JR East Group Management Vision “Move Up” 2027 Investor Meeting July 4, 2018 Table of Contents

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JR East Group Management Vision “Move Up” 2027 Investor Meeting July 4, 2018 Table of Contents JR East Group Management Vision “Move Up” 2027 Investor Meeting July 4, 2018 Table of Contents 1. Changes in the business environment P3 2. JR East Group’s strengths P5 3. Basic Policies of “Move Up” 2027 P6 4. “Move Up” 2027 (1) Overview P8 (2) Making cities more comfortable P12 (3) Making regional areas more affluent P21 (4) Developing businesses for the world P23 (5) Numerical targets (FY2023), etc. P24 Environmental Group “Move Up” 2027 “Move Up” 2027 1. Changes in the business environment: Decreasing population change strengths Basic Policies Overview Urban cities Regional areas World Targets ■ After 2025, the population in Tokyo metropolitan area (Tokyo, Saitama, Chiba, Kanagawa) is expected to decrease gradually. ■ In Tohoku region (Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima), the population is expected to decrease by nearly 30% by 2040. (Population in 2015 = 100) 100% Tokyo metropolitan area 90% JR East service area National 80% By 2040 Tohoku region 70% 2015 2020 2025 2030 2035 2040 (Year) Decrease by nearly 30% Source: IPSS (National Institute of Population and Social Security Research) Population Projections by Prefecture (2018) 3 Environmental Group “Move Up” 2027 “Move Up” 2027 1. Changes in the business environment: Decreasing need for railway transportation change strengths Basic Policies Overview Urban cities Regional areas World Targets ■ After 2020, due to decreasing population, changes in the working style, development of internet society and practical application of autonomous driving technologies, the need for railway transportation is expected to decline. Since our railway business has large xed costs, we face a high risk of a drastic prot loss. Transition of passenger-km (East Japan area) (100 mil. passenger-km) Tokyo 2020 Olympic and 1,500 Paralympic Games Decreasing population ▲4% ▲9% Non-commuter passes ▲( 4 + α )% 1,000 ▲( 9 + α )% Changes in the working styles Development of internet society Decreasing Practical application of population, etc. Commuter passes autonomous driving technologies 500 0 1987 1990 1995 2000 2005 2010 2016 2020 2025 2030 2040(FY) Based on the 5th Tokyo metropolitan area person trip survey (Tokyo Toshiken Kotsu Keikaku Kyogikai, 2008), the no. of passenger-km is calculated by multiplying the expected population in 2030 and 2040 by the no. of trips/person by age group. 4 Environmental Group “Move Up” 2027 “Move Up” 2027 2. JR East Group’s strengths change strengths Basic Policies Overview Urban cities Regional areas World Targets ■ While utilizing JR East Group’s strengths, we will continue to create new values through technological innovation and data integration for transportation, shopping and payment. Business design Open innovation by utilizing knowledge and ideas from external sources IT & Suica Lifestyle services Transportation services services Strengthening EC and increasing payment volumes Transportation services Creating new values through Lifestyle technological innovation and Increasing added value and services data integration for transportation, expanding business areas shopping and payment Undertaking qualitative reform IT & Suica and fully exerting our strengths services Trust of our customers and people in communities (= JR East Group’s foundation) JR East Group’s services 5 Environmental Group “Move Up” 2027 “Move Up” 2027 3. Basic Policies of “Move Up” 2027 ① change strengths Basic Policies Overview Urban cities Regional areas World Targets ■ Stories to create values: From the provision of services with railway infrastructure as our basis to the introduction of new values to society, focusing on the afuence of everyone in their daily lives. 30 years since the 10 years from now company’s establishment Base Railway infrastructure, Base point technologies and knowledge point Affluent lives for all people Shifting Creating new services by introducing Upgrading of services through technologies and knowledge from outside the the evolution of railways company, by utilizing a multilayered “real” network and stations as hubs for interaction Rehabilitation and Offering new values to society revitalization of railways by staying ahead of changes in the business environment ①Drastic changes and diversication in social structures due to the decreasing birth ③Changes in our living environment due to technological innovations such rate and population and aging of the population as AI and IoT ②Changes and diversication in values related to what it means to work and be afuent ④Acceptance of new values through globalization of economy and society 6 Environmental Group “Move Up” 2027 “Move Up” 2027 3. Basic Policies of “Move Up” 2027 ② change strengths Basic Policies Overview Urban cities Regional areas World Targets ■ There is an urgent need to qualitatively reform, revolutionize and develop transportation services mainly by railways. ■ Further allocate management resources to lifestyle services and IT & Suica businesses, developing them as our new growth engine. Consolidated operating revenues (Transportation:non-transportation) (6:4) Increasing earning power by expanding businesses in the lifestyle Approx. 2.95 tril. yen services, IT & Suica services (7:3) Lifestyle services, IT & Suica Accelerating growth Lifestyle of the lifestyle services, services, IT & Suica Approx. 2.0 tril. yen IT & Suica businesses (9:1) Non-Transportation Concentrating business resources on Investment in the evolution of major businesses with the potential to grow railways (Creating new business (Lifestyle services, IT & Suica) opportunities for Ekinaka, Suica, etc.) Transportation Transportation Transportation services services business Making sales and Technological Strengthening transportation service innovation creating profit mainly through businesses by revolutionizing and New技 術 measures Improving 革 新 the railway business productivity developing the railway business The company’s 30 years since the → FY2018 → 10 years from now Around 2027 establishment company’s establishment 7 Environmental Group “Move Up” 2027 “Move Up” 2027 4. (1) Overview of “Move Up” 2027 change strengths Basic Policies Overview Urban cities Regional areas World Targets ■ With people (“everyone”) as our base point, and with “Safety,” “People's daily lives,” and “Happiness of our employees and their families” as keywords, we will continue to create values of “Trust” and “Afuence” in cities, regional areas, and around the world. Major efforts for the realization of the JR East Group Philosophy Values Base point Focus points Making cities more Making regional Developing businesses to be created comfortable areas more affluent for the world Revolutionizing transportation services Realizing seamless mobility Promoting tourism Establishing business Commercialization of new services Revitalization of regional industries models for overseas businesses Domestic People’s based on data analysis, etc. and overseas “Affluence” customers daily lives Making Suica a shared infrastructure Offering new lifestyles and creating cities Advancement of our work “Everyone” Happiness of our employees Expanding the range of fields for career development and their families Employees Exercising creativity closer to our customers and their families Preventing global warming and diversifying energy sources “Trust” Safety Contribution to regional society Transfer of technologies and know-how People in ESG communities Service quality reform management Pursuing ultimate safety levels Management of business risk and thorough compliance ESG stands for Environment, Social and Governance, important elements for the sustainable growth of a company. 8 Environmental Group “Move Up” 2027 “Move Up” 2027 4. (1)【Focus point】 Safety change strengths Basic Policies Overview Urban cities Regional areas World Targets ■ Safety is the top priority of JR East Group’s management. This awareness needs to be shared thoroughly with all of our employees. We take concrete measures to further improve our ultimate safety levels through the concerted efforts of all group companies. Completely eliminating accidents due to internal causes ● Proper maintenance, ● Strengthening practical safety education and Tangible management, strategic renewal Intangible training measure and strengthening of facilities measure ● Not only learning from failures, but also and rolling stock recognizing things that go well ● Understanding the true nature of Advancing safety capabilities of Evolution of ● Efforts to further advance our safety culture each task, voluntarily and thoroughly ● Efforts to detect new risks and advance searching for potential risks, and each one of our employees safety management rules and systems promptly responding to them ● Training personnel to respond to environmental change Strategic and positive maintenance of safety equipment ● Properly responding to new risks by Realization of safer station actively utilizing new technologies Reducing risk of disasters platforms and level crossings and terrorist incidents Improving safety levels at station platforms ● Accelerating plans for further seismic reinforcement against large-scale earthquakes ● By the end of FY2033, the introduction of platform doors ● Improving prediction accuracy for abnormal weather and serious disasters at all stations (330 stations) for major conventional lines (wind gusts, heavy rain, etc.) in Tokyo metropolitan area ● Strengthening security against new threats such as terrorism, etc. ● Development of high-precision Image Processing Type Fallen Passenger Detecting System Improving safety levels
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