Fujitsu's State of Readiness for Year 2000 Problems

    Fujitsu recognizes that so-called Year 2000 (Y2K) problems are an important management concern and together with each group company is actively addressing the issue.

1. Measures Now in Place

   (1) In-House Systems
       Fujitsu recognizes the need to be aware of potential in-house Y2K problems not only in its computer systems but also in its networks, factory production equipment and facilities, and research facilities. From top management on down, everyone at Fujitsu is cognizant of the significant potential negative impact of Y2K problems, and the company is placing special priority on dealing with the systems that support its core business activities. Every division is taking responsibility for addressing potential problems and sharing information across divisional lines. More specifically, the process starts with identifying where Y2K problems may exist and, when they are found, is followed up by ascertaining what measures should be taken and what tests should be conducted. When necessary, further steps are taken to plan and execute comprehensive inspection plans covering all business processes as well as crisis management schemes.

       As of the end of March 1999, about 90 % of Fujitsu's in-house systems had been tested for Y2K compliance. Proceeding steadily with full testing and trial runs of various systems -- including those in the process of being made Y2K-compliant -- the company is on track to confirm Y2K compliance of all in-house systems by September 1999.

       Fujitsu believes that the way our suppliers of parts and services respond to Y2K problems is also very important to the stability of our business. Fujitsu previously requested its principal suppliers to address the Y2K issue on their own and to verify the status of their readiness, so as to ensure that there will be no disruption of manufacturing, distribution, or sales activities. This verification activity was completed by the end of March 1999, and the company is considering various follow-up measures.

   (2) Fujitsu Products
       Individual customers will need to judge for themselves whether the computer systems they own are Y2K-compliant. However, Fujitsu has been actively assisting customers by providing information on how to address Y2K issues for Fujitsu products and third party products sold by Fujitsu, as well as offering specific proposals for solving Y2K problems. In addition, with respect to products for the consumer market, the company has been disseminating information through its web site, newspaper advertisements and brochures to promote awareness of Y2K problems. Moreover, Fujitsu will have regular support teams available at the year-end/new year period to ensure customers a worry-free start to the year 2000.

   Information about Y2K compliance of Fujitsu products can be found at the following web sites:
   

   http://www.fujitsu.co.jp/hypertext/2000 http ://www.fujitsu.co.jp/hypertext/2000/English/index.html

2. Costs of Addressing Y2K Problems
       Fujitsu has been handling Y2K issues for in-house systems mostly with its own engineers and resources. It is difficult to separate out Y2K costs from regular internal costs, particularly salaries, and therefore this type of information is not available. The company estimates that its accumulated Y2K-related external costs will amount to a total of 5.7 billion yen on an unconsolidated basis, out of which 3.8 billion yen has been included as expenses by the end of March 1999. Fujitsu believes that the ultimate cost of addressing its Y2K problems is not of a magnitude that will impact management of the company.

3. Risks of Y2K Problems

   (1) In-House Systems
       If potential problems with in-house core systems and production systems are not properly addressed, Fujitsu's business activities might be adversely affected, and the company would be unable to fulfill contracts with customers or otherwise inconvenience them. Likewise, if the company's suppliers and vendors do not address the problems, Fujitsu's business would be similarly affected. Accordingly, ensuring that in-house systems are fully Y2K compliant and verifying Y2K compliance with suppliers are high priority tasks that Fujitsu is moving to accomplish.

   (2) Fujitsu Products
       If Fujitsu delays addressing the problems of customers who are using non-Y2K-compliant products or if customers themselves delay taking measures for their own programs, there is a danger that their business activities might be disrupted. For some problems, there is likewise a possibility that customers might make claims against Fujitsu. In order to prevent this eventuality, Fujitsu has been providing information about its products that will enable customers take an active role in solving their own Y2K problems, as well as offering specific proposals and support for the transition. In addition, the company is recommending that customers conduct a thorough inspection of their systems so that they may more precisely address any Y2K problems.

4. Risk Management Plans

       Based on careful consideration of the possible effects of Y2K problems on its operations, Fujitsu has been developing contingency plans, including alternative means of carrying out most important activities. These plans -- which center on emergency response organization and hypothetical problems and countermeasures -- will be completed by the end of June 1999.

   The above statement is intended solely to provide general information on the current status of Fujitsu's Y2K compliance readiness, and does not commit or imply any kind of guarantee, obligation or abandonment of rights.