Tokyo Electric Power Company Holdings, Incorporated · TSE:9501

Tokyo Electric Power — FY2017 Earnings Presentation

51 slides from Tokyo Electric Power's earnings presentation, Apr 26, 2018

1. Slide 1: FY2017 Financial Results

   FY2017 Financial Results (April 1, 2017 – March 31, 2018) Tokyo Electric Power Company Holdings, Inc. ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

2. Slide 2: Regarding Forward-Looking Statements

   Regarding Forward-Looking Statements Certain statements in the following presentation regarding TEPCO Group’s business operations may constitute “forward-looking statements.” As such, these statements are not historical facts but rather predictions about the future, which inherently involve risks an

3. Slide 3: Overview of FY2017 Financial Results

   Overview of FY2017 Financial Results (Released on April 26, 2018) ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

4. Slide 4: Key Points of FY2017 Financial Results

   Key Points of FY2017 Financial Results 1 < FY2017 Financial Results >  Ordinary revenue increased due to an increase in electricity sales revenue caused by a rise in fuel cost adjustments etc., even though electricity sales volume decreased.  Ordinary expenses increased due to increases in fuel ex

5. Slide 5: 1. Consolidated Financial Results

   1. Consolidated Financial Results 2 (Unit: Billion Yen) Comparison FY2017 (A) FY2016 (B) (A)-(B) (A)/(B) (% ) Operating Revenue 5,850.9 5,357.7 493.2 109.2 Operating Income/ Loss 288.4 258.6 29.7 111.5 Ordinary Income/ Loss 254.8 227.6 27.2 112.0 Extraordinary Income 381.9 330.6 51.2 - Extraordinary

6. Slide 6: 2. Electricity Sales Volume/ Key Factors Affecting Performance

   2. Electricity Sales Volume/ Key Factors Affecting Performance 3 Electricity Sales Volume (Consolidated) (Unit: Billion kWh) Comparison FY2017 (A) FY2016 (B) (A)-(B) (A)/(B) (%) Lighting 82.7 86.4 -3.7 95.7 Power 157.6 157.4 0.2 100.1 Total 240.3 243.8 -3.5 98.6 * Electricity Sales Volume by TEPCO E

7. Slide 7: 3. Ordinary Revenue (Consolidated)

   3. Ordinary Revenue (Consolidated) 4 (Unit: Billion Yen) Comparison FY2017 (A) FY2016 (B) ・Decrease in (A)-(B) (A)/(B) (%) electricity sales (Operating Revenue) 5,850.9 5,357.7 493.2 109.2 volume: - 170.0 ・Rise in fuel cost adjustments:+287.0 Electricity Sales Revenue 4,574.0 4,426.2 147.7 103.3 ・Re

8. Slide 8: 4. Ordinary Expenses (Consolidated)

   4. Ordinary Expenses (Consolidated) 5 (Unit: Billion Yen) Comparison FY2017 (A) FY2016 (B) ・Effect of price fluctuations: (A)-(B) (A)/(B) (%) + 213.0 Personnel Expenses 324.5 332.9 -8.4 97.5 (Exchange rate: + 28.0 Fuel prices (CIF): + 181.0) Fuel Expenses 1,339.4 1,162.4 177.0 115.2 ・Decrease in the

9. Slide 9: 5. Extraordinary Income/ Loss (Consolidated)

   5. Extraordinary Income/ Loss (Consolidated) 6 (Unit: Billion Yen) FY2017 FY2016 Comparison Extraordinary Income 381.9 330.6 51.2 Grants-in-aid from NDF* 381.9 294.2 87.7 Gain on change in equity - 36.4 -36.4 Extraordinary Loss 308.1 411.3 -103.1 Extraordinary loss on disaster 21.3 19.3 1.9 Expenses

10. Slide 10: 6. Consolidated Financial Position

    6. Consolidated Financial Position 7 Total assets increased 314.2 billion yen primarily due to increases in cash and deposits. Total net assets increased 308.5 billion yen primarily due to a record net income attributable to owners of parent. Equity ratio improved by 2.0 points. Balance Sheets as

11. Slide 11: 7. FY2018 Full-Year Financial Forecasts

    7. FY2018 Full-Year Financial Forecasts 8  Operating revenue will increase to approx. 6,099 billion yen, an increase of 249 billion yen year-on-year due to a rise in fuel cost adjustments, etc.  Ordinary income will increase to approx.285 billion yen due to an increase in operating revenue despite

12. Slide 12: 8. FY2018 Full-Year Financial Forecasts (Key Factors/ Financial Impact)

    8. FY2018 Full-Year Financial Forecasts 9 (Key Factors Affecting Performance/ Financial Impact) Key Factors Affecting Performance FY2018 Projections FY2017 Results (released on Apr. 26, 2018) Electricity Sales Volume (billion kWh) [consolidated] 233.4 240.3 Crude Oil Prices (All Japan CIF; dollars p

13. Slide 13: Supplemental Material

    Supplemental Material ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

14. Slide 14: Table of Contents

    Table of Contents Financial Results Detailed Information The Current Status of Fukushima Daiichi NPS and Future Initiatives Consolidated Statements of Income 10 Current Situation and Status of Units 1 through 4 28 Breakdown of Consolidated Ordinary Revenue 11 Key Points from the 4th Revision of the

15. Slide 15: FY2017 Financial Results Detailed Information

    FY2017 Financial Results Detailed Information ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

16. Slide 16: Consolidated Statements of Income

    10 Consolidated Statements of Income (Unit: Billion Yen) Comparison FY2017 (A) FY2016 (B) (A)-(B) (A)/(B) (%) Operating Revenue 5,850.9 5,357.7 493.2 109.2 Operating Expenses 5,562.4 5,099.0 463.4 109.1 Operating Income 288.4 258.6 29.7 111.5 Non-operating Revenue 48.6 62.2 -13.6 78.1 Investment Gai

17. Slide 17: Breakdown of Consolidated Ordinary Revenue

    Breakdown of Consolidated Ordinary Revenue 11 (Unit: Billion Yen) Comparison FY2017 (A) FY2016 (B) (A)-(B) (A)/(B) (%) Ordinary Revenue 5,899.5 5,420.0 479.5 108.8 Operating Revenue 5,850.9 5,357.7 493.2 109.2 Operating Revenue from Electric Power Business 5,494.8 5,100.7 394.1 107.7 Electricity Sal

18. Slide 18: Breakdown of Consolidated Ordinary Expenses

    Breakdown of Consolidated Ordinary Expenses 12 (Unit: Billion Yen) Comparison FY2017 (A) FY2016 (B) (A)-(B) (A)/(B) (%) Ordinary Expenses 5,644.7 5,192.4 452.3 108.7 Operating Expenses 5,562.4 5,099.0 463.4 109.1 Operating Expenses for Electric Power Business 5,238.2 4,878.7 359.5 107.4 Personnel 32

19. Slide 19: Year-on-Year Comparison of Consolidated Ordinary Expenses - 1

    Year-on-Year Comparison of Consolidated Ordinary Expenses - 1 13 Personnel expenses (¥332.9 billion to ¥324.5 billion) - ¥8.4 billion Salary and benefits (¥254.5 billion to ¥242.5 billion) - ¥11.9 billion Retirement benefits (¥14.5 billion to ¥22.8 billion) +¥8.2 billion Amortization of actuarial di

20. Slide 20: Year-on-Year Comparison of Consolidated Ordinary Expenses - 2

    Year-on-Year Comparison of Consolidated Ordinary Expenses - 2 14 Maintenance expenses (¥319.9 billion to ¥318.7 billion) - ¥1.2 billion Generation facilities (¥118.8 billion to ¥137.6 billion) +¥18.7 billion Hydroelectric power (¥8.0 billion to ¥8.0 billion) +¥0.0 billion Thermal power (¥66.8 billio

21. Slide 21: Year-on-Year Comparison of Consolidated Ordinary Expenses - 3

    15 Year-on-Year Comparison of Consolidated Ordinary Expenses - 3 Taxes and other public charges (¥300.4 billion to ¥304.8 billion) +¥4.3 billion Tax for promotion of power-resources development (¥102.3 billion to ¥104.3 billion) +¥1.9 billion Enterprise tax (¥52.0 billion to ¥54.2 billion) +¥2.2 bil

22. Slide 22: Increase/ Decrease of Consolidated Business Performance

    Increase/ Decrease of - Year on Year Comparison 16 Consolidated Business Performance Ordinary income increased 27.2 billion yen to 254.8 billion yen. Ordinary Income Factors related to Power Supply and Demand Others (Unit: Billion Yen) (including renewable energy) + 125.5 - 98.3 Foreign exchange ra

23. Slide 23: Financial Impact of the Great East Japan Earthquake

    Financial Impact of the Great East Japan Earthquake 17 (Unit: Billion Yen) Cumulative Item FY2010 to FY2016 FY2017 Amount ◇Grants–in-aid from Nuclear Damage Compensation and Decommissioning Facilitation Corporation ○Grants-in-aid based on Nuclear Damage Compensation and Decommissioning *1 *2 Facilit

24. Slide 24: Consolidated Balance Sheets

    Consolidated Balance Sheets 18 (Unit: Billion Yen) <Interest-bearing debt outstanding> (Unit: Billion Yen) Mar. 31 Mar. 31 Comparison Mar. 31 Mar. 31 2018 (A) 2017 (B) (A)-(B) (A)/(B) (%) (A)-(B) 2018 (A) 2017 (B) Total Assets 12,591.8 12,277.6 314.2 102.6 Bonds 2,230.8 3,205.9 -975.0 Fixed Assets 1

25. Slide 25: Consolidated Statements of Cash Flows

    Consolidated Statements of Cash Flows 19 (Unit: Billion Yen) Comparison FY2017 (A) FY2016 (B) (A)-(B) Cash flow from operating activities 752.1 783.0 -30.8 Income / loss before income taxes and minority interests 327.8 146.4 181.3 Depreciation and amortization 561.2 564.2 -3.0 Interest expenses 63.2

26. Slide 26: Overview of Consolidated Cash Flows

    Overview of Consolidated Cash Flows - Year on Year Comparison 20  Cash and cash equivalents as of March 31, 2018 increased 244.1 billion yen to 1,184.3 billion yen. - Cash flow from operating activities increased 752.1 billion yen mainly due to income before income taxes and minority interests - Ca

27. Slide 27: Segment Information

    Segment Information 21 (Unit: Billion Yen) (Unit: Billion Yen) Comparison Comparison FY2017 (A) FY2016 (B) FY2017 (A) FY2016 (B) (A)-(B) (A)/(B) (%) (A)-(B) (A)/(B) (%) Operating Revenue 5,850.9 5,357.7 493.2 109.2 Assets 12,591.8 12,277.6 314.2 102.6 957.7 918.0 39.6 104.3 Holdings 9,421.5 11,230.3

28. Slide 28: [Reference] Key Factors Affecting Performance and Financial Impact

    [Reference] Key Factors Affecting Performance and Financial Impact 22 Key Factors Affecting Performance Financial Impact (Sensitivity) (Unit: Billion Yem) [Ref.] FY2017 [Ref.] FY2018 FY2017 FY2018 FY2016 Actual Actual FY2016 Actual Full-year Projection Actual Performance Full-year Projection Perform

29. Slide 29: [Reference] Seasonal Breakdown of Electricity Sales Volume and Total Power Generated

    [Reference] Seasonal Breakdown of Electricity Sales Volume and 23 Total Power Generated Electricity Sales Volume* *TEPCO Energy Partner Unit: Billion kWh FY2017 Apr-Sep Oct-Dec Jan Feb Mar Jan-Mar Full year Lighting 37.60 19.05 9.32 9.17 7.55 26.04 82.69 Power 77.45 36.02 12.31 12.64 12.03 36.97 150

30. Slide 30: [Reference] Fuel Consumption

    [Reference] Fuel Consumption 24 Fuel Consumption Data FY2015 FY2016 FY2017 Actual Actual Actual LNG(million tons) 21.55 21.06 20.80 Oil (million kｌ) 2.48 2.05 0.91 Coal (million tons) 8.34 8.14 8.31 Note: The oil data is total of crude oil and heavy oil, not including gas oil. Fuel Procurement Oil L

31. Slide 31: [Reference] Gas Supply Business

    [Reference] Gas Supply Business 25 Sales Volume Revenues (Million ton) (Billion yen) (FY) * April 2017~ Full liberalization of gas market <FY2017 Actual Performance> Revenues: Increased 33.0 billion yen to 104.2 billion yen due to increased sales volume. Operating expenses: Increased 34.4 billion ye

32. Slide 32: [Reference] Feed-in Tariff Scheme for Renewable Energy

    [Reference] Feed-in Tariff Scheme for Renewable Energy 26 (Purchase Cost Collection Flow) （FY2017) Avoidable Cost 105.2 billion yen (Green Investment Promotion Organization) Cost Bearing Adjustment Organization Generators Renewable Energy Subsidy Purchase Cost 337.4 billion yen 442.6 billion yen (Re

33. Slide 33: [Reference] Schedules for Public Bond Redemption

    [Reference] Schedules for Public Bond Redemption 27 (Billion Yen) Amount at Maturity (As of Mar. 31, 2018) TEPCO Public Bond TEPCO Power Grid Public Bond (FY) Note: The amount redeemed for fiscal 2017 totaled 625.9 billion yen. ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

34. Slide 34: The Current Status of Fukushima Daiichi Nuclear Power Station and Future Initiatives

    The Current Status of Fukushima Daiichi Nuclear Power Station and Future Initiatives ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

35. Slide 35: Current Situation and Status of Units 1 through 4

    Current Situation and Status of Units 1 through 4 28 - At Units 1, 2 and 3, it was evaluated that the comprehensive cold shutdown condition had been maintained, judging from the temperatures of the reactors and spent fuel pools as well as the density of radioactive materials. To facilitate the remov

36. Slide 36: Key Points from the 4th Revision of the Mid-and-Long-Term Roadmap

    Key Points from the 4th Revision of the Mid-and-Long-Term Roadmap (Sep. 2017) 29 ●The revised version of the Mid-and-Long-Term Roadmap is available here (TEPCO website). 1. Basic Approach toward Revision (1) Maintain approach that prioritizes safety and emphasizes risk reduction (2) Optimize overall

37. Slide 37: Revised Mid-and-Long-Term Roadmap Milestones

    Revised Mid-and-Long-Term Roadmap Milestones 30 Maintain Overall Framework of Decommissioning Schedule Nov. 2013 Dec. 2011 (Fuel removal initiated at Unit 4) Dec. 2021 30 to 40 years later Stabilization initiatives Phase 1 Phase 2 Phase 3 Cold shutdown achieved Period until start of spent Period unt

38. Slide 38: Contaminated Water Management

    Contaminated Water Management 31 − In December 2013, the government’s Nuclear Disaster Response Headquarters arranged a set of preventative and multi-tiered measures based on the three basic policies for addressing contaminated water issues. − The generated contaminated water, including transfer to

39. Slide 39: The Current Status of Kashiwazaki-Kariwa Nuclear Power Station and Future Initiatives

    The Current Status of Kashiwazaki-Kariwa Nuclear Power Station and Future Initiatives ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

40. Slide 40: Main Measures to Secure Safety - Outline

    Main Measures to Secure Safety – 1 [Outline] 32  We promote the following measures to secure further safety after the Great East Japan Earthquake. I. Installation of flooding embankment III. Further enhancement of heat removal and III. Further enhancement of heat III. Further enhancement of heat re

41. Slide 41: Main Measures to Secure Safety - Implementation Status

    Main Measures to Secure Safety - 2 [Implementation Status] 33 As of April 23, 2018 Item Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7 Ⅰ. Installation of flooding embankment [banks] Completed Completed Ⅱ. Countermeasures against inundation into buildings (1) Installation of tide embankments (flood

42. Slide 42: Compliance Review under the New Regulatory Requirements

    Compliance Review under the New Regulatory Requirements 34 Latest Review Status ・On September 27, 2013, an application was presented requesting verification of compliance with new regulatory requirements for Units 6 and 7. ・After the compliance verification application was presented, amended applica

43. Slide 43: Key License/Permit Steps in Enforcement of New Regulatory Requirements

    35 Pre-use inspection(※2) Successful passage of pre-use inspection TEPCO Application for pre-use inspection Key License/Permit Steps in Enforcement of New Regulatory Requirements Construction plan & safety regulations(※1) Construction plan authorization Safety regulation revision authorization NRA ※

44. Slide 44: Other Initiatives

    Other Initiatives ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

45. Slide 45: Implementation of the Streamlining Policy

    Implementation of the Streamlining Policy 36 <Cost reduction> − In addition to the cost reductions that has been made under the New Comprehensive Special Business Plan (TEPCO *1 : 4.8 trillion yen/10 years), TEPCO has been executing, under the Revised New Comprehensive Special Business Plan, unprece

46. Slide 46: Efforts towards Nuclear Reform - 1

    Efforts towards Nuclear Reform - 1 37 - Framework for Nuclear Reform − Since April 2013, TEPCO has advanced the Nuclear Safety Reform Plan so that it may realize its determination that “the Fukushima nuclear accident will never be forgotten and we will be a nuclear operator which continues to create

47. Slide 47: Efforts towards Nuclear Reform - 2

    Efforts towards Nuclear Reform – 2 38 - Report on Status of the Nuclear Safety Reform Plan - The Nuclear Safety Reform Plan consists of 6 measures that compensate for the lack of “safety awareness”, “technological capability” and “dialogue-promoting capability” which are the underlying contributors

48. Slide 48: Main Efforts to Increase Corporate Value - 1

    Main Efforts to Increase Corporate Value -1 39 <TEPCO Holdings> February 7, 2018: Strategic alliance with Curtiss-Wright Corporation including software exclusive sales (Support thermal efficiency management of thermal power plants in Japan and Asia). March 29, 2018: Launched a power retail venture c

49. Slide 49: Main Efforts to Increase Corporate Value - 2

    Main Efforts to Increase Corporate Value -2 40 <TEPCO Power Grid> February 15, 2018:Established "Energy Gateway Co., Ltd.", a new company that provides IoT platform capable of collecting, storing, analyzing and processing information such as electricity usage inside houses etc. March 6, 2018: Rakute

50. Slide 50: Comprehensive Alliance/ Step3 Progress toward Business Succession

    Comprehensive Alliance/ Step3 Progress toward Business Succession 41 - Both TEPCO Fuel & Power Inc. and Chubu Electric Power Co., Inc. agreed on the scope of the subject assets and liabilities and schedule for the integration of existing thermal power projects etc. with JERA on February 27, 2018 and

51. Slide 51: T=PCO

    T=PCO The Energy for Every Challenge

Tokyo Electric Power Company Holdings — FY2017 Earnings Presentation on 6ix