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EXHIBIT 99.0
THE TIMBERS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1996
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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 Timbers for the year ended December 31, 1996. This statement
of revenues and direct operating expenses is the responsibility of the
Property'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 and 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 Timbers for the year ended December 31, 1996,
in conformity with generally accepted accounting principles.
Farmer, Fuqua, Hunt & Munselle, P.C.
Dallas, Texas
April 8, 1997
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THE TIMBERS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1996
REVENUES
Net rental revenues $ 812,811
Other revenues 37,042
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Total revenues 849,853
OPERATING EXPENSES
Repairs and maintenance 138,839
Salaries and benefits 137,898
Property taxes 101,829
Utilities 75,597
Insurance 29,791
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Total direct operating expenses 483,954
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REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 365,899
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The accompanying notes are an integral part of this statement.
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THE TIMBERS
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
DECEMBER 31, 1996
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
The Timbers is a 180-unit apartment complex, located in Houston, Texas.
During 1996, the property was owned by Lost Timbers Limited Partnership
The accompanying financial statement does not include a provision for
depreciation and amortization, bad debt expense, interest expense or
income taxes. Accordingly, this statement is not intended to be a
complete presentation of the results of operations.
NOTE 2: ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 3: OTHER REVENUES
Other revenues consist of the following;
NSF/Late fees $ 22,513
Forfeited deposits 8,982
Application fees 4,425
Miscellaneous 1,122
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$ 37,042
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NOTE 4: SUBSEQUENT EVENT
The property was sold to Continental Mortgage and Equity Trust, a
California business trust, on January 17, 1997.
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