FUJI KYUKO CO., LTD.

There is a risk that business operations may be disrupted by natural disasters and abnormal weather such as earthquakes, an eruption of Mt. Fuji, typhoons, and heavy snowfall, as well as human error, equipment failures, and food quality issues. Such events may result in facility restoration costs and a decline in reliability, potentially affecting business results and financial position. The Group has adopted "providing 120% safety and the highest hospitality" as its management vision and conducts business activities with safety as the top priority.

The Real Estate and Leisure & Service businesses are susceptible to declines in personal consumption due to economic deterioration and changes in market conditions. Bad weather, extreme heat, the arrangement of holidays, and gasoline price trends may also affect business results and financial position. The Group has a policy of taking measures to minimize the impact on its business from changes in the external environment.

There is a risk that geopolitical circumstances such as terrorism, war, economic sanctions, and diplomatic instability may cause delays in the procurement of raw materials and supplies or sharp increases in procurement prices. The Transportation and Leisure & Service businesses use various forms of energy across railways, buses, taxis, marine vessels, and amusement facilities, and sharp increases in energy prices such as diesel fuel unit prices and electricity rates may significantly affect business results and financial position. As involvement with overseas markets becomes increasingly important each year, strengthening risk management is required.

Rising temperatures and the intensification and increased frequency of natural disasters may disrupt the operation of each facility. If stakeholders assess the Group's efforts to address climate change, including greenhouse gas reduction, as insufficient, this may damage social trust and affect business results and financial position. The Group recognizes climate change countermeasures as an important social issue and is working to address it.

The Group, whose main business area centers on the World Cultural Heritage site of Mt. Fuji, depends on a large number of domestic and international tourists, and there is a risk that the occurrence of terrorism or criminal acts inside or outside its facilities could diminish the area's appeal as a tourist destination. Terrorism, war, or deteriorating diplomatic relations overseas may also significantly reduce the number of foreign travelers, which could affect business results and financial position through decreased usage of railways, buses, amusement facilities, and accommodation facilities.

The population decline associated with Japan's declining birthrate and aging population may lead to a decrease in users of the Transportation and Leisure & Service businesses. A decrease in the working-age population may make it difficult to secure staff, creating risks such as increased recruitment costs and personnel expenses, decline in service levels, and reduced vehicle operations, thereby restricting business operations. Furthermore, labor shortages at other companies may also lead to increases in construction order prices and delays in construction periods for business facilities.

The Transportation and Leisure & Service businesses are capital-intensive industries requiring large-scale capital investment, and fund procurement relies mainly on borrowings from financial institutions. Although procurement is generally based on fixed interest rates, borrowings at variable interest rates as well as refinancing and new fund procurement are subject to the influence of interest rate conditions, which may affect business results and financial position.

If external factors such as infectious diseases cause long-term disruption to the flow of people, there is a risk that this could lead to a decrease in customers or disruption to business operations such as suspension of operations. Combined with the occurrence of countermeasure costs, this may affect business results and financial position. Based on past experience, the Group has a policy of taking measures to minimize the impact when such situations occur.

Amid the rapidly increasing threat of cyberattacks, there is a risk of serious disruptions occurring due to unauthorized intrusion, data tampering, leakage, destruction, or system interference. If personal information of customers, business partners, or employees is leaked externally, this may lead to a decline in social trust and affect business results and financial position. The Group strives to ensure a sufficient information security framework.

The Group holds investment securities and real estate such as land and buildings for business use and for sale. If market stagnation or other factors cause deterioration in the equity capital of investee companies or a decline in real estate values, this may result in the recognition of valuation losses, losses on sales, or impairment losses, which could affect business results and financial position. The Group has a policy of continuously monitoring the value trends of its held assets and striving to manage such risks.