(1) Business Investment Risk

The Company and its consolidated subsidiaries are engaged in investment activities in various businesses. However, the Company and its consolidated subsidiaries are exposed to various risks related to business investments, such as possible inability to recover invested capital, losses associated with the sale or exit of investments, or being unable to earn expected returns.
Furthermore, the Company and its consolidated subsidiaries participate in various businesses directly or indirectly through joint ventures or by making strategic investments in other companies. The outcome of these joint ventures and strategic investments is unpredictable and may be impacted by the following factors:

• Events that are beyond the Company and its consolidated subsidiaries’ management and control such as operating results and financial condition of partner companies or strategic investees.
• If the Company is unable to exercise sufficient control over the management, operations, or disposition of assets in equity method investees, or if it is unable to share business objectives or strategic priorities with partners, resulting in impediments to important decision-making.

Any occurrence of these events could have a significant impact on our operating results and financial condition.

The Company and its consolidated subsidiaries participate as a non-operator in certain parts of exploration, development and production activities of mineral and metal resources and oil and gas projects, which are significant to the Company and its consolidated subsidiaries’ operating results and financial condition. In these businesses, the Company and its consolidated subsidiaries carefully consider the business potential and profitability of projects based on the information and data provided by operators. However, the business operations, including decision-making for development and production, are subject to the operator’s policy and may be therefore affected by it. An operator’s failure in managing those projects may affect the Company and its consolidated subsidiaries’ operating results and financial condition significantly.

Due to this, new investment decisions are made based on analysis of strategic significance and other qualitative factors, as well as profitability and other quantitative standards, and we conduct asset reconfiguration through periodic review of the purpose for holding each investments and examining turnaround plans or exit policies for businesses that hit alert threshhold, including underperforming, unprofitable, and low-profitability businesses. In addition to the amount of risk in assets on our consolidated statements of financial position, we assess and periodically monitor the amount of off-balance-sheet risks, such as market risk and guarantees, using a set standard and periodically stress test on our Risk-adjusted assets* for various scenarios, verifying the impact on the ratio of risk assets to shareholder.

*Refers to the maximum loss exposure and is calculated by multiplying assets including trade and other receivables, other investments, fixed assets and off-balance-sheet items such as guarantees by risk weights, which we have determined individually based on the potential risk of loss.

(2) Geopolitical Risk

Increased political and social tensions between countries and regions, such as those in the Middle East, the situation in Russia and Ukraine, and relations between the United States and China, pose risks that may deteriorate the business performance of the Company and its consolidated subsidiaries operating in such countries and regions, and may consequently make it difficult to continue operations.
Due to geopolitical uncertainties, the operating environment surrounding the businesses of the Company and its consolidated subsidiaries is changing significantly, and there is an increasing need for more appropriate organizational management and more responsible and proactive approaches, as well as closer communication with stakeholders involved in each business. In order to respond flexibly in this uncertain climate caused by these heightened geopolitical risks, the Company has adopted the following risk hedging measures; however, it is difficult to avoid all geopolitical risks, which may have a significant impact on the Company’s operating results and financial condition.

• We regularly monitor the political and economic conditions and other trends in the countries and regions in which we operate, and we keep a close watch on risks and changes in the business environment in those countries and regions.
• When expanding business to regions where geopolitical risks are considered high, we reduce risk through financial means such as insurance and financing from Export Credit Agencies (ECAs).
• The Company has accumulated expertise in responding to emergencies and has established a system in which multiple local subsidiaries across countries and regions collaborate to ensure the safety of employees and business continuity in Japan and overseas.

If conflicts in the Middle East or changes in political conditions continue, or if such developments spread to surrounding regions, fluctuations in energy markets and resource prices, disruptions to logistics, increases in operating costs, and other factors may adversely affect the Company and its consolidated subsidiaries’ business activities, operating results, and financial condition. Among the investments made by the Company and its consolidated subsidiaries in the Middle East, the principal investments are other investments (financial assets measured at FVTOCI) in LNG projects. For further details, please refer to the notes to the consolidated financial statements: Note 8, “DISCLOSURES ABOUT FINANCIAL INSTRUMENTS AND RELATED MATTERS (2) Other investments.”

Concerning the Russia-Ukraine situation, the Company is complying with international sanctions imposed in coordination by the international community while continuing its business activities. However, if future developments in the situation, changes in sanctions or credit conditions, changes in the business environment arising therefrom, or changes in policies related to the Company’s associated businesses occur, these factors may have a material impact on the Company’s business activities, operating results, and financial condition. Risk exposure (gross) to Russia, comprising investments, loans, guarantees, and trade receivables, was 279.8 billion yen as of March 31, 2026, representing approximately 1.5% of the total risk exposure (gross) of the Company and its consolidated subsidiaries. Risk exposure to Ukraine is immaterial. For further information about the impact for the fiscal year ended March 31, 2026, please see Note 27, “IMPACT OF THE RUSSIA-UKRAINE SITUATION ON THE RUSSIAN LNG BUSINESS.”

(3) Country Risk

The businesses conducted by the Company and its consolidated subsidiaries worldwide are exposed to risks arising from changes in the political, economic, and social conditions of the countries in which they operate. Such changes may result in the inability to recover receivables from counterparties located in those countries, as well as investments and loans related to investees or ongoing projects, or may lead to impairment in the value of inventories, property, plant and equipment, and other assets. Furthermore, some of the Company and its consolidated subsidiaries’ business activities are exposed to concentration risk in particular industries in specific countries and regions.

Therefore, with respect to country risk, we implement appropriate risk mitigation measures according to the nature of each project, including the use of insurance and financing provided by Export Credit Agencies (ECAs). Additionally, we periodically monitor country-by-country exposures, including receivables, investments, loans, and guarantees held by the Company, and conduct quantitative and qualitative monitoring of country risk, in principle, excluding developed countries. Based on such monitoring, we formulate policies for country risk management once a year and also whenever deemed necessary. Furthermore, in the regular monitoring of the overall portfolio, we verify not only exposure by business area but also whether the level of assets by country is appropriate.

(4) Risk Regarding Climate Change

To establish a more robust business portfolio by identifying the future impact of climate change and incorporating associated growth opportunities, we have set a vision of achieving net-zero emissions by 2050, with a 2030 target of halving GHG Impact and reducing GHG emissions by 30% compared to 2020, for Scope 1+2 and Scope 3 Category 15 (Investments) of Mitsui and its consolidated subsidiaries (including un-incorporated JVs*¹), and halving GHG emissions by 2030 compared to 2020 for Scope 1 and 2 of Mitsui and its consolidated subsidiaries (excluding un-incorporated JVs*¹).

In order to enhance the resilience of our strategy by responding flexibly to changes in the global business environment, we have implemented a medium- and long-term scenario analysis. We conduct scenario analysis of transition risk by utilizing multiple scenarios set out by the International Energy Agency (IEA) and other organizations, and of physical risk with reference to the RCP (Representative Concentration Pathway) used by the IPCC (Intergovernmental Panel on Climate Change).

*1 Un-incorporated JVs (un-incorporated joint ventures).
*2 The base year emissions for a 30% reduction in GHG emissions are 44 million tons, calculated by adding the 36 million tons of GHG emissions in the fiscal year ended March 2020 to the 8 million tons of increased emissions expected during normal operation after the start of operations in thermal power generation businesses for which FID (final investment decision) had been made as of the end of the fiscal year ended March 2020.

Transition risk that are likely to occur in the medium- to long-term include the below. Over the long term, maintaining the existing portfolio could have a significant adverse effect on the Company and its consolidated subsidiaries’ operating results and financial condition due to the deterioration in value of our interests and assets.

• Policy and legal risks: Changes in the energy and power source mix due to government policies in each country, and the introduction of government-imposed greenhouse gas emission restrictions including carbon taxes, could have a significant impact on the Company and its consolidated subsidiaries’ operating results and the financial condition of the Company and its consolidated subsidiaries’ businesses that emit large amounts of greenhouse gases.
• Technology risk: The introduction of new technologies that respond to climate change may cause changes in the supply and demand of existing products and services or render existing production equipment and facilities obsolete.
• Market risk: Changes in demand for fossil fuel-related products and services, potential damage to the deterioration in value of Mitsui’s ownership interests, and decarbonization policies of financial institutions and insurance companies may adversely affect the Company’s ability to secure financing.

We regard the following four physical risk hazards as having a particularly significant impact on the Company from the present day until 2050 under the 4°C scenario: extreme heat, wildfires, water stress & drought, and tropical cyclones. The number of companies exposed to a high degree of risk related to extreme heat in 2050 will be approximately 80% of the 65 companies analyzed, with nearly half exposed to risk related to wildfires, water stress & drought, and tropical cyclones. Among these, the number of companies exposed to high degree of risk related to wildfires will be approximately double what it is today. Many companies are currently exposed to a high degree of risk related to tropical cyclones, and although there will only be a small increase in the number of companies exposed to a high degree of risk, there is concern that the frequency and magnitude of their occurrence will make damage more severe. For these risks, the Company and its consolidated subsidiaries implement measures such as insurance coverage, the use of multiple suppliers, the establishment of crisis management policies, and the physical reinforcement of equipment. However, physical risk cannot be completely avoided and may have a significant impact on the Company and its consolidated subsidiaries’ future operating results and financial condition.

Moreover, we have introduced an internal carbon pricing system to increase resilience and accelerate the development of projects that contribute to reducing GHG emissions and have integrated it into our project screening process.

For further information about risk and opportunity related to climate change in each operating segment, please see “1. Management Policies, Operating Environment, and Management Issues, (2) Operating Environment 2) Operating Segments.” For further information about the Company and its consolidated subsidiaries’ initiatives related to climate change, including our response to risk, please see “2. Disclosure of Sustainability-related Financial Information, (5) Climate Change Response.”

(5) Commodity Price Risk

The production and trading of various commodities, including iron ore, metallurgical coal, copper, crude oil, natural gas, and LNG, are important business areas for the Company and its consolidated subsidiaries. The prices of these commodities can be volatile in a short period or seasonally fluctuate by various factors such as an imbalance of supply and demand, changes in the economy, inventory adjustment, and exchange rate fluctuations. These factors are beyond the Company and its consolidated subsidiaries’ control.

Price fluctuations directly affect revenues from the equity share of production at our subsidiaries and equity method investees. For the year ending March 31, 2027, we estimate that the impact of a change of 1 USD per barrel of crude oil and 1 USD per ton of iron ore on profit for the year attributable to owners of the parent would be approximately 1.3 billion yen and 3.0 billion yen respectively (excluding the effects of hedging). For further information about the impact of commodity price fluctuations on our operating results, please see “1. Management Policies, Operating Environment, and Management Issues, (5) Forecast for the Year Ending March 31, 2027” and “4. Management’s Discussion and Analysis of Financial Position, Operating Results and Cash Flows, (4) Discussion and Analysis of Operating Results for the Years Ended March 31, 2026 and 2025”

As a result, the Company and its consolidated subsidiaries have formulated market risk management policies including commodity price risk and have established management systems at several levels. In particular, regarding commodity price risk, Chief Operating Officers have the primary responsibility of establishing risk management policies that prescribe the setting of limits on positions and losses, as well as prescribing management systems at each business unit. They also have the responsibility of obtaining the approval of our Executive Officers in charge of risk management, and carrying out management and reporting in accordance with such approval. In addition, risk management sections, which are independent from trading sections, monitor, analyze, and evaluate market risk and periodically report to the executive officers in charge.

Furthermore, in conducting sales activities related to marketable commodities, the Company and its consolidated subsidiaries use derivative instruments such as commodity swap contracts to hedge the cash flows from contracted positions, and apply hedge accounting to a portion of such hedges. For further information about risk management, please see Note 8, “DISCLOSURES ABOUT FINANCIAL INSTRUMENTS AND RELATED MATTERS (6) Risk-related matters” and “(7) Derivative instruments and hedge accounting.”
Unexpected market fluctuations may significantly affect the Company and its consolidated subsidiaries’ business, operating results and financial condition in the following ways:

• At businesses such as mineral and metal resources and energy development projects, in which large amounts of investment have been made, the invested amount may not be recoverable through sales of the produced commodities due to a fall in price and we may have difficulty in divesting our equity stake at a reasonable price.
• A decline in the value of our investments in LNG projects and other investments which are recognized as fair value through other comprehensive income (“FVTOCI”), could affect the Company and its consolidated subsidiaries’ comprehensive income.

(6) Foreign Exchange Risk

The Company and its consolidated subsidiaries are exposed to the conversion risk of assets and liabilities denominated in foreign currencies. Exchange rate fluctuations may reduce the value of investments in overseas subsidiaries and associated companies as well as that of FVTOCI, and significantly affect our comprehensive income and financial condition.

For the year ending March 31, 2027, we estimate the impact on profit for the year attributable to owners of the parent to be 4.6 billion yen per 1 yen change in the USD/JPY exchange rate, and 1.8 billion yen per 1 yen change in the AUD/JPY exchange rate. For further information about the impact of foreign exchange rate price fluctuations on our operating results, please see “1. Management Policies, Operating Environment, and Management Issues, (5) Forecast for the Year Ending March 31, 2027” and “4. Management’s Discussion and Analysis of Financial Position, Operating Results and Cash Flows, (4) Discussion and Analysis of Operating Results for the Years Ended March 31, 2026 and 2025.”

Due to this, the Company and its consolidated subsidiaries have formulated market risk management policies including foreign exchange risk and have established management systems at several levels. In particular, regarding foreign exchange risk, Chief Operating Officers have the primary responsibility of establishing risk management policies that prescribe the setting of limits on positions and losses, as well as prescribing management systems at each business unit. They also have the responsibility of obtaining the approval of our Executive Officers in charge of risk management, and carrying out management and reporting in accordance with such approval. In addition, risk management sections, which are independent from trading sections, monitor, analyze and evaluate foreign currency risk and periodically report to the Executive Officers in charge.

Furthermore, the Company and its consolidated subsidiaries use derivative instruments, such as foreign exchange forward contracts and currency swap agreements, as hedging instruments partially for hedge accounting to fix the expected future cash flows from foreign-currency-denominated receivables and payables resulting from selling and purchasing activities in currencies other than the local currency. The Company and its consolidated subsidiaries also use foreign-currency-denominated debt in order to mainly hedge the foreign currency exposure in the net investment in foreign operations.

For further information about risk management, please see Note 8, “DISCLOSURES ABOUT FINANCIAL INSTRUMENTS AND RELATED MATTERS (6) Risk-related matters” and “(7) Derivative instruments and hedge accounting.”

(7) Stock Price Risk of Listed Stocks We Hold

The Company and its consolidated subsidiaries invest in marketable equity financial assets, for the purpose of creating business opportunities, or building, maintaining, or strengthening business and collaborative relationships, and are exposed to the risk of stock price fluctuations. As of March 31, 2026, the Company and its consolidated subsidiaries’ marketable equity financial assets recognized as FVTOCI were carried at a fair value of 1,479.3 billion yen, representing 7.1% of our total assets. While the Company and its consolidated subsidiaries periodically review our investment portfolio, and covers all listed stocks, a decline in the stock market could significantly affect the value of the Company and its consolidated subsidiaries’ investment portfolio and financial condition due to the decline of other comprehensive income.

The Company and its consolidated subsidiaries have formulated market risk management policies including stock price risk and have established management systems at several levels. In particular, we manage the stock price risk by analyzing factors behind market capitalization fluctuations. For further information about risk management, please see Note 8, “DISCLOSURES ABOUT FINANCIAL INSTRUMENTS AND RELATED MATTERS (6) Risk-related matters.”

(8) Credit Risk

The Company and its consolidated subsidiaries are exposed to significant credit risk related to various customers and businesses with which it has commercial and financing transactions.

While many of the Company and its consolidated subsidiaries’ customers purchase products and services from the Company and its consolidated subsidiaries on a deferred payment basis, the Company and its consolidated subsidiaries may also provide financing programs associated with sales contracts or debt guarantees for customers’ borrowings. As of March 31, 2026, the balance of current trade and other receivables (less loss allowance - current) was 2,344.5 billion yen, representing 11.3% of our total assets. The balance of loss allowance - current was 17.1 billion yen. Furthermore, the Company and its consolidated subsidiaries provide significant loans and guarantees with collection risk to finance various projects.

Therefore, we manage credit risk through the management of commitment lines of credit approved by an appropriate person with authority and through monitoring past-due status of credit. In addition, we require collateral and/or other forms of security from counterparties as necessary. For further information about risk management, please see Note 8, “DISCLOSURES ABOUT FINANCIAL INSTRUMENTS AND RELATED MATTERS (6) Risk-related matters.”

Even if the measures for credit risk are implemented, it is not possible for the Company and its consolidated subsidiaries’ credit risk management policy to completely eliminate risk relating to the deterioration of the financial positions of the Company and its consolidated subsidiaries’ counterparties. Furthermore, factors such as insolvencies among the Company and its consolidated subsidiaries’ customers caused by liquidity crises, sudden falls in real estate market or stock market prices, or increases in company bankruptcies may make it difficult for the Company and its consolidated subsidiaries to collect receivables and significantly affect our future operating results and financial condition.

(9) Risk Regarding Financing

Turmoil in financial markets, a downgrade in our credit rating or significant changes in the lending or investment policies of our lenders or institutional investors could result in constraints on financing together with an increase in financing costs, and could have an impact on the Company and its consolidated subsidiaries’ financial condition and liquidity.

We obtain long-term funds (those with maturities of around 10 years), and at the same time, we minimize our refinance risk by deconcentrating the amount of long-term debt to be repaid each fiscal year. We also hold sufficient cash and cash equivalents in order to maintain liquidity to flexibly meet capital requirements and to minimize the harmful effect of a deterioration in financial markets on future interest-bearing debt repayments.

For information on our funding sources and credit ratings, please see “4. Management’s Discussion and Analysis of Financial Position, Operating Results and Cash Flows, (5) Liquidity and Capital Resources.”

(10) Operational Risk

In each segment, namely, Mineral & Metal Resources, Energy, Machinery & Infrastructure, Chemicals, Iron & Steel Products, Lifestyle, and Innovation & Corporate Development, the Company and its consolidated subsidiaries engage in a diversified range of services, including trading, manufacturing, transport, and financial services involving various commodities. Making full use of the global network, the Company and its consolidated subsidiaries engage in a wide range of initiatives that include development of natural resources and infrastructure projects, business investment in relation to the environment, new technologies, next-generation fuels and wellness, and value creation that leverages digital tools. These businesses are exposed to various operational risks such as fires, explosions, accidents, export and import restrictions, and natural disasters. In the event such accidents and disasters were to occur, they could significantly affect the Company and its consolidated subsidiaries’ operating results and financial condition.

If an environmental accident were to occur, as the owner of mineral resource and energy interests, regardless of the degree of the Company and its consolidated subsidiaries’ contribution to such an accident or any acts of negligence, the Company and its consolidated subsidiaries may be imposed to bear fines or payments for compensation from environmental authorities or other concerned parties, which may significantly affect the Company and its consolidated subsidiaries’ operating results and financial condition, even in situations where the Company and its consolidated subsidiaries are not involved in any actual operations as a non-operator. These fines and/or compensation payments may include clean-up costs, compensation for environmental damages, compensation for health hazards and/or property damage to those affected by the accident, compensation for absence from work and/or for loss of earnings.

The Company and its consolidated subsidiaries consider risk measures for risk mitigation and damage prevention and have insurance for accidents, disasters, etc. to the extent possible and appropriate, however they may not be able to cover all the damage.

(11) Risks Regarding Employee’s Compliance with Laws, Regulations, and Internal Policies

Given the scale, operational scope and geographic breadth of the Company and its consolidated subsidiaries, we revised Mitsui & Co. Group Conduct Guidelines - With Integrity in May 2024 to articulate our Group-wide approach to integrity and compliance, including adherence to applicable laws and internal rules by all officers and employees. We continuously send out messages from management, have established channels for reporting compliance-related matters within or outside of the administrative chain of command, fostering a “speak up” culture, handling any cases of compliance violations strictly. For further information, please see “4. Corporate Information 4. Corporate Governance (1) Overview of Corporate Governance 3) Status of Internal Control System iv) Compliance structure.”

However, such efforts are not possible to completely prevent all instances of illegal conduct. If any violations of laws—such as trading and investment regulations, antitrust laws, anticorruption laws, or tax laws in Japan or other jurisdictions—or transactions deviating from internal rules were to occur, they could result in unforeseen losses or unmanageable risks, and depending on their nature, employees’ misconduct could have a significant impact on business activities, reputation, operating results, and financial condition of the Company and its consolidated subsidiaries.

(12) Risks Regarding Information Systems and Information Security

As the operation of our global communication network progresses and with the recent worldwide cyber-attacks on the increase, it is important to properly operate IT systems, grasp the value of information and handle it properly. We enhance the safety and security of information systems by internal control through development of related regulations to properly secure confidentiality, integrity, and availability on information and information systems for the Company and its consolidated subsidiaries. We reduce risk on data breaches by improved guidelines for better risk management, conduct internal training regularly, and tackle external threats with various measures, including the security monitoring of our IT networks.

However, we cannot eliminate all possibilities of destruction or theft of confidential business information triggered by unexpected serious IT system troubles, and unforeseeable threats against our IT system infrastructure or communication networks. Such situations could seriously reduce our operational efficiency or jeopardize our ability to maintain or expand our business activities, which may have a significant impact on the Company and its consolidated subsidiaries’ business, operating results, and financial condition. In addition, we have insurance to cover damage caused by external cyber-attacks to the extent possible and appropriate, however, it may not be possible to cover all damages.

For further information about governance and strategy based on discussions about cybersecurity and the use of AI, please refer to “2. Disclosure of Sustainability-related Financial Information (7) Information Security.”

(13) Risk Regarding Human Capital Constraints

The Company and its subsidiaries have consistently believed that people are the source of our sustainable value creation and have dedicated ourselves to acquiring and developing talent, continuous talent management, and organizational development. In our businesses, we deploy human capital engaged in planning and evaluating business, executing projects and managing and supervising workforce. However, we may have a shortage of people, which could cause a loss of opportunities to create business value or hinder stable operations in certain business areas, which in turn may affect the Company and its consolidated subsidiaries’ future business, operating results and financial condition. For further information about our initiatives related to human resources strategy, please see “2 Disclosure of Sustainability-related Financial Information, (8) Human Resources Strategy”.

(14) Risk Regarding Human Rights

The Company and its consolidated subsidiaries provide a wide range of functions and services globally, from upstream to downstream, and operate diverse businesses, thereby affecting a broad range of stakeholders. If it becomes apparent that the Company and its consolidated subsidiaries’ business activities, or their involvement with investees or business relationships in the supply chain, have caused negative impacts on human rights or contributed to human rights violations, the Company and its subsidiaries may suffer damage to its social trust and reputation, and incur additional costs associated with remediation and mitigation of such impacts. Such circumstances could have a material impact on the Company and its consolidated subsidiaries’ operating results and financial condition.

Recognizing that respect for human rights is required not only within the Company but also across its investee companies and throughout the supply chain, the Company identified “Cultivate societies that respect human rights” as an standalone material issue in its 2025 materiality review. Further, the Company clarifies the importance of human rights in the “Mitsui & Co. Group Conduct Guidelines - With Integrity”, and promotes its incorporation into the management philosophies and codes of conduct of each Group company. In addition, the Company identifies and assesses adverse human rights impacts related to its business activities based on its human rights due diligence framework, and strives to prevent and mitigate such impacts. Where material human rights issues are identified, the Company confirms the facts and, taking into account the nature of its involvement with the relevant parties and its degree of leverage, requests corrective actions and considers and implements appropriate measures toward resolution. If no improvement is observed, the Company considers reviewing the relevant business relationships, including termination. In addition, the Company is strengthening its initiatives to promote respect for human rights in its business activities through collaboration with suppliers and other business partners, including incorporating human rights clauses into commodity trading agreements and integrating human rights risk management approaches into existing internal processes.
For further information about our initiatives to respect human rights, including measures to address human rights-related risks, please see “2. Disclosure of Sustainability related Financial Information (6) Supply Chain and Human Rights.”

(15) Risks Relating to Natural Disasters, Terrorism, Violent Groups, and Infectious Disease

Earthquakes and floods, terrorism, infectious diseases, power shortages, etc., could affect the Company and its consolidated subsidiaries’ businesses in the countries and regions in which it conducts business activities. The Company and its consolidated subsidiaries have implemented measures such as creating a Business Continuity Plan (BCP), developing a disaster contingency manual, introducing a safety confirmation system for employees, reinforcing earthquake resistance and conducting emergency drills. However, despite these measures, there is no assurance that all damage and impact can be completely avoided, and they may significantly affect the Company and its consolidated subsidiaries’ operating results and financial condition.

In addition to the principal risks as of March 31, 2026, we recognize the following risk factors which may have an impact on the Company and its consolidated subsidiaries’ operating results, financial condition, and cash-flow. However, these do not cover all risk factors.

• General Risks Not Unique to Mitsui & Co. and its Subsidiaries

- Risk of Changes in Global Macroeconomic Environment

Rapid technological innovation and changes in industry structures, both globally and within specific regions, as well as policy changes related to economic security and tariffs in response thereto, and rising political and social tensions between countries and regions, may lead to fluctuations in the macroeconomic environment. These factors may affect economic conditions, including availability of resources and energy, as well as the markets for products and materials, personal consumption, and capital investment. Consequently, demand for products and services of the Company and its consolidated subsidiaries may fluctuate, potentially having a material impact on the business activities, future operating results, and financial condition of the Company and its consolidated subsidiaries.

- Risks Associated with Laws and Regulations

The Company and its consolidated subsidiaries’ business operations are subject to extensive laws and regulations in Japan and other countries throughout the world. The Company and its consolidated subsidiaries’ operations are subject to laws and regulations governing, among other things, commodities, consumer protection, business and investment approvals, environmental protection, currency exchange control, import and export (including restrictions from the viewpoint of national and international security), investments, sanctions, taxation, and antitrust. These laws and regulations may be amended by the authorities without prior notice or compensation for any disadvantage caused to the Company and its consolidated subsidiaries. For instance, many of the Company and its consolidated subsidiaries’ infrastructure projects in developing countries are subject to less developed legal systems. As a result, our costs may increase due to factors such as the lack of a comprehensive set of laws and regulations, an unpredictable judicial system based on inconsistent application and interpretation of laws and regulations, and changing practices of regulatory and administrative bodies. For example, we are subject to sudden and unpredictable changes to: tariffs for products and services that we provide; technical specifications with respect to environmental regulations; income tax and customs duty rates in certain countries or regions; and foreign currency exchange controls with respect to repatriation of investments and dividends.

The Company and its consolidated subsidiaries are subject to complex sets of environmental regulations in the United States, Australia, Brazil, Chile, Russia, the Middle East, Mozambique, and other locations. These laws and regulations may require us to perform site clean-ups, require us to curtail or cease certain operations; impose fines and payments for significant environmental damage; require us to install costly pollution control equipment; and require us to modify our operations.

Further, while the Company and its consolidated subsidiaries are involved in the exploration, development and production activities through various contractual arrangements for concessions, the contracts may not be honored or extended when they expire. Moreover, the regulatory bodies of these areas may unilaterally intervene or even alter the contractual terms of our oil and gas as well as mineral and metal resource producing operations involving production rates, pricing formulas, royalties, environmental protection cost, land tenure or otherwise. If these regulatory bodies unilaterally alter such contractual terms, or if the cost of complying with revised or newly established laws and regulations increases, the Company and its consolidated subsidiaries’ business, operating results and financial condition could be affected. Development of projects may face schedule delays than originally planned due to difficulties in technical conditions, procurement of materials, financial conditions and government regulations including environmental aspect.

- Risk Due to Competition

The markets in which the Company and its consolidated subsidiaries provide products and services are generally competitive. Other Japanese global investment and trading companies as well as other competitors, which engage in similar business activities in various fields, may have stronger business associations and relationships with the Company and its consolidated subsidiaries’ customers, suppliers and business partners in both domestic and global markets; or stronger global network and regional expertise, diversified global customer bases, greater financial engineering skills and market insights. Unless the Company and its consolidated subsidiaries can successfully continue to meet the changing needs of our customers by providing them with innovative and integrated services in a cost effective manner, we may lose our market share or relationships with our existing customers, and there may be an impact on the Company and its consolidated subsidiaries’ operating results and financial condition.

- Interest Rate Risk

The Company and its consolidated subsidiaries are exposed to risk associated with interest rate fluctuations, which may affect our overall operational costs and the value of our financial assets and liabilities, particularly our debt obligations from the capital markets and borrowings from financial institutions. An increase in interest rates, especially in Japan and the United States, may affect the Company and its consolidated subsidiaries’ operating results.

For information on the status of the Company and its consolidated subsidiaries’ funding, please see “4. Management’s Discussion and Analysis of Financial Position, Operating Results and Cash Flows, (5) Liquidity and Capital Resources” and Note 8, “DISCLOSURES ABOUT FINANCIAL INSTRUMENTS AND RELATED MATTERS.”

- Risks Regarding Defined Benefit Pension Costs and Obligations

Declines in the market value of domestic and foreign government bonds, other debt securities and marketable equity securities would reduce the value of the Company and its consolidated subsidiaries’ pension plan assets. A decline in the value of our pension plan assets or an increase in our defined benefit obligations could affect the Company and its consolidated subsidiaries’ operating results and financial condition due to the decline of other comprehensive income and retained earnings.

For information on our defined benefit costs, please see “4. Management’s Discussion and Analysis of Financial Position, Operating Results and Cash Flows, (6) Critical Accounting Policies and Estimates” and Note 18, “EMPLOYEE BENEFITS.”

- Risks Associated with Litigation and Other Disputes

The Company and its consolidated subsidiaries’ business operations are conducted in numerous countries and regions around the world, which subjects the Company and its consolidated subsidiaries to risk of disputes and litigation as part of its operations. In the normal course of our business, lawsuits and other disputes may arise incidentally or claims that do not develop into lawsuits may be brought against the Company and its consolidated subsidiaries.

Due to the inherent uncertainty of lawsuits and other disputes, it is not possible to predict the ultimate outcome of the lawsuits or other disputes in which the Company and its consolidated subsidiaries are involved. There is no assurance that the Company and its consolidated subsidiaries will prevail in any lawsuit or other dispute or that it will not be materially adversely affected by such action in the future. For information on the status of significant litigation, please see “ll. LITIGATION AND OTHER DISPUTES on Note 25, CONTINGENT LIABILITIES.”