East Japan Railway : Consolidated Financial Results

Fiscal 2021 Financial Results (Japanese GAAP) (Unaudited)

Fiscal 2021 (Year ended March 31, 2021)

All financial information has been prepared in accordance with accounting principles generally accepted in Japan.

"JR East" refers to East Japan Railway Company on a consolidated basis, or if the context so requires, on a non-consolidated basis. English translation from the original Japanese-language document.

	April 28, 2021
East Japan Railway Company
Stock Exchange Listing	Tokyo
Securities Code	9020
URL	https://www.jreast.co.jp/e
Representative	Yuji Fukasawa, President and CEO
Contact Person	Dan Tsuchizawa, General Manager,
	Public Relations Department
	(Tel. [phone])
Scheduled Date of Ordinary General Meeting of Shareholders	June 22, 2021
Scheduled Date of Dividend Payment Commencement	June 23, 2021
Scheduled Date for Release of Annual Securities Report	June 22, 2021
Preparation of Supplementary Explanations of Financial Results:	No
Financial Results Presentation to Be Held:	Yes

1. Consolidated Results for Fiscal 2021 (Year Ended March 31, 2021)

(Amounts less than one million yen, except for per share amounts, are omitted.)

(1) Consolidated financial results

(Percentages represent percentage changes as compared with the previous fiscal year.)

	Operating revenues		Operating income		Ordinary income		Profit attributable to
				owners of parent
	Millions of yen	%		Millions of yen	%		Millions of yen	%		Millions of yen	%
Fiscal 2021	1,764,584	(40.1)	(520,358)	-	(579,798)	-	(577,900)	-
Fiscal 2020		(1.8)		380,841	(21.5)		339,525	(23.4)		198,428	(32.8)
2,946,639

Note: Comprehensive income - Fiscal 2021: (565,771) million yen (-%), Fiscal 2020: 173,329 million yen (a decrease of 41.4%)

Earnings

Earnings

Return on

Ratio of ordinary

Ratio of operating

per share－

per share－

income to

income to

average equity

Basic

Diluted

average assets

operating revenues

Yen

Yen

%

%

%

Fiscal 2021

(1,531.91)

-

(20.3)

(6.6)

(29.5)

Fiscal 2020

-

6.4

4.0

524.91

12.9

Reference: Equity in net income (losses) of affiliated companies - Fiscal 2021: (13,417) million yen, Fiscal 2020: 5,614 million yen

(2) Consolidated financial position

Shareholders' equity

Total assets

Net assets

Equity ratio

per share

Millions of yen

Millions of yen

%

Yen

Fiscal 2021

8,916,420

2,557,361

28.4

6,719.93

Fiscal 2020

3,173,427

36.9

8,340.01

8,537,059

Reference: Shareholders' equity - Fiscal 2021: 2,535,027 million yen, Fiscal 2020: 3,146,196 million yen

(3) Consolidated cash flows

Net cash provided by

Net cash used in

Net cash used in

Cash and cash equivalents

operating activities

investing activities

financing activities

at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Fiscal 2021

(189,968)

(749,397)

983,385

197,960

Fiscal 2020

43,409

153,794

548,692

(701,601)

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2. Dividends (Year Ended March 31, 2020 and 2021 and Year Ending March 31, 2022)

Dividends per share

Ratio of

(Record date)

Total

Dividend

dividends to

1st quarter

2nd quarter

3rd quarter

Year end

Total

dividends

ratio

shareholders'

end

end

end

annual

(annual)

(consolidated)

equity

(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

Fiscal 2020

－

82.50

－

82.50

165.00

62,304

31.4

2.0

Fiscal 2021

－

50.00

－

50.00

100.00

37,760

－

1.3

(Forecast) Fiscal 2022

－

50.00

－

50.00

100.00

104.8

3. Forecasts for Fiscal 2022 (Year Ending March 31, 2022)

(Percentages represent percentage changes as compared with the previous corresponding fiscal period or fiscal year, as applicable.)

							Profit attributable to	Earnings
	Operating revenues	Operating income	Ordinary income	per share－
	owners of parent
							Basic
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Six-month period ending	1,083,000	37.6	1,000	－	(28,000)	－	(52,000)	－	(137.84)
September 30, 2021
Fiscal 2022	2,326,000	31.8	74,000	－	25,000	－	36,000	－	95.43

• Notes

1. Changes to principal subsidiaries during the period (status changes of specified subsidiaries due to changes in the scope of consolidation): No

Newly consolidated － excluded －

(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions

i	Changes in accounting policies with revision of accounting standards	:	No
ii	Changes in accounting policies other than the above	:	No
iii	Changes in accounting estimates	:	No
iv	Restatement of revisions	:	No

(3) Number of issued shares (common stock)
i	Issued shares at period-end	Fiscal 2021	377,932,400 shares	Fiscal 2020	377,932,400 shares
	(including treasury stock)
ii	Treasury stock at period-end	Fiscal 2021	692,286 shares	Fiscal 2020	691,228 shares
iii	Average number of shares	Fiscal 2021	377,240,648 shares	Fiscal 2020	378,026,258 shares
	during period

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(Reference) Overview of the Non-consolidated Financial Results

1. Non-consolidated Results for Fiscal 2021 (Year Ended March 31, 2021)

(Amounts less than one million yen, except for per share amounts, are omitted.)

(1) Non-consolidated financial results

(Percentages represent percentage changes as compared with the previous fiscal year.)
		Operating revenues			Operating income		Ordinary income		Profit
		Millions of yen	%			Millions of yen	%		Millions of yen	%		Millions of yen	%
Fiscal 2021	1,184,145	(42.5)	(478,535)	-	(517,715)	-	(506,631)		-
Fiscal 2020			(2.5)		294,077	(25.0)		260,136	(26.7)		159,053		(36.7)
	2,061,078
		Earnings				Earnings
		per share－				per share－
		Basic				Diluted
		Yen				Yen
Fiscal 2021	(1,341.71)			-
Fiscal 2020					-
	420.35
(2) Non-consolidated financial position
												Shareholders' equity
		Total assets			Net assets			Equity ratio
								per share
		Millions of yen			Millions of yen		%			Yen
Fiscal 2021	8,172,474	2,014,228		24.6			5,334.28
Fiscal 2020							6,756.71
	7,840,416		2,551,346			32.5

Reference: Shareholders' equity - Fiscal 2021: 2,014,228 million yen, Fiscal 2020: 2,551,346 million yen

2. Forecasts for Fiscal 2022 (Year Ending March 31, 2022)

(Percentages represent percentage changes as compared with the previous corresponding fiscal period or fiscal year, as applicable.)
									Earnings
	Operating revenues	Operating income	Ordinary income	Profit		per share－
									Basic
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Six-month period ending	775,000	43.3	(5,000)	-	(18,000)	-	(34,000)	-	(90.04)
September 30, 2021
Fiscal 2022	1,677,000	41.6	37,000	-	0	-	25,000	-	66.21

• Financial results are not subject to auditing.
• Explanation of appropriate use of forecasts of business results; other important items

The forecasts of business results and other forward-looking statements in this document are based on information available as of the date of this document and on certain assumptions that JR East viewed as reasonable as of the date of this document. Actual results may differ from such forward-looking statements for a variety of reasons. Regarding the forecasts of business results, please refer to "Outlook for the Year Ending March 31, 2022" on page 10 of this document.

JR East is scheduled to hold an analysts' conference on April 30, 2021, to present its operating results for Fiscal 2021. JR East plans to upload the presentation materials distributed at such conference to its website upon its conclusion.

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Contents of Attachments

1.	Operating Results and Financial Position .........................................................	5
(1)	Analysis of Operating Results ..................................................................................................................	5
(2)	Analysis of Financial Position.................................................................................................................	11
(3)	Basic Dividend Policy and Dividends for Fiscal 2021 and Fiscal 2022..................................................	11
2.	Status of the Group....................................................................................	13
3.	Management Policies .................................................................................	16
(1)	Basic Management Policies ...................................................................................................................	16
(2)	Medium- to Long-Term Management Strategies and Issues to Be Addressed.....................................	16
4.	Basic Policy for Selection of Accounting Standards ..........................................	18
5.	Consolidated Financial Statements and Main Notes .........................................	19
(1)	Consolidated Balance Sheets (Unaudited) ............................................................................................	19
(2)	Consolidated Statements of Income and Comprehensive Income (Unaudited) ....................................	21
(3)	Consolidated Statements of Changes in Net Assets (Unaudited) .........................................................	23
(4)	Consolidated Statements of Cash Flows (Unaudited) ...........................................................................	25
(5)	Notes to Consolidated Financial Statements (Unaudited) .....................................................................	26
		(Notes on Going Concern Assumption (Unaudited)) ..........................................................................	26
		(Segment Information (Unaudited)) ....................................................................................................	26
		(Per Share Information (Unaudited)) ..................................................................................................	28
		(Subsequent Events (Unaudited)) ......................................................................................................	28
		(Additional Information (Unaudited)) ...................................................................................................	29
6.	Non-consolidatedFinancial Statements .........................................................	30
(1)	Non-consolidated Balance Sheets (Unaudited) .....................................................................................	30
(2)	Non-consolidated Statements of Income (Unaudited) ...........................................................................	33
(3)	Non-consolidated Statements of Changes in Net Assets (Unaudited) ..................................................	35
(Additional Information Regarding Operating Results (Unaudited)) .........................	39

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1. Operating Results and Financial Position

(Unless otherwise stated, all comparisons are between the fiscal year under review and the previous fiscal year.)

(1) Analysis of Operating Results

(i) Summary of the Fiscal Year Ended March 31, 2021

Overview

In the fiscal year ended March 31, 2021, despite signs of recovery in the second half, the Japanese economy continued to be in a difficult state due to the ongoing spread of COVID-19.

There was a significant decline in the number of customers using railways following the spread of COVID-19. In addition, with respect to the life-style service business, there have been declines in the use of stores and restaurants within railway stations and station buildings as well as the use of hotels. In light of this situation, the Group has been placing the utmost priority on preventing the spread of COVID-19 to its customers and employees and ensuring the safety and reliability of transportation and the quality of its services. In September 2020, the Group announced Speed Up "Move Up" 2027, a policy tailored to the post-COVID-19 society. By increasing the level and pace of its various initiatives, the Group will work to expedite its progress toward the achievement of "Move Up" 2027 management vision.

During the fiscal year under review, operating revenues declined 40.1%, to ¥1,764.5 billion, due mainly to the significant revenue declines in the Transportation, Retail & Services, and Real Estate & Hotels segments, which were attributable to the impact from the spread of COVID-19. In addition, as a result of these decreases in operating revenues, we recorded operating loss of ¥520.3 billion (operating income of ¥380.8 billion in fiscal 2020), ordinary loss of ¥579.7 billion (ordinary income of ¥339.5 billion in fiscal 2020), and loss attributable to owners of parent of ¥577.9 billion (profit attributable to owners of parent of ¥198.4 billion in fiscal 2020).

Deepening trust

【Pursuing ultimate safety levels】

Based on the "Group Safety Plan 2023," the JR East Group united as one toward the enhancement and innovation of "safety conduct" and "safety management" by each employee as well as the installation of safety equipment that actively leverages new technologies.

(Specific measures)

• Installation of automatic platform gates completed at 61 railway stations (72 railway stations on a line-by-line basis) as of March 31, 2021
• Introduction of a "system to support decisions on moving railcars," which assists the moving of railcars to safe places in light of the damage caused by flooded rivers and other hazards brought about by Typhoon No. 19 (Hagibis) in 2019, at a total of 78 locations
• Implementation of practical training for train crew through actual video making use of simulators installed at all workplaces
• Promotion of additional seismic reinforcement covering more areas and facilities to prepare for a major earthquake, such as an earthquake directly beneath the Tokyo metropolitan area, in conjunction with examination of measures in light of the damages incurred from the February 2021 earthquake off the coast of Fukushima Prefecture
• Implementation of verification tests at Tokyo, Ueno, and Omiya stations in August 2020 of hazardous-material detection dogs for baggage check to enhance security
• Implementation of test runs from September 2020 to January 2021 for a new train control system on the Hachiko Line that utilizes the Global Navigation Satellite System (GNSS) and a mobile wireless communication network with the aim of introducing the system in fiscal 2025
• Introduction of an AI-based method for detecting wind gusts in November 2020 for controlling train operations using the Doppler radar on certain segments of the Uetsu Line and the Rikuu West Line
• Establishment of a life-size mockup facility at the JR East General Education Center in December 2020, to promote technological development including the mechanization of work processes and renovation materials toward major upgrades to the Shinkansen

【Service quality reforms】

Based on "Medium-term Vision for Service Quality Reforms 2020," the JR East Group accelerated various initiatives, including to prevent transportation service disruptions and their impact on passengers from spreading as well as to strengthen information provision.

(Specific measures)

• Improvement of electrical equipment on conventional lines in the Tokyo metropolitan area to reduce transportation disruptions
• Establishment of a framework to promptly provide relevant information in the event of a planned suspension of operations when a natural disaster occurs, with swift information provision using this framework at the time of heavy snowfall in December 2020
• Implementation of year-round "Assistance and support campaign," which encourages our personnel to proactively ask customers whether they require assistance
• Commencement of the provision of information on the status of congestion inside trains over the last week in 15 sections of 13 line segments in the Tokyo metropolitan area via the JR East corporate website and the JR East

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