2014
Contents President's Message...1 Agency Overview...2 1. Privatization of Highway Public Corporations...2 2. Framework of Agency Business Activities...3 3. Procedural Flow...6 Status of Business Execution in FY 2013...7 1. Holding and Leasing of Expressway Assets...7 2. Status of Debt Repayment...8 3. Interestfree Loans to Companies...10 4. Implementation of Toll Rate Discounts on Expressways...10 5. Arrangements to Facilitate Reduction in Costs for New Construction, Reconstruction, Maintenance, Repairs and other Expressway Maintenance...10 6. Exercise of Statutory Authority on Behalf of Road Administrators...10 7. Management of Railway Facilities Connecting Honshu and Shikoku...11 Comparison of Debt Repayment Plan and Performance...12 Overview of FY 2013 Financial Statement...14 1. Profit and Loss Statement...14 2. Balance Sheet...15 Present Condition of Expressways...16 Appendix...17 Expressway Network...22
President s Message The Japan Expressway Holding and Debt Repayment Agency was established in 2005 with six privatized expressway companies within the privatization framework of the highway public corporations. The missions are to hold and maintain the expressway assets in a good condition and to repay inherited debts from the highway public corporations and incremental debts due to new construction of expressway assets. We commit the steady and full repayment of the debts within 45 years from the beginning as well as maintaining the safe and high quality expressway assets working closely with the six expressway companies. The repayment scheme is based on utilization of the fees paid by the expressway companies for the lease of the expressway assets. Further, we exercise our authority as a road administrator in a timely and appropriate manner, in cooperation with expressway companies, in order to ensure safe and efficient operation of the expressways. Also, we care for detailed maintenance and management works for the assets in accordance with each regional condition to hand over safe and quality expressways to the next generation. Interest rate hike is the most critical risk for the repayment. We have been carefully dealing with the risk through effective liability management such as issuing ultralongterm bonds during the recent historical low interest rate period. As a result, we have been outperforming the debt repayment all the way from the beginning. The current balance is well below its planned number. Accountability is another important responsibility for the agency. We actively disclose business and operational information through our website such as debt repayment plan/performance comparison tables, annual maintenance reports and revenue/expenditure result of each route regardless of statutory requirements to ensure transparency of our operation. Revision of the Road Law, etc. on June 30, 2014 changed the expiration date of toll collection duration from 2050 to 2065, to allow prompt and deliberate renewals corresponding to the aging of expressways. We will continue to work together with the nation and the expressway companies to further improve the safety of expressways by responding to these framework changes in a timely and appropriate manner. In 2014, Higashi Kyushu Expressway was extended in March, KenOExpressway in April and June, and MaizuruWakasa Expressway was opened in July. We believe that connecting the missing links like these expressways will improve redundancy and contribute to further socioeconomic revitalization. The 3rd Mediumterm Plan has started from FY2013. We will continue to do our best efforts to realize effective and efficient operation of expressway business. With your continuous support and guidance, we will make every effort to meet our commitments. Hirotada Seyama President, Japan Expressway Holding and Debt Repayment Agency September 2014 1
Agency Overview 1. Privatization of Highway Public Corporations The Japan Expressway Holding and Debt Repayment Agency (hereafter referred to as the Agency ) was established on October 1, 2005, along with six expressway companies (hereafter referred to as the Companies ), under four laws regarding the privatization of four highway public corporations, which were enacted in accordance with the Japanese Government s policy of privatizing the four public corporations, as spelled out in the Reorganization and Rationalization Plan for Special Public Corporations (approved in a Cabinet meeting on December 19, 2001) Framework of the Privatization of Highway Public Corporations Objective of Privatization To secure the repayment of interestbearing debts amounting to about 40 trillion To construct, without delay, genuinely needed expressways with minimum fiscal burden on the general public, while paying due respect to the autonomy of the Companies To offer diverse and flexible prices and services to expressway users by utilizing the private sector s knowhow Four Laws Regarding the Privatization of Highway Public Corporations Expressway Company Law Japan Expressway Holding and Debt Repayment Agency Law Law Regarding the Development of HighwayRelated Laws in Connection with the Privatization of the Japan Highway Public Corporation Law Regarding the Development of HighwayRelated Laws in Connection with the Privatization of the Japan Highway Public Corporation Outline of Privatization Japan Highway Public Corporation Metropolitan Expressway Public Corporation Hanshin Expressway Public Corporation HonshuShikoku Bridge Authority Companies: Construction and management of expressways and collection of tolls *To merge with West Nippon Expressway Co., Ltd when business stabilizes East Nippon Expressway Co., Ltd. Central Nippon Expressway Co., Ltd. West Nippon Expressway Co., Ltd. Metropolitan Expressway Co., Ltd. Hanshin Expressway Co., Ltd. HonshuShikoku Bridge Expressway Co., Ltd. Agency: Holding of expressways, repayment of debts Japan Expressway Holding and Debt Repayment Agency 2
2. Framework of Agency Business Activity The objectives of the Agency are to reduce the burden of the general public relating to expressways and to support the successful implementations of the expressway business by the Companies, by holding and leasing expressway assets related to expressways and repaying debts in reliable and swift manner. The Agency concludes agreements with each of the Companies; receives approval by the Minister of Land, Infrastructure, Transport and Tourism (MLIT); and formulates business implementation plans that include lease fees and a debt repayment plan. On the basis of this agreement, the Agency will fully repay the debts inherited from the public corporations and new debts accepted from the Companies before the expiration date of toll collection duration*, with the lease fees paid by the six Companies. Upon full repayment of the debts, the expressways will be transferred to the respective road administrators. Until the handover of expressway management, the Agency will exercise statutory rights on the behalf of the respective road administrators. Scheme for the Implementation of Expressway Business Activities by Agency and Companies Agency (Secure repayment of debts) Holding of expressways Repayment of debts (inherited debts and acquired debts) Transfer of highway assets and acceptance of debts Leasing of highway assets Payment of lease fees Companies (Efficient implementation of business activities) Expressway construction Expressway management Toll collection Funds raised Approval by the Minister of MLIT Agreements Approval by the Minister of MLIT * Partial revision of the Road Law, etc. that was executed on June 30, 2014 changed the expiration date of collection duration of expressway tolls leased by the Agency to before September 30, 2065, to allow prompt and deliberate renewals (construction such as specified renewal) corresponding to the aging of expressways. Scope of Business Activities (prescribed in Article 12 of the Japan Expressway Holding and Debt Repayment Agency Law) 1. Holding of expressway assets and their leasing to the Companies 2. Repayment of inherited debts 3. Acceptance of debts borne by any of the companies to pay the cost of new construction, reconstruction, repair or restoration of expressways following disasters under the Agreement, and the repayment of such debts 4. Provision of interestfree loans, financed with subsidies granted by the national government or local public entities as prescribed by Cabinet order, to Metropolitan Expressway Co., Ltd., and/or Hanshin Expressway Co., Ltd., to partially cover funds to pay the cost of new construction or reconstruction of the Metropolitan Expressway and/or Hanshin Expressway 5. Provision of interestfree loans, financed with subsidies granted by the national government, to the Companies to partially cover funds to pay the cost of the restoration of expressways damaged by disasters 6. Provision of interestfree loans, financed with subsidies granted by the national government, to the Companies to partially cover funds to pay the cost of construction of junctions connecting the said expressways and roads (excluding expressways) specified by the Ordinance of the Ministry of Land, Infrastructure and Transport and Tourism. 7. Provision of interestfree loans, financed with subsidies granted by local public entities, as prescribed by Cabinet order, to Metropolitan Expressway Co., Ltd., and/or Hanshin Expressway Co., Ltd., to partially cover funds to pay the cost of new construction, reconstruction, repair or restoration of Metropolitan Expressway Co., Ltd., and/or Hanshin Expressway Co., Ltd., following disasters 8. Subsidization required to facilitate a reduction in costs of the new construction, reconstruction, maintenance, repair and other aspects of management of expressways through the Companies own effort 9. Where any of the Companies is to engage in new construction work, reconstruction, maintenance, or repair work or perform other aspects of expressway management, the Exercise of Statutory Powers on Behalf of Road Administrators under the Law concerning Special Measures for Highway Improvement 10. Operations prescribed under the Law Concerning Special Measures regarding general marine passenger liner service operations, etc., in relation to the construction of the HonshuShikoku Bridge 11. Management of railway facilities linking Honshu and Shikoku 12. Making available railway facilities under item 11 above for use by the railway service operator for the charging of fees 3
Flow of Expressway Assets/Debts between the Agency and Companies Expressway assets constructed by a Company shall be transferred to the Agency after the completion of construction, and at the same time, the debts borne by the Companies from construction shall be accepted by the Agency. The Companies pay the Agency the lease fees prescribed in their Agreement out of their income from tolls, excluding costs for expressway maintenance and management, and the Agency uses these funds to repay debts. Agency (Holding of expressways/ repayment of debts) Funds raised Inherited debts Accepted debts Debt repayment (existing and new debts) Lease fees Companies (Construction and management of expressways and collection of tolls) Lease of Expressways Assets and liabilities shall be transferred to the Agency after completion. Tolls Debts New construction Expressway assets Funds raised Agreements with Expressway Companies and Business Implementation Programs (1) Overview When intending to undertake a business operation, under Article 13, Item 1 of the Japan Expressway Holding and Debt Repayment Agency Law (hereafter referred to as the Agency Law ), the agency is required to enter in advance into an agreement with the Company concerned, prescribing the lease fees and other conditions of lease regarding the expressway assets the Agency is to lease to the Company for each expressway belonging to the national expressway network, the regional expressway networks or independent general toll roads. When an agreement has been entered into, under Article 14, Item 1 of the Agency Law, the Agency is required to formulate a business implementation program that specifies details of the income and expenditure budget (debt repayment plan) of the Agency, in addition to the item prescribed in the agreement (excluding the toll amounts to be collected by the Company and the duration of collection), and submit it to the Minister of Land, Infrastructure and Transport for his or her approval. A Company that enters into an agreement with the Agency is required to carry out its business activities under the agreement subject to approval by the Minister of Land, Infrastructure and Transport with regard to construction details, toll amounts, and other items. The Agency and the Companies concluded an agreement on March 31, 2006. The Agency obtained approval for its business implementation programs and the Companies obtained approval for their business activities from the Minister of Land, Infrastructure and Transport. 4
(2) List of Agreements and Programs Agreement / Approval for Business Activities As of September 1, 2014 Business Implementation Programs National expressway network (Note 1) Expressways within the national expressway network for East Nippon Expressway Co., Ltd., Central Nippon Expressway Co., Ltd., West Nippon Expressway Co., Ltd., and HonshuShikoku Bridge Expressway Co., Ltd.: 4 agreements Expressways within the national expressway network: 1 program Regional expressway networks Metropolitan Expressway, Hanshin Expressway (Hanshin area), and Hanshin Expressway (Kyoto area): 3 agreements Metropolitan Expressway, Hanshin Expressway (Hanshin area), and Hanshin Expressway (Kyoto area): 3 programs Independent general toll roads (Note 2) Respective independent general toll roads outside the national expressway network: 9 agreements Respective independent general toll roads outside the national expressway network: 9 programs National expressway network Regional expressway networks Independent general toll roads Name of Agreement Agreement Regarding the National Expressway Hokkaido Crossing Route, HakodateNayoro Line Agreement Regarding the National Expressway National Chuo Expressway FujiYoshida Line Agreement Regarding the National Chuo Expressway Nishinomiya Line Agreement Regarding General National Road Route 28 (HonshuShikoku Expressway (KobeNaruto Route) (Note 1) Agreement Regarding the Metropolitan Expressway Line 1 Agreement Regarding the Osaka Prefectural Expressway OsakaIkeda Line Agreement Regarding the Kyoto City Expressway Line 1 Agreement Regarding General National Road Route 45 (Sanriku Jukan Expressway (between NaruseOkumatsushima and IshinomakiKanan)) (Note 2) Agreement Regarding General National Road Route 1 (Hakone Bypass) (Note 2) Agreement Regarding General National Road Route 16 (Hachioji Bypass) Agreement Regarding General National Road Route 139 (NishiFuji Road) (Note 2) Agreement Regarding General National Road Route 158 (Chubu Crossing Route, Abotoge Road) Agreement Regarding General National Road Route 31 (HiroshimaKure Road) Agreement Regarding General National Road Routes 165 and 166 (MinamiHanna Road) Agreement Regarding General National Road Route 201 (Yakiyama Bypass) (Note 2) Agreement Regarding General National Road Route 506 (Naha Airport Expressway (Haebaru Road)) (Note2) Party to the Agreement with the Agency East Nippon Expressway Co., Ltd. Central Nippon Expressway Co., Ltd. West Nippon Expressway Co., Ltd. HonshuShikoku Expressway Co., Ltd. Metropolitan Expressway Co., Ltd. Hanshin Expressway Co., Ltd. Hanshin Expressway Co., Ltd. East Nippon Expressway Co., Ltd. Central Nippon Expressway Co., Ltd. Central Nippon Expressway Co., Ltd. Central Nippon Expressway Co., Ltd. Central Nippon Expressway Co., Ltd. West Nippon Expressway Co., Ltd. West Nippon Expressway Co., Ltd. West Nippon Expressway Co., Ltd. West Nippon Expressway Co., Ltd. Note 1: The regional expressway network of the HonshuShikoku Bridge Expressway was designated as a national expressway network on April 1, 2014. Note 2: The following expressway sections have been made tollfree with the completion of debt repayment. General National Road Route 45 (Sanriku Jukan Expressway (between NaruseOkumatsushima and IshinomakiKanan)) (made tollfree on January 24, 2008) General National Road Route 506 (Naha Airport Expressway, (Haebaru Road)) (made tollfree on March 28, 2009) General National Road Route 1 (Hakone Shindo) (made tollfree on July 26, 2011) General National Road Route 139 (NishiFuji Road) (made tollfree on April 1, 2012) General National Road Route 201 (Yakiyama Bypass) (planned to be tollfree from October 1, 2014) For information on individual agreements and business implementation programs, please see the Agency website (http://www.jehdra.go.jp/kyouteigyoumujisshi.html) Organization Chart The Agency carries out its business activities under the following organizational system. General Affairs Department General Affairs Division Management Division Accounting Division Finance Department Board member Auditor Funding Division Planning Division Planning Department Project Planning and Coordination Division Management Division Kansai Department Coordination Division 5
3. Procedural Flow Agency Application for Approval of Business Implementation Program Approval by the Minister of Land, Infrastructure and Transport Conclusion of Agreement (Agency Company) Items to be included in an Agreement 1. Route names of the relevant expressways 2. Details of new construction, reconstruction or repairs (excluding construction such as specified renewal) 3. Details of construction such as specified renewal 4. Upper limit of debts to be accepted in connection with item 2 and 3 5. Upper limit of debts to be accepted in connection with disasters 6. Lending plan for interestfree loans 7. Details of leased assets, lease fees, and lease duration 8. Toll rates, and duration of toll collection 9. Items necessary for securing appropriate standards of expressway management by the Company 10. Items necessary for subsidization by the Agency to facilitate the reduction of costs for new construction, reconstruction, maintenance, repairs and other aspects of expressway management through the Company's own operational efforts 11. Other necessary items, including revision of the Agreement Items to be included in a Business Implementation Program 1. Route names of the relevant expressways 2. Details of new construction, reconstruction or repairs (excluding construction such as specified renewal) 3. Details of construction such as specified renewal 4. Upper limit of debts to be accepted in connection with item 2 and 3 5. Upper limit of debts to be accepted in connection with disasters 6. Lending plan for interestfree loans 7. Details of leased assets, lease fees, and lease duration 8. Details of the Agency s income and expenditure budget (debt repayment plan) 9. Items necessary for securing appropriate standards of expressway management by the Company 10. Items necessary for subsidization by the Agency to facilitate the reduction of costs for new construction, reconstruction, maintenance, repairs and other aspects of expressway management through the Company's own operational efforts, and other necessary items Company Application for the approval of Business Activities Approval by the Minister of Land, Infrastructure and Transport Items to be included in an Application for the Approval of Business Activities 1. Route names of the relevant expressways 2. Details of new construction, reconstruction or repairs 3. Details of the Company s income and expenditure budget (revenue, management costs, lease fees, etc.) 4. Toll rates and duration of toll collection As of September 1, 2014, details of construction such as specified renewal are not included in agreements, business implementation programs, etc. Adjustments will be made with the national government and Companies to advance the proceedings. As for individual agreements and implementation programs, please refer to the Agency s website (http://www.jehdra.go.jp/kyouteigyoumujisshi.html) 6
Status of Business Execution in FY 2013 1. Holding and Leasing of Expressway Assets The Agency leases the Expressway assets to the Companies and collected 1.6206 trillion yen for lease fees. Status of Holding and Leasing of Expressway Assets As of March 31,2014 (Unit: km) Length of holding and leasing Of which are a length opened to traffic Of which are a length under construction (Breakdown) National expressway network National expressways Highways other than national expressways Of which are a length opened to traffic National expressways Highways other than national expressways Of which are a length under construction National expressways Highways other than national expressways Regional expressway networks Of which are a length opened to traffic Of which are a length under construction Independent general toll roads Of which are a length opened to traffic Of which are a length under construction 10,061 Total 9,812 (759) 249 9,251 8,251 1,000 9,027 8,039 988 (717) 225 (509) 212 (208) 13 758 733 (42) 25 52 52 47 106 67 58 47 47 101 29 72 63 54 29 29 34 25 4 4 4 East Nippon Expressway Co., Ltd. 3,802 3,732 (254) 70 3,802 3,360 442 3,732 3,303 429 (254) 70 (140) 57 (114) 13 33 57 19 23 33 33 57 57 19 23 19 23 Central Nippon Expressway Co., Ltd. 2,024 1,923 (322) 101 2,013 1,829 184 1,912 1,728 184 (322) 101 (228) 101 (94) 0 10 10 5 5 5 5 5 5 5 5 5 West Nippon Expressway Co., Ltd. 3,477 3,423 (141) 54 3,436 3,062 374 3,382 3,008 374 (141) 54 (141) 54 (0) 0 42 42 9 39 39 30 9 9 39 29 10 39 30 29 29 10 1 Metropolitan Expressway Co., Ltd. 312 301 (28) 11 312 301 (28) 11 Hanshin Expressway Co., Ltd. Hanshin area Kyoto area 263 249 (14) 14 263 249 (14) 14 [4] [4] [4] [4] [4] [4] 10 10 10 10 HonshuShikoku Bridge Expressway Co., Ltd. 173 173 173 173 Note 1: Figures in parentheses denote the increase or decrease in value over figures for March 31, 2013 Note 2: Length figures have been obtained by totaling all the sections that contain assets held by the Agency with the distance between ICs as the minimum unit. However, figures in parenthesis for "Of which are a length under construction" are the total distance of length for expressway sections undergoing new construction by expressway companies under agreements with the Agency, including sections for which the Agency already holds assets. Note 3: There may be discrepancies in figure totals due to the treatment of fractions. The following Expressway sections newly opened in FY 2013. National Expressway Higashi Kyushu Expressway: Kanda KitaKyushu Airport Yukuhashi 9 km National Expressway Higashi Kyushu Expressway: Hyuga Tsuno 20 km General National Road Route 6 (SendaiNanbu Road) (transferred): Sendai Wakabayashi JCT Sendai Minami 12.2 km General National Road Route 47 (SendaiHokubu Road): Tomiya JCT Tomiya 1.7 km General National Road Route 468 (KenOExpressway): Chigasaki JCT Samukawa Kita 5.1 km General National Road Route 468 (Tokyo Wan AquaLine/Kisarazu Togane Road):Togane JCT Kisarazu Higashi 42.9 km General National Road Route 478 (KyotoJukan Expressway): Kutsukake Oyamazaki JCT 9.8 km Osaka City Expressway YodogawaSagan Line:: Shimaya Ebie JCT 4.3 km Total 105.0 km 7
2. Status of Debt Repayment (1) Changes in the Debt Balance (Financial Statement Basis) Changes in the debt balance of the Agency in FY 2013 are shown in the table below. The total amount of debt as of the beginning of the term (April 1, 2013) was 30.7983 trillion yen, but decreased to 29.9829 trillion yen at the end of the term (March 31, 2014) as the result of acceptance of 532.3 billion yen in debt (debt accepted from expressway companies together with expressway assets), repayment of 4.3142 trillion yen in debt and the issuance of 2.9560 trillion yen in bonds. Changes in debt balance in FY 2013 FY 2013 Debt balance at start of the period A 307,983 Debt accepted B 5,323 Debt repaid C 43,142 Fund raised D 29,560 Increase in book value from the amortization of the discount on bonds payable E 105 Debt balance at end of the period A+BC+D+E 299,829 (Unit: million yen) (Reference) FY 2012 303,244 15,199 39,230 28,660 109 307,983 Note 1: The above figures do not include capital and inherited accounts payable relating roads (23.8 billion yen at the end of FY 2012, 37.8 billion yen at the end of FY 2013). Note 2: There may be discrepancies in figure due to rounding of fractions. Changes According to Debt Category (Unit: million yen) Loans payable and bonds (face value) Debt category Balance at start of period Increase during period New loan Debt accepted Decrease during period Repayment Balance at end of period Balance in discount on bonds payable Book value at end of period (Reference) At time of establishment Longterm loans payable Government borrowing (interestfree) Government borrowing (interestbearing) Private borrowing Total 4,657 5,488 10,457 20,602 1,898 1,898 567 1,409 4,474 6,450 4,090 4,079 7,881 16,051 4,090 4,079 7,881 16,051 7,800 87,693 31,784 127,276 Government guaranteed bonds 199,558 23,860 1,676 12,049 213,044 234 212,810 59,424 Government subscribed bonds 24,629 18,169 6,460 3 6,457 145,832 FILP agency bonds 52,659 5,700 4,370 53,989 844 53,145 23,925 Bonds Privately offered bonds Other bonds 184 6,700 1,750 84 2,000 6,450 0 6,450 18,080 Total 283,730 29,560 3,426 36,672 280,044 1,082 278,962 247,261 Longterm accounts payable (Longterm accounts payable relating to the construction of Tokyo Wan AquaLine) 4,836 20 4,816 4,816 7,239 Total debt 309,169 29,560 5,323 43,142 300,910 1,082 299,829 381,775 (Of which interestbearing debts) 304,511 29,560 5,323 42,575 296,820 1,082 295,738 373,976 Capital 53,547 1,097 54,643 54,643 43,712 Total of debts and capital 362,715 35,980 43,142 355,554 1,082 354,472 425,487 Note 1: The above figures do not include inherited accounts payable relating roads (23.8 billion yen at the end of FY 2012, 37.8 billion yen at the end of FY 2013). Note 2: Capital in terms of the expressway account is shown in the Capital section. Note 3: There may be discrepancies in figure due to rounding of fractions. 8
(2) Status of Funds Raised The Agency has raised up to 2.9560 trillion yen of funding stably at low interest by mainly issuing longterm (10year) and ultralongterm (over 10 years) bonds to reduce the risk of future interest rate hikes and enhance the certainty of debt repayment, and by issuing mediumterm (twoyear) bonds to diversify fundraising measures. Among these, 30year bonds (FILP agency bonds) were issued for the first time in six years as ultralongterm bonds, by ascertaining the issue market trends and uncovering demands from investor relations. The average financing period for FY 2013 was 11.8 years (11.8 years for FY 2012) and the average remaining period of outstanding debts at the end of FY 2013 was 7.2 years (6.8 years at the end of FY 2012). Status of external funds raised in FY 2013 (overview) Category Government guaranteed bonds FILP agency bonds Term 10 years 20 years 30 years Total 2 years 10 years 20 years 30 years Total Total Average financing period Average remaining period of outstanding debts Number of issuance 12 12 3 27 3 12 3 2 20 47 Amount of fund raised 19,360 3,600 900 23,860 1,500 3,400 600 200 5,700 29,560 11.8 years 7.2 years (5.1 years at the time of establishment) (Unit: million yen) Interest rate (average) 0.72% 1.59% 1.81% 0.89% 0.12% 0.81% 1.79% 2.04% 0.77% 0.87% Note 1: Amount of funds raised is that accepted by the Agency. Note 2: Interest rate (average) is presented as the simple weighted average of funds raised and the average subscriber s yield at the time of bond issuance. Note 3: There may be discrepancies in figure totals due to rounding of fractions. The average fundraising cost of interestbearing debt decreased to 1.46% at the end of the period, as shown in the table below. Average fundraising costs for interestbearing debt Balance of interestbearing debt at time of Agency establishment (October 1, 2005) Balance of interestbearing debt at the start of FY 2013 Debts accepted from Companies Changes Debts redeemed or repaid during Externally raised funds the period Increase in book value from the amortization of the discount on bonds payable Balance of interestbearing debt at the end of FY 2013 9 Total amount 373,976 303,326 5,323 42,575 29,560 105 295,738 (Unit: million yen) Cost 1.80% 1.49% 0.92% 1.22% 0.87% 1.46% Note 1: The above figures do not include inherited accounts payable relating to roads (23.8 billion yen at the end of FY 2012; 37.8 billion yen at the end of FY 2013) Note 2: Costs for loan financing shown in the above Balance of interestbearing debt are presented as the simple weighted average of the loan amount and the loan interest rate, while the funding cost of bonds is presented as the simple weighted average of funds raised and the average subscriber s yield at the time of bond issuance (funding cost of bonds included in Debt accepted from Companies is indicated by the simple weighted average of accepted book value and coupon rates). Note 3: There may be discrepancies in figure totals due to rounding of fractions. 9
3. Interestfree Loans to Companies The Agency received capital in the amount of 48.33 billion yen* from the national and local governments for the new construction and reconstruction of the Metropolitan Expressway and Hanshin Expressway, and lent 34.11 billion yen to the Metropolitan Expressway Co., Ltd, and 14.21 billion yen to Hanshin Expressway Co., Ltd., in interest free loans. As part of expenses incurred in the disaster restoration project of the Great East Japan Earthquake, the Agency accepted 37.45 billion yen as a subsidiary of national government, and made a noninterest bearing loan to East Nippon Expressway Co., Ltd. * There are discrepancies in figure totals due to rounding of fractions. 4. Implementation of Toll Rate Discounts on Expressways Based on the "Law Concerning Special Measures for National Financing of Road Construction (revised in May 2008)", construction of additional Smart Interchanges and toll rate discounts on expressways have been implemented as part of the Project to Promote the Effective Utilization of Expressways. However, the toll rate discounts on expressways managed by East Nippon, Central Nippon, West Nippon and HonshuShikoku Bridge Expressway Co., Ltd. terminated on March 31, 2014. In addition, to mitigate the effects of drastic changes in economic measures, tolls for regular and smaller passenger vehicles in rural areas were discounted by 50% on weekends until the end of June 2014, and for large or frequent users, tolls will be discounted by expanding the rate up to 50% until the end of March 2015. For the information on current toll rate discounts, please refer to the website of each Company or the Agency http://www.jehdra.go.jp/goannai.html 5. Arrangements to Facilitate Reduction in Costs for New Construction, Reconstruction, Maintenance, Repairs and other Expressway Maintenance Regarding subsidies to facilitate the managerial effort of companies, the Agency held the Committee on Subsidies regarding cost reduction in the construction of new expressways twice and certified companies compliance with its requirements for managerial effort in 39 cases, in FY 2013. Furthermore, the cases of managerial efforts employing new certified technologies were published on the website along with summary of the committee agenda, giving information to respective Companies and encouraging them to actively utilize the above efforts in cost reduction. These new technologies, such as construction method of castinplace extended floor slab, have been standardized and proactively utilized to promote cost reduction. Cost of about 1.65 billion yen was reduced and about 720 million yen was paid in subsidies for 29 cases, which satisfied requirements for FY 2013. (* Refer to p. 19 "Appendix") 6. Exercise of Statutory Authority on Behalf of Road Administrators The Agency has taken administrative measures, such as closing off roads to traffic as necessary, without delay under a system for collecting information from road supervisory personnel who are on duty around the clock. The Agency urged transport companies which repeatedly violate the Cabinet Order on Vehicle Restriction to improve their operations by issuing correction orders to violators, etc. The Agency also published on the website the names of transport companies not complying with the law nor improving their operations adequately, despite repeated warnings. Furthermore, the Agency participated in joint enforcement with East Nippon Expressway Co., Ltd., Central Nippon Expressway Co., Ltd., Metropolitan Expressway Co., Ltd., and Expressway Traffic Police Unit of Tokyo, Kanagawa, Saitama and Chiba. It also supported Metropolitan Expressway Co., Ltd. to prosecute the drivers and companies who repeatedly violate the Road Law by providing information such as the issue status of written order for action to the investigating authority. In the "Coordinating committee for proper and safe driving of large vehicles" organized by the national government, Companies, and affiliated groups, details were determined for specific initiatives such as legal compliance promotion and sharing violators information, and these initiatives were implemented in cooperation with relevant organizations. Moreover, to prevent traffic accidents by large vehicles and to maintain the roads in good condition, the Agency will reinforce regulations and guidance for violators of the Road Law and the Cabinet Order on Vehicle Restriction in cooperation with Companies and relevant organizations, following the "Policy for Proper Heavy Vehicle Traffic Related to Measures against Aging Road Structures" specified by the Ministry of Land, Infrastructure, Transport and Tourism on May 9, 2014. The Agency continued to enhance a network of cooperation and properly exercised the statutory authority of road administrators, including the issuance of permission for road occupancy, by familiarizing the Companies with the checkpoints of application of permission for road occupancy, hosting explanatory meetings to further optimize examination, etc. In addition, in order to maintain the safety of properties occupying the road, the Agency, cooperating with expressway companies, investigated the inspection status of occupying properties to be renewed at the end of the fiscal year, based on the notice by the Ministry of Land, Infrastructure, Transport and Tourism. The safety of overbridges, a part of the said properties, was confirmed by investigating the inspection status of all overbridges, implementation status of measures, etc. As for linking of useful expressway facilities (SA/PA), information on linking of SA/PA, etc. (location of the facilities, their scales, etc.) was published on the website in cooperation with the expressway companies, encouraging private enterprises, etc. to participate, based on the revised notice from the national government. 10
Main cases of exercise of statutory authority on behalf of road administrators Measures Number of cases Prohibition and restriction of traffic 2,102 Permission for passage of special vehicles Number of permissions given 2,572 Order for action against violation of the Cabinet Order on Vehicle Restriction Permission for road occupancy Number of orders given 5,874 Total number of permissions outstanding at the end of fiscal year 16,405 Number of permissions given 2,444 7. Management of Railway Facilities Connecting Honshu and Shikoku Based on the agreement on management divisions executed with West Japan Railway Company (hereafter referred to as JRWest ) and Shikoku Railway Company (hereafter referred to as JRShikoku ), the Agency, with the cooperation of HonshuShikoku Bridge Expressway Co., Ltd., managed facilities of HonshuShikoku Bridge railway as necessary to secure safe and smooth train service (including earthquake strengthening project). Concerning the earthquake strengthening project on dedicated facilities for railway in the common areas as well as railway in the exclusive area, the Agency executed "Agreement on earthquake strengthening construction of HonshiBisan Line (between Kojima and Utazu)", which defines the basic framework, with JRShikoku and launched the project with capital of 5.68 billion yen granted from the national government. As the usage fee in FY 2013, the Agency collected 815 million yen from JRWest and JRShikoku. 11
Comparison of Debt Repayment Plan and Performance Comparison of FY 2013 Debt Repayment Plan and Performance (General Overview) Japan Expressway Holding and Debt Repayment Agency Total National expressway network Metropolitan Expressway Hanshin Expressway (Hanshin area) Hanshin Expressway (Kyoto area) HonshuShikoku Bridge Expressway (Unit: million yen) Independent general toll roads Outstanding balance (start of FY 2013) Plan (A) 362,060 241,947 51,065 35,822 1,541 31,354 331 Performance (B) 358,029 238,193 51,050 35,809 1,582 31,146 248 Difference (B)(A) 4,031 3,754 15 12 42 207 84 Debt balance (start of FY 2013) Plan (A) 308,501 222,398 40,999 29,111 1,082 14,579 331 Performance (B) 304,482 218,644 40,983 29,098 1,130 14,378 248 Difference (B)(A) 4,019 3,754 15 12 48 202 84 Interestbearing debt Note 1 Plan (A) 303,876 222,398 38,085 29,051 1,082 12,928 331 Performance (B) 299,857 218,644 38,070 29,038 1,130 12,726 248 Difference (B)(A) 4,019 3,754 15 12 48 202 84 Infrastructure debt Plan (A) 2,973 0 2,913 60 0 0 0 Performance (B) 2,973 0 2,913 60 0 0 0 Difference (B)(A) 0 0 0 0 0 0 0 Interestfree debt Plan (A) 1,652 0 0 0 0 1,652 0 Performance (B) 1,652 0 0 0 0 1,652 0 Difference (B)(A) 0 0 0 0 0 0 0 Capital Plan (A) 53,559 19,549 10,066 6,711 458 16,774 0 Performance (B) 53,547 19,549 10,066 6,711 452 16,769 0 Difference (B)(A) 12 0 0 0 6 5 0 Debt accepted from Companies Plan (A) 13,015 8,113 3,103 1,673 1 96 29 Performance (B) 6,108 4,243 252 1,492 1 90 30 Difference (B)(A) 6,907 3,870 2,851 181 0 6 1 Interestbearing debt Plan (A) 11,603 8,113 2,300 1,063 1 96 29 Performance (B) 5,489 4,243 243 882 1 90 30 Difference (B)(A) 6,113 3,870 2,057 181 0 6 1 Infrastructure debt Plan (A) 0 0 0 0 0 0 0 Performance (B) 0 0 0 0 0 0 0 Difference (B)(A) 0 0 0 0 0 0 0 Interestfree debt Plan (A) 1,413 0 803 610 0 0 0 Performance (B) 619 0 9 610 0 0 0 Difference (B)(A) 794 0 794 0 0 0 0 Income Plan (A) 16,920 11,799 2,439 1,566 54 1,004 59 Performance (B) 18,817 13,719 2,385 1,505 23 1,112 73 Difference (B)(A) 1,897 1,921 53 62 31 108 14 Leasing fees Plan (A) 15,667 11,767 2,034 1,359 54 395 59 Performance (B) 17,017 13,040 2,034 1,359 23 489 72 Difference (B)(A) 1,351 1,273 0 0 31 95 13 Charges for occupation Plan (A) 46 32 9 3 0 1 0 Performance (B) 703 679 10 4 0 9 0 Difference (B)(A) 658 647 1 1 0 8 0 Capital Plan (A) 1,208 0 396 204 0 608 0 Performance (B) 1,097 0 341 142 0 613 0 Difference (B)(A) 111 0 55 62 0 5 0 Expenditure Plan (A) 5,585 3,688 923 689 37 240 9 Performance (B) 5,640 3,735 1,033 606 19 241 6 Difference (B)(A) 54 47 110 83 17 1 3 Management expenses Plan (A) 207 241 43 10 3 15 2 Performance (B) 569 458 91 4 1 20 2 Difference (B)(A) 362 217 135 6 2 5 1 Paid interest Plan (A) 4,778 3,447 571 494 34 224 7 Performance (B) 4,588 3,277 601 467 18 221 3 Difference (B)(A) 191 170 30 27 16 4 4 Interestfree debts Plan (A) 600 0 396 204 0 0 0 Performance (B) 483 0 341 142 0 0 0 Difference (B)(A) 117 0 55 62 0 0 0 Income/expenditure difference Plan (A) 11,335 8,111 1,515 877 17 765 50 Performance (B) 13,178 9,985 1,352 899 4 871 67 Difference (B)(A) 1,842 1,874 163 21 13 107 17 Outstanding balance (start of FY 2014) Note 2 Plan (A) 363,535 241,949 52,246 36,212 1,525 31,294 310 Performance (B) 351,437 232,451 50,282 35,934 1,580 30,979 211 Difference (B)(A) 12,098 9,498 1,964 277 55 315 99 Debt balance (start of FY 2014) Plan (A) 308,769 222,400 41,784 29,296 1,067 13,911 310 Performance (B) 296,794 212,902 39,875 29,081 1,128 13,596 211 Difference (B)(A) 11,975 9,498 1,909 215 61 315 99 Interestbearing debt Plan (A) 304,704 222,400 39,248 29,245 1,067 12,433 310 Performance (B) 292,729 212,902 37,339 29,030 1,128 12,118 211 Difference (B)(A) 11,975 9,498 1,909 215 61 315 99 Infrastructure debt Plan (A) 2,587 0 2,536 51 0 0 0 Performance (B) 2,587 0 2,536 51 0 0 0 Difference (B)(A) 0 0 0 0 0 0 0 Interestfree debt Plan (A) 1,478 0 0 0 0 1,478 0 Performance (B) 1,478 0 0 0 0 1,478 0 Difference (B)(A) 0 0 0 0 0 0 0 Capital Plan (A) 54,767 19,549 10,462 6,915 458 17,382 0 Performance (B) 54,643 19,549 10,407 6,853 452 17,382 0 Difference (B)(A) 123 0 55 62 6 0 0 Note 1: The outstanding balance at the beginning of FY 2014 includes capital invested and fluctuation in infrastructure debt during the term. Figures as of the end of FY 2013 are shown for the national expressway network and HonshuShikoku Bridge Expressway. Note 2: There may be discrepancies in figure totals due to rounding of fractions. * Charges for occupation refer to charges for occupation defined in Article 3 of the Order for Enforcement of the Japan Expressway Holding and Debt Repayment Agency Law, consolidation fees, income from selling land, etc., Capital refers to capital from the national government and subsidies for the disaster recovery defined in the Article 25 of the Japan Expressway Holding and Debt Repayment Agency Law, etc., and Management expenses refer to Agency s management expenses and consumption tax. 12
Comparison of the Debt Repayment Plan and Performance (since the Agency was established) The Agency has formulated debt repayment plans for each route network and lines by reviewing the latest versions of such basic prerequisites as traffic volume and interest rate levels, and reflecting the performance up to FY 2012 (including prospective performance). The following is a comparison between planned and actual figures since the Agency was established. trillion yen 39.0 38.2 Transition of the debt repayment plan and performance (outstanding obligations) 37.0 35.0 33.0 31.0 29.0 38.2 Establishment of the Agency October 2005 37.2 37.1 Plan Performance Beginning of FY2006 36.2 35.9 Beginning of FY2007 35.1 35.4 Beginning of FY2008 31.8 31.7 31.5 31.3 Beginning of FY2009 31.1 Beginning of FY2010 30.6 Beginning of FY2011 30.7 30.2 Beginning of FY2012 8.5 trillion yen 31.1 30.4 Beginning of FY2013 30.9 29.7 Beginning of FY2014 Net decrease in obligations 5.6 trillion yen Succession of obligations to the National government due to the Project to Promote the Effective Utilization of Expressways 2.9 trillion yen Debt accepted from Companies + 5.2 trillion yen Debt repayment 10.8 trillion yen Comparison of the Debt Repayment Plan and Performance (FY 2013) The debt balance at the beginning of FY 2013 was 30.4482 trillion yen. As a result of the income/expenditure difference of 1.3178 trillion yen and the debt accepted from expressway companies of 548.9 billion yen, the debt balance at the beginning of FY 2014 was 29.6794 trillion yen, which was 768.8 billion yen lower than at the beginning of FY 2013 and was 1.1975 trillion yen less than planned for FY 2013. A summary of income and expenditure in the debt repayment is as follows: (Debt accepted from Companies) The debt accepted from expressway companies was 548.9 billion, which was 611.3 billion yen less than planned. This was because the completion of the KenOExpressway (between Sagamihara Aikawa and Takaosan) and Central Circular Shinagawa Route was changed from FY 2013 to FY 2014, and also because some projects in previously opened sections are still due. (Income) With the gradual recovery of the economy, there was increase in leasing fee income due to the solid increase of expressway use, the total income was 1.8817 trillion yen, which was 189.7 billion yen higher than planned. (Expenditure) Due to the low interest rate of the fund raised, paid interest was lower than planned. On the other hand, management expenses, etc. were higher than planned, because debt accepted from expressway companies was lower and the lease fee income was higher than planned. As a result, the total expenditure was 564.0 billion yen, exceeding the plan by 5.4 billion yen. 13
Overview of FY 2013 Financial Statements Income from expressway asset lease fees was 1.6206 trillion yen. Financial expenses amounted to 459.0 billion yen, a decrease of 1.2 billion yen over the previous fiscal year. 1. Profit and Loss Statement Account items FY 2012 (A) FY 2013 (B) Ordinary expenditures Expressway asset leasing expenses Managerial effort support activity expenses Railway facility utilization expenses General administrative expenses Personnel expenses Other expenses million yen 15,373 9,704 9 87 15 (8) (6) million yen 14,682 9,705 7 86 13 (8) (4) Increase/decrease (B)(A) million yen 690 +0 2 0 1 (+0) ( 1) Account item details Depreciation expenses and fixed asset disposal expenses related to leased expressway assets Subsidy expenses for managerial efforts to encourage reduction of expressway construction costs Depreciation expenses, taxes and dues, expenses for outsourcing payment management, and fixed asset disposal expenses related to railway facilities Financial expenses Expressway asset acquisitionrelated expenses Sundry losses 4,602 953 1 4,590 277 1 12 675 +0 Expenses required for procuring and repaying funds and interest Among personnel expenses, other expenses, and interest incurred by expressway companies during the construction of expressways, the amount that is attributable to the Agency at the time of the transfer of assets Ordinary income Expressway asset leasing income Railway facility utilization income Other Income Refunds of asset collateral debts Reduction of debts as contra to railway facility construction Financial income Sundry Income Ordinary profit Nonrecurring losses Nonrecurring profit Net income reversal of carriedover provision from previous midterm target period Gross Profit 15,968 15,738 7 97 17,048 16,206 7 663 Note: There may be discrepancies in total amounts because unit fractions have been disregarded. 34 81 7 1 595 618 3,659 3,636 0 3,636 60 80 10 19 2,366 361 3,916 5,921 1 5,922 +1,080 +468 +0 +565 +26 1 +2 +17 +1,771 257 +256 +2,285 +0 +2,285 Lease fee income related to Expressway assets Usage fee income related to railway facilities Earnings such as occupation fee income, consolidation fee income related to service/parking areas, and subsidies Collateral debts equivalent to depreciation on collateralized highways that were withdrawn and accounted as income Collateral debts for railway facility construction equivalent to the depreciation on those facilities that were withdrawn and accounted as income Interest received Provision of reserves for the Project to Promote the Effective Utilization of Expressways Return of reserves for the Project to Promote the Effective Utilization of Expressways Ordinary expenditures The total amount for ordinary expenditures was 1.4682 trillion yen, most of which comprised (1) expressway asset leasing expenses of 970.5 billion yen, which are mainly depreciation expenses on expressway assets, and (2) financial expenses of 459.0 billion yen, which is interest paid on debentures and debts, amounting to 1.4295 trillion yen, approximately 97% of total ordinary expenditure. Ordinary income The total amount for ordinary income was 1.7048 trillion yen, most of which comprised expressway asset leasing income of 1.6206 trillion yen, approximately 95% of total ordinary income. This expressway asset leasing income corresponds to the amount projected in the agreements with expressway companies (1.4920 trillion yen) plus the amount subject to the variable lease fee system (128.6 billion yen). Ordinary profit or loss As a result, an ordinary profit of 236.6 billion yen was posted. Nonrecurring losses Nonrecurring losses amounted to 36.1 billion yen, most of which comprised the following: (1) 25.8 billion yen of reserves for the Project to Promote the Effective Utilization of Expressways allocated in accordance with the change in the project to promote the effectiveness of expressways; (2) 16.5 billion yen of loss on transfer of fixed assets caused by Nishifuji Road being made tollfree. Nonrecurring profit Nonrecurring profit amounted to 391.6 billion yen, most of which comprised a return of 390.6 billion yen of reserves for the Project to Promote the Effective Utilization of Expressways, which was intended to compensate for a reduction in leasing fee income under the project. Gross profit Gross profit amounted to 592.2 billion yen, which was an aggregate total of 236.6 billion yen in ordinary income, 36.1 billion yen in nonrecurring losses, 391.6 billion yen in nonrecurring profit and million yen in reversal of carriedover provision from previous midterm target period. 14
The interest bearing debt balance at the end of FY 2013 was 29.5738 trillion yen, a decrease of 758.7 billion yen from the previous fiscal year. 2. Balance Sheet Account items Assets I Current assets Cash and deposits Marketable securities Accrued revenue including expressway asset leasing Other End of FY 2012 (A) million yen 6,214 111 2,023 2,311 1,768 End of FY 2013 (B) million yen 5,981 19 2,409 2,687 865 Increase/decrease (B)(A) million yen 233 92 +386 +376 903 Account item details Accounts receivable related to expressway asset lease fees and charges for occupation Amounts receivable, shortterm loans, inventory goods, and deposits 407,532 403,810 2,557 1,164 (1,163) (1) 413,746 403,578 399,542 2,625 1,410 (1,408) (1) 409,559 3,954 4,268 +68 +245 (+245) (0) 4,187 Buildings, structures, machinery and equipment, land, and construction suspense accounts related to expressway assets and railway facilities Leaseholds and telephone subscription rights Noninterest bearing loans provided from the national and/or local governments 44,034 36,516 6,290 1,228 268,585 246,027 14,312 4,815 3,429 10,829 10,732 96 323,450 303,325 41,936 34,740 5,409 1,786 263,079 244,221 10,640 4,795 3,421 7,177 7,084 92 312,193 295,738 2,098 1,775 880 +557 5,506 1,806 3,671 20 7 Bonds redeemable within one year Debt repayable within one year Accounts payable, expenses payable, amounts deposited, principal on installment payments for the Tokyo Wan AquaLine that is redeemable within one year Bonds with a redemption period exceeding one year Debt with a payment period exceeding one year Outstanding balance on installment payment debt for the Tokyo Wan AquaLine Asset collateral debts and debts collateralized by the construction of railway facilities 3,652 3,648 4 11,256 Reserve for optimizing the Agency s periodical accounting of profit and loss, toward the implementation of the Project to Promote the Effective Utilization of Expressways Reserve for equalizing railway facility usage fees collected from railway service operators in regard to the management fee for a railway facility (Seto Ohashi Bridge). 7,587 II Fixed assets Tangible fixed assets Intangible fixed assets Investments and other assets (Longterm loans) (Deposit) Total assets Debts I Current debts Agency bonds redeemable within 1 year Longterm debt payable within 1 year Other II Fixed debts Agency bonds Longterm debts Longterm accrued expenses Other III Reserves, etc., required by law Reserves for the Project to Promote the Effective Utilization of Expressways Reserve for railway facilities management Total debts End of term book value of interestbearing debts Equity I Capital II Capital surplus III Retained earnings Total shareholders' equity Total debts and shareholders' equity 53,763 8,444 28,089 90,296 413,746 54,916 8,438 34,010 97,365 409,559 +1,153 Funds contributed by national and local governments 5 +5,921 +7,069 4,187 Note: There may be discrepancies in total amounts because unit fractions have been disregarded. Assets Total amount of assets was 40.9559 trillion yen, most of which comprised tangible fixed assets, such as expressway assets and railway facilities, of 39.9542 trillion yen (approximately 98% of the total). Assets decreased by 418.7 billion yen from the previous fiscal year. The main reasons for this were (1) a decrease of 426.8 billion yen in tangible fixed assets ( (i) a decrease of 938.9 billion yen due to depreciation, (ii) an increase of 553.2 billion yen in assets transferred from Companies), (2) an increase of 38.6 billion yen in marketable securities, (3) an increase of 36.7 billion yen in accounts receivable related to the amount subject to the variable lease fee system, and (4) a decrease of 47.7 billion yen in accounts receivable related to refund of consumption tax. Debts Total debts were 31.2193 trillion yen, most of which comprised Agency bonds (including those redeemable within 1 year) of 27.8962 trillion yen and long term debts (including those payable within 1 year) of 1.6050 trillion yen, adding up to 29.5012 trillion yen (approximately 94% of the total). Debt decreased by 1.1256 trillion yen from the previous fiscal year, mainly owing to (1) a decrease of 4.3121 trillion yen due to redemption of Agency bonds and repayment of long term loans, (2) a decrease of 364.8 billion yen by the reversal of reserves for the Project to Promote Effective Utilization of Expressways, (3) an increase of 2.9560 trillion yen arising from issuance of new Agency bonds and (4) an increase of 532.2 billion yen from the acceptance of debts from expressway companies. Total equity The total amount of equity was 9.7365 trillion yen, marking an increase of 706.9 billion yen over the previous fiscal year. The reasons for this were (1) an increase of 115.3 billion yen in capital due to investments from national and local governments, (2) a decrease of 500 million yen due to depreciation of railway facilities, in accordance with Specification 87 of the Accounting Standard Regarding Capital Surplus for Independent Administrative Agencies, and (3) an increase of 592.2 billion yen in retained earnings via accumulation of gross income. Retained earnings, the accumulation of net income of each business year, and the cumulative total of depreciation are the resources for debt repayment. Therefore, along with the increase in the amount of debt repayment, retained earnings will also increase. This is shown on the Balance Sheet as though the expressway assets owed by debts are owed by retained earnings (capital) instead. Status of debt repayment The balance of interestbearing debt was 29.5738 trillion yen, marking a decrease of 758.7 billion yen from the previous fiscal year due to an increase of debt accepted from expressway companies for the opening of the Shin Tomei Expressway. While the debt repayment plan based on the midterm goals projected a balance of 30.4704 trillion yen in interestbearing debt (amount of interestbearing debt in account settlement with cash deposit and accounts payable/receivable presumed settled) at the end of the fiscal year, the actual balance was 29.2729 trillion yen, 1.1975 trillion yen less than the planned amount. 15
Present Condition of Expressways On expressways managed by the Companies, traffic speed is higher than on ground roads. These expressways are excellent in terms of their safety and environment, and many customers use them each year. They play an important role in transporting people and goods in the Tokyo metropolitan and Hanshin areas, as well as across the entire nation. Traffic volume of expressways [ten thousand vehicles/day] National Expressway Network Independent General Toll Roads East Nippon Expressway Co., Ltd. Central Nippon Expressway Co., Ltd. West Nippon Expressway Co., Ltd. FY 2012 FY 2013 269 186 267 280 194 279 Regional Expressway Networks Metropolitan Expressway Co., Ltd. Hanshin Expressway Co., Ltd. HonshuShikoku Expressway Co., Ltd. FY 2012 FY 2013 * As a general rule, the traffic volume of East Nippon, Central Nippon and West Nippon Expressway Co., Ltd. is the number of vehicles counted passing through toll stations. * For Metropolitan Expressway Co., Ltd. and Hanshin Expressway Co., Ltd., 1 usage is counted as "1 vehicle". * The traffic volume of HonshuShikoku Expressway Co., Ltd. is the sum of crossborder traffic on the KobeAwajiNaruto Expressway, SetoChuo Expressway, and NishiSeto Expressway. 95 72 5 95 74 5 Framework of Expressway Management The maintenance and operation of expressways are implemented by rollsharing among the Companies and the Agency. Based on the Law for Special Measures for Road Construction, the Companies play a role in constant maintenance and operation of expressways by keeping them in good condition, repair, toll collection, etc. The Agency conducts field inspections as needed, shares information on management by the Companies, and checks the budget implementation status of repairs and planned administrative expenses, to maintain the expressways in good condition. Outcome Indicators Each Company carries out proper and efficient expressway management to keep the expressways in good condition. Each Company endeavors to disclose and evaluates outcome indicators that are objective and easy to understand from the standpoint of customers, in order to ensure appropriate management standards for indicators. The Agency discloses the following seven outcome indicators for each of the six Companies. Outcome Indicators Indicator definitions Unit East Nippon Central Nippon West Nippon Metropolitan Hanshin Degree of overall customer satisfaction FY2012 Results 3.6 3.6 3.6 3.4 3.5 Degree of satisfaction indication by results of CS FY2013 Points surveys, etc. (5level evaluation) Targets 3.6 3.6 3.7 3.4 3.6 FY2013 Results 3.6 3.6 3.5 3.4 3.6 Time lost due to mainline traffic congestion 10,000 FY2012 Results 686 1,126 469 2,460 449 Loss of time per year of highway users due to vehicles FY2013 hours Targets 635 1,192 467 2,400 425 traffic congestion per year FY2013 Results 712 1,066 548 2,810 530 Roadwork time FY2012 Results 92 (59) 75 (67) 89 (79) 283 (280) 120 (113) Time per year of traffic restrictions due to roadworks per kilometer of road The following figures in brackets show the number of hours of traffic regulation, excluding intensive construction etc. * Excluding intensive construction etc. refers to the hours of traffic regulation but excludes the hours of traffic regulation due to intensive construction (including the earthquake damage restoration construction), conducted with prior publication of the area and period. Hours per km year FY2013 Targets FY2013 Results 74 () 70 () 117 (109) 91 (83) 91 (78) 130 (110) 271 (268) 232 (229) 130 () 137 (128) Honshu Shikoku 3.9 3.9 3.9 4 4 4 86 () 85 () 116 () Rate of fatal and injurious accidents Number of cases of death or injury per million vehicles per kilometer (Annual data from January 1 to December 31) Rate of road structure maintenance (paving) Percentage of the route extension of paved roads not requiring urgent repair work Rate of road structure maintenance (bridge) Percentage of the robust bridges not requiring urgent repair work Cases per million vehicles km % % FY2012 Results FY2013 Targets FY2013 Results FY2012 Results FY2013 Targets FY2013 Results FY2012 Results FY2013 Targets FY2013 Results 6.9 6.7 6.3 96 97 97 89 90 89 8.1 7.6 8.0 95 95 96 90 90 92 8.2 8.0 8.7 92 94 95 92 94 93 17.0 16.5 17.1 97 97 97 83 85 85 25.1 24.5 24.7 88 89 91 88 88 89 6.0 6.0 5.3 91 91 89 84 85 93 Rate of completion of bridge pier reinforcement Percentage of bridges built to old construction standards* that are deemed to require antiseismic reinforcement for which reinforcement has been completed * Bridge piers subject to reinforcement are those particularly requiring prioritized antiseismic reinforcement among bridges designed in compliance with the old pre1980 standards, in consideration of the disaster caused by the 1995 Kobe Earthquake, and based on the Promotion of antiseismic reinforcement in roads and bridge piers of the Shinkansen Line (March, 2005, Ministry of Land, Infrastructure, Transport and Tourism ) % FY2012 Results FY2013 Targets FY2013 Results 99 Calculation parameters for some of the indicators given above may differ between companies. 16
Appendix Subsidies Granted in FY 2013 In order to help the Companies construct and manage expressways with less cost, the JEHDRA grants subsidies for individual improvements if they satisfy the requirement for companies managerial efforts. Description of managerial effort Sections Amount of subsidy Reviewing crossing structure (culvert box) through discussions with local communities Reviewing countermeasure construction against face of slope through discussions with local communities Reviewing location of tunnel pit mouth through discussions with local communities and related organizations Making snow break forest less dense Reviewing reduction and treatment of discharged contaminated soil Integration of traffic sign posts Construction of outdoor power receiving and distributing installation and inhouse power generator Development of a new type of lighting equipment for tunnels General National Road Route 16 (Yokohama Yokosuka Road), Sahara IC Maborikaigan IC Hokkaido Odan Expressway Kuromatsunai Kushiro Line, Shimukappu IC Tomamu IC Kinki Expressway Tsuruga Line, Obama Nishi IC Obama IC Hokkaido Odan Expressway Kuromatsunai Kushiro Line, Shimukappu IC Tomamu IC General National Road Route 16 (Yokohama Yokosuka Road), Sahara IC Maborikaigan IC Kinki Expressway Tsuruga Line, Obama Nishi IC Obama IC General National Road Route 1 (Daini Keihan Highway), HirakataHigashi IC Kadoma IC Hokkaido Odan Expressway Kuromatsunai Kushiro Line, Shimukappu IC Tomamu IC TokaiHokuriku Expressway, Gujo Hachiman IC Gifu Yamato IC (4 lanes) General National Road Route 16 (Yokohama Yokosuka Road), Sahara IC Maborikaigan IC Kinki Expressway Tsuruga Line, Obama Nishi IC Obama IC Chugoku Odan Expressway OkayamaYonago Line, Kuse IC Ueno PA 3 million yen 20 million yen 27 million yen 65 million yen 185 million yen 0.3 million yen 18 million yen 88 million yen Development of a new installation method for porous ceramic pipes in tunnels Adoption of a new gantry structure for ETC Development of new sound barrier with post concealed at back Direct procurement of materials with improved quality control method Improved material procurement utilizing coston method Effective utilization of temporary guard fence by activating materialandequipment management system Early opening of Hokkaido Jukan Expressway (Otoshibe IC Yakumo IC) Early opening of MaizuruWakasa Expressway (Obama Nishi IC Obama IC) Total General National Road Route 1 (Daini Keihan Highway), HirakataHigashi IC Kadoma IC Hokkaido Odan Expressway Kuromatsunai Kushiro Line, Shimukappu IC Tomamu IC Kinki Expressway Tsuruga Line, Obama Nishi IC Obama IC General National Road Route 16 (Yokohama Yokosuka Road), Sahara IC Maborikaigan IC General National Road Route 468 (KenOExpressway), TsukubaChuo IC Tsukuba JCT Kinki Expressway TenriSuita Line, Kadoma JCT General National Road Route 1 (Daini Keihan Highway), HirakataHigashi IC Kadoma IC Hokkaido Jukan Expressway HakodateNayoro Line, Otoshibe IC Yakumo IC General National Road Route 16 (Yokohama Yokosuka Road), Sahara IC Maborikaigan IC Hokkaido Odan Expressway Kuromatsunai Kushiro Line, Shimukappu IC Tomamu IC Chuo Expressway Nagano Line, Omi IC Azumino IC KanEtsu Expressway Joetsu Line, UsuiKaruizawa IC Saku IC, Nagano IC SuzakaNaganoHigashi IC Kinki Expressway TenriSuita Line, Kadoma JCT General National Road Route 1 (Daini Keihan Highway), HirakataHigashi IC Kadoma IC Kinki Expressway Tsuruga Line, Obama Nishi IC Obama IC Hokkaido Jukan Expressway HakodateNayoro Line, Otoshibe IC Yakumo IC Kinki Expressway Tsuruga Line, Obama Nishi IC Obama IC Number of grants: 29 (New technologies employed in 12 cases) 13 million yen 2 million yen 36 million yen 27 million yen 221 million yen 8 million yen 2 million yen 8 million yen 721 million yen Legend: Improvements based on development of new technology Note) There are discrepancies in figure totals due to rounding of fractions. 17
Details of the Income and Expenditure Budget (Debt Repayment Plan) The Agency has formulated a highly reliable debt repayment plan by utilizing the latest expertise and information available at the time of formulation to make reasonable and conservative forecasts of both the growth rate of the economy, which is a major precondition for lease income, and longterm interest rates, which significantly affect outlays. By doing so, it has formulated a highly reliable debt repayment plan. Details of the preconditions for debt repayment and changes in the Agency s outstanding balance are as follows. (1) Preconditions Forecasts of vehicular traffic volume in the future In estimating the total volume of vehicular traffic in future, in association with the changed agreement, we calculated the use rate of each expressway using the estimation of Total Traffic Demand in Future prepared by the Ministry of Land, Infrastructure and Transport and Tourism. Please refer to the Agency s website (http://www.jehdra.go.jp/pdf/909.pdf) for the volume of total vehicular traffic in future in respective agreements. Reference: Estimation of the volume of total vehicular traffic in future used to change the agreement in August 2014 Item FY FY 2005 (actual figure) FY 2020 FY 2030 FY 2050 Total distance traveled by all vehicles (in billion kilometers) 7,690 7,330 7,200 6,210 The growth rate of the Japanese economy and future population used for the estimation Growth rate of the economy: In FY2013, and 2014 Estimated values in the economic outlook and basic attitude of economic/financial management in FY2014 (Cabinet decision on January 24, 2014) From FY2015 onward: Estimated growth rate used as a prerequisite in the Statistic Procedures on Traffic Demand in Future (roads) by the Ministry of Land, Infrastructure and Transport and Tourism Future population (in millions) : Population Projections for Japan issued by the National Institute of Population and Social Security Research in December 2006 2013 2014 2.5% 3.3% 20152030 2031 0.9 0.8% 0% 2005 2020 2030 127.8 122.7 115.2 Future interest rates We have assumed future interest rates up to 4% as previously. Regarding the yield rate of 10year government bonds, an average of approximately 4% is estimated for FY 2020 in the "Mid, LongTerm preliminary calculation of economy and finance (announced by the Cabinet Office)". On the other hand, lower percentage is estimated by a private think tank, with an average of 1.8% for FY 2020, and approximately 2% for mid and longterm estimation. Regarding the prediction of traffic demand in future, the economic growth rate which has a positive corelation to interest rates, will remain up to 1.0% in FY 2015 and onward. The Agency has deemed it appropriate for the future interest rate to not exceed 4%, from the perspective of correlation between economic growth and interest rates. Please refer to the Agency s website (http://www.jehdra.go.jp/pdf/909.pdf) for interest rates in future in respective agreements. 18