Annual Report2017
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CENTRAL JAPAN RAILWAY COMPANY RAILWAY CENTRAL JAPAN CENTRAL JAPAN RAILWAY ANNUAL REPORT 2017 ANNUAL REPORT COMPANY Annual Report 2017 For the Year Ended March 31, 2017 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2017 Management Philosophy Contribute to the development of Japan’s main artery and social infrastructure Central Japan Railway Company (JR Central) marked the 30th anniversary of its founding on April 1, 2017. JR Central took this opportunity to revise its management philosophy with a view to continue carrying out its mission and responding to new challenges, such as operating “three generations of railways” , which are conventional lines, the Tokaido Shinkansen, and the Chuo Shinkansen. Japan’s Main Artery Social Infrastructure JR Central’s mission is to undertake high-speed, large- On a broader perspective, JR Central also undertakes capacity passenger transport between Tokyo, Nagoya, the mission of supporting the social infrastructure. and Osaka. “Japan’s main artery” refers to this passenger That is, along with the management of Japan’s transport. Since the artery runs through this area of main artery, we take a locally oriented approach Japan, which plays an important role as the center of in operating a network of conventional lines in the the country’s economy and culture, it is possible that Tokai Region, centered on the Nagoya and Shizuoka stagnancy in the main transportation artery will cause areas, and manage affiliated business focused on the Japan’s economic and societal movements in general to local communities, thereby supporting the people in also stagnate. JR Central must continue to carry out its these areas. We will remain committed to operating mission of managing Japan’s main transportation artery conventional lines while managing and further today and in the future through operation of the Tokaido enhancing affiliated businesses. Shinkansen and the Chuo Shinkansen. 2 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2017 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2017 1 CENTRAL JAPAN RAILWAY COMPANY Contents Operating Revenues Annual Report 2017 CENTRAL JAPAN Messages from Key Measures and Operating Revenues Composition RAILWAY COMPANY Management Management Strategies The transportation business accounts for approximately 80% of consolidated operating revenues and 1 Management Philosophy 8 Greetings 14 Key Measures and Capital Investment earnings from the Tokaido Shinkansen account for roughly 90% of non-consolidated operating revenues. 2 Contents 10 Interview with the President 18 Ensuring Safe and Reliable Transportation 3 Operating Revenues 12 Topics 1 Long-Term Loan Using the 22 Enhancing Transportation Services Transportation Tokaido Shinkansen 4 Market Area Characteristics and Fiscal Investment and Loan Transportation Capacity Program (FILP) 26 Promoting the Chuo Shinkansen 1,368.6 1,211.9 Project Using the Superconducting billion yen billion yen 6 Enhancing Our Competitive 13 Topics 2 Maglev System Strength Outlook on Key Measures 28 Refining the Superconducting Maglev Technology and Reducing Costs 78% 88 % Other Other 30 Enhancing Sales and Marketing 119.9billion yen 64.8billion yen 32 Technological Development and 7% 5% Enhancement of Technical Capability Real Estate Conventional Lines 33 Overseas Deployment of High- 41.2billion yen 103.9billion yen Speed Railway Systems Consolidated Non-consolidated 8% 2% 34 Developing Affiliated Businesses Merchandise and Other 1,756.9 1,380.7 227.2billion yen billion yen billion yen 13% FY2016 FY2016 Corporate Data and ESG* Information Appendices Financial Section Note 1: Consolidated operating revenues 36 Engagement in Global 51 Profile / Organization Chart 90 Financial and Transportation composition is based on revenues from external customers Environment Preservation Data Note 2: The total of items in the breakdown 52 Operating Area may not be 100% due to rounding. 40 Human Resources Development 92 Financial Data Comparison 53 History of Three JR Companies 42 Cooperation with Local (Consolidated) Communities / International 54 Summary of Performance Exchanges / Promotion of 93 Stock Information Culture & Art and Lifelong 56 Financial Highlights (Consolidated / Learning Non-consolidated) 44 Corporate Governance 57 Other Related Materials 50 Board of Directors, Audit and 58 Financial Section Supervisory Board Members, and Corporate Officers * Environmental, Social, and Governance. [Remarks regarding forecasts, etc.] Companies appropriately considering/responding to ESG Future plans, forecast figures, etc. in this report are an outlook based on the information that is currently available issues and the existence of shareholders who make for JR Central and may contain risks and uncertainty. Examples of potential risks and uncertainty include investments in response to such efforts by the companies economic trends, business environment developments, consumption trends, competition situation for JR Central are thought to lead to the solution/improvement of global and subsidiaries, and changes in relevant laws and legal provisions. This report is compiled based on information environmental issues and social issues and even to the available as of the end of May 2017 in principle. sound development/expansion of capital markets, thus •In this report, figures of financial information are truncated, while statistical data and all percentages are rounded. contributing to the establishment of a sustainable society. •FY2016 signifies the fiscal year ended March 31, 2017. Source: Japan Exchange Group, Inc. 2 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2017 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2017 3 Market Area Characteristics and CENTRAL JAPAN RAILWAY COMPANY Transportation Capacity Annual Report 2017 Japan’s population and economic activity are Representing a powerful presence in the inter-city concentrated in the area covering the Tokyo Metropolitan area, the Nagoya region, and the transportation market, one that is unrivaled all over the world. Osaka region Percentages of our market area in Japan as a whole JR Central’s Market Area Others Tokaido Shinkansen 23.7% Area [As of October 2016] An overwhelming capacity for transporting 60.3% passengers along its main route, from Tokyo to Population Osaka [As of January 1, 2016] Changes in daily transportation capacity (comparison 64.6% between the Tokaido Shinkansen and airline transportation Prefectural GDP Nagoya Tokyo Hiroshima Okayama services operating between the Tokyo Metropolitan area (Nominal GDP) Osaka [FY2014] and the Osaka region) Fukuoka 0 50 100 (%) Tokaido Shinkansen Airlines (Ten Thousand seats/day) [Source] 40 JR Central’s market area is calculated taking the following prefectures into Approximately account Tokyo, Kanagawa, Chiba, Saitama, Ibaraki, Shizuoka, Yamanashi, Nagano, *1 Aichi, Mie, Gifu, Shiga, Osaka, Kyoto, Hyogo, Nara Operating area seats 360,000 Population: Ministry of Internal Affairs and Communications “Population, Demographics and Number of Households Derived from Basic Resident Registration” Total production by prefecture: Cabinet Office “Report on Prefectural Accounts” 30 JR Central boasts an overwhelming market share within its operating areas About An inter-city transportation capacity that is unrivaled all over the world 12times that of airlines Market Share*1 (against Airlines) Railway Airlines (Example) Comparison with overseas transportation services JR Central JR West Shinkansen 20 (Thousand passengers/day) Operating (Reference*3) Tokyo Nagoya Osaka Okayama Hiroshima Hakata 100% Kilometers Tokaido Tokyo area*2 - 452 Nagoya area*2 New York ~ Shinkansen (76 thousand passengers/day) Tokyo ~ Nagoya Washington D.C. [Tokyo ~ Shin-Osaka] (LGA-IAD) 86% 14% 366.0km 369km Eurostar *1 Tokyo area - [London ~ 27 *2 Osaka area Los Angeles ~ San 10 Paris/Brussels] Tokyo ~ Shin-Osaka (142 thousand passengers/day) Francisco (LAX-SFO) Acela Express *2 69% 31% 552.6km 542km [Boston ~ 10 Tokyo area - Okayama Washington D.C.] (9 thousand passengers/day) New York ~ Chicago Tokyo ~ Hakata 70% 30% (LGA-ORD) (Reference) Tokyo area - Hiroshima *3 (15 thousand passengers/day) Approximately Airlines 1,174.9km 1,180km *2 11 % 90% 30,000seats [New York ~ Chicago] 10 0 Tokyo area - Fukuoka ’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ‘15.3 ’16.3 ’17.3 (29 thousand passengers/day) [Source] *1 Tokaido Shinkansen: The number of passenger seating provided (including extra *1 Calculated by JR Central based on figures provided on the Eurotunnel train services) on through-service “Nozomi” and “Hikari” lines operating between website (2016.1-2016.12) *1 Market share is calculated by JR Central based on the Inter-prefectural data of the inter-Regional Passenger Mobility Survey, Tokyo Station and Shin-Osaka Station in each respective fiscal year. *2 Calculated by JR Central based on figures provided by the National Fact published by the Ministry of Land, infrastructure, Transport and Tourism for FY2015. *2 Airlines: Calculated by JR Central based on information pertaining to specified Sheet: FY2016 (Amtrak) *2 Tokyo area: Tokyo, Kanagawa, Chiba, Saitama, Ibaraki / Nagoya area: Aichi, gifu, Mie / Osaka area: Osaka, Kyoto, Hyogo, Nara Japanese air carriers (Ministry of Land, Infrastructure, Transport and Tourism) for *3 Calculated by JR Central based on figures provided on the U.S. *3 Based on the U.S. Department of Transportation website FY2006 to FY2016. Department of Transportation website (2014.12-2015.11) 4 CENTRAL JAPAN RAILWAY COMPANY Annual Report 2017 CENTRAL JAPAN RAILWAY COMPANY Annual Report