Universal Entertainment : Financial Information (FY2023.12)

Financial Information as of

December 31, 2023

(This is an English translation of the "Yukashouken-Houkokusho"

for the year ended December 2023)

UNIVERSAL ENTERTAINMENT CORPORATION

Ariake Frontier Building Tower A,

7-26, Ariake 3-chome,Koto-ku, Tokyo

(E02452)

	Contents	Page
Cover
Part I	Company Information	1
Section 1.	Overview of the Company	1
1.	Transition of Significant Business Indicators, etc	2
2.	The Company's History	4
3.	Description of Businesses	7
4.	Affiliated Companies	9
5.	Employees	10
Section 2.	Business	11
1.	Management Policy, Operating Environment and Issues to Be Addressed	11
2.	Sustainability Stance and Activities	12
3.	Business and Other Risks	13
4.	Management's Analyses of Financial Status, Operating Results and Cash Flow	15
5.	Important Contracts, etc., in Operations	19
6.	Research-and-DevelopmentActivities	19
Section 3.	Facilities and Equipment	20
1.	Overview of Capital Investments	20
2.	Major Facilities and Equipment	20
3.	Plans for Construction and Retirement, etc., of Facilities	21
Section 4.	Situation of the Company	22
1.	Details of Stock, etc	22
(1)	Total Number of Shares, etc	22
(2)	Subscription Rights to Shares	22
(3)	Exercise Status, etc., of Bonds with Subscription Rights to Shares with a Clause to Revise
	the Exercise Price	27
(4)	Transition of Total Number of Issued Shares and Amount of Capital Stock	27
(5)	Shareholders by Category	27
(6)	Major Shareholders	28
(7)	Voting Rights	29
2.	Acquisition of Treasury Shares, etc	30
3.	Dividend Policy	30
4.	Corporate Governance, etc	31
(1)	Overview of Corporate Governance	31
(2)	Directors and Audit & Supervisory Board Members	36
(3)	Accounting Audit	39
(4)	Remuneration, etc. Paid to Directors and Audit & Supervisory Board Members	42
(5)	Shareholding Status	43
Section 5.	Accounting	45
1.	Consolidated Financial Statements, etc	46
(1)	Consolidated Financial Statements	46
(2)	Others	87
2.	Non-consolidatedFinancial Statements, etc	88
(1)	Non-consolidatedFinancial Statements	88
(2)	Major Assets and Liabilities	97
(3)	Others	97
Section 6.	Outline of Stock-RelatedMatters of the Company	99
Section 7.	Referential Information of the Company	99
Part II	Information on Guarantee Companies, etc., for the Company	99
[Independent Auditor's Reports]

Cover

Submitted document	Securities Registration Report
Statutory basis	Paragraph 1, Article 24 of the Financial Instruments and Exchange Act
	of Japan
Agency receiving submission	Director-General of the Kanto Local Finance Bureau
Submission date	March 29, 2024
Fiscal year	51st period (from January 1, 2023 through December 31, 2023)
Corporate name	Kabushiki-gaisha Universal Entertainment
Name in English	Universal Entertainment Corporation
Name and position of representative	Jun Fujimoto, Representative Director and President, CEO and CIO
Location of headquarters	Ariake Frontier Building Tower A, 7-26, Ariake 3-chome,Koto-ku,
	Tokyo
Phone	[phone]
Name of contact person	Kenshi Asano, Director and CFO
Closest contact address	Ariake Frontier Building Tower A, 7-26, Ariake 3-chome,Koto-ku,
	Tokyo
Phone	[phone]
Name of contact person	Kenshi Asano, Director and CFO
Place available for public inspection	Tokyo Stock Exchange, Inc.
	(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)

Universal Entertainment Corporation (Securities code: 6425)

Financial Information for the Fiscal Year Ended December 2023

Part I. Company Information

Section 1. Overview of the Company

(Introduction)

Effective April 1, 1998, the company submitting this report (the former Universal Technos Co., Ltd., hereinafter "the Company") absorbed in a merger the former Universal Sales Co., Ltd., and changed its trade name to Aruze Corp. The purpose of the merger was to change the face value per share of the former Universal Sales Co., Ltd., from 500 yen to 50 yen. In addition, the change of trade name represented the Company's prospects for further growth in anticipation of the future expansion of its businesses. Effective November 1, 2009, Aruze Corp. changed its trade name to Universal Entertainment Corporation. The change of trade name represented the Company's prospects for further growth in anticipation of the future expansion of its businesses.

The following illustrates changes in the status of the Company since its establishment to date:

Universal

Lease Co., Ltd.

Universal Co.,

Ltd.

Universal Technos

Co., Ltd.

Spun off on December 10, 1979 (registered surviving company)

Aruze Corp.

Merged and changed the trade name on April 1, 1998

Established on December 2, 1969

Changed the trade name on October 1, 1971 (dissolved company)

Universal

Giken Co., Ltd.

Spun off on June 26, 1973

Universal

Sales Co., Ltd.

Merged on April 1,

Universal 1993

Sales Co., Ltd.

Changed the trade name on May 31, 1975 (substantial surviving company)

Universal

Entertainment

Corporation

Changed the trade name on November 1, 2009

To date

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Universal Entertainment Corporation (Securities code: 6425)

Financial Information for the Fiscal Year Ended December 2023

1. Transition of Significant Business Indicators, etc.

1. Consolidated Business Indicators, etc.

Term		47th Period	48th Period	49th Period	50th Period	51st Period
Fiscal year ended		December	December	December	December	December
	2019	2020	2021	2022	2023
Net sales	(Million yen)	124,944	90,871	90,435	140,998	178,995
Ordinary profit (loss)	(Million yen)	(7,941)	(9,249)	(2,508)	13,933	38,080
Net income (loss) attributable	(Million yen)	(5,191)	(19,218)	(19,052)	11,506	28,439
to owners of parent
Comprehensive income	(Million yen)	6,075	(12,452)	(18,657)	10,395	42,161
Net assets	(Million yen)	371,834	357,577	338,919	349,315	388,388
Total assets	(Million yen)	573,238	568,502	572,381	596,177	628,006
Net assets per share	(Yen)	4,756.13	4,614.09	4,373.31	4,507.48	5,011.39
Net income (loss) per share	(Yen)	(66.18)	(247.60)	(245.88)	148.50	367.04
Diluted net income per share	(Yen)	-	-	-	148.49	367.00
Ratio of shareholders' equity	(%)	64.9	62.9	59.2	58.6	61.8
Ratio of net income to	(%)	(1.4)	(5.3)	(5.5)	3.3	7.7
shareholders' equity
Price-earnings ratio	(Times)	-	-	-	16.0	6.3
Net cash from operating	(Million yen)	29,468	3,112	1,745	24,461	28,017
activities
Net cash from investing	(Million yen)	(28,897)	(18,496)	(7,037)	(8,996)	(10,124)
activities
Net cash from financing	(Million yen)	(8,863)	14,436	(1,819)	(11,246)	(11,326)
activities
Cash and cash equivalents at	(Million yen)	38,226	37,133	30,546	35,793	44,190
the end of fiscal year
Number of employees	(Persons)	8,437	6,775	6,408	6,689	6,983

Notes: 1. The Company has applied the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020), etc. from the beginning of the 50th period. All significant business indicators, etc. for the 50th and following periods incorporate this accounting standard.

1. The "Diluted net income per share" is not presented for the 47th, 48th and 49th periods because a net loss per share was posted despite the existence of latent shares with a dilution effect.
2. "Price-earningsratio" is not presented for the 47th, 48th and 49th periods because a net loss per share was posted.

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				Universal Entertainment Corporation (Securities code: 6425)
				Financial Information for the Fiscal Year Ended December 2023
(2) Non-consolidated Business Indicators, etc., of the Company
	Term		47th Period	48th Period	49th Period	50th Period	51st Period
	Fiscal year ended		December	December	December	December	December
		2019	2020	2021	2022	2023
	Net sales	(Million yen)	54,812	64,489	56,037	70,049	83,028
	Ordinary profit (loss)	(Million yen)	(6,754)	(1,402)	1,211	8,479	9,527
	Net income (loss)	(Million yen)	(6,799)	(503)	(1,417)	4,749	7,374
	Capital stock	(Million yen)	98	98	98	98	98
	Number of issued shares	(Shares)	80,195,000	80,195,000	80,195,000	80,195,000	80,195,000
	Net assets	(Million yen)	361,212	358,936	357,514	362,261	366,516
	Total assets	(Million yen)	458,554	465,370	481,446	508,414	525,775
	Net assets per share	(Yen)	4,620.24	4,631.63	4,613.28	4,674.55	4,729.13
	Dividend per share	(Yen)	50	-	-	-	40
	[Interim dividend per share]	[50]	[-]	[-]	[-]	[40]
	Net income (loss) per share	(Yen)	(86.68)	(6.48)	(18.30)	61.29	95.17
	Diluted net income per share	(Yen)	-	-	-	61.29	95.16
	Ratio of shareholders' equity	(%)	78.8	77.1	74.2	71.2	69.7
	Ratio of net income to	(%)	(1.8)	(0.1)	(0.4)	1.3	2.0
	shareholders' equity
	Price-earnings ratio	(Times)	-	-	-	38.8	24.2
	Dividend payout ratio	(%)	-	-	-	-	42.0
	Number of employees	(Persons)	988	998	990	976	984
	Shareholder return	(%)	118.0	76.2	78.1	76.1	74.9
	[Comparison with TOPIX
	(%)	[118.1]	[126.8]	[143.0]	[139.5]	[178.9]
	including dividends]
	Highest share price	(Yen)	4,010	3,695	2,870	2,828	3,235
	Lowest share price	(Yen)	2,947	1,277	2,180	1,328	1,851

Notes: 1. The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of 50th period. All significant business indicators, etc. for the 50th and following periods incorporate this accounting standard.

1. The "Diluted net income per share" is not presented for the 47th, 48th and 49th periods because a net loss per share was posted despite the existence of latent shares with a dilution effect.
2. "Price-earningsratio" is not presented for the 47th, 48th and 49th periods because a net loss per share was posted.
3. The highest and lowest share prices are for prices on the Tokyo Stock Exchange (Standard Market) since April 4, 2022 and for prices on the JASDAQ (Standard) market before then.

3

Universal Entertainment Corporation (Securities code: 6425)

Financial Information for the Fiscal Year Ended December 2023

2. The Company's History

	Events
Month & Year	Universal Entertainment Corporation
Former company name: Aruze Corp. (Universal Sales Co.,	Universal Co., Ltd.
	Ltd. and Universal Technos Co., Ltd.)
December 1969		Established Universal Lease Co., Ltd., for the
		purpose of leasing jukeboxes at 2515, Mamada,
		Oyama, Tochigi Prefecture.
July 1970		Established a factory at the same place and started
		producing amusement machines.
October 1971		Changed trade name to Universal Co., Ltd.
June 1972		Purchased land adjacent to the factory and built a
		new factory.
June 1973	Spun off Sales Division of Universal Co., Ltd. from the
	company and established Universal Giken Co., Ltd., as an
	independent company and began its operation.
May 1975	Relocated the Head Office of Universal Giken Co., Ltd., to
	11-1, Ueno 5-chome,Taito-ku, Tokyo, and changed the
	trade name to Universal Sales Co., Ltd.
September 1975	Established the Osaka Sales Office in Suita, Osaka	Built a new factory in Oyama, Tochigi Prefecture.
	Prefecture.	Hereafter, this factory began full-scale production
		of various game machines as a base.
November 1976	Established the Nagoya Sales Office in Naka-ku, Nagoya,
	Aichi Prefecture.
April 1978	Built the Universal Building in Nihombashi Horidomecho,
	Chuo-ku, Tokyo, and relocated the Head Office of
	Universal Sales Co., Ltd.
December 1979	Spun off the Development Division of Universal Co., Ltd.
	from the company and established Universal Technos Co.,
	Ltd., as an independent company, and began its operation.
March 1980		Constructed a new factory located in the third
		industrial park in Oyama, Tochigi Prefecture
		(Oyama Second Factory) and moved there.
		Expanded from production of game machines into
		pachislot machines for the entertainment and
		amusement industry.
January 1981	Established the Fukuoka Sales Office in Hakata-ku,
	Fukuoka, Fukuoka Prefecture.
May 1982	Established the Hokkaido Sales Office in Shiroishi-ku,
	Sapporo, Hokkaido.
February 1983	Established the Sendai and Kagoshima Sales Offices in
	Sendai, Miyagi Prefecture, and Kagoshima, Kagoshima
	Prefecture, respectively.
August 1983	Established the Niigata Sales Office in Niigata, Niigata
	Prefecture.
June 1985	Established the Aomori, Shikoku and Kobe Sales Offices in
	Aomori, Aomori Prefecture, Takamatsu, Kagawa
	Prefecture, and Chuo-ku, Kobe, Hyogo Prefecture,
	respectively.
July 1985	Established the Hiroshima Sales Office in Naka-ku,
	Hiroshima, Hiroshima Prefecture, and the Okayama Sub-
	Branch in Okayama, Okayama Prefecture.
October 1985	Established the Kitakanto Sales Office in Utsunomiya,
	Tochigi Prefecture.
July 1986	Procured the head office building of Universal Technos
	Co., Ltd. in Nihombashi Hamacho, Chuo-ku, Tokyo, and
	moved there.
April 1988	Constructed the head office building of Universal Sales	Procured a factory in Yonago, Tottori
	Co., Ltd. in Takanawa, Minato-ku, Tokyo.	Prefecture, as a new manufacturing base and
		started production of amusement machines.
May 1988	Established the Shizuoka Sales Office in Shizuoka,
	Shizuoka Prefecture.
September 1988	Established the Oita Sub-Branch in Oita, Oita Prefecture.
	4

Universal Entertainment Corporation (Securities code: 6425)

Financial Information for the Fiscal Year Ended December 2023

	Events
Month & Year	Universal Entertainment Corporation
Former company name: Aruze Corp. (Universal Sales Co.,	Universal Co., Ltd.
	Ltd. and Universal Technos Co., Ltd.)
July 1990	Established the Kanazawa Sub-Branch in Kanazawa,
	Ishikawa Prefecture.
September 1990	Established the Koriyama Sub-Branch in Koriyama,
	Fukushima Prefecture.
April 1992	Established the Kumamoto Sub-Branch in Kumamoto,
	Kumamoto Prefecture.
July 1992	Established the Saitama, Kanagawa and Chiba Sales
	Offices in Omiya, Saitama Prefecture, Kohoku-ku,
	Yokohama, Kanagawa Prefecture, and Chuo-ku, Chiba,
	Chiba Prefecture, respectively.
August 1992	Established the Kyoto Sales Office in Shimogyo-ku, Kyoto,
	Kyoto Prefecture.
April 1993	Universal Sales Co., Ltd. absorbed Universal Co., Ltd. in a	Dissolved as a result of a merger with Universal
	merger.	Sales Co., Ltd.
July 1993	Moved the Head Office to the head office building of Universal
Co., Ltd. in Takanawa, Minato-ku, Tokyo.
April 1994	Established the Mito Sales Office in Mito, Ibaraki Prefecture.
April 1998	Universal Technos Co., Ltd. absorbed Universal Sales Co., Ltd. in a merger and changed the trade name to
	Aruze Corp. Moved the Head Office to Ariake, Koto-ku, Tokyo.
September 1998	Registered its shares on the over-the-counter market of the Japan Securities Dealers Association.
August 1999	Built a new factory in Yotsukaido, Chiba Prefecture (current Pachislot and Pachinko machine manufacturing site).
October 2000	Acquired shares of Aruze USA, Inc. (currently a consolidated subsidiary).
October 2000	Aruze USA, Inc. invested in Valvino Lamore, LLC.
November 2000	Acquired shares of Japan Amusement Broadcasting Co., Ltd.
February 2001	Established Yotsukaido Techno Center in Yotsukaido, Chiba Prefecture.
September 2002	All capital holdings of Valvino Lamore, LLC, were invested in kind to Wynn Resorts, Limited.
November 2002	Acquired shares of Nautilus Inc. (trade name was changed to Aruze Global Trading Corporation).
October 2003	Established Beijing Aruze Development Co., Ltd. (currently a non-consolidated subsidiary).
June 2004	Obtained a gaming machine manufacturer's license and an approval for stock acquisition of Universal
	Distributing of Nevada, Inc. (currently Aruze Gaming America, Inc.), in the State of Nevada, U.S.A.
December 2004	Cancelled over-the-counter registration with the Japan Securities Dealers Association and listed the Company's
	shares on Jasdaq Securities Exchange, Inc.
December 2004	Obtained a gaming machine manufacturer's license and an approval for stock acquisition of Universal
	Distributing of Nevada, Inc., in the State of Mississippi, U.S.A.
January 2005	Acquired shares of Universal Distributing of Nevada, Inc., which had subsidiaries in Australia and South Africa,
	and made the three companies consolidated subsidiaries.
March 2005	Wynn Resorts, Limited and its subsidiary obtained a license for casino operations in the State of Nevada, U.S.A.
May 2006	Established Aruze Preparatory Corporation.
July 2006	Obtained a gaming machine manufacturer's license, which is renewable without limitation, in the State of
	Nevada, U.S.A.
April 2007	Transferred gaming machine business for overseas casinos to Aruze Gaming America, Inc.
	Established ARUZE MEDIA NET CORP. for mobile web site operation business through a company split.
September 2007	Acquired shares of Japan Rental Service, Ltd. (trade name was changed to Aruze Rental Service Corporation).
October 2007	Transferred the Sales Division of the Pachislot/Pachinko Business to Aruze Marketing Japan Corporation
	(formerly known as System Staff Co., Ltd.) and the Development Division thereof to Seven Works Corporation
	(formerly known as Aruze Preparatory Corporation) through company splits.
February 2008	Established Aruze Investment Co., Ltd. (currently a consolidated subsidiary).
June 2008	Transitioned to a company with committees.
August 2008	Acquired a provisional license to operate a casino resort in the Philippines.
	Aruze Gaming America, Inc. implemented an allocation of new shares to a third party and the shares of Aruze
	Gaming America owned by the Company were partially transferred.
February 2009	Aruze Global Trading Corporation, Aruze Rental Service Corporation and Seven Works Corporation were
	merged to Aruze Marketing Japan Corporation by an absorption-type merger with Aruze Marketing Japan to act
	as the surviving company.
March 2009	Transferred all the shares of Aruze Gaming America, Inc. owned by the Company.

5

	Universal Entertainment Corporation (Securities code: 6425)
	Financial Information for the Fiscal Year Ended December 2023
Month & Year	Events
Universal Entertainment Corporation
	Former company name: Aruze Corp. (Universal Sales Co., Ltd. and Universal Technos Co., Ltd.)
June 2009	The Company merged Aruze Marketing Japan Corporation in an absorption-type merger with the Company to act
	as the surviving company.
November 2009	Changed the trade name to Universal Entertainment Corporation.
March 2010	A casino project of the Universal Entertainment Group (Manila Bay Resorts) obtained the designation as a
	special economic zone and the foreign capital restrictions for casino businesses were removed in the
	Philippines.
April 2010	The Company's stock was listed on the Jasdaq market of the Osaka Securities Exchange, in accordance with the
	merger of the Jasdaq Securities Exchange and the Osaka Securities Exchange.
June 2010	Transitioned to a company with an Audit & Supervisory Board.
October 2011	The Company merged ARUZE MEDIA NET CORP. in an absorption-type merger with the Company to act as
	the surviving company.
January 2012	Manila Bay Resorts Project's groundbreaking ceremony held in Manila.
July 2013	The Company's stock was listed on the JASDAQ (Standard) market of the Tokyo Stock Exchange, in
October 2013	accordance with the integration of the Tokyo Stock Exchange and the Osaka Securities Exchange.
Opened Okada Museum of Art in Hakone.
June 2014	Okada Museum of Art formed a sister partnership with Liu Hai Su Art Museum, a national museum of art in
March 2016	China.
Established joint venture "ZEEG Co. Ltd" with Sammy Corporation.
July 2016	The casino resort project in the Philippines was officially named OKADA MANILA.
December 2016	OKADA MANILA received permission to operate a casino and resort facility in the Philippines. Casino
March 2017	operations started.
Completed construction of the world's largest multi-color fountains "The Fountain" at OKADA MANILA.
December 2017	Cove Manila, covered by an enormous glass dome, started operating at OKADA MANILA.
December 2018	Completed construction of Tower A at OKADA MANILA.
July 2019	Started selling the Multi Currency System, an automated foreign exchange system for casino equipment, and
November 2021	the Slot Program Play System, customer special benefit system created exclusively for casino slot machines.
Completed construction of Tower B at OKADA MANILA.
April 2022	The stock listing was moved from the Tokyo Stock Exchange JASDAQ (Standard) market to the Tokyo Stock
	Exchange Standard Market, in accordance with the revision of the market classification of the Tokyo Stock
	Exchange.

6

Universal Entertainment Corporation (Securities code: 6425)

Financial Information for the Fiscal Year Ended December 2023

3. Description of Businesses

The corporate group of the Company is composed of the Company, 22 subsidiaries and three affiliates. The main businesses are the development, manufacture and sales of pachislot and pachinko machines and other game machines and peripheral equipment thereof, as well as the Integrated Resort Business and the media content business, etc.

Indicated below are the businesses of the Company's corporate group, the Company and each company's relative position in the business and the relationship with the segments (as of December 31, 2023).

Name of Segment	Main Business	Company Name
		Universal Entertainment Corporation,
	Development and manufacture of pachislot and	Macy Co., Ltd., Eleco Ltd., Mizuho
	pachinko machines	Corp., Across Corp. and Universal
Amusement		Bros. Corp.
Equipments	Sale of pachislot and pachinko machines;
Business	development, manufacture and sale of peripheral	Universal Entertainment Corporation
	equipment; procurement of units consisting of parts
	and materials
Integrated Resort	Casino resort business	TIGER RESORT, LEISURE AND
Business	ENTERTAINMENT, INC.
Other	Media content business	Universal Entertainment Corporation

• In addition to the companies listed above, there are four consolidated subsidiaries, 12 non-consolidated subsidiaries not accounted for by the equity method, two affiliates accounted for by the equity method, and one affiliate not accounted for by the equity method.

7