Item 1. Business
Not Applicable.
Item 2.

Item 2. Properties
Caterpillar Financial Asset Trust 1996-A (the "Trust") is a trust established under the laws of the State of Delaware by the Trust Agreement dated as of May 1, 1996 (the "Trust Agreement") between Caterpillar Financial Funding Corporation (the "Seller") and Chase Manhattan Bank, Delaware, acting thereunder not in its individual capacity but solely as trustee of the Trust. Caterpillar Financial Services Corporation (the "Servicer") is the Servicer under a Sale and Servicing Agreement dated as of May 1, 1996 (the "Sale and Servicing Agreement") among the Servicer, the Seller and the Trust. On May 15, 1996 (the "Closing Date"), the Trust issued its 6.55% Asset Backed Certificates (the "Certificates") with an aggregate principal amount of $14,876,157. In addition, on the Closing Date, the Trust issued $85,000,000 aggregate principal amount of Class A-1 5.41% Money Market Asset Backed Notes (the "A-1 Notes"), $139,000,000 aggregate principal amount of Class A-2 5.90% Asset Backed Notes (the "A-2 Notes"), and $133,021,000 aggregate principal amount of class A-3 6.30% Asset Backed Notes (the "A-3 Notes"; together with the A-1 and A-2 Notes, the "Notes"). The Certificates evidence fractional undivided interest in the Trust. The Notes evidence debt obligations of the Trust. The Trust property includes (i) fixed rate retail installment sale contracts (the "Receivables") secured by new and used machinery manufactured primarily by Caterpillar Inc. (the "Financed Equipment") sold to the Trust by the Seller, (ii) all monies (including accrued interest) due thereunder on or after May 1, 1996, (iii) such amounts as from time to time may be held in one or more accounts established and maintained by the Servicer pursuant to the Sale and Servicing Agreement, (iv) the security interest in the Financed Equipment and certain other cross-collateralized equipment, (v) the rights to proceeds from claims on physical damage, credit life and disability insurance policies, if any, covering the Financed Equipment or the obligors on the Receivables, as the case may be, (vi) the proceeds of any repossessed Financed Equipment, (vii) the rights of the Seller under the Purchase Agreement dated as of May 1, 1996 (the "Purchase Agreement") between the Servicer and the Seller, (viii) the interest of the Seller in any proceeds from recourse to dealers of Financed Equipment with respect to receivables, (ix) interest earned on short-term investments made by the Trust, and (x) any proceeds of the foregoing.
As of May 1 ,1996, the Receivables had an aggregate principal balance of approximately $371,987,157. As of December 31, 1996, the end of the fiscal year of the Trust for which this Form 10-K annual report is being filed, the aggregate principal balance of the Receivables remaining in the Trust was approximately $284,831,747.
Reference is made to Exhibit 99.1, the Statement to Certificateholders for the fiscal year ended December 31, 1996, for additional information regarding principal and interest payments in respect of the Certificates and the Notes and information regarding servicing compensation and other fees paid by the Trust during the year ending December 31, 1996.
Item 3.

Item 3. Legal Proceedings
The Registrant knows of no material pending legal proceedings involving either the Trust property, Trustee, Seller or Servicer in respect of the Trust.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fiscal year covered by this report to a vote of holders of either the Notes or Certificates.
PART II.
Item 5.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
(a) To the best knowledge of the Registrant, there is no established public market for the Certificates.
(b) As of December 31, 1996, there were less than 50 Certificateholders of record.
(c) Not Applicable.
Item 6.

Item 6. Selected Financial Data
Not Applicable
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Not Applicable.
Item 8.

Item 8. Financial Statements and Supplementary Data
Not Applicable.
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
Not Applicable.
Item 11.

Item 11. Executive Compensation
Not Applicable.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
Not Applicable.
Item 13.

Item 13. Certain Relationships and Related Transactions
Not Applicable.
PART IV.
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as part of this report:
Exhibit No.
99.1 Statement to Certificateholders*
99.2 Statement to Noteholders*
99.3 Servicer's Certificate*
99.4 Fiscal Year-End Statement (unaudited) for the period ended December 31, 1996
*Relating to the monthly collection period ending December 31, 1996.
(b) Reports on Form 8-K
Current report on Form 8-K dated December 27, 1996 (Item 7).
(c) Not Applicable.
(d) Not Applicable.
Supplemental information to be furnished with reports filed pursuant to Section 15(d) of the Act by Registrants which have not registered Securities pursuant to Section 12 of the Act.
No annual report, proxy statement, form of proxy or other proxy soliciting material has been sent to certificateholders, and the Registrant does not presently contemplate sending any such materials subsequent to the filing of this report. 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.
CATERPILLAR FINANCIAL FUNDING CORPORATION (Registrant)
Dated: March 17,1997 By: /s/Paul J, Gaeto Paul J. Gaeto, Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date Signature Title
March 17,1997 /s/Scott E. Harris President and Director (Scott E. Harris) (Principal Executive Officer)
March 17,1997 /s/Edward J. Scott Treasurer(Principal (Edward J. Scott) Financial Officer)
March 17,1997 /s/C. David Brooks Vice President and (C. David Brooks) Director (Principal Accounting Officer)
March 17,1997 /s/Steven W. Simonson Director (Steven W. Simonson)
EXHIBIT INDEX
SEQUENTIALLY EXHIBIT NO. NUMBERED PAGE
99.1 Statement to Certificateholders* 7
99.2 Statement to Noteholders* 9
99.3 Servicer's Certificate* 11
99.4 Fiscal Year-End Statement (unaudited) for 16 the period ended December 31, 1996
*Relating to the monthly collection period ending December 31, 1996. CATERPILLAR FINANCIAL FUNDING CORPORATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Thousands of dollars) December 31, 1996
Assets: Cash and cash equivalents $ 1,174.9 Investment in Caterpillar Financial Asset 282.1 Trust Other Receivables 26,689.3 Total assets $ 28,146.3
Liabilities and stockholder's equity: Payable to Caterpillar Financial Services $11,257.3 Corp. Income taxes payable 3,802.0 Other liabilities 229.9 Deferred income taxes (707.5) Total liabilities $ 14,581.7
Common stock - $1 par value 5,255.3 Authorized: 2,000 shares Issued and outstanding: one share Retained Earnings 8,309.3 Total stockholder's equity 13,564.6
Total liabilities and stockholder's equity $ 28,146.3
CATERPILLAR FINANCIAL FUNDING CORPORATION CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1996 (Thousands of dollars)
Revenues: Miscellaneous Income $4,609.8 Total revenues 4,609.8
Expenses: General, operating, and 358.9 administrative Total expenses 358.9
Profit on sale of securities 3,094.3
Income before income taxes 7,345.2
Provision for income taxes 2,575.5
Net income 4,769.7
Retained earnings - beginning of year 3,539.6
Retained earnings - end of year $8,309.3


Item 1. Business
(a) General Development of Business
The Andersons, Inc. is a diversified agribusiness and retailing company operating in three segments. The Agriculture Group engages in grain merchandising, operates grain elevator facilities located in Ohio, Michigan, Indiana and Illinois, distributes wholesale agricultural fertilizer and operates retail farm centers. The Retail Group operates six retail stores in Ohio. The Processing and Manufacturing Group (formerly called the Business Development Group) includes, primarily, the processing of lawn and industrial products and the repair and leasing of railcars.
Prior to January 2, 1996 the Company was structured as two entities; The Andersons Management Corp. (the "Corporation") and The Andersons (the "Partnership"). The Corporation was the sole general partner of the Partnership and provided all management services to the Partnership. The Partnership was the successor to other Ohio limited partnerships which operated as "The Andersons" continuously since 1947. On January 2, 1996, the Partnership merged with and into the Corporation and the Corporation survived, changing its name to The Andersons, Inc. See Note 1 to the consolidated financial statements for further discussion about the merger. All information herein gives effect to the merger.
(b) Financial Information About Industry Segments
See Note 13 to the consolidated financial statements for information regarding business segments.
(c) Narrative Description of Business
Agriculture Group
The Agriculture Group consists of grain operations, wholesale fertilizer operations, and retail farm centers.
The Company's grain operations involve merchandising grain and operating terminal grain elevator facilities. This includes purchasing, handling, processing and conditioning grain, storing grain purchased by the Company as well as grain owned by others, and selling grain. The principal grains sold by the Company are yellow corn, yellow soybeans and soft red and white wheat. The Company's total grain storage capacity was approximately 69 million bushels at December 31, 1996.
Virtually all grain merchandised by the Company is grown in the Midwestern portion of the United States (the Eastern Corn Belt) and is acquired from country elevators, dealers and producers. The Company makes grain purchases at prices referenced to Chicago Board of Trade quotations. The Company competes for the purchase of grain with grain processors and feeders, as well as with other grain merchandisers.
During 1996, approximately 72% of the grain sold by the Company was purchased domestically by grain processors and feeders, and approximately 28% was exported. Most of the exported grain was purchased by exporters for shipment to foreign markets. Some grain is shipped directly to foreign countries, mainly Canada. Almost all grain shipments are by rail or boat. Rail shipments are made primarily to grain processors and feeders, with some rail shipments made to exporters on the Gulf or east coast. All boat shipments are from the Toledo, Ohio port elevator. Grain sales are effected on a negotiated basis by the Company's merchandising staff.
The Company's grain business may be adversely affected by the grain supply in its principal growing area including crop quality and quantity, government regulations and policies, conditions in the shipping and rail industries and commodity price levels. See "Government Regulation". The grain business is seasonal coinciding with the harvest of the principal grains purchased and sold by the Company.
Fixed price purchases and sales of cash grain and grain held in inventory expose the Company to risks related to adverse changes in price. The Company attempts to manage these risks by hedging fixed price purchase and sales transactions and inventory through the use of futures and option contracts with the Chicago Board of Trade ("CBOT"). The CBOT is a regulated commodity futures exchange that maintains futures markets for the grains merchandised by the Company. Futures prices are determined by supply and demand.
The Company's hedging program is designed to reduce the risk of changing commodity prices. In that regard, hedging transactions also limit potential gains from further changes in market prices. The grain division's profitability is primarily derived from margins on grain sold, and revenues generated from other merchandising activities with its customer, not from hedging transactions. The Company has a policy which specifies the key controls over its hedging program. This policy includes a description of the hedging programs, mandatory review of positions by key management outside of the trading function on a biweekly basis, daily position limits, modeling of positions for changes in market conditions, and other internal controls.
Purchases of grain can be made the day the grain is delivered to a terminal or via a forward contract made prior to actual delivery. Sales of grain are generally made by contract for delivery in a future period. When the Company purchases grain at a fixed price, the purchase is hedged with the sale of a futures contract on the CBOT. Similarly, when the Company sells grain at a fixed price, the sale is hedged with the purchase of a futures contract on the CBOT. At the close of business each day, the open inventory ownership positions as well as open futures and option positions, are marked-to-market. Gains/losses in the value of the Company's owned inventory positions due to changing prices are netted with and generally offset by losses/gains in the value of the Company's futures positions.
When a futures contract is entered, an initial margin deposit must be sent to the CBOT. The amount of the margin deposit is set by the CBOT and varies by commodity. If the market price of a futures contract moves in a direction which is adverse to the Company's position, an additional margin deposit, called a maintenance margin, is required by the CBOT. Subsequent price changes could require additional maintenance margins or could result in the return of maintenance margins by the CBOT. Significant changes in market prices, such as occur when weather conditions are unfavorable for extended periods, can have an effect on liquidity and require the Company to maintain appropriate short-term lines of credit. The Company has, at times, utilized CBOT option contracts to limit its exposure to potential required margin deposits in the event of a rapidly rising market.
The Grain division relies on forward purchase contracts with producers, dealers and country elevators to ensure an adequate supply of grain to its facilities throughout the year. Bushels contracted for future delivery at February 28, 1997 approximated 23 million, 96% of which was to be delivered in the 1996 and 1997 crop years. The Company relies heavily on its hedging program as the method for minimizing price risk in its grain inventories and contracts. The Company monitors current market conditions and may expand or reduce the purchasing program in response to changes in those conditions. In addition, the Company reviews its purchase contracts and the parties to those contracts on a regular basis for defaults and non-delivery. Provision is made under the Grain Trade Rules of the National Grain and Feed Association ("NGFA") for resolution of contract defaults (non-delivery of grain) and for arbitration of contract disputes. The Company's standard purchase and sales contracts include arbitration clauses, and the Company is currently arbitrating several cases before the NGFA. In addition, the Company is involved in litigation with several producers. See "Legal Proceedings".
The Company competes in the sale of grain with other grain merchants, other private elevator operators and farmer cooperatives which operate elevator facilities. Competition is based primarily on price, service and reliability. Some of the Company's competitors are also its customers and many of its competitors have substantially greater financial resources than the Company.
The Company's wholesale fertilizer operations involve purchasing, storing, formulating, and selling dry and liquid fertilizers; providing fertilizer warehousing and services to manufacturers and customers; and wholesale distribution of seeds and various farm supplies. The major fertilizer ingredients sold by the Company are nitrogen, phosphate and potassium, all of which are readily available from various sources.
The Company's wholesale fertilizer market area primarily includes Illinois, Indiana, Michigan and Ohio and customers for the Company's fertilizer products are principally retail dealers. Sales of agricultural fertilizer products are heaviest in the spring and fall.
The Company's aggregate storage capacity for dry fertilizer was 14 million cubic feet at December 31, 1996. The Company reserves 6 million cubic feet of this space for various fertilizer manufacturers and customers. The Company's aggregate storage capacity for liquid fertilizer at December 31, 1996 was 29 million gallons and 5 million gallons of this space is reserved for manufacturers and customers. The agreements for reserved space provide the Company storage and handling fees and, generally, are for an initial term of one year and are renewable at the end of each term.
The Company operates nine retail farm centers located throughout Michigan, Indiana and Ohio. These centers, often strategically located at or near the Company's grain or wholesale fertilizer facilities, offer agricultural fertilizer, custom application of fertilizer, and chemicals, seeds and supplies to the farmer.
In its wholesale fertilizer and retail farm center businesses, the Company competes with regional cooperatives; fertilizer manufacturers; multi-state retail/wholesale chain store organizations; and other independent wholesalers of agricultural products. Many of these competitors have considerably larger resources than the Company. Competition in the agricultural products business of the Company is based principally on price, location and service.
Retail Group
The Company's Retail Group consists of six stores operated under the trade name "The Andersons", which are located in the Columbus, Lima and Toledo, Ohio markets and serve urban, rural and suburban customers. The retail concept is that of a destination store for the do-it-yourself homeowner and includes a full line of home center products plus a wide array of other items not available at the more traditional home center stores. In addition to hardware, home remodeling and lawn & garden products, The Andersons stores offer housewares, automotive, sporting goods, pet products, workwear and food (bakery, deli, produce, wine and specialty groceries). Each store carries more than 70,000 different items, has 100,000 square feet or more of in-store display space plus 40,000 square feet of outdoor garden center space, and has a center aisle that features do-it-yourself clinics, special promotions and varying merchandise displays.
The retail merchandising business is highly competitive. The Company competes with a variety of retail merchandisers, including numerous mass merchandisers, home centers, department and hardware stores. The principal competitive factors are quality of product, price, service and breadth of selection. The Company's retail business is affected by seasonal factors with significant sales occurring during the Christmas season and in the spring.
Processing and Manufacturing Group
The Processing and Manufacturing Group consists of three business units: the processing division, the manufacturing division and the ventures division.
The processing division consists of lawn products, which manufactures and markets fertilizer and related products to retailers and professional lawn care companies and industrial products, which processes corn cobs into various products for the chemical carrier, pet and industrial markets. The retail granular lawn products are sold to mass merchandisers, small independent retailers and other lawn fertilizer manufacturers. During the off-season, ice melt products are distributed to many of the same retailers. The professional granular lawn products are sold both direct and through distributors to lawn service applicators and to golf courses. The principal raw materials for the lawn care products are nitrogen, potash and phosphate, which are purchased primarily from the Company's wholesale fertilizer division. The lawn products industry is highly seasonal, with the majority of the sales occurring from early spring to early summer. Competition is based principally on merchandising ability, service and quality.
The Company is one of the largest producers of processed corncob products in the United States. These products serve the chemical carrier, animal litter, industrial and sorbent markets and are distributed throughout the United States and Canada and into Europe and Asia. The principal sources for the corncobs are the Company's grain operations and seed corn producers.
The Company's manufacturing division includes a full service railcar repair shop, which specializes in repair, renovation and painting of railcars. The division also is involved in the purchase and sale of railcars, leasing and subleasing of railcars, and also provides fleet management services. It also does custom fabrication work. Competition for railcar marketing and fleet maintenance services are based primarily on service and access to third party financing. Repair and fabrication shop competition is based primarily on price, quality and location.
The Company's ventures division includes the production of pet foods, which are marketed through a joint venture, the operation of eight auto service centers, also a joint venture, and a lawn and garden power equipment sales and service shop.
Research and Development
The Company's research and development program is mainly concerned with the development of improved products and processes, primarily for the processing division of the Processing and Manufacturing Group. The Company expended approximately $320,000, $370,000, and $490,000 on research and development during 1996, 1995 and 1994, respectively.
Employees
At December 31, 1996, the Company had 1,160 full-time and 1,864 part-time or seasonal employees. The Company believes its relations with its employees are good.
Government Regulation
Grain sold by the Company must conform to official grade standards imposed under a federal system of grain grading and inspection administered by the United States Department of Agriculture ("USDA").
The production levels, markets and prices of the grains which the Company merchandises are materially affected by United States government programs, including acreage control and price support programs of the USDA. Also, under federal law, the President may prohibit the export of any product, the scarcity of which is deemed detrimental to the domestic economy, or under circumstances relating to national security. Because a portion of the Company's grain sales are to exporters, the imposition of such restrictions could have an adverse effect upon the Company's operations.
The Company, like other companies engaged in similar businesses, is subject to a multitude of federal, state and local environmental protection laws and regulations including, but not limited to, laws and regulations relating to air quality, water quality, pesticides and hazardous materials. The provisions of these various regulations could require modifications of certain of the Company's existing plant and processing facilities and could restrict future facilities expansion or significantly increase their cost of operation. Of the Company's capital expenditures, approximately $720,000, $740,000 and $617,000 in 1996, 1995 and 1994, respectively, were made in order to comply with these regulations.
Item 2.

Item 2. Properties
The Company's principal agriculture, retail and other properties are described below. Except as otherwise indicated, all properties are owned by the Company.
Agriculture Facilities
Location Wholesale Fertilizer Grain Liquid Storage Dry Storage Storage (bushels) (cubic feet) (gallons) Maumee, OH 17,270,000 6,333,000 2,620,000 Toledo, OH River 7,010,000 2,000,000 3,000,000 Metamora, OH 6,860,000 --- --- Lyons, OH (3) 380,000 47,000 160,000 Toledo, OH 1,210,000 --- --- Champaign, IL 13,500,000 833,000 --- Delphi, IN 6,700,000 1,000,000 --- Clymers, IN (1)(4) 4,450,000 --- 2,694,000 Clymers, IN (3) --- 37,000 480,000 Dunkirk, IN 5,980,000 900,000 Poneto, IN 620,000 --- 5,540,000 North Manchester, IN (3) --- 23,000 90,000 Logansport, IN --- 33,000 3,011,000 Walton, IN (3) --- 433,000 7,000,000 Albion, MI (3) 2,590,000 23,000 40,000 White Pigeon, MI 2,070,000 --- --- Webberville, MI --- 2,017,000 3,200,000 Litchfield, MI (2)(3) --- 40,000 252,000 North Adams, MI(2)(3) --- 20,000 230,000 Union City, MI (3) --- 20,000 49,500 Munson, MI (3) --- 33,000 150,000 68,640,000 13,792,000 28,516,500
(1) Facility leased - lease expires in 1998, provides an option to purchase. (2) Facility leased. (3) Facility is or includes a retail farm center. (4) Facility also stores soybean oil with a capacity of 61,000,000 pounds.
The grain facilities are mostly concrete and steel tanks, with some flat storage. The Company also owns grain inspection buildings and dryers, a corn sheller plant, maintenance buildings and truck scales and dumps.
Wholesale fertilizer and retail farm center properties consist mainly of fertilizer warehouse and distribution facilities for dry and liquid fertilizers. The Maumee, Ohio and Walton, Indiana locations have fertilizer mixing, bagging and bag storage facilities. The Company also owns a seed processing facility in Delta, Ohio. Aggregate storage capacity in the nine retail farm centers located in Michigan, Indiana and Ohio for liquid fertilizer and dry fertilizer is 1.5 million gallons and 243,000 cubic feet, respectively.
Retail Store Properties
Name Location Square Feet Maumee Store Maumee, OH 131,000 Toledo Store Toledo, OH 130,000 Woodville Store (1) Northwood, OH 100,000 Lima Store (1) Lima, OH 117,000 Brice Store Columbus, OH 128,000 Sawmill Store Columbus, OH 134,000 Warehouse (1) Maumee, OH 245,000
(1) Leased
The leases for the two stores and the warehouse facility are long-term leases with several renewal options and provide for minimum aggregate annual lease payments approximating $1 million. The two store leases provide for contingent lease payments based on achieved sales volume. Neither store achieved a sales level triggering contingent lease payments in 1996, 1995 or 1994.
Other Properties
The Company owns lawn fertilizer production facilities and automated pet food production and storage facilities in Maumee, Ohio. It also owns corncob processing and storage facilities in Maumee, Ohio and Delphi, Indiana. The Company leases a lawn fertilizer production facility and a warehouse facility. In its railcar leasing business, the Company owns or leases approximately 2,000 railcars (primarily covered hopper cars) with lease terms ranging from one to ten years and future minimum lease payments aggregating $18 million with future minimum sublease income of an equal amount. The Company also owns a railcar repair facility, a steel fabrication facility, a service and sales facility for outdoor power equipment. Additionally, the Company is part of a joint venture which owns or leases eight auto service centers. The Company also owns or leases a number of switch engines, cranes and other equipment.
The Company's administrative office building is leased under a net lease expiring in 2005. The Company owns approximately 704 acres of land on which various of the above properties and facilities are located; approximately 439 acres of farmland and land held for future use; approximately 11 acres of improved land in an office/industrial park held for sale; and certain other real estate.
Real properties, machinery and equipment of the Company were subject to aggregate encumbrances of approximately $36 million at December 31,1996. Additions to property for the years ended December 31, 1996, 1995 and 1994 amounted to $10 million, $16 million, and $26 million, respectively. See Note 9 to the Company's consolidated financial statements for information as to the Company's leases.
The Company believes that its properties, including its machinery, equipment and vehicles, are adequate for its business, well maintained and utilized, suitable for their intended uses and adequately insured.
Item 3.

Item 3. Legal Proceedings
The Company, like others in the agriculture industry, utilizes different types of contracts with producers (including contracts commonly referred to as "Hedged To-Arrive" or "HTA" contracts) to purchase grain. Some grain producers have defaulted or threatened default on certain of these contracts, arguing that their contracts are unenforceable. The Company believes that this is due, in large part, to unprecedented high grain prices experienced in 1996. The Company currently is engaged in litigation and/or arbitration with several defaulting producers, including one purported class action filed on May 16, 1996 in the United States District Court for the Northern District of Illinois, Eastern Division, Case no. 96C2936, Harter, et. al., v. Iowa Grain Company and The Andersons Investment Services Corp., d.b.a. The Andersons, Inc., wherein enforceability of the delivery obligation under certain grain contracts has been raised as an issue. The Harter lawsuit seeks declaratory and injunctive relief and compensatory, exemplary and punitive damages of an unspecified amount. The Court, in Harter, ordered arbitration by the National Grain and Feed Association and dismissed Iowa Grain Company as a defendant. The Company believes its grain contracts are enforceable obligations and intends to enforce them. Although no assurance can be given that the current litigation and arbitration will not result in liability or loss, the Company continues to believe that it has valid claims and defenses in the lawsuits and proceedings in which it is involved.
Pursuant to subpoenas duces tecum served by the Commodities Futures Trading Commission (the "CFTC"), the Company has produced certain records, including names and phone numbers of certain customers and the depositions of certain employees and former employees have been taken in the matter of "Certain Transactions and Practices Among Grain Elevators, et. al., Involving Futures Contracts."
In light of the Company's current and prior use of Hedged To-Arrive contracts, related industry-wide litigation, and current conditions of the industry as a whole, there can be no assurance that other litigation will not be brought, that a class will not be certified or that other CFTC proceedings will not be instituted. There currently is no reasonable basis to predict the amount of future liability or loss, if any, that may arise from such litigation or CFTC proceedings.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
None
Item 4A. Executive Officers of the Registrant
Pursuant to General Instruction G(3) of Form 10-K, the following information with respect to the executive officers of the registrant is included herein in lieu of being included in the Registrant's Proxy Statement for its Annual Meeting of Shareholders to be held May 22, 1997.
Name Position Age Year Assumed Christopher President, Processing and 42 1996 J. Anderson Manufacturing Group Vice President, Business 1992 Development Group General Manager, Ventures & New 1990 Business Development Daniel T. President, Retail Group 41 1996 Anderson Director of Marketing and 1996 Merchandising, Retail Group General Merchandise Manager, 1991 Retail Group Michael J. President and Chief Operating 45 1996 Anderson Officer Vice President and General 1994 Manager, Retail Group Vice President and General 1990 Manager, Grain Group Richard M. Vice President and General 40 1996 Anderson Manager, Processing Division Vice President and General 1990 Manager, Industrial Products Group General Manager, Industrial 1990 Products & Technical Development Richard P. Chairman of the Board and Chief 67 1996 Anderson Executive Officer President and Chief Executive 1987 Officer Joseph L. President, Agriculture Group 46 1996 Braker Vice President and General 1994 Manager, Agriculture Group Vice President and General 1990 Manager, Agricultural Products Group Joseph C. Vice President, Human Resource 48 1996 Christen Development Director of Human Resource 1988 Development Dale W. Vice President - Corporate 52 1992 Fallat Services Senior Vice President, Corporate 1990 Services Phillip C. Vice President, Corporate 55 1996 Fox Planning Director of Company Planning 1988 Charles E. Vice President, Personnel 55 1996 Gallagher Director of Personnel 1988 Richard R. Vice President and Controller 47 1996 George Corporate Controller 1988 Beverly J. Vice President, General Counsel 55 1996 McBride and Secretary General Counsel and Corporate 1987 Secretary Gary L. Vice President, Finance and 51 1996 Smith Treasurer Corporate Treasurer 1988
PART II
Item 5.

Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
The information under the caption Market for Common Stock on page 10 and Shareholders on the inside back cover of The Andersons, Inc. 1996 Annual Report to Shareholders is incorporated herein by reference. The Company's first quarterly dividend of three cents per common share was declared on December 20, 1996 for shareholders of record on January 2, 1997.
Item 6.

Item 6. Selected Financial Data
The information under the caption Selected Financial Data on page 9 of The Andersons, Inc. 1996 Annual Report to Shareholders is incorporated herein by reference.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information under the caption Management's Discussion and Analysis appearing on pages 8 and 9 of The Andersons, Inc. 1996 Annual Report to Shareholders is incorporated herein by reference.
Item 8.

Item 8. Financial Statements and Supplementary Data
The information under the caption Selected Quarterly Financial Data on page 10 of The Andersons, Inc. 1996 Annual Report to Shareholders, as well as the following consolidated financial statements of The Andersons, Inc. set forth on pages 11 through 28 of The Andersons, Inc. 1996 Annual Report to Shareholders are incorporated herein by reference:
Consolidated Statements of Income for the years ended December 31, 1996, 1995 and 1994
Consolidated Balance Sheets as of December 31, 1996 and 1995
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Changes in Owners' Equity for the years ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Following is the Report of Independent Auditors on the Consolidated Financial Statements and schedule:
Report of Independent Auditors
Board of Directors The Andersons, Inc.
We have audited the accompanying consolidated balance sheets of The Andersons, Inc. and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of income, cash flows and changes in owners' equity for each of the three years in the period ended December 31, 1996. Our audits also included the financial statement schedule listed in the index at 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 and schedule 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Andersons, Inc. and subsidiaries at December 31, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1996, 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.
/s/ERNST & YOUNG LLP
Toledo, Ohio January 31, 1997
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
For information with respect to the executive officers of the registrant, see "Executive Officers of the Registrant" in Item 4A included in Part I of this report. For information with respect to the Directors of the registrant, see "Election of Directors" in the Proxy Statement for the Annual Meeting of the Shareholders to be held on May 22, 1997 (the "Proxy Statement"), which is incorporated herein by reference; for information concerning 1934 Securities and Exchange Act Section 16(a) Compliance, see such section in the Proxy Statement, incorporated herein by reference.
Item 11.

Item 11. Executive Compensation
The information set forth under the captions "Executive Compensation" in the Proxy Statement is incorporated herein by reference.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under the captions "Executive Compensation" in the Proxy Statement is incorporated herein by reference.
Item 13.

Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14.

Item 14. Financial Statement Schedules and Reports on Form 8-K
(a) (1) The consolidated financial statements of the Company, as set forth under Item 8 of this report on Form 10-K, are incorporated herein by reference from The Andersons, Inc. 1996 Annual Report to Shareholders.
(2) The following consolidated financial statement schedule is included in Item 14(d): Page II. Consolidated Valuation and Qualifying Accounts - years ended December 31, 1996, 1995 and 1994 14
All other 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:
2.1 Agreement and Plan of Merger, dated April 28, 1995 and amended as of September 26, 1995, by and between The Andersons Management Corp. and The Andersons. (Incorporated by reference to Exhibit 2.1 to Registration Statement No. 33-58963).
3.1 Articles of Incorporation. (Incorporated by reference to Exhibit 3(d) to Registration Statement No. 33-16936).
3.4 Code of Regulations of The Andersons, Inc. (Incorporated by reference to Exhibit 3.4 to Registration Statement No. 33-58963).
4.3 Specimen Common Share Certificate. (Incorporated by reference to Exhibit 4.1 to Registration Statement No. 33-58963).
4.4 The Fifteenth Supplemental Indenture dated as of January 2, 1995, between The Andersons, Inc. and Fifth Third Bank of Northwestern Ohio, N.A., successor Trustee to an Indenture between The Andersons and Ohio Citizens Bank, dated as of October 1, 1985. (Incorporated by reference to Exhibit 4.4 to registrant's 1995 Annual Report on Form 10-K).
10.1 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).
10.2 The Andersons, Inc. Long-Term Performance Compensation Plan * (Incorporated by reference to Appendix B to Registration Statement No. 33-58963).
10.3 The Andersons, Inc. Employee Share Purchase Plan * (Incorporated by reference to Appendix C to Registration Statement No. 33-58963).
13 The Andersons, Inc. 1996 Annual Report to Shareholders
22 Subsidiaries of The Andersons, Inc.
23.1 Consent of Independent Auditors
* Management contract or compensatory plan.
The Company 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.
(c) Exhibits:
The exhibits listed in Item 14(a)(3) of this report, and not incorporated by reference, follow "Financial Statement Schedule" referred to in (d) below.
(d) Financial Statement Schedule:
The financial statement schedule listed in 14(a)(2) follows "Signatures".
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 28th day of March, 1997.
THE ANDERSONS, INC. (Registrant)
By /s/Richard P. Anderson Richard P. Anderson Chairman of the Board 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 on the 28th day of March, 1997.
Signature Title Date /s/Richard P. Anderson Chairman and Chief Executive 3/28/97 Richard P. Anderson Officer (Principal Executive Officer)
/s/Richard R. George Vice President and Controller 3/28/97 Richard R. George (Principal Accounting Officer)
/s/Gary L. Smith Vice President, Finance 3/28/97 Gary L. Smith and Treasurer (Principal Financial Officer)
________________________ Director Donald E. Anderson
/s/Michael J. Anderson Director 3/28/97 Michael J. Anderson
/s/Richard M. Anderson Director 3/28/97 Richard M. Anderson
/s/Thomas H. Anderson Director 3/28/97 Thomas H. Anderson
/s/John F. Barrett Director 3/28/97 John F. Barrett
/s/Paul M. Kraus Director 3/28/97 Paul M. Kraus
_______________________ Director Donald M. Mennel
_______________________ Director David L. Nichols
_______________________ Director Dr. Sidney A. Ribeau
_______________________ Director Charles A. Sullivan
Except for those portions of The Andersons, Inc. 1996 Annual Report to Shareholders specifically incorporated by reference in this report on Form 10-K, such annual report is furnished solely for the information of the Securities and Exchange Commission and is not to be deemed "filed" as a part of this filing.
EXHIBIT INDEX
THE ANDERSONS, INC.
Exhibit Number
13 The Andersons, Inc. 1996 Annual Report to Shareholders
22 Subsidiaries of The Andersons, Inc.
23.1 Consent of Independent Auditors