Survey: Many companies not disclosing Y2K costs
September 15, 1999
by Kathleen Ohlson
(IDG) -- Despite efforts by the Securities & Exchange Commission (SEC), many Fortune 1,000 companies have failed to disclose the cost of their year 2000 fixes, according to a study by Weiss Ratings Inc., which offers Y2K readiness ratings on U.S. corporations.
SEC guidelines require public companies to disclose their total estimated Y2K budgets and current Y2K spending, Weiss Ratings said. But many companies are only reporting partial information or none at all. For example, IBM said its estimated Y2K budget is $575 million and Hewlett-Packard Co. reported $250 million, but neither company provided information on actual expenses, the Palm Beach Gardens, Fla.-based company said.
It said Bristol-Myers Squibb Co., Dell Computer Corp., Enron Corp., Merck & Co., Microsoft Corp. and Sysco Corp. didn't provide actual Y2K costs and budget estimates. They also failed to disclose this information in their 10K or 10Q mandatory SEC filings in 1998 and 1999, Weiss Ratings said. In addition, Weiss Ratings hasn't obtained complete Y2K costs from public documents for 41 of the Fortune 500 companies, the company said.
Most of the Fortune 1,000 companies, whether they made full disclosure or not, include standard language in their financial statements, saying Y2K costs are "not material," Weiss Ratings said. But according to the SEC, Y2K issues are "likely to be material," the company said.
Some of the companies that failed to completely disclose their Y2K budgets and costs include Bristol-Myers Squibb, Cisco Systems Inc., Computer Associates International Inc., Hormel Foods Corp., IBM, Microsoft, the New York Times Co., Dell Computer Corp., EMC Corp., the Gillette Co., Hilton Hotels Corp., Oracle Corp., Silicon Graphics Inc. and Tyco International Ltd., Weiss charged.
SGI spokeswoman Noreen Lovoi said the company doesn't track Y2K expenses by numbers, but that doesn't mean Y2K isn't important. "We expect to be fully compliant by year's end," Lovoi said. The company included Y2K information in its March 10Q (link below).
Meanwhile, a Dell spokeswoman said the company reports everything the SEC wants for investors on its Web site.
Other companies, including Microsoft, EMC, Oracle, Cisco and IBM, didn't return calls by press time.
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