NIPPON PARKING DEVELOPMENT Co.,Ltd.

Changes to laws, policies, interpretations, and business practices, such as the Parking Lot Act and the Building Standards Act, may have a direct or indirect negative impact on business operations and results. The Group operates in an environment where it can be indirectly affected even in areas not directly subject to regulation, meaning the risk from regulatory change is broad in scope. As a countermeasure, the Group actively collects information on relevant laws and regulations.

If the domestic number of vehicles owned declines sharply, triggered by factors such as the practical adoption of autonomous vehicles, parking supply-demand could ease sharply, potentially having a material adverse impact on the results of the core Parking Business. As this risk stems from external factors, it is difficult for the Group to control on its own. The securities report does not describe any specific countermeasures.

Technological innovation, including the practical adoption of autonomous vehicles, could fundamentally transform patterns of vehicle ownership and use, potentially leading to a structural contraction in demand for parking. This is a risk that could threaten the long-term revenue base of the Group's core Parking Business and may force a shift in the business model. The securities report does not describe any specific countermeasures.

The occurrence of earthquakes, storms, floods, infectious diseases, terrorism, and similar events could have a negative impact on the Group's overall results. In particular, the Ski Resort Business and Theme Park Business are susceptible to fluctuations in visitor numbers due to weather factors (weather, temperature, snowfall), and abnormal weather such as typhoons, prolonged rain, heavy snow, or light snow directly leads to declines in visitor numbers and operating days. As countermeasures, the Group is promoting the transformation of ski resorts into all-season resorts and complementing this through a business portfolio combining businesses with different winter and summer peak seasons, and has established a BCP Countermeasures Headquarters headed by the President.

The Group operates businesses such as the Parking Business in Thailand, and changes in the local political and economic situation, the enactment or revision of laws and various regulations, and changes in the labor environment could impede the development of overseas operations. Institutional uncertainty and geopolitical risks specific to emerging economies could affect business continuity. As a countermeasure, the Group actively collects local information to appropriately respond to local legal regulations and customs, and shares this information across the Group.

Because consolidated financial statements are prepared by translating the results, assets, and liabilities of overseas affiliated companies and foreign currency-denominated transactions into yen, fluctuations in exchange rates could have a negative impact on the Group's results. With the expansion of the Thailand business, the impact of fluctuations in the baht/yen rate on consolidated results is structurally increasing. The securities report does not describe any specific countermeasures such as hedging.

The Group holds listed and unlisted securities for business strategy and asset management purposes, and if domestic and overseas stock market conditions deteriorate sharply, valuation losses or impairments may occur, potentially having a negative impact on results. A deterioration in market conditions would push down the market value of held securities across the board, creating a risk of simultaneous losses across multiple holdings. As a countermeasure, the Group is implementing risk mitigation measures through the continuous review and rationalization of its shareholdings.

If safety issues arise with mechanical parking equipment in the Parking Business, lift facilities in the Ski Resort Business, or amusement rides in the Theme Park Business, this could adversely affect the Group's brand and credibility. Although ensuring safety is positioned as the highest priority, the risk of problems occurring despite the Group's efforts cannot be eliminated. As countermeasures, the Group strives to comply with audits and statutory inspections by supervisory authorities, adhere to applicable regulations, and meet safety and quality standards.

The Group recognizes and measures impairment losses by calculating future cash flows for held assets, and may record impairment losses on fixed assets, which could affect results. Given the Group's structure of holding numerous large fixed assets such as ski resorts and theme parks, impairment risk tends to become apparent during periods of deteriorating performance. As a countermeasure, the Group has established a framework to promptly and appropriately recognize impairment for assets showing signs of impairment when the recoverable amount falls below book value.