I'm Kise, President of the company. Thank you very much for joining our financial results and management strategy briefing today, despite the inclement weather.

To begin, I would like to outline our medium- to long-term strategies aimed at realizing our Group Management Vision, "To the Next Stage 2034." First, I will cover the performance highlights and updates to the numerical targets of "To the Next Stage 2034."

In fiscal year ended March 2026, our consolidated results saw an increase in both revenues and income, driven by factors such as strong passenger traffic. Operating revenues reached 3.0846 trillion yen, marking a record high since the inception of JR East.

For the fiscal year ending March 2027, we project an increase in both revenues and income. This growth will be supported by factoring in the impact of the fare revisions implemented this past March, as well as the contributions from the grand opening of Takanawa Gateway City during the same month.

Furthermore, we have updated our KPIs for fiscal year 2028.3 and fiscal year 2032.3 originally published in July 2025 to reflect changes in the business environment following the announcement of "To the Next Stage 2034." Regarding operating revenues for fiscal year 2032.3, while our previous target was set at over 4 trillion yen, we are now aiming for approximately 4.3 trillion yen.

In conjunction with this, we have revised our operating income target for fiscal year 2032.3 upward to approximately 750 billion yen. This reflects an increase of about 10 billion yen for the Mobility segment and 40 billion yen for the Lifestyle Solutions segment compared to our previous targets.

To achieve our KGI of an ROE of 10% or higher by the fiscal year ending March 2032, we will continue to pursue a wide range of initiatives across our two core pillars: Mobility and Lifestyle Solutions. Starting with the Mobility business, under our Pride and Integrity plan announced last September, we aim to drive sustainable growth by reinforcing our existing operations while creating new value and expanding our business domains.

Through these efforts, we have set a target to increase Mobility operating revenue by more than 200 billion yen by fiscal year 2032.3 compared to the level in fiscal year 2025.3. Based on our robust transportation results from the previous fiscal year, as well as the outlook for basic passenger traffic growth and revenue increases in railcar manufacturing and buses, we have decided to raise our target by an additional 100 billion yen.

This brings our new goal to an increase of more than 300 billion yen. We will continue to implement a variety of measures to drive revenue growth, including enhancing transportation capacity, refining our pricing strategies, and fostering growth in the exchange population.

Regarding Lifestyle Solutions, under the numerical targets of "Beyond the Border" announced in June 2024, we have committed to doubling both operating revenues and operating income for this segment over the 10-year period through the fiscal year ending March 2034. In addition to revising the growth rates of each business to account for subsequent inflation and other factors, we are incorporating further breakthrough growth.

This includes accelerating our rotational business model in the real estate business and the integration of our real estate subsidiaries with the Itochu Group. As a result, we have decided to pull forward our target of doubling operating revenue and operating income by two years, aiming to achieve this in the fiscal year ending March 2032.

Furthermore, we are targeting an additional 150 billion yen in operating revenues and 100 billion yen in operating income on top of this doubled figure. I would like to explain two points that serve as the foundation for achieving this growth.

The first is safety, which we have established as our top management priority. In "To the Next Stage 2034," we have positioned the pursuit of ultimate safety as the first engine for our growth.

Based on this premise, we will enhance the quality of our products and services to ensure that all people can experience a true sense of security. Our Group will remain steadfastly committed to pursuing ultimate safety as our top management priority.

By doing so, we will further enhance the security and trust we generate, using them as a foundation to accelerate the growth of all our business operations. Since our inception, we have committed over 5 trillion yen to safety-related investments.

Under our Group Safety Plan, we have allocated 1.3 trillion yen for the five-year period through fiscal 2029, and we will move forward with this plan resolutely. At the same time, I must acknowledge that a series of transportation incidents since January this year have caused significant inconvenience to our customers.

Regarding the six priority initiatives shown on the slide, which we announced on February 10th, we are diligently moving forward with these measures. As for equipment maintenance expenses, we have budgeted an increase of approximately 30 billion yen year-on-year for the current fiscal year.

Included in this figure is roughly 25 billion yen allocated to fully resolve any remaining impacts from the COVID-19 period by the end of this term. In light of these factors, we intend to fully eliminate the effects of the maintenance expenses constraints implemented during the COVID-19 pandemic by the end of this fiscal year.

This plan has already been disclosed. The second point I wish to discuss is group governance.

Following a series of incidents within our Group that undermined the trust of our stakeholders, we established an expert committee within the company last July. This committee is dedicated to strengthening and improving governance across the entire Group, as we work to restore management credibility.

Last December, we received a report from the expert committee. We have taken the challenges identified in the report very seriously, and following extensive deliberations by the Board of Directors, we formulated specific group-wide improvement measures this past March.

Our focus rests on three pillars: fostering a sound corporate culture, establishing the necessary systems and rules, and ensuring active communication. Building on this foundation, we will execute our improvement measures to rebuild the trust that is essential for realizing "To the Next Stage 2034."

The Board of Directors will periodically monitor the progress of these initiatives, and we are committed to sharing these updates with all of you. As the head of this Group, I am firmly committed to personally leading the efforts to rebuild trust in both safety and governance, which serve as the very foundation of our Group's growth.

Moving forward, I will now explain the medium- to long-term strategies for each of our business segments. First, I will discuss the Mobility business.

On March 14th of this year, we implemented our first fare revision since the company's inception. This is projected to result in an annual revenue increase of 82 billion yen.

While we recognize that fare revision places an additional burden on our customers, we are committed to enhancing capital investment in safe and secure infrastructure, as well as comfortable services and environmental improvements. Through these efforts, we aim to ensure our transportation services are chosen by customers more than ever before.

To enhance the profitability of our Mobility segment, we are also actively working on creating new passenger flows. This past February, we concluded an agreement with Japan Airlines to strengthen our collaboration on regional revitalization in the East Japan area.

We are spearheading concrete programs such as multidimensional tourism, which integrates rail, air, and local secondary transportation. Furthermore, in partnership with local governments in the Tohoku region, we are leading initiatives like living in two regions, East Japan area, to promote dual-residence lifestyles.

We have positioned this agreement as our regional future creation strategy toward three key objectives: the creation of wide-area tourism models, relationship and settled populations, and new markets. We intend to accelerate our initiatives by leveraging the respective strengths of both rail and air travel.

Furthermore, we are actively working to expand our transportation network. We are advancing the development of the Haneda Airport Access Line, with the goal of opening the Higashi-Yamanote Route in the fiscal year ending March 2032.

This Higashi-Yamanote Route will provide direct, seamless access through Tokyo Station straight to the underground station at Haneda Airport. Regarding the Haneda Access Line, we are currently moving forward with studies on the so-called Rinkai Route, which will provide direct access from the Chiba area.

Our goal is to open this route simultaneously in the fiscal year ending March 2032. Furthermore, in light of the expansion of arrival and departure slots at Narita Airport, we have just begun discussions with relevant authorities to explore ways to strengthen transportation to and from Narita.

Furthermore, as previously announced, we are moving forward with studies to launch through services between our Musashino Line and Seibu Railway's Seibu Ikebukuro Line, targeting a start in the fiscal year ending March 2029. This initiative will realize a significant new wide-area direct transport route.

By continuing to expand our transportation network, we aim to enhance the attractiveness of the Tokyo metropolitan area and implement a strategy that creates positive spillover effects for each of our Lifestyle Solutions businesses. Regarding our fares and charges, while we evaluate the impact of the fare revision implemented this past March, we will continue to urge the government and relevant authorities to facilitate more flexible railway fares and charges systems.

This includes transitioning to a notification system for Shinkansen non-reserved seating express charges, introducing a mechanism to respond flexibly to inflation and wage increases, and conducting a fundamental review of the current total cost method itself. In addition, we will advance pricing strategies that can be implemented through prior notification only or within the scope of our own measures.

This includes revising discount ticket settings and charge structures based on actual usage patterns. Next, I will discuss our initiatives toward realizing sustainable mobility.

We previously announced a plan to reduce railway business operation costs by 100 billion yen by the fiscal year ending March 2028, and I am pleased to report that we are now on track to achieve this target. Looking ahead, we will proactively pursue mechanization and leverage DX and AI to boost productivity.

Our goal is to reach a Mobility operating margin of 11.5%, effectively managing the impact of rising inflation. In our train operations, we plan to progressively expand driver-only operations to major lines in the Tokyo metropolitan area by around 2030, while simultaneously preparing for the introduction of driverless operations.

In our maintenance work, we are advancing the integration of robotics and AI. For instance, we have already begun trials using AI for the detection of pantograph failures.

While remaining mindful of the risks associated with AI, we have formulated and announced the JR East Group AI Policy to drive a transformation in work styles and create new customer experience value. The objective of this policy is not merely to replace human labor with machines or AI to reduce our workforce; rather, it is designed to empower our employees to use these technologies as tools, allowing them to focus more on ever more essential, human-centric tasks that only they can perform, such as further enhancing safety, service, and quality.

Furthermore, as a part of these new ways of working, we will implement the transition to area operation centers, which I will explain in more detail shortly. This restructuring is designed to empower our employees to take on new challenges within their daily roles, such as engaging in revenue-generating activities in collaboration with local communities and focusing on highly profitable operations.

By ensuring that every single employee finds a sense of fulfillment and experiences personal growth, we aim to enhance engagement and link this directly to the growth of the entire Group. Furthermore, we will take the lead in addressing the social challenges surrounding mobility.

Railway maintenance work has traditionally centered around nighttime operations; however, by shifting as much of this work as possible to daytime hours on weekdays, we aim to improve the working environments for our partner companies. Through these efforts, we intend to secure the necessary workforce engaged in railway construction and maintenance.

While we have already begun this transition on some local lines, we are considering expanding the scope of applicable lines and the frequency of these shifts, including in the Tokyo metropolitan area, while ensuring we gain the understanding of our customers. To address the labor shortage, we are also moving forward with human resource development by utilizing the specified skilled worker system.

In February 2025, we launched a pilot training program for our group and partner companies, and many of the participants have already begun working in the East Japan area. Based on these results, we invited other railway operators to participate, receiving applications from over 110 individuals across 47 organizations, including railway and construction companies.

Consequently, we conducted a four-week training session at our General Education Center between February and March of this year. Going forward, we intend to maintain this program as an open education platform, contributing to the sustainable operation of the entire railway industry, not just our own company.

Furthermore, from a supply chain perspective, the seven JR companies are collaborating to standardize railway electrical equipment, materials, and components. Until now, each company has achieved significant success in maintaining and developing their railway system by closely aligning with its local regions and building facilities tailored to the specific characteristics of the lines.

Moving forward, however, we will work to use common materials and parts, standardize specifications, and collaborate with manufacturers to build a truly sustainable supply chain. Next, I will discuss our local lines.

Through ongoing consultations, we have reached agreements with the relevant local municipalities to convert the Kururi Line and Tsugaru Line to automobile-based transport modes. This decision follows the recognition that the specific advantages of rail transport can no longer be effectively realized on these particular routes.

I want to emphasize that we are by no means withdrawing from our commitment to securing regional mobility or promoting regional revitalization. For both of these line segments, we will contribute to regional transport cooperation funds equivalent to 18 years' worth of operating costs.

Furthermore, we are dedicated to tangible regional contributions. For the Kururi Line, we will build a transportation hub, and for the Tsugaru Line, we will support the establishment of an NPO that will serve as the business entity for automobile transport.

We will deepen our discussions with each region, including those lines currently under consultation, to identify the optimal mobility mix and work toward building sustainable transportation systems in partnership with local communities. Furthermore, we are promoting business expansion by actively leveraging our railway assets.

Regarding our Hakobiun rail freight transportation service, to meet the demand for high-frequency transportation of large volumes of freight, we have repurposed an E3 series Shinkansen train set, previously used for the Tsubasa service, into a vehicle exclusively for cargo. We launched operation of Japan's first-ever dedicated freight Shinkansen this past March.

Furthermore, to enhance operational efficiency, we have introduced automated guided vehicles for transporting cargo within our railyard centers. By collaborating with other business operators, we aim to expand our networks and services, further promoting industrial development and increasing the exchange population.

We are targeting 10 billion yen in related revenue from these initiatives by the fiscal year ending March 2032. To realize our vision of a lifestyle transformation, we are also advancing co-creation in the medical field.

We have been deploying smart health stations at our railway stations, integrating both physical presence along daily transit routes and online healthcare services. Following the revision of relevant laws on April 1st, it has now become possible to deploy standalone private booths as designated facilities for online medical consultations.

We have decided to launch Eki Doctor, a new service that allows customers to receive online medical consultations within private booths located directly inside our stations or Ekinaka. Also, we will expand our online medical consultation booths from the Tokyo to regional areas.

Our ultimate goal is to realize sustainable medical access that is independent of where a person lives. By lowering the healthcare-related cost of living for those in regional communities, we aim to drive regional revitalization.

Furthermore, you may have noticed an increasing number of Multi-Ecube coin lockers at our stations lately. In 2023, we consolidated our coin locker business, which had been operated by two separate group companies, into a newly established entity.

Before the consolidation, the revenue from this business was 2.3 billion yen; however, last fiscal year, it generated a revenue of 5 billion yen. We intend to grow this into a new core business, aiming for 10 billion yen in revenue by fiscal year 2031.

Next, I will move on to urban development. Takanawa Gateway City held its grand opening on March 28th this year, with the opening of The Linkpillar 2, Mon Takanawa, and Takanawa Gateway City Residence.

Following completion, we have updated our projections for operating revenue and total project cost. Expected operating revenue has been revised upward from 57 to 65 billion yen, while total project cost is now estimated at 610 billion yen.

As previously disclosed, we are targeting an IRR of 10% or higher. Oimachi Tracks also opened on the same day.

Similarly, following completion, we have revised its expected operating revenue from 13 to 15 billion yen, and total project cost to approximately 120 billion yen. We are also targeting an IRR of around 10% for this project.

These revisions reflect updates to our financial plans in line with market conditions, as well as additional investments aimed at enhancing value. Centered on these two newly developed towns, we will continue to advance other projects with the aim of achieving annual operating revenue of over 100 billion yen across the greater Shinagawa area.

We will continue to advance developments that leverage our railway network-based urban development model unique to the JR East Group, including initiatives such as JTOD by utilizing company-owned land. In Funabashi, Chiba Prefecture, a large-scale redevelopment project is underway on a former company housing site of approximately 4.5 hectares comprising more than 1,000 residential units, with completion scheduled for December 2028.

We expect approximately 42 billion yen in revenue from condominium sales, and the development will also include rental housing and commercial facilities. We will also promote urban development in conjunction with a planned new Muraoka Station to be located between Ofuna and Fujisawa stations on the Tokaido Line.

By working in collaboration with local governments to develop the former Kamakura General Rolling Stock Center site and adjacent former company housing land, we aim to enhance the value of the surrounding area and generate synergies with our railway operations through increased passenger flow. In addition to these company-owned land developments, we will steadily advance the redevelopment of major terminal stations and fully leverage the JR East Group's network synergies.

In the real estate business segment, we announced a strategic partnership with the Itochu Group in April. JR East Real Estate and Itochu Urban Development will be integrated to establish a new consolidated subsidiary, JR East & Itochu Real Estate Development, in October of this year.

By combining the JR East Group's strength in a real railway-based network with the Itochu Group's global trading network, we aim to position the new company as a comprehensive developer and grow it significantly over the next five years, targeting revenue of over 250 billion yen for the fiscal year ending March 2031. We will also explore a broad range of collaboration opportunities with the Itochu Group in other business areas.

For the current fiscal year, we expect the integration to contribute approximately 40 billion yen in operating revenues and slightly over 4 billion yen in operating income. In addition, our "To the Next Stage 2034" plan for the fiscal year ending March 2032 incorporates contributions from M&A of approximately 500 billion yen in operating revenue and approximately 50 billion yen in operating income.

We expect this integration to contribute approximately 200 billion yen in operating revenue and approximately 20 billion yen in operating income. Going forward, we will continue to pursue initiatives that deliver high-impact, non-linear growth.

This slide outlines the overall framework of our real estate rotation business model. Including the effects of the subsidiary integration with the Itochu Group, we are targeting cumulative operating profit from real estate sales of over 600 billion yen over the seven-year period through the fiscal year ending March 2032.

At the same time, we will strengthen acquisitions and development to further enhance our future pipeline. Our real estate fund business also continues to grow steadily.

We had set a KPI of 550 billion yen in assets under management for the fiscal year ending March 2028; however, we have already exceeded this level as of the end of the fiscal year ending March 2026. In light of this, we are revising our KPI for the fiscal year ending March 2028 upward to 700 billion yen, and for the fiscal year ending March 2032 from 1 trillion yen to 1.2 trillion yen.

Going forward, we will further diversify our asset base and enhance portfolio diversification to make our funds and REITs even more attractive. We are advancing Suica Renaissance, an initiative to evolve Suica from a mobility and payment device into a lifestyle platform.

There are two major transformations under Suica Renaissance. The first is a shift of our Group's business to an account-based model through the creation of a Suica economic ecosystem.

Suica has evolved from a card primarily used for small-value payments to a more versatile platform with the introduction of Mobile Suica, which has made top-ups more convenient and enabled purchases such as commuter passes and Green Car tickets via smartphones. With the launch of the code-based payment service TEPAY this autumn, users will be able to make transactions exceeding 20,000 yen and also send and receive money.

Furthermore, through the development of the Suica app, which we aim to launch in fiscal year 2028, users will be able to access a full range of payment services seamlessly in one place tailored to their life stage. This will strengthen the Suica economic sphere and contribute to the growth of each of our Group's businesses.

We have previously targeted an uplift of 20 billion yen in operating income from Suica-related synergies by the fiscal year ending March 2032. In light of developments such as the rollout of TEPAY, we have revised this target upward to 25 billion yen.

The second transformation is the redesign of stations through a decisive shift to mobile and ticketless services. Based on actual ticket usage trends, we will review and optimize facilities such as ticket vending machines and repurpose the freed-up space to drive revenue growth, aiming to realize additional profit contributions at an early stage.

Next, I will discuss initiatives to capture inbound demand. For the fiscal year ended March 2026, mobility performance fell short of plan.

However, leveraging the lessons learned from changes in the market environment, we will further expand inbound revenue by advancing group-wide initiatives along two axes: Mobility and Lifestyle Solutions. Based on our targeting analysis, we will deepen our understanding of the needs of two key segments: customers from Europe, North America, and Australia, who tend to stay longer, and customers from Asia, who tend to stay for shorter periods, and, in collaboration with OTAs, promote itineraries and content tailored to those needs.

In addition, we will work with airlines and travel agencies to develop compelling content created jointly by our business units, group companies, and local communities into integrated multilayered tourism offerings. Through this new framework, we aim to increase the share of inbound visitors staying in the Tohoku region to 5%.

In July this year, we will implement an organizational restructuring to accelerate the realization of "To the Next Stage 2034." We will transition from the current structure, comprising two headquarters and 10 regional branches, a framework inherited from the former Japanese National Railways, to a new operating model of 36 business units in which frontline operations and planning functions are integrated.

In other words, we will abolish the existing two headquarters and 10 branches that have overseen operations by geographic area, and instead establish 36 business units. Employees engaged in station operations, train operations, and other frontline functions will expand their scope of activity and become the driving force behind growth along our two strategic axes: Mobility and Lifestyle Solutions.

At our company, we have already been promoting initiatives such as Breakthrough Communication, which facilitate dialogue between executives and frontline employees as well as group company staff. In addition, each executive has been actively visiting workplaces to engage in direct discussions.

With the transition to the business unit structure, we will further enhance communication across workplaces and with management, and drive growth toward the realization of "To the Next Stage 2034" through a combination of bottom-up and top-down approaches. Next, I will discuss our cash allocation.

Under "To the Next Stage 2034," we have outlined our cash allocation for the seven-year period through the fiscal year ending March 2032. We will continue to maximize cash inflows by expanding operating cash flow while also combining this with asset management initiatives such as scaling up real estate sales and reducing strategic shareholdings.

The cash generated will be allocated not only to growth investments and investments to maintain and strengthen our business foundation, but also to LX initiatives aimed at driving transformative innovation. Although major developments such as Takanawa Gateway City and Oimachi Tracks have largely been completed, we will continue to steadily invest in future growth projects, as well as in initiatives to ensure safe and stable transportation.

Finally, I will address shareholder returns. Under "To the Next Stage 2034," we have set out a policy to gradually raise the dividend payout ratio to 40% by the fiscal year ending March 2028.

Based on this policy and our earnings performance, we will increase the year-end dividend for the fiscal year ended March 2026 by 4 yen a share, bringing the full-year dividend to 74 yen a share, with a payout ratio of 33.7%. For the fiscal year ending March 2027, we plan to pay a full-year dividend of 84 yen, including an interim dividend of 42 yen, with a payout ratio of 37.2%.

While taking into account capital expenditure and business performance, we will continue to steadily enhance shareholder returns. Although we face rising prices and an increasingly uncertain global environment, the JR East Group remains fully committed to working together as one to realize "To the Next Stage 2034."

We sincerely appreciate your continued understanding and support. That concludes my presentation.

Thank you very much for your attention.

Now, I would like to briefly explain our financial results for the last fiscal year and our outlook for this fiscal year. Please turn to page 26.

This slide summarizes the key highlights of our results for the last fiscal year. In October last year, we revised our earnings forecast upward.

With respect to the top line, revenue exceeded our target of 3 trillion 58 billion yen, reaching 3 trillion 84.6 billion yen, representing a year-on-year increase of 6.8%. Operating income also increased by 9.9% to 414.2 billion yen.

As a result, we achieved higher revenue and profit across all segments. On the right-hand side, you can see a comparison with our plan.

Both revenue and profit exceeded the revised forecast announced in October. Transportation revenue also came in above plan at 100.8%, representing an increase of 15.5 billion yen, including the contributions since October.

As for dividends, they are as explained earlier. Now, if I could ask you to skip ahead a few pages, I would like to touch on passenger revenues.

Please turn to page 30. This slide shows traffic volume and passenger revenues for the fiscal year ended March 2026.

Looking at the bottom section in the center, passenger revenues totaled 1 trillion 848.5 billion yen, representing an increase of 4.5% compared with the previous year. In terms of historical levels, this is the second-highest on record, following fiscal 2018.

Turning to the Shinkansen segment shown above, revenue reached 617.4 billion yen. This reflects strong demand for business travel, as well as inbound demand, with a shift from rail passes to regional passes, more single tickets sold, and a higher revenue per passenger contributing to revenue growth.

As a result, this represents a record-high level. Overall, increased usage contributed approximately 60 billion yen.

In addition, the fare revision implemented on March 14th, covering roughly half a month, contributed approximately 2.5 billion yen: 0.5 billion yen from commuter passes and 2 billion yen from non-commuter passes. Next, if I could ask you to skip ahead a few pages, I would like to turn to inbound demand.

Please refer to page 36. Page 36 presents the results for inbound-related revenues.

In the Lifestyle Solutions segment, performance exceeded both previous year's level and our plan, and has remained on a solid upward trajectory. As for Mobility, as mentioned earlier, inbound visitor numbers to Japan increased by around 10% year-on-year, and we have been able to capture revenue growth accordingly.

However, as our plan had been set at a relatively high level, we ultimately fell short of that target. The main factors were insufficient capture of demand from higher-spending markets such as the US, Australia, and Europe, as well as a somewhat delayed response to softening demand in destinations that had previously been widely popular among inbound visitors, such as Kawaguchiko and Karuizawa.

For fiscal year 2026, as explained earlier, we are targeting 61 billion yen in mobility revenue. Our data analytics capabilities have improved significantly, and based on these insights, we will refine our targeting and work to grow each segment accordingly.

Finally, let me touch on the key indicators. Please turn to page 39.

This page presents our debt position, capital expenditures, key financial metrics, and a breakdown of our strategic shareholdings. We had planned capital expenditures of 907 billion yen.

However, in the Lifestyle Solutions segment, investment exceeded plan by approximately 40 billion yen, bringing the total to 949.1 billion yen. This increase reflects, among other factors, the early acquisition of development sites that will serve as a pipeline for future growth, as well as the opening of Oimachi Tracks during fiscal year 2025.

As for the key metrics, as shown here, indicators of financial soundness, such as the ratio of interest-bearing debt to EBITDA, have improved. With respect to strategic shareholdings, we are working toward a target of reducing their market value by 30% compared with fiscal 2024 levels.

Currently, we hold 64 stocks with a book value of 280 billion yen on the balance sheet. While share prices have risen across many holdings recently, resulting in a ratio of 9.2% of consolidated net assets, we have proceeded with selective sales, disposing of nine stocks during the fiscal year and generating cash inflows of 46.2 billion yen.

Next, I will move on to our outlook for the current fiscal year, the year ending March 2027. Please turn to page 43.

For the fiscal year ended March 2026, we achieved a record-high operating revenue, and we aim to exceed that level with further growth in consolidated group revenue. We are targeting 3 trillion 295 billion yen, representing an increase of 6.8%.

Operating income is expected to rise by 3.6% to 429 billion yen. Looking at performance by segment, Transportation and Retail & Services, Real Estate & Hotels are all expected to achieve increases in both revenue and profit.

The Others segment, however, is expected to record higher revenue but lower profit. This is primarily due to increased costs in the current fiscal year associated with the launch of the new code-based payment service TEPAY, which will begin operations.

In order to drive initial user adoption, we will spend higher expenses, particularly in advertising and promotional activities, resulting in a temporary increase in costs and, consequently, lower profit for this segment despite higher revenue. Page 44 shows the breakdown of changes in consolidated operating income.

Starting with revenue, JR passenger revenues are expected to increase by approximately 95 billion yen. This consists of a 31.2 billion yen increase from commuter passes and 64.2 billion yen from non-commuter passes.

The increase in commuter pass revenue is almost entirely attributable to the fare revision. For non-commuter revenue, approximately 48 billion yen is expected to come from the fare revision, while the remaining roughly 24 billion yen is projected to come from increased usage, including inbound demand.

Overall, we are forecasting passenger revenues to grow by 5.2% year-on-year. Retail & Services are expected to grow by 2.6%, driven primarily by station retail, Ekinaka, and advertising.

In Real Estate & Hotels, as mentioned earlier, we expect a 40 billion yen increase in revenue from the integration with Itochu Urban Development, as well as approximately 20 billion yen from the full opening of Takanawa Gateway City. Including these factors, we are projecting growth of 17.9%, or approximately 100 billion yen in total.

Turning to the right-hand side, repair and maintenance expenses for JR are expected to increase by approximately 30 billion yen, as mentioned earlier. This reflects efforts to catch up on deferred maintenance following COVID-19, as well as the impact of inflation.

On page 45, we present both our forecast for the fiscal year ending March 2027, as well as our outlook for the following year, the fiscal year ending March 2028. Please take a moment to review this page.

In addition, starting on page 63, we provide our semi-annual update on capital costs and our initiatives aimed at achieving management that is more conscious of capital efficiency and share price performance. On page 64, based on our current estimates, our WACC stands at approximately 3.5%.

While this remains below our hurdle rate for growth investments of 4.4%, interest rates have been rising recently, and we will consider revising this level as necessary. Next, please turn to page 73.

This page presents traffic volume and passenger revenues for the fiscal year ending March 2027. As mentioned earlier, passenger revenues are expected to increase by 5.2% overall.

On the other hand, for traffic volume, we are factoring in some demand loss associated with the fare revision, and as a result, the figure is projected to come in slightly below the prior year. Also, on page 74, we provide standard operating expenses.

In response to feedback from investors, starting from the next fiscal year, we have returned to providing a more detailed breakdown across all items. That concludes my presentation.

Thank you.