We have already taken many actions based on lessons learned from major earthquakes such as the Great Hanshin Awaji Earthquake, Sanriku-Minami Earthquake and Niigata Chuetsu Earthquake as well as from other disasters. Viaduct columns, bridge piers, tunnels, stations and other facilities have been reinforced. Other actions include measures to prevent train derailments and the installation of more seismographs. The Great East Japan Earthquake did not severely damage any of our structures and no passengers were killed or injured. Therefore, I believe that these earthquake countermeasures proved their effectiveness to some degree. However, I realize that this was due partly to good fortune. Therefore, we will never be satisfied with the current level of safety and always aim for even higher levels.

Many actions are under way. One is accelerating and expanding the scope of aseismatic reinforcement of viaduct columns. Other measures include reinforcing embankments, preventing parts of station ceilings and walls from falling during an earthquake, making aseismatic reinforcement to electric poles and other structures, and installing more seismographs to enhance our seismic observation system. I am determined to "build railways capable of withstanding natural disasters." All of these measures will require a total investment of about ¥300 billion. We will place priority on these investments and plan to complete them about five years from now. In prior years, JR East has spent approximately ¥180 billion on aseismatic reinforcement. Consequently, the program we are just starting will raise these expenditures to about ¥480 billion. This is a huge investment. But there is the possibility of an earthquake occurring directly beneath the Tokyo metropolitan area and other disasters in our service area. Therefore, I believe we must make steady progress with these additional measures.

Of course, the premise for our capital expenditures is to avoid making excessive expenditures that would damage our financial soundness. That requires maintaining the proper balance between capital expenditures and management stability. In fiscal 2013, we plan to make capital expenditures of ¥480 billion on a consolidated basis. We will allocate ¥304 billion of these expenditures for investment needed for the continuous operation of business, including safety-related investment and investment to improve reliability of transportation. For investment needed for the continuous operation of business, our basic policy is to hold expenditures to less than depreciation as we steadily continue "building railways capable of withstanding natural disasters" while preserving our financial soundness.

Regarding preparation in financial terms, when the Great East Japan Earthquake occurred, we had earthquake insurance (maximum coverage of ¥71 billion with ¥10 billion deductible) for our railway facilities and other civil engineering structures. We also had an earthquake derivative contract with a maximum receipt of US$260 million (about ¥20 billion). No receipt from the earthquake derivative was exercised because the epicenter of this earthquake did not meet the terms of the contract. However, I believe that we will receive about ¥20 billion during fiscal 2013 from our earthquake insurance. To prevent earthquake damage from causing a sudden decline in our financial position, we will continue to hedge risks associated with earthquakes. We will use earthquake insurance mainly for civil engineering structures, and earthquake derivatives for an earthquake directly beneath the Tokyo metropolitan area.