February 22, 1995

VIA FACSIMILE 310/996-3359 & 
U.S. MAIL

Kathleen Carson, Special Agent 
Federal Bureau of Investigation 
11000 Wilshire Boulevard 
Los Angeles, California 90024

Re: Kevin Mitnick

Dear Kathleen:  Congratulations on the arrest of Kevin Mitnick. Pursuant to your
request, I asked our Cellular group to assess the damages caused to Fujitsu
Network Transmission Systems, Inc. ("FNTS") by Mitnick's theft of the source code
for the PCX telephone. The infor mation provided to me is as follows: 

Software development expenses ...... $1,100,000.00
Research & development expenses ..... 1.000.000.00
                         Total . . . $2,100,000.00

Additionally, attached is a worksheet showing what it would (will) cost FNTS to
recall the PCX phones in the marketplace if the source code has been compromised
or is not safe. Please call me at (214) 479-2931 if you need further information

Very truly yours,
Melanie W. Scofield 
Corporate Counsel

MWS/lm 
Attachment

cc:	George Banash
To: Nobuo Yamamoto			              COMPANY CONFIDENTIAL
    Yoichiro Fujino					    DO NOT RELEASE	

				PCX Recall Cost Analysis


			    PCX Recall for Software Rework

COST ITEMS

DESCRIPTION	        PRICE	 COMMENT                            REFERENCE	  

Shipping		$17.31Fed. Exp.=$7.50x2 + $2.31(PACKAGE)            B5
Pre-Check		 $4.00Bench test to confirm operational statusB6
Labor to upgrade software$8.5015 min. @ $34.00 per hour                     B7
QC Cost			 $4.00After repair QC check - 6 min                 B8 
Packing & Handling labor $6.40Overhead cost to unpack/pack & ticket9.6m     B9 
Customer Handling    	$15.00Dealer,FASC,End-User Compensation            B10 
PCX Admin. Overhead      $2.00Mass Mailing,Accounting,Repair Admin,Misc    B11

	TOTAL	   	      $57.21 Total Cost per Recall Unit     SUM(B5:B11)
    GRAND TOTAL $5,517,389.61 Total recall cost for 96,441 unit population



CCN-2/21/95
Recall for source code rework. Based on population through December 1994

PCXRCL.XLS