East Japan Railway Company · TSE:9020
East Japan Railway — Q2 FY2011.3 Earnings Presentation
51 slides from East Japan Railway's earnings presentation, Oct 29, 2010
Slide 1: FY2011.3 Second Quarter Financial Results Presentation
FY2011.3 Second Quarter Financial Results Presentation October 29, 2010 East Japan Railway Company
Slide 2: Contents
Contents I. FY2011.3 Second Quarter Financial Results (summary) III. Reference Material (Overview of Forward-Looking Initiatives) Main Points of FY2011.3 Second Quarter Financial Results (consolidated) 4 Near-Term Initiatives for Growth (Transportation) 28 Main Points of FY2011.3 Second Quarter Fina
Slide 3: I. FY2011.3 Second Quarter Financial Results (summary)
I. FY2011.3 Second Quarter Financial Results (summary)
Slide 4: Main Points of FY2011.3 Second Quarter Financial Results (consolidated)
Main Points of FY2011.3 Second Quarter Financial Results (consolidated) (¥ Billion) 2009.9 2010.9 [April plan] 2010.9 / 2009.9 Operating revenues 1,293.0 [1,297.0] 1,293.8 +0.7 (100.1%) Operating income 216.0 [214.0] 234.3 +18.3 (108.5%) +0.7 Revenues and earnings up: 1,293.8 Operating revenues up f
Slide 5: Main Points of FY2011.3 Second Quarter Financial Results (non-consolidated)
Main Points of FY2011.3 Second Quarter Financial Results (non-consolidated) (¥ Billion, %) 2010.9 / 2009.9 2010.9 2009.9 Notes [April plan] Increase / decrease (%) Operating revenues down Operating revenues 955.4 [941.0] 943.4 -12.0 98.7 for second consecutive year Commuter passes:-0.8, Passenger Re
Slide 6: Main Points of FY2011.3 Business Results Forecast Revision
Main Points of FY2011.3 Business Results Forecast Revision Non-consolidated Consolidated Operating income ¥359.0 billion April October Increase/ ¥352.0 billion plan plan decrease Transportation 240.0 247.0 +7.0 ¥301.0 billion Station Space 32.0 32.0 - Utilization ¥294.0 billion +¥7.0 billion Shoppin
Slide 7: FY2011.3 Business Results Forecast (consolidated)
FY2011.3 Business Results Forecast (consolidated) (¥ Billion, %) FY2011.3 FY2010.3 (A) April plan October plan (C - B) (C - A) (%) (B) (C) Operating revenues 2,573.7 2,585.0 2,588.0 +3.0 +14.2 100.6 Transportation 1,757.9 1,757.0 1,760.0 +3.0 +2.0 100.1 Station Space Utilization 387.1 399.0 399.0 -
Slide 8: FY2011.3 Business Results Forecast (non-consolidated)
FY2011.3 Business Results Forecast (non-consolidated) (¥ Billion, %) FY2011.3 FY2010.3 (A) April plan October plan (C - B) (C - A) (%) (B) (C) Operating Revenues 1,882.5 1,865.0 1,868.0 +3.0 -14.5 99.2 Passenger Revenues 1,640.8 1,642.0 1,645.0 +3.0 +4.1 100.3 Others 241.6 223.0 223.0 - -18.6 92.3 O
Slide 9: Uses of Consolidated Cash Flows
Uses of Consolidated Cash Flows Total of FY2011.3 –FY2013.3 Uses of Consolidated Cash Flows Cash flows from operating ¥1.7 trillion activities Capital Capital expenditures expenditures Returns Returns to to shareholders shareholders Debt Debt reduction reduction (reference) FY2011.3 Use Amount Notes
Slide 10: II. Second Quarter Non-consolidated and Consolidated Financial Results
II. Second Quarter Non-consolidated and Consolidated Financial Results
Slide 11: FY2011.3 Passenger Revenues - Main Positive and Negative Factors (2Q cumulative)
FY2011.3 Passenger Revenues - Main Positive and Negative Factors (2Q cumulative) (¥ Billion) 2010.9 / Cause Notes 2009.9 Shinkansen Absence of typhoon (No.9) and earthquake (Suruga Bay) +0.2 Network +0.3 Decrease due to absence of five-day holiday in September -1.7 - Increase due to absence Increase
Slide 12: FY2011.3 Target for Passenger Revenues
FY2011.3 Target for Passenger Revenues FY2011.3 1st half (results) 2nd half [October plan] [October plan] Passenger Revenues ¥833.3 billion ¥811.5 billion ¥1,644.9 billion YoY: -¥2.6 billion (99.7%) YoY: +¥6.8 billion (100.9%) YoY: +¥4.2 billion (100.3%) [vs. April plan: -¥1.5 billion (99.8%)] [vs.
Slide 13: Topics: FY2011.3 Passenger Revenues Results and Targets
Topics: FY2011.3 Passenger Revenues Results and Targets April plan (YoY, %) 1st half (plan) 2nd half (plan) FY2011.3 Passenger Revenues 99.9% 100.3% 100.1% Commuter Passes 99.3% 99.9% 99.6% Other 100.1% 100.5% 100.3% Kanto Area Network 100.2% 101.2% 100.7% Shinkansen Network 100.2% 99.8% 100.0% Octo
Slide 14: FY2011.3 Non-consolidated Operating Expenses - Main Positive and Negative Factors
FY2011.3 Non-consolidated Operating Expenses - Main Positive and Negative Factors FY2011.3 Second Quarter <Results> FY2011.3 Plan Item Increase/ Increase / Main causes Main causes decrease decrease* - Elimination of fund shortage relating to difference - Elimination of fund shortage relating to diff
Slide 15: FY2011.3 Approach to Forecast of Energy Cost
FY2011.3 Approach to Forecast of Energy Cost April target: ¥61 billion (same level as previous year) set temporarily>> October target: ¥61 billion (new target) 1st half (result) 2nd half (forecast) Year on Year: + - Heat wave - Increase in - Increase in Operation of periodic periodic hydroelectric i
Slide 16: FY2011.3 Non-consolidated Financial Results
FY2011.3 Non-consolidated Financial Results (¥ Billion) 2010.9 / 2009.9 FY11.3 / FY10.3 2009.9 2010.9 FY2010.3 FY2011.3 Results Results Increase / Results Plan Increase / % % decrease decrease Operating revenues 955.4 943.4 -12.0 98.7% 1,882.5 1,868.0 -14.5 99.2% Operating income 188.3 202.4 +14.0 1
Slide 17: FY2011.3 Transportation
FY2011.3 Transportation (¥ Billion) FY2011.3 Plan 2009.9 2010.9 2010.9 / 2009.9 FY2010.3 FY11.3 / FY10.3 [April plan] -3.0 1,760.0 +2.0 Operating revenues 891.7 888.6 1,757.9 99.7% [1,757.0] 100.1% +10.4 247.0 +15.6 Operating income 163.1 173.6 231.3 106.4% [240.0] 106.8% (note) Operating revenues:
Slide 18: FY2011.3 Station Space Utilization
FY2011.3 Station Space Utilization (¥ Billion) FY2011.3 Plan 2009.9 2010.9 2010.9 / 2009.9 FY2010.3 FY11.3 / FY10.3 [April plan] +4.6 399.0 +11.8 Operating revenues 197.2 201.8 387.1 102.3% [399.0] 103.1% +1.7 32.0 -1.3 Operating income 17.1 18.8 33.3 110.0% [32.0] 96.0% (note) Operating revenues: o
Slide 19: FY2011.3 Shopping Centers & Office Buildings
FY2011.3 Shopping Centers & Office Buildings (¥ Billion) FY2011.3 Plan 2009.9 2010.9 2010.9 / 2009.9 FY2010.3 FY11.3 / FY10.3 [April plan] -1.7 228.0 +1.0 Operating revenues 112.2 110.5 226.9 98.5% [228.0] 100.5% -2.1 66.0 -3.3 Operating income 34.8 32.7 69.3 94.0% [66.0] 95.2% (note) Operating reve
Slide 20: FY2011.3 Others
FY2011.3 Others (¥ Billion) FY2011.3 Plan 2009.9 2010.9 2010.9 / 2009.9 FY2010.3 FY11.3 / FY10.3 [April plan] +0.9 201.0 -0.6 Operating revenues 91.8 92.8 201.6 101.0% [201.0] 99.7% +7.7 15.0 +1.4 Operating income 0.2 8.0 13.5 2,855.2% [15.0] 111.1% (note) Operating revenues: operating revenues from
Slide 21: FY2011.3 Second Quarter Summary of Non-Operating Income / Expenses and Extraordinary Gains / Losses
FY2011.3 Second Quarter Summary of Non-Operating Income / Expenses and Extraordinary Gains / Losses (consolidated) (¥ Billion) Increase / 2009.9 2010.9 decrease Operating income 216.0 234.3 +18.3 Interest expense: 38.4 (-3.1) Non-operating income 5.7 6.9 +1.1 Bond interest: 15.1 (-0.2) Interest inco
Slide 22: FY2011.3 Second Quarter Summary of Cash Flows (consolidated)
FY2011.3 Second Quarter Summary of Cash Flows (consolidated) (¥ Billion) Increase / 2009.9 2010.9 decrease Payments of income taxes : +36.8 Cash Flows from Operating Activities 193.0 250.1 +57.1 Payments for purchases of fixed assets : -31.5 Cash Flows from Investing Activities -190.6 -222.0 -31.3 F
Slide 23: FY2011.3 Consolidated Financial Results
FY2011.3 Consolidated Financial Results (¥ Billion) 2010.9 / FY2011.3 FY11.3 / 2009.9 2010.9 FY2010.3 2009.9 Plan FY10.3 +0.7 +14.2 Operating revenues 1,293.0 1,293.8 100.1% 2,573.7 2,588.0 100.6% +18.3 +14.1 Operating income 216.0 234.3 108.5% 344.8 359.0 104.1% +25.9 +26.8 Ordinary income 158.0 18
Slide 24: Capital Expenditures (consolidated)
Capital Expenditures (consolidated) (¥ Billion) 472.0 Depreciation 434.7 413.3 417.1 402.5 122.0 Non-transportation 400 82.8 322.5 322.3 361.3 361.0 147.5 329.6 321.9 90.8 307.5 313.9 319.9 316.0 130.8 356.3 296.9 301.7 335.5 343.1 300 318.5 317.9 72.6 90.6 108.0 81.9 85.7 88.4 200 177.3 351.9 350.0
Slide 25: Breakdown of Capital Expenditures (non-consolidated)
Breakdown of Capital Expenditures (non-consolidated) (¥ Billion) 400 380.0 Safety practice, transportation stability 363.7 Transportation improvement, measures to ensure steady income 323.4 Systems changes 315.3 321.1 Station improvement 300 Life-style businesses 174.0 167.6 Others 151.9 156.0 181.8
Slide 26: Total Long-term Debt (consolidated)
Total Long-term Debt (consolidated) (¥ Billion) Long-term liabilities incurred for purchase of railway facilities (%) 5,000 Long-term loans 5 4,699.7 Bonds 4.18 4,379.8 Average interest rate for existing debt (%) 4,117.5 4,000 3,974.5 4 4.09 3,833.0 4.02 3,703.8 3,636.2 3,558.7 2,392.2 3.83 3,488.5
Slide 27: III. Reference Material (Overview of Forward-Looking Initiatives)
III. Reference Material (Overview of Forward-Looking Initiatives)
Slide 28: Near-Term Initiatives for Growth (Transportation)
Near-Term Initiatives for Growth (Transportation) FY2011.3 FY2012.3 FY2013.3 Narita Express Introduction of new-type railcars Musashi-Kosugi Station on the Yokosuka Line Opened March 13, 2010 Tohoku Through Line FY2014.3 New high-speed Shinkansen train (E5 series) End of FY2011.3 New high-speed Shin
Slide 29: Near-Term Initiatives for Growth (Life-Style Businesses)
Near-Term Initiatives for Growth (Life-Style Businesses) - Examine realization of current project concepts Realize new development projects - Reevaluate potential of Tokyo metropolitan area railway stations - Building Development at the Main projects announced in JR East 2020 Vision New South Exit o
Slide 30: Topics: Initiatives in Inbound Tourism Businesses
Topics: Initiatives in Inbound Tourism Businesses Targets / initiatives for inbound business JR EAST PASS sales record Target 40,000 37,000 FY2011.3 Targets 32,619 30,000 (YoY: 131.6%) 20,325 JR EAST PASS: 37,000 (YoY 113.4%) 20,000 Suica & N’EX: 162,000 (YoY 114.5%) 10,304 10,000 1,727 0 1999.3 200
Slide 31: Topics: Initiatives in Life-Style Businesses
Topics: Initiatives in Life-Style Businesses Implementing initiatives in collaboration with regions Developing high-value-added products At Ueno Station, held “Made-in-Akita At hotels, offered “Aomori Fair” and offering solutions: 1 Market” selling vegetables and restaurant menus to coincide with th
Slide 32: IV. Reference Material (Data)
IV. Reference Material (Data)
Slide 33: FY2013.3 Numerical Targets (by segment)
FY2013.3 Numerical Targets (by segment) (¥ Billion) FY2010.3 FY2011.3 FY2013.3 FY2018.3 Results Plan Target Target [April Plan] Operating revenues 2,573.7 [2.585.0] 2,588.0 2,697.0 3,100.0 Transportation 1,757.9 [1,757.0] 1,760.0 1,782.0 1,930.0 Station Space Utilization 387.1 399.0 446.0 540.0 Shop
Slide 34: FY2013.3 Numerical Targets
FY2013.3 Numerical Targets Consolidated Operating Revenues / Target Consolidated Operating Income Item (FY2013.3) Left: Operating Revenues / Right: Operating Income (¥ Billion) Consolidated Operating Revenues ¥2,697.0 billion Consolidated Operating Income ¥410.0 billion 2,697.0 Consolidated Cash Flo
Slide 35: Passenger Revenues
Passenger Revenues (¥ Billion) 2010.9 / 2009.9 FY11.3 / FY10.3 2009.9 2010.9 FY2010.3 FY2011.3 Results Results Increase/ Results Plan Increase/ (%) (%) decrease decrease Commuter Passes 11.6 11.5 -0.0 99.6% 22.7 22.7 -0.0 99.7% Shinkansen Other 212.8 213.1 +0.3 100.2% 416.7 420.1 +3.3 100.8% Network
Slide 36: Traffic Volume
Traffic Volume (Million Passenger Kilometers) 2010.9 / 2009.9 FY11.3 / FY10.3 2009.9 2010.9 FY2010.3 FY2011.3 Results Results Increase/ Results Plan Increase/ (%) (%) decrease decrease Commuter Passes 856 855 -0 99.9% 1,665 1,660 -5 99.7% Shinkansen Other 8,466 8,466 -0 100.0% 16,486 16,619 +133 100
Slide 37: Topics: Investment in Life-Style Businesses
Topics: Investment in Life-Style Businesses Newly opening businesses and remodeling projects in FY2011.3 Scheduled Projected Total opening sales investment CELEO Hachioji November 2010 ¥15.0 billion ¥3.0 billion atré Akihabara 1 November 2010 ¥5.0 billion ¥4.4 billion Tokyo Station, NorthCourt (Gran
Slide 38: Development of ecute
Development of Omiya Shinagawa Tachikawa Nippori Tokyo October 2007 (phase I) March 2008 Beginning March 2005 October 2005 June 2009 March 2010 of operations October 2008 (phase II) (floor space increase) Store Space approx. 2,300 m2 approx. 1,600 m2 approx. 4,300 m2 approx. 380 m2 approx. 1,300 m2
Slide 39: Development of Tokyo Station City
Development of GranTokyo GranTokyo Sapia Tower GranSta SouthCourt North Tower South Tower Beginning March 2007 November 2007 Conference facilities, November 2007 October 2007 March 2010 of operations hotel: May 2007 (Phase I) Office: approx. 30,600 m2 Rentable area / approx. 15,300 m2 approx. 49,400
Slide 40: Hotel Operations - Overview
Hotel Operations - Overview > Metropolitan Hotels (10 hotels, 3,036 rooms) Hotel Metropolitan (Ikebukuro), Edmont (Iidabashi), Takasaki, Nagano, Sendai, Morioka, Morioka New Wing, Akita, Yamagata, Marunouchi Operating revenues*: ¥16.6 billion (2010.9) Occupancy rate: 82% > HOTEL METS chain (20 hotel
Slide 41: Suica
Suica > Cards issued: 33.63 million (as of September 30, 2010) (electronic money compatible cards issued: 31.23 million) (reference) View Suica card (including tie-ups) valid members: 3.08 million Mobile Suica registered members: 2.18 million [Data] Number of compatible locations (railway): 809 rail
Slide 42: Suica Electronic Money - Transactions and Compatible Stores
Suica Electronic Money - Transactions and Compatible Stores (compatible stores) (transactions per day: millions) Other Suica compatible stores Suica compatible stores outside stations Suica compatible stores in stations Transactions per day Suica cards issued: 33.63 million of which electronic money
Slide 43: Major Subsidiaries - Business Results
Major Subsidiaries - Business Results (¥ Billion) 2010.9 / FY2011.3 FY11.3 / 2009.9 2010.9 FY2010.3 2009.9 Plan FY10.3 Operating revenues 105.1 101.8 96.8% 205.9 200.5 97.4% JR East Retail Net Operating income 2.9 3.4 116.4% 5.1 3.7 73.9% Nippon Operating revenues 32.8 31.9 97.4% 64.9 61.0 94.0% Res
Slide 44: Breakdown of Operating Income
Breakdown of Operating Income (¥ Billion) Shinkansen Network Conventional Lines FY10.3 / FY10.3 / FY2009.3 FY2010.3 FY09.3 FY2009.3 FY2010.3 FY09.3 (%) (%) Passenger Line Network (km) 1,052 1,052 100.0 6,473 6,473 100.0 Passenger Kilometers (million) 19,302 18,152 94.0 110,353 108,807 98.6 Operating
Slide 45: Key Financial Indicators
Additional information for bond investors Key Financial Indicators (figures based on FY2005.3 as 100) (figures based on FY2005.3 as 100) 210 105 200 100 Interest coverage ratio 190 95 Interest-bearing debt / net cash 180 90 provided by operating activities 170 85 160 Equity ratio 80 150 75 140 70 13
Slide 46: Breakdown of Long-term Debt
Additional information for bond investors Breakdown of Long-term Debt Breakdown of consolidated total long-term debt (as of September 30, 2010) Average Average maturity ¥ Billion Breakdown interest rate (non-consolidated) Long-term liabilities incurred for 1,126.4 32.9% 5.35% 11.14 years purchase of
Slide 47: Outlook of Debt Maturity
Additional information for bond investors Outlook of Debt Maturity (¥ Billion) Debt payments (consolidated) Long-term liabilities incurred for purchase Early redemption of 400 of railway facilities long-term liabilities incurred for purchase of 359.5 354.5 Shinkansen facilities 20.6 24.6 335.6 319.1
Slide 48: Outlook of Bond Maturity
Additional information for bond investors Outlook of Bond Maturity (¥ Billion) Maturity ladder of bonds (non-consolidated) 150 Domestic bonds (unsecured) Domestic bonds (unsecured bond issuance FY2011.3) Euro-GBP bonds 100 120.0 40.0 Domestic bonds (general mortgage) 35.0 75.0 110.0 50 15.0 20.0 90.
Slide 49: Bond Issuances since FY2010.3
Additional information for bond investors Bond Issuances since FY2010.3 Total amount Reoffer JGB Maturity Series Tenor Coupon Issue price Issue date of issue yield spread date 59 5 ¥30.0 billion 0.808% ¥100.00 0.808% +13bp 2009.7.24 2014.7.24 60 10 ¥20.0 billion 1.449% ¥100.00 1.449% +13bp 2009.7.24
Slide 50: Long-term Debt - Credit Ratings
Additional information for bond investors Long-term Debt - Credit Ratings Moody’s S&P R&I Aa1 AA- AA+ - Real estate leasing operations and retail - Mainstay transportation operations, supported - Japan’s largest railway operator, the operations are highly competitive and generate by strong operation
Slide 51: Forward-Looking Statements and IR website
These materials and a video of the presentation can be viewed at the JR East’s web site. JR East web site, IR (Investor Relations) http://www.jreast.co.jp/e/investor/ Forward-Looking Statements Statements contained in this report with respect to JR East’s plans, strategies, and beliefs that are not
East Japan Railway Company — Q2 FY2011.3 Earnings Presentation on 6ix