Tokyo Electric Power Company Holdings, Incorporated · TSE:9501

Tokyo Electric Power — Q2 FY2019 Earnings Presentation

45 slides from Tokyo Electric Power's earnings presentation, Oct 28, 2019

1. Slide 1: FY2019 2nd Quarter Financial Results

   FY2019 2nd Quarter Financial Results (April 1 – September 30, 2019) Tokyo Electric Power Company Holdings, Inc. ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

2. Slide 2: ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

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

3. Slide 3: Overview of FY2019 2nd Quarter Financial Results

   Overview of FY2019 2nd Quarter Financial Results (Released on October 28, 2019) (Note) Please note that the following is an accurate and complete translation of the original Japanese version prepared for the convenience of our English-speaking investors. In case of any discrepancy between the transl

4. Slide 4: Key Points of FY2019 2nd Quarter Financial Results

   Key Points of FY2019 2nd Quarter Financial Results 1 < FY2019 2nd Quarter Financial Results >  Although electricity sales volume for TEPCO group companies decreased, operating revenue increased due to a rise in fuel cost adjustment.  Ordinary income increased due to a gain incurred by fuel cost ad

5. Slide 5: 1. Consolidated Financial Results

   1. Consolidated Financial Results 2 (Unit: Billion kWh) FY2019 FY2018 Comparison Apr-Sep (A) Apr-Sep (B) (A)-(B) (A)/(B) (% ) Electricity Sales Volume 111.8 116.1 -4.3 96.3 (Unit: Billion Yen) FY2019 FY2018 Comparison Apr-Sep (A) Apr-Sep (B) (A)-(B) (A)/(B) (% ) Operating Revenue 3,175.6 3,055.5 120

6. Slide 6: 2. Points of Each Company

   2. Points of Each Company 3 <TEPCO Holdings>  Ordinary income decreased due to factors including decreased wholesale power sales to TEPCO Energy Partner, etc. <TEPCO Fuel & Power>  Ordinary income increased due to factors including a gain incurred by fuel cost adjustment system time lag into incom

7. Slide 7: 3. Overview of Each Company

   3. Overview of Each Company 4 (Unit: Billion Yen) FY2019 FY2018 Comparison Apr-Sep (A) Apr-Sep (B) (A)-(B) (A)/(B) (% ) Operating Revenue 3,175.6 3,055.5 120.0 103.9 TEPCO Holdings 373.1 391.5 -18.3 95.3 TEPCO Fuel & Power 4.3 951.9 -947.5 0.5 TEPCO Power Grid 862.9 875.2 -12.2 98.6 TEPCO Energy Par

8. Slide 8: 4. Consolidated Extraordinary Income/Loss

   4. Consolidated Extraordinary Income/Loss 5 (Unit: Billion Yen) FY2019 FY2018 Comparison Apr-Sep (A) Apr-Sep (B) (A)-(B) ※1 Extraordinary Income 367.2 - 367.2 Grants-in-aid from NDF ※3 54.0 - 54.0 Gain on reversal of provision for loss on disaster 113.5 - 113.5 Gain on change in equity 199.7 - 199.7

9. Slide 9: 5. Extraordinary Loss on Disaster and Contingent Property Loss by Typhoon

   ５．Extraordinary Loss on Disaster and Contingent Property Loss by Typhoon 6  Repairing expenses for restoration on assets which was damaged by Typhoon #15, occurred on September 2019, were booked as extraordinary loss on disaster and contingent property loss.  Damage caused by Typhoon #19, occurred

10. Slide 10: 6. Consolidated Financial Position

    6. Consolidated Financial Position 7  Total assets balance decreased by 564.1 billion yen primarily due to the transfer of thermal-power-generation facilities to JERA.  Total liabilities balance decreased by 961.6 billion yen primarily due to the transfer of TEPCO Fuel & Power’s loans to JERA.  T

11. Slide 11: Reference: Key Factors Affecting Performance (Results)

    <Reference> Key Factors Affecting Performance (Results) 8 Area Demand (Unit: Billion kWh) Comparison FY2019 FY2018 Apr-Sep (A) Apr-Sep (B) (A)–(B) (A)/(B) (％) Area Demand 134.5 137.8 -3.3 97.6 Foreign Exchange Rates / CIF FY2019 FY2018 (A)–(B) Apr-Sep (A) Apr-Sep (B) Foreign Exchange Rate 108.6 110.

12. Slide 12: Reference: Consolidated Ordinary Income/Loss (Year-on-Year Comparison)

    <Reference> Consolidated Ordinary Income/Loss (Year-on-Year Comparison) 9 Factors related to power supply and demand, Ordinary Income/Loss and transmission revenue -158.8 Others +198.1 Related to Sales (After deduct renewable energy) Related to Area demand Decrease in other （Unit：Billion Yen） expens

13. Slide 13: Reference: Year-on-Year Comparisons for TEPCO Holdings

    <Reference> Year-on-Year Comparisons for TEPCO Holdings 10 Ordinary Income/Loss （Unit：Billion Yen） Profit structure Profit is dividend income, decommissioning charges profit, management consultation fees, wholesale power sales of hydro and nuclear power, Decrease in management consultation fees,etc

14. Slide 14: Reference: Year-on-Year Comparison for TEPCO Fuel & Power

    <Reference> Year-on-Year Comparison for TEPCO Fuel & Power 11 Ordinary Income/Loss Profit structure （Unit：Billion Yen） Main profit is JERA’s share of profit of entities accounted for using equity method. Mainly JERA’s share of Power-generation business was transferred to profit of entities Domestic

15. Slide 15: Reference: Year-on-Year Comparisons for TEPCO Power Grid

    <Reference> Year-on-Year Comparisons for TEPCO Power Grid 12 Ordinary Income/Loss Profit Structure （Unit：Billion Yen） Operating revenue is mainly transmission revenue, and this is fluctuated by area demand. Expenses is mainly for repairs and depreciation of transmission and distribution facilities.

16. Slide 16: Reference: Year-on-Year Comparisons for TEPCO Energy Partner

    <Reference> Year-on-Year Comparisons for TEPCO Energy Partner 13 Ordinary Income/Loss Profit Structure Operating revenue is mainly electricity sales （Unit：Billion Yen） revenue, and this is fluctuated by electricity Increase in retail sales volume. Expenses are mainly power and wholesale purchasing c

17. Slide 17: Supplemental Material

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

18. Slide 18: Table of Contents

    Table of Contents Financial Results Detailed Information The Current Status of Fukushima Daiichi NPS and Future Initiatives Consolidated Statements of Income 14 Current Situation and Status of Units 1 through 4 23 Financial Impact of the Great East Japan Earthquake 15 Key Points from the 4th Revisio

19. Slide 19: FY2019 2nd Quarter Financial Results Detailed Information

    FY2019 2nd Quarter Financial Results Detailed Information ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

20. Slide 20: Consolidated Statements of Income

    14 Consolidated Statements of Income (Unit: Billion Yen) FY2019 FY2018 Comparison Apr-Sep (A) Apr-Sep (B) (A)-(B) (A)/(B) (%) Operating Revenue 3,175.6 3,055.5 120.0 103.9 Operating Expenses 2,979.0 2,835.9 143.1 105.0 Operating Income / Loss 196.6 219.6 -23.0 89.5 Non-operating Revenue 85.5 27.4 58

21. Slide 21: Financial Impact of the Great East Japan Earthquake

    Financial Impact of the Great East Japan Earthquake 15 (Unit: Billion Yen) FY2019 Cumulative Item FY2010 to FY2018 Apr-Sep Amount ◇Grants–in-aid from Nuclear Damage Compensation and Decommissioning Facilitation Corporation ○Grants-in-aid based on Nuclear Damage Compensation and Decommissioning * * 7

22. Slide 22: Consolidated Balance Sheets

    Consolidated Balance Sheets 16 (Unit: Billion Yen) <Interest-bearing debt outstanding> (Unit: Billion Yen) Sep. 30 Mar. 31 Comparison Sep. 30 Mar. 31 (A)-(B) 2019 (A) 2019 (B) (A)-(B) (A)/(B) (%) 2019 (A) 2019 (B) Bonds 2,136.8 1,956.7 180.0 Total Assets 12,193.2 12,757.4 -564.1 95.6 Long-term Debt

23. Slide 23: Consolidated Statements of Cash Flows

    Consolidated Statements of Cash Flows 17 (Unit: Billion Yen) FY2019 FY2018 Comparison Apr-Sep (A) Apr-Sep (B) (A)-(B) Cash flow from operating activities 86.2 210.6 -124.4 Income / loss before income taxes and minority interests 450.6 126.2 324.3 Depreciation and amortization 209.5 269.7 -60.2 Incre

24. Slide 24: Overview of Consolidated Cash Flows

    Overview of Consolidated Cash Flows - Year on Year Comparison 18 Cash and cash equivalents as of September 30, 2019 increased 148.3 billion yen to 1,147.7 billion yen. - Cash flows from operating activities increased 86.2 billion yen mainly due to income before income taxes and minority interests -

25. Slide 25: Key Factors Affecting Performance

    Key Factors Affecting Performance 19 Key Factors Affecting Performance（Results） FY2019 Apr-Sep FY2018 Apr-Sep ［Reference］ FY2018 Electricity Sales Volume (Billion kWh) 111.8 116.1 230.3 Gas Sales Volume (Million ton) 0.88 0.77 1.77 F o r e i g n E x c h a n g e R a t e (Interbank; yen per dollar) 10

26. Slide 26: Seasonal Breakdown of Electricity Sales Volume and Total Power Generated

    Seasonal Breakdown of Electricity Sales Volume and Total Power Generated 20 Electricity Sales Volume Unit: Billion kWh FY2019 Apr-Jun Jul Aug Sep Jul-Sep Apr-Sep Lighting 15.25 4.68 6.56 5.76 17.00 32.25 Power 36.92 13.56 14.88 14.17 42.61 79.53 Total 52.17 18.24 21.43 19.93 59.61 111.78 Unit: Billi

27. Slide 27: Feed-in Tariff Scheme for Renewable Energy (Purchase Cost Collection Flow)

    Feed-in Tariff Scheme for Renewable Energy (Purchase Cost Collection Flow) 21 （FY2019 Apr.- Sep. ) Avoidable Cost 96.2 billion yen * Renewable Subsidy Purchase Cost Energy 227.6 billion yen 323.9 billion yen Generators Cost Bearing Adjustment (Recorded as (Recorded as Power Organization Other Revenu

28. Slide 28: Schedules for Public Bond Redemption

    Schedules for Public Bond Redemption 22 (Billion Yen) Amount at Maturity (As of Sep. 30, 2019) TEPCO Public Bond TEPCO Power Grid Public Bond (FY) Note: The amount redeemed for Apr.- Sep. of fiscal 2019 totaled 152.5 billion yen. ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved.

29. Slide 29: 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.

30. Slide 30: Current Situation and Status of Units 1 through 4

    Current Situation and Status of Units 1 through 4 23 - 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

31. Slide 31: 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) 24 ●The revised version of the Mid-and-Long-Term Roadmap is available via our website. 1. Basic Approach toward Revision (1) Maintain approach that prioritizes safety and emphasizes risk reduction (2) Optimize overall deco

32. Slide 32: Revised Mid-and-Long-Term Roadmap Milestones

    Revised Mid-and-Long-Term Roadmap Milestones 25 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

33. Slide 33: Contaminated Water Management

    Contaminated Water Management 26 − 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. <Main countermeasures> < Major Progress> Please visit our

34. Slide 34: 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.

35. Slide 35: Main Measures to Secure Safety - 1 [Outline]

    Main Measures to Secure Safety – 1 [Outline] 27  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

36. Slide 36: Main Measures to Secure Safety - 2 [Implementation Status]

    Main Measures to Secure Safety - 2 [Implementation Status] 28 As of October 10, 2019 Item Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7 Ⅰ. Installation of flooding embankment [banks] Completed *2 Completed Ⅱ. Countermeasures against inundation into buildings (1) Installation of tide embankments (

37. Slide 37: Compliance Review under the New Regulatory Requirements

    Compliance Review under the New Regulatory Requirements 29 Latest Review Status ・On September 27, 2013, the applications for permission changes in reactor installation were presented to receive the regulatory standard compliance examination for Units 6 and 7. ・After the application for permission ch

38. Slide 38: Key License/Permit Steps in Enforcement of New Regulatory Requirements

    30 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 R

39. Slide 39: Other Initiatives

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

40. Slide 40: Surge in profits leveraging the value of renewable energy

    Improvement of Profitability Spin off from the renewable energy power generation business-1 31  The renewable energy power generation business of TEPCO will be spun off on April 1, 2020, to facilitate specialization in renewable energy power sources for enhancing the awareness of the TEPCO Group ab

41. Slide 41: Group organization after the spin off of the renewable energy power generation business

    Improvement of Profitability Tokyo Electric Power Group organization after the spin off of the renewable energy power generation business 32  Aim to maximize corporate value while fulfilling the mission of supplying energy stably by optimizing the corporate structure, leveraging TEPCO’s entire valu

42. Slide 42: Efforts towards Nuclear Reform - 1

    Efforts towards Nuclear Reform - 1 33 - 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

43. Slide 43: Efforts towards Nuclear Reform - 2

    Efforts towards Nuclear Reform – 2 34 - Report on Status of the Nuclear Safety Reform Plan With respect to the Nuclear Safety Reform Plan, in addition to measures to make up for the inadequacies in "safety awareness", "interaction capabilities", "technical capabilities" that were the underlying fac

44. Slide 44: Main Efforts to Increase Corporate Value-1

    Main Efforts to Increase Corporate Value-1 35 <TEPCO Holdings> August 7, 2019 Finalized a policy to spin off the renewable generation business on April 1, 2020 Announced in October 1, 2019 that the name of the new company will be TEPCO Renewable Power Co., Inc.. The new company will aim for a develo

45. Slide 45: Main Efforts to Increase Corporate Value-2

    Main Efforts to Increase Corporate Value-2 36 <TEPCO Power Grid> September 3, 2019 Established TEPCO Solutions Advance to concentrate the TEPCO group’s technological expertise and knowledge of operations and secondee work in order to further reduce costs, increase quality and enhance competitiveness

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