Jr West Annual Report 2011

7/31/2019 Jr West Annual Report 2011

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WEST JAPAN RAILWAY COMPANY

Original Purpose,A Fresh StartAnnual Report 2011


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West Japan Railway Company (JR-West) is one of the six passenger railway

transport companies formed by the split-up and privatization of Japanese National

Railways (JNR) in 1987. Its mainstay railway business operates a network of lines

with a total route length of approximately 5,000 kilometers, extending through

18 prefectures that account for around one-fth of Japans land area.

Railway systems in Japan evolved as a natural consequence of the cities that

formed through the accumulation of people in the limited number of plains throughout

the country. Joined like links in a chain, the geographical distribution of these cities

has created a solid demand base that accounts for one-fourth of all passenger volume

in Japan. While railway operations remain the core of its business, JR-West also aims

to make the most of the assets that are part of its network of stations and railways to

develop its retail, real estate, and hotel businesses.


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This annual report contains forward-looking statements that are based on JR-Wests current expectations,

assumptions, estimates, and projections about its business, industry, and capital markets around the world.

These forward-looking statements are subject to various risks and uncertainties. Generally, these

forward-looking statements can be identied by the use of forward-looking terminology such as may,

will, expect, anticipate, plan, or simil ar words. These statements discuss future expectations,

identify strategies, contain projections of results of operations or of JR-Wests nancial condition, or state

other forward-looking information.

Known or unknown risks, uncertainties, and other factors could cause the actual results to differ materially

from those contained in any forward-looking statements. JR-West cannot promise that the expectations

expressed in these forward-looking statements will turn out to be correct. JR-Wests actual results could be

materially different from and worse than expectations.

Important risks and factors that could cause actual results to be materially different from expectations

include, but are not limited to:

expenses, liability, loss of revenue, or adverse publicity associated with property or casualty losses;

economic downturn, deation, and population decreases;

adverse changes in laws, regulations, and government policies in Japan;

service improvements, price reductions, and other strategies undertaken by competitors such as other

passenger railway and airline companies;

earthquake and other natural disaster risks; and

failure of computer telecommunications systems disrupting railway or other operations.All for ward-l ooking st atements in th is annual re port are mad e as of September 2 011 based on informati on

available to JR-West as of September 2011, and JR-West does not undertake to update or revise any of its

forward-looking statements or reect future events or circumstances.

Future compensation and other expenses related to the Fukuchiyama Line accident that occurred on April

25, 2005 are difcult to estimate reasonably at this time, and so have not been included in forecasts.

Cauiary Sam Wih rSpC FrWard-Lkig SamS

2 Overview

4 ConsolidatedFinancialHighlights

6 ThePresidentsMessage

8 SpecialFeature:

OriginalPurpose,AFreshStart

18 OperatingResultsbyBusinessSegment

26 CorporateSocialResponsibility

32 CorporateGovernance

38 BoardoDirectorsand

CorporateAuditors

39 ExecutiveOfcers

40 OrganizationalStructure

41 FinancialSection

82 AnalysisoJR-WestOperations

85 InvestorInormation

86 ConsolidatedSubsidiaries

88 CorporateData

Contents

Annual Report 2011 1


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Osaka

Kyoto

Kobe

Tokyo

$

JR-Westsbusinessiscentraltopeoplesdailylives.Weoperatearailwaynetworkthatstretchesacross

anareaoapproximately104,000squarekilometers,covering18preecturesinwesternHonshuand

thenortherntipoKyushu,withatotaloperatingkilometerageo5,012.7kilometers.Inadditiontorailway

passengerservices,weoperateretail,realestate,andotherbusinessesthatoersynergisticbenefts

withtherailwaybusiness.Theareaservedbyourrailwaynetworkishometoapproximately

43millionpeople34%oJapanspopulationwithanominalGDPo163trillion.

AsignifcantportionoJR-WestsrevenueisderivedromitsSanyoShinkansenservice,ahigh-speed

intercitytransportlineoperatingatspeedsoupto300kilometersperhourbetweenShin-OsakaStationin

OsakaandHakataStationinthecityoFukuokainnorthernKyushu.Theservicealsoconnectsseveralmajor

citiesinwesternJapan.JR-WestsUrbanNetworkprovidesservicestotheKyotoOsakaKobemetropolitan

area,whichhasapopulationomorethan20millionpeople.Eachday,anaverageo3.9millionpassengers

(fscal2011)useJR-WestsUrbanNetwork,mainlyorcommutingtoandromworkorschool. Goingorward,JR-Westwillcontinuetocontributetopeopleslivesthroughthesebusinessoperations.

5,012.7 km

ru Lgh

163 trillion

gdp

43 million

ppuLai

OurBusinessis

Centra to Peopes lives.

riW

JR-Wests service area

Urban Network (943.0-km basis)

WEST JAPAN RAILWAY COMPANY2


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.

.

.

.

.

.

.

.

, .

.

.

.

66%

806.4 billion

17%

201.3 billion

6%

75.7 billion

11%

129.9 billion

64%

61.1 billion

4%

3.5 billion

23%

22.2 billion

10%

9.6 billion

71%

1,933.7 billion

4%

114.6 billion

14%

370.9 billion

11%

292.6 billion

Transportation Operations

Sales of Goods and Food Services

Real Estate Business

Other Businesses

praig ruS

byBusinessSegment(FromThirdParties)

(Consolidated)

praig iCm

byBusinessSegment(Consolidated)

aL aSSS

byBusinessSegment(Consolidated)

raSprai praiS

Sno Snnsen

TheSanyoShinkansenisahigh-speedintercitypassenger

servicebetweenShin-OsakaStationinOsakaandHakata

StationinFukuokainthenortherntipoKyushu.Thelineruns

throughseveralmajorcitiesinwesternJapan,includingKobe,

Okayama,Hiroshima,andKitakyushu.

ubn etwo

TheUrbanNetwork(KyotoOsakaKobeareaconventionallines)

providespassengertransportservicestothedenselypopulated

citiesoKyoto,Osaka,andKobeandtheirsurroundingareas.

te Conventonl Lnes

JR-Westsotherconventionallinesconsistolimitedexpressand

expressservicetrainsorintercitytransport,localtransportorcom-

mutingtoandromworkorschoolinsuchcoreurbanareasasHiroshi-

maandOkayama,andlocallinesthroughless-populatedareas.

SaLS F gdS ad Fd SriCS

JR-Westssalesogoodsandoodservicesmainlytargetrailway

passengers,consistingoconveniencestores,specialtystores,

andoodandbeverageestablishmentslocatedinandaround

stationbuildings,aswellasdepartmentstores.

raL Sa BuSiSS

JR-Westsrealestatebusinessconsistsothemanagemento

shoppingcentersinstationbuildingsandotheracilities,operation

olargestationbuildingsatterminalstations,developmento

commercialacilitiesnearstationareasandunderneathelevated

tracks,andrealestatesalesandleasingoperationsorresidential

andurbandevelopmentocusedonrailwaylines.

hr BuSiSSS

JR-Westsotherbusinessesconsistoatravelagencybusiness

operatedbyNipponTravelAgencyCo.,Ltd.,whichbecamea

consolidatedsubsidiaryoJR-Westinfscal2004,ahotelbusiness

operatingtheHotelGranviaKyotoandotherhotels,aswellasan

advertisingagencybusiness,maintenanceandengineeringservices,andotherbusinessestoacilitatethesmoothand

efcientoperationothemainstayrailwaybusiness.



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Millionso

U.S.dol la rs1

CSLidad FiaCiaL highLighS

1YenfgureshavebeenconvertedintoU.S.dollarsattherateo83=U.S.$1.00,theexchangerateprevailingonMarch31,2011.

2Long-termdebtandpayablesincludesthecurrentportionolong-termdebtandlong-termpayables.

3EBITDA=Operatingincome+Depreciation

Billionsoyen

2011 2010 2009 2011

praiS:

Operatingrevenues 1,213.5 1,190.1 1, 275.3 $14,620

Operatingincome 95.9 76.5 122.5 1,156

Netincome 34.9 24.8 54.5 421

BaLaC ShS:

Totalassets 2,672.4 2,546.3 2,461.8 32,197

Long-termdebtandpayables2 1,102.6 1,038.9 953.2 13,284

Totalnetassets 721.2 702.1 689.6 8,689

CaSh FLWS:

Netcashprovidedbyoperatingactivities 223.2 161.3 178.8 2,689

Netcashusedininvestingactivities (246.2) (208.7) (172.6) (2,967)

Netcashprovidedby(usedin)fnancingactivities 51.4 54.6 (10.1) 619)

hr daa:

Depreciation 150.8 141.9 137.0 1,817

Capitalexpenditures,excludingcontributionsreceivedorconstruction 260.0 210.1 163.9 3,132

EBITDA3

246.8 218.4 259.5 2,870

Yen U.S.dollars1

pr Shar daa:

Netincome 18,066 12, 837 27,729 $ 217

Cashdividends 8,000 7,000 7,000 96

Netassets 355,712 345,568 339,113 4,285

%

raiS:

ROA(operatingincomebasis) 3.7 3.1 5.0

ROE 5.2 3.7 8.4

DOE 2.3 2.0 2.1

Equityratio 25.8 26.3 26.7

WestJapanRailwayCompanyanditsconsolidatedsubsidiaries

YearsendedMarch31



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500

1,000

1,500

70

140

210

00

Operating Revenues

Operating Income (right)

Net Income (right)

060504030201 07 08 09 10 11

1,213.5

95.9

34.9

0

150

300

450

Shinkansen

Urban Network(KyotoOsakaKobe Area)

Other Conventional Lines

060504030201 07 08 09 10 11

323.9

284.4

119.6

0

1,000

2,000

3,000

Total Assets

Long-Term Debt and Payables

Total Net Assets

060504030201 07 08 09 10 11

2,672.4

1,102.6

721.2

0

20

10

30

ROA (Operating Income Basis)

ROE

Equity Ratio

060504030201 07 08 09 10 11

25.8

5.2

3.7

praiS

Billionsoyen

raiLWay praig ruS

Billionsoyen

BaLaC ShSBillionsoyen

raiS

%



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Effects of the Great East Japan Earthquake

First,Iwouldliketostatethatthethoughtsandprayersoallat

JR-Westarewiththosewhohavelosttheirlivesandthosewho

areotherwisesueringasaresultotheGreatEastJapan

Earthquake.WithregardtotheJR-WestGroup,ortunately,we

didnotsueranydirectdamagetoouracilities.However,we

areexperiencingsomedifcultiesinprocuringpartsorour

rollingstockthatareproducedintheaectedregions.Thishas

orcedustotemporarilyhaltoperationocertaintrains.In

additiontocontinuingourvariousinitiativestoprovidesaeand

securetransportation,wewilloersupporttothepeopleinthe

aectedregionstothegreatestextentpossiblebasedonthe

situationonthegroundwithintheseregionsandtheneedso

thepeoplethere.Further,webelievethatinordertoovercome

thenationwidecrisiscausedbythisdisaster,itisimportantor

ustofrstocusoureortsoninvigoratingtheWestJapanarea,

whichinturnwillhelprevitalizethedomesticeconomy.We

anticipatethatthiswilllendstrengthtotherecoveryeorts

ollowingtheearthquake.Forthisreason,wewillredoubleoureortstocontributetotheinvigorationotheWestJapanarea

throughourbusinessactivitiescenteredonrailways.

Overvie of Fisca 2011

InthefscalyearendedMarch2011,wewereabletoachieve

increasesinbothrevenuesandincome.Thiscanbeseenasthe

resultoseveralactors,suchashighertransportationrevenues

romShinkansenservicesandothersourcesduetotherecovery

othedomesticeconomyaswellastherecoveryromthelosses

associatedwiththeepidemicothenewinuenzavirusexperi-

encedduringthepreviousyear,andreducedexpensescentered

onpersonnelcosts.Additionally,inOctober2010,werevisedthe

JR-WestGroupsMedium-TermManagementPlan20082012,

whichweoriginallyormulatedinMay2008.Inthisrevision,we

defnedamanagementvisionoachievingsustainablegrowth

overthelongterm,whilepursuingexcellenceinsaetymanage-

mentandseekingtobeacorporategrouptrustedbycustomers,

communities,andsociety.Inoureortstorealizethismanage-

mentvision,wewillcontinuetoimplementinitiativesbasedon

ourthreepillarsomanagementmeasurestohaveourselves

acceptedasactingwiththebestintentionsbythevictimsothe

trainaccident,measurestoenhancesaety,andurtheringoreorm.Intherevisedplan,however,wealsooutlinedthreenew

strategiesgearedtowardtherealizationothisvision

coexistencewithlocalcommunities,innovationbytechnology,

andthinkingandactingbasedonthefeld.

h prSidS mSSag

akayuki SaSakiPresident, Representative Director, and Executive Ofcer

OurGoalisto

AchieveSustainabeGroth.



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Asacompanythatoperatesrailwaysasitsmainbusiness,

werealizethatwecannotsurviveindependentothecommunitiesinwhichweoperate.Thereore,wemustestablishstrong

relationshipswithlocalgovernments,transportationproviders,

andotherlocalorganizations.Goingorward,wewillworktobuild

comprehensivewin-winrelationshipswiththeseorganizations.

Also,intheuture,wewillneedtoaddressthevariousissues

arisingromthedecliningpopulationinJapan.Tothisend,we

intendtoreormourrailwayoperationsystemandimplement

othermeasuresmeanttopromoteinnovationbytechnology.

Additionally,wewillthoroughlyreviseactualworkowprocesses

throughouttheCompanyromaperspectivethatocusesonthe

feldoplaythatdefnesouroperatingenvironment.Wehope

thatthiswillurtherstimulatetheJR-WestGroupandhelp

enhanceourcorporateculture.

Competion of To Major Projects

InthefscalyearendingMarch2012,webeganoperationo

directservicesbetweentheSanyoandtheKyushuShinkansen

linesaswellasoperationoOsakaStationCity,bothmajor

projectsthattheJR-WestGrouphasdevotedmanyyearsto

complete.OnMarch12,2011,servicesbeganoperationon

alllinesotheKyushuShinkansenline.Onthesameday,

webeganoperatingthenewMizuhoandSakuraShinkansen

services,whichconnectShin-OsakaandKagoshima-Chuo

stationsbymeansoadirectservice.Itisunortunatelytruethat

thesenewservicesgototoaslowstartduetosuchactorsas

theGreatEastJapanEarthquake,whichoccurredtheday

beorethedirectserviceswereduetobegin.However,the

substantialreductionintraveltimecombinedwiththetraveling

comortprovidedbyournewrollingstockwonthepraiseo

customers,consequentlywebelievethattheseserviceswere

abletoachieveastrongstartregardlessothedifcultoperating

environment.Goingorward,wewillworkincooperationwith

travelcompaniesandlocalgovernmentsinourserviceareato

communicatetheappealoKyushusmanytouristdestinations

topeopleintheKyotoOsakaKobeareaaswellastotherest

oWestJapan,whilealsocommunicatingtopeopleinKyushu

theappealoKyoto,Osaka,andotherdestinationsinWest

Japan.Throughtheseeorts,wehopetoencourageincreased

interactionbetweenbothareas.

OsakaStationCityhelditsgrandopeningonMay4,2011,

markingthecompletionoamassivedevelopmentproject.Withaoorspaceo245,000m2,theprojectrequiredaninvestment

oapproximately210billion.Inadditiontomakingthestation

moreopenandeasiertouse,theprojectentailedthe

constructionoanewbuildingthatwouldbeamplyequipped

withdepartmentstores,specialtyshops,andofcespaces.WebelievethatOsakaStationCitywillcontributegreatlyto

increasingrevenuesromrailwayoperations,aswellasrom

thesalesogoodsandoodservicesandtherealestatebusiness.

Also,anumberootherdevelopmentprojects,unrelatedtothe

Group,arecurrentlybeingconductedintheareasurrounding

OsakaStation.Inthenearuture,weanticipatethatthisareawill

becomedenselypopulatedbyappealinglarge-scalecommercial

institutionsthoroughlyconnectedbyundergroundandabove-

groundwalkways,thusmakingitveryeasytogetaround.The

JR-WestGroupaimstomakethisareaevenmoreappealingso

thatpeopleromtheKyoto-Osaka-Kobeareaandevenpeople

livingurtherawaywillcometovisitit.Toaccomplishthisgoal,

theGroupwillcoordinateitseortswithrailwayoperatorsand

otherorganizationsinthesurroundingareas.

Forecast for Fisca 2012

ForthefscalyearendingMarch2012,weareorecasting

somewhatlowoperatingresults,duetothecompounded

eectsosuchactorsastheeconomicslowdownollowing

theGreatEastJapanEarthquakeandthetemporaryincrease

oexpensesassociatedwithdevelopmentprojects.However,

wewillcontinuethevigorousimplementationothestrategies

outlinedinourmedium-termmanagementplan,whilemaking

saetyourutmostpriorityandaddressingthemanagement

issuesthatweremadeapparentbytherecentearthquake,

includingthoserelatedtodisasterprecautionarymeasures

andtheuninterruptedprocurementopartsorourrollingstock.

Intheseways,wewillsteadilystrengthenourmanagement

oundationsamidstthisharshmanagementenvironment,and

worktoensurethattheGroupachievesimprovedoperating

resultsandsustainablegrowth.

Inclosing,Iwouldliketoaskourshareholdersandotherinvestors

ortheircontinuedsupport.

May2011

TakayukiSasaki

President,RepresentativeDirector,andExecutiveOfcer



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Contents

In October 2010, the Company revised the JR-West Groups Medium-Term Management Plan

20082012, which outlines JR-Wests goal of contributing to the invigoration of the West Japan

area and create strong bonds of trust with all of its stakeholders. While continuing to stay true

to our original purpose of realizing our Corporate Philosophy, the revised plan offers a fresh

start. In doing so, the JR-West has identied three new strategiescoexistence with local

communities, innovation by technology, and thinking and acting based on the eldand laid

out the roadmap for a new quest in pursuit of sustainable growth. In this section, we will offer

an overview of the revised plan. In addition, we will introduce the Groups initiatives with regard

to the operation of Osaka Station City and the direct services between the Sanyo and the

Kyushu Shinkansen linesboth of which are symbolic embodiments of these new strategies.

Background and Goas of the Revision

TheCompanycausedanextremelyseriousaccidentthat

occurredontheFukuchiyamaLine.Asaresult,theJR-West

GroupestablishedtheBasicSaetyPlan,afve-yearplan

targetingthegoalobuildingacorporateculturethatplacestop

priorityonsaety,whichwasimplementedinfscal2008.All

Groupmembershavesubsequentlyworkedtirelesslytoward

achievingthisgoal.

TheMedium-TermManagementPlan20082012was

establishedinMay2008.Thebasicpoliciesothisplan

emphasizedtheimportanceoreturningtothestartingpointo

theGroupsbusiness,whichcanbedescribedasrealizing

JR-WestCorporatePhilosophy.Theplanalsooutlined

medium-tolong-termstrategiesgearedtowardaccomplishingthisobjective.

riSi F h Jr-WS grupSmdium-rm maagm pLa20082012

8 RevisionoTheJR-WestGroups

Medium-TermManagementPlan20082012

14 OpeningoOsakaStationCity

16 DirectServiceswiththeKyushuShinkansenLine

OriginalPurpose,

A Fresh Start

SpCiaL Faur



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However,theoperatingenvironmenthasbecomesignifcantly

harsherthanitwasatthetimetheJR-WestGroupsMedium-TermManagementPlan20082012wasormulated.Factors

contributingtothisharshenvironmentincludetherapiddeterio-

rationotheeconomythatbeganinall2008andtheimplemen-

tationogovernmentinitiativessuchastheMarch2009lowering

oexpresswaytolls.

Further,inall2009,aseriouscompliance-relatedissuewas

uncoveredwithintheCompany,whichnotonlycausedgreat

emotionaldistraughtorthevictimsotheFukuchiyamaLine

accident,butalsoseverelydamagedsocietystrustintheCompany.

Facedwiththisunprecedentedharshenvironment,we

decidedtorevisethecurrentmedium-termmanagementplan,

scheduledtoendinfscal2013.Wewanttoocusemphasison

long-termsustainabilityinourapproachtomanagementwhile

urtherclariyingandrealizingourmedium-tolong-termmanage-mentvision.

Underthisnewplan,allGroupemployeeswillcometogether

asone,workingtorebuildsocietystrustintheCompanyand

acilitatetherecoveryoitsbusinessresults.

MAAGEMET VSO

We,evermindulotheFukuchiyamaLineaccident,pursuing

sustainablegrowthbasedonsaetyandreliability,contributing

totheinvigorationotheWestJapanareathroughourbusiness

activities,andestablishingsaetymanagementsystems,willseek

tobeacorporategrouptrustedbycustomers,communities,

andsocietyinordertorealizeourCorporatePhilosophy.

NewStrategies

Coexistence with

local communities

Innovation by technology

Thinking and acting

based on the field

Care for

victimsEnhancement

of safety

Furthering

of reform

Three Pillars of Management

CORPORATEMISSION

Contributing to the invigoration of

the West Japan area through our

business activities centered on railways

Progressing with local communities

MEDIUM- TO

LONG-TERM VISION

Becoming a corporate group with

superior safety management

Becoming a corporate group

trusted by customers, communities,

and society

PREREQUISITE FOR

THE COMPANYSCONTINUED OPERATION

Achieving sustainable growth

based on

safety and reliability



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Regardlessotherevisionothemedium-termmanagement

plan,wewillcontinuetovigorouslypromotemanagement

basedonourthreepillarsomanagement,whichareoutlined

below.Basedonthesepillars,theGroupiscultivatingasaety

frstmindsetaswellasdevelopingarailwaythatcangive

customerspeaceomindandisworthyotheirtrust.

MeasurestoHaveOurselvesAcceptedasActingwiththeBest

IntentionsbytheVictimsotheTrainAccident

JR-Westisearnestlyapproachingthevictimsothetrain

accident.Byoeringthemoursympathyandsupport,weaim

toaddresstheirconcernsinacourteousandmindulmanner.

Additionally,wewillcontinuetoholdmeetingswiththemin

ordertoexplainourinitiativestoenhancesaety,remain

receptivetowardtheiropinionsotheCompany,andrespond

toanyquestionstheymighthave.

Further,wewillcontinuetoprovidevenuesorvictimsto

discusswithustheiropinionsanddesiresotheCompanyin

thehopeobetterbeingabletorespondtotheirvariousneeds.

Also,wewilldevelopmeasurestoenableustooeremotional

supporttovictimsandhelpalleviateanyuncertaintiesthey

mayhaveortheuture.Goingorward,theCompanywill

thoroughlydiscussthedevelopmentosuchmeasureswhile

takingintoconsiderationtheopinionsothevictims.

MeasurestoEnhanceSaety

In2008,JR-WestestablishedtheBasicSaetyPlaninordertopromotetheenhancementosaety.

Amajorgoalsetorthinthisplanwasthegoalobuildinga

corporatesystemthatensurednoaccidentsproducing

casualtiesamongourcustomersandnoseriouslabor

accidentsaectingouremployeesoccurred.Thiswasalso

presentedasamanagementgoalinthemedium-term

managementplanannouncedinMay2008.Accordingly,the

Groupwillcontinuetoworkunceasinglytoachievethisgoal

andcompletetheinitiativesoutlinedintheBasicSaetyPlan.

FurtheringoReorm

JR-Westisimplementinginitiativestoreormitsoverlytop-

downcorporateculture.Atthesametime,theCompanyis

pushingorwardcomprehensiveimprovementmeasuresthat

takeintoaccountitsreectionsregardingsuchissuesasthe

inormationleaksthatoccurredduringtheinvestigationothe

accident.Throughtheseeorts,allGroupmembersarework-

ingtoreormthecorporateculturethroughstrongercorporate

governanceandamoreopenorganizationalstructure.

COTATO OF OR TREE PllARS

OF MAAGEMET

10 WEST JAPAN RAILWAY COMPANY


13/92

VAlE PROVE TO A SARE

wT STAEOlERSWewillcreateavirtuouscycleovaluecreationbyachieving

harmonywithourstakeholdersinthelong-termandaimto

increaseouroverallvalue(realizingaplus-sumgame).Wewill

thensharethebeneftsthiscreateswithstakeholders.

Customers

Saetyandsecurity

Enhancementosaety

Eliminationooccurrencesthatcouldmakeour

customerseeluneasy

Improvedcustomersatisaction

Reliabletransportation

User-riendlytimetables,acilities,andsaleschannels

Friendlyservice

Innovativeproductsandservices

Responsetotheaging,decliningpopulationand

theinternationalizationocustomers

Society

Invigorationolocalcommunities

Improvementoourrailwaystationsaswellastownacilities

intheKansaiurbanareatomakeitaconvenient,attractive

placetolive(enhancingthevalueoourrailwaybelts)

ProvisionopublictransportationtomaketheWestJapan

areaaconvenient,attractiveplacetolive

Expansionotourismdemandtobringmorevisitorstothearea

PromotionoCSRandcompliance

Employees

Jobsatisactionandpride

Improvedteamworkthroughsmoothcommunication

Respectorassertive,activemindsetsandopinions

Increasedawarenessocorporateethics

Senseoacceptance

Clarifcationothepurpose,circumstances,anddirection

oeachindividualswork

Transerenceandimprovementotechnicalskills

Shareholders

Ensuredsustainability

Improvementinlong-termoperatingrevenuesand

reductionofxedcosts

Long-termdividendstability

DividendpaymentplansbasedontheconsolidatedDOEratio

Suppliers

Sincerity,airness,andmutualtrust

Guaranteedsaetyandquality,andestablishedcompliance

Victims

Measures to have ourselves accepted

as acting with the best intentions by

the victims of the train accident

JR-WEST

GROUP

CUSTOMERS

EMPLOYEES SOCIETY

SHARE-

HOLDERSSUPPLIERS



14/92

Ew STRATEGES TO REAlzE OR

MAAGEMET VSOWiththeaimocontinuingtoworktowardrealizingour

managementvision,wewillcontinuepursuingthemanagement

goalsandadvancingthestrategiesoutlinedinMedium-Term

ManagementPlan20082012.Atthesametime,theGroupwill

alsoocusitseortsontheimplementationoitsthreenew

strategies:coexistencewithlocalcommunities,innovationby

technology,andthinkingandactingbasedonthefeld.

CoexistencewithLocalCommunities

Asacompanythatoperatesrailwaysasitsmainbusiness,

JR-Westcannotsurviveindependentothecommunitiesin

whichitoperates.Thinkingromtheperspectiveothe

communitiesweoperatein,wewillworktoestablishacompre-

hensivecooperativenetworkowin-winrelationshipsby

strengtheningourtieswithlocalgovernmentsandother

railwaycompanies.

Specifcally,theentireGroupwillworkto:

Enhancethevalueoourrailwaybeltscenteredon

theKansaiurbanarea,

Realizeaplus-sumgameintheWestJapanarea,and

Invigoratelocalcommunitiesthroughtourism

inordertoenrichthelivesothepeopleothecommunitiesin

theseareas.

InnovationbyTechnology

Asweenteraneraodecliningpopulation,JR-Westwill

undertakesuchchallengesasthe:

Transerenceotechnicalskillsandimprovemento

technicalandoperationalskills,

Resolutionoissuesthroughsophisticatedtechnologies,and

Reormotherailwayoperationsystem

toensurethesustainablegrowthotheCompany.

Specifcally,thegoalotherailwayoperationsystemreorm

willbetoapplywidelyusedtechnologies,aswellastechnologiesinthefeldsoinormationand

telecommunications,tourtherthe:

Developmentoanewsaetysystem,

Developmentoanenergy-savingrailwaysystem,and

Innovationotrafccontrolandmaintenancesystemsby

utilizingnetworktechnology

inordertoenhancesaety,lowerthefxedcostsassociated

withrailwayoperations,andreducetheamountolabor

requiredormaintenance.

ThinkingandActingBasedontheField

Employeesutilizingtheskillsthattheyhavelearnedon

thefeldoplayplayamajorroleinenhancingsaetyand

improvingcustomersatisaction.Also,ideastourthercost

reductionsandtechnologicaldevelopmentareotenound

onthefeld.Inrecognizingthis,wehavedefnedchanging

ouroperationalrameworksromtheperspectiveothe

businessfeldasoneoourprincipaldirectives.Accordingly,

werealizethatissuesthatoccuronthefeldarealsoimportant

managementissues,andwewilltackletheseissueshead-on

withrenewedvigor.

Specifcally,basedontheresultsocompanyrevitalization

andreorminitiatives,romtheviewpointso:

Focusingonactualplaces,materials,andpeople

onthefeld,

Solvingproblemsautonomouslyonthefeld,

Solvingproblemsthroughthebottom-upapproach,and

Simpliyingtheprocessodevelopingstrategicmeasures

anddecisionmaking

wewillrebuildoperationalsystemsbasedonthefeld.



15/92

ky SragiS raLiz ur maagm iSi

FACAl OTlOO FOR FSCAl 2013

FinancialIndicators

Consolidatedoperatingrevenues:1,300billion

ConsolidatedEBITDA*:266billion

ConsolidatedROA:3.6%

*EBITDA=Operatingincome+Depreciation

TotalCapitalExpendituresorFiscal2009toFiscal2013

Consolidated:980billion

Non-consolidated:780billion

(saety-relatedcapitalexpenditures:430billion)

SAREOlER RETRS

Weaimtocreateavirtuouscycleovaluecreationbyachieving

harmonywithourstakeholdersinthelong-termandincrease

ouroverallvalue(realizingaplus-sumgame).Totheseends,

weplantooershareholdersrobustreturnsasollows.

Webelieveprovidingshareholderreturnsthatarestable

inthelong-termisanimportantmanagementresponsibility.

Thereore,weareaimingorconsolidatedDOEo3%in

fscal2013,basedontheexpectationthatourprojectsyield

sufcientresults.

Inlinewiththisprojection,weraisedthedividendpayments

orfscal2011rom3,500orboththeinterimandyear-end

dividendsto4,000orboththeinterimandyear-enddividends,

makingortotaldividendpaymentso8,000pershare.

Note:JR-Westmadeastocksplitattherationo1shareto100sharesasoJune30,2011

Steady progression of

the strategies outlined in

Medium-Term Management

Plan 20082012

New strategies

Reinforcing the Foundations

for the Companys

Continued Operation

Developing a railway that

can offer peace of mind and

earn the trust of society

Pursuing the development of a safe,

reliable railway by establishing

a higher level of safety

1

Reforming

Management

Reforming management and

conducting more-thorough

value provision

Innovation by technology6

Thinking and acting based on the field7

Strengthening

Business Foundations

Creating new value for customers,

local communities, and society

Establishing a direct service between

the Sanyo and the Kyushu Shinkansen2

5

Coexistence with local communities

realizing a plus-sum game in

the West Japan area

3 Opening the new Osaka Station City

4

Coexistence with local communities

enhancing the value of our railway belts

centered on the Kansai urban area



16/92

pig F Saka Sai Ciy

Usedbyapproximately850,000peopleperday,OsakaStation

isthelargestterminalstationoperatedbytheCompany.Addi-

tionally,withover2.5millionpeopleusingtheacilitiesinthe

surroundingareaonadailybasis,includingthoserelatedtoother

modesotransportation,theOsakaStationrailwaystationcould

beconsideredtheocalpointoWestJapan.Asaresult,weaim

todevelopOsakaStationintoaacilitybefttingitsroleasthe

gatewaytoOsaka,whichinturnwillhelpboosttherevenueso

theentireGroup.Atthesametime,wehopetorevitalizeboththe

areasurroundingOsakaStationaswellastheKansairegionin

general.ThisintegratedplanwasnamedtheOsakaStation

DevelopmentProject,whichwehavesubsequentlyadvanced,

conductinginvestmentstotalingapproximately210billion.On

May4,2011,thisdevelopmentprojectreachedasuccessulend,

markedbythegrandopeningoOsakaStationCity.

ORT GATE BlG

ThenewlyconstructedNorthGateBuilding,locatedonthenorth

sideoOsakaStation,isdividedintoanumberozones,

includingtheDepartmentStoreZone,SpecialtyShopZone,

andOfceZone.

DepartmentStoreZone

TheJROsakaMitsukoshiIsetandepartmentstore,operatedby

consolidatedsubsidiaryWestJapanRailwayIsetanLimited,

occupiesthewestsideotheNorthGateBuildingonthe12

oorsromitssecondbasementoortothe10thabove-groundoor.FollowingtheJRKyotoIsetandepartmentstore,thisisthe

secondstoreoperatedbythissubsidiary,anditistheourth

departmentstorelocatedintheUmedaDistrictoOsaka.While

thetotalareaothesalesoorisonly50,000m2,smallerthan

thatotheotherdepartmentstoresinthesurroundingarea,

iteaturesauniqueatmosphereasthefrstdepartmentstoreto

carryboththeIsetanandMitsukoshinames.Mergingelements

rombothoitsnamesakes,JROsakaMitsukoshiIsetaneatures

anumberouniquelyarrangedareasthatmixtheashion

traditionallyprovidedbyIsetanwiththeculturedandartisticnature

characteristicoMitsukoshi.Inthisway,JROsakaMitsukoshi

Isetanisanentirelynewtypeodepartmentstore,whichisone

othereasonsithasbecomepopularamongshoppers.

SpecialtyShopZone

TheeastsideotheNorthGateBuildingishometotheLUCUA

shoppingcenter,whichislocatedonthe11oorsromthefrst

basementoortothe10thabove-groundoor.Operatedby

consolidatedsubsidiaryJRWestJapanShoppingCenter

DevelopmentCompany,LUCUAisashoppingcenterwith198

commercialtenants,roughlyhalowhicharestoresthatare

eitherthefrstlocationopenedinOsakasUmedaDistrict,the

frstlocationintheKansairegion,orthefrstlocationinallo

Japan.Themaintargetsothisshoppingcenterareashion-

andtrend-consciousworkingwomentowhichthecenter

providesasenseoluxurythatcanbeenjoyedinonesdailylie

andoerstheopportunitytorealizesensitive,sophisticated

liestyles.ThesecharacteristicshaveearnedLUCUAastrong

reputationwithshoppers,aactthatcanbeseeninthesmileso

themanysatisfedcustomersthatflltheshops.

OfceZone

The14oorsromthe14thto27thoorintheupperlevelo

theNorthGateBuildingaredesignatedastheOfceZone,

spanningatotaloorspaceoapproximately21,000m2.Each

oorhasaoorspaceo1,500m2,whichisreeoobstructions

suchaspillars,therebymakingiteasilycustomizedtomeet

theneedsotenants.This,aswellastheconvenienceobeing

directlyconnectedtotherailwaystation,hashelpedthiszone

earnthepraiseothetenantsthatoccupyit.Therearecurrently

novacanciesintheOfceZone.

W FaCiLiiS

OsakaStation

Top-floor Restaurant

Ofce Zone

Service Zone

Entertainment Zone

Specialty Shop Zone

Department Store Zone

Extension



17/92

SOT GATE BlG

LocatedonthesouthsideoOsakaStation,theSouthGate

Buildingisalsodividedintoanumberozones,includingthe

DepartmentStoreZoneandHotelZone.

DepartmentStoreZone

TheSouthGateBuildingsDepartmentStoreZoneiscurrently

occupiedbyDaimaruUmeda.Therecentexpansionothe

SouthGateBuildingincreasedthesalesoorothiszonerom

40,000m2to64,000m2,whileexistingareasothezonewere

renovatedaswell.

HotelZone

TheHotelZoneiscurrentlyoccupiedbyahoteloperatedby

consolidatedsubsidiaryHotelGranviaOsakaCo.,Ltd.Asparto

therecentexpansion,thissubsidiaryopenedarestaurantinthe

LUCUAshoppingcenter,locatedintheSpecialtyShopZoneo

theNorthGateBuilding,andexpandedthelobbyandloungeon

thefrstoorothehotel.Further,inspring2012,itplanstoopen

anexecutivesuiteooronthe27thoorotheSouthGateBuilding.

EVElOPG OPE SARES A COECTG

PASSAGEwAySEACG TE STATOS APPEAl

WehavedevelopedeightopensquareswithinOsakaStationCity

inthehopeoallowinggreateraccesstoallthatithastooer,

includingaccesstothestation,shopping,andentertainment.

WealsobelievethiswillhelpOsakaStationCitybetteroer

asenseorelaxation,whilealsomaintainingaleveloenergy.

Inaddition,wehavecreatedundergroundandelevatedpassage-

ways(ashighasthesecondooroabuilding)thatextendinall

directionsinordertobetterconnectOsakaStationCitywithits

surroundingarea.Theseconnectingpassagewayshelpease

theprocessochangingtoorromprivaterailwayorsubwaylines

aswellasoersmoothaccesstoandromthesurroundingarea.

TheCompanyhasalsorenovatedtheacilitiesotherailway

station,creatingnewticketgatesandconcourses,aswellasbuilt

dome-shapedroos,whicharethesymbolothisdevelopment

project,overtheplatorms.Moreover,manymeasureshavebeen

takentoensurethatOsakaStationCityisriendlytowardthe

environment,includingtheinstallationosolarpowergeneratorstoutilizenaturalenergy.Theefcientuseoenergyispromoted

bytakingadvantageodrymistcoolingsystemstoreducethe

needorair

conditioningand

installingdouble

glazedwindows

inofcebuildingsto

providebetter

insulation.Inaddition,

eectiveuseismadeo

collectedrainwater.Also,we

haveplacedgarbagereciprocals

withdivisionsordierenttypeso

garbageonplatormstopromoterecycling

andareactivelyreusingresourcestolowertheenvironmental

impactoOsakaStationCity.

MPROVG RAlwAy ACCESS TO OSAA

InMarch2011,JR-Westreviseditstimetableswiththeaimo

encouragingpeopleromareasthroughoutitsserviceareatovisit

Osakabytrain.Specialrapidservicesonweekendsandpublic

holidaysusingtrainswith12carswereintroducedontheline

spanningromHimejitoMaibara.Additionally,thenumberorapid

servicesconnectingdirectlytoOsakaStationromTakarazuka,

KansaiInternationalAirport,andNarawereincreasedromtwo

trainsperhourtoourtrainsperhourduringthedaytime.

COOPERATG wT lOCAl BSESSES TO

ATTRACT CSTOMERS

TheareasurroundingOsakaStationisdenselypopulatedby

businesses.Whilethesebusinessesserveascompetitionor

theGroupscommercialacilitiesinthisarea,wethinkitis

importantthatweworktogetherwiththesebusinessesinorder

toimprovetheappealothisarea,therebyattractmorevisitors

tothearea.TheCompanyisamemberotheUmekitaPhase1

DevelopmentAreaProjectTMOCommittee,whichconsistso

threecompaniesinadditiontotheCompany:HankyuCorporate,

HanshinElectricRailwayCo.,Ltd.,andMitsubishiEstateCo.,

Ltd.Togetherwiththesecompanies,JR-Westhasestablished

theUmedaAreaManagementOrganization.Inaddition,italso

jointlydevelopsareamaps,activelyholdsanumberopromo-

tionalevents,communicatesinormationregardingtheseeventsaswellasthedevelopmentprojectitselviatheInternet,

andconductsotherareamanagementactivities.



18/92

dirC SriCS Wih h kyuShu ShikaS Li

OnMarch12,2011,inconjunctionwiththecommencemento

operationsoallsectorsotheKyushuShinkansen,theCompany

beganoeringdirectservicesbetweentheSanyoandKyushu

Shinkansenlines.Usingthesenewdirectservices,passengers

cantravelbetweenShin-OsakaStationandKago-shima-Chuo

Stationinaslittleas3hoursand45minutes,andbetween

Shin-OsakaStationandKumamotoStationinaslittleas2hours

and59minutes.Unortunately,thestartotheseserviceswas

overshadowedbytheGreatEastJapanEarthquake,which

occurredonMarch11,2011,thedaybeoretheopeningceremony.

Despitethecircumstancesinwhichtheserviceswerelaunched,

weareaimingtooerahigherqualityShinkansen-travelexperi-

encethroughthesedirectservicesbyintroducingnewrolling

stockbasedonthestate-o-the-art,highlyreliableN700Series

trains.Atthesametime,weareworkingtostimulatetourism

demandinKyushubyadvertisingtheappealoKyushusvarious

sightseeingspots.Duetotheseandothereorts,thedirect

serviceshaveproducednotableresultsinthemonthsater

beinglaunched.

Further,welaunchedtheonlinereservationservicee5489

inMarch2011.Thisserviceincreasestheconvenienceorailway

travelbyallowingpassengerstoreserveticketsonlineorthe

MizuhoandSakuraShinkansenservices,whichareusedonthe

newdirectservices,aswellasortheCompanystraditional

NozomiandHikariShinkansenservices.JR-Westisalsotaking

stepstoensurethatitsShinkansenservicesoersufcientprice

competitivenessrelativetoairlines.Forexample,thenewly

introducede-earlyreservationdiscountticketseaturereduced

prices.Usingthesetickets,apassengercantravelbetween

Shin-OsakaandKagoshima-Chuostationsor17,000oneway,

andbetweenShin-OsakaandKumamotostationsor14,400

oneway.

Goingorward,theCompanywillimplementanumbero

initiativesgearedtowardboostingusageotheSanyoShinkansen.

Thesewillincludeconductingpromotionaltourismcampaigns

incoordinationwithlocalgovernmentsandraisingthedegreeo

cooperationwithJR-Kysuhuwiththeaimoencouragingmore

exchangesbetweenKyushuandmajorareasinWestJapan,

suchastheKyotoOsaka Kobearea,Okayama,andHiroshima.

Further,weintendtorevisetimetablesnextspringtointroduce

newrollingstockandincreasethenumberotrainsoering

directservices.Throughsucheorts,ouraimistosignifcantly

improveourmarketshareothecombinedairtravelrailway

market,increasingourshareotravelbetweentheKyoto-Osaka-

KobeareaandKagoshimaromthefscal2010s10%toaround

50%,andincreasingourshareotravelbetweentheKyoto-

Osaka-KobeareaandKumamotoromfscal2010s32%to

around60%.

Atotalinvestmentoapproximately100billionisestimated

tobenecessarytoimplementtheseinitiatives,themajorityo

whichwillbeinvestedinnewrollingstock.



19/92

Okayama

Hiroshima

Shin-Osaka

Shin-Kobe

HakataKokura

Shin-Yamaguchi

Opened inMarch 2004

Opened inMarch 2011 HakataShin-Osaka Approx. 644 km

HakataShin-YatsushiroApprox. 151km

Shin-Yatsushiro

Kagoshima-ChuoApprox. 138 km

HakataKagoshima-Chuo Approx. 289 km

Kurume

AsaTokuyama

Mihara

Aioi

Himeji

Fukuyama

Shin-IwakuniShin-

Iwakuni

Shin-Onomichi

Shin-Kurashiki

Nishi-AkashiNishi-

AkashiHigashi-

Hiroshima

Shin-Shimonoseki

ChikugoFunagoya

Kumamoto

Shin-MinamataIzumi

Sendai

Kagoshima-Chuo

Shin-Tosu

Shin-Omuta

Shin-Tamana

Shin-Yatsushiro Kyushu Shinkansen (JR-Kyushu)

Sanyo Shinkansen (JR-West)

Shar F paSSgr mark: ShikaS S. airLiS (FiSCaL 2010)

rlws alnes otl

KyotoOsakaKobe

areaKagoshima

Numberopassengers

(Marketshare)

341people/day

(10%)

2,980people/day

(90%)

3,321people/day

KyotoOsakaKobe

areaKumamoto

Numberopassengers

(Marketshare)

750people/day

(32%)

1,614people/day

(68%)

2,364people/day

Source:Surveyonregionalpassengerow,MinistryoLand,InrastructureandTransport

SriC, daiLy FrquCy, raL im, Far

Service Frequency

Travel Time

(Fastest service) Fare

Shin-Osaka

Kagoshima-Chuo

Mizuho 4roundtrips

perday

3h45m 21,600

(17,000withe-earlyreservationdiscountticket)

Sakura 10.5roundtrips

perday

4h10m 21,300


Shin-Osaka

Kumamoto

Mizuho 4roundtrips

perday

2h59m 18,320


Sakura 11roundtrips

perday

3h20m 18,020


*TheastestMizuhoservicerunsatotaloourtimesperdayinthemorningandevening.

raL im (rduCi)

Hiroshima Okayama Shin-Osaka

Kumamoto 1h37m(52m) 2h14m(52m) 2h59m(58m)

Kagoshima-Chuo 2h23m(71m) 2h59m(72m) 3h45m(77m)

Note:TraveltimesareortheastestMizuhoShinkansenservice.

Timesinparenthesesrepresentthereductionintraveltimeollowingtheestablishmentodirectservices.



20/92

Operating Revenues


07 08 09 10 11

1,000

800

600

400

0

200

150

100

50

0

praig rSuLS By BuSiSS Sgm

the eveopment ofthe Communit we Serve.

OurTransportationNetworkcontributesto

JR-WestsTransportationOperationssegmentconsistsorailwayoperations

andsmall-scalebusanderryservices.Itsrailwayoperationsencompass18

preecturesinthewesternhaloJapansmainislandoHonshuandthe

northerntipoKyushu,coveringatotalserviceareaoapproximately104,000

squarekilometers.Theserviceareahasapopulationoapproximately43

millionpeople,equivalentto34%othepopulationoJapan.Therailway

networkcomprisesatotalo1,222railwaystations,withanoperatingroute

lengtho5,012.7kilometers,almost20%opassengerrailwaykilometeragein

Japan.ThisnetworkincludestheSanyoShinkansen,ahigh-speedintercity

railwayline;theUrbanNetwork,servingtheKyotoOsakaKobemetropolitan

area;andotherconventionalrailwaylines(excludingthethreeJR-Westbranch

ofcesinKyoto,Osaka,andKobe).Infscal2011,operatingrevenuesinthis

segmentwereup1.1%yearonyear,to806.4billion.Whiledemandor

domestictourismdeclinedollowingtheGreatEastJapanEarthquake,which

occurredonMarch11,2011,thisdeclinewasmorethanosetbytherevenues

generatedduetothestrongeconomicrecoverytrendseenupuntiltheearth-

quake,whichcontributedtoanoverallriseinrevenues.Operatingincomealso

increased,rising35.3%,to61.1billion.Thiswaslargelyattributabletothe

signifcantdecreaseinpersonnelexpensesasaresultothecompletionothe

amortizationonetretirementbeneftobligationattransitionoapproximately30.0billion.

TransportationOperations

praig rSuLS

Billionsoyen



21/92

TheSanyoShinkansenisahigh-speed

intercitypassengerservicebetween

Shin-OsakaStationinOsakaandHakata

StationinFukuokainnorthernKyushu.

Thelinerunsthroughseveralmajorcities

inwesternJapan,includingKobe,

Okayama,Hiroshima,andKitakyushu.Ithasatotaloperatingkilometerageo

644.0kilometersandhas19railway

stations,includingShin-OsakaStation.

JR-Westownstheentiretyotherailway

acilitiesrelatedtotheexistingSanyo

Shinkansen,andwiththeexception

oShin-OsakaStation(ownedby

JR-Central),operatesallotheother

18railwaystations.

TheservicesontheSanyoShinkan-

senincludetheGroupsNozomi,Hikari,

andKodamaservices,whichithas

oeredorsometime.Oparticular

interestarethedirectNozomiservices

operatedbyCentralJapanRailway

Company(JR-Central),whichlinkTokyo

StationandShin-OsakaStation.These

Nozomiservicesallowpassengersto

travelontheTokaidoShinkansenrom

TokyoorNagoyatothemajorrailway

stationsalongtheSanyoShinkansen

Okayama,Hiroshima,andHakatawith-

outhavingtochangetrains.Inaddition,

ollowingtheMarch12commencementooperationsonalllinesotheKyushu

Shinkansen,JR-Westlaunchedthe

MizuhoandSakuraShinkansenservices,

whichtraveldirectlybetweentheSanyo

ShinkansenandKyushuShinkansen

lines.Thesenewservicesenablecus-

tomerstotravelbetweenShin-Osaka

andKagoshima-Chuoinaslittleas3

hoursand45minutes.

Fisca 2011 Resuts

Infscal2011,theCompanywasorced

toacetheeectsotheGreatEast

JapanEarthquake,whichoccurredin

March2011.However,itsimpactwas

osetbythebeneftsoanumbero

initiativesimplementedearlierinthe

fscalyear.Theseincludedthelauncho

directservicesbetweentheSanyo

ShinkansenandKyushuShinkansen

lines,whichaccompaniedthecom-

mencementooperationsonalllineso

theKyushuShinkansen,aswellas

promotionalcampaignshighlightingthe

comortotravelingonthenewN700Seriesalongwiththeconvenienceand

priceadvantagesotheExpressReser-

vationandEX-ICsystems.Additionally,

therewasgrowthinrevenuesduetothe

absenceothenewinuenzaepidemic,

whichcausedadeclineinrevenues

duringthefrsthalothepreviousfscal

year.Asaresult,totalpassenger-kilome-

tersortheSanyoShinkansenincreased

4.9%yearonyear,to15,546million

kilometers.Likewise,transportation

revenueswereup11.4billion,or3.7%,

to323.9billion.

Tokyo

Nagoya

Shin-Osaka

Osaka

KyotoOkayama

Shin-Kobe

Hiroshima

Kumamoto

Kagoshima-Chuo

Hakata(Fukuoka)

raSprai ruSSanyo Shinkansen

Billionsoyen/Millionsopassengers

Transportation Revenues

Number of Passengers (right)

07 08 09 10 11

400

350

300

250

0

80

70

60

50

0

Sno Snnsen



22/92


TheUrbanNetworkprovidespassenger

servicesorthedenselypopulated

metropolisesandsurroundingareaso

Kyoto,Osaka,andKobe.Ithasan

operatingroutelengtho622.0kilometers(943.0kilometersincludingthethree

JR-WestbranchofcesinKyoto,Osaka,

andKobe),ormingacomprehensive

networkstretchingacrosstheentire

KyotoOsakaKoberegion.

TheUrbanNetworkareaincludes

thesectionotheFukuchiyamaLine

betweenTsukaguchiStationandAmaga-

sakiStation,thelocationwhereJR-West

causedaterribleaccidentonApril25,

2005,resultinginasubstantiallossothe

trustwehavebuiltwithcustomersand

society.Werecognizethatredoublingour

eortstoprioritizesaetyandregaining

thattrustisoneoourhighestmanage-

mentpriorities.

Further,therenovationoOsaka

StationthelargestJR-West-operated

terminalstationthatweundertookin

2003reachedcompletion,andwewere

subsequentlyabletoholdthegrand

openingoOsakaStationCityonMay4,

2011.OsakaStationservesasthegate-

waytotheKansairegionaswellasthe

gatewayintoOsakaitsel.Forthisreason,

wehopethatOsakaStationCitywillserve

asanewlandmarkinOsaka,alandmark

thatembodiesasenseoairandso-

phisticationbefttingitsroleasagateway.

Thisstrongdesirewasakeyactorinour

namingoOsakaStationCity.Further,itis

ourwishthatitwillcometobelovedbyall

whovisititasacitythatisbothhighly

relaxingandconvenient.

Fisca 2011 Resuts

Intransportationoperations,werevised

ourtimetablesinconsiderationothe

openingoOsakaStationCityinMarch

2011,increasingthenumberorapid

servicesconnectingdirectlytoOsakaStationandbeginningoperationo

specialrapidservicesusingtrainswith12

carsonweekendsandpublicholidays.

Inmarketinginitiatives,weworkedto

urtherenhancerailwayconvenienceby

launchingtheICOCAdirectcommuter

passserviceincooperationwithKeihan

ElectricRailwayCo.,Ltd.

Incustomerserviceinitiatives,we

bolsteredeortstohelppassengersuse

therailwaymoresaelyandmorecom-

ortably,includingtheuseovideoon

stationdisplaysandin-cardisplaysto

provideinormationorpassengers.We

alsoconductedcampaignstoraise

awarenessoeortstopreventgroping.

Additionally,aspartotherenovation

oOsakaStation,weopenedaportiono

astructurebuiltoverthetracksor

passengerstousewhenchangingtrains

inNovember2010.Thisstructurewas

ullycompletedinApril2011.

InFebruary2011,weconcludeda

comprehensivepartnershipagreement

withShigaPreecture.Underthisagree-

ment,wewillpromoteinitiativesgeared

towarddeepeningtheextentoour

coexistencewithlocalcommunities,

throughsucheortsasosteringthe

developmentourbanareasaroundtrain

stations.

Infscal2011,wesawrevenuein-

creaseasaresultoabsenceothenew

inuenzaepidemic,whichcauseda

declineinrevenuesduringthefrsthalo

thepreviousfscalyear.Inaddition,

JR-Westworkedincooperationwithlocal

governments,travelagents,andotherJR

companiestostimulatedemandor

domestictourismthroughvariouspro-

motionalcampaignssuchastheNaraDestinationCampaign.However,the

persistenceotheoverallslumpinrailway

usagewascompoundedbytheimpact

otheGreatEastJapanEarthquake,

whichoccurredinMarch2011.Asa

result,totalpassenger-kilometersorthe

UrbanNetwork(includingthethree

JR-WestbranchofcesinKyoto,Osaka,

andKobe)decreased0.2%yearonyear,

to28,047millionkilometers,whiletrans-

portationrevenuesweredown1.7

billion,or0.6%,to284.4billion.

ubn etwo Sevce

raSprai ruSUrban Network Service

Billionsoyen/Millionsopassengers

Transportation Revenues

Number of Passengers (right)

07 08 09 10 11

350

300

250

200

0

1,500

1,400

1,300

1,200

0



23/92

Omishiotsu

KusatsuYamashina

Nara

Oji

Takada

Tsuge

KyotoOsakaKobe Area

Urban Network

Kyobashi

Osaka Tennoji

Wakayama

Kansai Airport

Kobe

Amagasaki

Shin-Kobe

Nishi-Akashi

Kakogawa

Tanigawa

HimejiAioiShin-Osaka

Kyoto

Maibara

Kameyama

Boundary Stations between

JR-West and Other JR Companies

Shinkansen Line (Bullet Train)

Intercity Lines

Regional Lines

Osaka Loop Line

JR Kobe Line (OsakaHimeji)

JR Kyoto Line (OsakaKyoto)

Biwako Line (KyotoNagahama)

JR Tozai Line (KyobashiAmagasaki)

JR Yumesaki Line (Nishi-KujoSakurajima)

JR Takarazuka Line (OsakaSasayamaguchi)

Sagano Line (KyotoSonobe)

Gakkentoshi Line (KyobashiKizu)

Nara Line (KyotoKizu)

Yamatoji Line (JR-Namba Kamo)

Hanwa Line (TennojiWakayama)

Kansai Airport Line (HinenoKansai Airport)

Osaka Higashi LIne (HanatenKyuhoji)

te Conventonl Lnes

JR-Westsotherconventionallines

compriseintercitytransportprovidedby

limitedexpressandexpressservices,

regionaltransportorcommutersand

studentsinandaroundregionalhubcities

suchasHiroshimaandOkayama,and

locallineswithlowtransportdensity.The

otherconventionallineshaveanoperat-

ingroutelengtho3,425.7kilometers.

Theoperatingenvironmentorother

conventionallinescontinuestobe

difcultduetothedecliningpopulationo

theareasitserves.However,considering

thatthisnetworkplaysaroleasaeeder

orShinkansenservicesaswellas

unctionsasavitalpartotheoverall

JR-Westrailwaynetwork,weareworking

toprovidemorecommunityoriented

servicesandundertakeothermanage-menteorts,whileplacingpriorityon

ensuringsaety.

Fisca 2011 Resuts

Intransportationoperations,weimple-

mentedseveralmeasuresgearedtoward

improvingtheconvenienceotrain

services,suchastheNovember2010

introductionotheHamakazelimited

expressandtheDecember2010introduc-

tiononewtrainservicesinthesuburbso

theKyotoOsakaKobemetropolitan

area.Otherinitiativesincludedtheintro-

ductiononew-modeltrainswithexcep-

tionalsaetyandcomortonlimited

expressservicesthatconnectOsakaand

KyototothenorthernKinkiregion.

Insalesinitiatives,weworkedto

stimulatedemandortourismthroughthe

JapaneseBeautyHokurikucampaignaswellasvariousotherpromotionalcam-

paignsconductedincooperationwith

localgovernments,travelagents,and

otherJRcompanies.

However,thedeclineinrail-side

populationscoupledwiththeimpacto

theGreatEastJapanEarthquakeresulted

inthetotalpassenger-kilometersorother

conventionallinesdecreasing0.6%year

onyear,to9,020millionkilometers,while

transportationrevenuesweredown1.7

billion,or1.4%,to119.6billion.



24/92


Bs n Fe Sevces

TheTransportationOperationssegment

alsoincludesbusanderryservices.In

busservices,weenhancedconvenience

orcustomersthroughrevisedtimetables

andmore-exibleareschedules.

Inerryservices(theMiyajimaLine),we

heldspecialeventstocommemoratethe

frstanniversaryoourerryoperations,

marketedourerryservicetotravel

companies,andtookotherstepsto

increaserevenue.

Inrailwayoperations,ollowingthe

commencementoservicesonalllineso

theKyushuShinkanseninMarch2011,

JR-Westwillestablishconvenienttime-

tablesincorporatingdirect-service

operationsontheSanyoShinkansenand

KyushuShinkansenlines.Itwillalso

launchtheonlinereservationservice

e5489,andcontinuetotakeothersteps

toenhancethecompetitivenessoits

Shinkansenservicesbyensuringthe

provisionohigh-qualitycustomerservice

andaithullyreportinginormation.In

addition,wewillworktocoordinatewith

localorganizations,promoteregional

exchange,generatedemandortourism

throughsuchmeansasattractingoreign

visitorstoJapan,andbolsterourinorma-

tioninrastructure.Inregardtotranspor-

tationICcards(smartcards),JR-West

willexpandallianceswithprivaterailway

operatorsandaddresstheissuesstanding

inthewayothedevelopmentoservices

thatarecanbeusedreciprocallybetween

railwayoperatorsnationwide.Wewillalso

implementothermeasurestoenhance

customerservice,includingstrengthening

eortstoincorporatecustomereedback

inmanagementstrategies,osteringa

strongcustomerservicemindsetamong

employees,improvingthequalityothe

customerserviceprovided,aswellas

workinginconjunctionwithlocalgovern-

mentsandotherorganizationstomake

ourstationsmoreaccessiblewith

barrierreeacilities.

Fuur iiiaiS i raSprai praiS

iCCa iC C

UseotheICOCAnon-contactICcard,aserviceintroducedin

theUrbanNetworkareainNovember2003,hassteadilyincreased,

withthenumberocardsissuedreaching6.01millionwithinthe

frstseven-and-a-halyearsoitslaunch.InAugust2004,we

beganoeringreciprocalusewiththeSuicaICcard,issuedby

EastJapanRailwayCompany(JR-East),andinJanuary2006,

webeganoeringreciprocalusewiththePiTaPaICcard,

issuedbytheSuruttoKansaiAssociation,anorganization

composedopublicandprivaterailwayoperatorsintheKansai

region.Wehavealsosteadilybroadenedthegeographicalarea

inwhichtheICOCAICcardcanbeused,introducingittothe

OkayamaandHiroshimaareasromSeptember2007,and

oeringinteroperabilitywithCentralJapanRailwayCompany(JR-Central)sTOICAICcardromMarch2008.Inaddition,in

December2009,webegandiscussionsontie-upserviceswith

theSuruttoKansaiAssociationutilizingICcardpassenger

tickets,reachinganagreementthataimstourtherenhance

railwaypassengerconveniencebybettercoordinatingservices.

Also,tocoincidewiththeFebruary2006launchothe

J-WESTCard,webeganissuingtheSMARTICOCAICcard,

whichallowscardholderstoaddmoneytotheirICcardwithout

usingcash.WiththeICOCAelectronicmoney(e-money)

servicelaunchedinOctober2005,weareworkingtourther

expandthenumberostoresincitiesandtownswherethe

servicecanbeused,suchasinmajorconveniencestoreand

restaurantchains.Previously,inMarch2008,webeganrecipro-

calusewithJR-EastsSuicae-moneyservice,andinMarch

2010,wecommencedreciprocalusewithJR-CentralsTOICA

ICcard.Further,inMarch2011,webeganoeringICOCA

servicesthatcanbeusedreciprocallywithKyushuRailwayCompany(JR-Kyushu)sSUGOCAservice.Thesemeasures

aredesignedtoenhanceICOCAICcarduserconveniencein

combinationwithpromotingusageonrailwayservices.



25/92

JR-WestsNon-TransportationOperationssegmentcomprisesthreeoperations:

SalesoGoodsandFoodServices,RealEstateBusiness,andOtherBusinesses.

ThoseoperationscontributetothesustainablegrowthotheGroupasawholeby

vigorouslytakingadvantageotheirassets,improvingservicesorcustomersusing

railwayservicesandcustomersinareasalongsiderailwaylines,aswellasproviding

high-qualityservicesthataresaeandreliabletourtherincreasetheappealo

railwaystationsandearntheincreasedtrustocustomers.TheRailwayOperations

HeadquartersandtheBusinessDevelopmentHeadquarterswillincreasethevalueo

itsrailwaybeltsthroughinitiativesthatentailcollaborationwithlocalcommunitiesto

developindividualrailwaystationsandtheirsurroundingareas.Indevelopment

initiatives,ourbasicapproachistoclariymanagementresponsibilityinorderto

accelerateoperationaldevelopmentandpursuedevelopmentthroughGroupcompanies.

Inaccordancewiththatapproach,wewilldevelopcommercialacilitiesinandaround

railwaystationsaswellasareasbetweenrailwaystations,andconductoperations

thatuseidlelandorthedevelopmentandsalesocondominiums.Also,inorderto

osterearningsmainstaysorthenextgeneration,JR-Westisurtheringinitiativesto

createnewbusinessesthroughcollaborationsbothinsideandoutsidetheGroup.

Non-TransportationOperations

praig rSuLS

Billionsoyen

Operating Revenues


07 08 09 10 11

500

400

300

200

100

0

50

40

30

20

10

0

Sles of goos n Foo Sevces

JR-Westsretailservices,centeredon

railwaypassengers,consistoconve-

niencestores,specialtystores,andood

andbeverageoutletslocatedinand

aroundstationbuildings,aswellasthe

JRKyotoIsetandepartmentstore.

Fisca 2011 Resuts

Throughoutfscal2010,WestJapan

RailwayIsetanLimited,themainoperator

othenewJROsakaMitsukoshiIsetan

departmentstoreinthenewlyopened

NorthGateBuilding,continuedtoad-

vancepreparationsorthestoresMay

2011opening.Wealsocontinuedeorts

tomakeourstationsevenmoreattrac-

tive.Thisincludedopeningnewretail

outletsandrestaurantsinOsakaStation

andHakataStationollowingstation

renovations,aswellastheintegrated

developmentandopeningoshops

insideNadaStation,includingthesmall-

scaleconveniencestoreDaily-Inaswell

asthecaeandbakeryTHIRD.

However,regardlessotheseeorts,

operatingrevenuesinSalesoGoods

andFoodServicesweredown0.3%year,

to201.3billion.Thedecreasewas

primarilyattributabletothedeclineo

revenuesinitswholesaleoperations.

Conversely,operatingincomewasup

13.0%,to3.5billion,asaresultosuch

actorsaslowerpersonnelexpenses.

praig rSuLS

Billionsoyen

Operating Revenues


07 08 09 10 11

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200

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100

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8

6

4

2

0



26/92


rel stte Bsness

JR-WestsRealEstateBusinessconsists

othemanagementoshoppingcenters

instationbuildingsandotheracilities,

theoperationolargestationbuildingsat

terminalrailwaystations,thedevelop-

mentocommercialacilitiesnearrailway

stationareasandunderneathelevated

tracks,andrealestatesalesandleasing

operationsorresidentialandurban

developmentocusedonrailwaylines.

Fisca 2011 Resuts

Infscal2011,JR-Westadvanceddevel-

opmentprojectsinitsstationsandtheir

surroundingareas,includingopening

theJROjiStationNKBuilding,which

primarilycontainsrestaurants,and

theJRTamatsukuriStationNKBuilding,

whichhousesseveralhealthclinics.

Additionally,weopenedtheVIERANara

commercialacilitylocatedunderneath

theelevatedtracksatNaraStation;the

PLiErestaurantandgitcenters,which

arebelowtheelevatedtracksatHimeji

Station;andthenewRintoashionstore

intheKanazawa100bangaiashion

shoppingzoneatKanazawaStation.

InregardtotheOsakaStationDevelop-

mentProject,weadvancedpreparations

ortheMay2011grandopeningoOsaka

StationCity.Aspartothesepreparations,

weopenedtheSouthGateBuildingin

March2011.Also,provisionsweremade

intheNorthGateBuildingtoprepareor

theopeningotheLUCUAspecialtyshop

zone.Further,weworkedincooperation

withlocalbusinessesaroundOsaka

Stationinordertopromotebetterarea

management,withthegoaloinvigorating

theareasurroundingthestation.Also,we

encouragedthedevelopmentocondo-

miniumsontheormersitesocompany

housing.IntheHiroshimaarea,we

mergedtwoconsolidatedsubsidiariesin

April2010,whichoperateshopping

centers,inthehopeourtherboosting

theircompetitivenessandincreasingthe

overallstrengthotheseoperations.

Asaresult,operatingrevenuesinthe

RealEstateBusinessincreased6.8%,to

75.7billion,whileoperatingincomeell

1.2%,to22.2billion.

praig rSuLSBillionsoyen

Operating Revenues


07 08 09 10 11

100

80

60

40

20

0

30

24

18

12

6

0



27/92

praig rSuLSBillionsoyen

Operating Revenues


07 08 09 10 11

150

120

90

60

30

0

15

12

9

6

3

0

te Bsnesses

JR-WestsOtherBusinessesconsisto

thetravelagencybusinessoperatedby

NipponTravelAgency,thehotelbusiness

centeredontheHotelGranviaKyoto,

anadvertisingagencybusiness,mainte-

nanceandengineeringservices,and

otherbusinessestoacilitatethesmooth

andefcientoperationothemainstay

railwaybusiness.

Fisca 2011 Resuts

Inthehotelbusiness,werenovated

restaurantacilities,heldvarious

promotionalevents,andimplemented

otherinitiativesgearedtowardincreasing

revenues.Inthetravelagencybusiness,

wetargetedsalesgrowthbyenhancing

ourlineupotravelpackagessold

throughitsonlinesalessystemand

improvingtheconvenienceothissystem

whilealsoexpandingourlineupo

productsthatutilizeourrailwaynetworks.

Inaddition,webeganacceptingapplica-

tionsortheOsakaStationCityJ-WEST

Card,andtookotherstepstoincrease

thenumberocardholders.Inregardto

ourICOCAe-moneyservice,wecom-

mencedreciprocalusewithJR-Kyushus

SUGOCAcard.Also,weworkedto

increasethenumberoopportunitiesor

thisservicetobeusedaroundtown,

makingitusableatmajorconvenience

storechainsaswellasorpurchasing

ticketstoeventsandtouristattractions.

Asaresult,operatingrevenuesin

OtherBusinessesincreased8.6%year

onyear,to129.9billion,whileoperating

incomewasup43.8%,to9.6billion.

InSalesoGoodsandFoodServicesas

wellasRealEstateBusiness,JR-West

willimplementmeasurestourther

enhancethevalueoourrailwaybelts,

withtherailwaydivisionworkingin

cooperationwithlocalgovernmentsand

communitiestomaximizeassetefciency.

Inaddition,withtheaimoutilizingtheull

potentialostationsandtheirsurrounding

areaswhilealsoinvigoratingthearea

betweenstationswewillstrivetocreate

communitiescenteredonstationsoering

comprehensiveservicesanddevelop

surroundingareasprovidingample

convenienceandanattractiveplacetolive.

Further,wewillalsoworktobringout

theullpotentialoOsakaStationCity

andconductareamanagementorthe

areaaroundOsakaStation.Inregardto

theJ-WESTCard,JR-Westwillincrease

thenumberoJ-WESTCardcardholders,

expandthenumberostoreswherethe

ICOCAe-moneyservicecanbeused,

andtakeotherstepstoenhanceconve-

nienceorcustomersinconjunctionwith

theiruseotheCompanysrailwayservice.

Fuur iiiaiS i -raSprai praiS



28/92

Crpra SCiaL rSpSiBiLiy

OurAimis

to Communicate ith Societ and Promoteiaogue ith Stakehoders.

Corporate Phiosoph

TheJR-WestCorporatePhilosophydescribesthedirectionin

whichtheJR-WestGroupshouldmovetowardaswellasidentifes

thecorporatevaluesitwishesallemployeesandexecutiveofcers

toapplyintheirday-to-daywork.Itembodiestheunwavering

devotionoeachJR-Westemployeeandexecutiveofcerto

reectupontheFukuchiyamaLineaccidentwithsincerityand

theirunwaveringdevotiontorebuildJR-Westaccordingly.Italso

servesasamessagetoallitsstakeholders,includingsocietyat

large,thatcommunicatesthisunwaveringdevotion.

ThetitleoCorporatePhilosophyandtheuseoWe

placedatthebeginningoeachitemothisphilosophyrepre-

sentthecombineddeterminationoalloouremployeesand

executiveofcers.Simultaneously,thesewordsarethedriving

orcebehindtheactionsoeachemployee,eachexecutive

ofcer,andthecompanythateachotheseemployeesand

executiveofcerscometogethertoorm.

Corporate Philosophy

1 We,beingconsciousoourresponsibilityorprotectingthetruly

preciouslivesoourcustomers,andincessantlyactingonthe

basisosaetyfrst,willbuildarailwaythatassuresourcustom-

ersoitssaetyandreliability.

2We,withacentralocusonrailwaybusiness,willulfllthe

expectationsoourcustomers,shareholders,employeesand

theiramiliesbysupportingtheliestylesoourcustomers,

andachievingsustainablegrowthintotheuture.

3We,valuinginteractionwithcustomers,andconsideringour

businessromourcustomersperspective,willprovidecomort-

ableservicesthatsatisyourcustomers.

4We,togetherwithourgroupcompanies,willconsistently

improveourservicequalitybyenhancingtechnologyand

expertisethroughdailyeortsandpractices.

5We,deepeningmutualunderstandingandrespectingeach

individual,willstrivetocreateacompanyatwhichemployees

fndjobsatisactionandinwhichtheytakepride.

6We,actinginasincereandairmannerincompliancewith

thespiritolegalimperatives,andworkingtoenhance

corporateethics,willseektobeacompanytrustedby

communitiesandsociety.

Basic Approach to CSR

JR-Westsresponsibilityasagoodcorporatecitizenistowork

towardrealizingitsCorporatePhilosophy.Inordertounderpin

andosterthekeyvaluessetoutinitsCorporatePhilosophy,

andinlightosocietysexpectations,JR-Westhasestablished

priorityareasrelatingtoitsCSRactivities.TheCompanysmost

importantresponsibilityistoensurethesaetyoitscustomers

andemployeesalike.Theotherourpriorityareasinclude

customersatisaction,theglobalenvironment,humanresourc-

es/employeesatisaction,andcoexistencewithlocalcommu-

nities.JR-Westrecognizesthesefveareasasareaswhereit

canmakeuniquecontributions.JR-Westalsoprioritizescompli-

ance,crisismanagement,disclosure,inormationsecurity,

humanrights,andmaterialsprocurement.JR-Westrecognizes

thesesixareasastheoundationsoitsoperations.Going

orward,JR-Westintendstocommunicatesincerelywithsociety

andactivelypromotedialoguewithallitsstakeholders.Atthe

sametime,theCompanywillheightenthequalityoitsbusiness

activitiesromthestandpointoitsCSR-relatedactivities.

Throughthoseeorts,JR-Westhopestomeetsocietysexpec-

tationsandtoenhanceitslevelosaetyandreliabilitywhile

realizingsustainablegrowth.



29/92

Sstem to Promote CSR

ToenhanceourabilitytopromoteCSRasoneomanagements

coretasks,weestablishedtheCSRPromotionCommitteein

June2006.Thepresidentservesaschairpersonothecommit-

tee,whileitsmembershipcomprisesull-timedirectors,ull-time

corporateauditors,andgeneralmanagersoheadquarter

divisions.WealsoestablishedtheCSROfcewithinthe

CorporatePlanningHeadquartersastheexecutiveofceo

theCSRPromotionCommittee.

Withtheexceptionotheparamountresponsibilityosaety

whichiscoveredbyaseparatesystemtheCSRPromotionCom-

mitteeismandatedtocomprehensivelyexamine10feldsroma

CSRperspectiveandimplementimprovementswherenecessary.

Stakeholders

Corporate Philosophy

Sustainable growth

JR-West

CSR Initiatives

Customer

satisfaction

Global

environment

Human

resources /

Employee

satisfaction

Social

contribution

SafetyParamount

responsibility

Information security / Disclosure / Increasing awareness of human rights /Materials procurement / Compliance / Crisis management /

Supporting and cultivating values that are important in CSR initiatives

Each employee thinks and acts on their own initiative

Safety and reliability

We will promote dialogue with stakeholders and implement activities

to support the lifestyles of customers,

centered on the Companys mainstay railway business.

CSr prmi FramWrk



30/92


Safet Measures

FollowingtheFukuchiyamaLineaccident,JR-WestormulateditsnewCorporatePhilosophy,whichsetsoutthedirectionin

whichtheCompanymuststrivetowardandtheCompanys

senseovalues.ThefrstitemotheCorporatePhilosophy

stipulates,We,beingconsciousoourresponsibilityorpro-

tectingthetrulypreciouslivesoourcustomers,andincessantly

actingonthebasisosaetyfrst,willbuildarailwaythatassures

ourcustomersoitssaetyandreliability.

SAFETy CARTER

SinceJR-Westdefnessaetyastheonevaluethatmustalways

beupheldwiththehighestpriority,JR-Westhassetoutits

SaetyCharterasaspecifccodeoconductoremployees

regardingsaety.

Safety Charter

We,evermindulotherailwayaccidentthatoccurredonApril25,

2005,consciousoourresponsibilityorprotectingthetrulyprecious

livesoourcustomers,andbasedontheconvictionthatensuring

saetyisouroremostmission,establishthisSaetyCharter.

1 Saetyisensuredprimarilythroughunderstandingandcomply-

ingwithrulesandregulations,astrictexecutionoeachindi-

vidualsduty,andimprovementsintechnologyandexpertise,

andbuiltupthroughceaselesseorts.

2Themostimportantactionsorensuringsaetyaretoexecute

basicmotions,torigorouslyenorcesaetychecks,andto

implementawlesscommunication.

3Toensuresaety,wemustmakeaconcertedeort,irrespective

oourorganizationalafliation,rank,orassignment.

4Whenuncertainaboutadecision,wemustchoosethemost

assuredlysaeaction.

5Shouldanaccidentoccur,ourtopprioritiesaretopreventconcomitantaccidents,andtoaidpassengers.

STACE OF SAFETy MEASRES

FollowingthereectionovertheFukuchiyamaLineaccident,webelievethatourgreatestailureliesinnothavingbeen

abletodetectbeorehandtheactorsthatcontributedtothe

seriousaccident.Forthisreason,wehavesubsequentlystriven

toincreaseoursensitivitytosaety,identiydangersandrisks

beoretheymaterialize,andbuildasystemtoenablethe

necessarystepstobetakeninimplementingproactivesaety

measures.Toachievethis,webelievethatitisnecessaryto

establishaneectiverameworkaswellasinstillsaety

awarenessamongemployees.

Establishment of a Framework

Withregardtotheidentifcationodangersandrisksbeore

theymaterializeandtheimplementationomeasuresto

addressseriousrisks,wehaveintroducedriskassessments

asaspecifcmeansoenablinguniormresponseson

aCompany-widebasis.

Asasystemtoacilitatethesmoothandappropriate

implementationosuchmeasures,wehaveradicallyoverhauled

theCompanysentireconceptoaccidents,andareworkingto

enhanceourtechnicalcapabilities,improvecommunication,

enhancerontlinecapabilities,andreinorcecoordinationwith

Groupcompanies.

Instilling Safety Awareness

Saetyawarenessisthestartingpointorsaetyandisalso

essentialasameansocompensatingoranyincompleteness

withinthesystem.Forthesereasons,weormulatedtheSaety

Charterasaspecifccodeoconductregardingsaetyand

haveencouragedemployeestotakeconcreteactionin

accordancewiththevaluessetintheCharter.

Furthermore,intrainingprogramsconductedatourRailway

SaetyEducationCenter,whichweconsiderthestartingpoint

oroursaetyeducation,andateachoperationalsite,weare

pursuingmeasurestoensurethatwemaintainthelessons

learnedromtheaccident.



31/92

Developing Systems for Proactive Safety Measures

Establishment of a framework Instillment of safety awareness

Introduction of risk assessments Educate entire organization and each employee

Overhaul concept of accidents

Enhance safety-based technical capabilities

Improve safety-related communication

Improve safety based on human factors

Enhance frontline safety capabilities

Reinforce coordination between Group companies inshared pursuit of safety improvement

Specify the Safety Charter

Conduct safety training at the Railway Safety Education Center

Improve safety awareness through participation in

risk management

Ensure internalization of lessons learned

Hold safety meetings

0

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208217

169 169174

153 152

167160

139134

159 159

145 146

133 132 130

92

119

63

127 121145

129

97 104 92

81 83

8171

7175

79 75

7465

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8388

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71 76 74 71 69

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1 1 1

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11Preliminary

figure

praiaL raiLWay aCCidS

SaC F SaFy maSurS

Operational railway accidents:Accidentsasstipulatedbyministerialordinancesuchastraincollisions

Train accidents:Traincollisions,trainderailments,andtrainfres

Railway level crossing obstruction accidents:Collisionsorcontactsbetweentrainsorrailcarsandpeopleorvehiclescrossingrailwaytracksatrailwaylevelcrossings

Railway death or injury accidents:Deathsorinjuriestopeopleresultingromtheoperationotrainsorrailcars

Property damage accidents:Propertydamageo5millionormoreresultingromtheoperationotrainsorrailcars

Basic Safety Plan

WehaveormulatedtheBasicSaetyPlanasourinitiatives

aimedatbuildingasystemoproactivesaetymeasures.We

areworkingtogetherwithourGroupcompaniesinanall-out

eorttoreachourattainmenttargetsundertheBasicSaetyPlan.

AttainmentTarget

Buildingacorporatesystemtoensurenoaccidentsthatproducecasualties

amongourcustomersandnoseriouslaboraccidentstoouremployees.

Specifcally,throughthemeasuresothefve-yearBasicSaetyPlan,

weaimtoimplementandestablishtheollowinginitiatives:

(1)Identifcationorisksthatcouldleadtothedeathorinjuryocustomers

orseriouslaboraccidentsamongemployees,sharingresultso

evaluationsontheseriousnessoeachriskamongrelatedindividuals

(2)Implementationocountermeasuresorrisksthatneedtobe

givenpriority

(3)Receptionoalargeamountosaetyinormationromemployees,

establishmentoappropriatesystemsormonitoringrisk

Sinceitsestablishment,JR-Westhasimplementedanumberosaetymeasuresgearedtowardimprovingsaetythroughtheenhancemento

boththesotandhardelementsoitsoperations.Asaresult,operationalrailwayaccidentshavebeendeclining.Thenumberooperational

railwayaccidentsduringfscal2011wasthesecondlowestintheCompanyshistory.Inparticular,railwaylevelcrossingobstructionaccidents

wereatanall-timelow.However,inlightotheactthatacertainnumberoaccidentsstilloccur,wewillaggressivelyimplementmeasuresor

thecontinuedenhancementosaety.



32/92

Preserving the atura Environment

BASC PRESERVATO POlCyJR-WestworkstogetherwithotherGroupcompaniesto

contributetothepreservationothenaturalenvironment

andtherealizationoasustainablesociety.

TATVES TO PREVET GlOBAl wARMG

CO2 Emissions Reduction and Energy Conservation

Railwaysareamodeotransportationthathasarelativelylight

impactontheenvironment.However,railwayoperationsthem-

selvesrequireagreatdealoelectricityanduel.TheCompany

doesnotonlyocusonreducingtheenergyconsumedbyits

railwayoperations,whichaccountsorthemajorityotheGroups

energyconsumption,italsoendeavorstoconserveenergyinits

stations,ofces,andthroughoutallotherareasoitsoperations.

Throughcomprehensiveenergyconservationinitiatives,the

JR-WestGroupaimstohelppreventglobalwarming.

IntroducingEnergy-savingRollingStock

Inordertoreducetheenergyconsumedbyitsrailway

operations,whichaccountsorapproximately80%oitstotal

energyconsumption,JR-Westisintroducingnewrollingstock

equippedwithVVVFinvertercontrolsystems,regenerative

brakes,andotherenergy-savingeatures.

ImprovingGroundFacilities

JR-Westisimprovingitsgroundacilitiestoullyutilizethe

characteristicsoitsenergy-savingrollingstock.Thisincludes

theinstallationotheDCeedingsystemsbetweenupand

downlines,hybridelectricpowersupplysystems,andother

acilitiestohelptheCompanybettertakeadvantageothe

electricityacquiredthroughtheregenerativebrakesoits

energy-savingrollingstock.

ReducingtheEnergyUsedbyStations,Ofces,andOtherFacilities

Whilestationsandrelatedacilitiesuserelativelylowamountsoenergyincomparisontotheamountconsumedbyrailway

operations,themovetomakeJR-Westsstationsbarrierree

tendstoincreaseenergyconsumption.Inadditiontocontinuing

itsdevelopmentotechnologiestoreduceenergyconsumption,

JR-Westisalsoadvancingeortstomakeitsstationsinto

environmentallyriendlyeco-stations.

Utilizing Natural Energy

SolarandWindPower

Usingenergyinamoreefcientmannerinitstrains,stations,

andotheracilitiesisnottheonlywaythatJR-Westisworkingto

preventglobalwarming.Byintroducingsolarpowergenerators

andminiaturewindpowergenerationacilities,itisalsoactively

utilizingnaturalenergysourcesthatdonotleadtotheemission

oCO 2gases.Inaddition,OsakaStationCity,whichbegan

operationinMay2011,isequippedwithsolarpowergenerators.

A103kwgeneratorisequippedontherooothestationplatorm

anda26kwgeneratorisequippedontheroootheaccessway

leadingtotheparkingstructure.Theenergyromthesegenerators

isprimarilyusedtopowerlightingandelevators.

RECyClG TATVES

Realization of a Recycling-based Society

TheJR-WestGrouppracticesthe3Rs(reduce,reuse,and

recycle)withrespecttoallwasteproducedduringtheconstruc-

tionandmaintenanceoitsacilitiesaswellastheoperationo

itsstationsandtrains.Specifcally,ithasestablishedcleargoals

regardingtherecyclingothematerialwastecreatedthrough

railwayoperationsaswellasthegarbagecollectedromstations

andtrains,andisconductingrecyclinginitiativesaccordingly.

AddressingWasteProducedDuringFacilityMaintenance

andConstruction

TheJR-WestGroupperormsregularmaintenanceand

constructionoacilitiesinordertoensurethatitsrailwayscan

operatesaely.Infscal2011,thetotalwasteproducedthrough

theseactivitiesandcontractedconstructionamountedto

203,00 0tons.Toaddressthiswasteproduction,theGroup

employsconstructiondesignsandmethodsthatutilizeresources

moreefcientlyandlimitwasteproduction.Itisalsoproactivein

itseortstoreusesuchwaste.Infscal2011,theGroupwasabletoreuse95.6%othewasteproducedthroughthesemeans.

Energy-savingrollingstock

(321Series)




33/92

RecyclingGarbageromStationsandTrains

Infscal2011,thetotalamountogarbagecollectedromstationsandtrainswasapproximately21,000tons.Inordertopromotethe

recyclingosuchgarbage,theGroupplacedgarbagereciprocals

withdivisionsordierenttypesogarbageinitsstations,trains,and

otheracilities,andworkedtorecoverrecyclablessuchascansand

plasticPETbottleswiththecooperationocustomers.Infscal2011,

itwasabletorecycle95.8%othegarbagecollectedinthisway.

PlacingGarbageReciprocals

TheGrouphopesthatitscustomerswillhelpcontributetothe

separationogarbageorrecycling.Forthisreason,ittakescare

toensurethatitsgarbagereciprocalsareeasytousethroughsuch

innovationsasimprovingtheshapeothereciprocalsmouths.

TheGroupplaceslarge,transparentreciprocalswithourdivisions

onitsstationplatorms.Intrains,smallerreciprocalswithtwo

divisionsarebeinginstalledinconsiderationothelimitedspace.

COMPlACE TATVES

Consideration for Rail-side Environments

ReducingNoiseandVibrationPollution

TheJR-WestGroupisactivelyworkingtoreducethenoiseand

vibrationpollutioncreatedbyitsrailwayoperations.Asoneacet

otheseinitiatives,ithasinstallednoisebarriersalongtheside

oShinkansenraillinesandisexpandingtheusageoN700

seriestrains,whichrunrelativelyquietly.Onconventionallines,

theGroupisintroducingmaintenancecarsthatproduceless

noisewhenperormingmaintenance.

EliminatingSoilPollution

Whensellingplotsolandorconstructingacilities,shouldtheleveloDesignatedHazardousSubstancesoundinthesoil

exceedtheacceptablelimitsdefnedbytheSoilContamination

CountermeasuresAct,theCompanytakesthenecessary

measuresdescribedintheacttoaddresstheissue.

Management of Chemical Substances

TheJR-WestGroupisextremelycareulwhenmanaging

chemicalsubstances.Itmaintainsanaccurateunderstanding

othetypesandvolumesothechemicalsusedorstoredatits

variousoperationalsites,implementsthoroughstorageand

managementmeasures,andisconstantlystrivingtolimitits

usageosuchsubstances.

ManagingandDisposingoPCBs

Equipmentthathasusedpolychlorinatedbiphenyls(PCBs)

andotheritemsthathavebeencontaminatedbyPCBsare

careullystoredandmanagedinaccordancewithrelevantlaws

andregulations.Further,theGroupissteadilydisposingo

suchmaterialsaccordingtolawsandregulations.AsoMarch

31,2011,ithaddisposedo535tonsomaterialscontaminated

byPCBs.

TakingStepstoAddressthePRTRLaw

UnderthePollutantReleaseandTranserRegisters(PRTR)

Law,companiesarerequiredtosubmitreportsonthevolumes

ochemicalsubstancestheyhavereleasedortranserred.

ApplicablesubstanceshandledbytheJR-WestGroupinclude

thechemicalsusedasorganicsolventsortrainmaintenanceas

wellasantireezeordieseltrains.Infscal2011,theCompany

submittedreportsonthesesubstancesinaccordancewiththe

PRTRLawor6oitsoperationalsites.

Garbagereciprocalonastationplatorm

Noisebarriersinstalledalongside

Shinkansenraillines

Quietmaintenancecars



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Jr West Annual Report 2011

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