http://biz.yahoo.com/bw/991011/fl_weiss_r_1.html

Monday October 11, 9:49 am Eastern Time

Company Press Release

Vital U.S. Industries Harbor Y2K Laggards

Many Large Companies in Telecommunications, Pipelines, and Airlines Rated 'Low' or 'Below Average' for Y2K Readiness

PALM BEACH GARDENS, Fla.--(BUSINESS WIRE)--Oct. 11, 1999--Many large companies in vital U.S. industries, including telecommunications, pipelines, and airlines, have received Y2K ratings of ``low'' or ``below average,'' based on a study of their publicly disclosed Y2K budgets and expenditures by Weiss Ratings, Inc., the only provider of Y2K readiness ratings.

In the telecommunications industry, 73.3% of the 19 rated companies were in one of these two categories, including MCI WorldCom (rated below average), Bell Atlantic Corp. (below average), and Comcast Corp. (low). Among companies involved in vital oil, gas and other pipelines, 5 of the 6 rated companies were rated unfavorably, such as Dynegy Inc. (low) and El Paso Energy Corp. (below average). Even in the U.S. airline industry, supposedly further along in fixing its computer systems than its counterparts in most other countries, half of the eight rated companies received Y2K ratings of ``low'' or ``below average.'' The largest among them were UAL Corp. (below average), Northwest Airlines (below average) and Trans World Airlines (below average).

``Industries that were feared to be potential Y2K disaster areas, such as banking and electric utilities, have made major strides,'' commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. ``In contrast, many companies -- in vital, often high-tech industries which most people assumed would be fine -- have fallen behind. It just goes to show how fear can be a great motivator, while complacency can become a serious obstacle to progress.''

Other major industries with a relatively large percentage of lagging companies were diversified outsourcing services (100% of the rated companies), scientific, photo and control equipment (70%), pharmaceuticals (55.6%), food services (57.1%), and chemicals (44.5%).

On the other end of the spectrum, industries boasting the highest percentage of companies with a favorable Weiss Y2K rating include banks and S&Ls (95.5%)(a), security brokers (80%), electric utilities (66.7%), semiconductors (100%) and railroads (100%).

In the Weiss Y2K rating scale, ``low'' and ``below average'' are considered unfavorable ratings, implying a warning to investors, while ratings of ``average'' and ``high'' are considered favorable, implying that the companies are on schedule for complete remediation at least by year-end.

Although not intended to be an exact evaluation, the Weiss Y2K ratings are believed to provide an approximate indication of each company's relative progress.

Overall, among the 552 Fortune 1000 companies making complete disclosure on Y2K budgets and costs in their second quarter 1999 filings with the SEC, the aggregate budget estimate is $30.5 billion. But only $19.6 billion of those budgeted funds had been allocated to actual expenditures.

All other factors being equal, a company should have spent at least 70% of its budget by mid-year in order to qualify for a Weiss Y2K rating of ``average.''

Among the Fortune 1000 companies, other large firms rated ``low'' for their Y2K readiness include (in order of their size): Columbia/HCA Healthcare Corp., Ultramar Diamond Shamrock Corp., Lear Corp., Gateway, Consolidated Natural Gas Company, IKON Office Solutions, W.R. Grace & Co., Whitman Corp., Beverly Enterprises, 3Com Corporation, Worthington Industries, and others.

Other firms rated ``below average'' include: E.I. du Pont de Nemours & Co., Chevron Corp., Motorola, SBC Communications, Atlantic Richfield Co., Nabisco Group Holding Corp., Ameritech Corp., American Home Products Corp., NIKE, and Tenet Healthcare Corp.

Meanwhile, large ``high'' rated companies include: Exxon Corp., Mobil Corp., AMR Corp., American Express Co., AlliedSignal, Walgreen Co., Rockwell International Corp., Publix Super Markets, and Texas Instruments. These companies have generally reported consistent progress in duly allocating budgeted resources to Y2K remediation efforts, indicating advanced states of completion.

Separately, Weiss also publishes financial safety ratings and Y2K readiness ratings on insurers, banks, and S&Ls. The accuracy of its financial safety ratings has been favorably reviewed by the U.S. General Accounting Office (GAO) as well as national consumer organizations. For more information, contact Weiss Ratings at 800/289-9222 or visit the Weiss Ratings web site at www.weissratings.com.

(a) Weiss Y2K ratings for banks and S&Ls are based on the institutions' response to private Weiss Y2K surveys and are not directly comparable to the Weiss Y2K ratings for non-financial corporations, which are based on publicly disclosed Y2K budgets and expenditures.

Contact:

Weiss Ratings, Inc. by Yui & Co. Ellen Yui, 301/270-8571 ellenyui@starpower.net or Elizabeth Kelley Grace, 561/989-9855 lizkgrace@aol.com

-- Helium (Heliumavid@yahoo.com), October 11, 1999

Answers

From the above copy:

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On the other end of the spectrum, industries boasting the highest percentage of companies with a favorable Weiss Y2K rating include banks and S&Ls (95.5%)(a), security brokers (80%), electric utilities (66.7%), semiconductors (100%) and railroads (100%).

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It says that electric utilities are 66.7% ready and this is a very good rating? Does this mean I'll just have to do with a third less power?

Get serious, this is not good! Y2K=TooKY! Pass the jelly mam!

-- Helium (Heliumavid@yahoo.com), October 11, 1999.

Helium,

Actually that is relatively good news for electric power. If the railroads are done, DONE, then one huge interdependency is not a worry.

As to the power companies themselves, they had planned to fix the last 1/3 of their systems in late 3-Q or early 4-Q as generator capacity was taken down for routine maintenance after the peak summer season. Overall, it is good news as to Banking and Power. Notice, it's a mixed bag with Natural Gas, Petroleum and Chemicals.

Just 81 days 'till the Roll, just 20 workdays 'till Thanksgiving...NO heavy lifting in December!

-- K. Stevens (kstevens@ It's ALL going away in January.com), October 11, 1999.

I thought railroads needed the telecom business up & running to function, plus diesel fuel for the locomotives? How can the railroads be 100 percent if the telecom and oil industries aren't?

-- Ocotillo (peeling@out.___), October 11, 1999.

I am relatively new to your forum . I think it is really a farce when some off the companies listed as below average have reported themselves as being Y2K compliant. So much for self- reporting. I fully believe that corporate heads will roll come Jan! They ought to!

-- Ruth Edwards (REath29646@aol.com), October 11, 1999.

Great comment...

`In contrast, many companies -- in vital, often high-tech industries which most people assumed would be fine -- have fallen behind. It just goes to show how fear can be a great motivator, while complacency can become a serious obstacle to progress.''

*Sigh*

Koskinen... hope your ears are "twitching!" (Or is that the nose growing?)

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), October 11, 1999.

(P.S. welcome Ruth!)

-- Diane J. Squire (sacredspaces@yahoo.com), October 11, 1999.

Thank you, Diane! Does anyone know the criteria used for evaluating these companies? Amount of Y2k budget vs. the amount of actual money spent? I really don't know. Can someone help?

-- Ruth Edwards (REath29646@aol.com), October 11, 1999.

From this story, we have a single reference to just *how* Weiss came up with these ratings:

"All other factors being equal, a company should have spent at least 70% of its budget by mid-year in order to qualify for a Weiss Y2K rating of ``average.'' "

In other words, Weiss didn't even do a self-reporting survey, much less any direct research. They simply looked at the percentage of remediation budget had been spent. Overbudget, and you get a low rating because your problems were smaller than you thought! Only banks were even surveyed.

Nor is there any definition of "average" given. If everyone is very bad or very good, then all are "average" in either case, since all are average in either case.

Each Weiss release has been followed by a spate of companies hollering that they have finished all their work, even received glowing results from IV&V, yet were rated "low". All you have to do is read that railroads are 100% done to realize that the Weiss methodology stinks.

-- Flint (flintc@mindspring.com), October 11, 1999.

Ruth,

I'd study the Weiss site to determine what they're doing. Research it for yourself and checking out the details would be appropriate advice.

Also start checking out the links on Brians thread...

A long list of SEC Filings

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id= 001YoW

Diane

(BTW, Flint's advice, is, just his non-expert opinion... as usual. You'll get used to it. Or not. Like the rest of us).

-- Diane J. Squire (sacredspaces@yahoo.com), October 11, 1999.