2007 Annual Report [PDF/2.45MB]

Tokyo and Eastern Honshu... Annual Report 2007 At the Heart of Our Operations JR Hokkaido Operating Area (As of June 30, 2007) Providing JR East Safe and Reliable Transportation JR Central JR West JR Shikoku JR Kyushu Enhancing Customer Satisfaction Progressing to the Next Stage Omiya Akabane Ikebukuro Nishi-Funabashi Tachikawa Ueno Narita Airport Shinjuku Tokyo Hachioji JR East Railway Network Shinagawa Chiba around Tokyo Kawasaki Yokohama Ofuna Passenger Line Network Railway Line Networks (Kilometers) Contents Our JR East has a passenger line network covering JR East 7,527 U.K. 16,116 Story 7,526.8km, accounting for 27% Germany 34,715 Page France 29,080 5 6 A Message from the Management of Japan’s railway network. Mutsutake Otsuka Italy 15,916 Strategy Satoshi Seino U.S. 35,817 Strategy 8 An Interview with the President 09,000 18,000 27,000 36,000 45,000 14 New Frontier 2008 Transportation Volume Population Density (Per Square Kilometer) JR East accounts for nearly half of the Tokyo Area 2,591 Other 255 Transportation railway transportation volume National Average 338 18 Shinkansen Network 20 Tokyo Metropolitan Area Network 0 500 1,000 1,500 2,000 2,500 3,000 Page16 in the vibrant Tokyo metropolitan area. 22 Intercity and Regional Networks 23 Travel Agency Services Review of Operations Non-Transportation 24 Station Space Utilization 26 Shopping Centers & Office Buildings Review of Operations 28 Other Services “We are dedicated to ensuring our customers’ 30 Suica, the Next Step safety, and our overriding commitment to this objective will never change.” Page31 32 Safety 34 Corporate Social Responsibility Management Systems 36 Corporate Governance 39 Organization 40 Board of Directors and Corporate Auditors Number of Passengers (Millions) Number of Passengers Management Systems JR East serves 16 million passengers JR East 5,862 U.K. 1,038 daily and is the largest passenger railway com- Germany 1,691 42 Eleven-Year Summary France 931 44 Management’s Discussion and Analysis of pany in the world. Financial Condition and Results of Operations Italy 504 Page41 49 Operational and Other Risk Information U.S. 25 58 Consolidated Balance Sheets 02,1,200400 3,600 4,800 6,000 7,200 Financial Section 60 Consolidated Statements of Income 61 Consolidated Statements of Shareholders’ Equity/ Trends in Railway Accidents (Number of Accidents) Consolidated Statements of Changes in Net Assets Pursuit of “Extreme Safety” Financial Section 62 Consolidated Statements of Cash Flows In fiscal 2007, the average schedule delay for all 400 63 Notes to Consolidated Financial Statements 76 Independent Auditors’ Report JR East trains was approximately one minute. 300 200 100 Page77 78 A Brief History of JR East 82 JR East: Domestic and International Perspectives 0 FY’88’89’90’91’92’93’94’95’96’97’98’99’00’01’02’03’04’05’06’07 Corporate Information 95 Consolidated Subsidiaries and Equity Method Affiliated Companies Damage to Railway Facilities Fatalities or Injuries 97 Stock Information Accidents at Railway Crossings Train Collisions 98 Corporate Data/For Inquiries 99 Glossary Corporate Information 12 Synergies Sustained Growth As it develops new businesses while aiming to create opera- As a trusted Life-Style Service Creating Group, JR East will tions that create synergies with railway operations and maxi- aim to sustain the development of its business operations mize the returns on Group management assets, JR East is while emphasizing its responsibilities to stakeholders and building a business base and systems designed to strengthen society at large along with its responsibility to generate prof- its competitiveness and make it the overwhelming choice of its for shareholders. all types of customers. Making the Most of Real Estate Assets Technology Development JR East’s synergistic non-transportation operations are per- JR East will tirelessly research, develop, and introduce lead- forming well, as measured by sales and income growth. ing-edge technologies that create new customer value, These activities include 123 shopping centers, based on the following five key initiatives: “Safety and 18 office buildings, and 39 hotels. Reliability,” “Convenience and Comfort,” “Cost Reduction,” “Global Environment,” and “Revamping of Stations.” Suica Suica can be used instead of tickets at approximately 2,100 stations and as electronic money at approxi- Corporate Social Responsibility mately . The number 20,000 shops and stores Highly conscious of our great responsibility as the stewards of subscribers to Suica has surpassed 21 million of a critical component of social infrastructure, we will and is continuing grow. redouble efforts focused on stringent management compli- ance and measures that address global environmental issues. “The success of each and every one of our services is measured in terms of our customers’ contentment.” “JR East’s emphasis on reforms and innovation was a key factor propelling its first 20 years of dynamic corporate development, and this emphasis will present many opportunities during the next stage of its evolution.” Synergies Sustained Growth As it develops new businesses while aiming to create opera- As a trusted Life-Style Service Creating Group, JR East will tions that create synergies with railway operations and maxi- aim to sustain the development of its business operations mize the returns on Group management assets, JR East is while emphasizing its responsibilities to stakeholders and building a business base and systems designed to strengthen society at large along with its responsibility to generate prof- its competitiveness and make it the overwhelming choice of its for shareholders. all types of customers. Making the Most of Real Estate Assets Technology Development JR East’s synergistic non-transportation operations are per- JR East will tirelessly research, develop, and introduce lead- forming well, as measured by sales and income growth. ing-edge technologies that create new customer value, These activities include 123 shopping centers, based on the following five key initiatives: “Safety and 18 office buildings, and 39 hotels. Reliability,” “Convenience and Comfort,” “Cost Reduction,” “Global Environment,” and “Revamping of Stations.” Suica Suica can be used instead of tickets at approximately 2,100 stations and as electronic money at approxi- Corporate Social Responsibility mately . The number 20,000 shops and stores Highly conscious of our great responsibility as the stewards of subscribers to Suica has surpassed 21 million of a critical component of social infrastructure, we will and is continuing grow. redouble efforts focused on stringent management compli- ance and measures that address global environmental issues. “The success of each and every one of our services is measured in terms of our customers’ contentment.” “JR East’s emphasis on reforms and innovation was a key factor propelling its first 20 years of dynamic corporate development, and this emphasis will present many opportunities during the next stage of its evolution.” Contents Our Story Page5 6 A Message from the Management Mutsutake Otsuka Strategy Satoshi Seino Strategy 8 An Interview with the President 14 New Frontier 2008 Transportation 18 Shinkansen Network Page16 20 Tokyo Metropolitan Area Network 22 Intercity and Regional Networks 23 Travel Agency Services Review of Operations Non-Transportation 24 Station Space Utilization 26 Shopping Centers & Office Buildings Review of Operations 28 Other Services 30 Suica, the Next Step Page31 32 Safety 34 Corporate Social Responsibility Management Systems 36 Corporate Governance 39 Organization 40 Board of Directors and Corporate Auditors Management Systems 42 Eleven-Year Summary 44 Management’s Discussion and Analysis of Financial Condition and Results of Operations Page41 49 Operational and Other Risk Information 58 Consolidated Balance Sheets Financial Section 60 Consolidated Statements of Income 61 Consolidated Statements of Shareholders’ Equity/ Consolidated Statements of Changes in Net Assets Financial Section 62 Consolidated Statements of Cash Flows 63 Notes to Consolidated Financial Statements 76 Independent Auditors’ Report Page77 78 A Brief History of JR East 82 JR East: Domestic and International Perspectives 95 Consolidated Subsidiaries and Equity Method Affiliated Companies Corporate Information 97 Stock Information 98 Corporate Data/For Inquiries 99 Glossary Corporate Information 2 Three Benchmarks of Our Medium-Term Management Plan: New Frontier 2008 Cash Flows from Operating Activities Ratio of Total Long-Term Debt to Ratio of Operating Income to (Billions of yen) Shareholders’ Equity (Times) Average Assets (ROA) (%) FY ’06 447.7 FY ’06 2.7 FY ’06 5.9 ’07 541.9 ’07 2.4 ’07 6.2 ’06~’07 989.6 2,000 ’06~’09 ’09 2.0 (approximately) ’09 6.0 (Target) (Target) (Target) 0 500 1,000 1,500 2,000 0124 3 0125 3476 Consolidated Operating Revenues (For fiscal 2007) Consolidated Operating Income (For fiscal 2007) Transportation 69% Transportation 74% Station Space Utilization 15% Station Space Utilization 8% Shopping Centers & Office Buildings 7% Shopping Centers & Office Buildings 14% Other Services 9% Other Services 4% JR East will maintain high ethical standards and management transparency while earnestly taking progressive measures in response to major issues facing society as a whole. Through those efforts, JR East intends to continue fulfilling the expectations of society and the trust of shareholders and other stakeholders. In particular, JR East will redouble efforts focused on stringent

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