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: JULY 31, 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 S. SIMPSON TREASURER
- --------------------------------------- --------------------------
Original Signature of Responsible Party Title
WILFORD W. SIMPSON AUGUST 23, 2002
- --------------------------------------- --------------------------
Printed Name of Responsible Party Date
PREPARER:
/s/ DENNIS S. FAULKNER ACCOUNTANT FOR DEBTOR
- --------------------------------------- --------------------------
Original Signature of Preparer Title
DENNIS S. FAULKNER AUGUST 23, 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
ASSETS AMOUNT JUL-02 MONTH MONTH
- ------ ------------ ------------ ------------ ------------
1. Unrestricted Cash (FOOTNOTE) 6,557,974 2,999,988
2. Restricted Cash (FOOTNOTE) 2,022,461
3. Total Cash 6,557,974 5,022,449
4. Accounts Receivable (Net) (FOOTNOTE) 300,000
5. Inventory
6. Notes Receivable
7. Prepaid Expenses (FOOTNOTE) 3,450,681 238,142
8. Other (Attach List) 263,606 0
9. Total Current Assets 10,272,261 5,560,591
10. Property, Plant & Equipment 3,285,885 0
11. Less: Accumulated Depreciation/Depletion (1,753,163) 0
12. Net Property, Plant & Equipment 1,532,722 0
13. Due From Insiders
14. Other Assets - Net of Amortization (Attach List) 36,082 0
15. Other (Attach List) (FOOTNOTE) 153,399,371 39,971,438
16. Total Assets 165,240,436 45,532,029
POST PETITION LIABILITIES
17. Accounts Payable
18. Taxes Payable
19. Notes Payable
20. Professional Fees
21. Secured Debt
22. Other (Attach List) (FOOTNOTE) 1,680,378
23. Total Post Petition Liabilities 1,680,378
PRE PETITION LIABILITIES
24. Secured Debt (FOOTNOTE) 75,885,064 13,945,516
25. Priority Debt (FOOTNOTE) 200,832 0
26. Unsecured Debt 1,779,701 1,377,554
27. Other (Attach List) 242,243,558 171,795,019
28. Total Pre Petition Liabilities 320,109,155 187,118,089
29. Total Liabilities 320,109,155 188,798,467
EQUITY
30. Pre Petition Owners' Equity (154,868,719)
31. Post Petition Cumulative Profit Or (Loss) (6,198,323)
32. Direct Charges To Equity (Attach Explanation FOOTNOTE) 17,800,604
33. Total Equity (143,266,438)
34. Total Liabilities and Equity 45,532,029
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 - 1
COMPARATIVE BALANCE SHEET
SCHEDULED MONTH
ASSETS AMOUNT JUL-02 MONTH MONTH
- ------ ------------ ------------ ------------ ------------
A. Security Deposit 8,794 0
B. Cash Surrender Value: Life Ins. 254,812 0
C.
D.
E.
TOTAL OTHER ASSETS - LINE 8 263,606 0
A. Organizational Costs 36,082 0
B.
C.
D.
E.
TOTAL OTHER ASSETS NET OF AMORTIZATION - LINE 14 36,082 0
A. Intercompany Receivables 113,743,558 0
B. Intercompany Royalties 39,655,813 39,971,438
C.
D.
E.
TOTAL OTHER ASSETS - LINE 15 153,399,371 39,971,438
POST PETITION LIABILITIES
A. Accrued Liabilities Other 348,628
B. Deferred Compensation 960,371
C. Accrued Health Claims 371,379
D.
E.
F.
G.
TOTAL OTHER POST PETITION LIABILITIES - LINE 22 1,680,378
PRE PETITION LIABILITIES
A. Intercompany Payables (FOOTNOTE) 113,743,558 43,295,019
B. 10 3/8% Senior Sub. Notes 105,000,000 105,000,000
C. Sr. Sub. Exchangeable Notes 23,500,000 23,500,000
D.
E.
TOTAL OTHER PRE PETITION LIABILITIES - LINE 27 242,243,558 171,795,019
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 2
CASE NUMBER: 401-40788-BJH-11
INCOME STATEMENT
MONTH QUARTER
REVENUES JUL-02 MONTH MONTH TOTAL
- -------- ------------ ------------ ------------ ------------
1. Gross Revenues 0
2. Less: Returns & Discounts 0
3. Net Revenue 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
8. Gross Profit 0 0
OPERATING EXPENSES
9. Officer / Insider Compensation 12,771 12,771
10. Selling & Marketing 0
11. General & Administrative 471 471
12. Rent & Lease 5,020 5,020
13. Other (Attach List) 10,279 10,279
14. Total Operating Expenses 28,541 28,541
15. Income Before Non-Operating
Income & Expense (28,541) (28,541)
OTHER INCOME & EXPENSES
16. Non-Operating Income (Att List) 15,890 15,890
17. Non-Operating Expense (Att List) 0 0
18. Interest Expense 0
19. Depreciation / Depletion 0
20. Amortization 0
21. Other (Attach List) 0
22. Net Other Income & Expenses 15,890 15,890
REORGANIZATION EXPENSES
23. Professional Fees 0
24. U.S. Trustee Fees 7,250 7,250
25. Other (Attach List) 0
26. Total Reorganization Expenses 7,250 7,250
27. Income Tax 0
28. Net Profit (Loss) (19,901) (19,901)
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 QUARTER
OPERATING EXPENSES JUL-02 MONTH MONTH TOTAL
- ------------------ ------------ ------------ ------------ ------------
A.Utilities & Telephone 428 428
B.Payroll Taxes 4,788 4,788
C.Bank Fees 1,270 1,270
D.Insurance 844 844
E.Bowne of Dallas 2,949 2,949
TOTAL OTHER OPERATING EXPENSES - LINE 13 10,279 10,279
OTHER INCOME & EXPENSES
A.Interest Income 5,678 5,678
B.Tax Refund 4,991 4,991
C.Adj. To Property Tax Accrual 5,221 5,221
D.
E.
TOTAL NON-OPERATING INCOME - LINE 16 15,890 15,890
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL NON-OPERATING EXPENSE - LINE 17 0 0
REORGANIZATION EXPENSES
A. 0
B. 0
C. 0
D. 0
E. 0
TOTAL OTHER REORGANIZATION EXPENSES - LINE 25 0 0
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 3
CASE NUMBER: 401-40788-BJH-11
CASH RECEIPTS AND MONTH QUARTER
DISBURSEMENTS JUL-02 MONTH 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
4. Post Petition
5. Total Operating Receipts 0
NON-OPERATING RECEIPTS
6. Loans & Advances (Attach List)
7. Sale of Assets
8. Other (Attach List)
9. Total Non-Operating Receipts 0
10. Total Receipts 0
11. Total Cash Available 0
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 0
REORGANIZATION DISBURSEMENTS
27. Professional Fees
28. U.S. Trustee Fees
29. Other (Attach List)
30. Total Reorganization Expenses
31. Total Disbursements 0
32. Net Cash Flow 0
33. Cash - End of Month 0
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
JULY, 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 -- -- 5,047,569 -- -- -- 5,047,569
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 -- -- 10,670 -- -- -- 10,670
INTERCOMPANY TRANSFERS 235 (235) -- --
SALE EXPENSE REIMBURSEMENT
INCOME TAX REFUND 4,991
REBATE
WORKERS COMP REFUND
MISC. --
INTEREST INCOME -- 5,679
9 TOTAL NON OPERATING RECEIPTS 235 -- 10,435 -- -- -- 10,670
10 TOTAL RECEIPTS 235 -- 10,435 -- -- -- 10,670
11 CASH AVAILABLE 235 -- 5,058,004 -- -- -- 5,058,239
OPERATING DISBURSEMENTS
12 NET PAYROLL 12,770 12,770
13 PAYROLL TAXES PAID 4,788 4,788
14 SALES, USE & OTHER TAXES PAID -- --
15 SECURED/RENTAL/LEASES -- 5,020 5,020
16 UTILITIES -- 428 428
17 INSURANCE -- 844 844
18 INVENTORY PURCHASES -- --
19 VEHICLE EXPENSE -- --
20 TRAVEL -- --
21 ENTERTAINMENT -- --
22 REPAIRS & MAINTENANCE 235 -- 235
23 SUPPLIES -- --
24 ADVERTISING
25 OTHER -- -- 4,455 -- -- -- 4,455
LOAN PAYMENTS -- -- --
FREIGHT -- --
CONTRACT LABOR -- --
401 K PAYMENTS -- --
PAYROLL TAX ADVANCE ADP
WAGE GARNISHMENTS
MISC -- 4,455 4,455
26 TOTAL OPERATING DISBURSEMENTS 235 -- 28,305 -- -- -- 28,540
REORGANIZATION DISBURSEMENTS
27 PROFESSIONAL FEES --
28 US TRUSTEE FEES -- 7,250 7,250
29 OTHER --
30 TOTAL REORGANIZATION EXPENSE -- -- 7,250 -- -- -- 7,250
31 TOTAL DISBURSEMENTS 235 -- 35,555 -- -- -- 35,790
32 NET CASH FLOW -- -- (25,120) -- -- -- (25,120)
33 CASH- END OF MONTH -- -- 5,022,449 -- -- -- 5,022,449
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 4
CASE NUMBER: 401-40788-BJH-11
SCHEDULED MONTH
ACCOUNTS RECEIVABLE AGING AMOUNT JUL-02 MONTH MONTH
- ------------------ ------------ ------------ ------------ ------------
1. 0 - 30
2. 31 - 60
3. 61 - 90
4. 91 + 300,000
5. Total Accounts Receivable 0 300,000
6. (Amount Considered Uncollectible)
7. Accounts Receivable (Net) (FOOTNOTE) 0 300,000
AGING OF POST PETITION MONTH: JULY-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) 0
5. Total Taxes Payable 0 0 0 0 0
6. Accounts Payable 0
MONTH: JULY-02
STATUS OF POST PETITION TAXES -------------
AMOUNT
BEGINNING TAX WITHHELD AND/OR ENDING TAX
FEDERAL LIABILITY * ACCRUED (AMOUNT PAID) LIABILITY
- ------------------ ------------ ------------ ------------ ------------
1. Withholding ** 4,286 (4,286) 0
2. FICA - Employee ** 251 (251) 0
3. FICA - Employer ** 251 (251) 0
4. Unemployment 0 0 0
5. Income 0
6. Other (Attach List)
7. Total Federal Taxes 0 4,788 (4,788) 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 4,788 (4,788) 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 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: JULY-02
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BANK RECONCILIATIONS Account # 1 Account # 2
- -------------------- ----------------- ----------------
A. BANK: Bank of America Bank of America Other Accounts
B. ACCOUNT NUMBER: 1295026976 3751629012 (Attach List) TOTAL
DIP Disbursement
C. PURPOSE (TYPE): Operating Account Account
1. Balance Per Bank Statement 1,492,164 138,938 4,835,629 6,466,731
2. Add: Total Deposits Not Credited 4,991 3,294 8,285
3. Subtract: Outstanding Checks (7,490) 0 (7,490)
4. Other Reconciling Items (1,318,993) (126,083) 0 (1,445,076)
5. Month End Balance Per Books 178,162 5,365 4,838,922 5,022,449
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
CASH
12. Currency On Hand 0
13. Total Cash - End of Month 5,022,449
This form does x 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 - 5
MONTH: JULY-02
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BANK RECONCILIATIONS Account # 3 Account # 4 Account # 5
- -------------------- ---------------- ------------ ------------
Bank of America/ Bank of Bank of
A. BANK: Nations Funds America 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 2,721,002 88,200 3,966 2,813,168
2. Add: Total Deposits Not Credited 3,294 3,294
3. Subtract: Outstanding Checks 0
4. Other Reconciling Items 0
5. Month End Balance Per Books 2,724,296 88,200 3,966 2,816,461
6. Number of Last Check Written N/A N/A N/A
INVESTMENT ACCOUNTS
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
CASE NAME: KEVCO MANAGEMENT, INC. 2ND SUPPLEMENT TO
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS - 5
MONTH: JULY-02
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BANK RECONCILIATIONS Account # 6
- -------------------- ---------------
A. BANK: Bank of America TOTAL
B. ACCOUNT NUMBER: 3751930222 OTHER BANK
RESTRICTED
C. PURPOSE (TYPE): FUNDS ACCOUNTS
1. Balance Per Bank Statement 2,022,461 2,022,461
2. Add: Total Deposits Not Credited 0
3. Subtract: Outstanding Checks 0
4. Other Reconciling Items 0
5. Month End Balance Per Books 2,022,461 2,022,461
6. Number of Last Check Written N/A
INVESTMENT ACCOUNTS
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
CASE NAME: KEVCO MANAGEMENT, INC. ACCRUAL BASIS - 6
CASE NUMBER: 401-40788-BJH-11
MONTH: JULY-02
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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. sa)
INSIDERS
TYPE OF AMOUNT TOTAL PAID
NAME PAYMENT PAID TO DATE
-------- -------------- ------------ ------------
1. Sharon Romere Expense Reimb. 1,949
2. Joe Tomczak Expense Reimb. 626
3. John Wittig Expense Reimb. 263
4. Sharon Romere Payroll 126,246
5. Joe Tomczak Payroll 177,884
6. John Wittig Payroll 144,039
7. Wil Simpson Payroll 12,771 259,068
Other (see attached) 0 132,293
8. Total Payments To Insiders 12,771 842,368
PROFESSIONALS
DATE OF
COURT ORDER TOTAL
AUTHORIZING AMOUNT TOTAL PAID INCURRED
NAME PAYMENT APPROVED AMOUNT PAID TO DATE & UNPAID *
-------- ------------ ------------ ------------ ------------ ------------
1. Haynes and Boone 3/20/01 1,316,514 1,316,514
2. Lain, Faulkner & Co., P.C. 3/20/01 327,594 327,594
3. Baker & McKenzie 3/20/01 480,314 480,314
4. Gordion Group 3/20/01 17,438 17,438
5. (Attach List) 202,069 828,636
6. Total Payments To Professionals 2,343,929 0 2,970,496 0
* Include all fees incurred, both approved and unapproved
POST PETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE
PROTECTION PAYMENTS
AMOUNTS TOTAL
SCHEDULED PAID UNPAID
MONTHLY DURING POST
NAME OF CREDITOR PAYMENTS DUE MONTH PETITION
---------------- ------------ ------------ ------------
1. Bank of America N/A 13,945,516
2. Leases Payable none
3.
4.
5. (Attach List)
6. TOTAL 0 0 13,945,516
This form does x 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
MONTH: JULY-02
PAYMENTS TO INSIDERS AND PROFESSIONALS -------------
INSIDERS
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. 3,984
F. Wil Simpson Expense Reimb. 919
G.
H.
TOTAL OTHER PAYMENTS TO INSIDERS - LINE 5 132,293
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 65,764 77,715
B. Mark MacDonald & Assoc. 3/20/2001 49,382 623,145
C. David T. Roberts 3/20/2001 23,960 64,813
D. Barnes & Thornburg 3/20/2001 62,963 62,963
E.
F.
G.
H.
TOTAL OTHER PAYMENTS TO PROFESSIONALS-LINE 5 202,069 828,636
* 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
---------------- ------------ ------------ ------------
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: JULY-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, General Liability, Auto Aon Risk Services 3/1/02--9/1/02 Semi-Annual $98,598
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.
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CASE NAME: KEVCO MANAGEMENT, INC. FOOTNOTES SUPPLEMENT
CASE NUMBER: 401-40788-BJH-11 ACCRUAL BASIS
MONTH: JULY-02
-------------
ACCRUAL
BASIS FORM
NUMBER LINE NUMBER FOOTNOTE / EXPLANATION
- ------------- ----------- ----------------------
1 1 Pursuant to the February 12, 2001 Order (1)
3 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. 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 2 During May 2002, Kevco Manufacturing, LP and Kevco
Distribution, LP sold real property located in
Indiana and Georgia. Financial details of the
transactions are in the affiliated Debtor Monthly
Operating Reports.
1 4 In September 2001, Liberty Mutual, Debtor's
Workman's Compensation carrier, drew $300,000 on a
letter of credit issued during 2000. Although
Debtor has received a refund of $1,077,239
pursuant to a final audit, Liberty Mutual has
continued to hold the funds from the letter of
credit.
1 7 Prepaid Expenses consist primarily of professional
fee retainers.
1 15 Intercompany receivables/payables are from/to
1 27A co-debtors Kevco Manufacturing, LP (Case No.
7 3 401-40784-BJH-11), Kevco 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 24 Adjustments to equity are due to secured debt
1 32 reductions 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 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.