Status of 2015 Medium-Term Business Plan

May 9, 2017 Mitsubishi Heavy Industries, Ltd.

Shunichi Miyanaga, President and CEO

I. FY2016 Results 3 V. Organization and system reinforcements toward “Conclusion of Reforms” 26

II. Review of FY2017 Targets 6 1. Global and local management optimization 27 2. Production Innovation 29 III. Evaluation of Overall Progress of 3. Asset Management Reinforcement 32 2015 Business Plan 10 4. Innovation Laboratory (tentative name) 33

IV. Progress of Individual Measures 16 VI. Summary 34 1. Measures for MRJ and Tier1 business 17 2. Reinforcement of commercial ship (Reference Materials) business structure reforms 19 1. Technology topics in FY2016 40 3. Improvement of MHPS management 20 2. Medium-term measures against low capacity 4. PMI at M-FET 23 utilization at Nagoya facilities 41 5. PMI at Primetals Technologies (PT) 24 3. Investments relating to AREVA of France 42 6. Asset Management Progress 25 4. SONGS arbitration 43 5. AIDA Cruise Ship Construction Project 44 6. Acceleration of concentration into core competencies 45

(※ Profit attributable to Owners of Parent) (billions of yen) FY2016 Actual FY2015 Previous Actual Actual Main reasons for variance from FY2015 Actual Forecast ・ Decline in Orders received from overseas markets, MHPS etc. Orders received 4,485.5 4,275.6 (Decreased investment due to lower oil price) 4,800.0 (Overseas ratio) (52%) (48%) — ・ LNG carrier＊1 ＊1 includes yen appreciation Net sales 4,046.8 3,914.0 ・ MRJ Operating income 4,000.0 ・ Tier1＊1 △approx. ¥100 billion ＊2

・ MHPS＊1 Operating income 309.5 150.5 △approx. ¥50 billion 240.0 (Margin) (7.6%) (3.8%) (6.0%)

Net income※ 63.8 87.7 ・ Asset management benefits 100.0

(extraordinary profit + approx. ¥ 110 billion)

ROE 3.7% 5.1% (FCF + approx. ¥ 200 billion) 5.8%

FCF 7.5 104.6 100.0 Debt/Equity ratio 0.53 0.44 (excl. impact fm South Africa PJ) 0.30 ー Equity ratio 30.5% 32.5% (excl. impact fm South Africa PJ) 34.4％ー Interest-bearing debt 1,052.1 925.5 (excl. impact fm South Africa PJ) approx 625.5 ー

Dividend per share 12 yen 12yen ※2 Deterioration of MHPS and 12yen further deterioration of LNG Foreign exchange rates: 110yen/$ 119.7yen/$ 108.2yen/$ Carriers/MRJ reflected from 132.6yen/€ 118.6yen/€ 120yen/€ © 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. previous forecast 4 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 4 ROE：Return On Equity FCF：Free Cash Flow D/E：Debt/Equity MHPS：Mitsubishi Hitachi Power Systems LNG：Liquefied Natural Gas MRJ：Mitsubishi Regional Jet I. FY2016 Results (2)

Net Sales and Operating Income by Business Segment After segment reorganization* FY2015 Actual (A) (B)-(A) FY2016 Actual(B) FY2016 Actual

Operating Operating Operating Operating Former segment Net sales Net sales Net sales New segment Net sales income income income income

Energy & Environment 1,542.7 154.6 -72.3 -44.1 1,470.4 110.5 Power Systems 1,448.4 108.1

Commercial Aviation & Industry & 548.5 54.5 -33.1 -106.4 515.3 -51.9 1,747.0 50.0 Transportation Systems Infrastructure

Integrated Defense & Aircraft, Defense & 485.0 25.7 -14.4 2.1 470.6 27.9 703.4 0.9 Space Systems Space

Machinery, Equipment & 1,432.3 80.0 5.6 -7.5 1,438.0 72.5 ― ―― Infrastructure

Others 177.3 12.6 -1.4 -1.8 175.9 10.7 Others 175.9 10.7

Eliminations or Eliminations or -139.2 -18.1 -17.1 -1.1 -156.3 -19.3 -160.7 -19.3 Corporate Corporate

Total 4,046.8 309.5 -132.7 -158.9 3,914.0 150.5 Total 3,914.0 150.5

(billions of yen) * Use reorganization to integrate Commercial Aviation and Transportation Systems businesses (which face a challenging business environment, such as Commercial Aircraft and Commercial Ship) with other segments that have synergies, then accelerate measures.

FY2015 FY2016 FY2017

Actual Actual Previous target New target Factors behind target change Orders received 4,485.5 4,275.6 5,500.0 4,500.0 (Overseas ratio) (52%) (48%) (64%) (55%) Reflects uncertainty of global economy and Net sales 4,046.8 3,914.0 5,000.0 4,150.0 market forecasts Operating income 309.5 150.5 450.0 230.0 MHPS △350 (Margin) (7.6%) (3.8%) (9.0%) (5.5%) Transportation Systems △220 Commercial Aircraft △200 Net income *1 63.8 87.7 200.0 100.0 PT(Metals Machinery) △120 Compressor △110 ROE 3.7% 5.1% 10.2% 5.5% Total △1,000 FCF 7.5 104.6 200.0 100.0

Debt/Equity ratio 0.53 0.44 0.4 0.4

Equity ratio 30.5% 32.5％ 35％ 33％ Reflects costs of Interest-bearing debt 1,052.1 925.5 900.0 850.0 measures to tackle Dividend per share 12 yen 12円 *3 *2 12円 challenges faced in 2016

Foreign Exchange 119.7 yen/$ 108.2 yen/$ 110 yen/$ 110 yen/$ Rates 132.6 yen/€ 118.6 yen/€ 130 yen/€ 120 yen/€ *3:Payout Ratio 30％±5％

＊2: MHI is to conduct consolidation of shares(10 shares →1 share) on October 1, 2017. Dividend per share on this *1: Profit attributable to Owners of Parent material is based on the case before consolidation of shares to be comparable to FY2016. © 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 7 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 7

ROE：Return On Equity FCF：Free Cash Flow D/E：Debt/Equity MHPS：Mitsubishi Hitachi Power Systems MRJ：Mitsubishi Regional Jet PT：Primetals Technologies II. Review of FY2017 Targets -2

Business scale (net sales) Operating income

＊1 20% of Net Sales△850 bn yen 5,000 ＊2 5 Business Concentration into core competencies, etc. growth, M&A etc. Deviation from original Further Growing Increase target Organi- concentration 4,000 into core sales of Increase depending Business expansion delay＊1 △170 zational from reforms, competencies previously on timing Commercial Ships △30 efficiency (including M&A) received business Commercial Aircraft, etc. △60 improve- growth ＊2 ＋ ments orders 3,000 Other Improvements 40 Booking of orders etc. received to sales Total △220 4 ③ ② 2,000 Forex Improvement ① impact etc. along with Time gap increased ② increased sales between order received ① and net sales, esp. for 1,000 Partial introduction large scale thermal in FY2017 (Acceleration of coal plants, etc Reforms) 3 0 FY2016 FY2017 FY2018 FY2016 FY2017 FY2018 (trillions of yen) (billions of yen) ① Improvement from increased sales and PMI acceleration ① Previously received orders at MHPS, etc. • MHPS (P.20-22), M-FET/PT (P.23-24) ② Turbochargers, forklift trucks, space systems, etc. ② Radical measures for commercial ship and commercial ③ Land transportation systems, chemical plants, etc. aircraft businesses • Tier 1/MRJ (P.17-18), Commercial ship (P.19)

M&A：Mergers & Acquisitions PMI：Post Merger Integration MRJ：Mitsubishi Regional Jet MHPS： Mitsubishi Hitachi Power Systems, Ltd PT：Primetals Technologies M‐FET：Mitsubishi Heavy Industries Forklift, Engine & Turbocharger Holdings, Ltd. II. Review of FY2017 Targets -3

Net Sales and Operating Income by Business Segment (billions of yen) FY2016 Actual FY2017 forecasts Operating Operating Net Sales Net Sales Change from FY2016 Income Income （8.8％） • Partial recovery in Net Sales and Operating Power Systems 1,448.4 108.1 1,650.0 145.0 Income of MHPS

（4.6％） • Progress on Industry & Commercial Ship reforms 1,747.0 50.0 1,850.0 85.0 • PMI efforts at PT and Infrastructure M-FET

（1.5％） • Reform measures for Tier Aircraft, Defense & 703.4 0.9 650.0 10.0 1 business Space • Partial recovery of MRJ loss Others 175.9 10.7 150.0 10.0 Eliminations or -160.7 -19.3 -150.0 -20.0 Corporate Total 3,914.0 150.5 4,150.0 230.0

（） Margin

MHPS：Mitsubishi Hitachi Power Systems, Ltd. PT：Primetals Technologies M‐FET：Mitsubishi Heavy Industries Forklift, Engine & Turbocharger Holdings, Ltd. PMI：Post Merger Integration MRJ：Mitsubishi Regional Jet III. Evaluation of Overall Progress of 2015 Business Plan

① Structural Reforms, such as concentration into core competencies are progressing smoothly and on time

② Ongoing risk issues (SONGS/Cruise ships)now settled (see Reference Material p.43-44)

③ Optimizing asset management making progress with liquidation and utilization of balance sheet (p.25)

④ Challenges arose in FY2016 outside the scope of the Business Plan prompting fundamental measures for improvement ・ Commercial Ships → LNG Carriers/insufficient cost improvements and delays (5 ships) ・ Commercial Aircraft(Tier 1) → Yen appreciation and further decline in production (B777, Bombardier) ・ MRJ → Further delay in development schedule and increase in cost ・ MHPS → Delay in business expansion and PMI

• Accelerate measures to solve challenges through business reorganization (resource utilization, prompt decisions, etc.) • Implementation of immediate measures (including mid-to-long term actions for MRJ, MHPS：P.17-22)

Reinforce above measures, “Conclusion of Reforms”, reinforce commence actions for next organization and systems (P.26-33) Business Plan

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 11 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 11 SONGS：San Onofre Nuclear Generating Station LNG：Liquefied Natural Gas MRJ：Mitsubishi Regional Jet MHPS：Mitsubishi Hitachi Power Systems, Ltd. III. Evaluation of Overall Progress of 2015 Business Plan (2)

5,000 4.15 4.50 4.05 • ¥4 trillion business scale reached 3.91 Net 4,000sales (¥tn) 4.00 • Further action needed to reach ¥5 3.39 330.7 3.50 trillion scale Operating3,000 3.16 Income (¥bn) 2.86 251.2 2.82 309.5 211.0 3.00 2,000 221.9 ＊1 • Similar to 12 Business Plan level, due Net income before 230.0 taxes - excl. 2.50 to challenges that arose in FY16 (*1) extraordinary 106.6 150.5 210.0 1,000 90.4 200.8 factors (¥bn) 83.2 62.2 85.7 59.7 132.6 169.7 2.00 (*1) FY15-FY16 Operating Profit △ △ Net income before 51.6 46.5 54.6 CATS ¥100 bn., MHPS ¥50 bn. taxes (¥bn) 0 1.50

95% Original Target of Debt/Equity 87% 120% Shareholders’ ratio 95% Equity 57% 53% Improvement of D/E ratio 44% 40% 25,000 55% 30 Debt/Equity ratio 47% + 33% 25 Shareholders’20,000 (excluding impact of South Africa) equity (¥bn) 20 Increase in shareholders’ equity 15,000 1,637.8 1,679.4 1,750.0 1,491.3 (*2) 1,282.9 15 + 10,000 1,215.7 1,259.1 Dividend per 10 Maintain dividend of 12 yen/share share5,000 (¥) 12 12 12 9 5 5 5 5 (*2) Due to losses from cruise ship 0 0 construction and MRJ development delays, the gap between target and forecast needs to be 239.8 FCF (excl. 213.5 227.7 229.4 210.0 reconciled Extraordinary factors) FCF improvement (excl. impact 176.9 FCF(¥bn) 131.6 from extraordinary factors) 6.6 104.6 100.0 -69.9 7.5 -69.9 00～07 ‘08 Business ’10 Business ‘12 Business FY2015 FY2016 FY2017 Year (FY) Average Plan Average Plan Average Plan Average

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 12 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 12 D/E：Debt/Equity FCF：Free Cash Flow MRJ：Mitsubishi Regional Jet III. Evaluation of Overall Progress of 2015 Business Plan (3)

Improvement in net income before taxes ※1: excl. gain on change in equity in FY13 (approx. ¥130bn) (excluding extraordinary factors) 330.7 ※2: excl. extraordinary profit from asset management (approx. ¥110bn) 319.0 294.7 Income before tax, excluding ※1 ※3: incl. loss from equity method investment (MMC, approx. ¥20bn) cruise ship, MRJ, business ※3 ※2 reforms costs and 251.2 extraordinary profits (※1, 2) 211.0 Constant earning capacity

90.4 200.8 62.2 59.7 169.7 132.6 51.6 46.5 54.6 Steady improvement through FY2015

Impact from extraordinary factors to Operating Profit/Non-Operating Profit/Extraordinary Profit Income before tax (blue) Decline related to lower operating profit Improvement in operating cash flow due to several challenges in FY2016 (excluding extraordinary factors) 470.4 OCF OCF (ex S. Africa, Cruise Ships, MRJ) 360.6 381.6 OCF (ex S. Africa) 334.2 Ability to generate constant cash flow 282.3 282.3 205.6 Operating CF including 269.1 265.8 270.0 extraordinary factors 98.7 Cruise ships + MRJ (¥bn) 129.9 Cruise ships + MRJ + South Africa (loan to MHPS) 98.7 95.9

00-06 08 Business 10 Business 12 Business FY2015 FY2016 Business00-07平均 Plan Plan08-09 Average平均 Plan10-11 Average平均 Plan12-14 Average平均 2015 2016 Average (FY00～07) (FY08～09) (FY10～11) (FY12～14)

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 13 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 13 CF：Cash Flow MRJ：Mitsubishi Regional Jet MHPS：Mitsubishi Hitachi Power Systems, Ltd. III. Evaluation of Overall Progress of 2015 Business Plan (4)

Progress in business structure reforms Business scale expansion and profitability measures are making steady progress as a result of business structure reforms (with the exception of certain challenging businesses, as shown below)

Gap between FY12 and FY16 受注売上高営業利益総資産 FCF 既存事業 8,925 7,131 1,232 4,764 1,154 Orders Net Sales Total Operating (A)-(B) FCF Remarks 船舶、民間機 -3,219 307 -819 2,951 -1,180 Received (A) Assets (B) Income MHPS含む南ア 6,728 3,524 -542 7,753 -1,044 Steady progress in 全社合計 12,434 10,962 -130 15,468 -1,070 All Businesses business scale and 全社合計(除く南ア) 11,898 10,429 -130 12,254 34 ＋ 890 ＋ 710 ＋ 480 ＋ 230 ＋ 120 ＋120 (excl. those listed profitability below) 火力 6,191 2,991 ▲ 543 4,539 60 improvement

Commercial ＊1 Cruise ship + MRJ ＊1 ships + (As already delivered, no Commercial ▲ 320 ＋ 30 ＋ 300 ▲ 270 ▲ 80 ▲ 120 further impact from Cruise Aircraft ship #2 expected) ＊2 ＊2 South Africa PJ + MHPS ＋ 670 ＋ 350 ＋ 780 ▲ 430 ▲ 50 ▲ 100 delay in reduction of fixed (excl. S. Africa) (＋ 620) (＋ 300) (＋ 450) (▲ 150) (▲ 50) (＋ 0) cost

Total ＋ 1240 ＋ 1090 ＋1560 ▲ 470 ▲ 10 ▲ 100

(excl. S. Africa) (＋1190) (＋1040) (＋1230) (▲ 190) (▲ 10) (＋ 0)

Accelerate improved profit-generating structure through immediate measures (P.17-22)

Accelerate Concentration into Core Competencies (Movement of Net Sales and investment capital by position) Net sales Capital investment Major M&A Progress FY2012-2016 (FY2016 developments listed in blue) FY2011 Sales Grow / Position Product/business 1,957.3 1,047.7 increase 伸長・維持 maintain • Hitachi (thermal power 656.7 612.3 systems) 変革 Reform Grow/ ¥500bn Capital • Siemens (metals machinery) Net sales (approx.) investment maintain • Toyo Engineering Works (air- 新規 ¥ 2,820.9 bn. New 92.0 182.5 ¥ 2,463.5 bn. conditioning & refrigeration)

縮小・撤退 Downscale/withdraw 81.4 52.8 • PWPS/Turboden (GT) • Nichiyu/UniCarriers (forklift ¥300bn Reform 共通 Company wide 33.5 568.2 trucks) (approx.) • Federal Broach (machine tools)

(equity New • Vestas (offshore wind turbines) + ¥1093.1bn + ¥569.3bn share)

• Lithium-ion batteries FY2016 • Industrial cranes Grow / • Fin stabilizers 伸長・維持 maintain 2,762.2 1,412.9 Down- • Injection molding machines (business scale/ • Sluice gates transfer, 変革 Reform 1,095.3 606.1 withdraw • X-ray treatment equipment equity share) Net sales Capital • Marine diesel engines 新規¥3 ,914.0 bn. New 1.7 446.7 investment • ETC (electronic toll collection) ¥3,032.8 bn. onboard equipment 縮小・撤退 Downscale/withdraw 93.0 105.5 • Real estate Company (equity • IT infrastructure Increase for MRJ wide share) 共通 Company Wide △38.2 461.6 operation/maintenance

(See p.45 for details)

GT：Gas Turbine M&A：Mergers and Acquisitions IV. Progress of Individual Measures

1. Measures for MRJ and Tier1 business 2. Reinforcement of commercial ship Immediate measures business structure reforms 3. Improvement of MHPS management 4. PMI at M-FET 5. PMI at Primetals Technologies (PT) 6. Asset Management Progress

16 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 16 IV-1. Measures for MRJ and Tier1 business -1 Composite Key measures and implementation schedule Material Accumulation of technology that Technology differentiates MHI Improve business Flight Deck viability Acceleration of MRJ70 development ＭＲＪ U.S. Flight Test Reform organization Completion of MRJ90 development

Strengthening of human resources (skills development Reinforce etc.) (p.29-30) commercial aircraft business Medium-term measures against low capacity utilization Mass production of MRJ foundations at Nagoya facilities (see p.41) (applies to Tier1 and MRJ) Equipment and production technology Build synergies innovations (p.29-30) Early recovery of Improvement of Tier1 business* profitability Tier-1 business Plant Reorganization (p.31) * Strengthen to OEM level

2016 2017 2018 2019 2020～

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 17 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 17 MRJ：Mitsubishi Regional Jet OEM：Original Equipment Manufacturer IV-1. Measures for MRJ and Tier-1 business -2

Long term strategy for commercial aircraft business Continuous high demand growth 1) Reasons for continuation Forecast for jet equipment market - High entry barriers (technology, regulation, financing etc.)

- MHI’s capabilities (accumulation of technology, skills, financial support) 今後も高い需要伸長

- Sustainable market growth and continuous technological development

・ High possibility of becoming a core business, requires long-term commitment Source：ＪＡＤＣ

2) Original business model, enhanced by MHI’s advantages

・ Pursuing autonomy and synergies between aircraft business and advanced Tier 1 business ・ Beyond existing framework, expand business field and increase additional value of MHI business Cyber → Integration with cyber security technology and ICT Security Technology → Synergy with other MHI businesses, ex. traffic control system, etc. Apply technology

Traffic control Synergies system

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 18 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 18 MRJ：Mitsubishi Regional Jet IV-2. Reinforcement of commercial ship business reforms

Overall schedule for business structure reforms

FY2016 FY2017 FY2018- April (Delivery completed) ▼ ・ Expansion of engineering business Cruise Ship #2 → Establishment of Marine Engineering Center (TBD) (Concentrated use of engineering resources)

Reform Internal Structure July ・ Sales expansion for high value-added equipment/systems ▽ Preparation of organization reforms 1st step in new structure Corporate culture reform activities

Basic agreement reached ・ Cost reduction and shorter construction period for LNG with Imabari and Namura carriers → Improvements driven by shared technology division March Build Alliance w. Partners ▼

Negotiations towards alliance Transition to new structure (Under assessment, incl. spin off)

Smooth progression of negotiations Pursuing synergy between MHI’s development technology and partners’ construction capabilities

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 19 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 19 LNG：Liquefied Natural Gas IV-3. Improvement of MHPS management, PMI etc. (1)

1) FY2016 earnings decline and responses Net sales ・Operating income 20,0002,000 Gap from 15% Margin Original Plan Operating profit fell in FY16 due to yen appreciation, delay in business expansion 15,0001,500 Net sales 10% and time taken to reduce fixed costs 10,0001,000

5% 5,000500 Reduce fixed cost to enable profitability improvement, even Leveraging the following measures, though sales level stays achieve 10%+ margin with existing level of 0 0% FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 net sales in 2 years (billions of yen) FY17：△¥10-15 bn. ・ Reduce fixed costs → See graph on right Fixed costs FY20：△20%

・ Reduce variable costs (utilize LCC, etc.) → FY17 ： △¥20 bn. from FY16 ・ Accelerate PMI → Introduce chief officer system, strengthen SBU/KPI management system → Re-organize business structure and manufacturing bases (asset optimization, etc.) FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

SBU：Strategic Business Unit KPI：Key Performance Indicator LCC：Low Cost Country MHPS：Mitsubishi Hitachi Power Systems, Ltd.

IV-3. Improvement of MHPS management, PMI etc. (2)

Global demand for New GT (GW / yr) 2) Gas Turbine Business MHPS GTCC Sales from Service MHPS GTCC Sales from Original Equipment Challenge 1 78 78 ・ Sluggish ongoing demand for new GTCC plants worldwide 67 64 57 57

・ Strengthen service business → LTSA through use of IoT etc. (Long-term maintenance) Expansion of operation support service (See p.22) ・ Strengthen ability to gather information globally and to offer more customer focused proposals ＊ Asia N. and S. America FY13 FY14 FY15 FY16 FY17 FY18 ＊ → Concentrate human resources into key overseas markets Middle East Impact of sales decline in new GTCC → Strengthen ties with trading companies and expand use of ECA financing equipment for the Japanese market Global market share(170+MW) 4% Challenge 2 14% 10% 14% ・ 25% Increased competition from latest GE model (HA series) 27% 38% 36% ・ Expedite launch of high-performance gas GTCC Demonstration Facility (T-Point) 47% turbine models 41% → Accelerate development of next-generation 38% 36% 1650℃-class gas turbines 24% Delivery in FY2019(bring forward by 1.5 years) 18% 14% 14% ・ Strengthen cost competitiveness (See p.20) CY13 CY14 CY15 CY16 (Renovations due for completion in 2020) MHPS GE SIEMENS OTHERS

GTCC：Gas Turbine Combined Cycle EPC：Engineering, Procurement & Construction ECA：Export Credit Agency LTSA：Long Term Service Agreement MHPS： Mitsubishi Hitachi Power Systems, Ltd. IV-3. Improvement of MHPS management, PMI etc. (3)

3) Expand service business using IoT, AI, Big Data

Maximize use of automated Benefit for customers ＥＭＳ(Energy Management System) autonomous operations Big Data Optimization of overall efficiency Power supply (group management level) Monitoring Analysis Remote operations Total Control power- (labor-saving, high reliability) Power demand forecast generation facilities Enhanced O&M optimization Longer intervals between inspections Gas turbine early malfunction - Automated warnings for malfunctions/anomalies, detection service early detection and recovery measures ・ Orders received from China - Operating life extension measures, placing orders for spare parts Automated boiler control system Performance improvement and optimization (equipment and plant levels) ・ Verified by Taiwan Power Co. O&M support Shorter inspection times Global service center Higher operating ratios ・ Remote monitoring, - Preventive maintenance O&M support (Philippines) - Short-term peak operation, eco Electrical current monitoring tool for operation rotating machines (developed jointly O&M monitoring - Recommend replacement parts with Takada Corp.) during regular maintenance Data collection and evaluation (digitization) Synergies expected with other business

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 22 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 22 ＩｏＴ：Internet of Things ＡＩ：Artificial Intelligence O&M：Operation & Maintenance IV-4. PMI at M-FET (forklift truck business) Current PMI plan is underway Apply lessons learned from PMI ahead of schedule programs at MHPS and PT

Defensive PMI acceleration (through Aggressive From single product business to MN and UC merger) solutions business

Integration Process Approach Laser Guide Type AGF Approach (Automated Guided ・Integration and elimination of MN UC ・Next-generation forklift trucks Forklift) redundant functions and sites Factory A Factory B ・AGV(Automated Guided Vehicles), (launched in Japanese market in April) ・Reinforcement of procurement and Operating Operating logistics robots factory productivity enhancement ratio ratio ・V2G (Vehicle to Grid) etc. 70% 70%

Outcome Merger Outcome ・Reduction of fixed costs △10% Operating ・Sales expansion: ・Operating income margin ratio 400 billion → Over ¥500 billion improvement 4 → 8% 100%

8% (billions of yen) Operating 4% income margin 40～90 New (Before Business amortization △10% (Solutions) of goodwill)

Existing Fixed Net 400 Businesses costs sales

FY20162016 FY20172017 forecast FY20182018以降 target FY20162016 FY20172017 forecast FY20182018以降 target

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 23 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 23 MN：Mitsubishi Nichiyu Forklift Co., Ltd. UC：UniCarriers Corporation MHPS：Mitsubishi Hitachi Power Systems, Ltd. PT：Primetals Technologies PMI：Post Merger Integration IV-5. PMI at Primetals Technologies (PT)

Order received now in a gradual Worldwide manufacturing capacity surplus continues recovery trend 600 PT orders received, by 500 quarter (€ millions) 400 Promote PMI to enable profit even at €1.5 bn. scale 300 200 EBITDA improvement target 100 ＋ €85m 0 (FY2016→2019) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2015 FY2016

PMI (business integration Further PMI and implementation Sustained process) of growth strategy growth ・Consolidate organization (completed) ・Consolidate overseas locations (Approx.40 → 26) Business segments:10 → 7 ・Expand market share through Achieve top global implementation of growth strategy Organizational functions:26 → 9 position and → Improved utilization of ・Optimize work force scale (8,000 → 7,100) key technologies stabilization of earnings ・Eliminate redundant R&D costs → Reform of business model (completed) → Expansion of alliances Completion of PMI FY2015 FY2016 FY2017 FY2018 FY2019 FY2020～

Orders received €1.5B Orders received €1.6B Orders received €1.7~1.8B Orders received Over €1.9B

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 24 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 24 PMI：Post Merger Integration EBITDA：Earning Before Interest, Taxes, Depreciation and Amortization IV-6. Asset Management Progress

Aims and progress status of asset management Promote enhanced value and utilization of assets through asset shuffling, collaboration with other companies, etc., avoiding simple selloffs refer to examples below Ryoju Estate business MHI Yokohama Bldg. (majority stake transferred in September 2017) (sold in March 2017) ・Sold in March 2017 (asset liquidation) West Japan Railway Co. → In near term, used for MHPS head office functions, etc. Real estate operations made a core ・Enhance total asset value through 70% non-transportation-related business; use of acquired capital investment aiming for higher enterprise value and Yokohama business scale expansion / Bldg. strengthening Asset shuffling

Ryoju Properties (Collaboration) Reconstruction of Daiichi Tamachi Building (slated for completion in 2023) Company Operation consigned to other specialized companies, aiming for spinoff, ・Greater convenience 30% higher asset value and stable earning capability → Proximity to Marunouchi (global investment headquarters), etc. New Tamachi ・Increase in total floor space Bldg. MHI Group → Higher added value and profitability Daiichi Tamachi Bldg.

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 25 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 25 MHPS: Mitsubishi Hitachi Power Systems, Ltd. V. Organization and system reinforcements toward “Conclusion of Reforms”

- Preparations for “big leap” in 2018 Business Plan

1. Global and Local Management Optimization 2. Production Innovation 3. Asset Management Reinforcement 4. Innovation Laboratory (tentative name)

Current issues • Optimize and strengthen global management system

Shinagawa Head Office • Reinforce regional management and operations (especially ex-Japan) Global management system lacks experience compared to • Further utilize local human resources competitors • Eliminate unique rules lingering in some regions or businesses Corporate functions at bases Corporate • Numerous small-scale bases • Optimize use of Group-wide resources (resources are locked in  Consolidate small-scale bases (business place and dispersed) offices, factories) • Weak overseas business

foundation Global bases by scale E.g. North America (locations of bases having fewer than 50 employees) Corporate Corporate under 10 function function employees over 100 employees Redundant functions within under 50 employees the Group. Siloed sales structure remains under 100 employees Business Business segments Of approx. 70 bases in North Business Business Of approx. 300 bases worldwide, small- America, bases with fewer than 50 divisions companies scale ones with fewer than 100 employees employees account for approx. half account for more than half the total. the total

Current status Target vision Divide global / local functions Global headquarters (Marunouchi) • Enhance global management structure and efficiency

Shinagawa Head Office • Activate the local business management (clarification of authority transfer and responsibilities)

HR rotation HR rotation Corporate Regional Regional Regional Head Office (Japan) Regional Regional ・・・ (Americas) (Europe) (China) Corporate functions (Japan) (Shinagawa → Tamachi) at bases HR rotation Streamlining of regional bases and functions

Corporate functions at bases Reinforcement of overseas regional management and Corporate Corporate Qualitative and sales & marketing strength function function quantitative • Consolidation and reinforcement of enhanced domestic sales & Earnings improvement at efficiency of marketing and overseas businesses corporate functions service segments • Expanded BPO Increased overseas service personnel Business Business segments Business Business Business Business divisions companies divisions companies Excess personnel after consolidation, efficiency enhancement, etc. will initially undergo advanced training at specialized organizations (next page) and then be reassigned to overseas regional duties or business segments.

Globalization HR Response (accelerated response by specialist teams) • Increase in overseas factory management • Development of human resources suited to the times • Human resources fluidity, centering on continuous and technical guidance jobs from rotation of human resources (development and expansion of overseas production pooling) → Decrease in domestic conventional jobs Education/training

Manual work Mutual impact

• Automation (IoT, AI, etc.) ・Higher levels of • Integrated production techniques/skills Significant technological changes, lines ・Multi-skilled workers etc. and professional conversions • Rapid progress in IoT, AI, Robotics AI and robots and other technologies → Automation of direct and indirect work ・Development and introduction of innovative → Increased need for data analysts, etc. production and management methods ・R&D and introduction of the latest • Qualitative changes in factory work, technologies and processes, including AI etc. due to change in product (see next Production process and system innovations page) (Accelerated response by specially appointed teams)

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 29 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 29 ＩｏＴ：Internet of Things ＡＩ：Artificial Intelligence V-2. Production Innovation - 2

Tackle changing needs for technological and skills areas through education and productivity innovation (previous page)

Aircraft Ships Further technological innovations (totally electric, etc.) Further technological innovations (deal with the emission regulations, etc.)

MRJ Completed aircraft Completed aircraft ・Cabin interior technologies Car ferries / ・Entertainment facility YS-11 Cruise ships installation technologies Outfitting of electronic ・Low-temperature, cryogenic MU-2, MU-300 equipment technologies Computerization of Cyber security LPG carriers / ・Special tank processing avionics and control LNG carriers Main wings systems technologies

Challenger 300 787 Automation control technologies Composite GX material Shift in focus from hull work Composite material main wing to outrigging Automated inspection and process control ・Structural design Fuselage Car carriers technologies Assembly line Tankers ・Welding technologies 777 monitoring technology ・Large block Bulk carriers construction 767 Maintenance technology

Automated assembly

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 30 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 30 MRJ：Mitsubishi Regional Jet LPG：Liquefied Petroleum Gas LNG：Liquefied Natural Gas V-2. Production Innovation - 3

Power and Machinery Business Aerospace Business • Reduction of domestic production scale in tandem • Expansion in with expansion of global production domestic production • Domestic production facilities scattered and • Lack of global dilapidated (Decline in competitiveness) competitiveness Countermeasures

• Consolidation and reorganization of bases Productivity • Investment through use of IoT/AI improvement • Broaden and deepen skill sets target ≧30％ • Increase value of land and facilities through asset management Proposed consolidation of core businesses Gas turbines (Takasago + U.S.) Metals machinery Optimal (Hiroshima, U.S., Mexico, China) reorganization of domestic entities in Compressors(Hiroshima, U.S.) Aircraft, Defense & Space (Including Shipbuilding Hiroshima, Kobe) (Nagasaki, Nuclear power, machinery Shimonoseki) (Kobe*) * shared factory scheme

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 31 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 31 ＩｏＴ：Internet of Things ＡＩ：Artificial Intelligence V-3. Asset Management Reinforcement

Further carry out current measures, propose and implement asset management beyond the conventional framework as measures ahead of the 2018 Business Plan

Asset management focused on Centralized management of all each segment (current) Groupwide assets Newly idle assets of low book value dispersed Pursue maximum asset values and

Significant Significant room effective for use of appropriate returns

Highly active shared Balance sheet factories Underused factories (shared within Group. Business Business Partner leased to other companies) A B Current Liabilities Leased to other assets Lease office building companies space to other In-house usage companies Underused offices Fixed Net assets assets Lease and multi- purpose usage of assets In-house Leased to other idle lands usage companies Idle land properties (e.g. warehouse)

Majority of assets have been → Future, creation of stable CF of several 10 billions of yen fully depreciated per year → Progressive application from domestic to overseas assets

Objective Garner leading-edge knowledge and ideas from external sources, utilize for foundational technologies and new product development → Conduct cooperative research globally with “Novel ideas and approaches”

Organization format (plan)

• Establish wholly owned subsidiary (SPC), specialized in R&D Nanotechnology → SPC enables more technology-oriented activities Big data New material Quantum computer • Research theme is at discretion of Project Manager (PM) Utilize PMs → Optimized structure suitable for each theme (Partner, Location) Use of external from outside MHI institutions (Examples) Incorporation of Project manager Innovation Laboratory cutting-edge (Research Team A) knowledge Future University Development of technologies with expansion Shared shared foundations technology CTO Project manager framework (Research Team B) Research Research institute scale approx. Development of ¥120 billion Business new products, etc. segments Project manager (Research Team C) Other company

Numerical targets for 2015 Business Plan Orders received：4.5 trillion yen, • FY2017 targets have been adjusted Net income：100 billion yen, etc. (P.7)

• Reflecting uncertainty of global economy and market forecast • Bake in sufficient funds to tackle challenges that occured in 2016

• Original targets will be shifted to second year of 2018 Business Plan

Conclusion of Reforms

• Complete reforms in 2017, and compile additional measures (e.g. MRJ reforms) by 1H FY2018

Smooth transition to 2018 Business Plan (continuous growth phase)

• Implementation of advance measures necessary for long-term sustained growth (pp.26-33) • As machinery/engineering conglomerate, build long-term sustainable growth plan*

*Establish long-term direction of business portfolio within FY17, with leading-edge technology and complex system engineering at core

FY2016 FY2017 FY2018 FY2019

2015 Business Plan (Completion of reforms) (Achieve numerical target)

Structural reforms To sustained growth phase Cruise ships /SONGS Sinop nuclear power plant (FY2020) Remaining (feasibility study/risk reduction, implementation structure) Delivery of first aircraft ☆ risk MRJ development management Start mass production and (organizational reforms, business viability improvement) ＭＲＪ make MRJ more attractive Business reform (incl. Strengthen synergies with Tier 1 immediate measures) business Reform of Commercial Ship Business 15 Business Plan Commercial Aircraft Business(Tier1) Reforms Business scale ¥5 tn. PMI acceleration (PT) (M-FET) (MHPS)

Global standard profitability

Production segment innovations and increased value Conclusion Further reinforcement of reforms of financial foundation Further reinforcement of asset management ▼ Global headquarters Advance ▼ Relocate to Optimization of global/local management Marunouchi measures Sustainable foundation for growth Build and prepare for long-term growth Develop and cultivate new/next 18 Business Business Plan 18 ＋ Structure promoting innovation generation business

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 36 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. M-FET: Mitsubishi Heavy Industries Forklift, Engine36 & SONGS: San Onofre Nuclear Generating Station PMI: Post Merger Integration MHPS: Mitsubishi Hitachi Power Systems, Ltd. PT: Primetals Technologies Turbocharger Holdings, Ltd. VI. Summary -3

5.50 5.50 7,500 6.00 7,500 5.10 4.70 6.00 Keys to achieving 4.50 numerical targets 6,500 6,500 5.00 Orders 3.72 5.00 4.49 4.28 5.00 5.00

5,500 received (¥ tn) 2.90 5,500 4.20 4.60 Business scale

4.00 4.15 450.0 4.00

4,500 4,500 4.05 3.91 450.0 ✓ Business expansion of JV such

3,500 3.00 Net 3.39 3,500 320.0 380.0 3.00 Sales(¥ tn) 2.88 as MHPS (Incl. market recovery)

2,500 309.5 Operating 221.9 2,500 230.0 200.0 2.00 160.0 2.00 income 165.3 162.8 ✓ 1,500 Business growth in (¥ bn) 1,500 150.5 159.8 200.0 87.5 130.0 1.00 engineering/service field Net Income 100.0 1.00 500 122.7 500 (¥ bn) 24.9 63.8 87.7

Net income(except-500 for cruise 0.00 -500 0.00 Profitability & Financial ship and MRJ) 297.6 222.8 200.0 Foundation ＦＣＦ (except for cruise 161.2 200.0 100.0 ship and MRJ) 100.0 131.6 ✓ Achieving business scale of 5 ＦＣＦ (¥ bn) 104.6 100.0 trillion yen 22.2 10.9% 7.5 10% 9.0% 8.8% 10% → Achieve scale merit ROE (except for cruise ship and MRJ) 8.0% ✓ Completion of reforms 8.3% 7.1% 5.1% 5.5% → Profitability recovery from ＲＯＥ 3.7% 1.9% 2,500.0 challenging businesses 2,150.0 2,330.0 2,500.0 Net assets 2,107.2 2,150.0 2,000.0 1,774.8 1,999.7 1,700.0 1,830.0 2,000.0 ✓ Continuous concentration into (¥ bn) 1,330.0 1,637.8 1,679.4 1,750.0 1,491.3 core competence 1,234.1 Shareholder equity (¥ bn) ✓ Reinforcement of risk management 12 ：15 Business Plan Original target 00-11 Business Term FY2015 FY2016 FY2017 FY2019 ✓ Enhancement of asset average Plan Average management

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 37 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 37 ROE：Return On Equity FCF：Free Cash Flow MHPS: Mitsubishi Hitachi Power Systems, Ltd. © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 38 Reference Materials

1. Technology topics in FY2016 - P.40 2. Medium-term measures against low capacity - P.41 utilization at Nagoya facilities 3. Investments relating to AREVA of France - P.42 4. SONGS arbitration - P.43 5. AIDA Cruise Ship Construction Project - P.44 6. Acceleration of concentration into core competencies - P.45

Completion of world’s largest CO2 Stealth and high-maneuverability capture plant in Texas, USA technologies enabling realization of Advanced Technology Demonstrator (X-2) 提供：防衛装備庁

・Captures 4,776 tons per day of CO2 from coal-fired power ・Extremely high stealth capability and outstanding plant maneuverability with flying capability not possible with ・MHI Group has delivered 11 commercial CO2 capture systems worldwide. (top share of global market) conventional aircraft → Airframe system and advanced engine system integration

Large-output Organic Rankine Combustion stabilization technology for Cycle 5-stage axial turbine H3 rocket engine (LE-9) ・Development of key technologies to control high-frequency combustion vibrations ・ “5-stage 16MW” multi-stage large-scale axial turbine resolving ・In March 2016, applicability has been demonstrated in full- vibration and other issues and achieving outstanding efficiency size proto-type firing tests Exhaust pulsation energy-using technology Start of operation of new electric steelmaking for high-performance vehicle-use furnace (Mexico) turbochargers ・World’s most efficient electric furnace, cuts power consumption ・World’s first nonstationary performance evaluation technology and CO2 emissions by 25% and reduces production costs by for turbochargers, factoring in intermittent engine exhaust gas near 20% flow

Advanced AGV (automated guided vehicle) Mobile combat vehicle employing laser guidance (production launched in FY2016) ・Material handling capacity increased by more than 20% by laser ・Combat vehicle featuring outstanding mobility and air transport guidance and proprietary optimized operation algorithms capability applying onboard AI ・World’s highest level of firing accuracy while traveling and outstanding mobility

AGV:Automated Guided Vehicles Reference 2: Medium-term measures against low capacity utilization at Nagoya facilities

Measures for Tier1 production volume and staff Measures for MRJ timetable and staff

B787 B777 GX ▼ First flight 1.5-2 year delay

▼ Design changes (electrical wiring) Acquisition Delivery of first Flight testing in Japan and U.S. of TC aircraft* * Outlook: mid-2020 Production of Target: end-2019 final test aircraft 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2015 2016 2017 2018 2019 2020 2015 actual 2016 actual 2017 forecast

Maintaining staff for mass production, by temporary re-allocation Completed reduction of over 700 personnel （re-allocation within/out MHI） Approx.6,600 Approx.2,850 Optimization of MITAC employee numbers -10% -30% -20% Indirect間接員 MRJ事業部 staff Division Direct staff直接員 MITAC

2017年2月 2017年4月 2017年10月 2018年4月 2017年2月 2017年4月 2017年10月 2018年4月 Feb 2017 Apr 2017 Oct 2017 Apr 2018 Feb 2017 Apr 2017 Oct 2017 Apr 2018 （実績）（計画）（計画）（実績）（計画）（計画） (actual) (target) (target) (actual) (target) (target)

© 2017 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 41 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 41 MRJ：Mitsubishi Regional Jet TC：Type Certificate Reference 3: Investments relating to AREVA of France

・ Investment into stable earnings businesses after separation of existing risks ・ Creation and expansion of business opportunities through strengthening of strategic relationships with EDF and New AREVA

French Purpose of investment into NewCo government JNFL MHI ・ Reinforce collaboration with ～100% ～50% 5%(Approx.250M€) global leader (AREVA) in field of 5%(Approx.250M€) nuclear fuel cycle

・Uranium mining, enrichment and AREVA ～40% conversion Strengthen MHI’s response capability NewCo ・ SA Reprocessing of spent fuel, etc. to reactor decommissioning and fuel Under discussion cycle

Third 100% EDF MHI Purposes of investment into New party ANP 51%～・ Carve-out Increase business opportunities, (isolation) including ATMEA, through After-sale services expanded collaboration with EDF AREVA New Nuclear fuel cycle ・ Achieve stable profitability at NP ANP New ANP Transfer New NSSS / safety system Olkiluodon 50% I&C -- After-sale services and fuel cycle Unit 3 -- Reactor-related engineering ATMEA business (no EPC risk) 50% 50%

JNFL：Japan Nuclear Fuel Limited NSSS：Nuclear Steam Supply System I&C：Instrumentation & Control EPC：Engineering, Procurement & Construction Reference 4: SONGS arbitration

Chronology from contract signing to passage of arbitration award

2004 2005-2010 2011 2012 2013 2014-2016 2017

▼September 30: ▼January 31: Leak from SG tubing at Unit No.3 Contract signed Meetings to discuss response measures, followed by ▼Unit No.2 delivery construction of verification equipment, etc. (January 7, 2009) ▼June 7: Determination to decommission ▼Unit No.3 delivery SONGS (Units No.2 and No.3) (August 18, 2010) ▼July 18: Notification of dispute from SCE ▼October 17: Request by SCE ▼March 14: Manufacturing period for arbitration Arbitration awarded

Arbitration process

* SONGS comprises 3 units; MHI supplied SGs to Units No.2 and No.3. (The decision to decommission Unit No.1 was made in 1992.) Arbitration award

・Upper limit of responsibility stipulated in contract (approx. US$137 million) is valid. As claimed by MHI

・MHI to pay approx. US$118 million, after adjustments for expenses already paid, interest, etc. ・Rejection of SCE and other claimants’ allegation of fraud and gross negligence by MHI (award sought: US$6.667 billion) ・SCE and other claimants to bear majority (approx. US$58 million) of MHI’s arbitration expenses

SONGS：San Onofre Nuclear Generating Station SCE：Southern California Edison SG：Steam Generator Reference 5: AIDA Cruise Ship Construction Project

Construction and gain/loss record 内装作業 (in billion yen)

ＦＹ2011 ＦＹ2012 ＦＹ2013 ＦＹ2014 ＦＹ2015 ＦＹ2016 ＦＹ2017

Basic design Detailed design

Procurement Launch Start of block mounting Hull construction Interior work Testing Original (Block assembly) ship

Basic design Detailed design Delivery 1st Procurement Launch

Actual Start of block mounting Hull construction Interior work Testing (Block assembly) Detailed design Procurement Launch

Original Start of block mounting Hull construction Interior work Testing (Block assembly)

Detailed design Delivery

2nd ship Procurement Launch

Actual Start of block mounting Hull construction Interior work Testing (Block assembly) Operat -ing -9.3 6.0 -0.1 0 0 0 income

Extraor -dinary - - -64.1 -69.5 -103.9 -34.3 Finished loss except for

Gain / Loss Cumu- normal lative -9.3 -3.3 -67.5 -136.0 -239.9 -274.2 to date warranty

PMI Status and Results to Date ■ ：Overseas Company Product/Business Agreement Net sales Blue ：FY2016 initiatives Other results, etc. date contribution Business expansion and stabilization Machine tools Approx. JPY 5bn Federal Broach (USA) Apr 2012 from lineup integration Business expansion from added lineup PWPS(USA) , Turboden(Italy) Gas turbines Approx. JPY 80bn Dec 2012 in small/medium GT Daily Equipment (USA) Forklift trucks Jan 2012 Approx. JPY 1.5bn Expansion of after-sale servicing business Acquisition Concast (India) Metals machinery Jun 2012 Approx. JPY 2.5bn Strengthening of upstream product lineup Refrigeration Toyo Engineering Works Jan 2014 Approx. JPY 16bn Strengthening of engineering business systems Further business scale growth and Forklift trucks Approx. JPY 185bn UniCarriers Holdings Jul 2015 expanded global market share Nippon Yusoki Forklift trucks Nov 2012 Approx. JPY 130bn Business expansion from achievement of full lineup Thermal power Approx. Business expansion from full GT lineup (small to large), Hitachi Nov 2012 generation systems JPY 300bn expansion of unique technologies MHI Approx. Siemens (Germany) Metals machinery May 2014 Business expansion from achievement of full lineup -led JPY 150bn IHI Metaltech Metals machinery Jul 2013 Approx. JPY 10bn Strengthened lineups of aluminum rolling mills, etc. Agricultural Stronger competitiveness in domestic and Mahindra & Mahindra (India) May 2015 (equity-based) machinery global markets Early achievement of strategic model (8MW) development and Equal Wind turbines (equity-based) Vestas (Denmark) Sep 2013 order receipt targets Commercial Business strengthening from product lineup and Ryobi Jun 2013 (equity-based) printing machinery production integration JV Reductions in direct/indirect costs from standardization and Document-related - Fuji Xerox Oct 2013 effective document-related processes Miyaji Engineering Bridges Nov 2014 (equity-based) Scale merits, Market share increase Tunneling shield Assured capture of domestic demand and part Japan Tunnel Systems May 2015 (equity-based) machine accelerate business expansion overseas ner- Automobile Market share expansion and Fuji Oozx Jan 2016 (equity-based) led engine valves enhanced market presence Injection molding Expansion of product lineup and sales network, reductions in Ube Machinery Jul 2016 - machines production costs JR West Real estate Oct 2016 (equity-based) Boost corporate value through partnership with JR West Operation and NTT Data Mar 2017 - Sophistication of IT service and strengthening global readiness maintenance of IT Promotion of business concentration into - HIDROMEK (Turkey) Motor graders Nov 2013 core competence Lithium rechargeable Promotion of business concentration into Delta Electronics (Taiwan) Apr 2014 - batteries core competence Sumitomo Heavy Industries Promotion of business concentration into Industrial cranes - Material Handling Systems May 2015 core competence Promotion of business concentration into Michinori Holdings Shonan Monorail May 2015 - core competence Transfer Tohmei Industries Ship stabilizers Promotion of business concentration into Mar 2016 - core competence Promotion of business concentration into Sato Tekko Sluice gates May 2016 - core competence X-ray medical Promotion of business concentration into Hitachi Aug 2016 - equipment core competence Promotion of business concentration into Kobe Diesel Marine diesel engines - Dec 2016 core competence Promotion of business concentration into Furuno Electric ETC onboard devices - Jan 2017 core competence Promotion of business concentration into Withdrawal (equity-based) Ecovix (Brazil) Shipbuilding Jan 2016 core competence 45 © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 45 ＰＭＩ：Post Merger Integration PWPS：Pratt & Whitney Power Systems © 2016 MITSUBISHI HEAVY INDUSTRIES, LTD. All Rights Reserved. 46