SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------

                                    FORM 10-K



         Annual  report  pursuant  to  Section  13 or  15(d)  of the  Securities
Exchange Act of 1934 [Fee Required]

 X        For the fiscal year ended November 1, 1997

         Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
Exchange Act of 1934 [No Fee Required]

              For the transition period from _________ to _________

                         Commission file number 0-24902

                      CENTRAL TRACTOR FARM & COUNTRY, INC.

        Delaware                                     42-1425562
   (State of incorporation)                    (I.R.S. Employer I.D. No.)

                              3915 Delaware Avenue
                           Des Moines, Iowa 50316-0330
                                 (515) 266-3101
                          (Address and telephone number
                         of principal executive offices)

        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. [x]

         All of the  registrant's  stock (100 shares as of January 30,  1998) is
held by CT Holding, Inc. and is not publicly traded.
<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.

                                    INDEX TO

                           ANNUAL REPORT ON FORM 10-K

                         FOR YEAR ENDED NOVEMBER 1, 1997



                                                                            Page
PART I

Item 1.    Business.......................................................... 1
Item 2.    Properties........................................................ 8
Item 3.    Legal Proceedings................................................. 8
Item 4.    Submission of Matters to a Vote of Security-Holders............... 9

PART II

Item 5.    Market for Registrant's Common Equity and Related 
              Stockholder Matters........................................... 10
Item 6.    Selected Financial Data.......................................... 10
Item 7.    Management's Discussion and Analysis of Financial Condition
              and Results of Operations..................................... 11
Item 8.    Financial Statements and Supplementary Data...................... 15
Item 9.    Changes in and Disagreements With Accountants on Accounting and
              Financial Disclosure.......................................... 15

PART III

Item 10.   Directors and Executive Officers of the Registrant............... 16
Item 11.   Executive Compensation........................................... 18
Item 12.   Security Ownership of Certain Beneficial Owners and Management... 20
Item 13.   Certain Relationships and Related Transactions................... 20

PART IV

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.. 21



<PAGE>

     References  herein to "fiscal" years are references to Central Tractor Farm
& Country, Inc.'s 52- or 53-week fiscal year, which ends on the Saturday nearest
October 31 in that year.

ITEM 1. BUSINESS

Overview

     Central Tractor Farm & Country,  Inc., a Delaware  corporation,  along with
its subsidiary Country General,  Inc.,  (collectively the "Company" or "CT"), is
an  agricultural  specialty  retailer  with 228 stores (as of December 31, 1997)
serving  the  agricultural,  hardware  and  related  needs of  rural  consumers,
especially   part-time  and  full-time   farmers,   hobby   gardeners,   skilled
tradespersons and do-it-yourself  ("DIY") customers.  CT was founded in 1935 and
has established itself as a market leader in the agricultural  specialty market,
having strong name  recognition and a loyal customer base. The Company's  stores
offer a wide  selection  of  agricultural  products  such as  tractor  parts and
accessories,  feed,  fencing  materials  and animal health  supplies,  specialty
hardware  and  paint,  lawn  and  garden  items,   rural  automotive  parts  and
accessories,  workwear,  pet  supplies  and general  consumer  merchandise.  The
Company has also established  national  visibility for its products and services
through its catalog operation,  which has an annual circulation of approximately
685,000.

Acquisition of the Company by J.W. Childs

     On November 27, 1996, the Board of Directors of the Company  approved,  and
the Company entered into, a merger agreement (the "Merger  Agreement") with J.W.
Childs Equity Partners,  L.P. and two of its affiliates  (collectively "Childs")
that  provided  for the  acquisition  of the  Company  by Childs in a  two-stage
transaction (the  "Acquisition").  The Merger Agreement  provided that following
the  acquisition  by Childs of all of the Company  shares held by  affiliates of
Butler Capital Corporation  (collectively,  "BCC"), an affiliate of Childs would
merge with and into the Company  (the  "Merger")  and Childs  would  acquire the
remaining   shares  of  the  Company  held  by  public   shareholders   ("Merger
Consideration")  for $14.25 per share in cash. The Merger was completed on March
27,1997.

     Concurrent with the execution of the Merger Agreement,  Childs entered into
agreements  (the  "Securities  Purchase  Agreements")  with BCC and with certain
members of the Company's management (the "Management  Shareholders") pursuant to
which  Childs  agreed to  purchase  at a price of $14.00 per share 100% of BCC's
shares  and  36.4%  of  the   Management   Shareholders'   shares   representing
approximately  64.0%  and  1.4%  of  the  Company's  outstanding  common  stock,
respectively (collectively the "Securities Purchases").

     As of January 2, 1997, Childs had consummated the Securities  Purchases and
paid related expenses utilizing (i) $65.4 million of cash equity and, (ii) $35.1
million of  borrowings  under an interim  margin loan facility (the "Margin Loan
Facility").  In connection  with the Securities  Purchases,  the Company entered
into a term loan and a revolving credit facility (the "New Credit Facility") and
used a portion of such  facilities  to refinance  existing  debt of the Company,
including a $16.0 million  convertible note held by BCC. The New Credit Facility
was amended at the time of the Country General acquisition  discussed below. See
"Item 7. Managements  Discussion and Analysis of Financial Condition and Results
of Operations - Liquidity and Capital Resources."

     On March 27,  1997,  the Company  consummated  a public  offering of $105.0
million  aggregate  principal  amount of Senior Notes. The net proceeds from the
offering were used to repay borrowings  under the Margin Loan Facility,  pay the
Merger  Consideration,  repay a portion of the outstanding  borrowings under the
New Credit Facility and pay fees and expenses of the Acquisition.

                                       1

<PAGE>

     The Acquisition  was accounted for as a purchase.  The total purchase price
has been allocated to the tangible and intangible  assets and the liabilities of
the Company based upon their respective fair values. The cost of the Acquisition
over the  allocated  fair  value of the  underlying  tangible  net  assets is as
follows (in thousands):


Cost of acquiring the outstanding common stock of the Company
  from predecessor shareholders                                         $159,393
Fair value of underlying tangible net assets                              70,267
                                                                        --------
Excess of cost of acquisition over the allocated fair value
  of the underlying tangible net assets                                 $ 89,126
                                                                        ========

     As a result of the Acquisition,  the Company is wholly-owned  subsidiary of
CT  Holding,  Inc.  ("Holding"),  an  affiliate  of  Childs,  and a new basis of
accounting has been reflected in the Company's financial  statements  reflecting
the fair values for the Company's  assets and  liabilities as of March 27, 1997.
The financial statements of the Company for periods prior to March 27, 1997, are
presented on the historical cost basis of accounting.

Acquisitions

     Effective  June 26,  1997,  the  Company  acquired  all of the  outstanding
capital stock of Country General,  Inc.  ("Country  General") for  approximately
$137.0  million  (including  related  costs and  expenses)  in cash,  subject to
post-closing  adjustment (the "Country  General  Acquisition").  Country General
operates a chain of 114 agricultural specialty retail stores. The Company funded
the  acquisition  price in part from a $49.75  million cash equity  contribution
from Holding,  and the remainder from funds drawn under the amended and restated
New Credit  Facility  (see  "Item 7.  Managements  Discussion  and  Analysis  of
Financial   Condition   and  Results  of  Operations  -  Liquidity  and  Capital
Resources").

     The Country  General  Acquisition  was  accounted  for as a  purchase.  The
purchase  price was  allocated  to the tangible  and  intangible  assets and the
liabilities based on fair values, as follows (in thousands):

         Total purchase price                                        $136,995
         Fair value of underlying tangible net assets                  88,756
                                                                     --------
         Excess of cost of acquisition over the allocated
            fair value of the underlying tangible net assets         $ 48,239
                                                                     ========

     In May 1997, the Company acquired 4 retail stores and certain net operating
assets  from Donald A.  Walsh,  Inc.  ("Walsh"),  a  privately  owned  specialty
retailer for approximately $2.5 million.  The transaction was accounted for as a
purchase.

     The results of operations of Country  General and Walsh are included in the
accompanying  consolidated  statements  of income  from the  respective  date of
purchase.

Expansion Plan

     Since the beginning of fiscal 1993, the Company has increased the number of
its retail  stores from 47 to 228.  From fiscal 1993 through  fiscal  1995,  the
Company  opened twenty new stores,  acquired two stores and closed three stores.
In fiscal 1996, the Company opened 14 new stores and acquired 31 stores from Big
Bear Farm Stores,  Inc.  ("Big Bear").  In fiscal 1997, the Company opened 4 new
stores  and  acquired  118  stores   primarily   through  the  Country   General
Acquisition. Five stores were closed in 1997.

     The  integration  of the Big Bear  stores  into the  Company's  systems was
completed  during fiscal 1997. The Company plans to complete the  integration of
the Country  General  stores into the Company's  systems during fiscal 1998. The
Company plans to add an additional 20 stores in both fiscal 1999 and fiscal 2000
through further  penetration of the 

                                        2

<PAGE>
Northeastern and Midwestern United States markets and through expansion into the
Southeastern  United States.  Management  intends to achieve this growth through
new store  openings and  selective  acquisitions.  On a preliminary  basis,  the
Company has  identified  potential new markets  outside of its existing  markets
that  management  believes  are  attractive  candidates  for one or more  new CT
stores.  The number of actual new CT store  openings in the next three years may
differ materially from the Company's current  projections if the Company makes a
major  acquisition or is unable to find  attractive  store  locations to rent at
reasonable  prices,  negotiate  acceptable lease terms or acquire small regional
farm store chains at reasonable prices.

     The  Company  seeks to locate  stores in high  traffic  shopping  districts
whenever  possible in order to attract  customers who prefer to do much of their
shopping at one time and place. As with the majority of its existing stores, the
Company  intends to lease its new stores.  The estimated cash required to open a
new,  leased,  large  prototype  store  (approximately  22,000  square  feet) is
$850,000 and the estimated cash required to open a new, leased,  small prototype
store  (approximately  11,000  square  feet)  averages  $600,000  (in each case,
including  inventory  net of  accounts  payable  and  excluding  an  average  of
approximately  $125,000  in  pre-opening  expenses).  Of  these  estimated  cash
expenditures,  approximately half is used for initial inventory (net of accounts
payable),  and  the  balance  is  used  for  capital  expenditures,  principally
leasehold improvements, fixtures and equipment.

     The Company also intends to continue to opportunistically relocate existing
stores.  These relocations reflect, in most cases, the expiration of an existing
lease  coupled  with an  opportunity  to move to a more  demographically  and/or
physically attractive site. The Company relocated one store during fiscal 1997.

Retail Stores

     CT stores focus on agricultural  and  agricultural  related  products.  The
Company  segments  its  merchandising  mix into  seven key  product  categories:
agricultural  products  (including  tractor  parts and  accessories),  specialty
hardware,  lawn and garden products,  workwear products,  rural automotive parts
and  accessories,   pet  supplies  and  general  consumer   products.   Sale  of
agricultural and related products represent  approximately 60% of CT's total net
sales.  The growth and  percentage of total store sales for each retail  product
category for fiscal 1997,  fiscal 1996,  and fiscal 1995,  and a description  of
each product category, are set forth below:

                                                       Fiscal Year
                                              -----------------------------

                                              1997        1996         1995
                                              ----        ----        ----

Agricultural (including tractor parts         26.8%       24.0%       23.2%
   and accessories)
Specialty Hardware                            17.7%       20.6%       21.6%
Lawn & Garden                                 18.4%       19.6%       19.3%
Workwear                                       9.3%        8.4%        7.3%
Rural Automotive Parts & Accessories          14.3%       14.8%       16.0%
Pet Supplies                                   6.6%        6.3%        5.4%
General Consumer                               6.9%        6.3%        7.2%
                                             -----       -----       -----
                                             100.0%      100.0%      100.0%
                                             =====       =====       =====

     Agricultural  Products.  CT stores'  agricultural  product line consists of
     approximately 6,000 stock keeping units ("SKUs") supplying the needs of the
     part-time  and  full-time  farmer,  including  tractor  parts,  tillage and
     harvesting  parts,  fencing  materials  and animal  health  supplies.  This
     product  line  consists  largely of  consumable  products  and other  items
     requiring  replacements on a regular basis. This product line accounted for
     $110.5  million,  $67.3 million and $55.9  million of the  Company's  total
     revenue in fiscal years 1997,  1996 and 1995,  respectively.  CT emphasizes
     consumable  agricultural  supplies  that are  purchased  frequently  by its
     customers and does not sell heavy equipment such as tractors or combines.

     Specialty Hardware. CT's speciality hardware line consists of approximately
     9,000 SKUs with an  emphasis on products  with  agricultural  applications.
     These products accounted for $72.7 million, $57.9 million and $51.9 million
     of the  Company's  total  revenue  in  fiscal  years  1997,  1996 and 1995,
     respectively.  CT stores carry a broad range of 

                                        3
<PAGE>
     high-quality  hardware with an emphasis on recognized branded  professional
     products,  including hand tools, power tools,  mechanical tools, electrical
     products,   including  outdoor  lighting,  security  lighting  and  motors,
     welders,   air   compressors,    generators,   paints   (as   well   as   a
     competitively-priced    private-label   brand),   plumbing   supplies   and
     heating/energy equipment, including stoves, space heaters and fans.

     Lawn  and  Garden  Products.  CT's  lawn and  garden  products  consist  of
     approximately 2,000 SKUs,  including lawn and garden tools,  nursery stock,
     fertilizers,  lawn fencing and weed killers.  These products  accounted for
     $75.8  million,  $54.8  million and $46.3  million of the  Company's  total
     revenue in fiscal years 1997, 1996 and 1995, respectively. To differentiate
     itself from other  retailers,  CT also  stocks a  selection  of lawn mowers
     ranging  from  competitively  priced  items to  full-featured  riding  lawn
     mowers.  CT assembles and tests the lawn mowers and sells a full assortment
     of parts for follow-up  service  needs.  CT stores offer  seasonal  bedding
     plants, trees and shrubs in their garden centers.

     Workwear.  CT's  workwear  products,  including  products  sold  under  the
     Carhartt,  Walls and Iron Age brand names,  are targeted at the specialized
     needs of its outdoor-oriented customers who require high quality functional
     apparel.  This  product  category  consists  of  approximately  3,000 SKUs,
     including premium quality insulated outerwear, overalls, flannel shirts and
     work jeans. These products  accounted for $38.1 million,  $23.5 million and
     $17.6  million of the Company's  total revenue in fiscal years 1997,  1996,
     and 1995, respectively. The Company has been expanding its workwear line in
     its new stores to include  quality  non-insulated  workwear,  bib overalls,
     twill pants and hunting clothing.

     Rural  Automotive  Parts and  Accessories.  CT's rural automotive parts and
     accessories consist of approximately 4,000 SKUs, including a core selection
     of  automotive  parts,   batteries  and  accessories  for  rural  vehicles,
     primarily for pick-up trucks and tractors. The products accounted for $58.6
     million,  $41.4 million and $38.4 million of the Company's total revenue in
     fiscal  years  1997,  1996 and 1995,  respectively.  CT also stocks a small
     assortment of general  automotive  items as a convenience to its customers,
     including  oil and  lubrication  products and  anti-freeze.  In addition to
     brand name  products,  certain of the  Company's  automotive  products  are
     offered under CT's own private label.

     Pet  Supplies.  CT's pet  supplies  consist of  approximately  1,000  SKUs,
     including dog and cat foods,  wild bird feed,  and rabbit  supplies.  These
     products  accounted for $27.2  million,  $17.7 million and $13.0 million of
     the  Company's  total  revenue  in  fiscal  years  1997,  1996,  and  1995,
     respectively. The pet supplies sold by CT include economically priced large
     sizes,  such as 50 pound bags of dog food.  Certain of these items are sold
     under CT's private label.  CT has been  expanding its pet supplies  product
     category.

     General Consumer Products.  CT's general consumer products line consists of
     approximately  2,000 SKUs,  including farm replicas and  collectible  toys,
     hunting accessories, camping items and outdoor living needs. These products
     accounted  for  $28.3  million,  $17.8  million  and $17.2  million  of the
     Company's total revenue in fiscal years 1997, 1996, and 1995, respectively.
     CT stores  also offer  seasonal  merchandise  such as  charcoal  grills and
     coolers in the summer.

Store Operations

     The  Company  utilizes  large and small  store  formats  in order to enable
management to enhance CT's return on  investment in light of varying  population
density. The Company's small stores average 11,000 square feet of indoor selling
space and had average comparable store sales of $2.5 million in fiscal 1997. The
large stores  average 22,000 square feet of indoor selling space and had average
comparable  store sales of $4.1 million in fiscal 1997.  Small stores  generally
carry a smaller  selection of workwear and seasonal and other  general  consumer
products than large stores. In addition,  the Company looks for store sites that
have 15,000 to 20,000 square feet of outdoor selling space. This outdoor selling
space is  primarily  used for  displaying  lawn and  garden  products,  fencing,
tractor accessories and livestock watering and feeding equipment.

     Both CT  prototype  stores are designed to provide  customers  with ease in
locating  desired  products  and are clean and  colorful  in order to provide an
overall  enjoyable  shopping  environment.  The use of  informative  directional
signing 
                                        4
<PAGE>
adds  to the  ease  of the  customer's  shopping  experience.  Plan-o-grams  are
utilized to set merchandise  assortments in the seven core product categories to
ensure  uniformity  of  presentation,  ease of shopping  for the customer and to
facilitate inventory management, replenishment and restocking.

     The agricultural  products department is prominently featured in each store
and is identified by the parts desks. The parts desk is the focal point for CT's
new and used tractor parts  program.  In addition , the parts desk enables CT to
offer a high  level  of  customer  service,  ranging  from  answering  technical
questions  regarding  various  products to the special  ordering of hard to find
parts. Each parts desk is managed by the store's agricultural product specialist
who has access to the CT catalog and other  inventory  sources to quickly obtain
needed parts.

     Each store is managed by a store manager who is responsible for all aspects
of the store operations,  including the hiring and training of store associates,
work  scheduling,  inventory  control,  expense  control,  customer  service and
associate  morale.  Typically,  the store  manager is  supported by an assistant
manager and core department heads, along with an average of 15 sales associates.
Store operations are coordinated  through  seventeen  district  managers each of
whom is  currently  responsible  for  seven  to  twenty-one  retail  stores.  In
addition,  the Company has developed and implemented consistent store standards,
processes and best practices for the chain.

     The Company has established an internal store  management  training program
which focuses training on store operations,  systems,  financial matters,  human
resources  and  sales.  To  support  the  Company's  planned  expansion  and its
management training programs, the Company has implemented a long-range personnel
plan that provides for internal promotions,  coupled with recruitment of college
graduates and hiring of  individuals  with  previous  retail  experience.  Store
associates receive training which emphasizes  customer service,  sales,  product
knowledge and store procedures.  All CT store operations' management,  including
district  managers,  store managers and assistant managers are compensated based
on job performance,  and participate in an incentive program,  which is based on
the store/district exceeding a targeted level of profitability. The Company also
has  established an incentive  program for all store  associates that focuses on
sales and profitability.

Other Operations

     The CT catalog offers a broad  assortment of new, used and rebuilt  tractor
parts and  agricultural  componentry,  including  approximately  25,000 SKUs. In
fiscal 1997,  catalog sales were $7.6 million.  The catalog will be  distributed
nationally  to  approximately  685,000  households  in  rural  and  agricultural
communities  in fiscal  1998.  The  breadth of this  distribution  provides  the
Company with name recognition among  agricultural  consumers in areas outside of
its core geographical  markets.  As a consequence,  the Company anticipates some
customer familiarity with the Company when it expands into new areas.

     The Company also sells tractor parts and other items, on a wholesale basis,
to other agricultural  retailers and distributors.  In recent years, the Company
has been  reducing  the number of products  offered and the number of  customers
served by this unit. In fiscal 1997, the Company's  wholesale business generated
sales of $3.5 million.

Purchasing and Distribution

     The Company maintains a staff of nine merchandise  buyers,  each of whom is
responsible for specific product categories,  at its headquarters in Des Moines,
Iowa. The purchasing and inventory  control  process is controlled  centrally by
the Company's point of sale ("POS") and automatic replenishment systems. See "--
Corporate Offices and Management Information Systems." The Company purchases its
merchandise from approximately  1,500 vendors,  none of which accounted for more
than 10% of the Company's  purchases  during fiscal 1997. The Company  generally
maintains  multiple  sources of supply for its products in order to minimize the
risk of supply disruption and to improve its negotiating  position.  The Company
has no long-term contractual commitments with any of its vendors.

     The  Company  operates  a 135,000  square-foot  distribution  center in Des
Moines, Iowa, a 155,000 square-foot distribution center in Youngstown, Ohio, and
a 300,000 square foot distribution  center in Grand Island,  Nebraska from which
it currently  supplies the majority of its retail stores'  inventory  needs. The
Des  Moines  facility  is used to handle  the small  part  items and to  receive
purchases sourced from vendors located in the Midwest.  The Youngstown  facility

                                        5
<PAGE>
serves  primarily  as a  flow-through  distribution  station.  The Grand  Island
facility   primarily   services  the  newly  acquired  Country  General  stores.
Approximately 35% of total purchases, consisting mainly of high volume commodity
items are shipped by vendors directly to individual store locations. Merchandise
from the  distribution  centers is shipped to each store  through  supply orders
generated by an automated  replenishment  system. The Company transports most of
its merchandise to each store once a week from the distribution  centers through
a major  contract  carrier.  The  contract  carrier's  truck fleet  delivers all
warehouse  shipments and most of the truckloads of merchandise  which is shipped
directly from vendors to store locations.

     The  Company  expects  that its  current  distribution  facilities  will be
sufficient to accommodate its planned expansion through fiscal 2000.

Corporate Offices and Management Information Systems

     To facilitate the Company's expansion plan and to maintain consistent store
operations,  CT has centralized specific functions of its operations,  including
accounting,  the development of policies and procedures,  store layouts,  visual
merchandise  presentation,  inventory  management,  merchandise  procurement and
allocations,  marketing and advertising,  human resources and real estate.  This
centralization   effectively  utilizes  the  experience  and  resources  of  the
Company's senior management and provides a high level of consistency  throughout
the chain.

     The  Company  has  invested   considerable   resources  in  its  management
information and control systems, which were developed beginning in 1981 and have
been  expanded  and  improved  yearly.  These  systems  provide  support for the
purchase and distribution of merchandise and help to improve the manner in which
CT stores, the corporate offices and distribution  centers are operated.  All CT
stores  (including all of the acquired Country General Stores) use the Company's
POS system to  capture  sales  information  at the SKU  level.  Through  the POS
system,  the Company can monitor  customer  purchases and inventory  levels with
respect to every  item of  merchandise  in each store  daily.  The  Company  has
implemented  scanning  capabilities in the receiving process of its distribution
centers and currently plans to expand this to the picking and shipping  process.
Electronic Data  Interchange  ("EDI") is used to send purchase orders to certain
of its  largest  suppliers.  CT intends to expand its use of EDI to  communicate
invoicing, shipments and sales activity to and from most major suppliers.

     The Company also has an automated inventory replenishment system which uses
POS information, and facilitates the timely replenishment of both the stores and
the  warehouses.  The sales and  inventory  information  used in this  system is
updated on a daily basis.  This system also provides for minimum stocking levels
for lower volume items  enabling CT to carry a large number of SKUs at a minimum
of inventory carrying expense.

Competition

     The Company faces  competition  primarily from other chain and single-store
agricultural  specialty  retailers,   general  merchandise  retailers  and  home
centers.  Some of these  competitors have  substantially  greater  financial and
other resources than the Company.

     Currently,  most of the  Company's  stores do not  compete  directly in the
markets of other agricultural  specialty retail chains.  However,  the Company's
expansion  plans  will  likely  result in new  stores  being  located in markets
currently  served by one or more of these chains,  and there can be no assurance
that these chains,  certain of which have announced  expansion  plans,  will not
expand  into the  Company's  markets.  Expansion  by the  Company  into  markets
currently  served  by its  competitors  or  expansion  by  competitors  into the
Company's  markets  could  have a  material  adverse  effect  on  the  Company's
business, financial condition or results of operation.

     In  addition,  the Company  competes in over 90% of its markets  (which the
Company  defines as a 30 mile radius  around a store) with  general  merchandise
retailers  and/or home centers and expects these  retailers to be in many of the
markets  targeted for expansion.  The Company  believes that its merchandise mix
and  level  of  customer  service  successfully  differentiate  it from  general
merchandise  retailers and home centers, and as a result the Company has to date
been able to operate  profitably  despite  competition from general  merchandise
retailers and home centers.  However,  in the past certain  general  merchandise
retailers  and home  centers  have  modified  their  product  mix and  marketing
strategies

                                        6
<PAGE>

in an apparent  effort to compete more  effectively  in the  Company's  markets.
There can be no  assurances  that these  efforts  will not  continue or that the
Company will continue to be able to compete successfully against current and
future competition.

Advertising and Promotions

     The Company's primary advertising occurs through the bi-weekly distribution
of approximately 5.0 million color circulars  distributed as newspaper  inserts,
at retail stores and by direct mail. In order to focus its marketing on the many
farmers in the Company's markets,  the Company also advertises in geographically
zoned editions of leading farming industry magazines.  In addition,  the Company
runs periodic special events promoted through local flyers,  circulars and radio
advertising.

Seasonality

     Unlike many specialty  retailers,  the Company has  historically  generated
positive operating income in each of its four fiscal quarters.  However, because
the  Company  is an  agricultural  specialty  retailer,  its  sales  necessarily
fluctuate with the seasonal  needs of the  agricultural  community.  The Company
responds to this  seasonality by attempting to manage  inventory levels (and the
associated working capital requirements) to meet expected demand, and by varying
its use of part-time employees.  Historically, the Company's sales and operating
income  have been  highest in the third  quarter of each  fiscal year due to the
farming industry's  planting season and the sale of seasonal  products.  Working
capital needs are highest during the second  quarter.  The Company expects these
trends to continue for the foreseeable future.

Employees

     As of November 1, 1997, CT had approximately 4,500 employees (approximately
2,400 in full-time and approximately 2,100 in part-time positions).  The Company
believes its relations with its employees is good.


                                        7

<PAGE>

ITEM 2. PROPERTIES

     As of December 31, 1997,  the Company had 228 retail  stores  located in 27
states as follows:

                          State                  Number of Stores

                          Nebraska                     47
                          Iowa                         30
                          New York                     22
                          Pennsylvania                 17
                          Colorado                     15
                          Minnesota                    12
                          South Dakota                 11
                          Georgia                       7
                          Virginia                      7
                          Ohio                          7
                          Kansas                        7
                          Kentucky                      6
                          North Dakota                  5
                          Wisconsin                     5
                          Indiana                       4
                          Maryland                      4
                          Wyoming                       4
                          New Jersey                    3
                          Texas                         3
                          Montana                       2
                          Missouri                      2
                          Oklahoma                      2
                          Tennessee                     2
                          Massachusetts                 1
                          Illinois                      1
                          Vermont                       1
                          Delaware                      1
                                                       --
                          Total                        228
                                                       ===

     The Company owns 55 of the stores and leases the remaining  173 stores.  In
addition the corporate  headquarters and three distribution  centers are leased.
The Company's  corporate  headquarters  are located adjacent to its distribution
center in Des Moines, Iowa. The Company generally negotiates retail store leases
with an initial term between  five and seven  years,  with two or three  renewal
periods of five years each, exercisable at the Company's option. In fiscal 1997,
the Company paid an average of $5.63 per square foot in retail  store  occupancy
expenses,  including rent, taxes, common area charges,  repairs and maintenance.
Rent expenses  generally do not vary based on sales, and generally  increase 10-
15% at the beginning of each option period.

ITEM 3. LEGAL PROCEEDINGS

     The Company has been notified by the U.S.  Environmental  Protection Agency
that it may have  potential  liability  for cleanup  costs  associated  with the
cleanup of a dumpsite near  Owensburg,  Kentucky.  To date, the only articles of
waste  identified  as possibly  once  belonging to the Company are certain empty
battery acid  containers.  The Company believes that any liability it might have
as a result of this  action  would be as a de minimis  contributor  and will not
have a material effect on the Company's financial position, liquidity or results
of operations.

     The  Company  is not a party to any other  legal  proceedings,  other  than
routine  claims and  lawsuits  arising in the ordinary  course of business.  The
Company does not believe that such claims and lawsuits,  individually  or in the
aggregate,  will  have a  material  adverse  effect on the  Company's  business.
Compliance with federal, state and local laws

                                        8
<PAGE>

and regulations  pertaining to the discharge of materials into the  environment,
or otherwise relating to the protection of the environment,  has not had, and is
not  anticipated  to have,  a material  effect  upon the  capital  expenditures,
earnings or competitive position of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None




                                        9

<PAGE>
                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Central  Tractor  Farm & Country,  Inc.  Common  Stock is held  entirely by
Holding. See "Item 1. Business - Acquisition of the Company by J.W. Childs."

     The Company has not paid any cash  dividends on its common stock.  Although
the  Company  may  pay  limited  cash   dividends  on  its  common  stock  after
consummation of the Acquisition,  the Company's ability to pay cash dividends is
restricted by the New Credit Facility.

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>                                 
                                 
                                  Pro Forma    Successor                               Predecessor
                                 -----------  ----------   ----------------------------------------------------------------------- 
                                               Period of   Period of
                                                seven        five  
                                 Fiscal year    months      months                         Fiscal Year End
                                    ended       ended       ended          --------------------------------------------------------
                                  November 1,  November 1,  March 26,      November 2,    October 28,    October 29,    October 30,
                                   1997 (7)      1997        1997             1996            1995          1994           1993    
                                 -----------    ------     --------        -----------    -----------    -----------    -----------
                                                                    (In thousands of dollars)
<S>                                 <C>         <C>         <C>             <C>           <C>            <C>             <C>     
Net sales                            $600,157    $305,122    $106,048        $293,020      $251,703       $231,064        $202,589
Income (loss) from continuing                                             
  operations                            3,418       1,365      (1,247)          8,744         8,185          5,181           3,270
Ratio (deficiency) of earnings to                                         
  fixed charges (1)                      1.3x        1.3x      (1,881)           5.3x          5.8x           2.5x            2.0x
Number of stores at end of period (2)     228         228         112             111            66             55              50
Comparable store sales per square                                         
  foot of indoor  selling space (3)                   191(6)                      222           224            240             218
Comparable store sales increases                                          
  (decreases)(4)                                   (4.7%)(6)                      1.0%         (1.6%)         10.0%            4.2%
Balance Sheet Data (at end of period):                                     
Working capital                                   $85,639                    $ 63,803      $ 62,496       $ 50,442        $ 37,055
Total assets                                      434,235                     159,238       149,977        139,416         113,241
Long-term debt, less current portion (5)          153,171                      17,341        16,862         16,959          37,536
Stockholders' equity                              119,547                      90,063        81,277         75,735          24,287
                                                                        
----------------
<FN>
(1)  For purposes of computing this ratio, earnings consist of income before income taxes plus fixed charges.  Fixed charges consist
     of interest  expense,  amortization of deferred  financing costs and 20.0% of the rent expense from operating  leases which the
     Company  believes is a reasonable  approximation  of the interest factor included in the rent. For the five month period ended,
     March 26, 1997 earnings were insufficient to cover fixed charges by $1,881.
(2)  Net of three store closings in fiscal 1994 and five store closings in fiscal 1997.
(3)  Comparable  sales per square foot of indoor selling space and calculated by dividing store sales by total indoor selling square
     footage for stores open and operated by CT at least twelve months in each fiscal year.
(4)  Percentage change in store sales as compared to sales for the same stores for the prior year for stores open and operated by CT
     for at least twelve months in each year.  The 1.0%  increase in  comparable  store sales in 1996 has been adjusted to reflect a
     comparable 52 week year. Comparable store sales grew 2.9% without such adjustment.  The 4.7% decrease in comparable store sales
     in 1997 has been  adjusted to reflect that fiscal year 1996 was a 53 week year.  Comparable  store sales  declined 6.5% without
     such adjustment.
(5)  Excluding,  in fiscal 1995 and prior years,  long-term  debt from  discontinued  operations.  See footnote (10) in the Notes to
     Consolidated Financial Statements.
(6)  Calculations are for the fiscal year ended November 1, 1997.
(7)  Adjusted to give effect to the  Acquisition,  the Country  General  Acquisition,  and the related  financings,  as though these
     transactions  had occurred at the beginning of fiscal 1997.  See  "Unaudited  Pro Forma  Results of  Operations  for Year ended
     November 1, 1997" in Part IV herein.
</FN>
</TABLE>
                                                        10
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     The following discussion and analysis of financial condition and results of
operations  should  be  read  in  conjunction  with  the  selected  consolidated
financial  data and the  consolidated  financial  statements  of the Company and
related notes thereto.

Results of Operations

     The following table sets forth, for the periods indicated, certain items in
the Company's  Statements of Income  expressed as a percentage of net sales. All
amounts and  percentages  for the fiscal year ended November 1, 1997 include the
activity  for the  periods of the  seven-months  ended  November 1, 1997 and the
five-months ended March 26, 1997 on a combined basis.

                                                 Fiscal Year Ended
                                      ---------------------------------------
                                       November 1,   November 2,  October 28,
                                         1997          1996          1995
                                      ------------  ------------ ------------

Net sales                                100.0%       100.0%       100.0%
Gross profit                              29.1         29.3         29.5
Selling, general and
  administrative expenses                 24.6         23.3         23.2
Amortization of intangibles                 .6           .3           .3
                                         -----        -----        -----
Operating income                           3.9          5.7          6.0
Interest expense                           3.5           .6           .5
                                         -----        -----        -----
Income before income taxes                  .4          5.1          5.5
Income taxes                                .4          2.1          2.3
                                         -----        -----        -----
Income from continuing
  operations                               0.0%         3.0%         3.2%
                                         =====        =====        =====


Fiscal 1997 Compared to Fiscal 1996

     Net sales for the fiscal year ended  November 1, 1997 were $411.2  million,
an increase of $118.2 million, or 40.3%, as compared to net sales for the fiscal
year ended November 2, 1996 of $293.0 million.  The increase was due principally
to  the  acquisition  of 118  stores,  primarily  through  the  Country  General
Acquisition. Net sales includes $99.4 million of Country General sales since the
date of the  acquisition.  In addition,  the Company opened 4 new stores in 1997
and had a full year of  operations  for 45 stores  opened or purchased in fiscal
1996. This increase was offset by a decrease in comparable  store sales of $16.7
million or 6.5%. The decrease in comparable store sales was due primarily to the
fact  that  fiscal  year  1997  consisted  of 52 weeks  while  fiscal  year 1996
consisted of 53 weeks and a mild winter followed by a cool spring and dry summer
in the Northeast where most of the comparable stores are located.

     Gross  profit for fiscal  1997 was $119.5  million,  an  increase  of $33.7
million, or 39.3%, as compared to $85.8 million for fiscal 1996. Gross profit as
a percentage of sales remained  relatively constant at 29.1% for fiscal 1997, as
compared to 29.3% for fiscal 1996.

     Selling,  general, and administrative  expenses for fiscal 1997 were $101.2
million, an increase of $33.0 million, or 48.4%, over fiscal 1996. This increase
was due  primarily  to costs  related to the  acquisition  and  operation of the
Country  General  stores  and  costs  related  to new store  openings.  Selling,
general, and administrative expenses as a percentage of sales increased to 24.6%
in  fiscal  1997  as  compared  to  23.3%  in  fiscal  1996.  This  increase  is
attributable  to  higher  selling,  general  and  administrative  expenses  as a
percentage of sales at the Country General stores.  CT stores percentage in 1997
was 23.9%  versus  26.9%  for  Country  General.  The  percentage  for CT stores
increased over the prior year

                                       11
<PAGE>

primarily due to decreased sales volume in comparable stores. Management expects
to see a  decrease  as a  percentage  of  sales  in  the  selling,  general  and
administrative expenses of the Country General stores in 1998.

     Amortization  of  intangibles  was $2.2  million  for  fiscal  1997 and $.9
million in fiscal 1996. The increase is due to the additional  goodwill incurred
in the Acquisition and the Country General Acquisition.

     Operating  income for fiscal  1997,  was $16.2  million,  a decrease of $.5
million,  or 3.0%, as compared to fiscal 1996.  Operating income as a percentage
of sales decreased to 3.9% in fiscal 1997 from 5.7% in fiscal 1996. The decrease
resulted from the factors affecting net sales,  gross profit,  selling,  general
and administrative expenses and amortization of intangibles discussed above.

     Interest  expense for fiscal 1997 was $14.7  million,  an increase of $13.0
million,  as  compared  to $1.7  million  for fiscal  1996.  This  increase  was
primarily due to the additional  debt incurred to fund the  Acquisition  and the
Country General Acquisition and the additional short term borrowing needs of the
consolidated entity.

     Income tax expense  related to continuing  operations  for fiscal 1997, was
$1.4 million,  a decrease of $4.8 million,  or 77.4% as compared to $6.2 million
for fiscal 1996.  Income taxes as a percentage of pretax  earnings were 92.3% in
fiscal 1997 as compared to 41.7% in fiscal 1996.  The increase is due  primarily
to amortization of goodwill related to the Acquisition,  which is not deductible
for income tax purposes.

Fiscal 1996 Compared to Fiscal 1995

     Net sales for the fiscal year ended  November 2, 1996 were $293.0  million,
an increase of $41.3 million,  or 16.4%, as compared to net sales for the fiscal
year ended  October  28,  1995 of $251.7  million.  This  increase  was due to a
comparable store sales increase of approximately 1.0% (net of sales attributable
to an extra  (53rd) week in fiscal  1996),  sales  during  such extra week,  the
opening  of 14 new  stores in fiscal  1996,  a full year of  operations  for the
eleven new stores  opened in fiscal 1995 as compared to a partial year for those
stores  during  fiscal  1995 and the  acquisition  of the Big Bear stores in May
1996.  The increase in comparable  store sales was primarily due to a comparable
store  sales  increase  of 13.8%  during  the fourth  quarter of fiscal  1996 as
compared to the fourth quarter of fiscal 1995. This increase in comparable store
sales  during the fourth  quarter  was the result of normal  weather  conditions
during fiscal 1996 as compared to unusual and severe drought  conditions  during
fiscal 1995.

     Gross  profit for  fiscal  1996 was $85.8  million,  an  increase  of $11.4
million, or 15.3%, as compared to $74.4 million for fiscal 1995. Gross profit as
a percentage of sales was 29.3% for fiscal 1996, as compared to 29.5% for fiscal
1995.  This  decrease  is  primarily  attributable  to the sale of lower  margin
products  in the Big  Bear  stores  prior to  their  conversion  to the CT store
format.

     Selling,  general, and administrative  expenses for fiscal 1996, were $68.2
million,  an increase of $9.9 million,  or 17.0%, for fiscal 1995. This increase
was due  primarily to costs  related to new store  openings and costs related to
stores acquired and operated in the Big Bear acquisition.  Selling, general, and
administrative  expenses as a percentage  of sales  increased to 23.3% in fiscal
1996 as compared to 23.2% in fiscal  1995.  This  increase  is  attributable  to
higher selling,  general and administrative expenses as a percentage of sales at
the new Big Bear stores,  partially offset by a decrease in selling, general and
administrative  expenses  as a  percentage  of  sales at CT's  existing  stores.
Management  expects that the completion of the conversion of the Big Bear stores
to the CT store format will improve selling, general and administrative expenses
as a percentage of sales.

     Amortization of intangibles was $0.9 million for fiscal 1996 and 1995.

     Operating  income for fiscal 1996, was $16.7  million,  an increase of $1.5
million,  or 9.5%, as compared to fiscal 1995.  Operating income as a percentage
of sales decreased to 5.7% in fiscal 1996 from 6.0% in fiscal 1995. The decrease
resulted  from the factors  affecting  net sales,  gross  profit,  and  selling,
general and administrative expenses discussed above.


                                       12
<PAGE>

     Interest  expense  for fiscal  1996 was $1.7  million,  an increase of $0.4
million, or 27.7% as compared to $1.3 million for fiscal 1995. This increase was
primarily due to an increase in interest related to short-term  borrowings under
the Company's line of credit agreement.

     Income tax expense  related to continuing  operations  for fiscal 1996, was
$6.2 million,  an increase of $0.5 million,  or 8.8% as compared to $5.7 million
for fiscal 1995.  Income taxes as a percentage of pretax  earnings were 41.7% in
fiscal 1996 as compared to 41.1% in fiscal 1995. This increase was primarily due
to the effect of a reduction of prior year over accrual in fiscal 1995.

Liquidity and Capital Resources

     In  addition  to  cash to  fund  operations,  CT's  primary  on-going  cash
requirements  are those  necessary  for the Company's  expansion and  relocation
programs,  including  inventory  purchases  and capital  expenditures,  and debt
service.  The Company's  primary  sources of liquidity  have been funds provided
from operations,  borrowings pursuant to the Company's revolving and term credit
facilities, short term trade credit and additional equity investments.

     On November 1, 1997, the Company had working  capital of $85.6 million,  an
increase of $21.8  million,  as compared to working  capital of $63.8 million on
November  2,  1996.  This  increase  resulted  primarily  from  an  increase  in
inventory,  partially offset by increases in accounts payable, accrued expenses,
and borrowings under the Company's  revolving  credit  facility.  On November 1,
1997,  the  Company's  inventories  were $222.1  million,  an increase of $114.9
million,  as compared  to $107.2  million at  November  2, 1996.  This  increase
reflected  inventory for new stores and inventory for the stores acquired in the
Country General Acquisition. The increase in inventory was funded with cash from
operations,  short-term trade credit,  additional  borrowing under the Company's
revolving credit facility, and an additional equity investment of $49.8 million.

     Continuing  operations  of the  Company  used $0.5  million  of net cash in
fiscal 1997,  generated  $5.0 million of net cash in fiscal 1996,  and used $6.0
million of net cash in fiscal 1995. The decrease in net cash generated in fiscal
1997, as compared to fiscal 1996,  resulted  primarily from a decrease in income
from continuing operations,  a larger increase in inventory,  and an increase in
recoverable  income taxes,  partially  offset by an increase in accounts payable
and accrued  expenses,  as compared to a decrease in fiscal 1996, an increase in
depreciation  and  amortization  and a larger increase in deferred income taxes.
The increase in net cash  generated in fiscal 1996,  as compared to fiscal 1995,
resulted  primarily  from a smaller  increase  in  inventory  and an increase in
income from continuing  operations,  partially offset by a reduction in accounts
payable in fiscal 1996, as compared to an increase in fiscal 1995.

     The Company's  capital  expenditures were $6.2 million and $8.8 million for
fiscal 1997 and 1996,  respectively.  The majority of capital  expenditures were
for store fixtures,  equipment and leasehold  improvements  for new and existing
stores.  The Company presently expects its capital  expenditures for renewal and
replacement costs at existing stores and distribution  centers in fiscal 1998 to
be approximately $5.0 million.

     During fiscal 1997, the Company was acquired by an affiliate of J.W. Childs
Equity  Partners,  L.P.  and  thereafter  became a wholly  owned  subsidiary  of
Holding.  See "Item 1. Business - Acquisition of the Company by J.W. Childs" and
Notes to Consolidated Financial Statements.  In connection with the Acquisition,
on March 27, 1997, the Company  consummated a public  offering of $105.0 million
aggregate principal amount of 10 5/8% Senior Notes (the "Senior Notes"). The net
proceeds of the offering  were used to repay  borrowings  of $35.9 million under
the Margin Loan Facility,  pay the Merger  Consideration  of $51.8 million,  pay
fees  and  expenses  of  the  Acquisition,  and  reduce  outstanding  short-term
borrowings.  The  Senior  Notes  mature on April 1, 2007 with  interest  payable
semiannually  in  arrears  on April 1 and  October  1. The  Senior  Notes may be
redeemed beginning April 1, 2002 at a price of 105.3125% of the principal amount
decreasing  approximately 1.77% annually thereafter until April 1, 2005 at which
time  they  are  redeemable  at face  value.  Furthermore,  notwithstanding  the
foregoing the Company may redeem up to 35% of the original  aggregate  principal
amount of the Senior Notes at a price of 110% of the  principal  amount with the
net cash  proceeds of a public  equity  offering  within 60 days of closing such
offering.

     In  addition,  effective  June 26,  1997,  the Company  acquired all of the
outstanding capital stock of Country General.  The acquisition was accounted for
as a purchase  and the Company will elect to treat the purchase as a purchase of
all 

                                       13
<PAGE>
of the assets of Country  General for Federal income tax purposes.  See "Item 1.
Business - Acquisitions" and Notes to the Consolidated Financial Statements.  In
connection  with the Country General  Acquisition,  on July 3, 1997, the Company
entered into an amended and restated  credit  facility  (the "Credit  Facility")
which consists of a $50.0 million,  six-year term loan facility, which was fully
funded, and a $100.0 million revolving credit facility under which borrowings of
$60.8 million and letters of credit totaling $8.4 million were outstanding as of
November  1,  1997.  The term loan must be  repaid  in  semiannual  installments
beginning  December 31, 1997,  plus annual  prepayments  based on the  Company's
excess cash flow, as defined.  The minimum annual  installments  are as follows:
fiscal years 1998 - $3.0 million; 1999 - $3.0 million; 2000 - $6.0 million; 2001
- $8.0  million;  2002 - $12.0  million;  and 2003 - $18.0  million.  The Credit
Facility will mature on June 30, 2003. Borrowings under the Credit Facility will
bear interest at rates based upon prime or the Eurodollar Rate plus a margin. At
November 1, 1997,  the interest rate on the term loan was 8.19% and the interest
rate on the revolving  credit facility was 8.06%.  The Credit Facility  contains
covenants  which  require  the Company to  maintain a minimum  consolidated  net
worth, a minimum earnings before taxes, interest,  depreciation and amortization
(EBITDA),  a minimum  ratio of EBITDA to cash  interest  payable,  and a maximum
ratio of debt to EBITDA.  The covenants also restrict,  among other things,  the
payment of dividends,  incurrence of debt, and disposition of assets. The Credit
Facility is secured by substantially all of the assets of the Company.

     The Company  anticipates that its principal uses of cash in the foreseeable
future will be working  capital  requirements,  debt  service  requirements  and
capital expenditures,  as well as expenditures  relating to acquisitions.  Based
upon current and anticipated levels of operations, the Company believes that its
cash flow from  operations,  together  with amounts  available  under the Credit
Facility,  will  be  adequate  to  meet  its  anticipated  requirements  in  the
foreseeable  future for  working  capital,  capital  expenditures  and  interest
payments.  The  Company  expects  that  if  it  were  to  pursue  a  significant
acquisition,  it would arrange prior to the  acquisition  any additional debt or
equity financing required to fund the acquisition.

     There  can be no  assurance,  however,  that the  Company's  business  will
continue  to  generate  sufficient  cash flow from  operations  in the future to
service its debt,  and the Company may be required to refinance all or a portion
of its existing debt or to obtain additional  financing or to reduce its capital
spending.  There can be no assurance that any such refinancing would be possible
or that any  additional  financing  could be obtained.  The  inability to obtain
additional financing could have a material adverse effect on the Company.

Seasonality

     Unlike many specialty  retailers,  the Company has  historically  generated
positive operating income in each of its four fiscal quarters.  However, because
the  Company  is an  agricultural  specialty  retailer,  its  sales  necessarily
fluctuate with the seasonal  needs of the  agricultural  community.  The Company
responds to this  seasonality by attempting to manage  inventory levels (and the
associated working capital requirements) to meet expected demand, and by varying
its use of part-time employees.  Historically, the Company's sales and operating
income  have been  highest in the third  quarter of each  fiscal year due to the
farming industry's  planting season and the sale of seasonal  products.  Working
capital needs are highest during the second  quarter.  The Company expects these
trends to continue for the foreseeable future.

Inflation

     Management does not believe its operations have been materially affected by
inflation.

Year 2000

     The Company has conducted a comprehensive review of its computer systems to
identify  the  systems  that could be  affected  by the "Year 2000" issue and is
developing an implementation plan to resolve the issue. The Year 2000 problem is
the result of computer  programs being written using two digits rather than four
to  define  the  applicable  year.  Any  of the  Company's  programs  that  have
time-sensitive  software may recognize a date using "00" as the year 1900 rather
than  the  year  2000.   This  could  result  in  a  major  system   failure  or
miscalculations.  The Company  presently  believes that, with  modifications  to
existing software and converting to new software, the Year 2000 problem will not
pose significant  operational  problems for the Company's computer systems as so
modified and converted.  The expenditures for the  modifications and conversions
are not expected to have a material impact on

                                       14
<PAGE>

the operations of the Company.  However,  if such  modifications and conversions
are not completed  timely,  the Year 2000 problem may have a material  impact on
the operations of the Company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Included at pages F-1 through F-27.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     None.


                                       15

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  following  table sets forth the name,  age and position of each of the
Company's directors,  executive officers and other significant employees. All of
the Company's  officers are elected  annually and serve at the discretion of the
Board of Directors.
<TABLE>
<CAPTION>

     Name                           Age              Positions
     ----                           ---              ---------
                                  
    <S>                            <C>              <C>
     James T. McKitrick             52               President, Chief Executive Officer, Director
     Dean Longnecker                49               Executive Vice President, COO, Secretary, Director
     John R. Pearson                49               Executive Vice President, Sales
     John W. Childs                 56               Director
     Jerry D. Horn                  59               Director
     Steven G. Segal                37               Director
     Adam L. Suttin                 30               Director
     Jeffrey B. Swartz              36               Director
     William E. Watts               43               Director
     Habib Y. Gorgi                 41               Director
     Peter Lamm                     46               Director
     Richard C. Dresdale            41               Director
     George D. Miller               55               Senior Vice President, Merchandising
     Denny Starr                    44               Senior Vice President, Finance, CFO
     Jeffrey A. Stanton             47               Senior Vice President, Administration
     David E. Enos                  38               Senior Vice President, Information Systems/Logistics
     Daniel Cunningham              62               Vice President, Parts and Service
     Jack P. Feichtner              51               Vice President, Advertising
                          
</TABLE>
   
     James T.  McKitrick,  President  and Chief  Executive  Officer,  joined the
Company in July 1992. He has over 30 years experience in retailing, including 20
years at Kmart Corporation. Prior to joining CT, Mr. McKitrick was President and
Chief  Executive  Officer  of  Builder's  Emporium,   a  California-based   home
improvement  center chain.  Previously,  he was with Ames Department Stores from
1987 through  1990,  were he held the  positions of  Executive  Vice  President,
Chairman of Zayre Discount  Store  Division,  and President and Chief  Executive
Officer of G.C.  Murphy  Division,  a $900  million  variety  store  chain.  Mr.
McKitrick  also served as  President  and Chief  Executive  Officer of Warehouse
Club, Inc. from 1986 through 1987 and Executive Vice President of  Merchandising
for T.G.&Y.  Stores Company from 1984 through 1986.  From 1963 through 1984, Mr.
McKitrick was with the Kmart Corporation.

     Dean Longnecker,  Executive Vice President,  Chief Operating  Officer,  has
held his current position since 1997. He joined CT in 1980 as Controller and was
promoted to Executive  Vice  President of Finance in 1985.  Mr.  Longnecker  was
employed at Payless  Cashways from 1973 until 1980,  most recently as Treasurer.
He received a B.S. from Iowa State University in 1970 and C.P.A. in 1972.

     John R. Pearson, Executive Vice President, Sales, joined Central Tractor in
October 1997.  Previously he was with Tractor  Supply Center for 27 years,  with
the last 10 years in senior  management and the most recent  position being held
as Senior Vice President, Merchandising.

     John W. Childs has been  President  of J.W.  Childs  Associates  since July
1995.  Prior to that time, he was an executive at Thomas H. Lee Company from May
1987, most recently  holding the position of Senior Managing  Director.  He is a
director of Big V Supermarkets,  Inc., Cinnabon, Inc., The Edison Project, Inc.,
Chevys,  Inc., DESA  International,  Inc.,  Playtex  Products,  Inc., and Select
Beverages, Inc.

     Jerry  D.  Horn  has  been  Chairman  of the  Board  of  General  Nutrition
Companies,  Inc., a 3,000 store vitamin and nutritional  supplement retail chain
operating  under  the GNC  name,  since  October  1991  and,  prior  to that was
President

                                       16
<PAGE>

and Chief  Executive  Officer  since 1985.  Mr. Horn is Chairman of the Board of
Cinnabon,  Inc. and has been a Managing Director of J.W. Childs Associates since
July 1995.

     Steven G. Segal is Senior Managing  Director of J.W. Childs  Associates and
has been an executive of J.W. Childs  Associates  since July 1995. Prior to that
time,  he was an  executive  at Thomas H. Lee  Company  from August  1987,  most
recently  holding  the  position  of  Managing  Director.  He is a  director  of
International   DiverseFoods,   Inc.,   Empire  Kosher  Poultry,   Inc.,  Big  V
Supermarkets,  Inc., Cinnabon,  Inc., Jillian's Entertainment Holdings, Inc. and
Fitz and Floyd, Inc.

     Adam L. Suttin is a Managing  Director of J.W.  Childs  Associates  and has
been an executive of J.W. Childs Associates since July 1995. Prior to that time,
he was an executive at Thomas H. Lee Company  from August  1989,  most  recently
holding the position of Associate.  He is a director of Empire  Kosher  Poultry,
Inc. and DESA International, Inc.

     Jeffrey B. Swartz has been Chief  Operating  Officer of  Timberland  Co., a
manufacturer and marketer of branded  footwear and apparel,  since May 1991, and
has worked for that company in various positions since June 1986.

     William E. Watts has been President, Chief Executive Officer and a Director
of General Nutrition Companies, Inc. since October 1991 and, prior to that, held
various positions with its predecessor since 1984.

     Habib  Y.  Gorgi is  President  of the  general  partners  of Fleet  Equity
Partners VII, L.P. and the general partner of Silverado III, L.P.,  which is the
general  partner of Chisholm  Partners and has worked at Fleet  Equity  Partners
since  1986.  He is a director of La Petite  Academy,  Dines  Industrial  Group,
Rosina Food  Products,  Savage Sports  Corporation,  Simonds  Industries and FTD
Corporation.  Mr. Gorgi received a bachelor's degree from Brown University and a
master's degree from Columbia University.

     Peter Lamm,  is  President of Fenway  Partners,  a New  York-based  private
investment  firm with $527 million  under  management.  Mr. Lamm was  previously
Managing  Director of Butler Capital  Corporation (BCC) and a general partner of
each of the BCC funds. Mr. Lamm currently serves as a director on Van de Kamp's,
Aurora Foods, Iron Age Corporation, Delimex, Blue Capital and Beckley-Cardy.

     Richard C.  Dresdale,  is a  founding  partner  of Fenway  Partners,  a New
York-based  private  investment  firm with $527 million  under  management.  Mr.
Dresdale was previously a principal at Clayton,  Dubilier & Rice,  Inc.  (CD&R).
Mr. Dresdale is a director of Aurora Foods,  Delimex,  Blue Capital, MW Windows,
Bear Archery and Remington Arms Company.

     George D. Miller, Senior Vice President,  Merchandising,  joined CT in June
1996.  Previously,  he was Vice  President,  Merchandising,  with Home  Base,  a
California-based  home  improvement  center  chain from 1993 through  1996.  Mr.
Miller was employed by Sears,  Roebuck & Company from 1968  through  1993,  most
recently as Senior Merchandise Manager. He received B.S. and M.B.A. degrees from
Indiana University.

     Denny Starr,  Senior Vice  President,  Finance,  Chief  Financial  Officer,
joined the Company in October 1989 as Assistant Controller. He previously served
as Assistant  Controller of The Witten Group, a holding  company with operations
in  manufacturing,  real estate and finance,  from 1986 through  1989. He was an
Audit Manager with  McGladrey & Pullen from 1982 until 1986.  Mr. Starr received
his B.A. from the University of Iowa in 1982 and C.P.A.
in 1982.

     Jeffery A.  Stanton,  Senior  Vice  President,  Administration,  joined the
Company in June 1992.  Previously,  he was employed by R.R.  Donnelly & Sons and
Meredith/Burda  Corporation from 1985 through 1992, as well as Reichardt's Inc.,
a specialty  retailer,  from 1972 through 1985.  Mr.  Stanton  received a B.B.A.
degree from the University of Iowa in 1972.

     David E. Enos, Senior Vice President,  Information  Systems/Logistics,  has
held his current position since 1990. Mr. Enos joined CT in 1981. Previously, he
was employed at  Meredith/Burda  Corporation from 1979 through 1981. He received
an A.A.S. degree in Data Processing from DMACC in 1979.

                                       17

<PAGE>

Daniel  Cunningham,  Vice President,  Parts and Service,  joined CT in 1958. Mr.
Cunningham  has held  several  positions  within the  Company,  including  store
operations,  mail order and the Company's tractor parts area. Mr. Cunningham was
promoted to his current position in 1991.

     Jack P. Feichtner, Vice President,  Advertising, joined CT in July 1995. He
was  previously  with  Kmart  Corporation  for 27 years,  where his most  recent
position was Director, Advertising.

ITEM 11. EXECUTIVE COMPENSATION

         Summary Compensation Table

     The  following  table  sets  forth  compensation  earned  for all  services
rendered to the Company  during  fiscal 1997,  fiscal 1996,  and fiscal 1995, as
applicable,  by the Company's chief  executive  officer and four other executive
officers  who  were   employed  by  the  Company  as  such  during  fiscal  1997
(collectively, the "Named Executives").
<TABLE>
<CAPTION>
                                                                                                Long-Term
                                                                                              Compensation
                                                      Annual Compensation                        Awards
                                     -----------------------------------------------------   ---------------
                                                                                                Number of
                                                                                               Securities         All Other
Name and Principal                      Fiscal           Salary(1)             Bonus           Underlying       Compensation
Position During 1997                     Year               ($)                 ($)              Options             ($)
--------------------                 ------------     ---------------     ----------------   ---------------   ---------------
<S>                                     <C>             <C>                  <C>                <C>                <C>
James T. McKitrick                       1997            399,423                   --                --              9,586 (2)
  President, Chief                       1996            365,000               91,250                --              9,863 (2)
   Executive Officer                     1995            350,000               70,000                --              4,357 (2)
Dean Longnecker                          1997            254,327                   --                --              2,043 (2)
  Executive Vice                         1996            234,000               58,500                --              5,131 (2)
   President, Chief Operating Officer    1995            225,000               45,000            15,000              4,152 (2)
George D. Miller (3)                     1997            172,308                   --                --              2,907 (2)
 Senior Vice                             1996            108,462               15,190            60,000              5,128 (4)
   President, Merchandising              1995                 --                   --                --                 --
John R. Pearson (5)                      1997             15,923                   --                --            158,856 (6)
  Executive Vice President, Sales        1996                 --                   --                --                 --
                                         1995                 --                   --                --                 --
Denny Starr                              1997            123,558                   --                --              6,438 (2)
  Senior Vice President, Finance,        1996             89,167               23,000                --              5,942 (2)
    Chief Financial Officer              1995             83,308               20,000                --              3,562 (2)

----------
<FN>
(1)  Includes compensation deferred at the Named Executive's election under the Company's Profit Sharing Plan.

(2)  Represents amounts  contributed by the Company during each fiscal year, as applicable,  to the Named Executive's Profit Sharing
     Plan account.

(3)  Mr. Miller joined the Company in May 1996.

(4)  Represents payments or reimbursement of certain moving and relocating expenses.

(5)  Mr. Pearson joined the Company effective October 6, 1997.

(6)  Represents payments associated with the hiring of Mr. Pearson.
</FN>
</TABLE>
Employment Arrangements with Executive Officers

     Prior to the Acquisition, Mr. McKitrick was employed as President and Chief
Executive Officer pursuant to an employment  agreement dated September 16, 1994.
Under this agreement,  Mr. McKitrick  received a salary of $385,000,  subject to
increases  determined  annually by the  compensation  committee (which increases
must at least equal  increases in the consumer  price index).  In addition,  Mr.
McKitrick was eligible for an annual bonus of up to 60% of his salary,  based on
financial targets and non-quantitative performance objectives established by the
compensation  committee at the beginning of each fiscal year. If his  employment
was  terminated  by the  Company  other  than for cause or  because  of death or
disability,  or because the Company either removed him or failed to elect him as
President and Chief Executive  Officer,  the Company would pay to Mr.  McKitrick
his base salary (reduced by compensation received from

                                       18
<PAGE>

other  businesses) from the date of termination to the later of November 1, 1997
and the  first  anniversary  of such  termination.  Pursuant  to the  employment
agreement,  Mr. McKitrick was granted an option to acquire, at an exercise price
equal to the initial public offering price, up to 112,512 shares of Common Stock
on the seventh  anniversary  of the  original  date of grant,  with  accelerated
vesting in fiscal  1996  through  1998 if certain  EBITDA  targets  were met. Mr
McKitrick's  employment  agreement also contained  certain  confidentiality  and
non-competition requirements .

     Prior to the  Acquisition,  Mr.  Longnecker  was employed as Executive Vice
President,  Chief Operating Officer pursuant to an agreement dated September 16,
1994.  Under this  agreement,  Mr.  Longnecker  received  a salary of  $250,000,
subject to salary increases  determined  annually by the compensation  committee
(which increases must at least equal increases in the consumer price index).  In
addition,  Mr.  Longnecker  was eligible for an annual bonus of up to 48% of his
salary, based on financial targets and non-quantitative  performance  objectives
established by the  compensation  committee at the beginning of the fiscal year.
If his  employment was terminated by the Company other than for cause or because
of death or  disability,  or because the Company either removed him or failed to
retain him as Executive Vice  President,  Chief Operating  Officer,  the Company
would pay to Mr.  Longnecker his base salary (reduced by  compensation  received
from other  businesses) from the date of termination to the first anniversary of
such termination.  Mr. Longnecker's  employment agreement also contained certain
confidentiality and non-competition provisions.

     As part of the  Acquisition,  on January 2, 1997, James T. McKitrick and G.
Dean Longnecker  sold to Childs for $14.00 per share,  81,810 and 64,489 shares,
respectively,  of the Company's outstanding common stock, in accordance with the
terms of the Securities Purchase Agreements entered into at the same time as the
Merger Agreement.  Additionally, the Securities Purchase Agreements provide that
at the closing of the Merger, Mr. McKitrick would exchange  outstanding  options
to purchase 183,935 shares of Company common stock having an aggregate  exercise
price of $0.6  million for  options to acquire  shares of Holding  common  stock
valued at $2.6 million and that Mr.  Longnecker  would exchange 71,429 shares of
Company  common stock for shares of Holding common stock valued at $1.0 million.
The  Securities  Purchase  Agreements  also  contain  provisions  regarding  the
continued  employment  of Messrs.  McKitrick  and  Longnecker  in their  current
capacities after the Merger (the "New Employment Agreements").

     Mr.  McKitrick's  New  Employment  Agreement  provides for a base salary of
$435,000,  and Mr. Longnecker's provides for a base salary of $265,000,  subject
in each case to annual  increases as determined by the Board of Directors (which
increases  must  at  least  equal   increases  in  the  consumer  price  index).
Additionally,  Messrs.  McKitrick  and  Longnecker  are eligible for annual cash
bonuses if the Company  achieves  certain  operation  cash flow  targets,  which
bonuses  are  not  subject  to any  ceilings  contained  in the  New  Employment
Agreements.

     Mr.  McKitrick's New Employment  agreement  provides for severance payments
equal to his base salary for 18 months if his  employment is  terminated  (other
than in the case of death, disability or for cause) or if he is not reelected as
President and Chief  Executive  Officer,  reduced by any  compensation he should
earn during such 18-month period from other  businesses.  Mr.  Longnecker's  New
Employment  Agreement  provides for severance  payments equal to his base salary
for 12 months if his employment is terminated  (other than in the case of death,
disability or for cause) or if he is not reelected as Executive Vice  President,
Chief Operating Officer,  not subject however, to reduction for any compensation
earned from other businesses.

     The New Employment Agreements also contemplated that Messrs.  McKitrick and
Longnecker will participate  along with other management  personnel in two stock
option plans of Holding involving 4.5% and 3.2% of Holding's  outstanding common
stock and common  stock  equivalents  on a fully  diluted  basis,  respectively.
Allocations  of options among the  management  group are to be made in the first
instance by the Chief Executive Officer of the Company,  subject to ratification
by Holding's Board of Directors.  Such  allocations have not been made as of the
date of this filing.  The  management  stock  options will be subject to vesting
based on the Company's achievement of certain operating cash flow targets.

     Additionally,  the  New  Employment  Agreements  contemplate  that  Messrs.
McKitrick and Longnecker will receive additional stock options which vest if the
Company is sold within six years after the effective  time of the Merger and the
realized value of the common equity of the original  investment group in Holding
should  equal or exceed ten times the value  thereof at the time of the  Merger.
Mr. McKitrick's and Mr. Longnecker's options under this program are to

                                       19

<PAGE>

acquire an aggregate  number of shares of common stock of Holding equal to 1.25%
and 0.75%, respectively,  of the total outstanding common stock and common stock
equivalents of Holding on a fully diluted basis.

     In  addition  various  other  executives  of the  Company  have  employment
agreements that contain,  among other items, one year severance provisions under
certain circumstances as well as various bonus provisions.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of November 1, 1997,  Holding holds 100% of the outstanding stock of the
Company.  All  outstanding  options  were  repurchased  in  connection  with the
Acquisition or exchanged for options to acquire shares of Holding common stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Two of the Company's suppliers, Iron Age Corporation ("Iron Age") and Walls
Industries,  Inc. ("Walls"),  are controlled by certain BCC affiliates that were
stockholders  during  a  portion  of  the  predecessor  period.  Iron  Age  is a
manufacturer and distributor of work boots and protective  footwear.  Walls is a
manufacturer  of  insulated  and non-  insulated  workwear,  rugged  outdoor and
hunting apparel and casual outerwear. The Company believes that the terms of its
purchases  from Iron Age and Walls are at least as  favorable  to the Company as
could be obtained from other suppliers.  In fiscal 1997, the Company's purchases
from Iron Age and Walls  totaled  $1.6  million for the five month  period ended
March 26,1997.

     On November  26,  1997,  Childs  acquired  control of one of the  Company's
suppliers,  DESA  Internatioanl,  Inc.  ("DESA").  DESA  is a  manufacturer  and
marketer of zone  heating/home  comfort  products and specialty tools. In fiscal
1997, the Company's purchases from DESA totaled $172 thousand.

     Certain investment funds managed by BCC owned a majority of the outstanding
common stock of the Company during a portion of the predecessor  period. The BCC
Funds also held the 7% convertible  notes which were retired in connection  with
the  purchase  of the  BCC  common  stock.  Interest  paid  on  such  notes  was
approximately $171,000 for the five months ended March 26, 1997.

     In  connection  with  the  Acquisition,  Childs  was paid an  advisory  and
financing  fee of $1.7  million  in  consideration  of  services  regarding  the
planning, structuring and negotiating of the Acquisition and related financings.

     For the period of seven  months ended  November 1, 1997,  Childs was paid a
management and consulting  services fee of $140,000 under a five year agreement,
renewable annually thereafter, requiring annual payments of $240,000, subject to
limitations of the Company's debt agreements.

     In connection  with the  consummation  of the  Acquisition,  Holding loaned
$250,000 to George Miller and $25,000 to Jack  Feichtner to partially fund their
investment in Holding common stock. In addition,  on December 23, 1997,  Holding
loaned  $250,000 to John Pearson to  partially  fund his  investment  in Holding
common stock. The loans are due in ten years and require payments of interest at
the applicable interest rate under the Credit Facility.

     Additionally,   Messrs.   McKitrick  and   Longnecker   are  parties  to  a
Stockholders Agreement dated as of December 23, 1996 applicable to all shares of
Holding  common stock or vested options to acquire such common stock held now or
hereafter  acquired by them.  The  Stockholders  Agreement,  among other  terms,
permits  Holding to "call" their shares and vested options on their  termination
of  employment  for any reason.  Additionally,  if either Mr.  McKitrick  of Mr.
Longnecker  is  terminated  for any reason  other than for cause or without good
reason (as those terms are defined in the  Stockholders  Agreement),  he has the
right to "put"  his  shares or  vested  options  to  Holding.  Depending  on the
circumstances,  the price for  shares  of  Holding  common  stock  purchased  in
connection with a call or put under the  Stockholders  Agreement will range from
cost to seven  times  EBITDA.  The put and  call  features  of the  Stockholders
Agreement  terminate on completion of a public  offering of Holding common stock
with aggregate net proceeds of $50.0 million or more.

                                       20
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) Documents filed as part of this Report:

         1.  Financial  Statements.   See  the  Index  to  Financial  Statements
appearing at page F-1.

         2. Financial Statement Schedules.  The following Consolidated Financial
Statement Schedule is included at page F-27:

     Schedule II - Valuation and Qualifying Accounts

     No other  Financial  Statement  Schedules  have  been  presented  since the
required  information  is not  present or not present in amounts  sufficient  to
require  submission  of the  schedule,  or because the  information  required is
included in the consolidated financial statements or the notes thereto.

         3. Exhibits.

         The  following  exhibits are filed with this Annual Report on Form 10-K
or incorporated herein by reference.


Exhibit
  No.                               Description

3(i).1        --        Restated Certificate of Incorporation, filed as exhibit
                        3(i).1 to the Company's  Registration Statement on Form
                        S-1 (File #33-82620) originally filed on August 9, 1994
                        and incorporated herein by reference.      
3(i).2        --        Certificate  of Merger dated October 5, 1994,  filed as
                        exhibit 3(i).2 to the Company's  Registration Statement
                        on Form S-1 (File #33-82620) originally filed on August
                        9, 1994 and incorporated herein by reference.
3(ii)         --        By-Laws of the Company,  filed as exhibit  3(ii) to the
                        Company's  Registration  Statement  on Form  S-1  (File
                        #33-82620)  originally  filed  on  August  9,  1994 and
                        incorporated herein by reference.  
4.1           --        Form of Common Stock Certificate of the Company,  filed
                        as exhibit 4.1 to the Company's  Registration Statement
                        on Form S-1 (File #33-82620) originally filed on August
                        9, 1994 and incorporated herein by reference.      
4.2           --        Indenture  relating  to the Senior  Notes,  the form of
                        which was filed as exhibit  4.4 to  Amendment  No. 3 to
                        the Company's  Registration Statement on Form S-1 (File
                        No.  333-19613)  originally filed on March 19, 1997 and
                        incorpoated herein by reference.    
10.1          --        Employment  Agreement  between the Company and James T.
                        McKitrick  dated as of  September  16,  1994,  filed as
                        exhibit 10.5 to the Company's Registration Statement on
                        Form S-1 (File #33- 82620)  originally  filed on August
                        9, 1994 and incorporated herein by reference.  
10.2          --        Employment  Agreement  between  the  Company  and  Dean
                        Longnecker  dated as of September  16,  1994,  filed as
                        exhibit 10.6 to the Company's Registration Statement on
                        Form S-1 (File #33- 82620)  originally  filed on August
                        9, 1994 and incorporated herein by reference.          
                        


                                       21

<PAGE>
10.3          --        Asset Purchase Agreement By and Between Central Tractor
                        Farm & Country,  Inc.,  (the "Buyer") and Big Bear Farm
                        Stores,  Inc. (the "Seller") dated May 22, 1996,  filed
                        as exhibit 10.15 to the Company's 10-Q originally filed
                        on  September  9,  1996  and  incorporated   herein  by
                        reference.                                   
10.4          --        Agreement Plan of Merger dated November 27, 1996 by and
                        among Central Tractor Farm & Country, Inc., J.W. Childs
                        Equity  Partners,  L.P.,  JWC Holdings I, Inc., and JWC
                        Acquisition  I,  Inc.,  filed  as  an  exhibit  to  the
                        Company's 8-K originally  filed on December 3, 1996 and
                        incorporated herein by reference. 
10.5          --        Securities  Purchase Agreement dated as of November 27,
                        1996 by and among Central Tractor Farm & Country, Inc.,
                        J.W.  Childs  Equity  Partners,  L.P.,  JWC Holdings I,
                        Inc., and JWC Acquisition I, Inc.,  filed as an exhibit
                        to the  Company's 8-K  originally  filed on December 3,
                        1996 and incorporated herein by reference. 
10.6          --        Securities Purchase Agreement,  dated as of November 6,
                        1996,  by and among  Mezzanine  Lending  Associates  I,
                        L.P.,  Mezzanine Lending Associates II, L.P., Mezzanine
                        Lending Associates III, L.P., Senior Lending Associates
                        I, L.P., BCC Industrial  Services,  JWC  Acquisition I,
                        Inc.,  J.W.  Childs  Equity  Partners,   L.P.,  Central
                        Tractor  Farm &  Country,  Inc.  filed as an exhibit to
                        JWCAC's  Schedule 13D  originally  filed on December 9,
                        1996 and incorporated herein by reference.   
10.7          --        Letter Agreement, dated as of November 27, 1996 between
                        JWC  Acquisition  I, Inc. and Mr.  James T.  McKitrick,
                        filed as an exhibit to JWCAC's  Schedule 13D originally
                        filed on  December 9, 1996 and  incorporated  herein by
                        reference.                 
10.8          --        Letter Agreement, dated as of November 27, 1996 between
                        JWC  Acquisition  I, Inc.  and Mr. G. Dean  Longnecker,
                        filed as an exhibit to JWCAC's  Schedule 13D originally
                        filed on  December 9, 1996 and  incorporated  herein by
                        reference.    
10.9          --        Employment  Agreement between the Company and George D.
                        Miller dated May 6, 1996, filed as exhibit 10.25 to the
                        Company's  Registration  Statement  on Form  S-1  (File
                        #333-19613)  originally  filed on January  10, 1997 and
                        incorporated herein by reference.     
10.10         --        Credit  Agreement  dated as of December  23, 1996 among 
                        the Company,  Holding,  JWCAC, certain banks, financial 
                        institutions  and other  institutional  lenders  listed 
                        therein,    Fleet,   as   administrative   agent,   and 
                        NationsBank, as co-agent, filed as exhibit 10.22 to the 
                        Company's 10-K originally filed on January 31, 1997 and 
                        incorporated herein by reference.     
10.11         --        Stock  Purchase  Agreement,  dated June 26, 1997 by and
                        between the Company and  ConAgra,  Inc. and the Amended
                        and  Restated  Credit  Agreement,  dated  as of July 3,
                        1997, filed as exhibits to the Company's Form 8-K filed
                        on July 3, 1997 and incorporated herein by reference.
12            --        Statement Regarding Computation of Ratio of Earnings to
                        Fixed Charges        
21            --        Subsidiaries of the Company
27            --        Financial Data Schedule
99            --        Important Factors Regarding Forward-Looking Statements

     (b) Reports on Form 8-K Filed During the Last Quarter of Fiscal 1997

         Form  8-K/A  (Amendment  No. 1) filed  September  16,  1997 -  Included
         financial  statements for Country General,  Inc., which was acquired by
         the Company as of June 26, 1997.

                                       22
<PAGE>



     (c) See Item 14(a)(3) of this report.

     (d) See Item 14(a)(2) of this report.

                                       23

<PAGE>
<TABLE>
<CAPTION>
                          INDEX TO FINANCIAL STATEMENTS
<S>                                                                                                           <C>

Central Tractor Farm & Country, Inc. and Predecessor Historical Financial Statements:
     Report of Ernst & Young LLP................................................................................F-2
     Consolidated Balance Sheets as of November 1, 1997 and November 2, 1996....................................F-3
     Consolidated Statements of Income for periods of seven-months ended November 1, 1997 and
         five-months ended March 26, 1997 and years ended November 2, 1996 and October 28, 1995.................F-5
     Consolidated Statements of Changes in Stockholders' Equity for periods of  seven-months ended
         November 1, 1997 and five-months ended March 26,1997 and years ended
         November 2, 1996 and October 28, 1995..................................................................F-6
     Consolidated Statements of Cash Flows for periods of seven-months ended November 1, 1997 and
         five-months ended March 26, 1997 and years ended November 2, 1996 and October 28, 1995.................F-7
     Notes to Consolidated Financial Statements.................................................................F-9


Country General, Inc. Historical Financial Statements:
     Report of Deloitte & Touche LLP..............................................................................*
     Balance Sheets as of May 24, 1997 and May 25, 1996.......................................................... *
     Statements of Income for the years ended May 24, 1997 and May 25, 1996...................................... *
     Statements of Stockholder's Equity for the years ended May 24, 1997 and May 25, 1996.........................*
     Statements of Cash Flows for the years ended May 24, 1997 and May 25, 1996...................................*
     Notes to Financial Statements................................................................................*


Pro Forma Financial Information:
     Unaudited Pro Forma Results of Operations, Year ended November 1, 1997....................................F-25
     Notes to Unaudited Pro Forma Results of Operations........................................................F-26


Schedule II - Valuation and Qualifying Accounts................................................................F-27


<FN>

*    These financial statements were originally filed with the Company's Form 8-K/A (Amendment No. 1) filed
     September 16, 1997 and are incorporated herein by reference
</FN>
</TABLE>

                                       F-1

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS



The Board of Directors
Central Tractor Farm & Country, Inc.


We have audited the accompanying  consolidated balance sheets of Central Tractor
Farm & Country,  Inc.  ("Successor"),  a wholly-owned  subsidiary of CT Holding,
Inc., as of November 1, 1997 and its  "Predecessor"  as of November 2, 1996, and
the related consolidated  statements of income, changes in stockholders' equity,
and cash flows of the Successor  for the  seven-month  period ended  November 1,
1997 and the Predecessor for the five-month  period ended March 26, 1997 and for
each of the years ended  November 2, 1996 and October 28, 1995.  Our audits also
included the financial  statement schedule listed in Item 14(a). These financial
statements and schedule are the responsibility of the Company's management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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 financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Central Tractor
Farm & Country,  Inc.  at November  1, 1997 and its  Predecessor  at November 2,
1996, and the consolidated results of operations and cash flows of the Successor
for the  seven-month  period ended November 1, 1997 and the  Predecessor for the
five-month  period ended March 26, 1997 and for each of the years ended November
2, 1996 and October 28, 1995, in conformity with generally  accepted  accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.



                                                      ERNST & YOUNG LLP


Des Moines, Iowa
December 19, 1997


                                       F-2

<PAGE>
<TABLE>
<CAPTION>
                                       CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                  AND PREDECESSOR

                                            CONSOLIDATED BALANCE SHEETS

                                       (In thousands, except per share data)




                                                                   Successor   |       Predecessor
                                                                -------------  |     --------------
                                                                  November 1,  |       November 2,
                                                                     1997      |          1996
                                                                -------------  |     --------------
<S>                                                             <C>                    <C>
                                                                               |  
Assets (Note 4)                                                                | 
Current assets:                                                                | 
  Cash and cash equivalents                                      $  7,378      |        $  3,809
  Recoverable income taxes                                          2,513      |            --
  Trade and other receivables, less allowances of $386 in 1997                 | 
    and $50 in 1996                                                 7,264      |             992
  Inventory                                                       222,117      |         107,203
  Deferred income taxes (Note 7)                                    4,000      |            --
  Other                                                             3,136      |           2,368
                                                                 --------      |        --------
Total current assets                                              246,408      |         114,372
                                                                               | 
Property, improvements and equipment:                                          | 
  Land                                                              1,963      |            --
  Buildings and improvements                                        4,934      |            --
  Leasehold improvements                                           12,788      |          12,803
  Furniture and fixtures                                           24,731      |          23,766
  Capitalized property rights (Note 5)                                867      |           2,859
  Automobiles and trucks                                              628      |           1,065
                                                                 --------      |        --------
                                                                   45,911      |          40,493
                                                                               | 
  Less allowances for depreciation and amortization                 2,716      |          16,036
                                                                 --------      |        --------
                                                                   43,195      |          24,457
                                                                               | 
Goodwill, net of amortization of $1,753 in 1997                                | 
  and $4,592 in 1996                                              135,612      |          19,018
Other assets, principally deferred financing costs in 1997          9,020      |           1,391
                                                                               | 
                                                                 --------      |        --------
Total assets                                                     $434,235      |        $159,238
                                                                 ========      |        ========
                                                                                
</TABLE>

                                                                         
                                                        F-3                    
                                                                               
<PAGE>                                                                         
<TABLE>
<CAPTION>

                                                                     Successor     |     Predecessor
                                                                  -------------    |    ------------
                                                                    November 1,    |     November 2,
                                                                       1997        |         1996
                                                                  -------------    |    ------------
<S>                                                                <C>                 <C>                             
Liabilities and stockholders' equity Current liabilities:                          |
  Bank line of credit (Note 4)                                      $ 60,750       |    $  3,669
  Accounts payable                                                    68,015       |      41,081
  Accrued payroll and bonuses                                          5,847       |       3,631
  Deferred income taxes (Note 7)                                        --         |         913
  Accrued income taxes                                                   508       |           4
  Other accrued expenses                                              22,479       |       1,101
  Current portion of long-term debt and capital lease obligations      3,170       |         170
                                                                    --------       |    --------
Total current liabilities                                            160,769       |      50,569
                                                                                   |
Long-term debt, less current portion (Notes 4 and 11)                152,000       |      16,000
Capital lease obligations, less current portion (Note 5)               1,171       |       1,341
Deferred income taxes (Note 7)                                           748       |       1,265
                                                                    --------       |    --------
Total liabilities                                                    314,688       |      69,175
                                                                                   |
Stockholders' equity (Notes 3 and 6):                                              |
  Preferred stock, $.01 par value:  authorized shares -none in                     |
    1997 and 5,000,000 in 1996; none issued or outstanding              --         |        --
  Common stock, $.01 par value:  authorized shares - 3,000 in                      |
    1997 and 45,000,000 in 1996; issued and outstanding shares                     |
    - 100 in 1997 (wholly-owned by CT Holding, Inc.) and                           |
    10,589,082 in 1996                                                  --         |         106
  Stock warrant outstanding                                             --         |         665
  Additional paid-in capital                                         118,920       |      69,709
  Retained earnings                                                      627       |      19,583
                                                                    --------       |    --------
Total stockholders' equity                                           119,547       |      90,063
                                                                                   |
Commitments (Notes 5 and 8)                                             --         |        --
                                                                    --------       |    --------
Total liabilities and stockholders' equity                          $434,235       |    $159,238
                                                                    ========       |    ========
                                                                                  
</TABLE>
                                                                          

                             See accompanying notes.

                                       F-4

<PAGE>
<TABLE>
<CAPTION>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

                        CONSOLIDATED STATEMENTS OF INCOME

                                 (In thousands)



                                             Successor         |                        Predecessor
                                         ------------------    |   -----------------------------------------------------
                                                               | 
                                                               | 
                                           Period of seven     |     Period of five           Fiscal year ended
                                             months ended             months ended      November 2,      October 28,
                                           November 1, 1997    |     March 26, 1997        1996              1995
                                         ------------------    |   -----------------  --------------- ------------------
<S>                                        <C>                         <C>              <C>              <C>
                                                               | 
Net sales                                   $ 305,122          |        $ 106,048        $ 293,020         $ 251,703 
Cost of sales                                 216,342          |           75,281          207,228           177,340
                                            ---------          |        ---------        ---------         ---------
Gross profit                                   88,780          |           30,767           85,792            74,363
                                                               |                                          
Selling, general and administrative                            |                                          
  expenses, including amounts with                             |                                          
  related parties (Note 11)                    72,142          |           29,045           68,197            58,294
Amortization of intangibles                     1,753          |              415              938               862
                                            ---------          |        ---------        ---------         ---------
Operating income                               14,885          |            1,307           16,657            15,207
                                                               |                                          
Interest expense, including amounts                            |                                          
  with related parties (Note 11)               11,463          |            3,188            1,663             1,302
                                            ---------          |        ---------        ---------         ---------
Income (loss) from continuing                                  |                                          
  operations before income taxes                3,422          |           (1,881)          14,994            13,905
                                                               |                                          
Income taxes (credits) (Note 7)                 2,057          |             (634)           6,250             5,720
                                            ---------          |        ---------        ---------         ---------
Income (loss) from continuing                                  |                                          
  operations                                    1,365          |           (1,247)           8,744             8,185
                                                               |                                          
Discontinued operations (Notes 7 and 10):                      |                                          
  Income from discontinued                                     |                                          
    operations, net of income taxes                            |                                          
    of $474                                      --            |             --               --                 812
  Loss on sale of Herschel                                     |                                          
    Corporation, net of $665 income                            |                                          
    tax benefit                                  --            |             --               --              (3,455)
                                            ---------          |        ---------        ---------         ---------
Loss from discontinued operations                --            |             --               --              (2,643)
                                            ---------          |        ---------        ---------         ---------
Net income (loss)                           $   1,365          |        $  (1,247)       $   8,744         $   5,542
                                            =========          |        =========        =========         =========
                                                               |                                         
Ratio (deficiency) of earnings to
  fixed charges                                1.3x            |        $  (1,881)          5.3x              5.8x
                                            =========          |        =========        =========         =========
                                                          
</TABLE>
                                          
                             See accompanying notes.

                                       F-5

<PAGE>
<TABLE>
<CAPTION>

                                             CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                        AND PREDECESSOR

                                  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                                        (In thousands)

                             Periods of seven-months ended November 1, 1997 and five-months ended
                             March 26, 1997, and years ended November 2, 1996 and October 28, 1995





                                                                        Stock        Additional      Retained        Total
                                                        Common         Warrant        Paid-In        Earnings    Stockholders'
                                                        Stock        Outstanding      Capital       (Deficit)        Equity
                                                    --------------  -------------- -------------- -------------- --------------
Predecessor                                     
-----------                                     
<S>                                                  <C>             <C>               <C>           <C>            <C>      
Stockholders' equity at October 29, 1994              $    106        $    665          $ 69,667      $  5,297       $ 75,735 
  Net income                                              --              --                --           5,542          5,542
                                                      --------        --------          --------      --------       --------
Stockholders' equity at October 28, 1995                   106             665            69,667        10,839         81,277
  Exercise of common stock options                        --              --                  42          --               42
  Net income                                              --              --                --           8,744          8,744
                                                      --------        --------          --------      --------       --------
Stockholders' equity at November 2, 1996                   106             665            69,709        19,583         90,063
  Exercise of common stock options                        --              --                 252          --              252
  Net loss                                                --              --                --          (1,247)        (1,247)
                                                      --------        --------          --------      --------       --------
Stockholders' equity at March 26, 1997                $    106        $    665          $ 69,961      $ 18,336       $ 89,068
                                                      ========        ========          ========      ========       ========
                                                                                                       
Successor
---------
Initial capitalization of the Company after   
  merger of JWC Acquisition I on                
  March 27, 1997                                      $   --                            $ 69,170      $   (738)      $ 68,432
    Capital contribution from parent                                                      
    (Note 3)                                              --                              49,750           --          49,750
Net income                                                --                                 --          1,365          1,365
                                                      --------                          --------      --------       --------
Stockholders' equity at November 1, 1997              $   --                            $118,920      $    627       $119,547
                                                      ========                          ========      ========       ========
                                                                                    

</TABLE>

                                                    See accompanying notes.



                                                              F-6

<PAGE>
<TABLE>
<CAPTION>

                                            CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                       AND PREDECESSOR

                                            CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                       (In thousands)


                                                             Successor      |                  Predecessor
                                                            ------------    |    ---------------------------------------
                                                              Period of     |
                                                               seven        |    Period of five
                                                               months       |       months
                                                               ended        |        ended          Fiscal year ended  
                                                              November 1,   |      March 26,     November 2,     October 28,
                                                                1997        |         1997           1996            1995           
                                                            ------------    |     ------------- ------------      ------------
<S>                                                          <C>                 <C>             <C>             <C>
Operating activities                                                        
   Income (loss) from continuing operations                   $  1,365      |     $ (1,247)        $  8,744       $  8,185 
   Adjustments to reconcile income (loss) from                              |                                     
   continuing operations to net cash provided by                            |                                     
   (used in) continuing operations:                                         |                                     
     Depreciation and amortization of property,                             |                                     
       improvements and equipment                                2,716      |        1,490            3,056          2,523
     Amortization of intangibles and other deferred                         |                                     
       assets                                                    2,253      |          414              998            862
     Loss on sale of assets                                       --        |         --                 20             24
     Deferred income taxes                                       1,871      |        1,328            1,100            800
     Changes in operating assets and liabilities:                           |                                     
       Recoverable income taxes                                 (1,119)     |       (1,885)            --             --
       Trade and other receivables                                (871)     |          144               83            586
       Inventory                                                 1,957      |      (11,894)          (4,549)       (18,830)
       Other current assets                                        946      |         (924)            (972)           128
       Accounts payable                                          1,895      |        1,468           (3,806)         1,593
       Accrued expenses                                          1,139      |       (1,524)             287         (1,838)
                                                              --------      |     --------         --------       --------
                                                                12,153      |      (12,630)           4,961         (5,967)
                                                                            |                                     
   Loss from discontinued operations                              --        |         --               --           (2,643)
   Adjustments to reconcile loss from discontinued                          |                                     
     operations to net cash provided by discontinued                        |                                     
     operations:                                                            |                                     
     Loss on sale of Herschel Corporation                         --        |         --               --            4,120
     Depreciation and amortization of property,                             |                                     
       improvements and equipment                                 --        |         --               --              559
     Amortization of intangibles                                  --        |         --               --              561
     Deferred income taxes                                        --        |         --               (367)          (618)
     Changes in operating assets and liabilities                  --        |         --             13,520           (651)
                                                              --------      |     --------         --------       --------
                                                                  --        |         --             13,153          1,328
                                                              --------      |     --------         --------       --------
   Net cash provided by (used in) operating activities          12,153      |      (12,630)          18,114         (4,639)
                                                                                                              
                                                                               


                                                            
                                                        F-7                 

<PAGE>
<CAPTION>



                                            CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                       AND PREDECESSOR

                                      CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

                                                       (In thousands)


                                                             Successor      |                  Predecessor
                                                            ------------    |    ---------------------------------------
                                                              Period of     |
                                                               seven        |    Period of five
                                                               months       |       months
                                                               ended        |        ended          Fiscal year ended  
                                                              November 1,   |      March 26,     November 2,     October 28,
                                                                1997        |         1997           1996            1995           
                                                            ------------    |     ------------- ------------      ------------
<S>                                                          <C>                 <C>             <C>             <C>
Investing activities
   Purchases of property, improvements and equipment          $  (3,816)    |      $  (2,419)       $  (8,789)     $  (6,332)
   Acquisition of Central Tractor Farm & Country, Inc.                      |
     (Predecessor)                                             (155,963)    |           --               --             --
   Acquisition of Big Bear Farm Stores, Inc. in 1996                        |
     and Country General, Inc. in 1997 (Note 11)               (136,995)    |           --             (5,650)          --
   Other                                                            206     |         (1,348)             255            (74)
   Discontinued operations                                         --       |           --               --             (400)
                                                              ---------     |      ---------        ---------      ---------
   Net cash used in investing activities                       (296,568)    |         (3,767)         (14,184)        (6,806)
                                                                            |
Financing activities                                                        |
   Borrowings under line of credit                              206,106     |        113,119           86,782         67,020
   Repayments on line of credit                                (170,650)    |        (91,494)         (89,902)       (61,208)
   Proceeds from issuance of long-term debt                     155,000     |          8,000             --             --
   Payments on long-term debt                                    (8,000)    |        (16,000)             (17)          (372)
   Payments on capitalized lease obligations                       (101)    |            (69)            (120)          (186)
   Proceeds from issuance of common stock and capital                       |
     contributions                                              115,489     |            252               42          6,703
   Cash of Central Tractor at date of acquisition                 1,220     |           --               --             --
   Financing costs relating to new line of credit, term                     |
     loan and Senior Notes                                       (8,764)    |           --               --             --
   Other                                                          1,003     |           --               --             --
                                                              ---------     |      ---------        ---------      ---------
   Net cash provided by (used in) financing activities          291,303     |         13,808           (3,215)        11,957
                                                              ---------     |      ---------        ---------      ---------
   Net increase (decrease) in cash and cash equivalents           7,378     |         (2,589)             715            512
                                                                            |
   Cash and cash equivalents at beginning of period                --       |          3,809            3,094          2,582
                                                              ---------     |      ---------        ---------      ---------
   Cash and cash equivalents at end of period                 $   7,378     |      $   1,220        $   3,809      $   3,094
                                                              =========     |      =========        =========      =========
                                                                            |
Supplemental disclosures of cash flow information                           |
   Cash paid during the period for interest                   $  10,294     |      $   1,746        $   1,991      $   1,491
   Cash paid during the period for income taxes                     327     |            412            5,675          5,324
                                                               

</TABLE>
             
                                              See accompanying notes.

                                                        F-8

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Periods of seven-months ended November 1, 1997 and five-months ended
     March 26, 1997, and years ended November 2, 1996 and October 28, 1995

                (In thousands of dollars, except where indicated)




1.  Basis of Presentation and Acquisition of the Company

Central  Tractor  Farm  &  Country,  Inc.  ("the  Company")  is  a  wholly-owned
subsidiary  of CT Holding,  Inc.  ("CT  Holding"),  an affiliate of J. W. Childs
Equity Partners, L.P. ("Childs").

As a result of the acquisition of the Company  discussed below,  effective March
27,  1997,  a new  basis of  accounting  has  been  reflected  in the  Company's
financial  statements  reflecting  the fair values for the Company's  assets and
liabilities at that date ("Successor").  The financial statements of the Company
for periods prior to March 27, 1997 are presented on the  historical  cost basis
of  accounting  ("Predecessor").  A  line  has  been  placed  in  the  financial
statements to distinguish between Predecessor and Successor activity.

On November 27, 1996,  the Board of Directors of the Company  approved,  and the
Company entered into, a merger  agreement (the "Merger  Agreement") with Childs,
CT Holding and its  subsidiary,  JWC  Acquisition I, Inc., that provided for the
acquisition of the Company by CT Holding in a two-stage transaction.  The Merger
Agreement provided that following the acquisition of all of the Company's common
stock held by affiliates of Butler Capital Corporation  (collectively "BCC"), CT
Holding's subsidiary would merge with and into the Company (the "Merger") and CT
Holding would  acquire the remaining  shares of common stock of the Company held
by public shareholders. The Merger was completed on March 27, 1997.

On March 27, 1997, the Company  consummated a public  offering of $105.0 million
aggregate  principal  amount of Senior Notes. The net proceeds from the offering
were used to pay the Merger consideration, repay certain outstanding borrowings,
and pay fees and expenses of the acquisition.

The  acquisition  of the Company was accounted  for as a purchase.  The purchase
price for the common stock was approximately  $159.4 million,  including related
costs and expenses, of which $156.0 million was paid in cash and $3.4 million in
common  stock of CT Holding.  The cash  portion was funded from the  proceeds of
capital  stock  issued by CT  Holding,  and the Senior  Note  borrowings  by the
Company.  The purchase price was allocated to the tangible and intangible assets
and the liabilities of the Company based on fair values, as follows:



                                       F-9

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




1.  Basis of Presentation and Acquisition of the Company (continued)


     Inventory                                                       $124,284
     Property, improvements and equipment                              25,387
     Accounts receivable and other assets                               8,207
     Goodwill                                                          89,126
     Bank line of credit                                              (23,554)
     Accounts payable and accrued expenses                            (51,809)
     Long-term debt and capitalized lease obligations                  (9,442)
     Deferred income taxes                                             (2,806)
                                                                     -------- 
                                                                     $159,393
                                                                     ========

2.  Summary of Accounting Policies and Other Matters

Business and Principles of Consolidation

The consolidated  financial  statements include the Company and its wholly-owned
subsidiary, Country General, Inc. (hereinafter collectively "the Company").

The  Company  operates  agricultural  specialty  retail  stores  located  in the
Midwest,  Northeast,  and  Southeast  United  States.  The  Company  also  sells
merchandise on a wholesale basis under various distributor agreements throughout
the United  States.  With the sale (see Note 10) of the net operating  assets of
Herschel  Corporation,  continuing  operations  of the  Company  constitute  one
business segment for financial reporting purposes.

The Company  operates on a 52-53 week fiscal year ending on the Saturday nearest
to October 31.

All  significant  intercompany   transactions  have  been  eliminated  from  the
consolidated financial statements.

Cash and Cash Equivalents

For purposes of the statements of cash flows,  the Company  considers all highly
liquid  investments with a maturity of three months or less when purchased to be
cash equivalents.  Investments,  including repurchase  agreements and commercial
paper, are carried at cost, which approximates market.



                                      F-10

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


2.  Summary of Accounting Policies and Other Matters (continued)

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates.

Trade Receivables

Most of the  Company's  retail  sales  are  cash or  credit  card  sales,  while
wholesale sales and some retail sales are on account. The Company generally does
not require collateral for sales on account.  Concentrations of credit risk with
respect to trade  receivables  are limited due to the number of customers of the
Company and their geographic dispersion.  The allowance for doubtful accounts is
based on a current  analysis of receivable  delinquencies  and  historical  loss
experience.

Inventory

Inventory  is  recorded  at  cost,  including  warehousing  and  freight  costs,
determined principally by the last-in,  first-out (LIFO) method, which is not in
excess of market. The Company reviews its inventory for slow-moving, obsolete or
otherwise  unsalable items on a regular basis throughout the year,  including at
the time of physical  inventory  counts.  Write downs are made for any estimated
losses to be  incurred  with  respect  to  slow-moving,  obsolete  or  otherwise
unsalable  inventory as such inventory is identified.  Inventories  valued using
the LIFO  method  were  approximately  $134 and $5,081 at  November  1, 1997 and
November 2, 1996, respectively, less than the amounts of such inventories valued
at current cost.

Property, Improvements and Equipment

Property,  improvements  and equipment are carried at cost less  allowances  for
depreciation and amortization. Depreciation and amortization expense is computed
primarily on a basis of the straight-line method over the estimated useful lives
of the assets as follows:


Buildings and improvements                                        10 to 39 years
Leasehold improvements (not in excess of underlying lease terms)   5 to 20 years
Furniture and fixtures                                             5 to 15 years
Automobiles and trucks                                             3 to 10 years


                                      F-11

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)

2.  Summary of Accounting Policies and Other Matters (continued)

Certain long-term lease  transactions have been accounted for as capital leases.
The property  rights recorded under direct  financing  leases are amortized on a
straight-line  basis over the lesser of the useful life or the respective  terms
of the leases.

Goodwill

Goodwill is being amortized  utilizing the straight-line  method over periods of
40 years.  The carrying  value of goodwill is reviewed  continually to determine
whether any impairment has occurred.  This review takes into  consideration  the
recoverability  of the unamortized  amounts based on the estimated  undiscounted
cash flows of the related  businesses to the  respective  carrying  value of the
goodwill.  To the extent that the estimated  undiscounted  future cash flows are
less than the carrying value of the assets,  an impairment  loss can be measured
based upon various methods,  including undiscounted cash flows,  discounted cash
flows and fair value.  Based upon  undiscounted  cash flows,  no  impairment  of
goodwill was determined to exist and, accordingly, no measurement was required.

Deferred Financing Costs

Deferred financing costs are amortized over the term of the related debt.

Deferred Income Taxes

The Company uses the liability method of accounting for income taxes. Under this
method,  deferred income tax assets and liabilities are determined  based on the
difference  between  financial  reporting  and  income  tax bases of assets  and
liabilities  using the enacted marginal tax rates.  Deferred income tax expenses
or credits  are based on the  changes in the asset or  liability  from period to
period.

Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating the
fair value of its financial instruments:

     Cash  equivalents  and accounts  receivable and payable:  Carrying  amounts
     reported in the Company's  consolidated  balance sheets based on historical
     cost approximate  estimated fair value for these instruments,  due to their
     short-term nature.

     The fair value of the bank line of credit, bank term loan, and Senior Notes
     is estimated to approximate their carrying value as of November 1, 1997.

                                      F-12
<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


2.  Summary of Accounting Policies and Other Matters (continued)

Returns and Warranties

Costs  relating to  merchandise  returns from sales at retail stores and through
distributors are not significant and generally are accounted for as they occur.

Catalogs, Sale Flyers and Advertising Costs

The direct cost of printing and mailing the Company's  annual mail order catalog
is deferred and amortized  against mail order revenues over the year the catalog
is in use. The direct cost of printing and distributing  sale flyers is deferred
and  amortized  over the life of the flyer which is generally two weeks or less.
Other advertising costs are expensed as incurred.  Unamortized  amounts relating
to the costs of the annual  catalog and periodic  sale flyers  amounted to $923,
$950 and $610 at  November  1,  1997,  March  26,  1997 and  November  2,  1996,
respectively. Advertising expenses were approximately $7,755, $3,286, $8,841 and
$7,228 for the  seven-month  and five-month  periods of 1997 and for fiscal 1996
and 1995, respectively.

Store Pre-Opening Costs

Direct costs,  which consist  principally  of rent,  employee  compensation  and
travel costs for  merchandise  set-up and  supplies,  incurred in setting up new
stores for opening are deferred and amortized over the first twenty-six weeks of
store operations.  The amount of unamortized store pre-opening costs at November
1, 1997,  March 26,  1997,  and  November 2, 1996  amounted to $104,  $1,203 and
$1,123, respectively.

Emerging Accounting Issues

The Company is not aware of any accounting  standards which have been issued and
which will  require  the Company to change its  current  accounting  policies or
adopt new  policies,  the effect of which  would be  material  to the  Company's
financial statements.

                                      F-13
<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)



3.  Acquisitions

Effective June 26, 1997,  the Company  acquired all of the  outstanding  capital
stock of Country  General,  Inc.  (Country  General)  for  approximately  $137.0
million  (including related costs and expenses) in cash, subject to post-closing
adjustment.  Country  General  operates  a chain of 114  agricultural  specialty
retail stores.  The Company funded the acquisition  price in part from a $49,750
cash equity  contribution  from its parent,  CT Holding,  and the remainder from
funds drawn under the Company's amended and restated Credit Facility.

The  acquisition  was  accounted  for as a  purchase.  The  purchase  price  was
allocated to the tangible and  intangible  assets and the  liabilities  based on
fair values, as follows:


Inventory                                                             $  99,790
Accounts receivables and other assets                                     6,334
Property, improvements and equipment                                     16,708
Goodwill                                                                 48,239
Deferred income taxes                                                     7,929
Accounts payable and accrued expenses                                   (42,005)
                                                                      --------- 
                                                                      $ 136,995
                                                                      =========

Included in the amount allocated to accrued expenses is a $3,358 reserve for the
estimated cost,  principally  lease  liabilities,  to close nine acquired stores
during fiscal 1998; and a $2,866 reserve for the costs of severance  payments to
identified  employees  in  connection  with the  closing  of  Country  General's
corporate  headquarters.  As of November 1, 1997,  the reserve for severance had
been reduced to $2,722 as a result of payments to terminated employees.

On May 31,  1996,  the  Predecessor  acquired  31 retail  stores and related net
operating  assets from Big Bear Farm Stores,  Inc. (Big Bear),  an  agricultural
specialty  retailer,  for  approximately  $5,650 in cash.  The  acquisition  was
accounted  for as a purchase.  The purchase  price was allocated to the tangible
and intangible assets and the liabilities based on fair values as follows:

Inventory                                                               $ 8,780
Accounts receivable and other assets                                        206
Leaseholds and equipment                                                    517
Deferred income taxes                                                       135
Goodwill                                                                  2,666
Accounts payable and accrued expenses                                    (6,654)
                                                                        ------- 
                                                                        $ 5,650
                                                                        =======

The results of  operations  of Country  General and Big Bear are included in the
accompanying  consolidated  statements  of income  from the  respective  date of
purchase.

                                      F-14
<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


3.  Acquisitions (continued)

Pro Forma Results of Operations

Pro forma results of operations (in thousands)  presented below are based on the
historical  results  of  operations  of  the  Company,  as  Successor,  and  its
Predecessor,  adjusted  to give  effect to: (i) the  acquisition  of the Company
described  in Note 1; (ii) the  acquisitions  of  Country  General  and Big Bear
described  above;  and (iii) the debt  financing  arrangements  relating  to the
acquisitions,  as though these  transactions  had  occurred at the  beginning of
fiscal 1996.

                                                         Year ended
                                                November 1,      November 2,
                                                  1997              1996
                                             ---------------   --------------

     Net sales                                    $600,157         $613,538
     Operating income                               28,828           28,897
     Net income                                      3,418            4,147


4.  Line of Credit and Long-Term Debt

On July 3, 1997,  the  Company  entered  into an  amended  and  restated  Credit
Facility  with a bank which  consists  of a $50.0  million,  six-year  term loan
facility, which was fully funded, and a $100.0 million revolving credit facility
under which  borrowings  of $60,750 and letters of credit  totaling  $8,443 were
outstanding as of November 1, 1997. The Credit  Facility will mature on June 30,
2003.  Borrowings  under the Credit  Facility  will bear interest at rates based
upon prime or the  Eurodollar  Rate plus a margin.  At  November  1,  1997,  the
interest  rate on the Term Loan was 8.19% and the interest rate on the Revolving
Credit Facility was 8.06%.

The Credit Facility  agreement  contains  covenants which require the Company to
maintain a minimum:  consolidated  net worth;  earnings before taxes,  interest,
depreciation  and  amortization  (EBITDA);  ratio  of  EBITDA  to cash  interest
payable;  and ratio of debt to EBITDA. The covenants also restrict,  among other
things, the payment of dividends, incurrence of debt, and disposition of assets.

The  Credit  Facility  is  secured  by  substantially  all of the  assets of the
Company.

                                      F-15

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)

                                                               
                                                               
                                                               
4.  Line of Credit and Long-Term Debt (continued)              
                                                               
Long-term debt consisted of the following:                     
                                                               
                                                   Successor   |   Predecessor
                                                -------------  | -------------
                                                  November 1,  |   November 2,
                                                      1997     |       1996
                                                -------------  | -------------
                                                               |
10-5/8% Senior Notes due 2007                    $105,000      |  $   --
Bank term loan                                     50,000      |      --
7% Convertible notes                                 --        |    16,000
                                                 --------      |  --------
                                                  155,000      |    16,000
Less current portion                                3,000      |      --
                                                 --------      |  --------
                                                 $152,000      |  $ 16,000
                                                 ========      |  ========
                                                               
The Senior Notes mature on April 1, 2007 with interest  payable  semiannually in
arrears on April 1 and  October 1. The Senior  Notes may be  redeemed  beginning
April  1,  2002 at a price  of  105.3125%  of the  principal  amount  decreasing
approximately  1.77% annually  thereafter until April 1, 2005 at which time they
are  redeemable at face value.  Furthermore,  notwithstanding  the foregoing the
Company may redeem up to 35% of the original  aggregate  principal amount of the
Senior  Notes  at a price  of 110% of the  principal  amount  with  the net cash
proceeds of a public equity offering within 60 days of closing such offering.

The bank term loan must be repaid in semiannual  installments beginning December
31, 1997, plus annual  prepayments  based on the Company's  excess cash flow, as
defined.  The minimum annual  installments  are as follows:  fiscal years 1998 -
$3,000; 1999 - $3,000; 2000 - $6,000; 2001 - $8,000; 2002 - $12,000;  and 2003 -
$18,000.

5.  Lease Obligations

The Company has entered into certain  long-term lease  agreements for the use of
warehouses, certain retail store facilities and computer equipment. These leases
have been  accounted  for as  purchases  of property  rights and  designated  as
capitalized leases.

Amortization expense relating to such property rights recorded under capitalized
leases was $86, $59, $125 and $130 for the seven-month and five-month periods of
1997 and for fiscal 1996 and 1995, respectively.  The net book value of property
rights  recorded  under capital leases was $781 and $926 at November 1, 1997 and
November 2, 1996, respectively.


                                      F-16
<PAGE>


                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


5.  Lease Obligations (continued)

As of November 1, 1997, the debt associated with the capitalized property rights
is represented by the present value of the minimum lease payments as follows:


     Fiscal year ended in:
       1998                                                       $   325
       1999                                                           293
       2000                                                           293
       2001                                                           293
       2002                                                           293
       After 2002                                                     442
                                                                  -------
     Total minimum lease payments                                   1,939
     Less amount representing interest                                598
                                                                  -------
     Present value of minimum lease payments                        1,341
     Less current installments                                        170
                                                                  -------
                                                                   $1,171
                                                                  =======

The Company also has entered into certain noncancelable operating leases for the
use of real estate,  automobiles  and trucks,  and office  equipment.  Aggregate
rental expense for operating leases was approximately $9,299, $4,069, $9,294 and
$7,833 for the  seven-month  and five-month  periods of 1997 and for fiscal 1996
and 1995, respectively.

The following is a summary of minimum rental commitments as of November 1, 1997,
for operating leases:

                                              Automobile    Office
       Fiscal Year-End        Real Estate     and Trucks   Equipment     Total
-----------------------    ---------------  ------------- ------------ ---------

1998                          $14,161          $  552        $  52      $14,765
1999                           11,428             395           46       11,869
2000                            8,991             301           17        9,309
2001                            5,869             215            2        6,086
2002                            3,854               -            -        3,854
After 2002                      5,865               -            -        5,865
                              -------          ------         ----      -------
                              $50,168          $1,463         $117      $51,748
                              =======          ======         ====      =======


                                      F-17

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


6.  Stock Options

Stock Options

The Predecessor had stock option  arrangements with various officers,  directors
and other members of management  which it accounted for under the  provisions of
APB Opinion No. 25 and related  interpretations.  All  outstanding  options were
purchased  or  exchanged  for CT Holding  common  stock in  connection  with the
acquisition of the Company.

Neither the Company,  nor its parent, CT Holding has any capital shares reserved
for or any outstanding stock options at November 1, 1997.

7. Income Taxes

The  Company's   consolidated   results  of  operations   are  included  in  the
consolidated  tax  returns  of its  parent,  CT  Holding.  The  entities  in the
consolidated tax returns have adopted a policy of allocating  income tax expense
or  benefit  based on a  separate  return  concept.  This  generally  results in
profitable companies recognizing income tax expense as if the individual company
filed a separate return and loss companies  recognizing an income tax benefit to
the extent their losses contribute to reduce consolidated income taxes currently
or in the future.

Deferred  income  taxes  reflect  the net tax  effect of  temporary  differences
between the amount of assets and  liabilities for financial  reporting  purposes
and the amounts  used for income tax  purposes.  Significant  components  of the
Company's deferred tax liabilities and assets are as follows:
<TABLE>
<CAPTION>

                                                                           Successor        |      Predecessor
                                                                     ---------------------  |  --------------------
                                                                       November 1, 1997     |    November 2, 1996
                                                                     ---------------------  |  --------------------
    <S>                                                                       <C>                    <C>

     Deferred tax liabilities:                                                              |
       Differences in depreciation and cost basis of property,                              |
       improvements and equipment                                              $  2,428     |         $ 1,766
       Differences in cost basis of inventories due to LIFO and                             |  
       uniform capitalization                                                     5,423     |           1,320
       Prepaid advertising                                                          369     |             244
       Store pre-opening costs                                                       42     |             449
       Other                                                                          -     |               9
                                                                              ---------     |       ---------
     Total deferred tax liabilities                                               8,262     |           3,788
                                                                                            
</TABLE>
                                                                         
                                                       F-18              
                                                                         
<PAGE>                                                                   
<TABLE>
<CAPTION>
                                                                    
                                       CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                  AND PREDECESSOR

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                 (In thousands of dollars, except where indicated)


    7.  Income Taxes (continued)



                                                                           Successor        |      Predecessor
                                                                     ---------------------  |  --------------------
                                                                       November 1, 1997     |    November 2, 1996
                                                                     ---------------------  |  --------------------
    <S>                                                                    <C>                       <C>
     Deferred tax assets:                                                                   |
       Net operating loss carryforward                                      $  1,369        |          $      -
       Capital loss carryforward                                                 920        |               920
       Differences in amortization and cost basis of intangibles                  87        |                 -
       Allowance for doubtful accounts                                           214        |                20
       Excess and obsolete inventory reserves                                  5,355        |               160
       Compensation and employee benefit accruals                              2,222        |               218
       Operating leases                                                          368        |               273
       Accrued profit sharing contributions                                      287        |               356
       Stock warrant                                                               -        |               266
       Accrued store closing costs                                             1,362        |                32
       Capitalized property rights and lease obligations treated                            |
         as operating leases for income tax purposes                             223        |               234
       Other                                                                      27        |                51
                                                                            --------        |          --------
                                                                              12,434        |             2,530
                                                                                            |
       Less valuation allowance for capital loss carryforward                   (920)       |              (920)
                                                                            --------        |          --------
     Total deferred tax assets                                                11,514        |             1,610
                                                                            --------        |          --------
     Net deferred tax assets (liabilities)                                  $  3,252        |          $ (2,178)
                                                                            ========        |          ========
</TABLE>
                                                          
The Company has a net operating loss carryforward of approximately  $3.4 million
which will expire in the year 2012. A capital loss carryforward of approximately
$2.3 million which relates to the sale of Herschel will expire in the year 2001.
                                                               

                                                       F-19

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)

<TABLE>
<CAPTION>
7. Income Taxes (continued)

Components of income tax expense (benefit) are as follows:

                                        Successor           |                       Predecessor
                                   --------------------     |     -----------------------------------------------
                                                            |                    Fiscal year ended               
                                     Period of seven        |      Period of five
                                       months ended         |       months ended      November 2,      October 28
                                     November 1, 1997       |      March 26, 1997         1996            1995
                                   --------------------     |     ----------------- ---------------- --------------
<S>                                       <C>                         <C>               <C>              <C>
Continuing operations:                                      |
  Current:                                                  |
    Federal                                $   148          |          $(1,541)          $ 3,951           $ 3,768
    State                                       38          |             (421)            1,199             1,152
                                           -------          |          -------           -------           -------
                                               186          |           (1,962)            5,150             4,920
  Deferred                                   1,871          |            1,328             1,100               800
                                           -------          |          -------           -------           -------
                                             2,057          |             (634)            6,250             5,720
Discontinued operations:                                    |
  Current                                     --            |             --                 367               427
  Deferred                                    --            |             --                (367)             (618)
                                           -------          |          -------           -------           -------
                                              --            |             --                --                (191)
                                           -------          |          -------           -------           -------
Total                                      $ 2,057          |          $  (634)          $ 6,250           $ 5,529
                                           =======          |          =======           =======           =======
<CAPTION>
                                                            
Total reported  income tax expense differs from the tax that would have resulted
by applying the  statutory  expected  federal  income tax rate to income  before
taxes. The reasons for these differences are as follows:


                                        Successor           |                       Predecessor
                                   --------------------     |     -----------------------------------------------
                                                            |                    Fiscal year ended               
                                     Period of seven        |      Period of five
                                       months ended         |       months ended      November 2,      October 28
                                     November 1, 1997       |      March 26, 1997         1996            1995
                                   --------------------     |     ----------------- ---------------- --------------
<S>                                       <C>                         <C>               <C>             <C>
Income tax at federal statutory rate       $ 1,163          |          $  (639)          $ 5,098         $ 3,764
Increases in taxes resulting from:                          |                                           
  State income taxes, net of federal                        |                                           
    income tax effect                          306          |              (79)              833             897
  Goodwill amortization                        391          |               72               178             215
  Capital loss carryforward                   --            |             --                --               755
  Other, net                                   197          |               12               141             102
  Reduction of prior year overaccruals        --            |             --                --              (204)
                                           -------          |          -------           -------         -------
                                           $ 2,057          |          $  (634)          $ 6,250         $ 5,529
                                           =======          |          =======           =======         =======
                                                                                                   
</TABLE>
                                                            
                                                       F-20 
                                                            
<PAGE>                                                      

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


8.  Employment Commitments

The Company has  employment  agreements  with two officers of the Company  which
provide for annual salaries amounting to approximately $700. Upon termination of
employment for death, disability or without cause, compensation may be continued
for a period not to exceed eighteen months.

  9.  Profit Sharing Plan

The Company has a profit  sharing plan  covering all  employees who meet certain
eligibility   requirements.   The  plan  provides  for  discretionary   employer
contributions   and  allows   voluntary   participant   contributions.   Company
contributions  are  determined  by its Board of Directors.  The Company  accrued
expense in connection  with the profit sharing plan of $729,  $85, $881 and $804
for the seven-month and five-month periods of 1997 and for fiscal 1996 and 1995,
respectively.

10.  Discontinued Operations

During  fiscal  1996,  the  Company  completed  the  sale  of  its  wholly-owned
subsidiary,  Herschel  Corporation  (Herschel),  a  manufacturer  and  wholesale
distributor  of  equipment  parts for use in the farming  industry.  Herschel is
reported as a discontinued segment of the business;  accordingly,  its operating
results are  segregated  in the fiscal 1995  consolidated  statement  of income.
Summarized   financial   information  of  Herschel's  income  from  discontinued
operations follows:


                                                        Fiscal year ended
                                                         October 28, 1995
                                                      ------------------------

     Net sales                                               $22,970
     Income before income taxes                                1,286
     Income taxes                                                474
     Income from discontinued operations                         812



                                      F-21

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


11.  Transactions with Related Parties

Certain investment funds managed by Butler Capital  Corporation  ("BCC") owned a
majority of the  outstanding  common  stock of the Company (see Note 1 regarding
acquisition  by  Childs  and  CT  Holding).  The  BCC  Funds  also  held  the 7%
convertible  notes  (see  Note 4) which  were  retired  in  connection  with the
purchase of the BCC common stock.  Interest paid on such notes was approximately
$171, $1,425 and $883 for the period of five months ended March 26, 1997 and for
fiscal 1996 and 1995, respectively.

Included in costs  associated  with  acquiring the Company and related  deferred
financing  costs is an advisory and financing fee of $1.7 million paid to Childs
in consideration of services regarding the planning, structuring and negotiating
of the acquisition and related financings.

For the  period of seven  months  ended  November  1,  1997,  Childs  was paid a
management and consulting  services fee of approximately  $140 under a five-year
agreement, annually renewable thereafter, requiring annual payments of $240.

The Company purchases inventory from two suppliers who are controlled by the BCC
Funds.  Purchases from these suppliers aggregated  approximately  $1,605, $6,228
and $6,254 for the period of five  months  ended  March 26,  1997 and for fiscal
1996 and 1995, respectively.


12.  Guarantee of Senior Notes

The Senior Notes described in Note 4 are guaranteed jointly and severally, fully
and unconditionally by Country General, the Company's wholly-owned subsidiary.

As a result of the acquisition of Country General by the Company as discussed in
Note 2, a new  basis of  accounting  has been  reflected  in  Country  General's
financial statements reflecting the fair values for Country General's assets and
liabilities at that date.



                                      F-22

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


12.  Guarantee of Senior Notes (continued)

Summarized financial information for Country General as of year-end and from the
date of acquisition, is as follows:
<TABLE>
<CAPTION>
                                                                                   November 1, 1997
                                                                                --------------------
<S>                                                                                <C>
Balance sheet data Current assets:
  Accounts receivable                                                                $   6,049
  Inventory                                                                            102,571
  Other                                                                                  7,702
                                                                                     ---------
                                                                                       116,322
Property and equipment, net of allowances for depreciation                              16,673
Other noncurrent assets, principally goodwill and deferred financing costs              53,109
                                                                                     ---------
                                                                                     $ 186,104
                                                                                     =========

Current liabilities, principally accounts payable and accrued expenses               $  38,696
Noncurrent liabilities, principally amounts due to related parties                      11,434
Stockholder's equity                                                                   135,974
                                                                                     ---------
                                                                                     $ 186,104
                                                                                     =========
<CAPTION>

                                                                                   Period of four
                                                                                    months ended
                                                                                  November 1, 1997
                                                                                ---------------------
<S>                                                                                 <C>
Income statement data
Net sales                                                                            $  99,381
Cost of sales                                                                           71,095
                                                                                     ---------
Gross profit                                                                            28,285

Selling, general and administrative and other expenses                                  26,719
                                                                                     ---------
Operating income                                                                         1,567

Interest expense to related party                                                        3,201
                                                                                     ---------
Loss before income taxes                                                                (1,634)

Income tax credit                                                                         (613)
                                                                                     ---------
Net loss                                                                             $  (1,021)
                                                                                     =========

Cash flow data
Net cash flows provided by (used in):
  Operating activities                                                               $  (1,736)
  Investing activities, principally capital expenditures                                  (415)
  Financing activities, principally change in amounts due to related parties, less
    payment of deferred financing costs of $2,340                                        5,548

</TABLE>

                                                       F-23
<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)



13.  Quarterly Results of Operations (Unaudited)

The following is a tabulation of the unaudited  quarterly  results of operations
for the years ended November 1, 1997 and November 2, 1996:
<TABLE>
<CAPTION>
                                                   Predecessor                                  Successor
                                      ----------------------------------  |  -----------------------------------------------
                                                                          |
                                         First        February 2, 1997    |   March 27,1997      Third           Fourth
                                        Quarter       to March 26, 1997   |   to May 3, 1997    Quarter          Quarter
                                      -------------  ------------------   |   --------------   -----------      ---------
<S>                                  <C>               <C>                     <C>            <C>
Fiscal year ended November 1, 1997:                                       |
  Net sales                           $  71,479         $  34,569         |     $  35,168       $ 129,216        $ 140,738
  Gross profit                           20,409            10,358         |        10,634          36,649           41,497
  Operating income (loss)                 2,538            (1,231)        |         2,832           9,519            2,534
  Net income (loss) as reported           1,141            (1,848)        |           732           1,305           (2,076)
  Restatements                             (540)(1)          --           |          --             1,404(2)          --
                                      ---------         ---------         |     ---------       ---------        ---------
    Net income (loss) as restated           601            (1,848)        |           732           2,709           (2,076)
    Ratio (deficiency) of earnings                                        |                                    
      to fixed charges                     1.6x              (910)        |          1.8x            1.9x           (2,871)

<CAPTION>
                                                                          
                                                                     Predecessor
                                               --------------------------------------------------------

                                                  First          Second          Third          Fourth
                                                 Quarter         Quarter        Quarter         Quarter
                                               --------------------------------------------------------
<S>                                             <C>            <C>             <C>            <C>

Fiscal year ended November 2, 1996:
  Net sales                                      $69,967         $62,989        $86,169         $73,895
  Gross profit                                    18,862          19,245         25,417          22,268
  Operating income                                 2,580           3,368          6,972           3,737
  Net income                                       1,280           1,684          3,937           1,843
  Ratio of earnings to fixed charges                3.8x            4.1x           8.7x            4.3x
<FN>
----------
(1)      The  restatement of net income for the first quarter of 1997 reflects the after-tax  effect of bridge loan financing  costs
         and interest  expense  incurred during the first quarter by JWC Acquisition I, Inc. prior to its merger into the Company on
         March 27,  1997.  The bridge loan was retired from the proceeds of the Senior Notes issued by the Company on March 27, 1997
         and, accordingly,  the financing costs and interest expense were "pushed- down" to the Predecessor results of operations of
         the Company  during the period the bridge loan was  outstanding.  The period from  February 2, 1997 to March 26,  1997,  as
         reported, reflects the effect of the "push-down" of such costs.

(2)      The  restatement of net income for the third quarter of 1997 reflects the after-tax  effect of financing  costs expensed in
         that quarter relating to the Company's Credit Facility which were subsequently recorded as a deferred asset.
</FN>
</TABLE>

                                                       F-24

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.

                    UNAUDITED PRO FORMA RESULTS OF OPERATIONS

                           Year ended November 1, 1997
                            (In thousands of dollars)


Pro forma results of operations  for the year ended  November 1, 1997  presented
below are based on the historical  results of operations of Central Tractor Farm
& Country, Inc. ("the Company"), as Successor, and its Predecessor,  adjusted to
give effect to: (i) the  acquisition  of the Company as of March 27, 1997;  (ii)
the  acquisition  of Country  General,  Inc. as of June 26, 1997; and (iii) debt
financing   arrangements   relating  to  the   acquisitions,   as  though  these
transactions had occurred at the beginning of fiscal 1997.

The pro  forma  adjustments  are based  upon  available  data  that the  Company
believes are  reasonable.  However,  the pro forma results of operations for the
year ended  November 1, 1997 are not  necessarily  indicative  of the  Company's
results  of  operations   that  might  have  occurred  had  the   aforementioned
transactions  been completed as of the dates  indicated above and do not purport
to represent  what the Company's  results of operations  might be for any future
date.  The  Unaudited  Pro  Forma  Results  of  Operations  should  be  read  in
conjunction  with the consolidated  financial  statements of the Company and the
information  contained  in  Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations  included elsewhere in this Annual Report on
Form 10-K.

The  acquisitions  of the Company and Country  General,  Inc. were accounted for
using the purchase method of accounting.

<TABLE>
<CAPTION>
                                         Historical Results of Operations
                             -----------------------------------------------------------
                             Central Tractor Farm & Country, Inc.
                             ------------------------------------             Country
                                  Successor           Predecessor          General, Inc.
                                  ---------           -----------          -------------
                                 Seven months         Five months                                                   Pro Forma for
                                    ended                ended             Eight months                               year ended
                                 November 1,           March 26,          ended June 25,           Pro Forma         November 1,
                                     1997                 1997                 1997               Adjustments            1997
                               ----------------      --------------      -----------------      ---------------    ----------------
<S>                                <C>                <C>                     <C>                 <C>                 <C>      
Net sales                          $ 305,122          $ 106,048               $ 188,987                                $ 600,157
Cost of sales                        216,342             75,281                 135,603                                  427,226
                                   ---------          ---------               ---------                                ---------
Gross profit                          88,780             30,767                  53,384                                  172,931
                                                                                                  
Selling, general and                                                                              
  administrative expenses             72,142             29,045                  39,382            $     100(1)          140,669
Amortization of intangibles            1,753                415                    --                  1,266(2)            3,434
                                   ---------          ---------               ---------            ---------           ---------
Operating income                      14,885              1,307                  14,002               (1,366)             28,828
                                                                                                  
Interest expense                      11,463              3,188                   3,570                3,829(3)           22,050
                                   ---------          ---------               ---------            ---------           ---------
Income before income                   3,422             (1,881)                 10,432               (5,195)              6,778
  taxes                                                                                           
                                                                                                  
Income taxes                           2,057               (634)                  4,197               (2,260)(4)           3,360
                                   ---------          ---------               ---------            ---------           ---------
Net income                         $   1,365          $  (1,247)              $   6,235            $  (2,935)          $   3,418
                                   =========          =========               =========            =========           =========
                                                                                            
Ratio of earnings to fixed
  charges (5)                                                                                                             1.3x
                                                                                                                       =========
</TABLE>

                                                       F-25

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.

               NOTES TO UNAUDITED PRO FORMA RESULTS OF OPERATIONS
                            (In thousands of dollars)




(1)  Represents  an  annual  management  fee of $240  charged  by J.  W.  Childs
     Associates, L.P. pro rated for the five months ended March 26, 1997.

(2)  Represents the incremental amount of goodwill amortization (over periods of
     40 years) as a result  of the  increase  in  goodwill  attributable  to the
     acquisition of the Company and the acquisition of Country General,
     Inc.

(3)  Represents  the  incremental  amount of  interest  expense  relating to the
     acquisition of the Company and the acquisition of Country General  computed
     as follows:


Interest expense related to new debt and remaining debt
  outstanding after the acquisitions:
  Senior Notes                                                         $ 11,156
  Term Loan                                                               4,100
  Revolving Credit Facility                                               5,321
  Amortization of deferred financing costs                                1,298
  Interest on capital leases                                                175
                                                                       --------
                                                                         22,050
Less historical interest expense:
    Successor                                                           (11,463)
    Predecessor                                                          (3,188)
    Country General, Inc.                                                (3,570)
                                                                       --------
Pro forma adjustment                                                   $  3,829
                                                                       ========

     Interest  expense was calculated  using the following  average  rates:  (a)
     Senior  Notes - 10.625%;  (b) Term Loan - 8.2%;  and (c)  Revolving  Credit
     Facility - 8.0%.  Interest expense related to the Revolving Credit Facility
     was based on an annual  average  of  approximately  $66,500  of  borrowings
     outstanding.

(4)  Represents  the  reduction  in income tax to record the income tax  benefit
     related to the pro forma adjustments for the management fee, the portion of
     the  incremental  amount of goodwill  amortization  relating to the Country
     General, Inc. acquisition that is tax deductible,  and incremental interest
     expense, computed using an effective income tax rate of 40%. No tax benefit
     was provided relating to the portion of the incremental  amount of goodwill
     amortization relating to the acquisition of the Company, since such amounts
     will not be deductible for income tax purposes.

(5)  For purposes of computing  this ratio,  earnings  consist of income  before
     income taxes plus fixed charges. Fixed charges consist of interest expense,
     amortization  of deferred  financing  costs,  and 20.0% of the rent expense
     from  operating   leases  which  the  Company   believes  is  a  reasonable
     approximation of the interest factor in the rent.


                                      F-26

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.

                        Valuation and Qualifying Accounts

                                   Schedule II


                                                               Allowance for
                                                               Trade Receivables
                                                               -----------------


               Balance at October 29,1994                         $(168,000)
                 Credited to expense                                 30,500
                 Write-off of uncollectible accounts                 65,500
                                                                  ---------
               Balance at October 28, 1995                          (72,000)
                 Credited to expense                                 20,500
                 Write-off of uncollectible accounts                  1,500
                                                                  ---------
               Balance at November 2, 1996                          (50,000)
                 Credited to expense                                  4,700
                                                                  ---------
               Balance at March 26, 1997                            (45,300)
                 Debited to expense                                 (54,436)
                 Write-off of uncollectible accounts                 49,736
                 Acquired from Country General, Inc.               (336,000)
                                                                  ---------
               Balance at November 1, 1997                        $(386,000)
                                                                  =========

                                      F-27

<PAGE>


                                    SIGNATURE

     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.

                                          CENTRAL TRACTOR FARM & COUNTRY, INC.




DATED: January 30, 1998                   By: /s/ James T. McKitrick
                                             James T. McKitrick, President
                                             and 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 date indicated.

DATED: January 30, 1998


/s/ James T. McKitrick         President and Chief Executive Officer, Director
James T. McKitrick             (Principal Executive Officer)
                               
                               
/s/ Dean Longnecker            Executive Vice President and Chief Operating
Dean Longnecker                Officer, Director
                               
                               
/s/ Denny L. Starr             Senior Vice President, Finance and Chief 
Denny L. Starr                 Financial Officer (Principal Financial and
                               Accounting Officer)
                               
/s/ John W. Childs             Director
John W. Childs                 
                               
/s/ Jerry D. Horn              Director
Jerry D. Horn                  
                               
/s/ Stephen G. Segal           Director
Stephen G. Segal               
                               
/s/ Adam L. Suttin             Director
Adam L. Suttin                 
                               
/s/ Jeffrey B. Swartz          Director
Jeffrey B. Swartz              
                               
/s/ William E. Watts           Director
William E. Watts               
                               
/s/ Habib Y. Gorgi             Director
Habib Y. Gorgi                 
                               
/s/ Peter Lamm                 Director
Peter Lamm                     
                               
___________________            Director
Richard C. Dresdale