Real Estate Operations of Ryoju Facility & Properties to be Spun Off to Form New Company, with 70% Ownership Stake Held by JR West
-- Initiative Will Strengthen Management of MHI Group's Real Estate Assets--

MHI is currently implementing enhanced asset management as part of efforts to reinforce the Company's financial foundation. This is an integral element of MHI's 2015 Medium-Term Business Plan, a three-year plan that was launched in 2015. The business tie-up with JR West is being pursued in line with this initiative.

JR West views real estate operations as a core business among its various non-transportation operations, driving sustained growth into the future. MHI considers JR West a highly suitable partner for its new asset management program. As part of two companies' collaboration, the new business entity will be placed under JR West's corporate umbrella, a move expected to enable further business reinforcement.

* The real estate operations of Ryoju Facility and Properties, whose operations also include factory & facility management and construction, will be split-off effective January 1, 2017 and will be carried on by Ryoju Properties Co., Ltd., a new company established this July. MHI will hold a 30% stake in the newly splitting entity, with the remaining 70% to be transferred to JR West effective February 1, 2017.