a. Impact from the trend of lower fertility and population aging

If there is a decrease in the regional population due to factors such as a trend of lower fertility and population aging, it could have an impact on the financial position and business performance of the Group.

b. Impact of risks related to the areas along the railway lines

Because the Group's business is focused on the areas centered around our railway lines running from central Tokyo to the Miura Peninsula while passing through Shinagawa, Haneda Airport, Kawasaki, and Yokohama, the development of the areas along the railway lines and the business performance of the Group are closely related. For this reason, if there is interference with the development of the areas along the railway lines due to social or natural factors, etc. or the areas along the railway lines suffer destructive damage, it could have a significant economic impact on the Group.

c. Impact of changes in lifestyles

Changes in lifestyles, such as reduced mobility due to an increase in teleworking, it could have an impact on the financial position and business performance of the Group.

d. Impact of development in the vicinity of Shinagawa Station

The restructuring of the Company’s existing facilities in the vicinity of Shinagawa Station along with development in the vicinity of Shinagawa Station could have a temporary impact on the financial position and business performance of the Group. In addition, if renting demand for real estate decreases significantly due to new lifestyles, changes in social values, etc., the development plan may be changed.

e. Impact of new rail line for accessing Haneda Airport

New rail lines for accessing Haneda Airport are being considered and if there is intensified competition in the future due to such a line, it could have an impact on the financial position and business performance of the Group.

f. Impact of decrease in foreigners visiting Japan

If there is a significant decrease in foreigners visiting Japan due to factors such as a global depression or significant slowdown in the economy, particularly in the countries of Asia, changes in the security situation as a result of heightened political or military tensions in the eastern region of Asia or restrictions on international travel caused by the spread of infectious diseases, etc., it could have an impact on the financial position and business performance of the Group.

a. Impact of legal restraints

The Group's mainstay transportation business is subject to stringent legal restraints due to the public nature of such means of transportation as railways and buses, and there are regulations concerning the expansion and contraction of business, standard business operations, and setting and changing fares and fees as prescribed in the Railway Business Act and Road Transportation Act. Accordingly, changes in social conditions could have an impact on the financial position and business performance of the Group.

b. Impact of deregulation

In areas of operation such as the bus business, it is possible that competition will continue to become more intense because of the ease of entry for new operators from other industries arising from the relaxation of regulations, which could have an impact on the financial position and business performance of the Group.

c. Impact of environmental regulations

In the transportation business, although public transport institutions have the advantage of having a small environmental footprint, if environmental regulations are strengthened in the future, it could have an impact on the financial position and business performance of the Group.

a. Impact of interest rate fluctuations or credit rating downgrade

The Group makes large-scale capital expenditures in its railway business and other businesses, and it has a high balance of interest-bearing debt including borrowings from financial institutions and bonds. For this reason, if there is a major fluctuation in market interest rates or a downgrading by a ratings agency of a bond issued by the Company, it could result in an increase in the interest rate burden or change in procurement interest, which could have an impact on the financial position and business performance of the Group.

b. Impact of turmoil in the financial markets

If there are restrictions on financing due to factors such as turmoil in the financial markets, it could have an impact on the financial position and business performance of the Group.

c. Impact of fluctuations in land prices or stock prices or changes in tax systems

The Group needs to hold much land (business use and sales use) and investment securities including stocks due to the nature of its business, and a significant decline in land prices or stock prices due to market trends or changes in tax systems including an increase in taxes levied on holdings could have an impact on the financial position and business performance of the Group.

d. Impact of an increase in personnel expenses

Because the Group is mainly engaged in labor-intensive businesses, if there is a drastic increase in wage levels due to the impact of a labor shortage caused by an increase in the number of retirees and difficulty in recruiting personnel, it could have an impact on business performance as a result of increasing personnel expenses.

e. Impact of drastic increase in commodity prices or fuel expenses

Because the Group conducts ongoing repair work and consumes large amount of power and gas oil as required for business, if there is drastic increase in commodity prices or fuel prices or if there is a shortage in supply of such commodities or fuel, it could have an impact on the financial position and business performance of the Group.

a. Impact of an incident interfering with safety

The Group's business facilities that include railways, buses, hotels, department stores, and supermarkets are used by many customers, and the Group considers ensuring safety and continuing to avoid accidents to be its most important issue. Accordingly, if an incident such as an unforeseen fire, accident, or damage that leads to a loss of confidence toward safety, it could have a significant impact that would rock the foundation of the Group as a whole. In addition, although the Group takes sufficient care toward hygiene management in its businesses that handle food, etc., in the event of a general quality problem in management handled by the Group or in society in general, it could have an impact on the financial position and business performance of the Group.

b. Impact of problems related to the leakage of personal information, etc.

The Group holds personal information in its railway business, credit card business, and other businesses, and although it endeavors to manage this information appropriately, in the event of a problem such as the leakage of personal information, it could have an impact on the financial position and business performance of the Group.

a. Impact of a natural disaster or unlawful act

If the business facilities or equipment such as the computer systems of the Group are damaged as a result of a natural disaster such as an earthquake or typhoon or an unlawful act such as an act of terrorism, it could have a significant impact on the financial position and business performance of the Group.

b. Impact of the outbreak or spread of a disease

If customers or employees become infected or are injured as a result of panic related to the outbreak or spread of a disease, such as a new kind of virus, it could have a significant impact on the financial position and business performance of the Group.

In particular, although the Group is responding to the outbreak of the novel coronavirus disease (COVID-19) based on the Business Continuity Plan, customers or employees could become infected. In addition, there is the possibility of a larger-than-expected negative impact, such as a significant decrease in foreigners visiting Japan, and depending on the future spread of infections and when the infections will be brought under control, there could be a significant impact on the financial position and business performance of the Group.

Although the Group raises awareness through activities including regular training on compliance based on its Compliance Rules, Keikyu Group Compliance Policy and Standards of Conduct for Keikyu Group Officers and Employees, in the event of a significant inappropriate or unlawful act or misconduct by an employee or officer that results in a decline in trust in the Group, it could have an impact on the financial position and business performance of the Group.
Note that the items stated above are examples of major risks that are specific as possible that can be expected for the Group's business and other matters related to the Group, and the statements here do not necessarily cover all risks related to the Group.