Annual Report (Form 10-K), fiscal year 1994

Item 1. Business
The Andersons Management Corp. (The "Corporation") was formed in August 1987, principally for the purpose of providing management services to The Andersons, a partnership (the "Partnership") and to act as the Partnership's sole General Partner. The Corporation began operations in 1988 when it completed an offering of its Class A and Class B Common Shares, transferred $500,000 of offering proceeds to the Partnership as its capital investment, and became the sole General Partner of the Partnership. Ownership of the Corporation's Class A and Class B Common Shares is restricted to limited partners of The Andersons.
The Corporation provides all management services to the Partnership pursuant to a Management Agreement entered into between the Partnership and the Corporation. The fee paid to the Corporation for its services is an amount equal to (a) the salaries and cost of all employee benefits, and other normal employee costs, paid or accrued on behalf of the Corporation's employees who furnish services to the Partnership, (b) reimbursable expenses incurred by the Corporation in connection with its services to the Partnership, or on the Partnership's behalf, and (c) an amount equal to $5,000 for each 1% of return on partners' capital up to a 15% annual return on partners' capital, plus $7,500 for each 1% of return on partners' capital between 15% and 25%, plus $10,000 for each 1% of return on partners' capital greater than a 25% annual return to cover that part of the Corporation's general overhead which is attributable to Partnership services and to provide an element of profit to the Corporation. In addition to the fee payable to the Corporation, the Management Agreement also provides for certain other customary terms and conditions, including termination rights, and requires the Corporation to make its books and records available to the Partnership for inspection at reasonable times.
Business and Properties of the Partnership
The Partnership is engaged in agriculture which includes grain merchandising, operating grain elevator facilities located in Ohio, Michigan, Indiana and Illinois, and distributing agricultural supplies such as fertilizers, seeds and farm supplies. The Partnership is also engaged in the operation of retail general stores; the production, distribution and marketing of lawn care products and corncob products and the repair and leasing of rail cars.
For more complete information as to the Partnership's business and properties, and other information regarding the Partnership's operations, reference is made to the Partnership's Form 10-K for the year ended December 31, 1994 (the "Partnership Form 10-K"), which is filed as an exhibit hereto through incorporation by reference.
Item 2.



Item 2. Properties
The Corporation leases an office building located in Maumee, Ohio under a net lease expiring in 2000. The Corporation subleases approximately 90% of the building to the Partnership. See "Item 13. Certain Relationships and Related Transactions."
Item 3.

Item 3. Legal Proceedings
None.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
None. PART II
Item 5.

Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
(a) Because of ownership and transferability restrictions, there is no market for the Class A and Class B Common Shares.
(b) As of March 1, 1995, there were 187 holders of Class A Common Shares and 184 holders of Class B Common Shares.
(c) The Corporation does not intend to pay cash dividends in the foreseeable future.
Item 7.


Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
The Corporation had cash and cash equivalents and short-term investments of approximately $1.2 and $1.3 million at December 31, 1994 and 1993, respectively. The largest component of the Corporation's working capital was a receivable from the Partnership. This receivable represents the costs incurred by the Corporation in providing management and labor services to the Partnership but not yet paid by the Corporation and therefore not yet collected from the Partnership. The Corporation has no short-term or long- term debt. During 1994, the Corporation offered Class A and Class B Common Shares and received $21,369 under that offering. Class A and Class B Common Shares redeemed during 1993 totalled $18,405. Management believes, given the relationship between the Corporation and the Partnership whereby the Corporation is reimbursed by the Partnership for its cost in providing management and labor services to the Partnership, and given the Corporation's cash and cash equivalents and short-term investment of $1.2 million, that the Corporation's liquidity is adequate to meet both short-term and long-term needs.
Results of Operations
Years ended December 31, 1994 and 1993:
Net income in 1994 was $252,351 or $54.72 per Class A Common Share, compared to $146,399 or $31.66 per share in 1993. Income earned by the Corporation on its investment in the Partnership was up $73,318 in 1994 and the management fee earned by the Corporation based on the Partnership's return on equity and rent and other reimbursable expenses was up $213,563. These increases were due to improved 1994 operating results of the Partnership and an increase in space utilized by the Partnership in the Corporation's office building. Interest earned and other income decreased by $27,096, primarily due to less space leased by outside tenants in the Corporation's office building. Federal income tax expense increased due to the increase in income.
Years ended December 31, 1993 and 1992:
Net income in 1993 was $146,399, or $31.66 per Class A Common Share, compared to $9,083, or $1.96 per share in 1992. Income earned by the Corporation on its investment in the Partnership was up $51,398 in 1993 and the management fee earned by the Corporation based on the Partnership's return on equity and rent and other reimbursable expenses was up $175,185. These increases are a result of the improved 1993 operating results of the Partnership and an increase in reimbursable expenses. Federal income tax expense was up due to the increase in income.
During 1993 the Corporation adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." The Corporation elected to recognize the accrued benefits earned by employees as of January 1, 1993 (transition obligation) prospectively, which means this cost will be recognized as a component of the net periodic postretirement benefit cost over a period of approximately 20 years. The effect of adopting the new rules increased the 1993 net periodic postretirement benefit cost by approximately $850,000. This cost was included in the management fee charged to the Partnership in 1993 and, therefore, had no impact on the operating results of the Corporation. Also during 1993, as a result of lower prevailing interest rates, the Corporation decreased the discount rate used to determine its projected benefit obligation for its pension plan and for its postretirement health care benefits from 8.0% to 7.5%. Because the Corporation charges all employee benefit costs to the Partnership as part of the management fee, the change in the discount rate will not impact the future operating results of the Corporation.
Item 8.


Item 8. Financial Statements and Supplemental Data
Report of Independent Auditors
Shareholders The Andersons Management Corp.
We have audited the accompanying balance sheets of The Andersons Management Corp. as of December 31, 1994 and 1993, and the related statements of income, cash flows, and changes in shareholders' equity for each of the three years in the period ended December 31, 1994. These financial statements 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Andersons Management Corp. at December 31, 1994 and 1993, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles.
As discussed in Note 3 to the financial statements, in 1993 the Corporation changed its method of accounting for postretirement benefits.
/s/ Ernst & Young LLP ERNST & YOUNG LLP
Toledo, Ohio February 6, 1995
The Andersons Management Corp. Statements of Income
Year ended December 31 1994 1993 1992 Management fees (Note 2) $70,394,855 $63,107,331 $57,388,268 Equity in income of The Andersons 218,844 145,526 94,128 Interest earned and other income 148,829 175,925 175,947 70,762,528 63,428,782 57,658,343 Costs and expenses: Salaries, wages and benefits 69,400,144 62,326,184 56,782,306 Rent expense 754,867 731,209 726,028 General expenses 227,966 153,590 139,926 70,382,977 63,210,983 57,648,260 Income before income taxes 379,551 217,799 10,083
Federal income taxes: Current 140,100 68,500 3,800 Deferred (credit) (12,900) 2,900 (2,800) 127,200 71,400 1,000 Net income $ 252,351 $ 146,399 $ 9,083
Net income per weighted average Class A Common Share $54.72 $31.66 $1.96
Weighted average number of Class A shares outstanding 4,612 4,624 4,633
See accompanying notes.
The Andersons Management Corp. Balance Sheets
December 31 1994 1993 Assets Current assets: Cash and cash equivalents $ 736,599 $ 795,379 U.S. Treasury security, held-to-maturity (fair value of $486,875 and $504,375, respectively) 490,532 505,313 Receivable from The Andersons (Note 2) 4,700,699 4,173,287 Note and accounts receivable 307 3,026 Prepaid expenses (Note 3) 2,702,866 2,723,668 Total current assets 8,631,003 8,200,673
Receivable from The Andersons (Note 2) 3,059,742 2,413,041 Investment in The Andersons (Note 2) 969,376 761,839 Investment in mutual fund at fair value which approximates cost 250,000 - Other 73,843 56,650 $12,983,964 $11,432,203
Liabilities and shareholders' equity Current liabilities: Accounts payable $ 869,704 $ 1,149,232 Accrued compensation and benefits 7,192,479 6,263,206 Total current liabilities 8,062,183 7,412,438
Postretirement benefits (Note 3) 3,059,742 2,413,041
Shareholders' equity: Common Shares, without par value: Class A non-voting: Authorized--25,000 shares Issued-- 4,855 shares at stated value 1,456,405 1,456,405 Class B voting: Authorized--25,000 shares Issued--5,014 and 4,681 shares at stated value in 1994 and 1993, respectively 5,014 4,681 Retained earnings 471,441 219,090 1,932,860 1,680,176 Less common shares in treasury, at cost-- (236 and 242 Class A shares and -0- and 147 Class B shares in 1994 and 1993, respectively) (70,821) (73,452) 1,862,039 1,606,724 $12,983,964 $11,432,203
See accompanying notes.
The Andersons Management Corp. Statements of Cash Flows
Year ended December 31 1994 1993 1992 Operating activities Net income $ 252,351 $ 146,399 $ 9,083 Adjustments to reconcile net income to net cash provided by operating activities: Equity in earnings of The Andersons in excess of cash received (Note 2) (207,537) (139,180) (91,337) Provision for deferred income tax (credits) (12,900) 2,900 (2,800) Amortization 4,110 41,411 11,145 Changes in operating assets and liabilities: Note and accounts receivable 2,719 45,941 52,527 Receivable from The Andersons (Note 2) (1,174,113) (2,160,348) 732,588 Prepaid and other assets 3,609 (304,625) (841,184) Accounts payable and accrued expenses 1,309,346 2,457,183 233,324 Net cash provided by operating activities 177,585 89,681 103,346
Investing activities Purchases of investments (739,329) (505,313) (14,116) Sales and maturities of investments 500,000 1,000,000 - Net cash provided by (used in) investing activities (239,329) 494,687 (14,116)
Financing activities Sale of common shares from treasury 21,036 11,141 46,671 Purchase of common shares for treasury (18,405) (23,697) (27,846) Proceeds from sale of common shares 333 - - Net cash provided by (used in) financing activities 2,964 (12,556) 18,825
Increase (decrease) in cash and cash equivalents (58,780) 571,812 108,055 Cash and cash equivalents at beginning of year 795,379 223,567 115,512 Cash and cash equivalents at end of year $ 736,599 $ 795,379 $ 223,567
See accompanying notes.
The Andersons Management Corp. Statements of Changes in Shareholders' Equity
Common Shares Retained Treasury Class A Class B Earnings Shares Balances at December 31, 1991 $1,456,405 $4,681 $ 63,608 $(79,721) Sale of 150 Class A and 171 Class B shares from treasury 46,671 Purchase of 90 Class A and 54 Class B shares for treasury (27,846) Net income for the year 9,083 Balances at December 31, 1992 1,456,405 4,681 72,691 (60,896) Sale of 35 Class A and 251 Class B shares from treasury 11,141 Purchase of 75 Class A and 73 Class B shares for treasury (23,697) Net income for the year 146,399 Balances at December 31, 1993 1,456,405 4,681 219,090 (73,452) Sale of 59 Class A and 200 Class B shares from treasury 21,036 Purchase of 53 Class A and 53 Class B shares for treasury (18,405) Issuance of 333 shares 333 Net income for the year 252,351 Balances at December 31, 1994 $1,456,405 $5,014 $471,441 $(70,821)
See accompanying notes.
The Andersons Management Corp. Notes to Financial Statements December 31, 1994
1. Significant Accounting Policies
Cash Equivalents
The Corporation considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
Securities
The Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" in 1994. There was no cumulative effect as a result of the adoption.
Management determines the appropriate classification of debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Debt securities are classified as held-to-maturity when the Corporation has the positive intent and ability to hold the securities to maturity. Held- to-maturity securities are stated at amortized cost. Marketable equity securities and debt securities not classified as held-to-maturity are classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in a separate component of shareholders' equity.
Income Taxes
Effective January 1, 1993, the Corporation changed its method of accounting for income taxes from the deferred method to the liability method required by Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." The impact of this change was not significant.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Temporary differences relating to costs and expenses incurred on behalf of the Partnership are passed on to the Partnership through offsetting differences in the recognition of management fees by the Corporation. Deferred tax assets of the Corporation relate primarily to temporary differences associated with the Corporation's share of Partnership net income and amounted to $29,900 and $17,000 at December 31, 1994 and 1993, respectively.
Taxes paid during 1994 and 1993 amounted to $135,500 and $5,000, respectively, and tax refunds amounted to $5,900 in 1992.
Description of Common Shares
Common shares of the Corporation are held by limited partners of The Andersons. The holders of Class A shares are entitled to dividends, if declared, and to any surplus, earned or otherwise, of the Corporation upon liquidation or dissolution. The holders of Class B shares have sole voting power, but are not entitled to share in any dividends or surplus of the Corporation. Net income per share of Common Stock is computed based on the weighted average number of Class A Common Shares outstanding during the year.
Reclassifications
Certain amounts in the 1993 and 1992 financial statements have been reclassified to conform with the 1994 presentation. These reclassifications had no effect on net income.
2. Investment in The Andersons
The Corporation is the sole general partner of The Andersons (the Partnership). As sole general partner, the Corporation provides all management and labor services required by the Partnership in its operations. In exchange for providing management services the Corporation charges the Partnership a management fee equal to: a) the salaries and cost of all employee benefits and other normal employee costs, paid or accrued for services performed by the Corporation's employees on behalf of the Partnership, b) reimbursable expenses incurred by the Corporation in connection with its services to the Partnership, or on the Partnership's behalf, and c) an amount based on an achieved level of return on partners' invested capital of the Partnership to cover the Corporation's general overhead and to provide an element of profit to the Corporation.
The Corporation leases an office building under a lease that commenced on May 1, 1990. The Corporation is required to pay annual lease payments of $771,397 through 2000. The Corporation charges the Partnership rent for the space utilized in its operations, which amounted to $635,714, $529,982 and $516,344 in 1994, 1993 and 1992, respectively.
The Partnership generally pays the Corporation for salaries and employee benefits as those costs are paid by the Corporation. Amounts due from the Partnership relating to postretirement benefits that will not be received within one year have been classified as a noncurrent asset.
The components of the management fee and rent charged by the Corporation to the Partnership consisted of the following:
Year ended December 31 1994 1993 1992 Costs and expenses: Salaries and wages $53,726,460 $47,706,731 $43,356,247 Employee benefits 15,673,685 14,619,453 13,426,059 Rent for office space and other reimbursable expenses 803,830 641,491 516,344 Achieved level of return of the Partnership 190,880 139,656 89,618 Total management fees $70,394,855 $63,107,331 $57,388,268
3. Employee Benefit Plans
The Corporation sponsors several employee benefit programs which include the following: Defined Benefit Pension Plan, Retirement Savings Investment Plan, Cash Profit Sharing Plan, Management Performance Program and health insurance benefits.
Substantially all permanent employees are covered by the Corporation's Defined Benefit Pension Plan. The benefits are based on the employee's highest five consecutive years of compensation during their last ten years of service. The Corporation's policy is to pay into trusteed funds each year an amount equal to the annual pension expense calculated under the Entry Age Normal method.
The following table sets forth the plan's funded status and amounts recognized in the Corporation's balance sheets as of December 31, 1994 and 1993.
1994 1993 Accumulated benefit obligation, including vested benefits of $5,743,223 in 1994 and $4,815,512 in 1993 $6,107,230 $5,159,779
Projected benefit obligation for service rendered to date $9,524,599 $8,222,470 Plan assets at fair value 7,297,051 6,568,985 Projected benefit obligation in excess of plan assets 2,227,548 1,653,485
Unrecognized net asset at adoption of FAS 87, net of amortization 193,338 243,817 Unrecognized net gain (loss) (435,467) 530,128 Prior service cost (29,044) (147,663) Net pension liability recognized in balance sheet (includes current portion of $415,365 in 1994 and $645,966 in 1993) $1,956,375 $2,279,767
Net periodic pension cost includes the following components:
Year ended December 31 1994 1993 1992 Service cost - benefits earned during the period $1,082,143 $1,135,948 $1,088,099 Interest cost on projected benefit obligation 563,333 571,278 461,896 Return on plan assets 70,796 (493,623) (331,498) Net amortization and deferral (655,230) 10,420 (32,317) Net periodic pension cost $1,061,042 $1,224,023 $1,186,180
The weighted average discount rate and rate of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligation were 7.5% and 4%, for 1994 and 1993. The weighted average long-term rate of return on plan assets used in determining the expected return on plan assets included in net periodic pension cost was 8% for 1994, 1993 and 1992. Substantially all of the plan assets are invested in a family of mutual funds.
Under the Retirement Savings Investment Plan (RSIP) eligible participating employees may elect to contribute specified amounts up to the lesser of $9,240 or 15% of their gross pay on a tax-deferred basis to a trust for investment in a family of mutual funds. The Corporation contributes an amount equal to 50% of the participant's contributions, but not in excess of 3% of the participant's annual gross pay. Participants are fully vested in their contributions to the RSIP. Participants hired before January 1, 1993 vest immediately in the Corporation's matching contributions and participants hired after December 31, 1992 vest ratably over five years. The matching contributions to the RSIP amounted to $857,804, $761,536 and $682,099 in 1994, 1993 and 1992, respectively.
Substantially all permanent employees are included in the Cash Profit Sharing Plan. The Plan provides for participants to receive certain percentages of their pay as various threshold levels of return on capital of the Partnership are achieved. The Corporation also has a Management Performance Program for certain levels of management. Participants in the Management Performance Program are not eligible to participate in the Cash Profit Sharing Plan. The expense for profit sharing/management performance programs was $3,040,207, $2,050,273 and $1,331,260 for 1994, 1993 and 1992, respectively.
The Corporation currently provides certain health insurance benefits to its employees, including retired employees. The Corporation has reserved the right in most circumstances to modify the benefits provided and in recent years has in fact made changes. Further changes were implemented in 1993 that will effect the benefits provided to future retirees. These changes include the minimum retirement age, years of service and a sharing in the cost of providing these benefits. In addition, the Medicare Part B reimbursement currently paid by the Corporation for retirees is being phased out over a five-year period.
Effective January 1, 1993, the Corporation adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." This statement requires that the cost of providing postretirement health care benefits be accrued during the employees' working career rather than recognizing the cost of these benefits as claims are paid. The Corporation has elected to recognize the accrued benefits earned by employees as of January 1, 1993 (transition obligation) prospectively, which means this cost will be recognized as a component of the net periodic postretirement benefit cost over a period of approximately 20 years. The effect of adopting the new rules increased net periodic postretirement benefit cost by approximately $840,000 and $850,000 in 1994 and 1993, respectively. Postretirement benefit costs for 1992 of approximately $404,000, which were recorded on a cash basis, have not been restated. As all employee benefit costs are charged to the Partnership as described in Note 2, the change in accounting for postretirement benefit costs had no effect on the Corporation's net income.
The Corporation's postretirement benefits are not funded. The status of the plan as of December 31 is as follows:
1994 1993 Accumulated postretirement benefit obligation: Retirees $ 6,281,193 $ 5,534,885 Fully eligible active plan participants 1,691,711 752,975 Other active participants 2,764,533 3,065,722 10,737,437 9,353,582
Unrecognized net transition obligation (7,570,994) (7,991,605) Unrecognized net loss (1,647,711) (582,737) Accrued postretirement benefit cost $ 1,518,732 $ 779,240
Net periodic postretirement benefit cost includes the following components:
1994 1993 Service cost $ 245,186 $ 181,457 Interest cost 749,651 653,625 Net amortization 451,999 420,611 Net periodic postretirement benefit costs $ 1,446,836 $ 1,255,693
The weighted average discount rate used in determining the postretirement benefit cost was 7.5% for 1994 and 8% for 1993. The weighted average discount rate used in determining the accumulated postretirement benefit obligation at December 31, 1994 and 1993 was 7.5%.
The assumed health care cost trend rate used to measure the expected cost of benefits covered by the plan was 11% in 1994, declining to 5% through the year 2000 and remaining at that level thereafter. A 1% increase in the assumed health care cost trend rate would increase the annual postretirement benefit cost by approximately $185,000 and the accumulated postretirement benefit obligation as of December 31, 1994 by approximately $1,670,000.
To partially fund self-insured health care and other employee benefits, the Corporation makes payments to a trust. Assets of the trust amounted to $2,639,566 and $2,710,395 at December 31, 1994 and 1993, respectively, and such amounts are included in prepaid expenses.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None. PART III
Item 10.



Item 10. Directors and Executive Officers of the Registrant
The Corporation's Board of Directors has overall responsibility for the management of the Corporation's affairs, including its responsibilities as General Partner of the Partnership. Therefore, the Board directs the management and operations of the Partnership, through the Corporation, as General Partner, and pursuant to the Management Agreement. Day-to-day management decisions have been delegated by the Board to the Corporation's Chief Executive Officer and various committees authorized by the Board.
Under the Corporation's Code of Regulations, the Board of Directors consists of not less than 7, nor more than 21, directors. Directors serve three year terms on a staggered basis so that no more than one-third of the entire Board is subject to election each year. Holders of Class B Shares have the opportunity to vote for the election of directors at annual meetings of the Corporation's shareholders, which are scheduled no later than May 31 each year. The Corporation's officers are appointed by the Board of Directors. The executive officers and directors of the Corporation are:
Name Age Position Thomas H. Anderson 71 Chairman of the Board (1) (2)* (3)* Richard P. Anderson 65 Director; President and Chief Executive Officer (1)* (2)* (3)* Christopher J. Anderson 40 Vice President Business Development Group (3) Daniel T. Anderson 39 Director; General Merchandise Manager Retail Group (3) Donald E. Anderson 68 Director; Science Advisor (1) Michael J. Anderson 43 Director; Vice President and General Manager Retail Group (2) Richard M. Anderson 38 Director; Vice President and General Manager Industrial Products Group (2) John F. Barrett 45 Director Joseph L. Braker 44 Vice President and General Manager Agriculture Group (2) Dale W. Fallat 50 Director; Vice President Corporate Services (2) Richard R. George 45 Corporate Controller and Principal Accounting Officer (3) Paul M. Kraus 62 Director (1) Peter A. Machin 47 Vice President and General Manager Lawn Products Group (1) Beverly J. McBride 53 General Counsel and Corporate Secretary (2) Rene C. McPherson 70 Director (2) Donald M. Mennel 76 Director (1) (3) Larry D. Rigel 53 Vice President Marketing (1) Janet M. Schoen 35 Director (2) Gary L. Smith 49 Corporate Treasurer (1)
(1) Member of Nominating and Advisory Committee (2) Member of Compensation Committee (3) Member of Audit Committee * Denotes Ex-officio member
Thomas H. Anderson - Held the position of Manager-Company Services of The Andersons for several years and was named Senior Partner in 1987. When the Corporation was formed in 1987, he was named Chairman of the Board. He served as a General Partner of The Andersons and a member of its Managing Committee from 1947 through 1987.
Richard P. Anderson - He was Managing Partner of The Andersons from 1984 to 1987 when he was named Chief Executive Officer. Served as a General Partner of The Andersons and a member of its Managing Committee from 1947 through 1987 and has been a Director of the Corporation since its inception in 1987. He is also a director of Centerior Energy Corporation, First Mississippi Corp. and N-Viro, International Corp.
Christopher J. Anderson - Began full-time employment with the Partnership in 1983. He held several positions in the Grain Group, including Planning Manager and Administrative Services Manager, until 1988 when he formed a private consulting business. He returned to the Company in 1990 in his present position.
Daniel T. Anderson - Began full-time employment with The Andersons in 1979. He has served in various positions in the Retail Group since 1984, including Store Manager and Retail Operations Manager. In 1990, he assumed the position of General Merchandise Manager for the Retail Group. He was elected a Director in 1990.
Donald E. Anderson - In charge of scientific research for the Partnership since 1980, he semi-retired in 1992. He served as a General Partner of The Andersons from 1947 through 1987 and has served the Corporation as a Director since its inception in 1987.
Michael J. Anderson - Began his employment with The Andersons in 1978. He has served in several capacities in the Grain Group and he held the position of Vice President and General Manager Grain Group from 1990 to February 1994 when he was named Vice President and General Manager of the Retail Group. He has served as a Director of the Corporation since 1988.
Richard M. Anderson - Began his employment with The Andersons in 1986 as Planning Analyst and was named the Manager of Technical Development in 1987. In 1990, he assumed his present position. He has served as a Director since 1988.
John F. Barrett - He has served in various capacities at The Western and Southern Life Insurance Company, including Executive Vice President and Chief Financial Officer and President and Chief Operating Officer, and currently serves as Chief Executive Officer. He is a director of Cincinnati Bell, Inc. and Fifth Third Bancorp. He was elected a Director of the Corporation in December 1992.
Joseph L. Braker - Began his employment with the Partnership in 1968. He held several positions within the Grain area and in 1988, he was named Group Vice President Grain. In 1990, he was named Vice President and General Manager Ag Products Group and in February 1994 he was named Vice President and General Manager Agriculture Group. He served as a General Partner of The Andersons from 1985 to 1987.
Dale W. Fallat - Began his employment with The Andersons in 1967 and in 1988 was named Senior Vice President Law and Corporate Affairs. He assumed his present position in 1990. He served as a General Partner of The Andersons from 1983 through 1987 and a member of its Managing Committee in 1986 and 1987. He has served as a Director of the Corporation since its inception in 1987.
Richard R. George - Began his employment with the Partnership in 1976 and has served as Controller since 1979.
Paul M. Kraus - General partner in the law firm of Marshall & Melhorn. He has been a Director of the Corporation since 1988.
Peter A. Machin - Began his employment with The Andersons in the Lawn Products Group in 1987 as Sales Manager of Professional Products. In 1988 he was promoted to Sales and Marketing Manager and assumed his present position in 1990.
Beverly J. McBride - Began her employment with The Andersons in 1976. She has served as Assistant General Counsel, Senior Counsel and since 1987 as General Counsel and Corporate Secretary.
Rene C. McPherson - He has been a Director of the Corporation since 1988 and currently serves as a director of BancOne Corporation, Dow Jones & Company, Inc., Mercantile Stores Company, Inc., Milliken & Company, and Westinghouse Electric Corporation.
Donald M. Mennel - Retired Chairman of the Board and Chief Executive Officer of The Mennel Milling Company. He began a private law practice in 1986. Elected as a Director in 1990.
Larry D. Rigel - Began his employment with the Partnership in 1966. From 1987 to February 1994 was in charge of the Partnership's Retail operations and currently serves as Vice President Marketing for the Company.
Janet M. Schoen - A former school teacher, she is currently a full-time homemaker. She was elected a Director of the Corporation in 1990.
Gary L. Smith - Began his employment with the Partnership in 1980 and has served as Treasurer since 1985.
Donald E., Richard P. and Thomas H. Anderson are brothers; Paul M. Kraus is a brother-in-law. Christopher J. and Daniel T. Anderson are sons of Richard P. Anderson and Janet M. Schoen is a daughter of Thomas H. Anderson. Michael J. and Richard M. Anderson are nephews of the three brothers.
Item 11.

Item 11. Executive Compensation
The Corporation provides all management services to the Partnership pursuant to a Management Agreement entered into between the Partnership and the Corporation as further described under "Item 1. Business." The fee paid to the Corporation includes an amount equal to the salaries and cost of all employee benefits, and other normal employee costs, paid or accrued on behalf of the Corporation's employees who are engaged in furnishing services to the Partnership. The following table sets forth the compensation paid by the Corporation to the Chief Executive Officer and the four highest paid executive officers.
Summary Compensation Table
Annual Compensation All Other Name and Position Year Salary Bonus Compensation (a) Richard P. Anderson 1994 $335,000 $202,500 $4,620 President and Chief 1993 308,333 150,000 4,497 Executive Officer 1992 286,666 60,000 4,300
Thomas H. Anderson 1994 226,667 125,000 4,620 Chairman of the Board 1993 206,669 90,000 4,497 1992 190,004 35,000 4,364
Joseph L. Braker 1994 224,071 150,000 4,620 Vice President and General 1993 194,634 70,000 4,497 Manager Agriculture Group 1992 181,408 30,000 4,364
Michael J. Anderson 1994 200,765 100,000 4,620 Vice President and General 1993 161,962 100,000 4,497 Manager Retail Group 1992 146,978 30,000 4,364
Larry Rigel 1994 171,981 25,000 4,620 Vice President Marketing 1993 162,558 15,000 4,497 1992 151,924 30,000 4,364
(a) Corporation's matching contributions to its 401(k) retirement plan.
Pension Plan
The Corporation has a Defined Benefit Pension Plan (the "Pension Plan") which covers substantially all permanent and regular part-time employees. The amounts listed in the table below are payable annually upon retirement at age 65 or older. A discount of six percent per year is applied for retirement before age 65. The pension benefits are based on a single-life annuity and have been reduced for Social Security covered compensation. The compensation covered by the Pension Plan is equal to the employees' base pay, which in the Summary Compensation Table is the executive's salary, but beginning in 1989 was limited to $200,000, adjusted for inflation, and beginning in 1994 is limited to $150,000, which will also be adjusted for inflation in future years. Each of the named executives has six years of credited service.
Average Approximate Annual Retirement Benefit Based Five-Year Upon the Indicated Years of Service Compensation 5 Years 10 Years 15 Years 25 Years $ 50,000 $ 3,142 $ 6,284 $ 9,427 $ 15,711 100,000 6,892 13,784 20,677 34,461 150,000 10,642 21,284 31,927 53,211 200,000 14,392 28,784 43,177 71,961 250,000 18,142 36,284 54,427 90,711
Directors' Fees
Directors who are not employees of the Corporation and who are not members of the Anderson family receive an annual retainer of $15,000. Directors who are not employees of the Corporation receive a fee of $1,000 for each Board Meeting attended. There are three committees of the Board of Directors: the Audit Committee; the Nominating and Advisory Committee; and the Compensation Committee. The chairman of these committees receives a retainer of $3,000 provided they are not an employee of the Corporation, and members of the committees who are not employees of the Corporation receive $750 for each meeting attended.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee includes the following executive officers and directors: Michael J. Anderson, Richard M. Anderson, Richard P. Anderson (ex officio), Thomas H. Anderson (ex officio), Dale W. Fallat, Joseph L. Braker, Beverly J. McBride, Rene C. McPherson (chairman), and Janet M. Schoen. In addition, Charles E. Gallagher, Director of Personnel, is an ex officio member of the committee.
Certain Transactions - Alshire-Columbus:
The Partnership and certain of the directors and executive officers of the Corporation were limited partners in Alshire-Columbus Limited Partnership ("Alshire-Columbus"), an Ohio limited partnership, which owned the Partnership's Brice General Store in Columbus, Ohio. The store was leased to the Partnership by Alshire-Columbus at an annual base rental of $732,000.
The Partnership contributed the land, at its cost ($1,367,000), for its original limited partner interest. The other limited partners of Alshire- Columbus contributed $1,450,000, representing 35 limited partnership units. None of the directors and executive officers of the Corporation or their family members owned more than one limited partnership unit, except for Richard P. Anderson, who owned two units.
In the aggregate, 8 3/4 units were owned by directors and executive officers of the Corporation, and their family members owned an additional four units. The general partner of Alshire-Columbus experienced difficulties in refinancing the real property after the original seven year term of their note. During 1994, The Andersons obtained an independent appraisal of the property valued at $8.5 million and made an offer to purchase the property for that price. The initial lease term was scheduled to expire in 2000. The limited partners of Alshire-Columbus accepted the purchase offer from The Andersons. According to the partnership agreement, upon the sale of the real estate The Andersons received a preferential distribution from the proceeds of the sale equal to the original cost of the land contributed by The Andersons. The remaining proceeds from the sale, after payment of the debt and return of capital to limited partners, was distributed according to the partnership agreement which was 75% to the limited partners; 24% to The Andersons, as original limited partner; and 1% to the general partner.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) No individual beneficially owns as much as 5% of the Voting Class B Common Shares of the Corporation. As of March 1, 1995, the descendants of the founders of the Partnership beneficially held 3,926 shares of the voting Class B Common Shares, representing 78% of the outstanding shares.
(b) The following table sets forth, as of March 1, 1995, the beneficial ownership by each Director and by all Directors and Officers as a group, of the Corporation's voting Class B Common Shares:
Number of Shares Percent Director Beneficially Owned of Class Richard P. Anderson 93 1.9% Thomas H. Anderson 85 1.7% Daniel T. Anderson 88 1.8% Donald E. Anderson 54 1.1% Michael J. Anderson 33 * Richard M. Anderson 67 1.3% John F. Barrett 2 * Dale W. Fallat 17 * Paul M. Kraus 40 * Rene C. McPherson 6 * Donald M. Mennel 6 * Janet M. Schoen 71 1.4% Directors and Officers as a group 712 14.2%
* less than 1%
(c) The Corporation knows of no arrangements which may at a subsequent date result in a change in control of the Corporation.
Item 13.

Item 13. Certain Relationships and Related Transactions
See "Item 1. Business" regarding personnel and management services provided by the Corporation to the Partnership. The management fee received by the Corporation in 1994 under the Management Agreement between the Corporation and the Partnership was $70,394,855. See Note 2 to the Corporation's Financial Statements.
The office building utilized by the Partnership is leased by the Corporation from an unaffiliated lessor under a net lease expiring in 2000. The Partnership subleases approximately 90% of the building from the Corporation and pays the Corporation rent for the space it occupies. Under the terms of the sublease, the Partnership also is responsible for insurance, utilities, taxes, general maintenance, snow removal, lawn care and similar upkeep expenses for the entire building. The Corporation reimburses the Partnership for management and maintenance of the building, including the space it does not occupy. The amount paid by the Partnership to the Corporation for the portion of the building occupied by the Partnership is designed to reimburse the Corporation for its equivalent cost under the Corporation's lease. In 1993, the rental payments made by the Partnership to the Corporation, net of the reimbursement for management and maintenance of the building was $635,714, which is included in the management fee referred to in the preceding paragraph.
See "Item 11. Executive Compensation - Compensation Committee Interlocks and Insider Participation - Certain Transactions - Alshire-Columbus" regarding transactions with management.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) The following financial statements of the registrant are included in Item 8:
Page Report of Independent Auditors................................... 5 Statements of Income - years ended December 31, 1994, 1993 and 1992............................... 6 Balance Sheets - December 31, 1994 and 1993...................... 7 Statements of Cash Flows - years ended December 31, 1994, 1993 and 1992............................... 8 Statements of Changes in Shareholders' Equity - years ended December 31, 1994, 1993 and 1992................... 9 Notes to Financial Statements.................................... 10
All schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
(3) Exhibits:
3(a) Articles of Incorporation. (Incorporated by reference to Exhibit 3(d) in Registration Statement No. 33-16936.)
3(b) Code of Regulations. (Incorporated by reference to Exhibit 3(e) in Registration Statement No. 33-16936.)
4(a) Specimen certificate of Class A Shares. (Incorporated by reference to Exhibit 4(b)(i) in Registration Statement No. 33- 16936.)
4(b) Specimen certificate of Class B Shares. (Incorporated by reference to Exhibit 4(b)(ii) in Registration Statement No. 33-16936.)
10(a) Management Performance Program.* (Incorporated by reference to Exhibit 10(a) to the Partnership's Form 10-K dated December 31, 1990, File no. 2-55070.)
10(b) Lease agreement effective May 1, 1990, between Carentmon and The Andersons Management Corp. (Incorporated by reference to Exhibit 10(b) to Registrants Form 10-K dated December 31, 1992.)
10(h) Management Agreement between The Andersons and The Andersons Management Corp., effective as of January 1, 1988. (Incorporated by reference to Exhibit 10(h) in Registration Statement No. 33-13538.)
28 Partnership Form 10-K for the year ended December 31, 1994. (Incorporated by reference to File No. 2-55070.)
* Management contract or compensatory plan.
The Corporation agrees to furnish to the Securities and Exchange Commission a copy of any long-term debt instrument or loan agreement that it may request.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the last quarter of the year.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Maumee, Ohio, on the 23rd day of March, 1995.
THE ANDERSONS MANAGEMENT CORP. (Registrant)
By /s/Thomas H. Anderson Thomas H. Anderson Chairman of the Board
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 indicated on the 23rd day of March, 1995.
Signature Title
/s/Richard P. Anderson President and Chief Executive Officer, Richard P. Anderson Director (Principal Executive and Financial Officer)
/s/Richard R. George Corporate Controller Richard R. George (Principal Accounting Officer)
Signature Title Signature Title
/s/Daniel T. Anderson Director /s/Dale W. Fallat Director Daniel T. Anderson Dale W. Fallat
Director Director Donald E. Anderson Paul M. Kraus
/s/Michael J. Anderson Director Director Michael J. Anderson Rene C. McPherson
/s/Richard M. Anderson Director /s/Donald M. Mennel Director Richard M. Anderson Donald M. Mennel
/s/Thomas H. Anderson Director Director Thomas H. Anderson Janet M. Schoen
Director John F. Barrett
No proxy statement is prepared. Audited financial statements will be distributed to Shareholders at a later date.