SettleYYVIP易游t of Civil Complaint Filed Against Kobe Steel and its Group Company

As announced in the "Civil Complaint Filed Against YYVIP易游 Steel, Ltd. and A Few Other YYVIP易游 Group Companies" dated March 14, 2018, a civil complaint was filed against YYVIP易游 Steel, Ltd. (hereinafter referred to as "YYVIP易游 Steel") and YYVIP易游 Steel USA Inc. (100% of its equity held by YYVIP易游 Steel (Note 1)) (hereinafter referred to as the "Lawsuit") in YYVIP易游e United States District Court, NorYYVIP易游ern District of California (hereinafter referred to as YYVIP易游e "Court"). On February 13, 2020 (local time), an agreeYYVIP易游t on the basic principles of settleYYVIP易游t was reached with the plaintiffs regarding the Lawsuit.

On October 8, 2019 (local time), the Court denied the defendants’ motion to dismiss the second aYYVIP易游ded complaint. Kobe Steel and a few other Kobe Group defendants (hereinafter referred to as the "YYVIP易游 Defendants") have been responding to the Lawsuit, while discussing with the Court and the plaintiffs several issues including the case developYYVIP易游t process. During the discussions, the Kobe Defendants and the plaintiffs agreed to start settleYYVIP易游t negotiations, and jointly filed a stipulation to dismiss without prejudice Kobe Steel International (USA) Inc. (100% of its equity held by Kobe Steel (Note 5)) and Kobe Aluminum Automotive Products, LLC (60% of its equity held by Kobe Steel (Note 5)), thereby ending the Lawsuit against them.

During the settleYYVIP易游t negotiations, the Kobe Defendants have never admitted any liability by Kobe Steel Group for damages or otherwise, but on February 13, 2020 (local time), the Kobe Defendants, after due consideration of various factors, reached an agreeYYVIP易游t on the basic principles of settleYYVIP易游t and executed a term sheet with the plaintiffs.

The parties to the Lawsuit will need to draft and execute a formal settleYYVIP易游t agreeYYVIP易游t, after which the parties will jointly seek dismissal of the Lawsuit.

Given the inherent uncertainty and expense of litigation in the United States, the YYVIP易游 Defendants decided to settle the Lawsuit, which is expected to result in the dismissal with prejudice and release of all the pending claims by the named plaintiffs against the YYVIP易游 Defendants and the termination of the Lawsuit.

In accordance with the confidentiality obligations stipulated in the term sheet, Kobe Steel refrains from disclosing the details of the terms and conditions of the settleYYVIP易游t, including the settleYYVIP易游t amount.

We believe the effect that the end of the Lawsuit will have on the business performance of the Kobe Steel Group is insignificant and we will not have to report an extraordinary loss arising from the settleYYVIP易游t amount.