as granulated
fertilizers.

   We operate six granulation plants which produce homogenized NPK (nitrogen,
phosphate and potash) products. We believe that we are among the most
efficient, low-cost producers of granulated fertilizers in the U.S. market. We
have a cost-effective production process that uses potash, phosphate and
nitrogen to manufacture granulated fertilizer products with excellent agronomic
traits.

   We also offer a range of products with slightly different nutrient contents
within each branded, blended product category. The ability to offer a range of
fertilizer blends helps us accommodate the needs of farmers growing a variety
of specialty crops under different soil conditions. We also produce custom
products to meet the specific needs of large customers.

   We distribute our wholesale products in the southeastern United States
through a network of over 900 independent dealers. Typically, our products
represent 25% to 45% of a dealer's annual product turnover. We have supplied
granulated fertilizer product to some members of our network for over 50 years.
These customer relationships provide a competitive advantage today. We provide
a broad array of products and services through our dealer network.

   Another key part of our wholesale business is a network of terminals and
storage facilities located in the Midwest. This integrated network services
customers throughout Iowa, Missouri, Wisconsin, Minnesota, Illinois, Indiana,
Michigan, Ohio, Pennsylvania, New York, West Virginia and Kentucky. When
selling nitrogen fertilizer products, the East Dubuque and Cincinnati plants'
proximity to our wholesale business terminals provides a freight cost advantage
over other suppliers, some of which must be transported from the Gulf Coast
region or Trinidad. In addition to lowering freight costs, the location of our
wholesale business' supply terminals helps us meet the needs of customers in
the Midwest in a timely manner.

   We have developed a customer base throughout the Midwest in both the
agricultural and industrial markets. In the aggregate, our wholesale business
services approximately 1,200 customers in the region. Our wholesale business'
agricultural customer base is diverse and is composed of small family-owned
distributors, larger regional dealers and several national chains. The
industrial customer base is smaller and less seasonal than the agricultural
customers.

  Nitrogen Fertilizer Production

   We produce nitrogen fertilizer and industrial products that are sold through
our wholesale distribution network. We own and operate a fully integrated
nitrogen manufacturing plant in East Dubuque, IL, which

                                      4

<PAGE>

produces nitrogen products for both the agricultural and industrial markets.
This plant is designed to produce anhydrous ammonia, nitric acid, ammonium
nitrate solution, liquid and granular urea, nitrogen solutions and carbon
dioxide using natural gas as a feedstock. This plant can optimize the product
mix according to swings in demand and pricing for its various products. In the
year 2001, this plant produced through its various processes approximately 903
thousand tons. Quantities produced were in turn consumed in the process of
producing other upgraded nitrogen products that resulted in the shipment of
approximately 338 thousand tons of ammonia and upgraded nitrogen products.

   Located in the heart of the Midwest, we believe that the East Dubuque plant
enjoys a significant freight cost advantage relative to competing facilities
servicing the region, over competing suppliers located in the Gulf Coast
region, and over new facilities which came on-stream in Trinidad in 1998.

   The East Dubuque facility has operated at full capacity during the past ten
years except for temporary cutbacks or shutdowns for maintenance or
extraordinary market conditions. Through product-exchange agreements with other
nitrogen producers in the Midwest, we reduce transportation costs by limiting
the East Dubuque service area to customers within a 100-mile radius of the
plant. We often source products from competitors' facilities on a
cost-efficient basis for Farmarket retail centers outside the East Dubuque
service area. Such swap arrangements, coupled with the extensive fertilizer
storage capacity in our overall system, have enabled us to optimize production
on a year-round basis and minimize transportation costs.

   The company decided in December 2000 to temporarily shutdown production at
the East Dubuque plant. With natural gas price increases of 282% during 2000
from approximately $2.60 per MMBTU to approximately $9.98 per MMBTU, the
Company believed it could yield higher cash flow selling the natural gas versus
upgrading it to various nitrogen products. The large increases in natural gas
prices resulted from high industrial usage of natural gas, including usage by
electric utilities, a colder winter and no significant new supplies coming
online in the near future. Natural gas prices moderated during the first
quarter of 2001 and production at the East Dubuque plant resumed in March 2001.
Natural gas prices declined from a high of $9.98 per MMBTU at the beginning of
2001 to below $2.00 during the year, ending at $2.55 per MMBTU at the end of
the year.

   We also operate a smaller nitrogen manufacturing facility in Cincinnati, OH
that shipped approximately 120,000 tons of upgraded nitrogen products in 2001.
This plant purchases anhydrous ammonia and manufactures nitric acid and
ammonium nitrate liquor for industrial use and nitrogen solutions for the
agriculture market. The industrial market represents approximately 21% of sales
of manufactured nitrogen products. Since the industrial business is
non-seasonal, these sales provide a year-round revenue source.

   Substantially all of the nitrogen products manufactured in these two
facilities are sold through our wholesale distribution operation for either
agricultural or industrial purposes. While our profitability is influenced by
fluctuations in nitrogen prices, our strategic location in the heart of the
Midwest, extensive terminal and warehouse systems, complimentary wholesale
distribution channels and industrial customer concentration mitigate some of
the impact of nitrogen price fluctuations. In 1999, 2000 and 2001, less than
10% of our sales came from manufacturing nitrogen fertilizer products.

Seasonality

   Our business is seasonal with 72% of sales occurring between March and July.
This seasonality results from the planting, growing and harvesting cycles.
Inventories must be accumulated to be available for seasonal sales, requiring
significant storage capacity. The accumulation of inventory is financed by
suppliers or by the Company through its senior secured credit facility.

   As a result of the inherent seasonality of our business, we experience
significant fluctuations in our revenues, income and net working capital
levels. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations." This seasonality also generally results in higher
fertilizer prices during the peak periods, with prices typically reaching their
highest point in the spring, decreasing in the summer, increasing in the fall
through the spring.

                                      5

<PAGE>

Products

   The following table shows our revenues by product line for the years ended
December 31, 2001 and 2000 and nine months ended December 31, 1999.

<TABLE>
<CAPTION>
                               Nine Months
                                  Ended      Year Ended   Year Ended
                               December 31, December 31, December 31,
                                   1999         2000         2001
          -                    ------------ ------------ ------------
                                               ($000)
          <S>                  <C>          <C>          <C>
          Fertilizer..........   $194,824     245,608      240,657
          Fertilizer Materials    248,011     328,018      355,656
          Crop Protection.....    177,364     202,208      202,918
          Seed................     46,970      63,050       69,279
          Other...............     48,317      74,968       85,280
                                 --------     -------      -------
                                 $715,486     913,852      953,790
                                 ========     =======      =======
</TABLE>

Competition

   The market for the distribution of fertilizer, seed and crop protection
products and agronomic services is competitive. We compete in the retail
business primarily by providing a comprehensive line of products and what we
believe to be superior services at competitive prices. Currently there are
approximately 10,500 farm retail centers in North America, operated by three
primary types of distribution organizations. Principal competitors in
agricultural crop production inputs distribution include agricultural
cooperatives, which have the largest market share in a majority of the
locations served by us; national fertilizer producers and major grain companies
and independent distributors.

   Demand for the agricultural products and services that the Company offers
may be affected by: 1) continued population growth, 2) stable U.S. planted
acreage, 3) limited amount of arable land, 4) government programs, 5)
increasing farm size due to consolidation, 6) consolidation of crop input
producers, 7) biotechnology and 8) evolving environmental, health and safety
regulations.

Raw Materials and Supplies

   Fertilizer, nitrogen, phosphate and potash are global commodities that can
be purchased from multiple suppliers. We purchase our fertilizer, seed and crop
protection products primarily from the major North American producers. We also
have the capability to import products from foreign suppliers. Final purchasing
decisions are made based on several factors including availability, price,
quality and customer requirements. As a result of these factors, the quantity
of imported materials purchased for later resale or consumption will vary.
Related to the acquisition of AgriBusiness, we have entered into a ten-year
supply agreement with IMC Global to purchase specific quantities of phosphate
and potash. The purchase prices of the products covered by the IMC Global
supply agreement are determined and approximate market prices. The supply
agreement automatically renews for additional 5-year periods unless either
party cancels it. The supply agreement also specifies remedies available to the
parties in the event of noncompliance, which include compensatory damages in
the event of a failure to purchase or supply the required quantities of covered
products. The amounts paid to IMC Global under this agreement were
approximately $138.4 million during 2001.

   Approximately 24% of the Company's nitrogen solution, ammonia and urea
products are sourced from the East Dubuque facility. We purchase these products
from a number of different suppliers to meet the balance of our wholesale and
retail requirements.

   The major raw material in the manufacture of nitrogen products is natural
gas. The East Dubuque plant's annual gas purchases typically approximate over
11.6 billion cubic feet. We purchase natural gas monthly

                                      6

<PAGE>

through a combination of firm-supply, fixed-priced and market-priced long-term
contracts. We are able to purchase natural gas at competitive prices due to our
connection to the Northern Illinois Gas (Nicor) distribution system and its
proximity to the Northern Natural Gas pipeline. During 2001 natural gas
purchases were approximately 9.0 billion cubic feet.

   During the shutdown, the Company performed a maintenance turnaround that was
scheduled for later in the year. The maintenance turnaround was completed and
production resumed in March 2001. During 2001, the Company negotiated a new
combination of firm-supply, fixed-price and market-priced long-term contracts
to supply production requirements after the resumption of production. At
December 31, the Company had one index-priced natural gas contract that
extended to 2006 related to one supplier. The supplier was not in compliance
with contract provisions during December of 2001 and January of 2002 and the
Company elected to exercise its rights under the contract and cancel the
balance of the purchase commitments as of February 28, 2002. The Company was
able to replace the supply of natural gas caused by the deficiency of the one
supplier with no interruptions in production and without any material adverse
financial impact to the Company.

   While management believes that sufficient natural gas supplies exist for the
Company to operate the East Dubuque facility for the foreseeable future,
increases in the price of natural gas will affect the profitability of our
sales of manufactured nitrogen products.

   The Cincinnati plant purchases anhydrous ammonia for use in the production
of nitric acid and other upgraded nitrogen products. Anhydrous ammonia is
purchased under contract from one primary supplier in the region, but could be
purchased from a variety of other suppliers. The anhydrous ammonia is delivered
to the plant by barge and rail.

Employees and Labor Relations

   We employ approximately 2000 non-unionized and salaried employees, 230
unionized employees and approximately 900 temporary employees during seasonal
periods. We believe we have good relations with our employees.

   Two union contracts will expire in 2002 covering approximately 110
employees. We believe that we will be able to obtain new union contracts
without any work stoppage. We have not experienced any significant work
stoppages in the past. Additionally, our management believes the Company has a
good relationship with union employees and has historically experienced low
turnover.

Environmental Matters

   Our facilities and operations must comply with a variety of federal, state
and local environmental laws, regulations and ordinances, including those
related to air emissions, water discharges and chemical and hazardous waste
management and disposal. Laws relating to workplace safety and worker health
and safety also govern our operations, primarily the rules of the Occupational
Safety and Health Administration and the United States Department of
Transportation. We believe that our operations are in compliance in all
material respects with current requirements under environmental laws and
employee safety laws.

   Environmental laws may hold current owners or operators of land or
businesses liable for their own and for previous owners' or operators' releases
of hazardous or toxic substances, materials or wastes, pollutants or
contaminants, including petroleum and petroleum products. Because of our
operations, the history of industrial or commercial uses at some of our
facilities, the operations of predecessor owners or operators of some of the
businesses, and the use, production and release of hazardous substances at
these sites, the liability provisions of environmental laws may affect us. Many
of our facilities have experienced some level of regulatory scrutiny in the
past and are or may be subject to further regulatory inspections, future
requests for investigation or liability for regulated materials management
practices.

                                      7

<PAGE>

   We are in the process of responding to the presence of hazardous substances,
including nitrates, phosphorus and pesticides in soils and/or groundwater at
forty-nine sites. At other locations, past releases of fertilizers or of
fertilizers or other hazardous substances have been documented along with the
corrective actions we have taken. Our environmental consultants and we have
concluded that no further action is currently required. In addition, we have
also removed or filled in place underground storage tanks from some of our
facilities and, in some instances are responding to historic releases at these
locations. In total, both voluntary and government ordered cleanups of releases
of hazardous substances are planned or being performed at approximately
forty-nine sites. Also, with the limitations described below, indemnity may be
available for locations for which response actions are planned or required. The
cost of these on-going and potential response actions is not expected to have a
material adverse effect on our business, financial condition or results of
operations.

   The Comprehensive Environmental Response, Compensation and Liability Act, as
amended ("CERCLA"), provides for responses to, and, in some instances, joint
and several liability for releases of, hazardous substances into the
environment. We have been identified as a potentially responsible party under
CERCLA for five off-site locations to date. We believe we are a de minimis
party or not liable at all for those sites.

   In connection with the acquisitions of AgriBusiness and Royster-Clark, the
Company obtained indemnities for certain claims related to environmental
matters that existed or arose prior to the acquisitions. The indemnities
related to AgriBusiness have $4.5 million deductible, certain time limitations
and an overall cap on all indemnities of approximately $27.0 million. The
indemnities related to Royster-Clark, Inc. (Predecessor Company) are subject to
a deductible of $2.0 million, certain time limitations and an overall cap of
$5.0 million on all indemnities. In addition, Royster-Clark, Inc. (Predecessor
Company) had obtained indemnities from Lebanon Chemical Corporation (LCC) for
certain claims related to environmental matters that existed at sites acquired
from LCC in December 1998. This indemnity has deductibles, caps, cost sharing
and time limitations depending on the subject matter of the environmental
claim. As part of their indemnity obligation, Lebanon is required to respond to
environmental conditions at five of our facilities. The Company also obtained
indemnities from the former stockholder of Alliance for environmental
conditions identified as of the date of the acquisition.

   Based on our experience to date, we believe that the future cost of
compliance with existing environmental laws, including liability for known
environmental claims, will not have a material adverse effect on our business,
financial condition or results of operations. However, future events, such as
changes in existing laws and regulations or their interpretation, may give rise
to additional compliance costs or liabilities that could have a material
adverse effect on our business, financial condition or results of operations.
Compliance with more stringent laws or regulations, as well as stricter or
different interpretations of existing laws, may require additional expenditures
by us that could be material.

                                      8

<PAGE>

Item 2.  Properties.

   We have an extensive infrastructure of over 400 facilities, consisting of
retail farm centers ("Farmarkets"), granulation, blend, seed processing and
manufacturing plants and an integrated network of warehouses and terminals. Our
facilities cover the major farming markets in the East, South and Midwest.

   A typical Farmarket is located in or near a small farming community. The
main building would normally include office space for two or three people, an
area to receive customers and indoor warehousing of 5,000 to 10,000 square feet
for crop protection products and seeds. Typically, there is a second building
for the storage of bulk fertilizers and materials. A majority of Farmarkets
would also have a fertilizer blending facility, where fertilizer materials are
mixed together to produce bulk fertilizer products.

   The following table provides information regarding our principal production
and storage facilities.

<TABLE>
<CAPTION>
                                                                     Tons Capacity (in 000's)
                                                         ------------------------------------------------
                                                                      Production
                                                         ------------------------------------
                                                          Nitrogen   Super-   Granu- Blending
Location                             Type of Facility    Production phosphate lation  /Seed     Storage   Acres
--------                          ---------------------- ---------- --------- ------ -------- ----------- -----
<S>                               <C>                    <C>        <C>       <C>    <C>      <C>         <C>
East Dubuque, Illinois (1)....... Nitrogen plant           1,173                                    127.0  208
                                  (ammonia, urea,
                                  ammonium nitrate and
                                  nitric acid plant)
Cincinnati, Ohio (1)............. Nitrogen plant (nitric     120                                     51.3   92
                                  acid, ammonium
                                  nitrate and nitrogen
                                  solution plant)
Madison, Wisconsin (1)........... Granulation plant                    N/A      90                   18.0   26
Norfolk, Virginia (1)............ Granulation plant                     30      80                   25.0   24
Americus, Georgia (1)............ Granulation plant                     70     200                   32.0  156
Florence, Alabama (1)............ Granulation plant                     30     150                   13.0   15
Hartsville, South Carolina (1)... Granulation plant                     50     150                   22.6   29
Winston-Salem, North Carolina (1) Granulation plant                    N/A     150                   17.6   11
Washington, North Carolina (1)... Seed production and                                         bulk 44 Bu/    6
                                  processing facility                                  600      bag 60 bg
Union City, Tennessee............ Seed production and                                  780    bulk 578 Bu   35
                                  processing facility
Mulberry, Florida (1)............ Blend plant                                           85           20.0   40
Washington Court House, Ohio (1). Blend plant                                          124           37.0   29
Mt. Sterling, Ohio (1)........... Blend plant (Liquid)                                  30           18.0   11
Tifton, Georgia (1).............. Blend plant (Liquid)                                  20            8.2    6
Marseilles, Illinois (1)......... Large storage terminal                                             64.5   71
Murray, Kentucky (1)............. Large storage terminal                                             32.0   31
Wilmington, North Carolina (1)... Large storage terminal                                             37.0   30
Petersburg, Virginia............. Large storage terminal                                             40.0   12
Columbus, Ohio (1)............... Large storage terminal                                             15.0   10
</TABLE>
--------
(1) The First Mortgage Notes are secured by mortgages of these properties.

   All of the properties in the above table (with the exception of the Union
City, Tennessee and Petersburg, Virginia facilities) are subject to liens of
the First Mortgage Notes discussed in note 10 to the consolidated financial
statements included in this report.

   In addition to the properties noted above, our two real estate subsidiaries
own approximately 270 Farmarkets and other production, storage and distribution
facilities with our operating subsidiary owning the assets purchased subsequent
to April 22, 1999. The stock of the two real estate subsidiaries is subject to
liens by holders of the First Mortgage Notes.

   In addition to the assets and properties we own, we lease warehouses and
terminals from third parties. These facilities enhance our ability to source
products to retail centers and wholesale customers throughout the year,
especially during the high-volume spring season.

                                      9

<PAGE>

Item 3.  Legal Proceedings.

   We are involved in periodic litigation in the ordinary course of business,
including lawsuits brought by employees and former employees alleging
discriminatory termination practices. We cannot assure you that future
litigation alleging discrimination in our termination practices would not
adversely affect our financial condition or results of operations.

   We do not believe that there are any pending or threatened legal
proceedings, including ordinary litigation incidental to the conduct of our
business and the ownership of our properties that, if adversely determined,
would materially affect us.

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

   Not applicable.

                                      10

<PAGE>

                                    PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.

   Not applicable.

Item 6.  Selected Financial Data (Dollars in thousands)

   The following table provides selected financial and other data of Royster-
Clark, Inc., as of and for each of the years in the two-year period ended
December 31, 1998, the nine months ended December 31, 1999, and years ended
December 31, 2000 and 2001. This information should be read with the
consolidated financial statements and related notes, "Management's Discussion
and Analysis of Financial Condition and Results of Operations and Cash Flows"
and other information found elsewhere in this report.

   Effective April 1, 1999, Royster-Clark Group, a newly formed entity
capitalized with approximately $59.0 million in cash, acquired all of the then
outstanding stock of Royster-Clark, Inc. On April 22, 1999, Royster-Clark, Inc.
acquired all of the outstanding shares of three operating subsidiaries, IMC
AgriBusiness, Inc., IMC Nitrogen Company and Hutson's AG Service, Inc. from IMC
Global, Inc. These three IMC entities are referred to as "AgriBusiness." As a
result, the income statement, balance sheet and other data of Royster-Clark,
Inc. as of and for the nine months ended December 31, 1999 and years ended
December 31, 2000 and 2001, derived from our audited consolidated financial
statements, reflect the acquisition of Royster-Clark and AgriBusiness and are
described as "Successor" and is not comparable with Royster-Clark, Inc. as
predecessor company.

   The selected "Predecessor" financial and other data as of and for the years
ended 1997 and 1998 were derived from the audited financial statements of
Royster-Clark, Inc. prior to its acquisition by Royster-Clark Group.

   Included in the Selected Financial Data is EBITDA, which represents net
earnings (loss) plus interest, taxes, depreciation and amortization. EBITDA
presented below should not be construed as a substitute for operating income or
a better indicator of liquidity than cash flow from operating activities, which
are determined in accordance with GAAP, nor is EBITDA necessarily a measure of
our ability to fund our cash needs. EBITDA may not be comparable to similarly
titles measures reported by other companies.

<TABLE>
<CAPTION>
                                                            Predecessor                    Sucessor
                                                         -----------------  -------------------------------------
                                                             Year Ended         Nine
                                                            December 31,    Months Ended  Year Ended   Year Ended
                                                         -----------------  December 31, December 31, December 31,
                                                           1997     1998        1999         2000         2001
                        ($000)                           --------  -------  ------------ ------------ ------------
<S>                                                      <C>       <C>      <C>          <C>          <C>
Income Statement Data:
   Net sales............................................ $227,613  218,672     715,486     913,852      953,790
   Gross profit.........................................   34,996   33,026     144,547     185,396      197,880
   Operating income.....................................   11,781    8,544      34,332      21,552       19,637
   Net earnings (loss).................................. $  4,331    1,832       6,623      (4,760)      (8,879)
Other Data:
EBITDA.................................................. $ 14,086   11,222      50,151      56,925       48,849
   Ratio of earnings to fixed charges...................     2.33     1.47        1.41        0.84         0.66
   Depreciation and amortization........................ $  2,305    2,678      15,819      25,725       27,356
   Capital expenditures.................................    2,029    2,145      19,752      18,082       13,812
   Acquisitions.........................................       --   24,517     259,676      26,600           --
   Net cash provided by (used in) operating activities..   (6,581)  13,157      97,090     (15,088)      66,214
   Net cash used in investing activities................   (2,006) (26,532)   (278,458)    (44,173)     (11,770)
   Net cash provided by (used in) financing activities.. $  8,647   13,388     185,996      55,004      (53,860)

                                                          At December 31,              At December 31,
                                                         -----------------  -------------------------------------
                                                           1997     1998        1999         2000         2001
                                                         --------  -------  ------------ ------------ ------------
BALANCE SHEET DATA:
   Working capital...................................... $ 26,253   30,726     163,834     191,436      139,919
   Total assets.........................................   96,065  120,397     521,507     623,356      555,885
   Long-term debt less current installment..............   23,025   33,817     297,380     340,752      289,607
   Redeemable preferred stock........................... $ 12,000   12,000          --          --           --
</TABLE>

                                      11

<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition, Results
of Operations and Cash Flows

THE FOLLOWING INFORMATION CONTAINS FORWARD-LOOKING STATEMENTS. SEE
'FORWARD-LOOKING STATEMENTS' ABOVE.

General

   Royster-Clark, Inc. together with its subsidiaries, (the ''Company'' or
"Royster-Clark") is a retail and wholesale distributor of mixed fertilizer,
fertilizer materials, seed, crop protection products and agronomic services to
farmers, primarily in the East, South and Midwest. The Company's operations
include retail farm centers ("Farmarkets"), granulation, blending and seed
processing plants, and an integrated network of storage and distribution
terminals and warehouses. In addition, the Company operates two
nitrogen-manufacturing plants that supply the retail and wholesale distribution
businesses with nitrogen fertilizer products. Our business is affected by a
number of factors, including weather conditions, prevailing prices for
fertilizer, natural gas used in the production of various fertilizers and other
crop production inputs.

   Weather conditions can significantly impact our results of operations.
Adverse weather conditions during the planting season may force farmers to
either delay or abandon their planting, which may lead to lower use of
fertilizer, seed and crop protection products.

   The crop production inputs distribution business is seasonal, with 72% of
sales occurring between March and July based upon planting, growing and
harvesting cycles. This seasonality results from the planting, growing and
harvesting cycles of our customers. Inventories must be accumulated to be
available for seasonal sales, requiring significant storage capacity. The
accumulation of inventory is financed by suppliers or by the Company through
its credit facility. Depending on weather and field conditions, this period of
peak activity can begin several weeks earlier or later than normal, which may
have a material impact on whether sales are recorded in the first or second
quarter.

   Another factor affecting our business is the price for fertilizers. We
purchase nitrogen materials, phosphates, and potash and resell these nutrients
in either their original form or in the form of multi-nutrient fertilizers.
Prices for phosphates have recently experienced some volatility while potash
has been relatively stable over the past several years. During the second
quarter of 2001, nitrogen pricing dropped significantly due to producer
production coming back online and imports responding to the previous high
pricing levels. The level of nitrogen prices directly impacts the profitability
of our two nitrogen-manufacturing plants.

   The major raw material in the manufacture of nitrogen products is natural
gas. We purchase natural gas through a combination of firm supply, fixed-price
and market-priced contracts for use in our nitrogen-production plant in East
Dubuque, IL. Over a period of years, natural gas exhibited a low degree of
volatility until 2000 when natural gas price increases of 282% during 2000 from
approximately $2.60 per MMBTU to approximately $9.98 per MMBTU. The large
increases in natural gas prices resulted from high industrial usage of natural
gas, including usage by electric utilities, a colder winter and no significant
new supplies coming online in the near future. Natural gas prices moderated
during the first quarter of 2001. Natural gas prices declined from a high of
$9.98 per MMBTU at the beginning of 2001 to below $2.00 during the year, ending
at $2.55 per MMBTU at the end of the year due to lower industrial use and a
mild winter. The level of natural gas prices directly impacts the profitability
of our East Dubuque plant.

Results of Operations

   The following table and discussion provides information regarding
Royster-Clark, Inc.'s statement of operations as a percentage of net sales. The
results of operations for the nine months ended December 31, 1999 represent the
operations of Royster-Clark, Inc. subsequent to the acquisition of its stock by
Royster-Clark Group,

                                      12

<PAGE>

Inc. and includes post acquisition operations of AgriBusiness. Both
transactions had effective dates of April 1, 1999.

<TABLE>
<CAPTION>
                                                                                 Nine Months
                                                        Year ended   Year ended     ended
                                                       December 31, December 31, December 31,
                                                           2001         2000         1999
                                                       ------------ ------------ ------------
<S>                                                    <C>          <C>          <C>
Net sales.............................................    100.0%       100.0        100.0
Cost of sales.........................................     79.3         79.7         79.8
                                                          -----        -----        -----
Gross profit..........................................     20.7         20.3         20.2
Selling general and administrative expense............     18.2         17.8         15.4
Loss on disposal of property, plant and equipment, net      0.1          0.1           --
Expenses related to Agro acquisition..................      0.4           --           --
                                                          -----        -----        -----
Operating income......................................      2.0          2.4          4.8
Interest expense......................................     (3.6)        (4.2)        (3.2)
Gain on insurance.....................................      0.2           --           --
Gain on sales of gas contracts........................       --          1.1           --
                                                          -----        -----        -----
Income (loss) before income taxes.....................     (1.4)        (0.7)         1.6
Income tax expense (benefit)..........................     (0.5)        (0.2)         0.7
                                                          -----        -----        -----
Net income (loss).....................................     (0.9)%       (0.5)         0.9
                                                          =====        =====        =====
</TABLE>

  Year ended December 31, 2001 compared to twelve months ended December 31, 2000

   Net sales.  Royster-Clark's net sales were $953.8 million for 2001 compared
to $913.9 million for 2000, an increase of $39.9 million, or 4.4%. The increase
in sales resulted from the following:

  .   Sales of ammonia, nitrogen solution and other nitrogen based products
      were higher by approximately $17.7 million, primarily due to market
      related price appreciation during the first and second quarters of 2001
      compared to 2000. The sales increase was partially offset by lower
      wholesale sales in the Midwest during the first quarter of 2001, market
      related price depreciation and volume declines due to dealer customers
      delaying purchases.

  .   Sales of other fertilizer materials were higher by approximately $10.0
      million due to volume increases throughout the retail and wholesale
      distribution system.

  .   Sales of grain products were higher by approximately $8.2 million due to
      expansion through acquisitions of the Company's grain operations in 2000.
      While grain sales typically are at low gross margin rates, selling the
      grain for the farmer extends the Company's contact with the farmer and
      encourages continued patronage.

  .   Sales of seed were higher by approximately $6.2 million due to Company
      efforts to promote seed products. We believe that farmers align the
      purchase of other crop-input requirements with their seed supplier.

  .   Sales of application and other services were higher by approximately $2.1
      million due to strong fertilizer movement during the fall season and crop
      protection product application during the late summer.

  .   Sales of crop protection product sales were higher by approximately $0.7
      million despite price depreciation of major crop protection products and
      minimal insect pressures throughout most of the market areas.

   The above increases were partially offset by a reduction in fertilizer sales
of $5.0 million due to lower granulated fertilizer sales in the southeast in
areas that were affected by drought conditions and lower acreage due to
government cutbacks of tobacco quotas.

                                      13

<PAGE>

   Gross profit.  Gross profit was $197.9 million for 2001 compared to $185.4
million for 2000, an increase of $12.5 million, or 6.7%. Gross margin was 20.7%
for 2001 compared to 20.3% for 2000. Higher gross margin resulted primarily
from improved purchase costs and rebates for crop protection, seed and
fertilizer material product categories. This increase was partially offset by
the unabsorbed cost of approximately $3.9 million due to the lost production of
East Dubuque during the first quarter of 2001 while the plant was shutdown and
sales price depreciation on nitrogen and crop protection products discussed
above.

   Selling, general and administrative expenses  Selling, general and
administrative expenses were $173.2 million for 2001 compared to $163.2 million
for 2000, an increase of $10.0 million, or 6.1%. The increase in selling,
general and administrative expenses resulted from the following:

  .   Expenses related to Farmarkets that the Company acquired during first
      quarter of 2000 were $3.2 million higher in the first quarter of 2001
      compared to 2000.

  .   Lower capitalized cost to inventory of $2.9 million due predominantly to
      sales volume decreases at terminal locations during the first quarter
      whose volumes were not recovered in subsequent quarters.

  .   Health insurance expenses were $2.8 million higher in 2001 compared to
      2000 due to increased costs of health care coverage.

  .   General liability and property insurance expenses were $1.4 million
      higher in 2001 compared to 2000 due to rising costs of insurance coverage
      in the market place.

  .   Incentive program expenses were $1.8 million higher in 2001 compared to
      2000 due to the retail Farmarket program that rewarded return on asset
      performance in leveraging the combination of improved EBITDA at the local
      Farmarket level and lower average assets.

  .   Depreciation, workman's compensation and all other increases were
      approximately $2.1 million due to capital spending, industry wide
      increasing costs of workman's compensation and other general increases.

   These increases were partially offset by the following:

  .   Seasonal and overtime cost were $1.0 million lower due to management
      attempts to lower cost of seasonal personnel by converting seasonal labor
      to company hourly payroll and handling payroll internally versus using
      agency staffing. Spring season weather allowed for a longer spring season
      window allowing reductions in overtime.

  .   Computer software and development cost were $1.1 million lower due to the
      resolution of major issues concerning the integration of the
      Royster-Clark and AgriBusiness computer systems being resolved during
      2000 allowing the reduction of use of consultants.

  .   Repairs and supplies were $0.8 million lower due to cost containment
      efforts.

  .   Travel and entertainment were $0.7 million lower due to cost containment
      efforts.

  .   Postage and freight were $0.4 million lower due to improvements in the
      use of communication technology to lower cost in supplies, postage, and
      communication costs.


   Expenses related to Agro acquisition.  The Company entered into a purchase
agreement to acquire certain assets of Agro Distribution, LLC ("Agro") on June
14, 2001. The Company and Agro could not reach agreement on certain key
elements of the proposed transaction and terminated the purchase agreement on
October 17, 2001. During the negotiation period, the Company incurred costs
associated with the acquisition. At December 31, 2001, these costs totaled $4.2
million representing legal, accounting and other direct costs of the
acquisition including costs incurred associated with software costs related to
the acquisition.

   Loss on disposal of property, plant and equipment, net.  Loss on sales of
fixed assets was $0.9 million in 2001 compared to $0.6 million in 2000. This
increase was the result of $0.2 million higher impairment charges

                                      14

<PAGE>

on individual low performing Farmarket locations that have been closed in 2001
and other asset sales of closed or low performing Farmarket locations.

   Operating income.  Operating income was $19.6 million for 2001 compared to
$21.6 million 2000, a decrease of $2.0 million, or 9.3%, due to the
fluctuations noted above. Operating income as a percentage of net sales was
2.0% for 2001 compared to 2.4% for 2000, a decline of 0.4%.

   Interest expense.  Interest expense was $34.9 million for 2001 compared to
$38.0 million for 2000, a decrease of $3.1 million, or 8.2%. The decrease in
interest expense was due primarily to lower market interest rates, which
affects the rate charged on borrowings under the credit facility and
borrowings. Weighted average rate for LIBOR borrowings during 2001 was 8.1%
compared to 10.2% during 2000, a decline of 2.1%. The decrease was partially
offset by $2.6 million higher average daily borrowings on the senior secured
credit facility of $154.2 million in 2001 compared to $151.6 million in 2000.

   Gain on insurance.  In May 2001, the Company suffered a fire at its blend
facility located in Waynesville, North Carolina destroying the main blending
building, the machinery and equipment and inventory contained inside. The
Company has recorded a gain of $1.9 million on the insurance settlement related
to this loss.

   Income tax benefit.  Income tax benefit was $4.5 million for 2001 compared
to $2.0 million for 2000. This increase is attributable to the decrease in
income before taxes for 2001 described above. The effective tax rate was 33.7%
for 2001 compared to 30.0% for 2000. The increase in the effective tax rate
resulted from the impact of goodwill amortization and other nondeductible items
for taxes.

   Net loss.  Net loss was $8.9 million for 2001 compared to $4.8 million for
2000, an increased loss of $4.1 million, due to the fluctuations noted above.

   Twelve months ended December 31, 2000 compared to nine months ended December
31,1999

   Net sales.  Royster-Clark's net sales were $913.9 million for 2000 compared
to $715.5 million for 1999, an increase of $198.4 million, or 27.7%. Net sales
increased by $50.6 million as a result of the acquisitions made in 2000.
Three-month net sales for the first quarter 2000 were $173.2 million. Excluding
acquisitions and the first quarter sales, the remaining decrease in net sales
of $25.8 million, or 3.6%, resulted from wholesale sales force reductions and
the closure of non-performing Farmarkets effected after the second quarter in
1999 and reduced government tobacco quotas.

   Gross profit.  Gross profit was $185.4 million for 2000 compared to $144.5
million for 1999, an increase of $40.9 million, or 28.3% due to the sales
increases discussed above. Gross margin was 20.3% for 2000 compared to 20.2%
for 1999.

   Selling, general and administrative expenses.  Selling, general and
administrative expenses were $163.2 million for 2000 compared to $109.9 million
for 1999, an increase of $53.3 million, or 48.5%. Selling, general and
administrative expenses increased by $11.2 million due to acquisitions. In the
first quarter of 2000, selling, general and administrative expenses were $37.4
million. The remainder of the increase was due to higher expenses associated
with the integration of the Royster-Clark and AgriBusiness computer systems.
Selling, general and administrative expenses as a percentage of net sales were
17.8% for 2000 compared to 15.4% for 1999. Higher selling, general and
administrative expenses as a percent of net sales resulted from higher
depreciation on capital expenditures; depreciation and other expenses related
to computer system integration; higher fuel costs; and higher expenses for
legal and other professional services.

   Loss on disposal of property, plant and equipment, net.  Loss on sales of
fixed assets was $0.6 million in 2000 compared to $0.3 million in 2000. This
increase was the result of asset sales of closed or low performing

                                      15

<PAGE>

Farmarket locations and impairment charges of $0.1 million on individual low
performing Farmarket locations that have been closed and other.

   Operating income.  Operating income was $21.6 million for 2000 compared to
$34.3 million 1999, a decrease of $12.7 million, or 37.0%, as the result of the
factors discussed above. Operating income as a percentage of net sales were
2.4% for 2000 compared to 4.8% for 1999, a decline of 2.4%.

   Interest expense.  Interest expense was $38.0 million for 2000 compared to
$23.2 million for 1999, an increase of $14.8 million, or 63.8%. The increase in
interest expense was due higher borrowings against our credit facility to fund
acquisitions made during the first quarter, a greater increase in current
assets than current liabilities compared to 1999, higher market interest rates
which affects the rate charged on borrowings under the credit facility.
Interest in the first quarter of 2000 was $7.7 million.

   Gain of sale of natural gas contracts.  The company decided in December 2000
to temporarily shutdown production at the East Dubuque plant. With natural gas
price increases of 282% during 2000 from approximately $2.60 per MMBTU to
approximately $9.98 per MMBTU, the Company believed it could yield higher cash
flow selling the natural gas versus upgrading it to various nitrogen products.
Accordingly, certain contract rights, title and interest in several
fixed-priced and index-priced natural gas contracts were assigned to unrelated
parties. The contracts sold related to natural gas to be delivered from
mid-December 2000 when the assignment contracts were executed through October
31, 2001 with most of the quantities relating to the first quarter of 2001. The
Company recorded a gain of $9.6 million in December 2000 related to these sales.

   Income tax expenses (benefit).  Income tax benefit was ($2.0) million for
2000 compared to income tax expense of $4.6 million for 1999. This decrease is
attributable to the decrease in income before taxes for 2000 described above.
The effective tax rate was 30.0% for 2000 compared to 40.8% for 1999. The
decline in the effective tax rate resulted from the impact of goodwill
amortization and other nondeductible items for income tax purposes.

   Net income (loss).  Net loss was ($4.8) million for 2000 compared to net
earnings of $6.6 million for 1999, a decrease of $11.4 million. This decrease
was attributable largely due to acquisitions, the first quarter operating
losses and the fluctuations noted above.

Environmental Matters

   At December 31, 2001, the Company had accruals of approximately $3.5 million
for future costs associated with environmental remediation of certain
properties. Costs charged against these accruals for the year ended December
31, 2001 and 2000 were approximately $179 thousand and $77 thousand,
respectively. Environmental remediation projects related to the cleanup of
regulated substances are in progress at approximately forty-nine sites. The
cleanup efforts primarily involve remediation of excess nitrates, phosphorous
and pesticides in soils and/or groundwater at these sites, or costs to be
incurred in the cleanup and monitoring of old underground storage tanks.
Certain of these remediation efforts are of a long-term nature.

Liquidity and Capital Resources

   Our primary capital requirements are for working capital, debt service,
capital expenditures and possible acquisitions. For day-to-day liquidity
requirements, we operate with a senior secured credit facility with a
consortium of banks, currently with a $245 million borrowing capacity. The
credit facility expires in April 2004. At December 31, 2001, the borrowing base
provisions under the facility supported a borrowing availability of $125.9
million, from which we had drawn $89.2 million. This facility includes up to
$10.0 million for letters of credit. This facility contains financial and
operational covenants and other restrictions with which we must comply,
including a requirement to maintain financial ratios and limitations on our
ability to incur additional

                                      16

<PAGE>

indebtedness. We believe that cash generated from operations and borrowings
available under the amended credit facility will be sufficient to meet our
operating and capital needs in the foreseeable future.

   Capital expenditures were $13.8 million for the year ended December 31, 2001
compared with $18.1 million for the year ended December 31, 2000. These capital
expenditures were primarily for facilities improvements, machinery and
equipment replacement, computer system integration expenditures and
environmental improvement projects. We estimate total capital expenditures,
excluding acquisitions, for 2002 will range from $6.0 to $10.0 million.

   Net cash provided by operating activities for the year ended December 31,
2001 was $66.2 million compared to net cash used in operating activities of
($15.1) million in 2000. The most significant component of cash flows used in
operating activities was movement in operating assets and liabilities due to
the seasonal nature of our business with lower other receivables and inventory
being the largest components. The increase in net cash provided by operating
activities resulted primarily from lower inventory, trade receivables and other
receivables. Net cash used in investing activities amounted to $11.8 million
compared to $44.2 million in 2000. The decrease in net cash used in investing
activities resulted from $26.6 million lower cash used from acquisitions and
$4.3 million lower cash used from capital expenditures. Net cash used in
financing activities totaled ($53.9) million compared to net cash provided by
financing activities of $55.0 million in 2000. Cash was used in net payments of
$46.7 million on the credit facility and a decrease in customer deposits of
$7.3 million. Cash used from these changes was partially offset by proceeds
from long-term debt of $0.3 million that was used to finance capital
expenditures for a majority owned subsidiary of the Company. The increase in
net cash used of $108.9 million resulted primarily from increased payments on
the senior secured credit facility due to lower working capital and cash used
in acquisitions and capital expenditures.

   Net working capital, excluding senior secured credit facility and current
installments of long-term debt at December 31, 2001 totaled $147.1 million
versus $194.1 million at December 31, 2000, a decrease of $47.0 million, or
24.2%. This decrease resulted primarily from lower inventory of $29.3 million
resulting from improved inventory management and lower other receivables of
$14.0 million due to collections on natural gas contract assignment
receivables. The remaining decrease relates to lower trade accounts receivable
of $6.7 million, lower current deferred income taxes of $3.3 million and lower
prepaid expenses and other current assets of $3.1 million at December 31, 2001.
These decreases were partially offset by lower customer deposits of $7.3
million and lower accounts payable and accrued expenses of $1.6 million.
Inventory and accounts payable were lower due to an inventory reduction
emphasis, price deflation of nitrogen products compared to last year and
delayed purchasing decisions seeking lower cost inventory positions. The
decrease in other receivables resulted primarily from the collection of the
receivable recorded in December of 2000 for the sale of natural gas purchase
contracts of $12.2 million. Trade accounts receivable was lower due to lower
sales for the period. Customer deposits were lower due to price deflation of
nitrogen products and customers anticipating lower prices of products for
delivery in the spring season.

                                      17

<PAGE>

Contractual Obligations and Commitments

   The following tables summarize our material contractual obligations,
including both on- and off-balance sheet arrangements, and our commitments (in
millions) at December 31, 2001:

<TABLE>
<CAPTION>
                                      Total  2002 2003 2004 2005 2006 Thereafter
-                                     ------ ---- ---- ---- ---- ---- ----------
<S>                                   <C>    <C>  <C>  <C>  <C>  <C>  <C>
Contractual Obligations:
Operating leases..................... $ 35.4 11.4 9.3   6.3 4.0  2.4      2.0
Customer deposits....................   60.9 60.9  --    --  --   --       --
Severed employee contracts...........    1.1  0.7 0.3   0.1  --   --       --
Borrowings:
    First Mortgage Notes.............  200.0   --  --    --  --   --    200.0
    Senior secured credit facility...   89.2   --  --  89.2  --   --       --
    Industrial revenue bond..........    2.1  2.1  --    --  --   --       --
    Other notes payable..............    5.4  5.1 0.2    --  --   --      0.1
                                      ------ ---- ---  ---- ---  ---    -----
       Total obligations............. $394.1 80.2 9.8  95.6 4.0  2.4    202.1
                                      ====== ==== ===  ==== ===  ===    =====
Commitments:
Supply agreements.................... $   --   --  --    --  --   --       --
Employment contracts.................     --   --  --    --  --   --       --
Letters of credit....................     --   --  --    --  --   --       --
Purchase commitments:
    Natural gas......................    7.2  7.2
    Fertilizer.......................    2.4  2.4  --    --  --   --       --
                                      ------ ---- ---  ---- ---  ---    -----
       Total commitments............. $  9.6  9.6  --    --  --   --       --
                                      ====== ==== ===  ==== ===  ===    =====
</TABLE>

  Contractual obligations

   Operating lease financing.  The Company leases office facilities, rail cars
and various types of equipment under noncancelable operating leases whose
term's range from three to 30 years. The most significant portion of the
operating leases relate to equipment used in the application of crop inputs to
farmer's fields and equipment used by support staff at our Farmarket locations
servicing customers.

   Customer deposits.  The Company accepts both interest bearing and
non-interest bearing customer deposits. Customer deposits are refundable upon
demand either in cash or product. Interest rates paid on customer accounts vary
based on economic conditions and are posted at the locations where the Company
accepts customer deposits. Deposits accepted in anticipation of repayment with
product are typically repaid within a year.

   Severed employee contracts.  The Company has agreements to pay two former
employees under separation agreements. In addition, the Company is obligated to
pay one individual in connection with the acquisition of AgriBusiness in April
1999.

  Borrowings

   First Mortgage Notes.  The Company issued $200,000 of 10- 1/4% First
Mortgage Notes due April 2009 to partially finance the acquisition of
AgriBusiness in 1999. The First Mortgage Notes bear interest at 10.25% payable
semi-annually in arrears. The First Mortgage Notes are secured by 17 principal
properties, related fixtures and equipment and other related assets and a
pledge of equity of certain subsidiaries. RCG and certain subsidiaries also
unconditionally guarantee the First Mortgage Notes. The First Mortgage Notes
are not redeemable prior to April 1, 2004 except in the case of a change of
control or a public offering in the first three years after the issue date.
Thereafter, the First Mortgage Notes are redeemable in whole or in part, at the
Company's option, at a 5.125% premium, declining ratably to par on April 1,
2007, plus accrued and unpaid interest, if any, to the date of redemption.

                                      18

<PAGE>

   The First Mortgage Notes are subject to certain covenants, including
restrictions on dividend payments and retirement of equity interests, issuance
of new indebtedness or preferred stock and certain transactions with
affiliates. Dividends may not be made if default has occurred (or would occur
if the dividend payment were made), or such dividend payments would result in
noncompliance with any financial covenants. Dividend payments are further
restricted in amount to at most 50% of consolidated net income of the Company
from the date of origination of the First Mortgage Notes to the end of the most
recently completed fiscal quarter.

   Senior secured credit facility.  The Company maintains a senior secured
credit facility (credit facility) that allows it to borrow up to $245.0
million, subject to certain borrowing base limitations. The credit facility
expires in April 2004 and bears interest at LIBOR plus a spread based on the
Company's leverage. The credit facility is secured by (1) a lien on all
accounts receivable, inventory, general intangibles and all other assets of the
Company and its subsidiaries (except for the collateral securing the First
Mortgage Notes, as discussed below), (2) all of the common stock of the
Company, and (3) all of the common stock of the Company's subsidiaries, except
for the equity interests of certain subsidiaries pledged to secure the First
Mortgage Notes.

   The credit facility is subject to certain covenants, including limitations
on additional indebtedness, limitations on liens, limitations on capital
expenditures and maintenance of certain required financial ratios. The credit
facility also restricts the payment of dividends by the Company to RCG.
Dividends are restricted to (1) amounts necessary to enable RCG to pay overhead
expenses in an amount not to exceed $2,000; (2) amounts necessary to enable RCG
to pay income and other taxes; and (3) $1,000 over the life of the agreement
for the purpose of repurchasing, redeeming or otherwise acquiring and retiring
any capital stock, stock warrants, stock options or other rights to acquire
capital stock of RCG. Dividends made under the third provision are further
restricted in that such dividends may not be made if a default has occurred (or
would occur if the dividend payment were made), or such dividend payments would
result in noncompliance with any financial covenants.

   Industrial revenue bond.  The industrial revenue bond was issued by Decatur
County, Bainbridge Georgia Industrial Development Authority Variable Rate
Industrial Development Revenue Bonds Series 1985, due December 1, 2002.
Interest on the industrial revenue bond is variable and based on short-term
rates for tax-exempt securities. The bond is secured by a letter of credit that
is renewed annually by the Company.

   Other notes payable.  In connection with the AgriBusiness' purchase of
Hutson Company, Inc. in 1997, the Company entered into a $5.0 million unsecured
note payable, due in June 2002, bearing interest at an annual rate of 7.25%.
During 2000 the interest rate accrued was renegotiated to fluctuate with prime,
but not to drop below 7.25%. The note payable contains provisions that allow
the holder to demand payment of up to $2.5 million at any time. Other notes
payable includes eight notes incurred for the purchase of various property,
plant and equipment, with no individual note exceeding $175 thousand.

  Commitments

   Supply agreement.  In conjunction with the acquisition of AgriBusiness, the
Company has entered into a 10-year supply agreement with IMC Kalium Ltd.
(Kalium) and IMC-Agrico Company (Agrico), both of which are subsidiaries of IMC
Global. Under the terms of the supply agreement, the Company is required to
purchase (and Agrico and Kalium are required to supply) certain products in an
amount equal to its estimated normal business requirements of the former
AgriBusiness locations. The purchase prices of the products covered by the
agreement are determined and approximate market prices. The agreement
automatically renews for subsequent periods of five years unless otherwise
canceled by either party. In addition, the agreement specifies remedies
available to the parties in the event of noncompliance, which include
compensatory damages in the event of a failure to purchase (or supply) the
required quantities of the covered products. The amounts paid to IMC Global
under this agreement were approximately $138.4 and $140.7 million during 2001
and 2000, respectively. We expect to purchase approximately the same quantities
of materials under this agreement

   Employment contracts.  The Company has employment contracts with certain
members of management. These employment agreements are terminable by the
Company with or without cause. In the event that the

                                      19

<PAGE>

employment agreements are terminated without cause and provided that executives
comply with the confidentiality and non-competition covenants, they will be
entitled to receive all payments as defined in the respective agreements. The
contracts extend through April 2004 with an automatic one-year extension
thereafter unless notice of intent not to renew is given, either by the Company
or by the executive. If termination without cause had occurred as of December
31, 2001, the Company would have been required to pay approximately $3.8
million to satisfy its obligations.

   Letters of credit.  The Company maintains letters of credit for various
purposes including the industrial revenue bond discussed above, various types
of insurance coverage and other needs.

   Purchase commitments.  The Company purchases natural gas fixed-price and
index-priced contracts, which range from one to five years. These index-priced
contracts commit the Company to quantities of natural gas (daily MMBTUs)
although they are denominated under a scheduled price associated with a natural
gas index. The index-priced commitments reflected above are denominated at the
cost of natural gas as of December 31, 2001. This price is subject to market
fluctuations in the future, resulting in fluctuating purchase commitments in
the future. The Company has commitments to purchase various other fertilizer
materials for resale or the manufacture of other blended or mixed fertilizers.

Critical Accounting Policies and Estimates

   The discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in
the United States of America. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate the
judgments and estimates underlying all of our accounting policies, including
those related to inventories, allowance for doubtful accounts, rebate
receivables, impairment of long-lived assets, deferred tax valuation
allowances, restructuring reserves and contingencies and litigation. We base
our estimates on historical experience and circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Materially
different results in the amount and timing of our actual results for any period
could occur if our management made different judgments or utilized different
estimates.

   The U.S. Securities and Exchange Commission has defined critical accounting
policies as those that are both most important to the portrayal of our
financial condition and results and which require our most difficult, complex
or subjective judgments or estimates. Based on this definition, we believe our
critical accounting policies include the policies of inventory valuation,
allowance for doubtful accounts, rebate receivables and impairment of
long-lived assets. For all financial statement periods presented, there have
been no material modifications to the application of these critical accounting
policies.

  Inventory Valuation

   We value our inventories at the lower of cost or market using the average
cost method. To properly reflect our inventories at the lower of cost or
market, we perform an analysis quarterly to determine whether an allowance for
obsolescence or market declines is required. Our analysis considers current
market selling prices for our products, historical quantities sold and
quantities on hand. Historically, our allowances for obsolescence and market
declines have not been significant.

   We perform a full physical count of our inventory each year on September 30.
For periods before and after the physical count we estimate and accrue for
inventory shrinkage. Our accrual for shrink is based on the actual historical
shrink results of our most recent physical inventory, adjusted as necessary for
economic and market conditions. We have not experienced significant
fluctuations in historical shrink rates in our facilities.

                                      20

<PAGE>

  Allowance for Doubtful Accounts

   Our estimate of the allowance for uncollectible receivables is based on a
risk-based analysis of historical write-offs, current sales levels and sales
terms and the age of our receivables. Substantially all of our customers are
involved in the agricultural industry, which is influenced by a variety of
factors which are out of our control, including weather conditions, government
policy and regulation and world economic conditions, among others. As a result,
we continuously evaluate our aged receivables for collection risk. We have not
experienced significant changes in the estimate of our allowance for
uncollectible receivables in the past.

  Rebate Receivables

   Rebates are received from crop protection products, raw material and seed
vendors, based on programs sponsored by the vendors. The programs vary based on
product type and specific vendor practice. More than 90% of the rebates earned
are from crop protection product vendors. The majority of the rebate programs
run on a crop year basis, typically from October 1/st to September 30th,
although other fiscal periods are sometimes utilized. The majority of the
rebates are earned based on the sales a dealer generates of a vendor's product
in a given crop year. The rebate accrual booked monthly is based on actual
sales and the historical rebate percentage received in the prior year. The
actual rebates earned for most programs are finalized in our fourth quarter and
adjustments are made to the accrual as necessary. These adjustments have
historically resulted in additional rebate income in the fourth quarter.
Because the nature of the programs and the amount of rebates available are
determined by our vendors, there can be no assurance that this trend will
continue. /

  Impairment of long-lived assets

   We assess the impairment of long-lived assets on an ongoing basis and
whenever events or changes in circumstances indicate that the carrying value of
an asset may not be recoverable based upon an estimate of future undiscounted
cash flows. Our evaluation is performed by location. Factors we consider that
could trigger an impairment review include the following:

  .   Significant under-performance relative to expected historical or
      projected future operating results

  .   Significant changes in the manner of our use of the acquired assets or
      the strategy for our overall business

  .   Significant negative industry or economic trends

   When we determine that the carrying value of a long-lived assets may not be
recoverable based upon the existence of one or more of the above indicators of
impairment, we measure impairment based on the difference between an asset's
carrying value and an estimate of fair value, which may be determined based
upon quotes or a projected discounted cash flow.

Recently Issued Accounting Standards

  Statements of Financial Accounting Standards No. 141 and 142

   Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations," requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. SFAS No. 142, "Goodwill
and Other Intangible Assets", establishes accounting standards for intangible
assets and goodwill and is effective January 1, 2002. SFAS No. 142 requires
that goodwill and intangible assets with indefinite useful lives no longer be
amortized, but rather tested for impairment at least annually. SFAS No. 142
will also require that intangible assets with definite useful lives be
amortized over their respective estimated useful lives and reviewed for
impairment in accordance with SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-lived Assets." Application of the non-amortization provisions
of SFAS No. 142 is expected to result in a reduction in amortization expense of
approximately $1.3 million per year. The Company is performing a

                                      21

<PAGE>

transitional goodwill evaluation to determine whether there is an indication
that goodwill is impaired as of January 1, 2002. This evaluation will be
completed by June 30, 2002 in accordance with SFAS No. 142. The impairment, if
any, will be quantified and recorded prior to December 31, 2002 as cumulative
effect of a change in accounting principle. However, the amounts used in the
transitional goodwill test will be measured as of January 1, 2002 and any
previously filed 2002 quarters will be restated for this change when finalized.
Management is unable to determine whether the impact of implementing the
transitional elements of SFAS No. 142 will have a material effect on the
Company's financial condition or results of operations.

  Statement of Financial Accounting Standards No. 143

   In June 2001, the Financial Accounting Standards Board issued SFAS No. 143,
"Accounting for Asset Retirement Obligations," which addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. The
standard applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and/or normal use of the assets. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002. Management does not believe the implementation
of this standard will have a material effect on the Company's financial
condition or results of operations.

  Statement of Financial Accounting Standards No. 144

   In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets".  SFAS No. 144 addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This
Statement requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If the carrying amount of an asset
exceeds its estimated future cash flows, an impairment charge is recognized for
the amount by which the carrying amount of the asset exceeds the fair value of
the asset. SFAS No. 144 requires companies to separately report discontinued
operations and extends that reporting to a component of an entity that either
has been disposed of (by sale, abandonment, or in a distribution to owners) or
is classified as held for sale. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less cost to sell. The Company was
required to adopt SFAS No. 144 on January 1, 2002. SFAS No. 144 supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of." Management does not believe the implementation of
this standard will have a material effect on the Company's financial condition
or results of operations.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

   Our market risks relating to our operations result primarily from changes in
interest rates. The interest rates that we pay for borrowings under our credit
facility are based on the LIBOR rate of interest charged by the agent bank
under our credit facility. Our operating results will be impacted by changes in
interest rates. We estimate that based on an estimated annual average balance
on our credit facility that each 1% change in market interest rate will impact
before tax earnings by approximately $1.5 million. Our First Mortgage Notes
bear interest at a fixed rate of 10.25%. Some of our customer deposits also
bear interest at a fixed rate, which is established on an annual basis at the
beginning of each farming season based on prevailing market rates for similar
programs in each of the regions in which we operate.

   The Company is also exposed to market risk due to market fluctuations in
natural gas prices. Natural gas is a raw material used in the production of
various nitrogen-based products that the Company either manufactures at its
East Dubuque plant or purchases from vendors. Market prices of nitrogen-based
products are affected by changes in natural gas prices as well as supply and
demand and other factors. As a normal course of business nitrogen-based
products are purchased during the winter and early spring to supply its needs
during the high sales volume spring season. Nitrogen-based inventory remaining
at the end of the spring season will be subject to

                                      22

<PAGE>

market risk due to changes in natural gas prices. Currently, the Company enters
into indexed price commitments to purchase natural gas for use in its East
Dubuque facility and as such is exposed to significant market risk in supplying
natural gas for production purposes. The Company has experienced no
difficulties in securing needed supplies of natural gas, however, natural gas
is purchased at market prices and such purchases are subject to price
volatility.

   The Company also engages in certain commodity hedging activities with
respect to its grain and seed purchases. We believe that these contracts
approximate market rates. We do not hold or issue derivative financial
instruments for trading purposes.

                                      23

<PAGE>

Item 8.  Financial Statements and Supplementary Data.

                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              Page
                                                              ----
              <S>                                             <C>
              Independent Auditors' Report...................  25
              Consolidated Balance Sheets....................  26
              Consolidated Statements of Operations..........  27
              Consolidated Statements of Stockholder's Equity  28
              Consolidated Statements of Cash Flows..........  29
              Notes to Consolidated Financial Statements.....  31
</TABLE>


                                      24

<PAGE>

                         Independent Auditors' Report

The Board of Directors and Stockholder
Royster-Clark, Inc.:

   We have audited the accompanying consolidated balance sheets of
Royster-Clark, Inc. and subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of operations, stockholder's equity and cash
flows for the years ended December 31, 2001 and 2000 and for the nine months
ended December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

   We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

   In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Royster-Clark, Inc. and subsidiaries as of December 31, 2001 and 2000, and the
results of their operations and their cash flows for the years ended December
31, 2001 and 2000 and for the nine months ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States
of America.

                                          /s/  KPMG LLP

Norfolk, Virginia
March 4, 2002


                                      25

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                          December 31, 2001 and 2000
                            (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                      2001      2000
                                                                                    ---------  -------
<S>                                                                                 <C>        <C>
                                  Assets (Note 9)
Current assets:
   Cash............................................................................ $     997      413
   Trade accounts receivable, net of allowance for doubtful accounts of $5,350 and
     $5,891 at December 31, 2001 and 2000, respectively............................    73,754   80,425
   Other receivables (note 15).....................................................    24,381   38,372
   Inventories (note 5)............................................................   211,218  240,530
   Prepaid expenses and other current assets.......................................     2,246    5,349
   Deferred income taxes (note 8)..................................................     6,000    9,329
                                                                                    ---------  -------
       Total current assets........................................................   318,596  374,418
Property, plant and equipment, net (notes 6 and 10)................................   203,445  216,698
Goodwill, net of accumulated amortization of $3,395 and $2,049 at December 31, 2001
  and 2000, respectively (note 4)..................................................    16,540   18,383
Deferred income taxes (note 8).....................................................     4,795       --
Deferred financing costs, net of accumulated amortization of $5,430 and $3,409 at
  December 31, 2001 and 2000, respectively.........................................    10,512   12,533
Other assets, net..................................................................     1,997    1,324
                                                                                    ---------  -------
                                                                                    $555,885   623,356
                                                                                    =========  =======
                       Liabilities and Stockholder's Equity
Current liabilities:
   Current installments of long-term debt (note 11)................................ $   7,181    2,617
   Customer deposits (note 7)......................................................    60,900   68,179
   Accounts payable................................................................    86,282   87,637
   Accrued expenses (note 4).......................................................    24,314   24,549
                                                                                    ---------  -------
       Total current liabilities...................................................   178,677  182,982
Senior secured credit facility (note 9)............................................    89,244  135,956
10 1/4% First Mortgage Notes due 2009 (note 10)....................................   200,000  200,000
Long-term debt, excluding current installments (note 11)...........................       363    4,796
Other long-term liabilities (note 14)..............................................     6,018    5,608
Deferred income taxes (note 8).....................................................        --    3,552
                                                                                    ---------  -------
       Total liabilities...........................................................   474,302  532,894
                                                                                    ---------  -------
Stockholder's equity (notes 4 and 9):
   Common stock, no par value; authorized 350,000 shares; 1 share issued and
     outstanding at December 31, 2001 and 2000.....................................        --       --
   Additional paid-in capital......................................................    88,599   88,599
   Retained earnings (accumulated deficit).........................................    (7,016)   1,863
                                                                                    ---------  -------
       Total stockholder's equity..................................................    81,583   90,462
Commitments, contingencies and subsequent event (notes 3, 4, 11, 12, 14 and 15)....
                                                                                    ---------  -------
                                                                                    $ 555,885  623,356
                                                                                    =========  =======
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      26

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2001 and 2000 and Nine Months ended December 31, 1999
                            (Dollars in thousands)

<TABLE>
<CAPTION>
                                                              Years ended        Nine months
                                                       ------------------------     ended
                                                       December 31, December 31, December 31,
                                                           2001         2000         1999
                                                       ------------ ------------ ------------
                                                                                   (note 1)
<S>                                                    <C>          <C>          <C>
Net sales.............................................   $953,790     913,852      715,486
Cost of sales.........................................    755,910     728,456      570,939
                                                         --------     -------      -------
       Gross profit...................................    197,880     185,396      144,547
Selling, general and administrative expenses..........    173,168     163,228      109,889
Expenses related to Agro acquisition (note 19)........      4,163          --           --
Loss on disposal of property, plant and equipment, net        912         616          326
                                                         --------     -------      -------
       Operating income...............................     19,637      21,552       34,332
Interest expense......................................    (34,895)    (38,001)     (23,150)
Gain on insurance settlement..........................      1,856          --           --
Gain on sale of natural gas contracts (note 15).......         --       9,648           --
                                                         --------     -------      -------
       Income (loss) before income taxes..............    (13,402)     (6,801)      11,182
Income tax expense (benefit) (note 8).................     (4,523)     (2,041)       4,559
                                                         --------     -------      -------
       Net income (loss)..............................   $ (8,879)     (4,760)       6,623
                                                         ========     =======      =======
</TABLE>


         See accompanying notes to consolidated financial statements.


                                      27

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

Years ended December 31, 2001 and 2000 and Nine Months ended December 31, 1999
                            (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                 Common Stock
                                                                 -------------
                                                                    Issued     Additional Retained      Total
                                                                 -------------  paid-in   earnings  stockholder's
                                                                 Shares Amount  capital   (deficit)    equity
                                                                 ------ ------ ---------- --------- -------------
<S>                                                              <C>    <C>    <C>        <C>       <C>
Cash capital contributed by Royster-Clark Group.................    1    $--     59,043        --      59,043
Capital contribution of Royster-Clark Group securities issued to
  predecessor stockholders in the acquisitions of the Company by
  Royster-Clark Group...........................................   --     --     19,556        --      19,556
Capital contribution of junior subordinated notes from Royster-
  Clark Group used as consideration in the AgriBusiness
  transaction...................................................   --     --     10,000        --      10,000
Net income for the nine months ended December 31, 1999..........   --     --         --     6,623       6,623
                                                                   --    ---     ------    ------      ------
Balance at December 31, 1999....................................    1     --     88,599     6,623      95,222
Net loss for the year ended December 31, 2000...................   --     --         --    (4,760)     (4,760)
                                                                   --    ---     ------    ------      ------
Balance at December 31, 2000....................................    1     --     88,599     1,863      90,462
Net loss for the year ended December 31, 2000...................   --     --         --    (8,879)     (8,879)
                                                                   --    ---     ------    ------      ------
Balance at December 31, 2001....................................    1    $--     88,599    (7,016)     81,583
                                                                   ==    ===     ======    ======      ======
</TABLE>


         See accompanying notes to consolidated financial statements.

                                      28

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

 Year ended December 31, 2001 and 2000 and Nine Months ended December 31, 1999
                            (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                     Years ended        Nine months
                                                                              ------------------------     ended
                                                                              December 31, December 31, December 31,
                                                                                  2001         2000         1999
                                                                              ------------ ------------ ------------
                                                                                                          (note 1)
<S>                                                                           <C>          <C>          <C>
Cash flows from operating activities:
   Net income (loss).........................................................  $  (8,879)      (4,760)       6,623
                                                                               ---------     --------     --------
   Adjustments to reconcile net income (loss) to net cash provided
     by (used in) operating activities:
       Provision for doubtful accounts.......................................      2,980        2,800        1,703
       Depreciation and amortization.........................................     27,356       25,725       15,819
       Loss on disposal of property, plant and equipment.....................        912          616          326
       Gain on sale of natural gas contracts.................................         --       (9,648)          --
       Deferred income tax expense...........................................     (5,018)      (2,341)       4,559
       Changes in operating assets and liabilities increasing
         (decreasing) cash:
          Trade account receivable...........................................      3,691       16,427       18,085
          Other receivables..................................................     14,591      (11,084)     (15,079)
          Inventories........................................................     29,312      (67,785)     142,948
          Prepaid expenses and other current assets..........................      3,103          380       (1,108)
          Other assets.......................................................     (1,151)        (779)         462
          Accounts payable...................................................     (1,355)      34,628      (74,257)
          Accrued expenses...................................................        262         (156)      (3,657)
          Other long-term liabilities........................................        410          889          666
                                                                               ---------     --------     --------
              Total adjustments..............................................     75,093      (10,328)      90,467
                                                                               ---------     --------     --------
              Net cash provided by (used in) operating activities............     66,214      (15,088)      97,090
                                                                               ---------     --------     --------
Cash flows from investing activities:
   Proceeds from sale of property, plant and equipment.......................      2,042          509          970
   Purchases of property, plant and equipment................................    (13,812)     (18,082)     (19,752)
   Acquisitions, net of cash acquired of $20 and $40 in 2000 and
     1999, respectively......................................................         --      (26,600)    (259,676)
                                                                               ---------     --------     --------
              Net cash used in investing activities..........................    (11,770)     (44,173)    (278,458)
                                                                               ---------     --------     --------
Cash flows from financing activities:
   Proceeds from senior secured credit facility..............................    349,264      410,166      340,788
   Payments on senior secured credit facility................................   (395,976)    (366,756)    (247,825)
   Proceeds from issuance of First Mortgage Notes............................         --           --      200,000
   Capital contribution by RCG...............................................         --           --       23,088
   Long-term debt refinanced.................................................         --           --      (67,750)
   Principal payments on long-term debt......................................       (125)      (4,218)        (154)
   Proceeds from long-term debt..............................................        256           --           --
   Net increase (decrease) in customer deposits..............................     (7,279)      15,812      (46,474)
   Payment of deferred financing costs.......................................         --           --      (15,677)
                                                                               ---------     --------     --------
            Net cash provided by (used in) financing activities..............    (53,860)      55,004      185,996
                                                                               ---------     --------     --------
Net increase (decrease) in cash..............................................        584       (4,257)       4,628
Cash at beginning of period..................................................        413        4,670           42
                                                                               ---------     --------     --------
Cash at end of period........................................................  $     997          413        4,670
                                                                               =========     ========     ========
Supplemental disclosure of cash flow information:
   Cash paid during the period for interest..................................  $  35,027       38,332       17,762
                                                                               =========     ========     ========
   Cash paid during the period for income taxes..............................  $     429        1,432        4,491
                                                                               =========     ========     ========
</TABLE>


                                      29

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)

Years ended December 31, 2001 and 2000 and Nine Months ended December 31, 1999

Supplemental disclosure of noncash investing and financing activities:

  .   As discussed in note 4 to the consolidated financial statements, the
      Company increased (decreased) its estimates by $(497), $(395) and $1,411
      in 2001, 2000 and 1999, respectively, for costs to exit certain
      facilities, severance and termination obligations and relocation costs.
      These costs reduced recorded goodwill.

  .   During the current year, the Company recorded a gain of $600 on certain
      surplus land claimed by a city government by eminent domain.

  .   As discussed in note 4 to the consolidated financial statements, in 2000
      the Company completed several acquisitions. In conjunction with these
      transactions, the Company assumed liabilities of $14,357, including
      $4,092 in debt assumed in the Alliance transaction, of which, $3,957 was
      repaid immediately after closing.

  .   As discussed in note 4 to the consolidated financial statements, the
      Company finalized the purchase accounting related to the acquisition of
      IMC in 2000 resulting in an increase in property, plant and equipment and
      a decrease in deferred income taxes of $13,657.

  .   As discussed in note 4 in the consolidated financial statements, in 1999
      the Company completed an acquisition of the business unit of IMC Global
      known as IMC AgriBusiness, Inc. (IMC). In conjunction with this
      transaction, the Company assumed liabilities of $183,000 and $10,000 of
      the purchase price was financed by an equity contribution from
      Royster-Clark Group. Also in conjunction with the acquisition of
      Royster-Clark, Inc. by Royster-Clark Group, $152,746 of liabilities were
      assumed.


         See accompanying notes to consolidated financial statements.

                                      30

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


(1) Description of Business and Basis of Presentation

    Royster-Clark, Inc. (herein referred to as Royster-Clark or the Company) is
    a retail and wholesale distributor of mixed fertilizer, fertilizer
    materials, seed, crop protection products and agronomic services to
    farmers, primarily in the East, South and Midwest. The Company's operations
    consist of retail farm centers, granulation, blending and seed processing
    plants, and an integrated network of storage and distribution terminals and
    warehouses. In addition, the Company operates two nitrogen manufacturing
    plants that supply the retail and wholesale distribution businesses with
    nitrogen fertilizer products.

    As discussed further in notes 3 and 4, effective April 1, 1999,
    Royster-Clark Group, Inc. (herein referred to as RCG), a newly formed
    holding company capitalized with approximately $59,000 in cash, acquired
    all of the then outstanding stock of Royster-Clark. As a result, the
    accompanying audited consolidated financial statements of Royster-Clark,
    Inc. and subsidiaries as of December 31, 2001 and 2000, for the years ended
    December 31, 2001 and 2000, and the nine months ended December 31, 1999
    reflect the acquisition by RCG as of April 1, 1999.

    These financial statements also reflect the Company's acquisitions of IMC
    AgriBusiness, Inc. and subsidiaries (now a wholly owned subsidiary known as
    Royster-Clark AgriBusiness, Inc.), Hutson's AG Service, Inc. (a wholly
    owned subsidiary until September 29, 1999, known as Royster-Clark Hutson,
    Inc. that was merged into Royster-Clark AgriBusiness, Inc. on September 29,
    1999) and IMC Nitrogen Company (now a wholly owned subsidiary known as
    Royster-Clark Nitrogen, Inc.) (these three entities are collectively
    referred to as AgriBusiness) from IMC Global, Inc., which was consummated
    on April 22, 1999 with an effective date of April 1, 1999.

(2) Summary of Significant Accounting Policies

    (a) Principles of Consolidation

        The consolidated financial statements include the accounts of
        Royster-Clark, Inc. and its subsidiaries. All significant intercompany
        balances and transactions have been eliminated.

    (b) Cash

        The Company transmits, on a daily basis, substantially all available
        cash to pay balances related to the Senior Secured Credit Facility
        (note 9). Cash on the consolidated balance sheets represents funds
        which are deposited in Company accounts that are not associated with
        the administration of the Senior Secured Credit Facility. For purposes
        of the statements of cash flows, the Company considers all highly
        liquid debt instruments with original maturities of three months or
        less to be cash equivalents.

    (c) Concentration of Credit Risk

        The Company sells its products and services to farmers and retail
        dealers primarily in the midwestern and southeastern United States.
        Approximately 72% of the Company's sales are made between March and
        July. No single customer or group of affiliated customers accounted for
        more than 10% of the Company's net sales.

                                      31

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


        In addition to the concentration of sales between March and July, the
        Company is impacted by a number of other factors, including weather
        conditions and prevailing prices for fertilizer and other crop
        production inputs, including natural gas.

        Weather conditions can significantly impact the results of operations.
        Adverse weather conditions during the planting season may force farmers
        to either delay or abandon their planting, which may lead to lower use
        of fertilizer, seed and crop protection products.

    (d) Other Receivables

        Other receivables primarily consist of vendor rebates and for 2000,
        amounts receivable from the sale of natural gas contracts (note 15).
        Vendor rebates represent amounts due from suppliers on crop protection,
        seed and fertilizer products and are accrued when earned, which is
        typically at the time of sale of the related product. Other receivables
        also include amounts due from officers or employees of $64 and $147 at
        December 31, 2001 and 2000, respectively.

    (e) Inventories

        Inventories are stated at the lower of cost or market, with cost being
        determined by the weighted-average cost method. Costs directly
        associated with warehousing and distribution are capitalized into crop
        protection and seed inventories. Total warehousing and distribution
        costs capitalized into inventories amounted to $2,497 and $2,346 at
        December 31, 2001 and 2000, respectively.

    (f) Derivative Instruments and Hedging Activities

        Effective January 1, 2001, the Company adopted provisions of Statement
        of Financial Accounting Standards (SFAS) No. 133, Accounting for
        Derivative Instruments and Certain Hedging Activities, as amended by
        SFAS No. 138, Accounting for Certain Derivative Instruments and Certain
        Hedging Activities, an amendment of SFAS 133. The implementation of
        SFAS No. 133 did not have a material impact on the consolidated
        financial statements.

        The Company enters into certain futures contracts related to its grain
        and seed purchases in order to minimize the effects of price volatility
        on the Company's results of operations. In accordance with SFAS No.
        133, these contracts are recognized on the balance sheet at their fair
        value. Changes in the fair values of these contracts are reported in
        current period earnings.

    (g) Property, Plant and Equipment

        Property, plant and equipment are stated at cost. All assets are
        depreciated using the straight-line method using the following
        estimated useful lives:

<TABLE>
              <S>                                      <C>
              Buildings and land improvements......... 7-20 years
              Machinery and equipment................. 7-10 years
              Furniture, fixtures and office equipment 3-10 years
</TABLE>

    (h) Goodwill

        Goodwill, which represents the excess purchase price over the estimated
        fair value at the date of acquisition of the net assets acquired, is
        being amortized using the straight-line method over a period

                                      32

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)

        of 15 years. The Company periodically assesses the recoverability of
        this intangible asset by determining whether the amortization of the
        goodwill balance over its remaining life can be recovered through
        undiscounted future operating cash flows of the acquired operation.
        Impairment is determined by comparing anticipated undiscounted future
        cash flows to the carrying value of the related goodwill. If such
        assets are considered impaired, the impairment is measured as the
        amount by which the carrying amount of the assets exceeds the fair
        value of the goodwill. In accordance with SFAS No. 142, the Company
        ceased amortization of goodwill effective January 1, 2002. The Company
        will complete their initial evaluation of impairment in 2002.

    (i) Deferred Financing Costs

        Deferred financing costs are being amortized using the effective
        interest method over the term of the related debt facility.

    (j) Other Assets

        Other assets are primarily comprised of long-term prepaid expenses
        related to non-compete agreements, long-term notes receivable and
        various security deposits. The non-compete agreements are being
        amortized on a straight-line basis over their contract terms, which
        range from three to five years. Accumulated amortization is $553 and
        $75 at December 31, 2001 and 2000, respectively.

    (k) Income Taxes

        The Company uses the asset and liability method of accounting for
        income taxes. Deferred income tax assets and liabilities are recognized
        for the estimated future tax consequences of "temporary differences" by
        applying enacted statutory tax rates applicable to future years to
        differences between the financial statement carrying amounts and the
        tax bases of existing assets and liabilities. The effect on deferred
        tax assets and liabilities of a change in tax rates is recognized in
        income in the period that includes the enactment date.

    (l) Stock-Based Employee Compensation

        SFAS No. 123, Accounting for Stock-Based Compensation, encourages, but
        does not require, companies to record compensation cost for stock-based
        employee compensation plans at fair value. The Company has chosen to
        continue to account for stock-based compensation using the intrinsic
        value method prescribed in Accounting Principles Board Opinion No. 25,
        Accounting for Stock Issued to Employees, and provide the pro forma
        disclosure provisions of SFAS No. 123. Accordingly, compensation cost
        for stock options is measured as the excess, if any, of the estimated
        fair value of the Company's stock at the date of the grant over the
        amount an employee must pay to acquire the stock.

    (m) Impairment of Long-Lived Assets

        The Company reviews long-lived assets and certain identifiable
        intangibles for impairment whenever events or changes in circumstances
        indicate that the carrying amount of an asset may not be recoverable.
        Recoverability of assets to be held and used is measured by a
        comparison of the carrying amount of an asset to future undiscounted
        cash flows expected to be generated by the asset. Assets to be disposed
        of are reported at the lower of the carrying amount or fair value less
        costs to sell.

                                      33

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


    (n) Accrued Environmental Costs

        The Company's activities include the manufacture, blending and sale of
        crop nutrient products and the resale of crop protection products.
        These operations are subject to extensive federal, state and local
        environmental regulations, including laws related to air and water
        quality, management of hazardous and solid wastes, and management and
        handling of raw materials and crop protection products. Expenditures
        that relate to an existing condition caused by past operations of the
        Company or prior owners, and which do not contribute to current or
        future revenue generation, are charged to operations.

        The Company accrues for losses associated with environmental
        remediation obligations when such losses are probable and reasonably
        estimable. Accruals for estimated losses from environmental remediation
        obligations generally are recognized no later than completion of the
        remedial feasibility study. Such accruals are adjusted as further
        information develops or circumstances change. Costs of future
        expenditures for environment remediation obligations are not discounted
        to their present value. Recoveries of environmental remediation costs
        from other parties are recorded as assets when their receipt is deemed
        probable.

    (o) Revenue Recognition

        The Company recognizes revenue on sales when products are shipped and
        the customer takes ownership and assumes risk of loss. Revenue is
        recognized as the net amount to be received after deducting estimated
        amounts for discounts and trade allowances.

    (p) Use of Estimates

        Management of the Company has made a number of estimates and
        assumptions relating to the reporting of assets and liabilities and the
        disclosure of contingent assets and liabilities at the date of the
        financial statements and the reported amounts of revenues and expenses
        during the reported periods to prepare these financial statements in
        conformity with accounting principles generally accepted in the United
        States of America. Actual results could differ from those estimates.

    (q) Reclassifications

        Certain reclassifications have been made to the consolidated financial
        statements as of and for the year ended December 31, 2000 and for the
        nine months ended December 31, 1999 in order to conform to the
        financial statement presentation as of and for the year ended December
        31, 2001.

(3) Capitalization of RCG

    RCG was formed for the purpose of acquiring all of the outstanding stock of
    Royster-Clark and to enable the Company to purchase AgriBusiness. RCG is a
    holding company with no operations independent of those of Royster-Clark.
    Although Royster-Clark is not legally liable for the obligations of RCG,
    the ability of RCG to meet its obligations is dependent on Royster-Clark's
    ability to pay dividends to RCG in an amount sufficient to service these
    obligations, including dividend payments on RCG's preferred stock, and

                                      34

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)

    principal and interest payments on RCG's junior subordinated notes. The
    following paragraphs summarize the terms of RCG's outstanding securities.

    RCG has issued $20,000 of junior subordinated notes, $10,000 of which were
    issued to IMC Global, Inc. (herein referred to as IMC Global) in
    conjunction with the acquisition of AgriBusiness. The notes bear interest
    at an annual rate of 12%. Through maturity, RCG may elect to pay interest
    due in the form of additional junior subordinated notes. The notes,
    including additional notes issued in lieu of interest, are due April 2010.
    Of these notes, $10,000, which represents the notes issued to IMC Global,
    are exchangeable after three years for unregistered notes with rights
    similar to those of the Royster-Clark 10-1/4% First Mortgage Notes due 2009
    (herein referred to as the First Mortgage Notes), subject to compliance
    with the terms of the debt obligations of Royster-Clark. The terms of the
    indenture and the other debt obligations currently prohibit such exchange
    and are expected to prohibit this exchange for the foreseeable future.

    RCG has also issued 607,140 shares of 12% Series A Senior Cumulative
    Compounding Preferred Stock (herein referred to as the Senior Preferred
    Stock), 132,636 of which were issued to former stockholders of
    Royster-Clark in conjunction with the acquisition of Royster-Clark, with a
    $0.01 per share par value and a liquidation value of $100 per share.
    Dividends are payable annually at the rate of $12 per share per annum when,
    as and if declared by the Board of Directors. Additional dividends accrue
    on unpaid dividends. In the event that RCG shall be liquidated, dissolved
    or wound up, whether voluntarily or involuntarily, after all creditors of
    RCG shall have been paid in full, the holders of the Senior Preferred Stock
    shall be entitled to receive an amount equal to $100 in cash per share plus
    an amount equal to full cumulative dividends accrued and unpaid before any
    proceeds are paid to the holders of the Series B Junior Preferred Stock
    (herein referred to as the Junior Preferred Stock) or the RCG common stock.

    RCG has issued 74,874 shares of Junior Preferred Stock, all of which were
    issued to former stockholders of Royster-Clark in conjunction with the
    acquisition of Royster-Clark, with a $0.01 per share par value and a
    liquidation value of $100 per share. The holders of the Junior Preferred
    Stock shall not be entitled to receive any dividends until 2004.
    Thereafter, the holders of the Junior Preferred Stock shall be entitled to
    receive, when, as and if declared by the Board of Directors, cash dividends
    at the rate of $12 per share. Dividends, when entitled, shall be
    cumulative. In the event that RCG shall be liquidated, dissolved or wound
    up, whether voluntarily or involuntarily, after all creditors of RCG have
    been paid in full and the holders of any Senior Preferred Stock have been
    paid, the holders of the Junior Preferred Stock shall be entitled to
    receive an amount equal to $100 in cash per share plus an amount equal to
    cumulative dividends accrued and unpaid before any proceeds are paid to the
    holders of the RCG common stock.

    RCG has issued a total of 908,426 shares of Class A $.01 par common stock
    and 1,231,600 of Class B no par common stock, of which 368,426 of the Class
    A common stock was issued to former stockholders of Royster-Clark in
    conjunction with the acquisition of Royster-Clark. The common stock was
    issued in two series, Class A and Class B, with 2,200,000 and 2,000,000
    shares authorized, respectively. The rights and privileges are identical
    between the two classes except with regards to voting rights. The holders
    of Class A common stock have the general right to vote for all purposes
    while the holders of Class B common stock have no voting rights. Each
    record holder of Class A common stock will be entitled to convert any or
    all of such holder's Class A common stock into the same number of shares of
    Class B common stock and vice versa. So long as any shares of any class of
    common stock are outstanding, RCG will at all times reserve and keep
    available out of its authorized but unissued shares of Class A common stock
    and Class B

                                      35

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)

    common stock (or any shares of Class A common stock or Class B common stock
    which are held as treasury shares), the number of shares sufficient for
    issuance upon conversion.

(4) Acquisitions

    The paragraphs on the following pages describe acquisitions made during
    2000 and the acquisitions of Royster-Clark by RCG and AgriBusiness by
    Royster-Clark, both transactions having an effective date of April 1, 1999.

    (a) 2000 Acquisitions

        During the first and third quarters of 2000, the Company completed a
        series of small acquisitions consisting of several retail farm supply
        centers, a seed processing facility, two grain terminals and a
        fertilizer terminal for $26,620 in cash, including $635 in direct costs
        of the acquisition. Debt of $4,092 was assumed in the transactions, of
        which $3,957 was repaid immediately after closing. Descriptions of the
        various transactions are presented below.

        American Crop Services

        On March 7, 2000, the Company acquired substantially all of the
        property, plant and equipment and inventories of the American Crop
        Services (herein referred to as ACS) through a plan submitted to a
        bankruptcy court. The purchase price paid was $16,399. ACS owned and
        operated fertilizer retail farm supply outlets as well as distribution
        and storage facilities and a seed conditioning facility located
        primarily in Kentucky and Tennessee. The acquisition was accounted for
        by the purchase method of accounting and the accompanying consolidated
        financial statements include the operating results of ACS from the date
        of acquisition. Because the fair values of the assets purchased and the
        liabilities assumed exceeded the purchase price, the fair value of the
        property and equipment was reduced. Assets purchased included
        inventory, certain prepaid expenses and property, plant and equipment.

        Alliance

        On March 17, 2000, the Company acquired shares of stock from Alliance
        Agronomics, Inc., which owned and operated retail outlets in southern
        Virginia and northern North Carolina. The acquisition price paid was
        $4,334. The Company purchased, in a separate, but related transaction,
        the equity interest in Petersburg Agri-Terminal Associates, a general
        partnership for $3,609. These two entities are collectively referred to
        as Alliance. These acquisitions were accounted for by the purchase
        method of accounting, and the accompanying consolidated financial
        statements include the operating results of Alliance from the date of
        acquisition. As a result, the assets and liabilities were adjusted to
        their fair values, with the excess purchase price over the fair value
        assigned to goodwill. Assets purchased included cash, receivables,
        inventory and property, plant and equipment.

        Crop Builders, Inc., Armstrong Ag Center, Inc. and Maple Hill Ag, Inc.

        The Company purchased substantially all the assets of Crop Builders,
        Inc. and Armstrong Ag Center, Inc. in February 2000, and Maple Hill Ag,
        Inc. in August 2000, consisting of several retail fertilizer outlets in
        northern Iowa and southern Minnesota for $2,278. The acquisitions were
        accounted for by the purchase method of accounting, and the
        accompanying consolidated financial statements include the operating
        results from the acquisition dates. Assets purchased included
        receivables, inventory and property, plant and equipment. Because the
        fair values of the assets purchased and liabilities assumed exceeded
        the purchase price, the fair value of property and equipment was
        reduced.

                                      36

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


    The following summarizes the final allocation of the purchase price for all
    of the 2000 acquisitions described above.

<TABLE>
                 <S>                                   <C>
                 Assets purchased:
                    Cash.............................. $    22
                    Receivables, net..................   2,826
                    Inventories.......................  14,750
                    Prepaid expenses and other assets.     244
                    Deferred income taxes.............     225
                    Property, plant and equipment.....  18,413
                    Goodwill..........................   4,497
                                                       -------
                        Total assets purchased........  40,977
                                                       -------
                 Liabilities assumed:
                    Accounts payable..................   5,316
                    Customer deposits.................   2,487
                    Accrued expenses..................     289
                    Long-term debt....................   4,092
                    Deferred income taxes.............   1,728
                    Other liabilities.................     445
                                                       -------
                        Total liabilities assumed.....  14,357
                                                       -------
                        Purchase price paid........... $26,620
                                                       =======
</TABLE>

    (b) Acquisition of Royster-Clark by RCG

        RCG acquired all of the outstanding stock of Royster-Clark for $55,511,
        including $1,433 in direct costs of the acquisition, consisting of
        $35,955 in cash; 132,636 shares of Senior Preferred Stock valued at
        $13,264; 74,874 shares of Junior Preferred Stock valued at $4,535;
        368,426 shares of common stock valued at $368; and 728,426 options to
        purchase additional RCG securities valued at $1,389. Each option
        entitles the holder to purchase 5.5 shares of common stock, 2.0 shares
        of Senior Preferred Stock and 1.1 shares of Junior Preferred Stock. The
        acquisition was accounted for as a purchase. As a result, the assets
        and liabilities were adjusted to their fair values, with the excess
        purchase price over the fair value assigned to goodwill.

                                      37

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


   The following summarizes the final allocation of the purchase price:

<TABLE>
                 <S>                                   <C>
                 Assets purchased:
                    Cash.............................. $     42
                    Receivables, net..................   40,011
                    Inventories.......................   91,831
                    Prepaid expenses..................    3,987
                    Deferred income taxes.............      440
                    Property, plant and equipment.....   56,241
                    Goodwill..........................   15,107
                    Other assets......................      598
                                                       --------
                        Total assets purchased........  208,257
                                                       --------
                 Liabilities assumed:
                    Customer deposits.................   23,326
                    Accounts payable..................   44,486
                    Accrued expenses..................    5,222
                    Long-term debt....................   67,926
                    Deferred income taxes.............   11,492
                    Other liabilities.................      294
                                                       --------
                        Total liabilities assumed.....  152,746
                                                       --------
                        Purchase price paid........... $ 55,511
                                                       ========
</TABLE>

        Subsequent to the acquisition, RCG contributed $23,088 in cash to
        Royster-Clark which, along with borrowings under the newly established
        senior secured credit facility described in note 9, was used to
        refinance $67,750 of the long-term debt assumed above.

    (c) Acquisition of AgriBusiness

        Royster-Clark acquired AgriBusiness through the acquisition of all of
        the outstanding common stock of its component entities for $269,716 in
        cash, including $4,825 in direct costs of the acquisition. The
        acquisition was financed with proceeds from the senior secured credit
        facility (note 9), the issuance of $200,000 in First Mortgage Notes
        (note 10) and $10,000 contributed to the Company by RCG from proceeds
        on RCG Junior Subordinated Notes issued to IMC Global.

        The acquisition has been accounted for as a purchase, and as a result,
        all of the assets and liabilities have been adjusted to their fair
        values. Because the fair values of the assets purchased and the
        liabilities assumed exceeded the purchase price, the fair value of the
        property, plant and equipment was reduced. A summary of the final
        allocation of the purchase price is on the following page.

                                      38

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)



<TABLE>
                 <S>                                   <C>
                 Assets purchased:
                    Cash.............................. $     40
                    Receivables, net..................   79,164
                    Inventories.......................  209,784
                    Prepaid expenses..................      762
                    Property, plant and equipment.....  142,283
                    Deferred taxes....................   18,934
                    Other assets......................    2,349
                                                       --------
                        Total assets purchased........  453,316
                                                       --------
                 Liabilities assumed:
                    Accounts payable..................   77,464
                    Customer deposits.................   73,028
                    Accrued expenses..................   22,318
                    Long-term debt....................    7,100
                    Other liabilities.................    3,690
                                                       --------
                        Total liabilities assumed.....  183,600
                                                       --------
                        Purchase price paid........... $269,716
                                                       ========
</TABLE>

    (d) Restructuring Liabilities

        In connection with the acquisitions of Royster-Clark and AgriBusiness,
        the Company recorded accruals of $9,461 for future costs to be incurred
        related to the closure of certain facilities, severance and termination
        benefits and relocation costs of employees. These costs represent
        management's estimates of the ultimate obligations associated with
        executing its plans for the combined entity. In accordance with
        management's plans, the closed locations and the individuals to be
        terminated were specifically identified.

        The table on the following page shows the merger-related accruals and
        the remaining liability as of December 31, 2001.

                                      39

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                        Severance and
                                             Costs to    termination                 Total
                                           exit certain  of related   Relocation merger-related
                                            facilities    accruals      costs        costs
                                           ------------ ------------- ---------- --------------
<S>                                        <C>          <C>           <C>        <C>
Balance as of April 1, 1999...............    $1,197        7,167       1,097         9,461
Costs incurred through December 31, 1999..      (491)      (4,427)       (840)       (5,758)
Revisions to estimates....................       177        1,391        (157)        1,411
                                              ------       ------       -----        ------
Balance as of December 31, 1999...........       883        4,131         100         5,114
Costs incurred for the year ended December
  31, 2000................................       (94)      (2,511)       (314)       (2,919)
Revisions to estimates....................      (157)        (555)        317          (395)
                                              ------       ------       -----        ------
Balance as of December 31, 2000...........       632        1,065         103         1,800
Costs incurred for the year ended December
  31, 2001................................      (183)        (840)        (26)       (1,049)
Revisions to estimates....................      (289)        (131)        (77)         (497)
                                              ------       ------       -----        ------
Balance as of December 31, 2001...........    $  160           94          --           254
                                              ======       ======       =====        ======
</TABLE>

        The costs to exit certain facilities represent the costs to close an
        office building, which was redundant with an existing facility, and 10
        retail locations that were evaluated to be unprofitable. All facilities
        identified were closed as of September 30, 1999. The change in estimate
        resulted from the review of expected closing costs to be incurred in
        relation to the disposition of the remaining facilities. Remaining
        costs to exit certain facilities include estimated rent, utilities,
        maintenance, taxes and other costs to maintain the facilities until
        their disposal date.

        A total of 188 employees were identified for termination, as the
        positions were redundant with existing personnel. The positions
        eliminated included positions in sales, administration and production.
        As of December 31, 2001, 185 had been terminated. The remaining
        employees have left employment with the Company during 2000 or have
        assumed new positions with the Company. The revision to estimates
        reflects adjustments to amounts required to be paid for remaining
        severance obligations. Remaining severance obligations at December 31,
        2001 are being paid out over a period of six months. The termination of
        employees and closure of facilities has not had a material impact on
        other areas of operations.

        The relocation costs paid represent payments to 22 individuals for
        expenses incurred while relocating. These expenses included moving,
        house hunting and travel related costs. The revision to estimates
        reflects the adjustment to final costs of relocation expenses related
        to the relocated individuals.

        Amounts related to revisions to estimates for costs to exit certain
        facilities, severance and termination obligations and relocations costs
        reduced recorded goodwill.

                                      40

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


    (e) Pro Forma Results of Operations

        The following unaudited pro forma summary presents the consolidated
        income statement information as if the aforementioned transactions had
        been consummated on January 1, 1999, and do not purport to be
        indicative of what would have occurred had the acquisitions been made
        at that date or of the results which may occur in the future.

<TABLE>
<CAPTION>
                                  Years ended December 31,
                                  -----------------------
                                     2000         1999
                                   --------     ---------
                        <S>       <C>          <C>
                        Net sales $925,502     1,019,949
                                   ========     =========
                        Net loss. $ (6,126)       (8,753)
                                   ========     =========
</TABLE>

        The unaudited pro forma information reflects adjustments made to the
        historical statements of operations of the companies acquired in 2000
        and 1999 for:

        The impact on depreciation and amortization of adjusting to the fair
        values of property, plant and equipment, goodwill and other
        intangibles, including amortization of the deferred financing costs
        incurred in the establishment of the senior secured credit facility and
        the issuance of the First Mortgage Notes;

        The impact on interest expense to reflect the refinancing of
        Royster-Clark's existing long-term debt, and borrowings on the senior
        secured credit facility and issuance of the First Mortgage Notes in
        conjunction with the acquisitions;

        Pro forma adjustments to cost of sales and selling, general and
        administrative expenses representing the elimination of certain
        historical costs and expenses. These adjustments, summarized in the
        table below, for the year ended December 31, 1999, include elimination
        of payroll costs and benefits associated with the elimination of 89
        positions identified as of April 1, 1999, and the elimination of
        incremental employee benefit and insurance costs as compared to the
        cost of coverage after integration into Royster-Clark's programs,
        including the elimination of the administrative allocation from IMC
        Global and the rollback to 1997 benefit levels as provided in the
        purchase agreement. The effect has been allocated between cost of sales
        and selling, general and administrative expenses. Management does not
        expect the closure of the production plant and termination of employees
        to have a material impact on any other aspect of the pro forma results
        of operations.

        Summary pro forma adjustments to cost of sales and selling, general and
        administrative expenses are as follows:

<TABLE>
     <S>                                                             <C>
     December 31, 1999:
     Cost of sales:
     Elimination of incremental employee benefit and insurance costs $  170
                                                                     ======
     Selling, general and administrative expenses:
     Elimination of costs associated with 89 eliminated positions... $1,200
     Elimination of incremental employee benefit and insurance costs    339
                                                                     ------
                                                                     $1,539
                                                                     ======
</TABLE>

                                      41

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


        In addition, in connection with the acquisition of Agribusiness,
        management identified six AgriBusiness locations for closure. Pro forma
        adjustments to sales, cost of sales and other expenses are also
        required to eliminate the operating results for these locations for
        1999. These adjustments can be summarized as follows:

<TABLE>
              <S>                                         <C>
              Net sales.................................. $7,544
                                                          ======
              Cost of sales.............................. $6,399
                                                          ======
              Selling, general and administrative expense $1,579
                                                          ======
              Loss before income taxes................... $ (434)
                                                          ======
</TABLE>

        The impact on income tax expense, which represents the tax effect of
        the pro forma adjustments described above, calculated to yield an
        estimated composite tax rate of 39%.

(5) Inventories

    Inventories at December 31, 2001 and 2000 consist of the following:

<TABLE>
<CAPTION>
                                              2001    2000
                                            -------- -------
                   <S>                      <C>      <C>
                   Crop protection products $ 93,428  99,580
                   Fertilizers.............   25,824  30,378
                   Raw materials...........   62,624  86,009
                   Seeds...................   12,752  10,095
                   Sundries and other......   16,590  14,468
                                            -------- -------
                                            $211,218 240,530
                                            ======== =======
</TABLE>

(6) Property, Plant and Equipment

    Property, plant and equipment at December 31, 2001 and 2000 consist of the
    following:

<TABLE>
<CAPTION>
                                                 2001    2000
                                               -------- -------
                 <S>                           <C>      <C>
                 Land......................... $ 14,436  14,661
                 Buildings....................   65,369  62,880
                 Machinery and equipment......  176,831 169,043
                 Construction-in-progress.....    2,834   3,429
                                               -------- -------
                                                259,470 250,013
                 Less accumulated depreciation   56,025  33,315
                                               -------- -------
                                               $203,445 216,698
                                               ======== =======
</TABLE>

    Included in land and buildings above are assets held for sale, which are
    carried at their estimated net realizable value, less estimated costs to
    sell. The carrying value of these assets was $2,416 and $1,542 at December
    31, 2001 and 2000, respectively.

                                      42

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


(7) Customer Deposits

    The Company accepts both interest bearing and non-interest bearing customer
    deposits. Customer deposits are refundable upon demand either in cash or
    product. Interest rates paid on customer accounts vary based on economic
    conditions and are posted at the locations where the Company accepts
    customer deposits. The interest rate accruing on customer deposits was 8.0%
    to 9.5% during the year ended December 31, 2001, 8.5% to 9.5% during the
    year ended December 31, 2000 and approximately 8.5% for the nine months
    ended December 31, 1999. Interest expense on customer deposits totaled
    $1,417, $1,399 and $1,073 for the years ended December 31, 2001 and 2000
    and the nine months ended December 31, 1999, respectively.

    Certain customer deposits are from officers or employees of the Company. At
    December 31, 2001 and 2000, these deposits from related parties totaled
    $897 and $830, respectively.

(8) Income Taxes

    Components of income tax expense (benefit) for years ended December 31,
    2001 and 2000 and the nine months ended December 31, 1999 consist of the
    following:

<TABLE>
<CAPTION>
                                              Current Deferred Total
                                              ------- -------- ------
         <S>                                  <C>     <C>      <C>
         Year ended December 31, 2001:
          Federal............................  $295    (4,126) (3,831)
          State..............................   200      (892)   (692)
                                               ----    ------  ------
                                               $495    (5,018) (4,523)
                                               ====    ======  ======
         Year ended December 31, 2000:
          Federal............................  $ --    (1,869) (1,869)
          State..............................   300      (472)   (172)
                                               ----    ------  ------
                                               $300    (2,341) (2,041)
                                               ====    ======  ======
         Nine months ended December 31, 1999:
          Federal............................  $ --     3,831   3,831
          State..............................    --       728     728
                                               ----    ------  ------
                                               $ --     4,559   4,559
                                               ====    ======  ======
</TABLE>

    The effective income tax rate for 2001, 2000 and 1999 of 33.7%, 30.0% and
    40.8%, respectively, differs from the "expected" federal statutory income
    tax rate of 34% due to the following:

<TABLE>
<CAPTION>
                                                                                      Nine months
                                                             Year ended   Year ended     ended
                                                            December 31, December 31, December 31,
                                                                2001         2000         1999
                                                            ------------ ------------ ------------
<S>                                                         <C>          <C>          <C>
Expected income tax expense (benefit)......................   $(4,557)      (2,312)      3,767
Nondeductible expenses, including goodwill amortization and
  meals and entertainment..................................       643          573         291
State taxes, net of federal benefit (expense)..............      (457)        (114)        481
Other......................................................      (152)        (188)         20
                                                              -------       ------       -----
                                                              $(4,523)      (2,041)      4,559
                                                              =======       ======       =====
</TABLE>

                                      43

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


    The tax effects of temporary differences between the financial statement
    carrying amounts and tax bases of assets and liabilities that give rise to
    significant portions of the deferred tax assets and liability at December
    31, 2001 and 2000, relate to the following:

<TABLE>
<CAPTION>
                                                                                  2001     2000
                                                                                --------  -------
<S>                                                                             <C>       <C>
Deferred tax assets:
   Trade accounts receivable, due to allowance for doubtful accounts and
     discounts................................................................. $  2,033    2,284
   Accrued expenses, due to accrued vacation and certain other accruals for
     financial statement purposes..............................................    5,615    4,413
   Operating loss and other tax credit carryforwards...........................   25,002   14,129
   Inventories, due to costs capitalized for tax purposes and obsolescence and
     shrink reserves reflected for financial statement purposes................      839    1,186
                                                                                --------  -------
       Total gross deferred tax assets.........................................   33,489   22,012
Deferred tax liability:
   Property, plant and equipment due to differences in depreciation and basis
     differences resulting from purchase accounting............................  (22,694) (16,235)
                                                                                --------  -------
       Net deferred tax asset.................................................. $ 10,795    5,777
                                                                                ========  =======
</TABLE>

    The Company generated net operating loss carryforwards of $24,011 during
    2001 which will expire in 2021; $33,957 during 2000 which will expire in
    2020; and $3,160 during 1999 which will expire in 2019.

    Net deferred taxes are included in the consolidated balance sheets in the
    following captions:

<TABLE>
<CAPTION>
                                                      2001    2000
                                                     ------- ------
            <S>                                      <C>     <C>
            Deferred income tax asset--current...... $ 6,000  9,329
            Deferred income tax asset--long-term....   4,795     --
            Deferred income tax liability--long-term      -- (3,552)
                                                     ------- ------
                                                     $10,795  5,777
                                                     ======= ======
</TABLE>

    In assessing the realizability of deferred tax assets, management considers
    whether it is more likely than not that some portion or all of the deferred
    taxes will not be realized. Based upon management's projections for future
    taxable income over the periods in which the deferred tax assets are
    deductible, management believes it is more likely than not the existing net
    deductible temporary differences will reverse during periods in which the
    Company generates net taxable income. However, there can be no assurance
    that the Company will generate any income or any specific level of
    continuing income in future years.

(9) Senior Secured Credit Facility

    The Company maintains a senior secured credit facility (credit facility)
    that allows borrowings up to $245,000, subject to certain borrowing base
    limitations. The credit facility expires in April 2004 and bears interest
    at LIBOR plus a spread based on the Company's leverage (weighted average
    rate of 5.40% at

                                      44

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)

    December 31, 2001 and 10.07% at December 31, 2000). The credit facility is
    secured by (1) a lien on all accounts receivable, inventory, general
    intangibles and all other assets of the Company and its subsidiaries
    (except for the collateral securing the First Mortgage Notes, as discussed
    in note 10), (2) all of the common stock of the Company, and (3) all of the
    common stock of the Company's subsidiaries, except for the equity interests
    of certain subsidiaries pledged to secure the First Mortgage Notes. Amounts
    outstanding under the credit facility totaled $89,244 and $135,956 at
    December 31, 2001 and 2000, respectively.

    The credit facility is subject to certain covenants, including limitations
    on additional indebtedness, limitations on liens, limitations on capital
    expenditures and maintenance of certain required financial ratios. The
    credit facility also restricts the payment of dividends by the Company to
    RCG. Dividends are restricted to (1) amounts necessary to enable RCG to pay
    overhead expenses in an amount not to exceed $2,000; (2) amounts necessary
    to enable RCG to pay income and other taxes; and (3) $1,000 over the life
    of the agreement for the purpose of repurchasing, redeeming or otherwise
    acquiring and retiring any capital stock, stock warrants, stock options or
    other rights to acquire capital stock of RCG. Dividends made under the
    third provision are further restricted in that such dividends may not be
    made if a default has occurred (or would occur if the dividend payments
    were made), or such dividend payments would result in noncompliance with
    any financial covenants.

(10) Royster-Clark, Inc. 10-1/4% First Mortgage Notes Due 2009

    As discussed in note 4, the Company issued $200,000 of 10-1/4% First
    Mortgage Notes due April 2009 (herein referred to as the First Mortgage
    Notes) on April 22, 1999 to partially finance the acquisition of
    AgriBusiness. The First Mortgage Notes bear interest at 10.25% payable
    semi-annually in arrears. The First Mortgage Notes are secured by 17
    principal properties, related fixtures and equipment and other related
    assets and a pledge of equity of certain subsidiaries. RCG and certain
    subsidiaries also unconditionally guarantee the First Mortgage Notes. The
    First Mortgage Notes are not redeemable prior to April 1, 2004, except in
    the case of a change of control or a public offering in the first three
    years after the issue date. Thereafter, the First Mortgage Notes are
    redeemable in whole or in part, at the Company's option, at a 5.125%
    premium, declining ratably to par on April 1, 2007, plus accrued and unpaid
    interest, if any, to the date of redemption.

    The First Mortgage Notes are subject to certain covenants, including
    restrictions on dividend payments and retirement of equity interests,
    issuance of new indebtedness or preferred stock and certain transactions
    with affiliates. Dividends may not be made if default has occurred (or
    would occur if the dividend payment were made), or such dividend payments
    would result in noncompliance with any financial covenants. Dividend
    payments are further restricted in amount to at most 50% of consolidated
    net income of the Company from the date of origination of the First
    Mortgage Notes to the end of the most recently completed fiscal quarter.

                                      45

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


(11) Long-Term Debt

    Long-term debt at December 31, 2001 and 2000 consists of the following:

<TABLE>
<CAPTION>
                                                          2001  2000
                                                         ------ -----
          <S>                                            <C>    <C>
          Note payable to former stockholder of Hutson.. $5,000 5,000
          Industrial revenue bond.......................  2,100 2,100
          Other notes payable...........................    444   313
                                                         ------ -----
          Total long-term debt..........................  7,544 7,413
          Less current installments.....................  7,181 2,617
                                                         ------ -----
          Long-term debt, excluding current installments $  363 4,796
                                                         ====== =====
</TABLE>

    In connection with the AgriBusiness' purchase of Hutson Company, Inc. in
    1997, AgriBusiness entered into a $5.0 million unsecured note payable, due
    in June 2002, bearing interest at an annual rate of 7.25%. During 2000, the
    interest rate accrued was renegotiated to fluctuate with prime, but not to
    drop below 7.25%. Prime rate was 4.75% and 9.5% at December 31, 2001 and
    2000, respectively. The note is payable on demand. The holder demanded and
    received payment in full in early 2002.

    The industrial revenue bond was issued by Decatur County, Bainbridge
    Georgia Industrial Development Authority Variable Rate Industrial
    Development Revenue Bonds Series 1985, due December 1, 2002. Interest on
    the industrial revenue bond is variable and based on short-term rates for
    tax-exempt securities (1.6% at December 31, 2001 and 4.3% at December 31,
    2000). The bond is secured by a letter of credit that is renewed annually
    by the Company.

    The Company had total amounts issued under letters of credit of $5,352 at
    December 31, 2001.
    Other notes payable include eight notes incurred for the purchase of
    various property, plant and equipment. Interest rates vary from 4.0% to
    10.3%. No individual note exceeds $175.

    Aggregate annual principal payments due under the terms of the long-term
    debt for the five fiscal years subsequent to December 31, 2001 and
    thereafter are as follows:

<TABLE>
                        <S>                      <C>
                        Year ending December 31:
                           2002................. $7,181
                           2003.................    163
                           2004.................     19
                           2005.................     20
                           2006.................     22
                           Thereafter...........    139
                                                 ------
                               Total............ $7,544
                                                 ======
</TABLE>

                                      46

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


(12) Operating Leases

    The Company leases office facilities, rail cars and various types of
    equipment under operating leases with terms ranging from three to 30 years.
    Future minimum lease payments under noncancelable operating leases as of
    December 31, 2001 are as follows:

<TABLE>
                        <S>                      <C>
                        Year ending December 31:
                           2002................. $11,446
                           2003.................   9,257
                           2004.................   6,300
                           2005.................   3,971
                           2006.................   2,426
                           Thereafter...........   2,038
                                                 -------
                               Total............ $35,438
                                                 =======
</TABLE>

    Rental expense for all operating leases was approximately $17,707, $16,883
    and $12,578 for the years ended December 31, 2001 and 2000 and the nine
    months ended December 31, 1999, respectively.

(13) Employee Benefit Plans

    (a) Retirement Plans

        The Company maintains a defined contribution Employee Savings and
        Investment Plan (ESIP) covering substantially all full-time employees
        of the Company. Participants are allowed to contribute to the ESIP up
        to 18% of their salary on a pre-tax basis, up to the maximum allowed
        under Internal Revenue Service regulations. The Company makes
        contributions to the ESIP at the discretion of the Board of Directors.
        The Company also maintains three other defined contribution plans for
        union employees under collective bargaining agreements at six
        locations. Company contributions are based on the applicable provisions
        of each plan and totaled $1,609, $1,320 and $855 to the ESIP and other
        defined contribution plans during the years ended December 31, 2001 and
        2000 and the nine months ended December 31, 1999, respectively.

    (b) 1999 Restricted Stock Purchase and Option Plan

        Upon the acquisition of the Company by RCG, RCG created the 1999
        Restricted Stock Purchase and Option Plan (herein referred to as the
        1999 Plan). Under the terms of the 1999 Plan, 200,000 shares of RCG
        common stock have been reserved for issuance in the form of restricted
        share grants to current and future employees of RCG or Royster-Clark.
        Shares issued under the 1999 Plan are subject to certain restrictions
        on transfer of shares. No common stock shares were issued under this
        plan during the year ended December 31, 2001. During the year ended
        December 31, 2000, 180,000 common stock shares were issued under this
        plan at a price equal to the fair value at date of grant.

        In addition, 35,820 shares of common stock, 13,290 shares of Senior
        Preferred Stock and 7,470 shares of Junior Preferred Stock have been
        reserved for issuance pursuant to the exercise of stock options rolled
        over from the 1992 Stock Option Plan (herein referred to as the 1992
        Plan) previously maintained by Royster-Clark. All options granted under
        the 1992 Plan were either cashed out at the

                                      47

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)

        merger consideration of $285 per share less the exercise price under
        the 1992 Plan or exchanged for an option to purchase 5.5 shares of
        Common Stock, 2.0 shares of Senior Preferred Stock and 1.1 shares of
        Junior Preferred Stock at the same exercise price as under the 1992
        Plan. At December 31, 2001, the options described above are the only
        options vested and outstanding under the 1999 Plan. No options were
        issued or exercised during the years ended December 31, 2001 and 2000
        or the nine months ended December 31, 1999.

(14) Environmental Matters

    The Company is subject to a wide variety of federal, state and local
    environmental laws and regulations. The Company has been identified as a
    potentially responsible party concerning the release of certain hazardous
    substances at five locations. While the current law potentially imposes
    joint and several liability upon each party named as a potentially
    responsible party, the Company's contribution to clean up these sites is
    expected to be limited, given the number of other companies which have also
    been named as potentially responsible parties and the nature and amount of
    cleanup involved. A number of the Company's facilities have been evaluated
    as having excess nitrates, phosphorous and pesticides in the surrounding
    soil or groundwater. In addition, several underground storage tanks have
    been removed or closed at some facilities and these sites have been
    evaluated for possible contamination. In total, cleanup of hazardous or
    potentially hazardous substances has been planned or is being performed at
    approximately 49 sites.

    In connection with the acquisitions of AgriBusiness and Royster-Clark, the
    Company obtained indemnities for certain claims related to environmental
    matters that existed or arose prior to the acquisitions. The indemnities
    related to AgriBusiness are subject to a $4,500 deductible, an overall cap
    on all indemnities of approximately $27,000, and certain time limitations.
    The indemnities related to Royster-Clark, Inc. (predecessor company) are
    subject to a deductible of $2,000, certain time limitations and an overall
    cap of $5,000 on all indemnities. In addition, Royster-Clark, Inc.
    (predecessor company) had obtained indemnities from Lebanon Chemical
    Corporation (LCC) for certain claims related to environmental matters that
    existed at sites acquired from LCC in December 1998. The Company also
    obtained indemnities from the former stockholder of Alliance for
    environmental conditions identified as of the date of acquisition.

    The Company has recorded environmental liabilities at December 31, 2001 for
    the estimated cost of cleanup efforts of identified contamination or site
    characterization, which total $3,483, and are included in other long-term
    liabilities in the accompanying consolidated balance sheets. Actual cash
    expenditures during the years ended December 31, 2001 and 2000 were $179
    and $77, respectively. These liabilities do not take into account any
    claims for recoveries from insurance or third parties and are not
    discounted. Actual costs to be incurred at identified sites in future
    periods may vary from the estimates, given inherent uncertainty in
    evaluating environmental exposures.

(15) Commitments and Contingencies

    (a) Supply Agreements

        In conjunction with the acquisition of AgriBusiness, the Company has
        entered into a 10-year supply agreement with IMC Kalium Ltd. (Kalium)
        and IMC-Agrico Company (Agrico), both of which are subsidiaries of IMC
        Global. Under the terms of the supply agreement, the Company is
        required to

                                      48

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)

        purchase (and Agrico and Kalium are required to supply) certain
        products in an amount equal to estimated normal business requirements
        of the former AgriBusiness locations. The purchase prices of the
        products covered by the agreement approximate market prices at the time
        of purchase for the majority of the products. The agreement
        automatically renews for subsequent periods of five years unless
        otherwise canceled by either party. In addition, the agreement
        specifies remedies available to the parties in the event of
        noncompliance, which include compensatory damages in the event of a
        failure to purchase (or supply) the required quantities of the covered
        products.

        The Company has commitments to purchase various other fertilizer
        materials of approximately $2,443 and $13 during the years ending
        December 31, 2002 and 2003, respectively.

    (b) Gas Contracts

        The Company enters into natural gas fixed-price and index-priced
        contracts, which range from one to five years. These index-priced
        contracts commit the Company to quantities of natural gas (daily
        MMBTUs) which are denominated under a scheduled price associated with a
        natural gas index.

        At December 31, 2001, the Company had index-priced natural gas
        contracts that extended to 2006. One of the suppliers was not in
        compliance with contract provisions, and the Company elected to
        exercise its rights under the contract to cancel the balance of the
        purchase commitments as of February 28, 2002. Future minimum long-term
        purchase commitments for natural gas contracts at December 31, 2001,
        excluding the canceled contract, are $7,219 for 2002. These commitments
        are index-priced contracts and are denominated at the cost of natural
        gas as of December 31, 2001. This price is subject to market
        fluctuations in the future, resulting in fluctuating purchase
        commitments in the future.

        In December 2000, the Company sold all its rights, title and interests
        in several fixed-priced and index-priced natural gas contracts
        resulting in a gain of $9,648. The contract rights assigned were for
        periods from mid-December 2000, when the contracts were assigned,
        through October 31, 2001, with most of the quantities relating to the
        first quarter of 2001. Amounts due under the sales agreements have been
        recorded in "other receivables" in the accompanying consolidated
        balance sheet as of December 31, 2000. The Company received all amounts
        due under these sales agreements during 2001.

   (c) Employment Contracts

        The Company has employment contracts with certain members of
        management. These employment agreements are terminable by the Company
        with or without cause. In the event that the employment agreements are
        terminated without cause and provided that executives comply with the
        confidentiality and non-competition covenants, they will be entitled to
        receive all payments as defined in the respective agreements. The
        contracts extend through April 2004 with an automatic one-year
        extension thereafter unless notice of intent not to renew is given,
        either by the Company or by the executive. If termination without cause
        had occurred as of December 31, 2001, the Company would have been
        required to pay approximately $3,800 to satisfy its obligations.

                                      49

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


   (d) Legal and Regulatory Matters

        From time to time, the Company has had claims asserted against it by
        regulatory agencies or private parties for environmental matters (see
        note 14) and has incurred obligations for investigation or remedial
        actions with respect to certain of such matters. In addition, the
        Company is subject to various claims and legal matters that have arisen
        in the ordinary course of its business. Although there can be no
        assurance as to the ultimate disposition of these matters, it is the
        opinion of the Company's management that any such claims asserted or
        obligations incurred to date will not result in a material adverse
        effect on the results of operations or financial position of the
        Company.

(16)  Condensed Financial Data of Guarantor Subsidiaries

    As discussed further in note 4, the First Mortgage Notes are guaranteed on
    a full, unconditional and joint and several basis, by each of the following
    subsidiaries of Royster-Clark, including:

          Royster-Clark Realty LLC
          Royster-Clark Resources LLC
          Royster-Clark AgriBusiness, Inc.
          Royster-Clark AgriBusiness Realty LLC
          Royster-Clark Nitrogen, Inc.
          Alliance Fertilizer of Suffolk, Inc
          Seaboard Liquid Plant Food, Inc.

    There are currently no restrictions on the ability of Royster-Clark to
    obtain funds from its guarantor subsidiaries through dividends or loans.

                                      50

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


The following tables present the condensed financial data of Royster-Clark and
its guarantor subsidiaries as of and for the years ended December 31, 2001 and
2000 and the nine months ended 1999.

As of and for the year ended December 31, 2001:
<TABLE>
<CAPTION>
                                                       Royster-Clark,  Guarantor
                                                            Inc.      subsidiaries Eliminations Consolidated
Balance Sheet Data:                                    -------------- ------------ ------------ ------------
<S>                                                    <C>            <C>          <C>          <C>
Current assets:
   Cash...............................................    $     42          955            --         997
   Trade accounts receivable, net.....................          --       73,754            --      73,754
   Other receivables..................................       4,204       42,306       (22,129)     24,381
   Inventories........................................          --      211,257           (39)    211,218
   Prepaid expenses and other current assets..........         356        1,890            --       2,246
   Deferred income taxes..............................       6,000           --            --       6,000
                                                          --------      -------      --------     -------
       Total current assets...........................      10,602      330,162       (22,168)    318,596
   Property, plant and equipment, net.................      13,354      190,091            --     203,445
   Goodwill, net......................................      12,012        4,528            --      16,540
   Deferred income taxes..............................       4,795           --            --       4,795
   Deferred financing costs, net......................      10,512           --            --      10,512
   Other assets, net..................................          75        1,922            --       1,997
   Investment in subsidiaries.........................     322,845           --      (322,845)         --
                                                          --------      -------      --------     -------
       Total assets...................................    $374,195      526,703      (345,013)    555,885
                                                          ========      =======      ========     =======
Current liabilities:
   Current installments of long-term debt.............    $      4        7,177            --       7,181
   Customer deposits..................................          --       60,900            --      60,900
   Accounts payable...................................          --      108,411       (22,129)     86,282
   Accrued expenses...................................       5,750       18,564            --      24,314
                                                          --------      -------      --------     -------
       Total current liabilities......................       5,754      195,052       (22,129)    178,677
   Senior secured credit facility.....................      89,244           --            --      89,244
   10-1/4% First Mortgage Notes.......................     200,000           --            --     200,000
   Long-term debt, excluding current installments.....          --          363            --         363
   Other long-term liabilities........................         490        5,528            --       6,018
                                                          --------      -------      --------     -------
       Total liabilities..............................     295,488      200,943       (22,129)    474,302
                                                          --------      -------      --------     -------
Stockholder's equity:
   Common stock.......................................          --           --            --          --
   Additional paid-in capital.........................      78,599      332,845      (322,845)     88,599
   Retained earnings (accumulated deficit)............         108       (7,085)          (39)     (7,016)
                                                          --------      -------      --------     -------
       Total stockholder's equity.....................      78,707      325,760      (322,884)     81,583
                                                          --------      -------      --------     -------
       Total liabilities and stockholder's equity.....    $374,195      526,703      (345,013)    555,885
                                                          ========      =======      ========     =======
</TABLE>

                                      51

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                       Royster-Clark,  Guarantor
                                                            Inc.      subsidiaries Eliminations Consolidated
Statement of Operations Data:                          -------------- ------------ ------------ ------------
<S>                                                    <C>            <C>          <C>          <C>
Net sales.............................................   $   4,204     1,016,814     (67,228)      953,790
Cost of sales.........................................         423       802,210     (46,723)      755,910
                                                         ---------     ---------     -------      --------
       Gross profit...................................       3,781       214,604     (20,505)      197,880
Selling, general and administrative expenses..........         954       192,912     (20,698)      173,168
Expenses related to Agro acquisition..................          --         4,163          --         4,163
Loss on disposal of property, plant and equipment, net         405           507          --           912
                                                         ---------     ---------     -------      --------
       Operating income...............................       2,422        17,022         193        19,637
Interest expense......................................      (2,414)      (32,481)         --       (34,895)
Gain on insurance settlement..........................          --         1,856          --         1,856
                                                         ---------     ---------     -------      --------
       Income (loss) before income taxes..............           8       (13,603)        193       (13,402)
Income tax expense (benefit)..........................           3        (4,526)         --        (4,523)
                                                         ---------     ---------     -------      --------
       Net income (loss)..............................   $       5        (9,077)        193        (8,879)
                                                         =========     =========     =======      ========

Statement of Cash Flows Data:
Net cash provided by operating activities.............   $  46,620        19,594          --        66,214
                                                         ---------     ---------     -------      --------
Cash flows from investing activities:
   Proceeds from sale of property, plant
     and equipment....................................         139         1,903          --         2,042
   Purchases of property, plant and equipment.........          --       (13,812)         --       (13,812)
                                                         ---------     ---------     -------      --------
       Net cash provided by (used in) investing
         activities...................................         139       (11,909)         --       (11,770)
                                                         ---------     ---------     -------      --------
Cash flows from financing activities:
   Proceeds from senior secured credit facility.......     349,264            --          --       349,264
   Payments on senior secured credit facility.........    (395,976)           --          --      (395,976)
   Proceeds from long-term debt.......................          --           256          --           256
   Principal payments on long-term debt...............         (47)          (78)         --          (125)
   Net decrease in customer deposits..................          --        (7,279)         --        (7,279)
                                                         ---------     ---------     -------      --------
       Net cash used in financing activities..........     (46,759)       (7,101)         --       (53,860)
                                                         ---------     ---------     -------      --------
Net increase in cash..................................          --           584          --           584
Cash at beginning of year.............................          42           371          --           413
                                                         ---------     ---------     -------      --------
Cash at end of year...................................   $      42           955          --           997
                                                         =========     =========     =======      ========
</TABLE>

                                      52

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


As of and for the year ended December 31, 2000:

<TABLE>
<CAPTION>
                                                       Royster-Clark,  Guarantor
                                                            Inc.      subsidiaries Eliminations Consolidated
Balance Sheet Data:                                    -------------- ------------ ------------ ------------
<S>                                                    <C>            <C>          <C>          <C>
Current assets:
   Cash...............................................    $     42          371            --         413
   Trade accounts receivable, net.....................          --       81,599        (1,174)     80,425
   Other receivables..................................       4,107       55,815       (21,550)     38,372
   Inventories........................................          --      240,762          (232)    240,530
   Prepaid expenses and other current assets..........         871        4,478            --       5,349
   Deferred income taxes..............................       9,329           --            --       9,329
                                                          --------      -------      --------     -------
       Total current assets...........................      14,349      383,025       (22,956)    374,418
   Property, plant and equipment, net.................      15,626      201,072            --     216,698
   Goodwill, net......................................      13,509        4,874            --      18,383
   Deferred financing costs, net......................      12,533           --            --      12,533
   Other assets, net..................................         118        1,206            --       1,324
   Investment in subsidiaries.........................     370,460           --      (370,460)         --
                                                          --------      -------      --------     -------
       Total assets...................................    $426,595      590,177      (393,416)    623,356
                                                          ========      =======      ========     =======
Current liabilities:
   Current installments of long-term debt.............    $     47        2,570            --       2,617
   Customer deposits..................................          --       68,179            --      68,179
   Accounts payable...................................          --      110,361       (22,724)     87,637
   Accrued expenses...................................       7,844       16,705            --      24,549
                                                          --------      -------      --------     -------
       Total current liabilities......................       7,891      197,815       (22,724)    182,982
   Senior secured credit facility.....................     135,956           --            --     135,956
   10-1/4% First Mortgage Notes.......................     200,000           --            --     200,000
   Long-term debt, excluding current installments.....           4        4,792            --       4,796
   Other long-term liabilities........................         490        5,118            --       5,608
   Deferred income taxes..............................       3,552           --            --       3,552
                                                          --------      -------      --------     -------
       Total liabilities..............................     347,893      207,725       (22,724)    532,894
                                                          --------      -------      --------     -------
Stockholder's equity:
   Common stock.......................................          --           --            --          --
   Additional paid-in capital.........................      78,599      380,460      (370,460)     88,599
   Retained earnings..................................         103        1,992          (232)      1,863
                                                          --------      -------      --------     -------
       Total stockholder's equity.....................      78,702      382,452      (370,692)     90,462
                                                          --------      -------      --------     -------
       Total liabilities and stockholder's equity.....    $426,595      590,177      (393,416)    623,356
                                                          ========      =======      ========     =======
</TABLE>

                                      53

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
Statement of Operations Data:                                    Royster-    Guarantor
                                                                Clark, Inc. subsidiaries Eliminations Consolidated
                                                                ----------- ------------ ------------ ------------
<S>                                                             <C>         <C>          <C>          <C>
Net sales......................................................  $   4,106    985,430      (75,684)      913,852
Cost of sales..................................................        498    782,151      (54,193)      728,456
                                                                 ---------    -------      -------      --------
       Gross profit............................................      3,608    203,279      (21,491)      185,396
Selling, general and administrative expenses...................      1,288    183,199      (21,259)      163,228
Loss on disposal of property, plant and equipment, net.........         43        573           --           616
                                                                 ---------    -------      -------      --------
       Operating income (loss).................................      2,277     19,507         (232)       21,552
Interest expense...............................................     (2,269)   (35,732)          --       (38,001)
Gain on sale of natural gas contracts..........................         --      9,648           --         9,648
                                                                 ---------    -------      -------      --------
       Income (loss) before income taxes.......................          8     (6,577)        (232)       (6,801)
Income tax expense (benefit)...................................          2     (2,043)          --        (2,041)
                                                                 ---------    -------      -------      --------
       Net income (loss).......................................  $       6     (4,534)        (232)       (4,760)
                                                                 =========    =======      =======      ========

Statement of Cash Flows Data:
Net cash provided by (used in) operating activities............  $ (43,792)    28,704           --       (15,088)
                                                                 ---------    -------      -------      --------
Cash flows from investing activities:
   Proceeds from sale of property, plant and
     equipment.................................................        159        350           --           509
   Purchases of property, plant and equipment..................         --    (18,082)          --       (18,082)
   Acquisitions, net of cash acquired..........................         --    (26,600)          --       (26,600)
                                                                 ---------    -------      -------      --------
       Net cash provided by (used in) investing activities.....        159    (44,332)          --       (44,173)
                                                                 ---------    -------      -------      --------
Cash flows from financing activities:
   Proceeds from senior secured credit facility................    410,166         --           --       410,166
   Payments on senior secured credit facility..................   (366,756)        --           --      (366,756)
   Principal payments on long-term debt........................        (79)    (4,139)          --        (4,218)
   Net increase in customer deposits...........................         --     15,812           --        15,812
                                                                 ---------    -------      -------      --------
       Net cash provided by financing activities...............     43,331     11,673           --        55,004
                                                                 ---------    -------      -------      --------
Net decrease in cash...........................................       (302)    (3,955)          --        (4,257)
Cash at beginning of year......................................        344      4,326           --         4,670
                                                                 ---------    -------      -------      --------
Cash at end of year............................................  $      42        371           --           413
                                                                 =========    =======      =======      ========
</TABLE>

                                      54

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


For the nine months ended December 31, 1999:

<TABLE>
<CAPTION>
                                                       Royster-Clark,  Guarantor
                                                            Inc.      subsidiaries Eliminations Consolidated
Income Statement Data:                                 -------------- ------------ ------------ ------------
<S>                                                    <C>            <C>          <C>          <C>
Net sales.............................................   $  32,209      714,470      (31,193)      715,486
Cost of sales.........................................         119      570,820           --       570,939
                                                         ---------      -------      -------      --------
       Gross profit...................................      32,090      143,650      (31,193)      144,547
Selling, general and administrative expenses..........      28,918      112,164      (31,193)      109,889
Loss on disposal of property, plant and equipment, net         192          134           --           326
                                                         ---------      -------      -------      --------
       Operating income...............................       2,980       31,352           --        34,332
Interest expense......................................      (2,816)     (20,334)          --       (23,150)
                                                         ---------      -------      -------      --------
       Income before income taxes.....................         164       11,018           --        11,182
Income tax expense....................................          67        4,492           --         4,559
                                                         ---------      -------      -------      --------
       Net income.....................................   $      97        6,526           --         6,623
                                                         =========      =======      =======      ========

Statement of Cash Flows Data:
Net cash provided by operating activities.............   $  27,375       69,715           --        97,090
                                                         ---------      -------      -------      --------
Cash flows from investing activities:
   Proceeds from sale of property, plant and
     equipment........................................          --          970           --           970
   Purchases of property, plant and equipment.........          --      (19,752)          --       (19,752)
   Acquisitions, net of cash acquired.................    (259,676)          --           --      (259,676)
                                                         ---------      -------      -------      --------
       Net cash used in investing activities..........    (259,676)     (18,782)          --      (278,458)
                                                         ---------      -------      -------      --------
Cash flows from financing activities:
   Proceeds from senior secured credit facility.......     340,788           --           --       340,788
   Payments on senior secured credit facility.........    (247,825)          --           --      (247,825)
   Proceeds from issuance of First Mortgage Notes.....     200,000           --           --       200,000
   Capital contribution by RCG........................      23,088           --           --        23,088
   Long-term debt refinanced..........................     (67,750)          --           --       (67,750)
   Principal payments on long-term debt...............          --         (154)          --          (154)
   Net increase in customer deposits..................          --      (46,474)          --       (46,474)
   Payment of deferred financing costs................     (15,677)          --           --       (15,677)
                                                         ---------      -------      -------      --------
       Net cash provided by (used in) financing
         activities...................................     232,624      (46,628)          --       185,996
                                                         ---------      -------      -------      --------
Net increase in cash..................................         323        4,305           --         4,628
Cash at beginning of period...........................          21           21           --            42
                                                         ---------      -------      -------      --------
Cash at end of period.................................   $     344        4,326           --         4,670
                                                         =========      =======      =======      ========
</TABLE>

                                      55

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


(17) Fair Value of Financial Instruments

    The following methods and assumptions were used to estimate the fair value
    of the Company's financial instruments at December 31, 2001 and 2000. FASB
    Statement No. 107, Disclosures about Fair Value of Financial Instruments,
    defines the fair value of a financial instrument as the amount at which the
    instrument could be exchanged in a current transaction between willing
    parties.

    Cash, trade accounts receivable, other receivables, notes receivable,
    accounts payable customer deposits, and accrued expenses:  The carrying
    amounts approximate fair value because of the short maturity of those
    instruments.

    Long-term debt:  The fair value of the Company's long-term debt is
    estimated by discounting the future cash flows of each instrument at rates
    currently offered to the Company for similar debt instruments of comparable
    maturity by the Company's bankers. Based on these criteria, the carrying
    amounts approximate fair value.

    Senior secured credit facility:  The carrying amount of the Company's
    senior secured credit facility approximates fair value due to the variable
    interest rate charged, as well as changes in the rate charged based on the
    Company's leverage.

    First Mortgage Notes:  The fair value of the Company's first mortgage notes
    at December 31, 2001 was $130,000 based on publicly available trade
    information near December 31, 2001.

(18) Derivative Instruments and Hedging Activities

    The Company has commodity derivatives to manage its exposure to commodity
    price fluctuations related to its grain operations. Currently, the Company
    does not enter into derivative instruments for any purpose other than fair
    value hedging purposes. That is, the Company does not speculate using
    derivative instruments.

    The Company maintains a commodity-price risk management strategy that uses
    derivative instruments to minimize significant, unanticipated earnings
    fluctuations caused by commodity-price volatility related to grain
    operations.

    The Company periodically enters into grain option contracts for a portion
    of its anticipated purchases, to hedge the price risk associated with
    fluctuations in market prices. The option contracts limit the unfavorable
    effect that price increases will have on grain purchases. All of the
    Company's option contracts have been designated as fair value hedges.

    Changes in the fair value of grain future contracts designated as hedging
    instruments and that effectively offset the variability of fair value
    associated with anticipated purchases of grain are reported in cost of
    sales.

    The Company assesses the effectiveness of a hedge with a grain future
    contract based on changes, in the future contract's intrinsic value, the
    change in the time value of the contract is excluded from the assessment of
    hedge effectiveness and recorded in cost of goods sold. For the year ended
    December 31, 2001, the Company recognized $532 in net gains, which
    represented the total planned and unplanned ineffectiveness of commodity
    fair value hedges.

                                      56

<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                       December 31, 2001, 2000 and 1999
               (Dollars in thousands, except per share amounts)


    As of December 31, 2001, there were no deferred gains on derivative
    instruments accumulated in other comprehensive income. The Company hedges
    exposures to the variability of future value for commodity price risk for
    periods of 6 to 12 months. There were no fair value hedges discontinued
    during the year.

(19) Expenses related to Agro Acquisition

    The Company entered into a purchase agreement to acquire certain assets of
    Agro Distribution, LLC (Agro) on June 14, 2001. The Company and Agro could
    not reach agreement on certain key elements of the proposed transaction and
    terminated the purchase agreement on October 17, 2001. The Company incurred
    costs associated with the acquisition of $4,163 for legal, accounting and
    other direct costs associated with the proposed acquisition. With the
    termination of the transaction, these costs yield no future benefit and
    were written off during the fourth quarter of 2001. These expenses are
    included in "expenses related to Agro acquisitions" in the accompanying
    consolidated statements of operations.

(20) Quarterly Financial Information - Unaudited

    The following table sets forth certain items from our unaudited statements
    of operations for each quarter of 2001 and 2000. The unaudited information
    has been prepared on the same basis as the audited consolidated financial
    statements appearing elsewhere in this report and includes all adjustments,
    consisting only of normal recurring adjustments, which management considers
    necessary for a fair presentation of the financial data shown. The
    operating results for any quarter are not necessarily indicative of results
    for any future period.

<TABLE>
<CAPTION>
                                               Quarter ended
                               --------------------------------------------
                               March 31, June 30, September 30, December 31,
                                 2001      2001       2001          2001
                               --------- -------- ------------- ------------
   <S>                         <C>       <C>      <C>           <C>
   2001:
      Net sales............... $166,097  534,633     120,454      132,606
      Gross profit............   27,848  112,221      22,673       35,138
      Operating income (loss).  (15,846)  62,794     (16,436)     (10,875)
      Net income (loss).......  (15,545)  32,808     (15,658)     (10,484)

                                               Quarter ended
                               --------------------------------------------
                               March 31, June 30, September 30, December 31,
                                 2000      2000       2000          2000
                               --------- -------- ------------- ------------
   2000:
      Net sales............... $173,350  476,410     125,346      138,746
      Gross profit............   31,258   99,920      25,126       29,092
      Operating income (loss).   (6,349)  54,706     (15,294)     (11,511)
      Net income (loss).......   (8,819)  26,847     (15,081)      (7,707)
</TABLE>

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

   None.

                                      57

<PAGE>

                                   PART III

Item 10.  Directors and Executive Officers of the Registrant

   The following table provides information about our executive officers and
directors.

<TABLE>
<CAPTION>
  Name                   Age                     Position
  ----                   ---                     --------
  <C>                    <C> <S>
  Francis P. Jenkins, Jr 59  Chairman of the Board and Chief Executive Officer
  G. Kenneth Moshenek... 50  President and Chief Operating Officer
  Walter R. Vance....... 45  Managing Director, Finance
  Randolph G. Abood..... 51  Director
  Charles E. Corpening.. 36  Director
  Thomas F. McWilliams.. 58  Director
</TABLE>

   Francis P. Jenkins, Jr. is the Chairman of the Board and Chief Executive
Officer of Royster-Clark, and has been Chairman and Chief Executive Officer of
Royster-Clark Group since January 1999. From 1994 to 1999, Mr. Jenkins served
as Chairman of the Board and Chief Executive Officer of Royster-Clark. From
1992 until 1994, Mr. Jenkins served as a director and Chairman of the Audit
Committee for Royster-Clark. From 1988 to 1992, he served as Chairman of the
Board of Royster-Clark. From 1979 to 1988, Mr. Jenkins was employed by The
First Boston Corporation where he was one of the four members of the Executive
Committee, co-managed First Boston's Equity Capital Investments and was the
Principal Financial Officer. Prior to that position, he had responsibility for
all security sales, trading and research, as well as holding positions as a
Managing Director and a member of the Management Committee. Mr. Jenkins
currently serves on the Board of Trustees of Babson College, as the Chairman of
its Alumni and Development Committee and as a member of the Executive Committee
of the Board.

   G. Kenneth Moshenek is the President and Chief Operating Officer of
Royster-Clark. Mr. Moshenek has served as President of Royster-Clark since
December 1997, has served as Chief Operating Officer since 1995 and was a
director from August 1997 until April 1999. From August 1997 until April 1999
he served as Chief Investment Officer of Royster-Clark. Prior to that he held
several positions during his tenure with Royster-Clark including Senior Vice
President of Sales and Marketing, from September 1994 until July 1995, Vice
President and Divisional Sales Manager from 1992 until September 1994 and a
Division Manager from 1990 to 1992. Mr. Moshenek joined W.S. Clark & Sons, Inc.
in 1981. Mr. Moshenek started his career in the fertilizer industry in 1976
when he joined Smith Douglass, Inc., a division of Borden. Mr. Moshenek
currently serves on the Board of Directors of The Fertilizer Institute and is a
member of the Board's Executive Committee. He also serves as a member of the
Board of Directors of the Foundation for Agronomic Research and holds board
seats with other industry-related associations.

   Walter R. Vance is the Managing Director of Finance. From 1995 until 1999,
Mr. Vance served as Vice President and Chief Financial Officer of Royster-Clark
and from 1992 until 1995, he was Vice President and Corporate Controller. Mr.
Vance joined Royster-Clark in 1991 where he served as Controller until 1992.
From 1987 until 1991, he was the Controller of Northwest Hardware. Prior to
1987, he served as Senior Accountant of Royster-Clark for three years.

   Randolph G. Abood is a Director of Royster-Clark and has been a Director of
Royster-Clark Group since January 1999. Mr. Abood is a self-employed attorney,
and from 1994 until 1998, Mr. Abood served as General Counsel for
Royster-Clark. From 1976 until 1996, Mr. Abood practiced law with the firm of
Satterlee Stephens Burke & Burke LLC and its predecessor firm. He became a
partner of the firm in 1983 and head of its tax department. Mr. Abood is also
the manager and owner of The Ninigret Group, L.C., a Utah limited liability
company that develops, constructs and co-owns real estate, including Ninigret
Park, a 178 acre business park in Salt Lake City. Mr. Abood also serves on the
Board of Directors of Equity Oil Company.

                                      58

<PAGE>

   Charles E. Corpening is a Director of Royster-Clark and has been a Director
of Royster-Clark Group since March 2000. Mr. Corpening is a vice president of
Citicorp Venture Capital Ltd. ("CVC") since 1994. Prior to joining CVC, Mr.
Corpening was with Roundtree Capital Corporation, a private investment firm,
the Rockefeller Group and the investment-banking department of Paine Webber,
Inc. Mr. Corpening serves on the board of directors of Fabristeel Products,
Inc., The National Machinery Company, Pursell Industries, Inc. and Chase
Industries, Inc.

   Thomas F. Mcwilliams is a Director of Royster-Clark and has been a Director
of Royster-Clark Group since January 1999. Mr. McWilliams is a Managing
Director of Citicorp Venture Capital Ltd. and has served on its Investment
Committee since 1984. He is also a Vice President and a member of the
Investment Committee for 399 Venture Partners, Inc. He serves on the Boards of
Chase Industries, Pen-Tab Industries, Ergo Science, Airxcel, Inc., HydroChem
Holding, Inc., MMI Products, Inc., along with various other companies which
have no public securities outstanding. Mr. McWilliams served as a director of
Rax Restaurants when it filed for bankruptcy in 1996.

   Other key employees include:

<TABLE>
<C>                  <C> <S>
Max Baer............ 69  Sr. Managing Director, Materials and Purchasing
Kenneth W. Carter... 56  Managing Director, Human Resources
John Diesch......... 44  Managing Director, Nitrogen Division
Gary L. Floyd....... 47  Managing Director, Crop Protection and Seed
Michael J. Galvin... 38  Managing Director, Credit and Farm Financing
Larry D. Graham..... 49  Managing Director, Rainbow Manufacturing
Gregg Hutchison..... 44  Managing Director, Logistics
Paul M. Murphy...... 57  Managing Director, Financial Planning
Robert L. Paarlberg. 56  Managing Director, Information Technology
R. Macon Parker III. 54  Managing Director, Asset Allocation
J. Billy Pirkle..... 40  Managing Director, Environmental, Health and Safety
Robert M. Rainey.... 42  Managing Director, Sales and Marketing Western Division
Brad Rivers......... 37  Managing Director, Sales and Marketing Central Division
Randy Springs....... 51  Managing Director, Sales and Marketing Eastern Division
Michelle J. Weathers 46  Managing Director, Materials and Purchasing
</TABLE>

   Max Baer is the Senior Managing Director of Materials and Purchasing. Mr.
Baer was promoted to Senior Managing Director in 2001. From 1995 until 1999,
Mr. Baer served as Chief Purchasing Officer for Royster-Clark and as a director
of Royster-Clark since 1997. From 1992 until 1995, he served as Chief
Purchasing Officer where he assumed leadership of Royster-Clark's fertilizer
materials procurement and conducted its international trading activities. From
1978 until 1992, Mr. Baer served as Vice President of International Marketing.
Mr. Baer began his career with Smith Douglass, Inc. where he served in the
fertilizer materials purchasing group. Mr. Baer has worked in the fertilizer
industry for 40 years.

   Kenneth W. Carter is the Managing Director of Human Resources. From 1997 to
1999, Mr. Carter served as the Vice President of Human Resources for
AgriBusiness. Prior to joining AgriBusiness, he served as Vice President of
Human Resources from 1994 until 1997 for Sunbeam Outdoor Products and from 1990
to 1994 served as the Vice President of Human Resources and Corporate
Compensation and Benefits Manager for Litton Industries (Material Handling
Systems).

   John Diesch is the Managing Director, Nitrogen Division. From 1998 to 1999,
Mr. Diesch served as the Vice President and General Manager of Nitrogen
Production and Distribution for AgriBusiness. He also served as the Manager for
the Cincinnati, Ohio Nitrogen Plant and Nitrogen Terminals from 1996 until 1998
and joined Vigoro Industries, Inc. in 1991 as the Cincinnati, Ohio Plant
Manager. Prior to joining Vigoro Industries, Inc.,

                                      59

<PAGE>

Mr. Diesch held several positions in the chemical industry, including Plant
Manager, Production Manager and Process Engineer.

   Gary L. Floyd is the Managing Director of Crop Protection and Seed. From
1992 to 1999, Mr. Floyd managed Royster-Clark's Crop Protection business and
served as the Vice President of Crop Protection and Seed from 1997 to 1999. He
also served as a District Manager from 1990 to 1992 and Manager of Planning and
Development, Crop Protection from 1987 until 1990. Mr. Floyd began his career
in the fertilizer and chemical industry as a North Carolina Agricultural
Extension Agent in 1980 and joined Ciba-Geigy's agricultural division in 1984
as a Sales Representative. Mr. Floyd is a member and Past President of the
North Carolina Crop Protection Association and a member of the Southern Crop
Protection Association.

   Michael J. Galvin is the Managing Director of Credit and Farm Financing.
From 1996 until 1999, Mr. Galvin served as Vice President and General Credit
Manager of Royster-Clark. Prior to 1996, Mr. Galvin was a Vice President and
Regional Market Manager for Centura Bank. Mr. Galvin began his career in 1985
as a national bank examiner with the Comptroller of the Currency's office. Mr.
Galvin has over 14 years experience in banking and credit. He is currently a
member of the National Association of Credit Managers Atlantic Agricultural
Conference.

   Larry D. Graham is the Managing Director of Rainbow Production. From 1996
until 1999, Mr. Graham was employed by AgriBusiness first serving as Senior
Vice President with the Rainbow Division and then Senior Vice President--Sales.
From 1994 until 1996, he served as General Manager--Rainbow. From 1977 until
1994, he served in various positions with IMC Global, including Area Manager,
Area Sales Manager and Sales Supervisor.

   Gregg Hutchison is the Managing Director of Logistics. Mr. Hutchison joined
Royster-Clark in early 2000. From 1994 to 1999, Mr. Hutchison served as the
Manager of Logistics with Hydro-Agri NA in Tampa, Florida. From 1981 to 1994
Mr. Hutchison worked for Shipyard River Terminal in Charleston, South Carolina.

   Paul M. Murphy is the Managing Director of Financial Planning. From 1996
until 1999, he served as Vice President of Planning and Analysis and Secretary
of Royster-Clark. From 1992 until 1996, he served as a Divisional Controller of
Royster-Clark. From 1981 until 1992, Mr. Murphy served several companies in
Europe and the United States and from 1969 until 1981, he was at General
Electric, where he served in a lead financial and accounting role for GE's
Information Services business in Europe.

   Robert L. Paarlberg is the Managing Director of Information Technology. From
1997 to 1999, Mr. Paarlberg served as Director of Information Systems for
AgriBusiness. From 1979 to 1997, he held varying management and technical
positions with AgriBusiness and its predecessors, including Infrastructure
Architect, Manager of Financial Systems, Manager of Microcomputer and
Telecommunication Development and Senior Analyst. Prior to joining
AgriBusiness, Mr. Paarlberg was a financial internal auditor for various
companies. He has served on the Corporate Advisory Board of PC Week.

   R. Macon Parker III is the Managing Director of Asset Allocation. Mr. Parker
was promoted to the newly created position of Managing Director of Asset
Allocation in 2000. Mr. Parker joined the Company in 1997 as a vice-president
of marketing and has served in various roles in marketing, sales and
administrative duties from 1999 to 2000. From 1985 to 1997 he held a position
of sales representative for Western-Ag Minerals Company. Prior to 1985 he held
several positions of increasing responsibility in several fertilizer industry
related companies.

   J. Billy Pirkle is the Managing Director of Environmental, Health and
Safety. From 1996 until 1999, Mr. Pirkle served as the Southeast Environmental
Administrator for AgriBusiness. From 1990 to 1996 he served as Quality Control
Coordinator and Safety Administrator for the Rainbow Division of IMC Global.
Prior to joining IMC Global, Mr. Pirkle served as Plant Manager for Simplex
Nails from 1987 until 1990 and as the Quality Control Manager for Interface
Flooring from 1985 until 1987.

                                      60

<PAGE>

   Robert M. Rainey is the Managing Director of Sales and Marketing for the
Western Division. From April 1999 to August 2000 Mr. Rainey served as Director
of Sales in Illinois and Indiana. He served as Marketing Manager for
AgriBusiness from 1996 to 1999. From 1985 - 1996 he served with AgriBusiness in
varying management and sales positions ranging from Wholesale Account Executive
to Farmarket Manager to EHS Coordinator. Mr. Rainey began his career in 1982 as
Agronomy manager with Cargill, Inc. in Northern Indiana. Mr. Rainey also serves
on the Board of Directors for the Agricultural Retailers Association.

   Brad Rivers is the Managing Director of Sales and Marketing for the Central
Division. From April 1999 to August 2000, he served as Director of Sales for
the Southern Ohio Region. He served as Marketing Manager for Agribusiness from
1994 to 1999. Mr. Rivers began his career in 1982 working in various positions
with Mid Ohio Chemical Company and in 1993, he was named a sales supervisor.

   Randy Springs is the Managing Director Sales and Marketing, Eastern
Division. In 2000, Mr. Springs was promoted from Director of Sales for the
state of South Carolina and the southeastern region of North Carolina, to his
current position. From 1997 until 1999, he served as Sales Director for South
Carolina. Mr. Springs joined Royster-Clark in 1979, serving as a retail
location manager in Hemingway, South Carolina, until his promotion in 1997 to
Sales Director.

   Michelle J. Weathers is the Managing Director of Materials and Purchasing.
In July 2001, Ms. Weathers was promoted from Buyer - Materials to her current
position where she had served from January of 2000 until July of 2001. Ms.
Weathers served as Account Manager for Indiana for AgriBusiness from 1997 until
January 2000. In 1997 when AgriBusiness purchased Hutson Co., Inc. she had
served as Sales Supervisor of Northern Region since 1987.

Item 11.  Executive Compensation.

   The directors do not receive any compensation for their services as
directors or for expenses incurred attending meetings. Directors are elected
annually to serve until the next annual meeting or until their successors have
been elected and qualified. The stockholders have entered into stockholders'
agreement governing the election of directors. The following table summarizes
the compensation paid or accrued for the fiscal year ended December 31 to our
executive officers.

                          SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                        Other annual      All Other
Name and Principal Position    Year Salary $ Bonus $ Compensation (1) $ Compensation $
---------------------------    ---- -------- ------- ------------------ --------------
<S>                            <C>  <C>      <C>     <C>                <C>
Francis P. Jenkins, Jr.,...... 2001 499,990  200,000           --           50,000(2)
   Chairman and Chief          2000 499,990  140,000        1,200          100,000(2)
   Executive Officer           1999 431,051       --          800               --
G. Kenneth Moshenek,.......... 2001 349,981   75,000       11,086
   President and Chief         2000 349,981  100,000        4,208               --
   Operating Officer           1999 349,983       --        4,300           77,740(3)
Walter R. Vance,.............. 2001 170,007   40,000        9,188
   Managing Director, Finance  2000 170,007   47,500        2,575               --
                               1999 170,005       --        3,067           30,026(3)
</TABLE>
--------
(1) Includes employer matching contributions from our 401(K) Plan and auto
    allowance of $7,700 $1,200 and $800 for each individual in 2001, 2000 and
    1999, respectively.
(2) Represents $50,000 for 2001 and $100,000 for 1999 and 2000 for life
    insurance policy described below which was paid in 2001 and 2000,
    respectively.
(3) Represents taxable moving expenses for Mr. Moshenek and Mr. Vance.

                                      61

<PAGE>

Employment Agreements

   In 1999 Mr. Jenkins entered into an employment agreement with the Company's
parent, Royster-Clark Group, and with the Company, to serve as Chief Executive
Officer ("CEO"). The agreement provides for an annual base salary of $499,990,
subject to annual merit increases as determined by the Royster-Clark Group
Board of Directors.

   In addition to the annual base salary, Mr. Jenkins will be entitled to:

  .   participate in an annual performance bonus plan based on individual
      criteria and/or executive incentive programs to be determined from time
      to time by the Royster-Clark Group Board of Directors and

  .   receive standard company benefits provided to executive officers from
      time to time.

   In addition to standard company benefits, Royster-Clark Group has agreed to
provide up to $50,000 per year to Mr. Jenkins to obtain a life insurance policy
for the benefit of his wife and family.

   The term of Mr. Jenkins's agreement is five years subject to automatic
renewal for successive one-year terms unless, in each case, either the
executive or the Company gives prior notice of non-renewal.

   The employment agreement is terminable by Royster-Clark Group with or
without cause. In the event that the employment agreement is terminated without
cause and provided that Mr. Jenkins complies with the confidentiality and
non-competition covenants, he will be entitled to receive all payments due as
base salary during the remainder of his employment term. Mr. Jenkins is subject
to a non-competition covenant during the term of his agreement and continues
for two years after his agreement expires in April of 2004.

   In 2000 Mr. Moshenek and Mr. Vance each finalized an employment agreement
with the Company. Mr. Moshenek is to serve as President and Chief Operating
Officer and Mr. Vance as Managing Director-Finance. The agreements for Mr.
Moshenek and Mr. Vance provides for an annual base salary of $350,000 and
$170,000, respectively, subject to annual merit increases as determined by the
CEO of the Company.

   In addition to the annual base salary, Mr. Moshenek and Mr. Vance will be
entitled to:

  .   Participate in an annual performance bonus plan based on individual
      criteria and/or executive incentive programs to be determined from time
      to time by the Company, its Board of Directors or Royster-Clark Group
      Inc. and

  .   Receive standard company benefits provided to executive officers from
      time to time.

   The term of Mr. Moshenek's and Mr. Vance's agreement expire in April of
2004, subject to automatic renewal for successive one-year terms unless, in
each case, either the executives or the Company gives prior notice of
non-renewal.

   The employment agreements are terminable by the Board of Directors with or
without cause. In the event that the employment agreement is terminated without
cause and provided that Mr. Moshenek and Mr. Vance comply with the
confidentiality and non-competition covenants, they will be entitled to receive
all payments due as base salary during the remainder of their employment term.
They are subject to a non-competition covenant during the term of their
agreements and continue for one year after their agreement expires in April
2004.

   On January 16, 2001 the Company and Mr. Fred Sharp III entered into a
termination and consulting agreement which terminates the employment agreement
entered into July of 1999. Mr. Sharp has ceased to be a Managing Director and
Assistant Secretary of the Company and Royster-Clark Group, Inc but remained an
employee in an internal consultant status. The agreement provides for payments
through July 2004 and includes covenant not to compete and non-interference
clauses. Royster-Clark Group and the Company expect to enter into employment
agreements with other key employees in the future as needed.

                                      62

<PAGE>

Employee Benefits

  Retirement Plans

   The Company maintains a defined contribution Employee Savings and Investment
Plan (ESIP) covering substantially all full-time employees of the Company.
Participants are allowed to contribute to the ESIP up to 18% of their salary on
a pre-tax basis, up to the maximum allowed under Internal Revenue Service
regulations. The Company makes contributions to the ESIP at the discretion of
the Board of Directors. The Company also maintains three other defined
contribution plans for union employees under collective bargaining agreements
at seven locations covering approximately 215 employees. Company contributions
are based on the applicable provisions of each plan.

  1999 Restricted Stock Purchase and Option Plan

   Upon the acquisition of the Company by RCG, RCG created the 1999 Restricted
Stock Purchase and Option Plan (herein referred to as the 1999 Plan). Under the
terms of the 1999 Plan, 200,000 shares of RCG common stock have been reserved
for issuance in the form of restricted share grants to current and future
employees of RCG or Royster-Clark. Shares issued under the 1999 Plan are
subject to certain restrictions on transfer of shares including the right of
Royster-Clark Group to repurchase shares upon termination of a stockholder's
employment prior to the fifth anniversary of the closing, at a formula price.
During the year ended December 31, 2000, 180,000 common stock shares were
issued under this plan at a price equal to the fair value at date of grant. No
common shares were issued under this plan during the year ended December 31,
2001.

   In addition, 35,820 shares of Common Stock, 13,290 shares of Senior
Preferred Stock and 7,470 shares of Junior Preferred Stock have been reserved
for issuance pursuant to the exercise of stock options rolled over from the
1992 Stock Option Plan (herein referred to as the 1992 Plan) previously
maintained by Royster-Clark. All options granted under the 1992 Plan were
either cashed out at the merger consideration of $285 per share less the
exercise price under the 1992 Plan or exchanged for an option to purchase 5.5
shares of Common Stock, 2.0 shares of Senior Preferred Stock and 1.1 shares of
Junior Preferred Stock at the same exercise price as under the 1992 Plan. At
December 31, 2001, the options described above are the only options vested and
outstanding under the 1999 Plan. No options were issued or exercised during the
years ended December 31, 2001 and 2000.

  Stock Options

   The following table lists as of December 31, 2001, the number of shares of
common and preferred stock underlying options held by the named executive
officers and the value of unexercised in-the-money options:

<TABLE>
<CAPTION>
                                                        Number of shares
                                   Shares                 of Underlying         Value of Unexercised
                                  Acquired             Unexercised Options     In-The-Money Options(1)
                                     on     Value   ------------------------- -------------------------
                                  Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
                                  -------- -------- ----------- ------------- ----------- -------------
<S>                               <C>      <C>      <C>         <C>           <C>         <C>
Francis P. Jenkins, Jr...........    --       --          --         --        $     --        --
G. Kenneth Moshenek..............
   Class A Common Stock..........    --       --      17,792         --
   Series A Preferred Stock......    --       --       6,612         --
   Series B Preferred Stock......    --       --       3,715         --
   Aggregate value of securities.                                               475,764        --
Walter R. Vance..................    --       --                     --
   Class A Common Stock..........    --       --       4,720         --
   Series A Preferred Stock......    --       --       1,753
   Series B Preferred Stock......    --       --         986
   Aggregate value of securities.                                              $119,250        --
</TABLE>
--------
(1) Because there is no public market for the Company's stock, management has
    used the original exercise prices to determine the value of the unexercised
    in-the-money options. However, there can be no assurance that this
    methodology accurately reflects the intrinsic value of such options.

                                      63

<PAGE>

Board of Directors Interlocks and Insider Participation

   No director has any direct or indirect material interest in or relationship
with the Company other than stockholdings as set forth below in "Item 12,
Security Ownership of Beneficial Owners and Management" and as related to their
position as a director. No officer or other employee of the Company served on
the board of directors of any other entity, where any officer or director of
such entity also served on Company's Board.

Report on Executive Compensation

   The Company has no Compensation Committee. The Board of Directors ("Board")
performs the functions of the Compensation Committee as a whole. The following
Executive Officers participated in the Board's deliberations on Executive
Officer Compensation: Francis P. Jenkins Jr.

   Management presented a proposal for the Board to evaluate concerning
executive compensation during 2001. The Board has not made a decision
concerning this issue. In the absence of a governing policy, the Board
determined compensation for the chief executive officer by taking into
consideration Mr. Jenkins' contribution to the management of the Company and to
persons with comparable experience and responsibilities.

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

Principal Shareholders

   All of the outstanding capital stock of the Company is owned by
Royster-Clark Group. The following table provides information about the
beneficial ownership of the Royster-Clark Group common and preferred stock as
of the December 31, 2001 by (1) each person or entity who owns five percent or
more of the common or preferred stock, (2) each of our directors who is a
stockholder, (3) our Chief Executive Officer and the other executive officers
named in "ITEM 11 Executive Compensation" above who are stockholders, and (4)
all of our directors and executive officers as a group.

                                      64

<PAGE>

<TABLE>
<CAPTION>
                                                           Number and Percent of Shares
                                   ---------------------------------------------------------------------------
                                      Royster-Clark Group Common Stock     Royster-Clark Group Preferred Stock
                                   --------------------------------------  -----------------------------------
                                      Class A (1)         Class B (2)           Series A          Series B
       Name and Address of         -----------------  -------------------  -----------------  ----------------
        Beneficial Owners          Number     Percent  Number      Percent Number     Percent Number    Percent
        -----------------          -------    ------- ---------    ------- -------    ------- ------    -------
<S>                                <C>        <C>     <C>          <C>     <C>        <C>     <C>       <C>
399 Venture Partners, Inc (3)..... 299,761     31.7%  1,025,514     83.3%  395,104     63.7%      --      0.0%
   399 Park Avenue
   New York, New York 10043
CCT Partners VI, L.P. (3).........  52,899      5.6%    180,973     14.7%   69,724     11.2%      --      0.0%
   399 Park Avenue
   New York, New York 10043
Francis P. Jenkins, Jr............ 355,638     37.7%         --      0.0%  110,032     17.7%  62,114     75.4%
   c/o Royster-Clark, Inc.
   600 Fifth Avenue 25th Floor
   New York, New York 10020
G. Kenneth Moshenek...............  59,727(4)   6.3%         --      0.0%    7,309(4)   1.2%   4,108(4)   5.0%
   c/o Royster-Clark, Inc.
   999 Waterside Drive Suite 800
   Norfolk, Virginia 23510
Walter Vance......................  23,213(5)   2.5%         --      0.0%    2,111(5)   0.3%   1,188(5)   1.4%
   c/o Royster-Clark, Inc.
   6 Executive Dr
   Collinsville, Illinois 62234
Thomas F. McWilliams.............. 355,596(6)  37.7%  1,216,532(6)  98.8%  468,698(6)  75.5%      --      0.0%
   c/o 399 Venture Partners, Inc.
   399 Park Avenue
   New York, New York 10043
Charles E. Corpening.............. 352,843(7)  37.4%  1,207,115(7)  98.0%  465,070(7)  75.0%      --      0.0%
   c/o 399 Venture Partners, Inc.
   399 Park Avenue
   New York, New York 10043
Randolph G. Abood.................  35,925(8)   3.8%         --      0.0%    9,467(8)   1.5%   5,333(8)   6.5%
   c/o Royster-Clark, Inc.
   600 Fifth Avenue 25th Floor
   New York, New York 10020
All directors and executive
  officers as a group (6 persons). 830,282     87.9%  1,217,160     98.8%  597,859     96.4%  72,743     88.3%
</TABLE>
--------
(1) All percentages do not give effect to the shares of Royster-Clark Group
    Class A issuable upon conversion of Royster-Clark Group Class B Common
    Stock. See " - Royster-Clark Group Common Stock."
(2) Does not include shares of Royster-Clark Group Class B Common Stock
    issuable upon conversion of Royster-Clark Group Class A Common Stock. See "
    - Royster-Clark Group Common Stock."
(3) The general partner of CCT Partners VI, L.P. is the chairman of 399 Venture
    Partners, Inc.
(4) Includes 17,792 shares of Common Stock, 6,612 shares of Series A and 3,715
    shares of Series B Preferred Stock subject to options that are currently
    exercisable.
(5) Includes 4,720 shares of Common Stock, 1,753 shares of Series A and 986
    shares of Series B Preferred Stock subject to options that are currently
    exercisable.
(6) Includes the following: a) shares of Class A and B Common and Series A
    Preferred stock of Royster-Clark Group owned by 399 Venture Partners, Inc.,
    of which Mr. McWilliams is a managing director, all of which Mr. McWilliams
    disclaims beneficiary ownership; b) shares of Class A and B Common and
    Series A Preferred stock of Royster-Clark Group owned by CCT Partners VI,
    L.P., of which Mr. McWilliams is a limited partner without the power to
    dispose of the securities; c) 2,936 shares of Class A and 10,045 shares of
    Class B Common stock owned by Alchemy, L.P. of which Mr. McWilliams is the
    general partner with

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<PAGE>

   the power to vote and dispose of the securities and d) 3,870 shares of
   Series A Preferred stock owned by the Thomas F. McWilliams Flint Trust,
   Jeanne Blasberg, Trustee, of which Mr. McWilliams is beneficiary and has the
   limited ability to dispose of the stock.
(7) Includes the following: a) shares of Class A and B Common and Series A
    Preferred stock of Royster-Clark Group owned by 399 Venture Partners, Inc.,
    of which Mr. Corpening is a vice president, all of which Mr. Corpening
    disclaims beneficiary ownership and b) shares of Class A and B Common and
    Series A Preferred stock of Royster-Clark Group owned by CCT Partners VI,
    L.P., of which Mr. Corpening is a limited partner without the power to
    dispose of the securities.
(8) Includes 13,308 shares of Common Stock, 4,925 shares of Series A and 2,769
    shares of Series B Preferred Stock subject to options that are currently
    exercisable and 232 shares of Series B Preferred Stock owned by Ninigret
    Foundation, Inc. of which Mr. Abood is a member of its board of directors
    and has the right to vote these shares.

Royster-Clark Group Common and Preferred Stock

   The Certificate of Incorporation of Royster-Clark Group provides that
Royster-Clark Group may issue 4,200,000 shares of common stock, divided into
two classes consisting of 2,200,000 shares of Class A Common Stock and
2,000,000 shares of Class B Common Stock and 775,000 shares of series preferred
stock. The holders of Class A Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of the stockholders.
Except as required by law, the holders of Class B common stock have no voting
rights. Under the Certificate of Incorporation of Royster-Clark Group, a holder
of either class of common stock may convert any or all of his shares into an
equal number of shares of the other class of common stock; provided that in the
case of a conversion from Class B Common Stock, which is nonvoting, into Class
A Common Stock, which is voting, the holder of shares to be converted would be
permitted under applicable law to hold the total number of shares of Class A
Common Stock which would be held after giving effect to the conversion.

   The Series A and Series B Preferred stock outstanding does not have voting
rights except as provided under Delaware law and except in certain limited
circumstances (See note 3 to the consolidated financial statements).

   In addition to the common stock and preferred stock, 399 Ventures holds a
$10 million subordinated note of Royster-Clark Group that does not require cash
interest payments The total number of shares of Royster-Clark Group preferred
stock outstanding as of the recapitalization the Company on April 1, 1999 and
as of December 31, 2001 was approximately 682,014 shares.

Item 13.  Certain Relationships and Related Transactions.

   None.

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<PAGE>

                                    PART IV

Item 14.  Exhibits and Reports on Form 8-K

(a) (1) Financial statements:

   The following consolidated financial statements are included in Part II,
Item 8, of this Form 10-K:

       Independent Auditors' Report
       Consolidated Balance Sheets as of December 31, 2001 and 2000
       Consolidated Statements of Operations for the Years ended December 31,
         2001 and 2000 and Nine Months ended December 31, 1999
       Consolidated Statements of Stockholder's Equity for the Years ended
         December 31, 2001 and 2000 and Nine Months ended December 31, 1999
       Consolidated Statements of Cash Flows for the Years ended December 31,
         2001 and 2000 and Nine Months ended December 31, 1999

(2) Financial Statements Schedules:

   Financial statement schedules required to be included in this report are
shown in Schedule II attached
   or in the financial statements and notes thereto included in Item 8 of this
report or have been omitted
   because they are not applicable.

(3) Exhibits:

<TABLE>
<C>   <S>

 3.01 Restated Certificate of Incorporation of the Company. +

 3.02 Certificate of Amendment of Restated Certificate of Incorporation of the Company. +

 3.03 Amended and Restated Bylaws of the Company. +

 4.01 Indenture dated as of April 22, 1999 by and among the Company, the Guarantors, and the United
      States Trust Company of New York, as Trustee. +

 4.02 Form of 101/4% First Mortgage Note Due 2009 (Included in Exhibit 4.01)+

10.01 Credit Agreement dated as of April 22, 1999 by and among the Company, the Guarantors, various
      lenders, DLJ Capital Funding, as arranger and syndication agent, J.P. Morgan Securities Inc., as
      documentation agent and U.S. Bancorp Ag Credit, Inc., as administrative agent. +

10.02 Purchase Agreement dated April 15, 1999 among the Company, the Guarantors and the Initial
      Purchasers. +

10.03 Supply Agreement dated as of April 22, 1999 among IMC Kalium Ltd., IMC-Agrico Company and the
      Company. Portions of this exhibit have been omitted pursuant to a request for confidential treatment. +

10.04 Company Employee Savings and Investment Plan. +

10.05 Royster-Clark Group, Inc. 1999 Restricted Stock Purchase and Option Plan. +

10.06 Employment Agreement dated as of April 22, 1999 by and among Francis P. Jenkins, Jr., Royster-
      Clark Group, Inc. and Royster-Clark, Inc. +

10.07 Master Conveyance Agreement dated as of April 22, 1999 by and among IMC Global Inc., the Vigoro
      Corporation, the Company and the United States Trust Company of New York. +

10.08 Master Conveyance Agreement dated as of April 22, 1999 by and among IMC Global Inc., the Vigoro
      Corporation, the Company and the United States Trust Company of New York. +

10.09 Agreement for the Sale and Purchase of Assets among Royster-Clark, Inc. ("RCI"), American Crop
      Services, Inc. ("ACS") and Chickasaw Chemical Company, Inc. ("CCC") dated as of January 27,
      2000, as amended by an amendment to Asset Purchase amended by an Amendment to Asset Purchase
      Agreement among RCI, Royster-Clark Resources LLC, ACS and CCC dated February 16, 2000. +
</TABLE>

                                      67

<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number                                             Title of Document
------                                             -----------------
<C>     <S>

 10.10  Form of Stock Purchase Agreement among Royster-Clark Resources, LLC, as Buyer, and the
        persons and entities identified therein as Sellers, for the Shares of Alliance Agronomics, Inc. dated as
        of March 17, 2000. +

 10.11  Form of Purchase Agreement between Royster-Clark Resources, LLC and G. Waddy Garrett dated
        March 17, 2000. +

 10.12  Agreement for the Sale and Purchase of Assets between Crop Builders, Inc., as Seller and Royster-
        Clark, Inc., as Purchaser dated January 28, 2000. +

 10.13  Agreement for the Sale and Purchase of Assets between Armstrong Ag Center, Inc., as Seller and
        Royster-Clark, Inc., as Purchaser dated January 28, 2000. +

 10.14  Amendment Agreement dated August 18, 2000 amending Credit Agreement. ++

 10.15  Second Amendment to Revolving Credit Agreement among Royster-Clark, Inc., various financial
        institutions, DLJ Capital Funding., J.P. Morgan Securities, Inc., and U.S. Bancorp, Ag Credit,
        Inc.+++

 10.16  Employment Agreement dated as of December 1, 1999 between Royster-Clark, Inc. and G. Kenneth
        Moshenek. ++++

 10.17  Employment Agreement dated as of December 1, 1999 between Royster-Clark, Inc. and Walter
        Vance. ++++

 12.01  Statement of Computation of Ratio of Earnings to Fixed Charges.*

 99.01  Allowance for Doubtful Accounts-Royster-Clark, Inc.*
</TABLE>
--------
+   Incorporated by reference to Exhibit Nos. 3.01 to 3.03, 4.01 to 4.02, and
    10.01 to 10.13 to Registration Statement on Form S-4 (Reg. No.: 333-81235)
    filed on April 19, 2000
++  Incorporated by reference to Exhibit No. 10.14 to Form 10Q for the
    quarterly period ended June 30, 2000 (Reg. No.: 333-81235) filed on August
    21, 2000
+++ Incorporated by reference to Exhibit No 10.15 to Form 10Q for the quarterly
    period ended September 30, 2000 (Reg. No.: 333-81235) filed on November 14,
    2000
++++ Incorporated by reference to identically numbered exhibit to Form 10K for
     the annual period ended December 31, 2000 (Reg. No.: 333-81235) filed on
     April 2, 2001
*   Filed herein.

   (b)  Reports on Form 8-K

   None

                                      68

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) 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.

Dated: March 28, 2002                         ROYSTER-CLARK, INC.

                                               By: /s/  FRANCIS P. JENKINS, JR.
                                                   -----------------------------
                                                      Francis P. Jenkins, Jr.
                                                      Chief Executive Officer

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated

          Signature                        Title                  Date
          ---------                        -----                  ----
By:  /s/  FRANCIS P. JENKINS,
  JR.
------------------------------
   Francis P. Jenkins, Jr.     Chairman of the Board         March 28, 2002
By:  /S/  CHARLES E. CORPENING
------------------------------
    Charles E. Corpening       Director                      March 28, 2002
By:  /s/  THOMAS F. MCWILLIAMS
------------------------------
    Thomas F. McWilliams       Director                      March 27, 2002
By:  /s/  RANDOLPH G. ABOOD
------------------------------
      Randolph G. Abood        Director                      March 27, 2002
By:  /s/  WALTER R. VANCE
------------------------------ Chief Financial and
       Walter R. Vance           Accounting Officer          March 28, 2002

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE EXCHANGE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE EXCHANGE ACT.

   (a) (i) No annual report is provided to the Noteholders other than copies of
Registrant's Annual Report on Form 10-K

   (a)(ii) No Proxy Statement, form of proxy or other proxy soliciting material
has been sent to any Noteholder with respect to any annual or other meeting of
Registrant's security holders.

                                      69