For companies whose fiscal year aligns with the calendar year, 10Q filing season for the first quarter is almost finished; the rest should be in by next week. Many still report little more than boilerplate. Some report that they are 90% or more ready, but have spent less than 50% of their own current estimates of their Y2K anticipated expenditures. ;-) While 10Q reports of some companies mention increasing inventories in preparation for possible Y2K problems, I have not found quantitive statements in that regard. However, an occasional company 10Q report will include some quantitive comments regarding their appraisals of Y2K readiness of pertinent third parties. Here are a few: From Sears Roebuck: Merchandise Vendors. The Company rates its vendors on a scale of green (on target to be compliant by July 1), yellow (on target to be compliant by July 1 but minor concerns about progress) and red (not on target to be compliant by July 1). As of April 7, 1999, the Company has assigned a red rating to one first tier vendor (less than 1% of merchandise sales), 24 second tier vendors (approximately 3% of merchandise sales) and 208 third tier vendors (approximately 3% of merchandise sales). Vendor ratings are subject to change based on the Company's ongoing evaluation process. From Pepsico: In addition, independent consultants completed in 1998 a survey of the state of readiness of our significant bottling franchisees. Such surveys identified readiness issues for certain international bottlers and, therefore, potential risk to us. Our current assessment of international bottlers comprising approximately 92% of international volume indicates that bottlers representing 17% of the international volume are currently at risk. Divisional personnel are providing these bottlers with self assessment tools to identify areas still needing attention. We are also providing assistance to the franchisees with processes and with certain manufacturing equipment compliance data. Our contingency planning will include specific focus on those bottlers that remain at risk at the end of the second quarter. From Dupont (E. I. du Pont de Nemours): The company is continuing its Business Partner 2000 Program with key suppliers and major customers. The company has substantially completed its survey of key suppliers and as of the end of the first quarter of 1999, assessed approximately 23% of its key suppliers as having a high risk of not becoming Year 2000-capable on a timely basis. The company continued its survey of its major customers focusing on their Year 2000-capability as it affects ordering procedures for, as well as delivery of and payment for DuPont products. Based on responses from 55 percent of its major customers, the company assessed approximately 33 percent of them as being in the high risk category as of the end of the first quarter 1999 versus 28 percent as of December 31, 1998. This change results from an increase in the number of surveys conducted of major customers from Asia Pacific and South America. However, the company is working with its major customers and key suppliers to reduce the risk that they will not become Year 2000-capable on a timely basis. If this risk cannot be reduced to the company's satisfaction, appropriate contingency plan will be developed by the end of June 1999.

-- Jerry B (skeptic76@erols.com), May 15, 1999

Answers

Let's try that again with some better formatting:

For companies whose fiscal year aligns with the calendar year, 10Q filing season for the first quarter is almost finished; the rest should be in by next week. Many still report little more than boilerplate. Some report that they are 90% or more ready, but have spent less than 50% of their own current estimates of their Y2K anticipated expenditures. ;-)

While 10Q reports of some companies mention increasing inventories in preparation for possible Y2K problems, I have not found quantitive statements in that regard. However, an occasional company 10Q report will include some quantitive comments regarding their appraisals of Y2K readiness of pertinent third parties. Here are a few:

From Sears Roebuck:

Merchandise Vendors. The Company rates its vendors on a scale of green (on target to be compliant by July 1), yellow (on target to be compliant by July 1 but minor concerns about progress) and red (not on target to be compliant by July 1). As of April 7, 1999, the Company has assigned a red rating to one first tier vendor (less than 1% of merchandise sales), 24 second tier vendors (approximately 3% of merchandise sales) and 208 third tier vendors (approximately 3% of merchandise sales). Vendor ratings are subject to change based on the Company's ongoing evaluation process.

From Pepsico:

In addition, independent consultants completed in 1998 a survey of the state of readiness of our significant bottling franchisees. Such surveys identified readiness issues for certain international bottlers and, therefore, potential risk to us. Our current assessment of international bottlers comprising approximately 92% of international volume indicates that bottlers representing 17% of the international volume are currently at risk. Divisional personnel are providing these bottlers with self assessment tools to identify areas still needing attention. We are also providing assistance to the franchisees with processes and with certain manufacturing equipment compliance data. Our contingency planning will include specific focus on those bottlers that remain at risk at the end of the second quarter.

From Dupont (E. I. du Pont de Nemours):

The company is continuing its Business Partner 2000 Program with key suppliers and major customers. The company has substantially completed its survey of key suppliers and as of the end of the first quarter of 1999, assessed approximately 23% of its key suppliers as having a high risk of not becoming Year 2000-capable on a timely basis.

The company continued its survey of its major customers focusing on their Year 2000-capability as it affects ordering procedures for, as well as delivery of and payment for DuPont products. Based on responses from 55 percent of its major customers, the company assessed approximately 33 percent of them as being in the high risk category as of the end of the first quarter 1999 versus 28 percent as of December 31, 1998. This change results from an increase in the number of surveys conducted of major customers from Asia Pacific and South America. However, the company is working with its major customers and key suppliers to reduce the risk that they will not become Year 2000-capable on a timely basis. If this risk cannot be reduced to the company's satisfaction, appropriate contingency plan will be developed by the end of June 1999.

-- Jerry B (skeptic76@erols.com), May 15, 1999.

What is an appropriate contingency plan for going out of business???

-- David (C.D@I.N), May 15, 1999.

And from recent 10Q of my local bank - Fifth Third Bancorp:

We will implement our contingency plans for the periods PRIOR< during and after the rollover event.

I paraphrased the above, but was struck by the emianing of implementing contingency plans prior to rollover. Looks like they are acknowledging and have a plan to address increased cash demand and decreased liquidity ( I just can't say bank run). I wonmder how they plan to handle that?

-- Bill P (porterwn@one.net), May 15, 1999.

Bill P,

Y2K aside, I have long imagined, but never checked, that there must be a curious story as to how Fifth Third came up with that name. :-)

Jerry

-- Jerry B (skeptic76@erols.com), May 16, 1999.

From: DuPont's statement to the US Senate Special Committee on the Year 2000 Technology Problem , May 10, 1999 Presented by Paul Couvillion, Global Director, DuPont Year 2000 Project:

(snip)

DuPont has more than 80,000 suppliers, 20,000 customers and 150 joint ventures around the globe. A Business Partner workstream was established to develop an informed view of the readiness of more than 5,000 critical suppliers, 2,000 key customers and the joint ventures.

About three-fourths of the suppliers surveyed responded; of those we have assessed 15% as potentially creating interruptions to the continuity of supplies or services. Key reasons for our concerns are "no response," "no program in place," "late completion," or "no supplier assessment in place." We initiated and have almost completed four special emphasis surveys among these key supplier groups to become better informed about potential disruptions to our operations:

Global telecommunications, Logistics suppliers (air, truck, rail, ocean and freight forwarders), Electrical utilities generation and distribution, and Natural gas providers.

Initial conclusions indicate we will likely experience a "low" probability of failure among these groups of infrastructure suppliers. However, we have found some specific regional or area exceptions where these services could be interrupted and where contingency plans will be required.

About half of the customers we surveyed responded; of those responding we have assessed 33% as potentially creating interruptions to our business processes. Key concerns include the late remediation of order placement systems, receipt of product by customers and accounts payable systems.

(snip)

I post this here because it touches on Dupont's appraisals of its suppliers, as did the portion of Dupont's recent 10Q which I had posted earlier in this thread. You will notice that Mr. Couvillion's statement provides some additional comments about suppliers, but not sufficient information to reconcile his numbers with those in the 10Q.

For example, he mentions: "About three-fourths of the suppliers surveyed responded; of those we have assessed 15% as potentially creating interruptions to the continuity of supplies or services." The 10Q mentions: "The company has substantially completed its survey of key suppliers and as of the end of the first quarter of 1999, assessed approximately 23% of its key suppliers as having a high risk of not becoming Year 2000-capable on a timely basis." The 15% and the 23% refer to different, possibly overlapping, sets. Perhaps more to the point, the descriptions of those sets are not adequate to support comparisons between them, such as whether either one is "better" or "worse" than the other.

Jerry

-- Jerry B (skeptic76@erols.com), May 17, 1999.