Management’s Discussion and Analysis of Consolidated Financial Conditions and Results of Operations for
FY2023.3 (MD&A)(Summary of business results in FY2023.3)
The business environment continued to be severe due to the impact of COVID-19. Against this backdrop, the JR Central
Group (the “Group”) placed the highest priority on ensuring safe and reliable transportation in the railroad operations, which isthe core of our business, and worked to further enhance our services, improve employees’ ability to perform their duties, andupgrade our facilities while working to prevent the spread of infection. In addition, we further strengthened our efforts to improve
efficiency and cost reduction across the entirety of business execution, including capital investment, which we have been working
tirelessly on, and made our utmost efforts to reduce costs without compromising safe and reliable transportation and the provisionof transportation services. Moreover, we worked on the reinforcement of earning power 1) by promoting reform of business
operations with the aim of reducing recurring costs by 80 billion yen on a non-consolidated basis over a period of 10 to 15 years
by building an efficient business execution structure and 2) by endeavoring to increase revenue based on new ideas.
For the Tokaido Shinkansen, we flexibly adjusted the transportation capacity that we provide based on passenger volume byutilizing the “12 Nozomi Timetable” while addressing the prevention of infection spread, to allow our customers to enjoy ourservices with peace of mind. In addition, the Group introduced the new N700S rolling stock and pushed forward with theremodeling work on the existing N700A rolling stock to add some of the functions of the N700S to it, while continuing topromote large-scale renovation for the Tokaido Shinkansen and earthquake countermeasures, including measures to prevent
derailment and deviation.
For the conventional lines, we flexibly increased the number of cars and trains for limited express trains, such as Shinano andHida, as necessary based on demand, while addressing the prevention of infection spread so that our customers could enjoy ourservices with peace of mind. We also switched all regular Hida trains to the Series HC85, a new hybrid model for limited express
trains, in March 2023. In addition, we systematically promoted earthquake countermeasures, such as reconstruction of theinspection and repair workshop building of the Nagoya rolling stock area and earthquake-proofing of elevated track columns, aswell as rainfall countermeasures, rockfall preventive measures, and improvement of railroad-crossing security equipment.
As part of our sales measures, we extended the service area of our online reservation and ticketless boarding services (“Express
Reservation” and “smartEX”) for the Tokaido and Sanyo Shinkansen to the Kyushu Shinkansen in order to promote greater useof them. As part of efforts to increase the use of our services, in addition to “Zurashi Travel” which we had proposed as a newstyle of travel, whereby customers choose different times, places, means of transportation, and activities at the destination fromthe “standard” trip, we also sold other attractive travel products, etc., including a campaign for “Oshi Travel Update,” which
proposes updated “Oshi Travel,” in which people pursue their own favorites, in cooperation with various business operators. We
also launched “Iza Iza Nara,” a new sightseeing campaign highlighting Nara. In addition, we worked to improve the businessenvironment in the train and stations. For example, we introduced business booths inside N700S rolling stock on a trial basis ina private room format, to be used on an ad hoc basis for meetings and web conferences. We also installed semi-private businessspaces in all Nozomi stations.
Regarding the Chuo Shinkansen project using the Superconducting Maglev System, we proceeded with land acquisition
between Shinagawa and Nagoya, for which section we received approval for the construction implementation plan. In addition,
construction work progressed steadily in various areas along the line. At Gifu Prefecture Station (tentative name) and Nagano
Prefecture Station (tentative name), among other places, we started full-scale construction work. In the Nagano section of theSouthern Alps Tunnel, excavation of the main tunnel was started. In the Kajigaya section and the Higashiyurigaoka section of
Metropolitan Tunnel No. 1, where deep underground excavation by a shield machine is taking place, survey tunneling work wasstarted to confirm the effectiveness of safety and security measures in the field. We will continue to focus on construction safety,
environmental protection, and coordination with local communities, and we will vigorously proceed with various types of
construction while thoroughly and carefully examining costs.
On the other hand, we have been unable to begin tunnel excavation in the Southern Alps Tunnel (Shizuoka Section) due tofailure to gain the understanding of Shizuoka Prefecture and other stakeholders. Meanwhile, with regard to the impact on thewater resources of the Oi River, we have been examining methods to return to the Oi River the same amount of water as theamount of spring water flowing out of the tunnel to outside Shizuoka Prefecture during a certain period of the construction as an
exception, and have been providing explanation to Shizuoka Prefecture and other stakeholders since April 2022, based on theinterim report on the Oi River water resource issues prepared in December 2021 by the Expert Conference on the Linear Chuo
Shinkansen Shizuoka Section of the Construction Site of the Ministry of Land, Infrastructure, Transport and Tourism (MLIT).
We have also been accepting comments and questions on the Oi River water resources since July 2022 in order to facilitate future
initiatives and explanations to local residents. We have been replying to the questions individually, and published the maincomments, questions, and replies in October 2022. Discussions on the issue of environmental preservation of the ecosystem, etc.
of the Southern Alps have been taking place at the Expert Conference since June 2022. We will continue to work diligently to- 1 -gain the understanding and cooperation of the local communities.
Meanwhile, we worked to further improve the Superconducting Maglev System technology and to further reduce the costs ofthe construction, operation, and maintenance of commercial lines by performing running tests on the Yamanashi Maglev Lineand verification tests at the Komaki Laboratory, on the premise that high-temperature superconducting magnets will be
introduced to commercial lines. In order to raise expectations toward the opening of the Chuo Shinkansen, we offered a trial rideon an improved testing vehicle exclusively for students to allow them to experience the Superconducting Maglev System, in
addition to similar trial rides that we have already been offering to general customers.
As for overseas high-speed railway project initiatives, we continued to work steadily on the High Speed Rail Project in the
U.S. We also provided technical consulting for the Taiwan High Speed Rail Corporation. In addition, we promoted efforts tomake the Japanese high-speed railway system an international standard.
Regarding businesses other than railways, we worked to increase revenues through the integrated operations of JR Central
Towers and JR Gate Tower, which has celebrated the fifth anniversary of its opening. We also worked to strengthen ourcompetitiveness and sales power by renovating station commercial facilities, such as First Avenue Tokyo Station, Asty
Ichinomiya, and Asty Kyoto, and promoting the development of spaces under elevated tracks. We prepared systematically forthe launch of “TOKAI STATION POINT,” a common points service available at the JR Central Group’s station commercial
facilities, scheduled for October 2023.
As a result, the total transportation result (passenger kilometers) in the fiscal year ended March 2023 increased by 56.7% year
on year to 50,183 million. Operating revenues increased by 49.7% year on year to 1,400.2 billion yen, ordinary income was
307.4 billion yen, and net income attributable to owners of the parent was 219.4 billion yen.
The above operating results by business segment are shown as follows.
Transportation
For the Tokaido Shinkansen, we flexibly adjusted the transportation capacity that we provide based on passenger volume byutilizing the “12 Nozomi Timetable” while addressing the prevention of infection spread, to allow our customers to enjoy ourservices with peace of mind. In addition, we have steadily proceeded with large-scale renovations while constantly reducing
costs, with the aim of maintaining and improving the soundness of civil engineering structures. As for earthquake
countermeasures, we worked on the prevention of derailment and deviation for all Tokaido Shinkansen lines, such as laying
derailment prevention guards. We also took measures against flooding to protect railway facilities based on hazard maps, etc. In
addition, we continued the deployment of N700S rolling stock, which has a space that can accommodate six wheelchairs, andoperated a reservation system for certain wheelchair compatible seats through “Express Reservations” and “smartEX” on a trial
basis. The Group also continued to introduce additional N700S rolling stock, which is a new model, while conducting
enhancement work to add certain functions of the N700S to the existing N700A type. In addition, we endeavored to ensure safe
and stable transportation and further enhance transportation services by starting the use of platform doors on platform No. 20 ofShin-Osaka Station, and completing the installation of platform doors in all Nozomi stations.
For the conventional lines, as for the Tokaido Shinkansen, we flexibly increased the number of cars and trains for limited
express trains, such as Shinano and Hida, as necessary based on demand, while addressing the prevention of infection spread sothat our customers could enjoy our services with peace of mind. In addition, we systematically promoted earthquake
countermeasures, such as reconstruction of the inspection and repair workshop building of the Nagoya rolling stock area andearthquake-proofing of elevated track columns, as well as rainfall countermeasures, rockfall preventive measures, andimprovement of railroad-crossing security equipment. Furthermore, we introduced additional Series 315 rolling stock, a new
type of commuter train whose commercial operation started in March 2022. We also introduced additional Series HC85 rollingstock, a new hybrid model for limited express trains whose commercial operation started in July 2022 for Hida trains. As a result,
all Hida trains were switched to the Series HC85 in March 2023. In addition, in January 2023, we started technologicalverification of platform safety confirmation by using cars that have installed car-side cameras. Regarding platform doors, weinstalled platform doors on the outbound platforms of Nagoya Station on the Tokaido Line, and made preparations for the
introduction a platform door opening/closing system that utilizes QR codes. Regarding braille blocks with inside lines thatindicate where platform edges are located, the installation was expanded to stations with more than 1,000 passengers per day,and the replacement of braille blocks is under way as part of our efforts to secure safe and reliable transportation and further
enhance our transportation services.
As an initiative common to both Shinkansen and conventional lines, we carried out practical training, etc. to respond to various
situations that are expected in the event of an abnormality, such as a natural disaster, or an unforeseen situation. Furthermore, as
an earthquake countermeasure, we took measures to prevent the suspended ceilings of stations from falling down, andimplemented seismic retrofitting work for storage sheds on station platforms.

- 2 -As part of sales measures, we extended the service area of “Express Reservation” and “smartEX” to the Kyushu Shinkansen
in order to promote greater use of them. In commemoration of the achievement of reaching 10 million members and registrantsof “Express Reservation” and “smartEX,” we conducted various campaigns, such as a “Doctor Yellow” trial ride event, inappreciation of the patronage of our customers. We made steady preparations for the scheduled launch in fall 2023 of a new“EX-MaaS” service (tentative name) to enable customers to make reservations and payments seamlessly for their entire trip,
including Shinkansen tickets, hotel rooms, sightseeing plans, etc. We have also enhanced the travel destination content of the“EX Travel Content Portal” site, which is accessible from “Express Reservation” and “smartEX” online pages, by providing
links to various contents offered by hotels and other facilities along the line. In order to increase the use of our services going
forward, we started sales of the “Chartered Car Package” whereby customers can charter one or more cars of a Tokaido
Shinkansen train to hold an event of their own in the car(s). In addition, we distributed attractive travel products in collaboration
with municipalities along the line and various business operators while advertising through the special websites and Twitter
accounts “Zurashi Travel” and “Oshi Travel Update,” where we propose a new style of travel. We also launched “Iza Iza Nara,”a sightseeing campaign highlighting Nara, and conducted various campaigns utilizing the sightseeing resources of other tourist
destinations, such as Kyoto, Tokyo, and Hida. Furthermore, we worked to improve the business environment in trains andstations. For example, we introduced business booths inside N700S rolling stock on a trial basis in a private room format, to be
used on an ad hoc basis for meetings and web conferences. We also installed semi-private business spaces in all Nozomi stations.
We also conducted a “Let’s Go Meet” campaign to encourage use for business travel by business users.
The total transportation result (passenger kilometers) in the fiscal year ended March 2023 increased by 68.5% year on year to42,418 million for the Tokaido Shinkansen, and increased by 13.5% year on year to 7,765 million for conventional lines.
In the bus business, although the situation remains severe, our efforts were focused on securing profits by developing products
in light of customer needs with top priority placed on safety.
As a result, operating revenues for the fiscal year ended March 2023 increased by 58.0% year on year to 1,134.0 billion yen,and operating income was 338.5 billion yen.

- 3 -The operating results of our railway business, which accounts for the majority of the transportation business, are as follows:

Category

FY2022.3(April 1, 2021
to March 31, 2022)

Unit
Shinkansen

Conventional lines

FY2023.3(April 1, 2022
to March 31, 2023)
Total

Shinkansen

Conventional lines

Total

Number of business days

days

365

365

365

365

365

365

Operating kilometers

kilometers

552.6

1,418.2

1,970.8

552.6

1,418.2

1,970.8

911,762

221,292

1,133,054

970,018

227,590

1,197,608

Rolling stock kilometers

thousandkilometers
thousand

10,289231,319

239,899

11,275

236,132

245,535

Other

thousand

73,221

88,520156,478

120,060

115,003226,858

thousand

83,511

319,839

396,377

131,335

351,135

472,393

millionpassenger
kilometers

25,176

6,840

32,01642,418

7,765

50,183

Commuter pass

million yen

11,79029,581

41,372

12,90930,18343,092Othermillion yen

578,055

37,815615,870

973,264

53,621

1,026,885

Totalmillion yen

589,846

67,396657,242986,173

83,805

1,069,978

Parcel carriage

million yen

－

2

2

－

2

2

Total

million yen

589,846

67,398657,244986,173

83,807

1,069,980

Railtrack’s accesschargesmillion yen

－

－

3,564

－

－

3,798

million yen－－

50,587－－

52,944

million yen－－

711,396－－

1,126,724

Seat utilization rate

Boarding efficiency

Seat utilization rate

Boarding efficiency

33.4

23.7

52.9

26.2

Passenger ridership

Commuter pass

Total

Passenger fares

Transportation revenues

Passenger kilometers

Miscellaneous incomesof transportation
Total revenue
Transport efficiency

%

－

－

Note: 1. The figures of Shinkansen and conventional lines in transportation revenues are categorized by passenger count. The total
passenger ridership excludes overlapping passengers for Shinkansen and conventional lines.
2. Transport efficiency is calculated using the following formula.
Seat utilization rate for Shinkansen =Boarding efficiency of conventional lines =Passenger kilometers
Available seat kilometers (train kilometers by composition x number of seats)

Passenger kilometers
Rolling stock kilometers x average capacity

x 100

x 100

3. The composition rate of ticket sales by other major JR companies (including travel agencies of the relevant companies) out
of transportation revenues is as follows:
Name of company

FY2022.3 (%)

FY2023.3 (%)

East Japan Railway Company

17.7

19.7

West Japan Railway Company

15.3

15.6

- 4 -

Merchandise and otherIn the merchandise and other business, as part of efforts to strengthen our revenue generating capabilities, we are undertaking
a major renovation of the luxury zone in JR Nagoya Takashimaya, and some of the stores there have already opened. We also
opened a food section in AEON Mall Okazaki. In addition, we conducted sales activities that are designed to meet customer
needs in Takashimaya Gate Tower Mall, which has celebrated the fifth anniversary of its opening. In order to enhance the lineup
of our products offered through our online shopping website, JR Central Market, where a wide range of online stores offer
popular products of stations and hotels and exclusive railway-related articles, we launched products commemorating the 30th
anniversary of the start of operation of Nozomi and products made of “Shinkansen recycled aluminum,” which was extracted
from retired Shinkansen rolling stock.
As a result, operating revenues for the fiscal year ended March 2023 increased by 35.1% year on year to 138.7 billion yen,and operating income was 8.3 billion yen.
Real estate
In the real estate business, we worked to strengthen our competitiveness and sales power through various measures, including
the renovation of station commercial facilities, such as First Avenue Tokyo Station, Asty Ichinomiya, and Asty Kyoto, and thedevelopment of spaces under elevated tracks, in addition to various campaigns and events commemorating the fifth anniversaryof opening of JR Gate Tower. In addition, we further expanded “EXPRESS WORK,” a workspace service provided mainly
inside stations and buildings directly connected to stations.
As a result, operating revenues for the fiscal year ended March 2023 increased by 7.2% year on year to 77.3 billion yen, andoperating income increased by 16.3% year on year to 17.3 billion yen.
Other
In the hotel business, we endeavored to provide high-quality services while preventing the spread of infection. In addition, we
stimulated demand by, for example, offering attractive guest rooms in collaboration with various business operators.
In the travel business, we distributed attractive travel products bound for Kyoto, Nara, Tokyo, Hida, and other areas incoordination with the “Zurashi Travel” campaign, which we propose as a new style of travel. In addition, we also launched newsightseeing plans in “Oshi Travel Update” in cooperation with various business operators.
In the rolling stock manufacturing business, we endeavored to receive orders for and manufacture rolling stock andconstruction machinery.
As a result, operating revenues for the fiscal year ended March 2023 increased by 6.4% year on year to 249.4 billion yen, andoperating income increased by 755.9% year on year to 10.0 billion yen.

- 5 -(Analysis of financial position, operating results, and cash flows status)
The forward-looking statements in the text represent the Group’s judgment as of the end of the consolidated fiscal year underreview.
(1) Operating results(i) Operating revenues
Operating revenues increased by 465.1 billion yen (49.7%) year on year to 1,400.2 billion yen.
In the transportation business, our transportation revenues increased by 412.7 billion yen (62.8%) year on year to 1,069.9
billion yen. As for the Tokaido Shinkansen, transportation revenues increased by 67.2% year on year to 986.1 billion yen due
to a year-on-year increase of 68.5% in the transportation result (passenger kilometers). As for the conventional lines,
transportation revenues increased by 24.3% year on year to 83.8 billion yen due to a year-on-year increase of 13.5% in thetransportation result (passenger kilometers).
In businesses other than the transportation business, the merchandise and other business, the real estate business, and theother business recorded increases in revenues of 35.1%, 7.2%, and 6.4%, respectively, on a year-on-year basis. As a result, allbusiness segments achieved revenue growth.
(ii) Operating expenses
Operating expenses increased by 92.3 billion yen (9.9%) year on year to 1,025.7 billion yen.
(iii) Operating income
Ordinary income increased by 372.7 billion yen to 374.5 billion yen.
(iv) Non-operating income and expenses
Non-operating income and expenses improved by 1.9 billion yen compared to the previous fiscal year.
(v) Ordinary income (loss)
Ordinary income totaled 307.4 billion yen, an improvement of 374.7 billion yen compared to an ordinary loss of 67.2 billion
yen in the previous fiscal year.
(vi) Net income (loss) attributable to owners of the parent
As a result of adding or subtracting income taxes to/from the above result, net income attributable to owners of the parent
was 219.4 billion yen, an improvement of 271.3 billion yen compared to a net loss attributable to owners of the parent of 51.9
billion yen in the previous fiscal year.
(2) Financial position
The balance of total assets as of the end of the fiscal year ended March 2023 increased by 63.8 billion yen from the end of theprevious fiscal year to 9,514.4 billion yen. The balance of assets by business segment is as follows: in the transportation business,
it decreased by 154.5 billion yen from the end of the previous fiscal year to 8,559.2 billion yen; in the merchandise and otherbusiness, it increased by 18.7 billion yen from the end of the previous fiscal year to 136.3 billion yen; in the real estate business,
it increased by 15.1 billion yen from the end of the previous fiscal year to 366.5 billion yen; and in the other business, it increasedby 30.7 billion yen from the end of the previous fiscal year to 420.4 billion yen.
The balance of total liabilities as of the end of the fiscal year ended March 2023 decreased by 133.9 billion yen from the endof the previous fiscal year to 5,707.2 billion yen. The balance of long-term debt as of the end of the fiscal year ended March2023 stood at 4,949.8 billion yen. Of this amount, the balance of long-term debt, excluding long-term debt for the constructionof the Chuo Shinkansen, stood at 1,949.8 billion yen, an increase of 8.1 billion yen compared to the end of the previous fiscal
year.
The balance of net assets at the end of the fiscal year ended March 2023 increased by 197.8 billion yen from the end of theprevious fiscal year to 3,807.1 billion yen, pushing up the equity ratio to 39.5% as of the end of the fiscal year ended March
2023, compared to 37.7% at the end of the previous fiscal year.
(3) Source of capital and liquidity of funds(i) Status of cash flows
Cash and cash equivalents (hereinafter, “funds”) as of the end of the fiscal year ended March 2023 increased by 91.0 billion
yen from a year earlier to 710.5 billion yen, and we judge that the liquidity of funds is secured.
Cash flows from operating activities were positive 486.7 billion yen. Net cash provided by operating activities increased by
414.9 billion yen, mainly due to an increase in our transportation revenues compared to an increase of 71.7 billion yen in theprevious fiscal year.
Cash flows from investing activities were negative 175.0 billion yen. Net cash provided by investing activities decreased
by 21.9 billion yen, mainly due to a decrease in proceeds from redemption of investment compared to a decrease of 153.0- 6 -billion yen in the previous fiscal year.
Cash flows from financing activities were negative 220.6 billion yen. Net cash provided by financing activities decreased
by 201.4 billion yen, mainly due to an increase in redemption of short-term bonds compared to a decrease of 19.1 billion yen
in the previous fiscal year.
(ii) Significant capital expenditure plans and the source of the funds
As stated in “Item 3 Equipment and Facilities 3 Plan for the construction, retirement, etc., of equipment and facilities(1) Construction, etc. of significant equipment and facilities.”(iii) Shareholder returns
As stated in “Item 4 Company Information 3 Dividend policy.”(iv) Fund procurement
Regarding fund procurement, it is our basic principle to secure the necessary funds on a stable, agile basis at a low interest
rate, taking into consideration capital investment plans for the Chuo Shinkansen and debt redemption plans, in light of
economic conditions and financial market trends.
During the fiscal year ended March 2023, we issued 18 billion yen in domestic straight bonds (green bonds) and raised 84.4
billion yen through long-term debts in order to fund the redemption of debt, capital investment, etc. We also issued 200.0
billion yen in short-term bonds in preparation for the continued decline in revenues due to the impact of COVID-19.
Regarding the construction of the Chuo Shinkansen, we have secured the funds necessary for the time being through longterm loans using the fiscal investment and loan program.
For smooth fund procurement, we received an A2 rating from Moody’s Japan K.K., an AA rating from Rating andInvestment Information, Inc., an A+ rating from S&P Global Ratings Japan Inc., and an AAA rating from Japan Credit Rating
Agency, Ltd.
Furthermore, we had established a commitment line of 100 billion yen as of the end of the fiscal year under review for the
purpose of securing short-term liquidity.
(4) Significant accounting estimates and the assumptions used for such estimates
The Company’s consolidated financial statements are prepared in accordance with the generally accepted accounting
principles in Japan. In preparing these consolidated financial statements, our estimates and judgments were made based on
various factors that we deem reasonable in the light of past results and situations. However, the actual results may differ fromthese estimates due to uncertainties inherent to the estimates.
Of the estimates in the Group, the discount rate and long-term expected rate of return on investments and other assumptions
for liability for retirement benefits and retirement benefit expenses are indicated in “Section 5 FINANCIAL RESULTS, 1.
Consolidated financial statements, etc., Notes (Retirement benefits accounting).” It should be noted that in the event where anychanges occur in the discount rate and long-term expected rate of return on investments, there will be an increase or a decreasein liability for retirement benefits and retirement benefit expenses due to the changes in retirement benefit liabilities.
As for deferred tax assets, please refer to “Section 5 FINANCIAL RESULTS, 1. Consolidated financial statements, etc., Notes(Significant Accounting Estimates)” for the relevant information.

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