FY2013.3 Financial Results Presentation May 1, 2013 East Japan Railway Company Contents I. JR East Group Management Vision Ⅴ - Ever Onward - Current Situation and Foresight JR East Group Management Vision Ⅴ 4 Transportation - Results and Plan 21 “Eternal Mission” 5 Station Space Utilization - Results and Plan 22 “Pursuing Unlimited Potential” 8 Shopping Centers & Office Buildings - Results and Plan 23 Numerical Targets for FY2016.3 10 Others - Results and Plan 24 Summary of Non-operating Income / Expenses and Uses of Consolidated Cash Flows 11 25 Extraordinary Gains / Losses (consolidated) FY2016.3 Numerical Targets by Segment 12 Summary of Cash Flows (consolidated) 26 Change in Capital Expenditures(consolidated) 27 II. FY2013.3 Financial Results and FY2014.3 Plan FY2013.3 Financial Results and FY2014.3 Plan (non-consolidated) 14 Main Capital Expenditures in FY2014.3 28 Passenger Revenues - FY2013.3 Results 15 Change in Consolidated Interest-bearing Debt Balance 29 Main Positive and Negative Factors in Passenger Revenues 16 III. Reference M aterials Passenger Revenues - FY2014.3 Plan 17 > FY2014.3 Traffic Volume and Passenger Revenues - Plan > Operation Suspended Lines and Segments Operating Expenses (non-consolidated) - FY2013.3 Results 18 Damaged by Tsunami during Great East Japan Earthquake > Suica Operating Expenses (non-consolidated) - FY2014.3 Plan 19 > Life-style Business ecute, Hotel Operations, Major Subsidiaries > Future Plans - Railway Business - FY2013.3 Financial Results and FY2014.3 Plan (consolidated) 20 > Future Plans - Life-style Business - > Additional information for bond investors I. JR East Group Management Vision Ⅴ - Ever Onward - Current Situation and Foresight JR East Group Management Vision Ⅴ JR East Group Management Vision Ⅴ (announced on Oct. 30, 2012) --- Ever Onward - Eternal Mission Pursuing Unlimited Potential Extreme safety levels Technological innovation Service quality reforms Tackling new business areas Strengthening Creating a corporate culture collaboration with local that maximizes communities human potential Local Communities and Shareholders and Investors Society The JR East Group Customers Employees “ Thriving with Communities, Growing Globally” 4 “Eternal Mission” (1) Pursuing “extreme safety levels”—Building a railway capable of withstanding natural disasters ■Implement seismic reinforcement countermeasures Approximately ¥300.0 billion total in seismic reinforcement countermeasures (Five-year intensive implementation period from FY2013.3) Seismic reinforcement of bridge piers Seismic reinforcement of viaduct columns ■Natural disaster countermeasures ■Install automatic platform gates 〈 Installation plan on the Yamanote Line 〉 FY2011.3 Ebisu and Meguro FY2013.3 Osaki and Ikebukuro FY2014.3 7 stations FY2015.3 7 stations FY2016.3 5 stations Major renovation 6 stations planned 5 Rainfall disaster prevention (slope reinforcement) “Eternal Mission” (2) Service quality reforms ⎯ Enhancing rail transportation network and other measures ■Improving the quality of the Tokyo ■Expanding the intercity transportation network Metropolitan area railway network Tohoku bound Operate Series E5 at max. 320 km/h Mar. 16, 2013 Debut Series E6 Increase railcars for series E5 FY2014.3 and E6 Start of Hokkaido Shinkansen to End of FY2016.3 Series E6 Shin-Hakodate (provisional name) Hokuriku bound -Improve transport capability of express trains on the Joban Line -Speed up service on the Chuo Line(rapid service) Apr. 1, 2013 Open Hokuriku Marketing Center Mar. 16, 2013 -All trains of Shonan- Shinjuku Line FY2014.3 Unveil Series E7 stop at Urawa Station Start of Hokuriku Shinkansen to -Enhance convenience along End of FY2015.3 the “Tokyo Megaloop” Kanazawa -Start of Tohoku Through Line FY2015.3 service Series E7 6 “Eternal Mission” (3) Strengthening collaboration with local communities ⎯ Supporting earthquake recovery, stimulating tourism and revitalizing communities ■Stimulate tourism ■Bus Rapid Transit (BRT) system Destination Campaign (DC) Construct exclusive roadways and upgrade service Sendai and Miyagi DC (Apr.-Jun.) FY2014.3 Akita DC (Oct.-Dec.) Niigata DC (Apr.-Jun.) FY2015.3 Yamagata DC (Jun.-Sep.) Fukushima DC (Apr.-Jun.) FY2016.3 Hokuriku DC (Oct.-Dec.) StarttooperateBRTonKesennuma Dec. 22, 2012 ■Develop attractive towns centered on railway Line Start to operate BRT on Ofunato Mar. 2, 2013 Line ■Promote emigration and interaction ○ Collaborate with Saku City and Nagano Prefecture ○ Revitalize local communities ○ Generate new traffic 7 Tokyo Station City Shibuya Station development “Pursuing Unlimited Potential” (1) Technological innovation ⎯ Forging strategies for conserving energy and the environment, utilizing ICT and operating railways at faster speed ■Catenary and battery-powered ■ Operate Shinkansen at ■ Construct mega-solar hybrid railcar train system faster speeds electricity plant Operate starting spring 2014 on R&D toward achieving an Construct at Keiyo Rolling Stock the Karasuyama Line operation at speed of 360 km/h Center Opening timeframe FY2014.3 Rated output 1,050 kW Panel expanse 6,600 m2 Approx. Estimated output/year 1,000 MWh Estimated Approx. CO2reduction/year 500 Tons Series EV-E301 ■Considering the introduction of Communications-Based Train Control System (CBTC) ○Considering the introduction of a train control system utilizing radio technology on the Joban local line (a local line between Ayase and Toride) ○Selected Alstom and Thales to discuss more details of the system with 8 “Pursuing Unlimited Potential” (2) Tackling new business areas ⎯ Globalization ■Participate in overseas railway projects Overseas railway consulting Rolling stock Concept manufacturing business Feasibility study Overseas office openings Design and tenders “sustina” next-generation stainless-steel railcars Construction stage Operation and Brussels office Singapore office maintenance (Opened Nov. 1, 2012) (Opened Mar. 15, 2013) 9 Numerical Targets for FY2016.3 Consolidated Consolidated operating revenues ¥ 2,788.0billion operating income ¥ 418.0 billion (￥billion) 2,788.0 (￥billion) 2,800 450 418.0 2,671.8 2,692.0 397.5 401.0 2,600 350 2,400 250 2013.3 2014.3 2015.3 2016.3 (FY) 2013.3 2014.3 2015.3 2016.3 (FY) Consolidated ROA (rate of operating income on total assets ) (at the end of FY2016.3) 5.5 % Consolidated ROE (rate of net income on equity ) (at the end of FY2016.3) 8.9 % The three-year targets will be reviewed annually, and will be revised to new targets for the next three 10 years starting from the following fiscal year. Uses of Consolidated Cash Flows Targets FY2014.3 Consolidated operating ■ Approx. ¥1.75 trillion cash flow (Three-year total to FY2016.3) □Capital expenditures Approx. ¥1.55 trillion Approx. ¥510.0 billion* Of which (Three-year total to FY2016.3) Investment needed for the continuous Approx. ¥950.0 billion operation of business Approx.¥316.0 billion (Safety practice and transportation stability) (Approx. ¥600.0 billion) Growth investment Approx. ¥600.0 billion Approx. ¥194.0 billion □Shareholder returns 33% ¥120/share dividend total return ratio (to net income) Share buybacks ** (During the 2020s) Reduce interest- □Debt reduction ¥3,000.0 billion bearing debt around interest-bearing debt ¥20.0 billion balance *In addition, priority budget allocation max. ¥30.0 billion from the deposit balance on Mar. 31, 2013 (capital expenditures of approx. ¥540.0 billion in total) 11 **Share buybacks of max. 1 million shares or aggregate ¥10.0 billion (for May 2013 execution) FY2016.3 Numerical Targets by Segment (¥ billion,%) 16.3/13.3 2013.3 2014.3 2016.3 Increase / Results Plan Target (%) decrease Operating revenues 2,671.8 2,692.0 2,788.0 +116.1 104.3 Transportation 1,795.1 1,820.0 1,857.0 +61.8 103.4 Station Space Utilization 404.2 406.0 437.0 +32.7 108.1 Shopping Centers & Office Buildings 238.9 250.0 261.0 +22.0 109.2 Others 233.5 216.0 233.0 -0.5 99.8 Operating income 397.5 401.0 418.0 +20.4 105.1 Transportation 266.4 269.0 278.0 +11.5 104.3 Station Space Utilization 37.5 37.0 42.0 +4.4 111.8 Shopping Centers & Office Buildings 68.1 69.0 72.0 +3.8 105.6 Others 26.8 27.0 27.0 +0.1 100.5 Adjustment -1.5 -1.0 -1.0 ■ Main assumptions for 3 years from FY2014.3 to FY2016.3 Real GDP growth rate: approx. +1.3% per year Basic growth rate for passenger revenues per year: 12 Commuter passes: approx. +0.0%, Non-commuter passes: approx. +0.5% II. FY2013.3 Financial Results and FY2014.3 Plan FY2013.3 Financial Results and FY2014.3 Plan (non-consolidated) (¥ billion) 2012.3 2013.3 13.3/12.3 2014.3 14.3/13.3 Increase / Increase / (%) (%) Results Results [Oct. plan] decrease Plan decrease Operating revenues 1,817.4 1,910.8 ［1,893.0］ +93.3 105.1 1,926.0 +15.1 100.8 Passenger revenues 1,595.3 1,681.5 +86.2 105.4 1,695.0 +13.4 100.8 Others 222.1 229.2 +7.0 103.2 231.0 +1.7 100.8 Operating expenses 1,524.4 1,587.9 +63.4 104.2 1,601.0 +13.0 100.8 Personnel expenses 467.9 483.5 +15.5 103.3 482.0 -1.5 99.7 Non-personnel expenses 605.2 657.1 +51.9 108.6 664.0 +6.8 101.0 Energy 60.6 67.6 +7.0 111.6 74.0 +6.3 109.4 Maintenance 209.3 240.5 +31.1 114.9 235.0 -5.5 97.7 Other 335.2 349.0 +13.7 104.1 355.0 +5.9 101.7 Usage fees to JRTT, etc. 83.4 83.1 -0.2 99.7 76.0 -7.1 91.4 Taxes 82.2 82.6 +0.3 100.5 89.0 +6.3 107.7 Depreciation 285.6 281.4 -4.2 98.5 290.0 +8.5 103.1 Operating income 292.9 322.8 ［321.0］ +29.8 110.2 325.0 +2.1 100.7 Ordinary income 207.7 243.0 ［241.0］ +35.2 117.0 258.0 +14.9 106.2 Net income 77.1 138.8 ［142.0］ +61.6 180.0 162.0 +23.1 116.7 14 Passenger Revenues – FY2013.3 Results (YoY, ¥ billion, %) 1st half 2nd half Total Increase / Increase / Increase / (%) (%) (%) decrease decrease decrease Passenger revenues +70.3 109.0 +15.8 101.9 +86.1 105.4 Commuter passes +4.0 101.7 +0.7 100.3 +4.7 101.0 (Seasonal tickets) Non-commuter passes +66.3 112.4 +15.1 102.6 +81.4 107.3 (Ordinary tickets) Kanto Area Network of +21.1 106.7 +4.9 101.5 +26.0 104.0 Conventional lines Shinkansen Network +42.1 121.6 +9.8 104.4 +52.0 112.5 15 Main Positive and Negative Factors in Passenger Revenues (YoY, ¥ billion) Positive and Negative Factors Change YoY Operation of Shinkansen at higher speeds, etc.