|
Supplement to Commissioner Unger's
|
Year |
Annual reports filed during first 4 months12 |
Total number that contain the phrase "Year 2000" |
Percentage |
1998 |
9,449 |
6,612 |
70% |
1997 |
9,886 |
963 |
10% |
B. Selected SIC Codes
This section of the survey shows the frequency of Year 2000 disclosure in reports filed by companies in selected Standard Industry Classification (SIC) codes. The charts below show, for the SIC codes specified: 13
Health Care Services and Products
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
|
| |||
2834 |
Pharmaceutical Preparations |
135 |
108 |
80% |
2836 |
Biological Products |
70 |
53 |
76% |
5047 |
Wholesale-Medical Supplies |
5 |
5 |
100% |
6321 |
Health Insurance |
11 |
8 |
73% |
8060 |
Services-Hospitals |
8 |
7 |
88% |
8062 |
Services-General Medical & Surgical |
6 |
6 |
100% |
8090 |
Services-Home Health Care |
22 |
18 |
82% |
Total |
257 |
205 |
80% |
Electric Utilities and Energy Transmission Systems
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
|
| |||
4911 |
Electric Services |
108 |
94 |
87% |
4922 |
Natural Gas Transmission |
24 |
22 |
92% |
4923 |
Natural Gas Distribution |
15 |
12 |
80% |
4924 |
Natural Gas Distribution |
15 |
11 |
73% |
4931 |
Electric & Other Services |
62 |
59 |
95% |
4941 |
Water Supply |
16 |
10 |
63% |
Total |
240 |
208 |
87% |
Computer Services and Products
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
| ||||
3571 |
Electronic Computers |
16 |
11 |
69% |
3576 |
Computer Communications |
28 |
23 |
82% |
3577 |
Computer Peripheral |
51 |
40 |
78% |
7370 |
Services-Computer Programming |
24 |
23 |
96% |
7373 |
Services-Computer Integrated Systems |
67 |
55 |
82% |
Total |
186 |
152 |
82% |
Oil and Gas Utilities
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
| ||||
1311 |
Crude Petroleum |
228 |
154 |
68% |
1381 |
Drilling Oil and Gas |
67 |
61 |
91% |
2911 |
Petroleum Refining |
32 |
22 |
69% |
4610 |
Pipelines |
8 |
6 |
75% |
Total |
335 |
243 |
73% |
Transportation
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
| ||||
3711 |
Motor Vehicles |
17 |
12 |
71% |
3714 |
Motor Vehicle Parts |
38 |
24 |
63% |
3721 |
Aircraft |
7 |
4 |
57% |
3812 |
Search Aeronautical Systems |
13 |
11 |
85% |
4011 |
Railroads |
20 |
19 |
95% |
4213 |
Trucking |
45 |
34 |
76% |
4512 |
Air Transportation |
27 |
24 |
89% |
Total |
167 |
128 |
77% |
Manufacturing
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
|
| |||
3089 |
Plastic Products |
23 |
15 |
65% |
3580 |
Refrigeration Machinery |
9 |
5 |
56% |
3585 |
Air Conditioning Equipment |
14 |
10 |
71% |
3730 |
Ships & Boats |
6 |
4 |
67% |
3990 |
Misc. Manufacturing |
12 |
10 |
83% |
4953 |
Refuse Systems |
14 |
10 |
71% |
4955 |
Hazardous Waste |
25 |
18 |
72% |
Total |
103 |
72 |
70% |
Financial Institutions
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
|
| |||
6021 |
National Commercial Banks |
222 |
132 |
59% |
6029 |
Commercial Banks |
4 |
2 |
50% |
6035 |
Savings Institutions |
126 |
65 |
52% |
6141 |
Personal Credit Institutions |
37 |
28 |
76% |
6162 |
Mortgage Bankers |
35 |
17 |
49% |
Total |
424 |
244 |
58% |
Real Estate
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
|
| |||
6500 |
Real Estate |
332 |
193 |
58% |
6512 |
Operators of Non-Residential Buildings |
75 |
35 |
47% |
6798 |
REITs |
270 |
186 |
69% |
7011 |
Hotels |
71 |
44 |
62% |
Total |
748 |
458 |
61% |
Electronic Equipment and Machinery
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
| ||||
3510 |
Engines & Turbines |
6 |
6 |
100% |
3620 |
Elect. Industrial Apparatus |
6 |
6 |
100% |
3674 |
Semiconductors |
52 |
42 |
81% |
3823 |
Industrial Instruments for Measuring |
16 |
9 |
56% |
3825 |
Instruments for Meas. & Testing of Elec. |
21 |
13 |
62% |
3826 |
Laboratory Analytical Instruments |
19 |
12 |
63% |
3841 |
Surgical & Medical Instruments |
44 |
27 |
61% |
3845 |
Electromedical & Electrotherapeutic Apparatus |
56 |
41 |
73% |
Total |
220 |
156 |
71% |
Telecommunications
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
| ||||
3661 |
Telephone & Telegraph Apparatus |
44 |
35 |
80% |
3663 |
Radio & TV Communications Equipment |
48 |
42 |
88% |
3669 |
Communications Equipment, NEC |
19 |
13 |
68% |
4812 |
Radio Telephone Communications |
65 |
51 |
78% |
4813 |
Telephone Communications |
106 |
95 |
90% |
7385 |
Services-Telephone Interconnect |
4 |
2 |
50% |
Total |
286 |
238 |
83% |
Financial Services
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
| ||||
6199 |
Finance Services |
41 |
18 |
44% |
6200 |
Security & Commodity Brokers |
42 |
19 |
45% |
6211 |
Security Brokers |
33 |
23 |
70% |
Total |
116 |
60 |
52% |
Miscellaneous
SIC |
Title |
Total |
Y2K Discl. |
% of Total |
|
| |||
2621 |
Paper Mills |
20 |
10 |
50% |
2200 |
Textile Mill Products |
8 |
4 |
50% |
2800 |
Chemicals |
10 |
4 |
40% |
7389 |
Services-Business Services |
43 |
39 |
91% |
8050 |
Services-Nursing & Personal Care |
13 |
9 |
69% |
Total |
94 |
66 |
70% |
Small Business
Total |
Y2K Discl. |
% of Total |
||
Total |
1194 |
683 |
57% |
In this section of the survey, we show the extent to which the filings we selected for survey followed the staffs guidance in revised Staff Legal Bulletin No. 5. These statistics also account for the Form 10-Ks and Form 10-Qs filed by the Fortune 100 companies that are publicly held. The Appendix sets forth this information assorted for each of the 12 industries, the Fortune 100 companies, and the 66 small businesses.
1. Assessment - the extent to which the company has assessed the seriousness of its Year 2000 technology problems if no corrective action is taken.
Assessment: |
Percentage |
About to be started |
9% |
Still in progress |
56% |
Completed |
27% |
No disclosure regarding assessment |
8% |
2. Plan - the extent to which a company described its plan to remedy its Year 2000 technology problems.
Plan: |
Percentage |
General description |
44% |
Detailed description |
9% |
Plan is fully implemented |
4% |
No disclosure regarding plan |
43% |
3. Timetable - the time frame within which a company intends to complete its assessment and/or its remediation plan. We considered disclosure like "in time" or "by the year 2000" as "No disclosure."
Timetable: |
Percentage |
By the end of 1998 |
19% |
Other than the end of 1998 |
17% |
No disclosure regarding timetable |
64% |
4. Relationships - whether a company plans to evaluate or is evaluating the Year 2000 technology problems of those entities with which it has material relationships.
Relationships: |
Percentage |
Disclosure regarding evaluation of material relationships |
49% |
No disclosure regarding evaluation of material relationships |
51% |
5. Historical Costs - the amount of money a company has already spent on Year 2000 issues to date.
Historical costs: |
Percentage |
Disclosure regarding historical costs |
8% |
No disclosure regarding historical costs |
92% |
6. Estimated Costs - the amount of money a company estimates it will spend on Year 2000 issues.
Estimated costs: |
Percentage |
Disclosure regarding estimated costs |
22% |
No disclosure regarding estimated costs |
78% |
7. Materiality - whether a company disclosed that the Year 2000 issue is material to its business and, if so, the level of materiality.
Materiality: |
Percentage |
Year 2000 issues could be material |
9% |
Year 2000 materiality is unknown at this time |
5% |
Year 2000 issues are not material as to remediation costs or operations |
67% |
No disclosure regarding materiality of Year 2000 issues |
19% |
8. Cautionary Language - whether a company warned investors that, because the effects of Year 2000 technology problems cannot be known until the Year 2000, actual effects may differ from the companys predictions.
The Task Force evaluated whether companies sought specifically to avail themselves of the safe harbor under the Private Securities Litigation Reform Act of 1995 or included general cautionary language. Because it was possible for companies to do both, and many did, the percentages for the categories below total more than 100%.
Cautionary language: |
Percentage |
Statutory safe harbor language;
|
7% |
Statutory safe harbor language:
|
6% |
Statutory safe harbor language:
|
59% |
Disclosure includes general cautionary language with the Year 2000 disclosure |
43% |
No disclosure regarding the statutory safe harbor or general cautionary language on Year 2000 issues |
19% |
-[1]- These estimates from a Gartner Group survey have been reported widely. See, e.g., "Many Reported Unready to Face Year 2000 Bug," New York Times, Sept. 25, 1997, page D3.
-[2]- See Reports to be Made by Certain Brokers And Dealers, Securities Exchange Act Rel. No. 34-39724 (March 5, 1998) and Year 2000 Readiness Reports to be Made by Transfer Agents, Securities Exchange Act Rel. No. 34-39726 (March 5, 1998). These releases are on the Commission’s web site at www.sec.gov.
-[3]- Senate Financial Services and Technology Subcommittee Chairman Robert Bennett has introduced legislation, the Year 2000 Computer Remediation and Shareholder Protection Act of 1997 (S.1518), which would require public companies to disclose their Year 2000 issues.
-[4]- The Staff Legal Bulletin contains the Divisions’ staffs’ guidance on good disclosure practices. It is not a rule, regulation, or statement of the Commission.
-[5]- Revised Staff Legal Bulletin No. 5 supersedes the original bulletin and is located on the Commission’s web site at www.sec.gov/rules/othern/slbcf5.htm.
-[6]- See Item 303 of Regulations S-K and S-B.
-[7]- This guidance is not exclusive. Compliance with the Staff Legal Bulletin does not necessarily constitute compliance with the disclosure requirements of the federal securities laws. Companies need to consider these laws and the Commission’s rules and regulations in addition to the bulletin.
-[8]- Revised Staff Legal Bulletin No. 5 did not request this disclosure. Rather, companies are required to make this type of disclosure in the "Results of Operations" section of MD&A.
-[9]- Companies that file quarterly reports during January or February would not have a fiscal year end that coincided with the calendar year end.
-[10]- Seven of the Fortune 100 companies are not publicly held: State Farm Life Insurance, Prudential Insurance, TIAA-CREF, Metropolitan Life Insurance, New York Life Insurance, Federal Home Loan Mortgage Corp., and Fannie Mae.
-[11]- These statistics are based on numerous advanced text searches within the Commission’s electronic filing system, EDGAR, for 1998 and 1997. Also, the statistics in this Survey do not include paper filers, which mainly consist of foreign private issuers. Most foreign private issuers have not had to file a periodic report since the issuance of revised Staff Legal Bulletin No. 5.
-[12]- These reports were filed on Form 10-K or Form 10-KSB. Of the 13,000 public companies required to file either of these forms, the vast majority file during this time period.
-[13]- For the 12 major industries, these numbers do not include small businesses that file annual reports on Form 10-KSB. Small businesses that file Form 10-KSBs are under the caption entitled "Small Business."
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