IR

Financial Results
CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED MARCH 31,1997

EAST JAPAN RAILWAY COMPANY(9020)

Years ended March 31, 1997 and 1998 MAY 22, 1997
Millions of Yen(except for Net Income per Share)
  1996.3 1997.3 change(%)
Operating Revenues 2,473,200 2,513,790 1.6
Net Income 68,431 70,661 3.3
Net Income per Share(yen) 17,107 17,665 3.3
Total Assets 7,345,759 7,384,462 0.5
Shareholders' Equity 669,290 719,509 7.5
Figures are rounded down to the nearest million.

Overview of Results

The Japanese economy posted a gradual recovery during most of the fiscal year ended March 31, 1997, although the pace was weak. In this environment, JR East and its consolidated subsidiaries focused on increasing revenues while improving the consolidated financial position and taking steps to raise operating efficiency. As a result, consolidated operating revenues increased 1.6 percent to 2,513.7 billion yen, ordinary income was up 3.8 percent to 119.0 billion yen, and net income rose 3.3 percent to 70.6 billion yen.

Performance by business segment is as follows: In transportation, the number of passengers at JR East increased in the first half of the fiscal year compared with the same period a year earlier, when the Great Hanshin-Awaji Earthquake and sarin gas incident impacted demand. While growth in passenger volume slowed in the second half, volume for the entire year was higher than in the year earlier. This resulted in a 1.0 percent gain in operating revenues to 1,904.0 billion yen. Operating income declined 0.7 percent to 375.3 billion yen due to an increase in expenses at the parent company.

In merchandise sales, aggressive marketing activities at subsidiaries offset the effects of the closing of underperforming stores and restaurants by the parent company, resulting in a 1.7 percent advance in operating revenues to 363.8 billion yen. An improvement in efficiency at the parent company brought about a significant reduction in segment operating loss of 40.3 percent to 3.9 billion yen.

In other services, which primarily includes real estate leasing, advertising and publicity, information processing, hotel operations, and building maintenance, aggressive marketing activities led to 6.1 percent growth in operating revenues to 305.5 billion yen. Operating income rose 7.9 percent to 32.0 billion yen.

The number of consolidated subsidiaries was 73, one more than in the prior fiscal year. This is due to the inclusion of two newly formed subsidiaries, JR East Convenience Stores Co., Ltd., and JR Atlis Co., Ltd., and the elimination of Takasaki Terminal Hotel Co., Ltd., following its merger with Takasaki Terminal Building Co., Ltd.