Chubu Electric Power Company,incorporated · TSE:9502

Chubu Electric Power Company,incorporated — Q2 FY2016 Earnings Presentation

55 slides from Chubu Electric Power Company,incorporated's earnings presentation, November 2016

1. Slide 1: Investors Meeting 2nd Quarter FY2016

   Investors Meeting 2nd Quarter FY2016 November, 2016

2. Slide 2: Index

   INDEX 01 Outline of Financial Results 03 Management Situation‫؟‬Specific efforts toward for Six-Months ended September 30, 2016 the achievement of ‟What We Aim For” Summary of Financial Results ҩҩҩҩ01 Development of high efficiency Thermal Power Plants ҩҩҩҩ14 Electricity Sales Volume ҩҩҩҩ04 JERA<1>

3. Slide 3: Outline of Financial Results for Six-Months ended September 30, 2016

   01 Outline of Financial Results for Six-Months ended September 30, 2016 Note: The Company’s fiscal year (FY) is from April 1 to March 31 of the following year. FY2016 represents the fiscal year begun in April 1, 2016, and ended in March 31, 2017. 2nd Quarter(2Q) represents six months period ended Se

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

   01 Summary of Financial Results <1> „ Operating revenues (Consolidated and Non-consolidated) decreased for two consecutive years since 2015/2Q,. „ Ordinary income (Consolidated and Non-consolidated) decreased following 2013/2Q, for the first time in 3 years. (We posted a deficit in 2013/2Q.) „ [Cons

5. Slide 5: Summary of Financial Results <2> Consolidated operating revenues

   02 Summary of Financial Results <2> ‫ي‬Consolidated operating revenuesً „ Operating revenues decreased by 174.9 billion yen compared with 2015/2Q, mainly due to a decrease in electricity sales revenues resulting from a decrease of electricity sales volume and a decrease of fuel cost adjustment charg

6. Slide 6: Summary of Financial Results <3> Consolidated ordinary income

   03 Summary of Financial Results <3> ‫ي‬Consolidated ordinary incomeً „ Consolidated ordinary income decreased by 46.6 billion yen compared with 2015/2Q, mainly due to a reduction of accrued income incurred by fuel cost adjustment system and a decrease in fuel cost, affected by the fall of fuel price

7. Slide 7: Electricity Sales Volume

   04 Electricity Sales Volume <Electricity Sales Volume> 凑 Dropped by 1.0% to 60.4TWh, compared with 2015/2Q, mainly due to a rebound of an increase in electricity sales volume in the previous fiscal year accompanied by a decrease in operation of private power generation, in spite of an increase of pr

8. Slide 8: Generated and Received Power

   05 Generated and Received Power ٛGenerated and Received Powerٜ „ Hydro : Due to lower water flow, hydro power output decreased by 0.8TWh. (flow rate for 2016/2Q: 92.3%, 2015/2Q: 114.3%) „ Interchanged, purchased Power : Decreased by 1.0TWh, mainly due to an increase in electricity sales volume to po

9. Slide 9: (Reference) Impact of accrued income by fuel cost adjustment system (Result)

   06 (Reference) Impact of accrued income incurred by fuel cost adjustment system (Result) <2015/2Q> Income 120.0 billion Average Fuel price (basis of fuel cost adjustment charge) <2016/2Q> Income 55.0 billion Fuel procurement price (basis of fuel cost) 2015/4 2015/10 2016/4 2016/10 2017/4 Copyright ©

10. Slide 10: Dividends

    07 Dividends <The Policy on Shareholder Return> „ 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. <Divid

11. Slide 11: Summary of Forecast for FY2016 <1>

    08 Summary of Forecast for FY2016 <1> ‫ي‬Forecastً Revised Forecasts of Financial Results previously announced on July 29, 2016. „ Operating revenues (consolidated and non-consolidated) will decrease mainly due to a decrease in electricity sales volume and fuel cost adjustment charge. „ Ordinary inc

12. Slide 12: Summary of Forecast for FY2016 <2> Principal Figures

    09 Summary of Forecast for FY2016 <2> ْPrincipal Figuresٓ (TWh,%) Current July 29 Change (Electricity sales volume) (A) (B) (A-B) (A-B)/B Low voltage 38.5 38.0 0.5 1.3 High voltage 䞉Extra-high voltage 82.9 84.2 (1.3) (1.5) Total 121.4 122.2 (0.8) (0.7) (Other principal figures) Current July 29 CIF p

13. Slide 13: (Reference) Impact of accrued income by fuel cost adjustment system in FY2016 (Forecast)

    (Reference) Impact of accrued income incurred by fuel cost adjustment system in FY2016 (Forecast) <FY2015> Income 160.0 billion Average Fuel price (basis of fuel cost adjustment charge) <FY2016> Income 20.0 billion Fuel procurement price (basis of fuel cost) 2015/4 2015/10 2016/4 2016/10 2017/4 Copy

14. Slide 14: Management Situation: What We Aim For

    02 Management Situation : ‟What We Aim For” Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

15. Slide 15: Management Vision

    11 Management Vision 凑 We will aim to become a “total energy service corporate group that is one step ahead.” Chubu Electric Power Group : “What We Aim For ರ As a leading company that provides services that exceed expectations to customers ahead of our competitors, we will aim to become a “total ene

16. Slide 16: Mid-term target toward the achievement of What We Aim For

    Mid-term target toward the achievement of ‟What We Aim For” 12 (Initiatives for management issues) Chubu electric 凑 As a leading company that provides services that exceed expectations to Power Group customers ahead of our competitors, we will aim to become a ‟total “What We Aim For ” energy service

17. Slide 17: Launch of the Internal Company System

    13 Launch of the Internal Company System „ We established a ‟Power Generation Company,” ‟Power Network Company,” and a ‟Customer Service & Sales Company” to make swift and flexible responses to changes in the business environment in April 2016. „ We selected Company Presidents, delegated executive a

18. Slide 18: Specific efforts toward the achievement of What We Aim For

    03 Management Situation : Specific efforts toward the achievement of ‟What We Aim For” Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

19. Slide 19: Development of high efficiency Thermal Power Plants

    㻝㻡 14 Development of high efficiency Thermal Power Plants ƂOperation Schedule for High-Efficiency 䛆Outline of development of high efficiency thermal power plants䛇 (FY) Combined-Cycle Power Generation Systemsƃ 2013 2014 2015 2016 2017 2018 䞉䞉䞉䞉䞉䞉 2021 Nishi-Nagoya Taketoyo Thermal Thermal Power Power

20. Slide 20: JERA <1>: Establishment of JERA Co., Inc. and What We Aim For

    15 JERA <1> : Establishment of JERA Co., Inc. and ‟What we Aim For” „ 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 alliance covering the entire energy

21. Slide 21: JERA <2>: Business Area of JERA

    16 JERA <2> : Business Area of JERA „ In the power generation field, we will seek to supply internationally competitive energy and improve corporate value by expanding our business scale, target areas and target countries, as well as strengthening our value chain, through JERA, our joint venture wit

22. Slide 22: Sales strategy for further expansion of electricity and gas market share

    17 Sales strategy for further expansion of electricity and gas market share „ In response to full liberalization of the electricity and gas retail markets, we will continue to deploy nNew services for customers using the companybs electricity,| nBusiness expansion in the Tokyo metropolitan area,| an

23. Slide 23: Hamaoka Nuclear Power Station: Further effort for Safety Enhancement Measures

    Hamaoka Nuclear Power Station : 18 Further effort for Safety Enhancement Measures „ Chubu Electric Power is now under review by the Nuclear Regulation Authority to ensure compliance with the new regulatory standards, and we will make united efforts to swiftly gain confirmation that our reactors are

24. Slide 24: (Reference) Measures for risk reduction

    19 ‫ق‬Reference‫ك‬Efforts to reduce risk „ Minimize risk related to Nuclear Power Generation by taking measures for Safety Enhancements and Emergency Preparedness „ Ceaseless efforts for risk reduction at all times are necessary and this is Operator’s Mission 2SHUDWRUbV ⋇Multiple safety measures $FW

25. Slide 25: Reference Data(1): Financial Results

    04 Reference Data(1): Financial Results Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

26. Slide 26: Consolidated Statements of Income

    20 Consolidated Statements of Income (Rounded down to nearest 100 million yen.) (Billion yen,%) 2016/2Q 2015/2Q Change (A) (B) (A-B) (A-B)/B Operating revenues 1,306.8 1,481.8 (174.9) (11.8) Non-operating revenues 7.7 7.5 0.2 2.7 Ordinary revenues 1,314.6 1,489.3 (174.7) (11.7) Operating expenses 1,

27. Slide 27: Non-consolidated Statements of Income <1>: Operating revenues

    21 Non-consolidated Statements of Income <1>: Operating revenues (Rounded down to nearest 100 million yen.) (Billion yen,%) 2016/2Q 2015/2Q Change 岧Major factors for Change岨 (A) (B) (A-B) (A-B)/B 凑 A decrease in electricity sales Electricity sales revenue 1,025.5 1,225.8 (200.3) (16.3) volume : -11.

28. Slide 28: Non-consolidated Statements of Income <2>: Operating expenses

    22 Non-consolidated Statements of Income <2>: Operating expenses (Rounded down to nearest 100 million yen.) (Billion yen,%) 岧Major factors for Change岨 2016/2Q 2015/2Q Change (A) (B) (A-B) (A-B)/B Salaries and employee benefits 89.1 90.7 (1.5) (1.7) Fuel 264.6 405.7 (141.0) (34.8) 凑 A decrease in fue

29. Slide 29: Non-consolidated Statements of Income <3>: Net income

    23 Non-consolidated Statements of Income <3>: Net income (Rounded down to nearest 100 million yen.) (Billion yen,%) 2016/2Q 2015/2Q Change 岧Major factors for Change岨 (A) (B) (A-B) (A-B)/B Operating income 164.0 220.2 (56.1) (25.5) 凑 Electricity business : -55.8 凑 Incidental business : -0.3 Non-opera

30. Slide 30: Consolidated and Non-consolidated Financial Standing

    24 Consolidated and Non-consolidated Financial Standing (Rounded down to nearest 100 million yen.) (Billion yen) 2016.9 2016.3 Change (A) (B) (A-B) 5,510.1 5,538.9 (28.7) Assets <5,091.8> <5,065.5> <26.2> 3,764.5 3,901.8 (137.2) Liabilities <3,619.1> <3,697.3> <(78.1)> 1,745.6 1,637.1 108.5 Net asse

31. Slide 31: Electric utility operating expenses (Non-Consolidated)

    25 Electric utility operating expenses (Non-Consolidated) Other Depreciation Maintenance Purchased Power Fuel Salaries and employee benefits ‫ق‬Billion yen‫ك‬ 3,000.0 2,709.7 2,638.2 (6%) 2,457.1 (7%) 2,500.0 2,297.3 2,317.3 (7%) 2,136.8 2,037.3 (8%) (9%) 1,982.9 1,871.8 2,000.0 1,884.3 1,861.3 (9%)

32. Slide 32: Cash Flow (Consolidated)

    26 Cash Flow (Consolidated) ‫ق‬%LOOLRQ\HQ‫ك‬ Cash Flows from Operating Activities Cash Flows from Investing Activities FCF 800.0 663.1 605.3 599.4 592.4 600.0 557.6 562.4 539.1 441.5 472.0 449.8 476.8 400.0 358.9 442.2 307.2 393.0 227.6 200.0 265.2 176.8 203.7 267.2 296.7 254.4 215.4 166.5 199.2 194

33. Slide 33: Fund Raising

    27 Fund Raising „ We raised total approximately 1,500 billion yen in long-term funding for 3 years since the shutdown of Hamaoka Nuclear Power Station. „ We raised 130 billion yen in long-term funding in FY2015. „ We plan to raise approximately 400 billion yen in long-term funding in FY2016. 900.0 8

34. Slide 34: Financial Ratio, Credit Ratings

    28 Financial Ratio, Credit Ratings 岧Shareholders’ equity ratio岨 岧Debt-Equity ratio岨 Times 35.0 4.5 Non-Consolidated Consolidated Non-Consolidated Consolidated 4.0 30.0 27.0% (Non-Consolidated) 3.5 25.0 3.0 2.1 Times (Non-Consolidated) 20.0 2.5 28.9% 2.0 15.0 (Consolidated) 1.5 10.0 1.0 1.8 Times 5.0

35. Slide 35: Reference Data (2): Management Information

    05 Reference Data (2) : Management Information Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

36. Slide 36: Schedule of the Electricity System Reform

    29 Schedule of the Electricity System Reform ْSchedule of the Electricity System Reformٓ Schedule for Schedule for implementing the measures Enacted the bill 1st phase: Established on Enacted on Establishing the Organization for Nationwide Coordination of April 1, 2015 November 13, 2013 Transmission

37. Slide 37: Strengthen Mutual Support among Power Companies

    30 Strengthen Mutual Support among Power Companies „ Reinforcement of the FC (Frequency converter) 凑 To reinforce 900MW FC capacity by the end of FY 2020 (from 1,200MW to 2,100 MW) . 凑 Furthermore, to increase up to total 3,000MW by the end of FY2027. present End of FY2020 End of FY2027 1,500MW Shin

38. Slide 38: Composition of Power Sources and Electric Power Output (FY2015)

    31 Composition of Power Sources and Electric Power Output (FY2015) ْComposition of power sourcesٓ ْComposition of Electric Power Outputٓ 0% Less than1% Less than 1% 4% 4% 11% 1% 6% 20% ٫ 12% 9% 48% 60٫ ‫ٹ‬Coal ‫ٹ‬LNG ‫ٹ‬Oil Nuclear Coal LNG ‫ٹ‬Hydro(more than 30MW) ‫ٹ‬Renewable Energy(exclude Hydro(

39. Slide 39: JERA <1>: Initiatives of JERA

    32 JERA <1> : Initiatives of JERA „ JERA will expand business based on investment profits from each business and profits generated from the optimization of the value chain. ¾ We will divide the value chain from the securing of interests of energy resources to procurement, transportation, gas supply

40. Slide 40: JERA <2>: Management Objectives in FY2030

    33 JERA <2> : Management Objectives in FY2030 ƂQuantitative targetƃ (left : FY2016 right : FY2030) (billion yenᲣ Total Assets Sales Net Profit 2,800 4,600 280 4,200 2,200 2,200 120 1,180 100 860 760 600 1,000 60 250 280 400 20 70 200 15 0 5 0 Fuel Overseas Fuel Domestic Power Overseas Total Fuel Dom

41. Slide 41: (Reference) Overseas IPP and Fuel projects of JERA Group

    (Reference) Overseas IPP and Fuel projects of JERA Group 34 (As of the end of October 2016) Canada • Goreway Gas Thermal IPP US U.A.E. • Tenaska Gas Thermal IPP • Umm Al Nar Gas Thermal IWPP Oman Taiwan • Carroll County Gas Thermal IPP • Sur Gas Thermal IPP • Chang Bin, Fong Der, • Freeport LNG and

42. Slide 42: Outlook for Fuel Procurement

    35 Outlook for Fuel Procurement „ 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 Company considers that it needs to procure appr

43. Slide 43: Sales Strategy <1>: New Tariff Menu in Chubu Region

    36 Sales Strategy <1> : New Tariff Menu in Chubu Region „ We will create attractive and competitive services, deliver valuable services worth more than the price (including safe, stable, and affordable energy services) to meet the needs of customers, and also meet customers’ expectations and gain th

44. Slide 44: Sales Strategy <2>: Sales in the Tokyo metropolitan area <New KatEne Plan>

    37 Sales Strategy <2> 䠖 Sales in the Tokyo metropolitan area <New KatEne Plan> „ In the Tokyo metropolitan area, we will aggressively expand our business since the area has a large market size and is an extremely attractive market with high growth and we will aim to achieve 100 thousand contracts at

45. Slide 45: Sales Strategy <3>: Sales in the Tokyo metropolitan area <Partners>

    38 Sales Strategy <3> 䠖 Sales in the Tokyo metropolitan area <Partners> Partners 凑 We are unfolding electricity sales through partner companies which have customers in Tokyo metropolitan. Procurement Sales channels Overview Chubu Electric Sales of New KatEne plan in our website EDION Introduce the N

46. Slide 46: Sales Strategy <4>: Gas sales business

    39 Sales Strategy <4> : Gas sales business „ In 2001, Chubu Electric Power launched a natural gas sales operation geared towards large factories, harnessing its own pipelines. The company has since then been taking incremental steps to strengthen and expand its gas business. „ Toward full liberaliza

47. Slide 47: Hamaoka Nuclear Power Station <1>: Progress of the Nuclear Regulation Authority's review

    Hamaoka Nuclear Power Station <1> : Progress of the Nuclear Regulation 40 Authority’s review to verify compliance with the 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 Aut

48. Slide 48: Hamaoka Nuclear Power Station <2>: Plan of bringing the accident under control (onsite)

    Hamaoka Nuclear Power Station <2>‫؟‬Measures for improving responses to 41 nuclear disaster ~ Plan of bringing the accident under control (onsite) „ We will amplify field response and equipment measures geared towards enhancing safety, and work to prevent any offsite influence. „ To prepare against

49. Slide 49: Hamaoka Nuclear Power Station <3>: Plan of responses to nuclear disaster (offsite)

    Hamaoka Nuclear Power Station <3>:Measures for improving responses to 42 nuclear disaster ~ Plan of responses to nuclear disaster (offsite) „ Chubu Electric Power will continue to prevent accidents. We will also achieve stronger partnership with related organizations and both national and local gove

50. Slide 50: Hamaoka Nuclear Power Station <4>: Activities to take part in dialogue with local residents

    Hamaoka Nuclear Power Station <4> : 43 Activities to take part in dialogue with local residents „ 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

51. Slide 51: Hamaoka Nuclear Power Station <5>: Seawater inflow via damaged tubes in main condenser

    Hamaoka Nuclear Power Station <5> : Seawater inflow via damaged tubes 44 in the main condenser for Hamaoka Reactor No.5 ْFactٓ - 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 st

52. Slide 52: Responses to Global Warming

    45 Responses to Global Warming „ The Company has been making efforts to reduce CO2 emission through comprehensive initiatives including the development of high efficiency thermal power generators and renewable energy to achieve a balanced power source composition. „ We intend to participate in the v

53. Slide 53: Renewable Energy: Our efforts toward Promotion

    46 Renewable Energy : Our efforts toward Promotion (As of the end of September, 2016) (Reference1) Development locations of hydroelectric power station (Reference)Chubu Electric Chubu Electric Conventional hydro Generation with minimum water level Group Parentheses denote the commercial operation st

54. Slide 54: Disclaimer

    DISCLAIMER This presentation contains assumptions and forward-looking statements with respect to the financial conditions, and forecasts of the company, which are based on information currently available. These assumptions involve certain risks and uncertainties, and may cause actual results materia

55. Slide 55: Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

    Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

Chubu Electric Power Company — Q2 FY2016 Earnings Presentation on 6ix