Chubu Electric Power Company,incorporated · TSE:9502

Chubu Electric Power Company,incorporated — Q1 FY2015 Earnings Presentation

56 slides from Chubu Electric Power Company,incorporated's earnings presentation, August 2015

1. Slide 1: Presentation Materials for Investors 1st Quarter FY2015

   Presentation Materials for Investors 1st Quarter Q t FY2015 August 2015 August, Note: The Company's p y fiscal yyear ((FY)) is from April p 1 to March 31of the following g yyear. FY2015 represents the fiscal year begun in April 1, 2015, and ending in March 31, 2016. 1st Quarter (1Q) represents three

2. Slide 2: Table of Contents

   Table of Contents I Outline of Financial Results for Three-Months Ended June June 30, 2015 Summary of Financial Results <1> 䞉䞉䞉䞉䞉䞉䞉䞉䞉䞉 1 Summary of Financial Results <2> 䞉䞉䞉䞉䞉䞉䞉䞉䞉䞉 2 Electricity Sales Volume 䞉䞉䞉䞉䞉䞉䞉䞉䞉䞉 3 G Generated t d andd Received R i d Power P 䞉䞉䞉䞉䞉䞉䞉䞉䞉䞉 4 Consolidated Finacial

3. Slide 3: Outline of Financial Results for Three-Months Ended June 30, 2015

   I Outline of Financial Results for Three-Months Ended June 30,, 2015 Note: We hereby announces a revision of this "Presentation Materials for Investors 1 Quarter 1st Q FY 2015" 2015".We W correct iit as ffollows. ll (August (A 26 26,2015) 2015) Corrected parts Slide4 Generated and Received Power Cha

4. Slide 4: Summary of Financial Results <1>

   Summary of Financial Results <1> 㻥1 -Operating revenues increased for two consecutive years since 1Q of FY2014. -Ordinary income and net income increased for two consecutive years since 1Q of FY2014. [Consolidated] (Billion yen,%) 2015/1Q 2014/1Q Change (A) (B) (A-B) (A-B)/B Operating revenues 744.2

5. Slide 5: Summary of Financial Results <2>

   Summary of Financial Results <2> 㻥 2 <Consolidated ordinary income> On electric power business, consolidated ordinary income increased 121.9 billion yen comparedd with ith the th 2014/1Q, 2014/1Q due d to t accruedd income i incurred i d by b fuel f l costt adjustment dj t t system and decrease of f

6. Slide 6: Electricity Sales Volume

   Electricity Sales Volume 3 <Demand from customers under regulation> -Electric lighting Amounted to 7.4TWh, almost the same as in FY2014/1Q, mainly due to customer's power saving effect, in spite of an increase of meter-reading days. -Electric Electric power Amounted to 1.3TWh, almost the same as in

7. Slide 7: Generated and Received Power

   Generated and Received Power 4 -Hydro Thanks to higher water flow, hydro power output increased by 0.5 TWh. (flow rate for 2015/1Q:109.0%, 2014/1Q:87.8%) -Interchanged, I t h d purchased h dP Power Increased I dbby 11.1 1 TWh, TWh due d to an iincrease in i purchase h off renewable energy. -Thermal

8. Slide 8: Consolidated Financial Standing

   Consolidated Financial Standing 5 -Assets A D Decreased dbby 169 169.66 billi billion yen from f the h end d off FY2014 FY2014, bbecause off a ddecrease iin noncurrent assets ddue to progress in depreciation, and also a decrease in current assets due to a reduction in short-term investment. -Liabili

9. Slide 9: Summary of Forecast for FY 2015

   Summary of Forecast for FY 2015 6 1213 [Consolidated] (Billion yen) FY2015 Forecast FY2015 Forecast Change (Current) (Apr. 28) (A) (B) (A-B) Operating revenue 2,860.0 2 860 0 2,860.0 2 860 0 - Operating income 160.0 160.0 - Ordinary income 130.0 130.0 - Net income 90.0 90.0 - [N C [Non-Consolidated]

10. Slide 10: Non-consolidated Forecast for FY 2015 (compared to FY 2014)

    Non-consolidated Forecast for FY 2015 (compared to FY 2014) 127 (Billion yen) FY 2015 FY 2014 Change Forecast Result ((A)) ((B)) ((A)-(B) )( ) Operating revenues 2,650.0 2,899.0 approx. (249.0) Operating income 150 0 150.0 90 8 90.8 approx 59 approx. 59.00 Ordinay income 120.0 41.9 approx. 78.0 Net

11. Slide 11: Impact of accrued income (loss) by fuel cost adjustment system in FY2015

    䠄Reference䠅Impact of accrued income (loss) incurred by fuel 8 cost adjustment system in FY2015 䕔 Impact of accrued income (loss) incurred by fuel cost adjustment system in FY2015 Fuel procurement price Average Fuel price (basis of fuel cost adjustment charge) Standard fuel price Income 130 billion L

12. Slide 12: The Policy on Shareholder Return

    The Policy on Shareholder Return 9 - Dividend Forecast -The Company will work to maintain stable dividends after taking account of financial condition and other factors, while continuously investing in building and operating facilities that are essential for a safe and stable supply of electricity.

13. Slide 13: Management Situation

    Management g Situation © © 2014 2015 Chubu Chubu Electric Electric Power Power Co., Co., Inc. Inc. All All rights rights reserved. reserved.

14. Slide 14: Hamaoka Nuclear Power Station <1>: Further effort for Safety enhancement measures

    Hamaoka Nuclear Power Station <1>: 10 Further effort for Safety enhancement measures -Roadmap for Safety enhancement measures Th works The k for f safety f t enhancement h t measures related l t d to t Units U it 4 andd 3 are anticipated ti i t d to t be b completed l t d in i September 2016 and Sep

15. Slide 15: Hamaoka Nuclear Power Station <2>: Review of Compliance with New Regulatory Standards

    Hamaoka Nuclear Power Station <2>: 11 Current Situation about Review of Compliance with New Regulatory Standards As to Unit No.4, the application form for Change in reactor establishment permission that we submitted has been reviewed by the Nuclear Regulation Authority in two separate categories (ma

16. Slide 16: Enhancement of competitiveness<1>: Development of high efficiency Thermal Power Plants

    Enhancement of competitiveness<1>: 㻝㻡 Development of high efficiency Thermal Power Plants 12 - Outline of development of high efficiency thermal power plants (FY) 2013 2014 2015 2016 2017 2018 䕰 Dec.-13: construction started p 䕰Sep.-17: Nishi-Nagoya Group No.7 operation to start (Unit 7-1) 1,188 MW

17. Slide 17: Enhancement of competitiveness<2>: Sales strategy toward full liberalization of retail power market

    Enhancement of competitiveness<2>䠖 㻢13 gy toward full liberalization of retail power Sales strategy p market - Measures being taken toward the scheduled full liberalization of the retail power market in April 2016 are designed to minimize the risk of a change by our current customers in their power

18. Slide 18: Enhancement of competitiveness<3>: Power generation & Sales outside the Chubu region

    Enhancement of competitiveness<3>䠖 㻢14 Power generation & Sales outside the Chubu region -In an effort to reinforce the future profit base, we have been aggressively developing the electric power sales business and power generation business in regions other than Chubu. Chubu - We will promote sales

19. Slide 19: TEPCO and Chubu Electric Comprehensive Alliance <1>: Establishment of JERA

    TEPCO and Chubu Electric to form Comprehensive Alliance <1>: 15 Establishment of JERA Co., Inc. - Tokyo Electric Power Company, Incorporated (hereinafter, “TEPCO”) and Chubu Electric established “JERA Co., Inc.” effective from April 30, 2015, as a new company that implements “a comprehensive allianc

20. Slide 20: TEPCO and Chubu Electric Comprehensive Alliance <2>: Scope of Comprehensive Alliance

    TEPCO and Chubu Electric to form Comprehensive Alliance <2>: Scope of Comprehensive Alliance 16 Overseas power 䠘Scope of Comprehensive Alliance䠚 generation Gas wholesaling Energy LNG supply infrastructure Thermal power generation (Existing) Receipt and PCO Fuel Transportation storage 42 GW Upstream

21. Slide 21: Reference Data

    R f Reference D Data t © © 2014 2015 Chubu Chubu Electric Electric Power Power Co., Co., Inc. Inc. All All rights rights reserved. reserved.

22. Slide 22: The New Regulatory Standards<1>: Outline

    The New Regulatory Standards<1>: 17 Outline of "the New Regulatory g y Standards" Compared to the former safety standards, the new regulatory standards have been strengthen the standards to prevent a severe accident, and newly added the standards to cope with a severe accident or a terrorist attack.

23. Slide 23: The New Regulatory Standards<2>: Influence of 40-years regulation

    The New Regulatory Standards<2>: 18 Influence of 40-years y regulation g < Article 43, Paragraph 3, Item 32 of the Law for the Regulations of Nuclear Source Material, Nuclear Fuel Material and Reactors> - The h operation i period i d off a power reactor shall h ll be b 40 years from f the h start of

24. Slide 24: Hamaoka Nuclear Power Station <1>: Submission of Applications for Review

    Hamaoka Nuclear Power Station <1>Ჴ 19 Submission of Applications for Review of Compliance with New Regulatory Standards -On February 14, 2014 , the company has submitted application document for change in reactor establishment permission, an application document for approval of construction plans, a

25. Slide 25: Hamaoka Nuclear Power Station <2>: Earthquake countermeasures

    Hamaoka Nuclear Power Station <2>: 20 =Design basis measures] Earthquake countermeasures - Taking into consideration elements of uncertainty, we have conducted an evaluation of seismic ground motion in relation to inland crustal earthquakes, interplate earthquakes and oceanic intraplate earthquakes,

26. Slide 26: Hamaoka Nuclear Power Station <3>: Tsunami countermeasures

    Hamaoka Nuclear Power Station <3>: 21 [Design basis measures] Tsunami Tsunami-counter counter measures - We have conducted surveys and studies on factors causing huge tsunami, regarding interplate earthquakes, oceanic intraplate earthquakes, earthquakes crustal earthquakes produced by active faults,

27. Slide 27: Hamaoka Nuclear Power Station <4>: Seawater inflow via damaged condenser tubes at Reactor No.5

    Hamaoka Nuclear Power Station <4>: 22 Seawater inflow via damaged tubes in the main condenser for Hamaoka Reactor No.5 Fact - On May 14, 2011, when preparing for cold shutdown after reactor No. 5 was suspended, a portion of the tubes in the main condenser, through which seawater flowed to cool steam

28. Slide 28: Hamaoka Nuclear Power Station <5>: Enhancing anti-disaster measures

    Hamaoka Nuclear Power Station <5>:Enhancing anti-disaster measures 23 -Our anti-disaster measures -In order to prevent abnormal radioactive emissions in the event of an incident at the nuclear power station and to suppress and mitigate the impact in the event of such emissions, we are establishing t

29. Slide 29: Hamaoka Nuclear Power Station <6>: Activities to gain public understanding

    Hamaoka Nuclear Power Station <6>: 24 Activities to g gain public p understanding g - On the Hamaoka Nuclear Power Station, we have been steadily promoting further safety measures including facilities measures and disaster prevention measures together with gaining public understanding as a package.

30. Slide 30: Hamaoka Nuclear Power Station <7>: Location and Regional Area

    Hamaoka Nuclear Power Station <7>: 25 Overview of the Hamaoka Nuclear Power Station Location and Regional Area 䕦 Mt.Fuji Shizuoka 60Hz 50Hz (CEPCO's supply area) (TEPCO's supply area) Suruga Bay Enshu-nada sea Kakegawa Kikugawa Makinohara We have signed safety agreement with i h Shizuoka Shi k prefe

31. Slide 31: Electricity System Reform <1>: Schedule of the Electricity System Reform

    Electricity System Reform <1> : Schedule of the Electricity System Reform 26 - Schedule of the Electricity System Reform schedule for implementing the schedule for enacted the bill measures 1st phase: Establishing the Organization for Cross-regional Established on April 1, 2015 Enacted on November 1

32. Slide 32: Electricity Power System Reform <2>: Smart Meter

    27 Electricity Power System Reform <2> : Smart Meter 㻝㻡 - The Th iintroduction t d ti schedule h d l off smartt meters t - Installation of smart meters has already been completed for our special high-voltage and high-voltage (500 kW and above) customers. - In the case of other high-voltage (less tha

33. Slide 33: Electricity Supply & Demand <1>: Outlook for Summer FY2015

    Electricity Supply & Demand <1>: 28 Outlook for Summer FY 2015 (generating end) ŠPeak load (three-day average) We estimate the peak load at 24,750MW with assumption of the effect of customers' energy conservation by 1,320MW in this coming summer. *The effect of customers' energy conservation is base

34. Slide 34: Electricity Supply & Demand <2>: Outlook for Summer 2015 in Japan

    Electricity Supply & Demand <2>: Outlook of Electricity Supply and Demand for Summer (August 2015) in Japan 29 29 (GW) West Japan 100 12.1% 14.0% 80 12.0% Hokkaido 10 0% 10.0% 60 7.9% 6.4% 8.0% 4.9% 4.9% 6.0% 40 3.0% 3.0% (1.28) (0.89) 4.0% 20 (0.84) (0.35) (0.67) 2.0% (0.50) 0 0.0% Chubu Kansai Hok

35. Slide 35: Electricity Supply & Demand <3>: Strengthen Mutual Support among power companies

    Electricity Supply & Demand <3>: Strengthen Mutual 䠍 Support among power companies 30 䕔 Reinforcement of the FC (Frequency Converter) (Outline of the master plan interim report regarding strengthening inter-regional inter regional gridconnection, gridconnection etc. etc ) Hokkaido-Honshu - To reinfo

36. Slide 36: Electricity Supply & Demand <4>: Composition of Power Sources and Electric Power Output

    Electricity Supply & Demand <4>: Composition of Power Sources and Electric Power Output 31 - Composition of Power Sources ᲢGWᲣ 0 5 10 15 20 25 30 35 40 FY2010 12% 13% 41% 15% 19% FY2011 41% 12% 13% 15% 19% FY2012 11% 12% 43% 15% 19% FY2013 11% 13% 45% 12% 19% FY2014 Ƃ37᳁Wƃ 11% 12% 46% 12% 19% N l Nu

37. Slide 37: Electricity Supply & Demand <5>: Trend of Large Industrial Power

    Electricity Supply & Demand <5>: 㻥 32 Trend of Large Industrial Power -Dropped 0.5% , compared with FY2014, due to a decrease of Industrial power d demandd caused d bby a ddecrease off production d ti in i the th automobile t bil industry i d t etc. t -Sales Volume of Large Industrial Power FY2014 F

38. Slide 38: Reinforcement Plan for LNG Handling Facilities

    Reinforcement Plan for LNG Handling Facilities 33 㻝㻢 - Supporting stable yet flexible LNG procurement 䐣Installation of new gas pipeline 䐟Additional LNG tanks & reinforcement to LNG 䐠 s o oof ggass 䐠Installation receiving dock Shin-Nagoya pipeline across Ise Bay 䐢Installation of ( for Toho Gas Co.) N

39. Slide 39: Fuel Procurement<1>: Outlook for Fuel Procurement in FY2015

    Fuel Procurement<1>:Outlook for Fuel Procurement in FY2015 34 - Outlook for fuel procurement (LNG) - After the suspension of all the units of Hamaoka Nuclear Power Station, the Company has increased the utilization of thermal power plants, mostly LNG, to compensate for the loss of power output by nu

40. Slide 40: Fuel Procurement<2>: LNG Contracts

    Fuel Procurement<2>: LNG Contracts 35 - Principal LNG Contracts (1,000 t/year) Contract volume Projects / <delivery> Period of contract (approximate figure) Q Qatar1 / <Ex-ship> p 1997 - 2021 ((approx.25 pp years) y ) 4,000 , Australia (extension) / <Ex-ship> 2009 - 2016 (approx.7 years) 500 Austral

41. Slide 41: Fuel Procurement<3>: LNG Ship Charter

    Fuel Procurement<3>: LNG Ship Charter 36 39 ŠThree Contracts of LNG Ship Charter - Based on the FOB contract, we concluded eight contracts of LNG ship charter to enhance efficiency and flexibility of procurement by managing freight charge. 1st Ship (Seishu-maru) 2nd Ship (Esshu-maru) 3rd Ship 4th Sh

42. Slide 42: Fuel Procurement<4>: Advancement of Coal Trading

    37 Fuel Procurement<4>: Advancement of Coal Trading 36 - Coal tradingg business -Chubu Electric and Electricite de France’s subsidiary EDFT each established 100% subsidiaries in Japan and started fuel trading business under partnership agreement in FY2008. -Effective in April, 2010, Chubu Energy Tra

43. Slide 43: Fuel Procurement<5>: Acquisition of Interests in Energy Resources

    Fuel Procurement<5> 38 Acquisition of Interests in Energy Resources - Acquisition of upstream interests, etc.ೌ Cordova Embayment Integra ႩƷӕࢽཞඞƳƲ] (Shale gas) (Coal) Ichthys Project output capacity: Project output capacity: (LNG) Approx 3.3 million ton/year Approx 3.5 million ton/year in LNG (planne

44. Slide 44: Fuel Procurement<6>: Results of FY2014

    Fuel Procurement<6> Results of FY2014 39 Others 3.2 Canada Russia 1.8 R ssia Russia 47 4.7 3.3 (%) Africa 10 5 10.5 Australia LNG Coal 11.4 Qatar Australia Indonesia (13 485mil t) (13.485mil.t) 55.0 43 0 43.0 Ტ10 552mil tᲣ Ტ10.552mil.tᲣ 51 9 51.9 Asia 15.2 Vietnam 19.3 Crude oil Ტ228,000klᲣ Indonesi

45. Slide 45: Renewable Energy <1>: Feed-in Tariff Scheme

    Renewable Energy <1>䠖Feed-in Tariff Scheme 40 㻙 Basic framework of feed-in tariff scheme for renewable energy Purchase Electric Supply Power Punrchased power Equivalent to the purchased costs of renewable energy sourced Company Electricity sales revenues Equivalent to the surcharge for Operators p o

46. Slide 46: Renewable Energy <2>: Our efforts toward Promotion

    Renewable Energy <2> : Our efforts toward Promotion 41 㻝㻡 - Details for promotion of renewable energy Detailed plans Output (MW) Operation commences Mega Solar Iida 1 FY 2010 Solar Mega Solar Kawagoe Chubu Electric 7.5 FY2017 (Plan) (Transfer from Mega Solar Taketoyo) Mega Solar Shimizu 8 FY 2014 Wi

47. Slide 47: Renewable Energy <3>: Status of Renewable Energy Initiatives

    42 Renewable Energy <3> : Status of Renewable Energy Initiatives 㻝㻡 ŠStatus of Renewable Energy Initiatives (Chubu Electric Power Group) ƂContract demand (Solar, Wind)ƃ ƂThe number of contracts (Solar)ƃ (MW) FY2010 FY2011 FY2012 FY2013 FY2014 4,000 The number of contracts 128,000 178,000 237,000 310

48. Slide 48: Renewable Energy <4>: Application volume for grid connection

    Renewable Energy <4>: 43 㻝㻡 The situation of application volume associated with connection ŠThe situation of application volume associated with connection of renewable energy generation facilities to grid Total electric volume of interconnected inverters plus application volume for connection to ren

49. Slide 49: Sales Strategy <1>: Evolve into a Total Service Corporation

    Sales Strategy <1>:Evolve into a Total Service Corporation 44 㻢 - Supplying S l i Gas, G LNG and d On-Site O Sit E Energy Collaborating with C Energy fully acquired, the Chubu Electric Group continues to offer energy services that combine gas, LNG and on-site energy to business customers. We support

50. Slide 50: Sales Strategy <2>: Overseas Business Deployment

    Sales Strategy <2>: Overseas Business Deployment 45 - Outline of overseas business Investment amount Output based on Chubu's stake* (approximate) At the end of 2015/1Q Cumulative total 110 billion yen Cumulative total 3,400 MW - Projects in participation Output Region Project Chubu's stake Participa

51. Slide 51: Efforts toward Promotion of Management Efficiency

    Efforts toward Promotion of Management Efficiency 㻥 46 - The Th whole h l Chubu Ch b Electric El t i group has h been b working ki tot raise i managementt efficiency ffi i the th costs t for f the th approved rates equivalent to 191.5 billion yen per year (a three-year average). As a result, we achi

52. Slide 52: Fund Raising

    Fund Raising 47 - Trend of Fund raising results and Outlook for fund raising in FY 2015 -We raised total approximately 1,500 billion yen in long-term funding for 3 years since the shutdown of Hamaoka Nuclear Power Station. Station -We raised 120 billion yen in long-term funding in FY 2014. -We plan

53. Slide 53: Cash Flow (Non-consolidated)

    Cash Flow (Non-consolidated) 48 (Billion yen) 800.0 Cash Flows from Operating Cash Activities Flows from Operating Activities 608 9 608.9 Cash Flows from Investing Cash Activities Flows from Investing Activities 563.4 600.0 548.6 556.9 523.6 FCF 522.2 424.1 420.1 443.2 402.6 400 0 400.0 426.0 333.8

54. Slide 54: Electric utility operating expenses (Non-consolidated)

    Electric utility operating expenses(Non-consolidated) 49 䕔Electric El t i utility tilit operating ti expenses䠄Non-consolidated䠅 䠄N lid t d䠅 (Billion Yen) 3,000.0 2,709.7 2,638.2 (6%) 2,457.1 (7%) 2,500.0 2 297 3 2,297.3 (7%) Salaries and 2,136.8 (9%) employee 2,037.3 1,982.9 benefits (9%) 2,000.0 (7

55. Slide 55: Financial Ratio, Credit Ratings

    Financial Ratio, Credit Ratings 50 - Shareholders’ equity ratio - Debt - equity ratio 䠄Times䠅 35% 5 Non-Consolidated Non-Consolidated Consolidated Consolidated 30% 26.1 26 1ᲟᲟ 4 (Non-Consolidasted) 25% 20% 23.5Ჟ 3 2.6 Times (Consolidated) ᲢNon-ConsolidatedᲣ 15% 2 2.1 Times 10% ᲢConsolidatedᲣ Ტ Უ 1 5

56. Slide 56: Disclaimer

    DISCLAIMER This presentation Thi t ti contains t i assumptions ti andd forward-looking f d l ki statements t t t with ith respect to the financial conditions, and forecasts of the company, which are based on information currently available. These assumptions involve certain risks and uncertainties,

Chubu Electric Power — Q1 FY2015 Earnings Presentation on 6ix