Sheffield Steel's 10-K filed yesterday read, in part:

"The payroll system and the accounts receivable systems are currently not Y2K compliant. However, the payroll system is in Phase IV of a four-phase project. The accounts receivable system is currently in Phase I of a three-phase conversion. Both projects are on schedule and expected to be completed during 1999.

In addition, the accounts payable system has a minor Y2K problem but testing has confirmed that it does not pose a service interruption risk.

Outside the areas noted above, only minor problems were identified with electronic equipment and third party software. Our rolling mill and shear line in Sand Springs were both installed in the last four years. The rolling mill relies on a third party system that has been represented to us as being Y2K compliant, with the exception of certain upgrades that we expect to have installed by September of 1999. All remaining third party software has been examined and has been represented by the vendor as being Y2K compliant.

The Task Force has surveyed all vendors with invoices that total over $10,000 in the previous calendar year in an attempt to ascertain the potential risks within the supply chain, specifically in the areas of raw materials and utilities. We have received responses from approximately 80% of the vendors surveyed and the Task Force has recommended additional follow up for vendors failing to respond to the survey. To date, we have not received any unfavorable responses from significant vendors. It is anticipated that the vendor survey process will be completed by July of 1999.

Although others in the

steel industry will be required to spend significant amounts to become Y2K compliant, we identified problem areas early and upgraded equipment and systems in the normal course of business. The historical and estimated future costs related to Y2K issues have not been and are not expected to be significant.

The Risks of Year 2000 Issues and Contingency Plans. While we believe we have taken the necessary steps to identify and remediate our Y2K issues, the failure to do so prior to January 1, 2000 could result in system/equipment failures causing disruption in routine business activities including the production of goods. We believe that our greatest risk of Y2K issues to be with third party suppliers and customers. The failure of third parties upon whom we rely to timely remediate their Y2K issues could result in disruption to our daily operations including the production of steel products. As a result of our reliance on third parties to resolve their Y2K issues, the overall risks associated with the year 2000 remain difficult to accurately describe and quantify. There can be no assurance that the Y2K issues will not have a material adverse impact on us or on our operations. We have developed contingency plans in areas where the risk of Y2K failures appears to be possible and where the cost of a contingency plan is not prohibitive."

-- Puddintame (achillesg@hotmail.com), July 27, 1999

Answers

URL:

http://www.sec.gov/Archives/edgar/data/910719/0000927016-99-002679.txt

Hotlink: Don't let Koskinenbones see this one!

-- Puddintame (achillesg@hotmail.com), July 27, 1999.

For those who do not have time to click through to the source document, you should also have the first sentence of the Year 2000 disclosure statement:

"We recognized the Year 2000 (Y2K) Information Technology issues in 1986 and began to address the problem with the re-design of our internal information systems."

-- Puddintame (achillesg@hotmail.com), July 27, 1999.

"...have been represented to us as compliant..."

Could this be the newly RESURFACED ROAD to Hell???? Good intentions having been so heavily used recently, one would suspect that the road would need repaving now and then.

Chuck

-- Chuck, a night driver (rienzoo@en.com), July 27, 1999.