Central Japan Railway Company
and Consolidated Subsidiaries
Consolidated Balance Sheet as of March 31, 2023,
and the Related Consolidated Statements of Operations,
Comprehensive Income, Changes in Equity,
and Cash Flows for the Year then Ended and Independent
Auditor’s ReportINDEPENDENT AUDITOR’S REPORTTo the Board of Directors of Central Japan Railway Company:
OpinionWe have audited the consolidated financial statements of Central Japan Railway Company and its
consolidated subsidiaries (the "Group"), which comprise the consolidated balance sheet as ofMarch 31, 2023, and the consolidated statement of operations, consolidated statement ofcomprehensive income, consolidated statement of changes in equity and consolidated statementof cash flows for the year then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as of March 31, 2023, and its
consolidated financial performance and its consolidated cash flows for the year then ended inaccordance with accounting 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.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of theGroup in accordance with the provisions of the Code of Professional Ethics in Japan, and we havefulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of our audit of the consolidated financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.
Information Technology ("IT") control related to passenger transportation revenue
How the Key Audit Matter Was
Key Audit Matter Description
Addressed in the Audit
As stated in Note 18 SEGMENT
Our audit procedures, with the assistance of our
INFORMATION to the consolidated financial
IT specialists, for the IT controls related tostatements, operating revenues from thepassenger transportation revenue stated on thetransportation business to external customers
left included the following, among others:
for the current fiscal year amounted to
1,123,437 million yen, which represented
1. Testing Contractor’s IT controls

80.2% of the operating revenues on the
consolidated financial statements. The
transportation business comprises the railway
business, the bus business, and otherbusinesses. Passenger transportation revenueof the railway business for Central Japan
Railway Company (the "Company") consists of
the Tokaido Shinkansen and conventional lines
in the Tokai region, amounted to 1,069,980
million yen, representing the majority of theoperating revenues of the transportation
business with external customers.
Passenger fares are subject to contracts withother Japan railway companies that allow
passengers to pay the total fares on routes
operated by all the railway companies, and thefares applicable to the Company's own routes
are recorded as the Company's passenger
transportation revenue. Since the Tokaido
Shinkansen is responsible for the passenger
transportation of Japan's main transportationartery between Tokyo and Osaka, theproportion allocated to the Company of tickets
sold in the operating areas of other Japanrailway companies, including travel agencies ofeach company, is relatively high.
Train tickets are sold through the Mars system,
which is an online system that is jointly used by
six Japan railway companies for sellingdesignated seat tickets and other tickets.
Regarding the utilization of the system, the six
Japan railway companies have jointly signed acontract with Railway Information Systems Co.,
Ltd. (the "Contractor"), and entrust theContractor with calculation work, such as
revenue clearing for tickets sold mutually byeach company. Passenger transportation
revenue is determined by receiving theclearing results from the Contractor of therevenue clearing business by collecting therevenue data through equipment, such as
ticket vending machines and theaforementioned online system. The mainprocesses, such as the aggregation processingof the revenue data, the calculation of therevenue clearing amount, and the interface
between the systems and the financial
accounting system, are highly reliant on the IT
system. In addition, the accuracy of thepassenger transportation revenue that consistsof high volume of daily usage data is

Regarding the design and operating
effectiveness of the internal controls over thesystem related to the Contractor's revenue
clearing operations, we inspected"Independent service auditor's assurance
report on the description of the service
organization's systems and the design andoperating effectiveness of internal controls"
issued by an independent auditor of theContractor, and we examined whether thegeneral information technology controls("GITCs") and IT application controls
corresponding to the accuracy of thecalculation processing of revenue clearing
were identified and tested.
2. Testing the Company's IT controls• We tested the design and operating
effectiveness of the IT application controls
over the interfaces between the IT systems
at the Contractor and the IT systems related
to passenger transportation revenue at theCompany through inspection of documents,
such as design documents, and assessed
the consistency of data for a series of IT
systems.
• We tested the design and operating
effectiveness of GITCs over the relevant IT
systems by inspecting test results at the timeof program changes and approval trails for
granting or changing access rights to
information resources.
3. Testing of the internal controls for the accurate
recording of passenger transportation revenue
We tested the design and operating
effectiveness of controls for the accurate
recording of passenger transportation revenue
through inquiries and inspection of related
documents. We specifically focused oncontrols over the accuracy related to theprocess in the revenue data management
system, such as tracking cash discrepancies
on a daily basis and comparing revenue
clearing results with those obtained from otherrailway companies.
In addition to the audit procedures performed fordependent on a properly functioning IT system.
Passenger transportation revenue isdetermined through the aggregated ticket
revenue amount of Japan railway companies
and the revenue clearing amount. It does notinclude the amount solely sold by theCompany. In addition, the effective design andstable operation of the Company's IT systems
are imperative for accurately recording
revenue derived from a high volume of daily
revenue data, and our testing of controls overthe IT systems required the involvement of IT
specialists. Therefore, we determined the IT
controls related to passenger transportation
revenue as a key audit matter.

IT controls of the Contractor and the Company,
our audit procedures for testing the accuracy ofpassenger transportation revenue included thefollowing, among others:• We performed a correlation analysis between
the passenger-kilometer, which is one of themeasurement units of passenger transportation,and the amount of revenue recorded frompassenger transportation. We also assessed
the fluctuation analysis of the cash receipts fromsales of tickets by station.
• On a sample basis, we tested revenue by
tracing it back to cash or credit card payments
and receipts or other relevant supporting
documents.
• We confirmed the balance of receivables fromcredit card companies and the balance ofreceivables from and payables to otherpassenger transportation companies for fares
distributions.

Accounting for capital investment in the railway business
How the Key Audit Matter Was
Key Audit Matter Description
Addressed in the Audit
As of March 31, 2023, the Group recorded net Our audit procedures related to the accounting
property, plant and equipment of 5,612,601
treatment of capital investment in the railway
million yen on the consolidated balance sheet, business included the following, among others:
most of which were related to the core railway
business. As stated in Note 18 SEGMENT
1. Testing of the internal controls over the
INFORMATION to the consolidated financial
accurate accounting treatment of capitalstatements, the increase in property, plant andinvestment
equipment and intangible assets in thetransportation business, including in the
We tested the design and operating
railway business, for the year ended March 31,
effectiveness of controls over the determination
2023, was 435,450 million yen. In addition toof accounting treatments for various capitalensuring safe and reliable transportation of theinvestments by making inquiries and inspecting
Tokaido Shinkansen and conventional lines,
documents. The evaluation focused specificallyand improving services, the Company hason the following:
made significant capital investments in theconstruction of the Chuo Shinkansen.
• Controls over the appropriate classificationof capitalizable expenditure (plan andRegarding the Chuo Shinkansen project, theapproval of the classified construction works
construction work between Tokyo and Nagoya
in accordance with the accounting policy forhas commenced and is currently in the firsteach type of construction)
stage. The project is deemed to be long-termand large in scale, and the significance of• Controls over the accuracy of fixed assets
capital investment related to the construction
recording (trace and agree the amountof the Chuo Shinkansen is increasing.
booked with relevant support such as
contracts)
The Company's capital investment is often

accompanied by constructions, and has thefollowing characteristics:• A large number of construction works are
performed at the same time, and themonetary amount per construction contract
is material. Also, changes in plans andspecifications from the initial contract areoften made in response to the progress ofconstruction.
• Construction contracts often include anumber of performance obligations, and theyoften include incidental construction, such as
the equipment removal and repairs, without
extending the useful life of the fixed assets
or increasing the asset value.
• Large-scale projects can take several years
to complete. In particular, most of the capital
expenditures related to the construction of
the Chuo Shinkansen are accounted for as
construction in progress for a long period oftime until future commencement of theoperation.
We determined the accounting for capital
investments in the railway business as a key
audit matter given the following considerations:• There are a large number of construction
contracts consisting of transactions that arequantitatively material individually;• Management judgment is required indetermining the appropriate classification ofwhether costs should be capitalized or
expensed; and• Controls over appropriate management of
the construction in progress balances(regular examination of construction inprogress detail by project)
2. Test of transactions related to the addition in
fixed assets and the construction in progressyear end balance• We selected samples from fixed assets
addition and tested the accuracy of amounts
booked by matching them with contracts andother supporting documents.
• In order to understand the current status of
the Chuo Shinkansen construction work,
which is a large-scale and long-term project,
we performed observations of theconstruction sites on a sample basis.
• Regarding projects involving incidental
construction activities, such as equipment
removal and repair, we obtained anunderstanding of the nature of expenditures
through inquiries of the Company's
personnel and inspected related supporting
documents such as contracts. In addition, we
tested the appropriateness of theclassification of capital expenditures and theexpenditures to be expensed.
• We obtained an understanding of the natureof expenditures and the planned timing ofcompletion of the construction by examining
administrative data of each construction. We
also tested whether any projects recorded inconstruction in progress should betransferred to fixed assets as they wereready for their intended use.

• The amount of construction in progress isextremely material, mainly due to the Chuo
Shinkansen construction work.

Other Information
Other information comprises the information included in the Group's disclosure documents
accompanying the audited consolidated financial statements, but does not include theconsolidated financial statements and our auditor's report thereon.
We determined that no such information existed and therefore, we did not perform any work
thereon.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for suchinternal 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.
In preparing the consolidated financial statements, management is responsible for assessing theGroup's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern in accordance with accounting principles generally accepted in Japan and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible foroverseeing the Directors' execution of duties relating to the design and operating effectiveness ofthe controls over the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and toissue an auditor's report that includes our opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conducted in accordance with auditing standards
generally accepted in Japan will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We
also:• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks. The
procedures selected depend on the auditor's judgment. In addition, we obtain audit evidence thatis sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain, when performing risk assessment procedures, an understanding of internal control
relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Group's internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group's ability to continue asa going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial
statements are in accordance with accounting principles generally accepted in Japan, as well as
the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board
regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bearon our independence, and where applicable, related safeguards.
From the matters communicated with Audit & Supervisory Board members and the Audit &Supervisory Board, we determine those matters that were of most significance in the audit of theconsolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Central Japan Railway Company and Consolidated Subsidiaries
Consolidated Balance Sheet
March 31, 2023

ASSETS

Millions of Yen(Note 2)
2023
2022

CURRENT ASSETS:
Cash and cash equivalents (Note 13)\
Money held in trust for the Chuo Shinkansen construction (Notes 3.c and 13)
Marketable securities (Notes 5 and 13)
Trade receivables and contract assets (Notes 12 and 13)
Allowance for doubtful accounts
Inventories
Prepaid expenses and other710,526
1,585,282
143,600
141,085(95)
37,337
94,548

Total current assets\

2,712,285

619,460
1,813,068
42,40098,763(106)
34,36974,809Thousands of
U.S. Dollars(Note 2)2023$

2,682,764

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term loans payable (Notes 6 and 13)
Current portion of long-term debt (Notes 6 and 13)
Current portion of long-term accounts payable—
railway facilities (Notes 8 and 13)
Trade payables (Note 13)
Provision for bonuses
Income taxes payable (Note 13)
Advances received
Other (Note 6）

5,342,300
11,919,413
1,079,699
1,060,789(714)
280,729
710,887

20,393,120

Investments and other assets:
Investment securities (Notes 5 and 13)
Investments in and advances to unconsolidated
subsidiaries and affiliates (Note 13)
Asset for retirement benefits (Note 9)
Deferred tax assets (Note 11)Long-term prepaid expenses and other
Allowance for doubtful accounts

616,764

758,176

4,637,323

17,155
5,763
217,495
332,831(487)

15,731
5,257
260,389
321,084(545)

128,984
43,3301,635,300
2,502,488(3,661)\

Total current liabilities

NONCURRENT ASSETS:NONCURRENT LIABILITIES:Long-term debt (Notes ６ and 13)
Long-term debt for the Chuo Shinkansen construction (Notes 3.c, 7 and 13)
Long-term accounts payable—railway facilities (Notes 8 and 13)
Provision for large-scale renovationof the Shinkansen infrastructure (Note 3.j)Liability for retirement benefits (Note 9)
Other (Note 11)

Total noncurrent liabilities

Total investments and other assets
Property, plant and equipment (Note 3.f):
Buildings and structures
Machinery, rolling stock and vehicles
Land
Construction in progress
Other
Total
Accumulated depreciation

1,189,522

1,360,093

8,943,774

5,037,457
1,543,827
2,367,843
1,571,185
196,875
10,717,190(5,104,588)

5,012,231
1,506,111
2,356,728
1,382,891
191,622
10,449,585(5,041,923)

37,875,616
11,607,721
17,803,330
11,813,421
1,480,263
80,580,375(38,380,360)

5,612,601

5,407,662

42,200,007

27,341
186,695\

30,73887,777$

205,571
1,403,721

6,937
297,661
26,811
44,21642,476
97,311

6,529
286,101
22,493
6,409
35,618261,645

52,1572,238,052
201,586
332,451
319,368
731,661

729,452

737,3145,484,601

1,243,192
3,000,000
513,050

1,327,396
3,000,000
519,988

9,347,308
22,556,390
3,857,518

182,801
38,80235,000180,830
40,736

1,374,443
291,7444,977,846

5,103,953

37,427,413

112,000
53,474
3,643,142

112,000
53,474
3,449,334

842,105
402,060
27,392,045(103,159)(103,159)(775,631)

49,5174,280
3,759,255
47,855

46,912
5,516
3,564,078
45,173372,308
32,18028,265,075
359,8123,807,110

3,609,252

28,624,887

CONTINGENCIES (Note 16)

Net property, plant and equipment
Total noncurrent assets

6,802,124

6,767,755

EQUITY (Notes 10 and 19):
Common stock—authorized, 824,000,000 shares;
issued, 206,000,000 shares in 2023 and 2022
Capital surplus
Retained earnings
Treasury stock—at cost, 9,200,852 shares in 2023
and 9,200,851 shares in 2022
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Remeasurements of defined benefit plans (Note 9)
Total
Noncontrolling interests

51,143,789

Total equity
TOTAL ASSETS

Thousands of
U.S. Dollars(Note 2)
2023

Millions of Yen(Note 2)
2023
2022

\

9,514,409\

9,450,519$

71,536,909

TOTAL LIABILITIES AND EQUITY

See notes to consolidated financial statements.

-9-\9,514,409\

9,450,519$

71,536,909

Central Japan Railway Company and Consolidated Subsidiaries
Consolidated Statement of Operations
Year Ended March 31, 2023
Thousands of
U.S. Dollars(Note 2)
2023

Millions of Yen(Note 2)
2023
2022
OPERATING REVENUES (Note 12)\ 1,400,285

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

935,139$

10,528,458

847,847
177,934

773,583
159,847

6,374,789
1,337,849

1,025,781

933,4317,712,639

374,503

1,708

2,815,812

OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense (Note 8)
Other—net

7,034(79,111)
3,706

6,229
(79,023)
4,340

52,887(594,819)
27,864

Other expenses—net(68,370)(68,453)(514,060)

INCOME (LOSS) BEFORE INCOME TAXES

306,132(66,745)

2,301,744

INCOME TAXES (Note 11):
Current
Deferred

41,00343,031

4,980(22,098)

308,293
323,541

84,034(17,117)

631,834

222,098(49,627)

1,669,909

2,680

2,300

20,150Total operating expenses
Operating income

Total income taxes
NET INCOME (LOSS)NET INCOME ATTRIBUTABLE TONONCONTROLLING INTERESTSNET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE PARENT\219,417\(51,928)

$

Yen
2023
PER SHARE OF COMMON STOCK (Note 3.r):Basic net income (loss)
Cash dividends applicable to the year\

See notes to consolidated financial statements.

- 10 -

1,114.93
135.00U.S. Dollars
2023

2022

\

(263.87)130.001,649,751

$

8.38
1.02

Central Japan Railway Company and Consolidated Subsidiaries
Consolidated Statement of Comprehensive Income
Year Ended March 31, 2023

Thousands of
U.S. Dollars(Note 2)Millions of Yen(Note 2)2023
NET INCOME (LOSS)\

222,098

2022\(49,627)2023$

1,669,909

OTHER COMPREHENSIVE INCOME(LOSS) (Note 17):
Unrealized gain (loss) on available-for-sale securities
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) in affiliates

2,781(1,256)8(328)(2,168)(19)

20,909(9,443)60

Total other comprehensive income (loss)

1,533(2,517)

11,526COMPREHENSIVE INCOME (LOSS)TOTAL COMPREHENSIVE INCOME (LOSS)ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests
See notes to consolidated financial statements.

- 11 -\

223,631\(52,144)$

1,681,436\

220,786
2,844\(53,352)
1,207$

1,660,045
21,383

Central Japan Railway Company and Consolidated Subsidiaries
Consolidated Statement of Changes in Equity
Year Ended March 31, 2023
Millions of Yen (Note 2)
Accumulated Other
Comprehensive Income
Unrealized
Gain onRemeasurements
Available-forof Defined
Benefit Plans
Sale Securities

Thousands

Outstanding
Number of
Shares ofCommon Stock

BALANCE, APRIL 1, 2021
Net loss attributable to owners of the parent
Dividends from surplus, ¥130 per share
Purchases of treasury stock
Disposal of treasury stock
Changes in the ownership interest by purchases of shares of
consolidated subsidiaries
Net change in the year
BALANCE, MARCH 31, 2022
Net income attributable to owners of the parent
Dividends from surplus, ¥135 per share
Purchases of treasury stock
Disposal of treasury stock
Changes in the ownership interest by purchases of shares of
Net change in the year
BALANCE, MARCH 31, 2023

196,777

CommonStock\112,000

CapitalSurplus

\

(0)
22

\

3,526,873\(103,578)\

46,157

\

7,695

\

3,642,622

112,000

53,474

3,449,334(103,159)$

842,105\

CapitalSurplus$3,643,142

\

(359)

46,912

5,516

3,564,078

45,1733,609,252

219,417(25,610)(0)$

25,934,842\

49,517

\

4,280

$

(775,631)$

352,721$

41,473\$(0)

19,578$402,060$

See notes to consolidated financial statements.

- 12 -

27,392,045$(775,631)\

26,797,578

47,855\

Noncontrolling
Interests$

339,646$$

372,308$

32,180$28,265,075

27,137,233
1,649,751(192,556)(0)(0)
10,293(9,285)

3,807,110

Total
Equity1,649,751(192,556)(0)(0)

842,105

3,759,255

(0)
4,051

2,682

Total

1,649,751(192,556)$

219,417(25,610)
(0)

(0)
1,369

(1,235)

Thousands of U.S. Dollars (Note 2)
Accumulated Other
Comprehensive Income
Unrealized
Gain onRemeasurements
Treasury
Available-forof Defined
Stock
Benefit Plans
Sale Securities

Retained
Earnings

402,060(103,159)

(0)
1,064

2,604
53,474(51,928)(25,610)(0)419(1,424)(0)\

3,686,731(2,179)(0)

112,000

\

(0)

(0)

\

44,108754

219,417(25,610)

196,799\

Total
Equity(51,928)(25,610)
(0)
419

(0)

196,799

Noncontrolling
Interests

Total

(0)
419

0

Net income attributable to owners of the parent
Dividends from surplus, $1.02 per share
Purchases of treasury stock
Disposal of treasury stock
Changes in the ownership interest by purchases of shares of
Net change in the year
BALANCE, MARCH 31, 2023

53,475

TreasuryStock(51,928)(25,610)

CommonStock

BALANCE, MARCH 31, 2022

Retained
Earnings(0)30,458

20,165$359,812$28,624,887

Central Japan Railway Company and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2023
Thousands of
U.S. Dollars(Note 2)Millions of Yen(Note 2)2023
OPERATING ACTIVITIES:
Income (loss) 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) decrease in trade receivables(Increase) decrease in inventories
Increase in trade payables
Increase in advances received
Decrease in liability for retirement benefits
Other—net\

Net cash provided by operating activities
INVESTING ACTIVITIES:Payments into time deposits
Proceeds from withdrawal of time deposits
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 received for construction
Purchases of investment securities
Proceeds from sales and redemption of investment securities
Purchase of investments in subsidiaries resulting
in change in scope of consolidation
Other—net
Net cash used in investing activities
FORWARD\

306,132

2022\(66,745)2023$

2,301,744(6,485)
219,614(173)(1,329)1,992
6,817(1,404)(79,060)
207,039(182)(4,730)4,679
5,578(2,370)(48,759)
1,651,233(1,300)(9,992)
14,97751,255(10,556)(35,000)(37,102)(2,192)
7,118
6,869
(317)
22,166(35,000)
11,123
8,090
11,583
3,618(1,240)9,361(263,157)(278,962)(16,481)
53,51851,646(2,383)
166,661486,706

71,746

3,659,443(28,700)
28,700(31,000)
31,000(215,789)
215,789

227,786(70,000)
70,000(427,192)
4,054(3,499)50,302

263,090(71,100)
71,100(450,554)
2,864(2)
62,164

1,712,676(526,315)
526,315(3,211,969)
30,481(26,308)378,210(26,488)(30,611)(199,157)(175,036)(153,049)(1,316,060)

311,670\(81,303)$2,343,383(Continued)- 13 -

Central Japan Railway Company and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2023
Thousands of
U.S. Dollars(Note 2)Millions of Yen(Note 2)
2023
FORWARD\

FINANCING ACTIVITIES:Net (decrease) increase in short-term loans payable
Proceeds from issuance of short-term bonds
Redemption of short-term bonds
Proceeds from long-term debt
Repayments of long-term debt
Payments for long-term accounts payable—
railway facilities
Cash dividends paid
Purchases of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid to noncontrolling interests
Other—net

311,6702022\(81,303)2023$

2,343,383(3,397)200,000(400,000)
102,440(87,777)745
200,000(200,000)
145,500(130,359)(25,541)
1,503,759(3,007,518)
770,225(659,977)(6,529)(25,610)(0)(49,090)(192,556)
(0)

(161)
432

(6,146)(25,610)
(0)
336
(141)
(3,502)

Net cash used in financing activities(220,604)(19,178)(1,658,676)

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

91,066(100,481)

684,706

CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR

619,460

719,941

4,657,593(1,210)3,248

CASH AND CASH EQUIVALENTS,
END OF YEAR\

710,526\

619,460$

5,342,300

ADDITIONAL CASH FLOW INFORMATION:
Interest paid\

78,867\78,816$592,984

See notes to consolidated financial statements.
(Concluded)- 14 -

Central Japan Railway Company and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
Year Ended March 31, 2023

1.

INCORPORATION OF CENTRAL JAPAN RAILWAY COMPANY
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 succeeded by 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")), the former Railway Telecommunication Co., Ltd., Railway Information Systems Co., Ltd., andthe 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 theassets 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 Minister of Land,
Infrastructure, Transport and Tourism regarding fundamentals such as: (1) commencement of businessother than railway and its related business, (2) the appointment or dismissal of representative directors
and corporate auditors, (3) the issuance of new shares and bonds, (4) long-term loans payable,(5) amendments to the Articles of Incorporation, (6) operating plans, (7) sales of material assets,(8) appropriations of earnings and (9) merger or dissolution. As of December 1, 2001, since the Law wasrevised 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 inJapan. 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 andLiabilities of the JNRSC enacted in October of 1998, the Company's shares held by the JNRSC weretransferred 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 CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions 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 the application and disclosure requirements of International Financial
Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements havebeen made to the consolidated financial statements issued domestically in order to present them in aform which is more familiar to readers outside Japan.

- 15 -

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 of readers outside Japan and have been made at therate of ¥133 to $1, the approximate rate of exchange as of March 31, 2023. Such translations should not
be construed as representations that the Japanese yen amounts could be converted into U.S. dollars atthat 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 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 ACCOUNTING POLICIESa. Principles of Consolidation—The accompanying consolidated financial statements as of March 31,
2023, include the accounts of the Company and its 29 (29 in 2022) significant subsidiaries (together,the "Companies").
Under the control and influence concepts, those companies in which the Company, directly or
indirectly, is able to exercise control over operations are consolidated, and those companies overwhich the Company has the ability to exercise significant influence are accounted 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 effect on the accompanying consolidated
financial statements would not be material.
The difference between the cost of acquisition and the fair value of the equity of an acquired
subsidiary at the date of acquisition is fully amortized when incurred.
All significant intercompany balances and transactions have been eliminated in consolidation. All
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 thesubsidiary 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 of changes in value. Cash equivalents include time
deposits, certificates of deposit and others, all of which mature or become due within three months ofthe date of acquisition.
c. Money Held in Trust for the Chuo Shinkansen Construction and Long-Term Debt for the Chuo
Shinkansen Construction — The Company has received loans from the JRTT for the further
construction of the Chuo Shinkansen, and the money is placed in the trust fund to segregate it fromother money.
d. Inventories— Inventories are stated at the lower of cost, principally determined by the retail method
for merchandise, by the specific identification 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 formaterials 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, forwhich 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 the aforementioned securities, are reported
at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate- 16 -

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 costof the related assets. The accumulated contributions deducted from the cost of property, plant andequipment as of March 31, 2023 and 2022 amounted to ¥297,969 million ($2,240,368 thousand),and ¥296,760 million, respectively.
Depreciation is computed substantially 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 2 to 60 years for buildings 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 replacement-accounting method.

g. Long-Lived Assets—The Companies review their long-lived assets for impairment whenever eventsor changes in circumstances indicate the carrying amount of an asset or asset group may not berecoverable. An impairment loss is recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected to result from the continued use
and eventual disposition of the asset or asset group. The impairment loss would be measured as theamount by which the carrying amount of the asset exceeds its recoverable amount, which is thehigher 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 Shinkansen Infrastructure— Provision for large-scalerenovation of Shinkansen infrastructure is provided based on the Nationwide Shinkansen Railway
Development Law. In accordance with the Nationwide Shinkansen Railway Development Law andRegulations, the Company reversed the provision in the amount of ¥35,000 million ($263,157
thousand) for the year ended March 31, 2023 and ¥35,000 million for the years ended March 31,
2022. The reversal was completed in March 2023.

k. Retirement and Pension Plans—The Company and 28 consolidated subsidiaries have unfunded
retirement plans covering substantially all of their employees. Six consolidated subsidiaries havenoncontributory defined benefit pension plans and one consolidated subsidiary has a defined
contribution pension plan, some of those subsidiaries also have unfunded retirement plans. Some ofthe subsidiaries adopt the simplified 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 andplan 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 a straight-line basis mainly over
five years, which is within the average remaining service period. Prior service costs are amortized ona straight-line basis mainly over five years, which is within the average remaining service period.

l.

Revenue Recognition—The principal performance obligations of the Companies in the principal
businesses and the normal time at which revenue is recognized are as follows:- 17 -

Transportation
In addition to railway operations on the Tokaido Shinkansen and conventional lines in the Tokai
region, the Transportation segment conducts bus operations and other operations. The segment hasa performance obligation to provide transportation services based on transportation contracts withcustomers.
Of these transportation services, ordinary tickets are recognized as the Companies determine that
performance obligations are satisfied upon completion of the delivery of the transportation service, in
principle. In addition, performance obligations are satisfied over a specified period of time forcommuter passes and revenues are recognized over the effective period.
Merchandise and Other
The Merchandise and Other segment operates a department store business within JR Central
Towers and primarily sells products on train and station premises and has performance obligations todeliver merchandise under sales contracts with customers.
Such performance obligations are determined to be satisfied upon delivery of the merchandise andrevenue is recognized at the time of delivery.
Revenue is recognized on a net basis for sales of merchandise that we believe qualify as agent
transactions, such as transactions that we consider to have purchased the merchandise at the pointof sale.
Real Estate
In the Real Estate segment, in addition to the real estate leasing business for station buildings andother properties, the Companies engage in the real estate sales business.
The real estate leasing business is a transaction that is included in the scope of "AccountingStandard for Lease Transactions" (ASBJ Statement No. 13, March 30, 2007), etc., and lease fees
are recognized as revenue over the contracted period.
With respect to the real estate sales business, the Companies are obligated to deliver properties
pursuant to real estate purchase and sale contracts with our customers. Such performanceobligations are determined to be satisfied upon delivery of the property and revenue is recognized at
the time of delivery.
m. Research and Development Costs—Research and development costs are charged to income as
incurred. Research and development costs charged to income were ¥30,325 million ($228,007
thousand) and ¥28,764 million for the years ended March 31, 2023 and 2022, respectively.
n. Leases—Lease assets of finance leases that were not deemed to transfer ownership of the leased
property are depreciated and amortized by the straight-line method over the lease period.
o. Income Taxes—The provision for income taxes is computed based on the pretax income included in
the consolidated statement of operations. The asset and liability approach is used to recognize
deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes aremeasured by applying currently enacted tax laws to the temporary differences.
p. Appropriations of Retained Earnings—Appropriations of retained earnings are reflected in the
consolidated financial statements for the following year upon shareholders' approval.
q. 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 foreignexchange risks. The Companies do not enter into derivatives for trading or speculative purposes.
Foreign currency swaps, which qualify for hedge accounting and specific matching criteria, are notremeasured at market value, but the hedged debt is translated at the contracted rates of the foreign
currency swaps. Interest rate swaps, which qualify for hedge accounting and meet specific matching- 18 -

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 the contracted rates, and thedifferential paid or received under the swap agreement is recognized and included in interest
expense.
r.

Per Share Information—Basic net income (loss) per share is computed by dividing net income(loss) attributable to owners of the parent available to common shareholders by theweighted-average number of common shares outstanding for the period.
Net income (loss) attributable to owners of the parent available to common shareholders used in thecomputation for 2023 and 2022 were ¥219,417 million ($1,649,751 thousand) and ¥(51,928) million,
respectively. The average number of common shares used in the computation for 2023 and 2022
were 196,799,149 shares and 196,797,600 shares, respectively.
The average number of shares of the Companies held by the employee stock ownership trust for theyears ended March 31, 2023 and 2022 was 0 shares and 1,567 shares, respectively, and it has been
deducted from the weighted-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 operations are
dividends applicable to the respective years, including dividends to be paid after the end of the year.

s. New accounting pronouncements—The ASBJ issued ASBJ Statement No. 27, “AccountingStandard for Income Taxes, Residential and Enterprise Taxes”, ASBJ Statement No. 25 “AccountingStandard for Presentation of Comprehensive Income” and ASBJ Guidance No. 28 “Implementation
Guidance on Accounting Standard for Tax Effect Accounting” on October 28, 2022. Accounting
treatments under this standard and guidance are as follows:
In February 2018, ASBJ Statement No. 28, "Partial Amendment of Accounting Standard for Tax EffectAccounting" (ASBJ Statement No. 28, etc.) was issued. The transfer of the Practical Guidance on Tax
Effect Accounting to the Accounting Standards Board of Japan was completed by the JapaneseInstitute of Certified Public Accountants. In the course of its deliberation, the following two issues
were reviewed and announced after the issuance of ASBJ Statement No. 28, etc.
(1)Tax expense classification (taxation of other comprehensive income)(2)Tax effect on sales of shares of subsidiaries (shares of subsidiaries or affiliates) under the Group
Taxation Regime.
The Company expects to adopt the accounting standards and guidance for annual periods beginningon April 1, 2024, and is in the process of measuring the effects of applying the accounting standard
and guidance in future applicable periods.
t.

Accounting Changes and Error Corrections—In March 2020, 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 applied following the 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 the specific transitional provisions.
(2) Changes in Presentation—When the presentation 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 thechange 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 of Prior-Period Errors—When anerror in prior-period financial statements is discovered, those statements are restated.

- 19 -

4.

SIGNIFICANT ACCOUNTING ESTIMATEThe Company’s consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in Japan. In preparing these consolidated financial statements, although
the estimates were made based on past results and various reasonable factors depending on thesituation, because of uncertainty unique to estimates, actual results could differ from these estimates.
Of the accounting estimates, deferred tax assets are recognized for deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable that they can be used against
future taxable profit. However, estimated taxable profit could be revised due to changes in uncertain
economic conditions in the future, and when the future taxable profit is revised, it could affect theamount of deferred tax assets for the next fiscal year and subsequent fiscal years. Even if the use of
trains is retained in the future, the recoverability of the deferred tax assets is deemed not to be affected.
The amount and details of deferred tax assets are included in Note 11.

5.

MARKETABLE AND INVESTMENT SECURITIESInformation regarding marketable and investment securities with readily determinable fair values
classified as available-for-sale and held to maturity as of March 31, 2023 and 2022, was as follows:

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

95,875
276
584,600
680,751

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

97,540276
627,000
724,817

Cost
Securities classified as:
Available for sale:
Equity securities$ 720,864
Trust fund investment and other2,075
Held to maturity
4,395,488
Total$ 5,118,428- 20 -

Millions of Yen
2023
Unrealized
Unrealized
Gain
Loss

¥

¥

76,351117
1476,483

Fair
Value

¥

5,911

¥

¥

1,787
7,698

¥

Millions of Yen
2022
Unrealized
Unrealized
Gain
Loss

¥

¥

74,25777
124
74,459$$574,067879
105
575,060

Fair
Value

¥

6,972

¥

¥

1,814
8,786

¥

Thousands of U.S. Dollars
2023
Unrealized
Unrealized
Gain
Loss

$

44,443$

13,43657,879166,314393
582,827
749,536

164,826353
625,310
790,490

Fair
Value

$ 1,250,481
2,954
4,382,157$ 5,635,609

The information for available-for-sale securities whose fair value is not readily determinable as of March
31, 2023 and 2022, is disclosed in Note 13.
During the year ended March 31, 2022, the portions of held-to-maturity securities were sold based on acomprehensive judgment based on the operation policy, etc., but the information of the sale was notpresented because they were immaterial. There are no sales of held-to-maturity securities during theyear ended March 31, 2023.
The transactions related to sales of other securities for the years ended March 31, 2023 and 2022 were
not presented as the effect was immaterial.
The impairment loss on marketable and investment securities for the years ended March 31, 2023 and2022 was not presented as the effect was immaterial.

6.

SHORT-TERM LOANS PAYABLE, SHORT-TERM BONDS AND LONG-TERM DEBT
The interest rates applicable to short- term loans payable was 0.14% as of March 31, 2023 and 2022.
Short-term bond and Long-term debt held by the Company as of March 31, 2023 and 2022, consisted of
the following:

Millions of Yen
2023
2022
The Company
Unsecured 2.39% bonds due 2026
Unsecured 2.31% bonds due 2027
Unsecured 2.30% bonds due 2027
Unsecured 2.39% bonds due 2028
Unsecured 2.391% bonds due 2028
Unsecured 2.646% bonds due 2038
Unsecured 2.166% bonds due 2029
Unsecured 2.312% bonds due 2029
Unsecured 2.556% bonds due 2039
Unsecured 2.321% bonds due 2029
Unsecured 2.157% bonds due 2029
Unsecured 2.375% bonds due 2039
Unsecured 2.212% bonds due 2030
Unsecured 2.111% bonds due 2030
Unsecured 1.797% bonds due 2030
Unsecured 2.083% bonds due 2031
Unsecured 1.895% bonds due 2031
Unsecured 1.824% bonds due 2032
Unsecured 1.725% bonds due 2033
Unsecured 1.807% bonds due 2033
Unsecured 1.786% bonds due 2033
Unsecured 1.629% bonds due 2033
Unsecured 1.623% bonds due 2034
Unsecured 1.584% bonds due 2034
Unsecured 1.502% bonds due 2034
Unsecured 1.309% bonds due 2032
Unsecured 1.917% bonds due 2044
Unsecured 1.362% bonds due 2034
Unsecured 1.014% bonds due 2035¥

- 21 -

29,796
9,996
4,999
19,99330,00010,00030,00030,00010,00030,00040,00010,00030,00020,00010,00020,00010,00010,0005,000
15,00015,00010,00015,00015,00020,00015,00010,00020,00020,000¥29,795
9,995
4,998
19,99230,00010,00030,00030,00010,00030,00040,00010,00030,00020,00010,00020,00010,00010,0005,000
15,00015,00010,00015,00015,00020,00015,00010,00020,00020,000Thousandsof U.S.
Dollars2023$

244,030
75,15737,586150,323
225,563
75,187
225,563
225,563
75,187
225,563
300,751
75,187
225,563
150,375
75,187150,375
75,18775,18737,593112,781
112,781
75,187112,781
112,781
150,375
112,781
75,187150,375
150,375

Unsecured 1.685% bonds due 2045
10,000Unsecured 1.196% bonds due 2035
15,000Unsecured 1.297% bonds due 2035
15,000Unsecured 1.210% bonds due 2035
15,000Unsecured 1.018% bonds due 2036
15,000Unsecured 0.421% bonds due 2036
10,000Unsecured 0.001% bonds due 2023
100,000
Unsecured 0.897% bonds due 2056
20,00020,000Unsecured 1.091% bonds due 2057（Green bonds）
10,000Unsecured 1.243% bonds due 2057（Green bonds）
8,000
Unsecured 1.584% bonds due 2057（Green bonds）
Short-term (△0.010%) bonds due 2022
Short-term (△0.000%) bonds due 2022
U.S. dollar 4.25% bonds due 2045 issued abroad
36,526
U.S. dollar 3.40% bonds due 2023 issued abroad
39,002
U.S. dollar 2.20% bonds due 2024 issued abroad
80,489Unsecured loans from Japanese banks andothers, with interest rates
ranging from 0.61% to 2.27% (2023), 0.61% to 2.27%(2022), due 2022 to 2045
¥ 521,082
Total
1,429,887
Less current portion(186,695 )Long-term debt, less current portion¥ 1,243,192

10,00015,00015,00015,00015,00010,000100,000
20,00020,00075,187112,781
112,781
112,781
112,781
75,187
751,879
150,375
150,375
75,18760,150200,000
36,50538,99180,474

274,631
293,248
605,180¥ 524,420
1,615,174(287,777 )¥ 1,327,396$ 3,917,909
10,751,030(1,403,721 )$ 9,347,308

There are no debts held by consolidated subsidiaries as of March 31, 2023 and 2022.
Annual maturities of debt outstanding at the principal amounts as of March 31, 2023, were as follows:Year Ending
March 31
2024
2025
2026
2027
2028
Thereafter
Total

Millions of Yen

Thousands of
U.S. Dollars

¥

$

¥

186,700
116,762
76,200135,300
119,440
796,015
1,430,418

1,403,759
877,909572,932
1,017,293
898,045
5,985,075$ 10,755,022

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 theprimary responsibility for the liability by these agreements. The outstanding bonds covered by these
agreements as of March 31, 2023 and 2022, were as follows:

Millions of Yen
2023
Unsecured 2.200% bonds due 2022
Unsecured 1.740% bonds due 2022
Unsecured 1.150% bonds due 2022
Unsecured 1.310% bonds due 2033
Unsecured 2.015% bonds due 2023
Unsecured 2.200% bonds due 2024¥¥

- 22 -

10,000
9,000
9,900

2022
18,20020,00025,00010,0009,000
9,900

Thousands of
U.S. Dollars
2023$

75,187
67,66974,436

Unsecured 2.210% bonds due 2024
Unsecured 2.405% bonds due 2026
Unsecured 2.310% bonds due 2027
Unsecured 2.300% bonds due 2027
Unsecured 1.725% bonds due 2033
Total

¥

9,650
9,900
10,00010,0005,000
73,450 ¥

9,650
9,900
10,00010,0005,000
136,650$

72,55674,43675,18775,18737,593552,255

The aforementioned bonds for which the Company entered into debt assumption agreements have been
derecognized in the consolidated balance sheet and disclosed as contingent liabilities (see Note 16).
The Company has credit commitments from banks. Total unused credit available to the Company as of March
31, 2023, was ¥100,000 million ($751,879 thousand).

- 23 -

7． 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 the further construction of the Chuo Shinkansen.
The average interest rates of long-term debt for the Chuo Shinkansen construction as of March 31, 2023,
were 0.86%.
Annual maturities of long-term debt for the Chuo Shinkansen construction as of March 31, 2023, were as
follows:
Year Ending
March 31
2024
2025
2026
2027
2028
Thereafter
Total

8.

Millions of Yen

Thousands of
U.S. Dollars¥¥$ 22,556,390$ 22,556,390

3,000,000
3,000,000

LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIESLong-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 paid off ¥4,494,466 million by January 2017.
The average interest rates of long-term accounts payable—railway facilities excluding current portion asof March 31, 2023, were 6.51%.
Annual maturities of long-term accounts payable—railway facilities as of March 31, 2023, were as
follows:
Year Ending
March 31
2024
2025
2026
2027
2028
Thereafter
Total

Millions of Yen
¥
6,937
7,373
7,837
8,333
8,861
480,645¥519,988

Thousands of
U.S. Dollars$
52,15755,43658,92462,654
66,624
3,613,872$ 3,909,684

Interest expense on the aforementioned long-term accounts payable—railway facilities amounted to¥34,132 million ($256,631 thousand) and ¥34,516 million for the years ended March 31, 2023 and 2022,
respectively.

- 24 -

9.

RETIREMENT AND PENSION PLANS
Employees whose service with the Company and consolidated subsidiaries is terminated are entitled toretirement and pension benefits determined by reference to accumulated points during theiremployment 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 of retirement benefits and retirement benefit expenses.
a. The changes in defined benefit obligation for the years ended March 31, 2023 and 2022, were as
follows:
Thousands of
U.S. Dollars

Millions of Yen
2023
Balance at beginning of year
(as previously reported)
Current service cost
Interest cost
Actuarial (gains) losses
Benefits paid
Prior service cost
Balance at end of year¥¥

204,753
14,809844(722)(12,525)
6
207,165

2022

¥

¥

202,128
14,674811
367(13,179)(48)
204,753

2023

$

$

1,539,496
111,345
6,345(5,428)(94,172)45
1,557,631

The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt thesimplified accounting method, are included in the current service cost.
b. The changes in plan assets for the years ended March 31, 2023 and 2022, were as follows:

Millions of Yen
2023
2022
Balance at beginning of year
Expected return on plan assets
Actuarial gains
Contributions from the employer
Benefits paid
Balance at end of year¥¥

- 25 -

29,180 ¥
435
(43)
1,373
(818)
30,127 ¥28,179
399
(26)
1,363
(736)
29,180Thousands of
U.S. Dollars
2023
$

$

219,398
3,270(323)
10,323(6,150)226,518

c. Reconciliation between the liability recorded in the consolidated balance sheet and the balances ofdefined benefit obligation and plan assets as of March 31, 2023 and 2022, was as follows:
Millions of Yen
2023
2022
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¥¥

25,605 ¥(30,127)(4,521)
181,560

25,230(29,180)(3,950)179,523

177,038
182,801(5,763)

175,572
180,830(5,257)177,038 ¥

175,572

Thousands of
U.S. Dollars
2023$

192,518(226,518)(33,992)
1,365,112
1,331,112
1,374,443(43,330)$

1,331,112

d. The components of net periodic benefit costs for the years ended March 31, 2023 and 2022, were as
follows:
Millions of Yen
2023
2022
Service cost
Interest cost
Expected return on plan assets
Recognized actuarial gains
Amortization of prior service cost
Net periodic benefit costs¥ 14,809844(435)(2,369)(261)¥ 12,587¥ 14,674
811(399)(2,417)(261)¥ 12,407

Thousands of
U.S. Dollars
2023
$

$

111,345
6,345(3,270)(17,812)(1,962)
94,639The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt thesimplified 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, 2023 and 2022, were as follows:
Millions of Yen
2023
2022
Actuarial gains
Prior service costTotal

¥ (1,690)(267)¥ (1,958)- 26 -¥ (2,811)(212)¥ (3,024)

Thousands of
U.S. Dollars
2023
$
$

(12,706)(2,007)(14,721)

f. Amounts recognized in accumulated other comprehensive income (before income tax effect) in
respect of defined retirement benefit plans as of March 31, 2023 and 2022, were as follows:
Millions of Yen
2023
2022
Unrecognized actuarial losses
Unrecognized prior service cost
Total
g. Plan assets

¥
¥

7,341
455
7,796

¥
¥

9,032
723
9,755

Thousands of
U.S. Dollars
2023
$
$

55,195
3,421
58,616(1) Components of plan assets
Plan assets as of March 31, 2023 and 2022, consisted of the following:
2023
2022
Equities
General security account
Bonds
Others
Total

44 %
33
10
12
100 %

45 %
32
11
12
100 %

The employee retirement benefit trust for the Companies’ contributory pension plans accounted for
37% of total plan assets for the years ended March 31, 2023 and 2022.

(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 thevarious components of the plan assets.
h. Assumptions used for the years ended March 31, 2023 and 2022, were set forth as follows:

Discount rate
Expected rate of return on plan assets

2023

2022

Mainly 0.4%
1.2% to 2.0%

Mainly 0.4%
1.2% to 2.0 %i. Defined contribution plan
Total contribution by the Companies for the defined contribution plan was ¥152 million ($1,142
thousand) for the year ended March 31, 2023 and ¥144 million for the year ended March 31, 2022.

- 27 -

10.

EQUITYJapanese 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 of service of the directors being prescribedas 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 theCompany has prescribed so in its articles of incorporation.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) toshareholders 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 the company 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 the shareholders, but the amount ofequity after dividends must be maintained at no less than ¥3 million.
b. Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as alegal reserve (a component of retained earnings) or as additional paid-in capital (a component of
capital surplus), depending on 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 appropriated defined amount as a legal reserve or additional paidin capital. Under the Companies 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, other capital surplus and retained earnings-unappropriated can betransferred among the accounts within equity under certain conditions upon resolution of theshareholders.
c. Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of suchtreasury stock by resolution of the Board of Directors. The amount of treasury stock purchased
cannot exceed the amount available for distribution to the shareholders which is determined by aspecific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights
and treasury stock. Such treasury stock acquisition rights are presented as a separate component ofequity or deducted directly from stock acquisition rights.

- 28 -

11.

INCOME TAXESThe Companies are subject to Japanese national and local income taxes which, in the aggregate,
resulted in a normal effective statutory tax rate of approximately 30.3% for the years ended March 31,
2023 and 2022.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred
tax assets and liabilities as of March 31, 2023 and 2022, were as follows:

Millions of Yen
2023
2022
Deferred tax assets:
Depreciation and amortization
Liability for retirement benefits
Tax loss carryforwards
SoftwareLoss on write down of investment securities
Unrealized profit on property, plant and equipment
Provision for bonuses
Accrued railway usage charges
Other
Total
Less valuation allowance for tax loss carryforwards
Less valuation allowance for temporary differences
Total less valuation allowance
Deferred tax assets
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- 29 -

Thousands
ofU.S. Dollars
2023¥ 94,053
57,81857,07013,192
13,190
8,954
8,270
2,101
33,816
288,467(11,877 )(31,596 )(43,473 )
244,993¥ 87,908
57,613
114,107
14,54813,080
8,732
6,931
2,342
33,953
339,219(13,914 )(35,386 )(49,301 )289,917$707,165434,721429,097
99,187
99,172
67,32362,18015,796254,255
2,168,924(89,300)(237,563)(326,864)
1,842,052

20,951
4,297
4,053
29,302

22,446
4,286
4,590
31,322

157,526
32,30830,473
220,315¥ 215,691¥ 258,595$ 1,621,736

The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred
tax assets as of March 31, 2023 and 2022, were as follows:

Millions of Yen
March 31,2023

1 Yearor
Less

After 1Year
through
2 Years

After 4Years
through
5 Years

After 5
Years

Total

¥ 2,408¥54,547¥57,070(11,835 )(11,877 )¥ 2,408¥42,712¥45,193

After 4Years
through
5 Years

After 5
Years

Total

Deferred tax
assetsrelating to tax
loss
carryforwardsLessvaluation
allowances
for tax loss
carryforwards¥¥114,012¥114,107(13,914 )(13,914 )Net deferred
tax assets
relating to tax
loss
carryforwards¥¥100,097¥100,192

Deferred tax
assetsrelating to tax
loss
carryforwardsLessvaluation
allowances
for tax loss
carryforwards

After 2Years
through
3 Years¥ 1¥ (1 )Net deferred
tax assets
relating to tax
loss
carryforwards

After 3Years
through
4 Years
¥ 112

（39）

¥ 72

Millions of Yen
March 31,2022

1 Yearor
Less

After 1Year
through
2 Years

After 2Years
through
3 Years- 30 -

After 3Years
through
4 Years

94

94

Thousands of U.S. Dollars
March 31,2023

1 Yearor
Less

After 1Year
through
2 Years

Deferred tax
assetsrelating to tax
loss
carryforwardsLessvaluation
allowances
for tax loss
carryforwards

After 2Years
through
3 Years

After 3Years
through
4 Years

After 4Years
through
5 Years

After 5
Years

Total

$

7

$ 842

$18,105$410,127$429,097

$

(7)

(293)

(88,984 )(89,300 )$321,142$339,796

Net deferred
tax assets
relating to tax
loss
carryforwards$ 541$18,105

The amount of tax loss carryforwards was calculated by using the statutory tax rate.
The amount of deferred tax assets related to tax loss carryforwards is determined to be recovered basedon the expected future taxable income.
Reconciliations between the normal effective statutory tax rate and the actual effective tax rate reflectedin the accompanying consolidated statements of income for the years ended March 31, 2023 and 2022,
were as follows:

March 31, 2022

March 31, 2023

This is not presented because the Groupis a loss before income taxes.

Normal effective statutory tax
rate

30.3%

Change in valuation allowance
Tax credits for promotion ofsalary increases
Tax credit for R&D Expenses
Other - net
Actual effective tax rate

△2.3
△0.4
△0.3
0.2
27.5%

The Company and certain of our consolidated subsidiaries apply the Group Comprehensive Income Tax
System from the current fiscal year. In addition, the Group accounts for and discloses income taxes andlocal income taxes in accordance with "Accounting and Disclosure for the Application of the Group
Comprehensive Income Tax System" (ASBJ PITF No. 42, August 12, 2021).

- 31 -

12.

REVENUEa.

Disaggregation of Revenue
Millions of Yen
2023
Reportable Segment

passesTransportation
Ordinarytickets

Othersand Other

Real Estate

Other

Total

¥ 43,092¥ 1,026,885¥ 49,789¥ 125,429¥ 14,338¥ 99,646¥ 1,359,183¥ 43,092¥ 1,026,885

3,669¥ 53,459

6,026¥ 131,456

31,059¥ 45,398

346¥ 99,992

41,102¥ 1,400,285

Commuter

Merchandise

Revenues
fromcontractwithcustomers

Otherrevenue
Total

Millions of Yen
2022
Reportable Segment
Transportation
CommuterOrdinary
passestickets

Othersand Other

Real Estate

Other

Total

¥ 41,372¥ 615,870¥ 46,903¥ 88,036¥ 12,428¥ 90,955¥ 895,566¥ 41,372¥ 615,870

3,937¥ 50,840

6,745¥ 94,782

28,563¥ 40,992

326¥ 91,282

39,573¥ 935,139

Other

Total

Merchandise

Revenues
fromcontractwithcustomers

Otherrevenue
Total

Thousands of U.S. Dollars
2023
Reportable Segment
CommuterpassesTransportation
Ordinarytickets

Merchandise

Othersand Other

Real Estate

Revenues
fromcontractwithcustomers

Otherrevenue
Total$

324,000 $ 7,720,939 $

374,353$ 943,075 $

27,58645,308$324,000 $ 7,720,939 $

401,947$ 988,390 $107,804 $
233,526
341,338 $749,218 $ 10,219,421
2,601

309,037

751,819 $ 10,528,458"Other" includes business in hotel, travel, advertising, rolling stock production,construction,etc., which are not included in any reportable segment.

- 32 -

In the year ended March 31, 2023, due to changes in the reportable segments, the scopeof business segments included in the "Others" was changed. Hence, reclassification has
been made to disaggregation of revenue for the year ended March 31, 2022 using the new
operating segmentsb.

Basic Information to Understand Revenues from Contracts with Customers
The following table provides information on the basis of how customer contracts relate toitems presented in the consolidated financial statements or other notes in the notes torevenue recognition.
The content described in Note 3.l to the consolidated financial statements is notpresented.

c.

Contract Balances
Receivables from contract with customers, contract assets and contract liabilities at the
beginning and end of the year are as follows:
Millions ofYen
2023
Receivables from contracts withcustomers:
Balance at beginning of year
Balance at end of year
Contract assets:
Balance at beginning of year
Balance at end of year
Contract liabilities:
Balance at beginning of year
Balance at end of year¥

91,377
128,338

Millions of
Yen
2022

¥

7,723
12,94324,43730,192¥

98,70991,377

Thousands of
U.S. Dollars
2023

$

5,769
7,723
¥

20,951
24,437

687,045964,947
58,067
97,315$

183,736
227,007

Contractual liabilities primarily relate to prepaid fares received to satisfaction of
performance obligations for which we provide transportation services pursuant totransportation agreements with customers and consist of commuter fares and noncommuter fares. For charges non-commuter fares, the Companies generally record
revenue upon completion of the delivery of the transportation service, and for commuter
fares, the Companies record revenue over a period of time, and reverses the contractual
liability at the time such revenue is recorded. The contractual liability for these prepaid
fares received is both monetized in a short period of time.

d.

Transaction Prices Allocated to Remaining Performance Obligations
The transaction prices allocated to remaining performance obligations within one year are
not presented in accordance with the practical expedient stipulated in the accounting
standard for revenue recognition. In addition, the transactions prices allocated toremaining performance obligations after one year and after are not presented since theamount is immaterial.

- 33 -

13.

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURESa.

Policy for Financial Instruments
The Companies use only financial instruments with high degrees of safety 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 14.

b.

Nature and Extent of Risks Arising from Financial Instruments
Money held in trust for the Chuo Shinkansen construction is set to segregate loans fromthe JRTT from other cash on hand for purposes of the further construction of the Chuo
Shinkansen. The trust property is comprised of deposits.
Trade receivables are exposed to customer credit risk.
Marketable and investment securities, mainly held to maturity debt securities and equity
instruments of customers and suppliers of the Companies, are exposed to the risk ofmarket price fluctuations.
Payment terms of trade payables and income taxes payable are within one year.
Short-term bank loans are used to fund the Companies’ ongoing operations. Bonds andlong-term loans are used for renewal of long-term debt and capital spending. Please see
Note 6 for a maturity analysis of bank loans and bonds payable.
Long-term debt for the Chuo Shinkansen construction is a loan in the amount of¥3,000,000 million from the JRTT using the FILP in accordance with the JRTT Act for
purposes of the further construction of the Chuo Shinkansen.
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 determinedbased 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 tomarket risks of changes in foreign exchange rates of foreign currency denominated longterm debt, and interest rate swaps, which are used to manage exposure to market risks ofchanges in interest rates of long-term debt. Please see Note 14 for details on derivatives.

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 orservice debt according to the contractual terms. The Companies manage their credit risk
from trade receivables by monitoring payment terms and balances of major customers byeach business administration department to identify the default risk of customers in theearly 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.

- 34 -

Market Risk Management
Marketable and investment securities are managed by monitoring market values and thefinancial position of issuers on a regular basis.
Foreign currency swaps are used to manage exposure to market risks of changes inexchange rates of foreign currency long-term debt. Interest rate swaps are used to
manage exposure to market risks of changes in interest rates of long-term debt.
d. Fair Values of Financial Instruments
Fair values of financial instruments are as follows: Investments in equity instruments that
do not have a quoted market price in an active market are not included in the following
table. The fair values of cash and cash equivalents, trade receivables, short-term loans
payable, trade payables, income taxes payable are not disclosed because their maturities
are short and the carrying values approximate fair value. The carrying values of money
held in trust for the Chuo Shinkansen construction approximate fair value because thetrust property consists of a deposit in cash. Therefore, the fair values of money held in
trust for the Chuo Shinkansen construction are not disclosed. Also, please see Note 14 forthe details of fair value for derivatives.
(1) Fair Value of Financial Instruments
Millions of Yen
March 31, 2023
Marketable andinvestment securities
Total
Long-term debt
including current
portionLong-term debt for the
Chuo Shinkansen
construction
Long-term accounts
payable—railway
facilities including
current portion
Total

Carrying
Amount¥¥751,308751,308

Fair Value
749,536
749,536¥¥(1,772)(1,772)¥ (1,429,887)¥ (1,478,936)¥

49,049(3,000,000)(2,690,051)(519,988)¥ (4,949,876)(925,882)¥ (5,094,870)- 35 -¥¥

Unrealized
Gain (Loss)(309,948)¥

405,893
144,994

Millions of Yen
March 31, 2022
Marketable andinvestment securities
Total
Long-term debt
including current
portionLong-term debt for the
Chuo Shinkansen
construction
Long-term accounts
payable—railway
facilities including
current portion
Total

Carrying
Amount¥¥Fair Value

792,179
792,179¥¥

Unrealized
Gain (Loss)

790,490
790,490¥¥(1,689)(1,689)¥ (1,415,174)¥ (1,517,498)¥

102,324(3,000,000)(2,954,226)(526,518)¥ (4,941,692)(1,044,587)¥ (5,516,312)(45,773)¥

518,069
574,619

Thousands of U.S. Dollars
March 31, 2023
Marketable andinvestment securities
Total
Long-term debt
including current
portionLong-term debt for the
Chuo Shinkansen
construction
Long-term accounts
payable—railway
facilities including
current portion
Total

Carrying
Amount$$5,648,932
5,648,932

Fair Value
5,635,609
5,635,609$$(13,323)(13,323)$ (10,751,030)$ (11,119,819)$

368,789(22,556,390)(20,225,947)(2,330,436)(3,909,684)$ (37,217,112)(6,961,518)$ (38,307,293)

3,051,827$ 1,090,180- 36 -$$

Unrealized
Gain (Loss)(2) Carrying Amount of Investments in Equity Instruments that Do Not Have a Quoted
Market Price in an Active Market

Carrying AmountMarch 31, 2023
Unlisted equity instruments:
Investment securities
Investments inunconsolidated
subsidiaries and affiliates
Total

March 31, 2022
Unlisted equity instruments:
Investment securities
Investments inunconsolidated
subsidiaries and affiliates
Total

Millions of Yen
¥

9,056

14,036¥ 23,093
Carrying AmountMillions of Yen
¥

8,396

13,912¥ 22,309- 37 -

Thousands of U.S.
Dollars$

68,090105,533$ 173,631

e. Maturity Analysis for Financial Assets and Securities with Contractual Maturities

March 31, 2023
Cash and cash
equivalents
Money held in trust
for the Chuo
Shinkansen
construction
Trade receivables
Marketable andinvestment
securities
Total

March 31, 2023
Cash and cash
equivalents
Money held in trust
for the Chuo
Shinkansen
construction
Trade receivables
Marketable andinvestment
securities
Total

Due within
One Year¥

Millions of Yen
Due after
One Yearthrough FiveYears

Due after
Five Years¥ 341,000¥ 341,000¥¥

710,526

1,585,282
128,142
143,600¥ 2,567,550

100,000
100,000

Thousands of U.S. Dollars
Due after
One Year
Due within
throughDue after
One Year
Five Years
Five Years$ 5,342,300

11,919,413
963,473
1,079,699$19,304,887$ 2,563,909$ 2,563,909$$

751,879
751,879

f. Annual Maturities of Long-Term Debt, Long-Term Debt for the Chuo Shinkansen
Construction and Long-Term Accounts Payable—Railway Facilities
Please see Note 6 for annual maturities of long-term debt, Note 7 for long-term debt for
the Chuo Shinkansen construction and Note 8 for long-term accounts payable—railway
facilities.

- 38 -

g. Financial Instruments Categorized by Fair Value Hierarchy
The fair value of financial instruments is categorized into the following three levels,
depending on the observability and significance of the inputs used in making fair value
measurements:
Level 1: Fair values measured by using quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2: Fair values measured by using inputs other than quoted prices included
within Level 1 that are observable for the assets or liabilities, either directly or
indirectly.
Level 3: Fair values measured by using unobservable inputs for the assets or
liabilities.
If multiple inputs are used that have a significant impact on the measurement of fair value,
fair value is categorized at the lowest level in the fair value measurement among thelevels to which each of these inputs belongs.
(1) The Financial Assets and Liabilities Measured at the Fair Values in theConsolidated Balance Sheet

March 31, 2023

Level 1Millions of Yen
Level 2
Level 3

Total

Marketable andinvestment securities：
Available-for-sale securities：

Equity securities
Other
Total assets¥ 166,314
393¥ 166,708

March31, 2022

Level 1¥¥Millions of Yen
Level 2
Level 3

166,314393
166,708

Total

Marketable andinvestment securities：
Available-for-sale securities：

Equity securities
Other
Total assets

March 31, 2023¥

164,826353¥ 165,179

Level 1¥¥Thousands of U.S. Dollars
Level 2
Level 3

164,826353
165,179

Total

Marketable andinvestment securities：
Available-for-sale securities：

Equity securities
Other
Total assets$ 1,250,481
2,954$ 1,253,443- 39 -$ 1,250,481
2,954$ 1,253,443

(2) The Financial Assets and Liabilities Not Measured at the Fair Values in theConsolidated Balance Sheet

Millions of Yen
March 31, 2023

Level 1

Level 2

Level 3

Total

Marketable and investment
securities：

Held-to-maturity securities：

Municipal bonds
Corporate bonds
Total assets¥¥

Long-term debt
including current portionLong-term debt for the Chuo
Shinkansen construction
Long-term accounts payable—
railway facilities including current
portionTotal liabilities

March 31, 2022

8,990
573,837
582,827¥¥

8,990
573,837
582,827¥ 1,478,936¥ 1,478,936

2,690,051

2,690,051

925,882¥ 5,094,870

925,882¥ 5,094,870

Millions of Yen
Level 2
Level 3

Level 1

Total

Marketable and investment
securities：

Held-to-maturity securities：

Municipal bonds
Corporate bonds
Total assets¥¥

Long-term debt
including current portionLong-term debt for the Chuo
Shinkansen construction
Long-term accounts payable—
railway facilities including current
portionTotal liabilities

March 31, 2023

9,017
616,293625,310¥¥9,017
616,293625,310¥ 1,517,498¥ 1,517,498

2,954,226

2,954,226

1,044,587
5,516,312

1,044,587¥ 5,516,312¥

Thousands of U.S. Dollars
Level 2
Level 3

Level 1

Total

Marketable and investment
securities：

Held-to-maturity securities：

Municipal bonds
Corporate bonds
Total assets
Long-term debt
including current portionLong-term debt for the Chuo
Shinkansen construction
Long-term accounts payable—
railway facilities including current
portionTotal liabilities- 40 -$

67,593
4,314,563$ 4,382,157$

67,593
4,314,563$ 4,382,157$ 11,119,819$ 11,119,819

20,225,947

20,225,947

6,961,518$ 38,307,293

6,961,518$ 38,307,293

The following is a description of valuation methodologies and inputs used formeasurement of the fair value of assets and liabilities:
Marketable and Investment Securities
The fair values of listed equity securities, municipal bonds and corporate bonds aremeasured at the quoted market prices. Since listed equity securities and government
bonds are traded in active markets, the fair values of listed equity securities are
categorized as Level 1. As the quoted market prices of municipal bonds and corporate
bonds are not considered to be in active markets due to low market transactions, the fairvalues of municipal bonds and corporate bonds are categorized as Level 2.
Long-Term Debt including Current Portion, Long-Term Debt for the Chuo
Shinkansen Construction
The fair values of domestic bonds are measured at the quoted market prices. Fair valuesof foreign currency bonds are measured in combination with foreign currency swaps,
which qualify for hedge accounting and meet specific matching criteria and are accounted
for by the method stated in Note 3.q, by using discounted present value techniques
considering the total amounts of principal and interest of the bonds in combination withforeign currency swaps and the Company's assumed bond issuing rate.
The 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.q, by using discounted
present value techniques considering the total amounts of the principal and interest andthe Company's assumed borrowing rate.
The fair values of other debt, long-term debt for the Chuo Shinkansen construction aredetermined by using discounted present value techniques considering the cash flows
related to the debt and the Company's assumed bond issuing rate or corporate borrowing
rate.
The fair values of these instruments are categorized as Level 2.
Long-Term Accounts Payable—Railway Facilities including Current PortionLong-term accounts payable represents monetary liability for purchase of railway facilities
assumed under a special law, and it is difficult for the Company to raise funds again in thesame manner. The fair values of such long-term accounts payable are determined byusing discounted present value techniques considering the total amounts of principal andinterest payment discounted and an interest rate to be applied if similar new bonds were
issued. The fair values of long-term accounts payable – railway facilities are categorized
as Level 2.

- 41 -

14. DERIVATIVESThe Companies enter into foreign currency swap agreements to manage exposure to market
risks of changes in foreign exchange of foreign currency long-term 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 andinterest rate exposures incorporated within their business. Accordingly, market risk in thesederivatives 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 arising from credit default.
Derivative transactions have been made in accordance with internal policies.

Derivative Transactions to Which Hedge Accounting Is Applied

March 31, 2023
Foreign currency
swaps:(fixed amountpayment in yen, fixedamount receipt in
U.S. dollars)Interest rate swaps:(fixed rate payment,
floating rate receipt)
Interest rate andcurrency swaps:(fixed rate / amountpayment in yen,
floating rate receipt
and fixed amountreceipt in U.S.
dollars)

Millions of Yen
Contract
Amount Due
Contract
after One
AmountYear

Hedged Item

Fair
Value

Foreigncurrencybonds¥ 156,535¥ 117,528※

Bank loans¥ 136,800¥ 136,800※

Foreigncurrencybank loans

¥

¥

※

- 42 -

12,732

9,440

Millions of Yen

March 31, 2022
Foreign currency
swaps:(fixed amountpayment in yen, fixedamount receipt in
U.S. dollars)Interest rate swaps:(fixed rate payment,
floating rate receipt)
Interest rate andcurrency swaps:(fixed rate / amountpayment in yen,
floating rate receipt
and fixed amountreceipt in U.S.
dollars)

Contract
AmountContract
Amount Dueafter One Year

Foreigncurrencybonds¥ 156,535¥ 156,535※

Bank loans¥ 117,500¥ 106,000※

Foreigncurrencybank loans

¥

¥

※

Hedged Item

22,570

Fair
Value

3,292

Thousands of U.S. Dollars
Hedged Item

Contract
AmountMarch 31, 2023
Foreign currency
swaps:(fixed amountpayment in yen, fixedamount receipt in
U.S. dollars)Interest rate swaps:(fixed rate payment,
floating rate receipt)
Interest rate andcurrency swaps:(fixed rate / amountpayment in yen,
floating rate receipt
and fixed amountreceipt in U.S.
dollars)

Contract
Amount Dueafter One Year

Fair
Value

Foreigncurrencybonds$ 1,176,954$

883,669※

Bank loans$ 1,028,571$ 1,028,571※

Foreigncurrencybank loans

$

$

※

- 43 -

95,72970,977

※ Foreign currency swaps, interest rate swaps, or interest rate and currency swaps which
qualify for hedge accounting are accounted for in combination with hedged items such as
the foreign currency bonds, long-term debt, or foreign currency bank loans and the fairvalues of these swaps are included in those of hedged items in Note 14.
15.

LEASESAs a lessee, the minimum rental commitments under noncancelable operating leases as ofMarch 31, 2023 and 2022, were due as follows:
ThousandsofMillions of Yen
U.S. Dollars
2023
2022
2023
Due within one year
¥
938
¥
704
$
7,052
Due after one year
4,826
4,410
36,285Total¥ 5,765¥ 5,115$
43,345
As a lessor, the minimum rental commitments under noncancelable operating leases as ofMarch 31, 2023 and 2022, were due as follows:

Millions of Yen
2023
2022
¥ 6,082¥ 5,606
18,62817,924¥ 24,710¥ 23,531

Due within one year
Due after one year
Total
16.

Thousands
ofU.S. Dollars
2023$
45,729140,060$ 185,789

CONTINGENCIESAs of March 31, 2023, the Company is contingently liable for guarantees of loans of RTRI
amounting to ¥13,400 million ($100,751 thousand). The proceeds are being used for theenhancement of technological development of the Maglev system.
As discussed in Note 6, based on debt assumption agreements with financial institutions, theCompany has transferred the debt repayment obligations for certain bonds to such financial
institutions. As of March 31, 2023, the Company had contingent obligations of ¥73,450 million($552,255 thousand) for the bonds.

- 44 -

17.

OTHER COMPREHENSIVE (LOSS) INCOME
The components of other comprehensive (loss) income for the years ended March 31, 2023
and 2022, were as follows:

Thousands ofMillions of Yen
2023
Unrealized (loss) gain on availablefor-sale securities:(Loss) gain arising during the year
Reclassification adjustments toprofit or loss
Amount before income tax effect
Income tax effectTotal
Remeasurements of defined benefit
plans:
Adjustments arising during the year
Reclassification adjustments toprofitAmount before income tax effect
Income tax effect
Total
Share of other comprehensive
income in affiliates
Loss arising during the year
Reclassification adjustments toprofitTotal
Total other comprehensive (loss)
income¥U.S. Dollars

2022

6,292

¥

2023

(3,079)$47,308(2,937)2,525(22,082)

3,355
(573)

(554)
225

25,225(4,308)

¥

2,781

¥

(328)

$

20,909

¥

672

¥

(345)

$

5,052

(2,630)(2,679)(19,774)(1,958)701(3,024)855(14,721)
5,270¥(1,256)¥(2,168)$(9,443)

¥

(0)

¥

(30)

$

(0)

8

11

60

¥

8

¥

(19)

$

60

¥

1,533

¥

(2,517)$

11,526- 45 -

18.

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 is required to report financial and descriptive information about its
reportable segments. Reportable segments are operating segments or aggregations ofoperating segments that meet specified criteria. Operating segments are components of anentity for which separate financial information is available and such information is evaluatedregularly by the chief operating decisionmaker in deciding how to allocate resources and inassessing 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 toallocate resources to operating segments.
a. Description of Reportable Segments
The Companies' reportable segments are those for which separate financial information isavailable and regular evaluation by the Companies' management is being performed in orderto decide how resources are allocated among the Companies.
The Companies are composed of three reportable segments by nature of products andservices: Transportation, Merchandise and Other, Real Estate.
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, retailsales in trains and stations and others. The Real Estate segment include real estate leasing
business, such as station building leasing and real estate sales in lots.
Effective April 1, 2022, operating segments of "Hotel and Services" and "Rolling Stock
Production," which were previously disclosed as reportable segments, are included in "Other"because of their falling short of the quantitative criteria. The segment information for the year
ended March 31, 2022, is also disclosed using the new operating segments.
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 uponarm's length transactions.

- 46 -

c. Information about Operating Revenues, Profit (Loss), Assets, Liabilities and Other Items
Millions of Yen
2023

Transportation

Reportable Segment
Merchandise
and Other
Real Estate

Total

Other

Total

Operating revenues:
External customers
Intersegment
transactions ortransfers
Total¥

1,123,437 ¥

131,456 ¥

45,398 ¥1,300,292 ¥99,992¥

10,5781,134,016 ¥7,294
138,751 ¥

31,99977,398 ¥49,8731,350,165 ¥

149,435
249,427 ¥Segment profit¥

338,502 ¥8,316 ¥

17,361 ¥364,180 ¥10,048 ¥Segment assets
Other:
Depreciation andamortization
Amounts of investmentsin equity in affiliates
Increase in property,
plant and equipment
and intangible assets¥

Reconciliations¥

Consolidated
1,400,285

199,308 ¥1,599,593 ¥(199,308)(199,308) ¥1,400,285

374,229 ¥274 ¥374,5031,400,285

8,559,242

136,386

366,526

9,062,154

420,476

9,482,631

196,041

3,807

15,710215,559

4,054

219,614219,614

11,176

11,176462,650

462,650

11,176

11,176435,450

4,676

17,394

457,522

5,128

31,7789,514,409

Millions of Yen
2022

Transportation

Reportable Segment
Merchandise
and Other
Real Estate

Total

Other

Total

Reconciliations¥

Consolidated
935,139

191,905 ¥1,127,044 ¥(191,905)(191,905) ¥935,139

3,982 ¥

(2,274) ¥1,708

Operating revenues:
External customers
Intersegment
transactions ortransfers
Total¥

708,083¥

94,782 ¥40,992 ¥843,857 ¥

91,282¥

9,534
717,618 ¥

7,947
102,729 ¥

31,231
72,223 ¥48,714
892,571 ¥

143,191
234,473 ¥Segment profit (loss)¥(8,327) ¥(3,790) ¥14,925 ¥2,807 ¥

1,174 ¥

8,713,798

117,679

351,348

9,182,826

389,734

9,572,561

182,415

3,951

16,317

202,684

4,355

207,039

207,039

10,752

10,752500,917500,917

Segment assets
Other:
Depreciation andamortization
Amounts of investmentsin equity in affiliates
Increase in property,
plant and equipment
and intangible assets

10,752

485,006

10,752

4,701

6,183

495,891

5,025- 47 -¥

935,139(122,041)

9,450,519

Thousands of U.S. Dollars
2023

Transportation

Reportable Segment
Merchandise
and Other
Real Estate

Total

Other
751,819

Total

Operating revenues:
External customers
Intersegment
transactions ortransfers
Total$

8,446,894$

988,390 $

341,338 $

9,776,631 $$

79,5338,526,436 $

54,842
1,043,240 $

240,593581,939

374,984
1,123,571
10,151,616 $ 1,875,390 $Segment profit$

2,545,127 $

62,526

130,533 $2,738,195$

Segment assets
Other:
Depreciation andamortization
Amounts of investmentsin equity in affiliates
Increase in property,
plant and equipment
and intangible assets

$

$

$

75,548 $Reconciliations

10,528,458

Consolidated$

10,528,458

1,498,556 $
12,027,015 $(1,498,556)(1,498,556) $10,528,458

2,813,751 $

2,060 $

2,815,812

64,355,203

1,025,458

2,755,834

68,136,496

3,161,473

71,297,977

1,473,992

28,624

118,120

1,620,744

30,481

1,651,233

1,651,233

84,03084,0303,478,571

3,478,571

84,0303,274,060

84,03035,157130,7813,440,015

38,556- 48 -

238,932

71,536,909

Notes:1. Other includes business in hotel, travel, advertising, rolling stock production, construction, etc., which are not included in any reportable segment.
2. Reconciliations are as follows:a. The amount of elimination of intersegment transactions included in the reconciliations was ¥274 million ($2,060 thousand), ¥(2,274) million for the years ended March 31, 2023 and 2022, 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 ¥646,707 million ($4,862,458 thousand), ¥448,551 million for the years ended March 31,
2023 and 2022, respectively.
The elimination of intersegment transactions consists of intersegment receivables and others. The amounts of the elimination were ¥614,928 million ($4,623,518 thousand), ¥570,593 million for the years ended March
31, 2023 and 2022, respectively.
3. Segment profit (loss) is reconciled to operating income (loss) in the consolidated statement operations.
4. Information 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.

d. Information about Impairment Loss on Noncurrent Assets by Reportable Segments
Information about impairment loss on noncurrent assets by reportable segments for the years ended March 31, 2023 and 2022 is omitted because the amount is not material.

- 49 -

19.

SUBSEQUENT EVENT
Appropriations of Retained Earnings
The following appropriation of retained earnings as of March 31, 2023, was approved at theCompany's shareholders’ meeting held on June 23, 2023.

Year-end cash dividends, ¥70 ($0.53) per share******- 50 -

Millions of Yen

Thousands of
U.S. Dollars¥$

13,790103,684