[TRANSLATION]
April 27, 2021
To Whom It May Concern:
Name of Company: Central Japan Railway Company
Name of Representative: Shin Kaneko,
President and Representative Director(Code: 9022, First Sections of the TSE and NSE)
Contact Person: Kentaro Takeda,
Corporate Officer and General Manager of the Public Relations Department(Telephone No.: +81-52-564-2549)
Notice Concerning Total Construction Costs for the Chuo Shinkansen Section
between Shinagawa and Nagoya
The Central Japan Railway Company (the “Company” or “we”) is carrying out theconstruction of the Chuo Shinkansen section between Shinagawa and Nagoya, since theconstruction implementation plan was approved for the section between Shinagawa andNagoya in October 2014, by entering into contracts after making decisions on capital
investments, starting with those that need to be undertaken at an early stage, such as
Shinagawa Station, Nagoya Station, and Southern Alps Tunnel.
In the meantime, we have estimated an increase in construction costs sinceconstruction costs exceeded the initially expected amount with respect to certain
construction sites, such as both the Shinagawa and Nagoya terminals. At the same time,
the business environment has deteriorated sharply due to the impact of COVID-19 sincelast year. Therefore, in order to confirm that the plan for funding required for construction
and sound management are secured, the Company has been conducting a close
examination of the outlook for the construction costs for the entire section between
Shinagawa and Nagoya, reflecting factors that are considered reasonable. As a result, it
has been determined that the total construction costs are expected to exceed the amountannounced in the “Application for Permission regarding the Construction Implementation
Plan (#2) of the Chuo Shinkansen Section between Shinagawa and Nagoya” (September25, 2017), and we hereby make the following announcement.

1.

2.

Forecast of the total construction costs (section between Shinagawa and Nagoya)7.04 trillion yen* Increased by approximately 1.5 trillion yen compared to the estimated amount at
the time of the Construction Implementation Plan (#2) (5.52 trillion yen)
* Includes the cost for rolling stock and excludes the expenses already spent on theYamanashi Maglev Line
Reasons for the increase in construction costs
 Responding to challenging construction
3.

work,

enhancingearthquake

countermeasures, securing utilization sites of excavated soil, etc.
Please see Exhibit “Main Reasons for the Increase in Construction Costs”.

Confirmation of securing construction funds and sound management
 The Company will prioritize sound management and stable dividends with regard
to future management just as always, and will fund the construction costs mainly
through operating cash flow and the remaining amount through repayableborrowings. If the Company anticipates that it can no longer ensure soundmanagement and stable dividends, the Company will aim to complete theconstruction by adjusting the pace of construction and fully restoring itsmanagement strength.
 As a reference, in order to confirm that the funds necessary for completion of theconstruction are secured, the Company calculated the operating cash flow basedon certain reasonable assumptions in the event that the revenue recovers at arealistically expectable pace, and confirmed that, if approximately 1 trillion yen of
new financing is added to such operating cash flow, the cumulative amount of thefunds available for construction of the section between Shinagawa and Nagoya
would exceed the total construction costs calculated at 7.04 trillion yen in FY2028.
It should be noted that this does not mean that a new target time for opening is set,
however, a trial calculation of the status of securing funds under certain
assumptions was made for reference purposes only.
 The Company will continue to proceed with the Chuo Shinkansen project with theaim of early realization of the Chuo Shinkansen while ensuring sound management
and stable dividends.

(For reference: Assumptions for confirmation, etc.)
Transportation revenues

Transportation revenues will recover gradually to 66% in FY2021,(Shinkansen and80% in FY2022, and 90% in FY2023, and after FY2024 to 100% byconventional lines)

FY2028Essentially, personnel expenses will be maintained at the current
scale of personnel required for railways, and non-personnel expenses

Expenses

will be recorded at the five-year average of the results from FY2015
to FY2019. In addition, cost reductions pursued through “BusinessReforms” are considered to a certain extent.

Capital investments(Chuo Shinkansen)
Capital investments(Shinkansen andconventional lines)
Others7.04 trillion yen
Essentially, necessary capital investments will be accumulated, andconsidering the cost reductions through “Business Reforms”, capital
investments will remain unchanged at approximately 220 billion yen
per year in and after FY2028.
Interest rate on financing: 3%Note) The recovery in transportation revenues from Shinkansen and conventional lines iscompared to FY2018.
(For reference: Results of confirmation)
Period in which the cumulative amount of the funds available forconstruction of the Chuo Shinkansen exceeds the total construction cost*

FY2028Operating revenues for the fiscal year following the above period

1,530 billion yen

Ordinary income for the fiscal year following the above period

240 billion yen

Long-term debt outstanding for the fiscal year following the above period

6.0 trillion yenNote) In and after the period marked with asterisk (*) above, in calculating operating revenues
and ordinary income, it is assumed that transportation revenues will increase by around
5% compared to previous periods, and that depreciation expenses and maintenance andoperation costs will be recorded for the assets related to the Chuo Shinkansen. This does
not mean that a new target time for opening is set, however, a trial calculation was madefor reference purposes only.

(For reference: Changes in ordinary income and long-term debt)

4. Others The above matters were resolved at the meeting of the Board of Directors heldtoday.
 The above matters do not affect the forecasted results of operations for the fiscal
year ending March 31, 2022 (announced on April 27, 2021).

Exhibit
Main Reasons for the Increase in Construction Costs(1) Responding to challenging construction work (+500 billion yen)・ The construction of both terminals in Shinagawa Station and Nagoya Station is complicatedwith a long construction period, and the Company placed orders by dividing the construction
to the extent that the Company can control the risks during the procedure of execution ofcontracts. In addition, geological uncertainties and severity of construction constraints innarrow locations have become clear in the process of proceeding with the construction.
(2) Enhancing earthquake countermeasures (+600 billion yen)・ With respect to the structures in the open section, it became necessary to reinforce the entire
structure in order to further prepare for earthquakes based on the analysis using the data ofrunning tests in Yamanashi Maglev Line and the countermeasures of which effectiveness had
been verified by the vibration tests, etc. in the test equipment in Komaki Research Center.
(3) Securing utilization sites of excavated soil (+300 billion yen)・ It had been difficult to secure sites for the utilization of soil excavated in urban areas; however,
the Company solved this issue by bearing the expense of shore protection work, etc. in areclamation project (Shinhommoku Pier in Yokohama Port, etc.). In addition, transportation
and receiving costs are expected to increase for soil excavated from mountain tunnels due tothe situation of prospective utilization sites.