IR

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

EAST JAPAN RAILWAY COMPANY(9020)

Years ended March 31, 1996 and 1997 MAY 22, 1997
Millions of Yen(except for Net Income per Share)
  1996.3 1997.3 change(%)
Operating Revenues 1,957,397 1,967,934 0.5
Net Income 57,407 57,778 0.6
Net Income per Share(yen) 14,351 14,444 0.6
Total Assets 6,735,016 6,757,430 0.3
Total Long-Term Debt 4,914,735 4,858,037 -1.2
Shareholders' Equity 654,956 692,526 5.7
Figures are rounded down to the nearest million.

Overview of Results

1. Operating Activities and 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, 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. Now that economic expansion with high growth rates has ended following the collapse of Japan's bubble economy, JR East is bolstering sales efforts to generate revenue gains. The Company also focused on cutting costs, improving its financial position and taking steps to raise operating efficiency, thereby striving to establish a sound, stable management base.

Safety continues to receive top priority in railway operations. The Company carried out two timetable revisions during the year. The revisions increased capacity for business and student commuters in the Tokyo metropolitan area, made intercity travel more convenient and comfortable, and brought about other improvements in transportation services.

In related businesses, JR East continued to use existing assets to promote activities that mesh closely with railway activities and that bolster the strength of the entire JR East Group.

Due to these factors, operating revenues increased 0.5 percent to 1,967.9 billion yen, ordinary income rose 1.9 percent to 104.1 billion yen, and net income was up 0.6 percent to 57.7 billion yen.

2. Major Objectives of the Company

JR East is implementing a management vision, called Future21, to lay a solid foundation for operations in the next century. Based on this vision, JR East aims to reform and improve operations in accordance with the spirit of the JNR restructuring, as well as to position itself as a company providing comprehensive lifestyle services firmly rooted in reliable railway services. Achieving this objective demands the establishment of a management system within which JR East is truly independent and responsible for its own actions. This is the most important issue at JR East today. To this end, JR East is making every effort to strengthen its position as a railway company that is worthy of the admiration and trust of the public, and that grows along with the regional society it serves.

The Company plans to enhance disclosure activities as it moves toward full private-sector ownership. At the same time, JR East intends to further reinforce its management structure. In this way, JR East will strive to establish a sound operating base capable of maintaining a stable dividend and to fulfill obligations to shareholders.

We respectfully ask for your continued understanding and support.