Chubu Electric Power Company,incorporated · TSE:9502

Chubu Electric Power Company,incorporated — Q3 FY2013 Earnings Presentation

51 slides from Chubu Electric Power Company,incorporated's earnings presentation, Jan 31, 2014

1. Slide 1: Presentation Materials for Investors 3rd Quarter FY2013

   P Presentation t ti Materials M t i l for f Investors I t 3rd Quarter Q t FY 2013 January 2014 January, Note: The Company's p y fiscal year y (FY) ( ) is from April p 1 to March 31of the following g yyear. FY2013 represents the fiscal year begun in April 1, 2013, and ending in March 31, 2014. 3rd Qu

2. Slide 2: Table of Contents

   Table of Contents I Outline of Financial Results for Nine Months Ended December 31, 2013 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, Generated and Received Power 䞉䞉䞉䞉䞉䞉䞉䞉䞉䞉 3 Summary of Forecast for FY 2013 䞉䞉䞉䞉䞉䞉䞉䞉䞉䞉 4 Non-co

3. Slide 3: Outline of Financial Results for Nine Months Ended December 31, 2013

   I Outline of Financial Results for Nine Months Period Ended December 31,, 2013 © 2014 Chubu Electric Power Co., Inc. All rights reserved.

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

   Summary of Financial Results <1> 㻥1 - Operating revenues increased for four consecutive years. - Ordinary loss and net loss are recorded for three consecutive years. [Consolidated] (Billion yen,%) 2013/3Q 2012/3Q Change (A) (B) (A-B) (A-B)/B p Operatingg revenues 2,053.7 , 1,960.1 , 93.6 4.8 Operati

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 loss > - Positive factors - A decrease in maintenance expenses +16.3 billion yen - Negative factors - An increase in fuel price - 61.4 billion yen 䛆Factors for change in Consolidated ordinary loss 䛇

6. Slide 6: Electricity Sales Volume, Generated and Received Power

   Electricity Sales Volume, Generated and Received Power 㻥 3 - Electricityy Sales Volume ((TWh %)) 2013/3Q 2012/3Q Change (A) (B) (A-B) (A-B)/B Demand from Electric lighting 24.2 24.5 (0.3) (1.5) customers under d Electric l i power 43 4.3 45 4.5 (0 2) (0.2) (3 1) (3.1) regulation Subtotal 28.5 29.0 (

7. Slide 7: Summary of Forecast for FY 2013

   Summary of Forecast for FY 2013 4 1213 - Consolidated (billion yen) [Principal factors affecting ordinary loss] FY 2013 forecast FY 2013 forecast Change (Current) (Oct.29) Depriciation of the yen - 22.0 (A) (B) (A)-(B) Operating revenues 2,790.0 2,750.0 40.0 A decrease of CIF price + 5.0 Operating l

8. Slide 8: Non-consolidated Forecast for FY 2013 (compared to FY 2012)

   Non-consolidated Forecast for FY 2013 125 (compared to FY 2012) (Billion yen) [Principal factors affecting ordinary loss] FY 2013 FY 2012 Change Forecast Result A decrease in electricity sales volume - 6.0 (with subtraction of fuel cost) (A) (B) (A)-(B) Operating revenues 2,610.0 2,485.6 approx. 124

9. Slide 9: The Policy on Shareholder Return

   The Policy on Shareholder Return 6 After comprehensively considering the difficult business situation, the Company had decided t pay no interim to i t i dividend di id d for f the th fiscal fi l year ending di March M h 2014. 2014 The management sincerely appreciates your understanding in this matte

10. Slide 10: Management Situation

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

11. Slide 11: Safety Measures at Hamaoka Nuclear Power Station: Roadmap for Safety Improvement Works

    Safety Measures at Hamaoka Nuclear Power Station: 7 Roadmap p for Safety y Improvement p Works - The Company implements additional safety measures for Unit 3 and Unit 4 including earthquake countermeasures, tornado countermeasures, fire countermeasures and strengthening the water injection function

12. Slide 12: Outlook of Electricity Supply and Demand for Winter FY2013

    Outlook of Electricity Supply and Demand for Winter FY 2013 8 ŠPeak load (three-day average) We estimate the peak load at 22,670MW, considering several factors including the actual peak load in winter 2012, effects of customers’ energy conservation, weather and economic condition. (We estimate the e

13. Slide 13: Outlook for Fuel Procurement in FY2013

    Outlook for Fuel Procurement in FY2013 9 - 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. p - For

14. Slide 14: Fund Raising

    Fund Raising 10 - Progress of fund raising in FY 2013 -We plan to raise approximately 300 billion yen in long-term funding in FY 2013. -We have raised approximately 190 billion yen by the end of the third quarter (end of December 2013). (Billion yen) others 156.0 bond 20.0 Funding result Fund to be

15. Slide 15: Efforts toward Promotion of Management Efficiency in FY2013

    Efforts toward Promotion of Management Efficiency in FY2013 㻝㻜11 㻙 Efforts toward Promotion of Management Efficiency in FY2013 Ტbillion yenᲣ FY2012 Item FY2013 Contents (Reference) [Capital investment] -To review the timing, scope and method of construction works Investments reduction approx.70.0 -T

16. Slide 16: Outline of Application for Electricity Rate Increases

    Outline of Application for Electricity Rate Increases 㻥12 - On October 29,2013, 29 2013 the Company applied for a 4.95% 4 95% increase in electricity rates under regulation from April 1, 2014 with the Minister of Economy, Trade and Industry (a 8.44% increase in electricity rates under liberalization

17. Slide 17: Reference Data

    Reference Data The New Regulatory Standards<1>: Outline of "the New Regulatory Thermal Power Plants<3>: Actions at Thermal Power Plants etc. against 䞉䞉䞉䞉䞉䞉䞉䞉 13 䞉䞉䞉䞉䞉䞉䞉䞉 27 St d d " Standards" Earthquakes The New Regulatory Standards <2>: Method for Conducting Review Fuel Procurement<1>: LNG Contrac

18. Slide 18: The New Regulatory Standards<1>: Outline of the New Regulatory Standards

    The New Regulatory Standards<1>: 13 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.

19. Slide 19: The New Regulatory Standards<2>: Method for Conducting Review and Inspection

    The New Regulatory Standards <2>: Method for Conducting Review and Inspection After Enforcement of 14 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

20. Slide 20: The New Regulatory Standards<3>: Influence of 40-years regulation

    The New Regulatory Standards<3>: 15 Influence of 40-years y regulation g < Article 43, Paragraph 3, Item 31 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

21. Slide 21: Hamaoka Nuclear Power Station<1>: Additional Safety Measures for Units 3 and 4

    Hamaoka Nuclear 䠘ᡭᣢ䛱䠚 ὾ᒸཎᏊຊⓎ㟁ᡤ㻟㻘㻠 ὾ᒸཎᏊຊⓎ㟁ᡤ Power Station<1>: 㻟㻘㻠ྕᶵ䛾㏣ຍᑐ⟇䛾ᴫせ ྕᶵ䛾㏣ຍᑐ⟇䛾ᴫせ 16 Implementation of Additional Safety Measures for Units 3 and 4 in accordance with New Regulatory Standards 㻙䠄Announced on September 25, 2013䠅 The Company implements additional safety measures including earthquak

22. Slide 22: Hamaoka Nuclear Power Station<2>: Earthquake Countermeasures for Units 3 and 4

    Hamaoka Nuclear Power Station<2>: 17 Overview of Work related to Earthquake Countermeasures for Units 3 and 4 - (Announced on September 25, 2013) The Company has set the seismic ground motion and amplified seismic ground motion for renovation works mentioned below with an eye on important facilities

23. Slide 23: Hamaoka Nuclear Power Station<3>: Seawater inflow at Reactor No.5

    Hamaoka Nuclear Power Station <3>: 18 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 g which seawater flowed to cool steam, was damaged. co

24. Slide 24: Hamaoka Nuclear Power Station<4>: Reinforcement of disaster measures

    Hamaoka Nuclear Power Station <4>: 19 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

25. Slide 25: Electric Power System Reform <1>: Schedule

    Electric Power System Reform <1> : 20 Schedule of the Electric Power System Reform - Ordinary 2013 Diet session The bill for the Act for Partial Revision of the Electricity Business Act was submitted to the Diet session,, but the bill was abandoned. - Extraordinary Diet session in the fall of 2013 T

26. Slide 26: Electric Power System Reform <2>: Smart Meter

    Electric Power System Reform <2> : Smart Meter 21 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

27. Slide 27: Electricity Supply & Demand <1>: Outlook for Winter (February 2014) in Japan

    Electricity Supply & Demand <1>: Outlook of Electricity Supply and Demand for Winter (February 2014) in Japan 22 29 (GW) West Japan 100 10.0% 8.4% Hokkaido 80 7 1% 7.1% 8 0% 8.0% 6.3% 6.0% 60 5.0% 6.0% 40 3.0% 3.0% 4.0% (1.47) 20 ((0.78)) (0.88) (0.47) 2.0% ((0.31)) ((0.36)) 0 0.0% Chubu Kansai Hoku

28. Slide 28: Electricity Supply & Demand <2>: Strengthen Mutual Support among power companies

    Electricity Supply & Demand <2>: Strengthen Mutual 䠍 Support among power companies 23 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

29. Slide 29: Electricity Supply & Demand <3>: Composition of Power Sources and Electric Power Output

    Electricity Supply & Demand <3>: Composition of Power Sources and Electric Power Output 24 - 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 Ƃ36GWƃ 11% 12% 43% 15% 19% Nuclear Coal LNG Oil etc. Hydro Renewable - Composition of E

30. Slide 30: Thermal Power Plants <1>: Development of LNG Thermal Power Plants

    Thermal Power Plants <1>: Development of LNG Thermal 㻝㻡 Power Plants with Enhanced Efficiency 25 - 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: commercia

31. Slide 31: Thermal Power Plants <2>: Reinforcement Plan for LNG Handling Facilities

    Thermal Power Plants <2>: Reinforcement Plan for LNG 㻝㻢 Handlingg Facilities 26 - Supporting stable yet flexible LNG procurement 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.) Mie-Shig

32. Slide 32: Thermal Power Plants <3>: Actions against Earthquakes

    Thermal Power Plants <3>: Actions at Thermal Power 䠍 Plants etc. against Earthquakes 27 ŠThermal power plants To further improve the reliability of all power stations from the standpoint of public safety, the Company will implement measures necessary to ensure We will reinforce the earthquake resist

33. Slide 33: Fuel Procurement<1>: LNG Contracts

    Fuel Procurement<1>: LNG Contracts 28 - Principal LNG Contracts (1,000 t/year) Contract volume Projects j / <delivery> y Period of contract ( (approximate i t figure) fi ) Qatar1 / <Ex-ship> 1997 - 2021 (approx.25 years) 4,000 Australia (extension) / <Ex-ship> 2009 - 2016 (approx.7 years) 500 Austra

34. Slide 34: Fuel Procurement<2>: LNG Ship Charter

    Fuel Procurement<2>: LNG Ship Charter 29 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 2nd Ship 3rd Ship F

35. Slide 35: Fuel Procurement<3>: Advancement of Coal Trading

    30 Fuel Procurement<3>: Advancement of Coal Trading 36 - Coal trading g 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 Tr

36. Slide 36: Fuel Procurement<4>: Acquisition of Interests in Energy Resources

    Fuel Procurement<4> 31 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

37. Slide 37: Fuel Procurement<5>: Results of FY2012

    Fuel Procurement<5> Results of FY2012 32 Russia Others 3.4 2.8 䠄䠂䠅 Russia 5.4 Asia 8.3 Australia LNG Coal 10 6 10.6 Australia (14.279mil.t) 45.2 Indonesea Qatar Ტ10.316mil.tᲣ 52.0 Africa 60.8 .5 11.5 Malaysia 4.1 Gabon 15.3 Crude oil Indonesea Ტ1,062,000klᲣ 44.2 Vietnam 36 4 36.4 Figures in parenthe

38. Slide 38: Renewable Energy <1>: Feed-in Tariff Scheme

    Renewable Energy <1> : Feed-in Tariff Scheme 33 䕔 Governmental efforts toward promotion of Renewable Energy Feed-in Tariff Scheme for Renewable Energy ᲢImplementation from July 1,2012Უ What shall -Electricity generated from Solar PV*, wind power, hydraulic power, geothermal and biomass be purchased

39. Slide 39: Renewable Energy <2>: Our efforts toward Promotion

    Renewable Energy <2> : Our efforts toward Promotion 34 㻝㻡 - Details for promotion of renewable energy Output Detailed plans Operation commences (MW) Mega Solar Iida 1 FY 2010 Wind Solaar Chubu Electric Mega Solar Taketoyo 7.5 FY 2011 Mega Solar Shimizu 8 FY 2014 (Plan) (Phase1) FY 2009 Chubu Electri

40. Slide 40: Growth Business <1>: Sales Strategy

    Growth Business <1>: Sales Strategy 35 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

41. Slide 41: Growth Business <2>: Business Alliance with Tokyo Electric Power (TEPCO)

    Growth Business <2>: 36 6 46 Business Alliance with Tokyo Electric Power (TEPCO) - To develop the electric generation business in the 50Hz area of Japan , on December 6, 2013, the Company, together with TEPCO established "Hitachinaka Generation Co., Inc.", that will operate and maintain a new 600MW

42. Slide 42: Growth Business <3>: Acquisition of Shares of Diamond Power Corporation

    Growth Business <3>: 37 6 45 Acquisition of Shares of Diamond Power Corporation - The Company has acquired shares of Diamond Power Corporation and jointly established a power generation company to promote the electricity sales business in the 50Hz area of Japan (East Japan). - Regarding the project

43. Slide 43: Growth Business <4>: Overseas Business Deployment

    Growth Business <4>: Overseas Business Deployment 38 - Outline of overseas business Investment amount Output based on Chubu's stake* (approximate) At the 3Q FY2013 Cumulative total 100 billion yen Cumulative total 3,260 MW * represents t Chubu's Ch b ' stake t k in i total t t l output t t off whole

44. Slide 44: Financial Results <1>: Fuel cost adjustment system and thermal fuel cost

    Financial Results <1> 39 Fuel cost adjustment system and thermal fuel cost <Diagram of impacts of thermal fuel cost on the Fuel Cost Adjustment System> Price Monthlyy fluctuations in fuel p prices are reflected in unit prices of electricity as prescribed by the Fuel Cost Adjustment System. Fuel pric

45. Slide 45: Financial Results <2>: Retirement Benefit Cost (Non-consolidated)

    Financial Results <2> 40 Retirement Benefit Cost (Non-consolidated) (Non consolidated) 䕔Actuarial Differences (billion yen䠅 Amount of amortization Change Recorded amounts R Recorded d d 䠄 Excess amounts year FY2012(A) FY2013(B) (B)䠉(A) reserved䠅 FY2009 (29.3) (8.5) 8.5 FY2010 12.2 3.4 3.4 FY2011 (3.

46. Slide 46: Financial Results <3>: Cash Flow (Non-consolidated)

    Financial Results <3> Cash Flow (Non-consolidated) 41 (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 0 400.0 426.0 333.8 376.7 270.0 214.4 200.0 237.4 276.8 229.0 146.0

47. Slide 47: Financial Results <4>: Shareholders' Equity Ratio, Debt-Equity Ratio

    Financial Results <4> Shareholders’ Equity Ratio, 42 Debt - Equity Ratio - Shareholders’ equity ratio - Debt - equity ratio 䠄Times䠅 35% 5 Non-Consolidated Non-Consolidated Consolidated Consolidated 30% 4 25% 20% 22.8Ჟ 3 ᲢNon-ConsolidatedᲣ 2.4Times 15% (Non Consolidated) (Non-Consolidated) 24.7Ჟ 2 ᲢC

48. Slide 48: Application for Electricity Rate Increases <1>: Change in cost

    Application for Electricity Rate Increases <1> 䠖 㻥43 A change g in the cost at the time of the electricityy rate revision (billion yen) FuelȷPurchased Power Capital cost Maintenance Salaries and employee benefits other Ტ57%Უ 2,500.0 Ტ43%Უ Ტ27%Უ 2 000 0 2,000.0 Ტ26%Უ Ტ33%Უ Ტ28%Უ 562.0 1,409.5 935.2 5

49. Slide 49: Application for Electricity Rate Increases <2>: Cost for new rate

    Application for Electricity Rate Increases <2> 䠖Cost for new rate 㻥44 - Although we factored into the applied electricity rates a cost reduction of 163.3 163 3 billion yen, yen through the maximum possible efforts in raising management efficiency, we saw the costs used as a basis for the rate revisi

50. Slide 50: Application for Electricity Rate Increases <3>: Efforts toward Promotion of Management Efficiency

    Application for Electricity Rate Increases <3>䠖 㻥45 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 20

51. Slide 51: 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 — Q3 FY2013 Earnings Presentation on 6ix