Regarding the transfer of lithium ion battery business

NEC Corporation ("NEC"; TSE: 6701) announced today that NEC has determined to transfer (i) all shares of NEC Energy Devices, Ltd. ("NEC Energy Devices") owned by NEC to Envision Electrodes Corporation Ltd ("Company"), a member of Envision Group ("Envision"), a renewable energy company, and (ii) all shares of Automotive Energy Supply Corporation ("AESC") owned by NEC and NEC Energy Devices to Nissan Motor Co., Ltd. ("Nissan"), thereby enabling Nissan to transfer all shares of AESC to Envision.

The transfer of NEC Energy Devises shares to Envision and AESC shares to Nissan is subject to the fulfillment of the conditions outlined below in "1. About the transfer of shares." If these transfers are executed, capital gain will occur.

1. About the transfer of shares

NEC is focusing on Solutions for Society businesses. In the smart energy field, NEC is shifting towards services for the construction, operation, and maintenance of electric storage systems to support goals such as stabilizing power grids and improving the efficiency of companies' energy use.

Based on this policy, NEC had determined to transfer all shares of AESC owned by NEC and NEC Energy Devices to Nissan, thereby enabling Nissan to transfer all shares of AESC, as well as Nissan's electric battery operations and production facilities, to GSR Capital ("GSR"), a private investment fund, as described in the "Regarding the recording of gain from the transfer of shares in an affiliated company accounted for by the equity-method" press release dated August 8, 2017. NEC had also determined to transfer shares of NEC Energy Devices owned by NEC to GSR as described in the "Regarding the recording of gain from the transfer of shares in a consolidated subsidiary" press release dated December 4, 2017. Those transactions were scheduled to be executed on June 29, 2018 as all precedent conditions were fulfilled, however, those transactions were not executed as GSR failed to fulfill the purchaser's payment obligations under those transactions, due to lack of funds. After that, Nissan and NEC entered into negotiations with Envision and, as Nissan and NEC agreed to deal with Envision, NEC has determined to transfer NEC Energy Devices shares and AESC shares as described in "2. Share transfer summary" below.

The transfer of NEC Energy Devices shares to the Company and AESC shares owned by NEC and NEC Energy Devices to Nissan is respectively subject to (i) the fulfillment of the closing conditions of the other share transfer agreement, and (ii) the fulfillment of the closing conditions of the share transfer between Nissan and Envision.

The transfer of NEC Energy Devices shares to the Company and AESC shares owned by NEC and NEC Energy Devices to Nissan is scheduled to be executed on the same day as the transfer of AESC shares to Envision by Nissan.

2. Share transfer summary

(1)Transferred shares and transferee

• NEC Energy Devices shares
  Number of transferred shares: 4,000 shares (percent ownership: 100%)
  Transferee: Envision Electrodes Corporation Ltd
• AESC shares
  Number of transferred shares: 45,962 shares
  Portion owned by NEC: 39,396 shares (percent ownership: 42%)
  Portion owned by NEC Energy Devices: 6,566 shares (percent ownership: 7%)
  Transferee: Nissan Motor Co., Ltd.

(2)Scheduled Transfer Date

March 29, 2019

3. Future outlook

Approximately 10.0 billion yen in operating profit upon execution of the transfer of the NEC Energy Devices shares and approximately 10 billion yen in non-operating income upon execution of the transfer for AESC shares are expected to be recorded in the consolidated financial statement for the fiscal year ending March 31, 2019. This profit and income, however, has already been incorporated in the financial forecasts for the fiscal year ending March 31, 2019.

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Cautionary Statement with Respect to Forward-Looking Statements

This material contains forward-looking statements regarding estimations, forecasts, targets and plans in relation to the results of operations, financial conditions and other overall management of the NEC Group (the "forward-looking statements"). The forward-looking statements are made based on information currently available to NEC and certain assumptions considered reasonable as of the date of this material. These determinations and assumptions are inherently subjective and uncertain. These forward-looking statements are not guarantees of future performance, and actual operating results may differ substantially due to a number of factors.

The factors that may influence the operating results include, but are not limited to, the following:

• Effects of economic conditions, volatility in the markets generally, and fluctuations in foreign currency exchange and interest rate
• Trends and factors beyond the NEC Group's control and fluctuations in financial conditions and profits of the NEC Group that are caused by external factors
• Risks arising from acquisitions, business combinations and reorganizations, including the possibility that the expected benefits cannot be realized or that the transactions may result in unanticipated adverse consequences
• Developments in the NEC Group's alliances with strategic partners
• Effects of expanding the NEC Group's global business
• Risk that the NEC Group may fail to keep pace with rapid technological developments and changes in customer preferences
• Risk that the NEC Group may lose sales due to problems with the production process or due to its failure to adapt to demand fluctuations
• Defects in products and services
• Shortcomings in material procurement and increases in delivery cost
• Acquisition and protection of intellectual property rights necessary for the operation of business
• Risk that intellectual property licenses owned by third parties cannot be obtained and/or are discontinued
• Risk that the NEC Group may be exposed to an unfavorable pricing environment due to intensified competition
• Risk that a major customer changes investment targets, reduces capital investment and/or reduces the value of transactions with the NEC Group
• Risk that the NEC Group may be unable to provide or facilitate payment arrangements (such as vendor financing) to its customers on terms acceptable to them or at all, or risk that the NEC Group's customers are unable to make payments on time, due to the customers' financial difficulties or otherwise
• Risk that the NEC Group may experience a substantial loss of, or an inability to attract, talented personnel
• Risk that the NEC Group's ability to access the commercial paper market or other debt markets are adversely affected due to a downgrade in its credit rating
• Risk that the NEC Group may incur large costs and/or liabilities in relation to internal control, legal proceedings, laws and governmental policies, environmental laws and Rules, tax practice, information management, and human rights and working environment
• Consequences of natural and fire disasters
• Changes in methods, estimates and judgments that the NEC Group uses in applying its accounting policies
• Risk that the NEC Group may incur liabilities and losses in relation to its retirement benefit obligations
  
  The forward-looking statements contained in this material are based on information that NEC possesses as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect the NEC Group. NEC does not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Source of information

Date