CENTRAL JAPAN RAILWAY COMPANY Annual Report...

CENTR

AL JAPAN R

AILWAY CO

MPAN

Y ANN

UAL R

EPORT 2015

CENTRAL JAPAN RAILWAY COMPANYAnnual Report 2015For the Year Ended March 31, 2015

Operating Areas

Nagoya Tokyo

Osaka

●Contribute to society through sound management●Provide modern, valued, friendly, and reliable

services●Establish a cheerful, fresh, and active corporate

culture

Management Philosophy

●Safety is the most important mission in the transportation business

●Safety is ensured based on compliance with rules and strict execution of work and is built through continuous practice

●Enforcement of confirmation and thorough communication are the most important aspects in ensuring safety

●To ensure safety, we must cooperate together beyond our official responsibility

●When in doubt, we must thoroughly consider and take the measure that seems the safest

General Principles of Safety

　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 hub linking Japan's principal metropolitan areas of Tokyo, Nagoya, and Osaka, and a network of conventional lines in the Tokai Region centered on the Nagoya and Shizuoka areas. JR Central and its consolidated subsidiaries also promote affiliated businesses that are expected to generate synergic effects with the railway business.　JR Central is also 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.

P ro f i l e

CENTRAL JAPAN RAILWAY COMPANYAnnual Report 2015

Unparalleled large volume/high-speed transportation mode

Unparalleled large volume/high-speed transportation mode

350

Number oftrains in operation

Approximately

430,000Number of passengers

Transportation result of theTokaido Shinkansen (per day)

A Message from ManagementKey Measures and Management Strategy

　Key Measures and Capital Investment

　Safe and Reliable Transportation

　Transportation Service

　The Chuo Shinkansen Using the 　　　　　　Superconducting Maglev System

　Sales and Marketing

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

　Affiliated Business

ESG * Information

　Engagement in Global Environment 　Preservation, etc.

　Human Resources

　Cooperation with Local Communities

　Corporate Governance

Board of Directors, Audit and Supervisory Board Members, and Corporate Officers

Corporate Data

　Profile / Organization Chart

　Operating Areas

　Company History

　Financial Highlights　(consolidated/non-consolidated)

　Summary of Performance

Financial Section

Appendices

　Financial and Transportation Data

　Operating Environment

　International Comparison of Railway Operators

　Financial Data Comparison of Three JR Companies

　Stock Information

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8

12

16

18

20

22

24

28

29

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33

34

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68

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Contents

[Remarks regarding forecasts, etc.]Future plans, forecast figures, etc. in this report are an outlook based on the information that is currently available for JR Central and may contain risks and uncertainty.Examples of potential risks and uncertainty include economic trends, business environment developments, consumption trends, competition situation for JR Central and subsidiaries, and changes in relevant laws and legal provisions.

This report is compiled based on information available as of the end of May 2015 in principle.●In this report, figures of financial information are truncated, while statistical data

and all percentages are rounded.●FY 2014 refers to the one-year period ending March 31, 2015.

＊Environmental, Social, and Governance. Companies appropriately considering/responding to ESG issues and the existence of shareholders who make investments in response to such efforts by the companies are thought to lead to the solution/improvement of global environmental issues and social issues and even to the sound development/expansion of capital markets, thus contributing to the establishment of a sustainable society.

100

Japan(As a whole)

JR Central’sMarket Area

■Population Density (As of the end of March 2014)

23.7% 76.3%

60.0% 40.0%

0 50 100

0 200

64.5% 35.5%

other

JR Central’s Market Area

Population( As of January 1, 2014)

Area( As of October 2014)

Prefectural GDP( Nominal GDP) ( FY2013)

■Percentages of our market area in Japan as a whole

（%）

253

100 (Base)

　JR Central mainly deploys the transportation business with the focus on

the railway business in addition to merchandise and other businesses, real

estate businesses, and other affiliated businesses. The main focus is the

Tokaido Shinkansen, which serves as Japan's main transportation hub

connecting Tokyo, Nagoya, and Osaka. The Tokaido Shinkansen offers

safe and punctual transportation, which is unparalleled in the world. Its

revenue covers approximately 90% of the non-consolidated operating

revenue for JR Central.

Note 1: Consolidated operating revenues composition 　　　 is based on revenues from external customersNote 2: The total of items in the breakdown may not

be 100% due to rounding.

Consolidated Operating Revenues Composition

Non-Consolidated Operating Revenues Composition

Other6.8%Real Estate

2.4%Merchandise and Other13.5%

Transportation

77.4%

Affiliated Businesses0.7%

Miscellaneous4.2%

Conventional Lines7.6%

Tokaido Shinkansen

87.5%

Business structure/revenue situation

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2015 1

A Message from Management

to respond to various situations that we can expect due to natural

disasters, etc., such as earthquakes.

2.Strengthening Transportation ServiceIn terms of the Tokaido Shinkansen, we will utilize the “10 Nozomi

Timetable” to flexibly schedule trains to meet demands with the focus

on time frames with increased customer use. In addition, we will not only

improve convenience through the increased maximum speed of 285km/

h, which was implemented in March of 2015, but also aim to improve the

reliability of the timetable in case of emergencies. Furthermore, we will

continue introducing the new model rolling stock N700A and complete the

renovation construction for Series N700 within 2015.

In terms of conventional lines, we will establish a highly convenient

transportation system through the efficient rolling stock operations,

which were made possible by the electrification of the Taketoyo Line

in March 2015. Furthermore, we will continue newly manufacturing

the Series Ki-Ha 25 railcars with the aim of further enhancing the

transportation service by sequentially introducing it to the Kisei and

Sangu Lines, etc. In addition, we are scheduled to complete the

restoration construction of the Meisho Line (between Ieki Station and

Ise-Okitsu Station), which was affected in October 2009, along with

the soil/water projects by the prefecture/cities. We are scheduled to

restart the operation of the entire line within FY2015.

In terms of sales and marketing, we will reinforce tourist products

targeting "Express Reservation", "PLUS EX" services, and "50+"

members. Additionally, we will strive to proactively promote our sales

and marketing through the development of products utilizing permanent

tourism resources, such as Kyoto and Nara, enhancement of various

campaigns, and sales of products targeting foreign tourists. Furthermore,

we will aim to increase the demand by deploying excursion packages

using the Tokaido Shinkansen, Takayama Line, and Hokuriku Line by using

the Kanagawa inauguration of the Hokuriku Shinkansen as an opportunity.

In terms of passenger-related facilities, we will continue promoting the

installation of new movable platform fences at Nagoya Station and Kyoto

Station and will gradually start their use. We will also continue promoting

the installation of barrier-free facilities at stations, such as elevators,

disabled-accessible toilets, and new braille blocks that indicate where

platform edges are located.

3.Promoting the Chuo Shinkansen Using the Superconducting Maglev SystemThe Chuo Shinkansen that employs the Superconducting Magnetic

Levitation railway system (hereinafter referred to as “Superconducting

Maglev System”) will enable us to continue our mission of operating a

high-speed railway linking the Tokyo Metropolitan areas, Chukyo regions

and Kinki regions, which is also the lifeline of our business. It is being

planned in order to ensure the future foundation of the company.

As far as the said plan which was approved by the Minister of Land,

Infrastructure, Transport and Tourism in October 2014 goes, we will

systematically execute the measurement, designing, land acquisition,

etc. while closely collaborating with communities between Shinagawa

and Nagoya along the Chuo Shinkansen (Part 1). In addition, we will

steadily promote the construction with the focus on construction safety

and environment preservation, starting with areas where necessary

arrangements have been made, such as both Shinagawa Station and

Nagoya Station terminals that will require a long-term construction period.

Furthermore, we will also promote efforts to establish sophisticated and

efficient operation/maintenance systems for the Chuo Shinkansen.

On the other hand, with the Yamanashi Maglev Line, we will conduct

evaluations to establish a maintenance system that responds to

commercial services by alternately operating 2 trainsets and conducting

long distance running tests by using rolling stock and facilities in

commercial line specifications. We will also strive to further refine the

Superconducting Maglev technology and reduce the costs for the

construction/operation/maintenance of commercial lines. We will also

continue promoting "Superconducting Maglev Test Rides" in a well-

planned manner.

Since we decided to bear the cost of this project, we plan to thoroughly

reduce the cost throughout the construction, operation, and maintenance,

etc., which will be inspected by the internally-established "Chuo

Shinkansen Construction Cost Reduction Committee", while ensuring

safety. We also intend to flexibly respond to the project by optimizing the

resources in accordance with the managerial environment.

4.Enhancement of Technical CapabilityIn terms of enhancement of technical capability, we will further reduce

cost of maintaining and updating facilities, such as large-scale renovation,

through technological development. We will also promote the research

and development of practical technologies that would lead to efficiency

in inspections/maintenance, etc., enhancement of transportation service,

etc., accurate forecast and detection of major natural disasters, etc.

We will utilize our technical capability in high-speed railway and promote

marketing activities with the aim of establishing overseas projects targeting

certain lines. We will also promote our initiatives to establish Japan's

high-speed rail system, which is based on the core principle of “Crash

Avoidance”, as a global standard. In addition, we will continue offering

technical consultation for Taiwan High Speed Rail Company. Furthermore,

we will promote activities to use the Superconducting Maglev System in

the north east corridor project of the United States.

Non-Railway Businesses

　In terms of non-railway businesses, we will steadily promote the

construction of the “JR Gate Tower” at Nagoya Station with the aim of

completing the framework in winter of FY2015. We will not only promote

the formulation of the operation plan prior to the inauguration with the

aim of proactive striving to increase revenues but also promote PR/

advertisement activities. We will also make efforts to further strengthen

the earning capability of the JR Central Group by revitalizing commercial

facilities of station buildings and merchandise businesses, etc.

Global Environmental Issues

In regard to global environmental issues, JR Central will not only make

the public aware of the superiority of railways to the global environment

but also continue promoting various policies that contribute to global

environment preservation, such as introduction of the N700A that enables

significant energy conservation, as well as working toward resource/

energy conservation in our daily operation.

Reduction of Long-term Debt and Payables

We have steadily strengthened our financial ground by reducing our

long-term debt and payables, which was as much as 5.5 trillion yen at

its highest, by approximately 3.3 trillion yen. The company will continue

striving to reduce long-term debt and payables while steadily promoting

various efforts.

　Going forward, JR Central will continue making efforts to ensure safety

and reliability in the railway business, to improve customer service, and

to pursue efficiency and cost reduction throughout our entire operation

including capital investments. At the same time, we will steadily promote

efforts to strengthen our managerial foundation for various businesses, such

as the Tokaido Shinkansen, and to construct the Chuo Shinkansen using

the Superconducting Maglev System, and promote efforts to reduce long-

term debt and payables in order to continue offering stable dividends.

Chairman and Representative Director: Yoshiomi YamadaPresident and Representative Director: Koei Tsuge

Railway Business

1.Safety MeasuresIn the railway business, we will steadily promote large-scale

renovation with the aim of maintaining/improving the soundness

of civil engineering structures along the Tokaido Shinkansen while

continuously making efforts to reduce cost. We will also steadily

promote earthquake countermeasures, such as countermeasures

to derailment/deviation of the Tokaido Shinkansen, enhancement

of earthquake safety of the elevated track columns, etc. along the

conventional line tracks, and renovation and anti-quake reinforcement

of the Hamamatsu Workshop, the Nagoya Workshop, and station

buildings, etc. Furthermore, we will conduct practical training in order

　In the railway business, JR Central sets the highest priority on ensuring safety and reliability. JR Central's fundamental policy is to stably and fully execute the long-term social mission to integrally maintain/develop the Tokaido Shinkansen, which serves as Japan's main transportation hub, and the conventional line network in the Tokai region through the continuous efforts of providing services that are preferred by customers as well as the streamlining of work, etc.

　Since railway business, which is the core business of the JR Central Group, requires long-term massive capital investments and technological development with considerable lead times, the time base for recovering investments becomes extremely long. Due to such a business structure, it is vital that we manage our railway business with a continuous strategic perspective based on a long-term outlook rather than a short-term profitability-based view. Therefore, we are promoting mid-to-long-term projects in a well-planned manner while simultaneously providing high quality services in our daily railway operations and aiming to enhance our financial strength.

Chairman and Representative Director: Yoshiomi Yamada

President and Representative Director:Koei Tsuge

A Message from Management

32 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2015CENTRAL JAPAN RAILWAY COMPANY Annual Report 2015

We will give priority to ensuring safety and reliability, which are the foundation of the railway business.1

●Large-scale renovation for the Tokaido Shinkansen�We will steadily promote large-scale renovation to maintain and improve the soundness of civil engineering structures along the Tokaido Shinkansen in constant pursuit of cost reduction.●Updating the ATC device, overhead contact lines, etc. of the Tokaido ShinkansenIntroduce the latest technologies and ensure further safety while striving to reduce cost, including maintenance.●Updating the operation management system for conventional lines, etc.With conventional lines, we will continue the update of the operation management system in the Shizuoka area along the Tokaido Line, improvement of safety devices on grade crossings, etc.

●Tokaido ShinkansenWe will continue taking countermeasures to derailment/deviation for the Tokaido Shinkansen, making renovation of the Hamamatsu Workshop, etc.��

●Conventional linesWe will continue promoting the enhancement of earthquake safety of the elevated track columns, etc. along the conventional line tracks, anti-quake reinforcement of the Nagoya Workshop, station buildings, etc., and measures against falling rocks.��●Conducting practical trainingWe will conduct practical training in order to respond to various possible situations caused by natural disasters, etc., such as earthquakes.

Large-scale renovation(rock bolt installation within tunnels)

Derailment prevention guards

Meisho Line restoration construction

Series Ki-Ha 25

Electrified Taketoyo Line

Increased maximum speed of 285km/h

N700A

■Route of the Chuo Shinkansen (Between Tokyo and the City of Nagoya)

[Updating facilities, etc.] [Countermeasures for disasters, such as earthquakes, etc.]

Large-scale renovation for the Tokaido Shinkansen (FY2015, 35 billion yen)

We will continue striving to enhance the transportation service by utilizing the “10 Nozomi Timetable” and accelerating the speed, etc.2

●Utilization of the “10 Nozomi Timetable”We will flexibly schedule trains to meet demands with the focus on the time frames with increased customer use.●Introduction of the new model rolling stock N700A and completion of the modification of Series N700We will continue introducing the new model rolling stock N700A and complete the renovation construction for Series N700.●Increase of the maximum speed of the Tokaido ShinkansenWe will not only improve convenience through the increased maximum speed of 285km/h, which was implemented in March 2015, but also aim to improve the reliability of the timetable in case of emergencies, etc.●Installation of new movable platform fences and replacement of the new automatic ticketing gatesWe will continue the installation of new movable platform fences, start their use in Nagoya Station and Kyoto Station, and replace automatic ticketing gates with the latest model.

Enhancing the Tokaido Shinkansen Transportation Services

Introduction of N700A Shinkansen Trains (31 trainsets)

Modification of Series N700 Shinkansen Trains (80 trainsets)

★March 2014 "10 Nozomi Timetable" started★March 2014 "10 Nozomi Timetable" started★March 2014 "10 Nozomi Timetable" started★March 2014 "10 Nozomi Timetable" started★March 2014 "10 Nozomi Timetable" started★Increased maximum speed of 285km/h (Started in March 2015)★Increased maximum speed of 285km/h (Started in March 2015)★Increased maximum speed of 285km/h (Started in March 2015)★Increased maximum speed of 285km/h (Started in March 2015)★Increased maximum speed of 285km/h (Started in March 2015)

We will continue striving to enhance the transportation service by newly manufacturing diesel railcars.3

●Electrification of the Taketoyo LineWe will establish a highly convenient transportation system through the efficient rolling stock operations, which were made possible by the electrification of the Taketoyo Line in March 2015.●Introduction of new diesel railcarsWe will continue newly manufacturing the Series Ki-Ha 25 and introduce it to the Kisei and Sangu Lines one by one.●Meisho Line restoration constructionWe will complete the restoration construction of the Meisho Line (between Ieki Station and Ise-Okitsu Station), which was affected in October 2009, along with the soil/water conservation projects by the prefecture/cities and restart the operation of the entire line.●Installation of barrier-free facilitiesWe will continue promoting the installation of barrier-free facilities at stations, such as elevators, disabled-accessible toilets, and introducing new braille blocks that indicate where platform edges are located, etc.

Enhancing the Conventional Line Transportation Service

Newly produced railcars, Series Ki-Ha 25 (52 cars)

Meisho Line restoration construction

We will shift from the planning phase to the new construction phase, and will thoroughly promote the phase with the focus on safety, environment, and cooperation with communities.4

●Well-planned execution of measurement, designing, and land acquisition, etc.We will systematically execute the measurement, designing, and land acquisition, etc. while closely collaborating with communities while executing the Construction Implementation Plan (Part 1) between Shinagawa and Nagoya along the Chuo Shinkansen, which was approved by the Minister of Land, Infrastructure, Transport and Tourism in October 2014.●Thorough promotion of constructionWe will steadily promote the construction with the focus on construction safety and environment preservation, starting with areas where necessary preparations have been made, such as both Shinagawa Station and Nagoya Station terminals that will require a long-term construction period.●Establishment of the operation/maintenance systemsWe will promote efforts to establish sophisticated and efficient operation/maintenance systems for the Chuo Shinkansen.

Promotion of the Chuo Shinkansen Project using the Superconducting Maglev System

★August 2014 Submission of the final Environment Impact Statement★August 2014 Submission of the final Environment Impact Statement★October 2014 Approval for the Construction Implementation Plan (Part 1)★October 2014 Approval for the Construction Implementation Plan (Part 1)★December 2014 Started Shinagawa/Nagoya Station preparation construction★December 2014 Started Shinagawa/Nagoya Station preparation construction

*Countermeasures to derailment/deviation: Scheduled to be completed at the end of FY2019*Hamamatsu Workshop renovation: Scheduled to be completed in FY2018

*Nagoya Workshop renovation: Scheduled to be completed in March 2022

★March 2015 Electrification of the Taketoyo Line★March 2015 Electrification of the Taketoyo Line

Legends

：Yamanashi Maglev Line：Station Location

：Planning Route

N

0 25 50km

Enhancement of transportation service

Electrification of the Taketoyo Line

Installation of barrier-free facilities

GifuPrefecture

NaganoPrefecture

AichiPrefecture

Shizuoka

Kanagawa

YamanashiPrefecture

Tokyo

Prefecture

Prefecture

Prefecture

Ensuring Safe and Reliable Transportation

(Tokaido Shinkansen: Countermeasures to derailment/deviation, Hamamatsu Workshop renovation Conventional lines: Enhancement of earthquake safety of the elevated track columns, etc., renovation and anti-quake reinforcement of station buildings, etc.)(Tokaido Shinkansen: Countermeasures to derailment/deviation, Hamamatsu Workshop renovation Conventional lines: Enhancement of earthquake safety of the elevated track columns, etc., renovation and anti-quake reinforcement of station buildings, etc.)

FY 2015FY 2014FY 2013 FY 2012 FY 2016 FY 2017 FY 2015FY 2014FY 2013 FY 2012 FY 2016 FY 2017



Countermeasures for disasters, such as earthquakes, etc.

Key Measures and Capital Investment

FY2015Consolidated：366 billion yen　　　Non-Consolidated：335 billion yen

（including 183 billion yen for safety-related investments）

▶P.12

▶P.15

▶P.16

▶P.8 144 billion yen

Capital investment

36 billion yen

Capital investment

8 billion yen

Capital investment

93 billion yen

Capital investment


Key Measures and Management Strategy Key Measures and Capital Investment

5

●Conducting long distance running testsWith the Yamanashi Maglev Line, we will alternately operate 2 trainsets and conduct long distance running tests by using rolling stock and facilities in commercial line specifications.●Refining Superconducting Maglev technology and Reducing CostsWe will not only conduct evaluations to establish a maintenance system that responds to commercial services but also further strive to refine the Superconducting Maglev technology and reduce the costs for the construction/operation/maintenance of commercial lines.●Hosting test ridesWe wil l continue promoting "Superconducting Maglev Test Rides" in a well-planned manner.

Series L0 (L zero) “Superconducting Maglev Test Rides”

Overhead contact line test simulator

Railway Structure Loading Test System

Kyoto Campaign

Excursion packagesEX-IC

6●Enhancement of tourist productsWe will aim to increase the demand by enhancing tourist products for members of "Express Reservation", "PLUS EX", or "50+".●Enhancement of various campaigns utilizing permanent tourism resourcesWe will aim to expand use by enhancing products and various campaigns utilizing permanent tourism resources, such as Kyoto and Nara, and showcasing the attractions. We will also proactively promote sales and marketing by selling products targeting foreign tourists, etc.●Deploying excursion packagesWe will aim to increase the demand by deploying excursion packages using the Tokaido Shinkansen, Takayama Line, and Hokuriku Line by using the Kanagawa inauguration of the Hokuriku Shinkansen as an opportunity.●Cooperation with communitiesWe will aim to expand customer use and reinforce our cooperation with communities through "Sawayaka Walking", "Shupo", "Japan Highlights Travel", which is a portal site that has a collection of tourism information along the Tokaido Shinkansen, etc.

7

8●Promotion of the “JR Gate Tower” ProjectWe will steadily promote the construction of the "JR Gate Tower" with the aim of completing the framework in winter of FY2015. We will not only promote the formulation of the operation plan prior to the inauguration with the aim of proactive striving to increase revenues but also promote PR/advertisement activities.●Revitalization of commercial facilities of station buildings and merchandise businessesWe will aim to further increase revenues by revitalizing commercial facilities of station buildings and merchandising businesses.●Enhancement of agriculture businessWe will continue aiming to enhance our agriculture business in order to provide safer and more reliable food products.

★April 2014 International High-Speed Rail Association (IHRA) is established★April 2014 Technical Consulting Agreement with Taiwan High Speed Rail★April 2014 International High-Speed Rail Association (IHRA) is established★April 2014 Technical Consulting Agreement with Taiwan High Speed Rail

★October 2014 In Commemoration of the 50th Anniversary of the Tokaido Shinkansen, High-Speed Rail Conference★October 2014 In Commemoration of the 50th Anniversary of the Tokaido Shinkansen, High-Speed Rail Conference

★Winter of FY2015 Completion of Framework★Winter of FY2015 Completion of Framework★November 2016 Start of occupancy of offices★November 2016 Start of occupancy of offices

April 2017 Inauguration of commercial facilities/hotel★April 2017 Inauguration of commercial facilities/hotel★

"Takashimaya Gate Tower Mall" completion image

Image of “JR Gate Tower”（right side）"Nagoya JR Gate Tower Hotel" completion image

★From November 2014 Hosting “Superconducting Maglev Test Rides”

★Release of The Tokaido Shinkansen 50th Anniversary commemoration travel products★Release of The Tokaido Shinkansen 50th Anniversary commemoration travel products

★Enhancement of tourist products for EX and 50+ members★Enhancement of tourist products for EX and 50+ members

●Cost reduction through technological developmentWe will further reduce costs to maintain/upgrade facilities, such as large-scale renovation, through technological development.●Research and development of practical technologiesWe will promote research and development that would lead to not only the enhancement of efficiency in inspections, maintenance, etc., transportation services, etc. but also accurate forecast, detection, etc. for major natural disasters, etc.●Making efforts to promote Japan's high-speed rail system as a global standard.We will utilize our technical capability in high-speed railways and promote marketing activities with the aim of establishing overseas projects targeting

certain lines. We will also promote our initiatives to establish Japan's high-speed rail system, which is based on the core principle of “Crash Avoidance”, as a global standard. In addition, we will continue offering technical consultation for Taiwan High Speed Rail Company.●Promotion activities for the Superconducting Maglev SystemWe will promote activities to use the Superconducting Maglev System in the north east corridor project of the United States.●Promotion of various measures that contribute to global environment preservationWe will promote various measures that contribute to global environment preservation, such as replacing old rolling stock with new energy-conserving rolling stock.

Refinement of Superconducting Maglev technology and Cost Reduction

Promotion of sales and marketing to increase revenues (Various campaigns utilizing permanent tourism resources, such as Kyoto and Nara, etc.)

Cost reduction through technological development, research and development of practical technologies

Marketing activities, etc. with the aim of establishing projects targeting certain lines

Promotion of the "JR Gate Tower" Project at Nagoya Station

We will continue making efforts to refine the Superconducting Maglev technology and to reduce costs.

We will proactively promote our sales and marketing with the aim of increasing revenue.　(Various campaigns utilizing permanent tourism resources, such as Kyoto and Nara, etc.)

We will continuously strive to enhance our technical capability, which supports the railway management/development, and simultaneously promote the efforts toward overseas projects that use the high-speed railway and Superconducting Maglev System. We will also continue to engage in global environment preservation.

We will steadily promote the “JR Gate Tower” Project at Nagoya Station as well as strive to increase competitiveness and revenue of our existing businesses.

Enhancing Sales and Marketing

Enhancement of Technical Capability, Pursuit of Overseas Projects, and Engagement in Global Environment Preservation

Developing Affiliated Businesses

Refining Superconducting Maglev Technology and reducing costs

Key Measures and Capital Investment

FY2015

▶P.17

▶P.18

▶P.20

▶P.22



3 billion yen

Capital investment

4 billion yen

Capital investment

1 billion yen

Capital investment

43 billion yen

Capital investment

※Including 31 billion yen capital investments 　by consolidated subsidiaries


Key Measures and Management Strategy Key Measures and Capital Investment

Initiatives for Ensuring Safe and Reliable TransportationJR Central firmly believes that ensuring safety and reliability is

the fundamental principle of the railway business and has worked to improve its systems and to introduce the latest technologies for its rolling stock and facilities ever since the establishment of the company. Accordingly, we not only promote education and training for staff in charge of train operations and facility maintenance but also strive to enhance our crisis management ability by conducting hands-on training and other activities to respond to various accidents and disasters in case of emergency situations.

Measures for Ensuring SafetyJR Central proactively promotes updating of signaling

systems/rolling stock, etc., countermeasures for disasters, such as earthquakes, etc., and improvement of safety devices on grade crossings, etc. with the aim of ensuring safe and reliable transportation.

JR Central has implemented a wide range of capital investments in a well-planned manner, including the upgrading of ATC (Automatic Train Control)/CTC (Centralized Traffic Control) for the Tokaido Shinkansen, installation of ATS-PT (new Automatic Train Stop) for conventional lines, introduction of CTC to conventional lines, earthquake countermeasures such as strengthening of elevated track columns, embankments, and bridges, etc., the replacement of rolling stock for Series N700 and N700A, and improvement of safety devices on grade crossings, etc. In addition, we started implementing countermeasures to derailment/deviation on the Tokaido Shinkansen in 2009 as an earthquake countermeasure. We also started large-scale renovation of the Tokaido Shinkansen in FY2013.

Furthermore, while we appropriately implement various inspections for civil engineering structures and various rolling stock/facilities/electrical equipment, we also aim to develop more efficient and effective inspection methods and have introduced a number of inspection equipment and systems.

Since the establishment of the company, we have spent a total amount of approximately 3 trillion yen in safety-related investments over the 28 years up until FY2014. [ Diagram 1] We also plan to make 183 billion yen in safety-related investments in FY2015. This covers 76% of the overall investments, excluding the capital investment related to the Chuo Shinkansen. The ratio remains high. We also recognize that enhancement of the existing railway business is extremely important in our effort to promote the Chuo Shinkansen Project. We will continue making necessary investments to ensure safe and reliable transportation.

Maintaining/Updating FacilitiesIt is essential that we maintain/update facilities in a well-

planned manner in order to ensure safety. At the same time, we thoroughly consider and promote streamlining and cost reduction throughout our operations. We also promote initiatives to reduce costs to maintain/update, etc. facilities while maintaining/improving the safety level.

Large-scale Renovation� Diagram2Soundness of civil engineering structures for the Tokaido

Shinkansen is sufficiently maintained through daily and thorough inspections/repair. However, it will be necessary to replace many of the facilities in the future due to aging. Therefore, we formulated the allowance reserve plan for the large-scale renovation of Shinkansen infrastructure based on the Nationwide Shinkansen Railway Development Act and have reserved the allowance since 2002 in response to the approval by the Minister of Land, Infrastructure, Transport and Tourism.

Along with this, we continued research and development for large-scale renovation methods, which was mainly promoted by the Komaki Research Center, and developed a new method. In this method, we respond in 2 phases. We first implement "measures to inhibit aging deterioration", which extends the life of structures by inhibiting the very occurrence of aging damage, such as cracks; we then implement "overall renovation", such as material replacement, as necessary while confirming the effect of the first phase.

The new method made it possible not only to significantly reduce the interference to train operations when doing the construction work but also to significantly reduce construction costs.

In response to the development of this method, JR Central determined that an earlier start of the large-scale renovation would be appropriate and decided to start the construction in 2013, five years ahead of the original schedule. We promoted measures to inhibit aging deterioration for the three years between 2013 and 2015 [ Diagram 2] , and we are scheduled to steadily promote the overall construction over 10 years.

Updating ATC (Automatic Train Control)� Diagrams3/4With the Shinkansen, we divide routes by a certain distance and

determine sections (enclosed sections). By allowing only one train in each section, we ensure mutual safety between trains. Furthermore, using ATC (Automatic Train Control), the system displays the allowed speed, which takes the distance from the preceding train and the route conditions into account, on the driver's cabin of the train as a

signal. If the train's speed exceeds the allowed speed, the brakes are automatically activated to reduce the speed to under the allowed speed, which is one of the functions that makes the principle of “Crash Avoidance” * possible. [ Diagram 3] Using this system, the Tokaido Shinkansen has maintained excellent safety for half a century since its inauguration in 1964 by maintaining zero fatal train accidents.

*The principle of “Crash Avoidance” is a safety system that is designed to prevent even the possibility of a collision. The key elements of “Crash Avoidance” are: the use of “exclusively dedicated tracks for high speed passenger rail service”, which completely exclude freight and commuter rail being on the same tracks; no at-grade crossings of any sort; and an “Automatic Train Control” (ATC) system, which automatically detects train positions and controls the operation of the system.

To update this ATC, the Komaki Research Center has promoted technological development since 2011 and succeeded in further enhancing the performance of the current ATC. Specifically, we aggregate the equipment room by improving the processing capability of ATC ground equipment and reducing the ATC ground equipment and by extending the ATC signal transmission distance; thus further improving reliability and streamlining maintenance. [ Diagram 4] This enabled us to reduce costs significantly by approximately 14.5 billion yen, including the maintenance cost, in approximately 20 years. Renovation is expected to be completed in FY2026.

Introduction of the Next Generation Overhead Contact Line� Diagram5The Komaki Research Center has promoted technological

development on the next generation overhead contact line, which can respond to the Tokaido Shinkansen's characteristic of long trainset, high density, and high-speed travel, and which can also realize cost reduction at the same time.

The next generation overhead contact line can reduce the number of parts by reducing the number of lines from 3 to 2. It is effective in ensuring safe and reliable transportation, as there is lower risk of malfunction. It also realizes cost reduction, as it can reduce the replacement cost after the introduction by approximately 20% compared to the current overhead contact line. [Diagram 5]

Since November 2014, we have been introducing the next generation overhead contact line one by one in the light sections (excluding areas where contact wires cross) with more than a 2500m curve radius, which cover approximately 70% of the entire length of Tokaido Shinkansen, when replacing the lines due to aging damage.

Countermeasures for Disasters, such as Earthquakes, etc. ［ Diagram 6］As part of earthquake countermeasures, we have not only

reinforced structures with anti-earthquake reinforcement for

elevated track columns, embankments, and bridges, and reinforced the "Tokaido Shinkansen Earthquake Rapid Alarm System (TERRA-S)", which is an earthquake disaster prevention system, but also steadily promoted countermeasures to derailment/deviation along the Tokaido Shinkansen.

We will continue promoting these initiatives and proactively work on reinforcing facilities against natural disasters, etc. by renovating/reinforcing Hamamatsu Workshop along the Tokaido Shinkansen and by continuing to promote the earthquake safety for elevated track columns, etc., anti-earthquake reinforcement constructions for Nagoya Workshop, and station buildings, etc., and strengthen measures against falling rocks, etc. along the conventional line tracks.

Tokaido Shinkansen�①Countermeasures to Derailment/Deviation

In light of the derailment accident on the Joetsu Shinkansen caused by the Niigata Chuetsu Earthquake and certain characteristics of the Tokaido Shinkansen, we have been installing "Derailment Prevention Guards" inside of the rail along the Tokaido Shinkansen since 2009 with the aim of further reinforcing anti-earthquake safety. We are scheduled to complete the installation in 60% of the planned track extension length of 596km as of the end of FY2015, and we are scheduled to complete the entire project at the end of FY2019.

In addition, in order to prevent large rolling stock deviations from the track in case of a derailment as much as possible, “Deviation Prevention Stoppers” have been installed on all of our Shinkansen rolling stock. We completed the initiative in FY2012 [ Diagram 6]

②Reinforcement of StructuresIn terms of reinforcement of structures for the Tokaido

Shinkansen, we have completed anti-earthquake reinforcement of elevated track columns (with the exception of parts related to development projects, etc.), which were deemed to require reinforcement as a result of an anti-earthquake diagnosis performed after the Great Hanshin-Awaji Earthquake, as well as elevated track columns, for which the expected wave patterns for a future Tokai Earthquake published by the Japanese government in 2003 suggest that ground motion in this area could be particularly strong and long. In conjunction with this, to further strengthen structures along the same section, we have proceeded to implement earthquake-resistant reinforcement of bridges and embankments as well since 2008. We completed the construction of bridges in September 2014, and we completed the reinforcement of embankments at the end of FY2012, excluding parts related to development projects, etc.

Large-scale renovation (rock bolt installation within tunnels)

Overview of ATC Update

Other than Safety-Related Investments

Safety-Related Investments

Chuo Shinkansen

0

50

100

150

200

250

300

350

’12.3

142.9

298.4155.5

’11.3

164.7

124.1288.8

’13.3

301.6164.7

136.9

’14.3

229.085.5

143.5

’15.3

257.25.0

79.0

173.1

(plan)’16.3

335.093.0

59.0

183.0

FY 2015FY 2014FY 2013 FY 2017FY 2016

Shifts in Safety-Related Investment Amounts (Non-consolidated) Comparison Diagram for Next Generation Overhead Contact LineDiagram 3 Diagram 5Mechanism of ATCSafe and Reliable Transportation

　

Derailment Prevention Guards

Large-scale renovation for the Tokaido Shinkansen (FY2015, 35 billion yen)

Countermeasures for disasters, such as earthquakes, etc.(Tokaido Shinkansen: Countermeasures to derailment/deviation Hamamatsu Workshop renovation)(Conventional lines: Enhancement of earthquake safety of the elevated track columns, etc., renovation and anti-quake reinforcement of station buildings, etc.)

Station

60→24Equipment rooms

Station

Present

Afterreplacement

Equipment roomin station

Equipment room along the line

5kmmax

20km 20km

5km

Overheadcontact

line

Overheadcontact

line

Auxiliary overhead contact line

Auxiliary overhead contact line

Contactwire

Contactwire

Conventional model Next Generation

Number of overhead contact lines 3 2Number of overhead contact lines

(Heavy compound overhead contact line) (High-speed heavy simple overhead contact line)

ATC signal

ATC signal

▲ATC ground equipment

(Billion yen)Speed of the train

Preceding train

ReceiveGroundFacilities

(for position adjustment)

③Based on the position information of both trains, ATC signal (train speed checking pattern) is calculated

⑤When the speed exceeds the ATC 　signal, the brake system is activated

④Comparison between speed and ATC signal.

②Position information of the train

①Position information of 　the preceding train(Rail)Diagram2

Diagram1

Equipment roomin station

max

max max

Equipment room along the line

Diagram 4

Diagram 6


Key Measures and Management Strategy Safe and Reliable Transportation

③Improvement of Earthquake Disaster Prevention System　

We continued enhancing the earthquake disaster prevention system even after introducing it to the Shinkansen prior to other companies, and introduced the “Tokaido Shinkansen Earthquake Rapid Alarm System (TERRA-S)” in 2005, accelerating the speed of the alarm and improving accuracy, etc. [ Diagram 7] Furthermore, by the end of May 2013, we increased responsiveness to vertical earthquakes and interlocking-type earthquakes, as well as provided better backup systems.

④Anti-Quake Reinforcement and Renovation of the Hamamatsu Workshop

Since July 2010, we have been promoting anti-quake reinforcement and renovation of the Hamamatsu Workshop, which is the only workshop that conducts General overhauls* on the Tokaido Shinkansen. With this construction, we will not only enhance earthquake resistance through renovation and reinforcement of buildings but also reduce the risk of not being able to operate the Shinkansen due to rolling stock maintenance by maintaining the inspection/repair work of rolling stock even in case of a major earthquake while promoting earthquake safety in each Rolling Stock Depot. Along with this, we will aim to improve the operation efficiency and enhance the work environment by improving lines and introducing the latest equipment. Renovation is expected to be completed at the end of FY2018. [ Diagram 8]

*General overhauls (Shinkansen): Overhauls required for Shinkansen rolling stock within 36 months or under the distance of 120,000,000km.

Conventional lines�We promote enhancement of earthquake safety of the elevated

track columns, etc. and anti-quake reinforcement of the Nagoya Workshop/station buildings, etc. as part of our effort to reinforce structures. We already completed the anti-quake reinforcement of elevated track columns in high density sections (sections in which there are more than 10 trains one way per hour at its peak of the day) at the end of May 2014. We are currently promoting the reinforcement in the Shizuoka area of the Tokaido line and the Fuji area of the Minobu line, where a long strong earthquake tremor is anticipated in a future Tokai Earthquake.

On the other hand, we started the anti-earthquake construction of the Nagoya Workshop, which is the only workshop that can conduct General overhauls and important equipment inspections* for rolling stock of our conventional lines, in February 2014. This is scheduled to be completed at the end of FY2021. [ Diagram 9] In terms of anti-earthquake construction for stations, we have been

promoting the construction for stations with more than 5,000 passengers per day. We are scheduled to complete the anti-earthquake construction of Kiyosu Station and Matsuda Station in FY2015.

*1 General overhauls (conventional lines): General overhauls required for conventional line rolling stock within eight years.

*2 Important equipment inspections: Overhauls required for important equipment of conventional line rolling stock within four years or under the distance of 600,000km (electric trains)/500,000km (diesel railcars).

Education and Training ［ Diagrams10/11/12］To ensure safe and reliable transportation, we implement safety

education and training for the staff engaging in train operations and facility maintenance. We conduct education and training especially for the staff engaging in train operations (such as drivers, conductors, directors, and those who handle signals or operate switch stands) according to the contents/time stipulated for each duty.

We promote employee education/training mainly to improve the knowledge and technical capability of employees through the daily duties in their workplace. Specifically, we introduce simulators, which can perform simulation training of operations, etc. in case of emergencies, to field offices, in which drivers/conductors belong, as part of the skill improvement training for drivers and conductors. We also conduct a number of major and minor training sessions for transportation, rolling stock, facilities, and electric systems by using ground facilities, such as actual rolling stock/overhead contact lines/signaling equipment, so that employees of each system can swiftly and accurately respond to emergencies. We also conduct large-scale training, in which they participate.

General Training Session Simulating Actual Accidents is the biggest training session which is conducted every year as an opportunity for us to enhance the fast-response restoration structure in case of accidents and to learn the work of other systems. [ Diagram 10] We are scheduled to conduct practical training in FY2015, such as passenger evacuation guide training sessions, information communication training sessions, training sessions simulating repair of derailed rolling stock, and line facility restoration training, based on the assumption of natural disasters, such as earthquakes. [ Diagram 11]

In addition to this, the General Training Center not only offers education on specialized knowledge/skills for each function but also provides sessions for various qualifications and trains conductors/drivers. [ Diagram 12]

It also hosts effective training beyond the borders of

professions, such as simultaneously hosting Shinkansen-related training and conventional line-related training, holding lectures and discussions for both Shinkansen and conventional lines, and enhancing lectures involving borders of systems, etc. As you can see, JR Central strives to further develop employee education that focuses on safety.

Operation Management and Safety Measures

Tokaido Shinkansen� Diagrams13/14The safe and punctual operation of the Tokaido Shinkansen

is supported by a number of systems, mainly the Computer aided Traffic Control (COMTRAC*). These systems accurately comprehend a massive amount of information, such as the operational status of trains and utilization status of facilities, control, and thoroughly manage the safety of the overall transportation services.

At the Shinkansen General Control Center in Tokyo, various directives, such as transportation, operations, facilities, electrical power, and signals, utilize these systems and work in close cooperation to support the safety and reliability of the Shinkansen. Also, the Shinkansen Second General Control Center with the same functions as the General Control Center in Tokyo has been established in Osaka with the cooperation of JR West. This Center is to be used in the event that the Shinkansen General Control Center becomes inoperable due to a disaster, thereby strengthening our crisis management ability in case of emergency situations. Equipment at the Second General Control Center is on stand-by at all times with the power on. They are usually utilized for education/training of directors/maintenance staff. The Tokaido Shinkansen has been doubling as various facilities with the aim of ensuring safe and reliable transportation. We also reinforce the crisis management ability by doubling control centers themselves, which are in charge of operation management. [ Diagram 13]

We updated the ATC system (refer to Diagram 3 on P9 for details) in March 2006. The updated system realized a “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 ATC system, JR Central improved the reliability of the system, the comfort of the passenger cabin, and the flexibility of the timetable scheduling.

Furthermore, we have also introduced the "Shinkansen Multiple Inspection Train (AKA Dr. Yellow)" to test the ground facilities, such as electrical facilities and tracks. [ Diagram 14] This rolling stock, which is based on Series 700, is equipped with the latest inspection/measurement devices to efficiently conduct high-

precision inspections at the speed of 270 km/h; and it therefore supports the safety and reliability of the Tokaido Shinkansen.

*COMTRAC (COMputer-aided TRAffic Control): COMTRAC is the system that controls train routes, manages train operations, and operates/manages 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) in the computer, the system can monitor the status of all trains in operation at all times.

Conventional lines� Diagrams15/16

JR Central's 12 conventional lines are operated and managed by two control centers; the Tokai General Control Center in Nagoya and the Shizuoka General Control Center. Each center monitors the operational status of trains and the utilization status of facilities 24 hours a day.

The operation management is done by the operation management system, including CTC (Centralized Traffic Control)*, PRC (Programmed Route Control)*, and automatic broadcasting devices, etc. These systems manage train schedules, signal control, train tracing, and operation performance data, etc. These systems enable us to manage train and station information in a centralized manner at control centers. Such centralization not only enables normal train management but also allows orders and directives to be issued more rapidly even in emergency situations. We have implemented the operation management systems on almost all of our lines, thus ensuring reliable train operation management.

In addition, ATS-PT (Automatic Train Stop) continuously checks the speed for conventional lines according to the distance between the train and the signal. It ensures safety by automatically applying emergency brakes in situations where the train risks overrunning. [ Diagram 15] We completed the introduction of ATS-PT to all of our conventional lines in February 2012.

As for the maintenance of railway tracks and electrical facilities on conventional line tracks, using the "Shinkansen Multiple Inspection Train" and "Track Inspection Train" (AKA Dr. Tokai), JR Central monitors the facility status both efficiently and quickly. [ Diagram 16]

*CTC: The CTC system not only remotely and integrally controls signaling equipment of stations, etc. in order to efficiently manage train operations but also has the function to conduct real-time monitoring of operational status of trains.

*PRC: Equipment that automatically controls the route for each train via CTC, using daily operation plan information and the position of each train.

General Training Session Simulating Actual Accidents

Simulators for Station Staff and Conductors

Dr. Yellow

ATS-PT Functions

Tokaido/Sanyo Shinkansen Second General Control Center

Dr. Tokai

Tsunami Evacuation Guide Training

Shinkansen General Control Center

Train Control System in the Case of Earthquakes

Stop Electricity

Renovation of the Hamamatsu Workshop (completion image) Renovation of the Nagoya Workshop (completion image)

Tokai General Control Center

Detector

Conventional-Lines Earthquake Information Communications System

Tokaido Shinkansen Earthquake Rapid AlarmSystem (TERRA-S)

Transmit stop signal to train

Splicing equipment for earthquake early warningSplicing equipment for earthquake early warning

Japan Meteorological Agency main office(Japan Meteorological Business Support Center)

Detector of the Japan Meteorological Agency

Substation

Train Radio

Epicenter

Seismometer

Seismic wave

Relay Station

ATS-PT Overview・Based on 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.・ATS-PT provides continuous

control through braking patterns.Ground element (generates pattern)

Braking Pattern

Speed

Train’s running curve

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

Signal

Diagram 7

Diagram 8 Diagram 9

Diagram 10

Diagram 11

Diagram 12

Diagram 13 Diagram 14



Key Measures and Management Strategy Safe and Reliable Transportation

Improvement of the Tokaido Shinkansen Timetable and Speed Upgrage

"10 Nozomi Timetable" and Offering extra trains flexibly � Diagrams1/2

Since the introduction of "Nozomi" in 1992, JR Central has increased the number of services for "Nozomi", which is the fastest train of Tokaido Shinkansen with the aim of improving our transportation service. In March 2014, we created the "10 Nozomi timetable", which enabled a maximum of 10 “Nozomi” services operated each hour, for almost all time frames. This was made possible due to the fact that the renovation construction to add a new track, a new platform, and two more draw-out tracks from 2 to 4 in Shin-Osaka Station was completed and that we now have a certain number of trainsets for the N700A and Series N700 (renovated). We currently operate 10 "Nozomi" per hour, mainly during the time frames with increased customer use. We strive to offer more flexible services to meet the demands. [ Diagram 1]

In addition, the number of services per day in FY2014 was increased by 2% YoY, and use has also increased. [ Diagram 2]

Increasing the Speed of the Tokaido Shinkansen

Thanks to the revised timetable in March 2015, we were able to increase the speed for the first time in 23 years. The maximum speed of the Tokaido Shinkansen became 285km/h. Due to this, the travel time required between Tokyo and Shin-Osaka was shortened by 3 minutes, which is as short as 2 hours and 22 minutes. The new timetable has not only improved convenience but also improved the timetable recovery capability in case of emergency.

Currently, approximately 1 "Nozomi" per hour travels at 285km/h, rather than all trains. However, we plan to expand the operation of trains at 285km/h as we update rolling stock and promote modification constructions.

Introduction of the latest N700A (N700 Advanced) and Modification of Series N700

We have developed the N700A, which employs the results of our original technological developments achieved since the birth of Series N700, including the “Wheel Mounted Brake Disks”, “Bolster-less Bogie Vibration Detection System”, and “Cruise Control System”, in an effort to replace Series 700 rolling stock, which is facing the need to be replaced. With this N700A, we strive to further improve the safety and reliability and conserve energy. We are scheduled to introduce a total of 31 N700A trains by FY2016.

We have also been modifying all of the existing eighty N700 trains to improve further safety and reliability by equipping part of the latest functions introduced to the N700A, such as the “Central fastening brake disks” and the “Cruise control system”. Modification construction is expected to be completed in FY2015.

This means that more than 80% of the Shinkansen rolling stock owned by JR Central will be composed of the latest N700A type at the end of FY2016.

Providing Services Customers Will ChooseJR Central has been working to improve its transportation

services not only by ensuring safety and reliability, which are the fundamental principles of the railway business, but also by establishing easy-to-use timetables, introducing new rolling stock to increase the speed and passengers' comfort, and improving facilities/equipment, etc. These efforts are made in order to fulfill our long-term mission of maintaining and developing, in an integrated manner, both the Tokaido Shinkansen which serves as Japan's main transportation hub and the conventional lines network in the Tokai region, as well as to continue to be a transportation mode chosen by the customers.

■Tokaido Shinkansen

　Since its inauguration in 1964, approximately 5.7 billion people have used the Tokaido Shinkansen, the transportation hub linking Japan's three largest metropolitan areas, Tokyo, Nagoya, and Osaka. The Tokaido Shinkansen has literally supported Japan's economic growth.　2014 was a commemorative year as the 50th anniversary of the Tokaido Shinkansen. We held a number of events, etc. to promote customers' understanding of the Tokaido Shinkansen, and many customers used the Shinkansen.We will continue operating Japan's transportation hub while ensuring safety and reliability as the first priority.

■Characteristics of the Tokaido Shinkansen

Safety

○No accidents resulting in fatalities or injuries of passengers on board since operations commenced.○Improvement of safety awareness/skills through human resources education/training.○Continuous safety-related investments, such as further earthquake countermeasures for derailment/

deviation, etc., in addition to the train control system with the latest technologies, reinforcement of structures including anti-earthquake reinforcement, etc.

Punctuality ○Annual average delay is 0.6 minutes per operational train in FY2014 (including delays due to natural disasters, etc.)

Comfort

○Rolling stock with enhanced riding comfort and comfortable interior space.○Comfortable interior space that meets various needs of passengers such as a wireless Internet connection

service in Series N700/N700 available between Tokyo and Shin-Osaka.○Renovation of stations and modification of station facilities for better convenience, such as elevators,

escalators, and smoking rooms.

High Speeds

○Maximum speed of 285 km/h (300km/h in the Sanyo Shinkansen section).○"Nozomi" connects Tokyo and Shin-Osaka in as fast as 2 hours and 22 minutes. This 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.

High Frequency and High Capacity

○350 daily services (FY2014, including extra services), 1,323 seats per train.○A maximum of 10 “Nozomi” services are available in each direction per hour in almost all time frames. Daily

passenger capacity of the Shinkansen between Tokyo and Osaka is approximately 340 thousand, which far exceeds that of airlines with approximately 30 thousand (FY2014).○Number of passengers: 431 thousand/day, 157 million/year (FY2014).

N700A

Transportation Service Example of "10 Nozomi timetable" Tokaido/Sanyo Shinkansen timetable (Departures from Tokyo Station)

The Tokaido Shinkansen Service

Introduction of N700A Shinkansen Trains (31 trainsets)

Modification of Series N700 Shinkansen Trains (80 trainsets)

“10 Nozomi Timetable” (from March 2014)

Increased maximum speed of 285km/h (from March 2015)

Electrification of the Taketoyo Line ★Electrified in March 2015

Introducing new diesel railcars

Completion of the Meisho Line restoration construction

Installation of barrier-free facilities

Shifts in the number of daily departures for the Tokaido Shinkansen

(Trains / day) HikariNozomi Kodama

50

100

150

200

250

400

300

350

’88.3

89

143

’94.3 ’06.3 ’14.3

15834

81

65

166

80

65

194

83

65

201

83

’15.30

231273

311350342

Shifts in GDP and the Tokaido Shinkansen Passenger-kilometers

GDP

20

25

30

35

40

45

50

300

350

400

450

500

550

600

’01.3 ’02.3 ’03.3 ’04.3 ’05.3 ’06.3 ’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ’15.3

477 475 480491

498507

516 525

506496

513 515 520531 526

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

Shifts in the introduction of rolling stock for the Tokaido Shinkansen

(Trainsets) Series N700 N700ASeries 300 Series 700

*Excerpt only for "Nozomi"

30

60

90

120

150

’09.3

32

41

60

’08.3

16

52

60

’07.3

61

60

’10.3

48

60

25

’11.3

64

9

60

’12.3

80

51

’13.3

80

6

47

’14.3

8013

40

’15.3

19

80

32

0

40.639.7 39.6 40.3

41.6

43.844.5

46.5 46.0

42.743.7 44.3

46.9

48.950.1

Note: The trainset figures are as of the end of each fiscal year (excluding retrained trains, etc.)

FY 2015FY 2014FY 2013 FY 2017FY 2016

■Example for Monday ■Example for Friday

15

16

17

18

19

20

21

00 10 30 40 　50

00 10 　20 30 40 　50

00 10 　20 30 40 　50

00 10 　20 30 40 　50

00 10 　20 30 　50

00 10 　20 30 　50

00 10 　20 23

Hour Departure time

15

16

17

18

19

20

21

00 10 20 30 40 47 50 53

00 10 20 30 40 47 50 53

00 10 13 20 23 30 40 47 50 53

00 10 13 20 23 30 40 47 50 53

00 10 13 20 23 30 40 47 50 53

00 10 13 20 23 30 40 50 53

00 10 20 23

Hour Departure time

Maximum of

10“Nozomi ” services

operatedeach hour

Late Friday afternoon, etc. when many customers take the Shinkansen

Passenger-kilometers(Trillion yen)(Billion passenger-kilometers)

Note: Each Tokaido Shinkansen train has 16 cars*1. Time required for the fastest train*2. For a reserved seat during the normal season (¥13,620 for all non-reserved seats)*3. May vary by train

Tokyo～Shin-Osaka,time required

Type of Service

2 hr 22 min

Approx. 3 hr

Approx. 4 hr

Nozomi

Hikari

Kodama

Tokyo～Shin-Osaka,Fare and Surcharges

Number of Non-reserved seatscars

¥14,450

¥14,140

¥14,140

3

5

10

Stops for Nozomi: Shinagawa, Shin-Yokohama, Nagoya, and Kyoto　Hikari: Same as "Nozomi", plus a few additional stations Kodama: Stops at each station

*3

*1

*2

Note 1. Departures shown include extra trainsNote 2. JR Central is established in 1987.4, "Nozomi" is introduced in 1992.3, Drastic timetable revision in 2003.10 (maximum 7 “Nozomi” hourly departures)

Diagram 1

Diagram 2


Key Measures and Management Strategy Transportation Service

Modification of Station Facilities (new movable platform fences and new automatic ticketing gates) ［ Diagrams4/5］

On the Tokaido Shinkansen, we are installing movable platform fences in stations where "Nozomi" stops, which have many passengers, with the aim of further improving safety on platforms. We will complete the installation of movable platform fences in all platforms in Nagoya Station and Kyoto Station by March 2016. [ Diagram 4]

We are also replacing automatic ticketing gates for the Tokaido Shinkansen with the new model one by one. [ Diagram 5] We strive to improve services by making the guidance screen for customers easier to understand, etc. In addition, the standby electricity consumption of the new automatic ticketing gates has reduced by approximately 30% compared to the existing ones.

■Conventional lines

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 in the Tokai region, mainly around Nagoya and Shizuoka.

Improvement of Service on Conventional Lines� Diagram6In regards to conventional lines, we have steadily improved

services such as speeding up, introducing new rolling stock, and increasing the frequency of trains. With regard to the express trains, we have introduced “Wide View” new rolling stock and established the "Wide View" express network, which forms an integrated network with the Shinkansen, by ensuring connections with the Shinkansen. [ Diagram 6] In terms of local trains, we are striving to increase the frequency/cars of train services during peak-demand morning and evening periods, establish a rapid train system, and adjust services so that they are offered in certain intervals. Through initiatives such as the above, we strive to offer timetables that are easier for customers to use.

Electrification of the Taketoyo Line � Diagram7We promoted the construction for electrifying the Taketoyo Line

(between Obu and Taketoyo), which transports commuters in the Nagoya metropolitan area, and started the operation on March 1, 2015. [ Diagram 7] As a result, timetable flexibility and rolling stock operation efficiency have improved due to the fact that the same type of trains that are in operation in the Nagoya metropolitan area are used. We have been able to not only expand direct service operation time frames and increase the number of local trains for the Taketoyo Line but also increase the number of services of the Tokaido Line and increase the number of trainsets for the Kansai Line. We have also been able to reduce the running cost and environmental burden after discontinuing the use of diesel railcars.

New Manufacturing of Rolling Stock� Diagram8In terms of conventional line rolling stock, we have

newly manufactured/introduced the latest rolling stock with considerations for energy efficiency, being barrier-free, riding comfort, etc. in a well-planned manner since the establishment of the company.

We have newly manufactured 28 Series 313 cars along with the electrification of the Taketoyo Line. We are also introducing 16 new Series Ki-Ha 25 (secondary edition) to the Takayama Line and the Taita Line since FY2014. In this new series, new functions/facilities were added to the Series Ki-Ha 25, which were newly manufactured and introduced in FY2010. Furthermore, we will introduce 36 cars to the Kisei and Sangu Lines one by one in FY2015. [ Diagram 8]

With this introduction, by March 2016, all diesel railcars for our conventional lines will be those which were newly manufactured after the foundation of the company.

Construction of a New Station�Since 1994, JR Central has held a number of discussions

regarding the establishment of a new station between Fukuroi Station and Iwata Station on the Tokaido Line, which had been requested by the City of Iwata for some time. In April 2014, four parties, including the City of Iwata, formed associations to carry out a land readjustment project in Shingai and Kamata-Daiichi of Iwata, and JR Central, signed the agreement regarding the construction start for the new station. After this, we signed the agreement regarding the construction work in December 2014. We are currently taking necessary procedures and designing the details in preparation for the construction work. The new station is scheduled to open at the end of FY2019.

October 2003Drastic timetable revision and opening of the Shinagawa Shinkansen Station on the Tokaido Shinkansen

With the inauguration of the Tokaido Shinkansen in 1964, the time required traveling between Tokyo and Osaka was shortened to 3 hours and 10 minutes from 6 hours and 30 minutes (originally 4 hours). Furthermore, with the introduction of the “Nozomi” in 1992, that time was shortened to 2 hours and 30 minutes.

In October 2003, the investment in rolling stock and ground facilities that we had continuously engaged in for approximately 15 years culminated with the upgrading of the maximum speed of all trains to 270km/h and the drastic timetable revision that resulted in a maximum of seven “Nozomi” services operated each hour.

We also simultaneously opened the Shinkansen Shinagawa Station with the drastic timetable revision, thereby shortening the total travel time of passengers traveling from or to southwest Tokyo by 20 to 30 minutes. Furthermore, 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/convenience to the Tokaido Shinkansen in the Tokyo metropolitan area.

Commuter Passes Ordinary Tickets

100

200

300

400

’12.3

132

254

386 384 387 395 391

’11.3 ’13.3 ’14.3 ’15.3

254

130

253

133

260

135

257

134

0

Shifts in the Number of Passengers on Conventional LinesNew Automatic Ticketing Gates Express Train “Wide-View Shinano”

Series Ki-Ha 25 (Secondary Edition)Opening Ceremony of the Electrification of the Taketoyo Line

Conventional Automatic ticketing gate New Automatic Ticketing Gates

New Movable Platform Fence

(Million passengers)

Diagram 4 Diagram 5 Diagram 6

Diagram 7 Diagram 8


Key Measures and Management Strategy Transportation Service

Improvement in the access time due to the inauguration of Shinagawa Station

7km

15km

Shinjuku

Shibuya

Tokaido ShinkansenShinagawa

Tokyo International Airport

Shin-Yokohama

Tokyo

Area in which the access will be improved

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, promotes the Chuo Shinkansen Project using the Superconducting Maglev System.

The Chuo Shinkansen Project Using the Superconducting Maglev System

Promoting the Project While Ensuring Sound Management and Providing Stable Dividends�We are promoting the Chuo Shinkansen Project using the

Superconducting Maglev System based on the Nationwide Shinkansen Railway Development Act (hereinafter referred to as “the Act”) to continually carry out our mission of operating a high-speed railway linking the Tokyo Metropolitan area, Chukyo, and Kinki regions, which is the lifeline of our business, and to ensure the future foundation of the company.

50 years have passed since the inauguration of the Tokaido Shinkansen, which serves as Japan's main transportation hub. Therefore, we must think of drastic ways to respond to aging in the future and large-scale disasters based on the fact that it takes a long time to construct and build a new railway line. In the wake of the Great East Japan Earthquake, the need for a new line which enables us to offer multiple routes in our main transportation hubs has become even more important to prepare for the risk from natural disasters. This is the very reason why we decided to complete the Chuo Shinkansen as quickly as possible, as it can be used instead of the Tokaido Shinkansen by utilizing the Superconducting Maglev System, which we have developed, under the condition that we bear the cost of its rail construction. JR Central will operate the Chuo Shinkansen in an integrated manner along with the Tokaido Shinkansen.

While promoting this project, we will make necessary investments to ensure safe and reliable transportation and to enhance competitiveness as well as ensure sound management and provide stable dividends. We will first realize the project between Tokyo and the City of Nagoya and strive to further extend to the City of Osaka as soon as possible after the company regains its business strength.

In order to confirm that the principles of a privately owned company, such as freedom of management and autonomy of capital investment, 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 principles would not be hindered.

Progress of the Project� Diagrams1/2/3According to the Act, JR Central follows the procedures for

the Chuo Shinkansen (between the Tokyo Metropolis and the City of Osaka) as shown in Diagram 2. Since receiving the order for construction in May 2011, we have taken the procedures of environmental assessment between Tokyo and the City of Nagoya, which is promoted as the first stage. In August 2014, we submitted the final Environment Impact Statement to the Minister of Land, Infrastructure, Transport and Tourism (the Minister) and made a public announcement. In addition, we simultaneously made necessary preparations to apply for the approval for the construction implementation plan along with the environmental assessment procedures. We submitted the application for the approval for the Construction Implementation Plan (Part 1) between Shinagawa and Nagoya to the Minister on the same day as the submission of the final Environment Impact Statement and received the approval in October.

After the approval, we held explanatory sessions for the project in various locations along the line in order to further deepen the understanding of the Chuo Shinkansen. We also held a construction safety invocation ceremony at Shinagawa Station and Nagoya Station, which are the 2 ends of the construction, in December before the preparation construction with the hopes of safety in construction of all lines and to pledge to carry out safe construction. Furthermore, we have been promoting the preparation for the full-scale construction, such as establishing the system to acquire land with the cooperation of local municipalities along the line and starting the procedures for measurement for the center line and construction contracts, etc.

Initiatives with the Yamanashi Maglev LineBased on our long-term belief that the Superconducting Maglev

System is the most suitable for use on the Chuo Shinkansen due to its speed and advanced technology, JR Central has not only conducted technological developments but also constructed the Yamanashi Maglev Line and conducted test runs.

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

JR Central is currently conducting test runs using a new vehicle, the series L0 (L zero), in commercial line specifications and making

efforts to refine the Superconducting Maglev technology, which has already been established for practical use, and to reduce costs in construction, operation, and maintenance of the commercial line.[ Diagram 4] In April 2015, we recorded the travel distance of 4,064km per day in the long distance running test and the maximum speed of 603km/h in the high-speed area running test.

We have also been conducting "Superconducting Maglev Test Rides" since FY2014, and many people have experienced the high-speed travel at 500km/h. [ Diagram 5]

Reducing Costs thoroughly while Ensuring SafetyThe burden of the cost for construction of the Chuo Shinkansen

rests entirely on us, therefore all construction expenses and costs will be examined by the internally established “Chuo Shinkansen Construction Cost Reduction Committee”, which will thoroughly reduce costs while ensuring safety. At the same time, we will flexibly distribute resources in an optimal fashion in accordance with the managerial environments.

Superconducting Maglev System and Engagement in Global Environment Preservation

Tokyo and Osaka will be connected in as fast as 67 minutes 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 of airplanes. In addition, the amount of CO2 emissions that Superconducting Maglev System produces when carrying one person between Tokyo and Osaka is approximately one-third of airplanes. As this shows, Superconducting Maglev is a transport system suitable for the 21st century in which global environment preservation is becoming more and more important.

Basic PlanArticle 4

● Decided in November 1973

*Research on “the residual 4 items”● Items related to transportation capacity in response to the transportation demand● Items related to the development of facility and rolling stock technologies● Items related to construction costs● Other necessary items

Researches and Reports

● Topographical and geological research: Ordered in February 1990

　　　　　　　→ Reported in October 2008

● Research on “the residual 4 items” *Ordered in December 2008

　　　　　　　→ Reported in December 2009

Article 5

The Transport Policy Council

● Consulted on February 24, 2010

　　　　　　　→ Reported on May 12, 2011

Article 14-2

Designation of Operator and Constructor

● Consented on May 18, 2011

　　　　　　　→ Designated on May 20, 2011

Article 6

Development Plan

● Agreed on May 23, 2011

　　　　　　　→ Decided on May 26, 2011

Article 7

Environmental Impact Assessment

Start of Construction

● Instructed on May 27, 2011

Instruction to ConstructArticle 8

● Submission of Construction Implementation Plan (Part 1) on August 26, 2014

　　　　　　　→ Approved on October 17, 2014

Construction Implementation PlanArticle 9

Flow of work based on the Nationwide Shinkansen Railway Development ActDiagram 2

The Chuo Shinkansen Using the Superconducting

Maglev System

Refinement of Superconducting Maglev technology and Cost Reduction

Series L0 (L zero) The Principles of the Superconducting Maglev System

SN SN SN SN N

S SN N

S N S N S N S N S

N S N S

By passing current through the Propulsion Coils on the ground, a magnetic field (north and south poles) is produced, thus the vehicle is propelled forward by the attractive force of opposite poles and the repulsive force of same poles acting between the ground coils and the Superconducting Magnets built into the vehicles.

SSSN N N

The Levitation and Guidance Coils are installed on both sides of the guideway (track). When the on-board Superconducting Magnets pass through at high speed, an electric current is induced in the Levitation and Guidance Coils, causing them to become electromag-nets. This generates a force that both pushes and pulls up the vehicle.

SN N N

The Levitation and Guidance Coils on both sides of the guideway keep the vehicle in the center of the guideway at all times by exerting an attractive force on the far side of the vehicle and a repulsive force on the near side when the vehicle moves off center to either side.

Receiving an approval from Minister Ota of Land, Infrastructure, Transport and Tourism

“Superconducting Maglev Test Rides”

Propulsion System

Levitation System

Guidance System

★October 2014 Approval for the Construction Implementation Plan (Part 1)★December 2014 Started Shinagawa/Nagoya Station preparation construction

★From November 2014 Hosting of Superconducting Maglev Test Rides

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: H25 310)Route of the Chuo Shinkansen (Between Tokyo and the City of Nagoya)

Legends

：Yamanashi Maglev Line

：Station Location

：Planning Route

N

0 25 50km

GifuPrefecture

NaganoPrefecture

AichiPrefecture

ShizuokaPrefecture

KanagawaPrefecture

YamanashiPrefecture

TokyoMetropolis


FY 2015FY 2014FY 2013 FY 2017FY 2016

Diagram 1

Diagram 4 Diagram 3

Diagram 5


Key Measures and Management Strategy The Chuo Shinkansen Using the Superconducting Maglev System

Proactive Promotion of Sales and Marketing with the Aim of Increasing Revenues

While improving convenience for business passengers, we are also making efforts to stimulate tourism demands through various information media/sales channels by launching various campaigns and products for each region and target to further increase revenues.

"Express Reservation" and "PLUS EX", which are mainly offered to business passengers, are internet seat reservation services, which are the key features for the Tokaido Shinkansen. We will continue thoroughly expanding their use.

In terms of tourism, we will not only further deepen our cooperation with local communities along the line as well as travel agencies but also strive to further expand the Shinkansen use by offering attractive travel products that are unique to the Tokaido Shinkansen through effective campaigns, such as the "Kyoto Campaign".

Enhancement of Tourist Products Utilizing the Active Member Base

We will aim to further increase the demand by enhancing tourist products targeting members of "Express Reservation", "PLUS EX", and "50+".

“Express Reservation” and “PLUS EX”� Diagrams1/2JR Central offers “Express Reservation” along with “PLUS

EX” services, which can be used with various kinds of credit cards frequent customers of the Shinkansen already own who use it mainly while on business. These services can significantly shorten the total travel time for customers because they can reserve seats online even if their schedule, such as a meeting time, suddenly changed, change the reserved seat as many times as they like without any fee, and board trains by touching their special IC card for the Shinkansen on the reader at the automatic ticketing gates. Furthermore, when transferring to a conventional l ine, customers can transit smoothly by touching two cards, the special IC card for the Shinkansen and another IC card for conventional l ines such as “TOICA”, together on the reader at the automatic ticketing gates.

In FY2014, we significantly increased the memberships through the sales of commemorative products, such as "Super-Super IC Hayatoku" and “Kodama Rakutabi IC Hayatoku”, to commemorate the 50th anniversary of the Tokaido Shinkansen. As a result, the number of members of “Express Reservation” together with the “PLUS EX” service has become 2.66 mill ion, and daily usage per weekday has become approximately 140

thousand (as of March 2015). [ Diagram 1/2] In FY2015, we will continue working to expand membership

numbers/usage with the focus on customers, who currently use our services for business, by improving convenience for customers and effectively promoting advertisement. We will also enhance our tourism product l ineup for members, such as "EX Family Hayatoku", "IC Hayatoku Type 21", and "Kodama Rakutabi IC Hayatoku", so that our customers use our services not only for business but also for tourism; thus further expanding the usage by uti l izing the member base.

50+�JR Central has been operating a travel club "50+", which anyone

over 50 years old can join, since 2003. The number of members as of March 2015 is approximately 760,000. We not only inform the members of seasonal tourism information through the magazine and the Internet but also inform them of exclusive travel products, such as tours that enable customers to enjoy special viewings of shrines and temples.

In FY2015, we are promoting "Always the same price for 50+", which is a special product for the web members that offers the same special price during a certain period regardless of the season or day of the week. We also share tourism information from new perspectives through "Futatabi", which is a new brand of "50+". Through these initiatives, we will promote the enhancement of tourism demand and expand customers for tours, which have higher added values.

Deployment of Various Campaigns ［ Diagram3］

First, JR Central has continuously implemented travel campaigns for Kyoto and Nara, which are the largest tourist resources in our market area, and the company is promoting the use of the Shinkansen mainly from the Tokyo Metropolitan area to the Kansai region. [ Diagram 3] We will especially promote large-scale advertisement for the Kyoto Campaign while incorporating shrines and temples that we have covered in the past, with the concept of enabling customers to re-acknowledge the Japanese beauty and its depth possessed by Kyoto.

In terms of measures to increase the tourism demand from the Kansai and Nagoya regions to the Tokyo Metropolitan area, we are striving to develop and promote the sales of travel products in collaboration with popular tourist spots through initiatives, such

as the “Tokyo Bookmark” campaign that mainly targets trend-conscious young women.

In FY2015, we will not only showcase the attractions of these tourism resources again but also capture opportunities, such as events, etc. along the l ine, and will develop attractive products in cooperation with local people and travel agencies with the aim of encouraging more people to travel, using the Tokaido Shinkansen.

Cooperation with Communities ［ Diagrams4/5］

JR Central promotes initiatives, such as the “Shupo Campaign” which introduces a number of tourism resources along our conventional lines, together with the local people for the promotion of the limited express trains on conventional lines. [ Diagram 4]

We also promote “Sawayaka Walking”, etc, which is a walking event visiting the tourist spots along our lines which is free of charge. In May 2015, the number of the cumulative participants reached 4 million people. We are also planning a commemorative event.

In September 2014, we also established "Japan Highlights Travel" (in Japanese and English, etc.), which is a portal site that has a collection of tourism information along the Tokaido Shinkansen, with the cooperation of local municipalities and tourism associations along the line. We will enhance the contents, etc. in FY2015 with the aim of further stimulating the travel demand. [ Diagram 5]

Products for Foreign Tourists

With the Japanese Government 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 increase the number of tourists visiting Japan. We also sell travel products, etc. for foreign tourists through the Internet, etc., using the "FLEX JAPAN" brand, with the aim of stimulating the tourism demand for the Tokaido Shinkansen.

In addition to this, we also collaborate with various local transportation companies to promote the sales of excursion packages for foreign tourists visiting Japan, targeting areas such as "Takayama/Hokuriku" and "Ise/Kumano".

Enhancement of IC Service for Conventional Lines［ Diagram6］

While we have been promoting “TOICA”, the IC card for conventional lines, by expanding valid areas, expanding mutual use, and adding the electronic money function, etc., we have started nationwide mutual use with the 10 main conventional line IC cards in March 2013. [ Diagram 6]

The mutual use enables those with any IC card for conventional lines to use the railways and buses within the area of each company and also to use electronic money at member stores of each operator (excluding member stores of PiTaPa).

By introduction of transportation system electronic money to commercial facilities in city centers, stores in stations, and convenience stores etc., it has been expanding the usage as a means of payment for customers. Due to this, we introduced transportation system electronic money to pay for items sold in the Tokaido/Sanyo Shinkansen trains in March 2015 with the aim of further improving convenience for customers. The total of transportation system electronic money uses exceeded 120 million per month for the first time in May 2015.*

We will continue striving not only to promote the establishment of nationwide mutual use services but also to promote the use of railways and electronic money services.

*Total number of electronic money uses for various transportation systems in member stores of Kitaca, PASMO, Suica, manaca, TOICA, ICOCA, HAYAKAKEN, nimoca, and SUGOCA

"Japan Highlights Travel" website

Promotion of sales and marketing to increase revenues(Various campaigns, etc. utilizing tourism resources, such as Kyoto and Nara, etc.)

Sales and Marketing Image of Mutual Use of IC card for conventional lines in JapanKyoto Campaign

Shifts in “Express Reservation” usage and the membership numbers

A poster introducing “Express Reservation” and “PLUS EX”

Membership

0

500

1,000

1,500

2,000

2,500

50

100

150

200

250

’12.3’10.3 ’11.3 ’13.3 ’14.3 ’15.3

2,660

96110 119

134 138

Numbers of use (Daily average on weekdays)

96

1,980

1,6101,790

2,1702,360

“Shupo Campaign”

Note 1. The membership numbers are as of the end of each month and include the total of JR Central and JR West. 2. Include "PLUS EX" members starting in March 2013

★Release of The Tokaido Shinkansen 50th Anniversary 　commemoration travel products

★Enhancement of tourist products for EX and 50+ members

Membership (Thousand)

Usage(Thousand)

FY 2015FY 2014FY 2013 FY 2017FY 2016

Any IC card for conventional lines can be used for railway and bus services in all areas.

*IC cards for conventional lines cannot be used for travel that extends beyond the areas of use of each card. However, this excludes travels between the Suica and Pasmo usage areas in the metropolitan area and between Sugoca usage areas in Kyushu and part of the HAYAKAKEN area (sections of mutual direct service). Also, some transportation companies do not allow mutual use of IC cards.

Kitaca areas

TOICA areas

ICOCA areas

nimoca areasHAYAKAKEN areas

SUGOCA areas

PiTaPa areas manaca areas PASMO areas

Suica areasDiagram 1


Diagram 4 Diagram 5


Key Measures and Management Strategy Sales and Marketing

Creating the Future through Research and DevelopmentRailway business is made possible by employees with various

skills cooperating with one another to thoroughly execute their tasks and by various types of equipment, such as rolling stock, civil engineering structures, tracks, and electric and signaling equipment, functioning seamlessly. In order for a railway operator to further ensure safety and strengthen its future managerial foundation, it is vital for us to continue developing technologies, which are the base of the foundation. Based on this belief, JR Central is proactively tackling the issue of practical 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 technical capability that the company has cultivated through the operation of the Tokaido Shinkansen.

Promoting Technological Development at the Komaki Research Center

JR Central opened its own 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 with the aim of enhancing our technical capabilities and developing human resources. The Komaki Research Center not only further promotes cost reduction in facility maintenance/updates, such as large-scale renovation, etc., with the primary focus on safety and reliability, but also promotes research and development for practical technologies, which lead to enhancement of efficiency in inspections and maintenance, etc., and to improvement of transportation services, etc.

We also promote efforts related to more accurate forecast/detection, etc. for extreme weather and major natural disasters. [ Diagram 1]

Recent Technological Developments

Introduction of the Next Generation Overhead Contact Line (high-speed heavy simple overhead contact line)� Diagram2We have developed the next generation overhead contact line,

which can respond to the Tokaido Shinkansen's characteristics of long trainset, high density, and high-speed travel, and which can also realize cost reduction at the same time. We have been putting it to practical use through steady technological development, such as tests and simulations using an overhead contact line test simulator at the Komaki Research Center as well as evaluations and understanding

of characteristics through field tests. We have been introducing it when replacing the lines due to aging damage since November 2014. With fewer parts, the next generation overhead contact line can reduce the risk of malfunction and reduce the replacement cost after introduction by approximately 20%.

Improving the performance of ATC (Automatic Train Control) Track Circuit�We have been working to improve the performance of ATC since

2011 in an effort to update ATC facilities. We have thoroughly conducted evaluations through simulations and onsite evaluations at the Komaki Research Center as well as test introduction of actual facilities in the field, etc. This has enabled us to extend the ATC signal transmission distance. This introduction will reduce the malfunction frequency due to there being fewer facilities, enhance the facility monitoring function, and aggregate equipment rooms, etc. We will be able to further improve reliability in the Tokaido Shinkansen's ATC and enhance the efficiency of maintenance.

Development of a New Method for Large-Scale Renovation�In terms of large-scale renovation methods, the company has

continuously promoted research and development for over 10 years and successfully developed a new construction method. In this method, we first take measures to extend the life of structures by inhibiting the very occurrence of aging damage of civil engineering structures, then we conduct overall renovation, such as replacement of the parts, as necessary by observing the structure condition. The new method makes it possible not only to reduce interference significantly when doing the construction work but also to greatly reduce construction costs.

Introduction of the Bolsterless Bogie Temperature Detection System

The Tokaido Shinkansen possesses the function to record various data, which indicates the condition of each piece of equipment during operation, within the rolling stock and transmit it to the ground side. We have further developed the Bolsterless Bogie Temperature Detection System, which monitors the soundness of rolling stock bogies from the ground side, and put it into practical use. It measures the surface temperature of key parts of bogies, such as wheels and axle boxes of trains in operation, from the ground (tracks) and confirms the soundness. By continuously monitoring this data, we are able to improve inspection accuracy and efficiency of rolling stock inspections, and ensure safe and reliable transportation.

Technological Development that Supports Series N700/N700A� Diagrams3/4Series N700 began commercial operation in July 2007. The

results of various research and development, such as the "modification of the nose shape" and the "Body Inclining System", are reflected in the series N700. N700A, which was introduced in February 2013, reflects the technological development results from the test rolling stock of Series N700 and the “Rolling Stock Field Test Simulator”, which reproduces running conditions by simulating various vibrations and aerodynamic characteristics that are generated while running. By equipping N700A with “Wheel Mounted Brake Disks”, which provide stronger and more reliable braking, the “Bolsterless Bogie Vibration Detection System”, which continuously monitors the state of all bogies, and the “Cruise Control System”, which enables even more reliable operation using ATC signals, we have been able to further improve safety and reliability of the Tokaido Shinkansen rolling stock.

Overseas Deployment of High-Speed Railway System［ Diagram5］

Today, global warming is a pressing issue. High-speed railway has many environmental advantages over other forms of transportation, and construction projects are underway all over the world. JR Central offers consultation to overseas high-speed railway projects and coordination services (C&C) for our group companies and various domestic manufacturers by utilizing our comprehensive technologies regarding the highest level high-speed railway system in the world.

JR Central believes that the overseas deployment of its high-speed railway system will be a meaningful project that not only leads to diversification of our group's revenue sources but also enables domestic manufacturers to maintain and strengthen their technology and skills through the expansion of the international high-speed railway market, and it also leads to technological innovation and cost reduction of railway-related equipment.

C&C (Consulting and Coordination) Business� Diagram6Internally established the “C&C (Consulting and Coordination)

Office-Overseas High Speed Railway Project” which mainly promotes overseas deployment of the high-speed railway system. C&C office proposes the deployment of high-speed railway as a total system, which includes civil engineering structures, tracks, electrical equipment, signaling equipment, rolling stock, operation management systems, maintenance and repairing, etc., to overseas markets. When overseas high-speed railway projects

become concrete, the office not only coordinates with relevant Japanese companies but also provides support and consultation to ensure safe and reliable operation of the high-speed railway by supplying various manuals regarding operations/maintenance, and conducting education/training for staff, etc.

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

“N700-I Bullet” and “SCMAGLEV” to overseas markets. The “N700-I Bullet” is an integrated high-speed rail system that consists mainly of the Series N700 rolling stock.

The “N700-I” is based on Series N700 operated in Japan and refers to an 8 car trainset (Series N700 is a 16 car trainset) that meets the overseas market trends and can currently 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 realize commercial services at a speed of 500km/h (311mph). JR Central currently proactively promotes marketing activities, targeting the State of Texas for the “N700-I Bullet,” and the north east corridor of the United States between Washington D.C. and New York City for “SCMAGLEV”.

(2) Technical Consulting Agreement with Taiwan High Speed Rail［ Diagram6］JR Central signed a technical consulting agreement with Taiwan

High Speed Rail Company, which operates high-speed railways in Taiwan, in April 2014 and provides consulting services as the first C&C business entrusted by overseas railway operators.

Additional Efforts for Overseas Deployment Diagrams� Diagrams7/8JR Central, JR West, JR East, and JR Kyushu established the

"International High-Speed Rail Association (IHRA)" in April 2014 to promote the Japanese high-speed rail system based on the principle of “Crash Avoidance”* as a global standard. Furthermore, we held the "In Commemoration of the 50th Anniversary of the Tokaido Shinkansen, High-Speed Rail Conference" on October 22, 2014 with IHRA, JR West, and JR Kyushu to promote deeper understanding of the Japanese high-speed rail system among people in more countries and regions.

*The principle of “Crash Avoidance” is a safety system that is designed to prevent even the possibility of a collision. The key elements of “Crash Avoidance” are: the use of “exclusively dedicated tracks for high speed passenger rail service”, which completely exclude freight and commuter rail being on the same tracks; no at-grade crossings of any sort; and an “Automatic Train Control” (ATC) system, which automatically detects train positions and controls the operation of the system.

Internal Research Facility (Komaki City, Aichi Prefecture)

Cost reduction through technological development, research and development of practical technologies

Marketing activities, etc. with the aim of establishing projects targeting certain lines

Image of Overseas High-Speed Railway

Prime Minister Abe and U.S Ambassador to Japan Kennedy, observing the Yamanashi Maglev Line In Commemoration of the 50th Anniversary of the Tokaido Shinkansen, High-Speed Rail Conference

Signing a technical consulting contract with Taiwan High Speed Rail

Outcome of technological development equipped on N700A

Overhead contact line test simulator Rolling Stock Field Test Simulator

Vibration SensorVibration SensorVibrationDetectionMachine

(Conventional)Internal Circumference-

anchored Brake DiskWheel Mounted

Brake Disk

①Wheel Mounted Brake Disk

Brake Disk Bolt

Brake Disk

Mechanical problems are displayed in the driver's cabin

★April 2014 Technical Consulting Agreement with Taiwan High Speed Rail★April 2014 International High-Speed Rail Association (IHRA) is established

★October 2014 In Commemoration of the 50th Anniversary of the Tokaido Shinkansen, 　 High-Speed Rail Conference

FY 2015FY 2014FY 2013 FY 2017FY 2016

②Bolsterless Bogie 　Vibration Detection 　System

Technological Development and Enhancement of Technical Capability/

Overseas Deployment of High-Speed Rail System

Diagram 1

Diagram 2 Diagram 5

Diagram 7 Diagram 8

Diagram 6

Diagram 4

Diagram 3


Key Measures and Management Strategy Technological Development and Enhancement of Technical Capability / Overseas Deployment of High-Speed Rail System

Aiming for the Collective Strength of the Whole JR Central Group

As seen in JR Central Towers, Shin-Yokohama Chuo Building, and the “JR Gate Tower” Project, we are improving the revenue base by engaging in businesses that are expected to generate synergic effects with the railway business, such as areas that make full use of the good location of railway stations. We will continue striving to enhance the earning capability as a business group by deploying businesses in cooperation with group companies.

Deployment of the JR Central Group ［ Diagram1］

The JR Central Group undertakes business in the areas of “Transportation”, “Merchandise and Other”, “Real Estate” and “Other”. The “Transportation” segment involves railway business and bus business. The “Merchandise and Other” segment manages department stores and provides sales services for goods and food in stations and trains, utilizing the railway's ability to attract customers. The “Real Estate” segment develops commercial facilities in stations and areas under elevated track columns and also leases real estate such as station buildings. As far as the “Other” segment is concerned, we manage hotels at major stations, travel agencies, and advertising agencies, etc. We also manufacture rolling stock and maintain, inspect, and repair our railway facilities.

Operating revenues of consolidated subsidiaries, excluding JR Central, totaled 557.7 billion yen (simply aggregated) in FY2014.

JR Central Towers ［ Diagram2］

JR Central Towers (or “Towers”), the skyscraper complex with a height of 245 meters and total floor area of approx. 417,000m2, built on Nagoya Station, is the core of the JR Central Group’s affiliated businesses and has a department store, a hotel and offices that three of our subsidiaries are operating. The grand opening in 2000 significantly increased the revenues from our affiliated businesses.

The office business is run by JR CENTRAL BUILDING CO., LTD. (wholly-owned subsidiary of JR Central, belonging to the “Real Estate” segment), which owns Towers. Since its opening, the offices have continually recorded high levels of occupancy, which remained at almost 100% during FY2014.

In terms of the department store business, JR Tokai Takashimaya Co., Ltd., belonging to the “Merchandise and Other” segment, operates JR Nagoya Takashimaya, attracting many visitors by leveraging the store's location directly above the station. Thanks to renovation of sales space and proactive sales promotions, etc., the sales of FY2014 was 126 billion yen (104.7% YoY), which is the highest ever and approximately twice as much as that in 2000 when the store commenced its operation.

With regard to the hotel business, Nagoya Marriott Associa Hotel is run by JR Tokai Hotels Co., Ltd. (wholly-owned subsidiary of JR Central, belonging to the “Other” segment). The location directly above the station allows for a spectacular view from the high-rise, and the high-grade facilities have gained wide acclaim, thereby enabling the hotel to maintain a high occupancy rate of more than 85% in FY2014 (annual average).

The combined operating revenues of these three companies were 167.7 billion yen in FY2014 (simply aggregated). We will be further strengthening and developing businesses at Towers, which have already been well-established.

“JR Gate Tower” Project ［ Diagram3］

The “JR Gate Tower” Project is a project to construct a tall complex comprised of offices, commercial facilities, a hotel, a bus terminal and parking lots, next to Towers. The height is approximately 220 meters, and the total floor area is approximately 260,000m2. It is approximately 60% of the scale of Towers. It creates a highly convenient and attractive urban space with Towers, providing even more activities around Nagoya Station. From the standpoint of efficient management by the JR Central Group, JR CENTRAL BUILDING CO., LTD. will be in charge of the overall management/operation of the building. "Takashimaya Gate Tower Mall", which is operated by JR Tokai Takashimaya Co., Ltd., and "Nagoya JR Gate Tower Hotel", which is operated by JR Tokai Hotels Co., Ltd., are scheduled to occupy the building.

"Takashimaya Gate Tower Mall" will have approximately 150 fashion/goods stores. We will aim to effectively deploy businesses through the 2 department stores in an integrated manner by offering stores in categories/price range that are not covered by the current JR Nagoya Takashimaya.

"Nagoya JR Gate Tower Hotel" will have 350 rooms in total. It will be a hotel with the focus on lodging that provides a sense of high quality and great functions, while offering the convenience of being directly connected to the station as well as providing a comfortable sleeping environment.

In addition, restaurants, a mass appliance retailer, fitness club, childcare facility, and medical facilities, etc. are scheduled to occupy the building. We aim to create a highly convenient and attractive building.

We will steadily move the project forward with the start of occupancy of offices in November 2016 and the opening of the "Takashimaya Gate Tower Mall" and "Nagoya JR Gate Tower Hotel" in April 2017.

Other Initiatives

In terms of the merchandising businesses, we will enhance customer-attracting capabilities and product capabilities by updating products and renovating stores, etc. In terms of real estate businesses, we have completed the renovation of commercial facilities in 4 stations, including "Cubic Plaza Shin-Yokohama", in FY2014. We will aim to expand revenues in the existing commercial facilities by renovating "Termina", the underground mall in front of Nagoya Station, to the "Gate Walk", which will be a suitable approach to “JR Gate Tower”, etc.

Moreover, for IC card “TOICA”, the IC card for conventional lines, we have expanded member stores and improved convenience for the use of electronic money. Also, we have promoted the shift to digital signage for advertisement media in stations. We will continue promoting efforts to enhance the competitiveness and expand revenues of the existing businesses.

List of Consolidated Subsidiaries

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

Tokai Food Service Co., Ltd,

JR Tokai Corporation

JR CENTRAL BUILDING CO., LTD.

JR Tokai Real Estate Co., Ltd.

Toyohashi Station Building Co., Ltd.

Tokyo Station Development Co., Ltd.

JR Tokai Hotels 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

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

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

67.0

76.8

100.0

100.0

100.0

100.0

70.0

90.0

51.2

100.0

87.6

100.0

92.1

88.4

100.0

Bus services

Logistics business

Railway business, entrusted business

Department store operations

Wholesale and retail sales

Food and beverage service

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

Travel agency services

Advertising

Construction

Linen supply services

Track maintenance and inspection

Construction consulting business

Company NameSegment Capital(Million yen)

Shareholding(%) Main Business

Note 1: Two affiliated companies, SHINSEI TECHNOS CO., LTD. and RAILWAY INFORMATION SYSTEMS CO., LTD., are accounted for by the equity method.Note 2: SHIZUOKA TERMINAL HOTEL CO., Ltd. merged with JR Tokai Hotels Co., Ltd.

on April 1, 2015 and was dissolved.

Development, improvement and maintenance of systems

Wholesale and retail sales, food and beverage service

Rolling stock and machinery inspections and repair

Manufacturing of railway rolling stock

The Japan Mechanised Works and Maintenance of Way Co. LTD

JR Development and ManagementCorporation of Kansai

JR DEVELOPMENT AND MANAGEMENT CORPORATION OF SHIZUOKA

Shizuoka Terminal Development CO. Ltd.HAMAMATSU TERMINAL DEVELOPMENT CO. Ltd.

Shin-Yokohama Station Development Co., Ltd.

Nagoya Station Area Development Corporation

Shifts in the Operating Revenues of Consolidated Subsidiaries (simply aggregated) Affiliated BusinessAffiliated BusinessReal Estate Other Transportation Merchandise and Other

Note: Each of the figures in parentheses indicates the number of consolidated subsidiaries at the end of FY

0

100

200

300

400

500

518.1（29）

’11.3

528.6（31）

’10.3

507.3（31）

’09.3

462.4（30）

’08.3

436.2（30）

’07.3

410.5（30）

’06.3

385.0（30）

’05.3

382.0（29）

’04.3

369.3（30）

’03.3

355.6（30）

’02.3

335.0（30）

’01.3

210.1（19）

’00.3

511.2（29）

’12.3

525.9（29）

’13.3

236.3

12.1

64.0

245.1

557.7（29）

556.1（29）

’14.3 ’15.3

JR Central Towers Completion image of "JR Gate Tower" (right side)

"Takashimaya Gate Tower Mall" completion image "Nagoya JR Gate Tower Hotel" completion image

JR Nagoya Takashimaya

FY2015 winter Completion of framework★November 2016 Start of occupancy of offices ★

April 2017 Inauguration of commercial facilities/hotel★

(Billion yen)

FY 2015FY 2014FY 2013 FY 2017FY 2016

Promotion of the "JR Gate Tower" Project at Nagoya Station



Key Measures and Management Strategy Affiliated Business

Engagement in GlobalEnvironment Preservation

Distribution of Passenger Transportation Share, in terms of Transportation Volume, Energy Consumption and CO2 Emissions

Comparison of Electricity Consumption by the Tokaido Shinkansen Rolling Stock Type Shifts in the Ratio of the Tokaido Shinkansen Energy-Saving Type Rolling Stock and Energy Consumption Unit

Electric Power Regenerative Braking SystemReduction in Running Resistance (Coverall Hoods)

Comparison of the Tokaido Shinkansen and Airplane (between Tokyo and Osaka)

29%

6% 5%

84%

6%

3%

77%

5%

9%

2%

6%

52%

5%

7%

3%

270km/h270km/h

285km/h

Series 300（1992）

Series 700（1999）

N700A（2013）

100％92％

77％

-16％-23％

’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12(FY)

0

20

40

60

80

100

0

20

40

60

80

100

Railway Bus Airplane Car Others

（%）（%）

’13 ’14

■Energy Consumption per Seat

B777-200

Series N700“Nozomi”

Airplane

90MJ

746MJ

*1

*2

■ CO2 Emission per Seat

4.2kg-CO2

50kg-CO2

*1

*2

Approximately

of airplane

Propulsion (Electricity consumption)

The electricity that is returned to the overhead contact line 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 contact line.

Compared to FY1990

Even more energy-saving type rolling stock Series N700/N700A

Energy-saving type rolling stock Series 300/Series 700

Series 0, Series 100

Ener

gy C

onsu

mpt

ion

Uni

t (R

atio

usi

ng a

n FY

1990

bas

is)

Rol

ling

Sto

ck R

atio1/8

Approximately

of airplane1/12

33% improvement

Source: For transportation volume/energy consumption, created based on data from Transportation Related Statistics (Ministry of Land, Infrastructure, Transport and Tourism), and for CO2 emissions, the National Institute for Environmental Studies, Greenhouse Gas Inventory Office of Japan.* The total of items in the breakdown may not be 100% due to rounding.

Transportationvolume

(Passenger-kilometer)

Energyconsumption

CO2 emissions

*1. Calculation based on running performance of Series N700 “Nozomi” (Tokyo-Shin-Osaka) conducted by JR Central*2. Calculated by JR Central using ANA's "Annual Report 2011" B777-200 (Haneda - Itami/Kansai Airport) for reference

Shinkansen

*Simulated run from Tokyo to Shin-Osaka at the maximum speed above.

N700A (Equipped with Coverall Hoods)

Series 300 (Not Equipped with Coverall Hoods)

Diagram 1


Diagram 6Diagram 5

B777-200

Series N700“Nozomi”

Airplane

Shinkansen

Environmental Superiority of Railway� Diagrams1/2

Railways have the outstanding characteristic of being highly energy efficient compared to other transportation modes and having minimal adverse impact on the global environment. In terms of transportation volume and CO2 emissions in passenger transportation, even though railway accounts for 29% of the passenger transportation volume in Japan, it is only responsible for 5% of CO2 emissions. [ Diagram 1]

Compared with an airplane (B777-200), the Tokaido Shinkansen (Series N700 “Nozomi”) consumes approximately 1/8 of the amount of energy per seat when traveling between Tokyo and Osaka, and discharges about 1/12 of the CO2 emissions. The data show that the Tokaido Shinkansen has overwhelming environmental superiority. [ Diagram 2]

Environmental Action Guidelines

1 Provide comfortable transportation services to promote further use of railways which offer superior global environment preservation

2 Promote technological development that contributes to global environment preservation

3 Efficiently utilize fuel and energy

4 Promote waste controlling and recycling

5 Appropriately manage chemical substances

6 Procure environmentally friendly goods and materials

7 Contribute to society and raise awareness for global environment preservation

3 Enhancement of Electricity Supply Efficiency by Replacing Ground Facilities

By replacing the electricity compensation devices from FY2011 to FY2018, which inhibit voltage reduction as rolling stock travels away from a substation, with a facility with less electricity loss, we expect to be able to reduce the electricity use on the Shinkansen by approximately 3%.

Initiatives with Shinkansen� Diagrams3/4/5/6

1 Introducing Energy-saving type Rolling StockWe are proactively developing and introducing energy-saving

type rolling stock in our effort to further reduce Shinkansen energy consumption.

In March 1992, we introduced Series 300, in which the energy consumption was improved by approximately 30% compared to the first Series 0. In October 2003, all rolling stock was replaced with Series 300/Series 700. We introduced 80 Series N700 trainsets in the five years starting from 2007. We introduced 19 of the latest N700A trainsets by FY2014 and are scheduled to introduce 12 trainsets in FY2015 and FY2016.

Energy consumption volume for N700A to travel between Tokyo and Shin-Osaka at the maximum speed of 285km/h is 23% less than Series 300 and 16% less than Series 700 which travel at the maximum speed of 270km/h. It means that N700A has significantly improved energy consumption while accelerating the speed. [ Diagram 3]

The result is that our Energy Consumption Unit* at the end of FY2014 improved by approximately 33% compared with that of FY1990. [ Diagram 4]

We will aim to further achieve energy efficiency by promoting the introduction of N700A.

*JR Central defines Energy Consumption Unit as the "amount of energy consumed when running 1 car for 1 kilometer", due to total rolling stock kilometers being the value which is the most relevant to our business activities.

Also, by replacing part of the frequency converters from FY2014 to FY2021, which convert 50Hz electricity to 60Hz electricity required to operate the Shinkansen, with a stationary type with less loss, we expect to be able to reduce Shinkansen electricity consumption by approximately 2%.

Fundamental Policies for Engaging in Global Environment Preservation

JR Central believes that demonstrating the superior qualities of railways, particularly with the Tokaido Shinkansen, results in a contribution to global environment preservation. Our proactive approaches focus on the following two points. Firstly, we reduce direct burden on the environment by further enhancing the energy efficiency for railway operations through initiatives such as improving energy-efficiency of rolling stock. Secondly, we strive to offer even more comfortable transportation services with the aim of having as many customers choose and use railways as possible, which has less burden on the global environment. We believe that these initiatives would suppress the environmental burden in the entire transportation sector, and would lead to global environment preservation.

1 Reduction in running resistance [ Diagram 5]

We reduce the running resistance by introducing the nose shape with great aerodynamic attributes, using flush windowpanes, which have no unevenness between the outside panel and windowpane, and installing coverall hoods between all cars, etc.

2 Reducing rolling stock weightA light and simple-structured bolsterless bogie is used for rolling stock in Series 300 and after. Light aluminum alloy is used for the body frame. Furthermore, we employed a high performance and small alternating-current traction motor. Through these changes, we have reduced the rolling stock weight.

3 Introducing the Body Inclining System

The Body Inclining System is introduced to Series N700/N700A for the first time in the Shinkansen in order to increase the speed at curves currently subject to speed restriction. This system makes it possible to increase speed while maintaining comfort, shortening travel hours, and reducing the frequency of speed acceleration and deceleration.

4Expansion of Electric Power Regenerative Braking System [ Diagram 6]

The Electric Power Regenerative Braking System, in which the motor is used as a generator during braking to produce electricity and return it to the overhead contact line, is used in the Shinkansen for the first time. This is installed in rolling stock in Series 300 and after. While 12 of the 16 cars in one trainset of Series 700 were regenerative, 14 of the 16 cars in one trainset of Series N700 and N700A are regenerative. The Electric Power Regenerative Braking System provides all of the braking power needed for one trainset during normal braking.

5 Lighter, smaller blower-less CI in all motor cars

The power converter (CI) converts electricity from the overhead contact line and sends it to the motor at the time of acceleration and returns the electricity generated by the motor back to the overhead contact line at the time of deceleration. JR Central was the first to put the blower-less power converter, which uses the wind from running for air cooling, into practical use in Shinkansen and uses the system in part of the rolling stock of Series N700. For N700A, they were made 17% smaller and lighter and installed on all motor cars.

6 Optimization of cabin lighting and introduction of LED lighting

In the cabins of regular cars on N700A, lighting has been optimized in accordance with the bright seat colors. LED lights with dimmer switches have also been employed in the toilets and powder rooms. These measures have resulted in achieving a reduction in energy consumption of lighting by approximately 20% compared to Series N700.

7 Using eco-friendly materials

Approximately 90% (weight ratio) of the waste generated by scrapped Shinkansen rolling stock is recyclable. With N700A, 100% recyclable polyester has been used for seat cushions, and conventional FRP (fiber reinforced plastic) bogie skirts, which cover bogies to lower air resistance, have been replaced with stainless steel ones to utilize highly recyclable materials.

2 Great Environmental Performance of Series N700 and N700ASeries N700 and N700A trains have been highly improved in the environmental performance both in terms of speed and comfort

due to the introduction of technologies mentioned as follows.

ESG Information Engagement in Global Environment Preservation


Shifts in the Number of Rolling Stock (Electric Cars and Diesel Railcars) in Conventional Lines

SCMAGLEV and Railway Park(solar power generation system)

General Education Center (rooftop gardening) “JR Gate Tower” (Skystreet, 15th floor/image of courtyard)

INPUT/OUTPUTEnvironmental Accounting

“Eco Business Trips” poster

*Figures indicate the number of rolling stock as of the end of each FY (March). They include some event trains and retained trains.

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

(Cars) (Cars)

■Changes in the Number of Energy-Saving Type Electric Rolling Stock Introduced ■Changes in the Number of Energy-Saving Type Diesel Cars Introduced

(FY)0

200

400

600

800

1,000

1,200

’94 ’99 ’09 ’14’04

351 497664

774658

419

868

127

1009

0 0

50

100

150

200

250

300

(FY)’94 ’99 ’09 ’14’04

139 221223

103

206 0

256

0

244

Energy-saving type Conventional type Cars with new model energy-saving type engines

Cars with conventional type engines

447.9

0.0

0.5

113.3

0.0

0.0

561.8

5.7

89.4

28.6

41.2

0.0

0.0

165.2

INPUT

OUTPUT

■ Electric cars

■ Diesel railcars

100(Base)

71

69

100(Base)

Comparison of Electricity Consumption and Diesel Fuel Consumption of Conventional Line Cars (Electric Cars and Diesel Railcars)

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

*Result from running Series Ki-Ha 40 with new/conventional engines (Conventional engine: DMF15HS, new model engine: C-DMF14HZ)

Rolling stock with conventional engine

Rolling stock with new model engine

Conventional rolling stock Series 117 (110km/h)

New energy-saving type rolling stock Series 313 (120km/h)

•Energy-saving type rolling stock ratios: 100% (Shinkansen electric cars), 100% (conventional line electric cars), 100% (conventional line diesel railcars)

•Non-CFC rectifiers: 45 in operation

•Recycling rate for refuse and waste: 58%•Recycling rate for construction waste: 57%

•Energy efficiency of Series N700A ▲23% (more efficient than Series 300)*Comparison between series 300 (running at the speed of 270km/h) and N700A (running at the speed of 285km/h)

•Acquisition of ISO14001 certification in Technology Research and Development Department

•Participation in environmental partnership organizing club (EPOC)

•Protection of the surrounding environment by increasing the height of and modifying noise-blocking wall, shaving of rail surface, etc.

Classification Main Initiatives Principal Effects of Environmental

Total*2

Global environment preservation cost

Research and development cost

Resource recycling cost

Environment conservation cost along railway lines

Management activity cost

Social activity cost

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

•Development of energy-saving type rolling stock•Development related to environment preservation along railway lines, etc.

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

•Environmental advertising•Environmental management education etc.

•Support and cooperation for organizations and other groups undertaking environment preservation

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

Investment Expenditures

*1. Fractions of 10 million yen are omitted *2. Totals do not add up due to rounding

Electricity

Water

Fuel

3,331 thousand m3

* The electricity and fuel CO2 emission coefficients are based on a report of the law (Energy Saving Act) concerning the streamlining of energy use.

*Figures in parentheses are for operations (reprinted)

129,000t[Approach to environment preservation cost]•Compilation is applicable only to JR Central.　•The applicable period is April 1, 2014 to March 31, 2015.•“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 with greater environment preservation effect is included in the calculation.

Environment preservation cost (100 million yen)*1

(Station, train, and office refuse 19,000t)(Construction waste 196,000t)(Rolling stock waste 9,000t)Recycled amount reused

Refuse and waste 224,000t

CO2 emissions 1,530,000t

Diagram 7 Diagram 8

Diagram 9 Diagram 10 Diagram 11 Diagram 12


2.79 billion kWh (2.03 billion kWh)

33 thousand kL(15 thousand kL)

(Amount of converted crude oil)

Recycled

(Including internal reuse)

Initiatives with Conventional Lines� Diagrams7/8

①Introducing Energy-conserving Rolling StockJR Central has also been striving to conserve energy of rolling

stock on conventional lines. We aim to improve energy efficiency by introducing the Electric Power Regenerative Braking System, higher efficiency power control conversion methods, lighter rolling stock, etc. to electric cars. We aim to improve energy efficiency for diesel railcars by introducing lighter rolling stock and high mileage diesel engines, etc. [ Diagram 7]

As a result of these initiatives, all of the conventional line rolling stock is energy-saving type rolling stock. [ Diagram 8]

②Environmental Load Reduction through Electrification of the Taketoyo Line　In March 2015, the Taketoyo Line (19.3km between Obu and Taketoyo) was electrified. This electrification is expected to reduce CO2 emissions by approximately 2,900t per year (approximately 57% reduction compared to before).

Legal Compliance

　JR Central has established a system to comply with relevant environmental laws.

①Management of Chemical SubstancesBased on the “PRTR Law (Pollutant Release and Transfer

Register Law)”, we report the amount of emission and transfer of relevant substances to local municipalities and manage those substances appropriately.

②Measures against Soil ContaminationIn FY2014, specific hazardous substances were detected

exceeding the standard value from part of the soil and underground water when we conducted soil surveys in the Nagoya Workshop and in Takayama Station prior to construction. We reported the matter to relevant administrative agencies and took appropriate measures.

Efficient use of resources�

We promote effective util ization of resources through the 3R (Reduce, Reuse, and Recycle) initiative, etc. Specifically, we aim

we were able to obtain "Rank S", which is the highest assessment level under the "Comprehensive Assessment System for Built Environment Efficiency (CASBEE)"

③Hamamatsu WorkshopHamamatsu Workshop, which conducts overhauls of Shinkansen

rolling stock, began the renovation construction in July 2010. Along with this, the rooftop of the workshop will be used for installing a 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 approximately 10%.

④Nagoya WorkshopJR Central started conducting anti-earthquake measures and

upgrading facilities in February 2014 in the Nagoya Workshop where general overhauls, etc. of conventional line rolling stock are conducted. We aim to reduce approximately 20% of electricity consumption for the entire workshop by introducing high ceiling LED lighting and transforming equipment as energy saving measures.

⑤“JR Gate Tower”With the “JR Gate Tower” Project, we plan to work on creating

energy-efficient buildings and reducing the environmental burden by introducing regional air-conditioning systems, adopting LED lighting, installing solar power generation panels, creating green areas in the 15th floor courtyard and on roofs of low-rise buildings, etc. We will not only aim to achieve "Rank S" of environmental performance, which is the highest rank on the “CASBEE” scale but also to reduce approximately 25% of CO2 emissions from the building compared to standard model buildings according to the CASBEE 2010 standard.[ Diagram 12]

Environmental Accounting� Diagram13

The investments, costs, and their principal effect involved in environment preservation activities during FY2014 are estimated as per the above. [ Diagram 13]

to reduce emissions of waste materials during construction, utilize rain water, recycle tickets/uniforms, and recycle rolling stock, etc.

In add i t ion , we have es tab l i shed the “JR Cent ra l Green Procurement Guidelines”. In the procurement of materials, we are promoting initiatives which give even greater consideration to global environment preservation.

Proposal of Eco Business Trips� Diagram9

JR Central proposes the idea of “Eco Business Trips”. “Eco Business Trips” refer to “business trips that contribute to environment preservation”, or the mindset of “selecting transportation and business trip methods that will emit a smaller amount of greenhouse gas when traveling mid to long distances (or making business trips)”. We will actively showcase the information of “Eco Business Trips” through advertisement campaigns to spread it in society, as we believe that this initiative will lead to further prevention of global warming. [ Diagram 9]

Introduction of Natural Energies and Energy-Saving Facilities� Diagrams10/11/12　　JR Central strives to leverage natural energies and introduce energy-saving facilities when constructing new buildings and renovating existing buildings.

①SCMAGLEV and Railway ParkAt the SCMAGLEV and Railway Park, which opened in March

2011, we introduced a solar energy generation system on the expansive roof. [ Diagram 10] The system has a generation capacity of approximately 500kW, or roughly 630,000kWh annually, which can cover approximately 30% of the Railway Park's energy needs.

②General Education CenterAt the General Education Center, which was newly built in

September 2011, we aim to conserve energy by introducing a ventilation system which uses ice thermal storage achieved from the utilization of nighttime electricity service as its heat source and LED lighting, etc. Furthermore, we designed the building to use natural energy effectively by improving external insulation efficiency by arranging a rooftop garden and taking advantage of natural wind and light as much as possible. [ Diagram 11] As a result,

Environmental Load in Business Activities� Diagram14

The main resources and energy utilized as well as waste generated during JR Central's business activities for FY2014 are as shown in the above. [ Diagram 14]

Environmental Goal�

JR Central has formulated the “Implementation Plan of Low Carbon Society Phase II”, in which our Energy Consumption Unit at the end of FY2030 will be improved by 25% compared with that of FY1995, and is striving to make sure that the plan is executed.

We will continue promoting proactive initiatives, such as the continuous introduction of energy-saving type rolling stock, while setting train services flexibly through the "10 Nozomi Timetable", etc. to meet the demand of passengers and enhancing transportation services by increasing the Shinkansen's maximum speed from 270km/h to 285km/h.

Evaluation for Our Activities

JR Central was awarded in November 2014 the "Minister's Prize, the Ministry of Land, Infrastructure, Transport and Tourism" at the "11th Eco-Products Awards", which is held by the Eco-Products Awards Steering Committee for our activities for environment load reduction; the environmentally friendly system of N700A and proactive development/introduction of energy-saving type roll ing stock.

ESG Information Engagement in Global Environment Preservation


Basic Policy of Human Resources Development�

In order to continue ensuring safe and reliable transportation, it is important to thoroughly hand down our technologies to younger/mid level employees, who will lead the next generation, and to smoothly promote generation changes.

The basic education system mainly involves "on-the-job training (OJT)", in which employees learn the knowledge and skills required for work through daily operations in each workplace. They also acquire additional knowledge/skills from "group training", which is held in the General Education Center, etc., and various "self-betterment" opportunities, such as internal/external correspondence training systems, etc. that help employees learn knowledge/skills on their own. In FY2014, approximately 260 group training sessions were held, and approximately 10,000 employees in total participated in the training. In addition, approximately 6,000 employees in total voluntarily participated in internal correspondence training.

We also offer original systems such as the "advisory system", in which young senior employees support employees with less experience, and "proposal activities" / "challenge Tokai activities", in which employees voluntarily make proposals regarding improvement of daily work, and encourage employees to proactively participate in them.

As a result of these initiatives, we have an extremely high employee retention rate despite the fact that we employ many new employees every year (approximately 630 employees in FY2015), as the labor turnover rate of approximately 1% indicates.

*The General Education Center conducts employee training with the focus on safety and services as the Group, including personnel from affiliated companies that are engaged in railway operations.

General Education Center (Mishima City, Shizuoka Prefecture)

Education and Training System Diagram

New employee training Female employee at workHuman Resources

WorkplaceEducation and

Training

Group training Self-betterment

Nagoya Central Hospital SCMAGLEV and Railway Park

Cooperation with Local Communities

Promoting Active Roles of Female Employees�

Due to the characteristics of the work, railway business requires so-called late-night work (work between 10 p.m. and 5 a.m.). However, the Labor Standards Act at the time of the company's establishment prohibited late-night work of women in principle, excluding some job types. As a result, we had no choice but to utilize the company's female labor force mainly in part of the clerical departments that did not require late-night work, and it was difficult for us to assign them to field departments. Due to this, the ratio of female employees as of the end of FY1996 was only 1.3%.

In response to the revision of the Labor Standards Act in 1997, we began actively employing female employees. As of the end of FY2014, the number of female employees was approximately 2,000 (approximately 10% of the overall employees).

JR Central has also been fostering an environment to support employees in achieving a balance of work and family, with things such as childcare, by establishing work systems, enhancing various allowance systems, etc. We proactively inform all employees of these systems through employee training and internal news, etc. For example, the number of employees utilizing childcare leave was approximately 430 in FY2014. Utilization of these systems has been disseminating among both men and women. These initiatives in gender equality and work-life balance have been highly recognized by the government, as seen in the example of the company receiving the "Minister of Health, Labour and Welfare Prize" in the Family-Friendly Enterprise category in FY2006.

and high quality acute medical care. The hospital offers patient-centered care by introducing cutting-edge medical equipment and so on. The institution also focuses on preventive medicine. The adjoining medical examination center offers medical examinations in collaboration with other medical professions.

The hospital will continue contributing to the local community as the core hospital of the Nagoya area by offering high-quality, advanced and safe medical services certified by the Japan Council for Quality Health Care.

③Participating in Programs to Vitalize Local 　Communities　(SCMAGLEV and Railway Park)

We opened the "SCMAGLEV and Railway Park" in March 2011 in Kinjo Futo, Minato-ku, Nagoya as part of our participation in the “Monozukuri (manufacturing) Culture Exchange Area Project”, hosted by the City of Nagoya.

At the "SCMAGLEV and Railway Park", we introduce the “progress of the high-speed railway technology” through displays of rolling stock mainly of the Tokaido Shinkansen as well as conventional lines and Superconducting Maglev. In May 2015, the number of visitors reached the 3 million mark. We will continue making efforts to improve the general public's understanding of railways and will contribute to the promotion of industrial tourism by planning events, advertising, and offering products linked with the Nagoya region tourism to attract even more visitors.

International Exchanges�

JR Central proactively undertakes 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 overseas as part of our PR activities, etc.

We also offer technical cooperation in the field of railways in response to government requests and promote human resources development by hosting interns from overseas universities and international organizations, etc.

Contribution to Local Communities

①Improving Station Convenience

　Railway stations serve as gateways to communities. With the aim of enhancing this function, JR Central cooperates with the requests of local municipalities to establish new stations, improve station buildings, develop plazas in front of stations, and promote railway elevation projects, etc., thereby contributing to community development.　Based on relevant laws, such as the so-called Barrier-Free Law, JR Central cooperates with governments and municipalities to jointly establish and improve facilities to enable all passengers, including disabled and elderly passengers, to use our service safely and with a sense of security. In particular, in accordance with the fundamental government policy, we have been renovating stations with governments and municipalities by installing elevators and escalators at stations used by more than 5,000 passengers a day, as well as stations used by more than 3,000 and less than 5,000 passengers since March 1, 2011 when the new policy was defined by the government.　In addition, to make the platforms safer, measures were taken to prevent falling. From FY2011, the busiest stations that the Nozomi stops at have started adding new movable platform fences, with more to be added to existing stations. Along with the fences, by FY2013, a new version of braille blocks indicating where the edges of the platforms are also have been finished introducing at all stations that are used by more than 10,000 passengers a day, and we will continue to improve stations in order of customer use level .

②Setting General Hospitals for Local Communities 　(Nagoya Central Hospital)

JR Central established the “Nagoya Central Hospital” in Nakamura-ku, Nagoya, whose mission is to provide advanced

Developing Secure and Safe Transport ProfessionalsIt is ultimately the people who operate railways and protect the

safety of its operation. Therefore, we focus on human resources development and skill development in order to develop employees with the awareness to thoroughly execute their duties and great skills. We aim to establish them and promote their activities through various programs.

Contributing to Local Communities through ProjectsRailways, which are a mode of public transportation, are

closely connected to local communities. We promote efforts to enhance the convenience of stations, which are the gateway to local communities, as well as initiatives to contribute to local communities, such as operating medical facilities and museums, etc. in the Nagoya region, where our head office is located.

ESG Information Human Resources/ Cooperation with Local Communities


Corporate Governance

Board of Directors

President and Representative Director

Head Office, Regional offices, Field offices

Management Meeting

General Shareholders Meeting

Audit and Supervisory BoardAudit

Investigate

Audit

Audit

AuditManagement / Guidance

Audit

Selection Selection Selection

Cooperate

Cooperate

CooperateCooperate Internal Audit Department (Audit Department/Transportation Safety Department)

Affiliated Companies

Accounting A

uditors

JR Central's Corporate Governance System

■Outside Directors and Outside Audit and Supervisory Board Members

Based on our policy to make the most appropriate execution system for Outside Directors and Outside Audit and Supervisory Board Members to execute our business, JR Central appoints three Outside Directors and three Outside Audit and Supervisory Board Members. Appointing them, we refer to the standard regarding to independence of outside directors and outside auditors provided by the Tokyo Stock Exchange, Inc.

JR Central receives beneficial opinions about the execution of our business from Outside Directors and Outside Audit and Supervisory Board Members, who provide advice based on their various experience and great insight gained outside of the company from their independent standpoints, both in and out of Board of Directors and Audit and Supervisory Board. We utilize the advice given by Outside Directors and Outside Audit and Supervisory Board Members to execute audits by Outside Audit and Supervisory Board Members, internal audits, safety audits, accounting audits, as well as items stipulated in the Fundamental Corporate Governance Policies.

Each Outside Director and Outside Audit and Supervisory Board Member is submitted to the Tokyo Stock Exchange and the Nagoya Stock Exchange as an independent officer who does not have any possible conflict of interest with general shareholders.

Meetings but also inspect the state of the execution carried out at head offices, railway operations divisions, branch offices, field offices and affiliated companies based on plans enacted by the Audit and Supervisory Board to strictly promote their audit work. Ensuring effective audit made by members of the Audit and Supervisory Board, JR Central also provides an assistant system in which our employees are assigned as full-time staff to support auditors work.　Internal audits are performed by the Audit Department on the work of JR Central, its affiliated companies, and related companies to confirm that execution is legally and appropriately made based on laws, articles of incorporation, and internal regulations. The results of internal audits are reported to management. In addition, to prevent operational and labor accidents, safety audits are performed by the Transportation Safety Department, and the results are also reported to management.　Based on generally accepted accounting standards, JR Central has appropriate accounting audits made by an audit corporation, Deloitte Touche Tohmatsu LLC, which has been selected to be our accounting auditor.　Audit and Supervisory Board Members, internal audit departments, and accounting auditors cooperate with each other by exchanging information periodically or as necessary and receive necessary information from each department involved in internal control to confirm the status of implementation of each item stipulated in the Fundamental Corporate Governance Policies.

■Overview of Corporate Governance System　The Board of Directors of JR Central is comprised of 16 members (three of whom are outside directors). JR Central also employs an auditor system, and its Audit and Supervisory Board consists of five members (three of whom are outside auditors). (The figures are as of June 23, 2015)　Meeting at least once a month, the Board of Directors makes legal and appropriate decisions upon fully discussing issues stipulated by the law and issues of importance to management and monitors the work of directors. To broaden deliberations, we have also established a Management Meeting in which important issues related to management are discussed in advance of the Board of Directors meeting. We request Audit and Supervisory Board Members 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 during the deliberation process.　Although we introduced the corporate officer system in May 2003, we introduced an executive system in June 2012 with the aim of further accelerating decision-making, enhancing discussions, and further clarifying roles for directors and corporate officers, who are responsible for operation, in order to appropriately respond to changes in the business environment influencing our management decision in a timely manner.　Audit and Supervisory Board Members not only attend important meetings such as the Board of Directors and the Management

JR Central strives to enhance our corporate governance to ensure soundness, efficiency, and transparency of management, to implement sustainable development of the company, and to enhance corporate value over the mid-to-long-term.

■Principal Activities of Outside Directors and Outside Audit and Supervisory Board Members [FY2014]

Name Principal Activity

Directors

Fujio Cho

Attended all 12 meetings of the Board of Directors held in FY2014. In the Board of Directors meetings, he has stated his opinions based on his experience in corporate management, etc.

Kenji Koroyasu

Attended 11 out of 12 meetings of the Board of Directors held in FY2014. In the Board of Directors meetings, he has stated his opinions based on his experience as a public prosecutor and lawyer, etc.

Takashi Saeki

Attended all 12 meetings of the Board of Directors held in FY2014. In the Board of Directors meetings, he has stated his opinions based on his experience of corporate management, etc.

Audit and Supervisory

Board Members

Hajime Ishizu

Attended all 10 meetings of the Board of Directors held after June 24, 2014 after his appointment and attended all 11 meetings of the Audit and Supervisory Board. In the Board of Directors meetings and meetings of the Audit and Supervisory Board, he has stated his opinions based on his experience in transportation administration, etc.

Hiroyuki Ota

Attended all 10 meetings of the Board of Directors held after June 24, 2014 after his appointment and attended all 11 meetings of the Audit and Supervisory Board. In the Board of Directors meetings and meetings of the Audit and Supervisory Board, he has stated his opinions based on his experience in police administration, etc.

Shigeo Kifuji

Attended all 12 meetings of the Board of Directors held in FY2014 and attended all 14 meetings of the Audit and Supervisory Board. In the Board of Directors meetings and meetings of the Audit and Supervisory Board, he has stated his opinions based on his experience as a public prosecutor and lawyer, etc.

■Appointment of Outside Directors and Outside Audit and Supervisory Board Members [As of June 23, 2015]

Name Reasons for election

Directors

FujioCho

Mr. Cho was appointed as an Outside Director because of his corporate management experience and his great insight.

Kenji Koroyasu

Mr. Koroyasu was appointed as an Outside Director because of his experience as a public prosecutor and lawyer and his great insight.

Takashi Saeki

Mr. Saeki was appointed as an Outside Director because of his corporate management experience and his great insight.


Board Members

Hajime Ishizu

Mr. Ishizu was appointed as an Outside Audit and Supervisory Board Member because of his experience in transportation administration and his great insight.

Hiroyuki Ota

Mr. Ota was appointed as an Outside Audit and Supervisory Board Member because of his experience in police administration and his great insight.

Shigeo Kifuji

Mr. Kifuji was appointed as an Outside Audit and Supervisory Board Member because of his experience as a public prosecutor and lawyer and his great insight.

■Concurrent Appointment of Outside Directors and Outside Audit and Supervisory Board Members [As of March 31, 2015]

Name Name of Other Company, etc. Titles

Directors

Fujio Cho

Toyota Industries CorporationDENSO CORPORATION

Outside DirectorOutside Audit and Supervisory Board Member

Kenji Koroyasu

Furukawa Electric Co., Ltd.Outside Audit and Supervisory Board Member

Takashi Saeki

TOHO GAS Co., Ltd.UNY Group Holdings Co., Ltd.The Ogaki Kyoritsu Bank, Ltd.

Aichi Tokei Denki Co., Ltd.

Chairman and Representative DirectorOutside DirectorOutside Audit and Supervisory Board MemberOutside Audit and Supervisory Board Member


Board Member

Shigeo Kifuji

ISHII IRON WORKS CO., LTD.

Mori Building CO., LTD.

Outside Audit and Supervisory Board MemberOutside Audit and Supervisory Board Member

■Contents of Compensation for Officers　Compensation for officers is comprised of certain basic compensation and a bonus. Basic compensation is based on comprehensive consideration of the title, length of service, etc., and the bonus is based on the performance and commissioned work, etc. of each FY. The appropriate amount for each is decided in Board of Directors meetings within the range of compensation, etc., which was decided in the 25th General Shareholders Meeting held on June 22, 2012.　Compensation for Outside Audit and Supervisory Board Members is comprised solely of certain basic compensation. The appropriate amount is decided through discussions of Outside Audit and Supervisory Board Members within the range of compensation, etc., which was decided in the 20th General Shareholders Meeting held on June 22, 2007.

□Total amount of compensation, etc. by officer classification, total amount of compensation, etc. by type, and number of target officers [FY2014]

Classification

Compensation BonusTotal amount

for the compensation/

bonus, etc.

Number of target officers

(People)

Total amount(Million yen)

Number of target officers

(People)

Total amount(Million yen)

Directors(Excluding Outside

Directors) 14 528 11 213 741

Audit and Supervisory Board Member

(Excluding Outside Directors)

3 94 - - 94

Outside Officers 8 114 3 6 121

ESG Information Corporate Governance


■Response to Internal Control related to Financial ReportingIn terms of internal control related to financial reporting, we

periodically investigate the system/execution situation, etc. within JR Central and JR Central Group companies in accordance with a basic framework offered by the Business Accounting Council in order to confirm that they are effectively functioning. JR Central also engages in efforts to maintain the level of internal control related to financial reporting by providing feedback from these investigations to duties.

■Concept of Capital Policy and Shareholder ReturnOur policy on dividends has always been to decide the

specific dividend amount in accordance with the management environment/performance in each FY based on the principle of continuously providing stable dividends. JR Central considers that shareholder returns through dividends are appropriate in principle, and we do not plan to purchase additional treasury stock at this point. In addition, although we will promote projects, such as construction of the Chuo Shinkansen, etc., we plan to procure the fund through issuance of corporate bonds and borrowing at this point. We do not plan to utilize the treasury stock or increase the capital.

■IR Activities/Dialogues with InvestorsJR Central assigns personnel in charge of IR in the Corporate

Planning Division and periodically holds dialogues with investors regarding the company's corporate strategies and performance. We not only hold investor meetings every 6 months for analysts and institutional investors but also hold telephone conferences, etc. as necessary with the aim of disclosing information. In addition, from the perspective of fair disclosure, we swiftly post disclosed information, important information, and materials, etc. from investor meetings on our website. We also disclose information in English as quickly as possible for overseas investors.

■Compliance/Whistle-Blowing SystemJR Central not only stipulates internal regulations based on

the law, etc. but also conducts employee education on various occasions with the aim of thoroughly complying with the law, etc. when executing work. In addition, we also have established a whistle-blowing system. We have whistle-blowing windows not only within the Company but also in an external law firm in order to establish a system in which employees, etc. can report any violation of the law, etc. at work. We also post flyers describing the whistle-blowing system and contact information for the window in all workplaces with the aim of widely disseminating the system.

■Risk-Management System　JR Central has established the "Railway Safety Promotion

Committees", etc. at the head office, railway operation divisions, branch offices, and in each area from the perspective of preventing train and labor accidents and formulates and promotes safety countermeasures through an integrated organization that stretches from the head office to each field office.

JR Central also manages a control center, which plays a key role in information communication, on call 24 hours a day at each railway operation division to respond to emergencies, such as accidents and disasters, and has also established a fast-response restoration structure in which employees can be gathered anytime according to the scale or impact of an accident or disaster. Additionally, in preparation for emergencies such as large-scale natural disasters, we have established the second Shinkansen General Control Center that can substitute for the Shinkansen General Control Center for the Tokaido Shinkansen.

Board of Directors, Audit and Supervisory Board Members, and Corporate Officers as of June 23, 2015

Yoshiyuki KasaiChairman Emeritus and Representative Director

Yutaka OsadaExecutive Vice President and Representative Director

Naotoshi YoshikawaExecutive Vice President and Representative Director

Yoshiomi YamadaChairman and Representative Director

Koei TsugePresident and Representative Director

Shin KanekoExecutive Vice President and Representative Director

Board of Directors and Audit and Supervisory Board Members

Chairman Emeritus and Representative Director

Yoshiyuki Kasai

Chairman and Representative Director

Yoshiomi Yamada

President and Representative Director

Koei Tsuge

Executive Vice President and Representative Director

Shin Kaneko

Naotoshi Yoshikawa

Yutaka Osada

Directors

Katsumi MiyazawaMamoru UnoKimiaki TanakaHideyuki ShojiYoshiki SuyamaKazuhiro IgarashiTorkel PattersonFujio ChoKenji KoroyasuTakashi Saeki

Full-time Audit and Supervisory Board Members

Hidenori FujiiHiromu EmiHajime IshizuHiroyuki Ota

Audit and Supervisory Board Member

Shigeo Kifuji

Corporate Officers

Senior Corporate Executive Officers

Katsumi Miyazawa

Noriyuki Shirakuni(Ph.D.)

Yoshito Tsubouchi

Corporate Executive Officers

Shunichi Kosuge

Mamoru Uno Sumio Atsuchi Kimiaki Tanaka Kiyoshi Watanabe

Hideyuki Shoji Yoshiki Suyama Hiroyuki Kawarasaki Kazuhiro Igarashi

Corpotrate Officers

Tokuji Matsuno

Yasukazu Endo

Yoshihiro Yamamoto Takanori Mizuno Motoaki Terai

Takao Yamaguchi

Toshio Otake

Shin Iwata

Ryo Ejiri (Ph.D.) Hideo Inaba Akihiko Ito Atsuhito Mori Kimihiro Ichikawa Mamoru Tanaka

Director General of the Corporate Planning Division and in charge of the Finance Department

Director General of the Maglev Systems Development Division of the Chuo Shinkansen Promotion Division

In charge of the Secretarial Department, the Audit Department, the Public Relations Department, the Administration Department, the Legal Affairs Department, the Personnel Department, and the Property Management Department Corporate Executive Officers

Deputy Director General of the General Technology Division, General Manager of the Technology Planning Department of the General Technology Division, Head of Consulting and Coordination Office - Overseas High Speed Railway Project of the Technology Planning Department of the General Technology Division, in charge of the Overseas High Speed Railway Project, and in charge of the controlling of the Tracks and Structures Section

Director General of the Chuo Shinkansen Promotion Division

Director General of the Marketing Division

Director General of the Business Promotion Division

General Manager of the Construction Department, General Manager of the Nagoya Construction Subdivision of the Chuo Shinkansen Construction Department of the Chuo Shinkansen Promotion Division, and in charge of controlling the Construction Section

Director General of the Conventional Lines Operations Division

Director General of the Shinkansen Operations Division

Director General of the Shizuoka Branch Office

Director General of the General Technology Division and in charge of controlling the Rolling Stock Section

Deputy Director General of the Corporate Planning Division, General Manager of the Project Development Department of the Corporate Planning Division, and General Manager of the Tokyo Project Development Department of the Corporate Planning Division

Deputy Director General of the Maglev Systems Development Division of the Chuo Shinkansen Promotion Division and General Manager of Yamanashi Maglev Center of the Maglev Systems Development Division of the Chuo Shinkansen Promotion Division

Deputy General Manager of the Construction Department

Deputy Director General of the Chuo Shinkansen Promotion Division

Deputy Director General of the Maglev Systems Development Division of the Chuo Shinkansen Promotion Division

Deputy Director General of the Corporate Planning Division and General Manager of the Information Systems Department of the Corporate Planning Division

Deputy Director General of the General Technology Division and General Manager of the Technology Research and Development Department of the General Technology Division

Deputy Director General of the Chuo Shinkansen Promotion Division and General Manager of the Chuo Shinkansen Construction Department of the Chuo Shinkansen Promotion Division

General Manager of the Public Relations Department

General Manager of the Administration Department

General Manager of the Property Management Department

General Manager of the Transportation Safety Department

General Manager of the General Education Center

Director General of the Kansai Branch Office

Note 1: Directors Fujio Cho, Kenji Koroyasu, and Takashi Saeki are Outside Directors. 2: Full-time Audit and Supervisory Board Members Hajime Ishizu, Hiroyuki Ota, and Shigeo Kifuji are Outside Audit and Supervisory Board Members.

In charge of the Administrative Departments and in charge of the Chuo Shinkansen Promotion Division

In charge of the Shinkansen and Conventional Lines Operations Division and in charge of controlling the Transportation and Transportation Safety Section

In charge of the Technology Section and in charge of controlling the Electrical Engineering Section

1System 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 their work is legal and appropriate based on laws, the articles of incorporation, and internal stipulations.We set a system to obtain advice as necessary from external experts, such as retained lawyers, and strive to ensure legal execution.We 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

We properly store and manage documents for which storage has been determined as needed in accordance with internal regulations.

3 Stipulations and systems related to managing risk of loss

We make proper decisions regarding items for which each department is responsible in accordance with their importance, such as by seeking approval by upper managers and/or through meetings.In regards to preventing train accidents, we actively promote effective countermeasures through discussion on Railway Safety Promotion Committees.

4 System to ensure that the duties of the director are executed efficiently

We introduce an efficient work system 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.

5System for ensuring the suitability of work performed by corporate groups comprised of JR Central and subsidiaries, etc.

The Board of Directors in each subsidiary, etc. monitors the work of directors along with making legal and appropriate decisions upon fully discussing issues stipulated by the law and issues of importance to management.We make proper decisions regarding subsidiaries, etc. in accordance with their importance and established procedures, such as by seeking approval by upper managers and/or through meetings.We introduce an efficient work system by clearly stipulating the duties of each department and its authority in accordance with internal regulations in subsidiaries, etc.In accordance with internal regulations, we manage and provide guidance for subsidiaries, etc. as needed based on agreements signed with the companies that stipulate that certain important issues should be discussed and reported.Our Internal Audit Department performs internal audits of the work of directors, corporate officers, and employees in major subsidiaries, etc. to determine whether their work is legal and appropriate based on laws, the articles of incorporation, and internal stipulations.Subsidiaries, etc. establish a necessary system, such as not giving in to unlawful demands, establishing departments to handle such issues, and forming close relationships with JR Central and external expert agencies, in order to shield themselves from anti-social groups.

6

System related to employees that have been assigned to support Audit and Supervisory Board Members at their request and matters related to the independence of those employees from directors, and matters to ensure the effectiveness of orders given to employees

Some of JR Central’s employees will be designated as auditor staff for the purpose of assisting such auditors with the execution of their duties.The Personnel Department obtains the opinion of auditors in advance in regards to auditor staff personnel.

7System 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 corporate groups comprised of JR Central and subsidiaries, etc. or important facts that infringe upon laws or the articles of incorporation of the JR Central or subsidiaries, etc., they must immediately report to an Audit and Supervisory Board Member or the Audit and Supervisory Board in accordance with internal regulations.Directors, corporate officers and employees report on the execution of their duties if requested by an Audit and Supervisory Board Member or the Audit and Supervisory Board.Directors, corporate officers, and employees who made the above report are not subject to disadvantageous treatment for making the said report.

8

System to enable directors, Audit and Supervisory Board Members, and employees of subsidiaries, etc. to report to an Audit and Supervisory Board Member of JR Central

If directors, corporate officers, and employees of subsidiaries, etc. discover facts that may cause great loss to the subsidiary, etc. or important facts that infringe upon laws or the articles of incorporation, they must immediately report to an Audit and Supervisory Board Member of the subsidiary, etc. in accordance with the internal regulations of the subsidiary, etc. An Audit and Supervisory Board Member of the subsidiary, etc. reports to an Audit and Supervisory Board Member of JR Central if he/she receives a report regarding the above fact or discovers the above fact.Directors, Audit and Supervisory Board Members, corporate officers, and employees of subsidiaries, etc. who made the above report are not subject to disadvantageous treatment for making the said report.

9 Other systems to ensure that audits of auditors are performed effectively

Audit and Supervisory Board Members attend important meetings, such as Management Meetings, 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 strengthens its links with Audit and Supervisory Board members and accounting auditors in an effort to enhance audits.Expenses, etc. resulting from the execution of duties of Audit and Supervisory Board Members are appropriately processed according to the internal regulations.

JR Central makes decisions regarding the Fundamental Corporate Governance Policies, which includes the following items, in Board of Directors meetings.Fundamental Corporate Governance Policies

ESG Information Corporate Governance


Secretarial Department

Corporate Planning Division

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 OfficePersonnel Department

Finance Department

Property Management Department

Marketing Division

Business Promotion Division

Construction Department

Transportation Safety Department

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

General Education 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

Chairman

Board of Directors

President

Audit and Supervisory Board Members

Audit and Supervisory Board

C o r p o r a t e D a t a

P r o f i l e

Organ i za t ion Char t

Name

Central Japan Railway Company (JR Central)

Established

April 1, 1987

Business activities

Railways business, Affiliated businesses

Key data

(as of the end of March 2015)

Capital 112 billion yen

Operating Revenues 1,306.6 billion yen

Number of Shares Outstanding 206,000,000

Share Listings Nagoya/Tokyo Stock Exchange

Number of Shareholders 95,949

Number of Employees 18,231

Operating Route Length 1,970.8 km

Number of Stations 405

Number of Rolling Stock 4,890

Double-and Multi-Tracked Section 55.1% (1,086.8km)

Electrified Section 76.7% (1,511.0km)

Centralized Traffic Control 97.5% (1,922.3km)

Automatic Signaling System 97.8% (1,927.3km)

Head Office and Other Main Offices　(As of July 2015)

Head Office JR Central Towers, Meieki 1-1-4, Nakamura-ku, Nagoya-shi, Aichi 450-

6101, Japan　JR Central Towers

Tokyo Head Office JR Central Shinagawa Building -A Wing 2-1-85, Konan, Minato-ku,

Tokyo 108-8204, Japan

Conventional Lines Operations Division

JR Central Taiko Building, Meieki 1-3-4, Nakamura-ku, Nagoya-shi,

Aichi 453-8520, Japan

Shizuoka Branch Office4, Kurogane-cho, Aoi-ku, Shizuoka-shi, Shizuoka 420-0851, Japan

Mie Regional OfficeUst-Tsu 12F, 700, Hadokoro-cho, Tsu-shi, Mie 514-0009, Japan

Iida Regional Office5356, Kami-Iida, Iida-shi, Nagano 395-0000, Japan

Shinkansen Operations Division

Marunouchi Chuo Building, 1-9-1, Marunouchi, Chiyoda-ku, Tokyo 100-

0005, Japan

Kansai Branch Office Shin-Osaka Hankyu Building 10F, 1-1-1, Miyahara, Yodogawa-ku,

Osaka-shi, Osaka 532-0003, Japan

Washington D.C. Office900 17th Street, N.W., Suite 520, Washington, DC 20006, U.S.A.

London Office6th Floor, 4 Eastcheap, EC3M 1AE, London, U.K.

Sydney OfficeSuite 5.01A, Level5, 20 Hunter Street, Sydney, NSW 2000, Australia

Sangu Line

Tokaido Line

Tokaido Shinkansen

Inotani

Shiojiri

Tatsuno

KofuTokyo

Shinagawa

Shin-Yokohama

Kozu

AtamiNumazu

Fuji

Shizuoka

Toyohashi

Obu

Nagoya

Tajimi

Mino-Ota

Gifu

Mino-Akasaka

OgakiMaibara

Kyoto

Shin-Osaka

Ise-Okitsu

Kameyama

Matsusaka

Toba

Shingu

Taki

Taketoyo

Meisho Line

Gotemba Line

Kansai Line

Kisei Line

Chuo Line

Takayama Line

Minobu LineIida Line

Taita Line

Taketoyo Line

Route Length by line

Tokaido Shinkansen

Tokaido Line

Gotemba Line

Minobu Line

Iida Line

Taketoyo Line

Takayama Line

Chuo Line

Taita Line

Kansai Line

Kisei Line

Meisho Line

Sangu Line

Conventional Line Total

Total

552.6km

360.1km

60.2km

88.4km

195.7km

19.3km

189.2km

174.8km

17.8km

59.9km

180.2km

43.5km

29.1km

1,418.2km

1,970.8km

Conventional Lines

JR Central Shinkansen Conventional Lines

O p e r a t i n g A r e a s

0 500km

Area of Japan: Approx. 380,000 km2

Population: 128 million (As of January 1, 2014)

Kyoto Nagoya Tokyo

Shin-OsakaShizuoka

JR Central

　JR Central operates the Tokaido Shinkansen, the main transportation hub linking Tokyo,

Nagoya, and Osaka, and a network of 12 conventional lines centered on the Nagoya and

Shizuoka City areas.

Corporate Data


FY2010 FY2011 FY2012 FY2013 FY2014Billion yen Billion yen Billion yen Billion yen Billion yen

Operating revenues ¥1,503.0 ¥1,508.3 ¥1,585.3 ¥1,652.5 ¥1,672.2Operating expenses 1,153.7 1,135.8 1,159.1 1,157.9 1,165.6Operating income 349.3 372.5 426.1 494.6 506.5Net income for this term before taxation, etc. 224.6 263.8 326.1 402.7 428.1Net income for this term 133.8 132.7 199.9 255.6 264.1Depreciation cost 258.5 257.0 240.1 276.2 271.5Capital expenditure*1 284.1 290.6 281.1 200.1 214.5Total asset 5,252.9 5,214.0 5,231.1 5,178.1 5,217.9Net asset 1,246.1 1,363.2 1,557.9 1,802.2 2,063.9Equity 1,206.6 1,321.6 1,513.3 1,753.7 2,020.1Equity Ratio 23.0% 25.3% 28.9% 33.9% 38.7%

Operating income/Total assets 6.7% 7.1% 8.2% 9.5% 9.7%

Return on Equity 11.6% 10.5% 14.1% 15.7% 14.0%Yen Yen Yen Yen Yen

Net income for this term per share*2 ¥67,990.31 ¥67,470.45 ¥1,016.12 ¥1,299.23 ¥1,342.15Annual dividend per share*2 9,000.00 9,500.00 105.00 115.00 120.00

*1: Increase in tangible fixed assets and intangible fixed assets*2: On October 1, 2012, the Company implemented a 100-for-1 stock split and employed a share unit system by which one share unit equals 100 shares. Along with this, the net income for this term and the annual

dividend per share were calculated based on the assumption that the said stock split was made in the beginning of FY2012.

FY2010 FY2011 FY2012 FY2013 FY2014Billion yen Billion yen Billion yen Billion yen Billion yen

Operating revenues ¥1,171.9 ¥1,184.5 ¥1,245.0 ¥1,277.2 ¥1,306.6 Railways business 1,162.6 11,75.6 1,235.9 1,268.5 1,297.8 Affiliated businesses 9.2 8.9 9.0 8.6 8.7Operating expenses 846.4 839.0 8,45.9 816.3 831.1 Railways business 839.6 833.2 8,40.1 808.9 826.5 Affiliated businesses 6.7 5.7 5.7 7.4 4.6Operating income 325.4 345.5 3,99.1 460.8 475.4Net income for this term before taxation 206.7 239.7 3,01.8 370.4 397.8Net income for this term 123.0 120.8 1,87.8 240.3 260.2Depreciation cost 240.0 241.4 223.7 260.3 255.8Total capital investments 288.8 298.4 301.6 229.0 257.2Total asset 5,075.0 5,033.5 5,042.9 4,986.0 5,013.4Net asset 1,156.1 1,258.2 1,436.3 1,661.3 1,931.0Equity 1,156.1 1,258.2 1,436.3 1,661.3 1,931.0Equity Ratio 22.8% 25.0% 28.5% 33.3% 38.5%

Operating income/Total assets 6.5% 6.8% 7.9% 9.2% 9.5%

Return on Equity 11.1% 10.0% 13.9% 15.5% 14.5%Yen Yen Yen Yen Yen

Net income for this term per share* ¥62,455.63 ¥61,328.43 ¥953.32 ¥1,220.16 ¥1,321.21Annual dividend per share* 9,000.00 9,500.00 105.00 115.00 120.00

*On October 1, 2012, the Company implemented a 100-for-1 stock split and employed a share unit system by which one share unit equals 100 shares. Along with this, the net income for this term and the annual dividend per share were calculated based on the assumption that the said stock split was made in the beginning of FY2012.


F i n a n c i a l H i g h l i g h t s

▶ C o n s o l i d a t e d

▶ N o n - c o n s o l i d a t e d

1987 April ●Central Japan Railway Company (JR Central) is established.

1988 March ●3 stations are established on the Tokaido Shinkansen (Shin-Fuji, Kakegawa, Mikawa-Anjo)●JR Tokai Bus Company is established (now a consolidated subsidiary). 　In April of the same year, automobile transport business is transferred to the company.

1989 March ●A new model diesel railcar is introduced to the “Hida” Express on the Takayama Line.

1990 February ●JR Central starts topographical and geological surveys along the Chuo Shinkansen following orders of the Minister of Transport.

June ●JR Central applies to the Minister of Transport for the approval of plans to build the Yamanashi Maglev Line and gains approval.

1991 October ●JR Central takes over the Tokaido Shinkansen facilities.

1992 March ●The first “Nozomi” begins commercial operation on the Tokaido Shinkansen using Series 300 rolling stock.

July ●JR Tokai Hotels Co., Ltd. is established (now a consolidated subsidiary).

December ●JR Central Department Store Co., Ltd. is established. Company name changed to JR Tokai Takashimaya Co., Ltd. in September 1997 (now a consolidated subsidiary).

1994 June ●JR CENTRAL BUILDING CO., LTD. is established (now a consolidated subsidiary).

1997 April ●Running tests start on the Yamanashi Maglev Line.

October ●JR Central lists on the first section of the Nagoya, Tokyo and Osaka stock exchanges (integrated with the Tokyo Stock Exchange in July 2013) and also on the Kyoto Stock Exchange (merged with the Osaka Stock Exchange in March 2001).

1999 March ●Series 700 rolling stock is introduced to “Nozomi” on the Tokaido Shinkansen.

December ●Construction of JR Central Towers is completed.

2000 March ●JR Nagoya Takashimaya opens (operated by JR Tokai Takashimaya Co., Ltd.).

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

2001 March ●JR Tokai Real Estate Co., Ltd. is established (now a consolidated subsidiary).

December ●JR Central is excluded from the jurisdiction of the JR Law through the enactment of amendment to the JR Law.

2002 July ●A new research center is constructed in Komaki City in Aichi Prefecture.

2003 October ●Shinagawa Shinkansen Station on the Tokaido Shinkansen opens. The timetable is drastically revised by the increase of the maximum speed on all Tokaido Shinkansen trains to 270km/h.

2005 July ●The Japan National Railways (JNR) Settlement Headquarters, an independent division within the Japan Railway Construction, Transport and Technology Agency (JRTT), sells 600,000 shares of JR Central.

2006 March ●New Automatic Train Control (ATC) system is introduced into the Tokaido Shinkansen.

April ●JR Central repurchases 268,686 shares of its treasury stock based on the decision made by the Board of Directors authorized by the articles of incorporation.●The JNR Settlement Headquarters within the JRTT completes the sale of all of its shares

of JR Central by selling 286,071 shares of common stock of the company.

2007 January ●Application for changes of “Yamanashi Maglev Line Construction Plan” is approved by the Minister of Land, Infrastructure and Transport.

July ●JR Central introduces the new Series N700 rolling stock for the Tokaido Shinkansen “Nozomi” services.

2008 October ●JR Central makes NIPPON SHARYO, LTD. a consolidated subsidiary.●JR Central submits a report to the Minister of Land, Infrastructure, Transport and Tourism

(the “Minister”) concerning topographical and geological surveys of the Chuo Shinkansen in response to the order received in 1990.

December ●JR Central starts conducting the remaining four surveys under Article 5 of the Nationwide Shinkansen Railway Development Act (hereinafter referred to as "the Act") related to the Chuo Shinkansen in response to the order by the Minister.

2009 May ●JR Central cancels 90,000 shares of treasury stock.

December ●JR Central submits a report regarding the remaining four surveys under Article 5 of the Act related to the Chuo Shinkansen in response to the order by the Minister received in 2008.

2011 May ●The Minister designates JR Central as the operator and constructor of the Chuo Shinkansen between Tokyo and Osaka City.●The Minister approves the development plan and instructs JR Central to construct the

Chuo Shinkansen.

2012 May ●JR Central cancels 90,000 shares of treasury stock.

2013 February ●JR Central introduces the new Series N700A rolling stock for the Tokaido Shinkansen “Nozomi” services.

August ●Extension of the Yamanashi Maglev Line to 42.8km and upgrading of facilities are completed, and the running test is restarted.

2014 October ●The Minister approves the Construction Implementation Plan (Part 1) between Shinagawa and Nagoya along the Chuo Shinkansen.

2015 March ●The Taketoyo Line (between Obu and Taketoyo stations) is electrified.●Increase of the maximum speed of the Tokaido Shinkansen to 285km/h.

April 1, 1987 Establishment of JR Central

October 8, 1997 Shares are listed

December 20, 1999 Construction of JR Central Towers is completed

October 1, 2003 Shinagawa Shinkansen Station on the Tokaido Shinkansen is opened

August 29, 2013 Opening ceremony of Yamanashi Maglev Line

March 14, 2015 Increase of the maximum speed to 285km/h

Company History

Corporate Data


Summary of Performance


Segment-by-Segment Performance for FY2014　　While the JR Central Group prioritizes safe and reliable

transportation, which is the foundation of the core of our business – the railway business, we aim to further enhance our services. We have continually endeavored to improve the competency of our employees, to enhance facilities, to increase efficiency and to reduce costs throughout our business, including capital investments, in an effort to enhance profitability. As a result, the overall railway performance (passenger-kilometers) rose favorably in terms of both business and tourism use, increasing by 1.9% YoY to 59.23 billion passenger-kilometers. The operating revenue also increased by 1.2% YoY to 1,672.2 billion yen, ordinary income increased by 5.9% YoY to 428.1 billion yen, and net income for this term increased by 3.3% YoY to 264.1 billion yen.

Long-term debt was reduced by 220.2 billion yen. The balance as of the end of the term is 2,150.5 billion yen. In addition, we set the year-end dividend at 60 yen per share for an annual per share dividend of 120 yen.

Business performance in each segment was as follows.

①TransportationIn the railway business, we have steadily promoted large-scale

renovation with the aim of maintaining/improving the soundness of civil engineering structures along the Tokaido Shinkansen while continuously making efforts to reduce cost. Also, in addition to taking earthquake countermeasures, such as countermeasures to derailment/deviation, we have also moved ahead with renovation of the Hamamatsu Workshop, which conducts the Shinkansen rolling stock overhauls, in an effort to improve earthquake resistance. Furthermore, we utilized the “10 Nozomi Timetable” to flexibly schedule trains to meet demands by operating more services than ever during busy seasons, such as summer and New Year seasons, etc. On January 4, 2015, we had approximately 466,000 customers (between Odawara and Shizuoka for “Nozomi” and “Hikari”, and between Shin-Yokohama and Odawara for “Kodama”), which was the highest number ever. We have improved convenience by increasing the maximum speed to 285km/h in March and reducing the shortest required time between Tokyo and Shin-Osaka to 2 hr 22 min, etc. We also improved the reliability of the timetable in case of emergencies, etc. We have also introduced the latest model rolling stock, N700A and are modifying Series N700 to mirror N700A's functions (by equipping trains with Wheel Mounted Brake Disks and the Cruise Control System, etc.). In addition, we have worked to further enhance passenger service and ensure safe and reliable transportation, including installing new movable platform fences at Nozomi stop-stations frequently used by large volumes of passengers and the latest automatic ticketing gates.

In terms of conventional lines, we have continued promoting earthquake countermeasures, such as anti-earthquake constructions in the Nagoya Workshop, which conducts overhauls for conventional line rolling stock, etc., in addition to anti-earthquake reinforcement for elevated track columns, etc. We have also systematically promoted measures against falling rocks, improvement of safety devices on grade crossings, and tsunami countermeasures, etc. Moreover, we have completed the replacement of the operation management system for the Tokaido Line in the Nagoya region. Furthermore, we have worked to further enhance passenger service and ensure safe and reliable transportation, including the electrification of the Taketoyo Line in March 2015 and introduction of new diesel railcars to the Takayama Line and Taita Line. In addition, we planned to reconstruct the Chuo Line (between Sakashita and Nojiri stations), which was affected by the heavy rain on July 9, 2014, and the Tokaido Line (between Yui and Okitsu stations), which was affected by typhoon No. 18 on October 6, as soon as was possible. The Chuo Line restarted the operation on August 6, and the Tokaido

Line restarted the operation on October 16.In terms of sales and marketing, we have enhanced our

initiatives to expand the number of members for Express Reservation and PLUS EX services along with the sales of "Super-Super IC Hayatoku", etc. and planning of "Trips along the Tokaido Line", etc. as valuable commemorative products to show our appreciation for the "50th Anniversary of the Tokaido Shinkansen". We also promoted the "80th anniversary of the Takayama Line" and the "80th anniversary of the Gotemba Line" plans in cooperation with local municipalities along the lines. Furthermore, we have aimed to expand the number of passengers by promoting various campaigns making use of tourist resources in Kyoto, Nara, and Tokyo, etc., planning and expanding travel products in connection with these campaigns, and promoting efforts in collaboration of local areas, such as "Shupo". We have also promoted proactive sales and marketing by deploying excursion packages using the Tokaido Shinkansen, Takayama Line, and Hokuriku Line by using the Kanagawa inauguration of the Hokuriku Shinkansen as an opportunity. We have also expanded the number of member stores of electronic money "TOICA" and started a service for customers to use electronic money to pay for items sold in the Tokaido/Sanyo Shinkansen.

Due to the successive use of the railway for business and tourism, performance for the Tokaido Shinkansen increased by 2.6% YoY to 50.134 billion passenger-kilometers for the current term. For conventional lines, it reduced by 1.7% YoY to 9.69 billion passenger-kilometers.

In our bus business, we have worked to create products tailored to customers' needs and ensure profitability with safety as the first priority.

As a result of the aforementioned, operating revenues for the term increased by 2.3% YoY to 1,305.6 billion yen, and operating income increased by 2.6% YoY to 472.0 billion yen.

②Merchandise and OtherIn our merchandise and other businesses, we have worked to

bolster earning power through JR Nagoya Takashimaya through renovation of sales spaces, an attractive product lineup, services suited to customer needs, and events for Valentine's Day, etc. We also held events and sold products, such as commemorative bento boxes, to commemorate the "Tokaido Shinkansen 50th Anniversary" with the aim of increasing revenues.

As a result of the aforementioned, operating revenues for the term increased by 5.9% YoY to 233.8 billion yen, and operating income increased by 8.7% YoY to 8.9 billion yen.

③Real Estate　In terms of Real Estate businesses, we have steadily promoted

construction of JR Gate Tower at Nagoya Station along with proactively promoting tenant leases and hashing out the details of other businesses to be opened. In terms of station commercial facilities, we renovated "Cubic Plaza Shin-Yokohama", "ASTY Shizuoka", and "ASTY Gifu", etc. We also held events, etc. to commemorate the "Tokaido Shinkansen 50th Anniversary" with the aim of increasing the number of customers.

As a result of the aforementioned, operating revenues for the term reduced by 1.2% YoY to 66.5 billion yen, and operating income increased by 20.1% YoY to 16.6 billion yen.

④OtherWith our hotel business, we have worked on creating attractive

products, such as plans, etc. to commemorate the "Tokaido Shinkansen 50th Anniversary", and on enhancing our sales capabilities. We have also worked to offer higher quality services to respond to the increasing number of foreign customers.

(Billion yen)

0

50

100

150

200

250

’11.3

239.6

’12.3

225.8

’13.3 ’14.3

250.6

’15.3

238.9233.1(Billion yen)

0

15

30

45

60

’11.3

66.4

’12.3

62.7

’13.3

64.9

’14.3

67.4

’15.3

66.5

❸ Real Estate ❹ Other

(Billion yen)

0

300

600

900

1,200

’11.3

1,169.7

’12.3

1,182.6

’13.3

1,243.0

’143

1,276.1

’15.3

1,305.6 (Billion yen)

0

50

100

150

200

’11.3

195.0

’12.3

205.2

’13.3

209.5

’14.3

220.7

’15.3

233.8

■Shifts in Operating Revenues

❶ Transportation ❷ Merchandise and Other

With our travel business, we have proactively marketed travel products in collaboration with the "Tokaido Shinkansen 50th Anniversary" project as well as attractive travel products in collaboration with travel campaigns for locations, such as Kyoto/Nara and Tokyo. We have also promoted sales through the Internet.

In our rolling stock manufacturing business, we have endeavored to increase orders for the manufacture of rolling stock, construction machinery, and other items.

As a result of the aforementioned, operating revenues for the term reduced by 4.6% YoY to 238.9 billion yen, and operating income reduced by 21.7% YoY to 8.2 billion yen.

Efforts for FY2015Over the next term, we will continue ensuring safe and reliable

transportation in our railway business as our top priority while steadily pushing forward with earthquake countermeasures, implementing large-scale renovation of civil engineering structures, introducing N700A rolling stock, modifying Series N700 rolling stock, replacing diesel railcars for conventional lines, and so on. With the Chuo Shinkansen Project using the Superconducting Maglev System, we will shift from the planning phase to the new construction phase and thoroughly promote the phase with the focus on safety, the environment, and cooperation with communities. In addition, we will steadily promote our efforts with the “JR Gate Tower” Project at Nagoya Station, high-speed railway systems and Superconducting Maglev projects overseas, etc. In order to steadily move forward with these various challenges, we will continue working to enhance profitability and make sustained improvements in our engineering capabilities. At the same time, we will make every effort to reduce costs and increase efficiency across all operations including capital investment and will strive to improve our business strength .

■Performance forecast for FY2015 (consolidated)

（Billion yen） YoY

Operating Revenues 1,674.0 100.1％

Operating Income 515.0 101.7％

Ordinary income 445.0 103.9％Net income attributable to

owners of the parent 303.0 114.7％Note: As of the release of the financial report for FY2014

Corporate Data


Financial Section

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

1) Overview of FY2014In the current term, amid the continuing satisfactory level

of railway use, JR Central strived to further enhance services

while placing the highest priority on ensuring safe and

reliable transportation in the railway business, which is the

core of our operations.

In our railway business, in terms of the Tokaido Shinkansen,

we have steadily promoted a large-scale renovation, which

started in FY2013, and earthquake countermeasures, such

as countermeasures to derailment and deviation. Also, we

utilized the “10 Nozomi Timetable” to schedule trains flexibly.

Furthermore, we have worked to enhance passenger service

and ensure safe and reliable transportation by increasing the

maximum speed to 285km/h, introducing the latest model

rolling stock, N700A, and modifying rolling stock of the

series N700. In terms of the conventional lines, we have

systematically promoted earthquake countermeasures, such

as anti-earthquake reinforcement for elevated columns,

measures against falling rocks, improvement of safety

devices on grade crossings, and tsunami countermeasures.

Also, we have made efforts to further improve convenience

by completing the electrification of the Taketoyo Line in

March 2015, of which construction began in FY2009. In

terms of sales and marketing, we have promoted proactive

initiatives, such as measures to expand the number of

members and usage of Express Reservation, etc.

In non-railway business, we have strived to strengthen

existing businesses, and steadily moved forward with the “JR

Gate Tower” Project at Nagoya Station.

Our commitment to the aforementioned series of measures

led to continuing favorable railway transportation volume for

both business and tourism. Therefore, transportation revenues

for JR Central increased. Overall consolidated operating

revenues also increased, in spite of revenue decrease at

NIPPON SHARYO, LTD., according to completion of

delivery of rolling stock to Taiwan.

On the other hand, operating expenses increased due to an

increase in non-personnel expenses, such as the cost related

to the progress of the large-scale renovations and rise in

the electric rate, despite a decrease in the cost of sales at

NIPPON SHARYO, LTD. Moreover, non-operating income/

loss improved due to a decrease in interest expenses as well

as in losses from the early repayment of long-term debt and

payables.

As a result, both revenue and income increased for the

current term with operating revenue ending at 1,672.2 billion

yen, operating income at 506.5 billion yen, ordinary income

at 428.1 billion yen, and net income at 264.1 billion yen.

2) Operating Performancea) Operating Revenue

Operating revenue increased by 19.7 billion yen (1.2%)

YoY to 1,672.2 billion yen.

In terms of our transportation business, JR Central’s

transportation revenues increased by 28.3 billion yen (2.3%)

YoY to 1,243.2 billion yen. Passenger volume on the Tokaido

Shinkansen rose 2.6% YoY, pushing up transportation

revenues 2.7% YoY to 1,143.4 billion yen. Passenger

volume on conventional lines decreased by 1.7% YoY with

transportation revenues decreasing 1.2% YoY to 99.7 billion

yen.

In our non-transportation businesses, operating revenues

for the merchandise and other segment increased by 5.9%

YoY, and the real estate and the other segments decreased

respectively by 1.2% and 4.6% YoY.

b) Operating Expenses

Operating expenses increased by 7.7 billion yen (0.7%)

YoY to end at 1,165.6 billion yen due to an increase in non-

personnel expenses, such as the cost related to the progress of

the large-scale renovations and rise in the electric rate, despite

a decrease in the cost of sales at NIPPON SHARYO, LTD.

c) Operating Income

Operating income increased by 11.9 billion yen (2.4%)

YoY to 506.5 billion yen.

d) Non-Operating Income/Loss

Non-operating income/loss improved 11.8 billion yen over

the previous term due to a decrease in interest expenses as

well as in losses from the early repayment of long-term debt

and payables.

e) Net Income

As a result, net income increased by 8.4 billion yen (3.3%)

YoY to 264.1 billion yen.

3) Cash FlowCash and cash equivalents (hereinafter, “capital”) as of the

end of March 2015 increased by 54.5 million yen YoY to 130

billion yen.

Long-term debt and payables decreased by 220.2 billion

yen YoY for a balance of 2,150.5 billion yen at the end of

March 2015.

Capital gained from operating activities increased by

30.2 billion yen YoY to 570.8 billion yen due to continuing

favorable railway transportation volume for both business

and tourism and an increase in JR Central’s transportation

revenues.

Capital expended through investing activities increased by

33.5 billion yen YoY to 263.9 billion yen due to increases in

expenses for fund management.

Capital expended through financing activities decreased by

57.4 billion yen YoY to 252.2 billion yen due to an increase

in proceeds from long-term debt.

4) Shrinking Long-Term Debt and PayablesDuring this term, we decreased long-term debt and

payables by 220.2 billion yen on a consolidated basis, and

215.4 billion yen on a non-consolidated basis. Long-term

debt and payables at the end of this term were 2,150.5 billion

yen on a consolidated basis and 2,136.3 billion yen on a non-

consolidated basis.

When JR Central purchased the Tokaido Shinkansen

facilities in October 1991, we were burdened with total long-

term debt and payables of more than 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 have regarded reducing long-

term debt and payables as our most important financial task,

we have endeavored to trim debt and payables as rapidly

as possible. Consequently, the 5,456.2 billion yen in total

long-term debt and payables at the end of March 1992,

immediately after we acquired Tokaido Shinkansen assets,

has been lowered by 3,319.9 billion yen.

In addition to continuing to strengthen our earning

capabilities and thoroughly pursuing efficiency as

well as greater cost reductions across all operations

including capital investment, we will strive to reduce

long-term debt as we steadily promote efforts directed

at construction of the Chuo Shinkansen through more

effective use of on-hand cash.

5) Net Asset BalanceNet asset balance at the end of March 2015 increased by

261.7 billion yen over the end of the previous term to end at

2,063.9 billion yen, and our equity ratio rose from 33.9% at

the end of the previous term to 38.7% at the end of this term.

6) Capital ProcurementIn order to procure capital from various sources

and facilitate smooth fundraising, we have acquired

issuer credit ratings from Moody’s Japan, Rating and

Investment Information, Inc. and Japan Credit Rating

Agency, Ltd. The rating is respectively Aa3, AA, and

AAA. Our credit ratings for corporate bonds during this

term are issued from Moody’s Japan, and Rating and

Investment Information, Inc.

Furthermore, in order to secure short-term liquidity, we

have established a commitment of 100 billion yen as of the

end of this term.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2015CENTRAL JAPAN RAILWAY COMPANY Annual Report 2015 4140

Financial Section

Consolidated Balance Sheet

　Central Japan Railway Company and Consolidated Subsidiaries March 31, 2015

ASSETSMillions of Yen

(Note 2)Thousands of U.S. Dollars

(Note 2)

2015 2014 2015

CURRENT ASSETS:

Cash and cash equivalents (Note 10) ￥ 130,002 ￥ 75,445 $ 　1,083,350

Time deposits (Note 10) 114,000 50,010 950,000

Trade receivables (Note 10) 90,957 99,031 757,975

Allowance for doubtful accounts (22) (39) (183)

Inventories 38,636 36,650 321,966

Deferred tax assets (Note 9) 26,708 27,592 222,566

Prepaid expenses and other 31,901 25,163 265,841

Total current assets 432,183 313,853 3,601,525

NONCURRENT ASSETS:

Investments and other assets:

Investment securities (Notes 4 and 10) 137,066 111,332 1,142,216

Investments in and advances to unconsolidated subsidiaries and affiliates (Note 4) 13,450 18,541 112,083

Asset for retirement benefits (Note 7) 5,929 2,276 49,408

Deferred tax assets (Note 9) 149,077 171,225 1,242,308

Prepaid expenses and other 45,535 46,317 379,458

Total investments and other assets 351,058 349,693 2,925,483

Property, plant and equipment (Note 3.e):

Buildings and structures (Note 5) 4,643,280 4,603,138 38,694,000

Machinery, rolling stock and vehicles 1,344,884 1,331,561 11,207,366

Land (Note 5) 2,356,186 2,358,060 19,634,883

Construction in progress 169,240 132,900 1,410,333

Other 184,573 185,192 1,538,108

Total 8,698,165 8,610,852 72,484,708

Accumulated depreciation (4,263,426) (4,096,232) (35,528,550)

Net property, plant and equipment 4,434,739 4,514,619 36,956,158

Total noncurrent assets 4,785,798 4,864,313 39,881,650

TOTAL ASSETS ￥ 5,217,982 ￥ 5,178,166 $ 43,483,183 See notes to consolidated financial statements.

　March 31, 2015

LIABILITIES AND EQUITYMillions of Yen


(Note 2)

2015 2014 2015

CURRENT LIABILITIES: Short-term loans payable (Notes 5 and 10) ￥ 31,368 ￥ 24,754 $　 261,400

Current portion of long-term debt (Notes 5 and 10) 139,879 213,026 1,165,658

Current portion of long-term accounts payable—railway facilities (Notes 6 and 10) 86,073 96,505 717,275

Trade payables (Note 10) 183,033 169,153 1,525,275

Provision for bonuses 27,715 27,319 230,958

Income taxes payable (Note 10) 71,528 84,472 596,066

Advances received 41,137 52,890 342,808

Other (Note 9) 78,130 43,403 651,083

Total current liabilities 658,868 711,526 5,490,566

NONCURRENT LIABILITIES:Long-term debt (Notes 5 and 10) 1,280,954 1,301,895 10,674,616

Long-term accounts payable—railway facilities (Notes 6 and 10) 643,611 759,382 5,363,425

Provision for large-scale renovation of the Shinkansen infrastructure (Note 3.i) 280,000 315,000 2,333,333

Liability for retirement benefits (Note 7) 205,501 212,969 1,712,508

Other (Note 9) 85,079 75,139 708,991

Total noncurrent liabilities 2,495,146 2,664,387 20,792,883

CONTINGENCIES (Note 13):

EQUITY (Notes 8 and 16):Common stock—authorized, 824,000,000 shares;

issued, 206,000,000 shares in 2015 and 2014 112,000 112,000 933,333

Capital surplus 53,500 53,500 445,833

Retained earnings 1,927,407 1,669,462 16,061,725

Treasury stock—at cost, 9,200,743 shares in 2015 and 9,200,676 shares in 2014 (103,156) (103,155) (859,633)

Accumulated other comprehensive income:

Unrealized gain on available-for-sale securities 38,663 21,493 322,191

Deferred (loss) gain on hedges (24) 5 (200)

Remeasurements of defined benefit plans (Note 7) (8,192) 465 (68,266)

Total 2,020,196 1,753,771 16,834,966

Minority interests 43,770 48,481 364,750

Total equity 2,063,967 1,802,252 17,199,725

TOTAL LIABILITIES AND EQUITY ￥ 5,217,982 ￥ 5,178,166 $ 43,483,183 See notes to consolidated financial statements.


Financial Section

Consolidated Statement of Income Consolidated Statement of Changes in Equity

Consolidated Statement of Comprehensive Income

　Central Japan Railway Company and Consolidated Subsidiaries Year Ended March 31, 2015

Millions of Yen (Note 2)

Thousands of U.S. Dollars

(Note 2)2015 2014 2013 2015

OPERATING REVENUES ￥ 1,672,295 ￥ 1,652,547 ￥ 1,585,319 $ 13,935,791

OPERATING EXPENSES (Note 3.k):Transportation, other services and cost of sales (Note 3.i) 983,074 979,083 986,975 8,192,283 Selling, general and administrative expenses 182,622 178,851 172,201 1,521,850

Total operating expenses 1,165,696 1,157,935 1,159,176 9,714,133

Operating income 506,598 494,612 426,142 4,221,650

OTHER INCOME (EXPENSES):Interest and dividend income 2,287 1,987 1,857 19,058 Interest expense (Note 6) (72,272) (80,325) (89,289) (602,266)Loss on redemption of bonds (13,676) (13,357) (11,721) (113,966)Other—net (18,239) (177) (801) (151,991)

Other expenses—net (101,900) (91,873) (99,954) (849,166)

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 404,698 402,738 326,187 3,372,483

INCOME TAXES (Note 9):Current 135,387 143,576 131,571 1,128,225 Deferred 12,547 (906) (8,906) 104,558

Total income taxes 147,934 142,670 122,664 1,232,783

NET INCOME BEFORE MINORITY INTERESTS 256,763 260,068 203,523 2,139,691

MINORITY INTERESTS IN NET (LOSS) INCOME (7,370) 4,381 3,551 (61,416)

NET INCOME ￥ 264,134 ￥ 255,686 ￥ 199,971 $ 2,201,116

Yen U.S. Dollars2015 2014 2013 2015

PER SHARE OF COMMON STOCK* (Note 3.q): Basic net income ￥ 1,342.15 ￥ 1,299.23 ￥ 1,016.12 $ 11.18 Cash dividends applicable to the year 120.00 115.00 105.00 1.00

* Per share figures have been restated, as appropriate, to reflect a hundred-for-one stock split effective as of October 1, 2012.See notes to consolidated financial statements.




(Note 2)2015 2014 2013 2015

NET INCOME BEFORE MINORITY INTERESTS ￥ 256,763 ￥ 260,068 ￥　 203,523 $ 2,139,691

OTHER COMPREHENSIVE INCOME (Note 14):Unrealized gain on available-for-sale securities 18,741 5,581 12,496 156,175 Deferred (loss) gain on hedges (59) (25) 2 (491)Remeasurements of defined benefit plans (6,725) (56,041)Share of other comprehensive income in affiliates 201 25 81 1,675

Total other comprehensive income 12,157 5,582 12,581 101,308

COMPREHENSIVE INCOME ￥ 268,921 ￥ 265,650 ￥ 216,104 $ 2,241,008

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the parent ￥ 272,616 ￥ 261,659 ￥ 211,363 ￥ 2,271,800 Minority interests (3,694) 3,991 4,741 (30,783)

See notes to consolidated financial statements.


Thousands Millions of Yen (Note 2) Accumulated Other

Comprehensive Income Outstanding Number of Shares of

Common Stock*

Unrealized Gain on

Available-for-Sale Securities

Deferred (Loss) Gain

on Hedges

Remeasurementsof Defined

Benefit PlansCommon Capital Retained Treasury Minority Total

Stock Surplus Earnings Stock Total Interests EquityBALANCE, APRIL 1, 2012 196,799 ￥112,000 ￥53,500 ￥1,357,387 ￥(205,367) ￥ 4,117 ￥ 17 ￥1,321,654 ￥41,597 ￥1,363,251

Net income 199,971 199,971 199,971 Dividends from surplus, ¥100 per share* (19,700) (19,700) (19,700)Retirement of treasury stock (102,212) 102,212 Net change in the year 11,390 1 11,391 3,057 14,449

BALANCE, MARCH 31, 2013 196,799 112,000 53,500 1,435,445 (103,155) 15,508 18 1,513,317 44,654 1,557,972

Net income 255,686 255,686 255,686 Dividends from surplus, ¥110 per share (21,670) (21,670) (21,670)Purchase of treasury stock (0) (0) (0) (0)Net change in the year 5,985 (12) ￥ 465 6,437 3,827 10,264

BALANCE, MARCH 31, 2014(APRIL 1, 2014, as previously reported) 196,799 112,000 53,500 1,669,462 (103,155) 21,493 5 465 1,753,771 48,481 1,802,252

Cumulative effect of accounting change (Note 3.j) 17,450 17,450 (580) 16,869 BALANCE APRIL 1, 2014 (as restated) 112,000 53,500 1,686,913 (103,155) 21,493 5 465 1,771,221 47,900 1,819,122

Net income 264,134 264,134 264,134 Dividends from surplus, ¥120 per share (23,640) (23,640) (23,640)Purchase of treasury stock (0) (1) (1) (1)Net change in the year 17,169 (30) (8,657) 8,482 (4,130) 4,351

BALANCE, MARCH 31, 2015 196,799 ￥112,000 ￥53,500 ￥1,927,407 ￥ (103,156) ￥38,663 ￥ (24) ￥ (8,192) ￥2,020,196 ￥43,770 ￥2,063,967

Thousands of U.S.Dollars (Note 2)

Accumulated OtherComprehensive Income

Unrealized Gain on

Available-for-Sale Securities

Deferred (Loss) Gain

on Hedges

Remeasurementsof Defined

Benefit PlansCommon Capital Retained Treasury Minority Total

Stock Surplus Earnings Stock Total Interests EquityBALANCE, MARCH 31, 2014(APRIL 1, 2014, as previously reported) $ 933,333 $ 445,833 $ 13,912,183 $ (859,625) $ 179,108 $ 41 $ 3,875 $ 14,614,758 $ 404,008 $ 15,018,766

Cumulative effect of accounting change (Note 3.j) 145,416 145,416 (4,833) 140,575 BALANCE APRIL 1, 2014 (as restated) 933,333 445,833 14,057,608 (859,625) 179,108 41 3,875 14,760,175 399,166 15,159,350

Net income 2,201,116 2,201,116 2,201,116 Dividends from surplus, $1.00 per share (197,000) (197,000) (197,000)Purchase of treasury stock (8) (8) (8)Net change in the year 143,075 (250) (72,141) 70,683 (34,416) 36,258

BALANCE, MARCH 31, 2015 $ 933,333 $ 445,833 $ 16,061,725 $ (859,633) $ 322,191 $ (200) $ (68,266) $ 16,834,966 $ 364,750 $ 17,199,725

* Shares and per share figures have been restated, as appropriate, to reflect a hundred-for-one stock split effective as of October 1, 2012.See notes to consolidated financial statements.


Financial Section

Consolidated Statement of Cash Flows　

Central Japan Railway Company and Consolidated Subsidiaries Year Ended March 31, 2015



(Note 2)2015 2014 2013 2015

OPERATING ACTIVITIES:Income before income taxes and minority interests ￥ 404,698 ￥ 402,738 ￥ 326,187 $ 3,372,483 Adjustments for:

Income taxes—paid (148,296) (139,513) (114,018) (1,235,800)Depreciation and amortization 271,568 276,269 240,193 2,263,066 Equity in earnings of affiliates (339) (326) (2) (2,825)Proceeds from contribution for construction (2,221) (1,284) (7,378) (18,508)Reduction of noncurrent assets related to contribution for construction 3,545 1,854 7,440 29,541 Loss on retirement of noncurrent assets 10,001 15,104 14,584 83,341 Gain on sales of noncurrent assets—net (1,395) (2,386) (561) (11,625)Changes in assets and liabilities:

(Decrease) increase in provision for large-scalerenovation of the Shinkansen infrastructure (35,000) (35,000) 33,333 (291,666)

Decrease (increase) in trade receivables 8,052 (24,259) 8,798 67,100 (Increase) decrease in inventories (518) 14,763 (16,813) (4,316)Increase (decrease) in trade payables 6,654 (1,603) 2,438 55,450 (Decrease) increase in advances received (11,752) 8,503 (3,758) (97,933)Increase in provision for retirement benefits 4,532 Increase in liability for retirement benefits 4,561 4,143 38,008

Other—net 61,249 21,552 17,347 510,408

Net cash provided by operating activities 570,806 540,557 512,324 4,756,716

INVESTING ACTIVITIES:Placement of time deposits (279,000) (95,000) (20,000) (2,325,000)Withdrawal of time deposits 215,010 65,002 30,000 1,791,750 Purchases of marketable securities (50,000) (35,000) (25,000) (416,666)Proceeds from redemption of marketable securities 50,000 35,000 25,000 416,666 Purchases of property, plant and equipment (197,469) (202,118) (268,440) (1,645,575)Proceeds from contribution for construction 4,929 3,825 2,433 41,075 Proceeds from sales of investment securities 434 902 519 3,616 Purchases of investment securities (203) (108) (4) (1,691)Other—net (7,670) (2,958) (6,623) (63,916)

Net cash used in investing activities (263,970) (230,454) (262,114) (2,199,750)

FINANCING ACTIVITIES:Net increase (decrease) in short-term loans payable 6,581 (1,889) 1,684 54,841 Proceeds from long-term debt 259,600 189,600 189,000 2,163,333 Repayments of long-term debt (353,699) (319,950) (266,782) (2,947,491)Payments for long-term accounts payable— railway facilities (126,202) (138,848) (148,989) (1,051,683)Cash dividends paid (23,640) (21,670) (19,700) (197,000)Cash dividends paid to minority shareholders (434) (434) (434) (3,616)Other—net (14,483) (16,572) (14,615) (120,691)

Net cash used in financing activities (252,279) (309,764) (259,838) (2,102,325)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 54,556 338 (9,629) 454,633

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 75,445 75,106 84,692 628,708

CASH AND CASH EQUIVALENTS INCREASEDBY MERGER WITH AN UNCONSOLIDATED SUBSIDIARY 43

CASH AND CASH EQUIVALENTS, END OF YEAR ￥ 130,002 ￥ 75,445 ￥ 75,106 $ 1,083,350

ADDITIONAL CASH FLOW INFORMATION:Interest paid ￥ 72,683 ￥ 81,070 　￥ 89,227 $ 605,691

See notes to consolidated financial statements.

Notes to Consolidated Financial Statements

1.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, Transport and Tourism (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 and Tokyo 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.

The shares above do not reflect the effect of the hundred-for-one stock split effective as of October 1, 2012.

2.BASIS OF PRESENTATION OF CONSOLIDATED 　　　FINANCIAL STATEMENTS

The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, and in accordance 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.

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 2014 and 2013 consolidated financial statements to conform to the classifications used in 2015.

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 ¥120 to $1, the approximate rate of exchange as of March 31, 2015. 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 of less than one million yen are rounded down to the nearest million of yen, except for per share information, and U.S. dollar figures of less than one thousand 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, 2015, include the accounts of the Company and its 29 significant subsidiaries (together, the "Companies").

On April 1, 2015, Shizuoka Terminal Hotel, Ltd., a consolidated subsidiary, was merged into JR Tokai Hotels, Ltd., another consolidated subsidiary.

Under the control and influence concepts, 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 28, 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 EquivalentsCash 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, certificates of deposit, 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 SecuritiesAll investment securities are classified and accounted for, depending

on management's intent, as available-for-sale securities, which are

Central Japan Railway Company and Consolidated Subsidiaries


Financial Section

principally comprised of investment securities, and are reported at fair value, with unrealized gain and loss, net of applicable taxes, reported in a separate component of equity.

Nonmarketable 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 EquipmentProperty, 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. The accumulated contributions deducted from the cost of property, plant and equipment as of March 31, 2015 and 2014 amounted to ¥275,321 million ($2,294,341 thousand), and ¥273,188 million, respectively.

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 is 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 CostsSoftware costs are amortized by the straight-line method over five

years.

h.Deferred ChargesBond issuance costs are fully charged to income as incurred.

i.Provision for Large-Scale Renovation of the Shinkansen InfrastructureProvision for large-scale renovation of the Shinkansen infrastructure

is provided based on the Nationwide Shinkansen Railway Development Law.

The Company amended the provision reserve plan in the year ended March 31, 2013, and started to appropriate the reverse evenly over 10 years from the year ended March 31, 2014. Accordingly, the Company reversed the provision in an amount of ¥35,000 million in the year ended March 31, 2014, whereas ¥33,333 million was reserved in the year ended March 31, 2013. As a result, operating expenses decreased by ¥68,333 million, and both operating income and income before income taxes in the year ended March 31, 2014, increased by the same amount from the year ended March 31, 2013.

j.Retirement and Pension PlansThe Company and 28 consolidated subsidiaries have unfunded

retirement plans covering substantially all of their employees. Six consolidated subsidiaries have noncontributory defined benefit pension plans and one consolidated subsidiary has a defined contribution pension plan, some of those subsidiaries also have unfunded retirement plans. Some of the subsidiaries adopt the simplified accounting method for calculation of liability of retirement benefits and retirement benefit expenses.

Liability for retirement benefits is mainly calculated based on the projected benefit obligations and plan assets at the balance sheet date. The projected benefit obligations are attributed to periods on a benefit formula basis. Actuarial gains and losses are amortized on a straight-

line basis mainly over five years, which is within the average remaining service period. Prior service costs are amortized on a straight-line basis mainly over five years, which is within the average remaining service period.

The Accounting Standards Board of Japan (the “ASBJ”) issued ASBJ Statement No. 26, "Accounting Standard for Retirement Benefits" in May 2012 and ASBJ Guidance No. 25, "Guidance on Accounting Standard for Retirement Benefits” in March 2015, which replaced the accounting standard for retirement benefits that had been issued by the Business Accounting Council in 1998 with an effective date of April 1, 2000, and the other related practical guidance, and were followed by partial amendments from time to time through 2009.(a)Under the revised accounting standard, actuarial gains and losses and past service costs that are yet to be recognized in profit or loss are recognized within equity (accumulated other comprehensive income), after adjusting for tax effects, and any resulting deficit or surplus is recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits).(b)The revised accounting standard does not change how to recognize actuarial gains and losses and past service costs in profit or loss. Those amounts are recognized in profit or loss over a certain period no longer than the expected average remaining service period of the employees. However, actuarial gains and losses and past service costs that arose in the current period and have not yet been recognized in profit or loss are included in other comprehensive income, and actuarial gains and losses and past service costs that were recognized in other comprehensive income in prior periods and then recognized in profit or loss in the current period, are treated as reclassification adjustments (see Note 14).(c)The revised accounting standard also made certain amendments relating to the method of attributing expected benefit to periods, the discount rate, and expected future salary increases.

This accounting standard and the guidance for (a) and (b) above are effective for the end of annual periods beginning on or after April 1, 2013, and for (c) above are effective for the beginning of annual periods beginning on or after April 1, 2014, or for the beginning of annual periods beginning on or after April 1, 2015, subject to certain disclosure in March 2015, all with earlier application being permitted from the beginning of annual periods beginning on or after April 1, 2013. However, no retrospective application of this accounting standard to consolidated financial statements in prior periods is required.

The Companies applied the revised accounting standard and guidance for retirement benefits for (a) and (b) above, effective March 31, 2014, and for (c) above, effective April 1, 2014.

With respect to (c) above, the Companies changed the method of attributing the expected benefit to periods from a straight-line basis to a benefit formula basis, and the method of determining the discount rate, and recorded the effect above as of April 1, 2014, in retained earnings. As a result, retained earnings as of April 1, 2014, increased by ¥17,450 million ($145,416 thousand). The effect of this change on the consolidated statement of income for the year ended March 31, 2015, was immaterial.

k.Research and Development CostsResearch and development costs are charged to income as incurred.

Research and development costs charged to income were ¥107,370 million ($894,750 thousand), ¥93,533 million and ¥33,851 million for the years ended March 31, 2015, 2014 and 2013, respectively.

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.Income TaxesThe 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.

4.INVESTMENT SECURITIESInformation regarding investment securities with readily determinable fair values classified as available-for-sale as of March 31, 2015 and 2014, was as follows:

Millions of Yen 2015

Unrealized Unrealized Fair Cost Gain Loss Value

Equity securities ￥ 60,185 ￥ 56,863 　　￥ 55 ￥ 116,992Trust fund investment and other 276 67 343

Total ￥ 60,461 ￥ 56,931 　　￥ 55 ￥ 117,336

Millions of Yen2014


Equity securities ￥ 60,452 ￥ 31,752 　　￥ 653 ￥ 91,552 Trust fund investment and other 276 4 271

Total ￥ 60,728 ￥ 31,752 　　￥ 657 ￥ 91,823

Thousands of U.S. Dollars2015


Equity securities $ 501,541 $ 473,858 　　$ 458 $ 974,933Trust fund investment and other 2,300 558 2,858

Total $ 503,841 $ 474,425 　　$ 458 $ 977,800 The information for available-for-sale securities whose fair value is not readily determinable as of March 31, 2015 and 2014, is disclosed in Note 10.The impairment loss on investments in an unconsolidated subsidiary for the year ended March 31, 2015, was ¥5,648 million ($47,066 thousand). The

impairment loss on available-for-sale equity securities for the years ended March 31, 2014 and 2013, was not presented as the effect was immaterial.

n.Appropriations of Retained EarningsAppropriations of retained earnings are reflected in the consolidated

financial statements for the following year upon shareholders' approval.

o.Consumption TaxUnless otherwise stated, all figures are presented net of tax.

p.Derivatives and Hedging ActivitiesThe Companies use derivative financial instruments mainly 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 is recognized and included in interest expense.

q.Per Share InformationBasic 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.

The net income available to common shareholders used in the computation for 2015, 2014 and 2013 was ¥264,134 million ($2,201,116 thousand), ¥255,686 million and ¥199,971 million, respectively. The average number of common shares used in the computation for 2015, 2014 and 2013 was 196,799,298 shares, 196,799,336 shares and 196,799,380 shares, respectively.

Diluted net income per share is not presented in the accompanying consolidated financial statements as the Companies do not have any dilutive

securities.Cash dividends per share presented in the accompanying consolidated

statement of income are dividends applicable to the respective years, including dividends to be paid after the end of the year.

On October 1, 2012, the Company effected a hundred-for-one stock split and implemented a share unit system, by which shares became share units. All prior year shares and per share figures have been restated and the Company presents the weighted-average number of common shares, basic net income per share and cash dividends per share to reflect the impact of the stock split.

r.Accounting Changes and Error CorrectionsIn 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 following revision of an accounting standard, the new policy is applied retrospectively unless the revised accounting standard includes specific transitional provisions, in which case the entity shall comply with the specific transitional provisions. (2) Changes in Presentation—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.


Financial Section

Annual maturities of long-term debt outstanding at the principal amounts as of March 31, 2015, were as follows:

Year Ending March 31 Millions of Yen Thousands of U.S. Dollars

2016 ¥ 139,879 $ 1,165,658 2017 132,236 1,101,9662018 170,574 1,421,4502019 130,647 1,088,7252020 134,593 1,121,608Thereafter 712,976 5,941,466

Total ¥ 1,420,907 $ 11,840,891

The Company has entrusted cash for the repayment of a portion of its outstanding 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, 2015 and 2014, were as follows:

Millions of Yen Thousands of U.S. Dollars

2015 2014 2015Secured 3.95% bonds due 2016 ¥ 29,000 ¥ 29,000 $ 241,666 Secured 2.825% bonds due 2017 49,800 49,800 415,000Secured 2.18% bonds due 2018 29,900 29,900 249,166Secured 2.6% bonds due 2020 49,800 49,800 415,000Unsecured 2.39% bonds due 2022 18,995 9,497 158,291Unsecured 2.2% bonds due 2022 18,200 9,100 151,666Unsecured 1.74% bonds due 2022 20,000 10,000 166,666Unsecured 1.42% bonds due 2017 10,000 5,000 83,333Unsecured 1.15% bonds due 2022 25,000 12,500 208,333Unsecured 1.31% bonds due 2033 10,000 5,000 83,333Unsecured 2.015% bonds due 2023 9,000 4,500 75,000Unsecured 2.2% bonds due 2024 9,900 4,950 82,500Unsecured 2.19% bonds due 2019 9,900 4,950 82,500Unsecured 1.875% bonds due 2019 20,000 10,000 166,666Unsecured 2.21% bonds due 2024 9,650 4,825 80,416Unsecured 1.775% bonds due 2020 20,000 10,000 166,666Unsecured 1.77% bonds due 2017 20,000 10,000 166,666Unsecured 1.695% bonds due 2016 20,000 10,000 166,666Unsecured 2.14% bonds due 2018 18,400 9,200 153,333Unsecured 2.405% bonds due 2026 9,900 4,950 82,500Unsecured 2% bonds due 2016 30,000 15,000 250,000

Total ¥ 437,445 ¥ 297,972 $ 3,645,375 The aforementioned bonds for which the Company entered into debt assumption agreements 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, 2015, was ¥100,000 million ($833,333

thousand).All assets of the Company were pledged for the above secured bonds of ¥158,500 million ($1,320,833 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 secured current portion of long-term debt of a consolidated subsidiary of ¥175 million ($1,458

thousand), as of March 31, 2015, were as follows:


Buildings and structures—net of accumulated depreciation ¥ 184 $ 1,533 Land 669 5,575

Total ¥ 854 $ 7,116

6.LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIESBased on legal defeasance agreements with special purpose entities, the Company has transferred the debt repayment obligations for certain long-term

accounts payable—railway facilities to the special purpose entities, and has provided the 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 ¥154,438 million ($1,286,983 thousand) and ¥224,711 million as of March 31, 2015 and 2014, respectively (see Note 13).

Annual maturities of long-term accounts payable—railway facilities as of March 31, 2015, were as follows:

Year Ending March 31 Millions of Yen Thousands of U.S. Dollars

2016 ¥ 86,073 $ 717,275 2017 89,749 747,9082018 4,820 40,1662019 5,118 42,6502020 5,437 45,308Thereafter 538,486 4,487,383

Total ¥ 729,685 $ 6,080,708 Interest expense on the aforementioned long-term accounts payable—railway facilities amounted to ¥46,784 million ($389,866 thousand), ¥52,375 million

and ¥59,004 million for the years ended March 31, 2015, 2014 and 2013, respectively.

5.SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBTThe interest rates applicable to short-term loans payable were 0.36% as of March 31, 2015, 0.32% as of March 31, 2014, and 0.35% as of March 31, 2013.Long-term debt as of March 31, 2015 and 2014, consisted of the following:


2015 2014 2015The Company

Unsecured 2.39% bonds due 2022 ￥ 9,497Unsecured 2.2% bonds due 2022 9,100Unsecured 1.74% bonds due 2022 10,000Unsecured 1.42% bonds due 2017 5,000Unsecured 1.15% bonds due 2022 12,500Unsecured 1.31% bonds due 2033 5,000Unsecured 2.015% bonds due 2023 4,500Unsecured 2.2% bonds due 2024 4,950Unsecured 2.19% bonds due 2019 4,950Unsecured 1.875% bonds due 2019 10,000Unsecured 2.21% bonds due 2024 4,825Unsecured 1.775% bonds due 2020 10,000Unsecured 1.77% bonds due 2017 10,000Unsecured 1.695% bonds due 2016 10,000Unsecured 2.14% bonds due 2018 9,200Unsecured 2.405% bonds due 2026 4,950Unsecured 2% bonds due 2016 15,000Unsecured 2.04% bonds due 2018 ¥ 18,795 18,794 $ 156,625 Unsecured 2.39% bonds due 2026 29,787 29,786 248,225Unsecured 1.88% bonds due 2016 19,997 19,996 166,641Unsecured 1.78% bonds due 2017 19,998 19,998 166,650Unsecured 1.78% bonds due 2017 19,998 19,998 166,650Unsecured 1.75% bonds due 2017 19,998 19,998 166,650Unsecured 2.31% bonds due 2027 19,981 19,979 166,508Unsecured 1.69% bonds due 2018 9,999 9,999 83,325Unsecured 2.3% bonds due 2027 14,993 14,992 124,941Unsecured 1.79% bonds due 2020 19,894 19,992 165,783Unsecured 1.83% bonds due 2018 9,997 9,996 83,308Unsecured 2.39% bonds due 2028 19,984 19,983 166,533Unsecured 2.391% bonds due 2028 30,000 30,000 250,000Unsecured 2.646% bonds due 2038 10,000 10,000 83,333Unsecured 1.557% bonds due 2019 19,800 20,000 165,000Unsecured 2.166% bonds due 2029 30,000 30,000 250,000Unsecured 2.312% bonds due 2029 30,000 30,000 250,000Unsecured 2.556% bonds due 2039 10,000 10,000 83,333Unsecured 1.667% bonds due 2019 10,000 10,000 83,333Unsecured 2.321% bonds due 2029 30,000 30,000 250,000Unsecured 2.157% bonds due 2029 40,000 40,000 333,333Unsecured 2.375% bonds due 2039 10,000 10,000 83,333Unsecured 1.472% bonds due 2020 14,100 15,000 117,500Unsecured 2.212% bonds due 2030 30,000 30,000 250,000Unsecured 2.111% bonds due 2030 20,000 20,000 166,666Unsecured 1.797% bonds due 2030 10,000 10,000 83,333Unsecured 0.586% bonds due 2015 30,000Unsecured 2.083% bonds due 2031 20,000 20,000 166,666Unsecured 0.297% bonds due 2014 30,000Unsecured 1.895% bonds due 2031 10,000 10,000 83,333 Unsecured 0.262% bonds due 2015 20,000 20,000 166,666Unsecured 1.824% bonds due 2032 10,000 10,000 83,333Unsecured 0.156% bonds due 2014 25,000Unsecured 0.13% bonds due 2016 15,000 15,000 125,000Unsecured 1.725% bonds due 2033 10,000 10,000 83,333Unsecured 1.807% bonds due 2033 15,000 15,000 125,000Unsecured 1.786% bonds due 2033 15,000 15,000 125,000Unsecured 1.629% bonds due 2033 10,000 10,000 83,333Unsecured 1.623% bonds due 2034 15,000 15,000 125,000Unsecured 1.584% bonds due 2034 15,000 125,000Unsecured 1.502% bonds due 2034 20,000 166,666Unsecured 1.309% bonds due 2032 15,000 125,000Unsecured 1.917% bonds due 2044 10,000 83,333Unsecured 1.362% bonds due 2034 20,000 166,666Unsecured 1.014% bonds due 2035 20,000 166,666Unsecured 1.685% bonds due 2045 10,000 83,333Unsecured loans from Japanese banks and others, with interest rates ranging from

0.76% to 6.6% (2015), from 0.84% to 6.6% (2014), due 2014 to 2045 639,293 612,883 5,327,441Subsidiaries

Unsecured and secured loans from Japanese banks and others, with interest rates ranging from 0.53% to 4.65% (2015), from 0.53% to 4.65% (2014), due 2014 to 2018 14,214 19,051 118,450

Total 1,420,834 1,514,922 11,840,283Less current portion (139,879) (213,026) (1,165,658)Long-term debt, less current portion ¥ 1,280,954 ¥ 1,301,895 $ 10,674,616


Financial Section

7.Plan assetsa.Components of plan assets

Plan assets as of March 31, 2015 and 2014, consisted of the following:

2015 2014Equities 62% 55%General security account 23 28Bonds 11 13Others 4 4

Total 100% 100%The employee retirement benefit trust for the Companies’ contributory pension plans accounted for 51% and 42% of total plan assets for the years ended

March 31, 2015 and 2014, respectively.

b.Method of determining the expected rate of return on plan assets The expected rate of return on plan assets is determined considering the long-term rates of return which are expected currently and in the future from the

various components of the plan assets.

8.Assumptions used for the years ended March 31, 2015 and 2014, were set forth as follows:

2015 2014Discount rate Mainly 0.4% Mainly 1.5%Expected rate of return on plan assets 1.2% to 2.0% 1.1% to 2.0%

9.Defined Contribution PlanTotal contribution by the Companies for the defined contribution plan was ¥113 million ($941 thousand) for the year ended March 31, 2015 and ¥106

million for the year ended March 31, 2014.

Year Ended March 31, 2013The components of net periodic benefit costs for the year ended March 31, 2013, were as follows:

Millions of Yen 2013

Service cost ¥ 12,575Interest cost 3,344Expected return on plan assets (235)Amortization of transitional obligation 199Amortization of prior service cost 49Recognized actuarial loss 255Net periodic benefit costs 16,188Contribution to the defined contribution plan 111

Total ¥ 16,300The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt the simplified accounting method, are included in service cost. Assumptions used for the year ended March 31, 2013 were set forth as follows:

2013Discount rate Mainly 1.5%Expected rate of return on plan assets 1.1% to 2.0%Amortization period of prior service cost Mainly five yearsRecognition period of actuarial gains/losses Mainly five yearsAmortization period of transitional obligation 15years (a certain consolidated

subsidiary only)

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. Some of the subsidiaries adopt the simplified accounting method for calculation of liability of retirement benefits and retirement benefit expenses.

Years Ended March 31, 2015 and 20141.The changes in defined benefit obligation for the years ended March 31, 2015 and 2014, were as follows:


2015 2014 2015Balance at beginning of year (as previously reported) ¥ 230,925 ¥ 227,177 $ 1,924,375

Cumulative effect of accounting change (25,696) (214,133)Balance at beginning of year (as restated) 205,228 227,177 1,710,233

Current service cost 13,227 12,770 110,225Interest cost 2,900 3,407 24,166Actuarial losses (gains) 19,841 (920) 165,341Benefits paid (15,068) (11,512) (125,566)Prior service cost 2Others 90 750

Balance at end of year ¥ 226,219 ¥ 230,925 $ 1,885,158 The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt the simplified accounting method, are included in the current

service cost.

2.The changes in plan assets for the years ended March 31, 2015 and 2014, were as follows:


2015 2014 2015Balance at beginning of year ¥ 20,231 ¥ 17,893 $ 168,591

Expected return on plan assets 290 269 2,416Actuarial gains 5,763 1,682 48,025Contributions from the employer 1,124 1,135 9,366Benefits paid (854) (748) (7,116)Others 90 750

Balance at end of year ¥ 26,647 ¥ 20,231 $ 222,058

3.Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obligation and plan assets:


2015 2014 2015Funded defined benefit obligation ¥ 21,606 ¥ 18,904 $ 180,050 Plan assets (26,647) (20,231) (222,058)

(5,041) (1,327) (42,008)Unfunded defined benefit obligation 204,613 212,020 1,705,108Net liability arising from defined benefit obligation 199,572 210,693 1,663,100Liability for retirement benefits 205,501 212,969 1,712,508Asset for retirement benefits (5,929) (2,276) (49,408)Net liability arising from defined benefit obligation ¥ 199,572 ¥ 210,693 $ 1,663,100

4.The components of net periodic benefit costs for the years ended March 31, 2015 and 2014, were as follows:


2015 2014 2015Service cost ¥ 13,227 ¥ 12,770 $ 110,225 Interest cost 2,900 3,407 24,166Expected return on plan assets (290) (269) (2,416)Recognized actuarial losses (gains) 3,742 (91) 31,183Amortization of prior service cost 79 86 658Amortization of transitional obligation 199 199 1,658Net periodic benefit costs ¥ 19,859 ¥ 16,103 $ 165,491

The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt the simplified accounting method, are included in service cost.

5.Other comprehensive income (pretax) on defined retirement benefit plans for the years ended March 31, 2015 and 2014


2015 2014 2015Actuarial gains ¥ (10,334) $ (86,116)Prior service cost 79 658Transitional obligation 199 1,658

Total ¥ (10,055) $ (83,791)

6.Accumulated other comprehensive income (pretax) on defined retirement benefit plans as of March 31, 2015 and 2014


2015 2014 2015Unrecognized actuarial (losses) gains ¥ (8,232) ¥ 2,102 $ (68,600)Unrecognized prior service cost (116) (196) (966)Unrecognized transitional obligation (199)

Total ¥ (8,349) ¥ 1,706 $ (69,575)

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 including (1) having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of the directors being prescribed as one year rather than the normal two-year 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 (noncash 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 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 within equity 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.d.Stock Splits

On October 1, 2012, the Company effected a hundred-for-one stock split and implemented a share unit system, by which shares became share units.


Financial Section

(1) Fair Value of Financial InstrumentsMillions of Yen

March 31, 2015 Carrying Amount Fair Value Unrealized Gain/LossCash and cash equivalents ¥ 130,002 ¥ 130,002Time deposits 114,000 114,000Trade receivables 90,957 90,957Investment securities 117,336 117,336

Total ¥ 452,296 ¥ 452,296

Short-term loans payable ¥ (31,368) ¥ (31,368) Trade payables (183,033) (183,033)Income taxes payable (71,528) (71,528)Long-term debt (1,420,834) (1,520,818) ¥ (99,984)Long-term accounts payable—railway facilities (729,685) (1,300,766) (571,080)

Total ¥ (2,436,450) ¥ (3,107,515) ¥ (671,065)

Millions of Yen March 31, 2014 Carrying Amount Fair Value Unrealized Gain/LossCash and cash equivalents ¥ 75,445 ¥ 75,445Time deposits 50,010 50,010Trade receivables 99,031 99,031Investment securities 91,823 91,823

Total ¥ 316,310 ¥ 316,310

Short-term loans payable ¥ (24,754) ¥ (24,754) Trade payables (169,153) (169,153)Income taxes payable (84,472) (84,472)Long-term debt (1,514,922) (1,600,517) ¥ (85,595)Long-term accounts payable—railway facilities (855,888) (1,387,186) (531,298)

Total ¥ (2,649,191) ¥ (3,266,085) ¥ (616,894)

Thousands of U.S. DollarsMarch 31, 2015 Carrying Amount Fair Value Unrealized Gain/LossCash and cash equivalents $ 1,083,350 $ 1,083,350 Time deposits 950,000 950,000Trade receivables 757,975 757,975Investment securities 977,800 977,800

Total $ 3,769,133 $ 3,769,133

Short-term loans payable $ (261,400) $ (261,400)Trade payables (1,525,275) (1,525,275)Income taxes payable (596,066) (596,066)Long-term debt (11,840,283) (12,673,483) $　 (833,200)Long-term accounts payable—railway facilities (6,080,708) (10,839,716) (4,759,000)

Total $ (20,303,750) $ (25,895,958) $ (5,592,208)

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 35.2% for the year ended March 31, 2015, and 37.6% for the years ended March 31, 2014 and 2013.The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities as of March 31, 2015

and 2014, were as follows:


2015 2014 2015Deferred tax assets:

Depreciation and amortization ¥ 69,401 ¥ 73,380 $ 578,341 Liability for retirement benefits 67,421 75,957 561,841Software 10,674 11,990 88,950Provision for bonuses 9,066 9,622 75,550Unrealized profit on property, plant and equipment 7,438 7,701 61,983Accrued railway usage charges 3,920 4,614 32,666Tax loss carryforwards 466 1,011 3,883Other 52,688 50,325 439,066

Total 221,077 234,603 1,842,308Less valuation allowance (22,685) (18,648) (189,041)

Deferred tax assets 198,391 215,954 1,653,258

Deferred tax liabilities:Unrealized gain on available-for-sale securities 17,656 10,748 147,133Deferred gain on transfer of certain fixed assets 4,664 5,318 38,866Other 6,439 4,984 53,658

Deferred tax liabilities 28,760 21,051 239,666

Net deferred tax assets ¥ 169,630 ¥ 194,903 $ 1,413,583 Net deferred tax assets as of March 31, 2015 and 2014, were reflected in the accompanying consolidated balance sheets under the following captions:


2015 2014 2015Current assets ¥ 26,708 ¥ 27,592 $ 222,566 Investments and other assets 149,077 171,225 1,242,308Current liabilities—other (1) (0) (8)Noncurrent liabilities—other (6,152) (3,913) (51,266)Net deferred tax assets ¥ 169,630 ¥ 194,903 $ 1,413,583

A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statement of income for the year ended March 31, 2014, was as follows:

2014Normal effective statutory tax rate 37.6%Deduction of R&D promotion tax system (2.8)Other—net 0.6Actual effective tax rate 35.4%

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, 2015 and 2013.

New tax reform laws enacted in 2014 in Japan changed the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2014, from approximately 37.6% to 35.2%. The effect of this change on the consolidated statement of income for the year ended March 31, 2014 was immaterial.

New tax reform laws enacted in 2015 in Japan changed the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2015, from approximately 35.2% to 32.7% and the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2016, to approximately 31.9%. The effect of these changes was to decrease deferred tax assets, net of deferred tax liabilities, in the consolidated balance sheet as of March 31, 2015, by ¥15,736 million ($131,133 thousand) and to increase income taxes - deferred in the consolidated statement of income for the year then ended by ¥17,296 million ($144,133 thousand).

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

The Companies use financial instruments, mainly debt including bank loans and bonds, based on their 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 within one year.

Short-term bank loans are used to fund the Companies’ ongoing operations. Bonds and long-term loans are used for renewal of long-term debt and capital spending. Please see Note 5 for a 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.

The 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 rates of long-term debt. Please see Note 11 for the detail of derivatives.c.Risk Management for Financial Instruments

Credit Risk ManagementCredit 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 the 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 quoted prices in active markets. If a quoted price is not available, other rational valuation techniques are used instead. Also, please see Note 11 for the details of fair value for derivatives.

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 Securities

The fair values of investment securities are measured at the quoted market price of the stock exchange. Fair value information for 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.Long-Term Accounts Payable—Railway Facilities Including Current Portion

Considering the legal characteristics, all terms and conditions of the accounts payable-railway facilities are stipulated in the special law, and as 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.


Financial Section

(2)Financial Instruments Whose Fair Value Cannot Reliably be DeterminedCarrying Amount

March 31, 2015 Millions of Yen Thousands of U.S. DollarsInvestments in equity instruments that do not have a quoted market price in an active market ¥ 31,822 $ 265,183

Carrying AmountMarch 31, 2014 Millions of YenInvestments in equity instruments that do not have a quoted market price in an active market ¥ 36,719

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

Millions of Yen

March 31, 2015 Due within One YearDue after One Year through Five Years

Due after Five Years

Cash and cash equivalents ¥ 130,002Time deposits 114,000Trade receivables 90,957

Total ¥ 334,959


March 31, 2015 Due within One YearDue after One Year through Five Years

Due after Five Years

Cash and cash equivalents $ 1,083,350 Time deposits 950,000Trade receivables 757,975

Total $ 2,791,325 f.Annual Maturities of long-term debt and long-term accounts payable—railway facilities

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

11.DERIVATIVESThe Companies enter 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 their 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 loss 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 AppliedMillions of Yen

March 31, 2015 Hedged Item Contract AmountContract Amount

Due after One Year Fair Value

Interest rate swaps:(fixed rate payment, floating rate receipt) Long-term debt ¥ 162,900 ¥ 142,800 *　

Millions of Yen



Interest rate swaps:(fixed rate payment, floating rate receipt) Long-term debt ¥ 152,900 ¥ 118,900 *　




Interest rate swaps:(fixed rate payment, floating rate receipt) Long-term debt $1,357,500 $1,190,000 *　*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 is recognized and included in interest expense. In addition, the fair value of such interest rate swaps is included in that of hedged items in Note 10 (i.e., long-term debt).

12.LEASESAs a lessee, the minimum rental commitments under noncancelable operating leases as of March 31, 2015 and 2014, were not presented as the effects were

immaterial.As a lessor, the minimum rental commitments under noncancelable operating leases as of March 31, 2015 and 2014, were due as follows:

Millions of YenThousands of U.S. Dollars

2015 2014 2015Due within one year ¥ 1,476 ¥ 1,514 $ 12,300 Due after one year 5,837 5,812 48,641

Total ¥ 7,313 ¥ 7,326 $ 60,941

13.CONTINGENCIESAs of March 31, 2015, the Company has joint and several obligations with the RTRI to make payments on long-term debt of ¥14,593 million ($121,608

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 the 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 the special purpose entities. As of March 31, 2015, the Company had contingent obligations of ¥437,445 million ($3,645,375 thousand) for the bonds and ¥154,438 million ($1,286,983 thousand) for long-term accounts payable—railway facilities.

14.COMPREHENSIVE INCOMEThe components of other comprehensive income for the years ended March 31, 2015, 2014 and 2013, were as follows:


2015 2014 2013 2015Unrealized gain on available-for-sale securities:

Gain arising during the year ¥ 25,964 ¥ 8,847 ¥ 16,907 $ 216,366 Reclassification adjustments to profit (158) (361) 477 (1,316)Amount before income tax effect 25,806 8,486 17,384 215,050Income tax effect (7,065) (2,905) (4,887) (58,875)

Total ¥ 18,741 ¥ 5,581 ¥ 12,496 $ 156,175 Deferred (loss) gain on hedges:

(Loss) gain arising during the year ¥ (88) ¥ (40) ¥ 4 $ (733)Amount before income tax effect (88) (40) 4 (733)Income tax effect 29 15 (1) 241

Total ¥ (59) ¥ (25) ¥ 2 $ (491)Remeasurements of defined benefit plans:

Adjustments arising during the year ¥ (14,077) $ (117,308)Reclassification adjustments to profit 4,021 33,508Amount before income tax effect (10,055) (83,791)Income tax effect 3,329 27,741

Total ¥ (6,725) $　(56,041)Share of other comprehensive income in affiliates

Gain arising during the year ¥ 167 ¥ 25 ¥ 81 $ 1,391 Reclassification adjustments to profit 33 275

Total ¥ 201 ¥ 25 ¥ 81 $ 1,675

Total other comprehensive income ¥ 12,157 ¥ 5,582 ¥ 12,581 $ 101,308

3.Information about Operating Revenues, Profit (Loss), Assets, Liabilities and Other Items

Millions of Yen2015

Reportable SegmentTransportation Merchandise and Other Real Estate Total Other Total Reconciliations Consolidated

Operating revenues:External customers ¥ 1,294,050 ¥ 225,038 ¥ 39,349 ¥ 1,558,437 ¥ 113,857 ¥ 1,672,295 ¥ 1,672,295Intersegment transactions or transfers 11,641 8,818 27,237 47,697 125,114 172,812 ¥ (172,812)

Total ¥ 1,305,691 ¥ 233,856 ¥ 66,587 ¥ 1,606,135 ¥ 238,971 ¥ 1,845,107 ¥ (172,812) ¥ 1,672,295

Segment profit ¥ 472,017 ¥ 8,935 ¥ 16,616 ¥ 497,570 ¥ 8,281 ¥ 505,851 ¥ 746 ¥ 506,598Segment assets 4,631,213 99,620 332,606 5,063,440 219,910 5,283,351 (65,369) 5,217,982Other:

Depreciation and amortization 251,092 3,383 13,148 267,624 3,944 271,568 271,568Amounts of investments in equity in affiliates 8,332 8,332 8,332 8,332Increase in property,plant and equipment and intangible assets 191,252 6,143 14,051 211,446 3,084 214,531 214,531

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.

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 of 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 (Loss), Assets, Liabilities and Other Items for Each Reportable Segment

The accounting policies of each reportable segment are consistent with 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 arm’s length transactions.

As described in Note 3.i, the Company amended the provision reserve plan in the year ended March 31, 2013, and started to appropriate the reverse evenly over 10 years from the year ended March 31, 2014.

Accordingly, the Company reversed the provision in an amount of ¥35,000 million in the year ended March 31, 2014, whereas the Company reserved the provision in an amount of ¥33,333 million in the year ended March 31, 2013. As a result, operating expenses of Transportation segment in the year ended March 31, 2014 decreased by ¥68,333 million, and Segment profit increased in the same amount from the year ended March 31, 2013.


Financial Section

Nonconsolidated Balance Sheet　

Central Japan Railway Company March 31, 2015

ASSETSMillions of Yen


(Note 2)2015 2014 2015

CURRENT ASSETS:Cash and cash equivalents ¥ 127,277 ¥ 72,108 $ 1,060,641 Time deposits 114,000 50,000 950,000Trade receivables 35,710 43,139 297,583Supplies 10,677 10,233 88,975Deferred tax assets (Note 8) 22,464 23,019 187,200Prepaid expenses and other 38,116 42,818 317,633

Total current assets 348,245 241,318 2,902,041

NONCURRENT ASSETS:Investments and other assets:

Investment securities 118,734 96,541 989,450Investments in and advances to subsidiaries and affiliates (Note 5) 184,325 187,001 1,536,041Deferred tax assets (Note 8) 134,898 161,504 1,124,150Prepaid expenses and other 33,054 33,728 275,450

Total investments and other assets 471,012 478,775 3,925,100Property, plant and equipment (Notes 3.e and 4):

Railway business property 7,912,012 7,865,908 65,933,433Construction in progress 165,753 126,614 1,381,275Other 163,702 164,180 1,364,183

Total 8,241,468 8,156,703 68,678,900Accumulated depreciation (4,047,266) (3,890,741) (33,727,216)

Net property, plant and equipment 4,194,202 4,265,962 34,951,683

Total noncurrent assets 4,665,215 4,744,738 38,876,791

TOTAL ASSETS ¥ 5,013,460 ¥ 4,986,057 $ 41,778,833

LIABILITIES AND EQUITYMillions of Yen


(Note 2)2015 2014 2015

CURRENT LIABILITIES:Short-term loans payable (Note 6) ¥ 126,210 ¥ 122,133 $ 1,051,750 Current portion of long-term debt (Note 6) 135,930 208,189 1,132,750Current portion of long-term accounts payable—railway facilities 86,073 96,505 717,275Trade payables 140,984 124,358 1,174,866Provision for bonuses 21,164 20,839 176,366Income taxes payable 65,361 74,005 544,675Prepaid fares received 27,643 38,790 230,358Inter-line fares received 7,293 163 60,775Other 57,111 32,665 475,925

Total current liabilities 667,773 717,651 5,564,775

NONCURRENT LIABILITIES:Long-term debt (Note 6) 1,270,689 1,287,681 10,589,075Long-term accounts payable—railway facilities 643,611 759,382 5,363,425Provision for large scale renovation of the Shinkansen infrastructure (Note3.i) 280,000 315,000 2,333,333Provision for retirement benefits 178,432 201,049 1,486,933Other 41,855 43,965 348,791

Total noncurrent liabilities 2,414,589 2,607,079 20,121,575

CONTINGENCIES (Note 9)

EQUITY (Notes 7 and 10):Common stock—authorized, 824,000,000 shares;

issued, 206,000,000 shares in 2015 and 2014 112,000 112,000 933,333Capital surplus 53,500 53,500 445,833Retained earnings:

Legal reserve 12,504 12,504 104,200Unappropriated 1,819,258 1,565,533 15,160,483

Treasury stock—at cost, 8,999,123 shares in 2015 and 8,999,056 shares in 2014 (102,203) (102,201) (851,691)Unrealized gain on available-for-sale securities 36,037 19,989 300,308

Total equity 1,931,097 1,661,326 16,092,475

TOTAL LIABILITIES AND EQUITY ¥ 5,013,460 ¥ 4,986,057 $ 41,778,833

See notes to nonconsolidated financial statements

　Millions of Yen

2014Reportable Segment

Transportation Merchandise and Other Real Estate Total Other Total Reconciliations ConsolidatedOperating revenues:

External customers ¥ 1,264,827 ¥ 212,907 ¥ 39,182 ¥ 1,516,917 ¥ 135,630 ¥ 1,652,547 ¥ 1,652,547Intersegment transactions or transfers 11,291 7,891 28,239 47,422 114,982 162,405 ¥ (162,405)

Total ¥ 1,276,119 ¥ 220,798 ¥ 67,422 ¥ 1,564,340 ¥ 250,613 ¥ 1,814,953 ¥ (162,405) ¥ 1,652,547

Segment profit ¥ 460,130 ¥ 8,221 ¥ 13,832 ¥ 482,183 ¥ 10,581 ¥ 492,765 ¥ 1,847 ¥ 494,612Segment assets 4,749,578 92,155 323,578 5,165,312 217,708 5,383,020 (204,853) 5,178,166Other:


Millions of Yen2013


Operating revenues:External customers ¥ 1,231,961 ¥ 201,547 ¥ 38,403 ¥ 1,471,911 ¥ 113,407 ¥ 1,585,319 ¥ 1,585,319Intersegment transactions or transfers 11,138 8,009 26,584 45,731 119,775 165,507 ¥ (165,507)

Total ¥ 1,243,099 ¥ 209,556 ¥ 64,987 ¥ 1,517,643 ¥ 233,183 ¥ 1,750,826 ¥ (165,507) ¥ 1,585,319

Segment profit ¥ 396,151 ¥ 7,262 ¥ 12,728 ¥ 416,142 ¥ 9,477 ¥ 425,620 ¥ 522 ¥ 426,142Segment assets 4,850,076 84,160 329,031 5,263,269 214,972 5,478,241 (247,137) 5,231,104Other:




Operating revenues:External customers $ 10,783,750 $ 1,875,316 $ 327,908 $ 12,986,975 $ 948,808 $ 13,935,791 $ 13,935,791 Intersegment transactions or transfers 97,008 73,483 226,975 397,475 1,042,616 1,440,100 $(1,440,100)

Total $ 10,880,758 $ 1,948,800 $ 554,891 $ 13,384,458 $ 1,991,425 $ 15,375,891 $(1,440,100) $ 13,935,791

Segment profit $ 3,933,475 $ 74,458 $ 138,466 $ 4,146,416 $ 69,008 $ 4,215,425 $ 6,216 $ 4,221,650 Segment assets 38,593,441 830,166 2,771,716 42,195,333 1,832,583 44,027,925 (544,741) 43,483,183Other:

Depreciation and amortization 2,092,433 28,191 109,566 2,230,200 32,866 2,263,066 2,263,066Amounts of investments in equity in affiliates 69,433 69,433 69,433 69,433Increase in property,plant and equipment and intangible assets 1,593,766 51,191 117,091 1,762,050 25,700 1,787,758 1,787,758

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

(1) The amount of the elimination of intersegment transactions included in the reconciliations was ¥746 million ($6,216 thousand), ¥1,847 million and ¥522 million for the years ended March 31, 2015, 2014 and 2013, respectively. (2) The reconciliations for segment assets include corporate assets, which are not allocated to a 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 ¥303,610 million ($2,530,083 thousand), ¥158,436 million and ¥119,959 million for the years ended March 31, 2015, 2014 and 2013, respectively.The elimination of intersegment transactions consists of intersegment receivables and others. The amounts of the elimination were ¥368,979 million ($3,074,825 thousand), ¥363,290 million and ¥367,096 million for the years ended March 31, 2015, 2014 and 2013, 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 above.

Information about geographical areas was not presented since the Companies have no significant overseas operations.

16.SUBSEQUENT EVENTSAppropriations of Retained Earnings

The following appropriation of retained earnings as of March 31, 2015, was approved at the Company's shareholders’ meeting held on June 23, 2015:

Millions of Yen Thousands of U.S. DollarsYear-end cash dividends, ¥60 ($0.50) per share ¥ 11,820 $ 98,500


Financial Section

Nonconsolidated Statement of Changes in Equity　

Central Japan Railway Company Year Ended March 31, 2015Thousands Millions of Yen (Note 2)

Outstanding Retained Earnings

Unrealized Number of Gain onShares of Common Capital Legal Treasury Available-for-Sale Total

Common Stock* Stock Surplus Reserve Unappropriated Stock Securities EquityBALANCE, APRIL 1, 2012 197,001 ¥ 112,000 ¥ 53,500 ¥ 12,504 ¥ 1,280,940 ¥ (204,414) ¥ 3,748 ¥ 1,258,280

Net income 187,804 187,804Dividends from surplus, ¥100 per share* (19,700) (19,700)Retirement of treasury stock (102,212) 102,212Net change in the year 10,000 10,000

BALANCE, MARCH 31, 2013 197,001 112,000 53,500 12,504 1,346,832 (102,201) 13,749 1,436,384

Net income 240,371 240,371Dividends from surplus, ¥110 per share (21,670) (21,670)Purchase of treasury stock (0) (0) (0)Net change in the year 6,240 6,240

BALANCE, MARCH 31, 2014(APRIL 1, 2014, as previously reported) 197,000 112,000 53,500 12,504 1,565,533 (102,201) 19,989 1,661,326Cumulative effect of accounting change (Note 3.j) 17,086 17,086

BALANCE, APRIL 1, 2014 (as restated) 197,000 112,000 53,500 12,504 1,582,619 (102,201) 19,989 1,678,412

Net income 260,278 260,278Dividends from surplus, ¥120 per share (23,640) (23,640)Purchase of treasury stock (0) (1) (1)Net change in the year 16,047 16,047

BALANCE, MARCH 31, 2015 197,000 ¥ 112,000 ¥ 53,500 ¥ 12,504 ¥ 1,819,258 ¥ (102,203) ¥ 36,037 ¥ 1,931,097

Thousands of U.S. Dollars (Note 2)

Retained EarningsUnrealized

Gain onCommon Capital Legal Treasury Available-for-Sale Total

Stock Surplus Reserve Unappropriated Stock Securities EquityBALANCE, MARCH 31, 2014 $ 933,333 $ 445,833 $ 104,200 $ 13,046,108 $ (851,675) $ 166,575 $ 13,844,383

(APRIL 1, 2014, as previously reported)Cumulative effect of accounting change (Note 3.j) 142,383 142,383

BALANCE, APRIL 1, 2014 (as restated) 933,333 445,833 104,200 13,188,491 (851,675) 166,575 13,986,766Net income 2,168,983 2,168,983Dividends from surplus, $1.00 per share (197,000) (197,000)Purchase of treasury stock (8) (8)Net change in the year 133,725 133,725

BALANCE, MARCH 31, 2015 $ 933,333 $ 445,833 $ 104,200 $ 15,160,483 $ (851,691) $ 300,308 $ 16,092,475 * Shares and per share figures have been restated, as appropriate, to reflect a hundred-for-one stock split effective as of October 1, 2012.See notes to nonconsolidated financial statements.

Nonconsolidated Statement of Income　

Central Japan Railway Company Year Ended March 31, 2015



(Note 2)2015 2014 2013 2015

OPERATING REVENUES:Railway business ¥ 1,297,852 ¥ 1,268,528 ¥ 1,235,988 $ 10,815,433 Other 8,749 8,693 9,094 72,908

Total operating revenues 1,306,602 1,277,222 1,245,082 10,888,350

OPERATING EXPENSES:Railway business (Note 3.i) 826,585 808,918 840,174 6,888,208Other 4,614 7,448 5,771 38,450

Total operating expenses 831,199 816,366 845,946 6,926,658

Operating income 475,403 460,855 399,136 3,961,691

OTHER INCOME (EXPENSES):Interest and dividend income 3,151 3,145 3,095 26,258Interest expense (72,148) (80,069) (88,772) (601,233)Loss on redemption of bonds (13,676) (13,357) (11,721) (113,966)Other—net 5,092 167 104 42,433

Other expenses—net (77,581) (90,113) (97,293) (646,508)

INCOME BEFORE INCOME TAXES 397,821 370,741 301,842 3,315,175

INCOME TAXES (Note 8):Current 125,607 130,225 123,494 1,046,725Deferred 11,935 144 (9,456) 99,458

Total income taxes 137,542 130,369 114,038 1,146,183

NET INCOME ¥ 260,278 ¥ 240,371 ¥ 187,804 $ 2,168,983

Yen U.S. Dollars2015 2014 2013 2015

PER SHARE OF COMMON STOCK* (Note 3.p):Basic net income ¥ 1,321.21 ¥ 1,220.16 ¥ 953.32 $ 11.01 Cash dividends applicable to the year 120.00 115.00 105.00 1.00

* Per share figures have been restated, as appropriate, to reflect a hundred-for-one stock split effective as of October 1, 2012.See notes to nonconsolidated financial statements.


Financial Section

Notes to Nonconsolidated Financial Statements

1.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, Transport and Tourism (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 and Tokyo 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 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.

The shares above do not reflect the effect of the hundred-for-one stock split effective as of October 1, 2012.

2.BASIS OF PRESENTATION OF NONCONSOLIDATED 　FINANCIAL STATEMENTS

The accompanying nonconsolidated 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 Act, the Law for Railway Business Enterprise and their related accounting regulations, and in accordance 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, nonconsolidated statements of cash flows and certain disclosures are not presented herein in accordance with accounting principles generally accepted in Japan.

Effective for the year ended March 31, 2014, the Japanese Financial Instruments and Exchange Act and its related accounting regulations were amended to allow an entity to not disclose certain designated footnote information in its nonconsolidated financial statements if the entity prepares and discloses consolidated financial statements. Accordingly, the Company has omitted disclosure of certain footnote information in the accompanying nonconsolidated financial statements.

In preparing these nonconsolidated financial statements, certain reclassifications and rearrangements have been made to the nonconsolidated 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 2014 and 2013 nonconsolidated financial statements to conform to the classifications used in 2015.

The nonconsolidated 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 ¥120 to $1, the approximate rate of exchange as of March 31, 2015. 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 of less than one million yen are rounded down to the nearest million of yen, except for per share information, and U.S. dollar figures of less than one thousand 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.Nonconsolidation

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

b.Cash EquivalentsCash 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, certificates of deposit, commercial paper and others, all of which mature or become due within three months of the date of acquisition.

c.SuppliesSupplies are stated at the lower of cost, determined by the moving-

average cost method, or net selling value.

d.Investment SecuritiesAll 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 gain and loss, net of applicable taxes, reported in a separate component of equity.

Central Japan Railway Company

Nonmarketable 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 EquipmentProperty, 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.

The accumulated contributions deducted from the cost of property, plant and equipment as of March 31, 2015 and 2014 amounted to ¥269,450 million ($2,245,416 thousand), and ¥267,318 million, respectively.

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 50 years for buildings, from 3 to 60 years for 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 AssetsThe 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 is 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 CostsSoftware costs are amortized by the straight-line method over five

years.

h.Deferred ChargesBond issuance costs are fully charged to income as incurred.

i.Provision for Large-Scale Renovation of the Shinkansen InfrastructureProvision for large scale renovation of the Shinkansen infrastructure

is provided based on the Nationwide Shinkansen Railway Development Law.

The Company amended the provision reserve plan in the year ended March 31, 2013, and started to appropriate the reverse evenly over 10 years from the year ended March 31, 2014. Accordingly, the Company reversed the provision in an amount of ¥35,000 million in the year ended March 31, 2014, whereas ¥33,333 million was reserved in the year ended March 31, 2013. As a result, operating expenses of Railway business decreased by ¥68,333 million, and both operating income and income before income taxes in the year ended March 31, 2014, increased in the same amount from the year ended March 31, 2013.

j.Retirement and Pension PlansThe 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. The projected benefit obligations are attributed to periods on a benefit

formula basis. Actuarial gains and losses are amortized on a straight-line basis over five years, which is within the average remaining service period. Accounting treatments for unrecognized actuarial gains and losses in the nonconsolidated financial statements are different from those in the consolidated financial statements.

The Accounting Standards Board of Japan (the “ASBJ”) issued ASBJ Statement No. 26, "Accounting Standard for Retirement Benefits" in May 2012 and ASBJ Guidance No. 25, "Guidance on Accounting Standard for Retirement Benefits” in March 2015, which replaced the accounting standard for retirement benefits that had been issued by the Business Accounting Council in 1998 with an effective date of April 1, 2000, and the other related practical guidance, and were followed by partial amendments from time to time through 2009.

The revised accounting standard made certain amendments relating to the method of attributing expected benefit to periods, the discount rate, and expected future salary increases.

This accounting standard and the guidance above are effective for the beginning of annual periods beginning on or after April 1, 2014, or for the beginning of annual periods beginning on or after April 1, 2015, subject to certain disclosure in March 2015, with earlier application being permitted from the beginning of annual periods beginning on or after April 1, 2013. However, no retrospective application of this accounting standard to nonconsolidated financial statements in prior periods is required.

The Company applied the revised accounting standard and guidance above, effective April 1, 2014.

The Company changed the method of attributing the expected benefit to periods from a straight-line basis to a benefit formula basis, and the method of determining the discount rate and recorded the effect of above as of April 1, 2014, in retained earnings. As a result, retained earnings as of April 1, 2014, increased by ¥17,086 million ($142,383 thousand). The effect of this change on the nonconsolidated statement of income for the year ended March 31, 2015, was immaterial.

k.LeasesLease 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 TaxesThe provision for income taxes is computed based on the pretax

income included in the nonconsolidated 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 EarningsAppropriations of retained earnings are reflected in the

nonconsolidated financial statements for the following year upon shareholders' approval.

n.Consumption TaxUnless otherwise stated, all figures are presented net of tax.

o.Derivatives and Hedging ActivitiesThe Company uses derivative financial instruments mainly 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.


Financial Section

6.SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBT

The Company has credit commitments from banks. Total unused credit available to the Company as of March 31, 2015, was ¥100,000 million ($833,333 thousand).

All assets of the Company were pledged for the secured bonds of ¥158,500 million ($1,320,833 thousand), which the Company entered into as debt assumption agreements and have been derecognized in the nonconsolidated balance sheet (see Note 9), 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.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.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 including (1) having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of the directors being prescribed as one year rather than the normal two-year 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 (noncash 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 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 within equity under certain conditions upon resolution of the shareholders.

c.Treasury Stock and Treasury Stock Acquisition RightsThe 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.

d.Stock SplitsOn October 1, 2012, the Company effected a hundred-for-one

stock split and implemented a share unit system, by which shares became share units.

8.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 35.2% for the year ended March 31, 2015, and 37.6% for the years ended March 31, 2014 and 2013.The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities as of March 31, 2015 and 2014, were as

follows:


2015 2014 2015Deferred tax assets:

Depreciation and amortization ¥ 69,311 ¥ 73,354 $ 577,591 Provision for retirement benefits 57,038 70,769 475,316Software 10,592 11,880 88,266Provision for bonuses 6,920 7,335 57,666Railway usage charges 3,920 4,614 32,666Other 41,980 45,380 349,833

Total 189,763 213,335 1,581,358Less valuation allowance (14,775) (16,537) (123,125)

Deferred tax assets 174,988 196,798 1,458,233

Deferred tax liabilities:Unrealized gain on available-for-sale securities 14,118 8,173 117,650Deferred gain on transfer of certain fixed assets 3,248 3,743 27,066Reserve for special depreciation 249 336 2,075Other 9 21 75

Deferred tax liabilities 17,626 12,273 146,883

Net deferred tax assets ¥ 157,362 ¥ 184,524 $ 1,311,350

4.PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment as of March 31, 2015 and 2014, consisted of the following:


2015 2014 2015Land ¥ 2,326,793 ¥ 2,328,636 $ 19,389,941 Buildings 536,616 531,711 4,471,800Structures 3,722,682 3,692,880 31,022,350Rolling stock 874,398 866,172 7,286,650Machinery and equipment 613,900 609,533 5,115,833Lease assets 1,323 1,155 11,025Construction in progress 165,753 126,614 1,381,275

Total 8,241,468 8,156,703 68,678,900Accumulated depreciation (4,047,266) (3,890,741) (33,727,216)Net property, plant and equipment ¥ 4,194,202 ¥ 4,265,962 $ 34,951,683

5.INVESTMENTS IN SUBSIDIARIES AND AFFILIATESThe carrying amounts and aggregate fair values of investment securities in subsidiaries whose fair values are available as of March 31, 2015 and

2014, were as follows:

Millions of Yen

2015 2014

Carrying Amount

FairValue

UnrealizedLoss

Carrying Amount

FairValue

UnrealizedGain

Subsidiaries ¥ 27,079 ¥ 25,291 ¥ 1,787 ¥ 27,079 ¥ 31,467 ¥ 4,388


Carrying Amount

FairValue

UnrealizedLoss

Subsidiaries $ 225,658 $ 210,758 $ 14,891 The carrying amounts of investments in subsidiaries and affiliated companies whose fair value cannot be readily determined as of March 31, 2015 and

2014, were as follows:

Millions of YenThousands ofU.S. Dollars

2015 2014 2015Subsidiaries ¥ 119,972 ¥ 120,075 $ 999,766 Affiliates 2,133 2,133 17,775

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 InformationBasic 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.

Cash dividends per share presented in the accompanying nonconsolidated statement of income are dividends applicable to the respective years, including dividends to be paid after the end of the year.

On October 1, 2012, the Company effected a hundred-for-one stock split and implemented a share unit system, by which shares became share units. All prior year shares and per share figures have been restated and the Company represents weighted-average number of common shares, basic net income per share and cash dividends per share to reflect the impact of the stock split.

q.Accounting Changes and Error CorrectionsIn 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 following revision of an accounting standard, the new policy is applied retrospectively unless the revised accounting standard includes specific transitional provisions, in which case the entity shall comply with the specific transitional provisions.

(2) Changes in Presentation—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.


Financial Section

INDEPENDENT AUDITOR’S REPORT

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 its consolidated subsidiaries as of March 31, 2015, 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 nonconsolidated balance sheet of the Company as of March 31, 2015, and the related nonconsolidated 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 Nonconsolidated Financial StatementsManagement is responsible for the preparation and fair

presentation of these consolidated and nonconsolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated and nonconsolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these

consolidated and nonconsolidated financial statements based on our audit. We conducted our audit in accordance 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 nonconsolidated 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 nonconsolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material

misstatement of the consolidated and nonconsolidated 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 nonconsolidated 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 nonconsolidated 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 its consolidated subsidiaries as of March 31, 2015, and the consolidated results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in Japan.

(2)The nonconsolidated financial statements referred to above present fairly, in all material respects, the financial position of Central Japan Railway Company as of March 31, 2015, and the results of its operations for the year then ended in accordance with accounting principles generally accepted in Japan.

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 accordance with the basis stated in Note 2 to the consolidated and nonconsolidated financial statements. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.

A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying nonconsolidated statement of income for the year ended March 31, 2014, was as follows:

2014Normal effective statutory tax rate 37.6%Deduction of R&D promotion tax system (3.0)Other—net 0.6Actual effective tax rate 35.2%

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, 2015 and 2013.

New tax reform laws enacted in 2014 in Japan changed the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2014, from approximately 37.6% to 35.2%. The effect of this change on the nonconsolidated statement of income for the year ended March 31, 2014 was immaterial.

New tax reform laws enacted in 2015 in Japan changed the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2015, from approximately 35.2% to 32.7% and the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2016, to approximately 31.9%. The effect of these changes was to decrease deferred tax assets, net of deferred tax liabilities, in the nonconsolidated balance sheet as of March 31, 2015, by ¥15,375 million ($128,125 thousand) and to increase income taxes - deferred in the nonconsolidated statement of income for the year then ended by ¥16,836 million ($140,300 thousand).

9.CONTINGENCIESAs of March 31, 2015, the Company has joint and several obligations with the RTRI to make payments on long-term debt of ¥14,593 million

($121,608 thousand) by the RTRI. The proceeds are being used for the enhancement of technology development for the Maglev system.The Company also had contingent liabilities for guarantees of the loans of a certain subsidiary amounting to ¥9,039 million ($75,325 thousand)

as of March 31, 2015.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, 2015, were as follows:


2015 2015Secured 3.95% bonds due 2016 ¥ 29,000 $ 241,666 Secured 2.825% bonds due 2017 49,800 415,000Secured 2.18% bonds due 2018 29,900 249,166Secured 2.6% bonds due 2020 49,800 415,000Unsecured 2.39% bonds due 2022 18,995 158,291Unsecured 2.2% bonds due 2022 18,200 151,666Unsecured 1.74% bonds due 2022 20,000 166,666Unsecured 1.42% bonds due 2017 10,000 83,333Unsecured 1.15% bonds due 2022 25,000 208,333Unsecured 1.31% bonds due 2033 10,000 83,333Unsecured 2.015% bonds due 2023 9,000 75,000Unsecured 2.2% bonds due 2024 9,900 82,500Unsecured 2.19% bonds due 2019 9,900 82,500Unsecured 1.875% bonds due 2019 20,000 166,666Unsecured 2.21% bonds due 2024 9,650 80,416Unsecured 1.775% bonds due 2020 20,000 166,666Unsecured 1.77% bonds due 2017 20,000 166,666Unsecured 1.695% bonds due 2016 20,000 166,666Unsecured 2.14% bonds due 2018 18,400 153,333Unsecured 2.405% bonds due 2026 9,900 82,500Unsecured 2% bonds due 2016 30,000 250,000

Total ¥ 437,445 $ 3,645,375 Based on legal defeasance agreements with special purpose entities, the Company has transferred the debt repayment obligations for certain

long-term accounts payable—railway facilities to the special purpose entities, and has provided the 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 ¥154,438 million ($1,286,983 thousand) as of March 31, 2015.

10. SUBSEQUENT EVENTSAppropriations of Retained Earnings

The following appropriation of retained earnings as of March 31, 2015,was approved at the Company's shareholders’ meeting held on June 23, 2015:


Year-end cash dividends, ¥60 ($0.5) per share ¥ 11,820 $ 98,500

June 23, 2015

Deloitte Touche Tohmatsu LLCNagoya Daiya Building 3-goukan13-5, Meieki, 3-chome, Nakamura-ku Nagoya, Aichi 450-8530 JapanTel: +81(52)565 5511 Fax:+81(52)569 1394www.deloitte.com/jp

Member ofDeloitte Touche Tohmatsu Limited


Appendices

Financial and Transportation Data

Rolling Stock kilometers Top 10 Stations in terms of Number of Average Daily Passengers

Shifts in Equity (Non-Consolidated)

Shifts in Revenues/Income (Consolidated)

Shifts in Revenues/Income (Non-Consolidated)

’11.3 ’13.3’12.3 ’14.3 ’15.3 ’16.3(Forecast)

1,585.31,672.2 1,674.01,652.5

1,508.31,503.0

0

800

900

1,000

1,100

1,200

1,400

1,300

1,500

1,600

1,700(Billion yen)

Note: The figures forecasted are as of the publication of the financial report for FY2014

Note: Net income for the term attributable to the parent company shareholder before March 2015 describes the net income for this term in the year-end financial results The figures forecasted are as of the publication of the financial report for FY2014

Note: The figures estimated are as of the publication of the financial report for FY2014

Note: The figures for Tokyo, Shinagawa, Kyoto, and Shin-Osaka Stations indicate Shinkansen passengers only

’11.3 ’13.3’12.3 ’14.3 ’15.3 ’16.3(Forecast)

1,245.01,306.6 1,307.0

1,277.2

1,184.51,171.9

0

800

900

1,000

1,100

1,200

1,300(Billion yen)

’11.3 ’13.3’12.3 ’14.3 ’15.3 ’16.3(Forecast)

302.4

187.8

207.5

0

100

200

300

400

500(Billion yen)

325.4

399.1

475.4 487.0

418.0

288.0240.3

371.8397.7

260.2

460.8

345.5

239.8

120.8123.0

0

300

600

900

1,200

1,500

1,800

2,100(Billion yen)

’89.3 ’91.3

337.2

’92.3

376.7

’93.3

398.8

’94.3

413.6

’95.3

419.3

’96.3

433.1

’97.3

455.6

’98.3

477.7

’99.3

479.0

’01.3

629.1

’02.3

662.3

’03.3

690.8

’04.3

757.3

’05.3

836.5

’06.3

953.2

’07.3

762.3

’09.3

975.0

’10.3

1,056.7

’12.3

1,258.2

’13.3

1,436.3

’14.3

1,661.3

’15.3

1,931.0

’90.3

284.0

’00.3

589.3

’08.3

881.9

’11.3

1,156.1

217.2

Total Long-Term Debt and Payables (Non-Consolidated)

0

1,000

2,000

3,000

4,000

5,000

6,000(Billion yen)

（％）

4.0

3.0

5.0

6.0

7.0

8.0

’15.3

2,136.3

’16.3(Forecast)

1,986.3

Average Interest Rate

Long-Term Accounts Payable - Railway Facilities Latent Liabilities Born by the Shinkansen Leasing System

Long-Term Debt Corporate Bonds Inherited Liabilities

’96.3

5,278.5

5.84

’95.3

5,346.3

5.90

’94.3

5,392.0

6.19

’93.3

5,422.3

6.39

’92.3

5,456.2

6.53

’91.3

5,195.6

6.08

’90.3

5,232.7

6.01

’89.3

5,223.0

6.35

’99.3

4,922.2

5.16

’00.3

4,801.0

5.08

’01.3

4,560.8

5.01

’02.3

4,289.3

4.91

’03.3

4,125.5

4.75

’04.3

3,943.4

4.62

’05.3

3,665.8

4.51

’06.3

3,455.7

4.30

’07.3

3,415.6

4.08

’08.3

3,260.1

3.91

’09.3

3,177.6

3.71

’10.3

3,117.0

3.54

’11.3

3,001.5

3.36

’12.3

2,829.1

3.24

’13.3

2,614.9

3.14

’98.3

5,045.2

5.21

’97.3

5,164.3

5.43

’14.3

2,351.7

3.13

0

50

100

150

200(thousand passengers/day, FY2014)

Shin-Osaka

74

Nagoya

199

Tokyo

93

Kanayama

63

Shizuoka

58

Kyoto

35

Hamamatsu

35

Shinagawa

33

Gifu

31

Kariya

32

’11.3 ’13.3’12.3 ’14.3 ’15.3

217

0

400

200

600

800

1,000

1,200(Million kilometers)

216 217 216

913 930 954912 906

214

1,1461,128 1,123 1,129 1,168

’11.3 ’13.3’12.3 ’14.3 ’15.3 ’16.3(Forecast)

328.0

199.9

494.6

404.2

264.1228.5

0

100

200

300

400

500(Billion yen) 426.1

Operating income Ordinary income Net income for this term

Operating income Ordinary income Net income for this term

349.3372.5

506.5 515.0

303.0255.6

133.8 132.7

263.8

Operating Revenues

Operating income

Transportation revenues

’11.3 ’13.3’12.3 ’14.3 ’15.3

100.9

34.0

0

20

40

60

80

120

100

(Billion yen)

98.7 99.4

’11.3 ’13.3’12.3 ’14.3 ’15.30

10

20

800

700

900

1,100

1,000

(Billion yen)

994.4

1,126.51,113.8

999.5

65.3

34.0

66.6

97.0 99.7

34.1 34.0 34.3

65.764.5 62.9

16.6 16.916.5 16.6

1,011.01,069.6 1,143.4

1,053.0983.0

17.1

1,096.7

Shinkansen

Shinkansen

Shinkansen

Conventional lines

Conventional lines

Conventional lines

Passenger Ridership

’11.3 ’13.3’12.3 ’14.3 ’15.3

133

395

135132

0

100

200

300

400(Million passengers)

(Million passengers)

386 384 387

130 134

’11.3 ’13.3’12.3 ’14.3 ’15.30

10

20

100

80

120

160

140143

155141 143 149 157

257

391

253254 254 260

127 129 135

1414 14 15 14

140

Passenger kilometers

’11.3 ’13.3’12.3 ’14.3 ’15.30

1,000

2,000

3,5000

4,0000

3,0000

4,5000

50,000(Million passenger-kilometers)

’11.3 ’13.3’12.3 ’14.3 ’15.30

4,000

2,000

6,000

8,000

10,000(Million passenger-kilometers)

9,2299,001 8,952 9,038 9,069

1,391

47,429

1,390

42,366 42,915

1,375 1,389 1,444

43,741 44,303

50,134

5,4635,476 5,490 5,588 5,481

48,87346,930

3,575 3,6413,525 3,5873,462

45,54048,744

3.10

445.0428.1

Total Commuter passesOrdinary tickets



Total Shinkansen Conventional lines

Appendices


Operating kilometers Passenger-kilometers

Number of Employees*4 Average Traffic Density

Transportation Revenues*6 Passenger Revenues per Operating Kilometer*6

Number of passengers Passenger Revenues per Employee*6

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

2000

4000

6000

8000

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

125,065

77,221

53,316

10,131

84,860

52,61452,742

33,707

15,775

34,08229,841

5,0131,971

*2

*3

7,513

JR East (Japan)

Amtrak (USA)

DB AG (Germany)

ATOC (UK)

SNCF (France)

JR West (Japan)

JR Central (Japan)

JR East (Japan)

Amtrak (USA)

DB AG (Germany)

ATOC (UK)

SNCF (France)

JR West (Japan)

JR Central (Japan)

JR East(Japan)

Amtrak (USA)

DB AG(Germany)

ATOC (UK)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak (USA)

DB AG(Germany)

ATOC (UK)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak (USA)

DB AG(Germany)

ATOC (UK)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak (USA)

DB AG(Germany)

ATOC (UK)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak (USA)

DB AG(Germany)

ATOC (UK)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak (USA)

DB AG(Germany)

ATOC (UK)

SNCF(France)

JR West(Japan)

JR Central(Japan)

52,076

239,635

35,60620,047

153,640

26,77817,468

*5

*36,277 9,260

8147,791

45,489

28,678

73,320

2580

560 69050

590

1750

6700

19,346 18,931

1,800

17,734

8,752

13,204

10,810

370

80

300

90120

330

7606,055,562

1,896,580

28,700

1,077,430

1,778,416

515,065

1,331,180

(Kilometers) (Million passenger-kilometers)

(Passenger-kilometers/day/operating kilometers) (Persons)

(Million US$) (Thousand US$/km)

(Thousand US$/km)) (Thousand US$/person)

Source: Statistique Internationale des Chemins de fer (Union Internationale de Chemins de fer), Financial Report of the JRs, etc.*1. Period is as below　Japan/UK: April 2010 - March 2011 Other: January 2010 - December 2010 However, data of passenger revenue, number of passengers, and passenger-kilometers for the U.S. Amtrak are for October 2009 - September 2010*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, 2011. The others are the average of the period indicated under *1*5. Sum of the data of SNCF and RFF*6. Data of the JRs are converted to US$ at the exchange rate as of March 31, 2012　Figures for European countries are first converted to Japanese Yen at the rate of the above time, then converted to US$.

Operating Environment

International Comparison of Railway Operators

International Comparison of Railway Operators*1

■Services (As of April 2015)

Between Tokyo and …(Operating kilometers)

Osaka

（552.6km）Okayama

（732.9km）Hiroshima

（894.2km）Fukuoka

（1,174.9km）

Travel Time*1Shinkansen 2 hr 22 min*3 3 hr 09 min 3 hr 44 min 4 hr 47 min*4

Airplane*2 1 hr 05 min（approx. 2 hr 40 min） 1 hr 10 min（approx. 3 hr） 1 hr 20 min（approx. 3 hr 10 min） 1 hr 35 min（approx. 2 hr 50 min）

Number of services and departures/arrivals per day

Shinkansen*5 250 128 99 67

Airplane 106 24 34 112

*1. Travel times are in the 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　*4. Travel time between Tokyo and Hakata stations*5. Number of services excludes extra services

70％ 30％

67％ 33％

100％

85％ 15％

10％ 90％

OsakaNagoyaTokyo Hiroshima Fukuoka

JR Central JR WestOkayama

Tokyo Area–Nagoya Area74 thousand passengers/day

Tokyo Area–Osaka Area133 thousand passengers/day

Tokyo Area–Okayama9 thousand passengers/day

Tokyo Area–Hiroshima15 thousand passengers/day

Tokyo Area–Fukuoka28 thousand passengers/day

Note: Market share is calculated by JR Central based on the inter-prefectural data of the inter-Regional Passenger Mobility Survey, published by the Ministry of Land, infrastructure, Transport and Tourism for 2014.3.Tokyo Area: Tokyo, Kanagawa, Chiba, Saitama, Ibaraki/Nagoya Area: Aichi, Gifu, Mie/Osaka Area: Osaka, Kyoto, Hyogo, Nara

Shinkansen Airplane

GDP per Capita (2014) Population Density (As of 2013)

*Figures for Japan and the U.S. are forecast figures Source: OECD *2014 only for the U.S. Source: Statistics Bureau, the Ministry of Internal Affairs and Communications

0

15,000

30,000

45,000

0

100

200

300

400

Japan U.K. Germany France U.S.

32,04636,163

31,06235,418

46,352

Japan U.K. Germany France U.S.

341

263226

116

33

International Comparison in Fundamentals

(US$) (per square kilometer)

■Market Share (against Air l ines)

▶Comparison between the Shinkansen and Airline Transportation

Appendices

Appendices


Financial Data Comparison of Three JR Companies Stock Information

▶Major Shareholders

JR Central has been included in the "FTSE4Good Index

Series" and "Ethical Index Global", which are leading

indexes for socially responsible investment (SRI) and are

used for investment decisions by investors.

[FTSE4Good Index Series]"FTSE4Good Index Series" is a socially responsible investment index provided by the FTSE Group, a subsidiary of London Stock Exchange, and selects exceptional companies throughout the world.

[Ethical Index Global]"Ethical Index Global" is a socially responsible investment index provided by ECPI, which investigates ESG (Environmental, Social and Governance) in a company and provides its rating information. ECPI's main offices are located in Luxembourg and Italy.

Name Number of shares held Percentage oftotal issued shares

Mizuho Bank, Ltd. 9,783,300 4.75%

Japan Trustee Services Bank, Ltd. (Trust Account) 8,538,200 4.14%

The Master Trust Bank of Japan, Ltd. (Trust Account) 7,764,800 3.77%

The Nomura Trust and Banking Co., Ltd. (Holder in Retirement Benefit Trust for The Bank of Tokyo-Mitsubishi UFJ, Ltd.) 7,125,000 3.46%

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 6,678,100 3.24%

Nippon Life Insurance Company 5,000,000 2.43%

Toyota Motor Corporation 4,000,000 1.94%

The Dai-ichi Life Insurance Company, Ltd 3,423,900 1.66%

Sumitomo Mitsui Banking Corporation 3,230,000 1.57%

JR Central Employee Shareholding Association 3,059,700 1.49%

Total 58,603,000 28.45%

Note:In addition to the above, JR Central holds 8,999,123 treasury stocks. (As of March 31, 2015)

*1.(Operating income + Interest and dividend income) / Interest expense*2.JR East implemented a 100-for-1 stock split effective January 4, 2009, JR West did as well at the same rate effective July 1, 2011, and JR Central also did at the same rate effective October 1, 2012.

Return on Equity

JR East JR WestJR Central

8.1

14.0

8.4

0

10

20

Net income / Total Assets


2.4

5.1

2.4

0.0

2.5

5.0

Operating Income / Operating Revenues


15.5

10.4

30.3

0.0

17.5

35.0

Total Long-Term Debt and Long-Term Payables / Operating Revenues


1.21.3

0.7

0

1.0

2.0

Equity Ratio


30.1 28.8

0.0

20.0

40.0

Debt to Equity Ratio


231.9

156.1

247.4

0

150

300

Current Ratio


63.965.669.0

0

35

70

Interest Coverage Ratio*1


5.3

7.0

5.4

0.0

3.5

7.0

0

5

10

Operating income/Total assets


5.7

9.7

5.1

Earnings per Share (EPS)*2


458

1,342

344

0

700

1400

Net Asset per Share*2


5,818

10,265

4,138

0

5,000

10,000

Dividend Payout Ratio


26.1

8.9

36.3

0

20

40

38.7（%）

（%）

（%）

（times）

（%）

（%）

（%）

（times）

（%）

（yen）

（yen）

（%）

1,600,000

2,600,000

2,400,000

2,200,000

2,000,000

1,800,000

16,000

18,000

20,000

22,000

24,000

26,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

4,000

6,000

8,000

10,000

12,000

14,000

Jul.2014

Sep.2014

Nov.2014

Jan.2015

Mar.2015

May2015

(yen) (yen)

Jan.2008

Mar.2008

May2008

Jul.2008

Sep.2008

Nov.2008

Jan.2009

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

Jul.2012

Sep.2012

Nov.2012

Jan.2013

Mar.2013

May2013

Jul.2013

Sep.2013

Nov.2013

Jan.2014

Mar.2014

May2014

Note: On October 1, 2012, the Company implemented a 100-for-1 stock split split and employed a share unit system by which one share unit equals 100 shares.Please refer to the left axis for stock prices before September 2012 and the right axis for stock prices after October 2012.

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

Appendices

Appendices

▶Shifts in JR Central’s Stock Price


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