MHI to Reorganize into Three-Domain Structure: Power Systems; Industry & Infrastructure; and Aircraft, Defense & Space

The present Energy & Environment domain will be consolidated to include commercial aircraft engine operations, currently part of the Commercial Aviation & Transportation Systems domain, and the compressor operations of the Machinery, Equipment & Infrastructure domain, with a view to pursuing synergies between the turbo machinery business and Mitsubishi Hitachi Power Systems, Ltd. (MHPS), etc. In its new incarnation, the domain will be renamed the Power Systems domain, and will also seek to strengthen related service operations.

The current Machinery, Equipment & Infrastructure domain will oversee the commercial ship and cruise ship businesses, which are currently under the Commercial Aviation & Transportation Systems domain. The objective is to shift from the traditional vertical structure to a horizontally integrated structure, combining and strengthening the Company's engineering operations. In order to pursue Group-wide synergy among businesses with strong EPC (engineering, procurement and construction) functions, chemical plant operations now under the Energy & Environment domain, and transportation systems presently in the Commercial Aviation & Transportation Systems domain, will be transferred and reassigned to the Engineering Headquarters, which is currently part of the shared technology framework. In its new incarnation, the domain will become the Industry & Infrastructure domain. This move will expand earnings through portfolio management of machinery businesses, and create global niche products.

The current Integrated Defense & Space Systems domain will be expanded to incorporate the Company's commercial aircraft operations and the MRJ (Mitsubishi Regional Jet) business, which currently fall under the Commercial Aviation & Transportation Systems domain. This will encourage synergies in aircraft technology and promote more effective use of management resources. Under its new name - the Aircraft, Defense & Space domain - the newly reconfigured domain will also target stronger use of the shared technology framework inaugurated in April 2016 to integrate Companywide functions such as technology, marketing and procurement, toward reforming the supply chain in MHI's commercial aircraft business. Specifically, procurement functions will be transferred from the aircraft procurement & production segment to the Value Chain Headquarters. Going forward new suppliers will be cultivated and procurement processes will be revamped. In its new incarnation, the Aircraft, Defense & Space domain will initially have no domain manager in view of the fact that the MRJ business is under the direct oversight of the CEO; the CEO will be in charge of managing the new domain. The businesses subsumed under this domain are all long-term growth businesses, and under the new system goals will focus on the early formation of development bases and the achievement of stable earnings.