<PAGE> 1
Exhibit 99
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF TENNESSEE
In re: Case No.: 399-02649 THROUGH 399-02680
----------------------------
SERVICE MERCHANDISE COMPANY, INC.
---------------------------------
Judge: PAINE
----------------------------
Chapter 11
Debtor(s)
MONTHLY OPERATING REPORT FOR PERIOD ENDING October 29, 2000
--------------------
COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
------------------------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for the
period commencing October 2, 2000 and ending October 29, 2000 as shown by
the report and exhibits consisting of 15 pages and containing the following
as indicated:
[X] Monthly Reporting Questionnaire (Attachment 1)
[X] Comparative Balance Sheets (Forms OPR-1 & OPR-2)
N/A Summary of Accounts Receivable (Form OPR-3)
[X] Schedule of Postpetition Liabilities (Form OPR-4)
[X] Statement of Income (Loss) (Form OPR-5)
I declare under penalty of perjury that this report and all the
attachments are true and correct to the best of my knowledge and belief. I
also hereby certify that the original Monthly Operating Report was filed
with the Bankruptcy Court Clerk and a copy delivered to the U.S. Trustee.
Date: 11/17/00 DEBTOR - IN - POSSESSION
--------------
By: /s/ KENNETH A. CONWAY
-----------------------------------
Name and Title: KENNETH A. CONWAY, VICE PRESIDENT
AND CONTROLLER
---------------------------------
Address: 7100 SERVICE MERCHANDISE DRIVE
---------------------------------
BRENTWOOD, TENNESSEE 37027
---------------------------------
Telephone No: (615) 660-3340
---------------------------------
Note: Report subject to further verification and account reconciliation
procedures
Page 1
<PAGE> 2
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29, 2000
1. Payroll
<TABLE>
<CAPTION>
WAGES TAXES
OFFICERS TITLE GROSS NET DUE PAID
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SAM CUSANO CHIEF EXECUTIVE OFFICER 50,188.10 24,037.33 6,500.54 19,269.97
C. STEVEN MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER,
GENERAL COUNSEL AND SECRETARY 27,752.86 18,603.87 2,185.87 6,712.01
THOMAS L. GARRETT, JR. SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 1,059,503.86 747,479.40 - 312,023.86
CHARLES K. SEPTER PRESIDENT AND CHIEF OPERATING OFFICER 39,229.81 24,680.08 3,595.07 10,056.61
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 11,558.88 6,984.33 1,265.94 3,127.93
JOE M. ELLIOTT VICE PRESIDENT, PROPERTY ADMINISTRATION 11,597.13 8,274.93 678.42 1,978.17
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VICE PRESIDENT 14,665.05 9,919.37 1,169.98 3,454.17
BILLY STEWART ASSISTANT VICE PRESIDENT, TAX 7,706.27 5,811.76 310.71 919.81
KENNETH A. CONWAY VICE PRESIDENT AND CONTROLLER 12,335.22 8,390.55 544.74 1,491.52
ERIC A. KOVATS SENIOR VICE PRESIDENT, STORES 22,000.46 15,116.87 1,536.50 4,751.38
ROSE C. SEPTER SENIOR VICE PRESIDENT, JEWELRY MERCHANDISING 22,502.81 15,422.49 1,647.15 5,317.02
JERRY E. FOREMAN SENIOR VICE PRESIDENT, MERCHANDISING 25,861.43 14,371.92 5,022.83 6,183.92
</TABLE>
THOMAS L. GARRETT, JR. received severance in the amount of $1,000,441.28 and a
retention payment in the amount of $59,062.58
Page 2
<PAGE> 3
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: October 2, 2000 THROUGH October 29, 2000
2. INSURANCE
<TABLE>
<CAPTION>
COVERAGE POLICY EXPIRATION PREMIUM DATE COVERAGE
TYPE NAME OF CARRIER AMOUNT NUMBER DATE AMOUNT PAID THROUGH
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Property Fireman's Fund Insurance Co $5 Million CCIPW12011 12/31/00 $1,441,249 12/31/00
Royal $5 Million RHD314289 12/31/00 $100,000 12/31/00
Westchester Fire $15 Million 1XA394310 12/31/00 $50,100 12/31/00
Allianz Insurance Co $12 Million CLP1034720 12/31/00 $20,040 12/31/00
TIG Insurance Co $13 Million XPT38797667 12/31/00 $32,500 12/31/00
Westchester Fire $20 Million 1XA394311 12/31/00 $10,020 12/31/00
Allianz Insurance Co $30 Million CLP1034720 12/31/00 $15,030 12/31/00
Allianz Insurance Co $25 Million CLP1034720 12/31/00 $6,680 12/31/00
Boiler & Machinery Hartford Steam Boiler $10 Million 4914539 12/31/00 $8,383 12/31/00
Transit Fireman's Fund Insurance Co $1 Million CCIMG72820 12/31/00 $8,525 12/31/00
Ocean Cargo Fireman's Fund Insurance Co $10 Million CR37211 12/31/00 $25,000 12/31/00
Special Crime Reliance Insurance Co $25 Million NFK1951937 05/01/02 $13,458 05/01/02
Crime National Union Fire Ins Co $10 Million 858-0797 03/01/01 $56,505 03/01/01
Fiduciary National Union Fire Ins Co $10 Million 267-81-30 03/01/01 $19,140 03/01/01
Employment Practices
Liability Chubb Insurance Co $10 Million 81278901A 03/01/01 $130,845 03/01/01
Royal Insurance Co $10 Million PSF000010 03/01/01 $56,364 03/01/01
Directors & Officers Continental Insurance Co $10 Million 300714943 03/01/01 $453,500 03/01/01
Chubb Insurance Co $10 Million 81278902-A 03/01/01 $266,666 03/01/01
Royal Insurance Co $10 Million PSF000009 03/01/01 $133,000 03/01/01
Umbrella Federal Insurance Co $50 Million 79763295 12/31/01 $63,357 12/31/00
Excess Liability American Guarantee & Liab $50 Million AEC287610700 12/31/00 $25,000 12/31/00
International Ace American Ins Co $1 Million PHF051491 12/31/00 $2,500 12/31/00
Punitive Damages Chubb Atlantic Indemnity $50 Million 00) 3310-05-98 12/31/00 $17,160 12/31/00
Punitive Damages - Excess Zurich International Bermuda $50 Million ZGEB-091 PD 12/31/00 $5,000 12/31/00
General Liability Ace American Ins Co $5 Million XSLG19903254 12/31/00 $11,032 12/31/00
Workers' Compensation Pacific Employers Ins Co Statutory WLRC42662112 12/31/00 $19,978 12/31/00
WC Excess Ace American Ins Co Statutory XWC011950 12/31/00 $1,601 12/31/00
WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19903461 12/31/00 $2,083 12/31/00
WC Nevada Ace American Ins Co Statutory NWCC42662173 12/31/00 $1,737 12/31/00
Auto Pacific Employers Ins Co $1 Million ISAH07571008 12/31/00 $2,083 12/31/00
</TABLE>
Page 3
<PAGE> 4
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. ET. AL.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29, 2000
3. BANK ACCOUNTS
TOTAL CASH AND CASH EQUIVALENTS
<TABLE>
<S> <C>
CASH IN STORES AND HOME OFFICE
------------------------------
HOME OFFICE $ 10,750
RETAIL SAFE FUNDS 1,932,326
CORPORATE ACCOUNTS 2,198,991
------------------ ---------
STORE DEPOSITORY ACCOUNTS
-------------------------
FIRST TENNESSEE 590,536
KEY NATIONAL BANK 309,304
BANK OF BOSTON 218,120
BANK OF BOSTON CONNECTICUT 187,166
FIRST UNION 2,073,521
BANK ONE LOUISIANA 322,426
ABN - AMRO BANK 153,378
COMERICA BANK 215,056
AM SOUTH 347,309
BANK OF AMERICA CALIFORNIA 216,234
BANK OF OKLAHOMA 125,177
CHASE BANK OF TEXAS 598,501
SINGLE STORE DEPOSITORY ACCOUNTS 283,093
WELLS FARGO BANK 62,307
BANK OF AMERICA 64,418
BANK ONE, IN 168,970
PNC BANK 533,125
OAK BROOK BANK 626,017
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) 8,915,907
------------------------------------------------------------------
OTHER DEPOSITORY ACCOUNTS
-------------------------
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC 22,896
OTHER CASH ACCOUNTS 904,988
-----------
TOTAL CASH PER GENERAL LEDGER $21,080,518
===========
</TABLE>
Page 4
<PAGE> 5
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. ET. AL.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29, 2000
RECEIPTS AND DISBURSEMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACTUAL ACTUAL ACTUAL ACTUAL TOTAL
Monday 10/02/00 10/09/00 10/16/00 10/23/00 10/02/00
Sunday 10/08/00 10/15/00 10/22/00 10/29/00 10/29/00
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Receipts:
Sales receipts $ 20,728 $ 22,310 $ 16,939 $ 21,075 $ 81,052
Miscellaneous receipts -- 470 -- -- 470
-------- -------- -------- -------- ---------
Total available collections 20,728 22,780 16,939 21,075 81,522
Disbursements:
Merchandise disbursements 23,038 16,199 20,748 20,379 80,364
Non-merchandise disbursements 24,343 22,215 15,068 18,316 79,942
-------- -------- -------- -------- ---------
Total disbursements 47,381 38,414 35,816 38,695 160,306
-------- -------- -------- -------- ---------
Net receipts/(disbursements) $(26,653) $(15,634) $(18,877) $(17,620) $ (78,784)
======== ======== ======== ======== =========
</TABLE>
Page 5
<PAGE> 6
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. ET. AL.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29, 2000
ROLLING REVISED CASH FLOW FORECAST
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Actual Forecast Forecast Forecast
11/05/00 11/12/00 11/26/00 12/31/00
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Ending total revolver balance $240,634 $261,384 $315,210 $107,348
Term loan 60,000 60,000 60,000 60,000
Standby letters of credit 27,228 27,184 27,184 25,684
Trade letters of credit 16,828 17,697 20,235 20,248
-------- -------- -------- --------
Total extensions of credit 344,690 366,265 422,629 213,280
Borrowing base 500,951 526,438 559,221 455,663
-------- -------- -------- --------
Availability $156,261 $160,173 $136,592 $242,383
======== ======== ======== ========
</TABLE>
Page 6
<PAGE> 7
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: October 2, 2000 THROUGH October 29, 2000
4. Payments to Professionals October 2, 2000 through October 29, 2000
<TABLE>
<CAPTION>
Vendor # Vendor Name Check Amt. Check Date Check #
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
101730 CBIZ Property Tax Solutions, Inc. $7,212.24 10/05/00 50019715
86237 Brusniak, Clement, Harrison & McCool, PC $1,729.57 10/05/00 50019719
94414 Keen Realty Consultants, Inc. $147,012.90 10/09/00 50019947
101607 PricewaterhouseCoopers, LLP $352.95 10/10/00 50020047
101730 CBIZ Property Tax Solutions, Inc. $6,000.00 10/10/00 50020109
101730 CBIZ Property Tax Solutions, Inc. $1,442.45 10/10/00 50020110
94005 Donald A. Blum $7,438.00 10/16/00 50020639
57117 Deloitte & Touche $106,250.00 10/17/00 50020735
50995 Brann & Issacson $847.99 10/17/00 50020784
76921 Doody and Lafakis, Ltd $339.71 10/18/00 50021214
57117 Deloitte & Touche $20,725.00 10/19/00 50021342
101625 DG Hart Associates, Inc. $52,440.73 10/20/00 B0023141
99444 Sitrick & Company $21,776.15 10/20/00 B0023143
53703 Barron and Stadfeld, PC $426.85 10/23/00 50021655
57809 McNeill & Taylor, PA $4,384.17 10/23/00 50021656
67017 Barkley & Thompson $4,327.20 10/23/00 50021657
91420 Magenheim, Bateman, Robinson $78.91 10/23/00 50021659
95913 Locke, Reynolds, Boyd & Weisell $72.30 10/23/00 50021662
63010 Rives & Peterson $85.44 10/24/00 50021730
84740 Taft, Stettinius & Hollister $37.28 10/24/00 50021741
97660 Schnader Harrison, Segal & Lewis $20.00 10/24/00 50021754
48779 Loss, Pavone & Orel $86.50 10/24/00 50021817
67017 Barkley & Thompson $74.60 10/24/00 50021818
69583 McCarthy, Fingar, Donovan, Drazen & Smith, LLP $35.00 10/24/00 50021820
93547 D'Assaro and Hall $2,210.85 10/24/00 50021823
96684 Sherbow & Mitchell, PC $31.14 10/24/00 50021824
57117 Deloitte & Touche $20,797.80 10/25/00 50022005
67017 Barkley & Thompson $54.00 10/26/00 50022319
99459 Robert L. Berger & Associates $32,921.99 10/26/00 B0023168
98176 Price Waterhouse Coopers, LLP $163,878.00 10/27/00 50022491
101606 Service Real Estate Venture $18,782.07 10/27/00 B0023196
101993 Rothschild, Inc. $108,488.07 10/27/00 B0023198
63078 Weil, Gotshal & Manges, LLP $3,013.05 10/27/00 B0023199
71217 Bass, Berry & Sims $125,723.88 10/27/00 B0023200
98378 Skadden, Arps, Slate, Meagher & Flom $506,634.00 10/27/00 B0023201
99104 Jay Alix & Associates $136,199.06 10/27/00 B0023202
99391 Otterbourg, Steindler, Houston & Rosen, PC $122,566.14 10/27/00 B0023203
99454 Harwell, Howard, Hyne, Gabbert & Manner, PC $31,646.69 10/27/00 B0023204
</TABLE>
Page 7
<PAGE> 8
FORM- OPR 1 AND 2
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DEBTOR - IN - POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
October 29, October 1,
2000 2000
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 21,081 $ 22,376
Accounts receivable 7,557 7,906
Inventories 583,822 523,968
Prepaid expenses and other assets 20,892 22,641
----------- -----------
TOTAL CURRENT ASSETS 633,352 576,891
----------- -----------
PROPERTY AND EQUIPMENT
Owned assets, net of accumulated depreciation 352,758 347,253
Capitalized leases, net of accumulated amortization 12,728 12,921
----------- -----------
TOTAL PROPERTY AND EQUIPMENT 365,486 360,174
----------- -----------
Other assets and deferred charges 47,390 48,865
TOTAL ASSETS $ 1,046,228 $ 985,930
=========== ===========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Liabilities Not Subject To Compromise
Current Liabilities:
Notes payable to banks $ 217,956 $ 139,485
Accounts payable 91,977 77,873
Accrued expenses 143,236 151,250
State & local sales tax 10,627 10,423
Current maturities capitalized leases 92 88
----------- -----------
TOTAL CURRENT LIABILITIES 463,888 379,119
Long -Term Liabilities:
Long-term debt 60,000 60,000
Capitalized lease obligations 2,412 2,420
Liabilities Subject To Compromise:
Accrued restructuring costs 42,329 42,329
Capitalized lease obligations 22,916 23,229
Long-term debt 418,796 419,465
Accounts payable 197,602 196,787
Accrued expenses 68,046 67,364
----------- -----------
Total Liabilities Subject To Compromise 749,689 749,174
TOTAL LIABILITIES 1,275,989 1,190,713
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock 49,954 49,954
Additional paid-in-capital 6,017 6,017
Deferred compensation (315) (327)
Retained (deficit) earnings (285,417) (260,427)
----------- -----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (229,761) (204,783)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 1,046,228 $ 985,930
=========== ===========
</TABLE>
Page 8
<PAGE> 9
CHAPTER 11
MONTHLY OPERATING REPORT
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29, 2000
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 10/29/00
FORM OPR-3 NOT APPLICABLE
Page 9
<PAGE> 10
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29 2000
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 10/29/2000
FORM OPR-4
<TABLE>
<CAPTION>
Total
--------
<S> <C>
Trade Accounts Payable (Merchandise) $ 91,977
<CAPTION>
Total
--------
Expense & other payables $143,236
</TABLE>
Page 10
<PAGE> 11
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
<TABLE>
<CAPTION>
Date Date Total
TAXES PAYABLE Incurred Due Due
-----------------------------------------
<S> <C> <C> <C>
Federal income tax ** Various Various 7,843,442
State income tax Various Various (86,144)
-----------
SUBTOTAL 7,757,298
-----------
Sales/use tax SUBTOTAL * Various Various 10,558,369
-----------
Personal property tax * Various Various 3,246,666
Real estate taxes * Various Various 12,499,395
Inventory taxes * Various Various -
Gross receipts/bus. licenses * Various Various 50,052
Franchise taxes * Various Various 545,636
-----------
SUBTOTAL 16,341,749
-----------
-----------
TOTAL TAXES PAYABLE 34,657,416
===========
</TABLE>
* liability included in accrued expenses on OPR-2
** tax reserve
Page 11
<PAGE> 12
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. ET. AL.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: OCTOBER 2, 2000 THROUGH OCTOBER 29, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL DUE
DATE (10/29/00
INCURRED DATE DUE BALANCE)
--------------------------------------
<S> <C> <C> <C>
POST PETITION SECURED DEBT
Revolver borrowings 04/14/00 04/14/04 $217,956
Facility standby letters of credit 04/14/00 04/14/04 25,728
Facility trade letters of credit 04/14/00 04/14/04 17,814
Term loans 04/14/00 04/14/04 60,000
--------
TOTAL EXTENSIONS OF CREDIT $321,498
========
ACCRUED INTEREST PAYABLE $ 1,333
========
</TABLE>
Page 12
<PAGE> 13
FORM OPR- 5
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR - IN - POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACTIVITY
OCTOBER 2, 2000
THROUGH
OCTOBER 29, 2000
----------------
<S> <C>
Net Sales $ 73,531
Costs of merchandise sold and buying and occupancy expense 57,080
--------
Gross margin after cost of merchandise sold and buying and occupancy expenses 16,451
Selling, General and Administrative Expenses:
Net Employment Expense 18,002
Net Advertising 6,947
Banking and Other Fees 1,048
Real Estate and Other Taxes 1,719
Supplies 1,441
Communication and Equipment 373
Travel 863
UCC and Other Services (702)
Legal and Professional 446
Sales and Shipping 71
Insurance 339
Miscellaneous 62
Credit Card Services (54)
--------
Total Selling, General and Administrative Expenses 30,555
Other expense/(income), net (2)
Restructuring charge (credit) 97
Depreciation and amortization 3,033
--------
Earnings (loss) before interest, reorganization items, and income tax (17,232)
Interest expense - debt 3,273
Interest expense - capitalized leases 284
--------
Earnings (loss) before reorganization items, and income tax (20,789)
Reorganization Items:
Legal and Professional 1,995
Miscellaneous fees 199
Loss (Gain) on Disposal of Assets 2,149
Close Store Charges (142)
--------
Total Reorganization Items 4,201
Earnings (loss) before income tax (24,990)
--------
Net earnings (loss) $(24,990)
========
</TABLE>
Page 13
