February 20, 2008 Chairman Yano's regular press conference

(Moderator)

Then we will start a regular conference.

(Chairman)

Hello everyone.
Today, I have four cases to explain.
First of all, the current status of the business. Regarding road conditions, the toll revenue in January is 2.1% less than the same month last year. The breakdown is high speed minus 2.6% and general pay plus 4.1%. Highway sales have declined due to the increase in discounts associated with the spread of ETC. General paid Ken-O Road sales increased by opening the effect of.
The number of passing vehicles has increased by 0.7%. High speed is plus 0.4%, general pay is plus 2.1%.
The ETC discount amount for January was 12.9 billion yen, which is a 21.7% discount compared to the revenue without the ETC discount.

The construction situation is as written, but finally, the Shin-Meishin Expressway will be opened this Saturday. The opening ceremony will be held at 10:00 from Koka-Tsuchiyama IC, so we would appreciate it if you could ask us for an interview.

Regarding the contract rate of successful contracts for major works, in January there were 11 contracts for major works, and the average successful bid rate was 87.91%. The cumulative total for the year was 86.02%.

Next is the situation of ETC. Comparing the period from February 8th to 14th with January 11th to 17th, the daily average usage rate is slightly higher, although it is 0.1%. Weekdays are 77.2% and holidays are 70.5%. Holidays did not easily exceed 70%, but the fact that it has exceeded since last month has greatly contributed to the improvement of the overall utilization rate.

SA sales increased 3.8% year-on-year. The breakdown is + 0.4% for the food and drink department, + 2.4% for the product sales department, -3.2% for the service department, and + 10.1% for the gasoline department.
The above is the current state of the business.

Next, I will explain the topics.

First is the implementation of planned discounts. There are 3 cases. All of them have been announced, but I will explain them again.
The first is the expansion of late-night discounts. This is a measure to deal with soaring crude oil prices, and the discount was 30% from 0:00 to 4:00, but it will be Large to 40% from February 15th. There is no limit to the distance it can be used, so I hope it can be used by logistics companies, including the transportation industry. For late-night discount, we hand out a map of the target section. It means that the place where you give a 30% discount will increase by 10%.
The second is the Shin-Meishin Expressway early opening discount. We distribute PR leaflets as materials. The content was announced on November 21st last year. This is a plan to do with NEXCO West Japan, and if you use a section that opens and closes between Suzuka IC, Kameyama IC and Kusatsu Tagami IC, the charge for the newly opened section will be halved. It's a discount. By the way, if you use the Shigaraki IC to Nagoya-nishi IC, the price of a regular car, which is usually 2,300 yen, will be 1,750 yen.
The third is the Hokuriku 3 prefectures ETC tour plan. This was also announced on February 15 by the Kanazawa Regional Head Office. I distributed the leaflet. This is the 4th trip discount plan for the 3 prefectures of Hokuriku, but the usage period has been changed from 14th March to 16th June. We have received favorable reviews so far, but this time, we are reviewing some of the plans at Hokuriku. Until now, the target period was extended from 2 months to 3 months. We decided to stop on weekends and make it available on weekdays. The usage fee has been set to be even more affordable. And it means that we will offer a convenient and affordable accommodation plan by tying up with a travel agency.
This is the first time we announced the trip of USJ as the first plan of the travel industry, but this is the second. Last time, we partnered with Kinki Nippon Tourist, but this time, we will also tie up with a total of four travel companies such as JTB. The accommodation plan is a little late, starting from March 14th, but I hope to announce it as soon as possible. In any case, it is a new project that combines a road plan discount and accommodation plan. There will be Takayama Festival on April 14th and 15th, and there will be the Hyakumangoku Festival in Kanazawa from June 6th to 8th, so I hope that many people will use it, and we would appreciate it. Will be provided as one of the services. The above is a description of planning discounts.

Next, I would like to talk about the current status of our grouping, which we are announcing today. I am pleased to report that the grouping of our maintenance and management operations has been completed. Up until now, we have established nine companies and begun operations, but our tenth and final company, Central Japan Highway Patrol Tokyo, will be launched on February 27th. This completes our initial plan to consolidate the four maintenance and management operations previously handled by 30 companies into 10 subsidiaries. Going forward, we will share a sense of mission as the NEXCO Central Group and strive to improve services for our customers.
As I mentioned in the footnote, on February 1st we established NEXCO Central Nippon Service Co., Ltd., a subsidiary that will be responsible for human resources services and real estate businesses, primarily within the NEXCO Central Nippon Group. We are currently working hard to prepare for the launch of operations on April 1st.
Page 2 provides an overview of the Central Japan Highway Patrol Tokyo, and Attachment 2 on page 3 provides a complete overview of the 10 group subsidiaries involved in the four maintenance and management services. There are four services on the left, and each has a number such as 9 or 2 in parentheses, which is the number of companies that have carried out the services up until now, and adding them all together makes 30. The following table is for reference, listing the 10 companies.
Attachment 3 on page 5 provides an overview of the service company. President Yokochi is currently our Managing Officer and Hachioji Director General, making him a part-time president. Senior Managing Member of the Board of Directors Ishigaki will serve as full-time director. As you can see here, the company's main business activities include real estate, temporary staffing, and building management. The customer service business, the Central Japan Highway Guide, is currently run directly by our company, but we plan to transfer this to the service company. The training business, which is also run directly by our company, will be transferred to the company in stages. The concession stand business involves staffing concessions, and we are considering a broad range of business areas, including these. While it will initially be a small operation, we hope to gradually expand the scope of our operations.

The last topic is the opening of a new PA facility and the opening of convenience stores. This is also announced today. It is 2 shop, but both Chuo Expressway and was, Achi PA of In-bound Daily Yamazaki in the March 1, Fujino PA of Out-bound will open in FamilyMart March 7 days. As I have said so far, I think that “Standard” and “individualization” are the major pillars of what SA / PA services will look like. "Standard" means that what you can get in town is SA / PA. "Individualization" means local specialties and souvenirs, as well as Yasai village, but it means that we offer products that make use of such unique local characteristics, but in that sense a convenience store is exactly this. We believe that this is one model of "Standard." Two photos and pictures are attached to each page. With regard to how we have developed convenience stores so far, there were 8 stores that were opened before privatization, and 15 stores including 2 places that were opened after privatization, a total of 23 stores. is. Speaking of fiscal 2007, it is the third or later from the top, 13 stores open when you add any two of these, and you are expanding at a speed of more than 1 store per month, so continue in the future I'm thinking

That's all for me.

(Moderator)

Then, thank you if you have any questions.

(Reporter)

Saturday's Shin-Meishin Expressway was approaching the 3 days left until the opening. I would like to ask you again about your expectations for the Shin-Meishin Expwy.

(Chairman)

Central and is a large main road connecting the two large economies of Japan's Kansai. The magnitude of the economic and social effect of this is completed is, I think there would be immeasurable. When called from an economic effect, to high-tech industries such as it is said that Silicon Valley Toka Crystal Valley is a Mie Prefecture side has developed, while the new factory location is also progressing as the center and Koka in Shiga Prefecture side is a situation that is out. Port of Nagoya, Yokkaichi also I think that large because super port is linked, such as Port and Kobe Port. And also the significance of that thing called convenience and alternative function is strengthened, I think a very large. Falling well guerrilla snow in the Meishin Sekigahara per our As you know is jurisdiction, but we restricted traffic occurs, Suzuka of the mountain is compared to Sekigahara Although the snow is falling and a fraction of snow It is what. The car had been parked in towards the Meishin ever be said from such a point is, new upcoming Shin-Meishin Expressway by the use of, function as an alternative path I think that will come become active.
Also It is living surface and tourism surface, I think that there is a very large effect in such a surface. Although I was examined a little, foreign tourists to the Ise Shrine but it was 50,000 people a year. On the other hand, foreign tourists to Kyoto and Kiyomizu Temple I are said to be 160,000. The ability to this new road, because Kyoto and triple will close, back and forth will not expect that it would be become more popular.
And did not large highway is completed in many ways, also I believe that I think we somewhat alleviate congestion of the current Meishin. Initially 10,000 is Shin-Meishin Expressway hope to come to more of. Traffic volume of the forthcoming opening section is has increased gradually in the future, we expect or not it becomes about 3 million units. Since this is uppercase it before, but is it clear I do not know yet, it is about the time being at least 10,000 units from Meishin Shin-Meishin Expressway we expect the move to. Toka that amount Tokyo, Nagoya and Osaka is so crowded, but I have a lot of things, as is our, it all means the rest of that our jurisdiction Shin-Meishin Expressway is an interval, Yokkaichi from JCT Kameyamanishi JCT line up, but here is already not is progressing plan, this section to complete as soon as possible, we want to strive to ease traffic congestion in the Tokyo, Nagoya and Osaka.
Since the Tomei and Meishin is the Japan of the aorta, it is possible to attain to in this one year a little ahead of schedule, I think that was really good. Cooperation of local everybody how, as a county or city is, of course, Toka is everyone of the landowners, we are grateful thick was received very your cooperation in helping go, also local people who have supported construction It is up to. Was able to open ahead of schedule is, but the local people is, of course, it is very grateful serve you in terms of economy and industry and society and tourism and life, I think that way.

(Reporter)

Shin-Meishin Expressway Shinmeijin, what is the reason for the time lag in the story that I said earlier, "10,000 units will be transferred initially, but later there will be 30,000 units?"

(Chairman)

One is that it may take a while before everyone realizes how convenient it is. Then there is also the congestion of Tomeisaka. Eventually, the flow will improve, and the section from Yokkaichi JCT to Kameyama-nishi, where we are going to maintain less than 30 kilometers in the future, I think the flow will be very good once this section is completed. I myself intend to look conservatively, but I think that if the number of people who say "Let's try using it sooner" increases, the number of units will increase faster.

(Reporter)

What is the reason why you were able to open it a year ahead of schedule?

(Chairman)

This is not an endeavor for us, because it was realized in cooperation with Chairman Ishida of West Japan in cooperation with the idea that we can do such an excellent road, so we will do it as soon as possible. If the land can be acquired, the construction will have a different prospect. It's another case if you encounter an unexpected event due to difficult construction, but normally it goes smoothly when the land treatment is over. In that sense, it can be said that there were places that took some time due to land allowances. Therefore, it was something that was well understood by the landowners, so I think we were able to open it as early as this time.

(Reporter)

You mentioned Kiyomizu Temple and Ise Jingu, but I think it's a business opportunity for your company to have a sightseeing route that connects them. Do you have the feeling that you will be involved in the travel industry?

(Chairman)

Yeah, I definitely want to try it. Not only we can do it alone, but we also tie up with other travel agencies and work with Nishinihon Expressway. We have some wonderful tourism resources within our jurisdiction alone, so I would like to make the most of them. There are two cases, including the ones I talked about in fiscal 2007, but I want to do more next year. Up to now, there were more than 10 things that were done by planning discounts alone, and there are some that were well received, so it is not good to tie up with a travel agency this time while referring to such cases. I'm thinking.
Even so, I think the number of foreign tourists will continue to increase. "VISIT JAPAN" said that it was 10 million people in 2010, and we have heard that it is 8.35 million people now, but it was about 5 million people four or five years ago. I think that if you become interested in it, it will increase considerably. But I think it will not stop at 10 million people. More and more, 20 million, 30 million, 40 million. However, for that reason, I think that Japan will get punctured at airports and roads unless it is prepared not only with hardware but also with software such as service terms. I think that the number of foreign tourists will surely increase even if it does not increase so rapidly, so I think that I must prepare myself for that. I would like to cooperate with local tourism associations, prefectures and municipalities.

(Reporter)

Regarding the grouping of maintenance operations, how much did the total acquisition cost for combining 30 companies into 10 companies cost?

(Chairman)

It is 4.7 billion yen.

(Reporter)

The number of employees is "about", but did all of the employees take over when grouping?

(Chairman)

That's right. However, the number of directors has drastically decreased. As a general rule, all the people who are actually involved in the business were transferred on the assumption that they are as they are as they are, but at the request of themselves.

(Reporter)

By the way, how many officers are there?

(Chairman)

The 30 companies had 184 executives. Of these, 12 were so-called "family businesses." That number drops to 46 in the 10 reorganized companies. Again, the majority of executives are non-executive. They consist of a president and one or no full-time Member of the Board of Directors. We will be operating under this structure, so although I don't have the number of full-time executives on hand right now, it is quite small. It's one-quarter of the total number.

(Reporter)

What is the cost reduction effect of the grouping?

(Chairman)

There are some things that are expressed in numbers such as reducing overhead costs and reducing office space at the head office, but in reality, we are currently preparing a management plan and make concrete results in it Tells. It is a little difficult to measure the plus that occurs at that moment by making it a direct subsidiary. I would like to embody it in the future business plan.

(Reporter)

There are movements by distance in Tokyo and other places. How do you see Central Nippon Expressway?

(Chairman)

We are not involved in this, so it's hard to comment. When you hear from Shuto Expressway or the Hanshin Expressway management, it seems like it's a tough job, but it seems that you have a strong desire to realize this.

(Reporter)

Excuse me for the same question as last month, but I would like to talk about the progress of the Tokai-Hokuriku Expwy. It was said that the opening date will be announced around the spring of this year. Could you please tell me when the announcement is scheduled?

(Chairman)

The situation has not changed from last month, but I would like to announce it in April. Currently, the on-site process is steadily progressing, and I heard the details of the progress even earlier, but it was said that it was exactly as planned. The site is on the last pavement and is installing various facilities in the tunnel, it is almost done in spring about March, and after that, there is a system check of equipment for safety confirmation this time. . After all, it takes a while to check that the attached device works properly. It may take about three months, so I think that it will be April when it is possible to predict with a fairly high degree of accuracy from the time the hardware is completed until the check is completed. Thanks to you, the process is making good progress, so I hope to make a clear report before the holidays from April to May.

(Moderator)

If you have no other questions, we will end the 28th regular press conference.
Thank you for being busy today.

(Chairman)

Thank you very much.