Year 2000 Compliance
Many currently installed computer systems and software products were coded to accept or recognize only two-digit entries in the date code field. These date code fields needed to accept four-digit entries to distinguish 21st century dates from 20th century dates. As a result, computer systems and/or software used by many companies and governmental agencies had to be upgraded to comply with such Year 2000 requirements or risk system failure or miscalculations causing disruptions of normal business activities. We estimate that the total cost of our Year 2000 project was approximately $550,000.

To date, we have not experienced any material outages or failures as a result of Year 2000 related issues. We cannot make any assurances that we may not experience any such failures in the future. We have finalized a business continuity plan and have formulated action steps to be taken in the event that a material Year 2000 related failure should arise.

Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. In June 1999, the FASB issued SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133 - an amendment of FASB Statement No. 133. The adoption of these statements will not have a material impact on our financial statements.