JR East Group INTEGRATED REPORT 2020 JR East Group INTEGRATED JR East Group Report 2020 Published August 2020 East Japan Railway Company 2-2, Yoyogi 2-chome, Shibuya-ku, Tokyo 151-8578, Japan https://www.jreast.co.jp/e/ Overseas Offces East Japan Railway Company New York Office Empire State Building, Suite 4220, 350 Fifth Avenue, New York, NY 10118, U.S.A. Phone, Facsimile: +1 (212) 332-8686 East Japan Railway Company Paris Office 3, rue de Faubourg St. Honoré, 75008 Paris, France Phone: +33 (1) 45-22-60-48 Facsimile: +33 (1) 43-87-82-87 East Japan Railway Company London Office 4th Floor, 30-31 Furnival Street, London EC4A 1JQ, United Kingdom Phone: +44 (0) 20-7786-9900 East Japan Railway Company JR East Group Report Singapore Office 20 Anson Road, #11-01, Twenty Anson, Singapore 079912 Phone: +65-6536-1357 INTEGRATED REPORT Facsimile: +65-6536-1297 2020 BASIC INFORMATION Value Creation by the JR East Group The JR East Group’s Strengths Our strengths lie in a multilayered “real” network, which supports social infrastructure, and in our stations (mainly in the Tokyo metropolitan area), which act as hubs for interaction and the exchange and gathering of people, products, money, and information. By leveraging these unique strengths, we will continue to create new value through technological innovation and the integration of data for transportation, shopping, and payment. Hokkaido Ominato Aomori Shinkansen Mimmaya Noheji Shin-Aomori Hachinohe Kuji Transportation Services Life-style Services IT & Suica Services Koma Oga Akita Morioka Miyako We provide the safe and high-quality services our customers We create appealing lifestyle services that Suica serves as the standard for combining physical require and contribute to community development. add color to our customers’ lives. and digital networks, providing new value to customers. Akita Kamaishi Shinkansen Sakari Transportation Services, by the Numbers Life-style Services, by the Numbers IT & Suica Services, by the Numbers Tohoku Shinkansen Fiscal 2019 conventional revenues Number of Stations JR East’s shopping centers Suica cards issued Shinjo from passenger tickets Aterazawa Onagawa Yamagata 1,676 169 82.73 million Aobadori Sendai Niigata billion yen Yamagata 1,79 2.8 * Including BRT stations Shinkansen Yahiko Fukushima Office buildings–Leased floor space Mobile Suica Members Number of Passengers Passenger Line Network Served Daily 2 Hokuriku 420,000 m 9.34 million people Shikansen Naoetsu About Joetsu kilometers Joetsumyoko 7,401.7 Shinkansen Hotels–Total guest rooms JRE POINT Members Minami-Otari Nikko Karasuyama Nagano Omae 18 million Shinkansen Hitachi-Ota Komoro million people Takasaki Mito 7,974 12.05 Yokokawa Number of Rolling Stock Shiojiri Kashima-Soccer Stadium 1,194.2 kilometers Tatsuno Oku-Tama Omiya Kashimajingu Public transportation electronic money, Musashi-Itsukaichi record daily transactions Choshi Kofu 12,846 Conventional lines Hachioji Narita Airport Kozu million (Highest ever) Chiba 9.58 Kurihama kilometers Atami 6,207.5 (as of December 20, 2019) Ito Tokyo * Including BRT sections Kazusa-Kameyama Yokohama Public transportation electronic money, compatible stores Tokyo branch office Akita branch office Yokohama branch office Niigata branch office Hachioji branch office Nagano branch office 940,290 Omiya branch office Shinkansen lines Takasaki branch office Conventional lines converted Mito branch office for through Shinkansen service Chiba branch office Conventional lines Sendai branch office BRT Morioka branch office Lines of other JR companies JR East Group | INTEGRATED REPORT 2020 01 BASIC INFORMATION Value Creation by the JR East Group Performance Highlights Financial Highlights (Consolidated) Operating Revenues Operating Income / Profit Attributable to Owners of Parent Cash Dividends / Share Buybacks / Total Return Ratio / Dividend Payout Ratio EBITDA / Net Interest-bearing Debt / EBITDA (billions of yen) (billions of yen) (billions of yen) % (billions of yen) (times) 487.8 4,000 500 100 50 1,000 10.0 847.3 380.8 31.4 755.6 2,867.2 2,946.6 400 80 40 800 8.0 3,000 33.0 31.4 300 60 30.0 30 600 6.0 2,000 20.8 62.3 4.2 245.3 3.5 200 40 20 400 4.0 198.4 51.0 1,000 100 20 10 200 2.0 0 2016* 2017 2018 2019 2020 (FY) 0 2016* 2017 2018 2019 2020 (FY) 0 2016 2017 2018 2019 2020 (FY) 0 0 2016 2017 2018 2019 2020 (FY) 0 Transportation Retail & Services Real Estate & Hotels Others Transportation Retail & Services Real Estate & Hotels Others Cash dividends (left) Share buybacks (left) EBITDA (left) Net interest-bearing debt / EBITDA (right) * Information shown for FY2016 corresponds to former segments. Profit attributable to owners of parent Dividend payout ratio (right) Total return ratio (right) Cash Flows from Operating Activities Capital Expenditures ROA Interest Coverage Ratio / D/E Ratio (billions of yen) (billions of yen) (%) (times) (times) 800 800 740.6 10.0 15.0 2.5 673.1 548.7 541.9 8.0 12.0 2.0 600 600 6.3 8.8 9.0 6.0 9.0 1.5 4.5 1.1 400 400 1.3 4.0 6.0 1.0 200 200 2.0 3.0 0.5 0 2016 2017 2018 2019 2020 (FY) 0 2016 2017 2018 2019 2020 (FY) 0 2016 2017 2018 2019 2020 (FY) 0 2016 2017 2018 2019 2020 0 Interest coverage ratio (left) D/E ratio (right) Non-Financial Highlights Number of Employees (Consolidated / Non-Consolidated) Number of Female Managers (Non-Consolidated) CO2 Emissions (Non-Consolidated) Energy Consumption (Non-Consolidated) (million t-CO2) (billion MJ) 80,000 73,329 71,812 800 3 60 51.7 626 48.0 2.15 60,000 600 1.99 49,558 44,830 2 40 40,000 400 1 20 20,000 200 137 0 2014 2015 2016 2017 2018 2019 0 2004 2016 2017 2018 2019 2020 0 2013 2016 2017 2018 2019 (FY) 0 2013 2016 2017 2018 2019 (FY) (Beginning of the fiscal year) (Beginning of the fiscal year) (Base year) (Base year) Consolidated Non-Consolidated (Excluding those seconded to other companies and including those seconded from other companies) 02 JR East Group | INTEGRATED REPORT 2020 JR East Group | INTEGRATED REPORT 2020 03 JR East Group Philosophy CONTENTS We will earn the trust of our customers as a whole group by aiming for ultimate safety Basic Information levels as our top priority. We will strengthen our network capabilities focusing on technol- 01 The JR East Group’s Strengths ogies and information, and we are committed to helping our customers and people in Editorial Policy for This Publication 02 Performance Highlights communities to realize affluent lives. The JR East Group Report for 2020 is our first integrated report. In the past, we have separately published an annual report targeting investors and a sustainability report that introduced our activities related to safety, society, the environment, and governance. We have produced the current report to foster communication with diverse stakeholders by enhancing under- Value Creation by standing of the Group’s medium- to long-term value creation and providing a single, easy-to-understand introduction to sustainability initiatives in the JR East Group our business activities. This document functions as our “safety report” of official announcements based on the Railway Business Act. 06 A Message from the President The JR East Group practices ESG management. Through our efforts Basic Principles to resolve social issues through our businesses, we concentrate on 12 JR East Group Management Vision contributing to the development of local communities and achieving the Pursuing safety SDGs. This report focuses on communicating in an easy-to-understand “Move Up” 2027 manner our creation of value under “Move Up 2027,” our Group manage- 17 Progress Report By pursuing ultimate safety levels, we will offer a peace of mind ment vision, as well as the future once these objectives have been achieved and our state of progress along this path. The report also describes our to our customers. business strategies and contains financial information and non-financial information, such as on ESG-related initiatives. Most of the information in this report pertains to fiscal 2020. By using this report as a medium for Sustainability Initiatives Customer-oriented dialogue that enhances communication with stakeholders, we aim to prove worthy of the trust they have placed in the JR East Group. Activity Highlights We will offer quality services to rise to the expectations Going forward, we hope to continue fostering a deeper understanding 24 of the Group’s business operations. We welcome your frank input. of our customers. 32 Safety Atsuko Ito 48 Society Executive Officer and General Manager of Management Close to regional society Planning Department, Corporate Planning Headquarters 76 Environment East Japan Railway Company By utilizing our network capabilities, we will contribute to the development of regional society. References Corporate Governance International Integrated Reporting Framework of the International Autonomous and self-standing Integrated Reporting Council (IIRC) 88 Directors and Auditors Guidance for Collaborative Value Creation, Ministry of Economy, With a broad perspective and willingness to confront challenges, Trade and Industry 90 Message from an Outside Director Environmental Reporting Guidelines 2018 we will think and act on our own initiative. [Japan Ministry of the Environment] 92 Corporate Governance Reporting period JR East Group’s development This report basically covers our activities from April 1, 2019 to March 31, 2020, although some events presented here happened earlier or in the Data Section By fulfilling our social responsibility, we will aim to achieve sustainable growth period between the end of March 2020 and the publication of this report in August 2020. by JR East Group. 98 Review of Operations Boundary of reporting East Japan Railway Company 100 Financial Statements JR East Group (consolidated subsidiaries (71 companies)) 105 Organization Economic reporting: JR East, consolidated subsidiaries, and equity-method affiliates (six companies) 106 Corporate Data Environment report: JR East, consolidated Japanese subsidiaries Social report: JR East, consolidated subsidiaries 107 Stock Information Figures in this report Totals may not match the sum of individual figures due to rounding.