Chubu Electric Power Company,incorporated · TSE:9502

Chubu Electric Power Company,incorporated — 3Q FY2014 Earnings Presentation

60 slides from Chubu Electric Power Company,incorporated's earnings presentation, February 2015

1. Slide 1: Presentation Materials for Investors 3rd Quarter FY 2014

   P Presentation t ti Materials M t i l for f Investors I t 3rd Quarter Q t FY 2014 February 2015 February, Note: The Company's fiscal year (FY) is from April 1 to March 31of the following year. FY2014 represents the fiscal year begun on April 1, 2014, and ended on March 31, 2015. 3rd Quarter (3Q) rep

2. Slide 2: Table of Contents

   Table of Contents I Outline of Financial Results for Nine-Months Ended December 31, 31 2014 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 Generated and Received Power 䞉䞉䞉䞉䞉䞉䞉䞉䞉䞉 4 Consolidated Financial Standing 䞉䞉䞉䞉

3. Slide 3: Outline of Financial Results for Nine-Months Ended December 31, 2014

   I Outline of Financial Results for Nine-Months Ended December 31,, 2014 Note: We hereby announces a revision of this "Presentation Materials for Investors 3rd Quarter FY 2014" 2014 .We We correct it as follows. follows (August 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 five consecutive years since 3Q of FY 2010. -We recorded an ordinary income and net income. (The first time in four years after 3Q of FY2010) [Consolidated] (Billion yen,%) 2014/3Q 2013/3Q Change (A) (B) (A-B) (A-B)/B Operating re

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

   Summary of Financial Results <2> 㻥 2 < Main factors for year-on-year change in Consolidated ordinary income (loss) > -Positive factors - Influence of electricity rates increase +91.1 billion yen Q Fuel cost adjustment - 2014/3Q j charge g +54.9 billion yen y -Negative factors - An increase in fuel p

6. Slide 6: Electricity Sales Volume

   Electricity Sales Volume 3 <Demand from customers under regulation> -Electric lighting Dropped by 5.3% to 22.9TWh, compared with 2013/3Q, due to a decrease in air conditioning demand by lower temperature in this summer and customer's power saving effect. -Electric Electric power Dropped by 6.7% to 4

7. Slide 7: Generated and Received Power

   Generated and Received Power 4 -Hydro Thanks to higher water flow, hydro power output increased by 0.4TWh, compared with 2013/3Q. (flow rate for 2014/3Q:101.2%, 2013/3Q:94.8%) -Interchanged purchased Power Decreased by 11.6 -Interchanged, 6 TWh TWh, due to an increase in electricity sales volume to

8. Slide 8: Consolidated Financial Standing

   Consolidated Financial Standing 5 -Total Assets Decreased by 167.6 billion yen from the end of FY2013, because of a decrease in noncurrent assets due to progress in depreciation, and also a decrease in current assets due to a reduction in short-term investment. -Net assets Increased by 36.5 billion

9. Slide 9: Summary of Forecast for FY 2014

   Summary of Forecast for FY 2014 6 1213 - Consolidated (billion yen) FY 2014 forecast FY 2014 forecast Change (Current) (October 31) ((A)) ((B)) ((A)-(B) )( ) Operating revenues 3,120.0 3,120.0 䠉 Operating income 85.0 75.0 10.0 Ordinary income 40.0 30.0 10.0 Net income 28 0 28.0 38 0 38.0 (10 0) (10.

10. Slide 10: Non-consolidated Forecast for FY 2014 (compared to FY 2013)

    Non-consolidated Forecast for FY 2014 127 (compared to FY 2013) (Billion yen) FY 2014 FY 2013 Change Forecast Result (A) (B) (A)-(B) Operating 2,900.0 2,638.2 approx. 262.0 revenues Operating 2,830.0 2,715.4 approx. 115.0 expenses Operating 70.0 -77.2 approx. 147.0 income ((loss)) Ordinay 30.0 -104.

11. Slide 11: The Policy on Shareholder Return

    The Policy on Shareholder Return 8 - Dividend Forecast During FY 2014, 2014 we implemented an electricity rates increase while exerting our company-wide company wide efforts to enhance management efficiency. As a result, we have reached a certain level of likelihood of achieving profitability. Conse

12. Slide 12: Management Situation

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

13. Slide 13: TEPCO and Chubu Electric to form Comprehensive Alliance <1>

    TEPCO and Chubu Electric to form Comprehensive Alliance <1>: Significance of the participation and MOU 9 Significance of the participation -Chubu Electric determined to participate in bidding for partnership with TEPCO for Comprehensive Alli Alliance, based b d on theth understanding d t di hhatt th

14. Slide 14: TEPCO and Chubu Electric to form Comprehensive Alliance <2>

    TEPCO and Chubu Electric to form Comprehensive Alliance <2>: Scope and Effect 10 Fuel is not only LNG but also includes Coal and Oil ᲶScope of AllianceᲸ Fuell F Receipt R i t and d Thermall power Th TEPCO Upstream fuel procurement storage generation Transportation investment 25 million tons 4 termin

15. Slide 15: Safety Measures at Hamaoka Nuclear Power Station

    Safety Measures at Hamaoka Nuclear Power Station : Partial Review of the Construction Works for Safety Improvement 11 㻙With respect to the safety improvement measures for Unit 4 of the Hamaoka Nuclear Power Station, we will implement a partial review of the construction works based on the details of

16. Slide 16: Electricity Supply & Demand: Outlook for Winter FY 2014

    Electricity Supply & Demand: 12 Outlook for Winter FY 2014 ŠPeak load (three-day average) We estimate the peak load at 22,950MW, considering several factors including the actual peak load in winter 2013, effects of customers’ energy conservation, weather and economic condition. (We estimate the effe

17. Slide 17: Outlook for Fuel Procurement in FY2014

    Outlook for Fuel Procurement in FY2014 13 - 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 nuclear plants. -The C

18. Slide 18: Fund Raising

    Fund Raising 14 - Progress of fund raising in FY2014 -We plan to raise approximately 150 billion yen in long-term funding in FY 2014. -We have raised approximately 90 billion yen by the end of the third quarter (end of December 2014). (Billion yen) others 80.0 Fund to be raised Funding result approx

19. Slide 19: Reference Data

    Reference Data The New Regulatory Standards<1>: Outline of "the 䞉䞉䞉䞉䞉䞉䞉䞉 Electric Power System Reform <1>: Schedule of the Growth Business <1>: Sales Strategy 䞉䞉䞉䞉䞉䞉䞉䞉 43 15 䞉䞉䞉䞉䞉䞉䞉䞉 26 New Regulatory Standards" Electric Power System Reform Growth Business <2>: Promotion of the electricity The New R

20. Slide 20: The New Regulatory Standards<1>: Outline

    The New Regulatory Standards<1>: 15 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.

21. Slide 21: The New Regulatory Standards <2>: Review and Inspection Method

    The New Regulatory Standards <2>: Method for Conducting Review and Inspection After Enforcement of 16 the New Regulatory Standards (Image) - Application for compatibility check to New Regulatory Requirements, the effectiveness of the both hardware and software, software such as the design of facilit

22. Slide 22: The New Regulatory Standards<3>: Influence of 40-years regulation

    The New Regulatory Standards<3>: 17 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 operation period of a power reactor shall be 40 years from the start of operation. When app

23. Slide 23: Hamaoka Nuclear Power Station <1>: Submission of Applications

    Hamaoka Nuclear Power Station <1>: 18 Submission of Applications pp for Review of Compliance p with New Regulatory g y Standards - On February 14, 2014 , the company has submitted application document for change in reactor establishment permission, an application document for approval of constructio

24. Slide 24: Hamaoka Nuclear Power Station <2>: Current Situation of Review

    Hamaoka Nuclear Power Station <2>: 19 Current Situation about Review of Compliance with New Regulatory Standards -New regulatory standards for the regulation of nuclear facilities (New Regulatory Standards) were enacted on July 8, 2013. - On February 14, 2014, the Company applied to the Nuclear Regu

25. Slide 25: Hamaoka Nuclear Power Station <3>: Earthquake countermeasures

    Hamaoka Nuclear Power Station <3>: 20 =Design basis measures] Earthquake countermeasures 㻙 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 <4>: Tsunami countermeasures

    Hamaoka Nuclear Power Station <4>: 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<5>: Roadmap for Safety Improvement Works

    Hamaoka Nuclear Power Station<5>: 22 Roadmap p for Safety y Improvement p Works FY 2014 FY 2015 FY 2016 FY 2017 Tsunami countermeasures Reflecting designs for additional safety measures Severe accident countermeasures Reflecting designs for additional safety measures Unit 4 Earthquake countermeasure

28. Slide 28: Hamaoka Nuclear Power Station <6>: Seawater inflow at Reactor No.5

    Hamaoka Nuclear Power Station <6>: 23 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

29. Slide 29: Hamaoka Nuclear Power Station <7>: Reinforcement of disaster measures

    Hamaoka Nuclear Power Station <7>: 24 18 Reinforcement of disaster measures of Hamaoka Nuclear Power Station - Review and Strengthening of Nuclear Disaster Prevention System -In addition to construction of tsunami protection wall and other tangible measures, we will strengthen its disaster preventio

30. Slide 30: Hamaoka Nuclear Power Station <8>: Public understanding and voluntary safety measures

    Hamaoka Nuclear Power Station <8>: 25 Activities to gain public understanding and Enhancement of voluntary safety measures 㻙 On the Hamaoka Nuclear Power Station, we have been steadily promoting further safety measures includingg facilities measures and disaster pprevention measures together g with

31. Slide 31: Electric Power System Reform <1>: Schedule

    Electric Power System Reform <1> : 26 Schedule of the Electric Power System Reform - Schedule of the Electric Power System Reform schedule for implementing the schedule for enacted/submitting the bill measures 1st phase: Establishing the Organization for Nationwide In about 2015 Enacted on November

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

    Electric Power System Reform <2> : Smart Meter 27 㻝㻡 - The introduction schedule of smart meters - 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 than 500kW) customers, we b

33. Slide 33: Electricity Supply & Demand <1>: Winter 2015 Outlook in Japan

    Electricity Supply & Demand <1>: Outlook of Electricity Supply and Demand for Winter (February 2015) in Japan 28 29 (GW) West Japan 100 10.0% 8.3% Hokkaido 80 7 2% 7.2% 8 0% 8.0% 5.7% 5.5% 60 4.8% 6.0% 40 3.0% 3.0% 4.0% (1.37) 20 (0.77) (0.87) (0.46) 2 0% 2.0% (0.38) (0.27) 0 0.0% Chubu Kansai Hokur

34. Slide 34: Electricity Supply & Demand <2>: Mutual Support among power companies

    Electricity Supply & Demand <2>: Strengthen Mutual 䠍 Support among power companies 29 䕔 Reinforcement of the FC (Frequency Converter) (Outline of the master plan interim report regarding strengthening inter-regional inter regional gridconnection, gridconnection etc. etc ) - To reinforce 900MW FC cap

35. Slide 35: Electricity Supply & Demand <3>: Composition of Power Sources

    Electricity Supply & Demand <3>: Composition of Power Sources and Electric Power Output 30 - Composition of Power Sources (GW) 0 5 10 15 20 25 30 35 40 FY2010 12% 13% 41% 15% 19% FY2011 12% 13% 41% 15% 19% FY2012 11% 12% 43% 15% 19% FY2013 Ƃ37GWƃ 11% 13% 45% 12% 19% N l Nuclear C l Coal LNG Oil etc.

36. Slide 36: Electricity Supply & Demand <4>: Trend of Large-lot demand

    Electricity Supply & Demand <4>: 㻥 31 Trend of Large Large-lot lot demand 㻙 Trend of Large-lot demand (Large-lot demand by industry; year-on-year change 䠅 FY2014 <3Q> year-on-year change Ɔ%Ƈ Electricity sales component rate volume Ɔ%Ƈ April May June July August September October November December ƆG

37. Slide 37: Thermal Power Plants <1>: Development and Bidding

    Thermal Power Plants <1>: Development of Thermal Power Plants 㻝㻡 and Thermal Plant Bidding 32 - Outline of development of LNG thermal power plants with enhanced efficiency 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (FY) 䕰Mar.-07: construction started 䕰Jul.-12: commercial o

38. Slide 38: Thermal Power Plants <2>: Reinforcement Plan for LNG Handling Facilities

    Thermal Power Plants <2>: Reinforcement Plan for LNG 㻝㻢 Handlingg Facilities 33 - 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Installati

39. Slide 39: Fuel Procurement<1>: LNG Contracts

    Fuel Procurement<1>: LNG Contracts 34 - Principal LNG Contracts (1,000 t/year) Contract volume Projects / <delivery> Period of contract (approximate figure) Qata / <Ex-ship> Qatar1 s p 1997 997 - 2021 0 (approx.25 (app o . 5 years) yea s) 4,000 ,000 Australia (extension) / <Ex-ship> 2009 - 2016 (app

40. Slide 40: Fuel Procurement<2>: LNG Ship Charter

    Fuel Procurement<2>: LNG Ship Charter 35 39 ŠThree Contracts of LNG Ship Charter - Based on the FOB contract ( Gorgon, Ichthys, Wheatstone) , we concluded three contracts of LNG ship charter to enhance efficiency and flexibility of procurement by managing freight charge. 1st Ship (Seishu-maru) 2nd S

41. Slide 41: Fuel Procurement<3>: Advancement of Coal Trading

    36 Fuel Procurement<3>: 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

42. Slide 42: Fuel Procurement<4>: Acquisition of Interests in Energy Resources

    Fuel Procurement<4> 37 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

43. Slide 43: Fuel Procurement<5>: Results of FY2013

    Fuel Procurement<5> Results of FY2013 38 Others 3.0 Russia Canada 1.2 R ssia Russia 37 3.7 1.7 䠄䠂䠅 Australia 8.8 Africa 9.6 LNG Coal Australia (13 686 il ) (13.686mil.t) Indonesia Ტ10 31 i Უ Ტ10.531mil.tᲣ 49.2 Qatar 48.0 Asia 15.4 59.5 Gabon 4.0 Crude Vietnam Vi t 24.2 oil Indonesia Ტ380,000klᲣ 71.8

44. Slide 44: Renewable Energy <1>: Feed-in Tariff Scheme

    Renewable Energy <1>䠖Feed-in Tariff Scheme 39 㻙 Basic framework of feed-in tariff scheme for renewable energy Operators of renewable energy power generation plants(FY 2013) Class FormȷCapacity Unit price Term Purchase Electric Supply Power Solar no less than 10kW 37.80yen for 20 years Wind less than

45. Slide 45: Renewable Energy <2>: Our efforts toward Promotion

    Renewable Energy <2> : Our efforts toward Promotion 40 㻝㻡 - Details for promotion of renewable energy Output Detailed plans Operation commences (MW) Mega Solar Iida 1 FY 2010 Wind Solar Chubu Electric Mega g Solar Taketoyo y 7.5 FY 2011 S Mega Solar Shimizu 8 FY 2014 (Phase1) FY 2009 Chubu Electric

46. Slide 46: Renewable Energy <3>: Status of Renewable Energy Initiatives

    41 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) FY2009 FY2010 FY2011 FY2012 FY2013 2,500 The number of contracts 92,000 128,000 178,000 237,

47. Slide 47: Renewable Energy <4>: Grid connection applications

    Renewable Energy <4> 42 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 rene

48. Slide 48: Growth Business <1>: Sales Strategy

    Growth Business <1>: Sales Strategy 43 㻢 - Offers Off off energy solution l ti service i To respond to diversified and sophisticated customers’ needs, Chubu Electric and its group companies combine forces to offer solution service using advantages of both electricity and gas. - Offers of gas, LNG an

49. Slide 49: Growth Business <2>: Acquisition of Shares of Diamond Power Corporation

    Growth Business <2>: Promotion of the electricity sales business in the 50Hz area of Japan 6 45 (Acquisition of Shares of Diamond Power Corporation) 44 - The Company has acquired shares of Diamond Power Corporation and jointly established a power generation company to promote the electricity sales b

50. Slide 50: Growth Business <3>: Outline of Hitachinaka Generation Co., Inc.

    Growth Business <3>: Promotion of the electricity sales business in the 50Hz area of Japan 6 46 (Outline of Hitachinaka Generation Co., Inc.) 45 - To develop the electric generation business in the 50Hz area of Japan , on December 6, 2013, the Company, together with TEPCO established "Hitachinaka Ge

51. Slide 51: Growth Business <4>: Overseas Business Deployment

    Growth Business <4>: Overseas Business Deployment 46 - Outline of overseas business Investment amount Output based on Chubu's stake* (approximate) At the 3Q FY2014 Cumulative total 100 billion yen Cumulative total 3,260 MW * represents Chubu's stake in total output of whole projects it participates

52. Slide 52: Financial Results <1>: Fuel cost adjustment system and thermal fuel cost

    Financial Results <1> 47 Fuel cost adjustment system and thermal fuel cost <Diagram of impact of thermal fuel cost on the Fuel Cost Adjustment System> Ჶ້щ༓૰ᝲƷ༓૰ᝲᛦૢСࡇƴ‫ݣ‬Ƣǔࢨ᪪ಒဦ‫׋‬Ჸ Thermal fuel cost factored into the current ʻ‫ׅ‬ો‫ܭ‬ƷጢᡂLj້щ༓૰ᝲ revision Standard fuel price Fuel costs and fuel consumpti

53. Slide 53: Financial Results <3>: Retirement Benefit Cost (Non-consolidated)

    Financial Results <3> 48 Retirement Benefit Cost (Non-consolidated) (Non consolidated) 䕔Salaries and employee benefits (billion yenᲣ Year FY2013 (A) FY2012 (B) (A-B) M ajor factors for change Salaries and employee benefits 181.0 182.5 (1.4) Restated: Retirement benefit cost 10.2 2.9 7.3 Actuarial di

54. Slide 54: Financial Results <4>: Cash Flow (Non-consolidated)

    Financial Results <4> Cash Flow (Non-consolidated) 49 (billion yen) 800.0 փಅCF Cash Flows from Operating Activities 608 9 608.9 ৲᝻CF Cash Flows from Investing Activities 600.0 563.4 548.6 556.9 523.6 FCF 522.2 402.6 424.1 420.1 400.0 426.0 333.8 376.7 270.0 214.4 200.0 276.8 181.3 229.0 237.4 146.0

55. Slide 55: Financial Results <5>: Financial Ratios, Credit Ratings

    Financial Results <5> Financial Ratios, Credit Ratings 50 - Shareholders’ equity ratio - Debt - equity ratio 䠄Times䠅 35% 5 Non-Consolidated Non-Consolidated Consolidated Consolidated 30% 4 24.2Ჟ 25% ᲢConsolidatedᲣ 20% 3 22.0Ჟ Ჟ 2.7Times 2 7Times ᲢNon-ConsolidatedᲣ (Non-Consolidated) 15% 2 2.2Times 1

56. Slide 56: Electricity Rates Increase <1>: Summary of Approval

    Electricity Rates Increase <1> 䠖 㻥51 Summary of Electricity Rates Increase Approval 㻙 On October 29, 2013, the Company applied to the Minister of Economy, Trade and Industry for permission to increase electricity rates for customers in the regulated sector by 4.95%. For deregulated sector, the compa

57. Slide 57: Electricity Rates Increase <2>: Change in cost at rate revision

    Electricity Rates Increase <2> 䠖 㻥52 A change g in the cost at the time of the electricity y rate revision (billion yen) FuelȷPurchased Power Capital cost Maintenance Salaries and employee benefits other 2 500 0 2,500.0 Ტ57%Უ Ტ43%Უ Ტ27%Უ 2 000 0 2,000.0 Ტ26%Უ Ტ28%Უ Ტ33%Უ 562.0 1,393.8 935.2 503.4 52

58. Slide 58: Electricity Rates Increase <3>: Principal figures for cost calculation

    Electricity Rates Increase <3> 䠖 Summary of Principal figures for 㻥 the cost calculation, Generated and Received Power 53 㻙 The Company forecasts electricity sales volume by taking into account customers' power saving efforts over the past year (year-on-year difference: -9.5TWh) 㻙 Regarding generate

59. Slide 59: Electricity Rates Increase <4>: Efforts toward Management Efficiency

    Electricity Rates Increase <4>䠖 㻥54 Efforts toward Promotion of Management Efficiency - The Company has been implementing extensive cost reduction efforts to raise management efficiency since the suspension of all reactors at the Hamaoka Nuclear Power Station in May 2011. In April 2013, the Company

60. Slide 60: 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 — 3Q FY2014 Earnings Presentation on 6ix