Financial Results(FY2025.3)4.2MB

Central Japan Railway Company and Consolidated Subsidiaries

Consolidated Balance Sheet as of March 31, 2025, and the Related Consolidated Statements of Income, Comprehensive Income, Changes in Equity,

and Cash Flows for the Year then Ended and Independent Auditor’s Report

Deloitte.

INDEPENDENT AUDITOR'S REPORT

Deloitte Touche Tohmatsu LLC jP TOWER NAGOYA

1-1-1 Meieki, Nakamura-ku

Nagoya, Atchi 450-8530 japan

Tel: +81 (52) 565 5511

Fax: +81 (52) 569 1394

https://www.deloitte.com/jp/en

To the Board of Directors of

Central Japan Railway Company:

of Consolidated Financial Statements»

Opinion

We have audited the consolidated financial statements of Central Japan Railway Company and its consolidated subsidiaries (the "Group"), which comprise the consolidated balance sheet as of March 31, 2025, and the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of 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, 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance 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 the convenience 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 the Group in accordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we have obtained 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 significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Member of

Deloitte Touche Tohmatsu Limited

Other Information

Other information comprises the information included in the Group's disclosure documents accompanying the audited consolidated financial statements, but does not include the consolidated 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 such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group'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 for overseeing the Directors' execution of duties relating to the design and operating effectiveness of the 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 to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on 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 that is 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 of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting 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 as a 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 the audit 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.

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes 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 a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

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 the consolidated 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 matter should 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.

Fees for audit and other services for the year ended March 31, 2025, which were charged by us and our network firms to Central Japan Railway Company and its subsidiaries were ¥442 million and ¥26 million, respectively.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan

Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Keisuke Mizukami

Designated Engagement Partner Certified Public Accountant

Yasuhiko Go

Designated Engagement Partner Certified Public Accountant

July 22, 2025

Central Japan Railway Company and Consolidated Subsidiaries

Consolidated Balance Sheet

March 31, 2025

Thousands of Thousands of

Millions of Yen U.S. Dollars Millions of Yen U.S. Dollars

(Note 2) (Note 2) (Note 2) (Note 2)

ASSETS

2025 2024 2025

LIABILITIES AND EQUITY

2025 2024 2025

CURRENT ASSETS: CURRENT LIABILITIES:

Total current liabilities 782,343 798,703 5,250,624

NONCURRENT ASSETS:

Investments and other assets:

Investment securities (Notes 6 and 14) 438,512 511,472 2,943,033 NONCURRENT LIABILITIES:

See notes to consolidated financial statements.

- 8 -

Central Japan Railway Company and Consolidated Subsidiaries

Consolidated Statement of Income

Year Ended March 31, 2025

Thousands of

Millions of Yen U.S. Dollars (Note 2) (Note 2)

Yen U.S. Dollars

2025 2024 2025

PER SHARE OF COMMON STOCK* (Note 3.r):

Basic net income

465.88

390.66 $3.13

Cash dividends applicable to the year 31.00 29.000.21

See notes to consolidated financial statements.

* Per share figures have been restated, as appropriate, to reflect the five-for-one stock split effective as of October 1, 2023.

Central Japan Railway Company and Consolidated Subsidiaries

Consolidated Statement of Comprehensive Income

Year Ended March 31, 2025

Thousands of

Millions of Yen U.S. Dollars (Note 2) (Note 2)

See notes to consolidated financial statements.

Central Japan Railway Company and Consolidated Subsidiaries

Consolidated Statement of Changes in Equity Year Ended March 31, 2025

Thousands Millions of Yen (Note 2)

Accumulated Other

Comprehensive Income

Thousands of U.S. Dollars (Note 2)

Accumulated Other

Comprehensive Income

See notes to consolidated financial statements.

*Shares and per share figures have been restated, as appropriate, to reflect the five-for-one stock split effective as of October 1, 2023.

- 11 -

Central Japan Railway Company and Consolidated Subsidiaries

Consolidated Statement of Cash Flows

Year Ended March 31, 2025

Thousands of

Millions of Yen U.S. Dollars (Note 2) (Note 2)

2025 2024 2025

OPERATING ACTIVITIES:

Income before income taxes

645,875

545,328 $ 4,334,731 Adjustments for:

(160,220) (58,987) (1,075,302)

Depreciation and amortization 208,042 216,406 1,396,255

Equity in earnings of affiliates (617) (566) (4,140)

Proceeds from contribution for construction (1,046) (3,031) (7,020)

Loss on reduction of noncurrent assets 911 2,567 6,114

Loss on retirement of noncurrent assets 6,886 8,791 46,214

1,115 279 7,483

Changes in assets and liabilities:

Increase in trade receivables (24,256) (33,992) (162,791)

Decrease (Increase) in inventories 533 (3,928) 3,577

(Decrease) Increase in trade payables (187) 19,321 (1,255)

Increase in advances received 5,118 5,627 34,348

Decrease in liability for retirement benefits (3,011) (4,693) (20,208)

(54,596) (20,245) (366,416)

Net cash provided by operating activities 624,550 672,878 4,191,610 INVESTING ACTIVITIES:

F

Central Japan Railway Company and Consolidated Subsidiaries

Consolidated Statement of Cash Flows

Year Ended March 31, 2025

Thousands of

Millions of Yen U.S. Dollars (Note 2) (Note 2)

Central Japan Railway Company and Consolidated Subsidiaries

Notes to Consolidated Financial Statements

Year Ended March 31, 2025

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., and the Railway Technical Research Institute (the "RTRI") which reorganized as a public interest corporation as of April 1, 2011. The JNR itself became the JNR Settlement Corporation (the "JNRSC"). All of the assets and liabilities of the JNR were transferred to such organizations, including the JNRSC.

   Prior to December 1, 2001, the Law Concerning Passenger Railway Companies and the Japan Freight Railway Company (the "Law") required that authorization be obtained from the Minister of Land, Infrastructure, Transport and Tourism regarding fundamentals such as: (1) commencement of business other 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 was revised and the Company was no longer in scope of the Law, the Company was not required to obtain the aforementioned authorizations.

   On October 8, 1997, the Company's shares were listed on the Nagoya and Tokyo stock exchanges in Japan. The JNRSC, which held all 2,240,000 of the Company's outstanding shares prior to the listing, sold 1,353,929 shares in the initial public offerings. Pursuant to the Law for Disposal of Debts and Liabilities of the JNRSC enacted in October of 1998, the Company's shares held by the JNRSC were transferred to Japan Railway Construction Public Corporation (the "JRCPC"). On October 1, 2003, the CATT and the JRCPC were fully integrated, pursuant to the Law of Japan Railway Construction, Transport and Technology enacted on October 1, 2003, and designated as the JRTT. In July 2005, the JRTT sold 600,000 shares of the Company. On April 5, 2006, the JRTT also sold its remaining 286,071 shares of the Company. As a result of this sale, all of the Company's shares held by the JRTT were sold.

   The shares above do not reflect the effect of the hundred-for-one stock split effective as of October 1, 2012 and the five-for-one stock split effective as of October 1, 2023.

2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

   The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, and in accordance with accounting principles generally accepted in Japan, which are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards.

   In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the 2024 consolidated financial statements to conform to the classifications used in 2025.

   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 the rate of ¥149 to $1, the approximate rate of exchange as of March 31, 2025. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. Japanese yen figures of less than one million yen are rounded down to the nearest million of yen, except for per share information, and U.S. dollar 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 POLICIES

   1. Principles of Consolidation

      The accompanying consolidated financial statements as of March 31, 2025, include the accounts of the Company and its 28 significant subsidiaries (together, the "Companies").

      On October 1, 2023, JR-Central Passengers Co., Ltd., a consolidated subsidiary, was excluded from the scope of consolidation due to a merger with Tokai Kiosk Co., Ltd. On the same day, Tokai Kiosk Co., Ltd. changed its trade name to JR Central Retailing Plus Co., Ltd.

      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 over which 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 the subsidiary and that of the Companies.

   2. 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 of the date of acquisition.

   3. 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 from other money.

   4. 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 for materials and supplies, or net selling value.

   5. Securities

      Securities are classified and accounted for, depending on management's intent, as follows:

      1. Held-to-maturity debt securities, for which there is a positive intent and ability to hold to maturity, are reported at amortized cost.

      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 component of equity.

      3. 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. Investments in partnership, etc. (which are deemed to be securities pursuant to Article 2, Paragraph 2 of the Financial Instruments and Exchange Act (Act No. 25 of 1948)) are reported at the net value of equities based on the latest financial statements available according to the financial reporting dates stipulated in the partnership agreements.

   6. Money Held in Trust

      Held-to-maturity debt securities, which comprise trust property are reported at amortized cost.

   7. Property, Plant and Equipment

      Property, plant and equipment are stated at cost. Certain contributions in aid for construction of railways and other property are deducted directly from the cost of the related assets. The accumulated contributions deducted from the cost of property, plant and equipment as of March 31, 2025 and 2024 amounted to ¥299,716 million ($2,011,516 thousand), and ¥299,428 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.

   8. Long-Lived Assets

      The Companies review their long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.

   9. Software Costs

      Software costs are amortized by the straight-line method mainly over five years.

   10. Deferred Charges

       Bond issuance costs are fully charged to income as incurred.

   11. Retirement and Pension Plans

       The Company and 28 consolidated subsidiaries have unfunded retirement plans covering substantially all of their employees. Six consolidated subsidiaries have noncontributory defined benefit pension plans and one consolidated subsidiary has a defined contribution pension plan, some of those subsidiaries also have unfunded retirement plans. Some of the consolidated 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 and plan assets at the balance sheet date. The projected benefit obligations are attributed to periods on a benefit 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 on a straight-line basis mainly over five years, which is within the average remaining service period.

   12. 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:

       1. 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 has a performance obligation to provide transportation services based on transportation contracts with customers. Of these transportation services, non-commuter fares 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 for commuter passes and revenues are recognized over the effective period.

       2. 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 to deliver merchandise under sales contracts with customers. Such performance obligations are determined to be satisfied upon delivery of the merchandise and revenue 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 point of sale.

       3. Real Estate

          In the Real Estate segment, in addition to the real estate leasing business for station buildings and other 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 "Accounting Standard for Lease Transactions" (the Accounting Standards Board of Japan (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 performance obligations are determined to be satisfied upon delivery of the property and revenue is recognized at the time of delivery.

   13. Research and Development Costs

       Research and development costs are charged to income as incurred. Research and development costs charged to income were ¥36,752 million ($246,657 thousand) and ¥33,001 million for the years ended March 31, 2025 and 2024, respectively.

   14. 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.

   15. Income Taxes

       The provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset and liability approach is used to recognize deferred tax assets 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 are measured by applying currently enacted tax laws to the temporary differences.

   16. Appropriations of Retained Earnings

       Appropriations of retained earnings are reflected in the consolidated financial statements for the following year upon shareholders' approval.

   17. Derivatives and Hedging Activities

       The Companies use derivative financial instruments primarily to manage exposures to market fluctuations in foreign exchange and interest rates. Foreign currency swaps are utilized by the Companies to reduce foreign currency exchange rate risks. Interest rate swaps are utilized by the Companies to reduce interest rate risks. Interest rate and currency swap contracts are utilized by the Companies to reduce interest rate and foreign exchange risks. The Companies do not enter into derivatives for trading or speculative purposes.

       Foreign currency swaps, which qualify for hedge accounting and specific matching criteria, are not remeasured 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 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 the differential paid or received under the swap agreement is recognized and included in interest expense.

   18. Per Share Information

       Basic net income per share is computed by dividing net income attributable to owners of the parent available to common shareholders by the weighted-average number of common shares outstanding for the period.

       Net income attributable to owners of the parent available to common shareholders used in the computation for 2025 and 2024 were ¥458,423 million ($3,076,664 thousand) and ¥384,411 million, respectively. The average number of common shares used in the computation for 2025 and 2024 were 983,995,105 shares and 983,995,447 shares, respectively.

       Diluted net income per share is not presented in the accompanying consolidated financial statements as the Companies do not have any dilutive securities.

       Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective years, including dividends to be paid after the end of the year.

       The Company conducted the five-for-one stock split of its common stock, with an effective date of October 1, 2023. The weighted-average number of common share and per share figures have been adjusted to reflect the impact of the stock split as if the stock split had occurred at the beginning of the year ended March 31, 2024.

   19. Accounting Changes and Error Corrections

       Under 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 are required as follows:

       1. Changes in Accounting Policies

          When a new accounting policy is applied following revision of an accounting standard, the new policy is applied retrospectively unless the revised accounting standard includes specific transitional 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 the change if the change affects that period only, and is accounted for prospectively if the change affects both the period of the change and future periods.

       4. Corrections of Prior-Period Errors

          When an error in prior-period financial statements is discovered, those statements are restated.

   20. Changes in Presentation (Consolidated Balance Sheets)

       "Money held in trust" was included in "Other—net" under noncurrent assets of the consolidated balance sheets as of March 31, 2024. Since the amount increased significantly as of March 31, 2025, such amount is disclosed separately in the noncurrent assets in the consolidated balance sheets.

       (Consolidated Statement of Cash Flows)

       "Proceeds from cancellation of money held in trust" was included in "Other—net" under investing activities of the consolidated statement of cash flows for the year ended March 31, 2024. Since the amount increased significantly in the year ended March 31, 2025, such amount is disclosed separately in the investing activities in the consolidated statement of cash flows.

   21. New Accounting Pronouncements

       ・Accounting Standard for Leases (ASBJ Statement No. 34, September 13, 2024)

       ・Implementation Guidance on Accounting Standard for Leases (ASBJ Guidance No. 33, September 13, 2024), etc.

       1. Overview

          As part of its efforts to make Japanese accounting standards internationally consistent, the ASBJ conducted a study based on international accounting standards to develop lease accounting standards. These standards require lessees to recognize assets and liabilities for all leases. As a basic policy, the ASBJ issued Lease Accounting Standards based on a single accounting model under IFRS No. 16. These standards aim to make the provisions of IFRS No. 16 simpler and more convenient and to eliminate the need for modifications even when the provisions of IFRS No. 16 are used in individual financial statements.

          As for the accounting treatment for lessees, a single accounting model is applied to the lessees’ method of expense allocation for all leases, similar to IFRS 16, whereby the Companies record depreciation expense on a right-of-use asset and interest equivalent on the lease liability for all leases, regardless of whether the lease is a finance lease or an operating lease.

       2. Scheduled Date of Application

          The Companies expect to apply the accounting standard and guidance from the year beginning on April 1, 2027.

       3. Effect of Application

          The effect on the consolidated financial statements is currently under evaluation.

4. SIGNIFICANT ACCOUNTING ESTIMATE

   Not applicable.

5. ACCOUNTING CHANGES

   ・Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October 28, 2022)

   ・Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, October 28, 2022)

   ・Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022)

   Effective April 1, 2025, the Companies adopted ASBJ Statement 27, "Accounting Standard for Current Income Taxes, etc." (“ASBJ Statement No. 27, etc.”).

   Revisions to categories for recording Corporate Taxes, etc. (taxation on other comprehensive income) conform to the transitional treatment in the proviso of Paragraph 20-3 of the Revised Accounting Standard of 2022 and the transitional treatment in the proviso of Paragraph 65-2(2) of ASBJ Guidance No. 28, October 28, 2022, “Guidance on Accounting Standard for Tax Effect Accounting” ( “Revised Guidance on Accounting Standard of 2022”). There was no effect on the consolidated financial statements for the year ended March 31, 2025.

   In addition, revisions to the treatment in the consolidated financial statements of the deferral for tax purposes of gains or losses on sales of shares of subsidiaries and other securities arising from sales between consolidated companies have applied the Revised Guidance on Accounting Standard of 2022 from the beginning of the year ended March 31, 2025. There was no effect on the consolidated financial statements for the year ended March 31, 2024.

6. MARKETABLE AND INVESTMENT SECURITIES

   Information regarding marketable and investment securities with readily determinable fair values classified as available-for-sale and held-to-maturity as of March 31, 2025 and 2024, was as follows:

   Millions of Yen

   2025

   Cost

   Unrealized

   Gain

   Unrealized

   Loss

   Fair

   Value

   Securities classified as: Available for sale:

   Equity securities	¥	83,697	¥	122,903	¥	1,944	¥	204,657
   Trust fund investment and other		276		27				303
   Held-to-maturity	284,600				6,094		278,505
   Total	¥ 368,574		¥ 122,930		¥ 8,039		¥ 483,465

   Millions of Yen

   2024

   Cost

   Unrealized

   Gain

   Unrealized

   Loss

   Fair

   Value

   Securities classified as: Available for sale:

   Equity securities	¥	89,943	¥	125,510	¥	1,795	¥	213,658
   Trust fund investment and other		276		109				385
   Held-to-maturity	422,500				2,954		419,545
   Total	¥ 512,719		¥ 125,620		¥ 4,750		¥ 633,588

   Thousands of U.S. Dollars

   2025

   	Cost	Unrealized Gain	Unrealized Loss	Fair Value
   Securities classified as:
   Available for sale:
   Equity securities	$ 561,724	$ 824,852	$ 13,046	$ 1,373,536
   Trust fund investment and other	1,852	181		2,033
   Held-to-maturity	1,910,067		40,899	1,869,161
   Total	$ 2,473,651	$ 825,033	$ 53,953	$ 3,244,731

   The information for available-for-sale securities whose fair value is not readily determinable as of March 31, 2025 and 2024, is disclosed in Note 14.

   The transactions related sale of other securities for the years ended March 31, 2025 and 2024 were not presented as the effect was immaterial.

   The impairment loss on marketable and investment securities was not presented as the effect of the loss was immaterial for the years ended March 31, 2025 and there was no impairment loss for the years ended March 31, 2024.

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

   The interest rates applicable to short term loans payable were 0.71% as of March 31, 2025 and 0.15% as of March 31, 2024.

   Long-term debt held by the Company as of March 31, 2025 and 2024, consisted of the following:

   Thousands of

   Millions of Yen U.S. Dollars

   2025 2024 2025

   The Company
   Unsecured 2.39% bonds due 2026	¥	29,798	¥	29,797	$ 199,986
   Unsecured 2.31% bonds due 2027		9,998		9,997	67,100
   Unsecured 2.30% bonds due 2027		4,999		4,999	33,550
   Unsecured 2.39% bonds due 2028		19,996		19,995	134,201
   Unsecured 2.391% bonds due 2028		30,000		30,000	201,342
   Unsecured 2.646% bonds due 2038		10,000		10,000	67,114
   Unsecured 2.166% bonds due 2029		30,000		30,000	201,342
   Unsecured 2.312% bonds due 2029		30,000		30,000	201,342
   Unsecured 2.556% bonds due 2039		10,000		10,000	67,114
   Unsecured 2.321% bonds due 2029		30,000		30,000	201,342
   Unsecured 2.157% bonds due 2029		40,000		40,000	268,456
   Unsecured 2.375% bonds due 2039		10,000		10,000	67,114
   Unsecured 2.212% bonds due 2030		30,000		30,000	201,342
   Unsecured 2.111% bonds due 2030		20,000		20,000	134,228
   Unsecured 1.797% bonds due 2030		10,000		10,000	67,114
   Unsecured 2.083% bonds due 2031		20,000		20,000	134,228
   Unsecured 1.895% bonds due 2031		10,000		10,000	67,114
   Unsecured 1.824% bonds due 2032		10,000		10,000	67,114
   Unsecured 1.725% bonds due 2033		5,000		5,000	33,557
   Unsecured 1.807% bonds due 2033		15,000		15,000	100,671
   Unsecured 1.786% bonds due 2033		15,000		15,000	100,671
   Unsecured 1.629% bonds due 2033		10,000		10,000	67,114
   Unsecured 1.623% bonds due 2034		15,000		15,000	100,671
   Unsecured 1.584% bonds due 2034		15,000		15,000	100,671
   Unsecured 1.502% bonds due 2034		20,000		20,000	134,228
   Unsecured 1.309% bonds due 2032		15,000		15,000	100,671
   Unsecured 1.917% bonds due 2044		10,000		10,000	67,114
   Unsecured 1.362% bonds due 2034		20,000		20,000	134,228
   Unsecured 1.014% bonds due 2035		20,000		20,000	134,228
   Unsecured 1.685% bonds due 2045		10,000		10,000	67,114
   Unsecured 1.196% bonds due 2035		15,000		15,000	100,671
   Unsecured 1.297% bonds due 2035		15,000		15,000	100,671
   Unsecured 1.210% bonds due 2035		15,000		15,000	100,671
   Unsecured 1.018% bonds due 2036		15,000		15,000	100,671
   Unsecured 0.421% bonds due 2036		10,000		10,000	67,114
   Unsecured 0.897% bonds due 2056		20,000		20,000	134,228
   Unsecured 1.091% bonds due 2057（Green bonds）		20,000		20,000	134,228
   Unsecured 1.243% bonds due 2057（Green bonds）		10,000		10,000	67,114
   Unsecured 1.584% bonds due 2057（Green bonds）		8,000		8,000	53,691
   Unsecured 1.787% bonds due 2043（Green bonds）		20,000		20,000	134,228
   Unsecured 2.033% bonds due 2044（Green bonds）		10,000			67,114
   Unsecured 1.994% bonds due 2044（Green bonds）		10,000			67,114
   U.S. dollar 4.25% bonds due 2045 issued abroad		36,569		36,548	245,429
   U.S. dollar 2.20% bonds due 2024 issued abroad				80,504
   Unsecured loans from Japanese banks and others,

   with interest rates ranging from 0.61% to 2.17%

   (2025), 0.61% to 2.27% (2024), due 2024 to 2045 ¥ 543,590 ¥ 543,290 $ 3,648,255

   Total 1,272,952 1,333,131 8,543,302

   Less current portion (76,200) (116,754) (511,409) Long-term debt, less current portion ¥ 1,196,752 ¥ 1,216,377 $ 8,031,892

   There are no debts held by consolidated subsidiaries as of March 31, 2025 and 2024.

   Annual maturities of debt outstanding at the principal amounts as of March 31, 2025, were as follows:

   Year Ending

   March 31 Millions of Yen

   Thousands of

   U.S. Dollars

   2026	¥	76,200	$ 511,409
   2027		135,300	908,053
   2028		119,440	801,610
   2029		149,900	1,006,040
   2030		136,550	916,442
   Thereafter	656,015		4,402,785
   Total	¥ 1,273,405		$ 8,546,342

   The Company has entrusted cash for the repayment of a portion of its outstanding bonds based on debt assumption agreements with financial institutions; however, the Company is not released from the primary responsibility for the liability by these agreements. The outstanding bonds covered by these agreements as of March 31, 2025 and 2024, were as follows:

   Thousands of

   Millions of Yen U.S. Dollars

   2025 2024 2025

   Unsecured 1.310% bonds due 2033	¥	10,000	¥	10,000	$ 67,114
   Unsecured 2.210% bonds due 2024				9,650
   Unsecured 2.405% bonds due 2026	9,900		9,900		66,442
   Unsecured 2.310% bonds due 2027	10,000		10,000		67,114
   Unsecured 2.300% bonds due 2027	10,000		10,000		67,114
   Unsecured 1.725% bonds due 2033	5,000		5,000		33,557
   Total	¥ 44,900		¥ 54,550		$ 301,342

   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 17).

   The Company has credit commitments from banks. Total unused credit available to the Company as of March 31, 2025, was ¥100,000 million ($671,140 thousand).

8. 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, 2025, were 0.86%.

   Annual maturities of long-term debt for the Chuo Shinkansen construction as of March 31, 2025, were as follows:

   Year Ending

   March 31 Millions of Yen

   Thousands of

   U.S. Dollars

   2026
   2027
   2028
   2029
   2030 Thereafter	¥ 3,000,000	$ 20,134,228
   Total	¥ 3,000,000	$ 20,134,228

9. LONG-TERM ACCOUNTS PAYABLE—RAILWAY FACILITIES

   Long-term accounts payable—railway facilities were incurred in the amount of ¥5,095,661 million in 1991 for the purchase of the Shinkansen railway ground facilities and serially repaid to the JRTT. Payment terms are 25.5 years for ¥4,494,466 million and 60 years for ¥601,195 million. Payment terms and interest rates of the payables were determined based on the agreements 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 as of March 31, 2025, were 6.52%.

   Annual maturities of long-term accounts payable—railway facilities as of March 31, 2025, were as follows:

   Year Ending

   March 31 Millions of Yen

   Thousands of

   U.S. Dollars

   2026	¥	7,837	$ 52,597
   2027		8,333	55,926
   2028		8,861	59,469
   2029		9,424	63,248
   2030		10,024	67,275
   Thereafter	461,196		3,095,275
   Total	¥ 505,677		$ 3,393,805

   Interest expense on the aforementioned long-term accounts payable—railway facilities amounted to

   ¥33,288 million ($223,409 thousand) and ¥33,724 million for the years ended March 31, 2025 and 2024, respectively.

10. RETIREMENT AND PENSION PLANS

    Employees whose service with the Company and consolidated subsidiaries is terminated are entitled to retirement and pension benefits determined by reference to accumulated points during their employment calculated by their position or basic rates of pay at the time of termination, length of service and other conditions under which the termination occurs. Some of the consolidated subsidiaries adopt the simplified accounting method for calculation of liability of retirement benefits and retirement benefit expenses.

    1. The changes in defined benefit obligation for the years ended March 31, 2025 and 2024, were as follows:

       Millions of Yen

       Thousands of

       U.S. Dollars

       2025 2024 2025

       Balance at beginning of year	¥	181,797	¥	207,165	$ 1,220,114
       Current service cost		12,628		14,742	84,751
       Interest cost		2,272		865	15,248
       Actuarial (gains) losses		(19,174)		(28,893)	(128,684)
       Benefits paid		(6,364)		(11,234)	(42,711)
       Prior service cost	(32)		(848)		(214)
       Balance at end of year	¥ 171,126		¥ 181,797		$ 1,148,496

       The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt the simplified accounting method, are included in the current service cost.

    2. The changes in plan assets for the years ended March 31, 2025 and 2024, were as follows:

       Millions of Yen

       Thousands of

       U.S. Dollars

       2025 2024 2025

       Balance at beginning of year	¥	35,108	¥	30,127	$ 235,624
       Expected return on plan assets		536		465	3,597
       Actuarial (losses) gains		(1,406)		3,974	(9,436)
       Contributions from the employer		1,040		1,370	6,979
       Benefits paid	(1,150) (829)				(7,718)
       Balance at end of year	¥ 34,128 ¥ 35,108				$ 229,046

    3. Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obligation and plan assets as of March 31, 2025 and 2024, was as follows:

       Millions of Yen

       Thousands of

       U.S. Dollars

       2025 2024 2025

       Funded defined benefit obligation	¥	22,450	¥	24,892	$ 150,671
       Plan assets	(34,128)		(35,108)		(229,046)
       Total	(11,678)		(10,216)		(78,375)
       Unfunded defined benefit obligation	148,676		156,905		997,825
       Net liability arising from defined benefit obligation 136,997 146,688 919,442
       Liability for retirement benefits	149,080		157,019		1,000,536
       Asset for retirement benefits	(12,082)		(10,330)		(81,087)
       Net liability arising from defined benefit obligation ¥ 136,997 ¥ 146,688 $ 919,442

    4. The components of net periodic benefit costs for the years ended March 31, 2025 and 2024, were as follows:

       Thousands of

       Millions of Yen U.S. Dollars

       2025 2024 2025

       Service cost	¥	12,628	¥	14,742	$ 84,751
       Interest cost		2,272		865	15,248
       Expected return on plan assets		(536)		(465)	(3,597)
       Recognized actuarial (gains) losses		(11,815)		(8,169)	(79,295)
       Amortization of prior service cost	(334) (294)				(2,241)
       Net periodic benefit costs	¥ 2,213 ¥ 6,679				$ 14,852

       The retirement benefit expenses recognized by the consolidated subsidiaries, which adopt the simplified accounting method, are included in service cost.

    5. Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans for the years ended March 31, 2025 and 2024, were as follows:

       Thousands of

       Millions of Yen U.S. Dollars

       2025 2024 2025

       Actuarial gains (losses)	¥	5,952 ¥	24,698	$ 39,946
       Prior service cost	(302) 554			(2,026)
       Total	¥ 5,650 ¥ 25,253			$ 37,919

    6. Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement benefit plans as of March 31, 2025 and 2024, were as follows:

       Thousands of

       Millions of Yen U.S. Dollars

       2025 2024 2025

       Unrecognized actuarial gains (losses) ¥ 37,992 ¥ 32,040 $ 254,979 Unrecognized prior service cost 707 1,009 4,744 Total ¥ 38,700 ¥ 33,049 $ 259,731

    7. Plan assets

       1. Components of plan assets

          Plan assets as of March 31, 2025 and 2024, consisted of the following:

          2025		2024
          Equities	49 %	51 %
          General security account	32	30
          Bonds	10	10
          Others	9	10
          Total	100 %	100 %

          The employee retirement benefit trust for the Companies’ contributory pension plans accounted for 38% and 41% of total plan assets for the years ended March 31, 2025 and 2024.

       2. Method of determining the expected rate of return on plan assets

          The expected rate of return on plan assets is determined considering the current and future asset portfolio and the long-term rates of return which are expected currently and in the future from the various components of the plan assets.

    8. Assumptions used for the years ended March 31, 2025 and 2024, were set forth as follows:

       2025 2024

       Discount rate Mainly 2.1% Mainly 1.4%

       Expected rate of return on plan assets 1.2% to 2.0% 1.2% to 2.0%

    9. Defined contribution plan

       Total contribution by the Companies for the defined contribution plan was ¥167 million ($1,120 thousand) for the year ended March 31, 2025 and ¥159 million for the year ended March 31, 2024.

11. EQUITY

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

    1. 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 prescribed as one year rather than the normal two-year term by its articles of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if the Company has prescribed so in its articles of incorporation.

       The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders subject to a certain limitation and additional requirements.

       Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of 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 of equity after dividends must be maintained at no less than ¥3 million.

    2. 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 a legal 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 paid-in 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 be transferred among the accounts within equity under certain conditions upon resolution of the shareholders.

    3. Treasury Stock and Treasury Stock Acquisition Rights

       The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders which is determined by a specific 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 of equity or deducted directly from stock acquisition rights.

    4. Stock Splits

       At the meeting of the Board of Directors held on August 22, 2023, the Company resolved to implement the five-for-one stock split, with an effective date of October 1, 2023.

12. INCOME TAXES

    The 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, 2025 and 2024.

    The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities as of March 31, 2025 and 2024, are as follows:

    Millions of Yen

    Thousands of

    U.S. Dollars

    	2025	2024	2025
    Deferred tax assets:
    Depreciation and amortization	¥ 107,161	¥ 99,282	$ 719,201
    Liability for retirement benefits	47,809	49,020	320,865
    Loss on write down of investment securities	13,230	13,168	88,791
    Software	11,570	11,907	77,651
    Unrealized profit on property, plant and equipment	10,175	9,742	68,288
    Provision for bonuses	9,475	9,283	63,590
    Accrued railway usage charges	1,645	1,852	11,040
    Other	44,428	45,110	298,174
    Total	245,497	239,368	1,647,630
    Less valuation allowance	(36,380)	(37,108)	(244,161)
    Deferred tax assets	209,116	202,260	1,403,463
    Deferred tax liabilities:
    Unrealized gain on available-for-sale securities	36,774	36,133	246,805
    Deferred gain on transfer of certain fixed assets	4,733	4,598	31,765
    Other	5,366	4,768	36,013
    Deferred tax liabilities	46,873	45,501	314,583
    Net deferred tax assets	¥ 162,242	¥ 156,759	$ 1,088,872

    "Tax loss carryforwards" was disclosed separately under " Deferred tax assets" as of March 31, 2024. However, since the amount decreased significantly in the year ended March 31, 2025, it is included in "Other— Deferred tax assets". To reflect these changes in presentation, the notes as of March 31, 2024 have been reclassified.

    As a result, the amount of ¥7,875 million recorded as "Tax loss carryforwards" and the amount of

    ¥37,235 million recorded as "Other— Deferred tax assets", respectively, as of March 31, 2024, were reclassified to "Other— Deferred tax assets" in the amount of ¥45,110 million in the note as of March 31, 2025.

    Also, the breakdown of "Less valuation allowance" and the expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred tax assets are omitted as of March 31, 2025, and March 31,2024.

    Reconciliations between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statements of income for the years ended March 31, 2025 and 2024, are as follows:

    March 31, 2024				March 31, 2025
    Normal effective statutory tax rate		30.3%		Normal effective statutory tax rate		30.3%
    Effect of tax rate increase				Effect of tax rate increase		(0.7)
    Tax credit for R&D Expenses		(0.3)		Tax credit for R&D Expenses		(0.6)
    Tax credits for promotion of salary		(0.4)		Tax credits for promotion of salary		(0.5)
    increases				increases
    Change in valuation allowance		(0.8)		Change in valuation allowance		(0.3)
    Other - net		(0.1)		Other - net		(0.1)
    Actual effective tax rate		28.7%		Actual effective tax rate		28.1%

    Special defense surtax will be imposed on corporate income tax amounts for fiscal years beginning on or after April 1, 2026 in accordance with "Act to partially amend the Income Tax Act, etc." (Act No. 13 of 2025) passed by the parliament on March 31, 2025.

    Consequently, deferred tax assets and deferred tax liabilities relating to temporary differences, etc. that are expected to be reversed after the fiscal year beginning on April 1, 2026 have been calculated by changing the effective statutory tax rate from 30.3% to 31.2%.

    As a result, deferred tax assets (amount after deducting deferred tax liabilities) for the year ended March 31, 2025 increased by ¥3,629 million ($24,355 thousand), while deferred income taxes decreased by ¥4,679 million ($31,402 thousand).

    The Company and certain of its consolidated subsidiaries have adopted the group tax sharing system. In addition, the Group accounts for and disclose income taxes and local income taxes in accordance with "Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System" (ASBJ Practical Solution No. 42, August 12, 2021).

13. REVENUE

    1. Disaggregation of Revenue

       Millions of Yen 2025

       	Transportation
       Commuter	Non- commuter			Merchandise
       fares	fares	Others		and Other		Real Estate		Other		Total
       ¥ 46,677	¥ 1,385,849	¥ 54,972		¥ 156,543		¥ 17,359		¥ 125,958		¥ 1,787,360

       Reportable Segment

       Revenues from contract with customers

       Other revenue 3,032 6,614 34,461 378 44,487

       Total ¥ 46,677 ¥ 1,385,849 ¥ 58,004 ¥ 163,158 ¥ 51,821 ¥ 126,336 ¥ 1,831,847

       Millions of Yen 2024

       	Transportation
       Commuter	Non-commuter			Merchandise
       fares	fares	Others		and Other		Real Estate		Other		Total
       ¥ 45,233	¥ 1,291,998	¥ 51,364		¥ 146,796		¥ 16,252		¥ 115,792		¥ 1,667,437

       Reportable Segment

       Revenues from contract with customers

       Other revenue 2,973 6,347 33,270 377 42,969

       Total ¥ 45,233 ¥ 1,291,998 ¥ 54,337 ¥ 153,144 ¥ 49,522 ¥ 116,170 ¥ 1,710,407

       Thousands of U.S. Dollars 2025

       Reportable Segment Transportation

       Non-

       Revenues from contract

       Commuter

       fares

       commuter

       fares Others

       Merchandise

       and Other Real Estate Other Total

       with customers $ 313,268 $ 9,301,000 $ 368,939 $1,050,624 $ 116,503 $ 845,355 $ 11,995,704

       Other revenue 20,348 44,389 231,281 2,536 298,570

       Total $ 313,268 $ 9,301,000 $ 389,288 $1,095,020 $ 347,791 $ 847,892 $ 12,294,275

       "Other" includes business in hotel, travel, advertising, rolling stock production, construction, etc., which are not included in any reportable segment.

    2. Basic Information to Understand Revenues from Contracts with Customers

Basic information to understand revenues from contracts with customers is stated in Note 3.l.