CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY
Annual Report 2019

For the Year Ended March 31, 2019

CENTRAL JAPAN RAILWAYManagement Philosophy

Contents

Contribute to the development of Japan’s maintransportation artery and social infrastructure
Japan’s Main Transportation Artery
JR Central’s mission is to undertake high-speed, largecapacity passenger transport between Tokyo, Nagoya, andOsaka. “Japan’s main transportation artery” refers to thispassenger transport. Since the artery runs through this areaof Japan, which plays an important role as the center of thecountry’s economy and culture, it is possible that stagnancy
in the main transportation artery will cause Japan’s economic
and societal movements in general to also stagnate. JR
Central must continue to carry out its mission of managing
Japan’s main transportation artery today and in the future
through operation of the Tokaido Shinkansen and the Chuo
Shinkansen.

Social Infrastructure
On a broader perspective, JR Central also undertakes
the mission of supporting the social infrastructure. Thatis, along with the management of Japan’s main artery, wetake a locally oriented approach in operating a networkof conventional lines in the Tokai Region, centered on
the Nagoya and Shizuoka areas, and manage affiliatedbusiness focused on the local communities, thereby
supporting the people in these areas. We will remaincommitted to operating conventional lines while managing
and further enhancing affiliated businesses.

77

125.9billion yen
7%

Tokaido Shinkansen

Merchandise
and Other

253.3billion yen
13%

1,291.8billion yen

Other

Consolidated

1,878.1
billion yen

FY2018Preservation

Operating Revenues Composition

36 Human Resources Development
38 Cooperation with Local Communities /1 Contents
2 Market Area Characteristics andInternational Exchanges / Restorationof Culture & Art and Lifelong Learning

4 Enhancing Our Competitive Strength

40 Corporate Governance46 Directors, Audit and Supervisory
Board Members, and Executive
Officers

Messages from the Management

Corporate Data
47
48
49
50
52

6 Greetings
8 Interview with the President

Profile / Organization Chart
Operating Area
History
Summary of Performance
Financial Highlights(Consolidated,
Non-consolidated)

68.2billion yen
5%

88104.8billion yen
7%Appendices10 Key Measures and Capital Investment
14 Ensuring Safe and Reliable

82 Financial and Transportation Data
84 Financial Data Comparison of Three

18 Enhancing Transportation Services
22 Promoting the Chuo Shinkansen

85 Stock Information

Transportation

JR Companies (Consolidated)

Project Using the Superconducting
Maglev System

24 Refining the Superconducting Maglev
Technology and Reducing Costs%

26 Enhancing Sales and Marketing
28 Technological Development andEnhancement of Technical Capability

29 Overseas Deployment of High-Speed

Conventional
Lines

Real Estate

49.6billion yen
3%%

32 Engagement in Global Environment

Management Philosophy

Key Measures and Management Strategies

billion yen

Other

ESG* Information

53 Other Related Materials
54 Financial Section

The transportation business accounts for approximately 80% of consolidated operating revenues and earnings from the Tokaido
Shinkansen account for roughly 90% of non-consolidated operating revenues.

1,449.1

CENTRAL JAPAN RAILWAY COMPANY

Transportation Capacity

Operating Revenues Composition

Transportation

COMPANY Annual Report 2019

Railway Systems

Non-consolidated

1,464.8billion yen

FY2018Note 1: Consolidated operating revenues compositionis based on revenues from external customers
Note 2: The total of items in the breakdown may not
be 100% due to rounding.

30 Developing Affiliated Businesses* Environmental, Social, and Governance.
Companies appropriately considering/responding to ESG
issues and the existence of shareholders who makeinvestments in response to such efforts by the companies
are thought to lead to the solution/improvement of global
environmental issues and social issues and even to thesound development/expansion of capital markets, thus
contributing to the establishment of a sustainable society.

Source: Japan Exchange Group, Inc.

[Remarks regarding forecasts, etc.]
Future plans, forecast figures, etc. in this report are an outlook based on the information that is currently available
for JR Central and may contain risks and uncertainty. Examples of potential risks and uncertainty include
economic trends, business environment developments, consumption trends, competition situation for JR Central
and subsidiaries, and changes in relevant laws and legal provisions. This report is compiled based on information
available as of the end of May 2019 in principle.
• In this report, figures of financial information are truncated, while statistical data and all percentages are rounded.
• FY2018 signifies the fiscal year ended March 31, 2019.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 20191

Market Area Characteristics andTransportation Capacity

CENTRAL JAPAN RAILWAY COMPANY
Annual Report 2019

Representing a powerful presence in the inter-citytransportation market, one that is unrivaled all over
the world.

An overwhelming capacity for transporting
passengers along its main route, from Tokyo to
Osaka
Changes in daily transportation capacity (comparison
between the Tokaido Shinkansen and airline transportation
services operating between the Tokyo Metropolitan area
and the Osaka region)

Tokaido Shinkansen(Ten Thousand seats/day)40

Tokaido Shinkansen

Japan’s population and economic activity areconcentrated in the area covering the Tokyo
Metropolitan area, the Nagoya region, and the
Osaka region
Percentages of our market area in Japan as a whole
JR Central’s Market Area

Airlines

370,000*1

seats

Others23.7

Approximately%

Area[As of October 2018]

60.6

%

Population[As of January 1, 2018]30

Hiroshima

OkayamaShin-Osaka

Nagoya

Tokyo

About

12

times
that of airlines

Hakata65.5%

Prefectural GDP(Nominal GDP)
[FY2015]0

Operating area

366.0 km

50

100
(%)

20

[Source]
JR Central’s market area is calculated taking the following prefectures into
account
Tokyo, Kanagawa, Chiba, Saitama, Ibaraki, Shizuoka, Yamanashi, Nagano, Aichi,
Mie, Gifu, Shiga, Osaka, Kyoto, Hyogo, Nara
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”

552.6 km1,174.9 km
10An inter-city transportation capacity that is
unrivaled all over the world

JR Central boasts an overwhelming market share within its operating areas
Market Share*1 (against Airlines)

Railway

Tokyo
Tokyo area*2 Nagoya area*2

100%

Nagoya85%(81 thousand passengers/day)(Example)

HakataShinkansen
OperatingKilometers(Reference*3)

Tokyo ~ Nagoya

New York ~Washington D.C.
(LGA-IAD)

366.0km

369 kmTokyo ~ Shin-Osaka

Los Angeles ~ San
Francisco (LAX-SFO)

JR West

JR-Central
Osaka

Okayama

Hiroshima

15%

Tokyo area Osaka area*2(150 thousand passengers/day)Tokyo area - Okayama(9 thousand passengers/day)Tokyo area - Hiroshima(16 thousand passengers/day)Tokyo area - Fukuoka

10%

70%
68%

30%
32%
90%

(30 thousand passengers/day)*1 M arket share is calculated by JR Central based on the Inter-prefectural data of the inter-Regional Passenger Mobility Survey,
published by the Ministry of Land, infrastructure, Transport and Tourism for FY2017.
*2 Tokyo area: Tokyo, Kanagawa, Chiba, Saitama, Ibaraki / Nagoya area: Aichi, gifu, Mie / Osaka area: Osaka, Kyoto, Hyogo, Nara
*3 Based on the U.S. Department of Transportation website

2

CENTRAL JAPAN RAILWAY COMPANY Annual Report 20190

Airlines

552.6 km

542 kmTokyo ~ Hakata

New York ~ Chicago(LGA-ORD)

1,174.9 km

1,180 km

Approximately
30,000seats*2

Comparison with overseas transportation services(Thousand passengers/day)’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ‘15.3 ’16.3 ’17.3 ’18.3 ’19.3*1 Tokaido Shinkansen: The number of passenger seating provided (including extra train
services) on through-service “Nozomi” and “Hikari” lines operating between Tokyo
Station and Shin-Osaka Station in each respective fiscal year.
*2 Airlines: Calculated by JR Central based on information pertaining to specified
Japanese air carriers (Ministry of Land, Infrastructure, Transport and Tourism) for
FY2006 to FY2018.

477

TokaidoShinkansen[Tokyo ~ Shin-Osaka]

30

Eurostar[London ~Paris/Brussels]*2

Acela Express

9(Reference)
Airlines

11[Boston ~Washington D.C.]*1*3[New York ~ Chicago][Source]*1 Calculated by JR Central based on figures provided on the Eurotunnel website(2018.1-2018.12)*2 Calculated by JR Central based on figures provided by the National Fact Sheet:
FY2018 (Amtrak)*3 Calculated by JR Central based on figures provided on the U.S. Department ofTransportation website (2018.1-2018.12)

CENTRAL JAPAN RAILWAY COMPANY Annual Report 20193

CENTRAL JAPAN RAILWAY COMPANY

Enhancing Japan’s main transportation artery

Annual Report 2019

The Chuo Shinkansen Project
Under the condition that we bear all theconstruction cost, we are promoting the Chuo
Shinkansen Project using the Superconducting
Maglev system based on the Nationwide
Shinkansen Railway Development Act tocontinually carry out our mission of operationof high-speed railway linking the Tokyo
Metropolitan area, Chukyo region, and Kinki
region, and to ensure the future foundation of
the company.

FY2020Transportation Service•July 2020
Put N700S into
commercial service

FY2019We succeeded in lifting the maximum speed of our services•Standardize all rolling stock
to the N700A type and“12Nozomi Timetable,” scheduled
for the spring of 2020

from 220 km/h, to 270 km/h, and then to 285 km/h. We
successively increased the number of services for our fastest
speed train, the “Nozomi”, through increased investment
in rolling stock and ground facilities. We established an

FY2017

operational system running up to 10 “Nozomi” services eachstock incorporating the latest technology.

Distribution map of the estimated biggest seismic intensity of theEastern Nankai Trough Large Earthquake• Operating speed

7
6 upper
6 lower
5 upper
5 lower4

FY2014•Increase of the maximum
speed to 285 km/h

• Time required (fastest train)
Tokyo ~ Nagoya City

Tokyo ~ Osaka City

40minutes

67minutes

500km/hChuo Shinkansen
Shinagawa• First Phase (Shinagawa Station ~ Nagoya Station)

Nagoya

FY2013•Revise the timetable
to have a maximum of
10 “Nozomi” services
running per hour fornearly all operating hours

N700S validation test vehicles

The overwhelming time-reduction effect of the Chuo
Shinkansen will merge the three main regions into a"Super Mega Region", energizing economic and social
activity.

Seismic intensity class•Running tests using N700S
validation test vehicles starts

hour each direction. We continued to introduce new rolling

We will duplicate our artery transportation system linking
Tokyo, Nagoya, and Osaka with the Chuo Shinkansen,
thereby preparing for future risk.

Tokaido Shinkansen

Shin-Osaka

Tokaido Shinkansen

1hr 26min*

Chuo Shinkansen(Superconducting
Maglev System)

40minutes*As of the March 2019 timetable revision (arrival time based on the fastest trains
in service)*Prepared by JR Central based on“ Countermeasure against Eastern Nankai TroughLarge Earthquake (Final Report)” (May. 2013)

FY2012FY2017•Put N700A into commercial service•Extend platforms at Shin-Osaka Station•The “smartEX” service starts
for the Tokaido Shinkansen
and the Sanyo Shinkansen

FY2007CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

65

75

Tokyo

4

“EX-IC”

50 50 50 50 50 50 55

Shinagawa•“Express Reservation” was launched
for Tokaido Shinkansen

60

105

Odawara

FY200180

95
85 90 90 90

115 120

ShinYokohama

FY2006•“Express Reservation” service
expands to the total length of Tokaido
and Sanyo Shinkansen lines*1: The planned figures for FY2019 are as of the
publication of the financial report for FY2018.
*2: With respect to the amount of dividend per share
for FY2012, given the adoption of the unit sharesystem of splitting 1 share of common stock into
100 shares and setting one (1) unit of shares as
100 shares effective October 1, 2012, the amount
was calculated on assumption that the stock split
was conducted at the beginning of the period.
*3: The amount of dividend per share for FY2011 andprior is shown by dividing the amount by 100 for
the ease of comparison with the amount for FY2012
and thereafter.

Dividend per share

Atami

introduced at the end of September 2017.

Mishimaand ticketless boarding service, the “smartEX”,

Shin-Fuji

visitors to Japan with our new online reservation

Stations that Hikari and/or Kodama stop

Shizuoka

Our policy on dividends has always
been to decide the specific dividend(Yen / Year)amount in accordance with the
management environment/performance 140
in each FY based on the principle120
of continuously providing stabledividends.
100

improve convenience for light users and overseas

Kakegawa

Providing stable dividends

our ticketless boarding service EX-IC. We aim toHamamatsu•The “EX-IC” service starts for theTokaido Shinkansen

service. And we improved convenience throughToyohashi

FY2007

establishing it as a core Tokaido Shinkansen

Hikari,Kodama

Mikawa-Anjo

the “Express Reservation” online reservation service,

Nozomi

NagoyaWe expanded the lineup and sections covered by•The “EX-IC” service
expands to the Sanyo
Shinkansen•Corporate member
service starts

Stations that Nozomi, Hikari, and Kodama stop

Hikari,Kodama

Gifu-Hashima

FY2009After starting theoperation of the Chuo
Shinkansen's entire line

Nozomi

Maibara•Shinagawa Station on the Tokaido
Shinkansen is opened•Maximum speed of all Tokaido
Shinkansen trains increased to 270 km/h
•Shift to train scheduled centered on“Nozomi”

Present

Kyoto

Passenger Service

FY2003

Image of the Number of Operations

Shin-Osaka•Put the Series N700 into commercial service

Significant portion of "Nozomi" users will shift from the Tokaido Shinkansen to the Chuo
shinkansen, which enables more flexible use of the Tokaido Shinkansen.

Net income (non-consolidated)

125

135

140 145150(billion
yen)

400
300

40

200

20

100

0
’99.3

’02.3

’05.3

’08.3

’11.3

’14.3

’16.3 ’17.3 ’18.3 ’19.3 ’20.3 plan0

CENTRAL JAPAN RAILWAY COMPANY Annual Report 20195

Messages from the Management
Messages from the Management

Greetings

To all persons reading the Central Japan Railway Company Annual Report 2019
In the railway business, JR Central sets the highest priority on ensuring safe and reliable transportation under
its management philosophy of “Contribute to the development of Japan’s main artery and social infrastructure. ”
JR Central’s fundamental policy is to continue executing the long-term mission to integrally maintain and develop
the Tokaido Shinkansen, which serves as Japan’s main transportation artery, and the conventional line networkin the Tokai region through continuous efforts, such as providing services that are preferred by customers
and streamlining of work, as well as to operate the “three generations of railways” by constructing the Chuo
Shinkansen to make Japan’s main transportation artery a dual system.
The railway business, which is the core business of the JR Central Group, requires long-term massive capital
investment and technological development with considerable lead times. Due to such a business structure,
it is vital that we manage our railway business based on a long-term outlook rather than pursuing short-term
profitability. Therefore, we are promoting mid-to-long term projects in a well-planned manner while simultaneously
providing high quality services in our daily railway operations and aiming to enhance our management base.

Chairman and Representative Director

Koei Tsuge

6

President and Representative Director

Shin Kaneko

Ensuring Safe and Reliable Transportation

Enhancing Transportation Services

In the railway business, JR Central will place top priority
on ensuring safe and reliable transportation. We will pursue
derailment and deviation countermeasures for the Tokaido
Shinkansen by implementing derailment prevention guards forthe entire line. We will also proceed with the implementation of
measures to prevent suspended ceilings at stations from falling in
the event of an earthquake and reinforcing the quake resistanceof the Nagoya Workshop, viaduct pillars of conventional lines,
etc. In addition, JR Central will steadily proceed with large-scalerenovation of the Tokaido Shinkansen.
Furthermore, when typhoons, heavy rain or other climate
conditions are expected to have a major impact on train
operation. We will place the highest priority on ensuring safetyand determine the appropriate train operation plan, including
prompt suspension of operation. If train operation is suspended,
we will make efforts to resume operation in a timely manner, as
well as provide information on train operation in a more prompt
and precise manner.
We will also perform practical training repeatedly so as tobe able to respond to various conditions expected in theevent of extraordinary situations such as natural disasters orcontingencies. And we will cooperate with relevant organizations
in holding the G20 Osaka Summit and the Rugby World Cup
Japan 2019 and work to ensure safety at stations, trains, etc.,
and provide smooth transportation services.

In terms of the Tokaido Shinkansen, we will continue to work on
setting more flexible train services in accordance with demandduring seasons and time frames with increased customer use
by applying the “10 Nozomi” Timetable. And we will complete
the launch of the N700A (3rd edition) to standardize all rollingstock to the N700A type and finish the enhancement work toreflect features of the third-edition trainsets, such as reducing
the stopping distance of the Earthquake Brake on existing trains.
Furthermore JR Central will make the best of the operation of all
Tokaido Shinkansen trains at a maximum speed of 285 km/h inconjunction with securing rolling stock consistency, and update
train timetables to further heighten convenience and stability
in the spring of 2020. In addition, we will steadily proceed withpreparations for the launch of the next-generation Shinkansen
N700S that will enable us to increase safety and stability by
reducing the stopping distance of the Earthquake Brake andstrengthening the monitoring function, and to reinforce our ability
to respond to extraordinary situations by adopting a batterybased self-running system, and other features.
In terms of conventional line, we will flexibly increase thefrequency and number of cars in train services to meet demandfor express trains, such as for Shinano and Hida. And we will
advance construction and preparations for the opening of
Mikuriya Station on the Tokaido Line Scheduled to open between
Fukuroi Station and Iwata Station on the Tokaido Line.
In terms of passenger-related facilities, JR Central willproceed with the installation of movable platform fences on
the Shinkansen platforms No. 20 through No. 26 at Shin-Osaka

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Station, and begin using them upon completion. Meanwhile, forconventional lines, we will promote the installation of the fenceson the Tokaido Line platform at Kanayama Station. We will also
proceed with the replacement work for the installation of brailleblocks with a line that indicates where the inner platform edge islocated by expanding the scope of stations of conventional lines
to those servicing 1,000 or more passengers.
We will also promote the installation of barrier-free facilities atstations of conventional lines, such as elevators and multifunction
toilets.

Superconducting Maglev technology and reduce the costs forthe construction, operation, and maintenance of commerciallines. We will also produce an improved testing vehicle forformulating commercial rolling stock specifications and whilesteadily performing the necessary running tests in anticipationof the launch of the improved testing vehicle, conduct public“Superconducting Maglev Test Ride” events to further promote
understanding of Superconducting Maglev.

Enhancing Sales and Marketing

In our projects for the overseas deployment of high-speed railsystems, we will proceed with technical assistance to the maindevelopment entity of the Texas Project in the U.S. through thelocal subsidiary (High-Speed-Railway Technology Consulting
Corporation), while carrying on full-scale discussions through thelocal subsidiary (High-Speed-Railway Integration Corporation)
along with firms on the Japan side toward concluding thecontract for the core system. In addition, bolster promotional
activities for the use of the Superconducting Maglev systemin the Northeast Corridor Project in the U.S. and continuing toproceed with the technical consulting services for the Taiwan
High Speed Rail.
We will also promote initiatives to establish the Japanese
highspeed rail system, which is based on the core principle of“Crash Avoidance”, as a global standard.

In sales and marketing, JR Central will take initiatives so that
more customers become aware of the convenience of Express
Reservation and smartEX and use these services and promote
tourist products, such as “EX Nozomi Family Hayatoku,” towidely spur demand. We will also Enhance tourism campaigns
and products that convey the attractiveness of Kyoto, Nara,
Tokyo, Hida, etc and coordinate with local governments, travel
agencies and other parties through the “Shizuoka Destination
Campaign (Shizuoka DC)” and make efforts to develop attractive
sightseeing materials and products and operate sightseeing
trains. JR Central will take initiatives so that customers fromoverseas can conveniently use its railroad services. We will
promote expanded use of “smartEX” services for foreigners
visiting Japan as well as work to boost sales of sightseeing value
tickets, etc., while capturing demand from the Rugby World Cup
Japan 2019. In addition, We will make efforts to enhance theprovision of information to foreigners visiting Japan by adopting
announcements using tablet devices, etc., and by utilizing theCompany’s website for enhanced disclosure of information on
train status and complete the introduction of free-of-charge WiFi
service on all Shinkansen trains.

Promoting the Chuo Shinkansen Project Using theSuperconducting Maglev System
The Chuo Shinkansen that employs the Superconducting
Maglev System will enable us to continue our mission ofoperating a high-speed railway linking the Tokyo Metropolitan
areas, Chukyo regions and Kinki regions, which is also the lifelineof our business. It is being planned in order to ensure the future
foundation of the company.
As for the Chuo Shinkansen Project, we will maintain soundmanagement and stable dividends, and take steady steps with agreater sense of seriousness toward completing the project while
demonstrating flexibility. We will also continue promoting close
coordination with local communities and carry out measurement,
design, acquisition of land, etc., according to plan. Furthermore,
JR Central will steadily continue to make progress with various
types of construction work, including tunnel and emergency exit
excavation and diaphragm wall work of the Southern Alps tunnel,
Shinagawa Station, Nagoya Station, tunnels in mountainous
areas, emergency exit sites in urban areas, and other locations
where work is challenging and construction periods will belong by giving serious consideration to construction safety
and environmental protection. In addition, given the approvalobtained for the use of the deep underground section in October
2018, we will begin production of the shield machine and makeother preparations for the excavation of tunnels in urban areas.

Refining Superconducting Maglev Technology andReducing Costs
In regard to the Yamanashi Maglev Line, we will proceedwith verification testing, etc. to establish a maintenancesystem that responds to commercial services by alternately
operating 2 trainsets and continuing to conduct long distancerunning tests by using rolling stock and facilities in commercial
line specifications. We will also strive to further refine theOverseas deployment of high-speed railway systems

Technological Development and Enhancement ofTechnical Capability
In an effort to promote technological development, JR Central
will conduct tests using the N700S validation test vehicles,
such as the long-term endurance testing and acceleration
enhancement testing at 360 km/h. In addition, we will proceedwith the new production of a testing vehicle for next-generation
limited express rolling stock that uses a hybrid system forconventional lines and begin running tests. Furthermore, We will
also implement more advanced and power-saving inspections
and maintenance that utilize condition monitoring technologies.
We will also promote technical development that can lead to cost
reductions for maintenance and upgrading of facilities.

Developing Affiliated Businesses
In businesses other than the railway business, JR central will
operate JR Central Towers and JR Gate Tower in an increasingly
uniform manner and respond to diverse needs by demonstratingsynergistic effects to the fullest to boost earnings. Also, we willfurther invigorate the merchandizing business and the stationbuilding business by developing stores in station buildings andrenovating commercial facilities, as well as work to make effective
use of land owned by the Company to further expand earnings.
In addition, we will proceed with the commercial development at
Tokyo Station in light of the upcoming Tokyo 2020 Olympic andParalympic Games.

Engagement in Global Environment Preservation
In regard to global environmental issues, JR Central will not only
make the public aware of the superiority of railways to the global
environment, but also continue promoting various policies that
contribute to engagement in global environment preservation,such as introduction of the N700A, which enables significant
energy conservation, as well as working toward resource andenergy conservation in our daily operations.

We will strive to promote efficiency and reduce costs throughout
our business execution activities, including capital investments,
with a view to enhancing our management strength.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 20197

Messages from the Management
Messages from the Management

Interview with the President

Realize Our Management Philosophy
at a Higher Level

President and Representative Director

Shin Kaneko

Management
Please tell us what is the emphasis of your management
policy.
Our basic management policy is to continue to take necessary
measures to realize our management philosophy of “contributing
to the development of Japan’s main transportation artery andsocial infrastructure” at a higher level.
In order to achieve this ambitious goal, we have to improve ourcorporate capabilities accordingly. In particular, we will strive tostrengthen the following three capabilities: (1) capability to safely
proceed with business activities; (2) capability to provide evenbetter services; and (3) capability to work efficiently at low cost.
We would like to continue to hone these three capabilities.
Looking back on our past efforts, I would say that we havefocused on ensuring safe and reliable transportation. This has
always been the top-priority management issue for our company
and the basis for all of our businesses. In fact, investment forsafety represents approximately 70% of our annual capital
investment, excluding the Chuo Shinkansen, and has amounted
to 3,670 billion yen since the foundation of our company (as of theend of FY2018). Safety is also the main theme of our technologicaldevelopment and staff training. These efforts have built great trustin our ability to ensure the safety of customers.
In addition, we improved our transportation services, especiallythe “Nozomi” service, by launching a new rolling stock modeland renovating Shin-Osaka Station. We also honed our services
through sales and marketing initiatives such as promoting online
reservation and ticketless boarding services. These efforts have
led to a significant increase in the passenger volume of theTokaido Shinkansen.
The Chuo Shinkansen Project currently underway is also intended
to strengthen this main transportation artery. The increased
convenience resulting from this groundbreaking high-speed rail
and the duplication of the main transportation artery will allow us
to continue to carry out our mission.

We will continue enhancing the convenience of the maintransportation artery while placing top priority on safetywith an eye toward attracting more passengers andincreasing revenue. At the same time, we will work toensure operational efficiency and profitability as we lay
a foundation for investments designed to enhance safety
and services that will set a positive cycle in motion. These
measures will enable us to significantly strengthen ouroperating foundation so that we can continue to pay stabledividends and ensure long-term, steady employment.We
will strive not only to contribute to the economic prosperity ofJapan but also to earn the trust of all stakeholders, including
shareholders, customers, employees, and business partners, topromote the sustainable development of our company.

8

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Tokaido Shinkansen
The Tokaido Shinkansen saw steady ridership in FY2018,again achieving a record-high passenger volume. Whatfactors do you think are behind these results?
It was partly because the Japanese economy remained steadybut also because the various initiatives we took to strengthen
our competitive edge in a medium- to long-term context came tofruition.
Ever since our company was founded, we have consistently
made an effort to increase transportation capacity. In FY2018,the average number of services per day reached a record high of373. This high capacity was realized by the "10 Nozomi Timetable"(operating up to 10 Nozomi services in both directions), which
was introduced after more than five years of preparation,
including the construction of additional platforms and installationof additional draw-out tracks at Shin-Osaka Station. Other factorsthat have contributed to the current high-level of the Shinkansen
service include the continuous launch of new rolling stock models
and the enhancement of sales and marketing, such as new online
reservation and ticketless boarding services known as “Express
Reservation” and “smartEX.”

The introduction of a “12 Nozomi Timetable” wasannounced. What is this aimed at?
With the timetable change in the spring of 2020, we will introduce
a “12 Nozomi Timetable,” which will significantly improve ourtransportation services. We will make this possible by improving
equipment and completing the update to the N700A type to allow
all trains to run at the same highest speed of 285km/h.
There are two points to note about this new timetable. First, an
increasing number of “Nozomi” services will be provided. The
maximum number of “Nozomi” services per hour will increase by
2 from 10 to 12 in either direction. “Nozomi” will be operated at an
average interval of 5 minutes during busy hours.
Secondly, the travel time of “Nozomi” will be reduced. Under
the current “10 Nozomi Timetable,” seven “Nozomi” services run
between Tokyo and Shin-Osaka with a travel time ranging from 2
hours 33 minutes to 2 hours 37 minutes. Under the “12 Nozomi
Timetable,” all “Nozomi” services will travel between Tokyo andShin-Osaka within 2 hours 30 minutes.
With this “12 Nozomi Timetable,” additional “Nozomi” services
will be provided during busy hours. Passengers can reduce theirtravel time by reserving train seats online at their convenienceand using a new, faster “Nozomi.” This will make the Tokaido
Shinkansen even more convenient.
We will maintain a long-term perspective and continue to strive
to enhance our transportation services so that more and morepassengers will use our services.

Can you describe the N700S, the next series of rollingstock for the Tokaido Shinkansen? In addition, please let
us know the schedule for launching this new series.
The N700S, which will be the first full model change since
the Series N700, is designed based on the results of yearsof technological development, and is equipped with features
such as enhanced safety and stability, higher emergency
response capability, enhanced comfort and convenience, and astandardized design that can easily be constituted to any lengthof trainsets.
We started test runs using validation test vehicles last year andverified that the N700S performed as expected, so we decided to
manufacture a total of 40 trainsets over the three years from 2020
through 2022. Commercial operation is scheduled to begin in July
2020.
Reference P.20
Development of the next-generation rolling stock, N700S

Conventional lines
Can you tell us about what initiatives you have taken to
expand the use of conventional lines?
With regard to conventional lines, we have steadily improved
our services by, for example, launching new rolling stock andincreasing the frequency of services. We will further enhanceflexibility in the operation of limited express services, such as“Shinano” and “Hida,” by increasing the frequency of services
and the number of cars per train accordingly to meet the demandin busy seasons and at the time of wayside events. Coupled with
this, we will strengthen ties with local communities in order topromote the use of railways.
Moreover, with an eye toward the replacement of diesel railcars
currently used for “Hida” and other limited express trains, we willproduce hybrid type test trains for the next-generation limited
express rolling stock, and start test runs at the end of 2019 toestablish such technology. We are aiming to put this hybrid rollingstock into commercial operation with a top speed of 120km/h
without compromising safety and comfort. We are considering
launching the operation of mass-produced hybrid rolling stock byaround FY2022.
As part of our efforts to strengthen ties with local communities topromote the use of limited express services on conventional lines,
we are conducting the “Shupo” Campaign to introduce various
tourist attractions along our railway lines and “Sawayaka Walking”
to offer free-of-charge walking tours that start from one of ourstations and go around wayside sightseeing spots. This year, we
will also collaborate with local governments, travel agencies, etc.
through the “Shizuoka Destination Campaign” organized jointly by
the six JR passenger rail operators to develop attractive tourism
resources and products and operate sightseeing trains, etc. topromote the use of our services, including the Shinkansen.

Chuo Shinkansen
Construction work is now in full swing in different
sections of the Chuo Shinkansen line. Can you explain thesignificance of this project once more?
The Chuo Shinkansen Project is intended to allow us to continue
to carry out our founding mission of operating a high-speed
railway that runs from the Tokyo Metropolitan area through the
Chubu region to the Kinki region (from Tokyo through Nagoya to
Osaka).
At present, the Tokaido Shinkansen is serving this role. However,
now that it has surpassed its 50th anniversary, it is about time toconsider drastic measures against the need for future large scalerenovation and major disasters. Moreover, in the wake of theGreat East Japan Earthquake, it has become even more importantto prepare for potential disasters by duplicating the maintransportation artery. Therefore, we have decided to complete theconstruction of this alternative Chuo Shinkansen line as soon as
possible by accelerating the development of our Superconducting
Maglev System at our own expense and to operate the Chuo andTokaido Shinkansen lines in an integrated manner.

What risk factors do you foresee in the Chuo Shinkansen
Project? In addition, can you tell us what countermeasures
you have in mind?
We are taking steady steps towards the completion of the project
while maintaining sound management and stable dividends anddemonstrating our flexibility. Although the construction of the
Chuo Shinkansen will take years and therefore can inevitably beaffected by economic shifts, such as fluctuations in businessconditions, interest rates, prices, labor costs, and land values, wewill work to increase our earning power, improve the efficiency ofoperations, and cut costs to strengthen our management basewhile striving to further reduce construction costs for the Chuo
Shinkansen Project.
Moreover, in order to mitigate management risks, we obtained along-term, fixed low-rate loan in FY2016 and FY2017, totaling 3
trillion yen, by making use of Long-Term Loan through the Fiscal
Investment and Loan Program.
For details, please refer to “Long-Term Loan through the Fiscal
Investment and Loan Program (Long-term debt for the Chuo
Shinkansen construction)” on p. 55.

Affiliated Businesses
Please tell us about your affiliated business.
We are working to expand our revenue base, especially inbusinesses that allow us to make full use of our station areas andother businesses that are expected to generate synergies with ourrailway business.
In particular, the development of Nagoya Station, the largest
station in our network, is a pillar of our affiliated business. JR
Central Towers, opened in 2000, and JR Gate Tower, openedin 2017, have been attracting large numbers of visitors. Alreadyrecognized as landmarks of Nagoya, these buildings have madea significant contribution to the economic development of the
Chubu region. Going forward, we will continue to operate JR
Central Towers and JR Gate Tower in an integrated manner andmaximize their synergies to meet various needs.
We will continue to collaborate with our Group Companies toexpand revenues and profits.

Dividends
Can you tell us about your dividend policy?
Due to the nature of the railway business, which operates from along-term perspective, a specific dividend amount is determinedconsidering the business environment and results of each fiscal
year based on the Company’s consistent and basic policy for thecontinuation of stable dividends.
When we say “from a long-term perspective,” we mean that wewill not cut corners as we use current proceeds from our businessto take necessary steps to ensure that our rail services continue
to operate steadily over the long term. For example, we will
undertake such measures as large-scale renovations as well as
derailment and deviation countermeasures for the Shinkansenalong with working on the Chuo Shinkansen, a major long-term
project. We believe that continuing a stable dividends policy will
best meet the long term benefits of our shareholders.
We will maintain this principle of stable dividends during theconstruction of the Chuo Shinkansen.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 20199

Key Measures

Key Measures and Capital Investment

1

Ensuring Safe and Reliable
Transportation
P.14

Capital investment amount:2

FY2019159.0 billion yen

JR Central will work to further reinforce structures
along with earthquake countermeasures.
Advance construction work for the installation of derailment prevention guards
for the entire Tokaido Shinkansen line as part of implementing derailment anddeviation prevention measures.
Proceed with the implementation of measures to prevent suspended ceilings
at stations from falling in the event of an earthquake and reinforce the quake
resistance of the Nagoya Workshop, viaduct pillars of conventional lines, etc.
Steadily proceed with large-scale renovation of the Tokaido Shinkansen
while making efforts to achieve cost reductions by introducing the results oftechnological development and improving construction methods.

JR Central will advance initiatives to respond moresafely and properly to natural disasters, etc.
When typhoons, heavy rain or other climate conditions are expected to havea major impact on train operation, place the highest priority on ensuringsafety and determine the appropriate train operation plan, including prompt
suspension of operation. If train operation is suspended, make efforts toresume operation in a timely manner, as well as provide information on train
operation in a more prompt and precise manner.
Repeatedly perform practical training so as to be able to respond to various
conditions expected in the event of extraordinary situations such as natural
disasters or contingencies.
Cooperate with relevant organizations during the G20 Osaka Summit andthe Rugby World Cup Japan 2019 and work to ensure safety at stations,trains,etc., and provide smooth transportation services.

3

Enhancing Transportation Services
P.18

Capital investment amount:

JR Central will advance initiatives to offer greater
convenience and comfort, including updating
timetables that make the most of operating all
Tokaido Shinkansen trains at a maximum speed of
285 km/h in the spring of 2020.
Continue to work on setting more flexible train services in accordance withdemand during seasons and time frames with increased customer use by
applying the “10 Nozomi” Timetable.
Complete the launch of the N700A (3rd edition) to secure standardize all
rolling stock to the N700A type and finish the enhancement work to reflectfeatures of the N700A (3rd edition), such as reducing the stopping distance of
the Earthquake Brake on existing trains.
Make the most of the operation of all Tokaido Shinkansen trains at a
maximum speed of 285 km/h and update train timetables to further heighten
convenience and stability in the spring of 2020.
Steadily proceed with preparations for the launch of the next-generation
Shinkansen N700S that enables us to increase safety and stability by reducing
the stopping distance of the Earthquake Brake and strengthening condition
monitoring system, and to reinforce our ability to respond to extraordinary
situations by adopting a battery-based selfrunning system, and other features.
Flexibly increase the frequency and number of cars in train services to meetdemand for limited express trains, such as for Shinano and Hida.
Shift in the number of trainsets by series for
the Tokaido Shinkansen Wide-View Shinano
The maximum speedof all cars is 285km/h(Trainsets)

140

62.0 billion yen

JR Central will move ahead with the implementationof facilities, etc., so that customers can use railways
with a greater sense of convenience and security.
Proceed with the installation of movable platform fences on the Shinkansen
platforms No. 20 through No. 26 at Shin-Osaka Station, and begin using themupon completion. Meanwhile, for conventional lines, promote the installation of
the fences on the Tokaido Line platform at Kanayama Station.
Advance construction and preparations for the opening of Mikuriya Station on
the Tokaido Line.
Proceed with the replacement work for the installation of braille blocks witha line that indicates where the inner platform edge is located by expanding
the scope of stations of conventional lines to those servicing 1,000 or morepassengers.
Promote the installation of barrier-free facilities at stations of conventionallines, such as elevators and multifunction toilets.

Promoting the Chuo Shinkansen
Project involving theSuperconducting Maglev System
P.22
Capital investment amount: 310.0 billion yen

With regard to the Chuo Shinkansen Project using
Superconducting Maglev System, JR Central willproceed steadily with the construction work in
respective areas of the line while giving serious
consideration to safety, the environment, andcoordination with local communities along theplanned route.
As for the Chuo Shinkansen Project, maintain sound management and stabledividends, and take steady steps with a greater sense of seriousness toward
completing the project while demonstrating flexibility.
Continue promoting close coordination with local communities and carry out
measurement, design, acquisition of land, etc., according to plan.
Steadily continue to make progress with various types of construction work,
including tunnel and emergency exit excavation and diaphragm wall workof the Southern Alps tunnel, Shinagawa Station, Nagoya Station, tunnels inmountainous areas, emergency exit sites in urban areas, and other locations
where work is challenging and construction periods will be long by giving
serious consideration to construction safety and environmental protection. In
addition, given the approval obtained for the use of the deep undergroundsection in October 2018, produce the shield machine and make otherpreparations for the excavation of tunnels in urban areas.
Promote efforts to establish sophisticated and efficient operation/maintenancesystems for the Chuo Shinkansen.

Sample illustration of a large-opening movable
platform fence at Shin-Osaka Station

120
100
80

N700A
type

60
40

Excavation of Southern Alps tunnel(Yamanashi Section) on the main line

20 Series
0
N700S

Large-scale renovation

700’16.3 ’17.3 ’18.3 ’19.3 ’20.3(plan)Braking distance from traveling at
285km/h in the advent of an earthquake

25%

Illustrated image of completed Mikuriya Station

Power consumption volume

5%

16%
270
km/h

285
km/h

6%
285
km/h

A line that indicates theinner platform edge
Sample illustration of information provided

Series
700

N700A
type

N700S

Series
700

N700A
type

N700S

Features of the N700S
Reference

10

Reference

Laying derailmentprevention guards:

FY2019 approximately 98 km

Measures to prevent
suspended ceilings at
stations from falling:

All 17 Shinkansen stations, 30 conventional line stations(FY2016 to FY2026 approximately 13.0 billion yen)

Large-scale renovation:

FY2019 34.0 billion yen (FY2016 to FY2019
145.0 billion yen)

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

N700A (3rd edition):
Enhancement work to reflect
the features of the N700A(3rd edition):

FY2019 19 trainsets (applicable for 111 trainsets from
FY2017 to FY2019)

N700S:FY2020 12 trainsets (Launch 40 trainsets from FY2020
to FY2022: ), scheduled to begin commercial operationin July 2020

Construction of frames at KitaShinagawa emergency exit

Braille blocks with a line that indicates theinner platform edge
Reference

FY2019 5 trainsets (Launch 20 trainsets from FY2016
to FY2019)

Provisional installation of construction
beams at Nagoya Station

Installation of movable platform
fences at Shin-Osaka Station:
Movable fences at Kanayama Station:
Mikuriya Station:

Reference
To be completed by FY2022 for platforms #20 through#26. (Completed installations on platform #27)
To start operation on platforms #25 and #26 in FY2019
To start operation on the platform for Toyohashi-boundtrains in March 2021 and on the platform for Nagoyabound trains in December 2021

Construction beams:

Steel bridge beams temporarily installed to prevent deformationof existing tracks when excavation work is performed below thetracks for the construction of an underground station

Scheduled to open between Fukuroi Station and Iwata
Station on the Tokaido Line in the spring of 2020

Stations servicing 3,000 or more passengers:
Braille blocks with a line that indicates Installations completed in FY2018
the inner platform edge
Stations servicing 1,000 to 2,999 passengers:
Initiated new installations in 45 stations in FY2019

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201911

Key Measures

Key Measures and Capital Investment

4

Brushing Up Superconducting
Maglev Technology and Cost
Reduction
P.24
Capital investment amount: 2.0 billion yen

JR Central will continue brushing up
Superconducting Maglev Technology and pursuingcost reduction.
Continue to conduct long-distance running tests by alternately operating two
trainsets with rolling stock and facilities for commercial use at the Yamanashi
Maglev Line.
Produce an improved testing vehicle for formulating commercial rolling stock
specifications.
Proceed with verification, etc., toward establishing a maintenance systemthat can handle commercial services. At the same time, work to further refine
the Superconducting Maglev Technology and reduce costs for construction,
operation and maintenance of the commercial line.
While steadily performing the necessary running tests in anticipation of thelaunch of the improved testing vehicle, conduct “Public Superconducting
Maglev Test Ride events” to further promote public understanding ofSuperconducting Maglev.

FY20195Enhancing Sales and Marketing
P.26

Capital investment amount:

Promoting Technological Development,
Engagement in Global Environment Preservation,
Deploying the High-Speed Railway System Overseas

8.0 billion yen

JR Central will take initiatives to attract morecustomers to use online reservation services for
the Shinkansen.
Take initiatives so that more customers become aware of the convenience ofExpress Reservation and smartEX and use these services.
Promote tourist products, such as “EX Nozomi Family Hayatoku,” to widely
spur demand.

JR Central will make use of the tourist attractions
along its railway lines to actively deploy sales andmarketing measures.
Enhance tourism campaigns and products that convey the attractiveness of
Kyoto, Nara, Tokyo, Hida, etc.
Coordinate with local governments, travel agencies and other parties throughthe “Shizuoka Destination Campaign (Shizuoka DC)” organized by the 6 JR
passenger rail operators, and make efforts to develop attractive sightseeing
materials and products and operate sightseeing trains.

JR Central will take initiatives so that customers
from overseas can conveniently use its railroad
services.
Promote expanded use of “smartEX” services for customers from overseas aswell as work to boost sales of sightseeing value tickets, etc., while capturing
demand related to the Rugby World Cup Japan 2019.
Make efforts to enhance the provision of information to foreigners visiting
Japan by adopting announcement using tablet devices, etc., and by utilizing
the Company’s website for enhanced disclosure of information on train status.
In addition, complete the introduction of free Wi-Fi service on all Shinkansen
trains.
Running test being performed with Series L0

6

P.28

Capital investment amount:

1.0 billion yen

JR Central will strengthen efforts in technologicaldevelopment that contributes to enhancing safety
and reducing costs and in promoting global
environment preservation.
Conduct tests using the N700S validation test vehicles, such as the long-term
endurance testing and acceleration enhancement testing at 360 km/h.
Proceed with the new production of a testing vehicle for next-generation
limited express rolling stock that uses a hybrid system for conventional lines
and begin running tests.
Implement more advanced and power-saving inspections and maintenancethat utilize condition monitoring technologies. Also, promote technologicaldevelopment that can lead to cost reductions for maintenance and upgradingof facilities.
Carry out technological development to further heighten safety against
earthquakes, heavy rain and other disasters.
Promote various policies that contribute to global environment preservation,such as shifting to the N700A and other energy-saving rolling stock.

7

Steadily promoting affiliatedbusinesses
P.30
Capital investment amount: 41.0 billion yen(including capital investment of 38.0 billion yen by consolidated subsidiaries)

JR Central will promote affiliated businesses, with
JR Central Towers and JR Gate Tower at the core,
to further enhance customer satisfaction.
Respond to diverse needs to boost earnings by Operating JR Central Towers
and JR Gate Tower in an increasing uniform manner and demonstratingsynergistic effects to the fullest.
Further invigorate the merchandizing business and the station building
business by developing stores in station buildings and renovating commercial
facilities, as well as work to make effective use of land owned by the Company
to further expand earnings.
Proceed with the commercial development at Tokyo Station in light of theupcoming Tokyo 2020 Olympic and Paralympic Games.

JR Central will work to deploy the high-speed
railway system overseas.
Proceed with technical assistance to the main development entity of theTexas
Project in the U.S. through HTeC, while carrying on full-scale discussions
through HInC along with firms on the Japan side toward concluding thecontract for the core system. In addition, bolster promotional activities for theuse of the Superconducting Maglev system in the Northeast Corridor Projectin the U.S.
Continue to proceed with the technical consulting services for the operation
control system renovation work, etc., for the Taiwan High Speed Rail.
Advance initiatives to make the Japanese high-speed railway system, which isbased on the principle of Crash Avoidance, a global standard.

EX Service Members and Registered Persons (as of fiscal year-end)
Number of “Express Reservation” members(10,000 persons)

Number of persons registered to “smartEX”

600

Central Towers and Gate Tower

500

226

400
300
200

Online Reservation Ratio
About(Reserved Seat)

100
0

14

15

16

365

40%
17

18

(FY)

Next-generation limited
express rolling stock thatuses a hybrid system(testing vehicle)

Improved testing vehicle

Renovated PARCHĒ in Shizuoka Station building

Shizuoka DC poster

HTeC members reviewing a candidate station site
(Dallas)Reference

ReferenceLong-distance running tests for Cumulative running distance of 2.76 million km (as of
the Yamanashi Maglev Line:
February 28, 2019)

Free Wi-Fi service coverage:

On the Tokaido Shinkansen N700A type and Express“Hida” and “Nanki,” in 17 Shinkansen stations andin 24 conventional line stations (including 6 stations
servicing both Shinkansen and conventional lines)

Next-generation limited
express rolling stock thatuses a hybrid system forconventional lines:

To complete the testing vehicle at the end of 2019, withconsideration to launch a mass-production vehicle in
FY2022.

Shizuoka DC:

Held from April to June 2019, co-hosted by Shizuoka
Prefecture and the JR Group.

HTeC, HInC:

Local subsidiaries established by the Company topromote the Texas Project in the U.S.

Improved testing vehicle:

12

Guiding a customer using a mobiletranslation machine

To be completed in the spring of 2020 (Number ofrolling stock produced: 1 first car, 1 middle car)

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Reference

Reference
Commercial
development at Yaesu
North Exit of Tokyo
Station:To start operation in the spring of 2020 following the redevelopment of First Avenue Tokyo Station.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201913

Ensuring Safe and Reliable Transportation—

Management Strategy

Safe and Reliable Transportation

Further Reinforcement of Earthquake Countermeasures

Tokaido Shinkansen

Implementation of derailment and deviation countermeasures

Number of accidents resulting
in fatalities or injuries ofpassengers on board since
the Tokaido Shinkansen
started service in 1964

0

Total cumulative safetyrelated investments
since the Company’s
founding

accidents

3.6

trillion yen

General Principles of Safety

Ensuring safe and reliable transportation marks the foundation of the railway business. If we were to cause a major
accident, the trust placed in the Company would be lost in an instant, and the Company’s very existence would be put indanger. With this frame of mind, the Company has worked to ensure safety across all its operations since its founding.
Total safety-related investments have now exceeded 3.6 trillion yen in total, accounting for approximately 70% of allannual capital investment when excluding investments made towards the Chuo Shinkansen. We will also continue withsteadfast initiatives aimed at further improving the technical skills and safety consciousness of employees, such as byimplementing practical training and large-scale recovery training in preparation for emergency situations, etc.
Refer to P. 53 for further related information (Column 1 “Learning safety from accidents”)

Renovation and Upgrade of Structures and Other Facilities

Large-scale renovation
The reserve of 350 billion
yen accumulated by
FY2012 is appropriated at a
rate of 35 billion each year
from FY2013.
We will continue toactively incorporate theresults of our R&D efforts
and make improvements,
etc. to construction
Large-scale renovation
methods, thereby bringing
down related costs in making sure steps forward with our construction work.
*1 Received the approval of the Minister of Land, Infrastructure, Transport and Tourism for our allowance
reserve plan for the large-scale renovation of Shinkansen infrastructure in FY2012 and began therenovation work in FY2013.
*2 “Measures to inhibit aging damage”: Measures to extend the life of structures by inhibiting theoccurrence of cracking and other damage from aging.
*3 “Overall renovation”: Replacement of components, etc. .

Conventional Lines

Counter-disaster measures and other efforts
JR Central’s conventional lines operate not only in urban areas but also
along steep natural slopes and other varied terrain. As such, we havebeen making efforts to adopt measures against falling rocks, heavy
rainfall, and other disaster situations. In FY2019, we will continue to takemeasures against falling rocks, such as newly installing falling rock14

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Reinforcement of structures
JR Central has been implementing earthquake-resistance measures for various civil engineering
structures and buildings related to transportation by the Shinkansen so as to prevent the
Shinkansen from going out of service for a long period of time in the event of a major earthquake.
Since 2010, we have been carrying out large-scale renovation work for the Hamamatsu
Workshop, which conducts general overhauls*1 of Shinkansen rolling stock. This includes
rebuilding and reinforcement so that the general overhaul function can be maintained even in theevent of a major earthquake. Most of renovation work has already been completed, and we havebeen conducting general overhauls using the new inspection and repair lines since January 2017.
Reviewing the inspection and repair lines in conjunction with this renovation work resulted in
improving operating efficiency. As a result, the number of days required for the general overhauls
has been reduced from 15 days to 14 days, enabling us to use rolling stock for operating trains
more promptly.

Initiatives to stop trains quickly

Tokaido Shinkansen

Our civil engineering structures are sufficiently maintained through daily
and thorough inspections and repair. However, in future, it will be inevitableto replace many of the facilities due to aging. We received the approval of
the Minister of Land, Infrastructure, Transport and Tourism for our allowance
reserve plan for the large-scale renovation of Shinkansen infrastructure
based on the Nationwide Shinkansen Railway Development Act, and beganbuilding the reserve from 2002. Along with this, we have advanced our
research on a new construction method, led by our Komaki ResearchCenter. As a result of our R&D efforts, we developed a new construction
method that allows us to significantly reduce the impact on train operations
during construction work, and to considerably cut construction costs. With
this method in place, JR Central began the renovation work in FY2013,ahead of the original schedule*1.We are expecting to engage in renovations
for a period of about 10 years. We will begin with the implementation of“measures to inhibit aging damage”*2 and, while checking the effect of
those measures, perform “overall renovations”*3 as necessary.

We are promoting derailment and deviation countermeasures to prevent expansion ofdamage from derailment caused by an earthquake. These measures come in a dual system
where the highest priority is set on preventing rolling stock from derailment with “derailment
prevention guards”, and when derailment cannot be avoided, it prevents the rolling stock froma major derailment with “deviation prevention stoppers”.
In regard to measures for ground facilities, we are installing “derailment prevention guards”
as well as adopting measures for civil engineering structures to have the derail prevention
guards function effectively. While we expect to complete implementing these measures to theentire line by FY2028, considering the nature of these measures, we will continue to study thepossibility of completing the work as early as possible.
As for measures adopted for rolling stock, “deviation prevention stoppers” have alreadybeen installed on all of our Shinkansen rolling stock.

detection nets and protective equipment, and against heavy rainfall, suchas reinforcing slope protection and newly installing drainage facilities.
We will also continue to advance our efforts to improve safety devices
on grade crossings together with making replacements due to aging inorder to enhance safety.

In order to prevent expansion of damage caused by earthquakes, it is important to stop trains
quickly. JR Central adopts an earthquake prevention system*1 which detects tremors, automaticallystops power transmission, and issues an order to moving trains to make an emergency stop. We
also made improvements to the “Earthquake Brake” on rolling stock in an effort to reduce thestopping distance at the time of an earthquake. For the next-generation Shinkansen rolling stock
N700S, which we are planning to launch in FY2020, we will make improvements to ATC and thebrake system to further reduce the stopping distance at the time of an earthquake by roughly 5%
compared to the stopping distance of N700A (3rd edition)*1 After introducing the “Urgent Earthquake Detection and Alarm System (UrEDAS)” before other companies, we introduced the“Tokaido Shinkansen Earthquake Rapid Alarm System (TERRA-S)” in 2005, thereby improving the system in the speed of thealarm, etc. In 2019, we continue to further accelerate the speed of the alarm by utilizing information from the Seafloor Observation
Network for Earthquakes and Tsunamis.



Derailment prevention guards

Measures taken and progress
Measures taken

Progress (as of the end of FY2018)

Elevated trackcolumns, bridges,
and embankments

Completed * Except for some areas
under discussion(Elevated track columns:
Approximately 19,600; Bridges: Approximately
900 units; Embankments: Approximately 9.4 km)

Bridge railing(Fall prevention)

Under way (Completed about 2,070 beams outof about 2,125 beams concerned)

Station buildings

Completed * Except for some areas underdiscussion

Rolling stock
workshops, etc.

Rolling stock depot buildings: Completed
Hamamatsu Workshop: Completed*1 General overhauls (Shinkansen): Overhauls required for Shinkansen rolling stock
within 36 months or under the distance of 1,200,000 km.

Tokaido Shinkansen Earthquake Rapid Alarm System (TERRA-S)
Seafloor Observation Network
Suspension of power transmission
Information for Earthquakes(NIED)
Emergency stop of train
Earthquake early warning(Japan Meteorological Agency)

Seismometer alongsiderailway lines

Distant
seismometer
Relay Station
Substation
Trench-type earthquakes

Vertical earthquakes

Detects P-wave (primary tremors) and S-wave (secondary tremors), and once acertain level of tremors is detected, issues an order for trains to stop

Conventional Lines

Reinforcement of structures
In order to minimize the impact of earthquakes also on conventional lines, we are
implementing earthquake-resistance measures on various civil engineering structures.
Measures taken and progress
Measures taken

Progress (as of the end of FY2018)

Elevated trackcolumns andbridges

Earthquake-resistance reinforcements under way in sections where there are atleast 10 departures per peak hour, and in sections where a long, strong earthquake
vibration is expected, as in the case of the Tokai Earthquake* Elevated track columns: Completed 5,078 columns previous concerned by the end of FY2018.The target has been
expanded for the purpose of further early recovery at the time of disaster and Newly 3,338 columns under way.
* Bridges: Completed two out of the four bridges concerned

Bridge railing(prevention of fallingfrom bridges)

Earthquake-resistance reinforcements under way in sections including those where
there are at least 10 departures per peak hour and where a long, strong earthquake
vibration is expected, as in the case of the Tokai Earthquake* Completed about 1,975 beams out of about 1,985 beams concerned

Station buildings

Implementation of earthquake-resistance measures under way for station buildings
servicing at least 5,000 passengers per day* Completed for 74 stations out of 76 stations concerned

Rolling stock
workshops, etc.

Nagoya Workshop: Rebuilding and reinforcement of buildings under way* Plan to complete by the end of FY2021

Initiatives to stop trains quickly
Information from the aforementioned earthquake
prevention system will be used for conventional lines todetect the initial weak tremors in case of an earthquake,and give a warning to the driver’s cabin of trains traveling insegments that are likely to be impacted significantly by theearthquake. Every driver who received the warning would
immediately hit the brake and stop the train. Furthermore,
we have been strengthening the functions of seismometers
since FY2016. We will be able to issue warnings to trains
more quickly than before.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201915

Common Initiatives for the Tokaido Shinkansen and Conventional lines
Hanging bolts

In order to heighten safety at stations in case of an earthquake, we install earthquake
resistance measures on suspended ceilings*1 at stations that service a large numberof customers.*2
We prevent suspended ceilings from falling by firmly joining the building frame andthe ceiling with wires and taking other measures.
*1 A type of ceiling with a structure that hangs from the building frame*2 Applicable for all 17 stations of the Shinkansen and 30 stations of conventional lines that service at least 10,000 customers per day

Earthquake-resistance measure:
Joining the building frame and the ceiling with wires
Station concourse, etc.
Illustration of anti-falling measure

Operation Management and Safety Measures

Tokaido Shinkansen

Conventional Lines

Features of Japanese high-speed rail system

ATS-PT (Automatic Train Stop)
ATS-PT continuously checks the speed for conventional lines according
to the distance between the train and the signal, the curve, and the points.
It ensures safety by automatically applying emergency brakes in situations
where the train risks overrunning. We have completed the introduction of
ATS-PT to all of our conventional lines.
ATS-PT function
Speed

Travel curve of train

Brake patterns

How ATC works(3) Creates ATC signals (train speed comparing patterns) frompositional information for the train ahead and one’s own train(4) Compares
the speedwith thesignalConsecutively comparing
speeds. The emergency
brakes are applied when
excessive speed is detected,
regardless of the speed

signal(5) When the train’s speed exceeds
the signal the brakes are applied

Ground unit (pattern occurrence)(2) Own train positional information

Ground facilities(for positional adjustments)

Speed of own train

ATS-PT overview•A brake pattern is generated in the
train based on the distance to thesignal derived from informationfrom the ground•The emergency brakes areautomatically applied to stop trains
running at speeds in excess of thispattern by the time they get to thesignal•Continuous control is performed
using brake patterns

Preceding train

Tokai General Control Center(Nagoya) /Shizuoka General Control Center / Operation management systems(1) Preceding train positional information (rail)

Receive the information

Shinkansen General Control Center / Operational control systems
The safe and reliable transportation of the Shinkansen is supported by
the Shinkansen General Control Center in Tokyo, where directors work inclose collaboration using various systems, such as Computer Aided
Traffic Control (COMTRAC*), to accurately grasp a significant amount of
information, including the operational status of trains and the utilization
status of facilities, control overall transportation services, and manage
their safety. Moreover, the Shinkansen Second General Control Center has
been established in Osaka jointly by JR West, and is equipped with thesame functions as the Shinkansen General Control Center in Tokyo so thatit can serve as an alternative control center should Tokyo’s General
Control Center become non-operational due to a disaster. Thus, we havestrengthened our crisis management in preparation for emergencies.
* COMTRAC (COMputer-aided TRAffic Control): COMTRAC is the system that controls train routes,
manages train operations, and operates and manages the allocation of staff (drivers and conductors) androlling stock. Based on input data prescribing the operational conditions for each train (such as station
departure and arrival time, platform, and order) in the computer, the system can monitor the status of all
trains in operation at all times.

Safe and Reliable Transportation

Common Initiatives for the Tokaido Shinkansen and Conventional lines

Earthquake-resistance measures for ceilings of stations

The Japanese high-speed rail system led by the Tokaido Shinkansen
is based on a principle of Crash Avoidance, which is the biggest featurefor ensuring safety. This principle has been derived to prevent thepossibility of a collision by using (1) dedicated tracks for high speed
passenger rail service, which completely exclude freight and commuter
rail and have no grade crossings, and (2) an Automatic Train Control(ATC) system, which automatically controls the speed limit of highspeed trains and prevents collisions from happening.

—

Management Strategy

The operation of our conventional lines is managed by the Tokai General
Control Center (in Nagoya) and the Shizuoka General Control Center. In
these Control Centers, directors work in close collaboration using various
systems, such as CTC* (Centralized Traffic Control), to accurately grasp asignificant amount of information, including the operational status of trains
and the utilization status of facilities, control overall transportation services,and manage their safety to support safe and reliable transportation onconventional lines.

Safe and appropriate responses to natural disasters
Whenever a typhoon or other weather condition is expected toaffect train operations, we place the highest priority on ensuring
passenger safety. We may
impose drastic restrictions on
train operations in light ofspecific weather conditions anddetermine optimal operations
that will enable trains to avoid
being impacted by windborne
projectiles, etc., and prevent therisk of overcrowding in stationsor that of trains being stranded
between stations for long
periods of time.
Once adverse weather-related
Sample illustration of information provided

conditions subside, we will promptly resume train services after
conducting thorough safety checks to verify whether there is any
debris on the tracks or damage to equipment, when necessary.
We will communicate information about train operations via our
corporate website, press releases, and official Twitter account. In
addition to these communication channels, we will actively use
information boards installed at stations as well as station and train
public address systems.

Measures to ensure security
In order to ensure security within railway stations and trains, we havebeen implementing a series of concrete measures, such as installingsecurity cameras, equipping Shinkansen trains with shields and otherprotective devices as well as medical equipment in addition toenhancing security and patrols. At the same time, we are working to
improve our emergency response capability through training, etc.

Education and Training
Technical skills training

Employee training in preparation for contingencies

We implement safety education and training for staff engaging in
train operations and facility maintenance. We conduct education andtraining especially for staff engaging in train operations (such as drivers,
conductors, directors, and those who handle signals or operate switch
stands) according to the content and time stipulated for each duty.
We introduce simulators, which can perform operations simulation
training, etc. for emergencies, to field offices for drivers and conductors.
We also conduct various training sessions using ground facilities, such as
actual rolling stock, overhead contact lines, so that employees on eachsystem can swiftly and accurately respond to emergencies.

Emergency conditions response training
We conduct various training every year as an opportunity for us to enhance quick
response to safety in case of accidents and to learn the work of other specialized fields.
We conducted practical training in FY2018, such as passenger evacuation guide training
sessions, information communication training sessions, and line facility restoration training,based on the assumption of natural disasters, such as earthquakes, and contingencies.

We train all employees to go
beyond the call of duty in working
together with staff, etc., to respond
appropriately in ensuring ourcustomers’ safety should employees
happen to be present when
unforeseen circumstances occur
while commuting or on a business
trip.
Employee training in preparation for contingencies

Other training
The General Education Center offers education on specialized
knowledge and skills for each function, and provides sessions forvarious qualifications and train conductors and drivers by using various
training facilities that can simulate various events that occur in actual
situations.

* CTC: The CTC system not only remotely
and integrally controls station signaling
equipment, etc. in order to efficiently manage
train operations, but also has the functionof conducting real-time monitoring of theoperational status of trains.

Passenger rescue training

Tokai General Control Center

Tsunami evacuation guidance training

Training for Shinkansen conductors

Other Initiatives

Multiple Inspection Train and Track Inspection Train (Dr. Tokai)
The Shinkansen Multiple Inspection Train (Dr. Yellow)
We have also introduced the “Shinkansen Multiple Inspection
Train (Dr. Yellow)” to test ground facilities, such as electricalfacilities and tracks. Thisrolling stock, which isbased on the Series 700,
aids safe and reliabletransportation by
efficiently conducting highprecision inspections at
speeds of 270km/h.
Dr. Yellow

16

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

We efficiently and thoroughly manage and maintain facilities withregard to the maintenance of railway tracks and electrical facilities on
conventional lines, using the “Multiple Inspection Train” (Dr. Tokai)”.

Efforts to eliminate industrial accident.
We are also working hard to eliminate labor accidents. The number of labor
accidents has significantly decreased compared to when our company was founded.
We set “priority execution items” each fiscal year to make a company-wide effort toeliminate labor accidents. More specifically, we provide continuous safety education
at the General Education Center as well as at workplaces. We also promote research
activities on labor accident prevention, led by a group of field staff.

Safety audits

Dr. TokaiInternal audits are performed on the Company’s business organizations andaffiliated companies from three main standpoints. The confirmation of the level ofcompliance with laws and regulations, etc., the confirmation of systems in place toprevent train and labor accidents that occurred in the past, and the confirmationof the state of accident prevention measure implementation. We strive to prevent
violations of laws and regulations, the fading out of past countermeasures, and rules
from losing their substance before an incident occurs by having a third party inspect
our business operations and share these results.
CENTRAL JAPAN RAILWAY COMPANY Annual Report 201917

Enhancing Transportation Services“12 Nozomi Timetable” expected to significantly improve our services
We have worked to enhance our transportation services on the
Tokaido Shinkansen for years. We put the Series 300 “Nozomi” into
operation in 1992 with a maximum speed of 270km/h, and thenopened Shinagawa Station and replaced all trains with the Series
300 trains in 2003, shifting to a Nozomi-centered timetable. This
timetable also underwent successive improvements, with theupdate to the current "10 Nozomi Timetable" version (operating up
to 10 Nozomi services in both directions) to fulfill the needs ofcustomers. Then, in 2015, the speed of the Tokaido Shinkansen
increased for the first time in 23 years, reaching a top speed of
285km/h Diagram 1 .
At the time of the next timetable change in the spring of 2020, we
will introduce a “12 Nozomi Timetable,” which will again
significantly improve our transportation services. We will make thispossible by improving the equipment and completing the updateto the N700A type* to allow all trains to run at the same top speed
Diagram 1

JR Central strives to improve its transportation service to fulfill its mission of integrally maintaining and developing theTokaido Shinkansen, which serves as Japan’s main transportation artery, and the conventional line network in the Tokai
region. With continual long-term capital investments, we have improved the Tokaido Shinkansen service not only bybolstering safety and accuracy, but also by the high speed, frequency, and capacity, such as by boosting speeds to 285
km/h, or introducing the “10 Nozomi timetable” (operating up to 10 “Nozomi” services in both directions). We will look tofurther maintain and enhance the competitive advantages offered by the Tokaido Shinkansen as the earnings received
from this service are vitally important in proceeding with the Chuo Shinkansen Project.

Number of services and passenger volume of the Tokaido Shinkansen(per day)of 285km/h. The maximum number of “Nozomi” services per hour
will increase by 2 from 10 to 12 in either direction, and “Nozomi”
will be operated at an average interval of 5 minutes during busy
hours.
Under the current “10 Nozomi Timetable,” seven “Nozomi”
services run between Tokyo and Shin-Osaka with a travel time
ranging from 2 hours 33 minutes to 2 hours 37 minutes. Under the“12 Nozomi Timetable,” all “Nozomi” services will travel between
Tokyo and Shin-Osaka within 2 hours 30 minutes Diagram 2 . With
this “12 Nozomi Timetable,” additional “Nozomi” services will be
provided during busy hours. Passengers can reduce their travel
time by reserving train seats online at their convenience and using
a new, faster “Nozomi.” This will make the Tokaido Shinkansen
even more convenient.
* This is a collective name for the Series N700 rolling stock remodeled to reflect the key functions of the
N700A and the N700A and later-generation rolling stock.

1

Maximum number of the fastest train, “Nozomi” one way per hour
Nozomi

Safety0

accidents

No accidents resulting in fatalities or injuries of passengers on board
since operations commenced
Improvement of safety awareness and skills through humanresources education and training
Continual investment in safety-related facilities

High Speeds

285

127 126
122 120 122

125

123

126

231

341

133 134

336 333 336

260

5

34

34

35

37

41

45

50

51

61

70

101 145 166 170 175

239

358

373
365 368

12 360300

10276 273271
270 271 274 274 271 269 269 271 272 275

0

342

350

319

290

100

152
420

130

130
334

100

Average delay time: 0.9 minutes / 1 train in service

9
240

8
7

187 193 188 185 188 194 201

209 217 220 225
180

143 150 165 176 187 189 158 157 158 158 155 148 139 138 130 12240373
477,000

120

93

3

services,

20

89

88

87

84

84

passengers

Note: Results for FY2018 (including extra trains)
Note: Results for FY2018

Number of seating available: 1,323 seats/train

82

81

80

1

65

65

64

64

66

66

66

66

66

65

65

65

65

65

65

60

2
79

78

78

78

80

80

80

79

80

80

80

80

80

81

82

82

82

82

83

83

83

83

83

83

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

0

0

87

88

89

90

91

92

93

94

“Nozomi”(the Series 300) began commercial operation“Express Reservation” was launched

The Shin-Osaka Station improvement work completed

The Shinagawa Shinkansen Station opened and all trains at max. 270 km/h

19

(FY)

“smartEX” was launched

Unified N700A type rolling stock and all trains at max. 285 km/h

Maximum number of the fastest train, “Nozomi” one way per hour

1/12

ComfortApprox.

The energy consumption amount per seat when traveling between
Tokyo and Osaka is approximately 1/8th of that of an aircraft
The CO2 emission rate for the same is around 1/12th

18

123

311 314

Note: Results for FY2018. Including delays caused by natural disasters, etc.

Number of passengers per day: 477,000

1/8

121

157

159

138

111

60

Note: Accurate as of the March 2019 timetable revision (arrival time based on the fastest trains
in service)

Approx.

124

minutesNumber of train services per day: 373

Environmental
feasibility

126

118

120

252

Maximum speed: 285 km/h
Tokyo ~ Shin-Osaka: 2 hours 22 minutes
Refer to P. 53 for further related information(Column 2 “Shortening of arrival time by speed increase”)

148
142

141

140

0.9

High Frequency
andHigh Capacity

km/h(Trains / day)
480

143

80

Punctuality

169

164

160

128 129

Characteristics of the Tokaido Shinkansen (Safety, Punctuality, High Speeds, High Frequency and High Capacity, Environmental feasibility, Comfort)

Tokaido Shinkansen Passenger volume(FY 1987=100)
Kodama(Index)Tokaido Shinkansen
Since its inauguration in 1964, approximately 6.4 billion people have used the Tokaido Shinkansen, the transportation artery linking
Japan’s three largest metropolitan areas, Tokyo, Nagoya, and Osaka. The Tokaido Shinkansen has literally supported Japan’s economic
growth. We will continue operating Japan’s main transportation artery while ensuring safe and reliable transportation as the first priority.

HikariThe sum of figure for each train may not agree with the total due to rounding

137

Diagram 1

Transportation Service—

Management Strategy

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Wide open, quiet space

Note 1. Departures shown include extra trains.
Note 2. Usage status is shown by means of an index with the sectional transportation volume for
FY1987 as 100.
Note 3. Station stops Nozomi: Shinagawa, Shin-Yokohama, Nagoya, and Kyoto Hikari: Same as“Nozomi”, plus a few additional stations Kodama: Stops at each station
Note 4. The sum of figures for “Nozomi”, “Hikari”, and “Kodama” may not agree with the total
due to rounding.

Diagram 2

Travel Time of “Nozomi” between Tokyo and Shin-Osaka
Current Timetable

New Timetable

Within 2 hr 30 min

3 trains

12 trains

2 hr 33 min – 37min

7 trains

None

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201919

Conventional Lines

Development of the next-generation rolling stock, N700S

We operate a network of 12 conventional lines, which form an
integrated network with the Tokaido Shinkansen. These lines havecontributed to the development of communities and the regional
economy in the Tokai region, mainly around Nagoya and Shizuoka.

Diagram 1

Commuter Passes

2020

2021

2022

Total

12

14

14

40

General specifications of mass production cars

Enhanced safety
and stability

Higher emergency
response capability

Enhanced comfort
and convenience

Shorter braking distance in theevent of an earthquake Diagram 2
Enhanced snow-resistant features
Enhanced status monitoring
function Diagram 5

Battery-based self-propelled
system Diagram 4
Additional security cameras
Enhanced intercom functions
Toilet functions during power
outageEquipped with a fully active
damping control system
Additional outlets for mobile
devices

Shorter braking distance in the event of an earthquake

Diagram 5

25%

The speed of transmission
inside rolling stock
times*

Transmitter

10

Existing way

New way

DamageDamage*Possibility of breakdown

Series 700

Diagram 4

N700A
type

km/h

RepairThreshold

6%285

The rolling stock analysis centerin the inspection and repair center*Compared with N700A (3rd edition)

Dangerous Zone

km/h

By millimeter wave

Monitoring rolling stock with more detailed data on on-board equipment at the rolling stock analysis center[Image of Monitoring]

N700S

Power consumption

285

Employing the DualSupreme Wing design that
reduces air resistance anda drive system that uses
next-generation siliconcarbide semiconductors,
the N700S consumes 6%
less electricity than the
N700A type.

N700S

The battery-based self-propelled system

Dangerous Zone

414

134

138

140

142

143

257

262

265

269

271

’15.3

’16.3

’17.3

’18.3

’19.3

With regard to conventional lines, we have steadily improved ourservices by, for example, launching new rolling stock and thereby
increasing the speed and frequency of services. In order toenhance the convenience of limited express trains, we developed
an integrated network of Shinkansen and conventional lines byimproving connections between them and increased flexibility in theoperation of major limited express trains to absorb the demand
fluctuations caused by seasonal factors and events. Going forward,
we will continue to work to further enhance safety and comfort byintroducing next-generation hybrid limited express rolling stock.
Moreover, in order to offer convenient timetables for local train
passengers, we are working to develop rapid train systems, operate
trains at regular intervals, and increase the frequency of services

and the number of cars per train, especially during the morning andevening commuting hours.

Limited Express Train “Wide-View Shinano”

Inspection&Repair

Normal range
Time
Check condition only at the time of
regular inspectionTime
Detect predictive troubles and inspect andrepair them thanks to the monitoring

Equipment data that is more detailed than ever is consolidated at the rolling stock analysis center via
large-volume data communications. The data will be used for more precise equipment monitoring,so potential problems can be investigated and fixed in order to prevent failures from occurring.
The data will also be used to save labor on future inspection and repair work.

TunnelCENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

In anticipation of the replacement of electric cars currently used for the“Hida” and “Nanki” limited express trains, we will newly develop a
testing vehicle for the next-generation limited express rolling stock thatuses the hybrid system, the first of its kind for us, by the end of 2019 andconduct test runs to establish relevant technologies to prospect for one
year. We are aiming to commercially operate the country’s first hybridtype railway rolling stock that runs at speeds up to 120 km/h, while
enhancing the safety and comfort of such trains. We are currently
reviewing plans to commercially introduce massproduced vehicles by
FY2022.
The hybrid method utilizes a combination of power generated by theengine and the power stored in a storage battery during braking, etc., torotate the motor for running the train. By adopting this method, we do notneed the rotary components unique to diesel railcars and can achieve
increased safety and reliability. In terms of comfort, we can improve
quietness and comfort by not having to make the gear changes unique
to diesel railcars, reducing the number of engines, etc.
In addition to the hybrid
rolling stock, we will also
introduce new technologies
to further enhance safety,
such as a new one-piececast truck frame, vibration
detectors, and data
communications between
Exterior illustration
trains and wayside.

*Possibility of breakdown

Semi-Dangerous

The N700S is the first high-speed train equipped with a battery-based self-propelled system.
It can travel to a location where passengers can safely evacuate
in the event of a long power outage following a natural disaster, etc.

20

410

New production of next-generation limited express train rolling stock (testing vehicle) using the hybrid method

10

Equipment

Reduced power consumption

16%

Reduced power
consumption Diagram 3
Labor-saving inspection/repair
work

The speed of transmission
from rolling stock to the centertimes*

Equipment

5%
The braking distanceduring an earthquake is
5% shorter than the N700A
type thanks to an improved
ATC and brake system.

N700A
type

Lower running cost

Enhanced status monitoring function

The data

km/h

405

Transmit more detailed information on on-board equipment to the rolling stock analysis center

Braking distance at 285 km/h
during an earthquake

270

401

200

0

N700S validation test vehicles

Diagram 3

300

391

Ordinary Tickets

Improvement of service on conventional lines

Number of
Rolling Stock

Series 700

400

100

Launch Plan

Fiscal Year

Diagram 2

Transportation Service

Shifts in the number of passengers on conventional lines(Million passengers)

The N700S, the next-generation Shinkansen rolling stock, is designed basedon the results of years of technological development, and is equipped withfeatures such as enhanced safety and stability, higher emergency response
capability, enhanced comfort and convenience, and a standardized designthat can easily be constituted to any length of trainsets.
Based on the results of the test runs of N700S test trains, we determined themass production specifications for the rolling stock that will replace the Series
N700 trains in FY2020 and developed a launch plan Diagram 1 as shown below.

—

Management Strategy

Installation of movable fences on the Tokaido Line platform at Kanayama Station
We have been working on developing movable platform fences forconventional lines that can accommodate different types of rollingstock with doors located at varying positions. The width of the fence
opening measures more than 4 meters, which is the widest among
conventional line platform fences with two sliding gates. In order toaccommodate trains with different numbers of cars, the fences are
fitted with sensors that detect the number of cars in a trainset and theirpositions when the train stops, allowing the gates to automaticallyopen. The gates are then closed by the conductor.
In developing the fences, we focused on ensuring safety in light of
the large width of the gate opening, reducing weight, increasing
opening and closing speeds, and cutting costs. In January 2018, westarted testing the fences using a prototype installed on the TokaidoLine platform at Kanayama Station. Now that the movable fences havebeen fully verified for practical use, they will be installed on both sidesof the Tokaido Line platform at Kanayama Station. They are slated tobe put into service in 2021.

Movable fence

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201921

Promoting the Chuo Shinkansen Project Using the Superconducting Maglev System—

Management Strategy

Chuo Shinkansen

Progress of the Project
Diagram 2

Route of the Chuo Shinkansen (Between Tokyo and the City of Nagoya)

YamanashiTokyo

Prefecture

Metropolis

Nagano

Gifu

Prefecture

Prefecture

Kanagawa

Operating speed

500

km/h

40 67
Tokyo Metropolis ~ Nagoya City

Time required(fastest)

Prefecture

Tokyo Metropolis ~ Osaka City

minutes

Legends:Planning Route:Yamanashi Maglev Line

minutes

We are promoting the Chuo Shinkansen Project using the Superconducting Maglev System based on the Nationwide
Shinkansen Railway Development Act (hereinafter referred to as “the Act”) to continually carry out our mission ofoperating a high-speed railway linking the Tokyo Metropolitan area, Chukyo, and Kinki regions, which is the lifeline of ourbusiness, and to ensure the future foundation of the company.

Significance of the Chuo Shinkansen Project using the Superconducting Maglev System- Promoting the Project while ensuring sound management and providing stable dividends
50 years have passed since the inauguration of the Tokaido
Shinkansen, which serves as Japan’s main transportation artery.
Therefore, we must consider drastic measures to respond to aging in the
future and large-scale disasters based on the fact that it takes a long time
to construct and build a new railway line. In the wake of the Great East
Japan Earthquake, the need for a new line that enables us to offer
multiple routes in our main transportation artery has become even more
important to prepare for the risk from natural disasters. This is the reason
we decided to complete the Chuo Shinkansen as quickly as possible, as
it can be used as an alternate to the role of the Tokaido Shinkansen byutilizing the Superconducting Maglev System, which we have developed,
under the condition that we bear the cost of its construction. We will
operate the Chuo Shinkansen in an integrated manner along with theTokaido Shinkansen.
While steadily working towards the successful completion of this projectand maintaining our ability to react in a flexible manner, we will makenecessary investments to ensure safe and reliable transportation, and toenhance competitiveness in the railway business, as well as ensure
sound management and provide stable dividends. We will first realize theproject between Tokyo and the City of Nagoya, where we have received
approval for the construction plan, and strive to further extend to the Cityof Osaka.
In order to confirm that the principles of a privately owned company,
such as freedom of management and autonomy of capital investment,
would not be hindered by application of the Act, we referred fundamental
Contents of Development Plan
Construction line

Chuo Shinkansen

SectionTokyo - Osaka City

Technology used for running
Maximum design speed

22(Note) The estimated amount of expenditures for construction
does not include interest.

505 km / h
9,030 billion yen

Other necessary items

Main areas
passed throughDiagram 1

Flow of work based on the Nationwide Shinkansen Railway Development Act
Article 4

Basic Plan

Article 5

Researches and Reports

Topological and geological surveys
Ordered in February 1990
Reported in October 2008
“Research on the residual 4 items” *Ordered in December 2008
Reported in December 2009

Article 14-2

The Transport Policy Council

Consulted on February 24, 2010
Replied on May 12, 2011

Article 6

Designation of Operator and Constructor

Consented on May 18, 2011
Designated on May 20, 2011

Article 7

Development Plan

Consented on May 23, 2011
Decided on May 26, 2011

Article 8

Instruction to Construct

Instructed on May 27, 2011

Article 9Construction Implementation Plan

Environmental
ImpactAssessment

Start of Construction

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Construction Implementation Plan (Part1): Submission on August 26, 2014
Approved on October 17, 2014
Construction Implementation Plan (Part2): Submission on September 25, 2017
Approved on March 2, 2018

Outline of the Construction Implementation Plan (Part2) of the Chuo Shinkansen
section between Shinagawa and Nagoya
Between Shinagawa and Nagoya

Station Location

Shinagawa Station, Kanagawa Prefecture Station (provisional name),
Yamanashi Prefecture Station (provisional name), Nagano Prefecture Station(provisional name), Gifu Prefecture Station (provisional name), Nagoya Station

Line extension

285.6kmConstruction costs
Kofu City area, south-central Akaishi
Mountains (Southern Alps), Nagoya City
area, Nara City area

Decided in November 1973

* “Research on the residual 4 items”
Items related to transportation capacity in response to the transportation demand
Items related to the development of facility and rolling stock technologies
Items related to construction costs Other necessary items

SectionSuperconducting magnetic levitation technology

Estimated amount of costs
required for construction(including rolling stock costs)

clauses regarding application of the Act to the Ministry of Land,
Infrastructure, Transport and Tourism and received a reply in January
2008 indicating that those principles would not be hindered.

Expected completion year

4,853.6 billion yen[Total construction costs of 5,523.5 billion yen (Includes rolling stock
costs. Excludes the construction costs for the existing Yamanashi
Maglev Line)]
2027

Aichi

ShizuokaPrefecture:Station Location

N

25

50km

Prefecture0This map is copied from a Japanese map (with a scale of 1 to 1,000,000) published by the Geographical Survey Institute with their authorization. (Authorization number: H25 Jo Fuku, 310)

According to the Act, JR Central follows the procedures for the Chuo
Shinkansen (between the Tokyo Metropolis and the City of Osaka) as shown in
Diagram 1 . Since receiving the order for construction in May 2011, we havetaken the procedures of environmental assessment between Tokyo and theCity of Nagoya, which is promoted as the first stage. In August 2014, we
submitted the final Environment Impact Statement to the Minister of Land,
Infrastructure, Transport and Tourism (the Minister) and made a publicannouncement. In addition, we simultaneously made necessary preparations
to apply for the approval of the construction implementation plan along withthe environmental assessment procedures. We submitted the application for
the approval of the Construction Implementation Plan (Part 1) mainly on civilengineering structures for the Chuo Shinkansen section between Shinagawa
and Nagoya to the Ministery on the same day as the submission of the final
Environment Impact Statement, and received approval in October of the same
year. Subsequently, in September 2017, we submitted the application for theapproval of the Construction Implementation Plan (Part 2) primarily onelectrical facilities and received approval on March 2018.
We have continued to hold briefings introducing our project for individualmunicipalities and local governments along the planned route to explain theways in which we work with local communities in as detailed a manner as
possible, and introduce region-oriented information etc. Further, we haveproceeded carefully with preparations toward initiating construction work,
including conducting center line surveys, implementing designs and holding
discussions, acquiring land, concluding construction contracts, andconducting briefings.
We concluded construction contracts for an order that started with the mosttime-consuming and most difficult construction work, such as the constructionof the Southern Alps tunnel and Shinagawa and Nagoya Terminal Stations. We
are now drilling the main tunnel at the Southern Alps tunnel construction site(the Yamanashi section) and building construction beams to replace railway

tracks at Shinagawa and Nagoya Stations. We are also implementing otherconstruction work in full swing, drilling tunnels in mountainous areas andinstalling emergency exits in urban areas.
Moreover, in October 2018, we received approval from the Minister of Land,
Infrastructure, Transport and Tourism to use deep underground areas; sincethen, we have been manufacturing shield machines to drill tunnels in urban
areas.
We will continue to go forward with our plan based on the major premise ofstrictly ensuring sound management, and by focusing on construction safety,
environmental protection, and coordination with local communities.
The Act on the Japan Railway Construction, Transport and Technology
Agency, Independent Administrative Agency was revised in November 2016,
and a system in which the Agency provides JR Central with the loans for partof the funds required for the construction of the Chuo Shinkansen was put inplace. We borrowed a total of 3 trillion yen before July 2017 as scheduled.
We will see that sound management and stable dividends are strictly
maintained by securing freedom of management and autonomy of investment,
and effectively make use of long-term, fixed and low-interest rate financing to
reduce management risk as we actively move ahead with the construction
efforts. After launching the service to Nagoya Station, we will continue on topromptly initiate the construction of the route to Osaka with a view to exerting
full efforts to move up live operation of the entire line by up to 8 years.

Excavation at Southern Alps tunnel (Yamanashi section)

Reducing Costs thoroughly while Ensuring Safety
We are responsible for the entire construction cost of the Chuo
Shinkansen, therefore all construction expenses and costs will be
examined by the internally established “Chuo Shinkansen Construction

Cost Reduction Committee”, which will thoroughly reduce costs while
ensuring safety. At the same time, we will flexibly distribute resources inan optimal fashion in accordance with the managerial environment.

Superconducting Maglev System and Engagement in Global Environment Preservation
Tokyo and Osaka will be connected in as fast as 67 minutes by the Chuo
Shinkansen using the Superconducting Maglev System, and the actual travel
time required to move between the centers of Tokyo and Osaka City can beshortened to approximately half of airplanes. In addition, the amount of CO2

emissions that Superconducting Maglev System produces per seat between
Tokyo and Osaka is approximately one-third of airplanes. As this shows,Superconducting Maglev is a transport system suitable for the 21st century inwhich global environment preservation is becoming more and more important.
CENTRAL JAPAN RAILWAY COMPANY Annual Report 201923

Refining Superconducting Maglev Technology and Reducing Costs

Accumulated traveling distance(Yamanashi Maglev Line)

Approx.
Accumulated investment amount(includes consumption tax in part)

2.89
706.8

million km

Progress on the Superconducting Maglev System Technology
June 1990

JR Central applies to the Minister of Transport for the approval of theconstruction plan of the Yamanashi Maglev Line and gains approval.

April 1997

Running tests start on the Yamanashi Maglev Line.

March 2000

The Superconducting Magnetic Levitation Technological Practicality
Evaluation Committee of the Ministry of Transport (hereafter, the“Evaluation Committee”) acknowledges that “there is potential froma technological standpoint that the technology could have practicalapplications”

December 2003

JR Central records the world speed record for a manned rail vehicle at
581 km/hNovember 2004

JR Central performs exercises of trains passing each other at 1,026 km/
h relative to one another

March 2005

The Evaluation Committee of the Ministry of Land, Infrastructure,
Transport and Tourism acknowledges that “the core technologies forpractical application have been established”

September 2006

A facility investment plan is established to extend the Yamanashi Maglev
Line and upgrade facilities

January 2007

Application for changes of “Yamanashi Maglev Line Construction
Plan” is approved by the Minister of Land, Infrastructure and Transport(hereafter, the “Minister”)

July 2009

The Evaluation Committee of the Ministry of Land, Infrastructure,
Transport and Tourism acknowledges that “the technologies required forcommercial services have been established from a comprehensive andsystematic standpoint, and it is possible to move forward with detailingthe specifications for commercial services and the technical standards”

billion yen

JR Central has promoted technological development based on our long-term belief that the Superconducting Maglev
System is the most suitable for use on the Chuo Shinkansen due to its speed and advanced technology.
The Superconducting Maglev System Technology has been completed as a practical technology. We will continue tomake efforts in further brushing up the Superconducting Maglev System Technology, including improving comfort andenhancing efficiency of maintenance, toward the opening of the Shinagawa-Nagoya route of the Chuo Shinkansen, as well
as work to reduce costs for the construction, operation, and maintenance of commercial lines.

May 2011

The Minister of Land, Infrastructure, Transport and Tourism determines
development plans for the Chuo Shinkansen (between Tokyo and
the City of Osaka), which is based on a Superconducting Magnetic
Levitation System

December

The Minister establishes the technical standards for Superconducting
MaglevAugust 2013

Work extending the Yamanashi Maglev Line to 42.8km and renewing thefacilities is completed, and running tests starts with the Series L0

April 2015

JR Central records a travel distance of 4,064 km in one day
JR Central records the world speed record for a manned rail vehicle at
603 km/h

February 2017

The Evaluation Committee of the Ministry of Land, Infrastructure,
Transport and Tourism evaluates that “the technology development
required for commercial lines was completed”

Initiatives with the Yamanashi Maglev Line
We started running tests on the initial 18.4 km section of the
Yamanashi Maglev Line in April 1997. The level of the Superconducting
Maglev Technology was evaluated in multiple stages, resulting in the
Superconducting Magnetic Levitation Technological Practicality
Evaluation Committee of the Ministry (hereinafter, the Evaluation
Committee) acknowledging that the Superconducting Maglev
Technology had already achieved levels sufficient for commercial
service in July 2009. The Minister established the technologicalstandards of the Superconducting Maglev in December 2011.
Work extending the Yamanashi Maglev Line to 42.8 km and fully
renewing the facilities was completed in August 2013, and running tests
were started with the Series L0 (L-zero) rolling stock based oncommercial line specifications. In April 2015 we recorded the maximum
daily running distance of 4,064 km, and beat our own world record forthe fastest running train with a record of 603 km/h. In February 2017,
the Evaluation Committee confirmed its evaluation that the technology
development required for commercial lines was completed.
We will continue to make efforts in further brushing up
Superconducting Maglev System Technology, including improving
comfort and enhancing efficiency of maintenance for the practicaltechnologies already established, and produce an improved testingvehicle for formulating commercial rolling stock specifications as well aswork to reduce costs for the construction, operation, and maintenanceof commercial lines.

Diagram 1

performance of Superconducting Maglev Technology, with manygiving their positive impressions, such as “traveled in extreme comfort”
and “wishing for early launch of the service.” Diagram 1

Investment in the Yamanashi Maglev Line and Superconducting Maglev Technological Development
We have invested heavily in developing the practicaltechnologies required to establish Superconducting Maglev
commercial lines. We will proceed with initiatives to realize
Superconducting Maglev Project in the Northeast Corridor of theUnited States while constructing Superconducting Maglevbased Chuo Shinkansen ourselves. The construction, operationand maintenance for these projects all rely on technologies wehave developed.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

What is superconductivity?

HigherTemperature ofliquid helium
Electricalresistance0-273

HigherTemperature-269

The Principles of the Superconducting Maglev System
Propulsion System

N S N S N S N S N

By passing current through the
Propulsion Coils on the ground, amagnetic field (north and south
poles) is produced, thus the vehicle
is propelled forward by the attractive
force of opposite poles and therepulsive force of same poles acting
between the ground coils and theSuperconducting Magnets built into
the vehicles.

S N S NN S N SS N S N S N S N S

Levitation System
The Levitation and Guidance Coils
are installed on both sides of theguideway (track). When the
on-board Superconducting Magnets
pass through at high speed, anelectric current is induced in theLevitation and Guidance Coils,
causing them to become
electromagnets. This generates aforce that both pushes and pulls up
the vehicle.

Superconducting Maglev Ride

N
S

S

N

S
N

N

S

N

N

Guidance System
The Levitation and Guidance Coilson both sides of the guideway keep
the vehicle in the center of theguideway at all times by exerting an
attractive force on the far side of thevehicle and a repulsive force on thenear side when the vehicle moves
off center to either side.

Overview of the Yamanashi Maglev Line
Yamanashi Maglev
Line starting point

Initial section
start point

0km000m

Initial section
end point

16km610m

Yamanashi Maglev
Line end point

35km010m

42km800m

Investment in the Yamanashi Maglev Line and Superconducting Maglev technological development
Accumulated investment amountSpecial investments for the Yamanashi Maglev
Line *1
Extension of the Yamanashi Maglev Line andupgrading of facilities *2
Investment in proprietary Superconducting
Maglev technological development *3
Total

170.6 billion yen
339.1 billion yen
197.1 billion yen
706.8 billion yen*1 Special investment of 196.5 billion yen (including consumption tax) planned for test infrastructure (above-ground facilities for general purpose use), etc., such as civil engineering structures along initial sections of track.
The above amount is the amount paid from FY1990 to FY2018.
*2 355 billion yen (including tax) in construction costs planned as a new investment framework for work extending the Yamanashi Maglev Line to 42.8 km and renewing the facilities. The above amount is the amount paid
from FY2006 to FY2018.
*3 The above amount is the amount paid separate to the amounts listed for *1 and *2 from FY1987 when the company was founded to FY2018.

24

Superconducting Maglev System Technology

Superconductivity is the phenomenon that the electrical resistance of certain materials
approaches zero at very low temperatures. When an electrical current is applied to acoil in a superconductive state (superconducting coil), this current continues to flow
almost indefinitely, resulting in the creation of a very large magnetic field. Niobiumtitanium alloy has been used for the Superconducting Maglev and superconductive
state is achieved when cooling it with liquid helium to a temperature of minus 269°C.

Superconducting Maglev Ride
We have been conducting “Public Superconducting Maglev Test Ride
events” since FY2014, and approximately 100,000 people to date haveexperienced the high-speed travel at 500 km/h, and the high level of—Management Strategy

Elevation
800m
600m
400m
200m
Incline (‰)
Kilometers (km)180[Extended section]

40

17

5

40

10

6

40

15

20

Initial section [facility upgraded]
28

3

25

30

[Extended section]

40

9

35

3

40

40

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201925

—Management Strategy

Sales and Marketing

Stimulating Tourist Demand

Enhancing Sales and Marketing

Deployment of Tourism Campaigns“Express Reservation” and “smartEX” are reservation services that enable
seat reservations and the changing of reservations easily online whileeliminating the need to pick up tickets, thereby making the most use of the highvolume Tokaido Shinkansen. In particular, “smartEX”, which we introduced in
September 2017, is an online reservation and ticketless boarding service thatcan be used by following a simple registration procedure. The service offers
greater convenience also for non-members of Express Reservation and forforeign tourists visiting Japan, etc., when using the Tokaido Shinkansen.
In terms of tourism, we will roll out measures to stimulate demand, such as
the Kyoto campaign, and continue to strengthen our relationship with local
residents and travel agencies at tourist spots in our operating areas. We will
also strive to increase Shinkansen ridership by providing attractive travel
products and bolstering initiatives aimed at various members.

Number of uses of online reservation
services*1 per day*2

207,000

uses

Number of “Express Reservation”
members *2

3.65

We have continuously implemented travel campaigns, such as the
Kyoto Campaign, for Kyoto and Nara, which are the largest andmost sustainable tourist resources in our market area, and we arepromoting the use of the Shinkansen mainly from the Tokyo
Metropolitan area to the Kansai region. In particular, we run
promotional advertisements for the “Kyoto Campaign” based on aconcept of enabling customers to re-acknowledge Japanese beautyand profundity. Last fiscal year, when the Kyoto Campaigncelebrated its 25th anniversary, we held special campaigns such as
holding past campaign poster exhibitions and publishing TV
commercials broadcast on the web site.
In our “Tokyo Bookmark Campaign” to promote the use of the
Shinkansen to visit Tokyo from the Kansai and Chukyo areas, we
also introduce tourism information about Tokyo, travel items, etc., on
the website. In addition, we are working on coming up withattractive products associated with Hida, Ise-Shima and otherlocations.

Number of persons registered to“smartEX” *2

million2.26

million*1 The number of uses of “Express Reservation” and “smartEX”*2 As of March 201926

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

For customers using these services, we are expanding tourist
products that offer the use of the Shinkansen at discounted prices
when customers plan ahead for sightseeing and other purposes.
For example, by launching various products, such as “EX Nozomi
Family Hayatoku” and other services that offer a discount for family

or friends traveling together using the Shinkansen, although thetravel dates, number of seats, sections of travel and hours ofboarding may be limited, we are stimulating demand for Shinkansen
use. In addition, we are working to stimulate a wide range of demandby enhancing convenient benefits that are useful when traveling.

“50+ (Fifty Plus)” Travel Plan

Promoting Online Reservation and Ticketless Boarding Services*Scheduled to run up to 12 trains from spring 2020

Kyoto Campaign (Gionji)

Enhancement of Tourist Products for the Users of “Express Reservation” and “smartEX”

Improving Convenience for the Tokaido Shinkansen

In an effort to have customers more conveniently use the Tokaido
Shinkansen, JR Central takes initiatives to promote online reservationand ticketless boarding services.
We provide the “Express Reservation” service for customers who
frequently ride the Shinkansen for business or other reasons. Membersof the service can smoothly ride the Shinkansen by simply touching theirmember IC card at the automatic ticketing gates after reserving theirseats with a smartphone or other device beforehand. There is no need tostop at the ticket counter of a station, which allows customers tosignificantly reduce the total transit time, plus enjoy the benefit of using
the Shinkansen at a discounted member price. Additionally, as members
can change their reservation as many times as they want without any
additional charges, they can always select the train that best suits theirneed from a vast selection of trains including the “Nozomi”, which has amaximum of 10 departures every hour.
We also offer “smartEX” with no membership fee for customers who
only occasionally use the Shinkansen, including people traveling to visit
their hometowns, tourists, and foreigners visiting Japan, so that they canalso use the convenient online reservation and ticketless boarding
service. This ticketless service enables customers to board the Tokaido
Shinkansen and the Sanyo Shinkansen by simply registering their credit
cards and the widely-used commuting type IC card from theirsmartphone, etc. As a result, we offer greater convenience for even morecustomers, including people traveling to visit their hometowns, tourists,and foreigners visiting Japan, in addition to customers on business trips,
to use the Shinkansen.
Reservations for reserved seats using these services currently accountfor over 40% of all reservations. We will step up efforts for increasing theuse of online booking and ticketless boarding services and make online
booking the norm for Tokaido Shinkansen passengers. In addition, we
will concentrate on developing more user-friendly and efficient sales
systems ahead of the launch of the Chuo Shinkansen.

In addition, we will coordinate with local governments, travel
agencies and other parties through the “Shizuoka Destination
Campaign” organized by the 6 JR passenger rail operators between
April and June 2019, and make efforts to develop attractive
sightseeing materials and products and operate tourist trains.

Shifts in usage of online reservation services.
Number of “Express Reservation” members
Number of persons registered to “smartEX”
Number of uses of online reservation services per day(10,000 persons)

226

600

(Thousand)

280

550
500

260

450

240

72

400
350
300
250

315

289

266

365

339

220

207

180

176

200

140

134

100

120

120

50
0

160

148

150

’15.3

’16.3

’17.3

’18.3

’19.3

Illustration of using “smartEX”

1. Register
Creditcard

Commuting typeIC card200

2. Book

3. Board
Tap!

100

Given the aging population in Japan, the senior age group, whichis said to have more leisure time and disposable income than otherage groups, is growing. We expanded the target group to include
persons aged 50 and above, and have been operating a travel
club “50+”, which anyone over 50 years old can participate in. The
number of members as of the end of FY2018 totaled approximately

950,000 members of which a total of approximately 200,000
members enjoyed “50+” brand products in FY2018.
We not only inform the members of seasonal tourism information
through the magazine and the website but also offer affordable
travel products that use the Tokaido Shinkansen.

Efforts toward Foreign Tourists
We offer a smartphone app for our smart EX service that isdesigned for international tourists.* It allows them to book a train
before they leave their home country, enhancing the convenienceof using the Tokaido and Sanyo Shinkansen.
As to our travel products, working in cooperation withmunicipalities located along our train lines and other transportationcompanies, we offer sightseeing value tickets covering
destinations that are popular among international tourists, such as“Takayama and Hokuriku.” We also have the FLEX JAPAN line for
Tokaido Shinkansen tour packages, including a set that comeswith a roundtrip Shinkansen ticket for an unreserved seat and day
trip excursion tickets to destinations we serve.
We operate various websites in order to stimulate travel demand.
In partnership with municipalities and travel associations in central
Japan, we operate Japan Highlights Travel, a website offering
travel information about areas along the Tokaido Shinkansen line.
The Central Japan Shinkansen/Train Portal website showcases JR
Central products designed for international travelers. We also
operate BEING JAPAN jointly with Japan Airlines to communicate
wonderful things about Japan and help travelers get around.
In addition to these initiatives, we are making efforts to be betterat providing information to travelers by making announcements via
tablets and other devices, offering extensive train status
information on our corporate website, and expanding free Wi-Fi
service at stations and in the Tokaido Shinkansen, Express Hida
and Nanki trains. The service is currently available at all
Shinkansen stations, 27 conventional line stations that are
frequently used by international travelers, as well as in all Express
Hida and Nanki rolling stock. The service will be extended to all
Tokaido Shinkansen trains by the end of FY2019.
*As of April 30, 2019, the service is available in eight countries and regions.

Japan Highlights Travel

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201927

Technological Development and Enhancement of Technical Capability
The railway business is supported by employees who thoroughly
execute their tasks using various skills and cooperation with eachother, and supported by various types of equipment, such as
rolling stock, civil engineering structures, tracks, and electric andsignal communications equipment, functioning seamlessly. In
order to further ensure safety and strengthen the future managerial
foundation, it is vital to continue developing core technologies
which serve as the base of the foundation.
Looking ahead, we will continue to proceed with developmentusing the latest technology in relation to rolling stock and otherequipment towards further improving safety and enriching ourtransportation service, and have this lead back to the buildingof an efficient management structure that emphasizes reducing
unnecessary costs.

We currently offer consultation to overseas high-speed railway projects and takeassociated initiatives by utilizing our comprehensive technologies in the highest level highspeed railway system in the world with the aim of realizing overseas deployment of highspeed rail systems. We believe that the overseas deployment of our high-speed railway
system will be a meaningful project that enables Japanese manufacturers to maintain andstrengthen their technology and skills through the expansion of the international high-speed
railway market, that will lead to the stable provision of materials and equipment, and thatwill lead to technological innovation and cost reductions in railway-related equipment.
We target countries and regions where it can be expected to introduce total systems
involving new high-speed passenger railway lines in which our superior high-speed railway
systems can be used to their full potential. Furthermore, we realize the need for target
countries and regions to have a complete legal system where intellectual property rights
and the sanctity of agreements are established as socially-accepted ideas, a stable politicalsituation, and the economic strength to invest in large-scale infrastructure investments.
Therefore, the U.S. is currently the main target for promotional activities.

Field-based verification(From rolling stocks in commercial
services, above-ground facilities, test
rolling stock, etc.)(From testing on main lines, etc.)

Understanding phenomena
occurring in the field

Theoretical Examination
analysisusing testingand simulation equipment
Computer-based theoreticalanalysis

Verification using full scale large
testing equipment

Promoting Technological Development at the Komaki Research Center
To proactively deepen the existing railroad technologies, JR Central pursues
development of technologies that support the future of the Company, andtakes initiatives to enhance technical capabilities and develop humanresources. At the Komaki Research Center, by leveraging the development
capability using actual-size testing equipment, which is the main distinctive
feature of the research center, we have made accomplishments in proprietary
technology development, including the development of new rolling stockrefer to page 20 for features of the N700S; refer to page 21 for features of the next-generation

the development ofcountermeasures against derailment and deviation for the Tokaido
Shinkansen, the development of large-scale renovation methods for civilengineering structures in relation to our Shinkansen trains, and thedevelopment of high-speed heavy simple catenary for our Shinkansen trains.
limited express rolling stock using the hybrid method),Technological Development, Enhancement of Technical Capability, Overseas Development

Overseas Deployment of High-Speed Railway Systems

Basic railway R&D cycle
Acquisition of large amounts offield data—

Management Strategy

The Northeast Corridor Project:(Washington D.C. - New York)New York
Baltimore

The Texas Project:(Dallas - Houston)

Washington D.C.

Dallas
HoustonConsulting & Coordination Business

In FY2019, we will conduct tests using the N700S validation test vehicles
which are the next-generation rolling stock of the Tokaido Shinkansen, suchas the long-term endurance testing and increased speed testing at 360 km/h.
In regard to conventional lines, we will proceed with the new production of atesting vehicle for next-generation limited express rolling stock that uses a
hybrid system for conventional lines and begin running tests.
In addition, we implement more advanced and power-saving inspections
and maintenance that utilize condition monitoring technologies. Also, promotetechnological development that can lead to cost reductions for maintenanceand upgrading of facilities.
Furthermore, we will carry out technological development to further heighten
safety against earthquakes, heavy rain and other disasters.

Our policy regarding the overseas deployment of high-speed railway
systems is that we do not lead the implementing body of development
projects but contribute to projects primarily through consulting.
Specifically, we propose the deployment of high-speed railway as a total
system, which includes civil engineering structures, tracks, electricalequipment, signaling equipment, rolling stock, operation management

We have been working on getting the Tokaido Shinkansen system, which boasts the highest level of safety and precision in the world, up
and running in the state of Texas while introducing the SCMAGLEV, our superconducting maglev system that is capable of an operating
speed of 500 km/h, to the Northeast Corridor.

The Texas Project

In order to maintain and further enhance the comfort of passengers travelingon the Tokaido Shinkansen, we use an in-train system that measures track
conditions while the train is running.
We have developed a next-generation track monitoring system that adds
general-purpose sensors, such as speed, gyroscope, and laser displacement
sensors, to the conventional system, which was designed to monitor only
vertical rail irregularities. Combined with our proprietary computing program,the new system enables us to monitor not only vertical but also horizontal rail
irregularities as well as the distance between the rails and differences in railheight for enhanced monitoring accuracy. Figure In June 2018, we started
test runs of our N700S validation test vehicles equipped with this system.
Capable of monitoring various aspects of track conditions with highprecision on a daily basis, the system enables us to conduct maintenancework in a timely manner and further enhance passenger comfort.

The Texas Project is a private business venture that aims to link two major
cities, Dallas and Houston, via the Tokaido Shinkansen rail system. The key
players in the project, Texas Central Partners and its subsidiary (collectively
referred to as “TC”), are working on securing the capital needed for construction
and drawing up preliminary designs.
In order to provide TC with the technological assistance needed to move theproject forward, we launched a local subsidiary, High-Speed-Railway
Technology Consulting Corporation (HTeC), in 2016. HTeC currently provides TC
with technical consulting for its project-related operations, such as developing
specifications, formulating
operation and maintenance plans,
drafting preliminary designs forstations and maintenance facilities,
and preparing personnel training
and education programs. In August
2018, we launched another local
subsidiary, High-Speed-Railway
Integration Corporation (HInC), to
HTeC members reviewing a candidate station site
work with TC on signing contracts

Central command terminals
Telecommunication line
Car No. 4

DataIn-train computing
equipment

Newly developed system
Car No. 1

Track maintenance Administration
office terminal department terminal

Speed and gyroscope sensors

Conventional system
Laser light

Laser light
Laser displacement
sensor

In-train computing equipment

systems, maintenance and repair, etc., to overseas markets. We not only
formulate technical specifications and provide support and consultation
to ensure safe and reliable operation of the high-speed railway bysupplying various manuals regarding operations and maintenance, andconducting education and training for staff, etc., but also coordinate with
relevant Japanese companies when projects become concrete.

Initiatives in the US project

Development of a Next-Generation Track Monitoring System

Speed sensor

Target lines for overseas expansion

for core systems with other Japanese manufacturers and has been preparing forthe project.

The Northeast Corridor ProjectWith regard to the Northeast Corridor connecting Washington D.C. to New York
City, we are aiming to introduce our SCMAGLEV, starting with promotional
activities to realize cooperation between the Japanese and U.S. Governments forthe development of the Washington D.C.-Baltimore section. Now, the Federal
Railroad Association and other relevant organizations are making preparations
for environmental impact assessment and other procedures, using a federal
grant of 27.8 million USD provided by the U.S. Federal Government to the State
Government of Maryland to cover the survey costs for the section. The
Government of Japan also commenced research in FY2016 to introduce the
SCMAGLEV in the U.S. Meanwhile, both the Japanese and U.S. Governments
are showing more understanding and support for this project, in part because we
provided the U.S. Secretary of Transportation, the Governor of Maryland, andother leading officials with an opportunity to ride on a Maglev train in Yamanashi
Prefecture and realize the strong potential of the technology. We are planning toprovide comprehensive technical support when the project is put into action.
HTeC surveying a potential station site.

Development of Anti-Icing Technology for Overhead Lines
In the winter months, Tokaido Shinkansen staff check overhead lines forice or frost during the morning inspection conducted before the day’s
service begins. If any ice or frost is found on the line, the train operator runs
Shinkansen trains at a reduced speed over a predetermined section that
includes the area where the ice or frost has been found. This prevents an
arc from being generated due to the interaction between the pantographand the ice- or frost-coated line, which can damage the pantograph.
We are the first in Japan to develop a technology that enables a train to
detect ice or frost on an overhead line in real time and automaticallydecelerate to reduce the electric current collected from the overhead line
and prevent a large arc from occurring. Figure The new technology

28

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019minimizes not only the risk of pantograph damage but also train delays
since trains decelerate only in the section where the overhead line is coatedwith ice or frost. The technology has been tested on ten N700A trainsets
since December 2018 and is scheduled to be put into service in FY2020.

Technical consulting for Taiwan High Speed RailIn response to a request for technical assistance from Taiwan High Speed Rail Corporation, which operates Taiwan’s high-speed rail system basedon the Japanese high-speed rail system, we started providing technical consulting in FY2014. We have completed three projects so far, and we havebeen implementing technical consulting for renewal work of the operation management system conducted by Taiwan High Speed Rail Corporation.

Ice or frost coating overhead line
Overhead line

Making Efforts to Promote Japanese High-Speed Rail Systems as a Global Standard

Current sensor

Control device

We will continue to promote initiatives to establish the Japanese
high-speed rail system, which is based on the core principle of“Crash Avoidance”, as a global standard, through the International
High-Speed Rail Association (IHRA).

It automatically slows the train down to reduce the current from the overhead line.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201929

Developing Affiliated Businesses

FY201852.6

The development of Nagoya Station, which boasts an average
220,000 passengers per day, the highest number of passengers of
any our stations, forms a pillar of our affiliated businesses.
At Nagoya Station, we opened JR Central Towers (hereinafter,“Towers”) right above the station in 2000 and then fully opened JR
Gate Tower (hereinafter, “Gate Tower”) adjacent to the Towers in(3 companies)

April 2017.We will continue to operate Towers and Gate Tower in a
uniform manner and take initiatives to maximize earnings bydemonstrating synergistic effects through clearly segregating theconcepts of businesses of both facilities, while maximizing profits
based on business cooperation and by pursuing efficientmanagement.

billion yen

630.1

JR Central Towers
Towers, the skyscraper complex with a height of 245 meters and a total floor area ofapproximately 417,000 m2, built right above Nagoya Station at a total cost of roughly
200 billion yen, is the core of our affiliated businesses. Our three consolidated
subsidiaries run a department store, a hotel and offices. After the full opening in 2000,
earnings of our affiliated businesses increased significantly. Diagram 1
In the department store business, JR Nagoya Takashimaya, ideally located directly
above the Nagoya station, attracts large numbers of visitors. This fiscal year, working
jointly with the Takashimaya Gate Tower Mall (which will be covered later on), JR
Nagoya Takashimaya will continue to actively implement sales and marketingstrategies while hosting events that will draw lots of attention. It will also undergo amajor renovation designed to double the floor area of the cosmetics department withan aim to enhance customer satisfaction and expand its customer base to increase
revenue.
The hotel business has seen Nagoya Marriott Associa Hotel being rated highly for its
convenient location directly above the station, its spectacular view from the top floors,
and upscale facilities, etc. Maintaining a high guest room occupancy rate of over 80%(annual average) for the year ending March 2019, the hotel has been offering flexible(29 companies)

billion yen

JR Gate Tower

JR Central Towers (center/right) and JR Gate Tower (left)

As seen in JR Central Towers and the JR Gate Tower in Nagoya Station, we have improved our revenue base by engaging
in businesses that are expected to generate synergistic effects with the railway business, such as in areas that makefull use of the good location of railway stations. We will continue to expand our revenues and profits in cooperation withgroup companies.

JR Central Group’s affiliated business
The JR Central Group undertakes businesses in theareas of Transportation, Merchandise and Other, Real
Estate, and Other. The Transportation segment involves
railway and bus businesses. The Merchandise andOther segment manages department stores andprovides sales services for goods and food in stations
and trains, utilizing the merit of having good railway
station locations to attract customers. The Real Estatesegment develops commercial facilities in stations andareas under elevated track columns, and also leases
real estate such as station buildings. In the Other
segment, we manage hotels, travel agencies, andadvertising agencies, etc. We also manufacture rollingstock and maintain, inspect, and repair our railway
facilities in this segment.
Operating revenues of consolidated subsidiaries,
excluding JR Central, totaled 630.1 billion yen (simply
aggregated) in FY2018.

30

Affiliated Businesses

Development of Nagoya Station boasting the highest number of passengers among our stations

Operating Revenues of Consolidated
Subsidiaries (simply aggregated)

FY1989—Management Strategy

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Diagram 1

Shifts in the Operating Revenues of Consolidated
Subsidiaries (simply aggregated)

Transportation

Merchandise and Other

6,171(100s of million yen)
6,000

5,829 (29)5,696
5,561 5,577 (28) (29)5,286
5,259 (29)5,112 (29)5,073 (31) 5,181
(29)

5,000

4,362
4,105 (30)

4,624

(31)

Real Estate

6,301
(29)

143

(29)

(29)

(30)

3,820 3,850 (30)
3,693
(30)
3,556 (29) (29)

4,000

Other

3,350 (30)
(30)

3,000

2,690
798

2,101
2,000

(19)

2,668

1,000

0

’00.3 ’01.3 ’02.3 ’03.3 ’04.3 ’05.3 ’06.3 ’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’18.3 ’19.3
Note: Each figure in parentheses indicates the number of consolidated subsidiaries at the end of FY

JR Gate Tower is a high-rise complex building that stands adjacent to JR Central Towers
and consists of commercial facilities, a hotel, offices, a bus terminal, and parking lots. Witha height of approximately 220m and a total floor area of approximately 260,000m2, Gate
Tower is roughly 60% as large as the Towers. Constructed at a total cost of approximately
105 billion yen, Gate Tower began accepting offices in November 2016, and opened
Takashimaya Gate Tower Mall, Nagoya JR Gate Tower Hotel, and other commercial
facilities in April 2017. Together with the Towers, Gate Tower provides a highly convenientand attractive urban environment.
Takashimaya Gate Tower Mall is operated in conjunction with JR Nagoya Takashimaya.
Housing about 160 fashion stores and more, the mall offers products in categories andprice ranges not found in JR Nagoya Takashimaya and is a magnet for customer attraction.
As a result, the combined net sales of the two facilities came to 162.7 billion yen in the year
ending February 2019.
Nagoya JR Gate Tower Hotel is a sophisticated, functional hotel that specializes inlodging services and features 350 guest rooms. It offers the convenience of being directly
connected to the station as well as a comfortable sleeping environment. Attracting a large
number of travelers, the hotel enjoyed a guest room occupancy rate of over 90% (annual
average) in the year ending March 2019.
The office spaces are almost fully occupied due to their prime location directly above
Nagoya Station, which the Chuo Shinkansen will serve in the future. JR Gate Tower also
houses an electronics retail store, clothing stores, a fitness club, as well as child care,
medical care, and other facilities in addition to a dining zone. When combined with JRroom rates based on demand in an effort to increase revenue. This fiscal year, the hotel
will enhance its services with an eye toward better meeting customers’ needs, such as
relocating and expanding the concierge lounge, and sharpening its competitive edgein the luxury hotel market.
The office business has
enjoyed a high occupancy
rate since its launch. All
office spaces were almost
fully occupied in the year
ending March 2019. Thisfiscal year, we willcommence office renovation
work and implement otherinitiatives that will enable us
to gain a leg up in thismarket over the long run.
Nagoya Marriott Associa Hotel(Concierge lounge)

Central Towers’ restaurant floors, it’s one of the largest collections of restaurants under one
roof in the entire country. The JR Central Group integrates the management and operationof JR Gate Tower and JR Central Towers for maximum efficiency. Changes in restaurantzone tenants and the renovation of the common areas in JR Central Towers will becompleted in FY2019. We will enhance theintegrated management of both facilities’
restaurant zones with an eye toward
increasing sales.
JR Tokai Takashimaya Co., Ltd.
(Merchandise and Other segment), which
operates department stores in the twobuildings, JR Tokai Hotels Co., Ltd. (Other
segment), JR Central’s wholly-owned
subsidiary that operates the hotel business,
and JR CENTRAL BUILDING, Co., Ltd.
(Real Estate segment), JR Central’s
wholly-owned subsidiary that is responsible
for the management and operation of thetwo buildings as well as the operation of theoffice and restaurant businesses,
generated a combined total of 202.5 billion
yen (simple aggregation) in operating
revenues in the year ending March 2019.
Takashimaya Gate Tower Mall

Other Initiatives
In addition to the development of Nagoya Station as described above,
we operate commercial facilities using spaces inside stations andunder elevated tracks within our service area as well as engage in realestate and related businesses using former company housing sites.
As for the development of commercial facilities, such as stationbuildings, the activities in FY2018 included the launch of the Tokyo
Gourmet Zone, a new section featuring a variety of eateries along Tokyo
Station’s shopping strip dubbed First Avenue Tokyo Station, as well as
the renovation of station buildings, including the food and souvenirs
section of Parche, Shizuoka Station’s commercial facility. In FY2019 weplan to expand the commercial zone in Tokyo Station’s Yaesu North Exit
area to make it almost double the size of what it is now to accommodate
renovated souvenir stores and new cafes, etc. ahead of the Tokyo
Olympic and Paralympic Games. We will also renovate ASTY, ourcommercial facilities in Shizuoka, Ogaki, and Mikawa-Anjo.

The developments in our real estate business in FY2018 included
sales of condominium units at Central Garden Residence Gifu Kano in
Gifu City, Gifu Prefecture and Central Garden Residence Kariya in
Kariya City, Aichi Prefecture. We will continue to work steadily on realestate development using company-owned properties, etc.

ASTY Ogaki

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201931

—

ESG Information

Engagement in Global Environment Preservation

Initiatives with the Shinkansen

Engagement in Global Environment Preservation

Introducing Energy-Conserving Rolling StockLess than

1%

3%

84%

80%

6%

8%

7%

30%

3%
4%

3%
7%

Transportation volume(passenger-kilometer)

Energyconsumption

CO2
emission rate

6%Compared to FY1990

Railway
AirplaneCar
Other* Note: Generic name of Series N700 and N700A and later reflecting the main functions adopted in N700A
Diagram 3% improvement

Diagram 1

Comparison of Electricity Consumption by Tokaido
Shinkansen Rolling Stock Type270km/h

28%

270km/hDistribution of Passenger Transportation Share, in terms ofTransportation Volume, Energy Consumption and CO2 Emissions

285km/h

285km/h77%

72%* JR Central defines Energy Consumption Unit as the “Amount of energy consumed when running 1 car for 1 kilometer”, due to total rolling stock kilometers being the value which is the most relevant to our business activities.

Railways have the outstanding characteristic of being highly energy efficient compared to other transportation modes
and having minimal adverse impact on the global environment. In addition to directly reducing the load on the environment
by further improving energy efficiency in its railway operations, such as by lowering power consumption in rolling stock,
JR Central also considers suppression of the load placed on the environment across its entire Transportation section,
brought about by having as many passengers as possible opt to use railway services that reduce the burden on the global
environment, as linked to efforts related to the engagement in global environment preservation.

Environmental Superiority of Railway
The problem of global warming is an issue thatshould be dealt with on a global scale. While it isregarded that CO2, among greenhouse gasses, inparticular has the largest impact on global
warming, railways account for only 7% of CO2
emissions despite undertaking 30% of the country’s
overall passenger transport volume. Diagram 1
Compared with an airplane (B777-200), the Tokaido
Shinkansen (Series N700 “Nozomi”) consumes
approximately 1/8th of the amount of energy per seat
when traveling between Tokyo and Osaka, anddischarges about 1/12th of the CO2 emissions. The
data shows that the Tokaido Shinkansen has
overwhelming environmental superiority. Diagram 2

100%

Series 300(1992)

N700A(2013)

N700S(2020)

(%)
100

(%)
100

34

Approximately%
improvement over FY1990

80

80

60

60

Series 0 / Series 100
Energy-conserving rollingstock Series 300 / Series 700

40
20
0

40

Even moreenergy-conserving
rolling stock Series
N700 / N700A

20’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

0

(FY)

Great environmental performance of Tokaido Shinkansen
Diagram 2Comparison of the Tokaido Shinkansen and Airplanes (between Tokyo and Osaka)

Energy Consumption per Seat
Approximately

Shinkansen

Series N700
“Nozomi”

90MJ

*1

1/8

B777-200

Approximately

Shinkansen

Series N700
“Nozomi”

4.2kg-CO2*1

B777-200

1Reduction in runningresistance2

Use of silicon carbide
semiconductor drive system

The N700S’s drive system employs next-generation low-loss silicon carbide semiconductors with superior high temperature performance. The
N700S is the first Shinkansen rolling stock that employs a smaller sixtupole magnet instead of a quadrupole magnet in its motor, making the drive
motor more compact and more lightweight than ever before. The overall weight of the drive system is 11 tons lighter than that of the Series N700.

3Introducing the Body Inclining
SystemThe Body Inclining System is introduced to N700A type for the first time in the Shinkansen in order to increase the speed at curves currently subject
to speed restriction. This system makes it possible to increase speed while securing comfort and shortening travel time, and to simultaneously cut
power consumption by reducing the frequency of speed acceleration and deceleration.

4

Expansion of Electric Power
Regenerative Braking System

5Lighter, smaller blower-less CI
in all motor cars

The power converter (CI) converts electricity from the catenary and sends it to the motor at the time of acceleration, and returns the electricity
generated by the motor back to the catenary at the time of deceleration. JR Central was the first to put the blower-less power converter, which uses
airflow from running for air cooling, into practical use in the Shinkansen and uses the system in part of the rolling stock of Series N700. For N700A,
these CI were made 17% smaller and lighter and are installed on all motor cars.

6

Optimization of cabin lighting
and introduction of LED
lighting

In the cabins of regular cars on the N700A, lighting has been optimized in accordance with the bright seat colors. LED lights with a dimmer
function have also been installed in the toilets and powder rooms. These measures have contributed to achieving a reduction in lighting
energy consumption by approximately 20% compared to Series N700. We have been installing LED lights in passenger cabins of rollingstock introduced in FY2016 and thereafter to reduce power consumed for lighting.

50kg-CO *2

7

Using eco-friendly materials

Approximately 90% (weight ratio) of the waste generated after scrapping the Shinkansen rolling stock is recyclable. With the N700A, 100%
recyclable polyester has been used for seat cushions, and conventional fiber-reinforced plastic (FRP) bogie skirts, which cover bogies tolower air resistance, have been replaced with stainless steel ones to utilize highly recyclable materials.

2*1 Calculation based on running performance of Series N700 Nozomi (Tokyo - Shin-Osaka) conducted by JR Central.
*2 Calculated by JR Central using ANA's "Annual Report 2011” B777-200 (Haneda - Itami/Kansai Airport) for reference.

JR Central has established a set of Environmental Action
Guidelines consisting of the following seven items as part of its
engagement in global environment preservation.
1 Provide comfortable transportation services to promote further useof railways, which offer superior global environment preservation
2 Promote technological development that contributes to global
environment preservation
3 Use fuel and energy efficiently
4 Promote waste control and recycling
5 Appropriately manage chemical substances
6 Procure environmentally friendly goods and materials
7 Contribute to society and raise awareness for global environment
preservation

Diagram 5

1/12

of an airplane

Airplane

746MJ *2

Tokaido Shinkansen has greatly improved in environmental performance both in terms of speed and comfort due to the introduction of thefollowing technologies.

CO2 Emission per Seatof an airplane

Airplane

Environmental Action Guidelines

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Series 700(1999)* Note: Simulated run from Tokyo to Shin-Osaka at the maximum speed above

Guidelines and Objectives

32

92%

6%

Shifts in the Ratio of the Tokaido Shinkansen Energy-Conserving Rolling Stockand Energy Consumption Unit
Energy Consumption Unit (Ratio using an FY1990 basis)

Source: For transportation volume/energy consumption, created based on data from Handbook ofEnergy & Economic Statistics, and for CO2 emissions, based on the National Institute for Environmental
Studies, Greenhouse Gas Inventory Office of Japan.
* The total of items in the breakdown may not be 100% due to rounding.

Diagram 4

Ratio of energy-conserving rolling stock

34

1%

Bus

57%

Energy Consumption Unit* for theTokaido Shinkansen in FY2018

Less than

than the Series 300 and 16% less energy than the Series 700 whenboth are running at a highest speed of 270 km/h. This means that
the N700A type is not only faster but also much more energyefficient. As a result, the Energy Consumption unit as of the end of
FY2018 decreased approximately 34% from what it was in FY1990.
The next-generation N700S Shinkansen rolling stock, which isslated to be put into service in July 2020, will reduce energy
consumption by an additional 6% compared with the N700A typethanks to its silicon carbide semiconductor drive system, lightercar body, reduced air resistance, and other features.

We are actively developing and introducing energy-conserving
rolling stock in an effort to further reduce the Shinkansen's energy
consumption. In the five years following FY2007, we added a totalof 80 Series N700 trainsets to our fleet. As of FY2018, we haveadded 46 trainsets made up of the latest N700A rolling stock in aneffort to replace our fleet of Series 700 trains. We plan to add 5
more trainsets this fiscal year to make all Shinkansen rolling stock
N700A type.*
When operating between Tokyo and Shin-Osaka at a highest
speed of 285 km/h, the N700A type consumes 23% less energy

Environmental goal
JR Central has formulated the Implementation Plan of Low Carbon
Society Phase II, in which our Energy Consumption Unit(*) as of
FY2030 will be improved by 25% compared with that of FY1995(refer to the Japan Business Federation (Keidanren) website forfurther details), and is striving to make sure that the plan is
executed. Up to now we established a Voluntary Plan in which weachieved our target of a 15% reduction in energy consumption as ofthe end of FY2010, and we have proactively developed andintroduced energy-conserving rolling stock. We will continue
promoting proactive initiatives, such as the continuous development
and introduction of energy-conserving rolling stock, while setting
train services flexibly to meet the needs of passengers.

Diagram 6

Diagram 5

We reduce the running resistance by introducing a nose shape with great aerodynamic attributes, using flush windowpanes, which have no
unevenness between the outside panel and windowpane, and installing coverall hoods between all cars, etc.
The N700S’s Dual Supreme Wing design contributes to reducing air resistance even further.

We adopt the Electric Power Regenerative Braking System, in which the motor is used as a generator during braking to produce electricity
and return it to the catenary While 12 of the 16 cars in one trainset of Series 700 were regenerative, 14 of the 16 cars in one trainset of
N700A type are regenerative. The Electric Power Regenerative Braking System provides all of the braking power needed for one trainset
during normal braking.

Reduction in Running Resistance (Coverall Hoods)

Diagram 6

Electric Power Regenerative Braking System

BrakesSeries 700(Not Equipped with Coverall Hoods)

N700A(Equipped with Coverall Hoods)

Power running(Power generation)(Power consumption)

The motor is used as a generator
during braking to produce electricity
and return it to catenary

The regenerated power returned tocatenary is reused when
accelerating other trains

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201933

Engagement in Global Environment Preservation

Effective Use of Resources/Use of Natural Energies and Introduction of Energy-Efficient Facilities

Enhancement of electricity supply efficiency by replacing ground facilities
By replacing the electricity compensation devices from FY2011 to
FY2020, which inhibit voltage reduction as rolling stock travels
away from a substation, with a facility with less electricity loss, we
expect to be able to reduce the electricity use on the Shinkansen
by approximately 3%.

—

ESG Information

Also, by replacing part of the frequency converters from FY2014
to FY2021, which convert 50 Hz electricity to 60 Hz electricity
required to operate the Shinkansen, with a stationary type with lessloss, we expect to be able to reduce Shinkansen electricity
consumption by approximately 2%.

JR Central promotes effective utilization of resources through the 3R (Reduce, Reuse, and Recycle) initiative, etc. Specifically, we aim to
reduce emissions from waste materials during construction, utilize rain water, recycle tickets and uniforms, and recycle rolling stock, etc.
In addition, we strive to leverage natural energies and introduce energy-efficient facilities when constructing new buildings andrenovating existing buildings.

Green Procurement Guidelines

Initiatives with Conventional Lines

JR Central implements a green procurement policy, prioritizing the procurement of eco-friendly materials. To this end, we established the
JR Central Green Procurement Guidelines to enhance coordination with our business partners and work with them to contribute towards
global environment preservation. URL https://company.jr-central.co.jp/company/material_procurement/_pdf/green_guide_line.pdf

Introducing Energy-Conserving Rolling Stock
In anticipation of the replacement of the 85 Series diesel rail cars
currently used for the “Hida” limited express and other trains, theCompany will newly develop testing vehicles for the next-generation
limited express rolling stock that uses the hybrid system, and conduct
test runs to establish relevant technologies from the end of 2019. The
next-generation limited express train rolling stock (testing vehicle) is
expected to achieve an approximately 15% improvement in fuelefficiency and reduction in exhaust fumes, such as CO2 and NOx, bymaking use of power stored in batteries when accelerating andstopping. We are currently reviewing plans to commercially introduce
mass-produced vehicles by FY2022. Refer to P. 21 for further details.

JR Central has also been striving to conserve the energy of rolling stockon conventional lines. We will promote the introduction of rolling stockwith better energy efficiency by introducing the Electric Power
Regenerative Braking System, higher efficiency power control
conversion methods, lighter rolling stock, etc. to electric cars, and will dothe same for diesel railcars by introducing lighter rolling stock and highmileage diesel engines, etc. As a result of these initiatives, all of theconventional line rolling stock is energy-conserving rolling stock. For our
new rolling stock (Series 313 5th edition; Series Ki-Ha 25 2nd edition),
we look to further reducing the load on the environment by using LED
lights and some existing trains have been replacing LED lights.
Comparison of electricity consumption and diesel fuel consumptionof cars on conventional lines (electric cars and diesel railcars)
Electric cars
100 (Base)
Conventional type(Series 117, 110 km/h)

Energy-efficient type(Series 313, 120 km/h)

69

Energy-efficient type(cars with new modelenergy-efficient type engines)

100 (Base)71* Based on results of running the same railcar with conventional
engine and new model engine (Conventional engine: DMF 15HS,
new engine: C-DMF 14HZ).

EnginePower
converter[During braking]Electricity generated by the regenerative
braking system is stored in the storage battery.

EngineMotor

Storage battery

Speed

Power
converter

Storage battery
Air conditioner, lighting, etc.

Motor

[When stopping at a station]
The idle-stop system shuts down the engine
when the train stops at a station.

EngineGenerator

Conventional type

[When accelerating]A train is primarily powered by electricity
generated by its engine. The storage
battery is used to supply additional power
depending on the circumstances to realize
high-speed operation.

Generator

Diesel railcars(rolling stock with conventional engine)

A combination of electricity generated by the engine and electricity stored in a storage battery is used to drive the motor that powers the train.

Generator

Note: Based on simulated test runs between Toyohashi and Ogaki(rapid operation)

How the hybrid system works

Motor

JR Gate Tower

Hamamatsu Workshop

With the JR Gate Tower, the construction of which was completed in February 2017, we worked on creating anenergy-efficient environment within the entire building and reduce the environmental burden by introducing
regional air-conditioning systems, adopting LED lighting, installing solar power generation panels, creating green
areas in the 15th-floor rooftop garden and on roofs of low-rise buildings, etc. We not only achieved “Rank S” inenvironmental performance, which is the highest rank on the “CASBEE (Comprehensive Assessment System for
Built Environment Efficiency)” scale, but also reduced approximately 25% of CO2 emissions from the building
compared to standard model buildings, according to the CASBEE Nagoya 2010 standard.

The Hamamatsu Workshop, which conducts
general overhauls of Shinkansen rolling stock, hasbeen conducting renovation construction since July
2010. In FY2015 the rooftop of the workshop wasused to install a solar power generation system withthe capacity to generate approximately 300 kW or
about 300,000 kWh annually. In addition, we
implemented a highly efficient substation facility,
boilers, and other equipment in FY2015.
Meanwhile, in regard to painting for the body oftrains, although we had been using oil-based paintcontaining volatile organic compounds, we adopted
a new painting facility which now allows us to use
water-based paint that is harmless to theenvironment, thereby reducing environmental
burden. Furthermore, we implemented the country’s
first water-based paint coating robot to improve theworking environment for our employees.

General Education Center
At the General Education Center, which was newly built in
September 2011, we aim to conserve energy by introducing aventilation system which uses ice thermal storage achieved by
the utilization of nighttime electricity service as its heat source
and LED lighting, etc. Furthermore, we designed the building
to use natural energy effectively by improving external
insulation efficiency through arranging a rooftop garden andtaking advantage of natural wind and light as much as
possible. As a result, we were able to obtain “Rank S”, whichis the highest assessment level under the “CASBEE”.

General Education Center (rooftop gardening)

Nagoya Workshop

Storage battery
Air conditioner, lighting, etc.

AcceleratingPower
converter

Facility and workshop status

SCMAGLEV and Railway Park

Air conditioner, lighting, etc.

BrakingTime

0

At the SCMAGLEV and Railway Park, which opened in
March 2011, we introduced a solar energy generation systemon the expansive roof. The system has a generation capacityof approximately 500 kW, or roughly 630,000 kWh annually,
which can cover approximately 30% of the SCMAGLEV and
Railway Park’s energy needs.

SCMAGLEV and Railway Park
(solar power generation system)

JR Central has been taking anti-earthquake
measures and upgrading facilities in February 2014
in the Nagoya Workshop where general overhauls,
etc. of conventional line rolling stock are conducted.
We aim to reduce approximately 20% of electricity
consumption for the entire workshop by introducing
high ceiling LED lighting and highly efficienttransforming equipment as energy saving measures.

Common Initiatives for the Shinkansen and Conventional Lines
Energy-saving by replacing high-pressure mercury lamps with LED
JR Central had conventionally used high-pressure mercury lamps
for lighting in stations, railroad crossings, and other railway
facilities. However, we are proceeding to replace high-pressure
mercury lamps with LED lamps. We plan to complete thereplacement process by the end of 2020, as a result of which wewill cut our annual power consumption associated with lighting ofrailway facilities by approximately 70% (down 20 million kWh)compared to the level prior to the replacement work. At the sametime, we expect to also reduce the annual CO2 emission volume byapproximately 70% (down 10,000 t) compared to the prior level,
thereby decreasing environmental burden.

Activity Status for FY2018
Environmental accounting

Environmental load in business activities

The investments, costs, and their principal effect involved in environment
preservation activities during FY2018 are estimated as listed below.
Environmental accounting
Classification

Main Initiatives

Environment preservation cost(100 million yen) *1
Investment

Development of energy-conserving rolling stock
Development related to environment
preservation along railway lines, etc.

0.1 145.3

Energy efficiency of Series N700A 23%(more efficient than Series 300)
* Comparison between the Series 300 (traveling at 270 km/h) and the
N700A (traveling at 285 km/h)

Proper disposal and recycling of stationand train refuse, etc.
Proper disposal and recycling of items generated
by workshops and construction work

0.2

Recycle rate of Shinkansen rolling stock: Approximately 90%
Recycle rate of uniforms: Basically 100%

Legal Compliance

Introduction of energy-conserving
rolling stock
Improved energy-efficiency at stations
and office buildings, etc.

JR Central has established a system to comply with relevant environmental laws.

Research anddevelopment
costManagement of chemical substances

Resource
recycling cost

Based on the PRTR Law (Pollutant Release and Transfer Register
Law), we report the amount of emissions and transfer of relevant
substances to local municipalities and manage those substances
appropriately.

34

9.4

Energy-conserving rolling stock ratios: 100% (Shinkansen electriccars), 100% (conventional line (electric cars and diesel railcars))
Energy efficiency of Series N700A 23% (more efficient than Series300), New production of N700S validation test vehicles, Replacing
lamps of railway facilities with LED lamps

Globalenvironment
preservation
cost

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Measures against soil contamination
In FY2018, specific hazardous substances were detectedexceeding the standard value from part of the soil when we
conducted soil surveys in the former dormitory in Inazawa. We
reported the matter to relevant administrative agencies and tookappropriate measures. We will submit a report should any
substances exceeding the standard value set be detected in such
surveys, and will take appropriate measures as instructed by laws
and regulations and the administrative authorities.

Notes

Expenditures

445.3

Countermeasures for noise and vibration
Proper management of environmental load
substances, etc.

113.0

38.1

Protection of the surrounding environment bymodifying noise-blocking walls and increasing theirheight, shaving rail surfaces, etc.

Environmental advertising
Environmental management education etc.

0.0

0.1

Acquisition of ISO14001 certification in Technology
Research and Development Department

Social activity
cost

Support and cooperation for organizations
and other groups undertaking environment
preservation

0.0

Participation in environmental partnership organizing
club (EPOC)[Approach to environment preservation cost]

INPUT/OUTPUT* Figures in parentheses are for consolidated subsidiaries

INPUT
Electricity

Fuel(Amount of
converted crude oil)

Water

A4-sized
copy paperof sheets
2.86billion kWh 31,000kL 3.148million m 140 millions
3

96.5

Environment
conservation costalong railway lines
Management
activity cost

Total *2

The main resources and energy utilized as wellas waste generated during JR Central’s businessactivities during the year FY2018 are as shown
below.

0.0

558.7 289.7*1. Fractions below 10 million yen are omitted.*2. Totals do not add up due to rounding.

Compilation is applicable only to JR Central. The applicable period is April 1, 2018 to March 31, 2019.
“Environmental Accounting Guidelines 2005”, a publication of the Ministry of the Environment, was consulted with regard to aspects of style.
Depreciation is not included in the calculations for expenditures.
In the event of multiple-purpose expenditures, the full amount with greater environment preservation effect is included in the calculation.

(0.24billion kWh)

(34,000kL)(2.713million m)
3(110 millionsof sheets)*For railway operation Electricity:2.12 billion kWh Fuel:16,000kL

OUTPUT
CO2 emission

1.413million t(0.18million t)

Refuse and waste

565,000 t

Station, train, and office refuse 19,000 t
Construction waste
536,000 t
Rolling stock waste
10,000 t*The electricity and fuel CO2 emission
coefficients are based on a report of thelaw (Energy Saving Act) concerning thestreamlining of energy use.
*Recycled amount reprinted. Items
confirmed to have been reused bymanifest or vendor have been recorded.

Recycled

338,000 t*Including internal reuse

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201935

At JR Central, there is no gender bias in terms of the content ofwork performed, and a number of female workers are undertaking
active roles in the Company.
Due to the characteristics of the work involved, the railway
business requires so-called late-night work (work between 10 p.m.
and 5 a.m.). However, the Labor Standards Act at the time of theCompany's establishment prohibited late-night work by women in

Turnover rate

1

Around%General Education Center (Mishima City, Shizuoka Prefecture)

Sufficient childcare support system

JR Central views its employees as its greatest management resource. It is the people who operate railways that protect the safetyof railways. The railway business is also referred to as experience engineering, and employee skills development does not happen
short term. Therefore, we focus on human resources development and skills development from a long-term perspective based onlong-term employment in order to develop employees with the awareness to thoroughly execute their duties and great skills.
We also provide various welfare benefits beyond that called for by law, including programs for health management and nursing
care and childcare support. By making efforts to secure favorable work-life balance for employees, we encourage employees tocontinue working and demonstrate their strengths at JR Central.
As a result of these initiatives, we have an extremely high employee retention rate despite the fact that we employ many new
employees every year, as the labor turnover rate of approximately 1% indicates.

Basic Policy of Human Resources Development
JR Central’s Basic Policy of Human Resources Development is basedon three fundamental principles: Discipline, technical capability, andsense of unity. Given these three fundamental principles, we develop
human resources that undertake the businesses of the Company. The
basic education system mainly involves on-the-job training (OJT), in
which employees learn the knowledge and skills required for workthrough daily operations in each workplace. They also acquire additional
knowledge and skills through group training, which is held in the General
Education Center*1, etc., and various self-betterment opportunities, suchas internal and external correspondence training systems, etc., that help
employees learn knowledge and skills on their own.
In OJT, we have in place the “N-OJT” program particularly for
employees in younger generations to attain specialized knowledge andtechnical skills. Under the N-OJT program, we take a fine-tuned
approach in developing employees by using the so-called the “List”,
which indicates the requirements to attain in order to be regarded as
being qualified and the attained level, and the “Chart” for recording eachindividual’s development plan, details of guidance, and results of

Human Resources Development

Promoting Female Employees in Active Roles

Human Resources Development

Female employees at work—

ESG Information

guidance. Meanwhile, approximately 240 group training sessions were
held in FY2018 and about 9,600 employees*2 attended these sessions.
Taking this number multiplied by the number of days of training sessions
held came to roughly 83,000 man days. This means that we provided
approximately 5 days of training per employee in a year. To promote
self-betterment, we offered 30 internal correspondence training courses
to employees of JR Central, its group companies, etc. Approximately
7,100 employees in total voluntarily participated in these courses.
In addition to these programs, employees work in teams to study
challenges facing the company and participate in small group activities
where they solve problems in their workplace and make improvements
using their own creativity and ingenuity. Through these activities, wehelp employees develop skills and build a rewarding workplace where
everyone can thrive. We will remain committed to enhancing educational
opportunities by continuously working to brush up various training
programs and measures aimed at human resources development.

Support for Maintaining Balance between Child care, Nursing Care, and Work
JR Central has been actively making efforts to enhance various
programs so that employees, regardless of gender, can maintain agood home-work balance and be motivated to work withenthusiasm in active roles over many years. In 2006, JR Central
became the first company in the transport and railway industry toreceive the “Minister of Health, Labour and Welfare Effort Award”
as a Family Friendly Corporation*1. We have continued to makefurther efforts even after receiving the award and many of ourprograms greatly exceed the level required by law.
At JR Central, employees are entitled to longer maternity, childcare, and nursing care leave than is stipulated in the Child Careand Nursing Care Leave Act. We are currently taking specificmeasures to maintain and increase the percentage of employees
who take child care leave by setting targets.*2 In FY2017, thepercentage of employees who took child care leave was 100% forfemale employees and 8.29% for male employees.
We use flexible work arrangements, including flex time for clerical
workers and reduced work days, which allows field office
employees who provide care to a child in the third grade ofelementary school or younger to take multiple unpaid leave days

each month, all with an eye to helping employees maintain ahealthy work-life balance. We also have a wide range of employee
benefits,*3 which are enjoyed by many employees.
In addition to these programs, we have a system designed torehire former employees who resigned for child care or nursing
care reasons or due to other similar circumstances, as long as acertain set of conditions is met, as well as a system that allows an
employee whose work location is limited to be transferred, uponrequest, to a location outside the area where he or she normallyworks. These measures are all part of our efforts to create a better
work environment where employees can reach their full potential atdifferent life stages.
*1 A system introduced by the Ministry of Health, Labour and Welfare in which companies are rewarded
for taking initiatives to establish various programs to support employees in achieving a good balance
between work, childcare and nursing care, and for putting in place a mechanism in which employees
have the option of selecting diverse, flexible working styles.
*2 JR Central formulated an action plan for the fifth period from FY2016 to FY2020. Under this action plan,
we set targets on childcare leave, including 100% of female employees to take childcare leave, and 3%
or more of male employees to take childcare leave. Given that we achieved the targets set in our action
plan for the period from FY2005 to FY2014, we were certified by the Minister of Health, Labour andWelfare as a Childcare Support Company.
*3 We offer various benefits, including a monetary gift when an employee gives birth, a subsidy for daycare, a childcare support benefit when using a babysitter, nursing care relief money of nursing careleave, and a nursing care subsidy when using the nursing-care service, etc. set forth under the LongTerm Care Insurance Act.
*4 Treatment described above differs in part based on the type of employee

Initiatives for supporting childcare, etc.
PregnancyChildbirth

Initiatives beyond that called for by law, or voluntary initiatives

1 year old

Check-up/maternity leave (unpaid)

3 years old

Enrollment inelementary school

1st grade & 6 months
in elementary school

9 years old

Related to the Equal Employment Opportunity Act

Working restrictions on pregnant women
Related to the Labor Standards Act

Childbirth leave
Childcare leave(paid)*1 With focus on safety and service, the General Education Center conducts training for employees,
including personnel from affiliated companies that are engaged in railway operations.
*2 Simple aggregation of the number of persons participating in each training program or course.

Childcare leave
Reduction of scheduled working hours

Related to theChildcare andNursing Care
Leave Act

Initiatives for Improving Employee Healthprinciple, excluding some job types. Due to this situation, the ratioof female employees as of the end of FY1996 was only 1.3%.
Subsequently, in response to the revision of the Labor Standards
Act in 1997, we have actively employed female employees. As ofthe end of FY2018, the number of female employees wasapproximately 2,000 (approximately 11% of all employees),reflecting a significant increase.

Restriction on overtime/late-night work
Exemption from overtime work
Nursing leave (unpaid)

It is the important issue of JR Central to maintain and promote healthy
minds and bodies of employees and to secure an environment in which
employees can be motivated to work. To date, we have taken a numberof initiatives in addition to providing health check-ups, etc. required
under law. Such initiatives include measures to promote sound mental
health, measures against life-style related diseases and sleep apnea
syndrome, subsidies for fees for complete physical check-ups andinfluenza vaccinations, and efforts to maintain reasonable working hours.
As for measures to maintain sound mental health, we take various
steps to prevent mental disorders based on the “JR Central Plan for
Promoting Healthy Minds.” We also hold training sessions based on
employee level concerning ways to put in place the division of roles andcoordination among relevant departments, methods to make
improvements to the workplace environment, and so on. Furthermore,
we conduct stress checks for all employees at the annual checkup as
well as following a change in assignment, etc.

36

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

In regard to measures against lifestyle-related diseases, we have been
providing specific health checkups and specific health guidance for
employees aged 40 and above since FY2008. In FY2015, we expanded
the target of guidance to also include employees below the age of 40
and have since been offering guidance on various matters as necessary
from the perspective of taking measures early.
We have established the Health Promotion Guidelines to provide acompany-wide policy on measures aimed at promoting sound physicaland mental health and to specify the roles of the company and its
employees. The health and wellness administrator assigned to each
workplace helps develop systems designed to enable employees toperform to the best of their abilities regardless of their age or genderand to take voluntary actions to improve their health as well as create ahealthier workplace. At the same time, we will conduct ongoingassessments and make improvements based on objective data to
improve the health and wellbeing of all workers.

Wage

Child dependency allowance (up to 22 years old)
Provision of at least 30% of the year-end
bonus even during childcare leave

The Company bears the social insurance premium deducted fromthe year-end bonus in line with the period of childbirth/childcare leave

Home help usage subsidy: Up to 5,000 yen/day (up to 20 days per year) (no age limit)
Welfareassociation

Childcare support subsidy; Up to 4,000 yen/day (up to 60 days per year)
Day-care center usage subsidy: 5,000 yen/month

Healthy Labor-Management Relations
JR Central currently complies with the various laws andregulations, including the Labor Union Act, and has signed labor
agreements with all four labor unions currently in place. [Total
union membership of 19,500 employees as of March 31, 2019].We

hold joint management council meetings and engage in collective
bargaining based on these labor agreements, and will continue to
strive to build healthy and stable labor management relations.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201937

Cooperation with Local Communities / International Exchanges /Promotion of Culture & Art and Lifelong Learning—

ESG Information

Local Communities, International Exchanges, Culture & Art, etc.

Participating in programs to vitalize local communities
SCMAGLEV and Railway Park
- A museum of memories and dreams We opened the “SCMAGLEV and Railway Park” in March 2011 in
Kinjo Futo, Minatoku, Nagoya, as part of our participation in the“Monozukuri (manufacturing) Culture Exchange Area Project”,
hosted by the City of Nagoya.
At the “SCMAGLEV and Railway Park”, we introduce the progressof the high-speed railway technology through displays of rollingstock mainly of the Tokaido Shinkansen, as well as conventionallines and Superconducting Maglev. The number of visitors
exceeded 4.8 million by the end of FY2018.

SCMAGLEV and Railway Park

Roll out of initiatives in coordination
with communities located along our lines

Railways, which are a mode of public transportation, are extremely closely connected to local communities. We areenhancing the convenience of stations, which are the gateway to local communities, as well as contributing to local
communities, through operating medical facilities and museums, etc. in the Nagoya region, where our head office islocated, in addition to rolling out sales and marketing efforts and operating websites that spread the attractive features ofcommunities located along our railway lines by selling locally produced goods, etc. Furthermore, we interact with expertson railways from other countries and engage in activities toward promoting culture, art, and lifelong learning.

As part of sales and marketing, we are deepening ties with
communities located along our lines while rolling out initiatives
such as the “Shupo” campaign, “Sawayaka Walking”, and “Japan
Highlights Travel”.
Further, as an initiative aimed at revitalizing local communities
along the railway lines we operate, in October 2016 we beganselling locally produced goods on our “IIMONOTANBOU” websitethat introduces attractive features of local communities throughlocal delicacies in cooperation with producers in communities.

Shupo

Japan Highlights Travel

IIMONOTANBOU website

Contribution to Local Communities
Initiatives to improve the level of convenience and accessibility of stations, etc.
JR Central cooperates with the requests from local municipalities
to establish new stations, improve station buildings, develop
plazas in front of stations, and promote railway elevation projects,
etc., thereby contributing to community development.
Based on relevant laws, such as the so-called Barrier-Free Act,
JR Central cooperates with governments and municipalities tojointly establish and improve facilities to enable all passengers,
including persons with disabilities and elderly passengers, to use
our services safely and with a sense of security.
As part of our initiatives taken in stations, we are proceeding with
our plan to eliminate uneven ground by installing elevators, etc.
and to install multi-functional toilets sequentially in stations used by
3,000 or more passengers per day. Basically in all of the stations,installations have been completed or are under way. We havecompleted installation of guiding blocks for visually impaired
persons and braille blocks that prevent such persons from fallingfrom platforms. Furthermore, in regard to braille blocks, we aresequentially replacing them with the type of braille blocks thatindicate where platform edges are located. In addition, we areworking to install platform screen doors to further enhance safety
on platforms. On the Tokaido Shinkansen line, installation workcommenced in FY2011, aimed at fencing off platforms at busy
stations where Nozomi stops. Currently, all of the platforms at
stations where Nozomi stops have been fenced off, except for
Platforms No. 20 to 26 at Shin-Osaka Station, which are planned to
be fenced off by FY2022. On the conventional lines, installation
work commenced with the inbound and outbound Tokaido line
platforms at Kanayama Station. They are planned to be put into
use in 2021.
Further, nearly all of JR Central’s trains include support facilities
for passengers using a wheelchair.
Our station staff members offer assistance and guidance,
whenever necessary, to customers with disabilities using ourfacilities.

Setting general hospitals for local communities (Nagoya Central Hospital)
As an acute care hospital, Nagoya Central Hospital, located in
Nakamura-ku, Nagoya, performs over 1,500 surgeries year round,providing some of the most advanced medical care services
available using the latest medical equipment. The hospital is also a
committed emergency health care provider, coordinating with local
ambulance services to take in over 4,100 ambulance calls per
year. Looking ahead, the Nagoya Central Hospital will look toleverage its distinctive features and expertise to further contributeto the local community.
Nagoya Central Hospital38

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

International Exchanges
JR Central proactively undertakes a wide range of international
operations, such as gathering mainly railway information fromaround the world via the company's network of overseas offices(Washington D.C. , London, and Sydney), exchanging
technological and management information with specialists invarious countries, and issuing press releases overseas as part ofour PR activities, etc.
We also offer technical cooperation in the field of railways in
response to government requests, and promote human resources
development by hosting interns from overseas universities andinternational organizations, etc.

Accepting interns from foreign universities

Promotion of culture, art, and lifelong learning (JR Tokai Lifelong Learning Foundation)
JR Tokai Lifelong Learning Foundation is a public interest
incorporated foundation established in October 1990 with the
purpose of contributing to society through promotion of culture, art,and lifelong learning. The Foundation’s main activities include
holding exhibits of artwork of Hoshun Yamaguchi, known as apioneer in new Japanese art at Hoshun Yamaguchi Memorial Hall
which opened in Hayama-machi, Kanagawa in October 1991, anddisclosing the ateliers and gardens that offer seasonal flowers andtrees for public viewing. Further, in an effort to support lifelong
learning, the Foundation engages in a wide range of culturalactivities, including holding classes for painting, photography, etc.
and organizing classes to learn about history and culture.

Hoshun Yamaguchi “Ryokutei” 1927

Hoshun Yamaguchi “Bokyo (esquisse)” 1953

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201939

Corporate Governance
JR Central strives to enhance our corporate governance to ensure soundness, efficiency, and transparency of management,
to implement long-term development of the company, and to enhance sustainable corporate value.
JR Central's Corporate Governance System

Election of Outside Directors andOutside Audit and Supervisory
Board Members [As of June 21, 2019]

General Meeting of Shareholders
Selection

Selection
Audit

Board of Directors

Audit and Supervisory Board

Cooperate

Audit

Accounting
Auditors

Cooperate

Internal Audit Department Cooperate(Audit Department / Transportation Safety Department)

Audit

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

TakashiSaeki

Mr. Saeki was appointed
as an Outside Director
because of his corporate
management experienceand his great insight.

HajimeIshizuMr. Ishizu was appointed
as an Outside Audit andSupervisory Board Member
because of his experience intransportation administrationand his great insight.

Fumio
Yamashita

Mr. Yamashita was appointed
as an Outside Audit andSupervisory Board Member
because of his experience inpolice administration and his
great insight.

ShigeoKifujiMr. Kifuji was appointed
as an Outside Audit andSupervisory Board Member
because of his experience
as a public prosecutor andlawyer and his great insight.

Kunihiro
Nasu

Mr. Nasu was appointed
as an Outside Audit andSupervisory Board Member
because of his experience
as a lawyer and his great
insight.

Board Members based on the criteria for independence established by
the Japan Exchange Group, Inc. in order to ensure that the opinions
provided by Outside Directors and Outside Audit and Supervisory Board
Members on matters raised are formed from an independent standpoint,
and are based on the high degree of experience and insight accumulated

Takashi
Saeki

ShigeoKifujiKunihiro
Nasu

Name of other company, etc.

[FY2018]
Name

TitlesFamilyMart UNY
Holdings Co., Ltd.

OutsideDirector

The Ogaki Kyoritsu
Bank, Ltd.

OutsideAudit andSupervisory
Board Member

Aichi Prefecture
Public Safety
Commission

Committee
ChairmanMori Building
CO., LTD.

OutsideAudit andSupervisory
Board Member

Sangetsu
Corporation

OutsideDirector(Audit Member)

Audit and Supervisory Board Members

meetings such as the Board of Directors and the Management Meetings,
but also inspect the state of execution carried out at head offices, railway
operations divisions, branch offices, field offices, and affiliated companies
based on plans enacted by the Audit and Supervisory Board to strictly
promote their audit work. To ensure effective audits by the members of the
Audit and Supervisory Board, JR Central also provides an assistant system
in which our employees are assigned as full-time staff to support auditors
work.
Internal audits are performed by the Audit Department on the overall workof JR Central, its affiliated companies and related companies from theperspective of compliance, efficiency and effectiveness of operations. The
audits are performed by checking business materials, contracts and otherdocuments, observing operations, interviewing related persons and taking
other methods, and the results are reported to management. In addition, toprevent operational and labor accidents, safety audits are performed by
the Transportation Safety Department, and the results are also reported to
management.
Based on generally accepted accounting standards, JR Central has
appropriate accounting audits made by an audit corporation, and by
Deloitte Touche Tohmatsu LLC, which has been selected to be our
accounting auditor.
Audit and Supervisory Board Members, internal audit departments, andaccounting auditors cooperate with each other by exchanging information
periodically or as necessary and receive necessary information from eachdepartment involved in internal control to confirm the status of
implementation of each item stipulated in the Fundamental Corporate
Governance Policies.

Audit and Supervisory Board Member

40

Mr. Koroyasu was appointed
as an Outside Director
because of his experience
as a public prosecutor andlawyer, and his great insight.

Audit

Outside Directors and Outside Audit and Supervisory Board Members
Based on our policy to make the most appropriate execution system for
Outside Directors and Outside Audit and Supervisory Board Members, JR
Central appoints three Outside Directors and four Outside Audit andSupervisory Board Members. The Company determines the level of
independence of Outside Directors and Outside Audit and Supervisory

Kenji
Koroyasu

ReportOverview of Corporate Governance System
JR Central’s Board of Directors is composed of 18 members (including
three outside directors) and chaired by the company chairman.
JR Central also employs an auditor system, and its Audit and Supervisory
Board consists of five members (four of whom are outside auditors). (Thefigures are as of June 21, 2019.)
The Board of Directors meets at least once a month, and makes legal andappropriate decisions upon fully discussing issues stipulated by the law,following conscientious briefings that are given to bring all concerned up to
speed on the background of issues discussed, and the progress status for
such, and issues of importance to management, and monitors the work of
directors. A Management Meeting is held ahead of a Board of Directors
meeting for in-depth discussion of important management issues. Chairedby the president, the Management Meeting is attended by all full-time
directors, Audit and Supervisory Board members, and some corporate
officers. We request members of the Audit and Supervisory Board to attend
meetings of the Board of Directors, the Management Meeting and otherimportant meetings, as we endeavor to ensure the legality of management
measures during the deliberation process. Further, JR Central strives toensure the appropriate execution of business by managing and providing
guidance to affiliated companies where necessary.
Although we introduced the corporate officer system in May 2003, we
introduced an executive system in June 2012 with the aim of further
accelerating decision-making, enhancing discussions, and further
clarifying roles for directors and corporate officers, who are responsible for
operation, in order to appropriately respond to changes in the businessenvironment influencing our management decisions in a timely manner.
Audit and Supervisory Board Members not only attend important

Mr. Cho was appointed
as an Outside Director
because of his corporate
management experienceand his great insight.

Audit and Supervisory Board Member

Affiliated Companies

Fujio
Cho

Name

Activity status of Outside Directors and Outside
Audit and Supervisory Board Members

Directors

Management Meeting

Management / GuidanceReasons for election

Corporate Governanceand Supervisory Board Members, internal audits, safety audits,accounting audits, as well as items stipulated in the Fundamental
Corporate Governance Policies.
Each Outside Director and Outside Audit and Supervisory Board
Member is submitted to the Tokyo Stock Exchange and the Nagoya Stock
Exchange as an independent officer who does not have any conflicts ofinterest with general shareholders.

State of main posts held concurrently for Outside
Directors and Outside Audit and Supervisory
Board Members[As of March 31, 2019]

Directors

Investigate

Directors

Cooperate

Audit

Name
Selection

President and Representative Director

Head Office, Regional offices, Field offices

outside the Company.
JR Central receives beneficial opinions about the execution of ourbusiness from Outside Directors and Outside Audit and Supervisory Board
Members who provide advice based on their various experience andgreat insight gained outside of the company from their independent
standpoints, both in and outside of the Board of Directors and Audit andSupervisory Board. We utilize the advice given by Outside Directors andOutside Audit and Supervisory Board Members to execute audits by Audit—

ESG Information

Principal activity

Fujio
Cho

Attended all 12 meetings of the Board of
Directors held in FY2018. In the Boardof Directors meetings, he has stated his
opinions based on his experience incorporate management, etc.

Kenji
Koroyasu

Attended all 12 meetings of the Boardof Directors held in FY2018. In the oardof Directors meetings, he has stated his
opinions based on his experience as apublic prosecutor and lawyer, etc.

Takashi
Saeki

Attended all 12 meetings of the Board of
Directors held in FY2018. In the Boardof Directors meetings, he has stated his
opinions based on his experience incorporate management, etc.

HajimeIshizuAttended all 12 meetings of the Board of
Directors, and attended all 14 meetings of the
Audit and Supervisory Board held in FY2018.
In the Board of Directors meetings and meetingsof the Audit and Supervisory Board, he hasstated his opinions based on his experience intransportation administration, etc.

Hiroyuki
Ota

Attended all 12 meetings of the Board of
Directors, and attended all 14 meetings of the
Audit and Supervisory Board held in FY2017. In
the Board of Directors meetings and meetings of
the Audit and Supervisory Board, he has stated
his opinions based on his experience in police
administration, etc.

ShigeoKifuji

Attended all 12 meetings of the Board of
Directors, and attended all 14 meetings of the
Audit and Supervisory Board held in FY2017. In
the Board of Directors meetings and meetings of
the Audit and Supervisory Board, he has stated
his opinions based on his experience as a publicprosecutor and lawyer, etc.

Kunihiro
Nasu

Attended all 10 meetings of the Board of
Directors, and attended all 11 meetings of the
Audit and Supervisory Board held since taking
office on June 22, 2018. In the Board of Directors
meetings and meetings of the Audit andSupervisory Board, he has stated his opinions
based on his experience as a lawyer, etc.

Content of Compensation for Officers
Directors’ remuneration is comprised of basic compensation,
which is paid in a fixed amount, and a bonus. The basic
compensation amount is determined through a comprehensive
assessment of a director’s position, length of service, and otherfactors while the bonus amount is determined in consideration of
the performance of assigned duties.
The remuneration of outside directors includes only fixed basic
compensation.
The Board of Directors passed a resolution to have the president
determine specific remuneration amounts at his discretion after heexplained the above remuneration policy at a Board of Directors
meeting. A decision was made at the 25th Ordinary General
Meeting of Shareholders held on June 22, 2012 to keep the annual
amount of the directors’ remuneration at 1.2 billion yen or less (andup to 50 million yen for the outside directors’ remuneration). The
amounts are ultimately determined by the president within theselimits. When this decision was made at the 25th Ordinary General
Meeting of Shareholders held on June 22, 2012, the number of
directors was specified as being 20 or fewer in the company’s
Articles of Incorporation.
The remuneration of Audit and Supervisory Board members

consists only of fixed basic compensation, and the appropriate
amount is determined via discussions among Audit andSupervisory Board Members. A decision was made at the 20th
Ordinary General Meeting of Shareholders held on June 22, 2007 to
keep the annual amount of Audit and Supervisory Board members’
remuneration at 250 million yen or less. The final amount is set
within this limit. When this decision was made at the 20th Ordinary
General Meeting of Shareholders held on June 22, 2007, thenumber of Audit and Supervisory Board members was specified as
being 5 or fewer in the company’s Articles of Incorporation.
Total amount of compensation, etc. by officer classification, total amountof compensation, etc. by type, and number of target officers [FY2018]
Basic Compensation

Bonus(Million yen)

Numberof target
officers

Totalamount(Million yen)

Total amountfor thecompensation/bonus, etc.

(Excluding Outside Directors)

18

578

14

231

810

Audit andSupervisory Board
Members

2

49

-

-

49

Outside Officers

7

138

-

-

138

Numberof target
officers

Directors

Classification(People)Totalamount(People)(Million yen)

(Excluding Outside Auditors)

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201941

Respond to the Corporate Governance Code—ESG Information

Corporate Governance• Specific measures to be implemented in the current business year based on this Management Philosophy
are described in Key Measures and Capital Investment, and can be found at the URL below.
Key Measures and Capital Investment

JR Central has announced its stance on, and the initiatives it has
put in place, in relation to the Corporate Governance Code(hereafter, “the Code”) found within Corporate Governance
Report*.

* Corporate Governance Report can be found on the Japan Exchange Group, Inc. website.

Principle 4-1
Roles and responsibilities of
the Board of Directors (1)Supplementary
principle

4-1 2

Principle 5-2
Establishing and Disclosing
Business Strategies andBusiness Plans

Principle 4-10
Use of Optional Approach[3] Details on the policy and procedures concerning the setting of Director compensation are described in 2.1.
[Director Compensation-related] Disclosure of Policy for Determining the Amount of Compensation and the
Calculation Method for Such in the Corporate Governance Report.

Principle 3-1[4] It is our policy to appoint individuals who are most fit to perform the given duties for the company as directors
and Audit and Supervisory Board members. In accordance with this policy, we select candidates basedon a comprehensive review of their abilities, knowledge, work history, etc. via a resolution of the Board of
Directors and appoint them upon approval at a General Meeting of Shareholders. In appointing or dismissing
a representative director, we follow the same policy as well as the provisions of relevant laws and the rules of
the Board of Directors.

Disclosed contents• In the railway business, the core pillar of JR Central’s business, ensuring safe and reliable transportation is an issue ofSupplementary
principle

Supplementary
principle

4-10 1

utmost importance, and all aspects of our business, from our daily business operations, to employee training and capital
investment, are implemented with the highest priority given to increasing the level of reliability of the services we provide
and, as such, we do not implement a system of management whereby company-wide mid-term business plans areformulated and managerial targets are pursued in a manner that can neatly serve as a cross-sectional look at the stateof the business at set moments.
• While JR Central neither formulate mid-term management plans nor establish numerical targets in this manner, theCompany does promote its railway business from a long-term perspective. Specifically, in addition to the constructionof the Chuo Shinkansen, which is now underway, other measures that require a long-term capital investment, such aslarge-scale renovation for the Tokaido Shinkansen, the implementation of earthquake countermeasures, and plans to
upgrade rolling stock in service, are established with a long-term perspective in mind, and we are steadily proceeding
forward these projects. Plans and results of other major measures are announced publicly as appropriate, and steadyprogress continues to be made in these areas. We will continue to announce annual income and expenditure plans, key
measures, and capital investment plans each year in light of our immediate management environment, and will continue
to steadily enhance our management foundation in order to firmly maintain a sound management outlook based on
efficient operational management stemming from the securing of safe and reliable transportation.

Three independent outside directors serve on our Board of Directors, and participate in discussions related toimportant management decisions and provide adequate oversight of the directors’ performance of duties.
Although we do not have an independent advisory committee, all three outside directors and part-time outside
Audit Supervisory Board members exchange opinions with management on important management issues including
appointments and remuneration. We also provide other information sharing opportunities that lead to constructive
discussions and the exchange of opinions at Board of Directors meetings in order to ensure appropriate involvement
and advice from independent outside directors.

[5] Director and Audit and Supervisory Board member candidates are appropriately selected in consideration of
their career background provided in the General Meeting of Shareholders material. We disclose information
concerning the change of a representative director as required by the Tokyo Stock Exchange’s Timely
Disclosure Rules.

Principle 4-1
Roles and responsibilities of theBoard of Directors (1)Supplementary
principle

4-1 1

Principle 4-9

Supplementary
principle

Principle 4-11

General principle

Principle 1-4
Cross-shareholdings

Principle 1-7
Related party transactions

Principle 2-6

Supplementary
principle

Disclosed contents[1] Policy concerning cross-shareholdings
Our strategy for cross-holdings is grounded in the belief that maintaining and bolstering business
relationships through holding other companies’ stock facilitates our operations and enhances our corporate
value over the medium to long term. If any of our cross-holdings are deemed to be unnecessary in light ofthis policy, we will assess and possibly divest in them.
[2] Assessment of cross-holdings
Our Board of Directors examines whether it is beneficial to retain specific cross-holdings after scrutinizingthem in light of the medium- to long-term economic rationale and outlook, purpose of owning such crossholdings, etc.
[3] Criteria for the exercising of voting rights
In terms of the exercising of cross-shareholding voting rights, JR Central closely examines the content ofeach resolution and decides how to vote in consideration of improving the corporate value of the Company
over the mid- to long-term and the sustainable growth of business partners, etc.
All transactions involving Directors which may pose a conflict of interest, and transactions between Directors andthe Company, require the approval of, and reporting to, the Board of Directors as stipulated in relevant laws andregulations and rules governing the Board of Directors. Every year confirmations are made on a regular basis with
officers as to whether related party transactions have been made between officers or relatives and the Company.

Roles of Corporate Pension Funds
as Asset Owners

Since we do not offer a corporate-type defined benefit corporate pension plan, this principle does not apply to us.
We use a defined contribution pension plan instead. We provide employees who participate in the defined
contribution pension plan with adequate training on asset management since the plan affects their asset
accumulation.

Principle 3-1[1] • JR Central was founded in 1987 as part of the reform of the national railway system with a mission of
integrally maintaining, developing and future-proofing the Tokaido Shinkansen, which serves as Japan's
main transportation artery linking Tokyo, Nagoya and Osaka, and the conventional line network in the Tokai
region with a central focus around Nagoya and Shizuoka.
Furthermore, JR Central established its management philosophy to “Contribute to the developmentof Japan’s main transportation artery and social infrastructure” to reflect the direction the Company
should aim at in line with the expanding scope of business activities going forward, including
the operation, etc. of the three generations of railways, i.e. conventional lines, the Tokaido
Shinkansen, and the Chuo Shinkansen. This management philosophy can be found on our website.

Full disclosure

URL

https://global.jr-central.co.jp/en/company/about/outline.html• In the railway business, JR Central sets the highest priority on ensuring safe and reliable transportation. JR
Central's fundamental policy is to stably and fully execute the long-term social mission described in detailabove through the continuous efforts of providing services that are preferred by customers as well as thestreamlining of work, etc. This Management Philosophy is included in the A Message from the Management
section of the Annual Report, and can be found at the following URL.
Annual Report
URL

42

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019https://global.jr-central.co.jp/en/company/ir/annualreport/

Premises for ensuring theeffectiveness of the Board of
Directors and the Audit andSupervisory Board

Supplementary
principle

4-11 2

Supplementary
principle

4-11 3

Principle 4-14
Director and Audit andSupervisory training

The Board of Directors is involved in decision making processes concerning matters stipulated in relevant laws
and regulations and the articles of incorporation, matters put in their charge at a general shareholders’ meeting,and important matters related to the execution of business. A specific outline of such matters is established in therules governing the Board of Directors.
Further, the Board of Directors clearly defines the division of duties and job functions for each department
based on internal regulations, clarifies the scope of authority for Directors and corporate officers, while also
defining the division of roles of Directors and areas in which corporate officers are put in charge.
The Company determines the level of independence of Outside Directors and Outside Audit and Supervisory
Board Members based on the criteria for independence established by the Japan Exchange Group, Inc. in orderto ensure that the opinions provided by Outside Directors and Outside Audit and Supervisory Board Members on
matters raised are formed from an independent standpoint, and are based on the high degree of experience andinsight accumulated outside the Company.

Independence standards andqualification for Independent
Directors

4-11 1
Disclosure based on Corporate Governance Code principles

https://company.jr-central.co.jp/company/achievement/capital-investment/[2] The basic outlook on corporate governance is described in 1.1. Basic Outlook in the Corporate Governance
Report.

Full disclosure

The reasons for not implementing the principles of the code
General principle

URL

Further, The reasons for not implementing the principles of thecode and matters disclosed based on each principle of the code
are as follows.

Supplementary
principle

4-14 2

The appointment of Directors is conferred to General Shareholders Meetings following a resolution of the Boardof Directors concerning the appropriate election of candidates deemed to be the most fitting for the role asselected based upon a general consideration of their abilities, knowledge, and work history, etc. The number of
Directors elected, and the division of Director roles, etc. is determined based on a comprehensive considerationof the level of progress of each project at the time based on a policy of establishing the most appropriate
management structure for the execution of the Company’s business activities.
The status of Directors and Audit and Supervisory Board Members holding important concurrent positions
is as described in business reports and General Shareholders Meeting Reference Materials. All currently held
positions bear no hindrance on the Director or Audit and Supervisory Board Member’s ability to fulfill the roles
and responsibilities of such a position for the Company.
The Board of Directors of the Company meets once or more a month to make legal and appropriate decisions
upon fully discussing issues stipulated by law, following conscientious briefings that are given to bring allconcerned up to speed on the background of issues discussed, and the progress status for such. Further, thestatus of the execution of duties by Directors is monitored by having Directors report back on business functions
under their charge when needed. JR Central receives valuable broad-view advice on management from Outside
Directors, which is brought into consideration in regulating the management of the Company.
Additionally, round-table conferences for opinion exchanges between Outside Directors, Outside Audit andSupervisory Board Members and members of management are set up ahead of meetings of the Board of
Directors in order to further improve the effectiveness of the Board of Directors.
Through the above-mentioned initiatives, we find at meetings of the Board of Directors that the effectiveness ofthe entire Board of Directors is ensured to a satisfactory degree.
All Directors and Audit and Supervisory Board Members of the Company have the sufficient ability and insightto fulfill their roles and responsibilities, and perform their duties with an appropriate sense of responsibility as
entrusted by all shareholders, while continuing to refine their skills and knowledge by actively participating inexternal training programs, etc.
JR Central takes necessary measures to ensure that all Directors and Audit and Supervisory Board Members
perform the duties required of them, such as in instances where relevant laws and regulations are revised, forexample, by making the content of such revisions commonly known through meetings, etc., and by holding
training events to share management issues faced by the Company so that the Company can make decisions
concerning such issues in an appropriate manner.
JR Central has established a Policy for Promoting Constructive Dialog with Shareholders as follows.
• JR Central positions the General Meeting of Shareholders as an important opportunity for dialog with shareholders andPrinciple 5-1
Policy for constructive dialog withshareholders

strives to improve the quality of questions and answers sessions in the meeting as a means of contributing to sustainablegrowth and enhancing corporate value over the mid- to long-term. All dialog with shareholders is overseen by theGeneral Manager of the Administration Department, and questions, opinions and requests are fielded from shareholders
and responded to in the form of an individual meeting or over the telephone, etc. where it is reasonable to do so.
• Of this, dialog with institutional investors is overseen by the Director General of the Corporate Planning Division, and the
IR team is placed in the Business Administration Department, Corporate Planning Division in order to further improveshareholder dialog by organically coordinating with the Administration, Finance, Legal Departments, etc. Dialog
response is the purview of the IR team, and a response is made together with members of management and Directors,
where reasonable, based on a general consideration of the requests and interests, etc. put forth by the institutional
investor. Specifically, we strive to improve upon dialog measures by not only holding individual meetings but also holding
conference calls and facility tours, etc., where necessary, in addition to holding financial results briefings biannually.
• We also strive to enrich the broader provision of information to shareholders by sending reports on information presented
at financial results briefings biannually, on top of posting this information on our website. Moreover, we work to ensurethat a sufficient degree of information concerning decisions made on important measures and important capital
investments reaches as large a number of stakeholders as possible using the mass media services to deliver detailed
information at press conferences held by the President, and by presenting such information to the press.
• The content of discussions with shareholders is reported to members of management and, if necessary, feedback is
given to the Board of Directors.
• Under no circumstances is insider information communicated during discussions with shareholders. Furthermore, the14-day period in the lead up to the day in which financial results are announced each quarter is designated as a silent
period, in which the Company refrains from discussing financial results.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201943

—ESG Information

Fundamental Corporate Governance Policies

Summary of the 32th Ordinary General Meeting of Shareholders (Held June 21, 2019)

JR Central resolved the Fundamental Corporate Governance Policies* in the Board of Directors meetings.

The following resolutions were passed at the 32th Ordinary General Meeting of Shareholders held June 21, 2019.

Corporate Governance*The Fundamental Corporate Governance Policies can be found at the URL below.

URL(1) Content of the resolved matters:

https://company.jr-central.co.jp/company/about/governance.html

Compliance / Whistle-blowing System
JR Central not only stipulates internal regulations based on thelaw, etc. but also conducts employee education on various
occasions with the aim of thoroughly complying with the law, etc.
when executing work. In addition, we also have established awhistle-blowing system. We have whistle-blowing contact points
not only within the Company but also in an external law firm inorder to establish a system in which employees, etc. can reportany violation of the law, etc. at work. We also post fliers describing
the whistle-blowing system and contact information for the contact
points in all workplaces with the aim of widely disseminating thesystem.

Risk-management System
JR Central has established the Railway Safety Promotion
Committees, etc. at the head office, railway operation divisions,branch offices, and in each area from the perspective ofpreventing train and labor accidents, and formulating andpromoting safety measures through an integrated organization thatstretches from the head office to each field office.
JR Central also manages a control center, which plays a key rolein information communication, on call 24 hours a day at eachrailway operation division to respond to emergencies, such asaccidents and disasters, and has also established a fast-response
restoration structure in which employees can be gathered anytime
according to the scale or impact of an accident or disaster.
Additionally, in preparation for emergencies such as large-scale
natural disasters, we have established the second Shinkansen
General Control Center that can substitute for the Shinkansen
General Control Center for the Tokaido Shinkansen.

Proposal 1 :Appropriation ofretained earnings(i) Matters concerning year-end dividends
Seventy five (75) yen per common share of the Company(ii) Other matters concerning the appropriation of retained earnings:•Line item relating to retained earnings showing an increase and the amount thereof
General reserve: 380,000,000,000 yen•Line item relating to retained earnings showing a decrease and the amount thereof
Retained earnings carried forward: 380,000,000,000 yen

Proposal 2 :Election of one (1) Directors

Mr. Shunsuke Niwa was elected as Directors.

Proposal 3 :Election of five (5) Audit
and Supervisory Board Member

Messrs. Hidenori Fujii, Hajime Ishizu, Fumio Yamashita, Shigeo Kifuji and Kunihiro Nasu
were elected as Audit and Supervisory Board Member.

(2) Number of votes, indicating approval, disapproval, and abstention regarding the resolved matters,
requirements for the resolved matters to be adopted, and results of voting:
ProposalApproval(number of votes)

Disapproval(number of votes)

Abstention(number of votes)

Proposal 1

1,754,966

11,278

1,193

98.73

Approved

1,620,576

142,204

4,641

91.17

Approved

Approval Rate (%)

Result of Voting

Proposal 2
Shunsuke Niwa

Proposal 3

Response to Internal Control Related to Financial Reporting
We periodically investigate the system and execution situation,etc. within JR Central and JR Central Group companies inaccordance with a basic framework offered by the BusinessAccounting Council in order to confirm that they are effectivelyfunctioning. JR Central also engages in efforts to maintain the levelof internal control related to financial reporting by providing
feedback from these investigations to duties.

Hidenori Fujii

1,739,590

26,640

1,193

97.87

Approved

Hajime Ishizu

1,604,762

161,462

1,193

90.28

Approved

Fumio Yamashita

1,765,287

958

1,193

99.31

Approved

Shigeo Kifuji

1,679,407

86,837

1,193

94.48

Approved

Kunihiro Nasu

1,764,912

1,333

1,193

99.29

Approved(Note) The requirements for the proposals to be resolved were as follows:
1. For proposal 1, a majority of votes indicating the approval of the shareholders who attended the meeting was required.
2. For proposals 2 and proposal 3, a majority of votes indicating the approval of the shareholders who attended the meeting with the attendance ofshareholders representing 1/3 or more of all voting rights that can be exercised were required.

Concept of Capital Policy and Shareholder Return
Our policy on dividends has always been to decide the specificdividend amount in accordance with the management environment
and performance in each FY based on the principle of continuously
providing stable dividends. JR Central considers that shareholder
returns through dividends are appropriate in principle, and we do
not plan to purchase additional treasury stock at this point.

44

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

We will finance our projects by issuing corporate bonds andborrowing, in addition to the long-term loan totaling 3 trillion yen
acquired using the Fiscal Investment and Loan Program (FILP) to
promote the construction of the Chuo Shinkansen, and we do notplan to use treasury shares or pursue capital increase at this point.

(3) Reason for not adding some of the votes of shareholders who attended the ordinary general meeting of shareholders to the final
number of votes:
The votes of shareholders who attended the general meeting of shareholders on the meeting date, but have not been confirmed
as to whether they indicated approval, disapproval or abstention, were not added to the final count because the requirements forthe proposals to be resolved were already met by adding the votes from the exercise of voting rights as of the day before thegeneral meeting of shareholders was held to the votes of shareholders who attended the general meeting of shareholders, whichwere confirmed as approvals or disapprovals, and the proposals were duly adopted in accordance with the Companies Act.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201945

Corporate Data

Corporate Data

Board of Directors, Audit and Supervisory Board Members, and Corporate Officers (as of June 21, 2019)

ProfileName

Head Office and Other Main Offices

CENTRAL JAPAN RAILWAY COMPANY (JR Central)

Head Office

Meieki 1-1-4, Nakamura-ku, Nagoya-shi, Aichi 450-6101, Japan
JR Central Towers

Head Office (Tokyo)

JR Central Shinagawa Building -A Wing 2-1-85, Konan,
Minato- ku, Tokyo 108-8204, Japan

Conventional Lines
Operations Division

JR Central Taiko Building, Meieki 1-3-4, Nakamura-ku,
Nagoya- shi, Aichi 453-8520, Japan

Shizuoka
Branch Office

4, Kurogane-cho, Aoi-ku, Shizuoka-shi, Shizuoka 420-0851,
Japan

Mie
Regional Office

Ust-Tsu 12F, 700, Hadokoro-cho, Tsu-shi, Mie 514-0009, Japan

Iida
Regional Office5356, Kami-Iida, Iida-shi, Nagano 395-0000, Japan

Established
April 1, 1987
Chairman and
Representative Director

President andRepresentative Director

Executive Vice President
and Representative Director

Executive Vice President
and Representative Director

Koei Tsuge

Shin Kaneko

Yoshiki Suyama

Shun-ichi Kosuge Mamoru Uno

Board of Directors andAudit and Supervisory Board Members

Corporate Officers

Chairman and Representative Director

Koei Tsuge
President and Representative Director

Shin Kaneko

Operating Revenues

1,464.8 billion yen

Sumio Atsuchi

Number of Shares Outstanding

206 million

Takanori Mizuno

Hideyuki Shoji

Shin Iwata
Akihiko Ito
Mamoru Tanaka

Director General of the Chuo Shinkansen Promotion Division and in charge ofcontrolling the Construction Section

Share Listings

Nagoya / Tokyo Stock Exchange

Number of Shareholders

84,757

Number of Employees

18,148

Director General of the Maglev Systems Development Division of the Chuo
Shinkansen Promotion Division

Operating Kilometers

1,970.8km

Shinkansen Operations
Division

Marunouchi Chuo Building, 1-9-1, Marunouchi, Chiyoda-ku,
Tokyo 100-0005, Japan

Director General of the General Technology Division and in charge of controlling
the Tracks and Structures Section

Number of Stations

405

Kansai Branch Office

Deputy Director General of the General Technology Division, General Managerof the Technology Planning Department of the General Technology Division andin charge of controlling the Electrical Engineering Section

Number of Rolling Stock

4,848

Shin-Osaka Hankyu Building 10F, 1-1-1, Miyahara,
Yodogawa- ku, Osaka-shi, Osaka 532-0003, Japan

Double-and Multi-Tracked Section

55.1%(1,086.8km)

Washington D.C. Office

Deputy Director General of the Chuo Shinkansen Promotion Division and General Manager of
the Chuo Shinkansen Construction Department of the Chuo Shinkansen Promotion Division

Electrified Section

76.7%(1,511.0km)

900 17th Street, N.W., Suite 520, Washington,
DC 20006, U.S.A.

CTC System Adoption Rate

97.5%(1,922.3km)

Automatic Signaling System Adoption Rate

97.8%(1,927.3km)

Director General of the Business Promotion Division and in charge of theProperty Management Department
Director General of the Shinkansen Operations Division and in charge ofcontrolling the Rolling Stock Section

London Office

6th Floor, 4 Eastcheap, London, EC3M 1AE, U.K.

Sydney Office

Suite 5.01A, Level5, 20 Hunter Street, Sydney,
NSW 2000, Australia

Corporate Officers
in charge of the Shinkansen andConventional Lines Operations Division,in charge of Transportation Safety
SectionShunsuke Niwa
Hajime Ikuta
Yutaka Hatano

Chairman Emeritus and Director

Yoshiyuki Kasai

Hiroto Takeuchi(Ph.D.)

Director General of the Corporate Planning Division
Deputy Director General of the Chuo Shinkansen Promotion Division
Deputy Director General of the Maglev Systems Development Division of the Chuo
Shinkansen Promotion Division and General Manager of Yamanashi Maglev Center ofthe Maglev Systems Development Division of the Chuo Shinkansen Promotion Division
Deputy Director General of the Chuo Shinkansen Promotion Division and Deputy
General Manager of the Chuo Shinkansen Construction Departmentof the Chuo Shinkansen Promotion Division

Yoshiomi Yamada

Tatsuhiko Yamada General Manager of the Finance Department
Atsushi Honda (Ph.D.) General Manager of the Construction Department, General Manager of the

Directors

Tomohisa Furuhashi General Manager of the Transportation Safety Department and in charge ofCounselor and Director

Takanori Mizuno
Toshio Otake (Ph.D.)
Akihiko Ito
Mamoru Tanaka
Shunsuke Niwa
Hiroshi Suzuki
Torkel Patterson
Fujio Cho (Outside)
Kenji Koroyasu (Outside)
Takashi Saeki (Outside)
Full-time Audit and Supervisory Board Members

Hidenori Fujii
Hajime Ishizu (Outside)
Fumio Yamashita (Outside)
Audit and Supervisory Board Members
Shigeo Kifuji (Outside)

Kunihiro Nasu (Outside)46

In charge of the Secretarial Department, the Audit Department, the Public
Relations Department, the Administration Department and the Marketing DivisionCorporate Executive Officers

Atsuhito Mori

Promotion Division

Key data

Senior Corporate Executive Officers

Yoshiki Suyama

Mamoru Uno (Ph.D.) in charge of the Chuo Shinkansen

Railways business, Affiliated businesses

112.0 billion yen

Toshio Otake (Ph.D.)

Division, and in charge of the Overseas
High Speed Railway Project

Hideyuki Shoji

Business activities

CapitalExecutive Vice Presidents and Representative Directors

Shun-ichi Kosuge in charge of the General Technology

Executive Vice President
and Representative Director(As of the end of March 2019)

Motoaki Teraiin charge of the Administrative
Departments

Executive Vice President
and Representative Director

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Nagoya Construction Subdivision of the Chuo Shinkansen Construction
Department of the Chuo Shinkansen Promotion Division

Hiroshi Suzuki
Masayuki Ueno
Takayuki Oyama
Manabu Ishibashi
Tatsuya Okajima
Kenichi Niimi
Yoshihiko Uchida
Hiroshi Oshima
Shigeki Miyamoto

Organization Chart

Board of Directors
Chairmancontrolling the Transportation Section

Director General of the Conventional Lines Operations Division

President

Secretarial Department
Corporate Planning Division

Chuo Shinkansen Promotion Division

Deputy Director General of the Shinkansen Operations Division and General
Manager of the Rolling Stock Department of the Shinkansen Operations Division

Audit Department

Director General of the Shizuoka Branch Office

Administration Department

Deputy Director General of the Corporate Planning Division and General Managerof the Information Systems Department of the Corporate Planning Division

Legal Affairs Department

Deputy Director General of the General Technology Division and General Manager of theTechnology Research and Development Department of the General Technology Division

Personnel Department

Deputy Director General of the Chuo Shinkansen Promotion Division and General Managerof the Planning and Promotion Department of the Chuo Shinkansen Promotion Division
Deputy Director General of the Chuo Shinkansen Promotion Division and Deputy General Managerof the Chuo Shinkansen Construction Department of the Chuo Shinkansen Promotion Division
Deputy Director General of the Maglev Systems Development Division of the
Chuo Shinkansen Promotion Division
Deputy Director General of the Maglev Systems Development Division of the
Chuo Shinkansen Promotion Division

General Manager of the Administration Department
Masami Nitta
Masahiro Yamamoto General Manager of the Legal Affairs Department
Masaya Sugiura
Director General of the Marketing Division
Hajime Kobayashi Deputy Director General of the Business Promotion Division
General Manager of the General Education Center
Hiroshi Matsuo
Atsushi Tsujimura Deputy Director General of the Shinkansen Operations Division and General
Manager of the Transportation and Marketing Department

Supervision Department

General Technology Division
Conventional Lines
Operations Division

Finance Department

Audit andSupervisory Board

Marketing Division

Shizuoka Branch Office
Mie Regional Office
Iida Regional OfficePlanning Department

Property Management Department

Business Promotion Division

Rolling Stock Department
Engineering Department

Public Relations Department

Audit and Supervisory
Board Members

Transportation and Marketing Department

Supervision Department
Shinkansen
Operations Division

Construction Department
Transportation Safety Department
Overseas Offices: Washington D.C., London, Sydney

Transportation and Marketing Department
Rolling Stock Department
Tracks and Structures Department
Electrical Engineering Department
Kansai Branch Office

General Education Center
Nagoya Central Hospital
Health Care Center
Administration Management Center
SCMAGLEV and Railway Park

Michihiro Matsuzaki Director General of the Kansai Branch Office
General Manager of the Public Relations Department
Kentaro Takeda
General Manager of the Personnel Department
Kenji Hagihara

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201947

Corporate Data

Corporate Data

History

Operating Area
JR Central operates the Tokaido Shinkansen, the main transportation artery linking Tokyo,
Nagoya, and Osaka, and a network of 12 conventional lines centered on the Nagoya and
Shizuoka City areas.

1987
1988

500km

0

1989
1990

Area of Japan: Approx. 380,000 km2
Population: 128 million(As of January 1, 2018)

JR-CENTRAL

Shinkansen

NagoyaKyoto

Conventional Lines

Shin-Osaka

Tokyo

1991
1992

Shizuoka

JR Central

Inotani

April • Central Japan Railway Company (JR Central) is established.
March • Three stations are established on the Tokaido Shinkansen (Shin-Fuji, Kakegawa, Mikawa-Anjo)• JR Tokai Bus Company is established (now a consolidated subsidiary).
In April of the same year, automobile transport business is transferred to the company.
March • A new model diesel railcar is introduced to the Hida Express on the Takayama Line.
February • JR Central starts topographical and geological surveys along the Chuo Shinkansen following orders from the Minister of Transport.
June • JR Central applies to the Minister of Transport for approval of the construction plan of the Yamanashi Maglev Line and gains approval.
October • JR Central takes over the Tokaido Shinkansen facilities.
March • The first Nozomi begins commercial service on the Tokaido Shinkansen using Series 300 rolling stock.
July • JR Tokai Hotels Co., Ltd. is established (now a consolidated subsidiary).
December • JR Central Department Store Co., Ltd. is established. Company name changed to JR Tokai Takashimaya Co., Ltd. in September 1997 (now aconsolidated subsidiary).

1994
1997

Shiojiri
Takayama Line

1999

TatsunoTokyo
Kofu
Chuo Line

Taita Line

ShinagawaShin-Yokohama

Mino-Akasaka Mino-Ota
Ogaki

MaibaraIida Line

Gifu

Minobu Line

Tajimi
Fuji
NagoyaNumazuKansai Line

Kyoto

Obu

Kameyama

Tokaido Line

TaketoyoShin-Osaka

Meisho Line

Matsusaka
Ise-Okitsu
Kisei Line

Taki

Kozu
Atami

Taketoyo Line

2001

March • JR Tokai Real Estate Co., Ltd. is established (now a consolidated subsidiary).

2005

July • The Japan National Railways (JNR) Settlement Headquarters, an independent division within the Japan Railway Construction, Transport andTechnology Agency (JRTT), sells 600,000 shares of JR Central.
March • New Automatic Train Control (ATC) system is introduced to the Tokaido Shinkansen.
April • JR Central repurchases 268,686 shares of its treasury stock based on a decision made by the Board of Directors, authorized by the articles ofincorporation.
• The JNR Settlement Headquarters within the JRTT completes the sale of all of its shares of JR Central by selling 286,071 shares of common stock of
the company.

2007

January • Application for changes to the Yamanashi Maglev Line Construction Plan is approved by the Minister of Land, Infrastructure and Transport (hereafter,
the “Minister”)

2008

October • JR Central makes NIPPON SHARYO, LTD. a consolidated subsidiary.
• JR Central submits a report to the Minister of Land, Infrastructure, Transport and Tourism (the “Minister”) concerning topographical and geologicalsurveys of the Chuo Shinkansen in response to the order received in 1990.

Operating Kilometers by line
552.6kmConventional Lines
Tokaido Line

360.1km

Gotemba Line

60.2kmMinobu Line

88.4kmIida Line

195.7km

Taketoyo Line

19.3kmTakayama Line

189.2km

Chuo Line

174.8km

Taita Line

17.8kmKansai Line59.9kmKisei Line

180.2km

Meisho Line

43.5kmSangu Line

29.1kmConventional Line Total

1,418.2km

Total

1,970.8km

December • JR Central starts conducting the remaining four surveys under Article 5 of the Nationwide Shinkansen Railway Development Act (hereinafter referred toas “the Act”) related to the Chuo Shinkansen in response to the order by the Minister.

2009
2011
2012
2013
2014
2015

May • JR Central cancels 90,000 shares of treasury stock.
December • JR Central submits a report regarding the remaining four surveys under Article 5 of the Act related to the Chuo Shinkansen in response to the order by
the Minister received in 2008.
May • The Minister designates JR Central as the operator and constructor of the Chuo Shinkansen between Tokyo and Osaka City.
• The Minister approves the development plan and instructs JR Central to construct the Chuo Shinkansen.
May • JR Central cancels 90,000 shares of treasury stock.
February • JR Central introduces the new Series N700A rolling stock for the Tokaido Shinkansen Nozomi services.
August • Extension of the Yamanashi Maglev Line to 42.8km and upgrading of facilities are completed, and running operation is restarted.
October • The Minister approves the Construction Implementation Plan (Part 1) between Shinagawa and Nagoya along the Chuo Shinkansen.
March • The Taketoyo Line (between Obu and Taketoyo stations) is electrified.
• Increase in the maximum speed of the Tokaido Shinkansen to 285km/h.

2016

November • Applies for long-term loan totaling 3 trillion yen (plan) using the Fiscal Investment and Loan Program (FILP) for the construction of the Chuo
Shinkansen to the Japan Railway Construction, Transport and Technology Agency.

2017

February • Construction of JR Gate Tower is completed.

2018
CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

July • A new research center is constructed in Komaki City in Aichi Prefecture.

2003

Sangu Line

Tokaido Shinkansen

48

December • JR Central is excluded from the jurisdiction of the JR Law through the enactment of amendment to the JR Law.

July • JR Central introduces the new Series N700 rolling stock for the Tokaido Shinkansen Nozomi services.

Toba

ShinguMay • Nagoya Marriott Associa Hotel opens (operated by JR Tokai Hotels Co., Ltd.).

October • Shinagawa Station on the Tokaido Shinkansen opens. The timetable is drastically revised by the increase of the maximum speed on all Tokaido
Shinkansen trains to 270km/h.

Shizuoka

Tokaido Shinkansen

March • Series 700 rolling stock is introduced on the Tokaido Shinkansen Nozomi.
December • Construction of JR Central Towers is completed
March • JR Nagoya Takashimaya opens (operated by JR Tokai Takashimaya Co., Ltd.).

2006

Toyohashi

April • Running tests start on the Yamanashi Maglev Line.
October • JR Central lists on the first section of the Nagoya, Tokyo, and Osaka stock exchanges (integrated with the Tokyo Stock Exchange in July 2013) andalso on the Kyoto Stock Exchange (merged with the Osaka Stock Exchange in March 2001).

2000

2002

Gotemba Line

June • JR CENTRAL BUILDING CO., LTD. is established (now a consolidated subsidiary).

April • Takashimaya Gate Tower Mall (operated by JR Tokai Takashimaya Co., Ltd.), Nagoya JR Gate Tower Hotel (operated by JR Tokai Hotels Co., Ltd.) open
along with other facilities, resulting in the full-opening of JR Gate Tower.
March • The Minister approves the Construction Implementation Plan (Part 2) between Shinagawa and Nagoya along the Chuo Shinkansen.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201949

Corporate Data

Corporate Data

Summary of Performance

Segment-by-Segment Performance for FY2018
JR Central Group continues to put top priority on ensuring safe andreliable transportation in its core railway business and works to further
enhance its services. At the same time, the Group strives to takevarious initiatives, such as enhancing the business execution
capabilities of employees, reinforcing facilities, and promoting
efficiency while reducing costs across all areas of business execution,
including capital investments, with a view to strengthening earning
power. As a result, the overall railway performance for the term
(passenger-kilometers) rose favorably in terms of both business andtourism use, increasing by 2.4% YoY to 65.736 billion passengerkilometers. Operating revenue also increased by 3.1% YoY to 1,878.1
billion yen, ordinary income increased by 8.4% YoY to 632.6 billion
yen, and net income attributable to owners of the parent increased by
10.9% YoY to 438.7 billion yen.
Long-term debt was 4,851.1 billion yen, down 5.0 billion yen fromthe end of the previous fiscal year.
The year-end dividend was set at 75 yen, which increased by 5 yen
per share from the forecast of 70 yen per share, which wasannounced in January this year. As a result, the annual dividend
came to 145 yen per share.
Business performance in each segment was as follows.
1) Transportation
JR Central steadily moved forward with the large-scale renovation
work of the Tokaido Shinkansen while continuously working toachieve cost reductions to maintain and enhance the soundness ofcivil engineering structures. As a precaution against earthquakes, wetook derailment and deviation countermeasures on the entire Tokaido
Shinkansen line, such as installing safer derailment prevention
guards. We also worked on setting more flexible train services inaccordance with demand during seasons and time frames withincreased customer use by applying the "10 Nozomi
Timetable"(operating up to 10 Nozomi services in both directions)and welcomed a large of number of customers using our services.
Furthermore, we proceeded with the launch of the N700A (3rdedition), while moving forward with the enhancement work to reflectfeatures of the third-edition trainsets, such as reducing the stopping
distance of the Earthquake Brake on existing rolling stock. We
conducted basic performance tests using N700S test trains tovalidate acceleration and braking performance in 16- and 8-car
trainset. We also conducted basic performance tests using batterybased self-propelled system and commenced long-term durability
tests. In addition, we proceeded with the installation of platform
screen doors on Platforms No. 20 to 26 at Shin-Osaka Station toensure safe and reliable transportation and further improve ourtransportation services.
In terms of conventional lines, we have continued proceeding withearthquake countermeasures, such as anti-earthquake constructionsin the Nagoya Workshop, which conducts general overhauls forconventional line rolling stock, etc., in addition to anti-quake
reinforcement for elevated track columns, etc. We have alsosystematically promoted measures against rainfall, measures against
falling rocks, and the improvement of safety devices on grade
crossings. We flexibly increased the frequency or the number of traincars to meet demands for the “Shinano”, “Hida”, and other limited
express trains.
We also proceeded with the development of platform screen doors
to adapt them to our conventional lines, which are characterized bytheir wide variation in car model and train formation. We completed
validation testing at Kanayama Station and prepared for the
installation of platform screen doors on the Tokaido Honsen-line
platforms at the station. Moreover, we worked to replace the existing
braille blocks with those that indicate where platform edges arelocated, completing the replacement work at all stations handlingmore than 3,000 passengers. In addition, we changed the onboard
ticket examination method on limited express and other trains by

50

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019using new portable terminals provided to conductors. Thus, we
worked hard to ensure safe and reliable transportation and further
improve our transportation services. Lastly, it should also be notedthat we quickly restored the Takayama Honsen line, which wasdamaged by heavy rains in July 2018, and resumed services on theentire line on November 21, 2018.
Our initiatives related to both the Shinkansen and conventional lines
included measures to detect and handle irregularities in facilities andtrains as quickly as possible and practical training to improvereadiness in various emergencies such as natural disasters andcontingencies. We also took precautions against earthquakes, suchas taking measures to prevent suspended ceilings from falling instations. Moreover, we started providing up-to-date information on
the status of services via Twitter, in addition to detailed information
published on our website, such as real-time train locations andschedule delays.
As part of our sales and marketing, we conducted aggressive
promotional activities so that more customers would use our online
reservation and ticketless boarding services for the Tokaido andSanyo Shinkansen, known as “Express Reservation” and “smartEX.”
We also worked to promote the sales of tourist products, such as “EX
Nozomi Family Hayatoku,” spurring a wide range of demand.
Moreover, we rolled out various campaigns using tourism
resources, including Kyoto, Nara, Tokyo, Hida, and Ise-Shima, andintroduced relevant tourist products. We collaborated with local
governments, travel agencies, etc. through the “Aichi Destination
Campaign” organized jointly by six JR operators to develop attractive
tourism resources and products and operate sightseeing trains.
Through campaigns such as “Japan Highlights Travel” and “Shupo,”
we strengthened ties with local communities to expand the use of ourtransportation services. In addition, we improved convenience forinternational tourists by introducing a station numbering system on
our conventional lines, starting a free WiFi service on the Tokaido
Shinkansen and the “Hida” limited express lines, replacing some ofthe existing Japanese-style toilets with Western-style toilets on the“Hida” limited express trains, and using tablets, smartphones, andother devices to increase train and station announcements in
English. Meanwhile, we expanded the service area of TOICA byinstalling the system at 18 stations on three lines in March.
Due to the successive use of the railway for business and tourism,
performance for the Tokaido Shinkansen increased by 2.8% YoY to56.277 billion passenger-kilometers for FY2017. For conventionallines, it was 9.456 billion passenger-kilometers that is the same level
as the previous fiscal year.
In our bus business, we have worked to create products tailored tocustomers' needs and ensure profitability with safety as the firstpriority.
As a result of the aforementioned, operating revenues for the termincreased by 2.6% YoY to 1,461.3 billion yen, and operating income
increased by 6.7% YoY to 664.8 billion yen.
2) Merchandise and OtherIn Merchandise and Other, we worked to increase our earning
power by rolling out a campaign to celebrate the first anniversary of
Takashimaya Gate Tower Mall and promoting sales and marketing ina collaboration by JR Nagoya Takashimaya and Takashimaya Gate
Tower Mall to meet the needs of customers. Moreover, we
strengthened the competitiveness of stores within our stations byrenovating them and increasing their product lines.
As a result of the aforementioned, operating revenues for the termincreased by 3.8% YoY to 264.9 billion yen, and operating income
increased by 17.2% YoY to 9.6 billion yen.
3) Real Estate
In Real Estate, we worked to strengthen our sales and competitive
capabilities by opening Tokyo Gourmet Zone in the restaurant areaof the First Avenue Tokyo Station and ASTY Shinfuji at Shin-Fuji

Station and renovating Shokusaikan in the Shizuoka Station Terminal
Building “PARCHÉ.” We also proceeded with the project toredevelop the land where our company houses used to be located,selling condominium units at Central Garden Residence Gifu Kano in
Gifu City and at Central Garden Residence Kariya, which wasdeveloped in Kariya City, Aichi Prefecture, in the second phase of
the project. Eventually, all of the units were sold.
As a result of the aforementioned, operating revenues for the termincreased by 5.3% YoY to 82.1 billion yen, and operating income
increased by 9.4% YoY to 20.2 billion yen.

Shifts in Operating Revenues
1) Transportation(Billion yen)
1,500

1,305.6

1,358.1

1,380.4

1,424.0

1,461.3

’15.3

’16.3

’17.3

’18.3

’19.3

255.3

264.9

’18.3

’19.3

1,200
900

4) OtherIn our hotel business, we have worked on creating attractive
products and on enhancing our sales capabilities. We have also
worked to offer higher quality services to respond to the needs offoreign customers. Further, we moved ahead with preparations,
including marketing and promotional activities.
With our travel business, we have proactively marketed attractive
travel products and promoted sales of such products in collaboration
with travel campaigns for Kyoto, Nara, Tokyo, Hida, Ise-Shima, etc.
In our rolling stock manufacturing business, we have endeavored toincrease orders for and the manufacture of rolling stock, construction
machinery, and other items.
As a result of the aforementioned, operating revenues for the term
decreased by 0.2% YoY to 261.0 billion yen, and operating income
increased by 21.9% YoY to 16.1 billion yen.
Efforts for FY2019
In the railway business, next fiscal year, we will continue to place
the highest priority on safe and reliable transportation, steadily
promoting the large-scale renovation of civil engineering structures
as well as anti-seismic construction, such as installing derailment
and deviation countermeasures on the Tokaido Shinkansen line.
Moreover, in order to further enhance our transportation services, wewill introduce a “Nozomi 12 Timetable” in the spring of 2020, when
we complete the update to the N700A type (third generation), so that
all trains can run at the same highest speed of 285km/h. In addition,
we will prepare for the commercial operation of the N700S nextgeneration Shinkansen rolling stock, which is scheduled for July
2020. We will also produce hybrid test trains and start test runs forthe next-generation limited express rolling stock on conventionallines. Meanwhile, we will proceed steadily with the Chuo Shinkansen
Project involving the Superconducting Maglev System, while giving
serious consideration to safety, the environment, and coordination
with local communities. We will take steady steps forward also inpursuing overseas deployment of high-speed railway systems.
Simultaneously, JR central will operate JR Central Towers and JR
Gate Tower in an increasingly uniform manner and respond todiverse needs by demonstrating synergistic effects to the fullest toboost earnings. To smoothly move forward with these initiatives, JR
Central will continue to work on strengthening its earning power andachieving ceaseless improvement in its technological capabilities.
We will also strive to enhance efficiency and reduce costs in all areasof our business execution, including making capital investments, witha view to enhancing our management capabilities.

600
300
0

2) Merchandise and Other(Billion yen)
250
233.8

239.6

237.0

’16.3

’17.3

66.5

66.0

68.6

’15.3

’16.3

’17.3

’18.3

’19.3

238.9

243.0

253.9

261.6

261.0

’15.3

’16.3

’17.3

’18.3

’19.3

200
150
100
50
0

’15.3

3) Real Estate(Billion yen)
75

78.0

82.1

60
45
30
15

0

4) Other(Billion yen)
250
200
150
100

Performance forecast for FY2019(consolidated)(Billion yen)

(YoY)

Operating Revenues

1,891.0

100.7%

Operating Income

676.0

95.2%

Ordinary Income

599.0

94.7%

Net income attributable to owners of the parent

416.0

94.8%

50
0

Note: Operating revenues by segment include sales to other segments in addition tosales to external customers

Note: As of the release of the financial report for FY2018.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201951

Corporate Data

Corporate Data

Financial Highlights

Other Related Materials• List of consolidated subsidiaries (Table 1)

Consolidated

FY2014FY2015FY2016FY2017FY2018(Billion yen)(Billion yen)(Billion yen)(Billion yen)(Billion yen)

Operating Revenues¥1,672.2¥1,738.4¥1,756.9¥1,822.0

Operating expenses

1,165.6

1,159.7

1,137.4

Operating Income

506.5

578.6

Income before income taxes

404.6

Net income attributable to owners of the parent

Company Name

Capital Capital Ratio(Million yen)(%)

Main Business

JR Tokai Bus Company

1,747

100.0

¥1,878.1

Transportation JR TOKAI LOGISTICS COMPANY

300

90.0

Logistics business

1,160.0

1,168.3

Tokai Transport Service Company

295

100.0

Railway business,
entrusted business

619.5

662.0

709.7

508.1

560.0

561.8

630.2

264.1

337.4

392.9

395.5

438.7

Depreciation and amortization

271.5

242.3

225.3

216.0

Capital expenditure*1

214.5

238.3

329.9

5,217.9

5,268.5

7,052.6

Total assets

10,00059.2

Department store operations

998

100.0

Wholesale and retail sales,food and beverage service

700

100.0

Wholesale and retail sales

Tokai Food Service co., Ltd.

295

51.6

Food and beverage service

211.2

JR Tokai Corporation

100

70.0

Wholesale and retail sales

325.6

414.3

JR CENTRAL BUILDING CO., LTD.

45,000100.0

Real estate leasing

8,908.6

9,295.7

JR Tokai Real Estate Co., Ltd.

16,500100.0

Real estate leasing and sales

Shin-Yokohama Station Development Co., Ltd.

9,304

100.0

Real estate leasing

Toyohashi Station Building Co., Ltd.

1,880

52.5

Real estate leasing

Tokyo Station Development Co., Ltd.

1,750

100.0

Real estate leasing

Shizuoka Terminal Development Company Limited

624

67.0

Real estate leasing

JR Tokai Takashimaya Co., Ltd.
JR-CENTRAL PASSENGERS Co., Ltd.
Merchandise
andTokai Kiosk Company
Other2,063.9

2,352.5

2,726.7

3,084.7

3,508.0

Equity2,020.1

2,316.3

2,692.4

3,055.4

3,471.2

Equity Ratio

38.7%

44.0%

38.2%

34.3%

37.3 %

Operating income/Total assets

9.7%

11.0%

10.1%

8.3%

7.8 %

HAMAMATSU TERMINAL DEVELOPMENT CO., Ltd.

600

76.8

Real estate leasing

Return on Equity

14.0%

15.6%

15.7%

13.8%

13.4 %

Nagoya Station Area Development Corporation

480

100.0

Real estate leasing

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

JR DEVELOPMENT AND MANAGEMENTCORPORATION OF SHIZUOKA

363

100.0

Real estate leasing¥1,342¥1,714¥1,996¥2,015¥2,238

JR Development and Management
Corporation of Kansai

30

100.0

Real estate leasing

120

125

135

140

145

Annual Dividends per share*1: Increase in tangible fixed assets and intangible fixed assets

Non-consolidated

FY2014FY2015FY2016FY2017FY2018(Billion yen)(Billion yen)(Billion yen)(Billion yen)(Billion yen)

Operating Revenues¥1,306.6¥1,357.9¥1,380.7¥1,427.4¥1,464.8

Railways Business

1,297.8

1,349.7

1,371.9

1,414.8

1,452.0

8.7

8.2

8.8

12.5

12.8

Operating expenses

831.1

800.3

784.9

802.1

797.1

Railways Business

826.5

794.1

779.9

793.5

788.7

Affiliated Businesses

4.6

6.1

4.9

8.6

8.3

Operating Income

475.4

557.6

595.8

625.2

667.7

Income before income taxes

397.8

491.7

541.1

549.5

590.1

Net income

260.2

328.6

381.8

384.4

414.0

Depreciation and amortization

255.8

227.0

210.9

198.6

193.4

Total capital investments

257.2

259.1

330.8

384.5

448.8

Total assets

5,013.4

5,059.4

6,814.3

8,726.4

9,092.1

Total equity

1,931.0

2,219.9

2,582.8

2,929.8

3,315.4

Affiliated Businesses

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Real
EstateSegment

Bus services

Total equity

Earnings per Share

52

Segment

Company Name

Main Business

14,000100.0

JR Tokai Tours

490

70.0

Travel agency services

JR TOKAI AGENCY CO., LTD.

61

90.0

Advertising

11,81051.2

Manufacturing of railway
rolling stock

JR TOKAI CONSTRUCTION
Co., Ltd.

300

100.0

CHUOH LINEN SUPPLY Co., Ltd.

150

87.6

JR TOKAI Information Systems
Company

100

100.0

The Japan Mechanised Works andMaintenance of Way Co., Ltd.

100

92.1

Track maintenance andinspection

JR Tokai Financial Management
Co., Ltd.

80

100.0

Contracted accounting
operations and financial
business

Tokai Rolling Stock & MachineryCo., Ltd.

80

88.4

JR Central Consultants Company

50

100.0

JR Tokai Hotels Co., Ltd.

NIPPON SHARYO, LTD.

Other

Capital Capital Ratio(Million yen)(%)

Hotel business

ConstructionLinen supply services

Development, improvement
and maintenance of systems

Rolling stock and machinery
inspections and repair

Construction consulting
business

Note: Two affiliated companies, SHINSEI TECHNOS CO., LTD. and RAILWAY INFORMATIONSYSTEMS CO., LTD., are accounted for by the equity method.

• Learning safety from accidents (Column 1)• Shortening of arrival time by speed increase (Column 2)“Learning Safety from Accidents,” a booklet that uses illustrations to
explain past accidents and disasters in an easy-to-understandmanner, has been published in seven volumes since its first volume
was released in FY2007. In FY2018, we also developed digitalcontent (DVD), combining the illustrations with action, voices andsound effects, and recorded it on DVDs. These materials were
distributed to the General Education Center and field offices for use
in training and workplace OJT.
The above-mentioned booklet and DVD were designed around thetheme of applying lessons learned from past experiences. They areused as training materials to accurately understand why rules andfacilities are as they are.

With the inauguration of the Tokaido Shinkansen in 1964, the timerequired to travel between Tokyo and Osaka was shortened to 3
hours and 10 minutes from 6 hours and 30 minutes (4 hours at thetime of inauguration). Furthermore, with the introduction of the“Nozomi” in 1992, that time was shortened to 2 hours and 30 minutes.
In October 2003, the investment in rolling stock and ground facilities
that we had continuously engaged in for approximately 15 years
culminated with the upgrading of the maximum speed of all trains to
270 km/h and the drastic timetable revision that resulted in a
maximum of seven Nozomi services operating each hour.
With the introduction of the “10 Nozomi Timetable (operating up to
10 Nozomi services in both directions)” in 2014 and the increase inmaximum speed to 285 km/h in 2015, the shortest travel time between
Tokyo and Osaka has now been reduced to 2 hours and 22 minutes.
Acceleration by increasing the speed of the Tokaido Shinkansen
Tokyo - Osaka
Shortest travel time

4 hr

October 1, 1964

Series 0210km/hNovember 1, 1986

Series 100
220km/h

2 hr 52 min

March 14, 1992

Series 300
270km/h

2 hr 30 min

March 14, 2015

N700A
285km/h

2 hr 22 min(3 hr 10 min in thefollowing fiscal year)

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201953

Financial Section

Management’s Discussion and Analysis of Consolidated Financial
Condition and Results of Operations (MD&A)
1) Overview of FY2017
In FY2017, amid the continuing satisfactory level of railway

yen, operating income at 662.0 billion yen, and net income

end of FY2017 increased by 367.8 billion yen YoY to 782.4

trim debt and payables as rapidly as possible. Consequently,

attributable to owners of the parent at 395.5 billion yen.

billion yen.

the 5,456.2 billion yen in total long-term debt and payablesuse, JR Central strived to enhance services placing the top

Capital gained from operating activities increased by 29.0

at the end of March 1992, immediately after we acquired

priority on ensuring safe and reliable transportation in thebillion yen YoY to 609.5 billion yen due to a decrease in income

the Tokaido Shinkansen assets, has been reduced to 1,856.2

2) Operating Performancetax paid and the fact that non-consolidated transportation

billion yen (excluding long-term debt for the Chuo Shinkansena) Operating Revenue

revenues of JR Central increased as the use of JR Central’sconstruction).

railway business, which is the core of our operations.
In our railway business, in terms of the Tokaido Shinkansen,
we have steadily proceeded a large-scale renovation andearthquake countermeasures, such as countermeasures to

Operating revenue increased by 65.0billion yen (3.7%) YoY
to 1,822.0 billion yen.

JR Central will continue working to enhance the earning

Capital expended through investing activities decreased bycapability and make every effort to pursue efficiency and cost

233.0 billion yen YoY to 1,676.4 billion yen due to an increase

reduction across all operations including capital investment

derailment and deviation. Also, we utilized the “10 Nozomi

In terms of our transportation business, JR Central’sTimetable” to schedule trains flexibly. Furthermore, we havetransportation revenues increased by 42.4billion yen (3.2%)

in proceeds from the reversal of money held in trust for thewhile steadily promoting efforts to strengthen our managerial

introduced the N700A(3rd edition) and reflected the features of

YoY to 1,358.3 billion yen. Passenger volume on the Tokaido

Chuo Shinkansen construction and a drop in expenditures (net)foundation for various businesses, such as the Tokaido

the third-edition trainsets on existing rolling stock.

Shinkansen increased by 3.5% YoY, pushing up transportation

associated with fund management.

Shinkansen, and to construct the Chuo Shinkansen. At the same

In terms of the conventional lines, we have systematicallyrevenues 3.4% YoY to 1,253.2 billion yen. Passenger volume on

Capital gained from financing activities increased by 9.5

time, we will strive to improve our financial strength as thepromoted earthquake countermeasures, such as anti-earthquake

conventional lines increased by 1.0% YoY with transportation

billion yen YoY to 1,434.7 billion yen mainly due to a decrease

entire group by, among others, procuring capital effectively as

reinforcement for elevated columns, etc., measures against

revenues increasing 1.1% YoY to 105.1 billion yen.

in the amount of liquidation of long-term debt and payables

well as efficiently.

rainfall and falling rocks, and improvement of safety devices

In our non-transportation businesses, operating revenues foron grade crossings. Also, we flexibly increased the frequency

the merchandise and other segment, real estate segment, andand the number of train cars to meet demand for the “Shinano”,

other segment increased respectively by 7.7%, by 13.7%, and by“Hida”, and other limited express trains.

3.0% YoY.

In terms of sales and marketing, we have promoted proactive
initiatives, such as measures to expand our tourist products inorder to stimulate demand for use of our services.

b) Operating Expenses
Operating expenses increased by 22.5 billion yen (2.0%) YoY

In non-railway business, we worked to enhance existing

to 1,160.0 billion yen because of an increase in expenses relating

businesses. We have conducted integrated management of bothto the Company’s technological development and the opening of

the JR GATE TOWER, which fully opened in April 2017, andthe JR GATE TOWER despite of decrease in depreciation and

the JR CENTRAL TOWERS and carried out active sales andamortization associated with the Yamanashi Maglev Line.

advertising promotion.
Our commitment to the aforementioned series of measures
led to continuing favorable railway transportation volume forboth business and tourism, resulting in increase in transportationc) Operating Income
Operating income increased by 42.4 billion yen (6.9%) YoY
to 662.0 billion yen.

revenues for JR Central, while we saw an increase in revenue
from the opening of the JR GATE TOWER. As a result, overall
consolidated operating revenues increased. Overall consolidatedd) Non-Operating Income/Loss
Non-operating income/loss worsened 22.8 billion yen over

operating expenses increased because of increase in expenses

the FY2016 due to an increase in interest expenses from therelating to the JR Central’s technological development and thelong-term debt for the Chuo Shinkansen construction.

income/loss worsened due to an increase in interest expenses

despite a drop in the amount of bonds issued.
(Reference)
Substantial free cash flow (amount obtained by subtracting

Net asset balance at the end of FY2017 increased by 358.0

and intangible assets, etc. (306.9 billion yen) within net cash

billion yen over the end of FY2016 to 3,084.7 billion yen, andused in investing activities from net cash provided by operating

our equity ratio decreased from 38.2% at the end of FY2016 toactivities (609.5 billion yen)) increased by 52.1 billion yen YoY

34.3% at the end of FY2017.

to 302.5 billion yen.

6) Capital Procurement
4) Long-Term Debt and Payables

smooth fundraising, we have acquired issuer credit ratings

increased to 4,856.2 billion yen both on a consolidated and non-from Moody’s Japan, Rating and Investment Information,

consolidated basis, mainly due to borrowing of 1,500.0 billion

Inc., Standard and Poor’s Ratings Japan K.K. and Japan Credit

yen in long-term debt for the Chuo Shinkansen construction.

Rating Agency, Ltd. The rating is respectively Aa3, AA, AA-,

The balance of long-term debt and payables other than long-and AAA.

term debt for the Chuo Shinkansen construction decreased byestablished a commitment of 100 billion yen as of the end ofbasis.

FY2017.

When JR Central purchased the Tokaido Shinkansen facilitiese) Net Income Attributable to Owners of the Parent

and payables of more than five times our annual transportation
revenues, including the liabilities inherited from Japanese

As a result, net income attributable to owners of the parent
increased by 2.5 billion yen (0.7%) YoY to 395.5 billion yen.

National Railways at the time of its break-up and privatization.

3) Cash Flow

We regarded reducing long-term debt and payables as our

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Furthermore, in order to secure short-term liquidity, we have

12.8 billion yen to 1,856.2 billion yen on a non-consolidated

Despite the increase in consolidated operating expenses
for FY2017 with operating revenue ending at 1,822.0 billion

In order to procure capital from various sources and facilitate

During FY2017, the balance of long-term debt and payablesfrom the long-term debt for the Chuo Shinkansen construction.
and non-operating loss, both revenue and income increased

5) Net Asset Balance

an expenditure for purchase of property, plant, and equipment,in October 1991, we were burdened with total long-term debt

opening of the JR GATE TOWER. Moreover, non-operating

54

services for business as well as tourism maintained high levels.

Cash and cash equivalents (hereinafter, “capital”) as of themost important financial task, and we have endeavored to
CENTRAL JAPAN RAILWAY COMPANY Annual Report 201955

Financial Section

Consolidated Balance Sheet

Central Japan Railway Company and Consolidated Subsidiaries

March 31, 2019
Thousands of
U.S. Dollars(Note 2)Millions of Yen(Note 2)ASSETS
2019

Money held in trust for the Chuo Shinkansen construction (Notes 3.c and 12)¥

751,636¥

782,454$

6,833,054

2,670,591

2,840,931

24,278,100

112,845

102,0211,025,863

(61)

(13)

(554)

Inventories

46,358

38,116

421,436

Prepaid expenses and other49,322

41,258448,381

Total current assets

3,630,692

3,804,768

33,006,290

Trade receivables (Note 12)
Allowance for doubtful accounts

663,350

294,2426,030,454

Investments in and advances to unconsolidated
subsidiaries and affiliates (Note 4)

17,58818,212

159,890

Asset for retirement benefits (Note 8)

7,939

5,652

72,172

Deferred tax assets (Note 11)

170,574

166,438

1,550,672

Prepaid expenses and other

98,926

74,634

899,327

958,378

559,181

8,712,527

Buildings and structures

4,863,017

4,827,013

44,209,245

Machinery, rolling stock and vehicles

1,426,907

1,415,850

12,971,881

Land

2,354,886

2,354,570

21,408,054

Construction in progress

616,395

401,234

5,603,590

Other

189,859

178,720

1,725,990

9,451,067

9,177,390

85,918,790

Accumulated depreciation
Net property, plant and equipment(4,744,393)(4,632,657)(43,130,845)

4,706,673

4,544,732

42,787,936

TOTAL ASSETS (Note 5)
See notes to consolidated financial statements.

5,665,052

5,103,914

51,500,472¥ 9,295,745¥ 8,908,682$ 84,506,772¥

28,392¥27,509$258,109110,493

82,047

1,004,481

stock ownership plan trust (Notes 3.1, 10 and 12)

5,400

5,400

49,090Current portion of long-term accounts payable—
railway facilities (Notes 7 and 12)
Trade payables (Note 12)

5,444

5,126

49,490246,282

227,5232,238,927

Provision for bonuses

28,71628,218261,054

Income taxes payable (Note 12)105,698

109,783

960,890

Advances received

51,113

44,234

464,663

68,71972,979624,718

650,260

602,823

5,911,454

NONCURRENT LIABILITIES:Long-term debt (Notes 5 and 12)

1,196,732

1,225,134

10,879,381

Long-term debt for the Chuo Shinkansen construction (Notes 3.c, 6 and 12)

3,000,000

3,000,000

27,272,727

Long-term debt of the employee stock ownership—
plan trust (Notes 3.1, 10 and 12)Long-term accounts payable—railway facilities (Notes 7 and 12)

9,700

15,10088,181

538,451

543,897

4,895,009

Provision for large-scale renovationof the Shinkansen infrastructure (Note 3.j)Liability for retirement benefits (Note 8)
Other (Note 11)

140,000

175,000

1,272,727

194,347

201,006

1,766,790

58,18860,980528,981

5,137,419

5,221,118

46,703,809

1,018,181

CONTINGENCIES (Note 15):
EQUITY (Notes 9 and 18):
Common stock—authorized, 824,000,000 shares;
issued, 206,000,000 shares in 2019 and 2018

112,000

112,000

Capital surplus

53,49753,498486,336

Retained earnings

3,387,569

2,976,434

30,796,081(116,912)(121,687)(1,062,836)

33,02438,011

300,218

Treasury stock—at cost, 9,923,059 shares in 2019
and 10,173,749 shares in 2018 (Note 3.1 and 10)
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Deferred loss on hedges
Remeasurements of defined benefit plans (Note 8)

Total noncurrent assets

2019

2018

Current portion of long-term debt of the employee—

Total noncurrent liabilities

Property, plant and equipment (Note 3.f):

Total

Current portion of long-term debt (Notes 5 and 12)

Total current liabilities

Investments and other assets:

Total investments and other assets

Short-term loans payable (Notes 5 and 12)

Other

NONCURRENT ASSETS:
Investment securities (Notes 4 and 12)

2019

CURRENT LIABILITIES:CURRENT ASSETS:
Cash and cash equivalents (Note 12)

Millions of Yen(Note 2)

LIABILITIES AND EQUITY

2019

2018

March 31, 2019
Thousands of
U.S. Dollars(Note 2)

Total
Noncontrolling interests
Total equity

TOTAL LIABILITIES AND EQUITY

(3)
2,116

(2,842)

19,236

3,471,294

3,055,410

31,557,218

36,77029,329334,2723,508,065

3,084,739

31,891,500¥ 9,295,745¥ 8,908,682$ 84,506,772

See notes to consolidated financial statements.

56

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY Annual Report 201957

Financial Section

Consolidated Statement of Income

Consolidated Statement of Changes in Equity

Central Japan Railway Company and Consolidated Subsidiaries

Year Ended March 31, 2019
Thousands of
U.S. Dollars(Note 2)20172019

Millions of Yen(Note 2)
2019

2018

¥ 1,878,137¥ 1,822,039¥ 1,756,980$ 17,073,972

970,811
197,551

966,688
193,326

954,512
182,9038,825,554
1,795,918

1,168,362

1,160,015

1,137,415

10,621,472

Operating income

709,775

662,023

619,564

6,452,500

OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense (Note 7)
Other—net (Note 3.n)

4,939
(80,723)(3,719)3,314(78,722)(24,762)2,030(60,285)(1,279)44,900(733,845)(33,809)

Other expenses—net(79,503)(100,171)(59,534)(722,754)

INCOME BEFORE INCOME TAXES

630,271

561,852

560,029

5,729,736

INCOME TAXES (Note 11):
Current
Deferred

190,699(5,465)

183,663(11,710)

160,669
8,098

1,733,627(49,681)

185,233

171,952

168,768

1,683,936

445,037

389,899391,261

4,045,790

6,322(5,603)(1,652)57,472392,913$ 3,988,318

OPERATING REVENUESOPERATING EXPENSES (Note 3.m):
Transportation, other services and cost of sales (Note 3.j)Selling, general and administrative expenses
Total operating expenses

Total income taxes
NET INCOME
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENTPER SHARE OF COMMON STOCK (Note 3.t):
Basic net income
Cash dividends applicable to the year¥

438,715¥

395,5022019¥ 2,238.95
145.00¥Yen
2018¥ 2,015.48
140.00U.S. Dollars
2019

2017
¥ 1,996.52
135.00

$

20.35
1.32

See notes to consolidated financial statements.

Millions of Yen(Note 2)NET INCOME¥¥(4,409)
7
5,519
58

9,521
(4)
4,704
78

6,507
2
2,020
63

(40,081)63
50,172527

Total other comprehensive income

1,175

14,2998,595

10,681

399,856$ 4,056,481

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests
See notes to consolidated financial statements.
CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019¥¥446,213438,691
7,521¥¥

404,198
409,065(4,866)

Accumulated Other
Comprehensive Income
Outstanding
Unrealized
Number ofGain onDeferred Remeasurements
Common Capital Retained Treasury Available-for- Loss on
Shares ofof Defined
Stock Surplus Earnings Stock Sale Securities Hedges Benefit Plans
Common Stock
BALANCE, APRIL 1, 2016

196,799

Net income attributable to owners of the parent
Dividends from surplus, ¥130 per share
Purchase of treasury stock
Changes in the ownership interestby purchases of shares
Net change in the year
BALANCE, MARCH 31, 2017¥112,000¥53,499 ¥2,241,207 ¥(103,157)¥22,227(2) ¥ (9,375) ¥2,316,397¥

392,913392,913(25,610)(25,610)

(2)

(2)

(2)

112,000¥36,168 ¥2,352,566

392,913(0)

196,799

Noncontrolling Total
Interests
EquityTotal(25,610)(0)(0)

53,498 2,608,511 (103,159)

6,605

1

2,146

8,753

28,832(1)(7,229) 2,692,451(0)(1,891)

6,861

34,277 2,726,729

Net income attributable to owners of the parent

395,502395,502395,502

Dividends from surplus, ¥140 per share
Purchase of treasury stock
Disposal of treasury stock
Changes in the ownership interestby purchases of shares
Net change in the year

(27,580)(27,580)(27,580)(21,365)(21,365)(21,365)

2,838

2,838

2,838

BALANCE, MARCH 31, 2018

(1,121)149

0(0)

195,826

Net income attributable to owners of the parent
Dividends from surplus, ¥140 per share
Purchase of treasury stock
Disposal of treasury stock
Changes in the ownership interestby purchases of shares
Net change in the year

112,000(0)53,498 2,976,434 (121,687)

9,178

(2)

4,387

13,56238,011(3)(2,842) 3,055,410(0)(4,947)

8,615

29,329 3,084,739

438,715

438,715

438,715(27,580)(27,580)(27,580)

0

(0)

(0)

(0)

250

4,774

4,774

4,774

(0)

(0)
(4,986)

196,076¥112,000¥53,497 ¥3,387,569 ¥(116,912)¥33,024

3
¥

4,958

(23)

¥ 2,116 ¥3,471,294

(0)
7,440

7,417

¥36,770 ¥3,508,065¥¥

Accumulated Other

Year Ended March 31, 2019
Thousands of
U.S. Dollars(Note 2)
20172019
391,261$ 4,045,790

OTHER COMPREHENSIVE INCOME (Note 16):
Unrealized (loss) gain on available-for-sale securities
Deferred gain (loss) on hedges
Remeasurements of defined benefit plans
Share of other comprehensive income in affiliates

COMPREHENSIVE INCOME

58¥

Millions of Yen (Note 2)

Thousands of U.S.Dollars (Note 2)

Central Japan Railway Company and Consolidated Subsidiaries

2018
389,899

Year Ended March 31, 2019

Thousands

BALANCE, MARCH 31, 2019

Consolidated Statement of Comprehensive Income

2019
445,037

Central Japan Railway Company and Consolidated Subsidiaries

401,667(1,810)$ 3,988,100
68,372Comprehensive Income

CommonStock

BALANCE, MARCH 31, 2018
Net income attributable to owners of the parent
Dividends from surplus, $1.27 per share
Purchase of treasury stock
Disposal of treasury stock
Changes in the ownership interest by purchases ofshares of consolidated subsidiaries
Net change in the year

BALANCE, MARCH 31, 2019

CapitalSurplusRetained
Earnings

Treasury
Stock

Unrealized
Gain onAvailable-forSale Securities$1,018,181 $486,345 $27,058,490 $(1,106,245) $345,554

Deferred
Loss onHedgesRemeasurementsof Defined
Benefit Plans

Noncontrolling
Interests

Total

Total
Equity$ (27) $(25,836) $27,776,454 $266,627 $28,043,081

3,988,318

3,988,318

3,988,318(250,727)(250,727)(250,727)

(0)

(0)

(0)

43,40043,40043,400(0)(0)(45,327)$1,018,181 $486,336 $30,796,081 $(1,062,836)$300,218

27$

45,072(209)(0)
67,63667,427$ 19,236 $31,557,218 $334,272 $31,891,500

See notes to consolidated financial statements.
CENTRAL JAPAN RAILWAY COMPANY Annual Report 201959

Financial Section

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Central Japan Railway Company and Consolidated Subsidiaries

Year Ended March 31, 2019
Thousands of
U.S. Dollars(Note 2)20172019

Millions of Yen(Note 2)OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes—paidDepreciation and amortization
Equity in earnings of affiliates
Proceeds from contribution for construction
Loss on reduction of noncurrent assets
Loss on retirement of noncurrent assets
Gain on sales of noncurrent assets—net
Changes in assets and liabilities:
Decrease in provision for large-scalerenovation of the Shinkansen infrastructure
Increase in trade receivables(Increase) decrease in inventories
Increase in trade payables
Increase in advances received(Decrease) increase in liability for retirement benefits
Other—net

2019¥

Net cash provided by operating activities
INVESTING ACTIVITIES:
Placement of time deposits
Withdrawal of time deposits
Payments for money held in trust for the Chuo Shinkansen construction
Proceeds from cancellation of money held in trust
for the Chuo Shinkansen construction
Purchases of marketable securities
Proceeds from redemption of marketable securities
Purchases of property, plant and equipment
Proceeds from contribution for construction
Purchases of investment securities
Proceeds from sales of investment securities
Other—net

630,2712018¥

561,852¥

560,029$

5,729,736(194,689)
211,262(294)(2,984)
3,531
8,272
(926)

(159,463)
216,027(603)(9,981)
10,222
8,746(11,737)(183,562)
225,386(363)(2,641)
2,566
13,433(341)(1,769,900)
1,920,563(2,672)(27,127)
32,10075,200(8,418)(35,000)(10,824)(7,697)
425
6,940
(675)
(7,292)(35,000)(7,244)(971)
17,6751,018
1,040
18,015(35,000)(9,278)
1,946
10,409434
764(3,216)(318,181)(98,400)(69,972)
3,863
63,090(6,136)(66,290)

600,319609,595

580,565

5,457,445(1,500,000)(78,700)
110,700(1,500,000)

170,340

131,810(365,446)
4,564(375,002)
15(31,973)

1,548,545

138,700(280,424)
3,130(142,004)
423(28,124)

27,259(555,100)
416,400(305,151)
6,022(19,600)
33(11,410)(3,322,236)
41,490(3,409,109)
136(290,663)(597,502)(1,676,489)(1,909,547)(5,431,836)

2,817¥(1,066,893)¥(1,328,981)

882
94,543(94,543)(5,127)(27,580)
(0)
5,758
(79)
(7,486)

1,946
95,277(129,740)
1,500,000(4,829)(27,580)(21,365)
3,056(79)
18,103877
140,288(112,236)
1,500,000(77,668)(25,610)
(2)
(79)
(379)

(46,609)(250,727)(0)52,345(718)(68,054)(33,635)

1,434,788

1,425,188(305,772)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(30,817)367,894

96,207(280,154)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

782,454414,559

318,352

7,113,218

Net cash used in investing activities
FORWARD¥

FINANCING ACTIVITIES:Net increase in short-term loans payable
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from long-term debt for the Chuo Shinkansen construction
Payments for long-term accounts payable—railway facilities
Cash dividends paid
Purchases of treasury stock (Note 3.v)
Proceeds from sales of treasury stock
Cash dividends paid to noncontrolling interests
Other—net (Note 3.v)
Net cash (used in) provided by financing activities

CASH AND CASH EQUIVALENTS INCREASEDBY MERGER WITH AN UNCONSOLIDATED SUBSIDIARY$

25,6098,018
859,481(859,481)

Central Japan Railway Company and Consolidated Subsidiaries
1.INCORPORATION OF CENTRAL JAPAN RAILWAYCOMPANY

Central Japan Railway Company (Tokai Ryokaku Tetsudo
Kabushiki Gaisha, the "Company") was incorporated on April
1, 1987, as a private business company, pursuant to the Law
for Japanese National Railways Restructuring enacted upon the
resolution of the Japanese Diet.
The business of the Japanese National Railways (the "JNR")
was succeeded by the following newly established organizations:seven railway companies including the Company, the former
Shinkansen Holding Corporation (a predecessor entity to the Railway
Development Fund (1991–1997), which was subsequently succeededby the Corporation for Advanced Transport and Technology(the "CATT") (1997–2003) and in turn by the Japan Railway
Construction, Transport and Technology Agency (the "JRTT")), theformer Railway Telecommunication Co., Ltd., Railway Information
Systems Co., Ltd., and the Railway Technical Research Institute(the "RTRI") which reorganized as a public interest corporation
as of April 1, 2011. The JNR itself became the JNR Settlement
Corporation (the "JNRSC"). All of the assets and liabilities of the
JNR were transferred to such organizations, including the JNRSC.
Prior to December 1, 2001, the Law Concerning Passenger
Railway Companies and the Japan Freight Railway Company (the"Law") required that authorization be obtained from the Ministerof Land, Infrastructure, Transport and Tourism (the "Minister ofTransport") regarding fundamentals such as: (1) commencementof business other than railway and its related business, (2) theappointment or dismissal of representative directors and corporate
auditors, (3) the issuance of new shares and bonds, (4) long-termloans payable, (5) amendments to the Articles of Incorporation,(6) operating plans, (7) sales of material assets, (8) appropriationsof earnings and (9) merger or dissolution. As of December 1,
2001, since the Law was revised and the Company was no longer
in scope of the Law, the Company was not required to obtain the
aforementioned authorizations.
On October 8, 1997, the Company's shares were listed on the
Nagoya and Tokyo stock exchanges in Japan. The JNRSC, which
held all 2,240,000 of the Company's outstanding shares prior to
the listing, sold 1,353,929 shares in the initial public offerings.
Pursuant to the Law for Disposal of Debts and Liabilities of theJNRSC enacted in October of 1998, the Company's shares held by
the JNRSC were transferred to Japan Railway Construction Public
Corporation (the "JRCPC"). On October 1, 2003, the CATT and the
JRCPC were fully integrated, pursuant to the Law of Japan Railway
Construction, Transport and Technology enacted on October 1, 2003,
and designated as the JRTT. In July 2005, the JRTT sold 600,000
shares of the Company. On April 5, 2006, the JRTT also sold its
remaining 286,071 shares of the Company. As a result of this sale,
all of the Company's shares held by the JRTT were sold.
The shares above do not reflect the effect of the hundred-for-one
stock split effective as of October 1, 2012.

2.BASIS OF PRESENTATION OF CONSOLIDATEDFINANCIAL STATEMENTS

The accompanying consolidated financial statements have been
prepared in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Act and its related accounting
regulations, and in accordance with accounting principles generally
accepted in Japan, which are different in certain respects as to theapplication and disclosure requirements of International Financial
Reporting Standards.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order topresent them in a form which is more familiar to readers outside
Japan. In addition, certain reclassifications have been made in
the 2017 consolidated financial statements to conform to theclassifications used in 2019 and 2018.
The consolidated financial statements are stated in Japanese yen,
the currency of the country in which the Company is incorporated
and operates. The translations of Japanese yen amounts into
U.S. dollar amounts are included solely for the convenience ofreaders outside Japan and have been made at the rate of ¥110 to$1, the approximate rate of exchange as of March 31, 2019. Suchtranslations should not be construed as representations that theJapanese yen amounts could be converted into U.S. dollars at thator any other rate. Japanese yen figures of less than one million
yen are rounded down to the nearest million of yen, except for per
share information, and U.S. dollar figures of less than one thousand
U.S. dollars are also rounded down to the nearest thousand of U.S.
dollars, except for per share information.

3.SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES

a.Principles of Consolidation—The accompanying consolidated financial statements as ofMarch 31, 2019, include the accounts of the Company and its 29(29 in 2018 and 29 in 2017) significant subsidiaries (together, the"Companies").
Under the control and influence concepts, those companies inwhich the Company, directly or indirectly, is able to exercise control
over operations are consolidated, and those companies over which
the Company has the ability to exercise significant influence areaccounted for using the equity method.
Investments in two affiliates are accounted for using the equity
method. Investments in the remaining unconsolidated subsidiaries
and affiliates are stated at cost. If the equity method of accounting
had been applied to the investments in these companies, the effecton the accompanying consolidated financial statements would not bematerial.
The difference between the cost of acquisition and the fair valueof the equity of an acquired subsidiary at the date of acquisition is
fully amortized when incurred.

0

CASH AND CASH EQUIVALENTS, END OF YEAR¥

751,636¥

782,454¥414,559$

6,833,054

ADDITIONAL CASH FLOW INFORMATION:
Interest paid¥

80,366¥

74,240¥58,812$730,600

See notes to consolidated financial statements.

60

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY Annual Report 201961

Financial Section

All significant intercompany balances and transactions have been
eliminated in consolidation. All significant material unrealized profit
included in assets resulting from transactions within the Companies
is also eliminated.
A certain consolidated subsidiary has adopted a fiscal year ending
on February 28, which is different from that of the Company. The
necessary adjustments for preparing consolidated financial statements
as of the Company's year-end were appropriately made, such as
adjustments for significant intercompany accounts and transactions
which occur between the fiscal year-end of the subsidiary and that of
the Companies.
b.Cash Equivalents—Cash equivalents are short-term investments that are readily
convertible into cash and that are exposed to insignificant risk ofchanges in value. Cash equivalents include time deposits, certificatesof deposit and others, all of which mature or become due within
three months of the date of acquisition.
c.Money Held in Trust for the Chuo Shinkansen Construction andLong-Term Debt for the Chuo Shinkansen Construction—The Company has received loans from the JRTT for promoting
the construction of the Chuo Shinkansen, and the money is placed in
the trust fund to segregate it from other money.
d.Inventories— Inventories are stated at the lower of cost, principally
determined by the retail method for merchandise, by the specificidentification method for land and buildings held for sale in lots,
by the specific identification method for work in process and by
the moving-average cost method for materials and supplies, or net
selling value.
e.Marketable and Investment Securities— Marketable and investment securities are classified andaccounted for, depending on management's intent, as follows: (1)held-to-maturity debt securities, for which there is a positive intent
and ability to hold to maturity, are reported at amortized cost; and(2) available-for-sale securities, which are not classified as theaforementioned securities, are reported at fair value, with unrealized
gains and losses, net of applicable taxes, reported in a separate
component of equity.
Nonmarketable securities classified as available-for-sale securities
are carried at cost, determined by the moving-average method. For
other-than-temporary declines in fair value, investment securities are
reduced to net realizable value by a charge to income.
f.Property, Plant and Equipment—Property, plant and equipment are stated at cost. Certain
contributions in aid for construction of railways and other property
are deducted directly from the cost of the related assets. The
accumulated contributions deducted from the cost of property, plantand equipment as of March 31, 2019 and 2018 amounted to ¥290,680
million ($2,642,545 thousand), and ¥289,130 million, respectively.
Depreciation is computed substantially by the declining-balancemethod over the estimated useful lives of the assets. Additional
depreciation is provided for the Shinkansen rolling stock based on
kilometers traveled.
The range of useful lives is principally from 2 to 60 years forbuildings and structures, and from 2 to 20 years for machinery,rolling stock and vehicles.
Depreciation of certain railway structures, except for the
Shinkansen railway facilities, is computed by the replacementaccounting method.

62

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019g.Long-Lived Assets—The Companies review their long-lived assets for impairment
whenever events or changes in circumstances indicate the carrying
amount of an asset or asset group may not be recoverable. An
impairment loss is recognized if the carrying amount of an asset or
asset group exceeds the sum of the undiscounted future cash flows
expected to result from the continued use and eventual dispositionof the asset or asset group. The impairment loss would be measured
as the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows
from the continued use and eventual disposition of the asset or the
net selling price at disposition.
h.Software Costs—Software costs are amortized by the straight-line method mainly
over five years.
i.Deferred Charges—Bond issuance costs are fully charged to income as incurred.
j.Provision for Large-Scale Renovation of the Shinkansen
Infrastructure—Provision for large-scale renovation of the Shinkansen
infrastructure is provided based on the Nationwide Shinkansen
Railway Development Law. In accordance with the Nationwide
Shinkansen Railway Development Law and Regulations, theCompany reversed the provision in the amount of ¥35,000 million($318,181thousand) for the year ended March 31, 2019 and ¥35,000
million for the years ended March 31, 2018 and 2017.
k.Retirement and Pension Plans—The Company and 28 consolidated subsidiaries have unfunded
retirement plans covering substantially all of their employees. Six
consolidated subsidiaries have noncontributory defined benefit
pension plans and one consolidated subsidiary has a defined
contribution pension plan, some of those subsidiaries also have
unfunded retirement plans. Some of the subsidiaries adopt thesimplified accounting method for calculation of liability for
retirement benefits and retirement benefit expenses.
Liability for retirement benefits is mainly calculated based on the
projected benefit obligations and plan assets at the balance sheet
date. The projected benefit obligations are attributed to periods on abenefit formula basis. Actuarial gains and losses are amortized on astraight-line basis mainly over five years, which is within the averageremaining service period. Prior service costs are amortized on astraight-line basis mainly over five years, which is within the averageremaining service period.
l.Employee stock ownership plan
—In accordance with Accounting Standards Board of Japan("ASBJ") Practical Issues Task Force No. 30, "Practical Solution on
Transactions of Delivering the Company's Own Stock to Employees
etc. through Trusts," at year-end, the Company shall record (1)the Company stock held by the employee stock ownership trust as
treasury stock in equity, (2) all other assets and liabilities of theemployee stock ownership trust on a line-by-line basis, and (3)a liability/asset for the net of (i) any gain or loss on delivery of
the stock by the employee stock ownership trust to the employee
shareholding association, (ii) dividends received from the entity forthe stock held by the employee stock ownership trust, and (iii) any
expenses relating to the employee stock ownership trust.

m.Research and Development Costs—Research and development costs are charged to income as incurred.
Research and development costs charged to income were ¥55,001
million ($500,009 thousand), ¥58,797 million and ¥66,609 million forthe years ended March 31, 2019, 2018 and 2017, respectively.
n.Other Income (Expenses)—Other income (expenses) in the consolidated statement of income
for the year ended March 31, 2018 included settlement of the railway
rolling stock production business of ¥26,445 million. As for NIPPONSHARYO, LTD., a consolidated subsidiary of the Company, the large
railway rolling stock project for the U.S.A was taken over by anothermanufacturer. Accordingly, NIPPON SHARYO, LTD. recognized aloss resulting from the conclusion of the contract to pay the settlementmoney to Sumitomo Corporation and Sumitomo Corporation ofAmericas.
o.Leases—Lease assets of finance leases that were not deemed to transfer
ownership of the leased property are depreciated and amortized by thestraight-line method over the lease period.
p.Income Taxes—The provision for income taxes is computed based on the pretax
income included in the consolidated statement of income. The asset
and liability approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of temporary
differences between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying currently
enacted tax laws to the temporary differences.
q.Appropriations of Retained Earnings—Appropriations of retained earnings are reflected in the
consolidated financial statements for the following year uponshareholders' approval.
r.Consumption Tax—Unless otherwise stated, all figures are presented net of tax.
s.Derivatives and Hedging Activities—The Companies use derivative financial instruments mainly to
manage exposure to market risks of changes in foreign currency
exchange rates and in interest rates. Foreign currency swaps are utilized
by the Companies to reduce foreign currency exchange rate risks.
Interest rate swaps are utilized by the Companies to reduce interest
rate risks. Interest rate and currency swap contracts are utilized by
the Companies to reduce interest rate and foreign exchange risks. The
Companies do not enter into derivatives for trading or speculative
purposes.
Foreign currency swaps, which qualify for hedge accounting andspecific matching criteria, are not remeasured at market value, but thehedged debt is translated at the contracted rates of the foreign currency
swaps. Interest rate swaps, which qualify for hedge accounting andmeet specific matching criteria, are not remeasured at market value,
but the differential paid or received under the swap agreements is
recognized and included in interest expense. When interest and currency
swap contracts meet the above criteria, hedged debt is translated at thecontracted rates, and the differential paid or received under the swap
agreement is recognized and included in interest expense.

t.Per Share Information—Basic net income per share is computed by dividing net income
attributable to owners of the parent available to common shareholders
by the weighted-average number of common shares outstanding for theperiod.
The net income attributable to owners of the parent available tocommon shareholders used in the computation for 2019, 2018 and 2017was ¥438,715 million ($3,988,318 thousand), ¥395,502 million and¥392,913 million, respectively. The average number of common sharesused in the computation for 2019, 2018 and 2017 was 195,947,224
shares, 196,233,039 shares and 196,799,182 shares, respectively. The
average number of shares of the Companies held by the employee
stock ownership trust for the year ended March 31, 2019 and 2018 was
851,924 shares and 566,089 shares, and it has been deducted from theweighted-average number of shares outstanding during the fiscal year.
Diluted net income per share is not presented in the accompanying
consolidated financial statements as the Companies do not have any
dilutive securities.
Cash dividends per share presented in the accompanying consolidated
statement of income are dividends applicable to the respective years,
including dividends to be paid after the end of the year.
u.New accounting pronouncements—On March 30, 2018, the ASBJ issued ASBJ Statement No. 29,"Accounting Standard for Revenue Recognition," and ASBJ Guidance
No. 30, "Implementation Guidance on Accounting Standard for
Revenue Recognition. " The core principle of the standard and guidanceis that an entity should recognize revenue to depict the transfer ofpromised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange
for those goods or services. An entity should recognize revenue inaccordance with that core principle by applying the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligationsin the contract
Step 5: Recognize revenue when (or as) the entity satisfies a
performance obligation
The accounting standard and guidance are effective for annual
periods beginning on or after April 1, 2021. Earlier application ispermitted for annual periods beginning on or after April 1, 2018.
The Company expects to apply the accounting standard and guidance
for annual periods beginning on April 1, 2021, and is in the process ofmeasuring the effects of applying the accounting standard and guidancein future applicable periods.
v.Changes in presentation(Consolidated Statements of Cash Flows)"Purchase of treasury stock" was included in "Other—net" underfinancing activities of the consolidated statement of cash flows for theyears ended March 31, 2017. Since the amount increased significantly
during the year ended March 31, 2018, such amount is disclosed
separately in the financing activities of the consolidated statement ofcash flows.
As a result, the amounts of ¥(381) million recorded as “Other—net”
under financing activities of the consolidated statement of cash flows
for the years ended March 31, 2017 was reclassified to “Purchasesof treasury stock” in the amounts of ¥(2) million and to “Other—net”
in the amounts of ¥(379) million, respectively, in the consolidated
statement of cash flows for the years ended March 31, 2017.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201963

Financial Section

w.Accounting Changes and Error Corrections—In December 2009, the ASBJ issued ASBJ Statement No. 24,"Accounting Standard for Accounting Changes and Error Corrections"and ASBJ Guidance No. 24, "Guidance on Accounting Standard for
Accounting Changes and Error Corrections." Accounting treatments
under this standard and guidance are as follows: (1) Changes in
Accounting Policies—When a new accounting policy is appliedfollowing revision of an accounting standard, the new policy is applied
retrospectively unless the revised accounting standard includes specifictransitional provisions, in which case the entity shall comply with thespecific transitional provisions. (2) Changes in Presentation—When thepresentation of financial statements is changed, prior-period financial
statements are reclassified in accordance with the new presentation. (3)Changes in Accounting Estimates—A change in an accounting estimate
is accounted for in the period of the change if the change affects that
period only, and is accounted for prospectively if the change affects
both the period of the change and future periods. (4) Corrections ofPrior-Period Errors—When an error in prior-period financial statements
is discovered, those statements are restated.

4. INVESTMENT SECURITIESInformation regarding investment securities with readily determinable fair values classified as available-for-sale and held to maturity as of March 31,
2019 and 2018, was as follows:
Millions of Yen
2019

Securities classified as:
Available for sale:
Equity securities
Trust fund investment and other
Held to maturity
Total

Cost

Unrealized
Gain

Unrealized
Loss

88,785276
510,000¥ 599,061¥ 52,603
67
4,777¥ 57,449¥ 3,491¥90¥ 3,581

Fair
Value

¥

137,897343
514,687¥ 652,928

Millions of Yen
2018

Securities classified as:
Available for sale:
Equity securities
Trust fund investment and other
Held to maturity
Total

Cost

Unrealized
Gain

Unrealized
Loss

83,782276
140,000¥ 224,058¥ 56,940
60
136¥ 57,137¥ 1,970¥26¥ 1,997

Fair
Value

¥

138,752
336
140,110¥ 279,198

Thousands of U.S. Dollars
2019

Securities classified as:
Available for sale:
Equity securities
Trust fund investment and other
Held to maturity
Total

Cost

Unrealized
Gain

Unrealized
Loss

Fair
Value

$ 807,136
2,509
4,636,363$5,446,009$ 478,209
609
43,427$ 522,263$ 31,736$ 1,253,609
3,118
4,678,972$ 5,935,709

818$ 32,554

The information for available-for-sale securities whose fair value is not readily determinable as of March 31, 2019 and 2018, is disclosed in Note 12.
The impairment loss on investment securities for the year ended March 31, 2019 and 2018 was not presented as the effect was immaterial.
Investment securities of ¥5,887 million ($53,518 thousand) as of March 31, 2019 were pledged as collateral for issuing a letter of credit on railway rolling stock
production business.

64

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY Annual Report 201965

Financial Section

5. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBT

The interest rates applicable to short‑term loans payable were 0.15% as of March 31, 2019, 0.10% as of March 31, 2018, and 0.12% as of March 31, 2017.
Long-term debt as of March 31, 2019 and 2018, consisted of the following:

2019

Millions of Yen

The Company has entrusted cash for the repayment of a portion of its outstanding bonds based on debt assumption agreements with financial institutions;however, the Company is not released from the primary responsibility for the liability by these agreements. The outstanding bonds covered by these
agreements as of March 31, 2019 and 2018, were as follows:

Thousands of
U.S. Dollars
2019

2018

2019

Millions of Yen

Thousands of
U.S. Dollars
2019

2018

The Company
270,836

Secured 2.180% bonds due 2018

Unsecured 2.31% bonds due 2027

9,993

9,992

90,845

Secured 2.600% bonds due 2020

Unsecured 2.30% bonds due 2027

4,998

14,99445,436

Unsecured 2.39% bonds due 2028

19,98919,987

Unsecured 2.391% bonds due 2028

30,000Unsecured 2.646% bonds due 2038

Unsecured 2.39% bonds due 2026¥

29,792¥

29,790$¥ 29,900¥ 49,800

49,800Unsecured 2.390% bonds due 2022

18,99518,995

172,681

181,718

Unsecured 2.200% bonds due 2022

18,20018,200165,454

30,000272,727

Unsecured 1.740% bonds due 2022

20,00020,000181,818

10,00010,00090,909Unsecured 1.150% bonds due 2022

25,00025,000227,272

Unsecured 2.166% bonds due 2029

30,00030,000272,727

Unsecured 1.310% bonds due 2033

10,00010,00090,909Unsecured 2.312% bonds due 2029

30,00030,000272,727

Unsecured 2.015% bonds due 2023

9,000

9,000

81,818

Unsecured 2.556% bonds due 2039

10,00010,00090,909Unsecured 2.200% bonds due 2024

9,900

9,900

90,000Unsecured 2.321% bonds due 2029

30,00030,000272,727

Unsecured 2.190% bonds due 2019

Unsecured 2.157% bonds due 2029

40,00040,000363,636

Unsecured 1.875% bonds due 2019

20,00020,000Unsecured 2.375% bonds due 2039

10,00010,00090,909Unsecured 2.210% bonds due 2024

9,650

9,650

87,727

Unsecured 2.212% bonds due 2030

30,00030,000272,727

Unsecured 1.775% bonds due 2020

20,00020,000181,818

Unsecured 2.111% bonds due 2030

20,00020,000181,818

Unsecured 2.140% bonds due 2018

Unsecured 1.797% bonds due 2030

10,00010,00090,909Unsecured 2.405% bonds due 2026

Unsecured 2.083% bonds due 2031

20,00020,000181,818

Unsecured 2.040% bonds due 2018

Unsecured 1.895% bonds due 2031

10,00010,00090,909Unsecured 2.310% bonds due 2027

10,000Unsecured 1.824% bonds due 2032

10,00010,00090,909Unsecured 2.300% bonds due 2027

10,000Unsecured 1.725% bonds due 2033

10,00010,00090,909Unsecured 1.790% bonds due 2020

19,900Unsecured 1.807% bonds due 2033

15,00015,000136,363

Unsecured 1.830% bonds due 2018

Unsecured 1.786% bonds due 2033

15,00015,000136,363

Unsecured 1.557% bonds due 2019

Unsecured 1.629% bonds due 2033

10,00010,00090,909Unsecured 1.667% bonds due 201910,00010,00090,909Unsecured 1.623% bonds due 2034

15,00015,000136,363

Unsecured 1.472% bonds due 2020

14,10014,100128,181

Unsecured 1.584% bonds due 2034

15,00015,000136,363¥ 284,445¥ 381,245$ 2,585,863

Unsecured 1.502% bonds due 2034

20,00020,000181,818

Unsecured 1.309% bonds due 2032

15,00015,000136,363

Unsecured 1.917% bonds due 2044

10,00010,00090,909Unsecured 1.362% bonds due 2034

20,00020,000181,818

Unsecured 1.014% bonds due 2035

20,00020,000181,818

Unsecured 1.685% bonds due 2045

10,00010,00090,909Unsecured 1.196% bonds due 2035

15,00015,000136,363

Unsecured 1.297% bonds due 2035

15,00015,000136,363

Unsecured 1.210% bonds due 2035

15,00015,000136,363

Unsecured 1.018% bonds due 2036

15,00015,000136,363

Unsecured 0.421% bonds due 2036

10,00010,00090,909Unsecured 0.001% bonds due 2020

10,00010,00090,909Unsecured 0.020% bonds due 2020

10,00010,00090,909Unsecured 0.020% bonds due 2021

10,000U.S. dollar 4.25% bonds due 2045 issued abroad

36,44036,418331,272

U.S. dollar 2.8% bonds due 2022 issued abroad

68,123

68,110619,300

U.S. dollar 3.40% bonds due 2023 issued abroad
Unsecured loans from Japanese banks and others, with interest rates ranging from
0.61% to 4.65% (2019), from 0.61% to 4.65% (2018), due 2018 to 2045

38,956Total
Long-term debt, less current portion

452,7279,900
181,818

18,400
9,900

9,900

90,00018,80010,00090,90990,90919,900180,909

10,00019,800

The aforementioned bonds for which the Company entered into debt assumption agreements have been derecognized in the consolidated balance sheet anddisclosed as contingent liabilities (see Note 15).
The Company has credit commitments from banks. Total unused credit available to the Company as of March 31, 2019, was ¥100,000 million ($909,090
thousand).
All assets of the Company were pledged for the above secured bonds of ¥49,800 million ($452,727 thousand), as an enterprise mortgage, which gives theholder thereof a security interest in all assets junior to that of other present or future secured creditors, but senior to that of general creditors.

90,909354,145533,931572,886

4,853,918

1,307,225

1,307,181

11,883,863(110,493)(82,047)(1,004,481)¥ 1,196,732¥ 1,225,134$ 10,879,381

Millions of Yen¥ 110,493
85,869130,359
87,77785,600807,815¥ 1,307,914

Thousands of
U.S. Dollars$ 1,004,481
780,627
1,185,081
797,972
778,181
7,343,772$ 11,890,127

Less current portion

Total

$

Annual maturities of long-term debt outstanding at the principal amounts as of March 31, 2019, were as follows:Year Ending March 31
2020
2021
2022
2023
2024
Thereafter
Total

66

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY Annual Report 201967

Financial Section

6. LONG-TERM DEBT FOR THE CHUO SHINKANSEN CONSTRUCTION

Long-term debt for the Chuo Shinkansen construction is a loan in total of ¥3,000,000 million from the JRTT using the Fiscal Investment and Loan
Program (the “FILP”) in accordance with the Order for Enforcement of the Act on the Japan Railway Construction, Transport and Technology Agency (the"JRTT Act") for promoting the construction of the Chuo Shinkansen.
The average interest rates of long-term debt for the Chuo Shinkansen construction as of March 31, 2019, were 0.86%.
Annual maturities of long-term debt for the Chuo Shinkansen construction as of March 31, 2019, were as follows:Year Ending March 31

Millions of Yen

Thousands of
U.S. Dollars¥ 3,000,000$ 27,272,727¥ 3,000,000$ 27,272,727

2020
2021
2022
2023
2024
Thereafter
Total

c. Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obligation and plan assets as of March 31,
2019 and 2018, was as follows:

2019
Funded defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation
Net liability arising from defined benefit obligation
Liability for retirement benefits
Asset for retirement benefits
Net liability arising from defined benefit obligation

Long-term accounts payable—railway facilities were incurred in the amount of ¥5,095,661 million in 1991 for the purchase of the Shinkansen railway
ground facilities and serially repaid to the JRTT. Payment terms are 25.5 years for ¥4,494,466 million and 60 years for ¥601,195 million. Payment terms andinterest rates of the payables were determined based on the agreements on the purchase of the Shinkansen railway ground facilities. The Company had paidoff ¥4,494,466 million by January 2017.
The average interest rates of long-term accounts payable—railway facilities excluding current portion as of March 31, 2019, were 6.49%.
Annual maturities of long-term accounts payable—railway facilities as of March 31, 2019, were as follows:Year Ending March 31

Millions of Yen

2020

¥

5,444

Thousands of
U.S. Dollars$

49,490

2021

5,782

52,563

2022

6,142

55,836

2023

6,526

59,327

2024

6,935

63,045513,0634,664,209

Thereafter
Total

¥

543,896$

4,944,509

Interest expense on the aforementioned long-term accounts payable—railway facilities amounted to ¥35,464 million ($322,400 thousand), ¥35,839 millionand ¥37,523 million for the years ended March 31, 2019, 2018 and 2017, respectively.

Employees whose service with the Company and consolidated subsidiaries is terminated are entitled to retirement and pension benefits determined byreference to accumulated points during their employment calculated by their position or basic rates of pay at the time of termination, length of service
and other conditions under which the termination occurs. Some of the subsidiaries adopt the simplified accounting method for calculation of liability ofretirement benefits and retirement benefit expenses.
a. The changes in defined benefit obligation for the years ended March 31, 2019, 2018 and 2017, were as follows:

2019

Millions of Yen
2018¥222,243
15,772899(1,044)(20,840)(775)¥ 216,255¥226,417
15,768918(919)(19,888)(53)¥ 222,2432017¥228,531
15,510934
1,451(20,009)¥

226,417

Thousands of
U.S. Dollars
2019$2,020,390
143,381
8,172(9,490)(189,454)(7,045)$1,965,954

The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt the simplified accounting method, are included in the current
service cost.
b. The changes in plan assets for the years ended March 31, 2019, 2018 and 2017, were as follows:

2019
Balance at beginning of year
Expected return on plan assets
Actuarial gains (losses)
Contributions from the employer
Benefits paid
Balance at end of year

68

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019¥26,890
350
2,107
1,069
(570)
¥
29,847

Millions of Yen
2018
¥

¥

25,117
333
1,288
1,111
(960)
26,890

2017
¥

¥

24,920
322
(411)
1,100
(815)
25,117

Thousands of
U.S. Dollars
2019$244,454
3,181
19,154
9,718(5,181)$ 271,336

Thousands of
U.S. Dollars
2019

2018

$

214,354(271,336)(56,972)
1,751,590
1,694,609
1,766,790(72,172)$ 1,694,609¥23,483(26,890)(3,407)
198,760
195,353
201,006(5,652)¥195,353

d. The components of net periodic benefit costs for the years ended March 31, 2019, 2018 and 2017, were as follows:

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial losses
Amortization of prior service (benefit) cost
Net periodic benefit costs

Millions of Yen
2018¥15,772
899
(350)
4,068
(92)
¥ 20,296¥ 15,768
918
(333)
4,418
24
¥20,796

2017¥ 15,510
934
(322)
4,695
33
¥20,851

Thousands of
U.S. Dollars
2019$143,381
8,172(3,181)
36,981(836)$ 184,509

The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt the simplified accounting method, are included in service cost.
e. Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans for the years ended March 31,
2019, 2018 and 2017, were as follows:

2019
Actuarial losses
Prior service cost
Total

Millions of Yen
2018

2017

¥

¥

¥7,219682¥ 7,902

6,626
77¥6,704

2,832
33¥2,866

Thousands of
U.S. Dollars
2019$65,627
6,200$
71,836

f. Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement benefit plans as of March 31,
2019 and 2018, were as follows:

8. RETIREMENT AND PENSION PLANS

Balance at end of year¥23,579(29,847)(6,267)
192,675
186,407
194,347(7,939)¥ 186,407

2019

7. LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIESBalance at beginning of year (as previously reported)
Current service cost
Interest cost
Actuarial (gains) losses
Benefits paid
Prior service cost

Millions of Yen

2019
Unrecognized actuarial losses (gains)
Unrecognized prior service cost
Total

Millions of Yen¥5,839779¥ 6,619

Thousands of
U.S. Dollars
2019

2018

$53,081
7,081$
60,172¥ (1,380)
96¥(1,283)

g. Plan assets(1) Components of plan assets
Plan assets as of March 31, 2019 and 2018, consisted of the following:

2019
Equities
General security account
Bonds
Others
Total

2018

57 %
25
11
7
100 %

55 %
27
11
7
100 %

The employee retirement benefit trust for the Companies’ contributory pension plans accounted for 50% and 47% of total plan assets for the years ended
March 31, 2019 and 2018, respectively.
(2) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the current and future asset portfolio and the long-term rates of return which are
expected currently and in the future from the various components of the plan assets.
h. Assumptions used for the years ended March 31, 2019, 2018 and 2017, were set forth as follows:

2019
Discount rate
Expected rate of return on plan assets

2018

Mainly 0.4%
1.2% to 2.0%

Mainly 0.4%
1.2% to 2.0 %2017
Mainly 0.4%
1.2% to 2.0 %i. Defined Contribution Plan
Total contribution by the Companies for the defined contribution plan was ¥128 million ($1,163 thousand) for the year ended March 31, 2019, ¥125
million for the year ended March 31, 2018, and ¥121 million for the year ended March 31, 2017.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201969

Financial Section

9.EQUITY

Japanese companies are subject to the Companies Act of Japan (the"Companies Act"). The significant provisions in the Companies Act that
affect financial and accounting matters are summarized below:

a.Dividends

Under the Companies Act, companies can pay dividends at any time
during the fiscal year in addition to the year-end dividend upon resolution
at the shareholders’ meeting. Additionally, for companies that meet certain
criteria including (1) having a Board of Directors, (2) having independent
auditors, (3) having an Audit & Supervisory Board, and (4) the term ofservice of the directors being prescribed as one year rather than the normal
two-year term by its articles of incorporation, the Board of Directors may
declare dividends (except for dividends-in-kind) at any time during the
fiscal year if the Company has prescribed so in its articles of incorporation.
However, the Company does not meet all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind(noncash assets) to shareholders subject to a certain limitation and additional
requirements.
Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporation of thecompany so stipulate. The Companies Act provides certain limitations
on the amounts available for dividends or the purchase of treasury stock.
The limitation is defined as the amount available for distribution to theshareholders, but the amount of equity after dividends must be maintained at
no less than ¥3 million.

b.Increases/Decreases and Transfer of Common Stock, Reserve andSurplus

The Companies Act requires that an amount equal to 10% of dividends
must be appropriated as a legal reserve (a component of retained earnings)
or as additional paid-in capital (a component of capital surplus), dependingon the equity account charged upon the payment of such dividends, until
the aggregate amount of legal reserve and additional paid-in capital equals
to 25% of the common stock. The Company has already appropriateddefined amount as a legal reserve or additional paid-in capital. Under theCompanies Act, the total amount of additional paid-in capital and legal
reserve may be reversed without limitation. The Companies Act also
provides that common stock, legal reserve, additional paid-in capital, othercapital surplus and retained earnings-unappropriated can be transferredamong the accounts within equity under certain conditions upon resolutionof the shareholders.

c.Treasury Stock and Treasury Stock Acquisition Rights

The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Board of
Directors. The amount of treasury stock purchased cannot exceed theamount available for distribution to the shareholders which is determined bya specific formula.
Under the Companies Act, stock acquisition rights are presented as aseparate component of equity.
The Companies Act also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.

10.EMPLOYEE STOCK OWNERSHIP PLAN

The Company holds the Employee Stock Ownership Plan by transactions of delivering its own stock to the JR Tokai Employee Shareholding
Association (the "Shareholding Association") through trusts for the purpose of improving the employee benefit program for employees participatingin the Shareholding Association and revitalizing the Shareholding Association.
(1)Transaction outline
The Company introduced an "Employee Stock Ownership Plan (employee shareholding association purchase-type)" (the "Plan") in September,2017. To introduce the Plan, the Company, as the trustor, entered into a Stock Benefit Trust (Employee Shareholding Association Purchase-type)
Agreement (the “Trust Agreement”) with Mizuho Trust & Banking Co., Ltd. as the trustee (hereinafter the trust to be established pursuant to theTrust Agreement is referred to as the “Trust”). Mizuho Trust & Banking Co., Ltd. will enter into an agreement with Trust & Custody Services Bank,
Ltd. to re-entrust the administration of trust assets such as securities with Trust & Custody Services Bank, Ltd. as the re-trustee.
Trust & Custody Services Bank, Ltd. will collectively acquire the equivalent number of the Company’s shares that the Shareholding Association
is expected to purchase for four years after introducing the Plan, and place them in the trust account E established at Trust & Custody Services
Bank, Ltd. (“Trust Account E”), and thereafter, will sell the Company’s shares to the Shareholding Association upon its acquisition of shares. If
the amount equivalent to the net gains on the sale of the Company’s shares to the Shareholding Association by the Trust Account E accumulates
within the trust assets of the Trust by the time of termination of the Trust, such money will be distributed as the residual assets to members of the
Shareholding Association who meet the beneficiary requirements (employees).
Meanwhile, the Company will act as guarantor for the borrowing undertaken by the trust bank to purchase the Company’s shares, and will repay
any outstanding portion of the loan if there are remaining borrowings equivalent to the loss on the sale of the shares at the time of termination of
the Trust due to a decrease in the market price of the Company’s shares or otherwise.
(2)The Trust held the treasury stock and long-term debt, which was included in the consolidated balance sheet as follows:
Thousands of
U.S. Dollars
2019

Millions of Yen
2019

2018

Treasury stock¥¥(shares)Long-term debt of the employee stock ownership plan trust(722,200)(972,900)¥¥

13,753
15,10018,527
20,500$ 125,027$ 137,272(3) Annual maturities of long-term debt of the employee stock ownership plan trust as of March 31, 2019, were as follows:Year Ending March 31
2020

Millions of Yen

Thousands of
U.S. Dollars

¥

$

5,400

49,090

2021

5,400

49,090

2022

4,300

39,09015,100$ 137,272

11. INCOME TAXESThe Companies are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rateof approximately 30.3% for the year ended March 31, 2019,and 30.6% for the year ended March 31, 2018 and 2017.
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities as of March 31, 2019 and 2018, were as
follows:
Thousands of
U.S. Dollars
Millions of Yen
2019
2018
2019
Deferred tax assets:
Depreciation and amortization¥
75,302¥
72,739$ 684,563
Liability for retirement benefits
61,742
63,408561,290
Software12,106
11,168110,054
Loss on write down of investment securities
9,726
9,742
88,418Provision for bonuses
8,723
8,591
79,300
Unrealized profit on property, plant and equipment
7,566
7,459
68,781
Accrued railway usage charges
3,089
3,015
28,081
43,17344,840392,481
Other
Total
221,430
220,966
2,013,000(31,368)(34,715)(285,163)
Less valuation allowance
Deferred tax assets
190,061
186,250
1,727,827
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Deferred gain on transfer of certain fixed assets
Other
Deferred tax liabilities
Net deferred tax assets

14,971
4,286
5,829
25,087¥164,974¥

16,411
4,308
5,079
25,799136,100
38,96352,990228,063

160,450$ 1,499,763

Since the difference between the normal effective statutory tax rate and the actual effective tax rate was not significant, reconciliations were not presented
for the years ended March 31, 2019, 2018 and 2017.

12. FINANCIAL INSTRUMENTS AND RELATEDDISCLOSURES

a. Policy for Financial Instruments
The Companies use only financial instruments with high degrees ofsafety for the management of funds and raise funds from bank loans,bonds and others.
Derivatives are used, not for speculative purposes, but to manage
exposure to financial risks as described in Note 13.
b.Nature and Extent of Risks Arising from Financial Instruments
Money held in trust for the Chuo Shinkansen construction is set tosegregate loans from the JRTT from other cash on hand for purposes ofpromoting the construction of the Chuo Shinkansen. The trust property
is comprised of deposits.
Trade receivables are exposed to customer credit risk.
Investment securities, mainly held to maturity debt securities andequity instruments of customers and suppliers of the Companies, areexposed to the risk of market price fluctuations.
Payment terms of trade payables and income taxes payable arewithin one year.
Short-term bank loans are used to fund the Companies’ ongoing
operations. Bonds and long-term loans are used for renewal of longterm debt and capital spending. Please see Note 5 for a maturity
analysis for bank loans and bonds payable.
Long-term debt for the Chuo Shinkansen construction is a loanin the amount of ¥3,000,000 million from the JRTT using the FILP
in accordance with the JRTT Act for purposes of promoting theconstruction of the Chuo Shinkansen.
Long-term debt of the employee stock ownership plan trust is a loan
which the Trust borrowed from financial institutions.
Long-term accounts payable—railway facilities were incurred in

the amount of ¥5,095,661 million in 1991 for the purchase of the
Shinkansen railway ground facilities and serially repaid to the JRTT.
Payment terms are 25.5 years for ¥4,494,466 million and 60 years for¥601,195 million. Payment terms and interest rates of the payables
were determined based on the agreements from the purchase of the
Shinkansen railway ground facilities. The Company had paid off¥4,494,466 million by January 2017.
Derivatives include foreign currency swaps, which are used to
manage exposure to market risks of changes in foreign exchange rates
of foreign currency denominated long-term debt, and interest rate
swaps, which are used to manage exposure to market risks of changes
in interest rates of long-term debt. Please see Note 13 for details onderivatives.
c.Risk Management for Financial Instruments
Credit Risk Management
Credit risk is the risk of economic loss arising from a counterparty's
failure to repay or service debt according to the contractual terms.
The Companies manage their credit risk from trade receivables bymonitoring of payment terms and balances of major customers byeach business administration department to identify the default riskof customers in the early stage. With respect to held-to-maturity debt
securities, the Companies manage exposure to credit risk by limiting
debt securities to high credit rated bonds.
Market Risk Management
Investment securities are managed by monitoring market values andthe financial position of issuers on a regular basis.
Foreign currency swaps are used to manage exposure to market
risks of changes in exchange rates of foreign currency long-term debt.
Interest rate swaps are used to manage exposure to market risks ofchanges in interest rates of long-term debt.

2023
2024
Thereafter
Total

70

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019¥CENTRAL JAPAN RAILWAY COMPANY Annual Report 201971

Financial Section

d.Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices
in active markets. If a quoted price is not available, other rational

valuation techniques are used instead. Also, please see Note 13 for thedetails of fair value for derivatives.

(1) Fair Value of Financial Instruments
March 31, 2019
Cash and cash equivalents
Money held in trust for the Chuo Shinkansen construction
Trade receivables
Investment securities
Total

Carrying AmountMillions of Yen
Fair Value¥¥

Short-term loans payable
Trade payables
Income taxes payable
Long-term debt including current potion
Long-term debt for the Chuo Shinkansen construction
Long-term debt of the employee stock ownership plan trust
including current potion
Long-term accounts payable—railway facilities
including current potion
Total

¥

March 31, 2018
Cash and cash equivalents
Money held in trust for the Chuo Shinkansen construction
Trade receivables
Investment securities
Total
Short-term loans payable
Trade payables
Income taxes payable
Long-term debt including current potion
Long-term debt for the Chuo Shinkansen construction
Long-term debt of the employee stock
ownership plan trust including current potion
Long-term accounts payable—railway facilities
including current potion
Total

72

¥

751,6362,670,591
112,845648,241
4,183,314(28,392)(246,282)(105,698)(1,307,225)(3,000,000)

751,6362,670,591
112,845652,928
4,188,002¥¥

(28,392)(246,282)(105,698)(1,462,039)(3,263,563)

¥
¥

4,687
4,687

¥

154,814
263,563(15,100)(15,100)

0(543,896)¥ (5,246,593)(1,193,032)¥ (6,314,108)

649,136¥ 1,067,515

Carrying AmountMillions of Yen
Fair Value

¥

¥

¥
¥

782,454
2,840,931
102,021279,088
4,004,495(27,509)(227,523)(109,783)(1,307,181)(3,000,000)¥¥(27,509)(227,523)(109,783)(1,456,992)(2,995,100)(20,500)(549,024)¥ (5,241,523)

6,833,054
24,278,100
1,025,863
5,893,100$ 38,030,127

6,833,054
24,278,100
1,025,863
5,935,709$ 38,072,745

Short-term loans payable
Trade payables
Income taxes payable
Long-term debt including current potion
Long-term debt for the Chuo Shinkansen construction
Long-term debt of the employee stock
ownership plan trust including current potion
Long-term accounts payable—railway facilities
including current potion
Total

$

$

(258,109)(2,238,927)(960,890)(11,883,863)(27,272,727)

¥ 110
¥ 110

(2) Financial Instruments Whose Fair Value Cannot be Reliably Determined
March 31, 2019

Millions of Yen

Carrying AmountThousands of U.S. Dollars¥ 15,108
13,070¥ 28,178$ 137,345
118,818$ 256,163

Investments in equity instruments that do not have a quoted market price in an active market:
Investments in unconsolidated subsidiaries and affiliates
Total

Carrying AmountMillions of Yen

March 31, 2018
Investments in equity instruments that do not have a quoted market price in an active market:¥ 15,154
12,694¥ 27,848

Investment securities
Investments in unconsolidated subsidiaries and affiliates
Total¥149,810(4,899)(40)¥

630,979
775,849

Thousands of U.S. Dollars
Fair Value
Unrealized Gain/(Loss)

Carrying Amount$

Unrealized Gain/(Loss)(20,459)(1,180,003)¥ (6,017,372)

currency swaps, which qualify for hedge accounting and meet specificmatching criteria and are accounted for by the method stated in Note 3.s,by discounting the total amounts of principal and interest of the bonds in
combination with foreign currency swaps at the Company's assumed bondissuing rate.
Fair values of long-term debt with floating interest rates are measured in
combination with interest rate swaps or interest rate and currency swaps,
which qualify for hedge accounting and are accounted for by the method
stated in Note 3.t, by discounting the total amounts of the principal andinterest at the Company's assumed borrowing rate.
The fair values of other debt, long-term debt for the Chuo Shinkansen
construction and long-term debt of the employee stock ownership plantrust are determined by discounting the cash flows related to the debt at theCompany's assumed bond issuing rate or corporate borrowing rate.
Long-Term Accounts Payable—Railway Facilities Including Current
PortionLong-term accounts payable represents monetary liability for purchaseof railway facilities assumed under a special law, and it is difficult for theCompany to raise funds again in the same manner. The fair value of suchlong-term accounts payable is determined based on the present value of thetotal amounts of principal and interest payment discounted at an interest rate
to be applied if similar new bonds were issued.

Investment securities

782,454
2,840,931
102,021279,198
4,004,605

March 31, 2019
Cash and cash equivalents
Money held in trust for the Chuo Shinkansen construction
Trade receivables
Investment securities
Total

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

Unrealized Gain/(Loss)

Cash and Cash Equivalents
The carrying values of cash and cash equivalents approximate fair value
because of their short maturities.
Money Held in Trust for the Chuo Shinkansen Construction
The fair value of money held in trust for the Chuo Shinkansen
construction is determined based on financial assets which are held by thetrust property. Their carrying values approximate fair value because the trust
property consists of a deposit.
Investment Securities
The fair values of investment securities are measured at the quoted market
price of the stock exchange for the equity instruments, and at the quoted
price obtained from the financial institution for certain debt instruments.
Fair value information for investment securities by classification is includedin Note 4.
Trade Receivables and Payables, Short-Term Loans Payable andIncome Taxes Payable
The carrying values of trade receivables and payables, short-term loans
payable and income taxes payable approximate fair value because of theirshort maturities.
Long-Term Debt Including Current Portion, Long-Term Debt for the
Chuo Shinkansen Construction and Long-Term Debt of the Employee
Stock Ownership Plan Trust Including Current Portion
Domestic bonds are measured at the quoted market prices. Fair valuesof foreign currency bonds are measured in combination with foreigne. Maturity Analysis for Financial Assets and Securities with Contractual Maturities

Millions of Yen
March 31, 2019
Money held in trust for the Chuo Shinkansen construction
Trade receivables
Investment securities
Total

Cash and cash equivalents
Money held in trust for the Chuo Shinkansen construction
Trade receivables
Investment securities
Total(258,109)(2,238,927)(960,890)(13,291,263)(29,668,754)$ 1,407,400
2,396,027(137,272)(137,272)

0(4,944,509)$ (47,696,300)(10,845,745)$ (57,400,981)

5,901,236$ 9,704,681

Due after One Yearthrough Five Years

Due after FiveYears

¥ 156,900¥ 156,900¥ 353,100¥ 353,100

751,6362,670,591
112,845¥ 3,535,073

Thousands of U.S. Dollars
March 31, 2019

42,60942,609¥Cash and cash equivalents

$

$
$

Due within One YearDue within One Year$Due after One Yearthrough Five Years

Due after FiveYears

$ 1,426,363$ 1,426,363$ 3,210,000$ 3,210,000

6,833,054
24,278,100
1,025,863$ 32,137,027

f. Annual Maturities of Long-Term Debt, Long-Term Debt for the Chuo Shinkansen Construction, Long-Term Debt of the Employee Stock Ownership
Plan Trust and Long-Term Accounts Payable—Railway Facilities
Please see Note 5 for annual maturities of long-term debt, Note 6 for long-term debt for the Chuo Shinkansen construction, Note 10 for long-term debt of
the employee stock ownership plan trust and Note 7 for long-term accounts payable—railway facilities.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201973

Financial Section

13.DERIVATIVESThe Companies enter into foreign currency swap agreements to manage exposure to market risks of changes in foreign exchange of foreign currency longterm debt, and interest rate swap agreements to manage exposure to market risks of changes in interest rates of certain liabilities.
Derivative transactions are mainly entered into to hedge foreign exchange exposures and interest rate exposures incorporated within their business.
Accordingly, market risk in these derivatives is basically offset by opposite movements in the value of hedged liabilities.
Because the counterparties to these derivatives are limited to major international financial institutions, the Companies do not anticipate any losses arisingfrom credit default.
Derivative transactions have been made in accordance with internal policies and have been subject to due internal formalities.

Derivative Transactions to Which Hedge Accounting Is Applied

Millions of Yen
Contract AmountMarch 31, 2019
Foreign currency swaps:(fixed amount payment in yen, fixed amount receipt in U.S. dollars)Interest rate swaps:(fixed rate payment, floating rate receipt)
Interest rate and currency swaps: (fixed rate / amount payment in yen, floating
rate receipt and fixed amount receipt in U.S. dollars )Hedged Item

Contract AmountDue after One Year

Fair Value

Foreign currency bonds¥144,183¥ 144,183*

Bank loans¥75,500¥

41,500*Foreign currency bank loans¥53,062¥

53,062*Millions of Yen
Contract AmountMarch 31, 2018
Foreign currency swaps:(fixed amount payment in yen, fixed amount receipt in U.S. dollars)Interest rate swaps:(fixed rate payment, floating rate receipt)
Interest rate and currency swaps: (fixed rate / amount payment in yen, floating
rate receipt and fixed amount receipt in U.S. dollars )Hedged Item

Contract AmountForeign currency bonds¥105,175¥

105,175*

Bank loans¥110,000¥

75,500*Foreign currency bank loans¥49,769¥

49,769*Due after One Year

Fair Value

Thousands of U.S. Dollars
Contract AmountMarch 31, 2019
Foreign currency swaps:(fixed amount payment in yen, fixed amount receipt in U.S. dollars)Interest rate swaps:(fixed rate payment, floating rate receipt)
Interest rate and currency swaps: (fixed rate / amount payment in yen, floating
rate receipt and fixed amount receipt in U.S. dollars )Hedged Item

Contract AmountDue after One Year

Fair Value

Foreign currency bonds$1,310,754$ 1,310,754*

Bank loans$686,363$

377,272*

Foreign currency bank loans$482,381$482,381** Foreign currency swaps, interest rate swaps, or interest rate and currency swaps which qualify for hedge accounting are accounted for in combination withhedged items such as the foreign currency bonds, long-term debt, or foreign currency bank loans and the fair values of these swaps are included in those ofhedged items in Note 12.

14.LEASES

As a lessee, the minimum rental commitments under noncancelable operating leases as of March 31, 2019 and 2018 were due as follows.

Millions of Yen
2019

2018

Thousands of
U.S. Dollars
2019

Due within one year
Due after one year

¥495
2,711

¥468
2,716

$4,500
24,645Total¥3,207¥3,184$29,154

As a lessor, the minimum rental commitments under noncancelable operating leases as of March 31, 2019 and 2018, were due as follows:

Millions of Yen
2019

2018

Thousands of
U.S. Dollars
2019

Due within one year
Due after one year¥7,923
22,584¥5,704
25,334$72,027
205,309Total¥30,507¥31,038$277,336

15.CONTINGENCIESAs of March 31, 2019, the Company has joint and several obligations with the RTRI to make payments on long-term debt of ¥2,609 million ($23,718
thousand) borrowed by the RTRI. The proceeds are being used for the enhancement of technological development of the Maglev system. In addition, as ofMarch 31, 2019, the Company is contingently liable for guarantees of loans of RTRI amounting to ¥13,400 million ($121,818 thousand).
As discussed in Note 5, based on debt assumption agreements with financial institutions, the Company has transferred the debt repayment obligations forcertain bonds to such financial institutions. As of March 31, 2019, the Company had contingent obligations of ¥284,445 million ($2,585,863 thousand) forthe bonds.

74

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

16.OTHER COMPREHENSIVE INCOME

The components of other comprehensive income for the years ended March 31, 2019, 2018 and 2017, were as follows:

2017(5,850)1,440¥(4,409)¥13,824(0)13,824(4,303)¥9,521¥8,490(23)
8,466(1,959)¥6,507

¥7
7

¥(4)
(4)

¥2
2

$

63
63

¥

¥(4)

¥

$

63

2019
Unrealized (loss) gain on available-for-sale securities:(Loss) gain arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gain (loss) on hedges:
Gain (loss) arising during the year
Amount before income tax effect
Income tax effectTotal
Remeasurements of defined benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive income in affiliates
Gain arising during the year
Reclassification adjustments to profit
Total
Total other comprehensive income

17.SEGMENT INFORMATION

Under ASBJ Statement No. 17, "Accounting Standard for Segment
Information Disclosures" and ASBJ Guidance No. 20, "Guidance on
Accounting Standard for Segment Information Disclosures," an entity isrequired to report financial and descriptive information about its reportablesegments. Reportable segments are operating segments or aggregationsof operating segments that meet specified criteria. Operating segments
are components of an entity for which separate financial information isavailable and such information is evaluated regularly by the chief operating
decisionmaker in deciding how to allocate resources and in assessing
performance. Generally, segment information is required to be reported
on the same basis as is used internally for evaluating operating segment
performance and deciding how to allocate resources to operating segments.
a. Description of Reportable Segments
The Companies' reportable segments are those for which separate
financial information is available and regular evaluation by the Companies'
management is being performed in order to decide how resources areallocated among the Companies.

Thousands of
U.S. Dollars
2019

Millions of Yen
2018¥(5,850)72$(53,181)(53,181)
13,090$(40,081)¥3,927
3,975
7,902(2,382)¥5,519

¥

2,261
4,442
6,704
(1,999)¥4,704¥ (1,862)
4,729
2,866
(845)
¥2,020$ 35,700
36,136
71,836(21,654)$ 50,172

¥

41
16
58

¥39
38
¥
78

¥27
36
¥
63

$
$

¥1,175¥ 14,299¥$ 10,681

¥

8,595

372
145
527

The Companies are composed of three reportable segments by natureof products and services: Transportation, Merchandise and Other and Real
Estate are disclosed.
The Transportation segment manages the Companies' railway operations,such as the Tokaido Shinkansen and conventional railway operations in the
Tokai area, bus operations and others. The Merchandise and Other segment
includes a department store in JR Central Towers, retail sales in trains andstations and others. The Real Estate segment include real estate leasing
business, such as station building leasing and real estate sales in lots.
b. Methods of Measurement for the Amounts of Operating Revenues,
Profit (Loss), Assets, Liabilities and Other Items for Each Reportable
Segment
The accounting policies of each reportable segment are consistent
with those disclosed in Note 3, "Summary of Significant Accounting
Policies." Reportable segment profit represents operating income. Prices
of intersegment transactions or transfers are determined based upon arm's
length transactions.

c. Information about Operating Revenues, Profit (Loss), Assets, Liabilities and Other Items

Millions of Yen
2019

Operating revenues:
External customers
Intersegment transactions or transfers
Total

Reportable Segment
Transportation Merchandise and Other Real Estate

Total

Other

Total

Reconciliations Consolidated¥1,449,198 ¥253,312 ¥49,646 ¥1,752,156 ¥125,980 ¥1,878,137¥1,878,137
12,146
11,672
32,48856,307135,090
191,398 ¥(191,398)¥1,461,345 ¥ 264,984 ¥ 82,134 ¥1,808,464 ¥ 261,071 ¥2,069,535 ¥ (191,398) ¥1,878,137

Segment profit¥ 664,897 ¥9,638 ¥ 20,279 ¥ 694,814 ¥ 16,103 ¥ 710,918 ¥ (1,143) ¥ 709,775
Segment assets
8,711,224
127,619
370,244 9,209,088
408,015 9,617,103 (321,358) 9,295,745
Other:
Depreciation and amortization
186,166
4,101
16,930207,198
4,064
211,262
211,262
Amounts of investments in equity in affiliates
9,909
9,909
9,909
9,909
Increase in property, plant and equipment
and intangible assets
392,471
2,999
10,436405,907
8,492
414,399
414,399
CENTRAL JAPAN RAILWAY COMPANY Annual Report 201975

Financial Section

Millions of Yen
2018

Operating revenues:
External customers
Intersegment transactions or transfers
Total

Reportable Segment
Transportation Merchandise and Other Real Estate

Total

Other

Nonconsolidated Balance Sheet (Unaudited)
Total

Reconciliations Consolidated¥1,412,182 ¥243,228 ¥46,117 ¥1,701,528 ¥120,510 ¥1,822,039¥1,822,039
11,86912,16431,90255,936
141,115
197,052 ¥(197,052)¥1,424,051 ¥ 255,393 ¥ 78,020 ¥1,757,465 ¥ 261,626 ¥2,019,091 ¥ (197,052) ¥1,822,039

Segment profit¥ 623,077 ¥8,224 ¥ 18,534 ¥ 649,836 ¥ 13,208 ¥ 663,045 ¥ (1,021) ¥ 662,023
Segment assets
8,191,415
119,640
371,961 8,683,018
398,838 9,081,856 (173,173) 8,908,682
Other:
Depreciation and amortization
190,7634,009
17,164211,936
4,090
216,027
216,027
Amounts of investments in equity in affiliates
9,648
9,648
9,648
9,648
Increase in property, plant and equipment
and intangible assets
305,974
5,732
8,673
320,379
5,224
325,604
325,604
Millions of Yen
2017

Operating revenues:
External customers
Intersegment transactions or transfers
Total

Reportable Segment
Transportation Merchandise and Other Real Estate

Total

Other

Total

Reconciliations Consolidated¥1,368,604 ¥227,201 ¥41,244 ¥1,637,050 ¥119,929 ¥1,756,980¥1,756,980
11,7989,888
27,40049,087
134,036
183,124 ¥(183,124)¥1,380,403 ¥237,089 ¥68,645 ¥1,686,138 ¥253,966 ¥1,940,104 ¥(183,124) ¥1,756,980

Segment profit¥ 593,192 ¥
7,501 ¥ 18,144 ¥ 618,838 ¥
1,684 ¥ 620,522 ¥(958) ¥ 619,564
Segment assets
6,295,736
111,093376,295 6,783,124
369,461 7,152,585(99,910) 7,052,675
Other:
Depreciation and amortization
205,970
3,463
12,147
221,5813,804
225,386
225,386
Amounts of investments in equity in affiliates
9,048
9,048
9,048
9,048
Increase in property, plant and equipment
and intangible assets
270,710
12,78639,720323,217
6,706
329,924
329,924

Operating revenues:
External customers
Intersegment transactions or transfers
Total

Reportable Segment
Transportation Merchandise and Other Real Estate$ 13,174,527 $ 2,302,836 $
110,418
106,109$ 13,284,954 $ 2,408,945 $

Millions of Yen(Note 1)ASSETS
CURRENT ASSETS:

Cash and cash equivalents
Money held in trust for the Chuo Shinkansen construction
Trade receivables
Supplies
Prepaid expenses and otherTotal current assets

Investments and other assets:
Investment securities
Investments in and advances to subsidiaries and affiliates
Deferred tax assets
Prepaid expenses and otherTotal investments and other assets
Property, plant and equipment (Note 2):
Railway business property
Construction in progress
Other
Total
Accumulated depreciation
Net property, plant and equipment
Total noncurrent assets

TOTAL ASSETS

Thousands of U.S. Dollars
2019

CURRENT LIABILITIES:

Total

Other

Total

Reconciliations Consolidated

451,327 $ 15,928,690 $ 1,145,272 $ 17,073,972$ 17,073,972
295,345
511,881
1,228,090
1,739,981 $(1,739,981)
746,672 $ 16,440,581 $ 2,373,372 $ 18,813,954 $(1,739,981) $ 17,073,972

Notes: 1. Other includes business in hotel, travel, advertising, rolling stock production, construction, etc., which are not included in a reportable segment.
2. Reconciliations are as follows:a. The amount of the elimination of intersegment transactions included in the reconciliations was ¥(1,143) million ($(10,390) thousand), ¥(1,021) million and ¥(958) million for the years ended March 31, 2019, 2018 and 2017, respectively.
b. The reconciliations for segment assets include corporate assets, which are not allocated to a reportable segment, and the elimination of intersegment transactions.
Corporate assets principally consist of investment securities and certificates of deposit. The amounts of corporate assets were ¥288,709 million ($2,624,627 thousand), ¥441,612 million and ¥426,429 million for the years ended March 31, 2019, 2018and 2017, respectively.
The elimination of intersegment transactions consists of intersegment receivables and others. The amounts of the elimination were ¥610,068 million ($5,546,072 thousand), ¥614,785 million and ¥526,340 million for the years ended March 31, 2019,2018 and 2017, respectively.
3. Segment profit is reconciled to operating income in the consolidated statement of income.
4. I nformation about products and services was omitted since equivalent information was disclosed above.
Information about geographical areas was not presented since the Companies have no significant overseas operations.

18.SUBSEQUENT EVENTSAppropriations of Retained Earnings
The following appropriation of retained earnings as of March 31, 2019, was approved at the Company's shareholders’ meeting held on June 21, 2019. The
total amount of dividends includes ¥54 million ($490 thousand) in dividends to be paid to the Trust.

Millions of Yen¥ 14,775

Thousands of U.S. Dollars$ 134,318

March 31, 2019
Thousands of
U.S. Dollars(Note 1)

2019

2018

2019

¥740,989
2,670,591
57,96713,01945,5983,528,165¥772,744
2,840,931
49,823
11,15139,0093,713,661$6,736,263
24,278,100
526,972
118,354414,527
32,074,227

642,676
227,964
156,91047,902
1,075,453

275,306
239,179
151,383
39,053704,923

5,842,509
2,072,400
1,426,454
435,472
9,776,845

8,104,274
647,505
219,545
8,971,325(4,482,824)
4,488,500

8,050,659
420,438
216,992
8,688,090(4,380,236)
4,307,853

73,675,218
5,886,409
1,995,863
81,557,500(40,752,945)
40,804,545

5,563,954

5,012,776

50,581,400¥9,092,120¥ 8,726,438$ 82,655,636

NONCURRENT ASSETS:

LIABILITIES AND EQUITY

Segment profit$ 6,044,518 $
87,618 $ 184,354 $ 6,316,490 $ 146,390 $ 6,462,890 $ (10,390) $ 6,452,500
Segment assets
79,192,945
1,160,172
3,365,854 83,718,981
3,709,227 87,428,209 (2,921,436) 84,506,772
Other:
Depreciation and amortization
1,692,418
37,281
153,909 1,883,618
36,945 1,920,563
1,920,563
Amounts of investments in equity in affiliates
90,081
90,081
90,081
90,081
Increase in property,plant and equipment
and intangible assets
3,567,918
27,263
94,872 3,690,063
77,200 3,767,263
3,767,263

Year-end cash dividends, ¥75 ($0.68) per share

Central Japan Railway Company

Short-term loans payable
Current portion of long-term debt
Current portion of long-term debt of the employee stock ownership plan trust
Current portion of long-term accounts payable—railway facilities
Trade payables
Provision for bonuses
Income taxes payable
Prepaid fares received
Inter-line fares received
Other
Total current liabilities

NONCURRENT LIABILITIES:Long-term debt
Long-term debt for the Chuo Shinkansen construction
Long-term debt of the employee stock ownership plan trust
Long-term accounts payable—railway facilities
Provision for large-scale renovation of the Shinkansen infrastructure
Provision for retirement benefits
Other
Total noncurrent liabilities

Millions of Yen(Note 1)Thousands of
U.S. Dollars(Note 1)

2019

2018

2019

¥158,540
110,493
5,400
5,444
197,565
21,334
98,502
34,103
188
56,989688,562¥147,249
82,0475,400
5,126
182,958
21,340102,291
31,570476
52,445630,906$1,441,272
1,004,481
49,09049,4901,796,045
193,945895,472
310,027
1,709
518,0816,259,654

1,196,732
3,000,000
9,700
538,451
140,000
177,815
25,3595,088,058

1,225,134
3,000,000
15,100543,897
175,000
179,242
27,277
5,165,651

10,879,381
27,272,727
88,181
4,895,009
1,272,727
1,616,500
230,536
46,255,072

112,000
53,500112,000
53,5001,018,181
486,363

12,504
3,223,861(115,959)
29,5913,315,499

12,504
2,837,396(120,733)
35,2112,929,880

113,672
29,307,827(1,054,172)
269,00930,140,900¥9,092,120¥ 8,726,438$82,655,636

EQUITY:

Common stock—authorized, 824,000,000 shares;
issued, 206,000,000 shares in 2019 and 2018
Capital surplus
Retained earnings:
Legal reserve
UnappropriatedTreasury stock-at cost, 9,721,439 shares in 2019 and 9,972,129 shares in 2018
Unrealized gain on available-for-sale securities
Total equity

TOTAL LIABILITIES AND EQUITY
See notes to nonconsolidated financial statements.

76

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY Annual Report 201977

Financial Section

Nonconsolidated Statement of Income (Unaudited)Central Japan Railway Company
Millions of Yen(Note 1)

Nonconsolidated Statement of Changes in Equity (Unaudited)Year Ended March 31, 2019
Thousands of
U.S. Dollars(Note 1)
2017
2019

2019

2018

¥1,452,005
12,881
1,464,886¥ 1,414,884
12,5601,427,444¥ 1,371,906
8,863
1,380,770$13,200,045
117,100
13,317,145

Railway business
Other
Total operating expenses

788,7548,386
797,140

793,541
8,608
802,150

779,9704,978
784,949

7,170,490
76,236

7,246,727

Operating income

667,745625,293595,8216,070,409

OPERATING REVENUES:
Railway business
Other
Total operating revenues

OPERATING EXPENSES:OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Other—net
Other expenses—net

INCOME BEFORE INCOME TAXES

3,636(81,271)
86(77,548)

3,194(79,105)
208(75,702)2,233(60,177)
3,273(54,670)

33,054(738,827)
781(704,981)

590,197549,591

541,150

5,365,427

INCOME TAXES:
Current
Deferred
Total income taxes

NET INCOMEPER SHARE OF COMMON STOCK:
Basic net income
Cash dividends applicable to the year
See notes to nonconsolidated financial statements.

179,709(3,557)
176,151

172,961(7,780)165,181

151,746
7,505
159,252

1,633,718(32,336)
1,601,372¥414,045¥ 384,410¥  381,898$3,764,045

2019

Yen
2018

2017

U.S. Dollars
2019¥2,110.87
145.00¥1,956.94
140.00¥1,938.56
135.00$19.19
1.32

Central Japan Railway Company

BALANCE, APRIL 1, 2016

Year Ended March 31, 2019
Thousands
Outstanding
Number of
Shares ofCommon Stock
197,000

Net income
Dividends from surplus, ¥130 per share
Purchase of treasury stock
Net change in the year

BALANCE, MARCH 31, 2017
Net income
Dividends from surplus, ¥140 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year

BALANCE, MARCH 31, 2018
Net income
Dividends from surplus, ¥140 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year

BALANCE, MARCH 31, 2019

Millions of Yen (Note 1)

CommonStock112,000

CapitalSurplus53,500

Unrealized
Gain onRetained Earnings
Legal
Treasury Available-for-SaleReserve Unappropriated
Stock
Securities
12,504 2,124,277 (102,203)
19,831
381,898(25,610)(0)

197,000

6,643

381,898(25,610)(2)
6,643

26,474

2,582,839

8,736

384,410(27,580)(21,365)
2,838
8,736

35,2112,929,880(5,620)414,045(27,580)(0)4,774(5,620)(2)

112,000

53,50012,5042,480,566(102,205)

384,410(27,580)(972)

196,027(21,365)
2,838

112,000

53,50012,504

2,837,396(120,733)

414,045(27,580)
(0)
4,774

250

196,278

Total
Equity2,219,910¥112,000 ¥53,500 ¥12,504 ¥3,223,861 ¥(115,959) ¥29,591 ¥3,315,499
Thousands of U.S. Dollars (Note 1)

BALANCE, MARCH 31, 2018
Net income
Dividends from surplus, $1.27 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year

BALANCE, MARCH 31, 2019

Unrealized
Gain onRetained Earnings
CommonCapitalLegal
Treasury Available-for-Sale
Total
Stock
SurplusReserve Unappropriated
Stock
Securities
Equity$1,018,181 $486,363 $113,672 $25,794,509 $(1,097,572) $320,100 $26,635,272
3,764,045(250,727)(0)43,400(51,090)

3,764,045(250,727)(0)43,400(51,090)$1,018,181 $486,363 $113,672 $29,307,827 $(1,054,172) $269,009 $30,140,900

See notes to nonconsolidated financial statements.

78

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY Annual Report 201979

Financial Section

Deloitte Touche Tohmatsu LLC
JP TOWER NAGOYA
1-1-1 Meieki, Nakamura-ku
Nagoya, Aichi 450-8530
Japan

Notes to Nonconsolidated Financial Statements (Unaudited)Central Japan Railway Company
1. BASIS OF PRESENTATION OF NONCONSOLIDATEDFINANCIAL STATEMENTS

The accompanying nonconsolidated financial statements have been
prepared in accordance with the provisions set forth in the Companies
Act, the Japanese Financial Instruments and Exchange Act, the Law for
Railway Business Enterprise and their related accounting regulations,and in accordance with accounting principles generally accepted inJapan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
In preparing these nonconsolidated financial statements, certain
reclassifications and rearrangements have been made to thenonconsolidated financial statements issued domestically in order topresent them in a form which is more familiar to readers outside Japan.

Tel: +81(52)565 5511 Fax:+81(52)569 1394
www.deloitte.com/jp/en

The nonconsolidated financial statements are stated in Japanese yen,
the currency of the country in which the Company is incorporated andoperates. The translations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience of readers outside
Japan and have been made at the rate of ¥110 to $1, the approximate
rate of exchange as of March 31, 2019. Such translations should not
be construed as representations that the Japanese yen amounts could
be converted into U.S. dollars at that or any other rate. Japanese yen
figures of less than one million yen are rounded down to the nearest
million of yen, except for per share information, and U.S. dollar figuresof less than one thousand U.S. dollars are also rounded down to thenearest thousand of U.S. dollars, except for per share information.

2. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of March 31, 2019 and 2018, consisted of the following:
Millions of Yen
Land
Buildings
Structures
Rolling stock
Machinery and equipment
Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment2019¥2,326,941
612,049
3,816,563
906,235
658,8223,207
647,505
8,971,325(4,482,824)¥ 4,488,500

2018¥ 2,326,709
609,1123,788,243
898,687
641,905
2,993
420,438
8,688,090(4,380,236)¥ 4,307,853

Thousands of
U.S. Dollars
2019$21,154,009
5,564,081
34,696,027
8,238,500
5,989,290
29,154
5,886,409
81,557,500(40,752,945)$40,804,545

Property, plant and equipment are stated at cost.
Depreciation is computed by the declining-balance method over the estimated useful lives of the assets. Additional depreciation is provided for the
Shinkansen rolling stock based on kilometers traveled.
The range of useful lives is principally from 3 to 50 years for buildings, from 4 to 60 years for structures, from 10 to 20 years for rolling stock and from 4
to 17 years for machinery and equipment.
Depreciation of certain railway structures, except for the Shinkansen railway facilities, is computed by the replacement-accounting method.

INDEPENDENT AUDITOR’S REPORTTo the Board of Directors ofCentral Japan Railway Company:
We have audited the accompanying consolidatedbalance sheet of Central Japan Railway Company and its
consolidated subsidiaries as of March 31, 2019, and therelated consolidated statements of income, comprehensive
income, changes in equity, and cash flows for the year thenended, and a summary of significant accounting policies andother explanatory information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated
Financial Statements
Management is responsible for the preparation and fairpresentation of these consolidated financial statements inaccordance with accounting principles generally acceptedin Japan, and for such internal control as management
determines is necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected
depend on the auditor’s judgment, including the assessment

June 21, 201980

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of
the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectivenessof the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of
the consolidated financial statements.
We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, theconsolidated financial position of Central Japan Railway
Company and its consolidated subsidiaries as of March 31,
2019, and the consolidated results of their operations andtheir cash flows for the year then ended in accordance withaccounting principles generally accepted in Japan.
Convenience Translation
Our audit also comprehended the translation of Japanese
yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made in accordance with the basis
stated in Note 2 to the consolidated financial statements.
Such U.S. dollar amounts are presented solely for theconvenience of readers outside Japan.

Member of
Deloitte Touche Tohmatsu Limited

CENTRAL JAPAN RAILWAY COMPANY Annual Report 201981

Appendices

AppendicesFinancial and Transportation Data
Transportation revenues

Total

Shinkansen

1,126.5

1,000
900

1,175.2

1,194.5

16.8

17.3

16.9

20

1,211.9

1,192.0

1,143.4

1,100Commuter Passes

1,253.2

1,291.8(Billion yen)120

1,235.5

1,273.6

100

60

18.1

17.6

40

103.9

102.6

99.7

80

0

’15.3

’16.3

’17.3

’18.3

105.1

104.8

65.7

68.7

69.1

69.9

69.5

34.0

33.9

34.8

35.1

35.2

’15.3

’16.3

Passenger Ridership

Total

Shinkansen

163

157

140

148

143

120

’18.3
Ordinary Tickets

Conventional Lines(Million passengers)
180
160

’17.3

5,269.3 5,223.0 5,232.7 5,195.6

165

170

174

150

155

159

405

410

414

257

262

265

269

271

134

138

140

142

143

300
200

100

15

14

20

15

15

15

3,000

Commuter Passes

401

5,346.3 5,278.5

5,164.3

5,045.2

4,922.2

4,801.0

4,856.2 4,851.1 4,846.1 10.0
4,560.8

4,289.3

4,125.5

3,943.4

8.0

3,665.8

6.35

6.01 6.08

6.53 6.39
6.19

5.90 5.84

5.43

5.21 5.16 5.08 5.01 4.91

3,455.7 3,415.6

4.75 4.62 4.51
4.30

2,000

3,369.0

3,260.1 3,177.6

3,117.0 3,001.5

2,829.1

6.0

2,614.9
2,351.7

2,136.3
4.08 3.91
3.71 3.54
1,915.6
3.36 3.24 3.14 3.13
3.10 3.12

0

100

4.0

2.00

1,000

10

1.66 1.65

’15.3

’16.3

’17.3

’18.3

0

’19.3

’15.3

’16.3

Passenger kilometers

Total

Shinkansen(Million passenger-kilometers)
55,00050,13450,00048,74445,00052,16652,90954,75650,73451,45953,27756,27754,7582,000

0(plan)

1,431

1,450

1,479

1,519

’15.3

’16.3

’17.3

’18.3

’19.3

220

Shinkansen

9,456

9,459

5,481

5,568

5,614

5,656

5,676

3,587

3,734

3,745

3,800

3,783

’15.3

’16.3

’17.3

’18.3

’19.3

4,000
2,000
0

Top 10 Stations in terms of Number of Average Daily Passengers (FY2018)(Thousandpassengers/
day)
200

Shifts in EBITDA (consolidated)

Conventional Lines(Billion yen)
900
800
700

150

104

100

146

600

84

50

60

Tokyo

607.9

629.5

666.3

’11.3

’12.3

’13.3

778.1

’14.3

’15.3

821.0

844.9

878.0

’16.3

’17.3

’18.3

921.0

400

39

Shin-Osaka Kanayama Shizuoka

38

37

24
14

21

Nagoya

561.6

770.8

500

70

39

74

0

Commuter Passes

9,359

8,000

1,000
0

Ordinary Tickets

’19.3

9,302

(Million passenger-kilometers)
10,000
9,069

6,000

1,390

’18.3

Conventional Lines

40,00035,000

’17.3

Kyoto

36

300

34

200
100
0

Hamamatsu Shinagawa

Kariya Shin-Yokohama

’10.3

’19.3

Note: EBITDA figures are calculated as the sum of operating income and depreciation and amortization

Shifts in Capital Investment Amounts (Non-consolidated)

Capital Investment Amounts (Excluding the Chuo Shinkansen)

Chuo Shinkansen

583.0(Billion yen)
550
500

448.8

450

384.5

400
350
300

277.4 265.2

250
200
150

120.3

100

159.5

174.3

197.8 211.1

166.9 164.8 171.3 172.6 159.2 156.8

209.8
151.5 157.6 161.5

169.8

155.5

330.8

288.8 298.4 301.6
244.8

229.0

257.2 259.1

128.5 128.3

50 50.1’88.3 ’89.3 ’90.3 ’91.3 ’92.3 ’93.3 ’94.3 ’95.3 ’96.3 ’97.3 ’98.3 ’99.3 ’00.3 ’01.3 ’02.3 ’03.3 ’04.3 ’05.3 ’06.3 ’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’18.3 ’19.3

Note: The planned figures are as of the publication of March 2019.

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019

2.0

’88.3 ’89.3 ’90.3 ’91.3 ’92.3 ’93.3 ’94.3 ’95.3 ’96.3 ’97.3 ’98.3 ’99.3 ’00.3 ’01.3 ’02.3 ’03.3 ’04.3 ’05.3 ’06.3 ’07.3 ’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’18.3 ’19.3 ’20.3

Note: The planned figures are as of the publication of the financial report for FY2018.

082

5,456.2 5,422.3 5,392.0

4,000

’19.3

(Million passengers)
391
400

(%)

12.0

5,000

6.81

0

’19.3

Inherited Liabilities
Corporate Bonds
Long-Term Debt
Long-Term Accounts Payable - Railway Facilities
Latent Liabilities Born by the Shinkansen Leasing System
Long-term debt for the Chuo Shinkansen
Average Interest Rate (Right axis)(Non-Consolidated)

20

10

0

Shifts in Total Long-Term Debt and Payables(Billion yen)
6,000

Conventional Lines(Billion yen)
1,300
1,200

Ordinary Tickets

Long-Term Loan Using the Fiscal Investment and Loan Program (Long-term debt for the Chuo Shinkansen)
In November 2016, JR Central applied for a long-term loan using
the Fiscal Investment and Loan Program (hereinafter, “FILP Loan”)
for 3 trillion yen (plan) to Japan Railway Construction, Transport
and Technology Agency (“JRTT”) to promote the construction of the
Chuo Shinkansen. We proceeded to borrow funds in five lots
sequentially thereafter and secured financing for a planned total of
3 trillion yen in July 2017.
The advantage we gain from the FILP loan lies in mitigating threemanagement risks, which are interest-rate increase risk, financing
risk, and redemption risk. Specifically, since we can securelong-term, fixed- and low-interest rate funds, we are able to mitigate
the risk of interest rates rising in the future and fix interest payments
at a low level for a long period of time.
Under the original plan, roughly 3 trillion yen of the construction
cost for the route between Shinagawa and Nagoya, which isapproximately 5.5 trillion yen, was expected to require newfinancing. However, by securing the amount through the FILP Loan,
we have the funds needed until live operation in Nagoya without
being considerably impacted by future economic conditions andinterest rate fluctuations, thereby reducing financing risk.
Furthermore, since the FILP Loan matures after the construction
period of the Chuo Shinkansen, during which time a large amountof funds is needed, we are able to build up cash from operating
activities to provide for the redemption of liabilities, thereby also
mitigating redemption risk.
In the material submitted to the Transport Policy Council of the
Ministry of Land, Infrastructure, Transport and Tourism in 2010, we
indicated in our outlook that a period of 8 years after live operationin Nagoya will be set to recover management strength. After
reducing long-term debt by a certain amount, construction on theroute between Nagoya and Osaka will be initiated while seeing thatsound management and stable dividends are strictly maintained,
and ensuring that the balance of long-term debt does not exceed 5

trillion yen throughout the project period until live operation of theentire line. By utilizing this FILP Loan, we are able to reduce thisperiod for restoring management strength and promote
construction efforts in an aim to moving up live operation of theentire line by up to 8 years.
The Chuo Shinkansen Project is pursued based on the premisethat JR Central, as a private corporation, covers full cost of
construction, while securing management autonomy in investment
and seeing that sound management and stable dividends arestrictly maintained until the construction work is fully completed.
The FILP Loan poses no change to this premise.
As for the terms of the FILP Loan, the weighted average rate is
0.86%, which is fixed throughout the entire period, and the annualinterest expenses are 25.7 billion yen. The repayment method isequal principal payment over a period of roughly 10 years afterdeferring the payment of principal for about 30 years,
The funds procured from the FILP Loan will be applied only for thecost of construction of the Chuo Shinkansen. We ensure thetransparency of funds by setting a trust aimed at segment-based
management.
Illustrated plan of moving up live operation
2027
Existing
plan

Construction between
Shinagawa and Nagoya

Management strength
restoration period(8 years)Move up
operation

Construction between
Shinagawa and Nagoya

Construction between
Nagoya and Osaka

Construction between
Nagoya and Osaka

Live operationin Osaka

Live operationin Osaka

Equal principal
redemption overMoving up live operation by up to 8 years a period of about
10 years

FILP
Loan

Deferred fixed- / low-interest for about 30 years’20.3(plan)CENTRAL JAPAN RAILWAY COMPANY Annual Report 201983

Appendices

AppendicesFinancial Data Comparison of Three JR Companies (Consolidated)*1
Return on Equity

Operating Income/Total Assets

(%)
20

(%)
12

13.4

Shifts in JR Central’s Stock Price

Earnings per Share
(Yen)
2,500

2,238

7.8
10.0

10

Stock Information

9.8

5.9

6

6.2

JR-CENTRAL JR East

JR West

JR-CENTRAL JR EastNet Income/Operating Revenues

Equity Ratio

(%)
30

(%)
40

37.3

JR West

JR-CENTRAL JR East

36.7

(Yen)
18,00017,703

33.3

8,046

9,000

20

9.8

JR West

JR-CENTRAL JR East

Asset Turnover

Debt Ratio(Times)
1.0

(%)
200

166.7

0.4

JR West

JR-CENTRAL JR East

JR West2,200,000

22,0002,000,000

20,0001,800,000

18,0001,600,000

16,0001,400,000

14,0001,200,000

12,0001,000,000

10,000800,000

8,000

600,000

6,000

171.7

190.6

(Yen)

0.0

150

90

0

0

JR West

JR-CENTRAL JR East

JR WestNote: On October 1, 2012, the Company implemented a 100-for-1 stock split and employed a share unit system by which one share unit equals 100 shares.
Please refer to the left axis for stock prices before September 2012 and the right axis for stock prices after October 2012.

Name

175

180

145

100

4,000

Major Shareholders

Dividend per Share

0.2

JR-CENTRAL JR East

24,000Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May
2010 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2018 2019 2019 2019

0

0

0.5

2,400,000

400,000

0.0

0.5

26,000

5,612

6.7

JR-CENTRAL JR East

2,600,000

JR WestShareholders’ Equity per Share

23.4

15

533

0

0

(Yen)
28,000

1,250

773

0

(Yen)
2,800,000

JR-CENTRAL JR East

JR WestThe Master Trust Bank of Japan, Ltd. (Trust Account)

11,161,400

5.67%

10,546,500

5.35%

Mizuho Bank, Ltd.

8,642,300

4.39%

The Nomura Trust and Banking Co., Ltd. (Holder in Retirement Benefit Trust for MUFJ Bank, Ltd.)

7,125,000

3.62%

MUFJ Bank, Ltd.

6,678,100

3.39%

Nippon Life Insurance Company

5,000,000

2.54%

Toyota Motor Corporation

4,000,000

2.03%Japan Trustee Services Bank, Ltd. (Trust Account 5)

3,514,000

1.78%

The Dai-ichi Life Insurance Company, Ltd

3,423,900

1.74%

The Norinchukin Bank

3,350,000

1.70%

63,441,200

32.20%(Times)(Times)

4

10

2.7

2.7

9.9

8.9

40

32.8

5

2

19.4

20

JR-CENTRAL JR East

JR West0

JR-CENTRAL JR East

JR West0

JR-CENTRAL JR East

JR Central has been included in the following index for socially responsible investment (SRI).

MSCI Japan ESG Select Leaders Index is a SRI index
consisting of companies with high Environmental,
Social, and Governance (ESG) performance relative totheir sector peers, provided MSCI.

6.5
0[As of March 31, 2019]

(%)

7.8

3.0

Note: In addition to the above, JR Central holds 8,999,239 shares of treasury stock.

Dividend Payout Ratio

Interest Coverage Ratio*2

Percentage of total issued shares

Japan Trustee Services Bank, Ltd. (Trust Account)

Total

Financial Leverage

Number of shares held

JR WestECPI Indices is a socially responsible investment
index provided by ECPI, which investigates ESG(Environmental, Social and Governance) in a company
and provides its rating information. ECPI's main offices
are located in Luxembourg and Italy.

URL: https://english.jr-central.co.jp
Tel:(052 )564-2413 ,Fax:(052 ) 587-1300
E-mail: ir.msd@jr-central.co.jp*1 Figures are calculated by JR Central based on Financial Report of all JR companies for FY2018.
*2 (Operating income + Interest and dividend income) / Interest expense

84

CENTRAL JAPAN RAILWAY COMPANY Annual Report 2019CENTRAL JAPAN RAILWAY COMPANY Annual Report 201985