Annual Report 2012 - Central Japan Railway...

CENTRAL JAPAN RAILWAY COMPANYAnnual Report 2012

For the Year Ended March 31, 2012

CENTR

AL JAPAN R

AILWAY CO

MPAN

Y ANN

UAL R

EPORT 2012

0 500 km

1

Forward-Looking Statements In this annual report, forward-looking statements, such as those regarding business plans, strategies, and financial forecasts, are based on assumptions that reflect information available at the time of writing. The accuracy of such statements, therefore, is inherently uncertain because it is affected by future macroeconomic trends and business environment developments, notably, consumption trends, competitive challenges, and changes in relevant laws and legal provisions.This report is compiled based on information available as of the end of May 2012.

Notes: 1. Fiscal 2011, the year under review, refers to the one-year period ended March 31, 2012 (FY2012.3 / FY2011).2. In this report, figures of financial information are truncated, while statistical data and all percentages are rounded.

0 50 100

Population( As of the end of March 2011)

Area( As of October 2011)

Prefectural GDP( nominal ) ( FY2010.3 )

Central Japan Railway Company (JR Central, also known as JR Tokai) commenced operations in April 1987 upon the privatization and breakup of the Japanese National Railways (JNR). The core of JR Central’s operations is the Tokaido Shinkansen, the main transportation artery linking Japan’s principal metropolitan areas of Tokyo, Nagoya, and Osaka, and a network of conventional lines centered on the Nagoya and Shizuoka areas. JR Central and its consolidated subsidiaries also develop affiliated businesses that are expected to generate synergic effects with the railway business. JR Central is steadily moving forward with efforts aimed at the early completion of the Chuo Shinkansen using the Superconducting Maglev system in order to continually carry out its mission.

Management Philosophy● Contribute to community development by adhering to

sound management principles● Provide modern, friendly, and reliable services● Establish a cheerful, fresh, and active corporate

culture

General Principles of Safety● Safety is the most important mission in

transportation● Security is based on observance of rules and exact

works and is constructed of ceaseless practice● Enforcement of confirmation and contact is most important for security● For security we should cooperate unitedly beyond

our official responsibility● When we are open to doubt we should go a way to

safe considering thoroughly

Tokaido Shinkansen85.4％

Conventional Line8.2％

Miscellaneous5.7％

Affiliated Businesses0.8％

Transportation77.7％

Merchandise and Other13.0％

Real Estate2.5％

Other6.8％

FY 2012.3 data

23.7％ 76.3％

59.7％ 40.3％

64.0％ 36.0％

0 100 200

● Percentages of Japan as a whole

● Population Density (As of the end of March 2011)

Japan(as a whole)

JR Central’sMarket Area

otherJR Central’s Market Area

252

100(Base)

A Message from the Management 2

Summary of Performance and Key Measures

Financial Highlights 4

Summary of Performance 6

Key Measures and Capital Investment 8

Corporate Governance 10

Our Business

Safety and Reliability 12

Transportation Service 16

Sales and Marketing 20

Technological Development and Enhancement of Technical Capacity / Overseas Deployment of High-Speed Rail Systems 22

The Chuo Shinkansen using the Superconducting Maglev System 24

Affiliated Businesses 26

Engagement in Global Environment Preservation, etc 28

Corporate Data

Company Profile 34

Operating Area 35

Company History 36

Board of Directors, Corporate Auditors and Corporate Officers 37

Financial Section 38

Appendices

Financial and Transportation Data 66

Operating Environment 70

International Railway Comparison 70

Financial Comparison of Three JR Companies 72

Stock Information 73

Area: Approx. 380,000 km2

Population: 126 million (As of the end of March 2011)

JR Central Other JRShinkansen

Conventional Lines

KYOTOOKAYAMAHIROSHIMA NAGOYATOKYO

SHIN-OSAKAHAKATA

KAGOSHIMA-CHUO

TAKAMATSU

NIIGATA

NAGANO

SHIN-AOMORI

SAPPORO

SHIZUOKA

HokkaidoRailway Company

KyushuRailwayCompany

East JapanRailway Company

ShikokuRailway Company

West JapanRailway Company

Central JapanRailway Company

Note : JR Central’s market area includes the following prefectures: Tokyo, Kanagawa, Chiba, Saitama, Ibaraki, Shizuoka, Yamanashi, Nagano, Aichi, Mie, Gifu, Shiga, Osaka, Kyoto, Hyogo, Nara : Area data to calculate Population Density is as of October 2011Sources : Area – Statistical Reports on the Land Area by Prefectures and Municipalities in Japan, Geospatial Information Authority of Japan Population – Basic Resident Registration, Ministry of Internal Affairs and Communications Prefectural GDP – Annual Report on Prefectural Accounts, Cabinet Office, Government of Japan

Consolidated Operating Revenues Composition

Non-Consolidated Operating Revenues Composition

Note: Consolidated composition is based on the revenues from outside of JR Central's group

2 3

A Message from the Management

Yoshiomi Yamada President

Yoshiyuki KasaiChairman

In regard to the railway business, JR Central prioritizes maintaining safe and reliable transportation in its fundamental policy. Based on this primary principle, we also continue its fundamental policy of stably and sufficiently fulfilling its long-term mission to maintain and develop, in an integrated fashion, both the Tokaido Shinkansen, which serves as Japan’s main transportation artery, and the conventional line network in the Tokai (such as Nagoya or Shizuoka) region, and we constantly strive to provide services that are chosen by the customers and improve the efficiency of its business operation.

Since railway business, which is the core business of the JR Central Group, requires massive capital investments and long-term technological development with considerable lead times, the time frame for recovering investments is extremely long. Due to such business structure, it is vital that we manage our railway business strategically based on a long-term perspective, rather than overemphasize short-term profitability. Therefore, we are further improving the quality of our regular railway services and promoting mid- and long-term projects in a systematic manner while enhancing our financial strength.

■ Railway Businesses① Safety Measures

In order to further improve the safety of our railway business, we shall continue to steadily engage in earthquake countermeasures to prevent derailments and deviations as well as reinforce the earthquake resistance of embankments and bridge supports on the Tokaido Shinkansen. Also, we are systematically maintaining and renewing tracks, including replacing sleepers on the Tokaido Shinkansen, and are working to maintain and strengthen civil engineering structures. Furthermore, we are steadily pushing ahead with renovation of the Hamamatsu Workshop.② Improving Transportation Service

In regard to the Tokaido Shinkansen, while continuously striving to improve transportation services, we provide safe and punctual transportation unparalleled anywhere in the world. We are proceeding with introduction of the N700A, which incorporates the most up-to-date technology developments, and we are sequentially expanding operation of the N700 type along the Tokaido and Sanyo Shinkansen lines. Also, by utilizing the timetable revised in March 2012, we are committed to a flexible configuration of trains during peak hours and time frames. We will continue the major renovations underway at Shin-Osaka Station.

We are making efforts to further improve the transportation service of conventional lines by promoting the strengthening of transportation infrastructure in the Nagoya metropolitan region through plans to introduce new rolling stock and to electrify the Taketoyo Line.

As far as sales are concerned, we are promoting efforts to expand the use of EX-IC Service and increase the number of Express Reservation members. In addition to striving to expand the use of service in which a passenger can get on board the Shinkansen with TOICA commuter pass and electronic money functions, we will also make steady preparations on the mutual use of IC cards issued by other transportation companies. Furthermore, we will actively develop travel products and tourist promotion campaigns, which create new demand, such as those for Kyoto and Nara as well as launch new marketing initiatives including the development of products for foreign visitors.

In regard to passenger-related facilities, we are advancing installation of new movable platform fences on the 27 platforms at Shin-Osaka Station and Tokyo Station. We also steadily moving forward to provide barrier-free facilities and replacing old Braille blocks with new Braille blocks that have lines to indicate on which side the edge of the platform lies as warning blocks on platforms.③ Promoting the Chuo Shinkansen using the Superconducting Maglev system

Currently, the Tokaido Shinkansen, which is vital to our business, is in its best state ever in terms of equipment and service. We aim to continue their further improvement through the efforts mentioned above.

The Chuo Shinkansen that utilizes the Superconducting Maglev system will enable us to continue our mission of operating high-speed railway linking the Tokyo Metropolitan areas, Chukyo regions and Kinki regions, which is vital to our business, and will provide

the future foundation for the company. It has been 47 years since the inauguration of the Tokaido Shinkansen which presently fulfills the mission, and we have entered a time when we must think of drastic ways to deal with aging and large-scale disasters based on the fact that it takes a very long time to construct and realize a railway. In the wake of the Great East Japan Earthquake the need for redundancy in our main transportation arteries has become even more important. It is for this reason that we will realize as quickly as possible the bypass that can substitute the role of the Tokaido Shinkansen and that utilizes the Superconducting Maglev system, which we have developed, under the condition that we bear the cost of rail construction and operate it in an integrated manner along with the Tokaido Shinkansen. To promote this project we shall invest as necessary to enhance competitiveness and ensure safe and reliable transportation as well as ensure sound management that will continue to provide stable dividends. We will also surely and steadily engage in various efforts aimed at the realization of the Chuo Shinkansen first to City of Nagoya and thereafter to City of Osaka.④ Technological Development and Enhancement of Technical Capability

At the Komaki Research Center and other facilities, we are promoting efforts focused on measures to counter natural disasters and improving transportation services as well as maintaining and augmenting civil engineering structures beginning with the Shinkansen. In addition, we are promoting the deployment of high-speed railway in overseas projects by leveraging the comprehensive high-speed railway technology. We continue to engage in marketing activities to corridors that have been selected as viable targets.

■ Affiliated BusinessIn regard to non-railway businesses, we have completed demolition of the old building

and are now proceeding with construction of the Nagoya Station New Building. In addition, we are striving to further increase revenue with our commitment to revitalizing Tokyo Station Ichibangai, renewal of which has been completed, and other shopping and commercial facilities. Also we will engage in efforts to further enhance the earning capability of JR Central group companies by further developing the agricultural business and leveraging our assets.

■ Environmental Conservation ActivitiesIn regard to global environmental issues, we have actively worked to make the public

aware of the superiority of railway as a transportation means friendly to the global environment, and we are continuing with efforts that contribute to conservation of the global environment such as the introduction of the Series N700A, which enables large reductions in energy consumption, and the replacement with energy-efficient rolling stock for conventional line. We will also be making effort in reducing resources/energy in our daily operation.

■ Reduction of Long-term debt and payablesWe have reduced our long-term debt and payables, which had once totaled 5.5 trillion

yen at its highest, by approximately 2.6 trillion yen, and we have steadily continued with efforts to strengthen our financial foundation. We will continue striving to reduce long-term debt and payables while steadily promoting a wide variety of key measures.

Going forward, we will continue to strive to ensure safe and reliable transportation, improve customer service and pursue efficiency and Cost Reduction at all levels including equipment investment. At the same time, we shall surely and steadily promote efforts aimed at the enhancement of the managerial foundations of our businesses, starting with the Tokaido Shinkansen, and construction of the Chuo Shinkansen, while also striving to reduce long-term debt and payables and continue to offer stable dividends.

Chairman Yoshiyuki Kasai

President Yoshiomi Yamada

4 5

Thousands ofU.S. Dollars*1

Millionsof Yen

Millionsof Yen

Millionsof Yen

U.S. Dollars*1YenYenYen

Income before Income Taxes and Minority Interests

Cash Dividends Applicable to the Year

Per Share of Common Stock

Operating Revenues

Operating Expenses

Operating Income

Net Income

Depreciation and Amortization

Capital Expenditures*2

Total Assets

Equity

Shareholder’s Equity

Equity Ratio

Net income / Total Assets

ROE (Return on Equity)

$18,394,243

13,851,292

4,542,939

3,218,243

1,619,280

3,134,914

3,544,280

63,585,829

16,625,012

16,117,731

25.3%

2.5%

10.5%

¥1,508,328

1,135,806

372,521

263,896

132,781

257,063

290,631

5,214,038

1,363,251

1,321,654

25.3％

2.5％

10.5％

¥1,503,083

1,153,735

349,347

224,647

133,807

258,599

284,104

5,252,993

1,246,154

1,206,645

23.0％

2.6％

11.6％

¥1,486,632

1,193,157

293,474

160,899

91,764

268,219

248,302

5,211,009

1,134,566

1,096,678

21.0％

1.8％

8.7％

Net Income $822.81

115.85

¥67,470.45

9,500.00

¥67,990.31

9,000.00

¥46,574.56

9,000.00

*1. FY2012.3 yen figures have been converted into U.S. dollars at the rate of ¥82=US$1, the approximate rate of exchange at March 30, 2012.*2. Increase in property, plant and equipment, and intangible assets

FY2010.3 FY2011.3 FY2012.3

U.S. Dollars*1YenYenYen

Thousands ofU.S. Dollars*1

Millionsof Yen

Millionsof Yen

Millionsof Yen

Operating Revenues

Railway

Other

Operating Expenses

Railway

Other

Operating Income

Income before Income Taxes

Net Income

Depreciation and Amortization

Capital Investments

Total Assets

Equity

Shareholder’s Equity

Equity Ratio

Net Income / Total Assets

ROE (Return on Equity)

$14,446,060

14,337,439

108,621

10,232,000

10,161,304

70,682

4,214,060

2,923,231

1,473,378

2,945,085

3,639,182

61,385,341

15,344,878

15,344,878

25.0%

2.4%

10.0%

¥1,184,577

1,175,670

8,907

839,024

833,227

5,796

345,553

239,705

120,817

241,497

298,413

5,033,598

1,258,280

1,258,280

25.0％

2.4％

10.0％

¥1,171,930

1,162,660

9,269

846,465

839,699

6,765

325,465

206,779

123,040

240,084

288,884

5,075,085

1,156,128

1,156,128

22.8％

2.4％

11.1％

¥1,143,983

1,134,942

9,041

869,846

863,208

6,638

274,136

145,467

88,405

247,003

244,868

5,010,369

1,056,766

1,056,766

21.1％

1.8％

8.7％

Net Income $747.91

115.85

¥61,328.43

9,500.00

¥62,455.63

9,000.00

¥44,823.34

9,000.00Cash Dividends Applicable to the Year

Per Share of Common Stock

FY2010.3 FY2011.3 FY2012.3

Financial Highlights

0

300

600

900

1,200

1,500

’10.3

1,486●Operating Revenues

0

30

60

90

120

150

91

●Net Income

Depreciation and Amortization Capital Expenditures

0

60

120

180

240

300

268248

●Depreciation and Amortization, and Capital Expenditures

0

1,000

2,000

3,000

4,000

3,173

●Total Long-Term Debt and Payables

’11.3

’10.3 ’11.3

’10.3 ’11.3

’10.3 ’11.3

1,503

133

284

258

3,045

’12.3

’12.3

’12.3

’12.3

1,508

132

257

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

0

300

600

900

1,200

1,500

1,143

●Operating Revenues

0

30

60

90

120

150

88

●Net Income

0

60

120

180

240

300

247 244

Depreciation and Amortization Capital Investments

●Depreciation and Amortization, and Capital Investments

0

1,000

2,000

3,000

4,000

3,117

●Total Long-Term Debt and Payables

’10.3 ’11.3

’10.3 ’11.3

’10.3 ’11.3

’10.3 ’11.3

1,171

123

288

240

3,001

’12.3

’12.3

’12.3

’12.3

1,184

120

298

241

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

290

2,866 2,829

FY

FY

FY

FY

FY

FY

FY

FY

Consolidated Financial Highlights Non-Consolidated Financial Highlights

Corporate DataCorporate GovernanceSummary of Performanceand Key Measures Our Business Financial Section AppendicesEngagement in Global

Environment Preservation etc

6 7

Summary of Performance

■ Segment-by-segment performance for the year ended March 31, 2012This year began with a considerable decline in railway use after the Great East Japan

Earthquake. Nevertheless, the JR Central group prioritizes safe and reliable transportation, which is the foundation of the railway business, while aiming to further develop our service. We also continue to engage in efforts to improve the competency of our employees, to enhance facilities, and to pursue efficiency and Cost Reduction in an effort to strengthen earnings capabilities. As a result, total passenger kilometers increased YoY by 1.0% to 53.255 billion passenger kilometers. Also, operating revenues increased 0.3% YoY to 1.5083 trillion yen, ordinary income increased by 15.4% YoY to 263.8 billion yen, and net income decreased by 0.8% YoY to 132.7 billion yen due to an increase in adjustments for corporate and other taxes resulting from a reduction in deferred tax assets following a decrease in the corporate tax rate.

We were able to achieve a decrease in long-term debt and payables on a consolidated basis by 178.5 billion yen which resulted in a long-term liability balance of 2.8667 trillion yen as of the end of FY2012.3.

In addition, despite the impact from the Great East Japan Earthquake, there was a steady resumption in passenger volume from the second quarter on, which we took into consideration when deciding to increase the year-end dividend by 500 yen to 5,000 yen. As a result, the annual dividends for the year were 9,500 yen per share.

This works out as follows when looking at business performance by segment.

① TransportationIn regard to the Tokaido Shinkansen, we continued to improve anti-quake resistance,

such as by implementing deviation/derailment prevention measures and also proceeded with renovations at the Hamamatsu Workshop, where Shinkansen rolling stock is overhauled, in an effort to improve earthquake resistance. We also completed integrated introduction of the Series N700 rolling stock, which was started in 2007, and have improved convenience a notch by having all regular “Nozomi” service on the Tokaido Shinkansen operated by the Series N700 when the revised timetable went into effect in March 2012. Moreover, we have completed preparations for introduction of the “N700A” beginning in 2012, which adopts the results of technological developments achieved since the Series N700.

In regard to conventional lines, we moved forward with the installation of ATS-PT (Pattern Reference-type Automatic Train Stop system) and have completed the system’s introduction on all lines. Furthermore, in order to further develop transport service, we continued replacement of old rolling stock. Also, since March 14, 2011 some lines have been afflicted by rolling blackouts implemented by the Tokyo Electric Co., Ltd. but we strived to continue operation to the extent possible while considering safety and restarted operation in normal timetable from June 6.

In terms of sales, we have promoted efforts aimed at increasing the number of “Express Reservation” members and expanding use of “EX-IC Service.” Also, we have moved forward with the various preparations for expanding mutual use of TOICA and increased the number of participating retailers that accept electronic money. Also, we promoted tourist campaigns aimed at travel to Kyoto, Nara, Tokyo and Ise and strive to offer various travel products linked with such campaigns. We also put effort into developing new sales measures, such as the development of products for families traveling with children on the Tokaido Shinkansen, the development of products for foreign visitors to Japan and collaboration with sightseeing and other facilities.

Although the year began with a decline in usage due to the stagnated economy, sluggish demand for tourism and other such impacts in the wake of the Great East Japan Earthquake, total passenger kilometers for the Tokaido Shinkansen increased YoY by 1.3% to 44.303 billion passenger kilometers thanks to our commitment to the aforementioned series of measures, but due to the suspended service along some sections of the Kisei Line and the Minobu Line on account of the typhoon which struck in September 2011, total passenger kilometers for conventional lines decreased by 0.5% to 8.952 billion passenger kilometers.

In regard to our bus business, we continued with efforts to make work more efficient based on fierce competition.

As a result of the above, operating revenues increased by 1.1% YoY to 1.1826 trillion yen, and operating income increased by 6.1% YoY to 342.8 billion yen.

② MerchandiseIn regard to merchandise and other businesses, at JR Nagoya Takashimaya we strove

to develop an attractive line of products, renovate sales floors and enhance our selling strategies to meet the needs of customers.

And, we started open-field cultivation in our agricultural business.As a result, operating revenues increased by 5.3% YoY to 205.2billion yen, and

operating income increased by 11.2% YoY to 5.7 billion yen.

③ Real EstateIn regard to real estate, in order to leverage station location in a more effective manner

and increase customers we proceeded with renovations of commercial facilities at the Tokyo Station. Also, as for the Nagoya Station New Building project, we dismantled the existing building so as to proceed with breaking ground for construction on the new building.

As a result of the aforementioned, operating revenues decreased by 5.5% YoY to 62.7 billion yen, and operating income increased by 10% to 13 billion yen.

④ OtherIn our hotel business we strove to create products that are in line with the wishes of

our customers, offer high quality service and enhance selling power.In our travel business we actively sold attractive travel products linked to tourist

campaigns for travel to Kyoto, Nara, Tokyo and Ise etc while striving to leverage the Internet for sales.

In regard to our railway rolling stock manufacturing business, we strove to accept orders for and manufacture railway rolling stock and construction equipment.

As a consequence of the aforementioned, operating revenues decreased 5.7% YoY to 225.8 billion yen due to decrease in sales of Nippon Sharyo, Ltd. etc. And, operating income increased by 5.1% to 11.4 billion yen due to efforts to reduce costs.

■ Efforts for FY2013.3In FY2013.3 we shall continue to strive to ensure safe and reliable transportation even

as the anticipated severe economic conditions continue. In our railway business, we shall promote anti-quake measures on the Tokaido Shinkansen and strive to develop transport service through the introduction of Series N700A rolling stock and the replacement of old rolling stock with new rolling stock on conventional lines. The entire JR Group shall strive to provide better quality service and enhance profitability. On the other hand, we pursue efficiency and “Cost Reduction” at all levels including capital investments and develop management vitality.

’08.3 ’09.3 ’10.3 ’11.3 ’08.3 ’09.3 ’10.3 ’11.3

’08.3 ’09.3 ’10.3 ’11.3

’08.3 ’09.3 ’10.3 ’11.3

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

0

50

100

150

200

0

15

30

45

60

75

0

50

100

150

200

250

’12.3

’12.3

’12.3

205

62

225

0

300

600

900

1,200

’12.3

1,182

Operating Revenues (Transportation)

Operating Revenues (Merchandise and Other)

Operating Revenues (Real Estate)

Operating Revenues (Other)

FY 2013.3 Forecasts

1,1421,169

1,260 1,240

201

188

195202

7066 6666

255

239

216

175

(billions of yen)

Operating revenues

Operating income

Ordinary income

Net income

Consolidated

（102.9％）

（102.8％）

（108.0％）

（130.3％）

1,552

383

285

173

(2013/2012)(2013/2012) Non-Consolidated

（101.6％）

（103.3％）

（108.8％）

（135.7％）

1,204

357

261

164*As of the publishment of the financial report for FY2012.3



0

50

100

150

200

250

300(billions of yen)

Capital Investment Safety-related Investment

’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3planned

’06.3’05.3’04.3’03.3’02.3’01.3’00.3’99.3’98.3’97.3’96.3’95.3’94.3’93.3’92.3’91.3’90.3’89.3’88.3

8 9

120.3

159.5

174.3

197.8

211.1

166.9 164.8157.6

161.5169.8

155.5

128.5 128.3

209.8

277.4

265.2

171.3 172.6

159.2 156.8151.5

50.1

82.6

100.1

111.3

99.194.1

86.3 89.3

68.9

128.5

169.3

96.1

71.880.6

72.7 70.974.2

87.1

97.6 99.8

87.3

39.1

244.8

138.5

288.8

164.7

178.9

298.4

142.9

324.0

149.0

■ We will enhance transportation services of the Tokaido Shinkansen, such as replacing the Series 700 with N700A.■ Replacing the Series 700 with N700A for the Tokaido-Sanyo Shinkansen and gradually expanding operations

by the Series N700 and N700A (N700 type)■ Promoting large-scale renovations of a station concourse including equipments relating to ticket sales and

entry gates and the addition of a platform at Shin-Osaka Station■ Installing the latest model of movable platform fences at Tokyo Station and on platform #27 at Shin-Osaka

Station■ Replacing old Braille blocks with new Braille blocks that have lines to indicate on which side the edge of the

platform lies

■FY2012 Key Measures and Related Capital Investment

Key Measures and Capital Investment

▲Countermeasure for Derailment and Deviation ofthe Tokaido Shinkansen

▲Rendering of Shin-Osaka Station Platform Addition

Ensuring Safe and Reliable Transportation

Enhancing Transportation Services of the Tokaido Shinkansen

■ We will continuously strive to enhance our technological competences, which is the foundation of railway management and development, to pursue overseas deployment of high-speed railway system, and to conserve the global environment.

■ Promoting research and development for the maintenance and reinforcement of civil engineering structures with emphasis on the Shinkansen, the enhancement of transportation services, and countermeasures for natural disasters

■ Engaging in marketing activities in regions and corridors that have been selected as viable targets for the overseas deployment of high-speed railway system by leveraging our comprehensive technological competences

■ Promoting measures to contribute to the conservation of the global environment such as replacing old rolling stock with energy-saving rolling stock

▲Tri-axial Loading System for Structures

Strengthening Technological Competency, Pursuing Overseas Deployment of High-Speed Railway System, Conserving the Global Environment

■ We will steadily proceed with the Nagoya Station New Building Project and increase competitiveness and revenues of our existing business.

■ Promoting a construction of Nagoya Station New Building after the dismantlement of the existing building■ Increasing revenues by invigorating commercial facilities, such as “First Avenue Tokyo Station,” which is

being renovated■ Making continuous efforts to develop our agriculture business to provide safer and more reliable food

products

▲Rendering of the “Nagoya Station New Building”(tentative name)

Developing Affiliated Businesses

■ We will work on various measures such as the replacement of old rolling stock.■ Working to further improve transportation services such as the replacing old rolling stock■ Strengthening the transportation infrastructure in the Nagoya Metropolitan Area through plans to electrify the

Taketoyo Line■ Replacing old Braille blocks with new Braille blocks that have lines to indicate on which side the edge of the

platform lies and steadily introducing barrier-free accessible facilities

▲Braille blocks that have lines to indicate on whichside the edge of the platform lies

Enhancing Transportation Services of Conventional Lines

■ We will promote measures to realize the Chuo Shinkansen using the Superconducting Maglev System.■ Steadily proceeding with preparations to begin constructions including an assessment of environmental

impacts between Tokyo and the City of Nagoya■ Proceeding with the construction works to extend the length of the Yamanashi Maglev Test Line to 42.8 km

and upgrade its facilities in full scale steadily and swiftly toward early completion■ Making efforts to improve the Superconducting Maglev technology and reduce costs for construction,

operation and maintenance■ Proceeding with the manufacture of the new rolling stock, the Series L0

▲New vehicle Series L0 (L zero)

Promoting the Chuo Shinkansen Project using the Superconducting Maglev System

Enhancing Marketing Initiatives

Non-consolidated 324 billion yen / Consolidated 348 billion yen

Capital Investments : 102 billion yen Capital Investments : 1 billion yen

Capital Investments : 59 billion yen


*only includes capital investment related to the extensionand the upgrade of facilities of the Yamanashi Test LineCapital Investments : 105 billion yen

*including 24 billion yen to be investedby the consolidated subsidiariesCapital Investments : 35 billion yen


Total Capital Investment FY2012 (planned)

■ We will proactively develop marketing initiatives to increase revenues.■ Enhancing efforts to expand the use of “EX-IC Service” and increase the

number of “Express Reservation” members■ Making efforts to expand mutual use of TOICA with IC cards of other

transport operators■ Proactively developing various marketing campaigns by utilizing tourist

resources in Kyoto, Nara and other destinations and developing travel products for inbound tourists

■ Expanding the use of conventional lines by proactively developing events such as “SAWAYAKA Walking (walking event).”

●IC cards for transportation, starting mutual use in the spring of 2013*Mutual use of TOICA with other IC cards： with“Suica,” “ICOCA,” and “SUGOCA” in operation with “manaca” from 21 April, 2012 with IC Cards including “PASMO” and “PiTaPa” from the spring of 2013

Western Area

Tokai AreaKyushu Area

Hokkaido Area

Niigata

TotyoShizuokaNagoya

Shin-osaka

Okatyama

HiroshimaHakata

Sendai

Sapporo

■ We will prioritize ensuring safe and reliable transportation, which is the foundation of the railway business.■ Strongly promoting countermeasures for derailment and deviation as well as the reinforcement of

embankments and bridges as further anti-earthquake measures for the Tokaido Shinkansen■ Systematically maintaining and renewing tracks, including replacing sleepers on the Tokaido Shinkansen■ Promoting the renovation of the Hamamatsu Workshop, where general overhauls of the Tokaido Shinkansen

rolling stock are conducted■ Promoting countermeasures for falling rocks and upgrade of level-crossing safety devices for the

conventional lines■ Enhancing employee training that focuses on safety and hospitality in cooperation with group companies by

utilizing the General Education Center

Capital Investment (Non-Consolidated)



Eastern Area

Note: The figures planned for FY2013.3 are as of the publishment of the financial report for the year ended March 31, 2012

10 11

At JR Central, we are striving to develop corporate governance in order to ensure sound, efficient and transparent management, to develop the corporation over the long-term, and to continually improve corporate value

Corporate Governance

■ Overview of Corporate GovernanceThe Board of Directors of JR Central is comprised of 14 members (three of whom are external directors). We also employ an auditor system

comprised of five auditors (three of whom are external auditors). (*these numbers are as of June 22, 2012)The Board of Directors meets once a month or more, makes legal and appropriate decisions upon fully discussing issues stipulated by the

law and issues of importance to management, and monitors the status of directors’ management. Also, in an endeavor to broaden deliberations, we have also established a Management Meeting to fully discuss important issues related to management in advance of the Board of Directors meeting. Auditors are called to attend meetings of the Board of Directors, the Management Meeting and other important meetings as we endeavor to ensure the legality of management measures beginning with the deliberation process.

In May 2003, we introduced a corporate officer system, but, in order to appropriately and timely address changes in the business environment encompassing the company, we decided in June 2012 to have an executive system which further clarifies the roles between directors responsible for management decisions and supervising management and corporate officers responsible for operation, and which further promotes quick decisions and develops discussion by the Board of Directors.

Auditors attend important meetings such as the Board of Directors and Management Meeting and implement inspections of measures conducted at JR Central’s headquarters, railway operations divisions, regional offices, field offices and subsidiaries to verify the status of management based on plans enacted by the Board of Auditors. We also consolidate the system to ensure an effective audit by auditors including assigning our employees as full-time staff to support auditors work.

Internal audits are performed by the Audit Department on the work of JR Central, its subsidiaries, and related companies to determine whether such work is legal and appropriate based on laws, the articles of incorporation, and internal regulations, the results of which are reported to management. In addition, in order to prevent operational and labor accidents, safety audits are performed by the Transportation Safety Department and the results are reported to management.

We also undergo appropriate accounting audits based on generally accepted accounting standards by the audit corporation Deloitte Touche Tohmatsu LLC, which has been selected to be our accounting auditor.

Auditors, internal audit departments, and accounting auditors cooperate with each other by exchanging information periodically and as necessary, and receive necessary information from each department involved in internal control in order to confirm the status of implementation of each item stipulated in the internal control basic plan.

■ Fundamental Corporate Governance PoliciesAt JR Central, the Board of Directors has decided on the following fundamental corporate governance policies.

■ Risk-management SystemAt JR Central, we have established Railway Safety Promotion Committees at headquarters, railway operation divisions, regional offices, and

in each area in order to establish and promote safety countermeasures through an integrated organization that stretches from headquarters to each field office from the perspective of preventing train and labor accidents.

Furthermore, along with having a control center on call 24 hours a day at each railway operation division in order to deal with emergencies such as accidents or disasters, we have also created a fast-response restoration team that can be called in at anytime according to the scale and impact of an accident or disaster. Also, in preparation for emergencies such as large-scale natural disasters, we have established the Shinkansen 2nd General Control Center that can assume the tasks of the Shinkansen General Control Center.

■ Dealing with Internal Control related to Financial ReportingIn addition to building and operating a system based on the internal control basic plan mentioned above, we periodically investigate the

system and enforcement by JR Central and the JR Central Group in accordance with a basic framework put forth by the Business Accounting Council and confirm that they are valid. Furthermore by providing feedback, we are engaged in efforts to maintain the level of internal control related to financial reporting.

1.System to ensure that the execution of duties by directors and employees is in accordance with laws and the articles of incorporation The Board of Directors monitors the status of director management along with making legal and appropriate decisions upon fully

discussing issues stipulated by the law and issues of importance to management. The department in charge of internal audits performs internal audits of the work of directors, corporate officers and employees to

determine whether such work is legal and appropriate based on laws, the articles of incorporation, and internal stipulations.A system to obtain advice as necessary from external experts, such as retained lawyers, is in place and we strive to ensure that operation

is carried out legally.We will take action as necessary, such as by not giving in to unlawful demands, establishing departments to handle such issues, and

forming close relationships with external expert agencies, in order to shield ourselves from anti-social groups.2.System related to storing and managing information concerning the execution of duties of directors

Those documents for which a storage need has been determined in accordance with internal regulations are properly stored and managed.3.Stipulations and systems related to managing the danger of loss

Decisions made in regards to items for which each department is responsible are processed as stipulated in accordance with their importance, such as by seeking approval by upper managers and/or through meetings.

In addition, in regards to preventing train accidents, effective countermeasures are actively promoted through discussions by Railway Safety Promotion Committees.

4.System to ensure that the duties of the director are executed efficientlyAn efficient work system is introduced by clearly stipulating the duties of each department and its authority in accordance with internal

regulations, and by properly assigning personnel in accordance with the task and work load.5.System for ensuring the suitability of work performed by corporate groups comprised of JR Central and subsidiaries

In accordance with internal regulations, we manage and provide guidance for affiliated companies as needed based on agreements signed with these companies that stipulate how important items are to be discussed and reported.

The department in charge of internal audits performs audits to ensure that affiliates are engaging in business in an appropriate manner.6.System related to employees that have been assigned to auditors at their request to assist with the auditors duties and matters related

to the independence of those employees from directors Some of JR Central’s employees will be designated as auditor staff for the purpose of assisting such auditor with the execution of their

duties. The Personnel Department shall hear the opinions of auditors in advance in regards to auditor staff personnel.

7.System to enable directors and employees to report to an auditor, and other systems for reporting to auditors If directors, corporate officers, or employees discover facts that may cause great loss to the Company or important facts that infringe upon

laws or the articles of incorporation, in accordance with internal regulations they must immediately report to an auditor or the Board of Auditors.

Furthermore, directors, corporate officers, and employees shall report on the execution of their duties if requested by an auditor or the Board of Auditors.

8.Other systems to ensure that audits of auditors are performed effectively Auditors shall attend important meetings such as Management Meeting in addition to Board of Directors meetings to ensure the legality of

management measures beginning with the deliberation process.The department in charge of internal audits shall strengthen its links with auditors and accounting auditors in an effort to enhance audits.

Board of Directors

President

Headquarters, Regional offices, Field offices

Management Meeting

General Shareholders Meeting

Auditors (Board)Audit

Investigate

Audit

Audit

AuditManagement / Guidance

Audit

Selection Selection Selection

Cooperate

Cooperate

CooperateInternal Audit Department(Audit Department / Transportation Safety Department)

Group Companies

Accounting A

uditors

JR Central’s Corporate Governance



12 13

Shinkansen General Control CenterTokai General Control Center

Relay Station

Detector

Stop Electricity

Seismometer

Conventional-Lines Earthquake Information Communications System

Tokaido Shinkansen Earthquake Rapid AlarmSystem (TERRA-S)

Transmit train to stop

Splicing equipmentfor earthquakeearly warning

Japan Meteorological Agency(Japan MeteorologicalBusiness Support Center)

Detector

Substation

Epicenter

Train Radio

Seismic wave

Initiatives for Securing and Enhancing Safe and Reliable TransportationJR Central believes that ensuring safe and reliable transportation is the fundamental principle of the railway business, and has worked since

its inception to improve its systems and introduce the latest technologies for its rolling stock and equipment. Accordingly, we are continually implementing education and training for staff in charge of train operations and facility maintenance, and also improving our ability to respond quickly to all situations including emergencies through the implementation of practical training based on various types of simulated accidents or disasters.

Safety and Reliability

▲General Training Simulator (Shinkansen)

▲Simulator for Drivers (Shinkansen)

▲General Training Center

169178

138

164

’08.3 ’09.3 ’10.3 ’11.30

50

100

150

200

250

300

142

’12.3

277265

298

’13.3(planned)

324

■ Measures for Ensuring and Enhancing SafetyJR Central has implemented a wide range of safety-related capital investments in a

well-planned manner including the upgrading of ATC (Automatic Train Control) and CTC (Centralized Traffic Control) for the Tokaido Shinkansen, the introduction of CTC on conventional lines, the upgrading of safety devices on level crossings, strengthening of elevated track columns, embankments, and bridges as an earthquake countermeasure, the improvement of electrical facilities, and the replacement of rolling stock. In addition, we started implementing countermeasures to derailment / deviation on the Tokaido Shinkansen in 2009 as a new earthquake countermeasure. Further, while we appropriately implement various inspections of tunnels, bridges and other such structures as well as rolling stock, facilities, electrical and other equipment, we are also developing more efficient and effective inspection methods and have continually introduced various inspection equipment and systems. Furthermore, in February 2012, the replacement work, which began in 2006, was completed for introduction of ATS-PT, a new automatic train stop system, on all the conventional lines. As described above, we have worked actively since our inception to promote passenger safety and have spent a total of approximately 2.5 trillion yen (approximately 56% of total capital investment) over the 25 years up until the end of FY2012.3.

■ Trends in Accident NumbersJR Central works to prevent accidents by placing the highest priority on ensuring safe

and reliable transportation. On conventional lines, in order to prevent a potentially serious accident occurring at a level crossing, we have improved our hardware by installing various level crossing safety devices and as a result of these efforts, the number of train accidents during FY2012.3, which decreased significantly compared with the initial number of accidents at the time the company was founded, was15. Also, due to efforts to develop hardware, such as strengthening the functionality of the ATS (Automatic Train Stop), we have had no serious accidents, such as derailments, in recent years.

■ Preparing for Natural Disasters① Earthquake Countermeasures(1) Reinforcement of Structures

In regard to Shinkansen earthquake countermeasures, we have already completed anti-quake reinforcement of elevated track columns, except on parts related to development projects, which were deemed to require reinforcement as a result of an anti-quake diagnosis performed on all Tokaido Shinkansen track after the Hanshin-Awaji Earthquake. Also we have reinforced elevated track columns between Mishima and Toyohashi, which require reinforcement since the expected wave patterns for a future Tokai Earthquake published by the Japanese government in 2003 suggest ground motion in this area could be particularly strong. In conjunction to further strengthen structures along the same section, we have proceeded to implement earthquake-resistant reinforcement of bridges and embankments as well since 2008. Furthermore, we are engaging in works to strengthen facilities on conventional lines, such as construction to prevent bridges from falling down and anti-quake reinforcement of elevated track columns.(2) Improvement of Earthquake Disaster Prevention System

In 1992 JR Central became the first company to introduce an “Earthquake Rapid Alarm System,” which was introduced on the Tokaido Shinkansen, and we have made efforts to introduce a Conventional-Lines Earthquake Information Communications System. By introducing the “Tokaido Shinkansen Earthquake Rapid Alarm System (TERRA-S)” in 2005, which was an improvement over the previous system, the amount of time required from earthquake detection to alarm issuance was reduced from three seconds to two seconds, and alarm accuracy was improved. Also, from November 2008, we have been leveraging emergency earthquake information for advanced users sent out by the Japan Meteorological Agency. Furthermore, from 2012 through 2013, we will enhance functionality to respond to vertical earthquakes and interlocking-type earthquakes, as well as to provide for better backup of systems in an effort to further improve the reliability of systems and safety against earthquakes.(3) Countermeasures to Prevent Derailment / Deviation

In light of the derailment accident on the Joetsu Shinkansen caused by the Niigata Chuetsu Earthquake that occurred in October 2004 and certain characteristics of the Tokaido Shinkansen, we started implementing derailment and deviation prevention measures in 2009 and are committed to the greatest extent possible to further strengthen seismic resistance.

Firstly, in order to prevent as much as possible a derailment during an earthquake, “Derailment Prevention Guards” are installed parallel to and on the inside of rails in sections that are expected to experience strong earthquake motion during a Tokai Earthquake, and

on sections right before points that trains pass over at high speeds due to the fear of more damage in the event of a derailment. Also, in order to prevent as much as possible large rolling stock deviations from track in case of a derailment, “Deviation Prevention Stoppers” are installed in the center of Shinkansen rolling stock bogies. In conjunction with this, in addition to current earthquake countermeasures for conventional civil engineering structures, countermeasures to suppress the spilling of ballast, the sinking of embankments and the displacement of elevated track columns are implemented to ensure that derailment prevention guards function effectively.② Tsunami Countermeasures

In addition to stipulating in our corporate regulations the operating rules and procedures for verifying safety prior to recommencing train operation to guard against a tsunami, we have taken into account the events of the Great East Japan Earthquake which struck in March 2011, and strengthened our capability to guide an evacuation along conventional lines by revising the standards by which crews direct evacuations on their own judgment and improving “tsunami evacuation maps” noting evacuation routes and shelters. We have also conducted tsunami evacuation training based on these revisions. ③ Countermeasures against Other Natural Disasters

We also strive to minimize the impact of other natural disasters on our railway operations. For example, we are conducting training in rapidly communicating information in accordance with a prescribed communication network so as to restore the schedule to normal as early as possible. To protect railway lines from rain and wind, we are improving facilities including embankments and cutting slopes. Additionally, in extreme situations when wind speeds or rainfall exceeds certain levels, we guarantee safe and reliable transportation by taking measures including restricting operations.

■ Education and TrainingTo ensure safe and reliable transportation, we implement safety education and training for

the employees engaging in train operations and facility maintenance. In particular, we regularly confirm the knowledge and skills of staff in charge of train operation in order to be thoroughly prepared to maintain safety, and utilize Simulators for Drivers and Simulators for Conductors that are almost identical to actual cars to cultivate and train drivers and conductors. We also work to improve our ability to respond to accidents quickly and restoration technique by holding regular training sessions that simulate actual accidents, such as the simulated repair of derailed rolling stock, as well as damage repair trainings that include the restoration of track, power cable and signal communication facilities.

In addition, as the company experiences a swift generational change we are making sure that skills and knowledge are passed down mainly through OJT at work sites, group training to improve expert knowledge and skill in accordance with position and rank, and self-betterment, such as JR’s unique internal online training. In September 2011, we opened the newly established General Training Center, which integrates our previous employee training centers, and are implementing more practical and effective training using a full array of training equipment including the “General Training Simulator” which allows crews and other personnel to engage in complex training. Through these efforts we shall strive to further develop employee training that focuses on safety and service as a group.

▲Derailment Prevention Guards

(billions of yen)

244

288

▲General Training Session Simulating Actual Accidents

Safety-Related Investments (Non-consolidated)

Locations of Seismometers and Detection Points

Train Control System in the Case of Earthquakes

Example) The effect of derailment prevention guards on a rocking derailment, which is one type of derailment caused by earthquakes.①When the tracks move laterally during an earthquake, the

wheels on one side collide with the rails while the wheels on the other side bounce up from the shock.②The train derails when the tracks then move in the

opposite direction at this instant. (Rocking derailment)③Since the wheels opposite from the wheels that have

bounced up are still riding on the rail, the derailment prevention guards prevent a derailment by stopping these wheels from moving any further in the lateral direction.

①②

●

●

①

②③preventing a derailment by the 　derailment prevention guards

Safety-Related Investments

Total Capital Investments

Detection points (21)

Seismometers alongside railway lines (50)

Shin-Osaka

Tokyo

149



14 15

■ Shinkansen Operation SystemThe safe and punctual operation of the Tokaido Shinkansen is supported by the

complete safety control through utilizing various systems, with the Shinkansen operation system (COMTRAC*) as the core, which accurately controls vast volumes of data such as the operational status of trains and the utilization of facilities.

At the Shinkansen General Control Center in Tokyo, various directives, such as transportation, cars and crew management, facility, electrical power, and signal, utilize these systems and work in close cooperation to support the safe and reliable transportation. Also, the Shinkansen 2nd General Control Center that has the same functions has been established in Osaka with the cooperation of JR West to be used in the event that the Shinkansen General Control Center becomes inoperable, thereby strengthening our crisis management ability.*COMTRAC (COMputer-aided TRAffic Control)

COMTRAC is the system that controls train routes, train operations, and the allocation of staff (drivers and conductors) and rolling stock. Based on input data prescribing the operational conditions for each train (such as station departure and arrival time, platform, and order) the system can monitor the status of all trains in operation.

■ ATC (Automatic Train Control)The ATC system continually displays a signal to the driver showing the train’s maximum

permitted speed which varies according to the distance from the train in front of it and track conditions. If the train exceeds the permitted speed, the ATC automatically applies the brake to bring the train's speed back within the permitted range.

We introduced a new ATC system that uses the various cutting-edge technologies to enhance reliability with the renewal of Tokaido Shinkansen ATC ground equipment in March 2006.

Unlike the existing “multi-step” brake control system, the new system is “one-step” brake control system that ensures smoother braking from full speed to a complete stop. By digitalizing the signal used to send and receive data with this new ATC system we are now able to send and receive more data when compared with the previous ATC system resulting in improving system reliability as well as improving passenger comfort and flexibility of timetable scheduling.

■ Doctor YellowWe run a multiple inspection train, known as Doctor Yellow, to test the Shinkansen

facilities such as electrical facilities and track. This train, which is based on the Series 700, is equipped with the latest devices to efficiently conduct high-precision inspections and measurements at speeds of 270 km/h, and it therefore plays an important role in supporting the safety and reliability of the Tokaido Shinkansen.

■ Renovation of the Hamamatsu WorkshopTokaido Shinkansen rolling stock are kept in the best condition possible through

periodic inspections performed in accordance with inspection cycles and running distance. In July 2010 we started renovations of the Hamamatsu Workshop which is the only workshop that performs overhauls of the Tokaido Shinkansen. Through these renovations we aim to replace and strengthen existing structures to improve anti-quake resistance, improve work efficiency through the introduction of line improvements and the latest equipment, and improve the overall work environment. Renovations are expected to be completed at the end of FY2018.

■ Conventional Line Operation SystemJR Central’s 12 conventional lines are controlled from two control centers; the Tokai

General Control Center and Shizuoka General Control Center. Each of the centers monitors the operational status of trains and the utilization of facilities 24 hours a day.

■ Centralized Traffic Control (CTC)The CTC system efficiently controls train operations through the centralized remote

control of station signals. The system is also equipped with functions for real-time monitoring of the operational status of trains. The CTC enables us to manage train and station information at its control centers. Such centralization allows orders and directives to be issued more rapidly even in emergency situations. We have implemented the CTC system on almost all of our lines, thus ensuring reliable train management.

■ ATS: Automatic Train StopATS is a system for automatically applying emergency brakes in situations where the

train risks overrunning. We introduced ATS-ST systems on all lines, which have functions such as an immediate application of the emergency brake if the train passes over an ATS ground coil located short of signals which control departures and arrivals of trains in a station when such signal indicates that the train should stop. This has greatly led to the prevention of serious accidents.

In upgrading the ATS-ST systems, we have been replacing systems on all conventional lines with the ATS-PT system, which has the capability to check the speed continuously according to the distance from the train to the signal, and, since FY2006, we have moved forward with preparations and commenced its use gradually. In February 2012, we completed the introduction on all conventional lines, which has dramatically enhanced safety.

■ Doctor TokaiAs for the maintenance of railway tracks and electrical facilities, the use of the multiple

inspection train, known as “Doctor Tokai,” introduced in 1997, has enabled the efficient and early monitoring of facility conditions. Following on from Doctor Tokai’s long track record of steady and reliable inspections for approximately ten years, we introduced an additional track inspection train, known as DoctorⅡ, in April 2006. The new train is equipped with the latest technologies, and allows us to further improve our ability to carry out a frequent high-precision track testing.

■ Countermeasures Against Snow Slides and Falling RocksWe have developed equipment to protect against falling rocks and snow slides on

sections where such a risk is present. Moreover, the installation of equipment to detect falling rocks has prevented accidents before they happen by restricting train operation if falling rocks or snow slides are detected.

Safety and Reliability

▲Renovation of the Hamamatsu Workshop (completion image)

▲Retaining Walls and Alarm System for falling rocks

▲The Shinkansen General Control Center

ATS-PT Overview・Based upon information from the ground, a braking

pattern is generated in a train in accordance with the distance to the signal ahead.

・When the train speed exceeds this pattern, emergency brakes are automatically engaged bringing the train to a stop before the signal.

・The ATS-ST provides only intermittent controls, while ATS-PT provides continuous control through braking patterns.

Tokaido Shinkansen Conventional Line

③From the position information of both trains, 　ATC signal (speed check pattern) is calculated.

⑤When the speed exceeds ATC 　signal, a brake system will work.Speed of

own train

④Comparison between 　speed and ATC signal.

②Position information of own train

①Position information 　of the preceeding train

Preceeding train

ReceiveGround equipments

(for position adjustment)

ATS-ST

ATS-PT

CTC system area

InotaniShiojiri

Tatsuno

KofuTokyo

KozuAtamiNumazu

Fuji

ShizuokaToyohashi

ObuNagoya

Tajimi

Mino-OtaGifuMino-Akasaka

Ogaki

MaibaraKyoto

Shin-Osaka

Ise-Okitsu

Kameyama

Matsusaka

Toba

Shingu

Taki

Taketoyo

Tokaido Shinkansen

Tokaido Line

Iida Line

Meisho Line

Sangu Line

Minobu Line

Chuo Line

Gotemba Line

Kisei Line

Kansai Line

Takayama Line

Taita Line

Taketoyo Line

Driver is warned

Ground coil (Alarming point)

Ground coil (Pattern generation)

Ground coil (Speed check)

Ground coil below signal (Immediate stop)

Signal

Signal

Braking Pattern

Speed

Speed

train’s running curve

Speed is continuously checked. At any given speed, if the speed exceeds the pattern, the emergency brake activates.

CTC System Area

Comparison between ATS-ST and ATS-PT

Mechanism of ATC



Sources: GDP: Annual Report on National Accounts (Cabinet office, Government of Japan)

GDP Passenger-kilometers (JR Central)

GDP(100 million passenger-kilometers)

(¥ trillion)

525

’08.3 ’09.3 ’10.3 ’11.30

200

300

400

500

600

0

200

300

400

500

600

505495

511 511

’12.3 0

50

100

150

200

250

300

Nozomi Hikari Kodama

Note1: Departures shown are as of the beginning of each fiscal year (excluding extra services)Note2: JR Central commenced operations in Apr. 1987, “Nozomi” began commercial operation in Mar. 1992, a drastic timetable revision was implemented in Oct. 2003(maximum seven “Nozomi” hourly departures)

▲Outlet for Mobile Devices and Seatback table (The Series N700)

235144

91

288

1884

96

137

89

65

323173

66

84

(Trains / day)

’87.4 ’92.4 ’04.4 ’12.4

291

Higher vibration-control performance by semi-active suspension system

16 17

Japan’s GDP and Tokaido Shinkansen Passenger-kilometers

Providing Services Customers Will ChooseWe are working to improve our transportation services by, for example, establishing easy-to-use timetables, improving facilities, and

introducing new rolling stock to increase speed and passengers comfort in order to fulfill our long-term mission of maintaining and developing, in an integrated fashion, both the Tokaido Shinkansen, which serves as Japan’s main transportation artery, and the conventional line network in the Tokai (such as Nagoya or Shizuoka) region as well as to be a transportation mode that customers will choose.

Transportation Service

Since its inauguration in 1964, approximately 5.3 billion people have used the Tokaido Shinkansen, the transportation artery linking Japan’s three largest metropolitan areas, Tokyo, Nagoya, and Osaka, which has supported Japan’s economic growth.

■ Characteristics of the Tokaido Shinkansen

■ Drastic timetable revision and opening of the Shinkansen Shinagawa 　 Station in October 2003

With the inauguration of the Tokaido Shinkansen in 1964, the time required to travel between Tokyo and Osaka was shortened to three hours and 10 minutes (the trip took four hours initially) from six hours and 30 minutes. Then with the introduction of the “Nozomi” in 1992 that time was shortened further to two hours and 30 minutes and we strove to improve convenience even further by steadily increasing the number of “Nozomi” services thereafter.

In October 2003, the investment in rolling stock and ground facilities that we had continuously engaged in over approximately 15 years culminated with the upgrading of the maximum speed of all trains to 270km/h and a drastic timetable revision that resulted in a maximum of seven “Nozomi” services operated each hour. In conjunction with this we also dramatically improved convenience of the Tokaido Shinkansen by creating non-reserved seats on “Nozomi” services in addition to lowering reserved seat charges and offering travel products that allowed passengers to utilize the new timetable. Then, we opened the Shinkansen Shinagawa Station simultaneously with the drastic timetable revision, thereby shortening the total travel time of passengers traveling from or to southwest Tokyo by 20 to 30 minutes. Additionally, having all train services including

“Nozomi” services stop at Shinagawa and Shin-Yokohama stations with the timetable revision of March 2008 resulted in further improving accessibility to the Tokaido Shinkansen in the Tokyo metropolitan areas.

■ Further improvements to the Tokaido Shinkansen(1) Increasing capacity and the number of “Nozomi” services with direct service

between the Tokaido and Sanyo sections.We have continued to improve the convenience of the Shinkansen through a series of

timetable revisions since October 2003. We further boosted transportation capacity by allowing up to eight “Nozomi” services per hour in March 2005, and a maximum of nine services in March 2009, and continue to flexibly adjust train services during peak times in particular. Also, in March 2006 we aimed to further improve convenience to the Sanyo section by increasing the number of “Nozomi” services with direct service between the Tokaido and Sanyo Shinkansen sections and operating two “Nozomi” services between Tokyo and Hakata per hour. Since then as well, we have further strived to improve service by augmenting Sanyo direct service “Nozomi.”

(2) Concentrated introduction of the Series N700① Characteristics of the series N700

JR Central and JR West jointly developed the Series N700. The Series N700 increased the speed on curves by adopting a body inclining system for the first time in Japan’s Shinkansen history and improved acceleration performance thereby enabling a shortening of travel time. In addition, we have improved ride quality including comfort and quietness, and achieved significant energy savings to decrease the amount of energy consumed by 25% compared to the Series 300 and by 19% against the Series 700.

Tokaido Shinkansen Daily Departures

Advanced semi-active suspension system

Tokaido Shinkansen Data (FY2012.3)

Tokaido Shinkansen Service (Nozomi, Hikari, Kodama)

Tokaido Shinkansen

465 460

427437 443

*1.Including extra services*2.Including delays due to uncontrollable causes, such as natural disasters

Note:Each Tokaido Shinkansen train has 16 cars*1.Based on the fastest “Nozomi” service*2.For a reserved seat of regular cars (normal season) Non-reserved seats are all ¥13,240 　*3.May vary by train

Tokyo～Shin-Osaka,time required

2 hr 25 min

Approx. 3 hrApprox. 4 hr

NozomiHikariKodama

Tokyo～Shin-Osaka,fare/surcharge

Number ofnon-reservedseat cars

¥14,050¥13,750¥13,750

35

10

Nozomi:Shinagawa, Shin-Yokohama, Nagoya and KyotoHikari:Same as Nozomi, plus a few additional stationsKodama:Every station

Stops

*3

*1

*2

●Total daily number of trains 333●Average daily passenger ridership 391 thousand●Yearly passenger ridership 143 million●Maximum operating speed 270km/h●Average delay from schedule 　per train 0.6 minutes *2

*1

◯No accidents resulting in fatalities or injuries of passengers onboard since operations commenced◯Highly-skilled personnel with safety awareness through comprehensive training◯Train control system with the most sophisticated electronic technologies,

continuous safety-related investments including countermeasures for derailment and deviation as further anti-earthquake measures in addition to reinforcement of structures

◯Rolling stock with enhanced riding comfort and noise suppression◯Comfortable interior space that meets various needs of passengers such as a

wireless LAN Internet connection service in the Series N700 available between Tokyo and Shin-Osaka◯Constant renovation of stations and installation of new facilities such as

elevators and escalators

◯Maximum speed of 270km/h (300km/h in the Sanyo Shinkansen section)◯The fastest “Nozomi” connects Tokyo and Shin-Osaka by 2 hours and 25

minutes, which is virtually the same time that this route takes by air if one includes the time necessary to travel between airports and city centers as well as check-in, etc

◯333 daily departures (FY2012.3, including extra services), 1,323 seats per train◯A maximum of ten “Nozomi” services per hour. Daily passenger capacity of the

Shinkansen between Tokyo and Osaka is approximately 320 thousand, which exceeds that of airlines with approximately 30 thousand (FY2012.3)◯The “Express Reservation” service allows passengers to change their

reservations for free via mobile phones, PCs or smart phones as many times as they like prior to departure and receipt of tickets. With the ticketless “EX-IC Service” utilizing an IC card, it is no longer necessary to pick up a paper ticket prior to boarding, a benefit which shortens total travel time and enables passengers to take maximum advantage of the overwhelmingly frequent Tokaido Shinkansen services.

◯Average delay 0.6 minutes per train (FY2012.3, including delays due to uncontrollable causes such as natural disasters)

Safety

Punctuality

Comfort

High Speeds

High Frequency andHigh Capacity

1. Offering a relaxing, comfortable, and high-quality cabin environment● Enhanced riding comfort and quietness (installing an advanced semi-active

suspension system and cover-all hood)● Completely separated smoking and nonsmoking sections by making all seats

non-smoking and installing smoking rooms● Improvement of First class Green car quality (adopting Synchronized Comfort

Seats)2. Offering the ultimate internal environment for businessperson● Increasing the number of outlets for mobile devices (All seats in Green Cars,

window seats and seats at the front and back in regular cars)● Making seatback tables large enough for note PCs● Improving quietness in vestibules, and realizing an ultimate conversing

environment for mobile telephone users● Aiming to perfect a stable Internet connection environment even during

high-speed operation by utilizing Wireless LAN (between Tokyo and Shin-Osaka)

3. Perfecting train services so that passengers can feel more comfortable● Enlarging information displays for onboard electronic news caption● Enlarging multifunction wash room space and establishing facilities for

ostomates for the first time on a Shinkansen train● Establishing security cameras on vestibules in order to improve train security



18 19

The number of Regular Nozomi Services Operated by the Series N700

Note:The numbers are as of the timetable revisions of months indicated

Transportation Service

② Concentrated introduction and increase in the number of “Nozomi” operated by the Series N700 Starting with the introduction of the Series N700 rolling stock for “Nozomi” direct

service between Tokaido and Sanyo Shinkansen sections in FY2007, we have sequentially expanded operation of Series N700 “Nozomi” with the concentrated introduction of 80 trainsets over the five years ending FY2011. Since the timetable revision in March 2012, there is now a total of 96 trainsets, including the 16 trainsets introduced by JR West, and all regular “Nozomi” service operates with the Series N700.

(3) Introduction of N700ASubsequent to the intensive introduction of the Series N700, we will be introducing the

N700A, which employs the results of technological developments achieved since the birth of the Series N700, including the “High Performance Wheel Mounted Brake Disk,” “Bogie Vibration Detective System” “Fixed Speed Running Device,” in an effort to even further improve safety, reliability and energy efficiency, to replace the Series 700 rolling stock. We shall introduce six trainsets of the N700A in FY2012 and seven trainsets in FY2013 which will mean that approximately 70% of the Shinkansen rolling stock owned by JR Central will be of the Series N700 variety.

(4) Further Enhancements to Transportation Service① Large-scale renovations at Shin-Osaka Station

At the Tokaido Shinkansen Shin-Osaka Station we are currently engaged in construction to add a new track and a new platform in addition to increasing the number of draw-out tracks from two to four. Commencement of use of the track and platform will take place at the end of FY2012 and commencement of use of all facilities including draw-out tracks will take place during FY2013. These improvements will provide the foundation for largely improving the flexibility of transport and our ability to handle disasters, as well as increase the hours with maximum 10 “Nozomi” services possible.

Additionally, in August 2012, the passageway, which connects Shin-Osaka Station with the north side of the station where the Shin-Osaka Hankyu Building is scheduled to open in the fall, will be open for use, and improvements are scheduled to be completed to the station concourse by the end of this year.② Investment in Stations for Further Convenience and Comfort

In order to offer further convenience and comfort at stations, we have changed station layouts to make ticket offices more accessible, upgraded waiting rooms for passengers, and conducted renovation of retail tenants on station premises. At Tokyo Station on which work commenced in 2006, improvements had successively been made to the station facilities and were completed in March 2012.

Moreover, to further enhance safety on platforms, we are also steadily continuing to make improvements to passenger-related facilities by planning to implement new-model moving platform fences which can utilize existing fences and costs lower at Tokyo Station and on platform #27 at Shin-Osaka station.

　We operate a network of 12 conventional lines, which form an integrated network with the Tokaido Shinkansen. These lines have contributed to the development of communities and the regional economy around Nagoya and Shizuoka areas.

■ Improvement of Service on Conventional LinesIn regards to conventional lines, we are surely and steadily improving services such as

speeding up, introducing new rolling stock, and increasing the frequency of trains. With regard to the express trains, we introduced “Wide View” new rolling stock and have synchronized the timetables of both the Tokaido Shinkansen and express trains to create an integrated network of the Tokaido Shinkansen and Wide View trains. Local trains have benefited from the increased frequency and cars of train services during peak-demand morning and evening periods and from the introduction of expanded rapid train services that reduce travel times. Moreover, train departures are being adjusted to provide service at regular intervals in order to provide timetables that better serve passenger needs.

■ Electrification of the Taketoyo LineWe have decided to electrify the Taketoyo Line (between Obu and Taketoyo), which

transports commuters in the Nagoya metropolitan region, in the spring of 2015. By abolishing diesel cars and using the same type of trains that are presently in operation in the Nagoya metropolitan area, we aim to improve transportation service by creating flexible timetables for the entire Nagoya metropolitan region and flexibly adding cars. Also, we will improve the ability to respond to delays as well as create a system that reduces the burden on the environment through electrification. Furthermore, since some diesel cars will need to be replaced soon, by switching from diesel cars to electric cars we will be able to reduce new rolling stock production costs and running costs.

■ New Manufacturing for Conventional Line Rolling StockIn regard to conventional line rolling stock, in consideration of energy efficiency,

barrier-free and comfort, we newly produced and introduced 204 Series 313 rolling stocks in 2006. As a continuation of this, we aim to further improve safety and transportation service by newly producing 120 Series 313 rolling stocks as well as 10 Series Ki-Ha 25 rolling stocks and using them to replace aging rolling stock. We gradually commence commercial operation of this new rolling stock from FY2010 to the end of FY2012. And we plan to introduce 28 Series 313 rolling stocks after spring 2015 on the Taketoyo Line.

▲Rendering of Shin-Osaka Station Platform Addition

▲Rendering of a new-model moving platform fence

(million passengers) 389

250

139

391

252

139

384

252

132

386

254

132

’11.3’10.3’09.3’08.3100

200

300

400

384

254

130

’12.3

▲Series 313 (type of rolling stock)

▲Ki-Ha 25 (type of rolling stock)

▲Wide-View Shinano

Conventional Line

0

50

100

150

41

81

120

149

(Trains / day)

’08.3 ’09.3 ’10.3 ’11.3

163

’12.3

Conventional Lines Ridership

Total

CommuterPasses

Ordinary Tickets

The number of Regular Nozomi Services Operated by the Series N700

All regular N

ozomi S

ervices



20 21

Providing More Convenient ServiceJR Central has introduced EX-IC Service on the Shinkansen and TOICA on conventional lines to enable passengers to move more quickly as

we move towards eliminating paper tickets on the Shinkansen and conventional lines. Furthermore, passengers can use both of these services together to transfer smoothly between the Shinkansen and conventional lines. We are also evoking demand for tourism by offering various travel campaigns and vacation packages as we strive to actively create new demand.

Sales and Marketing

■ Service Expansion for “Express Reservation” and “TOICA”“EX-IC Service” enables passengers to board reserved cars of “Nozomi,” “Hikari,” or

“Kodama” trains on the Tokaido and Sanyo Shinkansen without paper tickets by using Express Reservation service, which is an online seat reservation service for members. Along with the services offered by “Express Reservation,” which enable passengers to easily make and change reservations for free as many times as they would like from their mobile phones and PCs as well as take advantage of economical price all year around, the “EX-IC Service” was introduced in March 2008 to reduce the total travel time and enhance the convenience of the Tokaido Shinkansen for the passengers by eliminating paper tickets. In August 2009, we expanded the “EX-IC Service” to the Sanyo Shinkansen section and began offering the service to our corporate customers. At the same time, we started to offer “IC Hayatoku,” by which passengers can take advantage by making reservations three days in advance, which makes the Shinkansen quite a bargain. Moreover, in July 2011, we broadened our services without interruption when we started offering “Express Reservation” on smart phones.

As a result of these efforts, there were over two million members as of the end of May 2012, and the average number of weekday usage was approximately 110,000 as of the end of March 2012 with a steady increase even under the severe conditions after the disaster struck. We will continue to strive to further improve the convenience of “Express Reservation” and expand use while taking into account passenger requests, such as expanding our handling of trains to address changes in train systems along the the Sanyo Shinkansen.

Also, along with expanding the service area of the conventional line IC card “TOICA,” which was introduced in the Nagoya area in November 2006, to the Shizuoka area in March 2008, we have also enabled mutual use of JR East's “Suica” card and JR West’s “ICOCA” card. As a result, passengers can now transfer smoothly between the Shinkansen and conventional lines by merely simultaneously touching the ticket gates with their “EX-IC” card and either conventional line IC card, such as “TOICA.” Furthermore, in addition to expanding the service area, introducing service so passengers may board the Shinkansen with a “TOICA” commuter pass, and adding an electronic money function to “TOICA” in March 2010, we have been providing mutual use of the electronic money function and boarding pass for JR Kyushu’s “SUGOCA” since March 2011 as well as the boarding pass function for “manaca” issued by the Nagoya City’s Transportation Bureau, Meitetsu and other institutions since April 2012. Thereafter, as a result of striving to improve the convenience of our electronic money service, such as by increasing the number of participating stores, in October 2010, we broke the one million

mark for the number of “TOICA” cards issued, and there were approximately 1.26 million in use as of the end of March 2012.

In addition, we are striving to further improve service by proceeding with preparations to implement mutual use with “PASMO,” “PiTaPa,” etc. issued by private railroads in the Tokyo and Kansai areas in the spring of 2013.

■ Measures to Stimulate Tourism DemandWhile improving convenience for business passengers, we have engaged in efforts to

stimulate tourism demand over a diverse range of informational media and sales channels by launching various campaigns and travel products in order to effectively leverage available seats on some services that are not comparatively crowded.

Firstly, we have continued to implement campaigns for Kyoto and Nara, which are the largest tourist resources in our market area, and are promoting the use of the Shinkansen mainly from the Tokyo Metropolitan areas to the Kansai regions.

We have also launched our “Tokyo☆Bookmark” campaign as a way to increase demand, especially of trend-conscious young women, for travel from the Kansai / Nagoya regions to the Tokyo Metropolitan areas. This campaign leverages the SNS and other networks through which customers can recommend tourist spots in the Tokyo Metropolitan to each other and offers attractive package tours available online in collaboration with travel agencies. Additionally, we are running a “Travel to Kyushu by Shinkansen” campaign in the Nagoya region to showcase the convenience and the comfort of the Shinkansen as well as provide the tickets with affordable pricing as a way to promote tourism in Kyushu. In conjunction with this we are also developing travel packages that are linked with the Kyushu Shinkansen which commenced full commercial operation in March 2011. In addition, we rolled out the “Shupo ~Train Travel Beginning with the Shinkansen~” with which passengers may change from the Shinkansen to conventional lines and be delivered to sightseeing spots along the lines as part of our effort to link the Shinkansen and conventional lines.

We also offer the “Nozomi Family Car,” a dedicated car for passengers traveling with children to make it easier for families to travel during the summer and new year holiday seasons. Besides this, we have strived to create new demand through efforts such as offering “EX Odekake Hayatoku” to “Express Reservation” service members for a limited time, which makes it convenient for families to take weekend trips.

Also, with the country striving to attract more foreign travelers to visit Japan, JR Central is doing its part by working with travel agencies and local municipalities along train lines to boost the tourist demand for the Tokaido Shinkansen. In order to achieve this goal, in March 2011, we launched the online foreign tourist package brand “FLEX JAPAN” which offers ticket-based products for round-trip use on the Nozomi and other trains as well as accommodation-based products in the Chubu area along with the current special travel products to Kyoto and other destinations.

As a way to promote the use of conventional lines, in addition to “Sawayaka Walking” event where participation fee is free and participants walk to tourist spots along our train lines, we are hosting a tour visiting “rarely-visited” stations along the Iida line as well as implementing a campaign to stimulate tourism demand for Ise in time for the special event at the “Grand Shrine of Ise” held in 2013.

Going forward, we will continue to strive to stimulate tourism demand through offering travel products and campaigns that meet the attributes of our customers and tourist resources.

Membership (Thousands)

0

500

1,000

1,500

0

50

100

150

2002,000

330

1,290

380

1,410

210

950

1,150

270

96 9686

81

’08.3 ’09.3 ’10.3 ’11.3

440

1,540

110

’12.3

Usage(Thousands)

▲Tokyo☆Bookmark website (TOKYO SKYTREE)

▲Kyoto Campaign, Spring 2012 version (Ryoan-ji Temple)

▲Nara Campaign, 2012 Kinpusen-ji Temple version

▲“FLEX JAPAN”Website

▲EX-IC Service

“Express Reservation” service

Concept Image of Using the Express IC Card along with TOICA Commuter Pass Mutual Use of IC Cards for Conventional Lines

Membership (JR Central) Membership (JR West)

Usage (Daily average on weekdays)

Making transferring between the Shinkansen and conventional lines in the Tokyo, Nagoya, Osaka, and other areas seamless.

Transferring between the Shinkansen and conventional lines is seamless with the use of TOICA commuter pass and an EX-IC Card.

*IC cards for conventional lines cannot be used for travel that extends through TOICA, ICOCA or Suica areas.

●Boarding conventional lines with an IC card for conventional lines●Boarding the Shinkansen by touching an EX-IC card and an IC card for conventional lines●Getting off at conventional line stations with an IC card for conventional lines

EX-IC Card+Suica

【①EX-IC Card】【②IC card “TOICA” for conventional lines】

Mutual use of IC cards makes it smoother to move between the three large cities.

EX-IC service

Tokaido Shinkansen

Boarding trains with the amount remaining on the IC card

Boarding trains with its commuter pass function

Gifu

Shinjuku

Touch the two IC cards at ticket gates

EX-IC Card+ICOCA

To

ky

o

Na

go

ya



22 23

（Current）Internal Circumference-anchored

Brake DiskHigh Performance

Wheel Mounted Brake Disk

Mechanical problems will be displayedin the cockpit.

BrakeDisk Bolt

BrakeDisk

Vibration Sensor Vibration SensorVibration Detective Machine

▲Komaki Research Center

▲Vehicle Dynamic Simulator

▲Rolling Stock Field Test Simulator

Creating the Future through Research and DevelopmentRailway business is made possible by skilled employees cooperating to execute their tasks and by various types of equipment, such as civil

engineering structures, tracks, electric and signaling equipment and rolling stock, functioning seamlessly. In order for a railway business to further ensure safety and strengthen its future managerial foundation, it is vital for it to continuously improve its technical capability. Based on this belief, JR Central is aggressively tackling the issue of technological development and enhancement of technical capability, and is achieving significant results. Furthermore, JR Central is promoting the deployment of high-speed railway in overseas projects by leveraging the comprehensive high-speed railway technology that JR Central has cultivated through the operation of the Tokaido Shinkansen.

■ Promoting Technological Development at the Komaki Research CenterJR Central opened its own original R&D center in Komaki, Aichi Prefecture in July

2002, and is promoting R&D activities to further strengthen our efforts toward technological development that will support our future, to enhance our technical capabilities, and to foster technically skilled human resources. At the Komaki Research Center, we place the highest priority on ensuring safe and reliable transportation, and we are promoting research and development around the principal pillars of improving transport service such as that on the Tokaido Shinkansen, improve technical skill and cultivate personnel and skill in-house, reducing costs and increasing efficiency at all levels including saving labor in maintenance work, as well as developing cutting-edge technologies.

■ Recent Technological Developments(1) Countermeasures to Prevent Derailment / Deviation for the Tokaido Shinkansen

We have been implementing derailment / deviation prevention measures as much as possible on the Tokaido Shinkansen since 2009 as new earthquake countermeasures to prevent damage from derailments caused by earthquakes. (See page 12 for more information) This countermeasure consists of three elements; installing derailment prevention guards and deviation prevention stoppers, and strengthening civil engineering structures. This achievement took approximately five years of unraveling the mechanism of derailment at the Komaki Research Center and conducting actual on-rail tests, and the efficacy of these countermeasures has been verified.

(2) Development of the Series N700 and its improvementThe Series N700 rolling stock began commercial operation in July 2007. The results of

various research and development conducted at the Komaki Research Center are reflected in N700. For example, in order to further improve riding comfort, the Series N700 introduced a newly developed “Body Inclining System” and “Advanced Semi-active Suspension System” that was developed by utilizing the “Vehicle Dynamic Simulator.” These developments allow the Series N700 to maintain riding comfort while traveling on curves at 270 km/h and also to reduce the level of vibrations transmitted to the interior of the cars. In order to improve the environment along tracks, we utilize “Low-noise Wind Tunnel Devices” and developed “Improved Rolling Stock Nose Shape,” ”All-covering Hoods,” and a “New Pantograph Configuration.”

Furthermore, we started actual tests using the “Rolling Stock Field Test Simulator” in April 2008. This simulator works by running a Shinkansen rolling stock atop track wheels that simulate rails, and reproducing running conditions by simulating various vibrations that are generated during running. The Series N700A that will be introduced from FY2012

reflects the results of post-Series N700 technological development that leverages this “Rolling Stock Field Test Simulator” and a test car of the Series N700. By equipping the Series N700A with “High Performance Wheel Mounted Brake Disk” which provides stronger and more reliable braking, a “Bogie Vibration Detective System” which continuously monitors the state of all bogies in order to further improve reliability, and a “Fixed Speed Running Device” which enables even more reliable operation using ATC signals, we have been able to further improve safe and reliable transport.

We will further leverage simulators in our efforts aimed at the further pursuit of safety and reliability, and the very best riding comfort, as well as our efforts to make rolling stock lighter and more energy efficient.

(3) Advanced Maintenance of StructuresJR Central is continuously engaged in research and development aimed at advanced

maintenance of structures. For example, in addition to continually ascertaining the actual condition of steel bridges, viaducts and tunnels along the Tokaido Shinkansen, we continue to develop methods for implementing reinforcement work by using actual-size test truss bridges and viaducts set up at Komaki Research Center. We introduced a new structure testing apparatus (Tri-axial Loading System for Structures) and are proceeding with research aimed at evaluating a degree of soundness of structures and creating a design code that suppresses costs while maintaining quality.

■ Overseas Deployment of High-Speed Railway SystemToday, global warming is a pressing issue. With its environmentally-friendly

characteristics, railway, in particular high-speed railway, is attracting more and more interest from all over the world, and thus, there are many high-speed railway projects underway. JR Central is promoting the overseas deployment of high-speed railway systems by leveraging the comprehensive high-speed railway technology it has accumulated through the operation of the Tokaido Shinkansen and development of the Superconducting Maglev system. JR Central and its group companies can diversify the source of their earnings, while allowing domestic manufacturers to maintain and strengthen their technology and skills and expand their international high-speed railway market. Furthermore, JR Central expects that the overseas deployment of its high-speed railway system will bring technological innovation and cost reduction of railway-related equipment and will ultimately help the performance of JR Central.

(1) C&C (Consulting and Coordination) Business“C&C (Consulting and Coordination) Office-Overseas High Speed Railways Project”

section, established in July 2009, mainly promotes overseas deployment of high-speed railway system. C&C office proposes the deployment of high-speed railway as a total system that includes civil engineering structures, track, electrical equipment, signaling equipment, rolling stock, operation management systems, maintenance and repair, etc. to overseas high-speed railway markets. As overseas high-speed railway projects are fleshed out, this section will coordinate with related Japanese companies to provide support and consultation necessary for the safe and reliable operation of a high-speed railway, such as the provision of operation and maintenance manuals as well as training for personnel.

(2) The N700-ⅠBullet and SCMAGLEVJR Central is proposing high-speed railway systems called the “N700-Ⅰ Bullet” and

“SCMAGLEV” to overseas markets. The “N700-Ⅰ Bullet” is a total system that consists of not only the “N700-Ⅰ” rolling stock but also track, electrical equipment, signaling equipment and an operation management system. The “N700-Ⅰ” is based on the Series N700 operated in Japan and refers to an eight-car trainset (the Series N700 is a 16 car trainset) that meets the overseas market trends and can travel at a maximum speed of 330km/h (205mph). The Superconducting Maglev (SCMAGLEV) is a high-speed transportation system developed by JR Central that can operate at a speed of 500km/h (311mph).

(3) Efforts for Overseas Deployment of the N700-I Bullet and SCMAGLEVWith the United States as the principal market for overseas expansion, JR Central has

worked with US companies, which are experienced in dealing with government agencies and companies, in order to look into opportunities for the overseas deployment of its high-speed railway system and to actively engage in marketing activities to regions and corridors that have been selected as viable targets.

▲Tri-axial Loading System for Structures

▲Steel truss bridge

▲Reinforced concrete rigid frame viaduct

▲Overseas High-Speed Railway (completion image)

①High Performance　Wheel Mounted 　Brake Disk

②Bogie Vibration Detective System

Technological Development and Enhancement of TechnicalCapability / Overseas Deployment of High-Speed Rail Systems



Results of technical development which will be equipped on N700A

24 25

Flow of works based on the Nationwide Shinkansen Railway Development Act

The comparison of accelerating/decelerating performance among high-speed railway systems

Gifu PrefectureNagano Prefecture

Aichi Prefecture Shizuoka Prefecture

Yamanashi Prefecture

Kanagawa Prefecture

Tokyo Metropolis

In order to continually carry out our missionJR Central, whose mission is to operate high-speed railway linking the three major metropolitan areas of Tokyo, Chukyo and Kinki, aims for

the realization of the Chuo Shinkansen using the Superconducting Maglev system and is steadily proceeding with necessary procedures and works.

The Chuo Shinkansen using the Superconducting Maglev System

■ Promoting the Chuo Shinkansen using the Superconducting Maglev SystemWe are promoting the Chuo Shinkansen project using the Superconducting Maglev

system based on the Nationwide Shinkansen Railway Development Act (“Act”) to continually carry out our mission of operation of high-speed railway linking the Tokyo Metropolitan areas, Chukyo regions and Kinki regions, which is vital to our business, and to provide the future foundation of the company.

It has been 47 years since the inauguration of the Tokaido Shinkansen, which presently fulfills the mission, and we have entered a time when we must think of drastic ways to deal with feared future aging and large scale disasters based on the fact that it takes a very long time to construct and realize a railway. It is for this reason that we will realize as quickly as possible the Chuo Shinkansen that can substitute the mission by utilizing the Superconducting Maglev system, which we have developed, under the condition that we bear the cost of rail construction. We will operate the Chuo Shinkansen in an integrated manner along with the Tokaido Shinkansen. To promote this project, we shall invest as necessary to ensure safe and reliable transportation and enhance competitiveness as well as ensure sound management that will continue to provide stable dividends. We will also surely and steadily engage in various efforts aimed at the realization of the Chuo Shinkansen first to the City of Nagoya and after recovering management vitality, to the City of Osaka as soon as possible.

In order to confirm that the rules of a privately owned company, such as autonomy of capital investment and discretion of management, would not be hindered by application of the Act, we referred fundamental clauses regarding application of the Act to the Ministry of Land, Infrastructure, Transport and Tourism (“the Ministry”), and received a reply in January 2008 indicating that those rules would not be hindered.

After some legal processes, in May 2011, the Transport Policy Council of the Ministry reported that it was appropriate to designate JR Central as the operator and constructor of the Chuo Shinkansen. The Transport Policy Council also reported that it was appropriate to utilize the Superconducting Maglev system and the Southern-Alps route. Based on this report, the Minister of the Ministry (“the Minister”) designated JR Central as the operator and constructor of the Chuo Shinkansen between Tokyo and the City of Osaka after obtaining our consent on the matter. Thereafter, the Minister determined the development plan after obtaining our concent and instructed JR Central to construct the Chuo Shinkansen.

We are now promoting assessment of environmental impacts between Tokyo and the City of Nagoya, where we will start to construct the line as the first step. In June and August, 2011, we announced a rough route, locations of stations and environmental considerations in the “Report for Environmental Consideration at the Planning Phase” and in September, 2011, published the “Report for Procedure of Environmental Assessment.”

In November 2011, we decided and explained to the local governments that we would construct the intermediate stations at our own expense, where we modified the existing idea, for the early realization of the Chuo Shinkansen by sharing the roles with the local governments.

■ Investment on the Yamanashi Maglev Test Line and Improvement of the Superconducting Maglev Technology In consideration of the fact that Superconducting Maglev is most suitable for use on

the Chuo Shinkansen due to its speed and advanced technology, technological developments have been conducted and test runs have been performed at the priority section of 18.4 km of the Yamanashi Maglev Test Line.

As a result, The Superconducting Magnetic Levitation Technological Practically Evaluation Committee of the Ministry acknowledged that the Superconducting Maglev technology had already achieved levels sufficient for commercial operation in July 2009 and the Minister established the technological standards of the Superconducting Maglev in December 2011.

In September 2006, we decided to invest 355 billion yen of our own capital to completely upgrade facilities along the Yamanashi Maglev Test Line to practical specifications, and to extend the line to 42.8km. Currently, with the goal of beginning running tests by the end of 2013, we are advancing construction in a steady and speedy manner, and are proceeding to manufacture the new vehicle Series L0 (L zero).

On the test line after it has been extended and improved, running tests will be conducted with the Series L0, and we are committed to bringing down costs for construction, operation and maintenance of commercial lines as well as improving the superconducting Maglev technology, for which the practical technology has been completed.

■ Reducing Costs thoroughly while Ensuring SafetyThe burden of the cost for construction of the Chuo Shinkansen rests entirely on us,

and all costs are examined by the internally established “the Chuo Shinkansen Construction Cost Reduction Committee,” which continues to thoroughly reduce costs while ensuring safety. At the same time, we will flexibly distribute resources in an optimal fashion in accordance with managerial environments.

■ Superconducting Maglev and Global Environmental PreservationTokyo and Osaka will be connected in approx. one hour by the Chuo Shinkansen using

the Superconducting Maglev system, and the actual travel time required to move between the centers of Tokyo and Osaka can be shortened to approximately half that of airplanes. In addition, the amount of CO2 emissions that Superconducting Maglev produces when carrying one person between Tokyo and Osaka is approx. one-third that of airplanes. As this shows, Superconducting Maglev is a transport system suitable of the 21st-century in which global environmental preservation is becoming more important.

Legends： Planning area： Operation planning area： Yamanashi Maglev Test Line：Rough locations of Stations

N

This map is copied from a Japanese map (with a scale of 1 to 1,000,000) and a Japanese local map (with a scale of 1 to 500,000) published by the Geographical Survey Institute with their authorization. (Authorization number: H23 89)

Basic Plan

Researches and Reports

Article 4

・November 1973 decided

(Assessment of Environmental Impacts)

・Topographical and geological researches :　　Instructions, February 1990 　　　　　→ Report, October 2008・The four researches*: 　　Instructions, December 2008　　　　　 → Report, December 2009

*The four researches・Items related to transportation capacity versus passenger demand・Items related to the development of facilities and rolling stock・Items related to construction costs・Other necessary items

Article 5

Transport Policy Council

・Consultation, February 24, 2010　　　　　 → Report, May 12, 2011

Article 14-2

Designation of Operator and Constructor

・Consent, May 18, 2011　　　　　 → Designation, May 20, 2011

Article 6

Development Plan

・Consent, May 23, 2011　　　　　 → Decision, May 26, 2011

Article 7

Instruction to Construct・Instruction, May 27, 2011

Construction Implementation Plan

Start of Construction

・Application and Permission

Article 8

Article 9

▲A running image of the new vehicle Series L0 (L zero)

0 25 50km

A Rough Route and Locations of Stations of Chuo Shinkansen (between Tokyo and City of Nagoya) announced in the “Report for Environmental Consideration at the Planning Phase”

0

18 40 17 40 40 40 4028 3 396

5 10 15 20 25 30 35 40

(extension) (extension)Priority section (upgrading)

elevation

distance (Km)

800m

600m

400m

200m

grade（0／00）

Starting point ofthe Yamanashi Maglev Test Line

0km000m00

Starting point ofthe priority section

16km610m00

Ending point ofthe priority section

35km010m00

Ending point ofthe Yamanashi Maglev Test Line

42km800m00

8.8

581

430

320

11.1 13.3 18.710

600

500

400

300

200

100

0

20 30

Superconducting Maglev Transrapid (Shanghai)TGV Series N700

Distance（km）

Speed（km/h）

Overview of the Yamanashi Maglev Test Line



○Planning areaThe area shows where the Transport Policy Council of the Ministry of Land, Infrastructure, Transport and Tourism made the environmental survey.○Operation planning areaThe area shows a rough route of Chuo Shinkansen.

(billions of yen)

’11.3’10.3’09.3’08.30

100

200

300

400

500

’12.3

207

12

60

231

▲JR Central Towers

▲Rendering of the “Nagoya Station New Building” (tentative name)

▲Tokyo Character Street (First Avenue Tokyo Station)

528（31）

507（31）

462（30）

511（29）

518（29）

26 27

Aiming for the Collective Strength of the Whole JR Central GroupAs seen in JR Central Towers, Shin-Yokohama Central Building, and Nagoya Station New Building (tentative name) which is scheduled to be

completed at the end of 2015, we are improving revenue base by engaging in businesses that are expected to generate synergic effects with the railway business itself, such as areas that make full use of the locational advantage of the railway station. We will actively run businesses, in cooperation with group companies, enhancing the earning capability of our business group.

Affiliated Business

■ Outlook of Group BusinessesJR Central Group undertakes business in the areas of “Transportation,” “Merchandise

and Other,” “Real Estate,” and “Other.” The “Merchandise and Other” segment manages a department store and provides sales services for goods and foods in stations and trains, utilizing the railway’s ability to attract customers. The “Real Estate” segment is involved with developing commercial facilities in stations and areas under elevated track columns, as well as leasing real estate such as station buildings. As far as the “Other” segment is concerned, in addition to managing hotels at major stations, travel businesses, and advertising agencies, we are also manufacturing rolling stock, and maintaining, inspecting and repairing our railway facilities.

Operating revenues of consolidated subsidiaries totaled ¥511.2 billion (simply aggregated) in FY2012.3.

■ JR Central TowersJR Central Towers, the skyscraper complex with height of 245 meter and total floor

area of approx.417,000m2, built above the Nagoya Station, is the core of the JR Central Group’s affiliated businesses and home to a department store, a hotel and offices that three of the Group’s subsidiaries are operating.

The office business is run by JR Central Building Co., Ltd., a wholly-owned subsidiary of JR Central, which owns JR Central Towers. Since its opening, JR Central Towers has continually recorded high levels of occupancy, which has maintained at close to 100% during FY2012.3.

JR Nagoya Takashimaya is operated by JR Tokai Takashimaya Co., Ltd., a joint venture of JR Central and Takashimaya Co., Ltd.. By leveraging the stores location directly above the station, the store attracts a large number of visitors. The renewal completed in the fall of 2011 has resulted in sales for FY2012. 2 reaching 104 billion yen (104.3% YoY), their highest level since the opening in 2000.

With regard to a hotel business, Nagoya Marriott Associa Hotel is run by JR Tokai Hotels Co., Ltd., a wholly-owned subsidiary of JR Central. JR Tokai Hotels Co., Ltd., which has concluded a franchise contract with Marriott International Inc., provides services appropriate to an international luxury city hotel. The spectacular view from the high-rise directly above the station and the high-grade facilities have gained wide acclaim thereby enabling us to maintain a high occupancy rate of more than 80% (average for FY2012.3).

The combined operating revenues of these three companies were ¥145.0 billion in FY2012.3 (simply aggregated). We will be further enhancing and developing business at JR Central Towers.

■ Main Projects Currently Underway(1) Nagoya Station New Building Project

We are developing a tall complex located next to JR Central Towers, which is directly above Nagoya Station, which is comprised of offices, commercial facilities, a hotel, bus terminal and parking lot. The development concept is to create an attractive and convenient cosmopolitan space that is unified with JR Central Towers with the intention of creating a bustling hotspot for the area around Nagoya Station, to give the office complex metropolitan functions that are fitting of it and meeting the diverse working style needs of the community around Nagoya Station, and to form a relaxing cosmopolitan space that considers reducing the burden on the environment by measures such as utilizing natural energy.

Also, from the standpoint of efficient management by the JR Central Group, it was decided that management and operation of the entire building shall be handled by the JR Central Building with aim of having an attractive and highly convenient building. The main tenants set to take up occupancy are a high-volume electronics retail store, childcare facility, healthcare and medical facilities and so on in addition to JR Nagoya Takashimaya and a hotel which will be managed by JR Tokai Hotels. The project is steadily moving forward with completion of the new building and start of occupancy of offices at the end of 2015 and opening of JR Nagoya Takashimaya and the hotel in the spring of 2016.

(2) Other Businesses We are working to enhance competitiveness of our existing businesses and expand

revenue by effectively utilizing real estate held by our group companies, including revitalizing First Avenue Tokyo Station, renewal of which has been completed, and other commercial facilities along with developing land where the employee training center had been located in the Chikusa district of Nagoya. While some of our group companies are engaged in food-related business, we have entered the agricultural business with the aim of providing safer and more reliable food products. Since March 2010, we have started to sell products on a commercial basis through restaurants operated by our group companies. We will expand our product lineup in cooperation with our group companies engaging in food-related business.

Real Estate Other

Transportation Merchandise and Other

Note: Each of figures in parentheses indicates number of consolidated subsidiaries at fiscal year-end

Bus services

Logistics business

Railway business

Department store operations

Wholesale and retail sales

Food and beverage sales

Wholesale and retail sales

Real estate leasing

Real estate leasing and sales

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Hotel business

Hotel business

Travel agency services

Advertising

Construction

Linen supply services

Track maintenance

Construction consulting business

JR Tokai Bus Company

JR Tokai Logistics Company

Tokai Transport Service Company

JR Tokai Takashimaya Co., Ltd.

JR-Central Passengers Co., Ltd.

Tokai Kiosk Company

JR Tokai Food Service Co., Ltd.

JR Tokai Corporation

JR Central Building Co., Ltd.

JR Tokai Real Estate Co., Ltd.

Shin-Yokohama Station Development Co., Ltd.

Toyohashi Station Building Co., Ltd.

Tokyo Station Development Co., Ltd.

Shizuoka Terminal Development Co., Ltd.

Hamamatsu Terminal Development Co., Ltd.

Nagoya Station Area Development Corporation

JR Development and Management Corporation of Shizuoka

JR Development and Management Corporation of Kansai

JR Tokai Hotels Co., Ltd.

Shizuoka Terminal Hotel Co., Ltd.

JR Tokai Tours

JR Tokai Agency Co., Ltd.

Nippon Sharyo, Ltd.

JR Tokai Construction Co., Ltd.

Chuoh Linen Supply Co., Ltd.

JR Tokai Information Systems Company

The Japan Mechanised Works and Maintenance of Way Co., Ltd.

Tokai Rolling Stock & Machinery Co., Ltd.

JR Central Consultants Company

Transportation

Merchandiseand

Other

Real Estate

Other

1,747

300

295

10,000

998

700

295

100

45,000

16,500

9,304

1,880

1,750

624

600

480

363

30

14,000

50

490

61

11,810

300

150

100

100

80

50

100.0

90.0

100.0

59.2

100.0

100.0

51.6

70.0

100.0

100.0

100.0

52.5

100.0

64.4

76.8

100.0

100.0

100.0

100.0

0.0

70.0

90.0

51.3

100.0

87.6

100.0

92.1

60.5

100.0

Operating Revenues of Consolidated Subsidiaries(simply aggregated)　

Note: Two affiliated companies, Shinsei Technos Co., Ltd. and Railway Information Systems Co., Ltd., are accounted for by the equity method.

Consolidated Subsidiaries



Development, improvement and maintenance of computer system

Food and beverage salesWholesale and retail sales

Rolling stock and machinery maintenance

Manufacturing of railway rolling stock

Company NameSegmentCapital

(Millions of yen)Shareholding

(%) Business Activities

0

100,000

200,000

300,000

400,000

500,000

600,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0

100,000

200,000

300,000

400,000

500,000

600,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

●Comparison of Energy Consumption per Passenger Seat

●Comparison of CO2 Emission per Passenger Seat

●Changes in CO2 Emissions and Transportation Volume (Tokyo~Osaka) 〈Shinkansen〉

*1.Calculation based on running performance (JR Central figures) Series N700 “Nozomi” (Tokyo~Shin-Osaka)*2.Calculated by JR Central while referencing ANA’s Annual Report 2011 B777-200 (Haneda~Itami・Kansai Airport)

Source: Created based on the FY2009 Inter-Regional Passenger Mobility Survey (Ministry of Land, Infrastructure, Transport and Tourism)

Source: Created based on data from Transportation Related Statistics (Ministry of Land, Infrastructure, Transport and Tourism)(Transportation volume/energy consumption), and the National Institute for Environmental Studies Greenhouse Gas Inventory Office of Japan(CO2 emissions).

●Changes in CO2 Emissions and Transportation Volume (Tokyo~Osaka) 〈Airplanes〉

Source: Created based on the “Annual Aggregate Air Transportation Report (FY2009)” and the “Transportation Related Statistics” (Ministry of Land, Infrastructure, Transport and Tourism)

’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

18 16 19 21

23 23 27 29

3438 40

44

51

5862 61

57

46

18 18

CO2 emissions

Transportation volume (passenger-km)

Number of flights(round-trip/day)

CO2 emissions

Transportation volume (passenger-km)

[tons-CO2] [million passenger-kms] [tons-CO2] [million passenger-kms]

90 MJ/seat (*1)

746 MJ/seat (*2)

About 1/8 of airplane

4.2 kg-CO2/seat (*1)

50 kg-CO2/seat (*2)

About 1/12 of airplane

Railway Bus Automobile Other

Transportationvolume(passenger-km)

Energyconsumption

CO2emissions

29％

6％

5％ 84％5％ 3％

77％5％ 9％

2％

6％ 52％5％ 7％

3％

Airplane

*Simulated run from Tokyo to Shin-Osaka at the maximum speed 270km/h.

270km/h

Series 300(1992)

Series 700(1999)

Series N700(2007)

100％

92％

75％

’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11

－19％－25％

CO

2 em

issi

ons

Tran

spor

tatio

n vo

lum

e

CO

2 em

issi

ons

Tran

spor

tatio

n vo

lum

e

(FY) (FY)

Tokaido Shinkansen(Series N700 “Nozomi” )

Airplane (B777-200)

Tokaido Shinkansen(Series N700 “Nozomi” )

Airplane (B777-200)

28 29

Promoting railway’s usage based on its characteristics of little burden on the global environmentJR Central believes that manifesting the superior qualities of railway, particularly with the Tokaido Shinkansen, results in a contribution to global

environmental conservation. We have adopted an active approach that revolves around the following two points. The first is that further improvement in the energy efficiency of railway operations, such as through the development of energy saving trains, provides for a direct reduction in the burden being placed on the environment. The second is to strive to provide even more comfortable transportation services so that as many passengers as possible will select and use railways, which have minimal impact on the global environment. We believe that through such efforts the impact of the entire transportation sector on the environment will be curbed and lead to preservation of the global environment.

Engagement in Global Environment Preservation, etc.

■ Fundamental Policies for Engaging in Global Environmental PreservationRailways have the outstanding characteristic of being highly energy efficient compared

to other transport modes and having minimal adverse impact on the global environment. Even though railway accounts for 29% of the passenger transport volume for the entire country, it is responsible for only 5% of CO2 emissions. We therefore believe that it is JR Central’s top priority to further improve the environmental superiority of railway in an effort to conserve the global environment.

■ Environmentally Superior Mode of the Tokaido ShinkansenIf the Tokaido Shinkansen (Series N700 “Nozomi” ) and an airplane (B777-200) are

compared, the Tokaido Shinkansen consumes approximately one-eighth of the amount of energy per passenger seat when traveling between Tokyo and Osaka and has about one-twelfth of the CO2 emissions. The Tokaido Shinkansen has overwhelming environmental superiority. If we look at transportation volume and CO2 emissions for the Tokaido Shinkansen in the Tokyo-Osaka corridor in FY2009, we will see that compared with FY1990, CO2 emissions have decreased as a result of our efforts to improve energy efficiency. Meanwhile, airplanes have shown an increase in transportation volume due to an increase in flights and consequent CO2 emissions have virtually doubled.

If for argument’s sake a calculation was made based on FY2009 transportation statistics that assumed that all transportation by airplane was handled by the Tokaido Shinkansen, it would show an actual overall emission reduction of approximately 410,000 tons. This corresponds to the yearly CO2 emissions for 86,000 households.

■ Environmental Action Guidelines1. Provide comfortable transportation services to promote further use of railways

which offer superior global environmental preservation2. Promote technological development that contributes to global environmental

preservation3. Efficiently utilize fuel and energy4. Promote waste control and recycling5. Appropriately manage chemical substances6. Procure environmentally-friendly goods and materials7. Contribute to society and raise awareness for preservation of the global

environment

■ Efforts on the Tokaido Shinkansen(1) Progress in Committing to Energy-Conserving Rolling Stock

We are proactively developing and introducing energy-conserving rolling stock in our effort to further reduce Shinkansen energy consumption.

By the time the Shinkansen Shinagawa Station opened in October 2003, we had replaced all rolling stock with the high-speed, energy-conserving Series 300 and Series 700. From 2007 through 2011, we undertook an intensive commitment of introducing 80 Series N700 trainsets. When electricity consumption rates are compared for travel between Tokyo and Shin-Osaka, our current mainstay the Series N700 consumes approximately 25% less energy than the Series 300, demonstrating a remarkable improvement in energy efficiency. As a result, by the end of FY2011, we had improved unit energy consumption* by approximately 30% compared with FY1990.

In March 2012, we retired the Series 300 from the Tokaido and Sanyo Shinkansen, and now we are striving to further reduce energy consumption by moving forward replacement of the Series 700 with the Series N700A, which achieves energy-conserving performance equivalent to that of the Series N700.*Amount of energy consumed when running 1 carriage for 1 kilometer

(2) Energy-Saving Technology on Series N700

The Series N700 have been highly improved in energy efficiency by the introduction of below technologies.① Reduction in Running Resistance

On the Series N700, an aerodynamically superior nose shape was developed to reduce specific running resistance. Also, exterior uniformity was enhanced by introducing the smoothed passenger cabin window, which alleviates unevenness between the outside sheathing and the window pane, as well as by installing cover-all hoods between all cars.② Reducing Rolling Stock Weight

Reducing the weight of rolling stock contributes greatly to improving its energy efficiency. For the Series 300 and later developed Series 700 and Series N700, a simpler bolsterless bogie was adopted and also a lighter aluminum alloy was adopted for the body frame as opposed to the steel frames that were used for the Series 0 and Series 100. Furthermore, whereas a direct-current traction motor was used in the Series 0 and Series 100, all rolling stock after the Series 300 employed a high performance and small alternating-current traction motor made possible by improvements in semiconductor technology.

These efforts have made it possible to reduce the weight of post-Series 300 rolling stock in 16 car trainsets by over 250 tons when compared with the first Shinkansen train, the Series 0.③ Introduction of Body Inclining System

On the Series N700, in an attempt to improve speeds at curves, where they are presently restricted, a body-inclining system was installed. This system enables improvements in speed while maintaining ride quality. It shortens travel time and at the same time realizes an improvement in energy savings through a decrease in the frequency of speed adjustment.④ Expansion of Regenerative Braking System

Regenerative braking refers to a system that uses a motor as a generator to convert kinetic energy into electric power when braking and then returns it to the overhead wires for other trains to use. JR Central was first to use regenerative braking for practical application on the Shinkansen and has equipped the Series 300, and subsequent Series 700 and Series N700, with the system.

In the Series 700, 12 of the 16 cars in one trainset are regenerative, but in the Series N700, this was extended to 14 cars, so that the braking force required during usual operation of one trainset is entirely covered by the regenerative braking. This has enabled further improvements in energy efficiency of the Shinkansen.

▲Series N700(Equipped with Cover-All Hood)

▲Series 300 (Not Equipped with

Cover-All Hood)

0

20

40

60

80

100

0

20

40

60

80

10030% improvementover FY1990

Energy-conserving rolling stock:Series 300, Series 700

Even more energy-efficient rolling stock:Series N700

Series 0, Series 100

Distribution of Transportation Volume, Energy Consumption and CO2 Emissions (FY2009)

Comparison of Electric Power Consumption by Tokaido Shinkansen Rolling Stock Type

Changes in the Ratio of Tokaido Shinkansen Energy-ConservingModel Rolling Stock and Unit Energy Consumption

Comparison of Tokaido Shinkansen and Airplane (Tokyo~Osaka)

Uni

t ene

rgy

cons

umpt

ion

(Rat

io u

sing

a F

Y199

0 ba

sis)

Rol

ling

Sto

ck R

atio

(%)

(FY)

Propulsion(Electric power consumption)

Regenerative Braking System

The electricity that is returned to the overhead wires is recycled by other trains during acceleration

Brake(Generation)

The motor is used as a generator during braking to produce electricity and return it to the overhead wires



345 463 664

783 669 424

868

266

956

107

120 163 221

153 79 8

223

6

254

30 31

0

200

400

600

800

1,000

1,200

0

50

100

150

200

250

300

* Figures indicate the number of rolling stock as of the end of each fiscal year (March) and may include retained trains.

* Figures indicate the number of rolling stock as of the end of each fiscal year (March) and include retained trains. as well as inspection trains.

● Changes in Number of Conventional Line Electric Rolling Stock Introduced

● Changes in the Number of Conventional Line Diesel Cars Introduced

’91 ’96 ’06 ’11’01

’91 ’96 ’06 ’11’01

0


■ Efforts on Conventional Lines(1) Progress in Committing to Energy-Conserving Rolling Stock

JR Central has been successively introducing new energy-conserving conventional line rolling stock since its foundation as a company. Just as with the Shinkansen, we have made an effort with conventional line electric cars to improve their energy efficiency by reducing car weight, introducing higher efficiency power control conversion methods as well as installing regenerative brakes which generate power using the motor as a generator when braking. As of the end of FY2011, 90% of conventional line electric cars had been replaced with the more energy efficient rolling stock. We have strived to introduce conventional line diesel vehicles having greater energy conserving capability by reducing vehicle weight as well as introducing lighter and higher energy efficient diesel engines. By the end of FY2008, we were able to equip 100% of our diesel cars with new engines.

(2) Future PlansJR Central will continue to introduce energy conserving rolling stocks through the end

of FY2012 and subsequently discontinue use of trains that were manufactured during the JNR era that have aged. This will mean that almost all conventional line rolling stock and diesel cars owned by JR Central will be energy-conserving rolling stock (excluding some event trains and retained trains).

JR Central has decided to electrify the Taketoyo Line (19.3km between Obu and Taketoyo), which carries commuters in the Nagoya metropolitan area, by the spring of 2015. This electrification will enable a decrease in the burden put on the environment with a reduction in CO2 emissions from operation of the Taketoyo Line by 2,900 tons annually (57% reduction from present).

■ Compliance of Related LawsWe have created a system that enables us to adhere to the related environmental laws

by distributing check lists and explanatory materials to each department in the company concerning those items that must be confirmed.① Management of Chemical Substances

Based on the so called “PRTR Law (Pollutant Release and Transfer Register Law),” JR Central reports emissions and amounts for transfer of the related substances to a prefecture and manage those substances appropriately.

We are also trying to reduce usage amounts by promoting the use of substitutes when possible.② Countermeasures against Soil Contamination

In 2011, the results of soil surveys obtained from samples taken from the site of the former Nagoya Terminal Building (Nagoya City) detected specific hazardous substances exceeding standard value, which JR Central reported to a related administrative agency.

■ Effective Use of ResourcesAs we conduct our business activities to promote ridership of railway, a mode of

transportation with minimal impact on the global environment, we are proactively working to effectively utilize resources, such as be engaging in “Reduce, Reuse, and Recycle.” Specifically, we are committed to using non-painted stainless steel for conventional line rolling stock, reducing emissions of waste materials during construction, recycling tickets, commuter passes, rolling stock and uniforms, implementing a system utilizing well water, reusing rainwater for irrigation, as well as collecting and separating rubbish.

In addition, we established the “JR Central Green Procurement Guidelines.” In the procurement of materials for construction and engineering work, we are advancing our commitment which gives even greater consideration to global environmental conservation.

■ The Proposal of “Eco Business Trips”We propose the idea of “Eco Business Trips” as part of our endeavor to prevent global

warming. “Eco Business Trips” refer to “business trips that contribute to environmental conservation.” In other words, the mindset of “selecting transportation and business trips methods that emit small amounts of greenhouse gases when traveling mid to long distances (business trips).” “Eco Business Trips” have a great impact on reducing CO2

emissions and are a relatively easy way to reduce greenhouse gas emissions that do not entail any initial investment or obvious maintenance costs. We believe that the idea of “Eco Business Trips” and actual efforts based on this idea would contribute to further preventing global warming. We are actively disseminating information, and engaging in advertising campaigns, in hopes of spreading the idea of “Eco Business Trips.”

■ Introduction of Natural Energies and Energy-Saving EquipmentWhen renovating facilities and building new ones, we are striving to leverage natural

energies, such as solar power generation systems, and introduce energy-saving equipment.

(1)SCMAGLEV and Railway ParkAt the SCMAGLEV and Railway Park, which opened in March 2011, we have

introduced a solar energy generation system on the expansive roof as one facet of our commitment to global environmental conservation. The system has a generation capacity of approximately 500kW or roughly 590,000kWh annually, which can cover about 30 percent of the Railway Park’s energy needs.

(2) General Training CenterIn September 2011, we combined our two training centers in Aichi and Shizuoka

prefectures to establish our new “General Training Center,” which carefully takes into account environmental performance. In addition to introducing a ventilation system which uses as its heat source ice storage achieved from the utilization of nighttime electricity service, we are actively reducing energy consumption by utilizing well water, reclaimed water and adopting LED illumination. Furthermore, we designed the building to effectively use natural energy by incorporating to the maximum extent possible natural wind drafts and lighting from the courtyard as well as improving insulation efficiency externally by arranging a rooftop garden and sun louvers. The result has been demonstrated in our acquisition of the “S rank,” the highest assessment level under “CASBEE,” a widely used system for evaluating the environmental performance of buildings.

(3)Hamamatsu WorkshopIn July 2010, work began on renovating the Hamamatsu Workshop where general

overhauls are conducted of Tokaido Shinkansen rolling stock. In conjunction with this overhaul, consideration is also being given to installing energy-saving equipment and utilizing renewable energy sources. Specifically, the roof of the workshop will be used for installing solar power generation system with the capacity to generate approximately 300kW or about 300,000kwh annually. High-efficiency transformer facilities, boilers and other equipment will be introduced in an effort to increase energy savings by roughly 10 percent. Also, trees are to be planted on approximately 20% of the site area or about 65,000m2 (1.4 times the size of the Tokyo Dome).

(4)Nagoya Station New Building ProjectOne concept adopted in our plans for the Nagoya Station New Building is the

formation of a comfortable urban space that considers reducing the burden on the environment through the use of natural energy. More specifically, energy consumption for the entire building is reduced by installing regional air-conditioning systems, adopting LED lighting, mounting solar power generation panels, and creating green areas in the 15th floor courtyard and on roofs of low-rise buildings as part of our commitment to reduce the load on the environment. Our aim is to achieve “S rank” environmental performance, the highest ranking on the “CASBEE” scale. We plan to reduce the building’s CO2 emission by about 25 percent compared to buildings modeled on the CASBEE 2008 standard.

Comparison of Electric Power Consumption and Diesel Fuel Consumption of Conventional Line Car (Electric Car and Diesel Car)

* Based on simulated test runs between Toyohashi and Ogaki (rapid operation)

* Based on performance when running the Kiha 40 with the new and old engines (Conventional engine: DMF15HS; New engine: C-DMF14HZ)

● Comparison of Electric Power Consumption by 　 Conventional Line Electric Car Type

● Diesel Fuel Consumption Comparison by Conventional　 Line Diesel Car Model

Rolling stockwithconventional engine

Rolling stock withnew model engine

Conventional rolling stockSeries 117 (110km/h)

New energy-conservingrolling stockSeries 313(120km/h)

71

69

▲“Eco Business Trips” Poster

▲General Training Center (rooftop gardening)

▲Nagoya Station New Building (tentative name) ( Skystreet, 15th floor / image of courtyard )

▲SCMAGLEV and Railway Park (solar power generation system)

100(Base)

100(Base)

Conventionalmodel

Energy-conservingmodel

[Cars]

[Cars]

Cars with conventional engines

Cars with new model engines

(FY)

(FY)

Changes in Energy-Conserving Rolling Stock (Electric Car and Diesel Car)



▲Noise Barriers

Electric power 2.79 billion kWh (2.02 billion kWh)Fuel 34 millionℓ(17 millionℓ)(Amount of converted crude oil)

Water 3,732 thousand m3

Of this,278

recycled(including

intracompanyreuse)

[Approach to Environmental Accounting Tabulation]● Compilation is applicable only to JR Central.● The applicable period is April 1, 2011 to March 31, 2012.● “Environmental Accounting Guidelines 2005,” a publication of the Ministry of the Environment, was consulted with regard to aspects of style.● Depreciation is not included in the calculations for expenditures.● In the event of multiple-purpose expenditures, the full amount of the higher environmental conservation effect is included in the calculation.

▲Nagoya Central Hospital

▲SCMAGLEV and Railway Park

▲Aimi Station, Tokaido Line (opened in March 2012)

CO2 emissions 1,245Refuse and waste 490

(Station, train & office refuse 22)(Construction waste products 456)(Rolling stock scrap 11)Unit: thousand tons

・Energy-conserving model rolling stock ratios:100% (Shinkansen), 　 90% (conventional line electric cars), 100% (conventional line

diesel cars)・Reduction rate for operational energy per rolling stock-km: −23.8%

(compared to FY1995 level)・Non-CFC rectifiers: 40 in operation・CO2 emission: 58 thousand tons (compared to FY 2010 level)

・Recycling rate for refuse and waste: 57%・Recycling rate for construction waste: 57%

・Energy-conserving efficiency of Series N700: −25% (compared to Series 300)

・Protection of surrounding environment by noise-blocking wall, embankment rising, improvement of roadbeds and shaving of rail surface, etc.

Classification Main Efforts Principal Effects of Environmental Conservation

Global environmentalconservation

Research anddevelopment

Resource recycling

Environmental conservation along railway lines

Management activities

Social activities

764.9

1.6

2.2

31.3

―

―

800.1

0.7

47.3

44.5

41.7

0.0

0.0

134.5

• Introduction of energy-conserving rolling stock• Improved energy-savings at stations and office buildings• Installation of non-CFC type equipment etc.

• Development of energy-conserving rolling stock• Development related to environmental conservation along railway etc.

• Proper disposal and recycling of station and train refuse• Proper disposal and recycling of items generated by workshops and engineering work etc.

• Environmental advertising• Environmental management education etc.

• Support and cooperation for organizations and other groups undertaking environmental conservation

• Countermeasures for noise and vibration• Proper management of environmental load substances etc.

Environmental preservation cost(100 million yen)*1

Investment Expenditures

32 33


■ Environmental AccountingThe investments, costs, and their principal effect involved in environmental

conservation activities during FY2011 are estimated as below.

■ Environmental Impact of OperationsThe main resources and energy utilized as well as waste generated during JR Central’s

business activities for FY2011 are indicated in the figure on the right side.

■ Environment Achievement Level(1) Conventional Environment Achievement Level

We have established the “Environment Achievement Level” below and have been taking various Energy-Conserving actions.

• We will raise the ratio of Energy-Conserving Shinkansen rolling stock up to 100% by FY2003.

• We will raise the ratio of Energy-Conserving Conventional line electric rolling stock up to 85% by FY2010.

• We will raise the ratio of Energy-Conserving Conventional line diesel rolling stock up to100% by FY2010.

• By FY2010, we will improve our unit energy consumption (amount of energy consumed when running 1 carriage for 1 kilometer) by 15% compared to FY1995 levels.

The result has been the achievement of all of our goals slated for FY2010. As for our performance at the end of FY2011, 90% of conventional line electric rolling stock were the energy conserving model, and our unit energy consumption improved by 23.8% compared to FY1995 levels.

(2) Outlook for the FutureWe intend to continue striving for even greater energy savings in the future. Following

further updates to rolling stock, the ratio of energy-conserving conventional line electric cars is projected to be 100% with the exception of some event and retained trains by the end of FY2013. Also, after the introduction of the Series N700A, we project that our unit energy consumption will improve by more than 25% on a FY1995 basis by the end of FY2013.

■ Contribution to Community DevelopmentRailway stations serve as a gateway to communities. In order to let them fulfill the role

better, we are cooperating with the requests of local governments to establish new stations, improve station buildings, develop plazas in front of stations, and facilitate railway elevation projects, thereby contributing to community development.

We are also renovating facilities working with the government and municipalities based on the related laws, such as the Barrier-Free Law, so that passengers, including physically challenged passengers and elderly passengers, can use our railway safely and comfortably. In particular, in accordance with fundamental government policy, we promoted barrier-free facilities through the continued installation of elevators and escalators at stations used by more than 5,000 passengers a day. Also, efforts are underway in cooperation with the government and municipalities to renovate stations that are used daily by anywhere from 3,000 to 5,000 passengers, which are now required to be renovated in conjunction with the new fundamental policy released in March 2011. In addition, we have installed new-model moving platform fence and replaced old Braille blocks with new Braille blocks that have lines to indicate on which side the edge of the platform lies to prevent passengers from falling off platforms.

Furthermore, we established the “Nagoya Central Hospital” in Nakamura Ward, Nagoya City which offers advanced and cutting-edge medical treatment with its experienced staff and the latest medical equipment. This hospital provides high-quality medical treatment and nursing care qualified by the hospital function evaluation (Ver. 5.0) by the Japan Council for Quality Health Care in September 2008 and contributes to the local community as a core hospital of the Nagoya area by emergency medical treatments and cooperation with regional medical treatment centers.

■ Efforts to Preserve the Environment along Railway LinesWe have implemented needed noise and vibration countermeasures for the

Shinkansen on both rolling stock and the ground. In particular, our rolling stock countermeasures include continuing to introduce new rolling stock with superior environmental performance that has optimal nose shapes and improved pantographs and pantograph covers. Our ground facility countermeasures include building noise barriers and extending the height of current noise barriers, raising banks, improving rail beds, and re-facing rail surface.

We will continue striving to preserve the environment along railway in the future as well by proceeding with low-noise / low-vibration countermeasure technology research such as developing new noise barriers with greater noise-reducing effect.

■ SCMAGLEV and Railway ParkWe opened the SCMAGLEV and Railway Park in March 2011 in Nagoya in response to

a request from City of Nagoya to participate in the “Monozukuri (manufacturing) Culture Exchange Area Project.”

At the SCMAGLEV and Railway Park which has the Tokaido Shinkansen as its focus, we introduce the “progress of the high-speed railway technology” through displays of rolling stock for the Tokaido Shinkansen, conventional lines and Superconducting Maglev. In January 2012, the number of visitors broke the one million mark. We are making an effort to improve the general public’s understanding of railway and contribute to the promotion of industrial tourism by planning an event, advertising the Park, and offering products linked with Nagoya region tourism to attract even more visitors.

■ International ExchangeWe undertake a wide range of international operations, such as gathering up-to-date

railway information from around the world via the company’s network of overseas offices (Washington D.C., London, and Sydney), participating in international conferences to exchange technological and management information with railway operators in the world, and issuing press releases to overseas as part of our PR activities.

We also participate in cooperation over railway technologies in response to government requests, and contribute to human resource development by accepting interns from overseas universities and international organizations.

*1. Fractions of ¥10,000,000 are omitted *2. Totals do not add up due to rounding

Total*2

* The electricity and fuel CO2 emission coefficient is based on a report of laws (Energy Saving Act) concerning the streamlining of energy use.



*Figures in parentheses are for operations (reprinted)

34 35

Chairman

Secretarial Department

Corporate Planning Division

Board of Directors

President

Corporate Auditors

Board of Corporate Auditors

General Technology Division

Audit Department

Public Relations Department

Administration Department

Legal Affairs Department

Supervision Department

Transportation and Marketing Department

Rolling Stock Department

Engineering Department

Shizuoka Branch Office

Mie Regional Office

Iida Regional Office

Personnel Department

Finance Department

Property Management Department

Marketing Division

Business Promotion Division

Construction Department

Transportation Safety Department

Overseas Offices : Washington D.C., London, Sydney

General Training Center

Nagoya Central Hospital

Health Care Center

SCMAGLEV and Railway Park

Administration Management Center

Conventional LinesOperations Division

Planning Department

Supervision Department

Transportation and Marketing Department

Rolling Stock Department

Tracks and Structures Department

Electrical Engineering Department

Kansai Branch Office

ShinkansenOperations Division

Chuo Shinkansen Promotion Division

Corporate Data

Head Offices and Other Main Offices● Head OfficeJR Central Towers, 1-1-4, Meieki, Nakamura-ku, Nagoya, Aichi 450-6101, Japan● Tokyo Head OfficeJR Central Shinagawa Building -A Wing 2-1-85, Konan, Minato-ku, Tokyo 108-8204, Japan● Conventional Lines Operations DivisionJR Central Taiko Building, Meieki 1-3-4, Nakamura-ku, Nagoya, Aichi 453-8520, Japan● Shizuoka Branch Office4, Kurogane-cho, Aoi-ku, Shizuoka, Shizuoka 420-0851, Japan● Mie Regional OfficeUst-Tsu 12F, 700, Hadokoro-cho, Tsu, Mie 514-0009, Japan● Iida Regional Office5356, Kami-Iida, Iida, Nagano 395-0000, Japan● Shinkansen Operations DivisionMarunouchi Chuo Building, 1-9-1, Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan● Kansai Branch OfficeShin-Osaka Central Tower 7F, 5-5-15, Nishi-nakajima, Yodogawa-ku, Osaka, Osaka 532-0011, Japan● Washington D.C. Office 900 17th Street, N.W., Suite 520, Washington, DC 20006, U.S.A.Tel: +1-202-429-1900 Fax: +1-202-429-1917● London OfficeLevel 17 City Tower, 40 Basinghall Street, London, EC2V 5DE, U.K.Tel: +44-20-7382-0650 Fax: +44-20-7638-6096● Sydney OfficeSuite 5.01A, Level5, 20 Hunter Street, Sydney, NSW 2000, AustraliaTel: +61-2-9221-6922 Fax: +61-2-9221-6933

The core of JR Central’s operations is the Tokaido Shinkansen, the main transportation artery linking Japan’s principal metropolitan areas of Tokyo, Nagoya, and Osaka. The company also operates a network of 12 conventional lines centered on the Nagoya and Shizuoka areas.

■Operating Kilometers

Tokaido Shinkansen

Conventional LineTokaido LineGotemba LineMinobu LineIida LineTaketoyo LineTakayama LineChuo LineTaita LineKansai LineKisei LineMeisho LineSangu Line

Conventional Line

Total

552.6km

360.1km60.2km88.4km

195.7km19.3km

189.2km174.8km

17.8km59.9km

180.2km43.5km29.1km

1,418.2km

1,970.8km

Inotani

Shiojiri

Tatsuno

KofuTokyo

Shinagawa

Shin-Yokohama

Kozu

AtamiNumazu

Fuji

ShizuokaToyohashi

Obu

Nagoya

Tajimi

Mino-Ota

Gifu

Mino-Akasaka

OgakiMaibara

Kyoto

Shin-Osaka

Ise-Okitsu

Kameyama

Matsusaka

Toba

Shingu

Taki

Taketoyo

Tokaido Shinkansen

Tokaido Line

Iida Line

Meisho Line

Sangu Line

Minobu Line

Chuo Line

Gotemba Line

Kisei Line

Kansai Line

Takayama Line

Taita Line

Taketoyo Line

Company NameCentral Japan Railway Company (JR Central)

EstablishedApril 1st, 1987

BusinessRailways business, Related businesses

Basic Information on a Non-consolidated Basis

●●●

●●●●●●●●●●

Paid in Capital Operating Revenues Number of Shares Outstanding

Share Listings Number of ShareholdersNumber of Employees Operating Kilometers Number of Stations Number of Rolling Stock Double-and Multi-Tracked SectionElectrified Section Centralized Traffic Control Automatic Signaling System

￥112 billion￥1,184 billion2.15 million

Nagoya, Tokyo and Osaka125,06617,8191,970.8 km4054,80655.1% (1,086.8km) 75.7% (1,491.7km) 97.5% (1,922.3km)97.8% (1,927.3km)

(JR Central cancelled 90,000 sharesof treasury stock in May 2012.)

Profile

Organization Chart

Operating Area



(as of the end of March 2012)

36 37

April

March

March

February

June

October

MarchJuly

December

June

AprilOctober

MarchDecember

MarchMay

MarchDecember

July

October

July

MarchApril

January

July

October

December

MayDecember

May

May

Central Japan Railway Company (JR Central) is established.

New stations are established on the Tokaido Shinkansen (Shin-Fuji, Kakegawa, Mikawa-Anjo).JR Tokai Bus Company is established (now a consolidated subsidiary). In April automobile transport business is transferred to the company.

New-model DMU is introduced to the “Hida” Express on the Takayama line.

JR Central starts topographical and geological surveys along entire proposed route of the Chuo Shinkansen following orders of the Minister of Transport.JR Central applies to the Minister of Transport for the approval of plans to build the Yamanashi Maglev Test Line and approval is received.

JR Central takes over the Tokaido Shinkansen facilities.

The first “Nozomi” (Series 300) begins commercial operation on the Tokaido Shinkansen.JR Tokai Hotels Co., Ltd. is established (now a consolidated subsidiary).JR Central Department Store Co., Ltd. is established. Company name changed to JR Tokai Takashimaya Co., Ltd. in September 1997 (now a consolidated subsidiary).

JR Central Building Co., Ltd. is established (now a consolidated subsidiary).

Running tests start on the Yamanashi Maglev Test Line.JR Central lists on the first section of the Nagoya, Tokyo and Osaka stock exchanges and also the Kyoto Stock Exchange (merged with the Osaka Stock Exchange in March 2001).

Series 700 is introduced to “Nozomi” on the Tokaido Shinkansen.Construction of JR Central Towers is completed.

JR Nagoya Takashimaya opens (operated by JR Tokai Takashimaya Co., Ltd.).Nagoya Marriott Associa Hotel opens (operated by JR Tokai Hotels Co., Ltd.).

JR Tokai Real Estate Co., Ltd. is established (now a consolidated subsidiary).JR Central is excluded from the jurisdiction of the JR Law through the enactment of amendment to the JR Law.

A new research center is constructed in Komaki City in Aichi Prefecture.

The new Shinagawa Shinkansen station opens. The timetable is drastically revised by the upgrading of the maximum speed on all Tokaido Shinkansen trains to 270km/h.

The Japan National Railways (JNR) Settlement Headquarters, an independent division within the Japan Railway Construction, Transport and Technology Agency (JRTT), sells 600,000 shares in JR Central.

New Automatic Train Control (ATC) system is introduced into the Tokaido Shinkansen.JR Central repurchases 268,686 shares of its common stock.The JNR Settlement Headquarters within the JRTT completes the sale of its entire shares in JR Central by selling 286,071 shares of common stock of the company.

Application for changes of “Yamanashi Test Line Construction Plan” is approved by the Minster of Land, Infrastructure and Transport.JR Central introduced the new Series N700 for “Nozomi” services.

JR Central made Nippon Sharyo, Ltd. a consolidated subsidiary.JR Central submitted a report to the Minister of Land, Infrastructure, Transport and Tourism (the “Minister”) concerning topographical and geological surveys of the Chuo Shinkansen.JR Central started to conduct four surveys related to the Chuo Shinkansen received from the Minister.

JR Central cancelled 90,000 shares of treasury stock.JR Central submitted a report to the Minister concerning the four surveys related to Chuo Shinkansen which we received instructions to implement from the Minister in 2008.

The Minister designated JR Central as the operator and constructor of the Chuo Shinkansen between Tokyo and Osaka City.The Minister approved the development plan and instructed JR Central to construct the Chuo Shinkansen.

JR Central cancelled 90,000 shares of treasury stock.

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Company History Board of Directors, Corporate Auditors and Corporate Officers (As of June 22, 2012)

Corporate Data

1988

19891990

19911992

19941997

1999

2000

2001

20022003

2005

2006

2007

2008

2009

2012

2011

October 8,1997　Shares are listed on the Nagoya, Tokyo, Osaka, and Kyoto Stock Exchanges

October 1,2003 　The Shinagawa Shinkansen Station is opened

December 20,1999　Construction of JR Central Towers is completed

April 1,1987　Establishment of JR Central

April 3,1997　Superconducting Maglev running tests begin

1987



ChairmanYoshiyuki Kasai*

President Yoshiomi Yamada*

Executive Vice PresidentsKoei Tsuge*Tsutomu Morimura* (ph.D.)Shin Kaneko*Naotoshi Yoshikawa*

DirectorsMasaki Seki (ph.D.)Katsumi MiyazawaYutaka OsadaSumio KudoKimiaki TanakaFujio ChoKenji KoroyasuTakashi Saeki

Corporate AuditorsOsamu NakayamaTakaharu KachiHarumi UmedaHiromu EmiShigeo Kifuji

*Representative Director

Senior Corporate Executive OfficersMasaki SekiKatsumi MiyazawaYutaka OsadaNoriyuki Shirakuni (ph.D.)Sumio Kudo

Corporate Executive OfficersShun-ichi KosugeMamoru UnoYoshiki SuyamaMakoto BabaYoshito TsubouchiHidenori FujiiSumio AtsuchiKimiaki TanakaKiyoshi WatanabeHideyuki Shoji

Corpotrate OfficersShuichi TakashimaKenji HamadaHiroyuki KawarasakiTokuji MatsunoYoshihiro YamamotoKazuhiro IgarashiYasukazu EndoYoshihisa Yamaguchi

Yoshiyuki KasaiChairman

Koei TsugeExecutive Vice President

Tsutomu MorimuraExecutive Vice President

Shin KanekoExecutive Vice President

Naotoshi YoshikawaExecutive Vice President

Yoshiomi YamadaPresident

Board of Directors and Corporate Auditors Corporate Officers

1) Overview of FY2011Although the current term started with a significant decline in ridership after the Great East Japan Earthquake, JR

Central strove to further enhance our services, placing the highest priority on the maintenance of safe and reliable transportation in the railway business which is the core of our operations.

We continued to promote earthquake countermeasures in the railway business, including measures to prevent derailment and deviation along the Tokaido Shinkansen, and endeavored to actively introduce the Series N700 rolling stock. On our conventional lines, we completed the installation of the ATS-PT (pattern reference-type automatic train stop system) on all lines, and have worked to replace existing vehicles with new model rolling stocks. In addition, in terms of sales, we have promoted efforts aimed at further increasing the use of the “EX-IC Service” and the number of “Express Reservation” members, and addressed various preparations for expanding the mutual use of TOICA and increasing the number of participating retailers that accept electronic money. Also, we promoted tourist campaigns aimed at travel to Kyoto, Nara, Tokyo, Ise and other destinations.

In non-railway businesses, we have strived to strengthen existing businesses, and steadily moved forward with projects including the Nagoya Station New Building and agricultural business.

Although the year began with a decline in usage due to the stagnated economy, sluggish demand for tourism, and other such impacts in the wake of the Great East Japan Earthquake, non-consolidated transportation revenue for JR Central as well as consolidated operating revenue overall increased thanks to our commitment to the aforementioned series of measures.

We took into account the severe economic situation and worked to reduce sales costs, etc through our commitment to thoroughly lowering expenses and improving efficiency across all aspects of our operations while at the same time ensuring safety. This produced an overall decrease in operating expenses. Also, non-operating profit and loss improved due to a decline in interest costs and other factors.

As a result, both revenue and income increased for the current term with operating revenues at 1,508.3 billion yen, operating income at 372.5 billion yen and ordinary income at 263.8 billion yen. Net income decreased slightly to 132.7 billion yen due to an increase in adjustments for corporate and other taxes resulting from a reduction in deferred tax assets following a decrease in the corporate tax rate.

2) Operating Performancea) Operating Revenues

Operating revenues increased by 5.2 billion yen (0.3%) year-on-year (YoY) to 1.5083 trillion yen.In regards to our transportation business, transportation revenues for JR Central increased by 9.7 billion yen (0.9%)

YoY to 1.1081 trillion yen. Passenger volume for the Tokaido Shinkansen increased by 1.3%, and transportation revenues increased by 1.2% YoY to 1.0110 trillion yen. Passenger volume on conventional lines decreased by 0.5% with transportation revenues decreasing 1.7% YoY to 97.0 billion yen.

In regards to our non-railway business, “Merchandise and Other” increased by 5.3%, while “Real Estate” and “Other” decreased by 5.5% and 5.7% YoY, respectively.

b) Operating ExpensesOperating expenses on a whole decreased by 17.9 billion yen (1.6%) YoY to 1.1358 trillion yen due to reductions in

sales costs, etc.c) Operating Income

Operating income increased by 23.1 billion yen (6.6%) YoY to 372.5 billion yen.d) Other Income (Expense)

In regard to other income (expenses), we had reductions in paid interest in conjunction with a reduction of long-term debt and payables, and a reduction in average interest rate.

e) Net IncomeResulting from a reduction in deferred tax assets in conjunction with the reduction of the corporate tax rate, net income

decreased by 1 billion yen (0.8%) YoY to 132.7 billion yen.

3) Cash FlowCash and cash equivalents (hereinafter referred to as, “Capital”) at the end of this term had decreased by 30.8 billion yen

YoY to 84.6 billion yen.Long-term debt and payables decreased by 178.5 billion yen to 2.8667 trillion yen as of the end of this term.Capital gained from operating activities decreased by 74.2 billion yen YoY to 447.6 billion yen due to the increase of

corporate tax payment, etc, though the transportation revenues from the Tokaido Shinkansen increased with the impact of the Great East Japan Earthquake remained.

Capital expended through investment activities decreased by 50.2 billion yen to 269.9 billion yen due to increases of acceptance resulting from fund management, though the expenditure for acquisition of fixed assets from capital management increased.

Capital expended through financial activities increased by 42.6 billion yen YoY to 208.5 billion yen due to reductions in the amount of funds raised, though the amount of issued corporate bonds and long-term debt decreased.

4) Shrinking Long-Term Debt and PayablesDuring this term we decreased long-term debt and payables by 178.5 billion yen on a consolidated basis, and 172.4

billion yen on a non-consolidated basis. Long-term debt and payables at the end of this term was 2.8667 trillion yen on a consolidated basis, and 2.8291 trillion yen on a non-consolidated basis.

When we purchased the Tokaido Shinkansen facilities in October 1991, we were burdened with total long-term debt and payables of over five times our annual transportation revenues, including the liabilities inherited from Japanese National Railways at the time of its break-up and privatization. Because we considered the reduction of these long-term debt and payables to be our most important financial issue, we have endeavored to reduce debt and payables as rapidly as possible. Consequently, total long-term debt and payables of 5.4562 trillion yen at the end of FY1991, immediately after we acquired Tokaido Shinkansen assets, has been reduced by 2.6271 trillion yen. However, at the end of this term, outstanding long-term debt and payables still stood at fewer than 3.0 trillion yen.

In addition to continuing to strengthen earnings capabilities and striving to pursue efficiency and cost reductions, we shall steadily promote efforts aimed at the construction of the Chuo Shinkansen by making capital investment and cash reserves more efficient, while striving to shrink long-term debt and payables.

5) Net Asset BalanceNet asset balance at the end of this term had increased by 117.0 billion yen to 1.3632 trillion yen, and our equity ratio

increased from 23.0% at the end of the previous term to 25.3% at the end of this term.

6) Capital ProcurementIn order to procure capital from various sources and facilitate smooth fund raising, we have acquired a rating from

Moody’s Japan, Rating and Investment Information, Inc. and Japan Credit Rating Agency, Ltd.. Credit ratings for corporate bonds issued during this term are Aa3 from Moody’s Japan, AA from Rating and Investment Information, Inc. and AAA from Japan Credit Rating Agency, Ltd..

Furthermore, in order to secure short-term liquidity, we have established a commitment line of 100 billion yen as of the end of this term.

38 39



Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations (MD&A)

40 41

Central Japan Railway Company and Consolidated Subsidiaries

CURRENT ASSETS:

Cash and cash equivalents (Note 10)

Time deposits (Note 10)

Trade receivables (Note 10)

Allowance for doubtful accounts

Inventories

Deferred tax assets (Note 9)

Prepaid expenses and other

Total current assets

¥ 84,692

30,012

83,410

(23)

33,378

23,886

34,119

289,476

¥ 115,521

45,008

65,149

(90)

26,461

24,285

32,484

308,819

$ 1,032,829

366,000

1,017,195

(280)

407,048

291,292

416,085

3,530,195

NONCURRENT ASSETS:

Investments and other assets:

Investment securities (Notes 4 and 10)

Investments in and advances to unconsolidated subsidiaries and affiliates



Total investments and other assets

86,878

12,533

171,322

37,130

307,865

90,552

12,358

191,157

35,859

329,927

1,059,487

152,841

2,089,292

452,804

3,754,451

See notes to consolidated financial statements.

TOTAL ASSETS ¥ 5,214,038 ¥ 5,252,993 $ 63,585,829

ASSETS

March 31, 2012

Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

Property, plant and equipment:

Buildings and structures (Note 5)

Machinery, rolling stock and vehicles

Land (Note 5)

Construction in progress

Other

Total

Accumulated depreciation

Net property, plant and equipment

Total noncurrent assets

4,342,319

1,217,783

2,363,882

191,189

180,666

8,295,842

(3,681,596)

4,614,246

4,944,173

4,385,346

1,238,423

2,362,553

251,686

182,206

8,420,217

(3,803,520)

4,616,696

4,924,561

53,479,829

15,102,719

28,811,621

3,069,341

2,222,024

102,685,573

(46,384,390)

56,301,170

60,055,621

EQUITY (Note 8):

Common stock—authorized, 8,960,000 shares;

issued, 2,150,000 shares in 2012 and 2011 (Note 16)

Capital surplus

Retained earnings

Treasury stock—at cost, 182,006 shares in 2012 and 2011 (Note 16)

Accumulated other comprehensive income

Unrealized gain on available-for-sale securities

Deferred gain (loss) on hedges

Total

　Minority interests

Total equity

CONTINGENCIES (Note 13)

112,000

53,500

1,357,387

(205,367)

4,117

17

1,321,654

41,597

1,363,251

¥ 5,214,038

112,000

53,500

1,242,335

(205,367)

4,178

(1)

1,206,645

39,509

1,246,154

¥ 5,252,993

1,365,853

652,439

16,553,500

(2,504,475)

50,207

207

16,117,731

507,280

16,625,012

$ 63,585,829


TOTAL LIABILITIES AND EQUITY

March 31, 2012

NONCURRENT LIABILITIES:

Long-term debt (Notes 5 and 10)

Long-term accounts payable—railway facilities (Notes 6 and 10)

Provision for large scale renovation of the Shinkansen infrastructure

Provision for retirement benefits (Note 7)

Other (Note 9)

Total noncurrent liabilities

1,557,256

1,035,307

316,666

205,195

80,083

3,194,509

1,628,823

1,177,065

283,333

204,441

89,351

3,383,014

18,990,926

12,625,695

3,861,780

2,502,378

976,621

38,957,426

CURRENT LIABILITIES:

Short-term loans payable (Notes 5 and 10)

Current portion of long-term debt (Notes 5 and 10)

Current portion of long-term accounts payable—railway facilities (Notes 6 and 10)

Trade payables (Note 10)

Provision for bonuses

Income taxes payable (Note 10)

Advances received

Other (Note 9)

　 Total current liabilities

¥ 25,325

165,777

108,418

167,451

26,195

62,506

48,144

52,456

656,277

¥ 24,697

129,413

110,009

172,065

25,942

61,248

39,898

60,548

623,824

$ 308,841

2,021,670

1,322,170

2,042,085

319,451

762,268

587,121

639,707

8,003,378

201220112012

LIABILITIES AND EQUITY



(Note 2)

201220112012



Consolidated Balance Sheet

42 43


BALANCE, APRIL 1, 2009

Net incomeDividends from surplus, ¥9,000 per share Purchases of treasury stockDisposal of treasury stockRetirement of treasury stock of 90,000 sharesNet change in the year

BALANCE, MARCH 31, 2010

Net incomeDividends from surplus, ¥9,000 per share Purchases of treasury stockNet change in the year


Net incomeDividends from surplus, ¥9,000 per share Net change in the year


Year Ended March 31, 2012

¥ 1,048,358 91,764 (17,748) (577) 2,089 10,679 1,134,566 133,807 (17,750) (2,962) (1,505) 1,246,154 132,781 (17,730)

2,045 ¥ 1,363,251


TotalEquity

¥ 37,282 604 37,887 1,621 39,509 2,087 ¥ 41,597

MinorityInterests

¥ 1,011,075 91,764 (17,748) (577) 2,089 10,074 1,096,678 133,807 (17,750) (2,962) (3,127) 1,206,645 132,781 (17,730) (42) ¥ 1,321,654

Total

¥ (309,122)

(577) 3,795

103,500 (202,405) (2,962) (205,367) ¥ (205,367)

TreasuryStock

¥ (2,773) 10,077 7,304 (3,125) 4,178 (60) ¥ 4,117

Unrealized Gain(Loss) on

Available-for-Sale Securities

¥ 3

(3)

0

(1)

(1)

18 ¥ 17

DeferredGain

(Loss) on Hedges

RetainedEarnings

¥ 53,500 53,500 53,500 ¥ 53,500

CapitalSurplus

¥ 112,000 112,000 112,000 ¥ 112,000

CommonStock

1,970

(1) 3

1,972

(4)

1,967

1,967

Millions of Yen (Note 2)Thousands


Net incomeDividends from surplus, $109.76 per shareNet change in the year


$ 1,365,853

$ 1,365,853

$ 652,439 $ 652,439

$ 15,150,426 1,619,280 (216,219) $ 16,553,500

$ 50,951

(731)

$ 50,207

$ (2,504,475) $ (2,504,475)

$ 14,715,182 1,619,280 (216,219) (512) $ 16,117,731

$ 481,817 25,451 $ 507,280

$ 15,197,000 1,619,280 (216,219) 24,939 $ 16,625,012

$ (12)

219 $ 207

Thousands of U.S. Dollars (Note 2)

Accumulated OtherComprehensive Income

TotalEquity

MinorityInterestsTotal

TreasuryStock

Unrealized Gain(Loss) on

Available-for-Sale Securities

DeferredGain

(Loss) on Hedges

RetainedEarnings

CapitalSurplus

CommonStock

Accumulated OtherComprehensive Income


PER SHARE OF COMMON STOCK (Note 3.r):Basic net incomeCash dividends applicable to the year

¥ 67,470.45 9,500.00

¥ 67,990.31 9,000.00

¥ 46,574.56 9,000.00

$ 822.81 115.85

OPERATING REVENUES

OPERATING EXPENSES:Transportation, other services and cost of salesSelling, general and administrative expenses

Total operating expenses Operating income OTHER INCOME (EXPENSES):

Interest and dividend incomeInterest expense (Note 6)Loss on long-term accounts payable—railway facilities (Note 6)Loss on redemption of bondsOther—net

Other expenses—net

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS

INCOME TAXES (Note 9):CurrentDeferred

Total income taxes

NET INCOME BEFORE MINORITY INTERESTS

MINORITY INTERESTS IN NET INCOME

NET INCOME

¥ 1,508,328

974,029 161,777

1,135,806 372,521

1,987 (99,187) (11,896) 471

(108,624)

263,896

108,200 19,591

127,791

136,105

3,323

¥ 132,781

¥ 1,503,083

993,604 160,131

1,153,735 349,347

1,805 (108,143) (15,691) (211) (2,460)

(124,700)

224,647

95,656 (6,933)

88,722

135,924

2,117

¥ 133,807

¥ 1,486,632

1,026,516 166,641

1,193,157 293,474

1,419 (117,310) (14,633)

(2,051)(132,575)

160,899

74,261 (7,625)

66,635

2,499

¥ 91,764

$ 18,394,243

11,878,402 1,972,890

13,851,292 4,542,939

24,231 (1,209,597)

(145,073) 5,743

(1,324,682)

3,218,243

1,319,512 238,914

1,558,426

1,659,817

40,524

$ 1,619,280



2012 2011 2010 2012




(Note 2)


NET INCOME BEFORE MINORITY INTERESTS

OTHER COMPREHENSIVE INCOME (Note 14):Unrealized gain (loss) on available-for-sale securitiesDeferred gain (loss) on hedgesShare of other comprehensive income in affiliates

Total other comprehensive income

COMPREHENSIVE INCOME (Note 14) TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO (Note 14):

Owners of the parentMinority interests

¥ 136,105

143 37 12

193 ¥ 136,298

¥ 132,739 3,559

$ 1,659,817

1,743 451 146

2,353

$ 1,662,170

$ 1,618,768 43,402

2012

¥ 135,924

(3,230) (3) (27)

(3,261) ¥ 132,663

¥ 130,679 1,983

2011 2012




(Note 2)

2012 2011 2010 2012

U.S. DollarsYen

Outstanding Number of Shares of

Common Stock

¥ 1,157,467 91,764

(17,748)

(1,705) (103,500) 1,126,278

133,807 (17,750) 1,242,335

132,781 (17,730)

¥ 1,357,387



Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

44 45

Central Japan Railway Company and Consolidated Subsidiaries1. INCORPORATION OF CENTRAL JAPAN RAILWAY COMPANY

Central Japan Railway Company (Tokai Ryokaku Tetsudo Kabushiki Gaisha, the "Company") was incorporated on April 1, 1987, as a private business company, pursuant to the Law for Japanese National Railways Restructuring enacted upon the resolution of the Japanese Diet.

The business of the Japanese National Railways (the "JNR") was succeeded by the following newly established organizations: seven railway companies including the Company, the former Shinkansen Holding Corporation (a predecessor entity to the Railway Development Fund (1991–1997), which was subsequently succeeded by the Corporation for Advanced Transport and Technology (the "CATT") (1997–2003) and in turn by the Japan Railway Construction, Transport and Technology Agency (the "JRTT")), the former Railway Telecommunication Co., Ltd., Railway Information Systems Co., Ltd. and the Railway Technical Research Institute (the "RTRI") which reorganized as a public interest corporation as of April 1, 2011. The JNR itself became the JNR Settlement Corporation (the "JNRSC"). All of the assets and liabilities of the JNR were transferred to such organizations, including the JNRSC.

Prior to December 1, 2001, the Law Concerning Passenger Railway Companies and Japan Freight Railway Company (the "Law") required that authorization be obtained from the Minister of Land, Infrastructure and Transport (the "Minister of Transport") regarding fundamentals such as: (1) commencement of business other than railway and its related business, (2) the appointment or dismissal of representative directors and corporate auditors, (3) the issuance of new shares and bonds, (4) long-term loans payable, (5) amendments to the Articles of Incorporation, (6) operating plans, (7) sales of material assets, (8) appropriations of earnings and (9) merger or dissolution. As of December 1, 2001, since the Law was revised and the Company was no longer in scope of the Law, the Company was not required to obtain the aforementioned authorizations.

On October 8, 1997, the Company's shares were listed on the Nagoya, Tokyo and Osaka stock exchanges in Japan. The JNRSC, which held all 2,240,000 of the Company's outstanding shares prior to the listing, sold 1,353,929 shares in the initial public offerings. Pursuant to the Law for Disposal of Debts and Liabilities of the JNRSC enacted in October of 1998, the Company's shares held by the JNRSC were transferred to Japan Railway Construction Public Corporation (the "JRCPC"). On October 1, 2003, the CATT and the JRCPC were fully integrated, pursuant to the Law of Japan Railway Construction, Transport and Technology enacted on October 1, 2003, and designated as the JRTT. In July 2005, the JRTT sold 600,000 shares of the Company. On April 5, 2006, the JRTT also sold its remaining 286,071 shares of the Company. As a result of this sale, all of the Company's shares held by the JRTT were sold.

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTSThe accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its

related accounting regulations, and in conformity with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards.

Under Japanese GAAP, a consolidated statement of comprehensive income is required from the fiscal year ended March 31, 2011 and has been presented herein. Accordingly, accumulated other comprehensive income is presented in the consolidated balance sheet and the consolidated statement of changes in equity. Information with respect to other comprehensive income for the year ended March 31, 2010 is disclosed in Note 14. In addition, “net income before minority interests” is disclosed in the consolidated statement of income from the fiscal year ended March 31, 2011.

In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the 2011 and 2010 consolidated financial statements to conform to the classifications used in 2012.

The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥82 to $1, the approximate rate of exchange as of March 30, 2012. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. Japanese yen figures less than one million of yen are rounded down to the nearest million of yen, except for per share information and U.S. dollar figures less than one thousand of U.S. dollars are also rounded down to the nearest thousand of U.S. dollars, except for per share information.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Principles of Consolidation

The accompanying consolidated financial statements as of March 31, 2012 include the accounts of the Company and its 29 (29 in 2011 and 31 in 2010) significant subsidiaries (together, the "Companies").

Under the control or influence concept, those companies in which the Company, directly or indirectly, is able to exercise control over operations are consolidated, and those companies over which the Company has the ability to exercise significant influence are accounted for by the equity method.

Investments in two affiliates are accounted for by the equity method. Investments in the remaining unconsolidated subsidiaries and affiliates are stated at cost. If the equity method of accounting had been applied to the investments in these companies, the effect on the accompanying consolidated financial statements would not be material.

The difference between the cost of acquisition and the fair value of the equity of an acquired subsidiary at the date of acquisition is fully amortized when incurred.All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets resulting from transactions within the

Companies is also eliminated.A certain consolidated subsidiary has adopted a fiscal year ending on February 29, which is different from that of the Company. The necessary adjustments for preparing consolidated

financial statements as of the Company's year-end were appropriately made, such as adjustments for significant intercompany accounts and transactions which occur between the fiscal year-end of the subsidiary and that of the Company.b. Cash Equivalents

Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value. Cash equivalents include time deposits, certificate of deposits, commercial paper and others, all of which mature or become due within three months of the date of acquisition.c. Inventories

Inventories are stated at the lower of cost, principally determined by the retail method for merchandise, by the specific identification method for land and buildings held for sale in lots, by the specific identification method for work in process and by the moving-average cost method for materials and supplies, or net selling value.d. Investment Securities

All investment securities are classified and accounted for, depending on management's intent, as available-for-sale securities, which are principally comprised of investment securities, and are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate component of equity.

Non-marketable available-for-sale securities are stated at cost determined by the moving-average cost method. For other-than-temporary declines in fair value, investment securities are reduced to net realizable value by a charge to income.e. Property, Plant and Equipment

Property, plant and equipment are stated at cost. Certain contributions in aid for construction of railways and other property are deducted directly from the cost of the related assets.Depreciation is computed substantially by the declining-balance method over the estimated useful lives of the assets. Additional depreciation is provided for the Shinkansen rolling stock

based on kilometers traveled.The range of useful lives is principally from 2 to 60 years for buildings and structures and from 2 to 20 years for machinery, rolling stock and vehicles.Depreciation of certain railway ground structures, except for the Shinkansen railway ground facilities, is computed by the replacement-accounting method.

f. Long-Lived AssetsThe Companies review their long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be

recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition. g. Software Costs

Software costs are amortized by the straight-line method over five years.h. Deferred Charges

Bond issuance costs are fully charged to income as incurred.i. Provision for Large Scale Renovation of the Shinkansen Infrastructure

Provision for large scale renovation of the Shinkansen infrastructure is provided based on the Company's provision plan authorized by the Minister of Transport over 15 years from October 1, 2002 in accordance with the Nationwide Shinkansen Railway Development Law.j. Retirement and Pension Plans

The Company and 28 consolidated subsidiaries have unfunded retirement plans covering substantially all of their employees. As of March 31, 2012, two consolidated subsidiaries had non-contributory funded pension plans as an alternative for, or in addition to their unfunded retirement plans. Six (four in 2011) consolidated subsidiaries have non-contributory defined benefit pension plans and certain subsidiaries also have unfunded retirement plans.


OPERATING ACTIVITIES:Income before income taxes and minority interests

Adjustments for:

Income taxes—paid

Depreciation and amortization

Equity in earnings of affiliates

Proceeds from contribution for construction

Reduction of noncurrent assets related to contribution for construction

Loss on retirement of noncurrent assets

(Gain) loss on sales of noncurrent assets

Changes in assets and liabilities:

Increase in provision for large scale renovation of the Shinkansen infrastructure

(Increase) decrease in trade receivables

(Increase) decrease in inventories

Decrease in trade payables

Increase (decrease) in advances received

Increase (decrease) in provision for retirement benefits

Other—net

Net cash provided by operating activities


INVESTING ACTIVITIES:Placement of time deposits

Withdrawal of time deposits

Purchases of marketable securities

Proceeds from redemption of marketable securities

Purchases of property, plant and equipment

Proceeds from contribution for construction

Proceeds from sales of investment securities and investment in and advances to

unconsolidated subsidiaries and affiliates

Purchases of investment securities

Other—net

Net cash used in investing activities

FINANCING ACTIVITIES:Net increase (decrease) in short-term loans payable

Proceeds from long-term debt

Repayments of long-term debt

Payments for long-term accounts payable—railway facilities

Cash dividends paid

Cash dividends paid to minority shareholders

Other—net

Net cash used in financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTSCASH AND CASH EQUIVALENTS, BEGINNING OF YEARCASH AND CASH EQUIVALENTS, END OF YEAR

ADDITIONAL CASH FLOW INFORMATION:Interest paid

(90,000) 105,000 (80,000) 80,000 (285,419) 994

1,055 (4) (1,580)(269,954)

628 174,700 (209,913) (143,348) (17,730) (434) (12,451)(208,549)

(30,829)115,521

¥ 84,692

¥ 99,824

(95,007)

50,000

(80,000)

80,000

(274,983)

6,801

113

(1,683)

(5,455)

(320,215)

182

235,900

(169,554)

(194,577)

(17,750)

(354)

(19,750)

(165,906)

35,813

79,708

¥ 115,521

¥ 109,713

(1,097,560)1,280,487

(975,609) 975,609 (3,480,719) 12,121

12,865 (48) (19,268)(3,292,121)

7,658 2,130,487 (2,559,914) (1,748,146) (216,219) (5,292) (151,841)(2,543,280)

(375,963)1,408,792

$ 1,032,829

$ 1,217,365

¥ 263,896

(107,003) 257,063 (199) (2,297) 2,780 13,899 (671)

33,333 (18,262)

(6,223) (1,081) 8,246 753 3,441

447,674

¥ 224,647

(63,620)

258,599

(311)

(20,586)

20,676

17,032

92

33,333

8,021

11,241

(5,329)

(1,742)

(522)

40,399

521,934

¥ 160,899

(83,365)

268,219

(246)

(7,130)

7,156

20,977

1,699

33,333

(5,995)

10,722

(15,645)

(8,656)

(4,635)

36,694

414,027

$ 3,218,243

(1,304,914) 3,134,914 (2,426) (28,012) 33,902 169,500 (8,182)

406,500 (222,707)

(75,890) (13,182) 100,560 9,182 41,963

5,459,439


2012 2011 2010 2012



(Note 2)

5,000

(250,766)

10,079

93

(12,326)

(8,290)

(256,209)

(3,023)

288,300

(158,523)

(211,418)

(17,748)

(365)

(30,856)

(133,635)

24,182

55,526

¥ 79,708

¥ 118,250



Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements

*Floating interest rates of unsecured bonds were converted to fixed interest rates using interest rate swap contracts. Interest rates shown above were presented at the fixed interest rates.

46 47

The information for available-for-sale securities whose fair value is not readily determinable as of March 31, 2012 and 2011 is disclosed in Note 10.The impairment losses on available-for-sale equity securities for the years ended March 31, 2012, 2011 and 2010 were ¥3,662 million ($44,658 thousand), ¥3,576 million and nil,

respectively.

Equity securities

Trust fund investment and other

Total

¥ 62,145

276

¥ 62,421

¥ 9,851

¥ 9,851

¥ 4,578

52

¥ 4,631

¥ 67,418

223

¥ 67,641

CostUnrealized

GainsUnrealized

LossesFair

ValueFair

ValueCostUnrealized

GainsUnrealized

Losses

¥ 65,803

276

¥ 66,079

¥ 12,505

¥ 12,505

¥ 7,231

55

¥ 7,286

¥ 71,077

221

¥ 71,298

Millions of Yen

2012 2011

Equity securities

Trust fund investment and other

Total

$ 757,865

3,365

$ 761,231

$ 120,134

$ 120,134

$ 55,829

634

$ 56,475

$ 822,170

2,719

$ 824,890

CostUnrealized

GainsUnrealized

LossesFair

Value

Thousands of U.S. Dollars

2012

In addition, Nippon Sharyo, Ltd., a consolidated subsidiary, implemented a defined contribution pension plan effective April 1, 2011 by which a portion of the non-contributory defined benefit pension plan was terminated. Nippon Sharyo, Ltd. applied the accounting treatment specified in the guidance issued by the Accounting Standards Board of Japan (the “ASBJ”), and accrued expense relating to the termination of ¥700 million was recorded for the year ended March 31, 2011.

The provision for retirement benefits is mainly calculated based on the projected benefit obligations and plan assets at the balance sheet date.k. Asset Retirement Obligations

In March 2008, the ASBJ published ASBJ Statement No. 18, “Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No. 21, “Guidance on Accounting Standard for Asset Retirement Obligations.” Under this accounting standard, an asset retirement obligation is defined as a legal obligation imposed either by law or contract that results from the acquisition, construction, development and normal operation of a tangible fixed asset and is associated with the retirement of such tangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of asset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected as an increase or a decrease in the carrying amount of the liability and the capitalized amount of the related asset retirement cost. This standard was effective for fiscal years beginning on or after April 1, 2010.

The Companies applied this accounting standard effective April 1, 2010 and the effect was immaterial.l. Leases

Lease assets of finance leases that were not deemed to transfer ownership of the leased property are depreciated and amortized by the straight-line method over the lease period.m. Construction Contracts

In December 2007, the ASBJ issued ASBJ Statement No. 15, "Accounting Standard for Construction Contracts," and ASBJ Guidance No. 18, "Guidance on Accounting Standard for Construction Contracts." Under the previous Japanese GAAP, either the completed-contract method or the percentage-of-completion method was permitted to account for construction contracts. Under this new accounting standard, the construction revenue and construction costs should be recognized by the percentage-of-completion method, if the outcome of a construction contract can be estimated reliably. When total construction revenue, total construction costs and the stage of completion of the contract at the balance sheet date can be reliably measured, the outcome of a construction contract can be estimated reliably. If the outcome of a construction contract cannot be reliably estimated, the completed-contract method should be applied. When it is probable that the total construction costs will exceed total construction revenue, an estimated loss on the contract should be immediately recognized by providing for a loss on construction contracts. n. Income Taxes

The provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted tax laws to the temporary differences.o. Appropriations of Retained Earnings

Appropriations of retained earnings are reflected in the financial statements for the following year upon shareholders' approval.p. Consumption Tax

Consumption tax is levied in Japan on the domestic sales of goods and services at the rate of 5%. Unless otherwise stated, all figures are presented net of tax.q. Derivatives and Hedging Activities

The Companies use derivative financial instruments to manage their exposures to fluctuations in interest rates. Interest rate swaps are utilized by the Companies to reduce interest rate risks. The Companies do not enter into derivatives for trading or speculative purposes.

Interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at market value but the differential paid or received under the swap agreements are recognized and included in interest expense.r. Per Share Information

Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period, retroactively adjusted for stock splits.

The net income available to common shareholders used in the computation for 2012, 2011 and 2010 was ¥132,781 million ($1,619,280 thousand), ¥133,807 million and ¥91,764 million, respectively. The average number of common shares used in the computation for 2012, 2011 and 2010 was 1,967,994 shares, 1,968,032 shares and 1,970,277 shares, respectively.

Diluted net income per share is not presented in the accompanying consolidated financial statement as the Companies do not have any dilutive securities.Cash dividends per share presented in the accompanying consolidated statement of income is dividends applicable to the respective years including dividends to be paid after the end of

the year.s. Accounting Changes and Error Corrections

In December 2009, the ASBJ issued ASBJ Statement No. 24, "Accounting Standard for Accounting Changes and Error Corrections" and ASBJ Guidance No. 24, "Guidance on Accounting Standard for Accounting Changes and Error Corrections." Accounting treatments under this standard and guidance are as follows:

(1) Changes in Accounting Policies—When a new accounting policy is applied with revision of accounting standards, the new policy is applied retrospectively unless the revisedaccounting standards include specific transitional provisions. When the revised accounting standards include specific transitional provisions, an entity shall comply with the specifictransitional provisions.

(2) Changes in Presentations—When the presentation of financial statements is changed, prior-period financial statements are reclassified in accordance with the new presentation. (3) Changes in Accounting Estimates—A change in an accounting estimate is accounted for in the period of the change if the change affects that period only, and is accounted for

prospectively if the change affects both the period of the change and future periods. (4) Corrections of Prior-Period Errors—When an error in prior-period financial statements is discovered, those statements are restated. This accounting standard and the guidance are

applicable to accounting changes and corrections of prior-period errors which are made from the beginning of the fiscal year that begins on or after April 1, 2011.The Companies applied this accounting standard effective April 1, 2011 and the effect was immaterial.

4. INVESTMENT SECURITIESInformation regarding investment securities with readily determinable fair values classified as available-for-sale as of March 31, 2012 and 2011 was as follows:

5. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBTThe interest rates applicable to short-term loans payable were 0.35% for 2012, 0.38% for 2011 and 0.46% for 2010.Long-term debt as of March 31, 2012 and 2011 consisted of the following:

Thousands of U.S. DollarsMillions of Yen

Annual maturities of long-term debt outstanding at the principal amounts as of March 31, 2012 were as follows:

$ 2,021,670 1,924,731 2,293,000 1,522,914 1,978,487

11,273,048 $ 21,013,890

20132014201520162017Thereafter Total

Thousands of U.S. DollarsYear Ending March 31 Millions of Yen

¥ 165,777 157,828 188,026 124,879

162,236 924,390

¥ 1,723,139

2012 2011 2012

¥ 29,000 49,900 29,900 49,900 20,000 20,000 10,000 20,000 10,000 25,000 10,000 10,000 10,000 10,000 20,000 10,000 20,000 20,000 20,000 20,000 20,000 20,000 10,000 30,000 19,989 29,983 19,993 19,996 19,996 19,997 19,975 9,998 14,991 19,989 9,993 19,979 30,000 10,000 20,000 30,000

30,000 10,000 10,000 30,000 40,000 10,000 15,000 15,000 15,000 30,000 20,000 10,000 20,000 30,000

620,901

10,000

33,752 1,758,237 (129,413)

¥ 1,628,823

$ 364,634 608,536 243,902 237,804 121,951 243,902 121,951 304,878 121,951 121,951 121,951 121,951 243,902

121,951 243,902 243,902 243,902 243,902 243,902 232,926 121,951 365,853 243,792 363,219 243,829 243,853 243,853 243,865 243,609 121,926

182,817 243,780

121,878 243,658 365,853 121,951 243,902 365,853 365,853 121,951 121,951 365,853 487,804 121,951 182,926 182,926 182,926 365,853 243,902 121,951 243,902 365,853 243,902 365,853 121,951

7,467,146

121,951

336,987 21,012,609 (2,021,670)

$ 18,990,926

¥ 29,900 49,900 20,000 19,500 10,000 20,000 10,000 25,000 10,000 10,000 10,000 10,000 20,000 10,000 20,000 20,000 20,000 20,000 20,000 19,100 10,000 30,000 19,991 29,784 19,994 19,996 19,996 19,997 19,976 9,998 14,991 19,990 9,994 19,980 30,000 10,000 20,000 30,000

30,000 10,000 10,000 30,000 40,000 10,000 15,000 15,000 15,000 30,000 20,000 10,000 20,000 30,000 20,000 30,000 10,000

612,306

10,000

27,633 1,723,034 (165,777)

¥ 1,557,256

The CompanySecured 3.95% bonds due 2016Secured 2.825% bonds due 2017Secured 2.18% bonds due 2018Secured 2.6% bonds due 2020Unsecured 2.39% bonds due 2022Unsecured 2.2% bonds due 2022Unsecured 1.49% bonds due 2012Unsecured 1.74% bonds due 2022Unsecured 1.42% bonds due 2017Unsecured 1.15% bonds due 2022Unsecured 1.31% bonds due 2033Unsecured 2.015% bonds due 2023Unsecured 2.2% bonds due 2024Unsecured 2.19% bonds due 2019Unsecured 1.875% bonds due 2019Unsecured 2.21% bonds due 2024Unsecured 1.775% bonds due 2020Unsecured 1.28% bonds due 2012Unsecured 1.77% bonds due 2017Unsecured 1.695% bonds due 2016Unsecured 1.845% bonds due 2013Unsecured 2.14% bonds due 2018Unsecured 2.405% bonds due 2026Unsecured 2% bonds due 2016Unsecured 2.04% bonds due 2018Unsecured 2.39% bonds due 2026Unsecured 1.88% bonds due 2016Unsecured 1.78% bonds due 2017Unsecured 1.78% bonds due 2017Unsecured 1.75% bonds due 2017Unsecured 2.31% bonds due 2027Unsecured 1.69% bonds due 2018Unsecured 2.3% bonds due 2027Unsecured 1.79% bonds due 2020Unsecured 1.83% bonds due 2018Unsecured 2.39% bonds due 2028Unsecured 2.391% bonds due 2028Unsecured 2.646% bonds due 2038Unsecured 1.557% bonds due 2019Unsecured 2.166% bonds due 2029Unsecured 2.312% bonds due 2029Unsecured 2.556% bonds due 2039Unsecured 1.667% bonds due 2019Unsecured 2.321% bonds due 2029Unsecured 2.157% bonds due 2029Unsecured 2.375% bonds due 2039Unsecured 0.371% bonds due 2013Unsecured 1.472% bonds due 2020Unsecured 0.316% bonds due 2013Unsecured 2.212% bonds due 2030Unsecured 2.111% bonds due 2030Unsecured 1.797% bonds due 2030Unsecured 0.443% bonds due 2014Unsecured 0.586% bonds due 2015Unsecured 2.083% bonds due 2031Unsecured 0.297% bonds due 2014Unsecured 1.895% bonds due 2031Unsecured loans from Japanese banks and others, with interest rates ranging from 0.95% to 6.6% (2012 and 2011),due 2011 to 2032

SubsidiariesUnsecured bonds with interest rates ranging from 1.57% to 1.992%, due 2012 *Unsecured and secured loans from Japanese banks and other, with interest rates ranging from 1.4% to 4.65% (2012) and from 1.4% to 5.75% (2011), due 2011 to 2018

TotalLess current portionLong-term debt, less current portion



8. EQUITYJapanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions in the Companies Act that affect financial and accounting matters are

summarized below:a. Dividends

Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders meeting. For companies that meet certain criteria such as (1) having the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by its articles of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation.

The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the company so stipulate. The Companies Act

provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of equity after dividends must be maintained at no less than ¥3 million.b. Increases/Decreases and Transfer of Common Stock, Reserve and Surplus

The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such dividends until the total of the aggregate amount of legal reserve and additional paid-in capital equals to 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings-unappropriated can be transferred among the accounts under certain conditions upon resolution of the shareholders.c. Treasury Stock and Treasury Stock Acquisition Rights

The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders which is determined by a specific formula.

Under the Companies Act, stock acquisition rights are presented as a separate component of equity.The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate

component of equity or deducted directly from stock acquisition rights.

9. INCOME TAXESThe Companies are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 40.2% for the years

ended March 31, 2012, 2011 and 2010.The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities as of March 31, 2012 and 2011 were as follows:

48 49

Based on legal defeasance agreements with special purpose entities, the Company has transferred the debt repayments obligation for certain long-term accounts payable—railway facilities to special purpose entities, and has provided special purpose entities with Japanese national government bonds or cash for the payments of principal and interest on the long-term accounts payable—railway facilities. As a result of these transactions, the balance of long-term accounts payable—railway facilities was reduced by ¥352,740 million ($4,301,707 thousand) and ¥410,996 million as of March 31, 2012 and 2011, respectively, and the related loss on long-term accounts payable—railway facilities by nil, ¥15,691 million and ¥14,633 million for the years ended March 31, 2012, 2011 and 2010, respectively. (see Note 13)

Annual maturities of long-term accounts payable—railway facilities as of March 31, 2012 were as follows:

6. LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIESLong-term accounts payable—railway facilities as of March 31, 2012 and 2011 consisted of the following:

Interest expense on the aforementioned long-term accounts payable—railway facilities amounted to ¥64,618 million ($788,024 thousand), ¥71,886 million and ¥82,302 million for the years ended March 31, 2012, 2011 and 2010, respectively.

7. RETIREMENT AND PENSION PLANSEmployees whose service with the Company or consolidated subsidiaries is terminated are entitled to retirement and pension benefits determined by reference to accumulated points

during their employment calculated by their position or basic rates of pay at the time of termination, length of service and other conditions under which the termination occurs. The liability for employees’ retirement benefits as of March 31, 2012 and 2011 consisted of the following:

Year Ending March 31


2012 2011 2012


2012 2011 2012




The Company has entrusted cash for the repayment of a portion of the bonds based on debt assumption agreements with financial institutions; however, the Company is not released from the primary responsibility for the liability by these agreements. The outstanding bonds covered by these agreements as of March 31, 2012 and 2011 were as follows:

The bonds aforementioned have been derecognized in the consolidated balance sheet and disclosed as contingent liabilities. (see Note 13)The Company has credit commitments from banks. Total unused credit available to the Company as of March 31, 2012 was ¥100,000 million ($1,219,512 thousand).All assets of the Company were pledged for the above secured bonds of ¥178,600 million ($2,178,048 thousand), including aforementioned off-balanced bonds of ¥98,800 million ($1,204,878

thousand), as an enterprise mortgage, which gives the holder thereof a security interest in all assets junior to that of other present or future secured creditors, but senior to that of general creditors.The carrying amounts of assets pledged as collateral for the above secured long-term debt of consolidated subsidiaries of ¥700 million ($8,536 thousand), including current portion of ¥175

million ($2,134 thousand), as of March 31, 2012 were as follows:

Assumptions used for the years ended March 31, 2012, 2011 and 2010 were set forth as follows:

The prepaid pension costs were recorded as prepaid expenses and other in the consolidated balance sheet as of March 31, 2012 and 2011.The components of net periodic benefit costs for the years ended March 31, 2012, 2011 and 2010 were as follows:

Net deferred tax assets as of March 31, 2012 and 2011 were reflected in the accompanying consolidated balance sheets under the following captions:

2012 2011

Discount rateExpected rate of return on plan assetsAmortization period of prior service costRecognition period of actuarial gain/lossAmortization period of transitional obligation

Mainly 1.5%0.91% to 2.0%Mainly 5 yearsMainly 5 years

15 years (a certainconsolidated

subsidiary only)

2010

Mainly 1.5%0.99% to 2.0%Mainly 5 yearsMainly 5 years

15 years (a certainconsolidated

subsidiary only)

Mainly 1.5%1.1% to 2.0%

Mainly 5 yearsMainly 5 years

15 years (a certain consolidated

subsidiary only)

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statement of income for the year ended March 31, 2012 is as follows:

Since the difference between the normal effective statutory tax rate and the actual effective tax rate was not significant, reconciliations were not presented for the years ended March 31, 2011 and 2010.

Following the promulgation on December 2, 2011 of the Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating a Taxation System Responding to Changes in Economic and Social Conditions (Act No. 114 of 2011) and the Act on Special Measures for Securing the Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake (Act No. 117 of 2011), the normal effective statutory tax rate changes from approximately 40.2% to 37.6% effective for the fiscal years beginning on or after April 1, 2012 through March 31, 2015, and to 35.2% afterwards. The effect of this change was to decrease deferred tax assets (net of deferred tax liabilities) in the consolidated balance sheet as of March 31, 2012 by ¥21,978 million ($268,024 thousand) and to increase income taxes—deferred in the consolidated statement of income for the year then ended by ¥22,413 million ($273,329 thousand).

Normal effective statutory tax rateEffect of tax rate reductionOther—netActual effective tax rate

2012

40.2% 8.5

(0.3)48.4%

¥ 20,000 29,000 49,800 ¥ 98,800

¥ 20,000

¥ 20,000

$ 243,902 353,658 607,317 $ 1,204,878

2012 2011 2012Secured 4.65% bonds due 2014Secured 3.95% bonds due 2016Secured 2.825% bonds due 2017 Total


¥ 569,654

565,893 8,177 1,143,726 (108,418)

¥ 1,035,307

¥ 709,643

568,899 8,531 1,287,074 (110,009)

¥ 1,177,065

$ 6,947,000

6,901,134 99,719 13,947,878 (1,322,170)$ 12,625,695

2012 2011 2012Long-term accounts payable incurred for purchase of the Shinkansen railway ground facilities:

With a floating interest rate of 4.08% (2012 and 2011), due semiannually through 2017With a fixed interest rate of 6.55%, due semiannually through 2051

Other TotalLess current portionLong-term accounts payable—railway facilities, less current portion

2012 2011 2012


¥ 222,638 (14,587)

(797) (805) (3,971)

202,475 (1,966)

¥ 204,441

¥ 222,475 (14,682) (598) (153) (3,603)

203,438 (1,756)

¥ 205,195

$ 2,713,109 (179,048) (7,292) (1,865) (43,939)

2,480,951 (21,414)

$ 2,502,378

Projected benefit obligationFair value of plan assetsUnrecognized transitional obligationUnrecognized prior service costUnrecognized actuarial lossNet liabilityPrepaid pension costProvision for retirement benefits


¥ 12,558 3,660 (230)

255 2,850 2,157

21,253

¥ 21,253

¥ 12,469 3,524 (227)

255 2,893 1,857 20,772

700

¥ 21,473

¥ 12,601 3,351 (222) 199 760 350 17,041

121 ¥ 17,163

$ 153,670 40,865

(2,707) 2,426 9,268 4,268 207,817

1,475 $ 209,304

Service costInterest costExpected return on plan assetsAmortization of transitional obligationAmortization of prior service costRecognized actuarial lossNet periodic benefit costsLoss on transfers to defined contribution plans Contribution to the defined contribution plan Total

2012 2011 2010 2012

Current assetsInvestments and other assetsCurrent liabilities—otherNoncurrent liabilities—otherNet deferred tax assets

¥ 23,886 171,322 (7) (1,548)¥ 193,652

¥ 24,285 191,157 (2) (2,316)¥ 213,123

$ 291,292 2,089,292 (85) (18,878)$ 2,361,609

¥ 82,948 73,011 18,145 10,424 8,025 6,386 3,746 47,808 250,496 (22,857) 227,639

6,127 3,839

4,548 14,515 ¥ 213,123

$ 898,707 833,609 185,280

119,914 105,914 64,426 24,304 525,536 2,757,743 (243,182) 2,514,560

65,243 37,207 50,475 152,939 $ 2,361,609

Deferred tax assets:Provision for retirement benefitsDepreciation and amortizationSoftwareProvision for bonusesUnrealized profit of property, plant and equipmentAccrued railway usage charges Tax loss carryforwardsOther

TotalLess valuation allowance

Deferred tax assets

Deferred tax liabilities:Deferred gains on transfer of certain fixed assets Unrealized gain on available-for-sale securities Other

Deferred tax liabilitiesNet deferred tax assets

¥ 73,694 68,356 15,193 9,833 8,685 5,283 1,993 43,094 226,135 (19,941) 206,194

5,350 3,051 4,139 12,541 ¥ 193,652

¥ 180 669 ¥ 849

$ 2,195 8,158 $ 10,353

Buildings and structures-net of accumulated depreciationLand Total

20132014201520162017Thereafter Total

¥ 108,418 112,958 117,735 122,746 127,954 553,912

¥ 1,143,726

$ 1,322,170 1,377,536 1,435,792 1,496,902 1,560,414 6,755,024

$ 13,947,878



50 51

10. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURESa. Policy for Financial Instruments

The Companies use financial instruments, mainly debt including bank loans and bonds, based on its capital financing plan. Cash surpluses, if any, are invested in low risk financial assets, such as bank deposits.

Derivatives are used, not for speculative purposes, but to manage exposure to financial risks as described in Note 11.b. Nature and Extent of Risks Arising from Financial Instruments

Trade receivables are exposed to customer credit risk. Investment securities, mainly equity instruments of customers and suppliers of the Companies, are exposed to the risk of market price fluctuations.

Payment terms of trade payables and income taxes payable are less than one year.Short-term bank loans are used to fund its ongoing operations. Bonds and long-term loans are used for renewal of long-term debt and capital spending. Please see Note 5 for maturity

analysis for bank loans and bonds payable. Long-term accounts payable—railway facilities were incurred in the amount of ¥5,095,661 million in 1991 for the purchase of the Shinkansen railway ground facilities and serially repaid

to the JRTT. Payment terms are 25.5 years for ¥4,494,466 million and 60 years for ¥601,195 million. Payment term and interest rate of the payable were determined based on the agreements on the purchase of the Shinkansen railway ground facilities. Interest rate of a part of such payable is variable and determined by the JRTT.

Derivatives include interest rate swaps, which are used to manage exposure to market risks of changes in interest rate of bank loans and bonds. Please see Note 11 for the detail of derivatives.c. Risk Management for Financial Instruments Credit Risk Management

Credit risk is the risk of economic loss arising from a counterparty's failure to repay or service debt according to the contractual terms. The Companies manage their credit risk from trade receivables by monitoring of payment terms and balances of major customers by each business administration department to identify the default risk of customers in early stage. Market Risk Management

Investment securities are managed by monitoring market values and financial position of issuers on a regular basis.Interest rate swaps are used to manage exposure to market risks of changes in interest rates of long-term debt.

d. Fair Values of Financial Instruments Fair values of financial instruments are based on a quoted price in active markets. If a quoted price is not available, other rational valuation techniques are used instead. Also please see

Note 11 for the detail of fair value for derivatives.

(1) Fair Value of Financial Instruments

Long-Term Accounts Payable—Railway Facilities Including Current PortionConsidering the legal characteristics, all terms and conditions of the accounts payable-railway facilities are stipulated in the special law, and the fact that no active market exists for this

type of obligation, the fair values of these payables are determined by discounting the cash flow estimated for each due date at the Company’s assumed bond issuing rate. The estimated cash flows of the floating rate portion of these payables are calculated using the latest rate provided by the JRTT.

(2) Financial Instruments Whose Fair Value Cannot Reliably be Determined

Cash and Cash Equivalents and Time DepositsThe carrying values of cash and cash equivalents and time deposits approximate fair value because of their short maturities.

Investment SecuritiesThe fair values of investment securities are measured at the quoted market price of the stock exchange. The information of the fair value for the investment securities by classification is

included in Note 4. Trade Receivables and Payables, Short-Term Loans Payable and Income Taxes Payable

The carrying values of trade receivables and payables, short-term loans payable and income taxes payable approximate fair value because of their short maturities.Long-Term Debt Including Current Portion

Bonds payable with market values are measured at the quoted market prices. The fair values of debt are determined by discounting the cash flows related to the debt at the Companies' assumed bond issuing rate or corporate borrowing rate.

Long-term debt with floating interest rates is accounted for by special treatment. Please refer to Note 11. The fair value is measured by the total amount of principal and interest discounted by the Companies’ assumed corporate borrowing rate.

March 31, 2012Investments in equity instruments that do not have a quoted market price in an active market

Carrying Amount

¥ 31,151 $ 379,890


March 31, 2011Investments in equity instruments that do not have a quoted market price in an active market

Carrying Amount

¥ 30,993

Millions of Yen

Please see Note 5 for annual maturities of long-term debt and Note 6 for long-term accounts payable-railway facilities, respectively.

11. DERIVATIVESThe Companies enters into interest rate swap agreements to manage exposure to market risks of changes in interest rates of certain liabilities.Derivative transactions are mainly entered into to hedge interest rate exposures incorporated within its business. Accordingly, market risk in these derivatives is basically offset by

opposite movements in the value of hedged liabilities.Because the counterparties to these derivatives are limited to major international financial institutions, the Companies do not anticipate any losses arising from credit risk.Derivative transactions entered into by the Companies have been made in accordance with internal policies and have been subject to due internal formalities.

Derivative Transactions to Which Hedge Accounting Is Applied

*The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at market value but the differential paid or received under the swap agreements are recognized and included in interest expense. In addition, the fair value of such interest rate swaps in Note 10 is included in that of hedged items (i.e. long-term debt).

e. Maturity Analysis for Financial Assets and Securities with Contractual Maturities

Millions of Yen

March 31, 2011Interest rate swaps: (fixed rate payment, floating rate receipt) ¥ 81,600

Hedged Item

Long-term debt

Contract Amount Dueafter One Year

¥ 81,600

Fair Value

*

Contract Amount

Millions of Yen

March 31, 2012Interest rate swaps: (fixed rate payment, floating rate receipt) ¥ 118,600

Hedged Item

Long-term debt


¥ 111,100

Fair Value

*

Contract Amount


$ 1,446,341

Hedged Item

Long-term debt


$ 1,354,878

Fair Value

*

Contract AmountMarch 31, 2012Interest rate swaps: (fixed rate payment, floating rate receipt)

As lessor, the minimum rental commitments under noncancelable operating leases as of March 31, 2012 and 2011 were due as follows:

12. LEASESAs lessee, the minimum rental commitments under noncancelable operating leases as of March 31, 2012 and 2011 were due as follows:

2012 2011 2012


2012 2011 2012


Millions of Yen

Carrying AmountMarch 31, 2012Cash and cash equivalentsTime depositsTrade receivablesInvestment securities Total

Trade payablesShort-term loans payableIncome taxes payableLong-term debtLong-term accounts payable—railway facilities Total

¥ 84,692 30,012 83,410 67,641

¥ 265,757

¥ (167,451) (25,325) (62,506)

(1,723,034) (1,143,726)

¥ (3,122,043)

Fair Value¥ 84,692

30,012 83,410 67,641

¥ 265,757

¥ (167,451)(25,325)(62,506)

(1,795,339) (1,700,753)¥ (3,751,376)

Unrealized Gain/Loss

¥ (72,304) (557,027)

¥ (629,332)




$ 1,032,829 366,000

1,017,195 824,890

$ 3,240,939

$ (2,042,085) (308,841) (762,268)

(21,012,609) (13,947,878)

$ (38,073,695)

Fair Value

$ 1,032,829 366,000

1,017,195 824,890

$ 3,240,939

$ (2,042,085)(308,841)

(762,268) (21,894,378)

(20,740,890)$ (45,748,487)


$ (881,756)(6,793,012)

$ (7,674,780)

Millions of Yen



¥ 115,521 45,008 65,149 71,298

¥ 296,977

¥ (172,065) (24,697) (61,248)

(1,758,237) (1,287,074)

¥ (3,303,323)

Fair Value ¥ 115,521

45,008 65,149 71,298

¥ 296,977

¥ (172,065)(24,697)

(61,248) (1,810,568) (1,807,163)

¥ (3,875,742)


¥ (52,330)(520,088)

¥ (572,419)

Millions of Yen

Due within One YearMarch 31, 2012Cash and cash equivalentsTime depositsTrade receivables Total

¥ 84,692 30,012 83,247

¥ 197,952

Due after One Yearthrough Five Years

¥ 162 ¥ 162

Due afterFive Years


Due within One YearMarch 31, 2012Cash and cash equivalentsTime depositsTrade receivables Total

$ 1,032,829 366,000

1,015,207 $ 2,414,048

Due after One Yearthrough Five Years

$ 1,975 $ 1,975

Due afterFive Years

¥ 444 679 ¥ 1,123

¥ 526 370 ¥ 896

$ 6,414 4,512

$ 10,926

Due within one yearDue after one year Total

¥ 1,491 4,681 ¥ 6,172

¥ 1,477 4,534 ¥ 6,011

$ 18,012 55,292 $ 73,304

Due within one yearDue after one year Total



15. SEGMENT INFORMATIONUnder ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance No. 20, “Guidance on Accounting Standard for Segment Information

Disclosures,” an entity is required to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity for which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. This accounting standard and the guidance are applicable to segment information disclosures for the fiscal years beginning on or after April 1, 2010.

The segment information for the year ended March 31, 2010 under the revised accounting standard is also disclosed hereunder as required.1. Description of Reportable Segments

The Companies’ reportable segments are those for which separate financial information is available and regular evaluation by the Companies’ management is being performed in order to decide how resources are allocated among the Companies.

The Companies are composed by segments by nature of products and services, and three reportable segments: Transportation, Merchandise and Other and Real Estate are disclosed.The Transportation segment manages the Companies’ railway operations, such as the Tokaido Shinkansen and conventional railway operations in the Tokai area, bus operations and

others. The Merchandise and Other segment includes a department store in JR central towers, retail sales in trains and stations and others. The Real Estate segment includes real estate leasing business, such as station building leasing, and real estate sales in lots.2. Methods of Measurement for the Amounts of Operating Revenues, Profit, Assets and Other Items for Each Reportable Segment

The accounting policies of each reportable segment are consistent to those disclosed in Note 3, “Summary of Significant Accounting Policies.”Reportable segment profit represents operating income. Prices of intersegment transactions or transfers are determined based upon the arm’s length transactions.

3. Information about Operating Revenues, Profit, Assets and Other Items

52 53

¥ 9,850 $ 120,121 Year-end cash dividends, ¥5,000 ($60.98) per share


2012 2012

13. CONTINGENCIESAs of March 31, 2012, the Company has joint and several obligations with the RTRI to make payments on long-term accounts payable of ¥23,390 million ($285,243 thousand) by the RTRI.

The proceeds are being used for the enhancement of technology development for the Maglev system.As discussed in Notes 5 and 6, based on debt assumption agreements with financial institutions or legal defeasance agreements with special purpose entities, the Company has transferred the

debt repayment obligations for certain bonds and long-term accounts payable—railway facilities to such financial institutions and special purpose entities. As of March 31, 2012, the Company had contingent obligations of ¥98,800 million ($1,204,878 thousand) for the bonds and ¥352,740 million ($4,301,707 thousand) for long-term accounts payable—railway facilities, respectively.

14. COMPREHENSIVE INCOMEFor the Year Ended March 31, 2012

The component of other comprehensive income for the year ended March 31, 2012 were as follows:

16. SUBSEQUENT EVENTSa. Appropriations of Retained Earnings

The following appropriation of retained earnings as of March 31, 2012 was approved at the Company's shareholders meeting held on June 22, 2012:

b. Retirement of Treasury StockOn April 26, 2012, the Board of Directors resolved to retire of treasury stock based on the provisions under Article 178 of the Companies Act and retired on May 7, 2012.(1) Class of Shares to be Retired

Common shares(2) Number of Shares to be Retired

90,000 shares (4.19% of outstanding number of shares of common stock before retirement of treasury stock)(3) Outstanding Number of Shares of Common Stock after Retirement of Treasury Stock

2,060,000 sharesc. Implementation of Stock Split and Share Unit System

Security listing regulations of each stock exchange revised in April 2012 have mandated listed companies, which the number of shares per unit share is other than 100 or 1,000, shall change number of shares per unit share to 100. On April 26, 2012, the Board of Directors resolved the implementation of share unit effective October 1, 2012, and on June 22, 2012, the change of incorporation at the 25th shareholders’ meeting, splitting one common share to 100 shares and turning 100 shares to a share unit was approved.

Given the shares split as of April 1, 2010, income per share and dividends per share would be as follows:

2010

Other comprehensive income for the year ended March 31, 2010 was the following:

The corresponding information for the years ended March 31, 2011 and 2010 were not required under the accounting standard for presentation of comprehensive income as an exemption for the first year of adopting that standard and not disclosed herein.

For the Year Ended March 31, 2010Total comprehensive income for the year ended March 31, 2010 was the following:

2010

Merchandise and Other




Notes:1. Other includes business in hotel, travel, advertising, rolling stock production and construction which are not included in reportable segment.2. Reconciliations are as follows:

(1) The amount of the elimination of intersegment transactions included in the reconciliations was ¥619 million ($7,548 thousand) and ¥1,739 million for the years ended March 31, 2012 and 2011, respectively. (2) The reconciliations for segment assets include corporate assets, which are not allocated to reportable segment, and the elimination of intersegment transactions.

Corporate assets principally consist of investment securities and short-term loans receivable. The amounts of corporate assets were ¥117,696 million ($1,435,317 thousand), ¥152,640 million and ¥107,788 million for the years endedMarch 31, 2012, 2011 and 2010, respectively.The elimination of intersegment transactions consists of intersegment receivables and others. The amounts of the elimination were ¥365,015 million ($4,451,402 thousand) and ¥349,321 million for the years ended March 31, 2012 and2011, respectively.

3. Segment profit is reconciled to operating income in the consolidated statement of income.4. Information about products and services was omitted since equivalent information was disclosed in above. Information about geographical areas was not presented since the Companies have no significant overseas operations.


U.S. DollarsYen

¥ 465.7590.00

¥ 679.9090.00

¥ 674.7095.00

$ 8.23 1.16

Income per shareDividends per share

2012 2011 2010 2012

Operating revenues: External customers Intersegment transactions or transfers Total

Segment profitSegment assetsOther: Depreciation and amortization Amounts of investments in equity in affiliates Increase in property, plant and equipment and intangible assets

ConsolidatedReportable Segment

Real Estate Total Other Total Reconciliations

Millions of Yen

Transportation

¥ 1,171,328 11,367

¥ 1,182,695

¥ 342,8044,849,907

235,157 7,433

261,893

¥ 1,405,297 45,459¥ 1,450,756

¥ 361,6665,255,549

252,282 7,433

286,258

¥ 103,031

122,801¥ 225,832

¥ 11,474205,807

4,780

4,373

¥ 1,508,328 168,260

¥ 1,676,589

¥ 373,1415,461,357

257,063 7,433

290,631

¥ (168,260)¥ (168,260)

¥ (619)(247,318)

¥ 1,508,328

¥ 1,508,328

¥ 372,521 5,214,038

257,063 7,433

290,631

2012

¥ 37,285 25,484

¥ 62,769

¥ 13,084322,555

13,823

19,049

¥ 196,683 8,607

¥ 205,291

¥ 5,77683,086

3,302

5,314





Millions of Yen

Transportation

¥ 1,158,085 11,661

¥ 1,169,747

¥ 323,0774,861,332

234,316 7,268

263,712

¥ 1,385,816 45,416

¥ 1,431,233

¥ 340,1705,253,206

253,412 7,268

279,163

¥ 117,267 122,334¥ 239,601

¥ 10,916196,467

5,187

4,940

¥ 1,503,083 167,750

¥ 1,670,834

¥ 351,0865,449,674

258,599 7,268

284,104

¥ (167,750)¥ (167,750)

¥ (1,739) (196,680)

¥ 1,503,083

¥ 1,503,083

¥ 349,347 5,252,993

258,599 7,268

284,104

2011

¥ 40,177 26,272¥ 66,449

¥ 11,896315,613

15,768

11,776

¥ 187,553 7,482

¥ 195,035

¥ 5,19676,261

3,327

3,674





Millions of Yen

Transportation

¥ 1,130,256 12,113

¥ 1,142,369

¥ 272,0114,844,852

242,243 7,022

219,095

¥ 1,353,529 44,277

¥ 1,397,806

¥ 282,5365,242,326

263,254 7,022

243,680

¥ 133,103 122,496

¥ 255,599

¥ 10,332 203,516

4 ,964

4,621

¥ 1,486,632 166,773

¥ 1,653,406

¥ 292,869 5,445,843

268,219 7,022

248,302

¥ (166,773)¥ (166,773)

¥ 605 (234,833)

¥ 1,486,632

¥ 1,486,632

¥ 293,474 5,211,009

268,219 7,022

248,302

2010

¥ 42,938 23,833¥ 66,771

¥ 6,740 324,564

17,687

20,954

¥ 180,334 8,330

¥ 188,664

¥ 3,78472,910

3,323

3,631






Transportation

$ 14,284,487 138,621

$ 14,423,109

$ 4,180,536 59,145,207

2,867,768 90,646

3,193,817

$ 17,137,768 554,378

$ 17,692,146

$ 4,410,560 64,092,060

3,076,609 90,646

3,490,951

$ 1,256,475 1,497,573

$ 2,754,048

$ 139,9262,509,841

58,292

53,329

$ 18,394,243 2,051,951

$ 20,446,207

$ 4,550,50066,601,914

3,134,914 90,646

3,544,280

$ (2,051,951)$ (2,051,951)

$ (7,548)(3,016,073)

$ 18,394,243

$ 18,394,243

$ 4,542,939 63,585,829

3,134,914 90,646

3,544,280

2012

$ 454,695 310,780$ 765,475

$ 159,5603,933,597

168,573

232,304

$ 2,398,573 104,963

$ 2,503,548

$ 70,439 1,013,243

40,268

64,804

¥ (3,660) 3,661 1 142 ¥ 143

¥ 59 59 (22)¥ 37

¥ 12 ¥ 12

¥ 193

$ (44,634) 44,646 12 1,731 $ 1,743

$ 719 719 (268)$ 451

$ 146 $ 146

$ 2,353

Unrealized gain on available-for-sale securities: Losses arising during the year Reclassification adjustments to profit Amount before income tax effect Income tax effect TotalDeferred gain on hedges: Gains arising during the year Amount before income tax effect Income tax effect TotalShare of other comprehensive income in affiliates Gains arising during the year Total

Total other comprehensive income

Total comprehensive income attributable to: Owners of the parent Minority interests Total comprehensive income

¥ 10,486 (6)

12 ¥ 10,492

Other comprehensive income: Unrealized gain on available-for-sale securities Deferred loss on hedges Share of other comprehensive income in affiliates Total other comprehensive income

¥ 101,839 2,917

¥ 104,756



54 55

Central Japan Railway Company

CURRENT ASSETS:

Cash and cash equivalents

Time deposits

Trade receivables

Supplies



Total current assets

NONCURRENT ASSETS:

Investments and other assets:

Investment securities

Investments in and advances to subsidiaries and affiliates (Note 5)



Total investments and other assets

Property, plant and equipment (Note 4):

Railway business property


Other

Total



Total noncurrent assets

TOTAL ASSETS

¥ 80,953

30,000

40,013

9,052

20,756

45,084

225,859

74,123

196,139

161,245

22,155

453,664

7,551,066

246,602

172,185

7,969,854

(3,615,780)

4,354,073

4,807,738

¥ 5,033,598

¥ 111,683

45,000

23,272

8,698

20,876

33,375

242,906

78,557

207,711

180,797

20,355

487,423

7,429,039

182,932

233,653

7,845,625

(3,500,869)

4,344,755

4,832,178

¥ 5,075,085

$ 987,231

365,853

487,963

110,390

253,121

549,804

2,754,378

903,939

2,391,939

1,966,402

270,182

5,532,487

92,086,170

3,007,341

2,099,817

97,193,341

(44,094,878)

53,098,451

58,630,951

$ 61,385,341

See notes to non-consolidated financial statements.

ASSETS

March 31, 2012

2012 2011 2012



(Note 2)


CURRENT LIABILITIES:

Short-term loans payable (Note 6)

Current portion of long-term debt (Note 6)

Current portion of long-term accounts payable—railway facilities (Note 7)

Trade payables


Income taxes payable

Prepaid fares received

Inter-line fares received

Other

Total current liabilities

NONCURRENT LIABILITIES:

Long-term debt (Note 6)

Long-term accounts payable—railway facilities (Note 7)

Provision for large scale renovation of the Shinkansen infrastructure

Provision for retirement benefits

Other

Total noncurrent liabilities

CONTINGENCIES (Note 11)

EQUITY (Note 8):

Common stock—authorized, 8,960,000 shares;

issued, 2,150,000 shares in 2012 and 2011 (Note 12)

Capital surplus

Retained earnings:

Legal reserve

Unappropriated


Treasury stock—at cost, 179,990 shares in 2012 and 2011(Note 12)

Total equity

TOTAL LIABILITIES AND EQUITY

¥ 121,139

148,178

108,418

118,757

20,127

55,728

24,281

147

49,646

646,425

1,537,222

1,035,307

316,666

194,090

45,604

3,128,891

112,000

53,500

12,504

1,280,940

3,748

(204,414)

1,258,280

¥ 5,033,598

¥ 104,645

123,294

110,009

129,150

19,968

55,183

21,352

11,209

46,454

621,266

1,591,190

1,177,065

283,333

194,220

51,881

3,297,690

112,000

53,500

12,504

1,177,853

4,683

(204,414)

1,156,128

¥ 5,075,085

$ 1,477,304

1,807,048

1,322,170

1,448,256

245,451

679,609

296,109

1,792

605,439

7,883,231

18,746,609

12,625,695

3,861,780

2,366,951

556,146

38,157,207

1,365,853

652,439

152,487

15,621,219

45,707

(2,492,853)

15,344,878

$ 61,385,341

LIABILITIES AND EQUITY

March 31, 2012

2012 2011 2012



(Note 2)



Non-consolidated Balance Sheet

56 57

Central Japan Railway Company



20112012 2010 2012



(Note 2)


Central Japan Railway Company Year Ended March 31, 2012

TotalEquity

TreasuryStock

UnrealizedGain (Loss) on

Available-for-SaleSecurities

LegalReserve

Unappropriated

Retained Earnings

CapitalSurplus

CommonStock

OutstandingNumber of Shares of

Common Stock

Millions of Yen (Note 2)Thousands

OPERATING REVENUES:

Railway business

Other

Total operating revenues

OPERATING EXPENSES:

Railway business

Other

Total operating expenses

Operating income

OTHER INCOME (EXPENSES):

Interest and dividend income

Interest expense (Note 6)

Loss on long-term accounts payable—railway facilities (Note 7)

Loss on redemption of bonds

Other—net

Other expenses—net

INCOME BEFORE INCOME TAXES

INCOME TAXES (Note 9):

Current

Deferred

Total income taxes

NET INCOME

PER SHARE OF COMMON STOCK (Note 3.p):

Basic net income

Cash dividends applicable to the year

¥ 1,175,670

8,907

1,184,577

833,227

5,796

839,024

345,553

3,284

(98,373)

(11,896)

1,138

(105,847)

239,705

98,348

20,538

118,887

¥ 120,817

¥ 1,162,660

9,269

1,171,930

839,699

6,765

846,465

325,465

3,032

(107,123)

(15,691)

(211)

1,307

(118,685)

206,779

87,119

(3,381)

83,738

¥ 123,040

¥ 1,134,942

9,041

1,143,983

863,208

6,638

869,846

274,136

2,617

(115,863)

(14,633)

(790)

(128,669)

145,467

66,446

(9,385)

57,061

¥ 88,405

$ 14,337,439

108,621

14,446,060

10,161,304

70,682

10,232,000

4,214,060

40,048

(1,199,670)

(145,073)

13,878

(1,290,817)

2,923,231

1,199,365

250,463

1,449,841

$ 1,473,378

¥ 61,328.43

9,500.00

¥ 62,455.63

9,000.00

¥ 44,823.34

9,000.00

$ 747.91

115.85

20112012 2012

U.S. DollarsYen

2010

BALANCE, APRIL 1, 2009

Net income

Dividends from surplus, ¥9,000 per share

Purchase of treasury stock

Disposal of treasury stock

Retirement of treasury stock of 90,000 shares

Net change in the year


Net income


Purchase of treasury stock



Net income




1,972

(0)

3

1,974

(4)

1,970

1,970

¥ 112,000

112,000

112,000

¥ 112,000

¥ 53,586

(86)

53,500

53,500

¥ 53,500

¥ 12,504

12,504

12,504

¥ 12,504

¥ 1,107,067

88,405

(17,748)

(1,748)

(103,413)

1,072,562

123,040

(17,750)

1,177,853

120,817

(17,730)

¥ 1,280,940

¥ (1,977)

9,627

7,649

(2,965)

4,683

(935)

¥ 3,748

¥ (308,168)

(577)

3,795

103,500

(201,451)

(2,962)

(204,414)

¥ (204,414)

¥ 975,012

88,405

(17,748)

(577)

2,046

9,627

1,056,766

123,040

(17,750)

(2,962)

(2,965)

1,156,128

120,817

(17,730)

(935)

¥ 1,258,280

TotalEquity

TreasuryStock

UnrealizedGain (Loss) on

Available-for-SaleSecurities

LegalReserve Unappropriated

Retained Earnings

CapitalSurplus

CommonStock


Net income

Dividends from surplus, $109.76 per share



$ 1,365,853

$ 1,365,853

$ 652,439

$ 652,439

$ 152,487

$ 152,487

$ 14,364,060

1,473,378

(216,219)

$ 15,621,219

$ 57,109

(11,402)

$ 45,707

$ (2,492,853)

$ (2,492,853)

$ 14,099,121

1,473,378

(216,219)

(11,402)

$ 15,344,878

Thousands of U.S. Dollars (Note 2)



Non-consolidated Statement of Income Non-consolidated Statement of Changes in Equity

58 59

Central Japan Railway Company1. INCORPORATION OF CENTRAL JAPAN RAILWAY COMPANY

Central Japan Railway Company (Tokai Ryokaku Tetsudo Kabushiki Gaisha, the "Company") was incorporated on April 1, 1987, as a private business company,

pursuant to the Law for Japanese National Railways Restructuring enacted upon the resolution of the Japanese Diet.

The business of the Japanese National Railways (the "JNR") was succeeded by the following newly established organizations: seven railway companies including

the Company, the former Shinkansen Holding Corporation (a predecessor entity to the Railway Development Fund (1991–1997), which was subsequently succeeded

by the Corporation for Advanced Transport and Technology (the "CATT") (1997–2003) and in turn by the Japan Railway Construction, Transport and Technology

Agency (the "JRTT")), the former Railway Telecommunication Co., Ltd., Railway Information Systems Co., Ltd. and the Railway Technical Research Institute (the

"RTRI") which reorganized as a public interest corporation as of April 1, 2011. The JNR itself became the JNR Settlement Corporation (the "JNRSC"). All of the

assets and liabilities of the JNR were transferred to such organizations, including the JNRSC.

Prior to December 1, 2001, the Law Concerning Passenger Railway Companies and Japan Freight Railway Company (the "Law") required that authorization be

obtained from the Minister of Land, Infrastructure and Transport (the "Minister of Transport") regarding fundamentals such as: (1) commencement of business other

than railway and its related business, (2) the appointment or dismissal of representative directors and corporate auditors, (3) the issuance of new shares and bonds,

(4) long-term loans payable, (5) amendments to the Articles of Incorporation, (6) operating plans, (7) sales of material assets, (8) appropriations of earnings and (9)

merger or dissolution. As of December 1, 2001, since the Law was revised and the Company was no longer in scope of the Law, the Company was not required to

obtain the aforementioned authorizations.

On October 8, 1997, the Company's shares were listed on the Nagoya, Tokyo and Osaka stock exchanges in Japan. The JNRSC, which held all 2,240,000 of the

Company's outstanding shares prior to the listing, sold 1,353,929 shares in the initial public offerings. Pursuant to the Law for Disposal of Debts and Liabilities of

the JNRSC enacted in October of 1998, the Company's shares held by the JNRSC were transferred to Japan Railway Construction Public Corporation (the "JRCPC").

On October 1, 2003, the CATT and the JRCPC were fully integrated, pursuant to the Law of Japan Railway Construction, Transport and Technology enacted on

October 1, 2003, and designated as the JRTT. In July 2005, the JRTT sold 600,000 shares of the Company. On April 5, 2006, the JRTT also sold its remaining

286,071 shares of the Company. As a result of this sale, all of the Company's shares held by the JRTT were sold.

2. BASIS OF PRESENTATION OF NON-CONSOLIDATED FINANCIAL STATEMENTSThe accompanying non-consolidated financial statements have been prepared from the accounts maintained by the Company in accordance with the provisions set

forth in the Companies Act of Japan (the "Companies Act"), the Japanese Financial Instruments and Exchange Law, the Law for Railway Business Enterprise and

their related accounting regulations and in conformity with accounting principles generally accepted in Japan, which are different in certain respects as to the

application and disclosure requirements of International Financial Reporting Standards.

As consolidated statements of cash flows and certain disclosures are presented in the consolidated financial statements of the Company, non-consolidated

statements of cash flows and certain disclosures are not presented herein in accordance with accounting principles generally accepted in Japan.

In preparing these non-consolidated financial statements, certain reclassifications and rearrangements have been made to the non-consolidated financial statements

issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the

2011and 2010 non-consolidated financial statements to conform to the classifications used in 2012.

The non-consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated and operates. The

translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥82

to $1, the approximate rate of exchange as of March 30, 2012. Such translations should not be construed as representations that the Japanese yen amounts could be

converted into U.S. dollars at that or any other rate. Japanese yen figures less than one million of yen are rounded down to the nearest million of yen, except for per

share information and U.S. dollar figures less than one thousand of U.S. dollars are also rounded down to the nearest thousand of U.S. dollars, except for per share

information.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Non-consolidation

The non-consolidated financial statements do not include the accounts of subsidiaries. Investments in subsidiaries and affiliates are stated at cost.

b. Cash Equivalents

Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value. Cash equivalents

include time deposits, certificate of deposits, commercial paper and others, all of which mature or become due within three months of the date of acquisition.

c. Supplies

Supplies are stated at the lower of cost, determined by the moving-average cost method, or net selling value.

d. Investment Securities

All investment securities are classified and accounted for, depending on management's intent, as available-for-sale securities, which are principally comprised of

investment securities, and are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate component of equity.

Non-marketable available-for-sale securities are stated at cost determined by the moving-average cost method. For other-than-temporary declines in fair value,

investment securities are reduced to net realizable value by a charge to income.

e. Property, Plant and Equipment

Property, plant and equipment are stated at cost. Certain contributions in aid for construction of railways and other property are deducted directly from the cost of

the related assets.

Depreciation is computed by the declining-balance method over the estimated useful lives of the assets. Additional depreciation is provided for the Shinkansen

rolling stock based on kilometers traveled.

The range of useful lives is principally from 3 to 60 years for buildings and structures, from 10 to 20 years for rolling stock and from 4 to 17 years for machinery

and equipment.

Depreciation of certain railway ground structures, except for the Shinkansen railway ground facilities,is computed by the replacement-accounting method.

f. Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group

may not be recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash

flows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by

which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual

disposition of the asset or the net selling price at disposition.

g. Software Costs

Software costs are amortized by the straight-line method over five years.

h. Deferred Charges

Bond issuance costs are fully charged to income as incurred.

i. Provision for Large Scale Renovation of the Shinkansen Infrastructure

Provision for large scale renovation of the Shinkansen infrastructure is provided based on the Company's provision plan authorized by the Minister of Transport

over 15 years from October 1, 2002 in accordance with the Nationwide Shinkansen Railway Development Law.

j. Retirement and Pension Plans

The Company has an unfunded retirement plan covering substantially all of its employees. The provision for retirement benefits is calculated based on the

projected benefit obligations at the balance sheet date.

k. Leases

Lease assets of finance leases that were not deemed to transfer ownership of the leased property are depreciated and amortized by the straight-line method over the

lease period.

l. Income Taxes

The provision for income taxes is computed based on the pretax income included in the non-consolidated statement of income. The asset and liability approach is

used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax

bases of assets and liabilities. Deferred taxes are measured by applying currently enacted tax laws to the temporary differences.

m. Appropriations of Retained Earnings

Appropriations of retained earnings are reflected in the financial statements for the following year upon shareholders' approval.

n. Consumption Tax

Consumption tax is levied in Japan on the domestic sales of goods and services at the rate of 5%. Unless otherwise stated, all figures are presented net of tax.

o. Derivatives and Hedging Activities

The Company uses derivative financial instruments to manage its exposures to fluctuations in interest rates. Interest rate swaps are utilized by the Company to

reduce interest rate risks. The Company does not enter into derivatives for trading or speculative purposes.

Interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at market value but the differential paid or received

under the swap agreements are recognized and included in interest expense.

p. Per Share Information

Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding

for the period, retroactively adjusted for stock splits.

The net income available to common shareholders used in the computation for 2012, 2011 and 2010 was ¥120,817 million ($1,473,378 thousand), ¥123,040

million and ¥88,405 million, respectively. The average number of common shares used in the computation for 2012, 2011 and 2010 was 1,970,010 shares,

1,970,048 shares and 1,972,303 shares, respectively.

Diluted net income per share is not presented in the accompanying non-consolidated financial statement as the Company does not have any dilutive securities.

Cash dividends per share presented in the accompanying non-consolidated statement of income is dividends applicable to the respective years including dividends

to be paid after the end of the year.

q. Accounting Changes and Error Corrections

In December 2009, the ASBJ issued ASBJ Statement No.24, "Accounting Standard for Accounting Changes and Error Corrections" and ASBJ Guidance No.24,

"Guidance on Accounting Standard for Accounting Changes and Error Corrections." Accounting treatments under this standard and guidance are as follows:

(1) Changes in Accounting Policies—When a new accounting policy is applied with revision of accounting standards, the new policy is applied retrospectively

unless the revised accounting standards include specific transitional provisions. When the revised accounting standards include specific transitional provisions,

an entity shall comply with the specific transitional provisions.

(2) Changes in Presentations—When the presentation of financial statements is changed, prior-period financial statements are reclassified in accordance with the

new presentation.

(3) Changes in Accounting Estimates—A change in an accounting estimate is accounted for in the period of the change if the change affects that period only, and

is accounted for prospectively if the change affects both the period of the change and future periods.

(4) Corrections of Prior-Period Errors—When an error in prior-period financial statements is discovered, those statements are restated. This accounting standard

and the guidance are applicable to accounting changes and corrections of prior-period errors which are made from the beginning of the fiscal year that begins

on or after April 1, 2011.

The Company applied this accounting standard effective April 1, 2011 and the effect was immaterial.



Notes to Non-consolidated Financial Statements

60 61

Secured 3.95% bonds due 2016Secured 2.825% bonds due 2017Secured 2.18% bonds due 2018Secured 2.6% bonds due 2020Unsecured 2.39% bonds due 2022Unsecured 2.2% bonds due 2022Unsecured 1.49% bonds due 2012Unsecured 1.74% bonds due 2022Unsecured 1.42% bonds due 2017Unsecured 1.15% bonds due 2022Unsecured 1.31% bonds due 2033Unsecured 2.015% bonds due 2023Unsecured 2.2% bonds due 2024Unsecured 2.19% bonds due 2019Unsecured 1.875% bonds due 2019Unsecured 2.21% bonds due 2024Unsecured 1.775% bonds due 2020Unsecured 1.28% bonds due 2012Unsecured 1.77% bonds due 2017Unsecured 1.695% bonds due 2016Unsecured 1.845% bonds due 2013Unsecured 2.14% bonds due 2018Unsecured 2.405% bonds due 2026Unsecured 2% bonds due 2016Unsecured 2.04% bonds due 2018Unsecured 2.39% bonds due 2026Unsecured 1.88% bonds due 2016Unsecured 1.78% bonds due 2017Unsecured 1.78% bonds due 2017Unsecured 1.75% bonds due 2017Unsecured 2.31% bonds due 2027Unsecured 1.69% bonds due 2018Unsecured 2.3% bonds due 2027Unsecured 1.79% bonds due 2020Unsecured 1.83% bonds due 2018Unsecured 2.39% bonds due 2028Unsecured 2.391% bonds due 2028Unsecured 2.646% bonds due 2038Unsecured 1.557% bonds due 2019Unsecured 2.166% bonds due 2029Unsecured 2.312% bonds due 2029Unsecured 2.556% bonds due 2039Unsecured 1.667% bonds due 2019Unsecured 2.321% bonds due 2029Unsecured 2.157% bonds due 2029Unsecured 2.375% bonds due 2039Unsecured 0.371% bonds due 2013Unsecured 1.472% bonds due 2020Unsecured 0.316% bonds due 2013Unsecured 2.212% bonds due 2030Unsecured 2.111% bonds due 2030Unsecured 1.797% bonds due 2030Unsecured 0.443% bonds due 2014Unsecured 0.586% bonds due 2015Unsecured 2.083% bonds due 2031Unsecured 0.297% bonds due 2014Unsecured 1.895% bonds due 2031Unsecured loans from Japanese banks and others, with interest rates ranging from 0.95% to 6.6% (2012 and 2011), due 2011 to 2032 TotalLess current portionLong-term debt, less current portion

2012 2011 2012

Thousands ofU.S. DollarsMillions of Yen

6. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBTThe interest rates applicable to short-term loans payable were 0.35% for 2012, 0.38% for 2011 and 0.46% for 2010.

Long-term debt as of March 31, 2012 and 2011 consisted of the following:

¥ 29,90049,90020,00019,50010,00020,00010,00025,00010,00010,00010,00010,00020,00010,00020,00020,00020,00020,00020,00019,10010,00030,00019,99129,78419,99419,99619,99619,99719,9769,998

14,99119,9909,994

19,98030,00010,00020,00030,00030,00010,00010,00030,00040,00010,00015,00015,00015,00030,00020,00010,00020,00030,00020,00030,00010,000

612,3061,685,401(148,178)

¥ 1,537,222

¥ 29,00049,90029,90049,90020,00020,00010,00020,00010,00025,00010,00010,00010,00010,00020,00010,00020,00020,00020,00020,00020,00020,00010,00030,00019,98929,98319,99319,99619,99619,99719,9759,998

14,99119,9899,993

19,97930,00010,00020,00030,00030,00010,00010,00030,00040,00010,00015,00015,00015,00030,00020,00010,00020,00030,000

620,9011,714,485(123,294)

¥ 1,591,190

$ 364,634608,536243,902237,804121,951243,902121,951304,878121,951121,951121,951121,951243,902121,951243,902243,902243,902243,902243,902232,926121,951365,853243,792363,219243,829243,853243,853243,865243,609121,926182,817243,780121,878243,658365,853121,951243,902365,853365,853121,951121,951365,853487,804121,951182,926182,926182,926365,853243,902121,951243,902365,853243,902365,853121,951

7,467,14620,553,670(1,807,048)

$ 18,746,609

2012 2011 2012


¥ 2,330,612

516,111

3,497,438

853,073

524,224

1,791

246,602

7,969,854

(3,615,780)

¥ 4,354,073

¥ 2,331,722

511,681

3,466,625

836,226

513,921

2,515

182,932

7,845,625

(3,500,869)

¥ 4,344,755

$ 28,422,097

6,294,036

42,651,682

10,403,329

6,392,975

21,841

3,007,341

97,193,341

(44,094,878)

$ 53,098,451

Land

Buildings

Structures

Rolling stock

Machinery and equipment

Lease assets


Total




¥ 27,079 ¥ 27,865 ¥ 785 Subsidiaries

2011

¥ 27,079 ¥ 25,144 ¥ (1,934)

2012

Millions of Yen

5. INVESTMENTS IN SUBSIDIARIES AND AFFILIATESThe carrying amounts and aggregate fair values of investment securities in subsidiaries whose fair values are available at March 31, 2012 and 2011were as follows:

The carrying amounts of investments in subsidiaries and affiliated companies whose fair value cannot be readily determined at March 31, 2012 and 2011were as

follows:

4. PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment as of March 31, 2012 and 2011, consisted of the following:

CarryingAmount

FairValue

UnrealizedLoss

CarryingAmount

FairValue

UnrealizedGain

Subsidiaries $ 330,231 $ 306,634 $ (23,585)

2012


CarryingAmount

MarketValue

UnrealizedLoss

Subsidiaries

Affiliates

¥ 120,206

2,133

¥ 120,196

2,133

$ 1,465,926

26,012

20112012 2012

Millions of Yen



62 63

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying non-consolidated statement of income for the year ended March 31, 2012 is as follows:

Since the difference between the normal effective statutory tax rate and the actual effective tax rate was not significant, reconciliations were not presented for the years ended March 31, 2011 and 2010.

Following the promulgation on December 2, 2011 of the Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating a Taxation System Responding to Changes in Economic and Social Conditions (Act No. 114 of 2011) and the Act on Special Measures for Securing the Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake (Act No. 117 of 2011), the normal effective statutory tax rate changes from approximately 40.2% to 37.6% effective for the fiscal years beginning on or after April 1, 2012 through March 31, 2015, and to 35.2% afterwards. The effect of this change was to decrease deferred taxassets (net of deferred tax liabilities) in the non-consolidated balance sheet as of March 31, 2012 by ¥21,901 million ($267,085 thousand) and to increase income taxes—deferred in the non-consolidated statement of income for the year then ended by ¥22,097 million ($269,475 thousand).

Deferred tax assets:

Provision for retirement benefits

Depreciation and amortization

Software


Railway usage charges

Other

Total

Less valuation allowance

Deferred tax assets

Deferred tax liabilities:

Deferred gains on transfer of certain fixed assets


Deferred tax liabilities

Net deferred tax assets


8. EQUITYJapanese companies are subject to the Companies Act. The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:

a. DividendsUnder the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders

meeting. For companies that meet certain criteria such as (1) having the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by its articles of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation.

The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the company so stipulate. The

Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of equity after dividends must be maintained at no less than ¥3 million.b. Increases/Decreases and Transfer of Common Stock, Reserve and Surplus

The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such dividends until the total of the aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings-unappropriated can be transferred among the accounts under certain conditions upon resolution of the shareholders.c. Treasury Stock and Treasury Stock Acquisition Rights

The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders which is determined by a specific formula.

Under the Companies Act, stock acquisition rights are presented as a separate component of equity.The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are

presented as a separate component of equity or deducted directly from stock acquisition rights.

9. INCOME TAXESThe Company is subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 40.2%

for the years ended March 31, 2012, 2011 and 2010.The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities as of March 31, 2012 and 2011 were as follows:

¥ 69,014

68,331

15,072

7,567

5,283

37,979

203,249

(16,121)

187,128

3,743

1,383

5,126

¥ 182,001

¥ 78,076

72,944

18,004

8,027

6,386

41,750

225,188

(16,989)

208,198

4,274

2,249

6,524

¥ 201,674

$ 841,634

833,304

183,804

92,280

64,426

463,158

2,478,646

(196,597)

2,282,048

45,646

16,865

62,512

$ 2,219,524

Normal effective statutory tax rate

Effect of tax rate reduction

Other—net

Actual effective tax rate

40.2%

9.2

0.2

49.6%

Based on legal defeasance agreements with special purpose entities, the Company has transferred the debt repayments obligation for certain long-term accounts payable—railway facilities to special purpose entities, and has provided special purpose entities with Japanese national government bonds or cash for the payment of principal and interest on the long-term accounts payable—railway facilities. As a result of these transactions, the balance of long-term accounts payable—railway facilities was reduced by ¥352,740 million ($4,301,707 thousand) and ¥410,996 million as of March 31, 2012and 2011, respectively, and the related loss on long-term accounts payable—railway facilities by nil, ¥15,691 million and ¥14,633 million for the years ended March 31, 2012, 2011 and 2010, respectively. (see Note 11)

Annual maturities of long-term accounts payable—railway facilities as of March 31, 2012 were as follows:

¥ 108,418

112,958

117,735

122,746

127,954

553,912

¥ 1,143,726

$ 1,322,170

1,377,536

1,435,792

1,496,902

1,560,414

6,755,024

$ 13,947,878

2013

2014

2015

2016

2017

Thereafter

Total

Thousands of U.S. DollarsMillions of YenYear Ending March 31

The Company has entrusted cash for the repayment of a portion of the bonds based on debt assumption agreements with financial institutions; however, the Company is not released from the primary responsibility for the liability by these agreements. The outstanding bonds covered by these agreements as of March 31, 2012 and 2011 were as follows:

The bonds aforementioned have been derecognized in the non-consolidated balance sheet and disclosed as contingent liabilities.(see Note 11)The Company has credit commitments from banks. Total unused credit available to the Company as of March 31, 2012 was ¥100,000 million ($1,219,512

thousand).All assets of the Company were pledged for the above secured bonds of ¥178,600 million ($2,178,048 thousand), including aforementioned off-balanced bonds of

¥98,800 million ($1,204,878 thousand), as an enterprise mortgage, which gives the holder thereof a security interest in all assets junior to that of other present or future secured creditors, but senior to that of general creditors.

7. LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIESLong-term accounts payable—railway facilities as of March 31, 2012 and 2011 consisted of the following:

Annual maturities of long-term debt outstanding at the principal amounts as of March 31, 2012 were as follows:

$ 1,807,048

1,851,768

2,234,012

1,474,756

1,941,109

11,246,219

$ 20,554,951

¥ 148,178

151,845

183,189

120,930

159,171

922,190

¥ 1,685,506

2013

2014

2015

2016

2017

Thereafter

Total

Thousands of U.S. DollarsMillions of YenYear Ending March 31

2012 2011 2012


Secured 4.65% bonds due 2014



Total

¥ 20,000

¥ 20,000

$ 243,902

353,658

607,317

$ 1,204,878

¥ 20,000

29,000

49,800

¥ 98,800

Interest expense on the aforementioned long-term accounts payable—railway facilities amounted to ¥64,618 million ($788,024 thousand), ¥71,886 million and ¥82,302 million for the years ended March 31, 2012, 2011 and 2010, respectively.

2012 2011 2012


Long-term accounts payable incurred for purchase

of the Shinkansen railway ground facilities:

With a floating interest rate of 4.08% (2012 and 2011), due semiannually through 2017

With a fixed interest rate of 6.55%, due semiannually through 2051

Other

Total

Less current portion

Long-term accounts payable—railway facilities, less current portion

¥ 709,643

568,899

8,531

1,287,074

(110,009)

¥ 1,177,065

$ 6,947,000

6,901,134

99,719

13,947,878

(1,322,170)

$ 12,625,695

¥ 569,654

565,893

8,177

1,143,726

(108,418)

¥ 1,035,307

2012 2011 2012

2012



64 65

11. CONTINGENCIESAs of March 31, 2012, the Company has joint and several obligations with the RTRI to make payments on long-term accounts payable of ¥23,390 million

($285,243 thousand) by the RTRI. The proceeds are being used for the enhancement of technology development for the Maglev system.As discussed in Notes 6 and 7, based on debt assumption agreements with financial institutions or legal defeasance agreements with special purpose entities, the

Company has transferred the debt repayment obligations for certain bonds and long-term accounts payable—railway facilities to such financial institutions and special purpose entities. As of March 31, 2012, the Company had contingent obligations of ¥98,800 million ($1,204,878 thousand) for the bonds and ¥352,740 million ($4,301,707 thousand) for long-term accounts payable—railway facilities, respectively.

The Company also had contingent liabilities for guarantees of the loans of a certain subsidiary amounting to ¥25,433 million ($310,158 thousand) as of March 31, 2012.

12. SUBSEQUENT EVENTSa. Appropriations of Retained Earnings

The following appropriation of retained earnings as of March 31, 2012 was approved at the Company's shareholders meeting held on June 22, 2012:

b. Retirement of Treasury StockOn April 26, 2012, the Board of Directors resolved to retire of treasury stock based on the provisions under Article 178 of the Companies Act and retired on May

7, 2012. (1) Class of Shares to be Retired

Common shares(2) Number of Shares to be Retired

90,000 shares (4.19% of outstanding number of shares of common stock before retirement of treasury stock)(3) Outstanding Number of Shares of Common Stock after Retirement of Treasury Stock

2,060,000 sharesc. Implementation of Stock Split and Share Unit System

Security listing regulations of each stock exchange revised in April 2012 have mandated listed companies, which the number of shares per unit share is other than 100 or 1,000, shall change number of shares per unit share to 100. On April 26, 2012, the Board of Directors resolved the implementation of share unit effective October, 1, 2012, and on June 22, 2012, the change of incorporation at the 25th shareholders’ meeting, splitting one common share to 100 shares and turning 100 shares to a share unit was approved.

Given the shares split as of April 1, 2010, income per share and dividends per share would be as follows:

¥ 9,850 $ 120,121Year-end cash dividends, ¥5,000 ($60.98) per share


June 22, 2012

Deloitte Touche Tohmatsu LLCNagoya Daiya Building 3-goukan

13-5, Meieki, 3-chome, Nakamura-ku Nagoya, Aichi 450-8530 Japan

Tel: +81(52)565 5511 Fax:+81(52)569 1394

www.deloitte.com/jp

10. LEASESAs lessee, the minimum rental commitments under noncancelable operating leases as of March 31, 2012 and 2011 were due as follows:

As lessor, the minimum rental commitments under noncancelable operating leases as of March 31, 2012 and 2011 were due as follows:

¥ 417

656

¥ 1,074

¥ 516

399

¥ 916

$ 6,292

4,865

$ 11,170

Due within one year

Due after one year

Total


2012 2011 2012

¥ 448.23

90.00

¥ 624.56

90.00

$ 7.48

1.16

Income per share

Dividends per share

U.S. Dollars Yen

2011

¥ 613.28

95.00

2012 2010 2012

¥ 688

32,277

¥ 32,966

¥ 735

32,969

¥ 33,705

$ 8,963

402,060

$ 411,036

Due within one year

Due after one year

Total


2012 2011 2012

To the Board of Directors of Central Japan Railway Company:We have audited the accompanying consolidated balance sheet of Central Japan Railway Company (the “Company”) and

consolidated subsidiaries as of March 31, 2012, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and the accompanying non-consolidated balance sheet of the Company as of March 31, 2012, and the related non-consolidated statements of income, and changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information, all expressed in Japanese yen.

Management’s Responsibility for the Consolidated and Non-consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidated and non-consolidated financial

statements in conformity with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated and non-consolidated financial statements that are free from material misstatements, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated and non-consolidated financial statements based on our audit.

We conducted our audit in conformity with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated and non-consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated and non-consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated and non-consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the consolidated and non-consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated and non-consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion; (1) The consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial

position of Central Japan Railway Company and consolidated subsidiaries as of March 31, 2012, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in Japan.

(2) The non-consolidated financial statements referred to above present fairly, in all material respects, the financial position of Central Japan Railway Company as of March 31, 2012, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in Japan.

Emphasis of Matter(1) As discussed in Note 16 to the consolidated financial statements and Note 12 to the non-consolidated financial statements, on

May 7, 2012, the Company retired treasury stock through the resolution of the Board of Directors on April 26, 2012.(2) As discussed in Note 16 to the consolidated financial statements and Note 12 to the non-consolidated financial statements, the

Company determined to split its stocks and apply the implementation of the share unit system as a result of the resolution of the Board of Directors on April 26, 2012 and the approval of the change of incorporation at the 25th shareholders’ meeting on June 22, 2012.

Our opinion is not qualified in respect of these matters.

Convenience TranslationOur audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such

translation has been made in conformity with the basis stated in Note 2 to the consolidated and non-consolidated financial statements. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.



INDEPENDENT AUDITOR’S REPORT

Net IncomeOrdinary IncomeOperating Income

0

100

200

300

400

Net IncomeOrdinary IncomeOperating Income

0

800

900

1,000

1,100

1,200

1,300

0

100

200

300

400

700

800

900

1,000

1,100

0

10

20

0

20

40

60

80

100

120

● Shinkansen

●Conventional Line

80

100

120

140

160

0

10

20

0

100

200

300

400

● Shinkansen


Note: The figures forecasted for FY2013.3 are as of the publishment of the financial report for FY2012.3

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

Operating Revenues

0

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

Financial Results (Consolidated) Transportation Revenue

Passenger Ridership

Financial Results (Non-Consolidated)

66 67

Appendix 1—Financial and Transportation Data

1,363.01,384.0

1,409.4

1,491.2

1,559.4 1,570.2

1,486.6 1,503.01,467.6

341.4

103.7

96.072.2

49.0

1,212.31,261.2 1,241.1

1,143.91,109.3 1,127.7

1,149.2

1,199.6

324.7

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’12.3

’12.3 ’13.3forecasted

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3



1,171.9 1,184.51,204.0

’13.3forecasted

130 132

373 374 374

13 13 14 14 14 141212

131 132138

137

12

124121118

239239238 242 245 250

135

382 381 389

136 136 139 139 132 132135 141

74.1 73.3 71.6

104.2105.7106.3

32.0 32.3 32.5

72.9 70.7 72.8

105.7 103.9 106.6

32.7 33.1 33.7

71.2

105.499.2 98.7

34.1

144 145151

135

252 252 254

391 384 386

149

124

138 141

14

143

130

254

384

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’12.3

’12.3

’12.3

’12.3

16.6

65.2 64.5

97.0

62.9

33.9 34.134.0

173.0

127129

1,508.31,552.0

131.0 142.3

213.4

402.4

434.4

236.6 276.2

137.1159.7

382.3

218.1

165.2

126.0

347.8344.4

403.7

91.7

293.4228.5

263.8

133.8 132.7

349.3372.5

122.4

285.0

383.0

Operating Revenues

380.8412.8 362.1

216.7

256.3

200.1

153.9

116.090.6

66.943.1

90.7117.5 127.9

195.3

383.7330.9327.3

88.4

274.1

325.4345.5

148.3

207.5239.8

130.1 121.4 123.0

357.0

261.0

164.0

120.8

Total

Ordinary tickets

Commuter passes

Total

Ordinary tickets

Commuter passes

Total

Ordinary tickets

Commuter passes

Total

Ordinary tickets

Commuter passes

13.2 13.213.8

925.8944.2 967.3

981.31,030.4 1,043.0

1,085.61,064.1

957.6939.1

14.4 15.0 15.7

1,015.8 1,027.9

1,069.81,047.8 973.6 999.5

957.3983.0

1,011.0

994.4

16.2 16.2 16.5

(million passengers)

(million passengers)



30,000

35,000

40,000

45,000

0

1,000

2,000

0

2,000

4,000

6,000

8,000

10,000

● Shinkansen


0

200

400

600

800

1,000

1,200

0

50

100

150

200

Note: The figures for Tokyo, Shinagawa, Kyoto, and Shin-Osaka Stations indicate Shinkansen passengers only

189

84

6658 56

35 32 30 2930

0

200

400

600

800

1,200

1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

（％）

4.0

3.0

5.0

6.0

7.0

8.0

Latent Liabilities Born by the Shinkansen Leasing System

Long-Term Debt Corporate Bonds Inherited Liabilities

Note: The figures estimated for FY2013.3 are as of the publishment of the financial report for FY2012.3

Total

Conventional Line

Shinkansen

(thousand passengers per day)

Long-Term Accounts Payable - Railway Facilities

Average Interest Rate (billions of yen)

(billions of yen)

68 69

(million passenger-kilometers)

(million passenger-kilometers)

Total

Total

Commuter passes

Commuter passes

Ordinary tickets

Ordinary tickets

(million kilometers)

(Daily average of FY2011)

Appendix 1—Financial and Transportation Data

’07.3’06.3 ’08.3’05.3’04.3’03.3’02.3’01.3’00.3’99.3’98.3’97.3’96.3’95.3’94.3’93.3’92.3’91.3’90.3’89.3’88.3

’07.3 ’09.3’06.3 ’08.3’05.3’04.3’03.3’02.3’01.3’00.3’99.3’98.3’97.3’96.3’95.3’94.3’93.3’92.3’91.3’90.3’89.3’88.3

’09.3 ’10.3 ’11.3

’10.3

953.2

881.9

762.3

182.0217.2

284.0

337.2376.7

398.8 413.6419.3 433.1

455.6477.7 479.0

589.3629.1

662.3690.8

757.3

836.5

4,922.2

5,269.3 5,223.0 5,232.7 5,195.6

5,456.2 5,422.3 5,392.0 5,346.3 5,278.55,164.3

5,045.2

4,801.0

4,560.8

4,289.34,125.5

3,943.4

3,665.8

3,455.7 3,415.63,260.1

3,177.63,117.0

’11.3

3,001.5

6.81

5.845.90

6.19

6.396.53

6.086.01

6.35

5.165.08 5.01

4.914.75

4.624.51

4.30

4.083.91

3.71

3.54

3.36

’12.3

2,829.1

3.24

5.21

5.43

975.0

1,056.7

’12.3

1,258.2

1,156.1

’13.3estimated

2,719.1

728

213

737

211

782

207

940 948 989

845 852870

205 206 212

1,050 1,057 1,082

910

217

1,127

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3 ’12.3

929

217

912

216

1,145 1,128

906

217

1,123

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3’03.3 ’11.3

43,777 44,48746,540

42,578 43,23345,229

46,044

44,69542,685

43,741

41,33042,366

1,155 1,199 1,254 1,311 1,3501,0961,088

1,355 1,375

8,878 8,933 9,103 9,0468,9229,2739,272 8,989 9,001

5,476

3,525

’12.3

’12.3

44,303

42,915

1,389

8,952

5,490

3,462

5,1325,060 5,2115,162 5,279 5,4275,380 5,425

3,7603,8003,819 3,893 3,8913,767 3,846 3,564

Passenger Kilometers Total Shareholders’ Equity (Non-Consolidated)

Total Long-Term Debt and Payables (Non-Consolidated)

Rolling Stock Kilometers

Top 10 Stations in terms of Number of Passengers

39,589 40,34041,556

40,40239,24438,501

Nagoya ShinagawaGifuKyoto MishimaHamamatsuKanayamaShizuokaShin-OsakaTokyo



0

50,000

100,000

150,000

200,000

250,000

0

5,000

10,000

15,000

20,000

0

1,500,000

3,000,000

4,500,000

6,000,000

0

20,000

40,000

60,000

80,000

0

1,500

3,000

4,500

6,000

0

200

400

600

800

0

30,000

60,000

90,000

120,000

150,000

0

10,000

20,000

30,000

40,000

33,714

15,820

33,650

29,903

5,0131,971

*2

*3

7,527

126,960

75,579

50,460

9,435

85,697

52,01151,674

52,259

239,888

37,15319,203

157,488

26,44317,004

*5

*3

6,142 8,739

768

7,852

46,213

28,427

17,64316,217

1,657

16,542

7,742

11,536

2,340

480 580

50550

1,540

6,088,824

1,883,320

27,200

1,078,050

1,776,417

510,803

1,238,760

340

70

250

90110

290

680

71,835

5,850

9,117

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

Source: Statistique Internationale des Chemins de fer 2009 (Union Internationale de Chemins de fer), Financial Report of the JRs, etc.*1. Data of the JRs and ATOC for April 2009 - March 2010 Data of passenger revenue, number of passengers, and passenger-kilometers for Amtrak for October 2008 - September 2009 The others for January 2009 - December 2009*2. Data for Réseau Ferré de France (RFF)

*3. Data for Network Rail Ltd.*4. Total number of employees including staff for freight transport, affiliated businesses, etc. Data of the JRs are as of March 31, 2010 The others are annual means*5. Sum of the data of SNCF and RFF*6. Data of the JRs are converted by the US$ exchange rate as of March 31, 2010 The others are first converted to Japanese Yen, then converted in the same way as mentioned above

70 71

● Services

Between Tokyo and …(Operating distance)

OsakaNagoyaTokyo Hiroshima Hakata

Travel Time

Departures / day

*1. Travel times are in case of the fastest service*2. Travel times in parentheses include transfer and access times between city centers and airports*3. Travel time between Tokyo and Shin-Osaka stations

Note1: Market share is based on the inter-prefectual date of the inter-Regional Passenger Mobility Survey, published by the Ministry of Land, infrastructure, Transport and Tourism (FY2010), Railway market share of FY2011 is as follows according to our own estimate Tokyo Area～Nagoya Area: 100% Tokyo Area～Osaka Area: 85%Note2: Tokyo Area: Tokyo, Kanagawa, Chiba, Saitama, Ibaraki Nagoya Area: Aichi, Gifu, Mie Osaka Area: Osaka, Kyoto, Hyogo, Nara

JR Central JR WestOkayama

*1

Railway Airlines

Osaka (552.6 km)

Hiroshima (894.2 km)

Okayama (732.9 km)

Fukuoka (1,174.9 km)

(As of April 2012)

Tokyo Area–Nagoya Area63 thousand passengers / day

Tokyo Area–Osaka Area120 thousand passengers / day

Tokyo Area–Okayama Prefecture8 thousand passengers / day

Tokyo Area–Hiroshima Prefecture14 thousand passengers / day

Tokyo Area–Fukuoka Prefecture26 thousand passengers / day

2 hr 25 min

1 hr 5 min (About 2 hr 40 min)

250

96

3 hr 12 min

1 hr 15 min (About 3 hr)

127

20

3 hr 48 min


99

34

4 hr 50 min


68

100

Shinkansen

Airlines

Shinkansen

Airlines

*2

*3

Japan U.K. Germany France U.S. Japan U.K. Germany France U.S.

Comparison with Airline Transportation

International Comparison in Fundamentals

Appendix 2—Operating Environment

Appendix 3—International Railway Comparison*1

● GDP per Capita (2009) (US$) ● Population Density (2010) (per square kilometer)

Source: OECD Source: Statistics Bureau, the Ministry of Internal Affairs and Communications

0

10,000

20,000

30,000

40,000

50,000

0

100

200

300

400

69％ 31％

62％ 38％

100％

84％ 16％

11％ 89％

●Market Share (against Airlines)

32,018

36,33233,373

343

253229

114

32

35,151

45,674

Route Length (kilometers) Passenger-Kilometers (million passenger-kilometers)

Number of Employees *4 Average Traffic Density (daily passenger-kilometers / route length)

Passenger Revenues (millions of US$)*6 Passenger Revenues per Route Length (thousands of US$ / route length)*6

Number of Passengers (thousands) Passenger Revenues per Employee (thousands of US$ / employee)*6



0

6

12

0

15

30

0

30,000

60,000

0.00

1.25

2.50

0

150

300

0

35,000

70,000

0.0

12.5

25.0

0

30

60

0

350,000

700,000

0

1.0

2.0

0

2.0

4.0

0

30

60

72 73

JR East JR WestJR Central JR East JR WestJR Central JR East JR WestJR Central




Consolidated Stock Price

Major Shareholders

URL : http://jr-central.co.jpInvestor Relations, Corporate Planning Division Tel: +81-52-564-2413, Fax: +81-52-587-1300 E-mail : [email protected] Department, Corporate Planning Division Tel: +81-3-6711-9533, Fax: +81-3-6711-9702

(yen)

©2012 Central Japan Railway CompanyPrinted in Japan

Mar.2009

May2009

Jul.2009

Sep.2009

Nov.2009

Jan.2010

Mar.2010

May2010

Jul.2010

Sep.2010

Nov.2010

Jan.2011

Mar.2011

May2011

Jul.2011

Sep.2011

Nov.2011

Jan.2012

Mar.2012

May2012

Jan.2009

Nov.2008

Sep.2008

Jul.2008

May2008

Mar.2008

Jan.2008

Nov.2007

Sep.2007

Jul.2007

May2007

Mar.2007

Jan.2007

Nov.2006

Sep.2006

Jul.2006

May2006

Mar.2006

Jan.2006

Nov.2005

Sep.2005

Jul.2005

Appendix 4—Financial Comparison of Three JR Companies (FY 2012.3) Appendix 5—Stock Information

1,600,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

*1.(Operating income + Interest and dividend income) / Interest expense*2.JR East implemented a 100-for-1 stock split effective January 4, 2009 and JR West also did at the same rate effective July 1 2011.

● ROE (Return on Equity) (%)

● Interest Coverage Ratio (times)*1

● Operating Income / Operating Revenues (%)

● Total Long-Term Debt and Long-Term Payables /　 Operating Revenues (times)

● Net income / Total Assets (%)

● Equity Ratio (%)

● Debt to Equity Ratio (%)

● Shareholders’ Equity per Share (yen)*2

5.9

10.5

4.2

14.2

8.5

1.3

1.9

0.8

24.7

1.5

2.5

1.1

3.63.8

3.3

26.525.3

26.6

275.8291.4

271.5

4,739

671,574

3,632

35,297

53,989

28,268

55.1

44.1 44.1

275

67,470

152

40.0

14.1

59.1

● Operating Revenues per Employee (thousands of yen)

● Current Ratio (%)

● Earnings per Share (EPS) (yen)*2

● Dividend Payout Ratio (%)

(As of March 31, 2012)

Mizuho Corporate Bank, Ltd.

Japan Trustee Services Bank, Ltd. (Trust Account)

The Master Trust Bank of Japan, Ltd. (Trust Account)

The Nomura Trust and Banking Co., Ltd. (Holder in Retirement Benefit Trust for The Bank of Tokyo-Mitsubishi UFJ, Ltd.)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

JR Central Employee Shareholding Association

Nippon Life Insurance Company

Toyota Motor Corporation

SSBT OD05 OMNIBUS ACCOUNT-TREATY CLIENTS

Mizuho Bank, Ltd.

97,833

96,881

87,876

71,250

66,781

51,864

50,000

40,000

38,501

34,162

635,148

4.55％

4.51％

4.09％

3.31％

3.11％

2.41％

2.33％

1.86％

1.79％

1.59％

29.54％

Number of shares heldName

Percentage of total issued shares

Total

Note: Besides the above, JR Central holds 179,990 treasury stocks. (JR Central cancelled 90,000 shares of treasury stock in May 2012)



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