EX-99.2 4 d99301exv99w2.txt MONTHLY OPERATING REPORT FOR KEVCO MANAGEMENT, INC EXHIBIT 99.2 CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS CASE NUMBER: 401-40788-BJH-11 JUDGE: BARBARA J. HOUSER UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS -------- ----- FORT WORTH DIVISION ---------- MONTHLY OPERATING REPORT MONTH ENDING: FEBRUARY 28, 2002 ----------------- IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING REPORT (ACCRUAL BASIS - 1 THROUGH ACCRUAL BASIS - 7) AND THE ACCOMPANYING ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT AND COMPLETE. DECLARATION OF THE PREPARER (OTHER THAN RESPONSIBLE PARTY): IS BASED ON ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE. RESPONSIBLE PARTY: /s/ Wilford W. Simpson TREASURER --------------------------------------- --------------------- Original Signature of Responsible Party Title WILFORD W. SIMPSON MARCH 21, 2002 --------------------------------------- --------------------- Printed Name of Responsible Party Date PREPARER: /s/ Dennis S. Faulkner ACCOUNTANT FOR DEBTOR --------------------------------------- --------------------- Original Signature of Preparer Title DENNIS S. FAULKNER MARCH 21, 2002 --------------------------------------- --------------------- Printed Name of Preparer Date CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 1 CASE NUMBER: 401-40788-BJH-11 COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH ASSETS AMOUNT JAN-02 FEB-02 MONTH ------ --------- --------- --------- ------ 1. Unrestricted Cash (FOOTNOTE) 6,557,974 3,006,125 2,958,782 2. Restricted Cash 3. Total Cash 6,557,974 3,006,125 2,958,782 4. Accounts Receivable (Net) (FOOTNOTE) 300,000 300,000 5. Inventory 6. Notes Receivable 7. Prepaid Expenses (FOOTNOTE) 3,450,681 391,128 340,945 8. Other (Attach List) 263,606 0 0 9. Total Current Assets 10,272,261 3,697,253 3,599,727 10. Property, Plant & Equipment 3,285,885 0 0 11. Less: Accumulated Depreciation/Depletion (1,753,163) 0 0 12. Net Property, Plant & Equipment 1,532,722 0 0 13. Due From Insiders 14. Other Assets - Net of Amortization (Attach List) 36,082 0 0 15. Other (Attach List) (FOOTNOTE) 153,399,371 39,971,438 39,971,438 16. Total Assets 165,240,436 43,668,691 43,571,165 POST PETITION LIABILITIES 17. Accounts Payable 18. Taxes Payable 5,221 5,221 19. Notes Payable 20. Professional Fees 21. Secured Debt 22. Other (Attach List) (FOOTNOTE) 1,752,084 1,741,659 23. Total Post Petition Liabilities 1,757,305 1,746,880 PRE PETITION LIABILITIES 24. Secured Debt (FOOTNOTE) 75,885,064 13,509,318 13,590,741 25. Priority Debt (FOOTNOTE) 200,832 0 0 26. Unsecured Debt 1,779,701 1,377,554 1,377,554 27. Other (Attach List) 242,243,558 169,586,497 169,579,877 28. Total Pre Petition Liabilities 320,109,155 184,473,369 184,548,172 29. Total Liabilities 320,109,155 186,230,674 186,295,052 EQUITY 30. Pre Petition Owners' Equity (154,868,719) (154,868,719) 31. Post Petition Cumulative Profit Or (Loss) (5,930,064) (6,010,545) 32. Direct Charges To Equity (Attach Explanation FOOTNOTE) 18,236,800 18,155,377 33. Total Equity (142,561,983) (142,723,887) 34. Total Liabilities and Equity 43,668,691 43,571,165
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 1 COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH ASSETS AMOUNT JAN-02 FEB-02 MONTH ------ ----------- ---------- --------- ------ A. Security Deposit 8,794 0 0 B. Cash Surrender Value: Life Ins 254,812 0 0 C. D. E. TOTAL OTHER ASSETS - LINE 8 263,606 0 0 A. Organizational Costs 36,082 0 0 B. C. D. E. TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 36,082 0 0 A. Intercompany Receivables 113,743,558 0 0 B. Intercompany Royalties 39,655,813 39,971,438 39,971,438 C. D. E. TOTAL OTHER ASSETS - LINE 15 153,399,371 39,971,438 39,971,438 POST PETITION LIABILITIES A. Accrued Liabilities Other 409,909 409,909 B. Deferred Compensation 960,371 960,371 C. Accrued Health Claims 381,804 371,379 D. E. F. G. TOTAL OTHER POST PETITION LIABILITIES LINE 22 1,752,084 1,741,659 PRE PETITION LIABILITIES A. Intercompany Payables (FOOTNOTE) 113,743,558 41,086,497 41,079,877 B. 10 3/8% Senior Sub. Notes 105,000,000 105,000,000 105,000,000 C. Sr. Sub. Exchangeable Notes 23,500,000 23,500,000 23,500,000 D. E. TOTAL OTHER PRE PETITION LIABILITIES - LINE 27 242,243,558 169,586,497 169,579,877
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 2 CASE NUMBER: 401-40788-BJH-11
INCOME STATEMENT SCHEDULED MONTH MONTH REVENUES AMOUNT JAN-02 FEB-02 MONTH -------- --------- ------- ------ -------- 1. Gross Revenues 0 2. Less: Returns & Discounts 0 3. Net Revenue 0 0 0 COST OF GOODS SOLD 4. Material 0 5. Direct Labor 0 6. Direct Overhead 0 7. Total Cost Of Goods Sold 0 0 0 8. Gross Profit 0 0 0 OPERATING EXPENSES 9. Officer / Insider Compensation 17,178 33,962 51,140 10. Selling & Marketing 0 11. General & Administrative 4,579 6,394 10,973 12. Rent & Lease 5,079 6,834 11,913 13. Other (Attach List) 34,065 8,513 42,578 14. Total Operating Expenses 60,901 55,703 116,604 15. Income Before Non-Operating Income & Expense (60,901) (55,703) (116,604) OTHER INCOME & EXPENSES 16. Non-Operating Income (Att List) 4,736 5,788 10,524 17. Non-Operating Expense (Att List) 0 0 0 18. Interest Expense 0 19. Depreciation / Depletion 0 20. Amortization 0 21. Other (Attach List) 0 22. Net Other Income & Expenses 4,736 5,788 10,524 REORGANIZATION EXPENSES 23. Professional Fees 92,450 30,567 123,017 24. U.S. Trustee Fees 11,500 0 11,500 25. Other (Attach List) 0 26. Total Reorganization Expenses 103,950 30,567 134,517 27. Income Tax 0 28. Net Profit (Loss) (160,115) (80,482) (240,597)
This form does x does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT MONTH MONTH QUARTER OPERATING EXPENSES JAN-02 FEB-02 MONTH TOTAL ------------------ ------ ------ ----- ------- A. Utilities & Telephone 192 170 362 B. Taxes 33,873 6,934 40,807 C. Contract Labor 563 563 D. Insurance 846 846 E. 0 TOTAL OTHER OPERATING EXPENSES - LINE 13 34,065 8,513 42,578 OTHER INCOME & EXPENSES A. Interest and Misc. Income 4,736 5,788 10,524 B. 0 C. 0 D. 0 E. 0 TOTAL NON-OPERATING INCOME - LINE 16 4,736 5,788 10,524 A. 0 B. 0 C. 0 D. 0 E. 0 TOTAL NON-OPERATING EXPENSE - LINE 17 0 0 0 REORGANIZATION EXPENSES A. 0 B. 0 C. 0 D. 0 E. 0 TOTAL OTHER REORGANIZATION EXPENSES - LINE 25 0 0 0
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 3 CASE NUMBER: 401-40788-BJH-11
CASH RECEIPTS AND MONTH MONTH QUARTER DISBURSEMENTS JAN-02 FEB-02 MONTH TOTAL ----------------- ------ ------- ----- ------- 1. Cash - Beginning Of Month SEE ATTACHED SUPPLEMENT AND FOOTNOTE RECEIPTS FROM OPERATIONS 2. Cash Sales COLLECTION OF ACCOUNTS RECEIVABLE 3. Pre Petition 4. Post Petition 5. Total Operating Receipts NON-OPERATING RECEIPTS 6. Loans & Advances (Attach List) 7. Sale of Assets 8. Other (Attach List) 9. Total Non-Operating Receipts 10. Total Receipts 11. Total Cash Available OPERATING DISBURSEMENTS 12. Net Payroll 13. Payroll Taxes Paid 14. Sales, Use & Other Taxes Paid 15. Secured / Rental / Leases 16. Utilities 17. Insurance 18. Inventory Purchases 19. Vehicle Expenses 20. Travel 21. Entertainment 22. Repairs & Maintenance 23. Supplies 24. Advertising 25. Other (Attach List) 26. Total Operating Disbursements REORGANIZATION DISBURSEMENTS 27. Professional Fees 28. U.S. Trustee Fees 29. Other (Attach List) 30. Total Reorganization Expenses 31. Total Disbursements 32. Net Cash Flow 33. Cash - End of Month
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO ACCRUAL BASIS -3 FEBRUARY, 2002 CASE NUMBER: 401-40788-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL ------- ------- --------- ------- ---- --------- --------- 1. CASH-BEGINNING OF MONTH -- 151,415 3,006,125 -- -- 1,000 3,158,540 RECEIPTS FROM OPERATIONS 2. CASH SALES -- -- -- COLLECTION OF ACCOUNTS RECEIVABLE 3. PRE PETITION -- -- -- 4. POST PETITION -- -- 5. TOTAL OPERATING RECEIPTS -- -- -- -- -- -- -- NON OPERATING RECEIPTS 6. LOANS & ADVANCES -- -- 7. SALE OF ASSETS -- -- 8. OTHER -- 10,441 55,971 -- -- -- 66,412 INTERCOMPANY TRANSFERS 2,315 4,304 (6,619) -- -- SALE EXPENSE REIMBURSEMENT INCOME TAX REFUND RENT PAYROLL TAX ADVANCE RETURNED 50,183 MISC 1,820 -- INTEREST INCOME 3,968 9. TOTAL NON OPERATING RECEIPTS 2,315 14,745 49,352 -- -- -- 66,412 10. TOTAL RECEIPTS 2,315 14,745 49,352 -- -- -- 66,412 11. CASH AVAILABLE 2,315 166,160 3,055,477 -- -- 1,000 3,224,952 OPERATING DISBURSEMENTS 12. NET PAYROLL 33,962 33,962 13. PAYROLL TAXES PAID -- 6,934 6,934 14. SALES, USE & OTHER TAXES PAID -- -- 15. SECURED/RENTAL/LEASES -- 6,834 6,834 16. UTILITIES -- 170 170 17. INSURANCE -- 11,271 11,271 18. INVENTORY PURCHASES -- -- 19. VEHICLE EXPENSE -- -- 20. TRAVEL -- -- 21. ENTERTAINMENT -- -- 22. REPAIRS & MAINTENANCE -- -- 23. SUPPLIES -- -- 24. ADVERTISING -- 25. OTHER 2,315 45,167 6,957 -- -- -- 54,439 LOAN PAYMENTS -- -- -- FREIGHT -- -- CONTRACT LABOR -- 563 563 401 K PAYMENTS -- -- PAYROLL TAX ADVANCE ADP -- WAGE GARNISHMENTS -- MISC 2,315 45,167 6,394 53,876 26. TOTAL OPERATING DISBURSEMENTS 2,315 45,167 66,128 -- -- -- 113,610 REORGANIZATION DISBURSEMENTS 27. PROFESSIONAL FEES -- 30,567 30,567 28. US TRUSTEE FEES -- -- 29. OTHER -- 30. TOTAL REORGANIZATION EXPENSE -- -- 30,567 -- -- -- 30,567 31. TOTAL DISBURSEMENTS 2,315 45,167 96,695 -- -- -- 144,177 32. NET CASH FLOW -- (30,422) (47,343) -- -- -- (77,765) 33. CASH- END OF MONTH -- 120,993 2,958,782 -- -- 1,000 3,080,775
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 4 CASE NUMBER: 401-40788-BJH-11
SCHEDULED MONTH MONTH ACCOUNTS RECEIVABLE AGING AMOUNT JAN02 FEB02 MONTH ------------------------- --------- ----- ----- ----- 1. 0 - 30 2. 31 - 60 3. 61 - 90 4. 91 + 5. Total Accounts Receivable 0 0 0 6. (Amount Considered Uncollectible) 7. Accounts Receivable (Net) (FOOTNOTE) 0 0 0
AGING OF POST PETITION MONTH: FEBRUARY-02 TAXES AND PAYABLES ----------
0 - 30 31 - 60 61 - 90 91 + TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL ------------- ------ ------- ------- ---- ----- 1. Federal 0 2. State 0 3. Local 0 4. Other (See below) 5,221 5,221 5. Total Taxes Payable 5,221 0 0 0 5,221 6. Accounts Payable 0
MONTH: FEBRUARY-02 ---------- STATUS OF POST PETITION TAXES
BEGINNING TAX AMOUNT WITHHELD ENDING TAX FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY ------- ------------- -------------- ------------- ---------- 1. Withholding ** (18,429) 18,429 0 2. FICA-Employee ** (4,340) 4,340 0 3. FICA-Employer ** (4,340) 4,340 0 4. Unemployment 0 0 5. Income 0 6. Other (Attach List) 7. Total Federal Taxes 0 (27,109) 27,109 0 STATE AND LOCAL 8. Withholding 0 0 9. Sales 0 0 10. Excise 0 11. Unemployment 0 0 12. Real Property (FOOTNOTE) 5,221 5,221 13. Personal Property 0 14. Other (Attach List) 0 15. Total State And Local 5,221 0 0 5,221 16. Total Taxes 5,221 (27,109) 27,109 5,221
* The beginning tax liability should represent the liability from the prior month or, if this is the first operating report, the amount should be zero. ** Attach photocopies of IRS Form 6123 or your FTD coupon and payment receipt to verify payment of deposit. This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 5 CASE NUMBER: 401-40788-BJH-11 The debtor in possession must complete the reconciliation below for each bank account, including all general, payroll and tax accounts, as well as all savings and investment accounts, money market accounts, certificates of deposit, government obligations, etc. Accounts with restricted funds should be identified by placing an asterisk next to the account number. Attach additional sheets if necessary. MONTH: FEBRUARY-02 --------------
BANK RECONCILIATIONS Account # 1 Account # 2 -------------------- ----------------- -------------------------- A. BANK: Bank of America Bank of America Other Accounts B. ACCOUNT NUMBER: 1295026976 3751629012 (Attach List) TOTAL C. PURPOSE (TYPE): Operating Account DIP Disbursement Account 1. Balance Per Bank Statement 136,224 40,448 2,801,442 2,978,114 2. Add: Total Deposits Not Credited 0 0 3. Subtract: Outstanding Checks (19,332) 0 (19,332) 4. Other Reconciling Items 0 0 5. Month End Balance Per Books 136,224 21,116 2,801,442 2,958,782 6. Number of Last Check Written N/A N/A
INVESTMENT ACCOUNTS
DATE TYPE OF BANK, ACCOUNT NAME & NUMBER OF PURCHASE INSTRUMENT PURCHASE PRICE CURRENT VALUE --------------------------- ----------- ---------- -------------- ------------- 7. 8. 9. 10. (Attach List) 11. Total Investments 0 0 CASH 12. Currency On Hand 0 13. Total Cash - End of Month 2,958,782
This form does x does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 5 MONTH: FEBRUARY-02 -----------
BANK RECONCILIATIONS Account # 3 Account # 4 Account # 5 -------------------- ----------- ----------- ----------- Bank of America/ A. BANK: Nations Funds Bank of America Bank of America TOTAL B. ACCOUNT NUMBER: 846713 3751775241 3750801912 OTHER BANK Kevco, Inc. S-T C. PURPOSE (TYPE): Investment Stay Pay Payroll-Mgmt ACCOUNTS 1. Balance Per Bank Statement 2,709,276 88,200 3,966 2,801,442 2. Add: Total Deposits Not Credited 0 3. Subtract: Outstanding Checks 0 4. Other Reconciling Items 0 5. Month End Balance Per Books 2,709,276 88,200 3,966 2,801,442 6. Number of Last Check Written N/A N/A N/A
INVESTMENT ACCOUNTS
DATE TYPE OF BANK, ACCOUNT NAME & NUMBER OF PURCHASE INSTRUMENT PURCHASE PRICE CURRENT VALUE --------------------------- ----------- ---------- -------------- ------------- A. B. C. D. 0 0 TOTAL OTHER INVESTMENT ACCOUNTS - LINE 10 0 0
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 6 CASE NUMBER: 401-40788-BJH-11 MONTH: FEBRUARY-02 ------------- PAYMENTS TO INSIDERS AND PROFESSIONALS Of the Total Disbursements shown for the month, list the amount paid to Insiders (as defined in Section 101 (31) (A) - (F) of the U.S. Bankruptcy Code) and to Professionals. Also, for payments to Insiders, identify the type of compensation paid (e.g. salary, bonus, commissions, insurance, housing allowance, travel, car allowance, etc.). Attach additional sheets if necessary. INSIDERS
TYPE OF AMOUNT TOTAL PAID NAME PAYMENT PAID TO DATE ---- ------- ------ ------- 1. Sharon Romere Expense Reimb. 1,536 2. Joe Tomczak Expense Reimb. 626 3. John Wittig Expense Reimb. 263 4. Sharon Romere Payroll 22,264 126,246 5. Joe Tomczak Payroll 177,884 6. John Wittig Payroll 144,039 7. Wil Simpson Payroll 11,698 204,716 Other (see attached) 417 132,219 8. Total Payments To Insiders 34,379 787,529
PROFESSIONALS
DATE OF COURT ORDER TOTAL AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED NAME PAYMENT APPROVED PAID TO DATE & UNPAID* ---- ----------- --------- --------- ---------- --------- 1. Haynes and Boone 3/20/2001 1,272,064 1,272,064 2. Lain, Faulkner & Co., P.C. 3/20/2001 327,594 327,594 14,996 3. Baker & McKenzie 3/20/2001 288,151 30,567 288,151 4. Gordion Group 3/20/2001 17,438 17,438 5. (Attach List) 17,959 0 17,959 6. Total Payments To Professionals 1,923,206 30,567 1,923,206 14,996
* Include all fees incurred, both approved and unapproved POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE PROTECTION PAYMENTS
SCHEDULED AMOUNTS TOTAL MONTHLY PAID UNPAID PAYMENTS DURING POST NAME OF CREDITOR DUE MONTH PETITION ---------------- --------- ------- ---------- 1. Bank of America N/A 13,590,741 2. Leases Payable none 3. 4. 5. (Attach List) 6. TOTAL 0 0 13,590,741
This form does x does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 6 PAYMENTS TO INSIDERS AND PROFESSIONALS MONTH: FEBRUARY-02 -------------- INSIDERS
NAME TYPE OF PAYMENT AMOUNT PAID TOTAL PAID TO DATE ---- --------------- ----------- ------------------ A. Bill Estes Director's Fees 13,000 B. Peter McKee Director's Fees 12,000 C. Richard Nevins Director's Fees 13,000 D. Wingate Partners Management Fee 89,390 E. Wingate Partners Expense Reimb. 109 3,910 F. Wil Simpson Expense Reimb. 308 919 G. H. TOTAL OTHER PAYMENTS TO INSIDERS - LINE 5 417 132,219
PROFESSIONALS
DATE OF COURT ORDER TOTAL AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED NAME PAYMENT APPROVED PAID TO DATE & UNPAID* ---- ----------- --------- --------- ---------- --------- A. Ernst & Young 3/20/2001 17,959 17,959 B. C. D. E. F. G. H. TOTAL OTHER PAYMENTS TO PROFESSIONALS - LINE 5 17,959 17,959
* Include all fees incurred, both approved and unapproved POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE PROTECTION PAYMENTS
SCHEDULED AMOUNT TOTAL MONTHLY PAID UNPAID PAYMENT DURING POST NAME OF CREDITOR DUE MONTH PETITION ---------------- --------- ----- -------- A. B. C. D. E. STATUS OF OTHER CREDITORS - LINE 5
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 7 CASE NUMBER: 401-40788-BJH-11 MONTH: FEBRUARY-02 ------------ QUESTIONNAIRE
YES NO --- -- 1. Have any Assets been sold or transferred outside the normal course of business this reporting period? X 2. Have any funds been disbursed from any account other than a debtor in possession account? X 3. Are any Post Petition Receivables (accounts, notes, or loans) due from related parties? X 4. Have any payments been made on Pre Petition Liabilities this reporting period? X 5. Have any Post Petition Loans been received by the debtor from any party? X 6. Are any Post Petition Payroll Taxes past due? X 7. Are any Post Petition State or Federal Income Taxes past due? X 8. Are any Post Petition Real Estate Taxes past due? X 9. Are any other Post Petition Taxes past due? X 10. Are any amounts owed to Post Petition creditors delinquent? X 11. Have any Pre Petition Taxes been paid during the reporting period? X 12. Are any wage payments past due? X
If the answer to any of the above questions is "Yes", provide a detailed explanation of each item. Attach additional sheets if necessary. See Footnote INSURANCE
YES NO --- -- 1. Are Worker's Compensation, General Liability and other necessary insurance coverages in effect? X 2. Are all premium payments paid current? X 3. Please itemize policies below.
If the answer to any of the above questions is "No", or if any policies have been canceled or not renewed during this reporting period, provide an explanation below. Attach additional sheets if necessary. INSTALLMENT PAYMENTS
TYPE OF POLICY CARRIER PERIOD COVERED PAYMENT AMOUNT & FREQUENCY -------------- ------- -------------- -------------------------- Property Lexington, Allianz 5/29/00-3/1/02 Semi-Annual $26,485 Auto Liberty Mutual 9/1/00-3/1/02 Semi-Annual $3,333 D&O Liability Great American Insurance 11/1/2001-10/31/2004 Annual $64,657
This form x does does not have related footnotes on Footnotes Supplement. --- --- CASE NAME: KEVCO MANAGEMENT, INC. FOOTNOTES SUPPLEMENT CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS MONTH: FEBRUARY-02 --------------
ACCRUAL BASIS FORM NUMBER LINE NUMBER FOOTNOTE / EXPLANATION ------- ----------- ---------------------- 1 1 Pursuant to the February 12, 2001 Order (1) Authorizing 3 1 Continued Use of Existing Forms and Records; (2) Authorizing Maintenance of Existing Corporate Bank Accounts and Cash Management System; and (3) Extending Time to Comply with 11 U.S.C. Section 345 Investment Guidelines, funds in the Bank of America and Key Bank deposit accounts are swept daily into Kevco's lead account number 1295026976. The Bank of America lead account is administered by, and held in the name of Kevco Management Co. Accordingly, all cash receipts and disbursements flow through Kevco Management's Bank of America DIP account. A schedule allocating receipts and disbursements among Kevco, Inc. and its subsidiaries is included in this report as a Supplement to Accrual Basis -3. 1 4 In September 2001, Liberty Mutual, Debtor's Workman's Compensation carrier, drew $300,000 on a letter of credit issued during 2000. Debtor believes, after a final audit of its Workman's Compensation account, that the amount drawn will be refunded in full. 1 7 Prepaid Expenses consist primarily of professional fee retainers. 1 15 Intercompany receivables/payables are from/to codebtors Kevco 1 27A Manufacturing, LP (Case No. 401-40784-BJH-11), Kevco Distribution, 7 3 LP (Case No. 401-40789-BJH-11), Kevco Holding, Inc. (Case No. 401-40785-BJH-11), DCM Delaware, Inc. (Case No. 401-40787-BJH-11), Kevco GP, Inc. (Case No. 401-40786-BJH-11), Kevco Components, Inc. (Case No. 401-40790-BJH-11), and Kevco, Inc. (Case No. 401-40783-BJH-11). Changes in intercompany have not been reflected as postpetition assets and liabilities. 1 22 The Debtor records on its books accruals for certain liabilities based on historical estimates. While the known creditors were listed on the Debtor's Schedules, the estimated amounts were not. Accordingly, for purposes of this report, the accrued liabilities are reflected as postpetition "Accrued Liabilities." 1 24 Adjustments to equity are due to secured debt reductions 1 32 pursuant to the sales of Kevco Manufacturing, LP's operating divisions, the asset sale of the South Region of Kevco Distribution, as well as direct cash payments. The secured debt owed to Bank of America by Kevco, Inc. (Case No. 401-40783-BJH-11) has been guaranteed by all of its co-debtors (see Footnote 1,15); therefore, the secured debt is reflected as a liability on all of the Kevco entities. The charge to equity is simply an adjustment to the balance sheet. 1 25 Pursuant to Order dated February 12, 2001 and Supplemental Order dated March 14, 2001, debtors were authorized to pay prepetition salaries and wages up to a maximum of $4,300 per employee. Debtors were also (a) allowed to pay accrued vacation to terminated employees and (b) permitted to continue allowing employees to use vacation time as scheduled. 4 12 Property tax liabilities represent accruals of tax and are not yet due.