EXHIBIT 99.3
CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS
CASE NUMBER: 401-40785-BJH-11
JUDGE: BARBARA J. HOUSER
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
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FORT WORTH DIVISION
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MONTHLY OPERATING REPORT
MONTH ENDING: JUNE 30, 2001
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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 AUGUST 24, 2001
- ---------------------------------------- ----------------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ Dennis S. Faulkner ACCOUNTANT FOR DEBTOR
- ---------------------------------------- ----------------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER AUGUST 24, 2001
- ---------------------------------------- ----------------------------------
Printed Name of Preparer Date
CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS - 1
CASE NUMBER: 401-40785-BJH-11
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT MAY-01 JUNE-01 MONTH
- ------ --------- ------ ------- -----
1. Unrestricted Cash 232 5,010 4,631
2. Restricted Cash
3. Total Cash 232 5,010 4,631 0
4. Accounts Receivable (Net)
5. Inventory
6. Notes Receivable
7. Prepaid Expenses
8. Other (Attach List) 0 0 0 0
9. Total Current Assets 232 5,010 4,631 0
10. Property, Plant & Equipment
11. Less: Accumulated Depreciation/Depletion
12. Net Property, Plant & Equipment 0 0 0 0
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) (FOOTNOTE) 95,356,800 85,999,559 1,636,742 0
15. Other (Attach List) 14,496,631 14,496,631 14,496,631 0
16. Total Assets 109,853,663 100,501,200 16,138,004 0
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) 0 0 0
23. Total Post Petition Liabilities 0 0 0
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 38,219,089 15,018,882
25. Priority Debt
26. Unsecured Debt
27. Other (Attach List) 328,039,345 321,192,806 321,192,806 0
28. Total Pre Petition Liabilities 403,924,409 359,411,895 336,211,688 0
29. Total Liabilities 403,924,409 359,411,895 336,211,688 0
EQUITY
30. Pre Petition Owners' Equity (294,070,746) (294,070,746)
31. Post Petition Cumulative Profit Or (Loss) (2,505,922) (86,869,117)
32. Direct Charges To Equity (FOOTNOTE) 37,665,973 60,866,179
33. Total Equity (258,910,695) (320,073,684) 0
34. Total Liabilities and Equity 100,501,200 16,138,004 0
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO HOLDING, INC. SUPPLEMENT TO
CASE NUMBER: 401-40785-BJH-11 ACCRUAL BASIS - 1
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH MONTH
ASSETS AMOUNT MAY-01 JUNE-01 MONTH
- ------ --------- ------ ------- -----
A.
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 0 0 0 0
A. Goodwill: SSS 6,097,280 6,038,227 0
B. Goodwill: Bowen 13,569,437 13,443,107 0
C. Goodwill: BTE 1,657,846 1,640,963 1,636,742
D. Goodwill: Shelter 74,032,237 64,877,262 0
E.
TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 95,356,800 85,999,559 1,636,742 0
A. Investment in Subsidiaries 14,496,631 14,496,631 14,496,631
B.
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 14,496,631 14,496,631 14,496,631 0
POST PETITION LIABILITIES
A.
B.
C.
D.
E.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 0 0 0
PRE PETITION LIABILITIES
A. Interco. Payables (FOOTNOTE) 199,539,345 192,692,806 192,692,806
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 27 328,039,345 321,192,806 321,192,806 0
CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS - 2
CASE NUMBER: 401-40785-BJH-11
INCOME STATEMENT
MONTH MONTH QUARTER
REVENUES MAY-01 JUNE-01 MONTH TOTAL
- -------- ------ ------- ----- -------
1. Gross Revenues 0
2. Less: Returns & Discounts 0
3. Net Revenue 0 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 0
8. Gross Profit 0 0 0 0
OPERATING EXPENSES
9. Officer/Insider Compensation 0
10. Selling & Marketing 0
11. General & Administrative 379 379
12. Rent & Lease 0
13. Other (Attach List) 0
14. Total Operating Expenses 0 379 0 379
15. Income Before Non-Operating Income & Expense 0 (379) 0 (379)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) 0 0 0 0
17. Non-Operating Expense (Att List) 0 0 0 0
18. Interest Expense 0
19. Depreciation/Depletion 0
20. Amortization (218,060) (218,060) (436,120)
21. Other (Attach List) 0 (84,144,756) 0 (84,144,756)
22. Net Other Income & Expenses (218,060) (84,362,816) 0 (84,580,876)
REORGANIZATION EXPENSES
23. Professional Fees 0
24. U.S. Trustee Fees 0
25. Other (Attach List) 0
26. Total Reorganization Expenses 0 0 0 0
27. Income Tax 0
28. Net Profit (Loss) (218,060) (84,363,195) 0 (84,581,255)
This form does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO HOLDING, INC. SUPPLEMENT TO
CASE NUMBER: 401-40785-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
MONTH MONTH QUARTER
OPERATING EXPENSES MAY-01 JUNE-01 MONTH TOTAL
- ------------------ ------ ------- ------ --------
0
0
0
0
0
TOTAL OTHER OPERATING EXPENSES - LINE 13 0 0 0 0
OTHER INCOME & EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL NON-OPERATING INCOME - LINE 16 0 0 0 0
A. Losses on Sales of Assets (FOOTNOTE) (84,144,756) (84,144,756)
B. 0
C. 0
D. 0
E. 0
TOTAL NON-OPERATING EXPENSE - LINE 21 0 (84,144,756) 0 (84,144,756)
REORGANIZATION EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER REORGANIZATION EXPENSES - LINE 25 0 0 0 0
CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS - 3
CASE NUMBER: 401-40785-BJH-11
CASH RECEIPTS AND MONTH MONTH QUARTER
DISBURSEMENTS MAY-01 JUNE-01 MONTH TOTAL
- ------------------ ------ ------- ----- --------
1. Cash - Beginning Of Month SEE ATTACHED SUPPLEMENT AND FOOTNOTE
RECEIPTS FROM OPERATIONS
2. Cash Sales 0
COLLECTION OF ACCOUNTS RECEIVABLE
3. Pre Petition 0
4. Post Petition 0
5. Total Operating Receipts 0 0 0 0
NON-OPERATING RECEIPTS
6. Loans & Advances (Interco. Transfer) 0
7. Sale of Assets 0
8. Other (Attach List) 0
9. Total Non-Operating Receipts 0 0 0 0
10. Total Receipts 0 0 0 0
11. Total Cash Available 0 0 0 0
OPERATING DISBURSEMENTS
12. Net Payroll 0
13. Payroll Taxes Paid 0
14. Sales, Use & Other Taxes Paid 0
15. Secured/Rental/Leases 0
16. Utilities 0
17. Insurance 0
18. Inventory Purchases 0
19. Vehicle Expenses 0
20. Travel 0
21. Entertainment 0
22. Repairs & Maintenance 0
23. Supplies 0
24. Advertising 0
25. Other (Attach List) 0
26. Total Operating Disbursements 0 0 0 0
REORGANIZATION DISBURSEMENTS
27. Professional Fees 0
28. U.S. Trustee Fees 0
29. Other (Attach List) 0
30. Total Reorganization Expenses 0 0 0 0
31. Total Disbursements 0 0 0 0
32. Net Cash Flow 0 0 0 0
33. Cash - End of Month 0 0 0 0
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO HOLDING, INC. SUPPLEMENT TO ACCRUAL BASIS - 3
JUNE, 2001
CASE NUMBER: 401-40785-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL
---------- ---------- ---------- ---------- ---------- ---------- ----------
1 CASH-BEGINNING OF MONTH 28 15,478 16,261,944 5,010 6,050 1,000 16,289,510
RECEIPTS FROM OPERATIONS
2 CASH SALES -- -- --
COLLECTION OF ACCOUNTS RECEIVABLE
3 PRE PETITION -- -- --
4 POST PETITION 155,454 408,048 563,502
5 TOTAL OPERATING RECEIPTS 155,454 408,048 -- -- -- -- 563,502
NON OPERATING RECEIPTS
6 LOANS & ADVANCES -- --
7 SALE OF ASSETS 300,000 13,335,176 365,203 14,000,379
8 OTHER 49,423 1,171 50,046 -- -- -- 100,640
INTERCOMPANY TRANSFERS 466,052 (275,474) (190,578) -- -- --
SALE EXPENSE REIMBURSEMENT
LIFE INSURANCE CASH VALUE
RENT
TAX REFUND
MISC. 49,423 --
INTEREST INCOME 50,046
9 TOTAL NON OPERATING RECEIPTS 815,475 13,060,873 224,671 -- -- -- 14,101,019
10 TOTAL RECEIPTS 970,929 13,468,921 224,671 -- -- -- 14,664,521
11 CASH AVAILABLE 970,957 13,484,399 16,486,615 5,010 6,050 1,000 30,954,031
OPERATING DISBURSEMENTS
12 NET PAYROLL 166,627 66,305 169,505 402,437
13 PAYROLL TAXES PAID -- 167,389 167,389
14 SALES, USE & OTHER TAXES PAID 281 -- 281
15 SECURED/RENTAL/LEASES 215,126 6,622 38,617 260,365
16 UTILITIES 76,221 48,459 3,480 128,160
17 INSURANCE 31,699 -- 166,527 198,226
18 INVENTORY PURCHASES 3,055 28,101 -- 31,156
19 VEHICLE EXPENSE 906 -- -- 906
20 TRAVEL 10,030 8,043 143 18,216
21 ENTERTAINMENT -- -- -- --
22 REPAIRS & MAINTENANCE 6,736 2,505 2,703 11,944
23 SUPPLIES 1,157 8,190 30,130 39,477
24 ADVERTISING --
25 OTHER 459,119 13,011,037 10,134,199 379 382 -- 23,605,116
LOAN PAYMENTS 300,000 12,883,776 10,000,000 23,183,776
FREIGHT 15,800 112,046 4,535 132,381
CONTRACT LABOR 1,917 -- 23,505 25,422
401 K PAYMENTS -- 40,675 40,675
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS 3,746 3,746
MISC. 141,402 15,215 61,738 379 382 219,116
26 TOTAL OPERATING DISBURSEMENTS 970,957 13,179,262 10,712,693 379 382 -- 24,863,673
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES 301,398 347,517 648,915
28 US TRUSTEE FEES -- 31,250 31,250
29 OTHER --
30 TOTAL REORGANIZATION EXPENSE -- 301,398 378,767 -- -- -- 680,165
31 TOTAL DISBURSEMENTS 970,957 13,480,660 11,091,460 379 382 -- 25,543,838
32 NET CASH FLOW (28) (11,739) (10,866,789) (379) (382) -- (10,879,317)
33 CASH - END OF MONTH -- 3,739 5,395,155 4,631 5,668 1,000 5,410,193
CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS - 4
CASE NUMBER: 401-40785-BJH-11
SCHEDULED MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT MAY-01 JUNE-01 MONTH
- ------------------------- --------- ------ ------- -----
1. 0 - 30
2. 31 - 60
3. 61 - 90
4. 91 +
5. Total Accounts Receivable 0 0 0 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 0 0 0 0
AGING OF POST PETITION MONTH: JUNE-01
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 (Attach List) 0 0 0 0 0
5. Total Taxes Payable 0 0 0 0 0
6. Accounts Payable 0
MONTH: JUNE-01
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STATUS OF POST PETITION TAXES
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- ----------
1. Withholding ** 0
2. FICA - Employee ** 0
3. FICA - Employer ** 0
4. Unemployment 0
5. Income 0
6. Other (Attach List) 0 0
7. Total Federal Taxes 0 0 0 0
STATE AND LOCAL
8. Withholding 0
9. Sales 0
10. Excise 0
11. Unemployment 0
12. Real Property 0
13. Personal Property 0
14. Other (Attach List) 0
15. Total State And Local 0 0 0 0
16. Total Taxes 0 0 0 0
* 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 does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS - 5
CASE NUMBER: 401-40785-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: JUNE-01
---------------
BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- ----------- -----------
A. BANK: PNC Bank Delaware Other Accounts TOTAL
B. ACCOUNT NUMBER: 56-0359-4656 (Attach List)
C. PURPOSE (TYPE): DIP Account
1. Balance Per Bank Statement 4,631 4,631
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks 0
4. Other Reconciling Items 0
5. Month End Balance Per Books 4,631 0 4,631
6. Number of Last Check Written 1,023
INVESTMENT ACCOUNTS
DATE OF TYPE OF
BANK, ACCOUNT NAME & NUMBER 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 4,631
This form does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS - 6
CASE NUMBER: 401-40785-BJH-11
MONTH: JUNE-01
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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.
2.
3.
4.
5. (Attach List)
6. Total Payments To Insiders 0 0
PROFESSIONALS
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED
NAME PAYMENT APPROVED PAID TO DATE & UNPAID *
---- ----------- -------- ------ ---------- ----------
1.
2.
3.
4.
5. (Attach List)
6. Total Payments To Professionals 0 0 0 0
* 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 23,200,207 15,018,882
2.
3.
4.
5. (Attach List)
6. TOTAL 0 23,200,207 15,018,882
This form does x does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO HOLDING, INC. ACCRUAL BASIS - 7
CASE NUMBER: 401-40785-BJH-11
MONTH: JUNE-01
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QUESTIONNAIRE
YES NO
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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 1, 24)
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.
KEVCO HOLDING, INC. HAS NO EMPLOYEES; OPERATES AS A HOLDING COMPANY.
INSTALLMENT PAYMENTS
TYPE OF POLICY CARRIER PERIOD COVERED PAYMENT AMOUNT & FREQUENCY
-------------- ------- -------------- --------------------------
General Liability Liberty Mutual 9/1/00-9/1/01 Annual $313,520
Umbrella National Union 6/1/00-9/1/01 Annual $103,349
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO HOLDING, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40785-BJH-11 ACCRUAL BASIS
MONTH: JUNE-01
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ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE/EXPLANATION
- ------ ----------- --------------------
1 14 Kevco Holding, Inc. is the holding company for Kevco
2 21A Manufacturing, LP (Case No. 00-40784-BJH) and Kevco
Distribution, LP (Case No. 00-40789-BJH). In conjunction with
the asset sales recorded in Kevco Manufacturing LP's and Kevco
Distribution LP's books and records (see Footnote for Accrual
Basis - 1, 24 D, E and F), losses were recorded on this Debtor's
income statement for its write-off of related goodwill.
1 24 (A) Pursuant to an Asset Purchase Agreement approved by the
7 1,4 Court on February 23, 2001 and effective as of the same date
among Kevco, Inc., Kevco Manufacturing, LP, Wingate
Management Co. II, LP and Adorn LLC, certain assets and
liabilities of Design Components, a division of Kevco
Manufacturing, LP (Case No. 401-40784-BJH-11), were
transferred to Adorn, LLC. At the effective date of
purchase, Buyer assumed certain executory contracts,
approximately $1.6 million of Kevco Manufacturing, LP's
unsecured pre-petition liabilities, $3.5 million of accounts
receivable, $5 million of inventory and $2.2 million (book
value) of property and equipment. Payment was made directly
to Bank of America, the secured lender, thereby reducing
pre-petition secured debt.
(B) Pursuant to an Asset Purchase Agreement approved by the
Court on April 3, 2001 and effective as of the same date,
Universal Forest Products Eastern Division, Inc. purchased
the assets (inventory, equipment, machinery and five of the
seven facilities at which Sunbelt Wood Components Division
operates) of the Sunbelt division of Kevco Manufacturing,
L.P. Approximately $ 7 million in sales proceeds were paid
directly to Bank of America thereby reducing pre-petition
secured debt.
(C) Debtor paid $15 million from available cash during April
and $10 million during June to Bank of America to reduce
pre-petition secured debt.
(D) Pursuant to an Asset Purchase Agreement approved by the
Court on April 25, 2001 and effective as of April 30, 2001,
Alliance Investment and Management Company, Inc. purchased
most of the assets (inventory, equipment, machinery and two
of seven facilities) of the South Region of Kevco
Distribution, LP. Approximately $4 million in sales proceeds
were paid directly to Bank of America thereby reducing
pre-petition secured debt.
(E) Pursuant to an Asset Purchase Agreement approved by the
Court on May 21, 2001 and effective June 1, 2001, Drew
Industries Incorporated purchased substantially all of the
assets used by the Better Bath Division of Kevco
Manufacturing, LP. Approximately $8 million of the sales
proceeds were paid directly to Bank of America thereby
reducing pre-petition secured debt.
(F) Pursuant to an Asset Purchase Agreement approved by the
Court on May 21, 2001 and effective June 1, 2001, Duo-Form
Acquisition Corporation purchased substantially all of the
assets used by the Duo-Form Division of Kevco Manufacturing,
LP. Approximately $5 million of the sales proceeds were paid
directly to Bank of America thereby reducing pre-petition
secured debt
CASE NAME: KEVCO HOLDING, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40785-BJH-11 ACCRUAL BASIS
MONTH: JUNE-01
---------------
ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE/EXPLANATION
- ------ ----------- --------------------
1 27A Intercompany payables are to co-debtors Kevco Management Co.
(Case No. 401- 40788-BJH-11), Kevco Distribution, LP (Case No.
401-40789-BJH-11), Kevco Manufacturing, LP (Case No.
401-40784-BJH-11), DCM Delaware, Inc. (Case No.
401-40787-BJH-11), Kevco, Inc. (Case No. 401-40783-BJH-11),
Kevco GP, Inc. (Case No. 401-40786-BJH-11), and Kevco
Components, Inc. (Case No. 401- 40790-BJH-11).
1 32 The direct charges to equity are due to the secured debt
reductions pursuant to sales of Kevco Manufacturing, L.P.'s
operating divisions, the asset sale of the South Region of Kevco
Distribution, as well as direct cash payments of $25 million
(See Footnote 1,24). 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 1,27A); 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.
3 1 Pursuant to a February 12, 2001 Order (1) Authorizing 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.
(co-debtor, Case No. 401-40788- BJH). 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. Debtor
maintains a petty cash account that is included in the cash
supplement schedule.