1 EXHIBIT 99.0 THE PINES STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1993 9 2 [FARMER, FUQUA, HUNT & ROBERT, LLC LETTERHEAD] Independent Auditors' Report To the Board of Trustees Continental Mortgage and Equity Trust We have audited the accompanying statement of revenues and direct operating expenses of The Pines (a real estate project) for the year ended December 31, 1993. This statement of revenues and direct operating expenses is the responsibility of the Trust's management. Our responsibility is to express an opinion on this statement of revenues and direct operating expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and direct operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and direct operating expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of revenues and direct operating expenses presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying financial statement is prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Continental Mortgage & Equity Trust) and, as described in Note 1, is not intended to be a complete presentation of the results of operations. In our opinion, the statement of revenues and direct operating expenses referred to above presents fairly, in all material respects, the revenues and direct operating expenses of The Pines for the year ended December 31, 1993, in conformity with generally accepted accounting principles. FARMER, FUQUA, HUNT & ROBERT, LLC Dallas, Texas February 6, 1995 10 3 THE PINES STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1993 REVENUES: Rental revenues $1,278,965 Other 48,021 ---------- Total Revenue 1,326,986 ---------- OPERATING EXPENSES: Repairs & maintenance 58,028 Services 64,629 Administration 15,895 Marketing 25,416 Payroll & benefits 159,792 Utilities 113,973 Property taxes 128,910 Insurance 42,927 Management Fees 59,486 ---------- Total Operating Expenses 669,056 ---------- NET OPERATING INCOME $ 657,930 ========== The accompanying notes are an integral part of this statement. 11 4 THE PINES NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES DECEMBER 31, 1993 NOTE 1: ORGANIZATION The Pines is a 242 unit apartment complex located in Gainesville, Florida. During 1993, the property was owned by Midland-Missouri Real Estate Holdings Trust, a Missouri corporation. The accompanying financial statement does not include provision for depreciation and amortization, interest expense or income taxes. Accordingly, this statement is not intended to be a complete presentation of the results of operations. NOTE 2: OTHER INCOME Other income consists of the following: Forfeited security deposits $ 2,560 Pet fees 3,670 Late fees 15,840 Application fee income 6,385 Vending income 12,942 Miscellaneous income 6,624 ------- Total Other Income $48,021 ======= NOTE 3: MANAGEMENT FEES The property has a management agreement with Dominion Management Corporation which calls for a fee equal to 4% of gross monthly receipts, as defined. NOTE 4: SUBSEQUENT EVENT On December 22, 1994, the property was sold to Continental Mortgage and Equity Trust, a California business trust. 12