CFO Survey: "Bring On Y2K - We're Ready".

From FEI/Duke University

A new poll of 272 companies across industries shows few feel unprepared for the Year 2000. In fact, 63 percent expect it to be a non-event. At the same time, some 14 percent predict a market-wide sell-off, including nearly one-half of CFOs in the mining and construction industries. The results are from the latest FEI/Duke University Corporate Outlook Survey, conducted the week of Sept. 13.

'There's still some trepidation about Y2K, as 6 percent of CFOs expect their firm will be subject to lawsuits as a result of problems that occur when the calendar changes," says Duke University finance professor John Graham, director of the survey. "And 13 percent of banking and finance firms anticipate lawsuits."

Overall, however, confidence is high. Notes FEI President and CEO Phil Livingston, "While much has been written about potential calamity, only 2 percent of the respondents expect Year 2000 to interfere with their ability to provide products and services. And only 3 percent think their companies' suppliers will have difficulties resulting from Y2K."

Other findings

* Four out of five firms dedicated from 1 percent to 5 percent of 1999 expenses to Year 2000 compliance. Another one in 25 spent between 6 percent and 10 percent of expenses; one in 100 dedicated over 10 percent and 13 percent spent nothing.

* 64 percent say Y2K-related expenses will not reduce earnings; 36 percent predict an earnings drag through the fourth quarter of 1999. Another 21 percent think the downturn will run through the first quarter of 2000; 6.4 percent say it will last at least through the first half of the new year.

* Only about half of mining/construction, communications/media, high-tech (e.g., biotech, software), and banking/finance firms think Year 2000 is a non-event.

The survey is conducted quarterly by FEI and Duke University's Fuqua School of Business and polls a broad cross-section of CFOs from over 3,000 U.S. companies. Complete results are available at www.duke.edu/percent7ejgraham.