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CENTRAL JAPAN RAILWAY COMPANY ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2013 For the Year Ended March 31, 2013

Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

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Page 1: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

CENTR

AL JAPAN R

AILWAY CO

MPAN

Y ANN

UAL R

EPORT 2013

CENTRAL JAPAN RAILWAY COMPANYAnnual Report 2013

For the Year Ended March 31, 2013

Page 2: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

0 50 100

Tokaido Shinkansen85.9%

Conventional Line8.0%

Miscellaneous5.4%

Affiliated Businesses0.7%

Transportation77.7%

Merchandise and Other12.7%

Real Estate2.4%

Other7.2%

23.7% 76.3%

59.5% 40.5%

64.1% 35.9%

0 100 200

255

1

0 500 km

Population( As of the end of March 2012)

Area( As of October 2012)

Prefectural GDP( nominal ) ( FY2011.3 )

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

Management Philosophy● Contribute to community development by adhering to

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

culture

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

transportation● Security is based on observance of rules and exact

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

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

safe considering thoroughly

FY 2013.3 data

● Percentages of Japan as a whole

● Population Density (As of the end of March 2012)

Japan(as a whole)

JR Central’sMarket Area

otherJR Central’s Market Area

100(Base)

Area: Approx. 380,000 km2

Population: 126 million (As of the end of March 2012)

JR Central Other JRShinkansen

Conventional Lines

KYOTOOKAYAMAHIROSHIMA NAGOYATOKYO

SHIN-OSAKAHAKATA

KAGOSHIMA-CHUO

TAKAMATSU

NIIGATA

NAGANO

SHIN-AOMORI

SAPPORO

SHIZUOKA

HokkaidoRailway Company

KyushuRailwayCompany

East JapanRailway Company

ShikokuRailway Company

West JapanRailway Company

Central JapanRailway Company

Note : JR Central’s market area includes the following prefectures: Tokyo, Kanagawa, Chiba, Saitama, Ibaraki, Shizuoka, Yamanashi, Nagano, Aichi, Mie, Gifu, Shiga, Osaka, Kyoto, Hyogo, Nara : Area data to calculate Population Density is as of October 2012Sources : Area – Statistical Reports on the Land Area by Prefectures and Municipalities in Japan, Geospatial Information Authority of Japan Population – Basic Resident Registration, Ministry of Internal Affairs and Communications Prefectural GDP – Annual Report on Prefectural Accounts, Cabinet Office, Government of Japan

Consolidated Operating Revenues Composition

Non-Consolidated Operating Revenues Composition

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

A Message from the Management 2

Key Measures and Management Strategy

Key Measures and Capital Investment 4

Safety and Reliability 6

Transportation Service 10

The Chuo Shinkansen using theSuperconducting Maglev System 14

Sales and Marketing 16

Technological Development and Enhancement of Technical Capability / Overseas Deployment of High-Speed Rail Systems 18

Affiliated Business 20

Engagement in Global Environment Preservation, etc. 22

Corporate Data

Profile 28

Organization Chart 28

Operating Area 29

Company History 30

Board of Directors, Corporate Auditors and Corporate Officers 31

Corporate Governance 32

Summary of Performance

Financial Highlights 34

Summary of Performance 36

Financial Section 38

Appendices

Financial and Transportation Data 66

Operating Environment 70

International Railway Comparison 70

Financial Comparison of Three JR Companies 72

Stock Information 73

Forward-Looking StatementsIn this annual report, forward-looking statements, such as those regarding business plans, strategies, and financial forecasts, are based on assumptions that reflect information available at the time of writing. The accuracy of such statements, therefore, is inherently uncertain because it is affected by future macroeconomic trends and business environment developments, notably, consumption trends, competitive challenges, and changes in relevant laws and legal provisions. This report is compiled based on information available as of the end of May 2013.

Notes: 1. Fiscal 2012, the year under review, refers to the one-year period ended March 31, 2013 (FY2013.3 / FY2012).2. In this report, figures of financial information are truncated, while statistical data and all percentages are rounded.

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A Message from the Management

2 3

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

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

■ Railway Businesses① Safety Measures

For our railway business, we started the large-scale renovation to keep and improve the safety of civil engineering structures of Tokaido Shinkansen. Also we will steadily promote earthquake measures to avoid derailments and deviations of Tokaido Shinkansen, renovation of the Hamamatsu Workshop, reinforcement of earthquake resistance of bridge supports on the conventional lines, reconstruction of an earthquake-proofing structure of Mishima Station and so on. Furthermore, we are systematically maintaining and renewing tracks and equipment including replacing sleepers on the Tokaido Shinkansen. Additionally, we try to further enhance measures for Tsunami by referring to hazard maps published by each local government.

② Improving Transportation ServiceIn regard to the Tokaido Shinkansen, while proceeding with introduction of a new train set, Series N700A, which has adopted the newest

technology, we will promote the conversion of Series N700 to equip technologies adopted by Series N700A. We will also strive to set a flexible train schedule during busy seasons and hours by using the track #27 of Shin-Osaka Station which opened when the Shinkansen timetable changed in March 2013. The major renovation work of Shin-Osaka Station which began seven years ago will be completed by the end of FY2013.

We are making efforts to further improve the transportation service of conventional lines by promoting the projects to electrify the Taketoyo Line and to plan the replacement with new diesel railcars.

As far as sales are concerned, we are promoting efforts to expand the use and increase the members of “Express Reservation” service and “PULS EX” service. In addition, we will strive to promote our marketing policy by developing travel products and tourist promotion campaigns using attractive tourism resources such as Kyoto, Nara, Tokyo, Hida and Ise, where Shikinen Sengu Ceremony of Ise Jingu (Shrine) is held, and by increasing tour packages for foreign visitors. Furthermore, while we will establish the nationwide mutual use of IC cards, we will try to promote the use of the railway and electronic money service by “TOICA. ”

In regard to passenger-related facilities, we are advancing installation of new movable platform fences at Tokyo Station and Nagoya Station and continue to set smoking rooms at all stations of Tokaido Shinkansen. We will also continuously provide barrier-free facilities including installation of elevators, multipurpose toilets and new Braille blocks that have lines to indicate the direction of the edge of the platform as warning blocks on platforms.③ Promoting the Chuo Shinkansen using the Superconducting Maglev System

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

The Chuo Shinkansen that utilizes the Superconducting Maglev system will enable us to continue our mission of operating high-speed railway linking the Tokyo Metropolitan areas, Chukyo regions and Kinki regions, which is vital to our business, and will provide the future foundation for the company. It has been 48 years since the inauguration of the Tokaido Shinkansen which presently fulfills the mission, and we have entered a time when we must think of drastic ways to deal with aging and large-scale disasters based on the fact that it takes a very long time to construct and realize a railway. In the wake of the Great East Japan Earthquake, the need for redundancy in our main transportation arteries has become even more important. It is for this reason that we will realize to construct as quickly as possible the bypass that can substitute the role of the Tokaido Shinkansen and that utilizes the Superconducting Maglev system, which we have developed, under

the condition that we bear the cost of rail construction and operate it in an integrated manner along with the Tokaido Shinkansen. While promoting this project, we shall make a necessary investment in to enhance competitiveness and ensure safe and reliable transportation as well as ensure sound management in which we will continue to provide stable dividends. We will also surely and steadily engage in various efforts aimed at the realization of the Chuo Shinkansen first from Tokyo to the Chukyo metropolitan area and thereafter to the Kinki metropolitan area.

Specifically, we will promote the preparation for construction by proceeding with the procedures of environmental impact assessment, such as publication of the Draft Environmental Impact Statement between Tokyo and Nagoya, as the first phase. With regard to Yamanashi Maglev test line, after completing the extension of the test line to 42.8km and equipment renewal, we will restart test runs with the new Series L0 (L zero). Furthermore, we will continuously brush up the technology of Superconducting Maglev for which the technical criterion has been set and which has been completed as a practical technology.

Since we decided to bear the cost of rail construction, we plan to reduce thoroughly the cost of construction, operation and maintenance, which will be inspected by the Commission for Cost Reduction of Chuo Shinkansen Construction, while ensuring safety. We will flexibly distribute resources in an optimum fashion in accordance with managerial environments.④ Promoting Technological Development and Enhancement of Technical Capability

For promoting technological development and enhancing technical capability, at the Komaki Research Center and other facilities, we will focus on research and development of practical technologies regarding maintenance and reinforcement of civil engineering structures starting with the Shinkansen, transportation services and measures to counter natural disasters. In addition, we are promoting the deployment of high-speed railway and Superconducting Maglev in overseas projects by applying comprehensive high-speed railway technologies. We continue to engage in marketing activities to corridors that have been selected as viable targets.

■ Affiliated BusinessIn regard to non-railway businesses, we are proceeding with construction and tenant leasing of the Nagoya Station New Building toward its

completion at the end of 2015. We are also striving to increase revenue with our commitment to revitalize commercial facilities of station buildings and merchandise businesses. Furthermore, we will engage in efforts to enhance the earning capability of JR Central group companies by further developing the agricultural business and leveraging our assets.

■ Environmental Conservation ActivitiesIn regard to global environmental issues, we have actively worked to make the public aware of the superiority of railway as a transportation

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

■ Reduction of Long-term Debt and PayablesWe have reduced our long-term debt and payables, which had once totaled 5.5 trillion yen at its highest, by approximately 2.8 trillion yen,

and we have steadily continued with efforts to strengthen our financial foundation. We will continue striving to reduce long-term debt and payables while steadily promoting key measures.

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

Chairman Yoshiyuki Kasai

President Yoshiomi Yamada

Yoshiomi Yamada President

Yoshiyuki KasaiChairman

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Key Measures and Capital Investment

4 5

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Capital Investment (Non-Consolidated)

P6Reference

P10Reference

P12参照

P14Reference

P13Reference

P16Reference

P18Reference

P12参照

P20Reference

0

50

100

150

200

250

300(billions of yen)

Capital Investment Safety-related Investment

’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3’06.3’05.3’04.3’03.3’02.3’01.3’00.3’99.3’98.3’97.3’96.3’95.3’94.3’93.3’92.3’91.3’90.3’89.3 ’14.3planned

’88.3

120.3

159.5

174.3

197.8

211.1

166.9 164.8157.6 161.5

169.8

155.5

128.5 128.3

209.8

277.4

265.2

171.3 172.6

159.2 156.8151.5

244.8

288.8298.4 301.6

271.0

82.6

100.1

111.3

99.194.1

86.3 89.3

68.9

128.5

169.3

96.1

50.1

39.1

71.880.6

72.7 70.9 74.2

87.1

97.6 99.8

87.3

138.5

164.7

178.9

142.9136.9

172.0

■ We will give priority to ensuring safe and reliable transportation, which is the foundation of the railway business.■ Starting large-scale renovation to preserve and improve the soundness of civil engineering structures

along the Tokaido Shinkansen■ Promoting measures to counter derailment and deviation of the Tokaido Shinkansen as well as

reinforcing elevated track columns along conventional lines as further anti-earthquake measures■ Promoting rebuilding and seismic strengthening of buildings such as the Hamamatsu Workshop and

Mishima station■ Promoting countermeasures for falling rocks and upgrade of level-crossing safety devices for the

conventional lines■ Enhancing anti-tsunami measures based on the hazard maps to be published by each local government■ Enhancing employee training to focus on safety and hospitality in cooperation with group companies by

utilizing the General Education Center▲Large-Scale Renovation

(tunnel; measures to inhibit age-related deterioration)

Ensuring Safe and Reliable TransportationCapital Investment:123 billion yen

■ We will continue to enhance transportation services, including replacement of Series 700 with the N700A for the Tokaido and Sanyo Shinkansen.

■ Introducing N700A, which employs the latest technological developments, as well as promoting modifications of Series N700 to incorporate technology adopted by the N700A

■ Completing large-scale renovation of Shin-Osaka Station after a seven-year renovation project with renovation of the draw-out tracks

■ Promoting installation of new movable platform fences at Tokyo Station and Nagoya Station■ Promoting installation of smoking rooms at all Shinkansen stations

▲N700A

Enhancing Tokaido Shinkansen Transportation ServicesCapital Investment:55 billion yen

■ We will actively address various measures such as electrification of the Taketoyo Line.■ Steadily promoting electrification of the Taketoyo Line to start operation in the spring of 2015■ Proceeding designs for replacing old diesel cars with new ones■ Continuously promoting installation of barrier-free facilities at stations, including elevators, multifunction

toilets, and braille blocks that have lines indicating the platform edge side

▲Taketoyo Line under construction for electrification

Enhancing Conventional Line Transportation ServicesCapital Investment:4 billion yen

■ We will promote measures to realize the Chuo Shinkansen employing the Superconducting Maglev System.

■ Steadily proceeding with preparations to begin construction, such as assessing the environmental impact between Tokyo and the Nagoya City including publication of “Draft Environmental Impact Statement”

■ Completing the construction to extend the Yamanashi Maglev Test Line to 42.8 km and upgrade its facilities, and restarting running tests using the new rolling stock Series L0

■ Making efforts to improve Superconducting Maglev technology and reduce costs for construction, operation and maintenance

▲New vehicle, Series L0

Promoting the Chuo Shinkansen Project Employing Superconducting Maglev SystemCapital Investment:37 billion yen *Consists of only capital investment related to extension and facility upgrade of Yamanashi Test Line

■ We will proactively develop marketing initiatives to increase revenue.■ Making efforts to expand use of and increase the number of “Express Reservation” service members

and “PLUS EX” service members■ Proactively developing various marketing campaigns utilizing tourism resources such as the Grand

Shrine of Ise, where a special ceremony is held, as well as Kyoto, Nara and other destinations, as well as developing travel products for inbound tourists

■ Making efforts to penetrate a new service, nation-wide mutual use of TOICA with IC cards of other transport operators, and to promote TOICA usage for railways and electric money

■ Increasing passenger volume through local cooperation, such as the Sawayaka Walking event ▲PLUS EX Card

Enhancing Marketing InitiativesCapital Investment:11 billion yen

■ We will continuously strive to enhance our technological capabilities, which are the foundation of railway management and development, as well as to pursue overseas projects using the high-speed railway and superconducting maglev systems, and to preserve the global environment.

■ Promoting research and development for practical technologies such as those for maintenance and reinforcement of civil engineering structures, enhancement of transportation services, and countermeasures for natural disasters

■ Engaging in marketing activities in regions and corridors that have been selected as viable targets for overseas projects using the high-speed railway or superconducting maglev systems by leveraging our comprehensive technological capabilities

■ Promoting measures to contribute to conservation of the global environment such as replacing old rolling stock with energy-saving rolling stock ▲Steel Truss Bridge (for tests)

Strengthening Technological Capability, Pursuing Overseas Projects & Preserving the Global EnvironmentCapital Investment:1 billion yen

■ We will steadily move ahead with the Nagoya Station New Building Project as we strive to increase competitiveness and revenue of our existing business.

■ Promoting construction of the Nagoya Station New Building, scheduled to be completed at the end of 2015, as well as actively promoting tenant leases

■ Increasing revenue by invigorating commercial facilities in the station building and stimulating merchandise businesses

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

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

Developing Affiliated BusinessesCapital Investment : 34 billion yen *Including 23 billion yen to be invested by consolidated subsidiaries

Total Capital Investment FY2013 (planned) Non-consolidated:271.0 billion yen * / Consolidated:294.0 billion yen*including 172.0 billion yen for safety-related investments

 Key Measures and Capital Investment in FY2013 (Year ended March 31, 2014)

Grout injection behind lining

Injection into crack

Reinforcement with rock bolts and steel plates (For where lining is thin)

Note: The figures planned for FY2014.3 are as of the publishment of the financial report for the year ended March 31, 2013

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Safety and Reliability

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

6 7

▲Tsunami Warning Sign indicats the evacuation root

▲Example of the “Large-scale renovation” (Concrete bridge)

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

well-planned manner including the upgrading of ATC (Automatic Train Control), CTC (Centralized Traffic Control) for the Tokaido Shinkansen and ATS (Automatic Train Stop) for conventional lines, the introduction of CTC on conventional lines, the strengthening of elevated track columns, embankments, and bridges as an earthquake countermeasure, the replacement of rolling stock and the upgrading of safety devices on grade crossings. In addition, we started implementing countermeasures to derailment / deviation on the Tokaido Shinkansen in 2009 as a new earthquake countermeasure. Further, while we appropriately implement various inspections of tunnels, bridges and other such structures as well as rolling stock, facilities, electrical and other equipment, we are also developing more efficient and effective inspection methods and have continually introduced various inspection equipment and systems. Furthermore, in February 2012, the replacement work, which began in 2006, was completed for introduction of ATS-PT, a new automatic train stop system, on all the conventional lines. As described above, we have worked actively since our inception to promote passenger safety and have spent a total of approximately 2.7 trillion yen (approximately 55% of total capital investment (non-consolidated)) over the 26 years up until the end of FY2013.3. Furthermore, we started to conduct the large-scale renovation of Tokaido Shinkansen infrastructure from 2013.

 Preparing for Natural Disasters(1) Earthquake Countermeasures① Reinforcement of Structures

In regard to Shinkansen earthquake countermeasures, we have already completed anti-quake reinforcement of elevated track columns, except on parts related to development projects, which were deemed to require reinforcement as a result of an anti-quake diagnosis performed on all Tokaido Shinkansen track after the Hanshin-Awaji Earthquake. Also we have reinforced elevated track columns between Mishima and Toyohashi, which require reinforcement since the expected wave patterns for a future Tokai Earthquake published by the Japanese government in 2003 suggest ground motion in this area could be particularly strong. In conjunction to further strengthen structures along the same section, we have proceeded to implement earthquake-resistant reinforcement of bridges and embankments as well since 2008 and have completed reinforcement of embankments by the end of FY2012 except for some parts related with consultative cases. Furthermore, we are engaging in works to strengthen facilities on conventional lines, such as the construction preventing bridges from falling down and the anti-quake reinforcement of elevated track columns.② Improvement of Earthquake Disaster Prevention System

In 1992 JR Central became the first company to introduce an “Earthquake Rapid Alarm System,” which was introduced on the Tokaido Shinkansen, and we have made efforts to introduce a Conventional-Lines Earthquake Information Communications System. The “Tokaido Shinkansen Earthquake Rapid Alarm System (TERRA-S)”, developed by modifying the previous earthquake-alarm system and introduced in 2005, has improved speed and accuracy of the system. Furthermore, by July 2013, we will increase responsiveness to vertical earthquakes and interlocking-type earthquakes, as well as provide for better backup systems in an effort to further improve the reliability of systems and safety against earthquakes.③ Countermeasures to Prevent Derailment / Deviation

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

Firstly, by March 2013, in order to prevent as much as possible a derailment during an earthquake, “Derailment Prevention Guards” has been installed parallel to and on the inside of rails in sections that are expected to experience strong earthquake motion during a Tokai Earthquake, and on sections right before points that trains pass over at high speeds due to the fear of more damage in the event of a derailment. Furthermore, by March 2020, we will install additional “Derailment Prevention Guards” in all other sections that are expected to experience strong earthquake motion during a Tokai Earthquake, and on sections right before tunnels where trains pass at high speeds. In conjunction with this, in addition to current earthquake countermeasures for conventional civil engineering structures, countermeasures to suppress the spilling of ballast, the sinking of embankments and the displacement of elevated track columns are implemented to ensure that derailment prevention guards function effectively. Also, in order to prevent as

much as possible large rolling stock deviations from track in case of a derailment, “Deviation Prevention Stoppers” had been installed at the bottom of all Shinkansen rolling stock bogies of our company by FY2012.

(2) Tsunami CountermeasuresIn addition to stipulating in our corporate regulations the operating rules and

procedures for verifying safety prior to recommencing train operation to guard against a tsunami, we have installed “Tsunami Warning Signs” which show evacuation direction along railways in the areas which are supposed to be attacked by tsunami. Also, we have taken into account the events of the Great East Japan Earthquake which struck in March 2011, and strengthened our capability to guide an evacuation along conventional lines by revising the standards by which crews direct evacuations on their own judgment and improving “tsunami evacuation maps” noting evacuation routes and shelters. We have also conducted tsunami evacuation training based on these revisions and will keep it.

(3) Countermeasures against Other Natural DisastersWe also strive to minimize the impact of other natural disasters on our railway

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

 Large-Scale RenovationFor the civil engineering structures of Tokaido Shinkansen, which has passed 48 years

from the opening of operation, it will be necessary to replace facilities in the future due to age-related deterioration, and in order to carry out large-scale renovation starting from FY2018, we had accumulated allowance reserves since 2002 upon approval by the Minister of Land, Infrastructure, Transport and Tourism on the allowance reserve plan for the large-scale renovation of Shinkansen infrastructure (the “Allowance Reserve Plan”) under the Nationwide Shinkansen Railway Development Act.

In addition to the allowance reserve, we have been continuously working on research and development mainly at our research facility, which was established in Komaki, Aichi, in 2002, and have succeeded in developing a new method that makes it possible to substantially reduce interference to train operations at the time of construction and also to decrease construction costs drastically.

Therefore, we determined that an earlier start of the large-scale renovation using the new method would be appropriate and decided to conduct such renovation five years ahead of schedule, starting from 2013. We applied to the Minister of Land, Infrastructure, Transport and Tourism for an amendment to the Allowance Reserve Plan in January 2013.

The new plan was approved in February 2013, by the Minister and we will conduct the renovation for ten years.

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

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

▲Derailment Prevention Guards

(billions of yen)

Locations of Seismometers and Detection Points

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

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

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

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

●①

●①

Detection points (21)

Seismometers alongside railway lines (50)

Shin-Osaka

Tokyo

②③preventing a derailment by the  derailment prevention guards

Shinkansen General Control CenterTokai General Control Center

Relay Station

Detector

Stop Electricity

Seismometer

Conventional-Lines Earthquake Information Communications System

Tokaido Shinkansen Earthquake Rapid AlarmSystem (TERRA-S)

Transmit train to stop

Splicing equipmentfor earthquakeearly warning

Japan Meteorological Agency(Japan MeteorologicalBusiness Support Center)

Detector

Substation

Epicenter

Train Radio

Seismic wave

Train Control System in the Case of Earthquakes

178

138

164

’09.3 ’10.3 ’11.3

142

’12.3

265

298

’13.3

301

244

288

Safety-Related Investments (Non-consolidated)

136

’14.3(planned)

271

172

0

50

100

150

200

250

300

Safety-Related Investments

Total Capital Investments

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Safety and Reliability

8

▲Retaining Walls and Alarm System for falling rocks

▲Renovation of the Hamamatsu Workshop (completion image)

▲The Shinkansen General Control Center

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

pattern is generated in a train in accordance with the distance to the signal ahead.・When the train speed exceeds this pattern, emergency

brakes are automatically engaged bringing the train to a stop before the signal.・ATS-PT provides continuous control through braking

patterns.

ATS-PT

Mechanism of ATC

Speed of own train

Preceeding train

ReceiveGround equipments

(for position adjustment)

CTC System Area

▲General Training Simulator (Shinkansen)

▲General Training Center

▲General Training Session Simulating Actual Accidents

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

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

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

 Tokaido Shinkansen(1) Shinkansen Operation System

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

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

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

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

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

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

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

(3) Doctor YellowWe run a multiple inspection train, known as Doctor Yellow, to test the Shinkansen

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

(4) Renovation of the Hamamatsu WorkshopIn July 2010 we started renovations of the Hamamatsu Workshop which is the only

workshop that performs overhauls of the Tokaido Shinkansen. Through these renovations we aim to replace and strengthen existing structures to improve anti-quake resistance, work efficiency through the introduction of line improvements and the latest equipment, and the overall work environment. Renovations are expected to be completed at the end of FY2018.

 Conventional Line(1) Conventional Line Operation System

JR Central’s 12 conventional lines are controlled from two control centers; the Tokai General Control Center and Shizuoka General Control Center. Each of the centers monitors the operational status of trains and the utilization of facilities 24 hours a day.

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

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

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

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

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

(4) Doctor TokaiAs for the maintenance of railway tracks and electrical facilities, the use of the multiple

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

(5) Countermeasures against Snow Slides and Falling RocksWe have developed equipment to protect against falling rocks and snow slides on

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

9

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

CTC system area

InotaniShiojiri

Tatsuno

KofuTokyo

KozuAtamiNumazu

Fuji

ShizuokaToyohashi

ObuNagoya

Tajimi

Mino-OtaGifuMino-Akasaka

Ogaki

MaibaraKyoto

Shin-Osaka

Ise-Okitsu

Kameyama

Matsusaka

Toba

Shingu

Taki

Taketoyo

Tokaido Shinkansen

Tokaido Line

Iida Line

Meisho Line

Sangu Line

Minobu Line

Chuo Line

Gotemba Line

Kisei Line

Kansai Line

Takayama Line

Taita Line

Taketoyo Line

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

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

④Comparison between  speed and ATC signal.

②Position information of own train

①Position information  of the preceeding train

Ground coil (Pattern generation)

Braking Pattern Speed

train’s running curve

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

Signal

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Transportation Service

10 11

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

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

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

southwest Tokyo by 20 to 30 minutes. Additionally, having all train services including “Nozomi” services stop at Shinagawa and Shin-Yokohama stations with the timetable revision of March 2008 resulted in further improving accessibility to the Tokaido Shinkansen in the Tokyo metropolitan areas.

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

We have continued to improve the convenience of the Shinkansen through a series of timetable revisions since October 2003. We further boosted transportation capacity by allowing up to eight “Nozomi” services per hour in March 2005, and a maximum of nine services in March 2009, and continue to flexibly adjust train services such as a new time table, in which ten “Nozomi” services are offered per hour during the busy time of the day, in March 2012. Also, in March 2006 we aimed to further improve convenience to the Sanyo section by increasing the number of “Nozomi” services with direct service between the Tokaido and Sanyo Shinkansen sections and operating two “Nozomi” services between Tokyo and Hakata per hour. Since then as well, we have further strived to improve service by augmenting Sanyo direct service “Nozomi.”

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

JR Central and JR West jointly developed the Series N700. The Series N700 increased the speed on curves by adopting a body inclining system for the first time in Japan’s Shinkansen history and improved acceleration performance thereby enabling a shortening of travel time. In addition, we have improved ride quality including comfort and quietness, and achieved significant energy savings to decrease the amount of energy consumed by 25% compared to the Series 300 and by 19% against the Series 700.② Concentrated introduction and increase in the number of “Nozomi” operated by the   Series N700

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

(3) Introduction of N700A(N700 Advanced) and Remodel of Series N700Subsequent to the intensive introduction of the Series N700, we have introduced the

N700A, which employs the results of technological developments achieved since the birth of the Series N700, including the “High Performance Wheel Mounted Brake Disk,” “Bogie Vibration Detective System” “Fixed Speed Running Device,” in an effort to even further improve safety, reliability and energy efficiency, to replace the Series 700 rolling stock. We introduced six trainsets of the N700A in FY2012 and we shall introduce seven trainsets in FY2013 and six trainsets per year from FY2014 to FY2016. Also, from FY2013 to FY2015, we will remodel existing eighty N700 trainsets to improve further safety and reliability by equipping “High Performance Wheel Mounted Brake Disk” and “Fixed Speed Running Device.” This means that approximately 80% of the Shinkansen rolling stock owned by JR Central will be of the Series N700A type by the end of FY2016.

Since its inauguration in 1964, approximately 5.4 billion people have used the Tokaido Shinkansen, the transportation artery linking Japan’s three largest metropolitan areas, Tokyo, Nagoya, and Osaka, which has supported Japan’s economic growth.

 Characteristics of the Tokaido Shinkansen

Tokaido Shinkansen

Tokaido Shinkansen Data (FY2013.3)

Tokaido Shinkansen Service (Nozomi, Hikari, Kodama)

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

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

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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

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

Tokyo~Shin-Osaka,time required

2 hr 25 min

Approx. 3 hrApprox. 4 hr

NozomiHikariKodama

Tokyo~Shin-Osaka,fare/surcharge

Number ofnon-reservedseat cars

¥14,050¥13,750¥13,750

35

10

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

Stops

*3

*1

*2

●Total daily number of trains 336●Average daily passenger ridership 409 thousand●Yearly passenger ridership 149 million●Maximum operating speed 270km/h●Average delay from schedule  per train 0.5 minutes *2

*1

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

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

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

wireless LAN Internet connection service in the Series N700・N700A available between Tokyo and Shin-Osaka◯Constant renovation of stations and installation of new facilities such as

elevators, escalators, smoking rooms.

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

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

◯336 daily departures (FY2013.3, including extra services), 1,323 seats per train◯A maximum of ten “Nozomi” services per hour. Daily passenger capacity of the

Shinkansen between Tokyo and Osaka is approximately 320 thousand, which exceeds that of airlines with approximately 29 thousand (FY2013.3)◯The “Express Reservation” service allows passengers to change their

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

◯Annual average delay is 0.5 minutes per operational train (FY2013.3, including delays due to uncontrollable causes such as natural disasters)

Safety

Punctuality

Comfort

High Speeds

High Frequency andHigh Capacity

Japan’s GDP and Tokaido Shinkansen Passenger-kilometers

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

GDP Passenger-kilometers (JR Central)

GDP(100 million passenger-kilometers)

(¥ trillion)

’09.3 ’10.3 ’11.30

200

300

400

500

600

0

200

300

400

500

600

505495

512 513

’12.3

460

427437 443

’13.3

519

469

Tokaido Shinkansen Daily Departures

Nozomi Hikari Kodama

Series 300

Series 700

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

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

SeriesN700 N700A

’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.30

30

60

90

120

150[Cars]

60

61

16

52

60

32

41

60

48

25

60

64

60

9

80

51

680

47

Introduction of rolling stocks (Tokaido Shinkansen)

0

50

100

150

200

250

300

350

235144

91

288

1884

96

137

89

65

323173

65

85

(Trains / day)

’87.4 ’92.4 ’04.4 ’13.4

291

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Transportation Service

▲Rapid-service train “Mie”

▲Running Image of an event train, “Mt. Fuji Train 371”

▲Ki-Ha 25 (type of rolling stock)

▲Express “Shinano” (Wide-View type)

▲New movable platform fence (Platform #27 of Shin-Osaka Station)

▲Smoking Room on the platform of Tokaido Shinkansen

▲Construction of an additional platform at Shin-Osaka Station

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

Advanced semi-active suspension system

Higher vibration-control performance by semi-active suspension system

(4) Further Enhancement of Transportation Service① Large-scale renovation at Shin-Osaka Station

At the Tokaido Shinkansen Shin-Osaka Station we added a new track and a new platform and will increase the number of draw-out tracks from two to four. We started using the track and platform from the end of FY2012 and will finish constructing other facilities including draw-out tracks during FY2013. The renovation will largely improve the flexibility of transport and enhance our ability to handle disasters, as well as increase the chance for us to operate 10 “Nozomi” services per hour.

Additionally, in August 2012, the Shin-Osaka Hankyu Building was opened and the passageway through which people can move to the north side of the station was constructed. The improvement work of the station concourse, which was conducted along with the railway track construction, was also completed at the end of FY2012.② Investment in Stations for Further Convenience and Comfort

In order to offer further convenience and comfort at stations, we have changed station layouts to make ticket offices more accessible, upgraded waiting rooms for passengers and conducted renovation of retail tenants on station premises. At Shin-Osaka Station, where work commenced in 2007, improvements work on station facilities, such as layout changes of ticket windows and ticket gates, was successfully conducted and completed in March 2013.

Moreover, to further enhance safety on platforms, we have introduced new movable platform fences that can utilize existing fences and cut costs, on platform #14 at Tokyo Station and on platform #27 at Shin-Osaka station from March 2013. We are steadily continuing to make improvements of passenger-related facilities including installation of new-model moving platform fences and installation of smoking rooms in all stations of Tokaido Shinkansen in the future.

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

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

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

We also try to meet demands of tourists by operating special trains and increasing frequency and cars for local events such as Shikinen Sengu Ceremony at Ise Jingu (Shrine).

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

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

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

barrier-free and comfort, we newly produced and introduced 204 Series 313 rolling stocks in 2006. As a continuation of this, from FY2010 to FY2012, we aimed to further improve safety and transportation service by newly producing 120 Series 313 rolling stocks as well as 10 Series Ki-Ha 25 rolling stocks and using them to replace aging rolling stocks. Upon such replacements, in March 2013, all rapid-service and local trains operating on the Tokaido Line became new rolling stocks made after the foundation of JR. We also plan to introduce 28 Series 313 rolling stocks after spring 2015 on the Taketoyo Line.

Also, we will gradually introduce 52 Series Ki-Ha 25 (Secondary edition) rolling stocks to the Takayama Line, Taita Line, Kisei Line and Sangu Line from FY2014 to FY2015. By those replacements, in March 2016, all diesel trains will be new rolling stocks made after the foundation of JR.

12 13

Conventional Line ■Characteristics of the Series N700 and N700A1. Latest equipment to further improve safety and ensure reliable transportation● Further improving safety (adopting “High Performance Wheel Mounted Brake

Disk” and ”Earthquake Blake”)● Quick recovery from timetable disruption (adopting “Fixed Speed Running

Device”)● Detecting a malfunction of bogie in advance (adopting “Bogie Vibration

Detective System”) (Only N700A)2. Offering a relaxing, comfortable and high-quality cabin environment● Enhanced riding comfort and quietness ・Installing an advanced semi-active suspension system ・Installing cover-all hood・Installing “Body Inclining System” (N700A uses the system in wider areas than

N700)・Installing “New vibration-damping panel” (Green cars of N700A) ・Installing “New acoustic floor structure” (Green cars of N700 and all cars of

N700A)● Completely separated smoking and nonsmoking sections by making all seats

non-smoking and installing smoking rooms● Improvement of First class Green car quality ・Adopting Synchronized Comfort Seats

3. Offering the ultimate internal environment for businessperson● Increasing the number of outlets for mobile devices・ All seats in Green Cars, window seats and seats at the front and back in regular

cars)● Individual high luminance LED reading light, leg warmers (Green cars)● Making seatback tables large enough for laptop computers ● Improving quietness in vestibules, and realizing an ultimate conversing

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

high-speed operation by utilizing Wireless LAN (between Tokyo and Shin-Osaka)4. Perfecting train services so that passengers can feel more comfortable● Enlarging information displays for onboard electronic news caption● Enlarging multifunction wash room space and establishing facilities for

ostomates for the first time on a Shinkansen train● Installing toilet seats with a warm-water washing function (scheduled as

standard equipment for N700A to be introduced in FY2014)● Establishing security cameras on vestibules in order to improve train security

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Conventional Lines Ridership

Total

CommuterPasses

Ordinary Tickets

391

252

139

384

252

132

386

254

132

’11.3’10.3’09.3100

200

300

400

384

254

130

’12.3

387

253

133

’13.3

(million passengers)

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The Chuo Shinkansen using the Superconducting Maglev System

14 15

▲The new vehicle Series L0 (L zero)

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

Flow of works based on the Nationwide Shinkansen Railway Development Act

0

18 40 17 40 40 40 4028 3 396

5 10 15 20 25 30 35 40

(extension) (extension)Priority section (upgrading)

distance (Km)

grade(‰)

A Rough Route and locations of each station of Chuo Shinkansen (between Tokyo and City of Nagoya) announced in the “Report for Environmental Consideration at the Planning Phase” Overview of the Yamanashi Maglev Test Line

Note: Specific route and locations of each station will be announced around autumn of 2013.

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

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

It has been 48 years since the inauguration of the Tokaido Shinkansen, which presently fulfills the mission, and we have entered a time when we must think of drastic ways to deal with feared future aging and large scale disasters based on the fact that it takes a very long time to construct and realize a railway. It is for this reason that we will realize as quickly as possible the Chuo Shinkansen that can substitute the mission by utilizing the Superconducting Maglev system, which we have developed, under the condition that we bear the cost of rail construction. We will operate the Chuo Shinkansen in an integrated manner along with the Tokaido Shinkansen. To promote this project, we shall invest as necessary to ensure safe and reliable transportation and enhance competitiveness as well as ensure sound management that will continue to provide stable dividends. We will also surely and steadily engage in various efforts aimed at the realization of the Chuo Shinkansen first to the City of Nagoya and after recovering management vitality, to the City of Osaka as soon as possible.

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

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

We are now promoting assessment of environmental impacts between Tokyo and the City of Nagoya, where we will start to construct the line as the first step, and around autumn of 2013 we will publish the “Draft Environmental Impact Statement” in which we will announce specific route and locations of each station. After the publishing, we will steadily promote preparations for starting construction work including procedures of environmental assessment.

 Investment on the Yamanashi Maglev Test Line and Improvement of the    Superconducting Maglev Technology

In consideration of the fact that Superconducting Maglev is most suitable for use on the Chuo Shinkansen due to its speed and advanced technology, technological developments have been conducted and test runs have been performed at the priority section of 18.4 km of the Yamanashi Maglev Test Line.

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

On the other hand, we have been engaged in the construction to extend the test line to 42.8km and to upgrade facilities of the Yamanashi Maglev Test Line by investing 355 billion yen of our own capital. We plan to restart the running test with the new Series L0 (L zero) in the end of August 2013.

On the test line after it has been extended and improved, we are committed to bringing down costs for construction, operation and maintenance of commercial lines as well as improving the Superconducting Maglev technology, for which the practical technology has been completed.

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

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

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

the Superconducting Maglev system, and the actual travel time required to move between the centers of Tokyo and Osaka can be shortened to approximately half that of airplanes.

In addition, the amount of CO2 emissions that Superconducting Maglev produces when carrying one person between Tokyo and Osaka is approx. one-third that of airplanes. As this shows, Superconducting Maglev is a transport system suitable of the 21st-century in which global environmental preservation is becoming more important.

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

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

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Gifu PrefectureNagano Prefecture

Aichi Prefecture Shizuoka Prefecture

Yamanashi Prefecture

Kanagawa Prefecture

Tokyo Metropolis

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

N

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

Basic Plan

Researches and Reports

Article 4

・November 1973 decided

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

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

Article 5

Transport Policy Council

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

Article 14-2

Designation of Operator and Constructor

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

Article 6

Development Plan

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

Article 7

Instruction to Construct

・Instruction, May 27, 2011

Construction Implementation Plan

Start of Construction

・Application and Permission

Article 8

Article 9

0 25 50km

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

elevation800m

600m

400m

200m

Starting point ofthe Yamanashi Maglev Test Line

0km000m00

Starting point ofthe priority section

16km610m00

Ending point ofthe priority section

35km010m00

Ending point ofthe Yamanashi Maglev Test Line

42km800m00

8.8

581

430

320

11.1 13.3 18.710

600

500

400

300

200

100

0

20 30

Superconducting Maglev Transrapid (Shanghai)TGV Series N700

Distance(km)

Speed(km/h)

Assessment of Environmental Impact

Page 10: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

Sales and Marketing

16 17

Kitaca areas

TOICA areasICOCA areas

nimoca areasHAYAKAKEN areas

SUGOCA areas

PiTaPa areasmanaca areas

PASMO areas

Suica areas

▲Tokyo☆Bookmark website

▲Kyoto Campaign, Spring 2013 version (Myoshin-ji Temple Taizoin)

▲Ise-Shima Campaign

▲“FLEX JAPAN” Website

▲EX-IC Service(Ticket less bording service for Shinkansen)

Concept Image of Using the “EX-IC card” along with “TOICA” Image of Mutual Use of IC card for conventional line in JapanTransferring between the Shinkansen and conventional lines is seamless with the use of “TOICA” (a conventional line IC card) and an “EX-IC Card.”

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

EX-IC serviceTokaido Shinkansen

Tokyo

Nag

oya

*IC cards for conventional lines cannot be used for travel that extends beyond the areas of use of each card. However, this excludes travel 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.

Boarding conventional trains with IC card

Getting off conventional trains with IC card

Touch two IC cards (Conventiona line IC card and EX-IC card) at tickets gates

 Improvement of IC Service(1) “Express Reservation”(“EX-IC Service”), “Plus EX” service

JR Central offers “Express Reservation” and “Plus EX” services for frequent customers of the Tokaido Shinkansen who use it mainly on business. These services can shorten the total travel time of customers because they can change their reservation repeatedly online without any fee and also can get on trains by touching their IC card for the Tokaido Shinkansen (“EX-IC card”) on the reader at the ticket gate. Furthermore, when transferring to a conventional line, customers can transit smoothly by touching two cards, “EX-IC card” and the other IC card for conventional line such as “TOICA”, together on the reader at the ticket gate.

The number of “Express Reservation” user on Tokaido and Sanyo Shinkansen has increased steadily to about 2.15 million. Daily usage on weekday become about 120 thousand (as of March 2013). Over 70% of members use “EX-IC Service,” which has become a standard service of Tokaido Shinkansen. Furthermore, in October 2012, we started “Plus EX” service which enables customers to use internet reservation and IC card transit service for Tokaido Shinkansen with their own credit cards.

We will continue to improve competitiveness of Tokaido Shinkansen by enhancing service contents of “Express Reservation” meeting customer needs and by increasing the number of its user and expanding their usage with effective announcement and advertisement.

(2) Expansion of IC Service for Conventional LineWhile we have been promoting the IC card for conventional line, “TOICA”, by

expanding valid area and mutual use and adding the function of electronic money, we have started nationwide mutual use with the main 10 conventional line IC cards in March 2013.

The mutual use enables IC card holders to transit 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).

Continually striving to achieve mutual use, we will keep promoting IC card uses for railways and electronic money services.

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

stimulate tourism demand over a diverse range of informational media and sales channels by launching various campaigns and travel products to increase revenue continuously.

First, we have continuously implemented campaigns for Kyoto and Nara, which are the largest tourist resources in our market area, and are promoting the use of the Shinkansen mainly from the Tokyo Metropolitan area to the Kansai region. Since the autumn of 2013 is the 20th anniversary of the Kyoto Campaign, we are planning to create tourist demand by collaborating with local communities and travel agencies. For travel from the Kansai and Nagoya regions to the Tokyo Metropolitan area, we are also striving to promote package tours collaborated with popular tourist spots such as TOKYO SKYTREE and Tokyo Disney Resort which cerebrates its 30th anniversary in 2013 through our “Tokyo☆Bookmark” online campaign as a way to increase demand of trend-conscious young women. In addition, since Ise Jingu (shrine) has a special event called Shikinen Sengu Ceremony, which takes place once every twenty years, this year, we will actively advertise the event and provide package tours with travel agencies to increase tourists visiting the Ise area.

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

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

As a way to promote the use of conventional lines, in addition to “Sawayaka Walking” event where participants walk to tourist spots along our train lines without charge, we are operating tourist trains such as “Iida line rarely-visited stations train” and also are promoting “Shupo - a train tour starting from Shinkansen” campaign, which recommends customers to visit tourist spots along conventional lines by transferring to conventional trains from Tokaido Shinkansen.

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

Providing More Convenient Service and Increasing DemandJR Central makes efforts to have customers use our lines more comfortable by expanding IC services on both the Shinkansen and

conventional lines. We are also increasing demand for tourism by offering various travel campaigns and vacation packages as we strive to actively create new demand.

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Gifu

Shinjuku

“Express Reservation” service

Membership (JR Central)

Membership (JR West)

Membership (Thousands)

Usage (Daily average on weekdays)

0

500

1,000

1,500

0

50

100

150

2002,000

330

1,290

380

1,410

1,150

270

96 96

86

’09.3 ’10.3 ’11.3

440

1,540

110

’12.3 ’13.3

Usage(Thousands)

490

1,660

119

Page 11: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

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

18 19

(Current)Internal Circumference-anchored

Brake DiskHigh Performance

Wheel Mounted Brake DiskBrakeDisk Bolt

BrakeDisk

Mechanical problems will be displayedin the cockpit.

Results of technical development which have been equipped on N700A

①High Performance Wheel Mounted Brake Disk ②Bogie Vibration Detective System

▲Komaki Research Center

▲Vehicle Dynamic Simulator

▲Rolling Stock Field Test Simulator

▲Steel Truss Bridge (for tests)

▲Reinforced Concrete Rigid Frame Viaduct

▲Overseas High-Speed Railway (completion image)

▲Noise Barriers

 Promoting Technological Development at the Komaki Research CenterJR Central opened its own original R&D center in Komaki, Aichi Prefecture in July 2002,

and is promoting R&D activities to further strengthen our efforts toward technological development that will support our future, to enhance our technical capabilities, and to foster technically skilled human resources. At the Komaki Research Center, we place the highest priority on ensuring safe and reliable transportation, and we are promoting research and development for practical technology for the enrichment of transportation service and countermeasures for natural disasters, as well as developing technologies linked to cutting costs and improving constraints of construction for the large-scale renovation. We are also reducing costs and increasing efficiency at all levels including saving labor in maintenance work.

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

We have been implementing derailment / deviation prevention measures as much as possible on the Tokaido Shinkansen since 2009 as new earthquake countermeasures to prevent damage from derailments caused by earthquakes. (See page 6 for more information) This countermeasure consists of three elements; installing derailment prevention guards and deviation prevention stoppers, and strengthening civil engineering structures. This achievement took approximately five years of unraveling the mechanism of derailment at the Komaki Research Center and conducting actual on-rail tests, and the efficacy of these countermeasures has been verified.

(2) Development of the Series N700 and of the technology linked to N700AThe Series N700 rolling stock began commercial operation in July 2007. The results of

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

Furthermore, we started actual tests using the “Rolling Stock Field Test Simulator” in April 2008. This simulator works by running a Shinkansen rolling stock atop track wheels that simulate rails, and reproducing running conditions by simulating various vibrations that are generated during running. The Series N700A that was introduced in February 2013 reflects the results of post-Series N700 technological development that leverages this “Rolling Stock Field Test Simulator” and the test car of the Series N700. By equipping the Series N700A with a “High Performance Wheel Mounted Brake Disk” which provides stronger and more reliable braking, a “Bogie Vibration Detective System” which continuously monitors the state of all bogies in order to further improve reliability, and a “Fixed Speed Running Device” which enables even more reliable operation using ATC signals, we have been able to further improve safe and reliable transport.

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

(3) Establishment of Construction Method for Maintenance and Reinforcement of StructuresJR Central is continuously engaged in research and development aimed at advanced

maintenance of structures. For example, we have ascertained the actual condition of steel bridges, viaducts and tunnels along the Tokaido Shinkansen and have developed methods for implementing reinforcement work by using actual-size test truss bridges and viaducts set up at Komaki Research Center.

As a result, we have established new methods to extend the life of civil engineering structures and decided to start large-scale renovation of the Tokaido Shinkansen in FY2013, 5 years earlier than our initial plan.

(4) Efforts to reduce noise and vibration We have implemented necessary noise and vibration countermeasures for the Shinkansen

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

We will continue to strive for technical development, including the development of countermeasures for rolling stock and ground, and also preservation of the environment along the railway.

 Overseas Deployment of High-Speed Railway SystemToday, global warming is a pressing issue. There are many environmentally-friendly

construction projects for high-speed railway that are underway all over the world. JR Central is promoting the overseas deployment of high-speed railway systems by leveraging the comprehensive high-speed railway technology which is at the world’s highest level. JR Central thinks that the overseas deployment of its high-speed railway system will be a meaningful project not only that diversify revenue bases of JR Central group, but also that enables domestic manufacturers to maintain and strengthen their technology and skills through the expansion of the international high-speed railway market, and also may lead to technological innovation and cost reduction of railway-related equipment.(1) C&C (Consulting and Coordination) Business

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

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

“SCMAGLEV” to overseas markets. The “N700-ⅠBullet” is a total high speed rail system that consists of mainly the “N700-Ⅰ” rolling stock. The “N700-Ⅰ” is based on the Series N700 operated in Japan and refers to an eight-car trainset (the Series N700 is a 16 car trainset) that meets the overseas market trends and can travel at a maximum speed of 330km/h (205mph). The Superconducting Maglev (SCMAGLEV) is a high-speed transportation system developed by JR Central that can operate at a speed of 500km/h (311mph).

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

worked with US companies, which are experienced in dealing with government agencies and companies, in order to look into opportunities for the overseas deployment of its high-speed railway system and to actively engage in marketing activities to regions and corridors that have been selected as viable targets. Also, JR Central agreed with JR West, JR Kyushu and Taiwan High Speed Rail, which basically use the same railway system, to cooperate in the promotion of overseas deployment.

In addition, JR Central will hold a forum, “International High Speed Rail Conference Commemorating 50 Years of the Shinkansen – High-Speed Rail Accelerating toward the Future – (tentative title)“ in Autumn 2014 with JR West and JR Kyushu, and also will provide an opportunity to share information about the Tokaido Shinkansen System and its technology with people from various countries and areas.

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

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

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Vibration Sensor Vibration SensorVibration Detective Machine

Page 12: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

Affiliated Business

20 21

▲JR Central Towers

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

▲Example of a tenant of the Tokyo Okashi Landin the First Avenue Tokyo Station

(billions of yen)

’11.3’10.3’09.3

528(31)

507(31)

0

100

200

300

400

500

’12.3

511(29)

518(29)

’13.3

525(29)

211

11

62

239

Operating Revenues of Consolidated Subsidiaries(simply aggregated) 

Real Estate Other

Transportation Merchandise and Other

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

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

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

Operating revenues of consolidated subsidiaries totaled ¥525.9 billion (simply aggregated) in FY2013.3.

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

area of approx.417,000m2, built on the 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 the Group’s subsidiaries are operating.

The office business is run by JR CENTRAL BUILDING Co., LTD., a wholly-owned subsidiary of JR Central, which owns JR Central Towers. Since its opening, JR Central Towers has continually recorded high levels of occupancy, which has maintained at close to 100% during FY2013.3.

JR Nagoya Takashimaya is operated by JR Tokai Takashimaya Co., Ltd., a joint venture of JR Central and Takashimaya Co., Ltd.. By leveraging the stores location directly above the station, the store attracts a large number of visitors. The renewal completed in the Spring of 2012 has resulted in sales for FY2013. 2 reaching ¥110.3 billion (106.1% YoY), their highest level since the opening in 2000.

With regard to a hotel business, Nagoya Marriott Associa Hotel is run by JR Tokai Hotels Co., Ltd., a wholly-owned subsidiary of JR Central. JR Tokai Hotels Co., Ltd., which has concluded a franchise contract with Marriott International Inc., provides services appropriate to an international luxury city hotel. The spectacular view from the high-rise directly above the station and the high-grade facilities have gained wide acclaim thereby enabling us to maintain a high occupancy rate of more than 85% (average for FY2013.3). The combined operating revenues of these three companies were ¥151.8 billion in FY2013.3 (simply aggregated). We will be further enhancing and developing business at JR Central Towers.

 Nagoya Station New Building ProjectWe have started the construction of a tall complex comprised of offices, commercial

facilities, a hotel, a bus terminal and parking lots, next to JR Central Towers at Nagoya Station, from December 2012. The development concept is to create an attractive and convenient cosmopolitan space that is unified with JR Central Towers with the intention of creating a bustling hotspot for the area around Nagoya Station, to give the office complex metropolitan functions that are fitting of it and meeting the diverse working style needs of the community around Nagoya Station, and to form a relaxing cosmopolitan space that considers reducing the burden on the environment by measures such as utilizing natural energy.

Also, from the standpoint of efficient management by the JR Central Group, it was decided that management and operation of the entire building shall be handled by JR CENTRAL BUILDING Co., LTD., aiming for an attractive and highly convenient building. The main tenants set to take up occupancy are Yodobashi Camera, one of the largest high-volume electronics retail stores in Japan, a fitness club, a childcare facility and so on in addition to JR Nagoya Takashimaya and a hotel which will be managed by JR Tokai Hotels. The project is steadily moving forward with start of occupancy of offices from the end of 2015 and opening of JR Nagoya Takashimaya and the hotel in the spring of 2016.

 Other BusinessesWe are striving for effective utilization of real estate owned by our group companies,

including revitalizing First Avenue Tokyo Station, renewal of which has been completed, and other station buildings and developing land where the employee training center had been located in the Chikusa district of Nagoya. On the other hand, merchandise and other sectors are working to enhance their sales forces and earning power by offering new products and new types of stores. Hereafter, we will keep striving to strengthen competiveness and increase revenue of current businesses by renovating station commercial facilities, selling lots where corporate houses had been located, reinforcing merchandise, and so on.

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

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

Consolidated Subsidiaries

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Bus services

Logistics business

Railway business

Department store operations

Wholesale and retail sales

Food and beverage sales

Wholesale and retail sales

Real estate leasing

Real estate leasing and sales

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Real estate leasing

Hotel business

Hotel business

Travel agency services

Advertising

Construction

Linen supply services

Track maintenance

Construction consulting business

JR Tokai Bus Company

JR TOKAI LOGISTICS COMPANY

Tokai Transport Service Company

JR Tokai Takashimaya Co., Ltd.

JR-CENTRAL PASSENGERS CO., Ltd.

Tokai Kiosk Company

JR Tokai Food Service Co, Ltd.

JR Tokai Corporation

JR CENTRAL BUILDING Co., LTD.

JR Tokai Real Estate Co., Ltd.

Shin-Yokohama Station Development Co., Ltd.

Toyohashi Station Building Co., Ltd.

Tokyo Station Development Co., Ltd.

Shizuoka Terminal Development Company Limited

HAMAMATSU TERMINAL DEVELOPMENT CO., Ltd.

Nagoya Station Area Development Corporation

JR DEVELOPMENT AND MANAGEMENT CORPORATION OF SHIZUOKA

JR Development and Management Corporation of Kansai

JR Tokai Hotels Co., Ltd.

SHIZUOKA TERMINAL HOTEL CO., Ltd.

JR Tokai Tours

JR TOKAI AGENCY CO., LTD.

NIPPON SHARYO, LTD.

JR TOKAI CONSTRUCTION CO., Ltd.

CHUOH LINEN SUPPLY CO, Ltd.

JR TOKAI Information Systems Company

The Japan Mechanised Works and Maintenance of Way Co. LTD

Tokai Rolling Stock & Machinery Co., Ltd.

JR Central Consultants Company

Transportation

Merchandiseand

Other

Real Estate

Other

1,747

300

295

10,000

998

700

295

100

45,000

16,500

9,304

1,880

1,750

624

600

480

363

30

14,000

50

490

61

11,810

300

150

100

100

80

50

100.0

90.0

100.0

59.2

100.0

100.0

51.6

70.0

100.0

100.0

100.0

52.5

100.0

67.0

76.8

100.0

100.0

100.0

100.0

0.0

70.0

90.0

51.3

100.0

87.6

100.0

92.1

88.4

100.0

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

Development, improvement and maintenance of computer system

Food and beverage salesWholesale and retail sales

Rolling stock and machinery maintenance

Manufacturing of railway rolling stock

Company NameSegmentCapital

(Millions of yen)Shareholding

(%) Business Activities

Page 13: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

Engagement in Global Environment Preservation, etc.

22

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

Comparison of Electric Power Consumption by Tokaido Shinkansen Rolling Stock Type

270km/h

100%

92%

75%

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

Regenerative Braking System

-19% -25%

▲Series N700 / N700A(Equipped with Cover-All Hood)

▲Series 300 (Not Equipped with

Cover-All Hood)

0

20

40

60

80

100

0

20

40

60

80

100

Energy-conserving rolling stock:Series 300, Series 700

Series 0, Series 100

0

100,000

200,000

300,000

400,000

500,000

600,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0

100,000

200,000

300,000

400,000

500,000

600,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

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

Source: Created based on the FY2010 Inter-Regional Passenger Mobility Survey (Ministry of Land, Infrastructure, Transport and Tourism)

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

Source: Created based on the “Annual Aggregate Air Transportation Report (FY2010)” and the “Transportation Related Statistics” (Ministry of Land, Infrastructure, Transport and Tourism)

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

CO2 emissions

Transportation volume (passenger-km)Number of flights(round-trip/day)

CO2 emissions

Transportation volume (passenger-km)

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

18 16 19 21

23 23 27 29

3438 40

44

51

5862 61

5755

46

18 18

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

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

 Environmentally Superior Mode of the Tokaido ShinkansenIf the Tokaido Shinkansen (Series N700/N700A “Nozomi” ) and an airplane (B777-200)

are compared, the Tokaido Shinkansen consumes approximately one-eighth of the amount of energy per passenger seat when traveling between Tokyo and Osaka and has about one-twelfth of the CO2 emissions. The Tokaido Shinkansen has overwhelming environmental superiority. If we look at transportation volume and CO2 emissions for the Tokaido Shinkansen in the Tokyo-Osaka corridor in FY2010, we will see that compared with FY1990, CO2 emissions have decreased as a result of our efforts to improve energy efficiency. Meanwhile, airplanes have shown an increase in transportation volume due to an increase in flights and consequent CO2 emissions have virtually doubled.

If for argument’s sake a calculation was made based on FY2010 transportation statistics that assumed that all transportation by airplane was handled by the Tokaido Shinkansen, it would show an actual overall emission reduction of approximately 380,000 tons. This corresponds to the yearly CO2 emissions for 79,000 households.

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

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

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

environment

23

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

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

Series 300, introduced in March 1992,improved its energy consumption by approximately 30% compared with the first Series 0 model (in the case of 220km/h operation).

Since that time, we have continued introducing energy-conserving rolling stocks, and by the time the Shinkansen Shinagawa Station opened in October 2003, we had replaced all rolling stocks with the high-speed, energy-conserving Series 300 and Series 700. From 2007 through 2011, we undertook an intensive commitment of introducing 80 Series N700 trainsets. We will also introduce 13 trainsets of N700A by FY2013 and another 18 trainsets from FY2014 to FY2016.

When electricity consumption rates are compared for travel between Tokyo and Shin-Osaka, our current mainstay the Series N700/N700A consumes approximately 25% less energy than the Series 300, demonstrating a remarkable improvement in energy efficiency. As a result, by the end of FY2012, we had improved unit energy consumption* by approximately 32% compared with FY1990 (in the case of 270km/h operation).

In March 2012, we retired the Series 300 from the Tokaido and Sanyo Shinkansen. Currently we are striving to further reduce energy consumption by advancing the replacement of the Series 700 with the Series N700A which achieves energy-conserving performance equivalent to that of the Series N700.

*Amount of energy consumed when running 1 carriage for 1 kilometer

(2) Energy-Saving Technology on Series N700/N700AThe Series N700/N700A have been highly improved in energy efficiency by the

introduction of below technologies.① Reduction in Running Resistance

On the Series N700/N700A, an aerodynamically superior nose shape was developed to reduce specific running resistance. Also, exterior uniformity was enhanced by introducing the smoothed passenger cabin window, which alleviates unevenness between the outside sheathing and the window pane, as well as by installing cover-all hoods between all cars.② Reducing Rolling Stock Weight

Reducing the weight of rolling stock contributes greatly to improving its energy efficiency. For the Series 300 and later developed Series 700 and Series N700/N700A, a simpler bolster less bogie was adopted and also a lighter aluminum alloy was adopted for the body frame as opposed to the steel frames that were used for the Series 0 and Series 100. Furthermore, whereas a direct-current traction motor was used in the Series 0 and Series 100, all rolling stock after the Series 300 employed a high performance and small alternating-current traction motor made possible by improvements in semiconductor technology.

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

On the Series N700/N700A, in an attempt to improve speeds at curves, where they need to slow down, a body-inclining system was installed. This system enables improvements in speed while maintaining ride quality. It shortens travel time and at the same time realizes an improvement in energy savings through a decrease in the frequency of speed adjustment.④ Expansion of Regenerative Braking System

Regenerative braking refers to a system that uses a motor as a generator to convert kinetic energy into electric power when braking and then returns it to the overhead wires for other trains to use. JR Central was first to use regenerative braking for practical application on the Shinkansen and has equipped the Series 300, and subsequent Series 700 and Series N700/N700A, with the system.

In the Series 700, 12 of the 16 cars in one train set are regenerative, but in the Series N700/N700A, this was extended to 14 cars, so that the braking force required during usual operation of one train set is entirely covered by the regenerative braking. This has enabled further improvements in energy efficiency of the Shinkansen.

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

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

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

●Comparison of Energy Consumption per Passenger Seat

●Comparison of CO2 Emission per Passenger Seat

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

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

90 MJ/seat (*1)

746 MJ/seat (*2)

About 1/8 of airplane

4.2 kg-CO2/seat (*1)

50 kg-CO2/seat (*2)

About 1/12 of airplane

Railway Bus Automobile Other

Transportationvolume(passenger-km)

Energyconsumption

CO2emissions

29%

6%

5% 84%5% 3%

77%5% 9%

2%

6% 52%5% 7%

3%

Airplane

CO

2 em

issi

ons

Tran

spor

tatio

n vo

lum

e

CO

2 em

issi

ons

Tran

spor

tatio

n vo

lum

e

Tokaido Shinkansen(Series N700 “Nozomi” )

Airplane (B777-200)

Tokaido Shinkansen(Series N700 “Nozomi” )

Airplane (B777-200)

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

Comparison of Tokaido Shinkansen and Airplane (Tokyo~Osaka)

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

Series 300(1992)

Series 700(1999)

Series N700/(2007)

N700A(2013)

32% improvementover FY1990

Even more energy-efficient rolling stock:Series N700/N700A

Uni

t ene

rgy

cons

umpt

ion

(Rat

io u

sing

a F

Y199

0 ba

sis)

Rol

ling

Sto

ck R

atio

(%)

Propulsion(Electric power consumption)

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

Brake(Generation)

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

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Engagement in Global Environment Preservation, etc.

24 25

▲General Training Center (rooftop gardening)

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

▲SCMAGLEV and Railway Park (solar power generation system)

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

JR Central has been striving to conserve energy of rolling stocks on conventional lines. Just as with the Shinkansen, we have made an effort with conventional line electric cars to improve their energy efficiency by reducing car weight, introducing higher efficiency power control conversion methods as well as installing regenerative brakes which generate power using the motor as a generator when braking. We have strived to introduce conventional line diesel vehicles having greater energy conserving capability by reducing vehicle weight as well as introducing lighter and higher energy efficient diesel engines.

As a result of our endeavor at successfully introducing new energy-conserving rolling stocks,100% of electric rolling stocks on conventional lines became the energy-conserving type by the end of FY2012. Also,100% of our diesel cars have been equipped with new engines since the end of FY2008. This means that we replaced almost all conventional line rolling stocks which were manufactured during the JNR era with energy-conserving rolling stocks (excluding some event trains and retained trains).

(2) Future PlansJR Central has decided to electrify the Taketoyo Line (19.3km between Obu and

Taketoyo), which carries commuters in the Nagoya metropolitan area, by the spring of 2015. This electrification will enable a decrease in the burden put on the environment with a reduction in CO2 emissions from operation of the Taketoyo Line by 2,900 tons annually (57% reduction from present).

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

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

Based on the “PRTR Law (Pollutant Release and Transfer Register Law),” we report the amount of emission and amount of transfer of relevant substances to local governments and manage those substances appropriately. We are also trying to reduce the amount of usage by promoting the use of substitutes when possible.② Measures against Soil Contamination

In FY2012, from the results of soil surveys in which samples were taken from the loan site (Nagoya City) and the site of company-owned apartment (Gifu City), specific hazardous substances were detected exceeding the standard value. We reported to the relevant administrative agency and removed the specific hazardous substances from the sites.

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

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

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

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

warming. “Eco Business Trips” refer to “business trips that contribute to environmental conservation.” In other words, the mindset of “selecting transportation and business trips methods that emit small amounts of greenhouse gases when traveling mid to long distances (business trips).” We believe that the idea of “Eco Business Trips” and actual efforts based on this idea would contribute to further preventing global warming. We are actively disseminating information, and engaging in advertising campaigns, in hopes of spreading the idea of “Eco Business Trips.”

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

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

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

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

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

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

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

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

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

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

▲“Eco Business Trips” Poster

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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

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

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

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

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

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

● Diesel Fuel Consumption Comparison by Conventional  Line Diesel Car Model

Rolling stockwithconventional engine

Rolling stock withnew model engine

Conventional rolling stockSeries 117 (110km/h)

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

71

69

100(Base)

100(Base)

Conventionalmodel

Energy-conservingmodel

Cars with conventional engines

Cars with new model engines

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

345 463 664

780 666 420

868

150

988

50

124 176 221

139 67 6

244

3

254

0

200

400

600

800

1,000

1,200

0

50

100

150

200

250

300

● Changes in Number of Conventional Line Electric Rolling Stock Introduced

● Changes in the Number of Conventional Line Diesel Cars Introduced

(FY)’92 ’97 ’07 ’12’02

(FY)’92 ’97 ’07 ’12’02

[Cars]

[Cars]

0

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Engagement in Global Environment Preservation, etc.

26 27

*1. Fractions of ¥10,000,000 are omitted *2. Totals do not add up due to rounding*3. Excluding some event trains and retained trains

 Cooperation with JR-Central and local communities(1) Contribution to Community Development

Railway stations serve as a gateway to communities. In order to let them fulfill the role better, we are cooperating with the requests of local governments to establish new stations, improve station buildings, develop plazas in front of stations and facilitate railway elevation projects, thereby contributing to community development.

Based on related laws, such as the Barrier-Free Law, we are also renovating facilities such as elevators, family toilets and Braille blocks, in order for all passengers, including disabled and elderly passengers, to use our service safely and comfortably. In particular, in accordance with fundamental government policy, we will continue to renovate stations with governments and municipalities by setting barrier-free facilities at stations used by more than 3,000 passengers a day. In addition, we have installed new moving platform fences at large stations where many passengers get on and off the “Nozomi” to prevent passengers from falling off the platform.

Furthermore, we established the “Nagoya Central Hospital” in Nakamura Ward, Nagoya, whose mission is to provide advanced and high quality acute medical care. The hospital offers patient-centered care by introducing cutting-edge medical equipment and so on. The hospital positively provides preventive medicine and thorough medical examination in association with other medical professions at the medical examination center. The hospital continues to contribute to the local community as a core hospital of the Nagoya area by offering high-quality, advanced, and safe medical services certified by Japan Council for Quality Health Care.

(2) SCMAGLEV and Railway ParkWe opened the SCMAGLEV and Railway Park in March 2011 in Nagoya in response to

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

At the SCMAGLEV and Railway Park, we introduce the “progress of the high-speed railway technology” through displays of rolling stocks for the Tokaido Shinkansen, conventional lines and Superconducting Maglev.

In July 2013, the number of visitors reached the two million mark. We are making an effort to improve the general public’s understanding of railway and contribute to the promotion of industrial tourism by planning an event, advertising the Park, and offering products linked with Nagoya region tourism to attract even more visitors.

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

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

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

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

conservation activities during FY2012 are estimated as below.

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

business activities for FY2012 are indicated in the figure on the left side.

 Environment Achievement LevelWe have engaged in environment-friendly measures. For example, we raised the ratio

of Energy-Conserving Conventional line electric rolling stock, excluding some event trains and retained trains, to 100% by the end of FY2012. The energy consumption rate in FY2012 was decreased by 25.4% compared to that in FY1995.

Our strategy is to continue to save energy in all aspects of our businesses. By the end of FY2016, the energy consumption rate will be decreased by over 27% compared to that in FY1995 by introducing the N700A series and so on.

▲Nagoya Central Hospital

▲SCMAGLEV and Railway Park

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

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

[Approach to Environmental Accounting Tabulation]● Compilation is applicable only to JR Central.● The applicable period is April 1, 2012 to March 31, 2013.● “Environmental Accounting Guidelines 2005,” a publication of the Ministry of the Environment, was consulted with regard to aspects of style.● Depreciation is not included in the calculations for expenditures.● In the event of multiple-purpose expenditures, the full amount of the higher environmental conservation effect is included in the calculation.

・Energy-conserving rolling stock ratios:100% (Shinkansen)*3,   100% (conventional line electric cars), 100% (conventional line

diesel cars)・Reduction rate for operational energy per rolling stock-km: −25.4%

(compared to FY1995 level)・Non-CFC rectifiers: 42 in operation

・Recycling rate for refuse and waste: 58%・Recycling rate for construction waste: 56%

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

・Acquisition of ISO14001 certification in Technology Research and Development Department

・Participation in Environmental Partnership Organizing Club (EPOC)

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

Classification Main Efforts Principal Effects of Environmental Conservation

Global environmentalconservation

Research anddevelopment

Resource recycling

Environmental conservation along railway lines

Management activities

Social activities

420.4

1.9

1.7

33.8

458.0

5.1

56.9

38.9

43.0

0.0

0.0

144.1

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

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

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

• Environmental advertising• Environmental management education etc.

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

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

Environmental preservation cost(100 million yen)*1

Investment Expenditures

Total*2

Electric power 2.75 billion kWh (1.99 billion kWh)Fuel 33 millionℓ(18 millionℓ)(Amount of converted crude oil)

Water 3,541 thousand m3

Of this,185

recycled(including

intracompanyreuse)

CO2 emissions 1,432Refuse and waste 323

(Station, train & office refuse 15)(Construction waste products 299)(Rolling stock scrap 8)Unit: thousand tons

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

*Figures in parentheses are for operations (reprinted)

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Corporate Data

28 29

Profile Operating Area

Organization Chart

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

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

■Operating Kilometers

Tokaido Shinkansen

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

Conventional Line

Total

552.6km

360.1km60.2km88.4km

195.7km19.3km

189.2km174.8km

17.8km59.9km

180.2km43.5km29.1km

1,418.2km

1,970.8km

Inotani

Shiojiri

Tatsuno

KofuTokyo

Shinagawa

Shin-Yokohama

Kozu

AtamiNumazu

Fuji

ShizuokaToyohashi

Obu

Nagoya

Tajimi

Mino-Ota

Gifu

Mino-Akasaka

OgakiMaibara

Kyoto

Shin-Osaka

Ise-Okitsu

Kameyama

Matsusaka

Toba

Shingu

Taki

Taketoyo

Tokaido Shinkansen

Tokaido Line

Iida Line

Meisho Line

Sangu Line

Minobu Line

Chuo Line

Gotemba Line

Kisei Line

Kansai Line

Takayama Line

Taita Line

Taketoyo Line

Chairman

Secretarial Department

Corporate Planning Division

Board of Directors

President

Corporate Auditors

Board of Corporate Auditors

General Technology Division

Audit Department

Public Relations Department

Administration Department

Legal Affairs Department

Supervision Department

Transportation and Marketing Department

Rolling Stock Department

Engineering Department

Shizuoka Branch Office

Mie Regional Office

Iida Regional Office

Personnel Department

Finance Department

Property Management Department

Marketing Division

Business Promotion Division

Construction Department

Transportation Safety Department

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

General Training Center

Nagoya Central Hospital

Health Care Center

SCMAGLEV and Railway Park

Administration Management Center

Conventional LinesOperations Division

Planning Department

Supervision Department

Transportation and Marketing Department

Rolling Stock Department

Tracks and Structures Department

Electrical Engineering Department

Kansai Branch Office

ShinkansenOperations Division

Chuo Shinkansen Promotion Division

Head Offices and Other Main Offices● Head OfficeJR Central Towers, 1-1-4, Meieki, Nakamura-ku, Nagoya, Aichi 450-6101, Japan● Tokyo Head OfficeJR Central Shinagawa Building -A Wing 2-1-85, Konan, Minato-ku, Tokyo 108-8204, Japan● Conventional Lines Operations DivisionJR Central Taiko Building, Meieki 1-3-4, Nakamura-ku, Nagoya, Aichi 453-8520, Japan● Shizuoka Branch Office4, Kurogane-cho, Aoi-ku, Shizuoka, Shizuoka 420-0851, Japan● Mie Regional OfficeUst-Tsu 12F, 700, Hadokoro-cho, Tsu, Mie 514-0009, Japan● Iida Regional Office5356, Kami-Iida, Iida, Nagano 395-0000, Japan● Shinkansen Operations DivisionMarunouchi Chuo Building, 1-9-1, Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan● Kansai Branch OfficeShin-Osaka Hankyu Building 10F, 1-1-1, Miyahara, Yodogawa-ku, Osaka, Osaka 532-0003, Japan● Washington D.C. Office 900 17th Street, N.W., Suite 520, Washington, DC 20006, U.S.A.Tel: +1-202-429-1900 Fax: +1-202-429-1917● London OfficeLevel 17 City Tower, 40 Basinghall Street, London, EC2V 5DE, U.K.Tel: +44-20-7382-0650 Fax: +44-20-7638-6096● Sydney OfficeSuite 5.01A, Level5, 20 Hunter Street, Sydney, NSW 2000, AustraliaTel: +61-2-9221-6922 Fax: +61-2-9221-6933

Company NameCentral Japan Railway Company (JR Central)

EstablishedApril 1st, 1987

BusinessRailways business, Related businesses

Basic Information on a Non-consolidated Basis

●●●●●●●●●●●●●

Paid in Capital Operating Revenues Number of Shares OutstandingShare Listings Number of ShareholdersNumber of Employees Operating Kilometers Number of Stations Number of Rolling Stock Double-and Multi-Tracked SectionElectrified Section Centralized Traffic Control Automatic Signaling System

¥112 billion¥1,245 billion2.06 millionNagoya, Tokyo and Osaka*119,59418,0941,970.8 km4054,87455.1% (1,086.8km) 75.7% (1,491.7km) 97.5% (1,922.3km)97.8% (1,927.3km)

(as of the end of March 2013)

*The Osaka Stock Exchange merged with the Tokyo Stock Exchange in July 2013

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Corporate Data

30 31

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

October 1,2003 The Shinagawa Shinkansen Station is opened

December 20,1999 Construction of JR Central Towers is completed

April 1,1987 Establishment of JR Central

February 8,2013 The new Series N700A is introduced for “Nozomi” services.

November 22,2012 The new vehicle Series L0 (L zero) is carried in the Yamanashi Test Line

Board of Directors and Corporate Auditors Corporate Officers

Company History Board of Directors, Corporate Auditors and Corporate Officers (As of June 21, 2013)

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

ChairmanYoshiyuki Kasai*

President Yoshiomi Yamada*

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

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

Corporate AuditorsOsamu NakayamaTakaharu KachiHarumi UmedaHiromu EmiShigeo Kifuji

*Representative Director

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

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

Corpotrate OfficersShuichi TakashimaKenji HamadaHiroyuki KawarasakiTokuji MatsunoYoshihiro YamamotoKazuhiro IgarashiYasukazu EndoYoshihisa YamaguchiTakanori MizunoMotoaki Terai

Yoshiyuki KasaiChairman

Koei TsugeExecutive Vice President

Tsutomu MorimuraExecutive Vice President

Shin KanekoExecutive Vice President

Naotoshi YoshikawaExecutive Vice President

Yoshiomi YamadaPresident

April

March

March

February

June

October

MarchJuly

December

June

AprilOctober

MarchDecember

MarchMay

MarchDecember

July

October

July

MarchApril

January

July

October

December

MayDecember

May

MayNovember

February

Central Japan Railway Company (JR Central) is established.

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

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

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

JR Central takes over the Tokaido Shinkansen facilities.

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

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

Running tests start on the Yamanashi Maglev Test Line.JR Central lists on the first section of the Nagoya, Tokyo and Osaka stock exchanges (merged with the Tokyo Stock Exchange in July 2013) and also the Kyoto Stock Exchange (merged with the Osaka Stock Exchange in March 2001).

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

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

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

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

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

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

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

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

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

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

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

JR Central cancelled 90,000 shares of treasury stock.JR Central carried the new vehicle Series L0 (L zero) in the Yamanashi Test Line

JR Central introduced the new Series N700A for “Nozomi” services.

●●

●●●

●●

●●

●●

●●

●●●

●●

●●

●●

19871988

19891990

19911992

19941997

1999 2000 2001

20022003

2005

2006

2007

2008

2009

2011

2012

2013

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Corporate Governance

32 33

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

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

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

comprised of five auditors (three of whom are external auditors). (*these numbers are as of June 21, 2013) The Board of Directors meets once a month or more, makes legal and appropriate decisions upon fully discussing issues stipulated by the

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

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

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

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

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

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

JR Central’s Corporate Governance

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Board of Directors

President

Headquarters, Regional offices, Field offices

Management Meeting

General Shareholders Meeting

Auditors (Board)Audit

Investigate

Audit

Audit

AuditManagement / Guidance

Audit

Selection Selection Selection

Cooperate

Cooperate

CooperateInternal Audit Department(Audit Department / Transportation Safety Department)

Group Companies

Accounting A

uditors

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Financial Highlights

34 35

0

400

800

1,200

1,600

●Operating Revenues

●Net Income

Depreciation and Amortization Capital Expenditures

0

60

120

180

240

300

●Depreciation and Amortization, and Capital Expenditures

0

1,000

2,000

3,000

4,000

●Total Long-Term Debt and Payables

’11.3

’11.3

’11.3

’11.3

1,503

133

284

258

3,045

’12.3

’12.3

’12.3

’12.3

1,508

’13.3

1,585

132

’13.3

199

257

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

0

400

800

1,200

1,600

●Operating Revenues

●Net Income

0

60

120

180

240

300

Depreciation and Amortization Capital Investments

●Depreciation and Amortization, and Capital Investments

0

1,000

2,000

3,000

4,000

●Total Long-Term Debt and Payables

’11.3

’11.3

’11.3

1,171

123

288

3,001

’12.3

’12.3

’12.3

1,184

’13.3

1,245

120

298

’13.3

301

(billions of yen)

(billions of yen)

(billions of yen)

290

’13.3

240

281

2,866

’13.3

2,6392,829

’13.3

2,614

’11.3 ’12.3 ’13.3

187(billions of yen)

240 241223

0

50

100

150

200

0

50

100

150

200

Consolidated Financial Highlights Non-Consolidated Financial Highlights

*1. FY2013.3 yen figures have been converted into U.S. dollars at the rate of ¥94=US$1, the approximate rate of exchange at March 29, 2013.*2. On October 1, 2012, the Company implemented a hundred-for-one stock split and employed a share unit system by which one share unit equals 100 shares.

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

U.S. Dollars*1YenYenYen

Thousands ofU.S. Dollars*1

Millionsof Yen

Millionsof Yen

Millionsof Yen

Operating Revenues

Railway

Other

Operating Expenses

Railway

Other

Operating Income

Income before Income Taxes

Net Income

Depreciation and Amortization

Capital Investments

Total Assets

Equity

Shareholder’s Equity

Equity Ratio

Net Income / Total Assets

ROE (Return on Equity)

$13,245,553

13,148,808

96,744

8,999,425

8,938,021

61,393

4,246,127

3,211,085

1,997,914

2,379,829

3,209,276

53,648,531

15,280,680

15,280,680

28.5%

3.7%

13.9%

¥1,245,082

1,235,988

9,094

845,946

840,174

5,771

399,136

301,842

187,804

223,704

301,672

5,042,962

1,436,384

1,436,384

28.5%

3.7%

13.9%

¥1,184,577

1,175,670

8,907

839,024

833,227

5,796

345,553

239,705

120,817

241,497

298,413

5,033,598

1,258,280

1,258,280

25.0%

2.4%

10.0%

¥1,171,930

1,162,660

9,269

846,465

839,699

6,765

325,465

206,779

123,040

240,084

288,884

5,075,085

1,156,128

1,156,128

22.8%

2.4%

11.1%

Net Income*2 $10.14

1.12

¥953.32

105.00

¥613.28

95.00

¥624.56

90.00Cash Dividends Applicable to the Year*2

Per Share of Common Stock

2011.3 2012.3 2013.3

Thousands ofU.S. Dollars*1

Millionsof Yen

Millionsof Yen

Millionsof Yen

U.S. Dollars*1YenYenYen

Income before Income Taxes and Minority Interests

Cash Dividends Applicable to the Year*3

Per Share of Common Stock

Operating Revenues

Operating Expenses

Operating Income

Net Income

Depreciation and Amortization

Capital Expenditures*2

Total Assets

Equity

Shareholder’s Equity

Equity Ratio

Net income / Total Assets

ROE (Return on Equity)

$16,865,095

12,331,659

4,533,425

3,470,074

2,127,351

2,555,244

2,990,500

55,650,042

16,574,170

16,099,117

28.9%

3.8%

14.1%

¥1,585,319

1,159,176

426,142

326,187

199,971

240,193

281,107

5,231,104

1,557,972

1,513,317

28.9%

3.8%

14.1%

¥1,508,328

1,135,806

372,521

263,896

132,781

257,063

290,631

5,214,038

1,363,251

1,321,654

25.3%

2.5%

10.5%

¥1,503,083

1,153,735

349,347

224,647

133,807

258,599

284,104

5,252,993

1,246,154

1,206,645

23.0%

2.6%

11.6%

Net Income*3 $10.81

1.12

¥1,016.12

105.00

¥674.70

95.00

¥679.90

90.00

*1. FY2013.3 yen figures have been converted into U.S. dollars at the rate of ¥94=US$1, the approximate rate of exchange at March 29, 2013.*2. Increase in property, plant and equipment, and intangible assets*3. On October 1, 2012, the Company implemented a hundred-for-one stock split and employed a share unit system by which one share unit equals 100 shares.

2011.3 2012.3 2013.3

Years ended March 31 2013, 2012, 2011 Years ended March 31 2013, 2012, 2011

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Summary of Performance

36 37

Operating Revenues (Merchandise and Other)

Operating Revenues (Real Estate)

Operating Revenues (Other)

’09.3 ’10.3 ’11.3 ’09.3 ’10.3 ’11.3

’09.3 ’10.3 ’11.3

’09.3 ’10.3 ’11.3

201

188

195

1,240

1,1421,169

(billions of yen)

255

239

216

(billions of yen)

(billions of yen)

(billions of yen)

7066 66

0

50

100

150

200

0

15

30

45

60

75

0

50

100

150

200

250

’12.3

’12.3

’12.3

205

225

62

’13.3

209

’13.3

64

’13.3

233

0

300

600

900

1,200

’12.3

1,182

Operating Revenues (Transportation)

’13.3

1,243

 Segment-by-segment performance for the year ended March 31, 2013The JR Central group prioritizes safe and reliable transportation, which is the

foundation of the railway business, while aiming to further develop our service. We also continue to engage in efforts to improve competencies of our employees, to enhance facilities and to increase efficiency and cost reduction in an effort to strengthen earnings capabilities. As a result, total passenger kilometers increased YoY by 5.1% to 55.968 billion passenger kilometers because it is compared with data of the last term negatively influenced by the Great East Japan Earthquake and the passenger volume had remained strong due to the positive impact of tourism. Also, operating revenues increased by 5.1% YoY to 1.5853 trillion yen, ordinary income increased by 24.4% YoY to 328.0 billion yen, and net income increased by 50.6% YoY to 199.9 billion yen due to a reduction in deferred tax assets following a decrease in the corporate tax rate in last term.

We were able to achieve a decrease in long-term debt and payables on a consolidated basis by 226.7 billion yen which resulted in a long-term liability balance of 2.6399 trillion yen as of the end of FY2013.3.

In addition, there was a steady transition in passenger volume, which we took into consideration in deciding to increase the year-end dividend by 5 yen to 55 yen. As a result, the annual dividends for the year were 110 yen per share. This works out as follows when looking at business performance by segment.

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

implementing deviation/derailment prevention measures and also proceeded with renovations at the Hamamatsu Workshop, where Shinkansen rolling stock is overhauled, in an effort to improve earthquake resistance. We also decided to start a large-scale renovation from FY2013 to maintain and to improve the quality of engineering structures of Tokaido Shinkansen. Moreover, we further improved convenience by starting the use of platform #27 of Shin-Osaka Station with the time schedule change in March 2013 as well as starting the commercial operation of N700A which adopts the technological developments since the Series N700.

In regard to conventional lines, we systematically promoted earthquake measures, falling rock measures and improvement of crossing safety devices. Also, in the time schedule change of March 2013, we completed the introduction of new electric train, Series 313, and improved our transportation service by operating extra trains and reconsidering the number of train cars.

In terms of sales, while we have promoted efforts aimed at increasing the number of “Express Reservation” members and expanding the use of “EX-IC Service,” we have started to offer “Plus EX” service since October 2012, which enables customers to use online reservation service and IC transit service with their own credit cards. Also, in regard to “TOICA,” we have started nationwide mutual use of IC transit cards and striven to increase the number of participating retailers that accept electronic money. Furthermore, we promoted tourist campaigns aimed at travel to Kyoto, Nara, Tokyo and Ise and strive to provide various travel products linked with these campaigns. We also carry out our marketing projects including the development of products for family passengers traveling with children on the Tokaido Shinkansen, the development of products for foreign visitors to Japan and collaboration with sightseeing and other facilities.

Because it is a comparison with data of the previous term when it was negatively influenced by the Great East Japan Earthquake and due to the positive impact of tourism, total passenger kilometers for the Tokaido Shinkansen increased YoY by 5.9% to 46.93 billion passenger kilometers and total passenger kilometers for conventional lines increased by 1.0% to 9.038 billion passenger kilometers.

In regard to our bus business, we promoted to make work more efficient based on keen competition while ensuring safety.

As a result of the above, operating revenues of this term increased by 5.1% YoY to 1.2430 trillion yen, and operating income increased by 15.6% YoY to 396.1 billion yen.

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

to develop an attractive line of products and enhance earning power by providing services that meet customer needs.

As a result, operating revenues increased by 2.1% YoY to 209.5billion yen, and operating income increased by 15.6% YoY to 7.2 billion yen.

③ Real EstateIn regard to real estate, we started the construction of the Nagoya Station New

Building (tentative name) in October 2012. Also we have striven to increase customers by renewing commercial facilities at the station such as First Avenue Tokyo Station, May One of Hamamatsu Station, Gourumet Street of Shin-Yokohama Station, etc.

As a result of the aforementioned, operating revenues increased by 3.5% YoY to 64.9 billion yen, and operating income decreased by 2.7% to 12.7 billion yen.

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

customers, offer higher quality service and enhance selling skills. In our travel business, we actively sold attractive travel products linked to tourist campaigns for travel to Kyoto, Nara, Tokyo and Ise, while striving to strengthen online sales.

In regard to our railway rolling stock manufacturing business, we tried to expand orders of railway rolling stocks and construction equipments and increase the amount of manufacture. As a consequence of the aforementioned, our operating revenues increased by 3.3% YoY to 233.1 billion yen, and operating income decreased by 17.4% to 9.4 billion yen due to decrease in sales of Nippon Sharyo, Ltd. etc.

 Efforts for FY2014.3In FY2014.3 we shall continue to strive to ensure safe and reliable transportation. In our

railway business, we shall promote anti-quake measures on the Tokaido Shinkansen and strive to develop transport service through the introduction of Series N700A rolling stock and the conversion of Series N700. The entire JR Central Group shall strive to provide higher quality service and enhance profitability. On the other hand, we will continue to increase efficiency and reduce cost at all levels including capital investments and eventually enhance the cost-performance.

FY 2014.3 Forecasts(billions of yen)

Operating revenues

Operating income

Ordinary income

Net income

(2014/2013)Consolidated

(100.8%)(100.2%)(105.8%)(111.0%)

1,598

427

347

222

(2014/2013)Non-Consolidated

(99.1%)

(101.0%)

(107.5%)

(113.4%)

1,234

403

325

213*As of the publishment of the financial report for FY2013.3

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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38 39

1) Overview of FY2012Amid the ongoing recovery in demand in tourism and other sectors since the preceding term impacted by the Great East

Japan Earthquake, the current term saw JR Central strive to further enhance our services, placing the highest priority on the maintenance of safe and reliable transportation in the railway business, the core of our operations.

We continued to promote earthquake countermeasures in our railway business, including measures to prevent derailment and deviation along the Tokaido Shinkansen, and decided to initiate large-scale renovation to maintain and enhance the soundness of civil engineering structures. We also commenced commercial service of the new model rolling stock N700A, which employs benefits achieved from recent engineering developments. On our conventional lines, we have systematically promoted improvements and other modifications in safety equipment for grade crossings as well as earthquake and falling rock countermeasures, and have worked to replace existing vehicles with new model rolling stock.

In terms of sales, we have promoted efforts aimed at further increasing the use of the “EX-IC Service” and the number of Express Reservation members. In October of last year, we started the “PLUS EX” service which allows passengers to use their existing credit cards for Tokaido Shinkansen IC boarding and online reservation services. Also, we commenced a nationwide mutual-use TOICA service in March of this year, and have worked to increase the number of participating retailers that accept electronic money. Furthermore, we rolled out tourism campaigns to promote travel to Kyoto, Nara, Tokyo, Ise and other areas.

In non-railway businesses, we have strived to strengthen existing businesses, and steadily moved forward with projects such as planning for the Nagoya Station New Building.

In addition to the difference made since the preceding term which was affected by the Great East Japan Earthquake, our commitment to the aforementioned series of measures increased both non-consolidated transportation revenue for JR Central as well as consolidated operating revenue overall due to increased sales by NIPPON SHARYO, LTD. to companies outside the group as well as of merchandise including JR Nagoya Takashimaya along with favorable transportation volume, including for tourism.

Although depreciation and amortization decreased, operating expenses rose overall because of the increase in sales costs at Nippon Sharyo, Ltd. and other group companies, together with an increase in non-personnel expenses. Also, non-operating profit and loss improved on a decline in interest expenses and other factors.

As a result, both revenue and income increased for the current term with operating revenues at 1,585.3 billion yen, operating income at 426.1 billion yen, ordinary income at 328 billion yen, and net income at 199.9 billion yen.

2) Operating Performancea) Operating Revenues

Operating revenues increased by 76.9 billion yen (5.1 %) year-on-year (YoY) to 1.5853 trillion yen. In regards to our transportation business, transportation revenues for JR Central increased by 60.9 billion yen (5.5%)YoY to 1.1691 trillion yen. Passenger volume for the Tokaido Shinkansen increased by 5.9%, and transportation revenues increased by 5.8% YoY to 1.0696 trillion yen. Passenger volume on conventional lines increased by 1.0% with transportation revenues increasing 2.4% YoY to 99.4 billion yen.

In regards to our non-railway business, operating revenue in “Merchandise and Other,” “Real Estate” and “Other” increased by 2.1%, by 3.5% and 3.3% YoY, respectively.

b) Operating ExpensesOperating expenses on a whole increased by 23.3 billion yen (2.1%) YoY to 1.1591 trillion yen due to increases of

sales cost with the increase in non-personnel expense sand sales of group companies including NIPPON SHARYO, LTD., etc.c) Operating Income

Operating income increased by 53.6 billion yen (14.4%) YoY to 426.1 billion yen.d) Other Income (Expense)

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

e) Net IncomeIn addition to the reduction in deferred tax assets in the previous term, resulting from adding and subtracting corporate

tax, etc. to and from the above, net income increased by 67.1 billion yen (50.6%) YoY to 199.9 billion yen.

3) Cash FlowCash and cash equivalents (hereinafter referred to as, “Capital”) at the end of this term had decreased by 9.5 billion

yenYoY to 75.1 billion yen.Long-term debt and payables decreased by 226.7 billion yen to 2.6399 trillion yen as of the end of this term. Capital

gained from operating activities increased by 64.6 billion yen YoY to 512.3 billion yen due to the increase in transportation revenues with much usage of train including tourism and to the decrease inpayment of interest,etc.

Capital expended through investment activities decreased by 7.8 billion yen to 262.1 billion yen due to decreases of expenses for acquisition of fixed assets provided by capital investments.

Capital expended through financial activities increased by 51.2 billion yen YoY to 259.8 billion yen due to the increases of the amount of long-term debt repayment.

4) Shrinking Long-Term Debt and PayablesDuring this term we decreased long-term debt and payables by 226.7 billion yen on a consolidated basis, and 214.1

billion yen on a non-consolidated basis. Long-term debt and payables at the end of this term was 2.6399 trillion yen on a consolidated basis, and 2.6149 trillion yen on a non-consolidated basis.

When we purchased the Tokaido Shinkansen facilities in October 1991, we were burdened with total long-term debt and payables of over five times our annual transportation revenues, including the liabilities inherited from Japanese National Railways at the time of its break-up and privatization. Because we considered the reduction of these long-term debt and payables to be our most important financial issue, we have endeavored to reduce debt and payables as rapidly as possible.

Consequently, total long-term debt and payables of 5.4562 trillion yen at the end of FY1991, immediately after we acquired Tokaido Shinkansen assets, has been reduced by 2.8413 trillion yen.

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

5) Net Asset BalanceNet asset balance at the end of this term had increased by 194.7 billion yen to 1.5579 trillion yen, and our equity ratio

increased from 25.3% at the end of the previous term to 28.9% at the end of this term.

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

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

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

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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

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40 41

Central Japan Railway Company and Consolidated Subsidiaries

CURRENT ASSETS:Cash and cash equivalents (Note 10)Time deposits (Note 10)Trade receivables (Note 10)Allowance for doubtful accountsInventories Deferred tax assets (Note 9)Prepaid expenses and other

Total current assets

¥ 75,106 20,012 74,771 (40) 50,610 26,717 34,825

282,003

¥ 84,692 30,012 83,410 (23) 33,378 23,886 34,119

289,476

$ 799,000 212,893 795,436 (425) 538,404 284,223 370,478

3,000,031

NONCURRENT ASSETS:Investments and other assets:

Investment securities (Notes 4 and 10)Investments in and advances to unconsolidated subsidiaries and affiliates Deferred tax assets (Note 9)Prepaid expenses and other

Total investments and other assets

103,297 13,451 174,813 36,895 328,457

86,878 12,533 171,322 37,130 307,865

1,098,904

143,095 1,859,712

392,500 3,494,223

See notes to consolidated financial statements.

TOTAL ASSETS ¥ 5,231,104 ¥ 5,214,038 $ 55,650,042

ASSETS

March 31, 2013Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

Property, plant and equipment:Buildings and structures (Note 5)Machinery, rolling stock and vehiclesLand (Note 5)Construction in progressOther

TotalAccumulated depreciation

Net property, plant and equipment

Total noncurrent assets

4,385,346 1,238,423 2,362,553

251,686 182,206

8,420,217 (3,803,520)

4,616,696

4,924,561

4,429,979 1,246,006 2,359,272

340,608 184,079

8,559,946 (3,939,302)4,620,643

4,949,101

47,127,436 13,255,382 25,098,638 3,623,489 1,958,287

91,063,255 (41,907,468)

49,155,776

52,650,010

EQUITY (Note 8):Common stock—authorized, 824,000,000 shares; issued, 206,000,000 shares in 2013 and 215,000,000 shares in 2012* Capital surplusRetained earningsTreasury stock—at cost, 9,200,620 shares in 2013 and 18,200,620 shares in 2012* Accumulated other comprehensive income

Unrealized gain on available-for-sale securities Deferred gain on hedges

Total

 Minority interests

Total equity

CONTINGENCIES (Note 13)

112,000 53,500

1,357,387 (205,367)

4,117

17 1,321,654

41,597

1,363,251

¥ 5,214,038

1,191,489 569,148 15,270,691 (1,097,393) 164,978 191 16,099,117

475,042 16,574,170

$ 55,650,042

* Shares of common stock and treasury stock 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.

TOTAL LIABILITIES AND EQUITY

March 31, 2013

NONCURRENT LIABILITIES:Long-term debt (Notes 5 and 10) Long-term accounts payable—railway facilities (Notes 6 and 10) Provision for large scale renovation of the Shinkansen infrastructure (Notes 3.i and 16)Provision for retirement benefits (Note 7)Other (Note 9)

Total noncurrent liabilities

1,487,434

891,285 350,000 209,736 77,176

3,015,632

1,557,256

1,035,307 316,666 205,195 80,083

3,194,509

15,823,765 9,481,755 3,723,404 2,231,234 821,021

32,081,191

CURRENT LIABILITIES:Short-term loans payable (Notes 5 and 10)Current portion of long-term debt (Notes 5 and 10) Current portion of long-term accounts payable—railway facilities (Notes 6 and 10) Trade payables (Note 10)Provision for bonusesIncome taxes payable (Note 10)Advances receivedOther (Note 9)

  Total current liabilities

¥ 26,643 157,828 103,450 175,691 26,802 80,273 44,386 42,423

657,498

¥ 25,325 165,777 108,418 167,451 26,195 62,506 48,144 52,456

656,277

$ 283,436 1,679,021 1,100,531 1,869,053

285,127 853,968 472,191 451,308

6,994,659

201320122013LIABILITIES AND EQUITY

Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

201320122013

112,000 53,500

1,435,445 (103,155)

15,508

18 1,513,317

44,654 1,557,972

¥ 5,231,104

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Consolidated Balance Sheet

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42 43

Central Japan Railway Company and Consolidated Subsidiaries

BALANCE, APRIL 1, 2010

Net incomeDividends from surplus, ¥90 per share* Purchases of treasury stockNet change in the year

BALANCE, MARCH 31, 2011

Net incomeDividends from surplus, ¥90 per share* Net change in the year

BALANCE, MARCH 31, 2012

Net incomeDividends from surplus, ¥100 per share* Retirement of treasury stock Net change in the year

BALANCE, MARCH 31, 2013

Year Ended March 31, 2013

¥ 1,134,566 133,807 (17,750) (2,962) (1,505) 1,246,154 132,781 (17,730) 2,045 1,363,251 199,971 (19,700)

14,449 ¥ 1,557,972

* 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.

TotalEquity

¥ 37,887 1,621 39,509 2,087 41,597 3,057 ¥ 44,654

MinorityInterests

¥ 1,096,678 133,807 (17,750) (2,962) (3,127) 1,206,645 132,781 (17,730) (42) 1,321,654 199,971 (19,700) 11,391 ¥ 1,513,317

Total¥ (202,405) (2,962) (205,367) (205,367)

102,212 ¥ (103,155)

TreasuryStock

¥ 7,304

(3,125) 4,178 (60) 4,117

11,390 ¥ 15,508

Unrealized Gain(Loss) on

Available-for-Sale Securities

¥ 0

(1)

(1)

18

17

1 ¥ 18

DeferredGain

(Loss) on Hedges

RetainedEarnings

¥ 53,500 53,500 53,500 ¥ 53,500

CapitalSurplus

¥ 112,000 112,000 112,000 ¥ 112,000

CommonStock

197,244

(445)

196,799

196,799

196,799

Millions of Yen (Note 2)Thousands

BALANCE, MARCH 31, 2012

Net incomeDividends from surplus, $1.06 per share*Retirement of treasury stock Net change in the year

BALANCE, MARCH 31, 2013

$ 1,191,489 $ 1,191,489

$ 569,148 $ 569,148

$ 14,440,287 2,127,351 (209,574) (1,087,361) $ 15,270,691

$ 43,797

121,170

$ 164,978

$ (2,184,755)

1,087,361 $ (1,097,393)

$ 14,060,148 2,127,351 (209,574) 121,180 $ 16,099,117

$ 442,521 32,521 $ 475,042

$ 14,502,670 2,127,351 (209,574) 153,712 $ 16,574,170

$ 180

10

$ 191

Thousands of U.S. Dollars (Note 2)

Accumulated OtherComprehensive Income

TotalEquity

MinorityInterestsTotal

TreasuryStock

UnrealizedGain on

Available-for-Sale Securities

DeferredGain onHedgesRetained

EarningsCapitalSurplus

CommonStock

Accumulated OtherComprehensive Income

Central Japan Railway Company and Consolidated Subsidiaries

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

¥ 1,016.12 105.00

¥ 674.70 95.00

¥ 679.90 90.00

$ 10.81 1.12

OPERATING REVENUES

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

Total operating expenses Operating income OTHER INCOME (EXPENSES):

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

Other expenses—net

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS

INCOME TAXES (Note 9):CurrentDeferred

Total income taxes

NET INCOME BEFORE MINORITY INTERESTS

MINORITY INTERESTS IN NET INCOME

NET INCOME

¥ 1,585,319 986,975 172,201

1,159,176 426,142

1,857 (89,289)

(11,721) (801) (99,954) 326,187 131,571 (8,906)

122,664 203,523 3,551 ¥ 199,971

¥ 1,508,328

974,029 161,777

1,135,806 372,521

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

(108,624)

263,896

108,200 19,591

127,791

136,105

3,323

¥ 132,781

¥ 1,503,083

993,604 160,131

1,153,735 349,347

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

(124,700)

224,647

95,656 (6,933)

88,722

135,924

2,117

¥ 133,807

$ 16,865,095 10,499,734 1,831,925 12,331,659

4,533,425

19,755

(949,882)

(124,691) (8,521)

(1,063,340) 3,470,074

1,399,691 (94,744)

1,304,936

2,165,138

37,776 $ 2,127,351

* 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.

See notes to consolidated financial statements.

2013 2012 2011 2013

Year Ended March 31, 2013Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

Central Japan Railway Company and Consolidated Subsidiaries

NET INCOME BEFORE MINORITY INTERESTS

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

Total other comprehensive income

COMPREHENSIVE INCOME TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO :

Owners of the parentMinority interests

¥ 203,523

12,496 2

81 12,581

¥ 216,104

¥ 211,363 4,741

$ 2,165,138

132,936 21

861 133,840

$ 2,298,978

$ 2,248,542 50,436

2013¥ 135,924

(3,230)(3)

(27)(3,261)

¥ 132,663

¥ 130,679 1,983

2011¥ 136,105

143 37 12

193 ¥ 136,298

¥ 132,739 3,559

2012 2013

Year Ended March 31, 2013Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

2013 2012 2011 2013U.S. DollarsYen

OutstandingNumber ofShares of

Common Stock*¥ 1,126,278

133,807 (17,750)

1,242,335

132,781 (17,730)

1,357,387

199,971 (19,700)

(102,212) ¥ 1,435,445

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Consolidated Statement of Income Consolidated Statement of Changes in Equity

Consolidated Statement of Comprehensive Income

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44 45

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

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

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

Prior to December 1, 2001, the Law Concerning Passenger Railway Companies and Japan Freight Railway Company (the "Law") required that authorization be obtained from the Minister of Land, Infrastructure, 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, Tokyo and Osaka stock exchanges in Japan. The JNRSC, which held all 2,240,000 of the Company's outstanding shares prior to the listing, sold 1,353,929 shares in the initial public offerings. Pursuant to the Law for Disposal of Debts and Liabilities of the JNRSC enacted in October of 1998, the Company's shares held by the JNRSC were transferred to Japan Railway Construction Public Corporation (the "JRCPC"). On October 1, 2003, the CATT and the JRCPC were fully integrated, pursuant to the Law of Japan Railway Construction, Transport and Technology enacted on October 1, 2003, and designated as the JRTT. In July 2005, the JRTT sold 600,000 shares of the Company. On April 5, 2006, the JRTT also sold its remaining 286,071 shares of the Company. As a result of this sale, all of the Company's shares held by the JRTT were sold.

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 STATEMENTSThe accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its

related accounting regulations, and in 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 2012 and 2011 consolidated financial statements to conform to the classifications used in 2013.

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 ¥94 to $1, the approximate rate of exchange as of March 29, 2013. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. Japanese yen figures less than one million of yen are rounded down to the nearest million of yen, except for per share information and U.S. dollar figures less than one thousand of U.S. dollars are also rounded down to the nearest thousand of U.S. dollars, except for per share information.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Principles of Consolidation

The accompanying consolidated financial statements as of March 31, 2013, include the accounts of the Company and its 29 significant subsidiaries (together, the "Companies").Under the control or influence concept, those companies in which the Company, directly or indirectly, is able to exercise control over operations are consolidated, and those companies

over which the Company has the ability to exercise significant influence are accounted for by the equity method.Investments in two affiliates are accounted for by the equity method. Investments in the remaining unconsolidated subsidiaries and affiliates are stated at cost. If the equity method of

accounting had been applied to the investments in these companies, the effect on the accompanying consolidated financial statements would not be material.The difference between the cost of acquisition and the fair value of the equity of an acquired subsidiary at the date of acquisition is fully amortized when incurred.All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets resulting from transactions within the

Companies is also eliminated.A certain consolidated subsidiary has adopted a fiscal year ending on February 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 Equivalents

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

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

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

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 Equipment

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

based on kilometers traveled.The range of useful lives is principally from 2 to 60 years for buildings and structures, and from 2 to 20 years for machinery, rolling stock and vehicles.Depreciation of certain railway ground structures, except for the Shinkansen railway ground facilities, is computed by the replacement-accounting method.Property, plant and equipment acquired on and after April 1, 2012, are mainly depreciated by the declining-balance method in accordance with the revised corporate tax law, which is

effective for fiscal years beginning on and after April 1, 2012.The effect of this revision on the consolidated statement of income for the year ended March 31, 2013, was immaterial.

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 Costs

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

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

Provision for large scale renovation of the Shinkansen infrastructure is provided based on the Company's provision plan authorized by the Minister of Transport from October 1, 2002, in accordance with the Nationwide Shinkansen Railway Development Law. (see Note 16)j. Retirement and Pension Plans

The 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 some of those subsidiaries also have unfunded retirement plans.

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

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

Central Japan Railway Company and Consolidated Subsidiaries

OPERATING ACTIVITIES:Income before income taxes and minority interestsAdjustments for:

Income taxes—paidDepreciation and amortizationEquity in earnings of affiliatesProceeds from contribution for constructionReduction of noncurrent assets related to contribution for constructionLoss on retirement of noncurrent assets(Gain) loss on sales of noncurrent assets Changes in assets and liabilities:

Increase in provision for large scale renovation of the Shinkansen infrastructureDecrease (increase) in trade receivables(Increase) decrease in inventoriesIncrease (decrease) in trade payables(Decrease) increase in advances receivedIncrease (decrease) in provision for retirement benefits

Other—net Net cash provided by operating activities

Year Ended March 31, 2013

INVESTING ACTIVITIES:Placement of time depositsWithdrawal of time depositsPurchases of marketable securitiesProceeds from redemption of marketable securitiesPurchases of property, plant and equipmentProceeds from contribution for constructionProceeds from sales of investment securities and investment in and advances to unconsolidated subsidiaries and affiliates Purchases of investment securitiesOther—net

Net cash used in investing activities

FINANCING ACTIVITIES:Net increase in short-term loans payableProceeds from long-term debtRepayments of long-term debtPayments for long-term accounts payable—railway facilitiesCash dividends paidCash dividends paid to minority shareholdersOther—net

Net cash used in financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTSCASH AND CASH EQUIVALENTS, BEGINNING OF YEARCASH AND CASH EQUIVALENTS INCREASED BY MERGER WITH AN UNCONSOLIDATED SUBSIDIARY CASH AND CASH EQUIVALENTS, END OF YEAR

ADDITIONAL CASH FLOW INFORMATION:Interest paid

(20,000) 30,000 (25,000) 25,000 (268,440) 2,433

519 (4) (6,623)

(262,114)

1,684 189,000 (266,782) (148,989) (19,700) (434) (14,615)(259,838)

(9,629)

84,692 43 ¥ 75,106

¥ 89,227

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

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

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

(30,829)

115,521 ¥ 84,692

¥ 99,824

(212,765)319,148

(265,957) 265,957 (2,855,744) 25,882

5,521 (42) (70,457)(2,788,446)

17,914 2,010,638 (2,838,106) (1,584,989) (209,574) (4,617) (155,478)(2,764,234)

(102,436)

900,978 457 $ 799,000

$ 949,223

¥ 326,187 (114,018) 240,193 (2) (7,378) 7,440 14,584 (561) 33,333

8,798 (16,813) 2,438 (3,758) 4,532 17,347 512,324

¥ 263,896 (107,003) 257,063 (199) (2,297) 2,780 13,899 (671) 33,333

(18,262) (6,223) (1,081) 8,246 753 3,441

447,674

¥ 224,647 (63,620) 258,599 (311) (20,586) 20,676 17,032 92 33,333 8,021 11,241 (5,329) (1,742) (522) 40,399 521,934

$ 3,470,074 (1,212,957) 2,555,244 (21) (78,489) 79,148 155,148 (5,968) 354,606

93,595 (178,861) 25,936 (39,978) 48,212 184,542

5,450,255

See notes to consolidated financial statements.

2013 2012 2011 2013

Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

(95,007)50,000

(80,000)80,000

(274,983) 6,801

113 (1,683) (5,455)(320,215)

182 235,900 (169,554) (194,577) (17,750) (354) (19,750)(165,906)

35,813

79,708 ¥ 115,521

¥ 109,713

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Notes to Consolidated Financial StatementsConsolidated Statement of Cash Flows

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46 47

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

The information for available-for-sale securities whose fair value is not readily determinable as of March 31, 2013 and 2012, is disclosed in Note 10.The impairment losses on available-for-sale equity securities for the years ended March 31, 2012 and 2011, were ¥3,662 million and ¥3,576 million, respectively. The impairment loss on

available-for-sale equity securities for the year ended March 31, 2013, was not presented as the effect was immaterial.

Equity securitiesTrust fund investment and other Total

¥ 60,990 276¥ 61,266

¥ 24,445 ¥ 24,445

¥ 1,785 40¥ 1,825

¥ 83,651 235¥ 83,886

CostUnrealized

GainsUnrealized

LossesFair

ValueFair

ValueCostUnrealized

GainsUnrealized

Losses¥ 62,145 276¥ 62,421

¥ 9,851 ¥ 9,851

¥ 4,57852

¥ 4,631

¥ 67,418 223¥ 67,641

Millions of Yen

2013 2012

Equity securitiesTrust fund investment and other Total

$ 648,829 2,936$ 651,765

$ 260,053

$ 260,053

$ 18,989 425$ 19,414

$ 889,904 2,500$ 892,404

CostUnrealized

GainsUnrealized

LossesFair

Value

Thousands of U.S. Dollars

2013

k. Asset Retirement ObligationsIn March 2008, the ASBJ published ASBJ Statement No. 18, “Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No. 21, “Guidance on Accounting Standard

for Asset Retirement Obligations.” Under this accounting standard, an asset retirement obligation is defined as a legal obligation imposed either by law or contract that results from the acquisition, construction, development and normal operation of a tangible fixed asset and is associated with the retirement of such tangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of the asset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected as an adjustment to the carrying amount of the liability and the capitalized amount of the related asset retirement cost. This standard was effective for fiscal years beginning on or after April 1, 2010.

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

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

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

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

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

The 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 Information

Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period.The net income available to common shareholders used in the computation for 2013, 2012 and 2011 was ¥199,971 million ($2,127,351 thousand), ¥132,781 million and ¥133,807

million, respectively. The average number of common shares used in the computation for 2013, 2012 and 2011 was 196,799,380 shares, 196,799,380 shares and 196,803,147 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 turn to a share unit. All prior years 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.r. Accounting Changes and Error Corrections

In December 2009, the ASBJ issued ASBJ Statement No. 24, "Accounting Standard for Accounting Changes and Error Corrections" and ASBJ Guidance No. 24, "Guidance on Accounting Standard for Accounting Changes and Error Corrections." Accounting treatments under this standard and guidance are as follows: (1) Changes in Accounting Policies—When a new accounting policy is applied 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. This accounting standard and the guidance are applicable to accounting changes and corrections of prior-period errors which are made from the beginning of the fiscal year that begins on or after April 1, 2011.s. New Accounting Pronouncements

On May 17, 2012, the ASBJ issued ASBJ Statement No.26, "Accounting Standard for Retirement Benefits" and ASBJ Guidance No.25, "Guidance on Accounting Standard for Retirement Benefits." Accounting treatments under this standard and the guidance are as follows:

(1) Recognition of the unrecognized actuarial gain and loss and the unrecognized prior service cost— The unrecognized actuarial gain and loss and the unrecognized prior service cost are recognized within equity in the balance sheet after adjusting for tax effects, and the difference between retirement benefit obligations and plan assets is recognized as a liability or asset.

(2) Amendments relating to the determination of the retirement benefit obligations and the current service cost—This accounting standard and the guidance allow the Companies to chose a method of attributing expected benefits to periods on a benefit formula basis or on a straight-line basis, and also amend the determination of a discount rate. This accounting standard and the guidance for (1) above are applicable for the end of annual periods beginning on or after April 1, 2013, and (2) above are applicable for the beginning of annual periods beginning on and after April 1, 2014. However, no retrospective application of this accounting standard and the guidance to consolidated financial statements in prior periods is required since this accounting standard and the guidance include transitional provisions.The Companies are in the process of measuring the effects on the consolidated financial statements.

4. INVESTMENT SECURITIESInformation regarding investment securities with readily determinable fair values classified as available-for-sale as of March 31, 2013 and 2012, was as follows:

5. SHORT-TERM LOANS PAYABLE AND LONG TERM DEBTThe interest rates applicable to short-term loans payable were 0.35% as of March 31, 2013 and 2012, and 0.38% as of March 31, 2011.Long term debt as of March 31, 2013 and 2012, consisted of the following:

Thousands of U.S. DollarsMillions of Yen

Annual maturities of long-term debt outstanding at the principal amounts as of March 31, 2013, were as follows:

$ 1,679,021 2,266,234 1,700,840 1,725,914 2,133,765 7,997,989

$ 17,503,797

20142015201620172018Thereafter Total

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

¥ 157,828 213,026 159,879 162,236

200,574 751,811

¥ 1,645,357

2013 2012 2013

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

30,000 10,000 10,000 30,000 40,000 10,000

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

612,306

10,000

27,633 1,723,034 (165,777)¥ 1,557,256

$ 202,074 206,382

212,765 106,382 265,957 106,382 95,744 106,382 106,382 212,765

105,319 212,765

212,765 212,765 212,765 203,191 106,382 319,148 212,680 316,861 212,712 212,734 212,734 212,744 212,531 106,372

159,489 212,670

106,329 212,563 319,148 106,382 212,765 319,148 319,148 106,382 106,382 319,148 425,531 106,382

159,574 159,574 319,148 212,765 106,382 212,765 319,148 212,765 319,148 106,382 212,765 106,382 265,957 159,574

6,426,893

266,319 17,502,787

(1,679,021)$ 15,823,765

¥ 18,995 19,400 20,000 10,000 25,000 10,000 9,000 10,000 10,000 20,000 9,900 20,000 20,000 20,000 20,000 19,100 10,000 30,000 19,992 29,785 19,995 19,997 19,997 19,998 19,978 9,999 14,992 19,991 9,995 19,981 30,000 10,000 20,000 30,000

30,000 10,000 10,000 30,000 40,000 10,000

15,000 15,000 30,000 20,000 10,000 20,000 30,000 20,000 30,000 10,000 20,000 10,000 25,000 15,000

604,128

25,034 1,645,262

(157,828)¥ 1,487,434

The CompanySecured 2.18% bonds due 2018Secured 2.6% bonds due 2020Unsecured 2.39% bonds due 2022Unsecured 2.2% bonds due 2022Unsecured 1.49% bonds due 2012Unsecured 1.74% bonds due 2022Unsecured 1.42% bonds due 2017Unsecured 1.15% bonds due 2022Unsecured 1.31% bonds due 2033Unsecured 2.015% bonds due 2023Unsecured 2.2% bonds due 2024Unsecured 2.19% bonds due 2019Unsecured 1.875% bonds due 2019Unsecured 2.21% bonds due 2024Unsecured 1.775% bonds due 2020Unsecured 1.28% bonds due 2012Unsecured 1.77% bonds due 2017Unsecured 1.695% bonds due 2016Unsecured 1.845% bonds due 2013Unsecured 2.14% bonds due 2018Unsecured 2.405% bonds due 2026Unsecured 2% bonds due 2016Unsecured 2.04% bonds due 2018Unsecured 2.39% bonds due 2026Unsecured 1.88% bonds due 2016Unsecured 1.78% bonds due 2017Unsecured 1.78% bonds due 2017Unsecured 1.75% bonds due 2017Unsecured 2.31% bonds due 2027Unsecured 1.69% bonds due 2018Unsecured 2.3% bonds due 2027Unsecured 1.79% bonds due 2020Unsecured 1.83% bonds due 2018Unsecured 2.39% bonds due 2028Unsecured 2.391% bonds due 2028Unsecured 2.646% bonds due 2038Unsecured 1.557% bonds due 2019Unsecured 2.166% bonds due 2029Unsecured 2.312% bonds due 2029Unsecured 2.556% bonds due 2039Unsecured 1.667% bonds due 2019Unsecured 2.321% bonds due 2029Unsecured 2.157% bonds due 2029Unsecured 2.375% bonds due 2039Unsecured 0.371% bonds due 2013Unsecured 1.472% bonds due 2020Unsecured 0.316% bonds due 2013Unsecured 2.212% bonds due 2030Unsecured 2.111% bonds due 2030Unsecured 1.797% bonds due 2030Unsecured 0.443% bonds due 2014Unsecured 0.586% bonds due 2015Unsecured 2.083% bonds due 2031Unsecured 0.297% bonds due 2014Unsecured 1.895% bonds due 2031Unsecured 0.262% bonds due 2015Unsecured 1.824% bonds due 2032Unsecured 0.156% bonds due 2014Unsecured 0.13% bonds due 2016Unsecured loans from Japanese banks and others, with interest rates ranging from 0.88% to 6.6% (2013), from 0.95% to 6.6% (2012), due 2012 to 2033

SubsidiariesUnsecured bonds with interest rates ranging from 1.57% to 1.992%, due 2012*Unsecured and secured loans from Japanese banks and other, with interest rates ranging from 0.53% to 4.65% (2013), from 1.40% to 4.65% (2012), due 2012 to 2018

TotalLess current portionLong-term debt, less current portion

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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48 49

6. LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIESLong-term accounts payable—railway facilities as of March 31, 2013 and 2012, consisted of the following:

Year Ending March 31

Thousands of U.S. DollarsMillions of Yen

Thousands of U.S. DollarsMillions of Yen

Thousands of U.S. DollarsMillions of Yen

2013 2012 2013

Thousands of U.S. DollarsMillions of Yen

2013 2012 2013

Thousands of U.S. DollarsMillions of Yen

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

summarized below:a. Dividends

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

The Companies Act permits companies to distribute dividends in kind (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 total of the aggregate amount of legal reserve and additional paid-in capital equals to 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings-unappropriated can be transferred among the accounts under certain conditions upon resolution of the shareholders.c. Treasury Stock and Treasury Stock Acquisition Rights

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

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

component of equity or deducted directly from stock acquisition rights.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 turn to a share unit.

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 37.6% for the year

ended March 31, 2013, and 40.2% for the years ended March 31, 2012 and 2011.The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities as of March 31, 2013 and 2012, were as follows:

Based on legal defeasance agreements with special purpose entities, the Company has transferred the debt repayments obligation for certain long-term accounts payable—railway facilities to 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 ¥290,726 million ($3,092,829 thousand) and ¥352,740 million as of March 31, 2013 and 2012, respectively, and the related loss on long-term accounts payable—railway facilities by nil for the years ended March 31, 2013 and 2012, and ¥15,691 million for the year ended March 31, 2011. (see Note 13)

Annual maturities of long-term accounts payable—railway facilities as of March 31, 2013, were as follows:

Interest expense on the aforementioned long term accounts payable—railway facilities amounted to ¥59,004 million ($627,702 thousand), ¥64,618 million and ¥71,886 million for the years ended March 31, 2013, 2012 and 2011, respectively.

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

during their employment calculated by their position or basic rates of pay at the time of termination, length of service and other conditions under which the termination occurs. The liability for employees’ retirement benefits as of March 31, 2013 and 2012 consisted of the following:

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, 2013 and 2012, were as follows:

The aforementioned bonds which the Company entered into as 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, 2013, was ¥100,000 million ($1,063,829 thousand).All assets of the Company were pledged for the above secured bonds of ¥178,500 million ($1,898,936 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 secured long-term debt of consolidated subsidiaries of ¥525 million ($5,585 thousand), including current portion of ¥175 million

($1,861 thousand), as of March 31, 2013, were as follows:

Assumptions used for the years ended March 31, 2013, 2012 and 2011, were set forth as follows:

The prepaid pension costs were recorded as noncurrent prepaid expenses and other in the consolidated balance sheet as of March 31, 2013 and 2012.

The components of net periodic benefit costs for the years ended March 31, 2013, 2012 and 2011 were as follows:

Net deferred tax assets as of March 31, 2013 and 2012, were reflected in the accompanying consolidated balance sheets under the following captions:

2013 2012Discount rateExpected rate of return on plan assetsAmortization period of prior service costRecognition period of actuarial gain/lossAmortization period of transitional obligation

Mainly 1.5%1.1% to 2.0%

Mainly 5 yearsMainly 5 years

15 years (a certain consolidated

subsidiary only)

2011Mainly 1.5%

0.91% to 2.0%Mainly 5 yearsMainly 5 years

15 years (a certainconsolidated

subsidiary only)

Mainly 1.5%1.1% to 2.0%

Mainly 5 yearsMainly 5 years

15 years (a certain consolidated

subsidiary only)

¥ 20,000 29,000 49,800 29,900 49,800 ¥ 178,500

¥ 20,000 29,000 49,800 ¥ 98,800

$ 212,765 308,510 529,787 318,085 529,787 $ 1,898,936

2013 2012 2013Secured 4.65% bonds due 2014Secured 3.95% bonds due 2016Secured 2.825% bonds due 2017Secured 2.18% bonds due 2018Secured 2.6% bonds due 2020 Total

Thousands of U.S. DollarsMillions of Yen

¥ 424,235 562,688 7,812 994,736 (103,450)¥ 891,285

$ 4,513,138 5,986,042 83,106 10,582,297 (1,100,531)$ 9,481,755

2013 2012 2013Long-term accounts payable incurred for purchase of the Shinkansen railway ground facilities:

With a floating interest rate of 4.11% (2013) and 4.08% (2012), due semiannually through 2017With a fixed interest rate of 6.55%, due semiannually through 2051

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

2013 2012 2013

Thousands of U.S. DollarsMillions of Yen

¥ 222,475 (14,682)

(598) (153) (3,603)

203,438 (1,756)

¥ 205,195

¥ 227,177 (17,893) (398) (280) (409)

208,196 (1,540)

¥ 209,736

$ 2,416,776 (190,351) (4,234) (2,978) (4,351)

2,214,851 (16,382)

$ 2,231,234

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

Thousands of U.S. DollarsMillions of Yen

¥ 12,469 3,524 (227)

255 2,893 1,857

20,772 700 ¥ 21,473

¥ 12,601 3,351 (222)

199 760 350 17,041

121 ¥ 17,163

¥ 12,575 3,344 (235) 199 49 255 16,188

111 ¥ 16,300

$ 133,776 35,574

(2,500) 2,117 521 2,712 172,212

1,180 $ 173,404

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

2013 2012 2011 2013

¥ 167 669 ¥ 836

$ 1,776 7,117 $ 8,893

Buildings and structures—net of accumulated depreciationLand Total

20142015201620172018Thereafter Total

¥ 103,450 107,810 112,405 117,181

4,814 549,074

¥ 994,736

$ 1,100,531 1,146,914 1,195,797 1,246,606

51,212 5,841,212

$ 10,582,297

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

¥ 26,717 174,813 (3,853)¥ 197,677

¥ 23,886 171,322 (7) (1,548)¥ 193,652

$ 284,223 1,859,712

(40,989)$ 2,102,946

¥ 73,694 68,356 15,193 9,833 8,685

5,283 1,993 43,094 226,135 (19,941) 206,194 3,051 5,350

4,139 12,541 ¥ 193,652

$ 799,670 772,957 147,308

106,287 86,010 52,606 18,595 507,978 2,491,436 (200,765) 2,290,670 84,159 56,744 46,797 187,712 $ 2,102,946

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

TotalLess valuation allowance

Deferred tax assets

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

Deferred tax liabilitiesNet deferred tax assets

¥ 75,169 72,658 13,847 9,991 8,085 4,945 1,748 47,750 234,195 (18,872) 215,323 7,911 5,334 4,399 17,645 ¥ 197,677

¥ 569,654 565,893 8,177 1,143,726 (108,418)¥ 1,035,307

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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50 51

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

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

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

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

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

Long-term debt with floating interest rates is accounted for by special treatment. Please refer to Note 11. The fair value is measured by the total amount of principal and interest discounted by the Companies’ assumed corporate borrowing rate.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 the fact that no active market exists for this type of obligation, the fair values of these payables are determined by discounting the cash flow estimated for each due date at the Company’s assumed bond issuing rate. The estimated cash flows of the floating rate portion of these payables are calculated using the latest rate provided by the JRTT.

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

March 31, 2013Investments in equity instruments that do not have a quoted market price in an active market

Carrying Amount

¥ 31,259 $ 332,542 Thousands of U.S. DollarsMillions of Yen

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

Carrying Amount

¥ 31,151 Millions of Yen

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

11. DERIVATIVESThe Companies 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 losses arising from credit risk.Derivative transactions entered into by the Companies have been made in accordance with internal policies and have been subject to due internal formalities.

Derivative Transactions to Which Hedge Accounting Is Applied

*The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at market value, but the differential paid or received under the swap agreements 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).

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

Millions of Yen

March 31, 2012

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

Hedged Item

Long-term debt

Contract Amount Dueafter One Year

¥ 111,100

Fair Value

*

Contract Amount

Millions of Yen

March 31, 2013

Interest rate swaps:(fixed rate payment, floating rate receipt) ¥ 138,400

Hedged Item

Long-term debt

Contract Amount Dueafter One Year

¥ 118,400

Fair Value

*

Contract Amount

Thousands of U.S. Dollars

$ 1,472,340

Hedged Item

Long-term debt

Contract Amount Dueafter One Year

$ 1,259,574

Fair Value

*

Contract AmountMarch 31, 2013

Interest rate swaps:(fixed rate payment, floating rate receipt)

201240.2% 8.5

(0.3)48.4%

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, 2013 and 2011.

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

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 its 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 Management

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

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

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

Note 11 for the detail of fair value for derivatives.

(1) Fair Value of Financial Instruments

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

Millions of YenCarrying AmountMarch 31, 2013

Cash and cash equivalentsTime depositsTrade receivablesInvestment securities Total

Short-term loans payableTrade payables Income taxes payableLong-term debtLong-term accounts payable—railway facilities Total

¥ 75,106 20,012 74,771 83,886

¥ 253,777

¥ (26,643) (175,691) (80,273)

(1,645,262) (994,736)

¥ (2,922,606)

Fair Value¥ 75,106

20,012 74,771

83,886 ¥ 253,777

¥ (26,643) (175,691)

(80,273) (1,744,871)

(1,585,445)¥ (3,612,924)

Unrealized Gain/Loss

¥ (99,609)(590,709)

¥ (690,318)

Thousands of U.S. Dollars Carrying AmountMarch 31, 2013

Cash and cash equivalentsTime depositsTrade receivablesInvestment securities Total

Short-term loans payable Trade payables Income taxes payableLong-term debtLong-term accounts payable—railway facilities Total

$ 799,000 212,893 795,436 892,404

$ 2,699,755 $ (283,436)

(1,869,053) (853,968)

(17,502,787) (10,582,297)

$ (31,091,553)

Fair Value$ 799,000

212,893 795,436 892,404

$ 2,699,755 $ (283,436)

(1,869,053) (853,968)

(18,562,457) (16,866,436)$ (38,435,361)

Unrealized Gain/Loss

$ (1,059,670) (6,284,138)

$ (7,343,808)

Millions of YenCarrying AmountMarch 31, 2012

Cash and cash equivalentsTime depositsTrade receivablesInvestment securities Total

Short-term loans payableTrade payables Income taxes payableLong-term debtLong-term accounts payable—railway facilities Total

¥ 84,692 30,012 83,410 67,641

¥ 265,757 ¥ (25,325)

(167,451) (62,506)

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

¥ (3,122,043)

Fair Value ¥ 84,692

30,012 83,410 67,641

¥ 265,757 ¥ (25,325)

(167,451) (62,506)

(1,795,339)(1,700,753)

¥ (3,751,376)

Unrealized Gain/Loss

¥ (72,304) (557,027)

¥ (629,332)

Millions of Yen

Due within One YearMarch 31, 2013Cash and cash equivalentsTime depositsTrade receivables Total

¥ 75,106 20,012 74,718

¥ 169,838

Due after One Yearthrough Five Years

¥ 52 ¥ 52

Due afterFive Years

Thousands of U.S. Dollars

Due within One YearMarch 31, 2013Cash and cash equivalentsTime depositsTrade receivables Total

$ 799,000 212,893 794,872

$ 1,806,787

Due after One Yearthrough Five Years

$ 553 $ 553

Due afterFive Years

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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, 2012, was as follows:

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¥ 10,835 $ 115,265 Year-end cash dividends, ¥55 ($0.59) per share

Thousands of U.S. DollarsMillions of Yen

13. CONTINGENCIESAs of March 31, 2013, the Company has joint and several obligations with the RTRI to make payments on long term accounts payable of ¥20,846 million ($221,765 thousand) by the

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

the debt repayment obligations for certain bonds and long-term accounts payable—railway facilities to such financial institutions and special purpose entities. As of March 31, 2013, the Company had contingent obligations of ¥178,500 million ($1,898,936 thousand) for the bonds and ¥290,726 million ($3,092,829 thousand) for long-term accounts payable—railway facilities, respectively.

14. COMPREHENSIVE INCOMEThe components of other comprehensive income for the years ended March 31, 2013 and 2012, were as follows:

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

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

Disclosures,” an entity is required to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity for which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. This accounting standard and the guidance are applicable to segment information disclosures for the fiscal years beginning on or after April 1, 2010.1. Description of Reportable Segments

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

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

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

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

3. Information about Operating Revenues, Profit (Loss), Assets, Liabilities and Other Items

Merchandise and Other

Merchandise and Other

Merchandise and Other

Merchandise and Other

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 ¥522 million ($5,553 thousand), ¥619 million and ¥1,739 million for the years ended March 31, 2013, 2012 and 2011, 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 ¥119,959 million ($1,276,159 thousand), ¥117,696 million and ¥152,640 million for the years endedMarch 31, 2013, 2012 and 2011, respectively.The elimination of intersegment transactions consists of intersegment receivables and others. The amounts of the elimination were ¥367,096 million ($3,905,276 thousand), ¥365,015 million and ¥349,321 million for the years endedMarch 31, 2013, 2012 and 2011, respectively.

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

16. SUPPLEMENTARY INFORMATIONAmendment to the Provision Reserve Plan for Large-Scale Renovation of the Shinkansen Infrastructure

The Company applied to the Minister of Transport for an amendment to the provision reserve plan for large-scale renovation of the Shinkansen infrastructure under Article 16, Paragraph (1) of the Nationwide Shinkansen Railway Development Law as of January 29, 2013, and the application for the amendment was approved as of February 27, 2013. Prior to the approval of the amendment, the Company had scheduled to reserve the provision in an aggregate amount of ¥500 billion over 15 years from October 1, 2002 to September 30, 2017, and to appropriate the provision evenly over 10 years from April 2018 to March 2028. Following the approval of the amendment, the Company rescheduled to reserve the provision in an aggregate amount of ¥350 billion over 10.5 years from October 1, 2002 to March 31, 2013, and to appropriate the reserve evenly over 10 years from April 2013 to March 2023.

17. SUBSEQUENT EVENTSAppropriations of Retained Earnings

The following appropriation of retained earnings as of March 31, 2013, was approved at the Company's shareholders meeting held on June 21, 2013:

Thousands of U.S. DollarsMillions of Yen

2013 2012 2013

Thousands of U.S. DollarsMillions of Yen

Operating revenues:External customersIntersegment transactions or transfers

Total

Segment profitSegment assetsOther:

Depreciation and amortizationAmounts of investments in equity in affiliatesIncrease in property, plant and equipment and intangible assets

ConsolidatedReportable Segment

Real Estate Total Other Total Reconciliations

Millions of Yen

Transportation

¥ 1,231,961 11,138

¥ 1,243,099

¥ 396,1514,850,076

218,099 7,531

253,852

¥ 1,471,911 45,731¥ 1,517,643

¥ 416,1425,263,269

235,534 7,531

277,701

¥ 113,407

119,775¥ 233,183

¥ 9,477214,972

4,659

3,406

¥ 1,585,319 165,507

¥ 1,750,826

¥ 425,6205,478,241

240,193 7,531

281,107

¥ (165,507)¥ (165,507) ¥ 522 (247,137)

¥ 1,585,319

¥ 1,585,319

¥ 426,1425,231,104

240,193

7,531

281,107

2013

¥ 38,403 26,584¥ 64,987

¥ 12,728329,031

14,063

19,695

¥ 201,547 8,009

¥ 209,556

¥ 7,26284,160

3,371

4,152

Operating revenues:External customersIntersegment transactions or transfers

Total

Segment profitSegment assetsOther:

Depreciation and amortizationAmounts of investments in equity in affiliatesIncrease in property, plant and equipment and intangible assets

ConsolidatedReportable Segment

Real Estate Total Other Total Reconciliations

Millions of Yen

Transportation

¥ 1,171,32811,367

¥ 1,182,695

¥ 342,8044,849,907

235,157 7,433

261,893

¥ 1,405,297 45,459

¥ 1,450,756

¥ 361,666 5,255,549

252,2827,433

286,258

¥ 103,031 122,801¥ 225,832

¥ 11,474205,807

4,780

4,373

¥ 1,508,328 168,260

¥ 1,676,589

¥ 373,1415,461,357

257,063 7,433

290,631

¥ (168,260)¥ (168,260) ¥ (619)

(247,318)

¥ 1,508,328

¥ 1,508,328

¥ 372,5215,214,038

257,063 7,433

290,631

2012

¥ 37,285 25,484¥ 62,769

¥ 13,084322,555

13,823

19,049

¥ 196,683 8,607

¥ 205,291

¥ 5,776 83,086

3,302

5,314

Operating revenues:External customersIntersegment transactions or transfers

Total

Segment profitSegment assetsOther:

Depreciation and amortizationAmounts of investments in equity in affiliatesIncrease in property, plant and equipment and intangible assets

ConsolidatedReportable Segment

Real Estate Total Other Total Reconciliations

Millions of Yen

Transportation

¥ 1,158,085 11,661

¥ 1,169,747

¥ 323,077 4,861,332

234,316 7,268

263,712

¥ 1,385,816 45,416

¥ 1,431,233

¥ 340,1705,253,206

253,412

7,268 279,163

¥ 117,267 122,334

¥ 239,601

¥ 10,916196,467

5,187

4,940

¥ 1,503,083 167,750

¥ 1,670,834

¥ 351,0865,449,674

258,599

7,268 284,104

¥ (167,750)¥ (167,750) ¥ (1,739)

(196,680)

¥ 1,503,083

¥ 1,503,083

¥ 349,3475,252,993

258,599

7,268 284,104

2011

¥ 40,177 26,272¥ 66,449

¥ 11,896315,613

15,768

11,776

¥ 187,553 7,482

¥ 195,035

¥ 5,19676,261

3,327

3,674

Operating revenues:External customersIntersegment transactions or transfers

Total

Segment profitSegment assetsOther:

Depreciation and amortizationAmounts of investments in equity in affiliatesIncrease in property, plant and equipment and intangible assets

ConsolidatedReportable Segment

Real Estate Total Other Total Reconciliations

Thousands of U.S. Dollars

Transportation

$ 13,105,968 118,489

$ 13,224,457

$ 4,214,372 51,596,553

2,320,202 80,117

2,700,553

$ 15,658,627 486,500

$ 16,145,138

$ 4,427,042 55,992,223

2,505,680 80,117

2,954,265

$ 1,206,4571,274,202

$ 2,480,670

$ 100,8192,286,936

49,563

36,234

$ 16,865,095 1,760,712

$ 18,625,808

$ 4,527,872 58,279,159

2,555,244 80,117

2,990,500

$ (1,760,712)$ (1,760,712) $ 5,553 (2,629,117)

$ 16,865,095

$ 16,865,095

$ 4,533,42555,650,042

2,555,244 80,117

2,990,500

2013

$ 408,542 282,808$ 691,351

$ 135,4043,500,329

149,606

209,521

$ 2,144,117 85,202

$ 2,229,319

$ 77,255 895,319

35,861

44,170

¥ (3,660) 3,661 1 142 ¥ 143 ¥ 59 59 (22)¥ 37 ¥ 12 ¥ 12 ¥ 193

$ 179,861 5,074 184,936 (51,989)$ 132,936 $ 42 42 (10)$ 21 $ 861 $ 861 $ 133,840

Unrealized gain on available-for-sale securities:Losses arising during the yearReclassification adjustments to profitAmount before income tax effectIncome tax effect TotalDeferred gain on hedges:

Gains arising during the yearAmount before income tax effectIncome tax effect TotalShare of other comprehensive income in affiliates

Gains arising during the year Total

Total other comprehensive income

2013 2012 2013

¥ 16,907 477

17,384 (4,887)¥ 12,496 ¥ 4 4 (1)¥ 2 ¥ 81 ¥ 81 ¥ 12,581

¥ 1,477 4,534 ¥ 6,011

¥ 1,393 5,101 ¥ 6,494

$ 14,819 54,265 $ 69,085

Due within one yearDue after one year Total

12. LEASESAs lessee, the minimum rental commitments under noncancelable operating lease as of March 31, 2013 and 2012, were not presented as the effects were immaterial.As lessor, the minimum rental commitments under noncancelable operating leases as of March 31, 2013 and 2012, were due as follows:

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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Central Japan Railway Company

CURRENT ASSETS:Cash and cash equivalentsTime depositsTrade receivablesShort-term loans receivables from subsidiaries and affiliatesSuppliesDeferred tax assets (Note 9)Prepaid expenses and other

Total current assets

NONCURRENT ASSETS:Investments and other assets:

Investment securitiesInvestments in and advances to subsidiaries and affiliates (Note 5)Deferred tax assets (Note 9)Prepaid expenses and other

Total investments and other assets

Property, plant and equipment (Note 4):Railway business propertyConstruction in progressOther

TotalAccumulated depreciation

Net property, plant and equipment

Total noncurrent assets

TOTAL ASSETS

¥ 69,757 20,000 33,048 31,260 9,841 23,100 25,718

212,726

87,002 189,553 164,780 22,565

463,902

7,599,036 338,496 171,568 8,109,101 (3,742,767)

4,366,333

4,830,235

¥ 5,042,962

¥ 80,953 30,000 40,013 19,141 9,052 20,756 25,942

225,859 74,123 196,139 161,245 22,155

453,664 7,551,066 246,602 172,185 7,969,854 (3,615,780)

4,354,073 4,807,738

¥ 5,033,598

$ 742,095 212,765 351,574 332,553 104,691 245,744 273,595

2,263,042 925,553 2,016,521 1,752,978 240,053

4,935,127 80,840,808 3,601,021 1,825,191 86,267,031 (39,816,670)

46,450,351 51,385,478

$ 53,648,531

See notes to nonconsolidated financial statements.

ASSETS

March 31, 2013

2013 2012 2013

Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

* Shares of common stock and treasury stock 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.

CURRENT LIABILITIES:Short-term loans payable (Note 6)Current portion of long-term debt (Note 6)Current portion of long-term accounts payable—railway facilities (Note 7)Trade payablesProvision for bonusesIncome taxes payablePrepaid fares receivedInter-line fares receivedOther

Total current liabilities

NONCURRENT LIABILITIES:Long-term debt (Note 6)Long-term accounts payable—railway facilities (Note 7)Provision for large scale renovation of the Shinkansen infrastructure (Notes3.i and 12)Provision for retirement benefitsOther

Total noncurrent liabilities

CONTINGENCIES (Note 11)

EQUITY (Note 8):Common stock—authorized, 824,000,000 shares; issued, 206,000,000 shares in 2013 and 215,000,000 shares in 2012*Capital surplusRetained earnings:

Legal reserveUnappropriated

Unrealized gain on available-for-sale securitiesTreasury stock—at cost, 8,999,000 shares in 2013 and 17,999,000 shares in 2012*

Total equity

TOTAL LIABILITIES AND EQUITY

¥ 117,355 151,845 103,450 126,205 20,676 75,308 25,190 381 34,499

654,912 1,468,383 891,285 350,000 197,721 44,273

2,951,664

112,000 53,500 12,504 1,346,832 13,749 (102,201)

1,436,384

¥ 5,042,962

¥ 121,139 148,178 108,418 118,757 20,127 55,728 24,281 147 49,646

646,425 1,537,222 1,035,307 316,666 194,090 45,604

3,128,891

112,000 53,500 12,504 1,280,940 3,748 (204,414)

1,258,280

¥ 5,033,598

$ 1,248,457 1,615,372 1,100,531 1,342,606 219,957 801,148 267,978 4,053 367,010

6,967,148 15,621,095 9,481,755 3,723,404 2,103,414 470,989

31,400,680

1,191,489 569,148 133,021 14,328,000 146,265 (1,087,244)

15,280,680

$ 53,648,531

LIABILITIES AND EQUITY

March 31, 2013

2013 2012 2013

Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Nonconsolidated Balance Sheet

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Central Japan Railway Company

* 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.

Year Ended March 31, 2013

20122013 2011 2013

Thousands ofU.S. Dollars

(Note 2)Millions of Yen

(Note 2)

* 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.

Central Japan Railway Company Year Ended March 31, 2013

TotalEquity

TreasuryStock

UnrealizedGain (Loss) on

Available-for-SaleSecurities

LegalReserve Unappropriated

Retained EarningsCapitalSurplus

CommonStock

OutstandingNumber of Shares of

Common Stock*

Millions of Yen (Note 2)Thousands

OPERATING REVENUES:Railway businessOther

Total operating revenues

OPERATING EXPENSES:Railway businessOther

Total operating expenses Operating income

OTHER INCOME (EXPENSES):Interest and dividend incomeInterest expense (Note 6)Loss on long-term accounts payable—railway facilities (Note 7)Loss on redemption of bondsOther—net

Other expenses—net

INCOME BEFORE INCOME TAXES

INCOME TAXES (Note 9):CurrentDeferred

Total income taxes

NET INCOME

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

¥ 1,235,988 9,094

1,245,082 840,174 5,771

845,946 399,136

3,095 (88,772)

(11,721) 104

(97,293) 301,842 123,494 (9,456)

114,038 ¥ 187,804

¥ 1,175,670 8,907 1,184,577 833,227 5,796 839,024

345,553 3,284 (98,373)

(11,896) 1,138

(105,847) 239,705 98,348 20,538

118,887 ¥ 120,817

¥ 1,162,660 9,269 1,171,930 839,699 6,765

846,465 325,465

3,032 (107,123) (15,691) (211) 1,307

(118,685) 206,779 87,119 (3,381)

83,738 ¥ 123,040

$ 13,148,808 96,744 13,245,553 8,938,021 61,393

8,999,425 4,246,127

32,925 (944,382)

(124,691) 1,106 (1,035,031) 3,211,085 1,313,765 (100,595)

1,213,170 $ 1,997,914

¥ 953.32 105.00

¥ 613.28 95.00

¥ 624.56 90.00

$ 10.14 1.12

20122013 2013

U.S. DollarsYen

2011

BALANCE, APRIL 1, 2010

Net incomeDividends from surplus, ¥90 per share*Purchase of treasury stockNet change in the year

BALANCE, MARCH 31, 2011

Net incomeDividends from surplus, ¥90 per share*Net change in the year

BALANCE, MARCH 31, 2012

Net incomeDividends from surplus, ¥100 per share*Retirement of treasury stockNet change in the year

BALANCE, MARCH 31, 2013

197,446

(445)

197,001

197,001

197,001

¥ 112,000 112,000 112,000 ¥ 112,000

¥ 53,500 53,500 53,500 ¥ 53,500

¥ 12,504 12,504 12,504 ¥ 12,504

¥ 1,072,562 123,040 (17,750) 1,177,853 120,817 (17,730) 1,280,940 187,804 (19,700)

(102,212) ¥ 1,346,832

¥ 7,649

(2,965) 4,683 (935) 3,748 10,000 ¥ 13,749

¥ (201,451) (2,962) (204,414)

(204,414)

102,212

¥ (102,201)

¥ 1,056,766 123,040 (17,750) (2,962) (2,965) 1,156,128

120,817 (17,730) (935) 1,258,280

187,804 (19,700) 10,000 ¥ 1,436,384

TotalEquity

TreasuryStock

UnrealizedGain on

Available-for-SaleSecurities

LegalReserve Unappropriated

Retained EarningsCapitalSurplus

CommonStock

BALANCE, MARCH 31, 2012

Net incomeDividends from surplus, $1.06 per share*Retirement of treasury stockNet change in the year

BALANCE, MARCH 31, 2013

$ 1,191,489 $ 1,191,489

$ 569,148 $ 569,148

$ 133,021 $ 133,021

$ 13,627,021 1,997,914 (209,574)

(1,087,361) $ 14,328,000

$ 39,872

106,382 $ 146,265

$ (2,174,617)

1,087,361 $ (1,087,244)

$ 13,385,957 1,997,914 (209,574)

106,382 $ 15,280,680

Thousands of U.S. Dollars (Note 2)

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Nonconsolidated Statement of Income Nonconsolidated Statement of Changes in Equity

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Central Japan Railway Company1. INCORPORATION OF CENTRAL JAPAN RAILWAY COMPANY

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

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

Prior to December 1, 2001, the Law Concerning Passenger Railway Companies and Japan Freight Railway Company (the "Law") required that authorization be obtained from the Minister of Land, Infrastructure, 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, Tokyo and Osaka stock exchanges in Japan. The JNRSC, which held all 2,240,000 of the Company's outstanding shares prior to the listing, sold 1,353,929 shares in the initial public offerings. Pursuant to the Law for Disposal of Debts and Liabilities of the JNRSC enacted in October of 1998, the Company's shares held by the JNRSC were transferred to Japan Railway Construction Public Corporation (the "JRCPC"). On October 1, 2003, the CATT and the JRCPC were fully integrated, pursuant to the Law of Japan Railway Construction, Transport and Technology enacted on October 1, 2003, and designated as the JRTT. In July 2005, the JRTT sold 600,000 shares of the Company. On April 5, 2006, the JRTT also sold its remaining 286,071 shares of the Company. As a result of this sale, all of the Company's shares held by the JRTT were sold.

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 STATEMENTSThe 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 Law, 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.

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 2012 and 2011 nonconsolidated financial statements to conform to the classifications used in 2013.

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 ¥94 to $1, the approximate rate of exchange as of March 29, 2013. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. Japanese yen figures less than one million of yen are rounded down to the nearest million of yen, except for per share information and U.S. dollar figures less than one thousand of U.S. dollars are also rounded down to the nearest thousand of U.S. dollars, except for per share information.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Nonconsolidation

The nonconsolidated financial statements do not include the accounts of subsidiaries. Investments in subsidiaries and affiliates are stated at cost.b. Cash Equivalents

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

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

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

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 Equipment

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

Depreciation is computed by the declining-balance method over the estimated useful lives of the assets. Additional depreciation is provided for the Shinkansen rolling stock based on kilometers traveled.

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

Depreciation of certain railway ground structures, except for the Shinkansen railway ground facilities, is computed by the replacement accounting method. Property, plant and equipment acquired on and after April 1, 2012, are mainly depreciated by the declining-balance method in accordance with the revised

corporate tax law, which is effective for fiscal years beginning on and after April 1, 2012.The effect of this revision on the nonconsolidated statement of income for the year ended March 31, 2013, was immaterial.

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 Costs

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

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

Provision for large scale renovation of the Shinkansen infrastructure is provided based on the Company's provision plan authorized by the Minister of Transport from October 1, 2002, in accordance with the Nationwide Shinkansen Railway Development Law. (see Note 12)j. Retirement and Pension Plans

The Company has an unfunded retirement plan covering substantially all of its employees. The provision for retirement benefits is calculated based on the projected benefit obligations at the balance sheet date.k. Leases

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

The provision for income taxes is computed based on the pretax income included in the 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 Earnings

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

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

The Company uses derivative financial instruments 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.

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.p. Per Share Information

Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period.

The net income available to common shareholders used in the computation for 2013, 2012 and 2011 was ¥187,804 million ($1,997,914 thousand), ¥120,817 million and ¥123,040 million, respectively. The average number of common shares used in the computation for 2013, 2012 and 2011 was197,001,000 shares, 197,001,000 shares and 197,004,767 shares, respectively.

Diluted net income per share is not presented in the accompanying nonconsolidated financial statements as the Company does not have any dilutive securities.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 turn to a share unit. All prior

years 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 Corrections

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

(1) Changes in Accounting Policies—When a new accounting policy is applied 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. This accounting standard and the guidance are applicable to accounting changes and corrections of prior-period errors which are made from the beginning of the fiscal year that begins on or after April 1, 2011.

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Notes to Nonconsolidated Financial Statements

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60 61

Secured 2.18% bonds due 2018Secured 2.6% bonds due 2020Unsecured 2.39% bonds due 2022Unsecured 2.2% bonds due 2022Unsecured 1.49% bonds due 2012Unsecured 1.74% bonds due 2022Unsecured 1.42% bonds due 2017Unsecured 1.15% bonds due 2022Unsecured 1.31% bonds due 2033Unsecured 2.015% bonds due 2023Unsecured 2.2% bonds due 2024Unsecured 2.19% bonds due 2019Unsecured 1.875% bonds due 2019Unsecured 2.21% bonds due 2024Unsecured 1.775% bonds due 2020Unsecured 1.28% bonds due 2012Unsecured 1.77% bonds due 2017Unsecured 1.695% bonds due 2016Unsecured 1.845% bonds due 2013Unsecured 2.14% bonds due 2018Unsecured 2.405% bonds due 2026Unsecured 2% bonds due 2016Unsecured 2.04% bonds due 2018Unsecured 2.39% bonds due 2026Unsecured 1.88% bonds due 2016Unsecured 1.78% bonds due 2017Unsecured 1.78% bonds due 2017Unsecured 1.75% bonds due 2017Unsecured 2.31% bonds due 2027Unsecured 1.69% bonds due 2018Unsecured 2.3% bonds due 2027Unsecured 1.79% bonds due 2020Unsecured 1.83% bonds due 2018Unsecured 2.39% bonds due 2028Unsecured 2.391% bonds due 2028Unsecured 2.646% bonds due 2038Unsecured 1.557% bonds due 2019Unsecured 2.166% bonds due 2029Unsecured 2.312% bonds due 2029Unsecured 2.556% bonds due 2039Unsecured 1.667% bonds due 2019Unsecured 2.321% bonds due 2029Unsecured 2.157% bonds due 2029Unsecured 2.375% bonds due 2039Unsecured 0.371% bonds due 2013Unsecured 1.472% bonds due 2020Unsecured 0.316% bonds due 2013Unsecured 2.212% bonds due 2030Unsecured 2.111% bonds due 2030Unsecured 1.797% bonds due 2030Unsecured 0.443% bonds due 2014Unsecured 0.586% bonds due 2015Unsecured 2.083% bonds due 2031Unsecured 0.297% bonds due 2014Unsecured 1.895% bonds due 2031Unsecured 0.262% bonds due 2015Unsecured 1.824% bonds due 2032Unsecured 0.156% bonds due 2014Unsecured 0.13% bonds due 2016Unsecured loans from Japanese banks and others, with interest rates ranging from 0.88% to 6.6% (2013) from 0.95% to 6.6%(2012), due 2012 to 2033 TotalLess current portionLong-term debt, less current portion

2013 2012 2013

Thousands ofU.S. DollarsMillions of Yen

6. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBTThe interest rates applicable to short-term loans payable were 0.35% as of March 31, 2013 and 2012, and 0.38% as of March 31, 2011.Long-term debt as of March 31, 2013 and 2012, consisted of the following:

¥ 18,995 19,400 20,000 10,000 25,000 10,000 9,000 10,000 10,000 20,000 9,900 20,000 20,000 20,000 20,000 19,100 10,000 30,000 19,992 29,785 19,995 19,997 19,997 19,998 19,978 9,999 14,992 19,991 9,995 19,981 30,000 10,000 20,000 30,000 30,000 10,000 10,000 30,000 40,000 10,000 15,000 15,000 30,000

20,000 10,000 20,000 30,000 20,000 30,000 10,000

20,00010,00025,00015,000

604,128

1,620,228(151,845)

¥ 1,468,383

$ 202,074 206,382 212,765 106,382 265,957 106,382 95,744 106,382 106,382 212,765 105,319 212,765 212,765 212,765 212,765 203,191 106,382 319,148 212,680 316,861 212,712 212,734 212,734 212,744 212,531 106,372 159,489 212,670 106,329 212,563 319,148 106,382 212,765 319,148 319,148 106,382 106,382 319,148 425,531 106,382 159,574 159,574 319,148

212,765 106,382 212,765 319,148

212,765319,148106,382212,765106,382265,957159,574

6,426,89317,236,468(1,615,372)

$ 15,621,095

2013 2012 2013

Thousands ofU.S. DollarsMillions of Yen

¥ 2,329,471 530,770 3,520,538 864,207 524,235 1,381 338,496 8,109,101 (3,742,767)

¥ 4,366,333

¥ 2,330,612 516,111 3,497,438 853,073 524,224 1,791 246,602 7,969,854 (3,615,780)

¥ 4,354,073

$ 24,781,606 5,646,489 37,452,531 9,193,691 5,576,968 14,691 3,601,021 86,267,031 (39,816,670)$ 46,450,351

LandBuildingsStructuresRolling stockMachinery and equipmentLease assetsConstruction in progress TotalAccumulated depreciationNet property, plant and equipment

Thousands ofU.S. Dollars

¥ 27,079 ¥ 25,144 ¥ (1,934)Subsidiaries

2012

¥ 27,079 ¥ 30,805 ¥ 3,726

2013

Millions of Yen

5. INVESTMENTS IN SUBSIDIARIES AND AFFILIATESThe carrying amounts and aggregate fair values of investment securities in subsidiaries whose fair values are available as of March 31, 2013 and 2012, were as

follows:

The carrying amounts of investments in subsidiaries and affiliated companies whose fair value cannot be readily determined as of March 31, 2013 and 2012,were as follows:

4. PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment as of March 31, 2013 and 2012, consisted of the following:

CarryingAmount

FairValue

UnrealizedGain

CarryingAmount

FairValue

UnrealizedLoss

Subsidiaries $ 288,074 $ 327,712 $ 39,638

2013

Thousands of U.S. Dollars

CarryingAmount

FairValue

UnrealizedGain

SubsidiariesAffiliates

¥ 120,206 2,133

¥ 120,206 2,133

$ 1,278,787 22,691

20122013 2013

Millions of Yen

¥ 29,900 49,900 20,000 19,500 10,000 20,000 10,000 25,000 10,000 10,000 10,000 10,000 20,000 10,000 20,000 20,000 20,000 20,000 20,000 19,100 10,000 30,000 19,991 29,784 19,994 19,996 19,996 19,997 19,976 9,998 14,991 19,990 9,994 19,980 30,000 10,000 20,000 30,000 30,000 10,000 10,000 30,000 40,000 10,000 15,000 15,000 15,000 30,000

20,000 10,000 20,000 30,000 20,000 30,000 10,000

612,3061,685,401(148,178)

¥ 1,537,222

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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62 63

Deferred tax assets:Depreciation and amortizationProvision for retirement benefitsSoftwareProvision for bonusesRailway usage chargesOther

TotalLess valuation allowance

Deferred tax assets

Deferred tax liabilities:Unrealized gain on available-for-sale securitiesDeferred gains on transfer of certain fixed assetsReserve for special depreciation

Deferred tax liabilitiesNet deferred tax assets

8. EQUITYJapanese companies are subject to the Companies Act. The significant provisions in the Companies Act that affect financial and accounting matters are summarized

below:a. Dividends

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

The Companies Act permits companies to distribute dividends-in-kind (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 total of the aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings—unappropriated can be transferred among the accounts under certain conditions upon resolution of the shareholders.c. Treasury Stock and Treasury Stock Acquisition Rights

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

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

presented as a separate component of equity or deducted directly from stock acquisition rights.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 turn to a share unit.

9. INCOME TAXESThe Company is subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 37.6%

for the year ended March 31, 2013, and 40.2% for the years ended March 31, 2012 and 2011.The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities as of March 31, 2013 and 2012, were as follows:

¥ 72,632 70,066 13,739 7,774 4,945 44,300 213,459 (16,469) 196,990

4,960 3,743 405 9,109 ¥ 187,881

¥ 68,331 69,014 15,072 7,567 5,283 37,979 203,249 (16,121) 187,128

1,383 3,743

5,126 ¥ 182,001

$ 772,680 745,382 146,159 82,702 52,606 471,276 2,270,840 (175,202) 2,095,638

52,765 39,819 4,308 96,904 $ 1,998,734

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 special the 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 ¥290,726 million ($3,092,829 thousand) and ¥352,740 million as of March 31, 2013 and 2012, respectively, and the related loss on long-term accounts payable—railway facilities by nilfor the years ended March 31, 2013 and 2012, and ¥15,691 millionfor the year ended March 31, 2011. (see Note 11)

Annual maturities of long-term accounts payable—railway facilities as of March 31, 2013,were as follows:

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, 2013 and 2012, were as follows:

The aforementioned bonds which the Company entered into as debt assumption agreements have been derecognized in the nonconsolidated balance sheet and disclosed as contingent liabilities.(see Note 11)

The Company has credit commitments from banks. Total unused credit available to the Company as of March 31, 2013, was ¥100,000 million ($1,063,829 thousand).

All assets of the Company were pledged for the above secured bonds of ¥178,500 million ($1,898,936 thousand), as an enterprise mortgage, which gives the holder thereof a security interest in all assets junior to that of other present or future secured creditors, but senior to that of general creditors.

7. LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIESLong-term accounts payable—railway facilities as of March 31, 2013 and 2012, consisted of the following:

Annual maturities of long-term debt outstanding at the principal amounts as of March 31, 2013,were as follows:

$ 1,615,372 2,214,776 1,658,829 1,693,308 2,057,170 7,997,989 $ 17,237,478

¥ 151,845 208,189 155,930 159,171 193,374 751,811 ¥ 1,620,323

20142015201620172018Thereafter Total

Thousands of U.S. DollarsMillions of YenYear Ending March 31

2013 2012 2013

Thousands ofU.S. DollarsMillions of Yen

Secured 4.65% bonds due 2014Secured 3.95% bonds due 2016Secured 2.825% bonds due 2017Secured 2.18% bonds due 2018Secured 2.6% bonds due 2020 Total

¥ 20,000 29,000 49,800 ¥ 98,800

$ 212,765 308,510 529,787

318,085 529,787

$ 1,898,936

¥ 20,000 29,000 49,800 29,900 49,800 ¥ 178,500

Interest expense on the aforementioned long-term accounts payable—railway facilities amounted to ¥59,004 million ($627,702 thousand), ¥64,618 million and ¥71,886 million for the years ended March 31, 2013, 2012 and 2011, respectively.

¥ 103,450 107,810 112,405 117,181 4,814 549,074 ¥ 994,736

$ 1,100,531 1,146,914 1,195,797 1,246,606 51,212 5,841,212 $ 10,582,297

20142015201620172018Thereafter Total

Thousands of U.S. DollarsMillions of YenYear Ending March 31

2013 2012 2013

Thousands ofU.S. DollarsMillions of Yen

Thousands ofU.S. DollarsMillions of Yen

Long-term accounts payable incurred for purchase of the Shinkansen railway ground facilities:With a floating interest rate of 4.11%(2013) and 4.08% (2012),due semiannually through 2017With a fixed interest rate of 6.55%, due semiannually through 2051Other TotalLess current portionLong-term accounts payable—railway facilities, less current portion

¥ 569,654 565,893 8,177 1,143,726 (108,418)¥ 1,035,307

$ 4,513,138 5,986,042 83,106 10,582,297 (1,100,531)$ 9,481,755

¥ 424,235 562,688

7,812 994,736 (103,450)¥ 891,285

2013 2012 2013

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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64 65

11. CONTINGENCIESAs of March 31, 2013, the Company has joint and several obligations with the RTRI to make payments on long-term accounts payable of ¥20,846 million

($221,765 thousand) by the RTRI. The proceeds are being used for the enhancement of technology development for the Maglev system.As discussed in Notes 6 and 7, based on debt assumption agreements with financial institutions or legal defeasance agreements with special purpose entities, the

Company has transferred the debt repayment obligations for certain bonds and long-term accounts payable—railway facilities to such financial institutions and special purpose entities. As of March 31, 2013, the Company had contingent obligations of ¥178,500 million ($1,898,936 thousand) for the bonds and ¥290,726 million ($3,092,829 thousand) for long-term accounts payable—railway facilities, respectively.

The Company also had contingent liabilities for guarantees of the loans of a certain subsidiary amounting to ¥19,509 million ($207,542 thousand) as of March 31, 2013.

12. SUPPLEMENTARY INFORMATIONAmendment to the Provision Reserve Plan for Large-Scale Renovation of the Shinkansen Infrastructure

The Company applied to the Minister of Transport for an amendment to the provision reserve plan for large-scale renovation of the Shinkansen infrastructure under Article 16, Paragraph (1) of the Nationwide Shinkansen Railway Development Law as of January 29, 2013, and the application for the amendment was approved as of February 27, 2013. Prior to the approval of the amendment, the Company had scheduled to reserve the provision in an aggregate amount of ¥500 billion over 15 years from October 1, 2002 to September 30, 2017, and to appropriate the provision evenly over 10 years from April 2018 to March 2028. Following the approval of the amendment, the Company rescheduled to reserve the provision in an aggregate amount of ¥350 billion over 10.5 years from October 1, 2002 to March 31, 2013, and to appropriate the reserve evenly over 10 years from April 2013 to March 2023.

13. SUBSEQUENT EVENTSAppropriations of Retained Earnings

The following appropriation of retained earnings as of March 31, 2013, was approved at the Company's shareholders meeting held on June 21, 2013:

¥ 10,835 $ 115,265 Year-end cash dividends, ¥55 ($0.59) per share

Thousands of U.S. DollarsMillions of Yen

¥ 735 32,969 ¥ 33,705

¥ 762 32,980 ¥ 33,742

$ 8,106 350,851 $ 358,957

Due within one yearDue after one year Total

Thousands of U.S. DollarsMillions of Yen

2013 2012 2013

June 21, 2013

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

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, 2013, 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, 2013, 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, 2013, 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, 2013, 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.

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

INDEPENDENT AUDITOR’S REPORT

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, 2012, was as follows:

Since the difference between the normal effective statutory tax rate and the actual effective tax rate was not significant, reconciliations were not presented for the years ended March 31,2013 and 2011.

Following the promulgation on December 2, 2011 of the Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating a Taxation System Responding to Changes in Economic and Social Conditions (Act No. 114 of 2011) and the Act on Special Measures for Securing the Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake (Act No. 117 of 2011), the normal effective statutory tax rate changes from approximately 40.2% to 37.6% effective for the fiscal years beginning on or after April 1, 2012 through March 31, 2015, and to 35.2% afterwards. The effect of this change was to increase income taxes—deferred in the nonconsolidated statement of income for the year ended March 31, 2012, by ¥22,097 million.

10. LEASESAs lessee, the minimum rental commitments under noncancelable operating lease as of March 31, 2013 and 2012, were not presented as the effects were

immaterial.As lessor, the minimum rental commitments under noncancelable operating leases as of March 31, 2013 and 2012, were due as follows:

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

40.2% 9.2 0.2

49.6%

2012

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Appendix 1—Financial and Transportation Data

66 67

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Net IncomeOrdinary IncomeOperating Income0

100

200

300

400

Net IncomeOrdinary IncomeOperating Income

0

800

900

1,000

1,100

1,200

1,300Operating Revenues

0

100

200

300

400

700

800

900

1,000

1,100

0

10

20

0

20

40

60

80

100

120

(billions of yen)

(billions of yen)

Total

Commuter passes

Total

Ordinary tickets

Commuter passes

● Shinkansen

●Conventional Line

80

100

120

140

160

0

10

20

0

100

200

300

400

(million passengers)

(million passengers)

Total

Ordinary tickets

Commuter passes

Total

Commuter passes

Ordinary tickets

● Shinkansen

●Conventional Line

Note: The figures forecasted for FY2014.3 are as of the publishment of the financial report for FY2013.3

Financial Results (Consolidated) Transportation Revenue

Passenger Ridership

Financial Results (Non-Consolidated)

(billions of yen)

(billions of yen)

(billions of yen)

(billions of yen)

Operating Revenues

0

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,384.01,409.4

1,491.2

1,559.4 1,570.2

1,486.6 1,503.0 1,508.31,467.6

402.4

434.4

236.6 276.2

137.1159.7

382.3

218.1

165.2

126.0

347.8344.4

131.0 142.3

213.4

96.072.2

403.7

91.7

293.4228.5

263.8

133.8 132.7

349.3372.5

380.8412.8 362.1

216.7

256.3

200.1

153.9

1,212.31,261.2 1,241.1

1,143.91,127.71,149.2

1,199.6

116.090.6

66.9

117.5 127.9

195.3

383.7330.9327.3

88.4

274.1

325.4345.5

148.3

207.5239.8

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’12.3

’12.3 ’13.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’12.3 ’13.3

’12.3 ’13.3

122.4

1,171.9 1,184.5

1,245.0

130.1 121.4 123.0

399.1

302.4

187.8

1,585.3

’13.3

’14.3forecasted

1,234.0

1,598.0

’14.3forecasted

132

374 374

13 13 14 14 14 1412

131 132138

137

12

124121

239239 242 245 250

135

382 381 389

136 136 139 139 132 132141

13.213.8

967.3

981.31,030.4 1,043.0

1,085.61,064.1

957.6

73.3 71.6

104.2105.7

32.3 32.5

14.4 15.0 15.7

1,015.8 1,027.9

1,069.81,047.8 973.6 999.5

957.3983.0

72.9 70.7 72.8

105.7 103.9 106.6

32.7 33.1 33.7

71.2

105.499.2 98.7

34.1

144 145151

135

252 252 254

391 384 386

149

124

138 141

14

143

130

254

384

1,011.0

994.4

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’12.3

’12.3

’12.3

’12.3

16.2 16.2 16.5 16.6

65.2 64.5

97.0

62.9

33.9 34.1 34.0

1,069.61,053.0

’13.3

’13.3

16.6

99.4

65.3

34.0

328.0

199.9

426.1

’14.3forecasted

’14.3forecasted

403.0

325.0

213.0

347.0

222.0

427.0

120.8

127 129

14

149

133

253

387

’13.3

’13.3

135

Ordinary tickets944.2

Page 36: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

Appendix 1—Financial and Transportation Data

68 69

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Latent Liabilities Born by the Shinkansen Leasing System

Long-Term Debt Corporate Bonds Inherited Liabilities

Long-Term Accounts Payable - Railway Facilities

Average Interest Rate

30,000

35,000

40,000

45,000

0

1,000

2,000

0

2,000

4,000

6,000

8,000

10,000

(million passenger-kilometers)

(million passenger-kilometers)

● Shinkansen

●Conventional Line

Total

Commuter passes

Total

Ordinary tickets

Commuter passes

0

200

400

600

800

1,000

1,200(million kilometers)

Total

Shinkansen

Conventional Line

0

50

100

150

200(thousand passengers per day)

Note: The figures for Tokyo, Shinagawa, Kyoto, and Shin-Osaka Stations indicate Shinkansen passengers only

89

6958 58

35 33 31 3031

Nagoya Tokyo Shin-Osaka Shizuoka Kanayama Hamamatsu Kyoto Shinagawa Gifu Kariya

(billions of yen)

(billions of yen)

0

1,000

2,000

3,000

4,000

5,000

6,000

(%)

4.0

3.0

5.0

6.0

7.0

8.0

Note: The figures estimated for FY2014.3 are as of the publishment of the financial report for FY2013.3

0

300

600

900

1,200

1,500

193

Passenger Kilometers

Rolling Stock Kilometers

Top 10 Stations in terms of Number of Passengers

Total Shareholders’ Equity (Non-Consolidated)

Total Long-Term Debt and Payables (Non-Consolidated)

(Daily average of FY2012)

’07.3 ’09.3’06.3 ’08.3’05.3’04.3’03.3’02.3’01.3’00.3’99.3’98.3’97.3’96.3’95.3’94.3’93.3’92.3’91.3’90.3’89.3’88.3 ’10.3

4,922.2

5,269.3 5,223.0 5,232.7 5,195.6

5,456.2 5,422.3 5,392.0 5,346.3 5,278.55,164.3

5,045.2

4,801.0

4,560.8

4,289.34,125.5

3,943.4

3,665.8

3,455.7 3,415.63,260.1

3,177.63,117.0

’11.3

3,001.5

6.81

5.845.90

6.19

6.396.53

6.086.01

6.35

5.165.08 5.01

4.914.75

4.624.51

4.30

4.083.91

3.71

3.54

3.36

’12.3

2,829.1

3.243.14

5.21

5.43

’13.3

2,614.9

’14.3estimated

2,474.9

’07.3’06.3 ’08.3’05.3’04.3’03.3’02.3’01.3’00.3’99.3’98.3’97.3’96.3’95.3’94.3’93.3’92.3’91.3’90.3’89.3’88.3 ’09.3 ’10.3 ’11.3

953.2

881.9

762.3

182.0217.2

284.0337.2

376.7398.8 413.6 419.3 433.1

455.6477.7 479.0

629.1662.3

690.8

757.3

836.5

975.0

1,056.7

’12.3

1,258.2

’13.3

1,156.1

737

211

782

207

948 989

845 852870

205 206 212

1,050 1,057 1,082

910

217

1,127

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3 ’12.3

929

217

912

216

1,145 1,128

906

217

1,123

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

’07.3 ’09.3 ’10.3’06.3 ’08.3’05.3’04.3 ’11.3

40,340

43,777 44,48746,540

41,556

40,40242,578 43,233

45,229

46,044

44,695

39,244

42,68543,741

41,33042,366

1,155 1,199 1,254 1,311 1,3501,096

1,355 1,375

8,933 9,103 9,0468,9229,2739,272 8,989 9,001

5,476

3,525

’12.3

’12.3

44,303

42,915

1,389

8,952

5,490

3,462

’13.3

913

217

1,129

’13.3

’13.3

46,93045,540

1,391

9,038

5,463

3,575

5,132 5,2115,162 5,279 5,4275,380 5,425

3,7603,800 3,893 3,8913,767 3,846 3,564

1,436.3

589.3

Ordinary tickets

Page 37: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

Appendix 2—Operating Environment

70 71

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

Appendix 3—International Railway Comparison*1

Comparison with Airline Transportation

International Comparison in Fundamentals

● GDP per Capita (2011) (US$) ● Population Density (2011) (per square kilometer)

Source: OECD Source: Statistics Bureau, the Ministry of Internal Affairs and Communications

0

15,000

30,000

45,000

0

100

200

300

400

70% 30%

64% 36%

100%

85% 15%

11% 89%

30,760

34,580

30,081

343

257229

115

32

32,889

42,385

● Services

Between Tokyo and …(Operating distance)

OsakaNagoyaTokyo Hiroshima Fukuoka

Travel Time

Departures / day

*1. Travel times are in case of the fastest service*2. Travel times in parentheses include transfer and access times between city centers and airports*3. Travel time between Tokyo and Shin-Osaka stations*4. Travel time between Tokyo and Hakata stations

Note1: Market share is based on the inter-prefectual data of the inter-Regional Passenger Mobility Survey, published by the Ministry of Land, infrastructure, Transport and Tourism (FY2012), Railway market share of FY2012 is as follows according to our own estimate Tokyo Area~Nagoya Area: 100% Tokyo Area~Osaka Area: 85%Note2: Tokyo Area: Tokyo, Kanagawa, Chiba, Saitama, Ibaraki / Nagoya Area: Aichi, Gifu, Mie / Osaka Area: Osaka, Kyoto, Hyogo, Nara

JR Central JR WestOkayama

*1

Railway Airlines

Osaka (552.6 km)

Hiroshima (894.2 km)

Okayama (732.9 km)

Fukuoka (1,174.9 km)

(As of April 2013)

Tokyo Area–Nagoya Area64 thousand passengers / day

Tokyo Area–Osaka Area121 thousand passengers / day

Tokyo Area–Okayama Prefecture8 thousand passengers / day

Tokyo Area–Hiroshima Prefecture14 thousand passengers / day

Tokyo Area–Fukuoka Prefecture26 thousand passengers / day

2 hr 25 min

1 hr 5 min (About 2 hr 40 min)

250

100

3 hr 12 min

1 hr 10 min (About 3 hr)

128

20

3 hr 47 min

1 hr 15 min (About 3 hr 10 min)

99

32

4 hr 50 min

1 hr 30 min (About 2 hr 40 min)

67

112

Shinkansen

Airlines

Shinkansen

Airlines

*2

*3 *4

Japan U.K. Germany France U.S. Japan U.K. Germany France U.S.

●Market Share (against Airlines)

0

50,000

100,000

150,000

200,000

250,000

0

5,000

10,000

15,000

20,000

0

1,500,000

3,000,000

4,500,000

6,000,000

0

20,000

40,000

60,000

80,000

0

1,500

3,000

4,500

6,000

0

200

400

600

800

0

30,000

60,000

90,000

120,000

150,000

0

10,000

20,000

30,000

40,000

33,714

15,820

33,650

29,903

5,0131,971

*2

*3

7,527

126,960

75,579

50,460

9,435

85,697

52,01151,674

52,259

239,888

37,15319,203

157,488

26,44317,004

*5

*3

6,142 8,739

768

7,852

46,213

28,427

17,64316,217

1,657

16,542

7,742

11,536

2,340

480 580

50550

1,540

6,088,824

1,883,320

27,200

1,078,050

1,776,417

510,803

1,238,760

340

70

250

90110

290

680

71,835

5,850

9,117

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

JR East(Japan)

Amtrak(U.S.)

DB AG(Germany)

ATOC(U.K.)

SNCF(France)

JR West(Japan)

JR Central(Japan)

Source: Statistique Internationale des Chemins de fer 2009 (Union Internationale de Chemins de fer), Financial Report of the JRs, etc.*1. Data of the JRs and ATOC for April 2009 - March 2010 Data of passenger revenue, number of passengers, and passenger-kilometers for Amtrak for October 2008 - September 2009 The others for January 2009 - December 2009*2. Data for Réseau Ferré de France (RFF)

*3. Data for Network Rail Ltd.*4. Total number of employees including staff for freight transport, affiliated businesses, etc. Data of the JRs are as of March 31, 2010 The others are annual means*5. Sum of the data of SNCF and RFF*6. Data of the JRs are converted by the US$ exchange rate as of March 31, 2010 The others are first converted to Japanese Yen, then converted in the same way as mentioned above

Route Length (kilometers) Passenger-Kilometers (million passenger-kilometers)

Number of Employees *4 Average Traffic Density (daily passenger-kilometers / route length)

Passenger Revenues (millions of US$)*6 Passenger Revenues per Route Length (thousands of US$ / route length)*6

Number of Passengers (thousands) Passenger Revenues per Employee (thousands of US$ / employee)*6

Page 38: Annual Report 2013 - Central Japan Railway Companyenglish.jr-central.co.jp/.../ir/annualreport/_pdf/annualreport2013.pdf · ANNUAL REPORT 2013 CENTRAL JAPAN RAILWAY COMPANY Annual

Appendix 4—Financial Comparison of Three JR Companies (FY 2013.3)

72 73

Appendix 5—Stock Information

Corporate DataKey Measures andManagement Strategy

Engagement in GlobalEnvironment Preservation, etc. Corporate Governance Summary of Performance Financial Section Appendices

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

©2013 Central Japan Railway CompanyPrinted in Japan

JR East JR WestJR Central JR East JR WestJR Central JR East JR WestJR Central

JR East JR WestJR Central JR East JR WestJR Central JR East JR WestJR Central

JR East JR WestJR Central JR East JR WestJR Central JR East JR WestJR Central

JR East JR WestJR Central JR East JR WestJR Central JR East JR WestJR Central

0

600

1,200

0

7.5

15.0

0

15

30

0

30,000

60,000

0

150

300

0.0

15.0

30.0

0

30

60

0

4,000

8,000

0

1.0

2.0

0

2.5

5.0

0

20

40

Consolidated Stock Price

Major Shareholders

1,600,000 16,000

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

(yen) (yen)

*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 at the same rate effective July 1 2011 and JR Central also did at the same rate effective October 2012.

● ROE (Return on Equity) (%)

● Interest Coverage Ratio (times)*1

● Operating Income / Operating Revenues (%)

● Total Long-Term Debt and Long-Term Payables /  Operating Revenues (times)

● Net income / Total Assets (%)

● Equity Ratio (%)

● Debt to Equity Ratio (%)

● Shareholders’ Equity per Share (yen)*2

9.0

14.1

8.3

14.9

10.0

1.3

1.7

0.8

26.9

2.5

3.8

4.2

4.8

4.3

28.128.9 28.5

254.8242.7 247.5

5,136

7,690

3,851

36,917

56,187

28,633

57.9

42.947.7

444

1,016

311

27.0

10.3

35.4

● Operating Revenues per Employee (thousands of yen)

● Current Ratio (%)

● Earnings per Share (EPS) (yen)*2

● Dividend Payout Ratio (%)

(As of March 31, 2013)

Mizuho Corporate Bank, Ltd.

Japan Trustee Services Bank, Ltd. (Trust Account)

The Master Trust Bank of Japan, Ltd. (Trust Account)

The Nomura Trust and Banking Co., Ltd. (Holder in Retirement Benefit Trust for The Bank of Tokyo-Mitsubishi UFJ, Ltd.)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

JR Central Employee Shareholding Association

Nippon Life Insurance Company

Toyota Motor Corporation

SSBT OD05 OMNIBUS ACCOUNT-TREATY CLIENTS

Mizuho Bank, Ltd.

9,783,300

8,625,700

8,452,200

7,125,000

6,678,100

5,089,400

5,000,000

4,000,000

3,968,346

3,416,200

62,138,246

4.75%

4.19%

4.10%

3.46%

3.24%

2.47%

2.43%

1.94%

1.93%

1.66%

30.16%

Number of shares heldName

Percentage of total issued shares

Total

Note: Besides the above, JR Central holds 8,999,000 treasury stocks.

0

2.0

4.0

2.3 Note: On October 1, 2012, the Company implemented a hundred-for-one stock 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 December 2012.

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

Jan.2009

Nov.2008

Sep.2008

Jul.2008

May2008

Mar.2008

Jan.2008

Nov.2007

Sep.2007

Jul.2007

May2007

Mar.2007

Jan.2007

Nov.2006

Sep.2006

Jul.2006

May2006

Mar.2006

Jan.2006