Translation of report filed with the Tokyo Stock Exchange on April 28, 2006 Mitsubishi Corporation Updates INNOVATION 2007 (Medium Term Management Plan) Mitsubishi Corporation today announced updates and revisions to its INNOVATION 2007 Medium Term Management Plan, as outlined in a separate press release. Mitsubishi Corporation recently passed the halfway of the plan, which covers the four-year period from the fiscal year ending March 2005 to the fiscal year ending March 2008. # # #
April 28, 2006 Mitsubishi Corporation Mitsubishi Corporation Updates INNOVATION 2007 (Medium Term Management Plan) Mitsubishi Corporation(MC) has updated INNOVATION 2007, having ended the first two-year hop stage and entered the second-half step period of this Medium Term Management Plan. The plan covers the four-year period from the fiscal year ending March 2005 to the fiscal year ending March 2008. During the step stage, MC will continue the hop period theme of achieving sustainable growth over the medium to long term. The following is an outline of the key points of the company s revised plan. (1) Aiming to achieve its sustainable growth over the step period, MC has set the goal of generating consolidated net income of 400.0 billion yen or more from the fiscal year ending March 2009 onward in the subsequent jump period. (2) MC will focus on ROE with the goal of achieving an average of 15% over the medium and long term. (3) MC will invest 1,200.0 billion yen over the 2-year period covering the fiscal year ending March 2007 and the fiscal year ending March 2008, mainly in strategic fields. (4) Investments will be made in line with the increase in shareholders equity, so as to maintain and improve the sound balance sheet of the company. MC s targets are investment assets of within 1.5 times the shareholders equity, and a debt to equity ratio of within 2 times the equity. (5) The dividend will be determined in a flexible manner with the target of a consolidated payout ratio of 15% or more based also on the need for funds to invest and other factors. (6) In terms of its medium to long term growth strategy, MC will concentrate on the following strategic fields while prioritizing two basic pillars: strengthening core businesses, and launching new businesses that meet societal and customer needs. a. Strengthening Core Businesses MC plans to make additional investments to expand businesses in the following
fields: the development of energy and metal resources, food commodities and products, automobile operations and overseas IPP business. Investments will also be made to strengthen trading capabilities in the field of steel and chemical products. b. Launching in New Businesses That Meet Societal and Customer Needs These include the industrial finance business, consumer-centric businesses, medical and nursing care-related businesses, businesses with a connection to the environment, and new technology-related businesses. # # #
Medium Term Management Plan INNOVATION 2007 Opening Up a New Era Heading Into the Step Period April 28, 2006 Mitsubishi Corporation Forward-looking Statements Earnings forecasts and other forward-looking statements in this presentation are management s current views and beliefs in accordance with data currently available, and are subject to a number of risks, uncertainties and other factors that may cause actual results to differ materially from those projected.
1. INNOVATION2007- Basic Policy Theme / Vision / Three concepts INNOVATION 2007 Theme Vision Opening Up A New Era In the middle of large-scale transitions, grasping change to sustain growth over the medium and long terms A New Industry Innovator Opening up a new era, and growing with society Basic Concept 1. Grasping Change and Opening Up a New Era Medium- to Long-term Growth Strategy (1) Strengthening Core Businesses (2) Launching new businesses 2. Developing Human Assets Nurturing human resources to support growth 3. Solidifying Our Ground Strengthening the Consolidated Management System Our basic policy continued 1
2. Outline of Management Plan for Step Period Step period A preparation period for moving up to one more higher stage and achieving sustainable growth in the subsequent jump period Management Measures Consolidated Net Income Step Period (FY2007 FY2008) Aim for steady growth FY2007: 370.0 billion yen Jump Period (FY2009 onward) 400.0 billion yen or more ROE Aim for an average ROE of 15% over the medium and long terms Investment Plans Investments of 1.2 trillion yen over the 2-year step period covering fiscal 2007 and 2008, mainly in strategic fields Asset Liability Management Policy MC will maintain and improve the sound balance sheet of the company through implementing its investments. - Target investment assets (stocks, long-term liabilities etc.) of within 1.5 times the shareholders equity - Aim for a debt-equity (D/E) ratio of within 2 times the equity Taking into consideration the need for funds to invest and other factors, MC will determine the dividend in a flexible manner, targeting a consolidated payout ratio of 15% or more. 2
3. Outlook for Step Period (Fiscal 2007 to Fiscal 2008) and Beyond Hop INNOVATION 2007 Step Jump P/L 370.0 Consolidated Net Income 116.0 2004.3 182.4 350.0 ROE 10.7% 13.4% 18.4% B/S 2005.3 2006.3 2007.3 2008.3 2009.3~ March 2006 Consolidated Total Assets: 10.4 Trillion Yen Other Assets Investment Assets 3.2 Trillion Yen Other Liabilities Interest-bearing Liabilities (Net) 3.1 Trillion Yen Shareholders Equity 2.4 Trillion Yen Investment Assets to Equity Ratio : 1.4 times Debt to Equity Ratio : 1.3 times Investment Assets to Equity Ratio : target within 1.5 the equity Debt to Equity Ratio : target within 2 times the equity 400.0 Billion Yen or more Target an average ROE of 15% over medium and long term Assumptions Exchange rate (Yen/US$) Interest rate (TIBOR) Crude oil price (US$/BBL) 3 14.6% Other Assets Investment Assets 4.4 Trillion Yen March 2008 Liabilities Shareholders Equity around 3.0 Trillion Yen 2007.3 110 yen 0.3% $55
4. Macroeconomic Circumstances and Actions in Strategic Fields Structural Changes During Hop Period - Steady global economic expansion - Growth in new markets such as BRICs - Strong demand for resources and energy - Increasing M&As - Full-fledged arrival of Japan s aging society - Shift from public to private sector Macroeconomic Outlook for Step Period <Fiscal 2007> Sustained economic growth in industrialized and developing nations Steady expansion in global economy <Fiscal 2008> Slight slowdown in rate of growth, mainly in the U.S. and China Sustained, moderate growth in global economy Concern for geopolitical risks Sustain growth growth over over medium and and long long terms terms by by grasping change change Further Strengthening Core Business Creating New Businesses That Meet Societal and Customer Needs 4
5. Investment Plans for Strategic Fields During Step Period Strategic Field (1) Further Strengthening Core Business Strategic Field (2) Creating New Businesses That Meet Societal and Customer Needs (1) Business Expansion Driven by Additional Investments Energy Metal resources Natural gas projects, E&P of oil resources Coal, aluminum, copper etc. 400.0 Industrial finance Consumer-centric businesses Auto leases, REIT and other areas LAWSON and other retail businesses Food Automobile Overseas IPP Other investments Reinforcing operating base in domestic distribution fields and expanding its value chain Strengthening joint business development with Mitsubishi Motors Corporation and Isuzu Motors Limited Expand into Asian markets Plant, construction and shippingrelated 150.0 50.0 100.0 250.0 Medical and nursing care-related business Environmentalrelated businesses New technologyrelated businesses Expand value chains in the healthcare field Emission rights trading and other areas Continue to actively participate in nanotechnology and other fields 150.0 (2) Strengthen Trading-related Businesses Steel Products Chemical Products Expanding overseas value chains Strengthening resource-based chemical businesses 100.0 Total Planned Investments During Step Period 1.2 Trillion Yen (Total Investments During Hop Period: 700.0 ) 5
Earnings forecasts and other forward-looking statements in this presentation are based on management s current views and beliefs in accordance with data available as of the date of release, and are subject to a number of risks, uncertainties and other factors that may cause actual results to differ materially from those projected. This presentation should not be construed to guarantee the achievement of earnings forecasts, targets, or any other indicators of future performance. This information may be revised at any time without prior notice. We therefore request that this presentation and the information contained therein be used in conjunction with information from other sources at your own discretion. Mitsubishi Corporation is not liable for any damages whatsoever resulting from the use of this presentation or other materials. 6