Formal Approval Received for Absorption-type Split of MHI's Commercial Aero Engine Business to Consolidated Subsidiary

1. Aims of the Company Split

In recent years the commercial aero engine market has seen a succession of new product developments spurred by brisk demand, and significant growth is expected to continue going forward. For MHI to respond to this challenge, improvements in production capacity and manufacturing technologies are needed in order to boost the company's competitiveness, and greater capital strength is demanded in order to continue participation in development programs in the field of commercial aero engines, an area in which joint international development forms the mainstream. To achieve those goals, MHI has taken the decision to carry out a simple absorption-type split, effective October 1, of its commercial aero engine operations, to be taken over by a newly established group company. In doing so, MHI looks to create a wholly integrated structure encompassing all aspects from sales and engineering to manufacture and repair, to set in place a structure enabling enhanced production capacity, and to promote greater capital strength through infusions of external funds.

2. Overview of the Company Split
(1) Schedule

Vote at Board of Directors Meeting:	August 28, 2014
Date of Agreement Signing:	August 29, 2014 (subject to change)
Effective Date of Company Split:	October 1, 2014 (subject to change)

*The company split will be a simple absorption-type split pursuant to Article 784, Paragraph 3 of the Companies Act of Japan. Approval at a general shareholders meeting as stipulated in Article 783, Paragraph 1 of that Act is therefore not required.

(2) Company Split Method
This will be a simple absorption-type split, with MHI as the splitting company and Mitsubishi Heavy Industries Aero Engines as the successor company.

(3) Allocation Relating to Company Split
Coinciding with the company split, Mitsubishi Heavy Industries Aero Engines will issue 980 shares of common stock to be allocated in full to MHI.

(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights Accompanying the Company Split
Obligations based on the stock acquisition rights of MHI, the splitting company, will neither be transferred to nor succeeded to by Mitsubishi Heavy Industries Aero Engines, the successor company. MHI has not issued any bonds with stock acquisition rights.

(5) Changes in Amount of Capital Accompanying the Company Split
The company split will result in no decrease either in MHI's capital or in its capital reserve.

(6) Rights and Obligations Transferred to the Successor Company
(7) Outlook on Performance of Obligations
Any obligations which the splitting company and the successor company should bear as a result of the company split will be duly met.

3. Outline of the Companies Involved in the Company Split

	Splitting Company (as of March 31, 2014)	Successor Company (as of August 28, 2014)
(1)Name	Mitsubishi Heavy Industries, Ltd.	Mitsubishi Heavy Industries Aero Engines, Ltd.
(2)Head Office	16-5, Konan 2-chome, Minato-ku, Tokyo	1200, Higashi-tanaka, Komaki, Aichi Prefecture (on premises of Nagoya Guidance & Propulsion Systems Works)
(3)Representative	Shunichi Miyanaga President and CEO	Katsuyuki Shimauchi President
(4)Business	Manufacture, etc. of ships, marine engines, power systems, machinery, steel structures, aircraft, aerospace systems, industrial machinery, special vehicles, etc.	1. Engineering, manufacture and repair of aero engines, their parts and components, and related equipment; marketing of parts and components 2. Engineering, manufacture and repair of gas turbines used for power generation and mechanical drive, and related equipment; marketing of parts and components 3. All business operations auxiliary to the foregoing
(5)Capital	265,608 million yen	20 million yen
(6)Establishment	January 11, 1950	July 1, 2014
(7)Number of issued shares	3,373,647,813	10
(8)Fiscal year end	March 31	March 31
(9)Major shareholders and shareholdings	・The Master Trust Bank of Japan, Ltd. (Trust Account) 4.7% ・Japan Trustee Services Bank, Ltd. (Trust Account) 3.9% ・The Nomura Trust and Banking Co., Ltd. (Retirement Allowance Trust, The Bank of Tokyo-Mitsubishi UFJ, Ltd Account) 3.7% ・J P Morgan Chase Bank 380072 2.3% ・Meiji Yasuda Life 2.3%	Mitsubishi Heavy Industries, Ltd. 100%

Note: As described in our News Release dated March 31, 2014 ("MHI to Establish New Company for Commercial Aero Engine Operations"), discussions are under way to receive investment capital from IHI Corporation and the Development Bank of Japan.

(10) Fiscal Status and Earnings Results (Consolidated) of the Splitting Company during the Most Recently Completed Fiscal Year

Net assets	1,774,223 million yen
Total assets	4,886,035 million yen
Net assets per share	459.99 yen
Revenues	3,349,598 million yen
Operating income	206,118 million yen
Ordinary income	183,159 million yen
Net income	160,428 million yen
Net income per share	47.81 yen

(11) Description of Business being Split or Succeed to
(12) Earnings of Business being Split or Succeeded to

	Business being Split (a)	MHI total (consolidated) in FY ended March 2014 (b)	Percentage (a/b)
Revenues	37,413 million yen	3,349,598 million yen	1.1%

(13) Assets and Liabilities of Business being Split or Succeeded to

Assets	116.2 billion yen
Liabilities	66.2 billion yen

4. Status of Splitting Company after Split

Name:	Mitsubishi Heavy Industries, Ltd.
Head Office:	16-5, Konan 2-chome, Minato-ku, Tokyo
Representative:	Shunichi Miyanaga, President and CEO
Business:	Manufacture, etc. of ships, marine engines, power systems, machinery, steel structures, aircraft, aerospace systems, industrial machinery, special vehicles, etc.
Capital:	265,608 million yen
Fiscal year end:	March 31

5. Status of Successor Company after Split

Name:	Mitsubishi Heavy Industries Aero Engines, Ltd.
Head Office:	1200, Higashi-tanaka, Komaki, Aichi Prefecture, (on premises of Nagoya Guidance & Propulsion Systems Works)
Representative:	Katsuyuki Shimauchi
Business:	1. Engineering, manufacture and repair of aero engines, their parts and components, and related equipment; marketing of parts and components 2. Engineering, manufacture and repair of gas turbines used for power generation and mechanical drive, and related equipment; marketing of parts and components 3. All business operations auxiliary to the foregoing
Capital:	500 million yen
Fiscal year end:	March 31

6. Outlook

Impact from the company split on MHI's earnings will be minimal, on both a consolidated and non-consolidated basis.