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: AUGUST 31, 2001
---------------
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 OCTOBER 11, 2001
- --------------------------------------- ------------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ Dennis S. Faulkner ACCOUNTANT FOR DEBTOR
- --------------------------------------- ------------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER OCTOBER 11, 2001
- --------------------------------------- ------------------------------
Printed Name of Preparer Date
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 1
CASE NUMBER: 401-40788-BJH-11
COMPARATIVE BALANCE SHEET
<Table>
<Caption>
SCHEDULED MONTH MONTH
ASSETS AMOUNT JULY-01 AUGUST-01 MONTH
- ------ ----------- ----------- ----------- -----
1. Unrestricted Cash (FOOTNOTE) 6,557,974 4,259,402 3,618,707
2. Restricted Cash
3. Total Cash 6,557,974 4,259,402 3,618,707
4. Accounts Receivable (Net) 6,748
5. Inventory
6. Notes Receivable
7. Prepaid Expenses (FOOTNOTE) 3,450,681 1,108,092 743,510
8. Other (Attach List) 263,606 0 0
9. Total Current Assets 10,272,261 5,367,494 4,368,965
10. Property, Plant & Equipment (FOOTNOTE) 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 45,338,932 44,340,403
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable 11,634 11,634
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) (FOOTNOTE) 2,776,114 1,894,121
23. Total Post Petition Liabilities 2,787,748 1,905,755
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 15,071,491 14,930,296
25. Priority Debt (FOOTNOTE) 200,832 91,281 91,281
26. Unsecured Debt 1,779,701 1,720,667 1,391,017
27. Other (Attach List) 242,243,558 169,279,290 169,303,664
28. Total Pre Petition Liabilities 320,109,155 186,162,729 185,716,258
29. Total Liabilities 320,109,155 188,950,477 187,622,013
EQUITY
30. Pre Petition Owners' Equity (154,868,719) (154,868,719)
31. Post Petition Cumulative Profit Or (Loss) (5,202,539) (5,013,798)
32. Direct Charges To Equity (Attach
Explanation FOOTNOTE) 16,459,713 16,600,907
33. Total Equity (143,611,545) (143,281,610)
34. Total Liabilities and Equity 45,338,932 44,340,403
</Table>
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
<Table>
<Caption>
SCHEDULED MONTH MONTH
ASSETS AMOUNT JUL-01 AUGUST-01 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 (FOOTNOTE) 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 1,338,789 510,433
B. Deferred Compensation 960,371 960,371
C. Accrued Health Claims 476,954 423,317
D.
E.
F.
G.
TOTAL OTHER POST PETITION
LIABILITIES - LINE 22 2,776,114 1,894,121
PRE PETITION LIABILITIES
A. Intercompany Payables (FOOTNOTE) 113,743,558 40,779,290 40,803,664
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 27 242,243,558 169,279,290 169,303,664
</Table>
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 2
CASE NUMBER: 401-40788-BJH-11
INCOME STATEMENT
<Table>
<Caption>
MONTH MONTH QUARTER
REVENUES JUL-01 AUGUST-01 MONTH TOTAL
- -------- ---------- --------- ----- ----------
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 (FOOTNOTE) 153,348 121,875 275,223
10. Selling & Marketing 0
11. General & Administrative 88,795 9,913 98,708
12. Rent & Lease 17,456 14,518 31,974
13. Other (Attach List) 521,733 173,559 695,292
14. Total Operating Expenses 781,332 319,865 1,101,197
15. Income Before Non-Operating
Income & Expense (781,332) (319,865) (1,101,197)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) 8,914 936,899 945,813
17. Non-Operating Expense (Att List) 114,757 114,757
18. Interest Expense 0
19. Depreciation / Depletion 35,680 35,680
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & Expenses (141,523) 936,899 795,376
REORGANIZATION EXPENSES
23. Professional Fees 160,801 397,043 557,844
24. U.S. Trustee Fees 31,250 31,250
25. Other (Attach List) 0
26. Total Reorganization Expenses 160,801 428,293 589,094
27. Income Tax 0
28. Net Profit (Loss) (1,083,656) 188,741 (894,915)
</Table>
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 2
INCOME STATEMENT
<Table>
<Caption>
MONTH MONTH QUARTER
OPERATING EXPENSES JUL-01 AUGUST-01 MONTH TOTAL
- ------------------ ------- --------- ----- -------
A. Payroll (FOOTNOTE) 503,153 168,886 672,039
B. Insurance 868 0 868
C. Utilities & Telephone 189 338 527
D. Taxes 17,523 4,335 21,858
E. 0
TOTAL OTHER OPERATING
EXPENSES - LINE 13 521,733 173,559 695,292
OTHER INCOME & EXPENSES
A. Interest and Misc. Income 8,914 7,229 16,143
B. Balance Sheet Adjustments (FOOTNOTE) 929,670 929,670
C. 0
D. 0
E. 0
TOTAL NON-OPERATING INCOME -
LINE 16 8,914 936,899 945,813
A. Balance Sheet Adjustments (FOOTNOTE) 114,757 0 114,757
B. 0
C. 0
D. 0
E. 0
TOTAL NON-OPERATING
EXPENSE - LINE 17 114,757 0 114,757
REORGANIZATION EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER REORGANIZATION
EXPENSES - LINE 25 0 0 0
</Table>
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 3
CASE NUMBER: 401-40788-BJH-11
<Table>
<Caption>
CASH RECEIPTS AND MONTH MONTH QUARTER
DISBURSEMENTS JULY-01 AUGUST-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 (Attach List) 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
</Table>
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO ACCRUAL BASIS - 3
AUGUST, 2001
CASE NUMBER: 401-40788-BJH-11 CASH RECEIPTS AND DISBURSEMENTS
<Table>
<Caption>
DIST LP MFG MGMT HOLDING COMP KEVCO INC TOTAL
------- ------- --------- ------- ----- --------- ---------
1 CASH-BEGINNING OF MONTH -- 153,739 4,259,402 4,631 5,668 1,000 4,424,440
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 250,000 250,000
8 OTHER 53,554 60,449 7,229 -- -- -- 121,232
INTERCOMPANY TRANSFERS 97,483 (10,425) (77,851) (4,084) (5,123) --
SALE EXPENSE REIMBURSEMENT
LIFE INSURANCE CASH VALUE
RENT
PAYROLL TAX ADVANCE RETURNED
MISC. 53,554 60,247 --
INTEREST INCOME 202 7,229
9 TOTAL NON OPERATING RECEIPTS 151,037 300,024 (70,622) (4,084) (5,123) -- 371,232
10 TOTAL RECEIPTS 151,037 300,024 (70,622) (4,084) (5,123) -- 371,232
11 CASH AVAILABLE 151,037 453,763 4,188,780 547 545 1,000 4,795,672
OPERATING DISBURSEMENTS
12 NET PAYROLL 99,215 128,012 227,227
13 PAYROLL TAXES PAID -- 90,139 90,139
14 SALES, USE & OTHER TAXES PAID -- --
15 SECURED/RENTAL/LEASES -- 14,708 14,708
16 UTILITIES 3,170 79 8,130 11,379
17 INSURANCE -- 55,317 55,317
18 INVENTORY PURCHASES -- --
19 VEHICLE EXPENSE -- --
20 TRAVEL -- --
21 ENTERTAINMENT -- --
22 REPAIRS & MAINTENANCE -- 32 32
23 SUPPLIES 581 -- 195 776
24 ADVERTISING --
25 OTHER 48,071 303,179 9,916 547 545 -- 362,258
LOAN PAYMENTS 250,000 250,000
FREIGHT 12,357 -- 12,357
CONTRACT LABOR -- 5,659 5,659
401 K PAYMENTS -- --
PAYROLL TAX ADVANCE ADP --
WAGE GARNISHMENTS --
MISC. 35,714 53,179 4,257 547 545 94,242
26 TOTAL OPERATING DISBURSEMENTS 151,037 303,258 306,449 547 545 -- 761,836
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES -- 232,374 232,374
28 US TRUSTEE FEES -- 31,250 31,250
29 OTHER --
30 TOTAL REORGANIZATION EXPENSE -- -- 263,624 -- -- -- 263,624
31 TOTAL DISBURSEMENTS 151,037 303,258 570,073 547 545 -- 1,025,460
32 NET CASH FLOW -- (3,234) (640,695) (4,631) (5,668) -- (654,228)
33 CASH- END OF MONTH -- 150,505 3,618,707 -- -- 1,000 3,770,212
</Table>
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 4
CASE NUMBER: 401-40788-BJH-11
<Table>
<Caption>
SCHEDULED MONTH MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT JUL-01 AUGUST-01 MONTH
- ------------------------- --------- ------ --------- -----
1. 0 - 30
2. 31 - 60
3. 61 - 90
4. 91 +
5. Total Accounts Receivable 0 0 6,748 0
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) 0 0 6,748 0
</Table>
AGING OF POST PETITION MONTH: AUGUST-01
TAXES AND PAYABLES -------------------
<Table>
<Caption>
0 - 30 31 - 60 61 - 90 91 +
TAXES PAYABLE DAYS DAYS DAYS DAYS TOTAL
- ----------------- ------ ------- ------- ----- -----
1. Federal 0
2. State 6,412 6,412
3. Local 0
4. Other (Attach List) 5,222 5,222
5. Total Taxes Payable 11,634 0 0 0 11,634
6. Accounts Payable 0
</Table>
STATUS OF POST PETITION TAXES MONTH: AUGUST-01
-------------------
<Table>
<Caption>
BEGINNING TAX AMOUNT WITHHELD ENDING TAX
FEDERAL LIABILITY* AND/OR ACCRUED (AMOUNT PAID) LIABILITY
- ------- ------------- --------------- ------------- -------------
1. Withholding ** 46,476 (46,476) 0
2. FICA - Employee ** 4,153 (4,153) 0
3. FICA - Employer ** 4,154 (4,154) 0
4. Unemployment 0 0
5. Income 0
6. Other (Attach List)
7. Total Federal Taxes 0 54,783 (54,783) 0
STATE AND LOCAL
8. Withholding 0 0
9. Sales (FOOTNOTE) 6,412 6,412
10. Excise 0
11. Unemployment 0 0
12. Real Property (FOOTNOTE) 0
13. Personal Property 5,222 5,222
14. Other (Attach List) 0
15. Total State And Local 11,634 0 0 11,634
16. Total Taxes 11,634 54,783 (54,783) 11,634
</Table>
* 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.
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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: AUGUST-01
-----------------
<Table>
<Caption>
BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- ----------- -----------
A. BANK: Bank of America Bank of America Other Accounts TOTAL
B. ACCOUNT NUMBER: 1295026976 3751629012 (Attach List)
C. PURPOSE (TYPE): Operating Account DIP Disbursement
Account
1. Balance Per Bank Statement 910,936 268,178 2,546,265 3,725,379
2. Add: Total Deposits Not Credited 0 0
3. Subtract: Outstanding Checks (56,583) (21,379) (77,962)
4. Other Reconciling Items (7,878) (20,832) (28,710)
5. Month End Balance Per Books 846,475 268,178 2,504,054 3,618,707
6. Number of Last Check Written N/A N/A
</Table>
INVESTMENT ACCOUNTS
<Table>
<Caption>
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
13. Total Cash - End of Month 3,618,707
</Table>
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 - 5
MONTH: AUGUST-01
------------------
<Table>
<Caption>
BANK RECONCILIATIONS Account # 3 Account # 4 Account # 5
- -------------------- ----------- ----------- -----------
A. BANK: Bank of America/ Bank of America Bank of America TOTAL
Nations Funds
B. ACCOUNT NUMBER: 846713 3751775241 3750801912 OTHER BANK
C. PURPOSE (TYPE): Kevco, Inc. S-T Stay Pay ACCOUNTS
Investment (FOOTNOTE) Payroll-Mgmt
1. Balance Per Bank Statement 2,374,089 127,200 13,257 2,514,546
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks 0
4. Other Reconciling Items 0
5. Month End Balance Per Books 2,374,089 127,200 13,257 2,514,546
6. Number of Last Check Written N/A N/A N/A
</Table>
INVESTMENT ACCOUNTS
<Table>
<Caption>
DATE OF TYPE OF
BANK, ACCOUNT NAME & NUMBER PURCHASE INSTRUMENT PURCHASE PRICE CURRENT VALUE
- --------------------------- -------- ---------- -------------- -------------
A.
B.
C.
D.
TOTAL OTHER INVESTMENT
ACCOUNTS - LINE 10 0 0
</Table>
CASE NAME: KEVCO MANAGEMENT, INC. 2ND SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 5
MONTH: AUGUST-01
------------------
AUGUST-01
<Table>
<Caption>
BANK RECONCILIATIONS Account # 6 Account # 7 Account # 8
- -------------------- ----------- ----------- -----------
A. BANK: Bank of America Bank of America TOTAL
B. ACCOUNT NUMBER: 1295027040 3750768628 OTHER BANK
C. PURPOSE (TYPE): Payroll-Dist Payroll-MFG ACCOUNTS
1. Balance Per Bank Statement 26,995 4,724 31,719
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks (21,379) (21,379)
4. Other Reconciling Items (20,832) (20,832)
5. Month End Balance Per Books (15,216) 4,724 (10,492)
6. Number of Last Check Written N/A N/A
</Table>
<Table>
<Caption>
DATE OF TYPE OF
BANK, ACCOUNT NAME & NUMBER PURCHASE INSTRUMENT PURCHASE PRICE CURRENT VALUE
- --------------------------- -------- ---------- -------------- -------------
A.
B.
C.
D.
TOTAL OTHER INVESTMENT
ACCOUNTS - LINE 10 0 0
</Table>
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 6
CASE NUMBER: 401-40788-BJH-11
MONTH: AUGUST-01
---------------
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
<Table>
<Caption>
TYPE OF AMOUNT TOTAL PAID
NAME PAYMENT PAID TO DATE
---- ------- ------- ----------
1. Sharon Romere Expense Reimb. 383
2. Joe Tomczak Expense Reimb. 626
3. John Wittig Expense Reimb. 263
4. Sharon Romere Payroll 49,038 97,114
5. Joe Tomczak Payroll 177,884
6. John Wittig Payroll 144,039
7. Will Simpson Payroll 72,837 142,338
Other (see attached) 0 131,083
8. Total Payments To Insiders 121,875 693,730
</Table>
PROFESSIONALS
<Table>
<Caption>
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED
NAME PAYMENT APPROVED PAID TO DATE & UNPAID*
---- ----------- --------- ------- ---------- ---------
1. Haynes and Boone 3/20/01 1,088,886 230,885 1,088,886 82,348
2. Lain, Faulkner & Co., P.C. 3/20/01 218,909 60,523 218,909 65,398
3. Baker & McKenzie 3/20/01 181,615 88,197 181,615
4. Gordion Group 3/20/01 17,438 17,438 17,438
5. (Attach List)
6. Total Payments To Professionals 1,506,848 397,043 1,506,848 147,746
</Table>
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
<Table>
<Caption>
SCHEDULED AMOUNTS TOTAL
MONTHLY PAID UNPAID
PAYMENTS DURING POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------- ----------
1. Bank of America N/A 0 14,930,296
2. Leases Payable none
3.
4.
5. (Attach List)
6. TOTAL 0 0 14,930,296
</Table>
This form x does does not have related footnotes on Footnotes Supplement.
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CASE NAME: KEVCO MANAGEMENT, INC. SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 6
PAYMENTS TO INSIDERS AND PROFESSIONALS MONTH: AUGUST-01
---------------
INSIDERS
<Table>
<Caption>
TYPE OF AMOUNT TOTAL PAID
NAME PAYMENT 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. 3,693
F.
G.
H.
TOTAL OTHER PAYMENTS TO
INSIDERS - LINE 5 131,083
</Table>
PROFESSIONALS
<Table>
<Caption>
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED
NAME PAYMENT APPROVED PAID TO DATE & UNPAID*
---- ----------- --------- ------- ---------- ---------
A.
B.
C.
D.
E.
F.
G.
H.
TOTAL PAYMENTS
TO PROFESSIONALS
</Table>
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
<Table>
<Caption>
SCHEDULED AMOUNTS TOTAL
MONTHLY PAID UNPAID
PAYMENTS DURING POST
NAME OF CREDITOR DUE MONTH PETITION
---------------- --------- ------- ----------
A.
B.
C.
D.
E.
6. STATUS OF OTHER
CREDITORS - LINE 5
</Table>
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 7
CASE NUMBER: 401-40788-BJH-11
MONTH: AUGUST-01
---------------
QUESTIONNAIRE
<Table>
<Caption>
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
</Table>
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
<Table>
<Caption>
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.
</Table>
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
<Table>
<Caption>
TYPE OF POLICY CARRIER PERIOD COVERED PAYMENT AMOUNT & FREQUENCY
-------------- ------- -------------- --------------------------
Property Lexingon, Allianz 5/29/00-3/1/02 Semi-Annual $26,485
Group Health Blue Cross Blue Shield Terminated 08/01/01 N/A
Auto Liberty Mutual 9/1/00-3/1/02 Semi-Annual $3,333
D&O Liability Great American Insurance 10/31/98-10/31/01 Annual $64,657
</Table>
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: AUGUST-01
------------
<Table>
<Caption>
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 7 Prepaid Expenses consist primarily of professional fee
retainers.
1 10 During July and August, expense accruals made at the
1 14A beginning of the year were reversed because the liabilities
2 16B,17A will not be incurred as estimated. In addition, all
remaining property, plant, equipment, fixed and other assets
were written off. These balance sheet and income statement
adjustments were made in order to more accurately reflect
Debtor's assets, liabilities and expenses. The income
statement gains and losses were netted and classified as
Balance Sheet adjustments.
1 15 Intercompany receivables/payables are from/to co-debtors
1 27A Kevco Manufacturing, LP (Case No. 401-40784-BJH-11), Kevco
7 3 Distribution, 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 post-petition 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
post-petition "Accrued Liabilities."
1 25 Pursuant to Order dated February 12, 2001 and Supplemental
2 9, 13A Order dated March 14, 2001, debtors were authorized to pay
5 Supp. pre-petition 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. During July, all Debtor's employees except two,
Sharon Romere and Wil Simpson, were terminated. In
accordance with a March 14, 2001 Order Granting Motion to
Approve Management and Employee Retention Plan by Kevco,
Inc., stay bonuses were paid to participating employees from
Debtors' DIP operating account. Funds maintained in the Bank
of America "Stay Pay" account were transferred in August to
the operating account as reimbursement.
</Table>
CASE NAME: KEVCO MANAGEMENT, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS
MONTH: AUGUST-01
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<Table>
<Caption>
ACCRUAL
BASIS
FORM
NUMBER LINE NUMBER FOOTNOTE/EXPLANATION
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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 (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.
4 9,12 Sales/ property tax liabilities represent accruals of tax
and are not yet due.
</Table>