Financial Results and Investor Meeting
CONSOLIDATED AND NON-CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED MARCH 31, 2001
Management Policies and Results of Operations
Management Policies
1. Basic Policy
The East Japan Railway Company (JR East) Group provides high-quality and advanced services based on its sound management, with railway operations as its core, to fulfill its obligations to shareholders. For this purpose, every individual employee of the Group will endeavor to support safe and punctual transportation and supply convenient and high-quality products. Every employee will take on the challenge of improving the standard of services and raising the level of technology in order to further gain the confidence and trust of customers. As a "Trusted Life-Style Service Creating Group," we will go forward with our customers to contribute to the achievement of better living standards, the cultural development of local communities and the protection of the global environment.
2. Establishing the Structure of Management Administration
To facilitate adequate and fast decision-making by the board of directors based on sufficient discussions, JR East is working on upgrading its corporate governance functions. This includes incorporating the opinions of directors from outside JR East and corporate auditors. Furthermore, JR East is strengthening ties between the parent company corporate auditors and the auditors at each Group company. The objective is to ensure the soundness of the management of each Group company, with recognition of the importance placed on consolidated results, which means that a company is now evaluated based on the performance of its entire group.
Regarding the disclosure of information, JR East offers a comprehensive range of IR activities, including information meetings held both in and outside of Japan.
3. Strategies and Management Issues
Medium-Term Business Plan
JR East has formulated the Group's medium-term business plan, "New Frontier 21" for the period from 2001 to 2005, which was announced on November 29, 2000. In this plan, the JR East Group aims to be a corporate group that strives to create life-style services trusted by its customers via corporate activities open to the world, i.e. a "Trusted Life-Style Service Creating Group."
Management will be carried out with five visions: "creating customer value and pursuing customer satisfaction," "innovation of business through the creation of technologies," "harmony with society and coexistence with the environment," "creating motivation and vitality," and "raising shareholder values. "
Regarding management indices, JR East aims for free cash flows of 180.0 billion yen, ROE (Ratio of net income to the shareholders' equity) of 10.0% and ROA (Ratio of operating income to total assets) of 5.5% on a consolidated basis in Fiscal 2006 (the year ending in March 2006). Further, JR East aims to reduce long-term debt of 500.0 billion yen and the number of employees by 10,000 respectively on a non-consolidated basis for the next five years to Fiscal 2006.
Early Attainment of Full Privatization
Since its inception, the entire JR East Group has continued to make efforts to implement the principle of the JNR (Japanese National Railways) restructuring to establish its independent management assuming freestanding responsibility for its own actions. Realization of full privatization, which is the final objective of the JNR restructuring as well as being the most important issue of JR East's management, is just around the corner. Full privatization will enable a more mobile and flexible business operation, and at the same time, require attainment of independent, freestanding management as a genuine private company more strongly than before. JR East intends to integrate its entire power base to attain full privatization as early as possible and carry out the establishment of this base to win even in the more severe and cutthroat competition expected after full privatization.
Achievement of Group Vision
JR East intends to earn even greater trust by increasing customer satisfaction through the security of safe and stable transportation and provision of higher- quality services under scrupulous customer-oriented management. JR East also intends to continue to reduce total long-term debt to improve its financial position not only by striving to increase revenues and reduce expenses but also by implementing measures to carry out efficient capital investment and the slimming of assets.
Furthermore, JR East will carry out substantiation and strengthening of the group management system to maximize the group value. JR East will make efforts to display the integrated power of the Group by placing massive management resources into the areas that are located in a superior position in competition and carrying out a wide range of measures needing closer cooperation within the Group companies. By so doing, JR East intends to realize "speedy and flexible management" and increase the profit level and the quality of management.
Establishment of a Sound Management Base
JR East intends to enhance the transparency of the management by strengthening its disclosure activities and, through the measures discussed above, fulfill its obligations to shareholders by establishing a sound management base capable of maintaining stable dividends.
