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To: John Hull who wrote (49028)	2/28/1998 10:47:00 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 186894

John and all FYI: Corporate Spending In filings to the SEC, Citicorp revealed spending plans of $600M for y2k problem out of an annual budget of $7.5 Billion for technology spending. Chase (CMB), on the other hand, has annual budget of only $2 Billion for tech spending. Would love to know the percentages for hardware spending; in particular the delta for client/server versus IBM mainframe/compatibles and Minis over the last three years. Just remember there are other banks in the US and there are other countries with banks and banking is only one industry that rely heavily on computers for competitiveness. Dow Jones Newswires -- February 26, 1998 Citicorp Expects To Spend $600 Million For 'Year 2000' Problem Dow Jones Newswires NEW YORK -- Banking giant Citicorp expects to spend about $600 million to prepare its systems for the so-called "millennium bug." Prompted by new SEC requirements, the $600 million figure is the first time the bank has disclosed an estimate for the bug, also known as the Year 2000 problem. Banks and other businesses are trying to cope with a widely anticipated scenario caused by older computer systems reading only the last two digits of a year. If uncorrected, computers would interpret the year 2000 as 1900. This would wreak havoc on banks' computer systems on Jan. 1, 2000. The most obvious problem would occur in date-sensitive functions, such as those that calculate expiration dates or accrued interest. The problem, if not corrected, could disrupt everything from automatic teller machine, or ATM, functions and direct deposits to automatic bill payments. In a filing Wednesday with the Securities and Exchange Commission, Citicorp said it will spend about $600 million over a three-year period from 1997 through 1999 with $150 million of that coming in 1997. Though Citicorp's disclosed costs were "modestly higher" than expected, the $450 million that the company will spend in 1998 and 1999 appears to be appropriate based on the company's total annual expense base of about $13 billion, said analyst Bradley Ball of Credit Suisse First Boston Corp. Of that $13 billion expense base, Citicorp spends about $7.5 billion a year on technology, he said. In contrast, Chase Manhattan Corp. (CMB), which spends about $2 billion a year on technology, estimated last year that it will spend about $250 million from 1997 through 1999 to cope with the problem, according to a company spokeswoman. Chase's estimate is also roughly appropriate based on the bank's total annual expense base of about $9 billion, Ball added. Banks such as Citicorp are probably more than a third of the way through the process of preparing their systems, said Lou Marcoccio, Year 2000 research director for the Gartner Group, an information technology advisory firm. And even though Citicorp's costs are higher than Chase Manhattan's estimate, it is possible that they have factored in costs other banks have yet to, he said.