The Chugoku Electric Power Company, Incorporated and Consolidated Subsidiaries
Year ended March 31, 2026 with Independent Auditor's Report
The Chugoku Electric Power Company, Incorporated and Consolidated Subsidiaries
Consolidated Financial Statements Year ended March 31, 2026
ContentsConsolidated Balance Sheets 1
Consolidated Statements of Income 3
Consolidated Statements of Comprehensive Income 4
Consolidated Statements of Changes in Equity 5
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 9
Independent Auditor's Report 40
Consolidated Financial Statements and Primary Notes
Consolidated Balance Sheet
(Millions of yen)
As of March 31, 2026 As of March 31, 2025
Assets
Non-current assets 3,790,640 3,665,124
Electric utility plant and equipment (Note 7 and 8) 1,933,504 1,942,913
Hydroelectric power production facilities 118,566 115,044
Thermal power production facilities 301,775 329,555
Nuclear power production facilities 471,625 498,087
Transmission facilities 297,187 293,479
Transformation facilities 179,797 173,387
Distribution facilities 425,917 415,273
General facilities 97,723 84,811
Inactive facilities 8,733 9,709
Other electric utility plant and equipment 32,179 23,563
Other non-current assets (Note 7, 8 and 11) 122,248 121,380
Construction in progress 1,087,923 955,043
Construction and retirement in progress 1,049,603 920,958
Special account related to reprocessing of 38,320 34,085 spent nuclear fuel
Nuclear fuel 155,343 151,398
Loaded nuclear fuel and nuclear fuel in 155,343 151,398 processing
Investments and other assets 491,619 494,388
Long-term investments 119,182 128,677
Long-term investments in subsidiaries and 238,650 225,685 associates (Note 9 and 11)
Retirement benefit asset 76,633 69,802
Deferred tax assets 47,536 61,047
Other 9,837 9,446
Allowance for doubtful accounts (220) (271)
Current assets 829,860 695,835
Cash and deposits (Note 11) 423,362 286,731
Notes and accounts receivable - trade, and contract 108,460 129,650 assets (Note 12)
Inventories 90,593 85,892
Other (Note 11) 207,782 193,997
Allowance for doubtful accounts (338) (435)
Total 4,620,500 4,360,959
-1-(Millions of yen)
As of March 31, 2026 As of March 31, 2025
Liabilities and net assets
Non-current liabilities 3,192,671 3,019,862
Bonds payable (Note 10 and 11) 1,216,690 1,241,690
Long-term borrowings (Note 10 and 11) 1,819,855 1,613,729 Contribution payable for nuclear reactor
decommissioning 87,311 90,544
Retirement benefit liability 45,867 50,270
Other (Note 10) 22,947 23,628
Current liabilities 652,536 635,231
Current portion of non-current liabilities
(Note 10 and 11) 260,913 222,287
Short-term borrowings 7,000 76,295
Accounts payable - trade 107,045 117,709
Accrued taxes 18,029 14,505
Other (Note 10 and 11) 259,548 204,434
Total liabilities 3,845,208 3,655,094
Shareholders' equity 693,186 636,153
Share capital 197,024 197,024
Capital surplus 28,548 28,537
Retained earnings 507,192 450,180
Treasury shares (39,578) (39,588)
Accumulated other comprehensive income 84,056 71,382 Valuation difference on available-for-sale
securities 14,950 11,882
Deferred gains or losses on hedges 9,011 7,004
Foreign currency translation adjustment 45,706 43,072
Remeasurements of defined benefit plans 14,388 9,422
Non-controlling interests (1,950) (1,670)
Total net assets 775,292 705,865
Total 4,620,500 4,360,959
-2-Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
(Millions of yen)
For the fiscal year For the fiscal year
ended March 31, 2026 ended March 31, 2025
Operating revenue (Note 14) 1,442,302 1,529,218
Electric utility operating revenue 1,294,874 1,358,528
Other business operating revenue 147,427 170,689
Operating expenses (Note 15) 1,352,086 1,400,069
Electric utility operating expenses 1,216,364 1,248,328
Other business operating expenses 135,721 151,741
Operating profit 90,216 129,148
Non-operating income 36,429 29,670
Dividend income 1,852 1,498
Interest income 1,872 1,046
Share of profit of entities accounted for using equity 7,859 8,304 method
Gain on derivatives 8,513 6,667
Gain on valuation of derivatives 7,290 -
Other 9,040 12,154
Non-operating expenses 46,420 30,275
Interest expenses 25,797 14,480
Loss on derivatives 9,799 3,538
Loss on valuation of derivatives - 3,032
Other 10,823 9,223
Total ordinary revenue 1,478,732 1,558,888
Total ordinary expenses 1,398,506 1,430,344
Ordinary profit 80,225 128,543
Extraordinary income 10,529 12,193
Gain on sale of nuclear fuel 10,529 12,193
Extraordinary losses - 13,992
Loss on sale of non-current assets (Note 16) - 7,021
Impairment losses (Note 16) - 6,970
Profit before income taxes 90,755 126,745
Income taxes - current 12,200 13,961
Income taxes - deferred 10,239 14,637
Total income taxes 22,440 28,598
Profit 68,315 98,146
Loss attributable to non-controlling interests (223) (328)
Profit attributable to owners of parent 68,539 98,474
-3-Consolidated Statement of Comprehensive Income
(Millions of yen)
For the fiscal year For the fiscal year
ended March 31, 2026 ended March 31, 2025
Profit 68,315 98,146
Other comprehensive income
Valuation difference on available-for-sale securities 479 (1,156)
Deferred gains or losses on hedges 3,573 (216)
Foreign currency translation adjustment (349) 7,684
Remeasurements of defined benefit plans, net of tax 3,068 112
Share of other comprehensive income of entities
accounted for using equity method 5,916 10,745
Total other comprehensive income 12,688 17,169
Comprehensive income 81,003 115,316 Comprehensive income attributable to
Comprehensive income attributable to owners of 81,212 115,876
parent
Comprehensive income attributable to non-controlling (208) (560) interests
-4-Consolidated Statement of Changes in Equity
For the fiscal year ended March 31, 2026
(Millions of yen)
Shareholders' equity
Total Share capital Capital Retained Treasury shareholders'
surplus earnings shares equity
Balance at beginning
of period 197,024 28,537 450,180 (39,588) 636,153
Changes during period
Dividends of
surplus (11,526) (11,526)
Profit attributable to 68,539 68,539 owners of parent
Purchase of (8) (8)
treasury shares
Disposal of treasury
shares (0) 27 27
Other 11 (9) 2
Net changes in items other than shareholders' equity
Total changes - 11 57,012 10 57,033 during period
Balance at end of 197,024 28,548 507,192 (39,578) 693,186
period
Accumulated other comprehensive income
Total Non-
Valuation Deferred gains Foreign Remeasureme accumulated controlling Total net
difference on or losses on currency nts of defined other interests assets
available-for- hedges translation benefit plans comprehensiv sale securities adjustment e income
Balance at beginning 11,882 7,004 43,072 9,422 71,382 (1,670) 705,865
of period
Changes during period
Dividends of (11,526)
surplus
Profit attributable to
owners of parent 68,539
Purchase of (8)
treasury shares
Disposal of treasury 27
shares
Other 2
Net changes in
items other than 3,067 2,006 2,634 4,965 12,673 (280) 12,393
shareholders' equity
Total changes 3,067 2,006 2,634 4,965 12,673 (280) 69,427
during period
Balance at end of 14,950 9,011 45,706 14,388 84,056 (1,950) 775,292
period
-5-For the fiscal year ended March 31, 2025
(Millions of yen)
Shareholders' equity
Total Share capital Capital Retained Treasury shareholders'
surplus earnings shares equity
Balance at beginning
of period 197,024 28,534 364,237 (38,902) 550,893
Changes during period
Dividends of
surplus (12,608) (12,608)
Profit attributable to 98,474 98,474 owners of parent
Purchase of (686) (686)
treasury shares
Disposal of treasury (0) 0 0
shares
Other 3 76 (0) 78
Net changes in items other than shareholders' equity
Total changes - 3 85,942 (686) 85,259 during period
Balance at end of
period 197,024 28,537 450,180 (39,588) 636,153
Accumulated other comprehensive income
Valuation Foreign Total Non- Total net difference on Deferred gains currency Remeasureme accumulated controlling assets available-for- or losses on translation nts of defined other interests
sale securities hedges adjustment benefit plans comprehensiv
e income
Balance at beginning
of period 13,355 5,747 26,888 7,988 53,980 8,527 613,401
Changes during period
Dividends of
surplus (12,608)
Profit attributable to 98,474
owners of parent
Purchase of (686)
treasury shares
Disposal of treasury 0
shares
Other 78
Net changes in
items other than (1,472) 1,257 16,183 1,433 17,401 (10,197) 7,204
shareholders' equity
Total changes (1,472) 1,257 16,183 1,433 17,401 (10,197) 92,463
during period
Balance at end of 11,882 7,004 43,072 9,422 71,382 (1,670) 705,865
period
-6-Consolidated Statement of Cash Flows
(Millions of yen)
For the fiscal year For the fiscal year
ended March 31, 2026 ended March 31, 2025
Cash flows from operating activities
Profit before income taxes 90,755 126,745
Depreciation 139,139 114,837
Amortization of nuclear fuel 4,012 1,314 Share of loss (profit) of entities accounted for using
equity method (7,859) (8,304)
Loss on retirement of non-current assets 4,460 5,490
Loss (gain) on valuation of derivatives (7,290) 3,032
Increase (decrease) in retirement benefit liability (2,220) (1,921)
Decrease (increase) in retirement benefit asset (4,610) (3,158)
Interest and dividend income (3,725) (2,544)
Interest expenses 25,797 14,480
Gain on sale of nuclear fuel (10,529) (12,193)
Increase (decrease) in contribution payable for nuclear
reactor decommissioning (3,233) (3,233)
Decrease (increase) in accounts receivable - trade, and 20,506 (16,511) contract assets
Decrease (increase) in inventories (3,225) (13,143)
Increase (decrease) in trade payables (10,788) 16,974
Other, net 29,156 14,510
Subtotal 260,344 236,375
Interest and dividends received 6,929 5,438
Interest paid (25,404) (13,445)
Income taxes refund (paid) (4,579) (42,345)
Net cash provided by (used in) operating activities 237,289 186,022 Cash flows from investing activities
Purchase of non-current assets (267,145) (378,352)
Proceeds from sale of non-current assets 23,450 24,006
Investments and loan advances (6,302) (15,003)
Proceeds from divestments and collection of loans
receivable 6,776 11,383
Proceeds from sale of shares of subsidiaries resulting - 2,705 in change in scope of consolidation
Other, net 6,974 (3,580)
Net cash provided by (used in) investing activities (236,245) (358,839)
-7-(Millions of yen)
For the fiscal year For the fiscal year
ended March 31, 2026 ended March 31, 2025
Cash flows from financing activities
Proceeds from issuance of bonds 39,882 260,660
Redemption of bonds (84,600) (163,185)
Proceeds from long-term borrowings 398,800 196,400
Repayments of long-term borrowings (134,710) (122,213)
Proceeds from short-term borrowings 194,460 173,670
Repayments of short-term borrowings (262,940) (167,355)
Dividends paid (11,530) (12,612)
Dividends paid to non-controlling interests (71) (121)
Other, net (3,901) (4,061)
Net cash provided by (used in) financing activities 135,389 161,182
Effect of exchange rate change on cash and cash 197 600
equivalents
Net increase (decrease) in cash and cash equivalents 136,631 (11,033)
Cash and cash equivalents at beginning of period 286,672 298,465 Decrease in cash and cash equivalents resulting from
exclusion of subsidiaries from consolidation - (759)
Cash and cash equivalents at end of period (Note 18) 423,303 286,672
-8-Notes to Consolidated Financial Statements
The Chugoku Electric Power Co., Inc. and Consolidated Subsidiaries
1. Basis of Presenting Consolidated Financial Statements
The accompanying Consolidated Financial Statements of The Chugoku Electric Power Co., Inc. ("the Company") and its consolidated subsidiaries (together with the Company, "the Companies") have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its related accounting regulations and the Electricity Business Act and in conformity with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects as to application and disclosure requirements from International Financial Reporting Standards.
The accounts of the Company's overseas subsidiaries are based on their accounting records maintained in conformity with generally accepted accounting principles prevailing in the respective countries of domicile. The accompanying Consolidated Financial Statements have been translated into English from the Consolidated Financial Statements of the Company prepared in accordance with Japanese GAAP and filed with the Director-General of the Kanto Local Finance Bureau as required by the Japanese Financial Instruments and Exchange Law. Certain supplementary information included in the statutory Japanese language Consolidated Financial Statements, but not required for fair presentation, is not presented in the accompanying Consolidated Financial Statements.
Numerical values less than one million yen are rounded off, excluding per share information. As a result, total values and numerical values obtained by summing each item will not necessarily match.
2. Significant Accounting Policies
The following is a summary of the significant accounting policies used in the preparation of the Consolidated Financial Statements.
Consolidation
The accompanying Consolidated Financial Statements include the accounts of the Company and significant companies over which the Company has power of control through majority voting rights or existence of certain other conditions evidencing control by the Company. In the elimination of investments in subsidiaries, all the assets and liabilities of a subsidiary, not only to the extent of the Company's share but also including the non-controlling interest share, are evaluated based on fair value at the time the Company acquired control of the subsidiary.
Investments in non-consolidated subsidiaries and affiliated companies over which the Company has the ability to exercise significant influence over the operating and financial policies of the investees are accounted for using the equity method.
For the year ended March 31, 2026, 20 subsidiaries (20 in 2025) were consolidated and8 (6 in 2025) subsidiaries were excluded from consolidation due to their immateriality for the consolidated total assets, sales, profit, and retained earnings, etc., in the Consolidated Financial Statements.
For the year ended March 31, 2026, 6 non-consolidated subsidiaries (5 in 2025) and 13 affiliated companies (13 in 2025) were accounted for by the equity method.
For the year ended March 31, 2026, 16 affiliated companies and 2 subsidiaries (16 affiliated companies and 1 subsidiary in 2025) were stated at cost without applying the equity method of accounting. Even if the equity method had been applied to these investments, the amounts of profit and retained earnings, etc., would individually have had only a slight effect and together would have had no material impact on the Consolidated Financial
Statements.
-9-The consolidated subsidiaries whose accounting closing date differs from the consolidated closing date are
Chugoku Electric Power Australia Resources Pty. Ltd., Chugoku Electric Power International Netherlands B.V., Chugoku Electric Power America, LLC and Chugoku Electric Power Singapore Pte. Ltd. These companies have December 31 as their closing dates. In drawing up the Consolidated Financial Statements, the Company uses these consolidated subsidiaries' financial statements as of their closing dates and makes the necessary adjustments, in consolidated terms, for significant transactions that occur between their closing dates and the consolidated closing date.
Inventories
Inventories are stated at cost, determined principally by the weighted average method. Inventories with lower profitability have been written down.
Securities
Available-for-sale securities for which market value is readily determinable are stated at market value as of the end of the period with unrealized gains and losses, net of applicable deferred tax assets/liabilities, not reflected in earnings but directly reported as a separate component of net assets. The cost of securities sold is determined by the moving average method. Available-for-sale securities for which market value is not readily determinable are stated primarily at moving average cost.
If equity securities issued by unconsolidated subsidiaries or affiliated companies that are not accounted for by the equity method, or available-for-sale securities, decline significantly in market value, the securities are stated at fair market value, and the difference between the fair market value and the book value is recognized as a loss in the period of the decline. If equity securities issued by unconsolidated subsidiaries or affiliated companies not accounted for by the equity method do not have any market value, the securities should be written down to net asset value with the corresponding loss recorded in the Consolidated Statements of Income in the year that the net asset value declined significantly. In these cases, the fair market value or the net asset value will be the carrying amount of the securities at the beginning of the next year.
Property and depreciation
Depreciation and amortization of tangible and intangible fixed assets are calculated by the straight-line method, mainly based on the useful life stipulated by the Corporation Tax Act.
Nuclear fuel and amortization
Nuclear fuel is stated at cost less accumulated amortization. The amortization of loaded nuclear fuel is calculated based on the quantity of heat produced for the generation of electricity.
Allowance for doubtful accounts
The allowance for doubtful accounts is provided in an amount sufficient to cover possible losses on collection. It
consists of the estimated uncollectible amount with respect to identified doubtful receivables and an amount calculated based on the Companies' historical rate of loss with respect to the remaining receivables.
-10-Accounting policy for recognition of significant revenues and expenses
The Companies' main businesses are power generation and electric power sales business by the Company and power transmission and distribution business by the Chugoku Electric Power Transmission & Distribution Co., Inc. The Company has an obligation to supply electricity based on electricity supply and demand contracts with customers. The electric revenue from transactions is recorded as revenue based on the electricity usage determined
by monthly meter readings.
The Chugoku Electric Power Transmission & Distribution Co., Inc. has obligations related to consignment supply and electricity supply adjustment in the service area. The electric revenue from consignment supply is recorded as revenue based on the electricity usage determined by monthly meter readings. The electric revenue from electricity supply adjustment is recorded as revenue based on the electricity usage determined as of the last day of each month.
Accounting methods pertaining to retirement benefits
To prepare for employees' retirement benefits, the amount of retirement benefit obligations at the end of the consolidated fiscal year, net of plan assets, is recorded as a retirement benefit liability (or as retirement benefit asset when the plan asset amount exceeds the retirement benefit obligations).
For attributing the estimated retirement benefits to the period until the end of the fiscal year in determining the retirement benefit obligations, the benefit formula basis is principally followed.
Past service costs are amortized by the straight-line method using a certain number of years (mainly 1 year) within the employee's average remaining service period when the costs occurred.
Actuarial gains/losses are apportioned into sums by the straight-line method using a certain number of years (5 years) within the employee's average remaining service period from the consolidated accounting year in which the difference occurred, and each sum is amortized from the consolidated accounting year following the year of occurrence.
Unrecognized actuarial gains/losses and unrecognized past service costs are recorded as remeasurements of defined benefit plans in accumulated other comprehensive income in the Net Assets section, after adjusting for tax effects.
Derivatives and hedge accounting
The Companies state derivative financial instruments at fair value and recognize changes in the fair value as gains or losses unless the derivative financial instrument is used for hedging purposes. If derivative financial instruments are used for hedging purposes and meet certain hedging criteria, recognition of gain/loss is deferred until the loss/gain on the hedged item is recognized.
Under Japan's accounting standards, interest rate swap transactions, forward foreign exchange transactions and currency swap transactions are processed together with the hedged items and are not recognized in terms of losses/gains in derivative transactions.
Hedging effectiveness is evaluated by comparing the total cash flow change of the hedging instrument and the total cash flow change of the hedged item. However, assessment of hedge effectiveness is not carried out for interest rate swap transaction or currency swap transactions that meet certain requirements.
Amortization method and amortization period for goodwill
Goodwill is amortized uniformly over a period not exceeding 20 years. However, when the amount is insignificant, the entire amount is amortized in the period in which it is incurred.
-11-Cash and cash equivalents
Cash and cash equivalents in the Consolidated Statements of Cash Flows also include all highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash as they present insignificant risk of change in value.
Capitalization of interest expenses
Interest expenses related to debt incurred for the construction of power plants have been capitalized and included in the cost of the related assets pursuant to the accounting regulations under the Electricity Business Accounting Regulations.
Method of recording expenses necessary for decommissioning of commercial nuclear power reactors
With regard to expenses necessary for decommissioning of commercial nuclear power reactors, in accordance with the "Act on Reprocessing of Spent Fuel in Nuclear Power Generation, etc., and Promotion of Decommissioning of Power Reactors" (Act No. 48 of 2005) as amended by Article 3 of the "Act for Partial Revision of the Electricity Business Act and Other Acts for Establishing Electricity Supply Systems for Realizing a Decarbonized Society" (Act No. 44 of 2023), the contribution for decommissioning of reactors is paid to the Nuclear Reprocessing and Decommissioning facilitation Organization of Japan (hereinafter, "NuRO") and recorded in the electric utility operating expenses.
Nuclear power companies fulfill their obligations to fund these costs by paying an annual contribution for decommissioning of reactors to NuRO, and NuRO is financially responsible for securing, managing and paying the funds required for decommissioning of the reactors.
(Additional Information)
"Act for Partial Revision of the Electricity Business Act and Other Acts for Establishing Electricity Supply Systems for Realizing a Decarbonized Society " (Act No. 44 of 2023; hereinafter, "Revised Act") and "Ministerial Order on Arrangement of Related Ministerial Orders in Conjunction with Enforcement of the Act for Partial Revision of the Electricity Business Act and Other Acts for Establishing Electricity Supply Systems for Realizing a Decarbonized Society" (Order of the Ministry of Economy, Trade and Industry No. 21 of 2024; hereinafter "Revised Ministerial Order") were enforced on April 1, 2024. As a result, the "Ministerial Ordinance concerning Reserve Fund for Dismantling Nuclear Power Facilities" (Ordinance of the Ministry of International Trade and Industry No. 30 of 1989; hereinafter, "Ministerial Ordinance concerning Dismantlement") was abolished and the Electricity Business Accounting Regulations were amended.
Expenses necessary for decommissioning of commercial nuclear power reactors had been previously recorded as asset retirement obligations. In accordance with provisions of the Ministerial Ordinance concerning Dismantlement, the asset cost equivalent of asset retirement obligations had been calculated by applying the straight-line method to the estimated total decommissioning cost for the period equal to the facilities'forecasted operating period and recorded as electric utility operating expenses. However, on and after the date of enforcement of the Revised Ministerial Order, contribution for decommissioning of reactors stipulated in Article 11, Paragraph 2 of "Act on Reprocessing of Spent Fuel in Nuclear Power Generation, etc., and Promotion of Decommissioning of Power Reactors" as amended by Article 3 of the Revised Act, is recorded as electric utility operating expenses.
Nuclear power companies had been responsible for securing the fund required for the decommissioning of commercial nuclear power reactors that they own. However, in accordance with the Revised Act, their obligation to shoulder the costs will be fulfilled by paying a contribution for decommissioning of reactors to NuRO every year, and NuRO is financially responsible for securing, managing and paying the funds required for
decommissioning of reactors.
-12-As a result, in the year ending March 31, 2025, the asset cost equivalent of asset retirement obligations of ¥6,185
million and asset retirement obligations of ¥103,197 million are reversed.
Pursuant to the provision of Article 10, Paragraph1 of the Supplementary Provisions of the Revised Act, in order to provide for expenses necessary for the decommissioning promotion work of reactors, the Company recorded
¥97,012 million, which is a total of cash payable to NuRO, as contribution payable for nuclear reactor decommissioning and treated the amount as expenses in accordance with the provision of Article 7 of the Supplementary Provisions of the Revised Ministerial Order. However, pursuant to the said provision, an amount of reversal of asset retirement obligations is deducted from the said expenses.
There is no impact on profit and loss. Of the amount mentioned above, ¥3,233 million is transferred to long-term debt due within one year.
Burden charge for smooth decommissioning of reactors
In order to smoothly decommission reactors, the "Decommissioning Accounting Scheme" was established. By applying this decommissioning accounting scheme, the remaining book value of the nuclear reactors decommissioned due to changes in energy policies or changes in safety regulations, etc. can be recovered through the structure of consignment supply service fees for general power transmission and distribution businesses.
Conventionally, the recovery was permitted through collecting retail regulation fees. However, since October 2020, the recovery was shifted to the current scheme considering the continuance of the system.
Pursuant to the stipulations of Article 45, Paragraph 21, Item 12 of the "Regulation for Enforcement of the Electricity Business Act" (Ministry of International Trade and Industry Ordinance No. 77 of 1995) prior to its amendment by the "Ministerial Order on Arrangement of Related Ministerial Orders in Conjunction with Enforcement of the Act for Partial Revision of the Electricity Business Act and Other Acts for Establishing Electricity Supply Systems for Realizing a Decarbonized Society" (Order of the Ministry of Economy, Trade and Industry No. 21 of 2024), the Company has submitted an application regarding the required reserve amount for the book value of specified nuclear power assets and reserve fund for dismantling nuclear power facilities (hereinafter, "burden charge for smooth decommissioning of reactors"), and this application was approved by the Minister of Economy, Trade and Industry.
In response to this and pursuant to the stipulations of Article 45, Paragraph 21, Item 15 of the "Regulation for Enforcement of the Electricity Business Act" (Ministry of International Trade and Industry Ordinance No. 77 of 1995), the Chugoku Electric Power Transmission & Distribution Co., Inc. altered its general clause for consignment supply services effective October 1, 2020, and is thereby collecting the burden charge for smooth decommissioning of reactors.
Method of recording the contributions required for spent nuclear fuel reprocessing
For expenses required in the reprocessing of spent nuclear fuel from commercial nuclear power reactors, in accordance with the "Act on Reprocessing of Spent Fuel in Nuclear Power Generation, etc., and Promotion of Decommissioning of Power Reactors" (Act No. 48 of 2005;the"Reprocessing Act") as amended by Article 3 of the "Act for Partial Revision of the Electricity Business Act and Other Acts for Establishing Electricity Supply Systems for Realizing a Decarbonized Society" (Act No. 44 of 2023), the nuclear power company's obligation to shoulder costs will be fulfilled by paying a contribution to NuRO, which will then implement the reprocessing, etc. Furthermore, based on Article 5, Paragraph 2 of the Reprocessing Act, the contributions calculated based on the amount of spent nuclear fuel generated during operation of commercial nuclear power reactors are recorded in the electric utility operating expenses.
Furthermore, contributions related to processing involved in reprocessing are recorded as special account related
to reprocessing of spent nuclear fuel.
-13-Foreign currency transactions
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the year-end rate.
Application of the group tax sharing system
The Companies apply the group tax sharing system.
3. Significant Accounting Estimates
Deferred tax assets
(1) Carrying amount
Millions of yen
2026 2025
¥47,536 ¥61,047
(2) Information that assists users of the Consolidated Financial Statements in understanding the nature of the accounting estimates
① Method used for calculating the amount recorded in the Consolidated Financial Statements for the year ended March 31, 2026
The Companies record the deferred tax assets for the amounts deemed to be recoverable through future taxable income estimated in the medium-term management plan.
② Main assumptions used in calculating the amounts recorded in the Consolidated Financial Statements for the year ended March 31, 2026
For the taxable income estimates, the Companies make assumptions such as unit sales prices based on the information available at present, taking into account market trends for fuel costs and electricity market prices, projection of the electricity sales volume, power generated and received, and etc.
③ Effects on the Consolidated Financial Statements for the year ending March 31, 2027
In the event that important changes occur to these assumptions and there is a decrease in the Companies' future taxable income resulting from factors that could not be predicted, such as changes in the competition environment or fluctuations in fuel costs, the recoverability of deferred tax assets may be affected.
4. Standard and Guidance not yet Adopted
"Accounting Standard for Leases" (ASBJ Statement No. 34, September 13, 2024)
"Implementation Guidance on Accounting Standard for Leases" (ASBJ Guidance No. 33, September 13, 2024) Other revisions related to Accounting Standards, Implementation Guidance on Accounting Standards, Practical Solutions, and Transferred Guidance.
(1) Outline
To be consistent with international accounting standards, the standard prescribes lessees to recognize assets and liabilities for all leases.
(2) Effective date
The standards and guidance will be effective from the beginning of the year ending March 31, 2028.
(3) Effects of application of the standards and guidance The impact is yet to be determined at this time.
5. Changes in Presentation
Related to the Consolidated Balance Sheets
The account title "Notes and accounts payable" presented under "Current liabilities" for the year ended March 31, 2025 was changed to "Accounts payable" for the year ended March 31, 2026, as the balance of notes payable had become zero.
-14-Related to the Consolidated Statements of Cash Flows
"Impairment losses," "Loss (gain) on sale of non-current assets," and "Decrease (increase) in other current assets" under "Cash flows from operating activities," which were presented as separate line items in the year ended March 31, 2025, are included in "Other" starting from the year ended March 31, 2026, due to their decreased importance in amount. In order to reflect these changes in presentation, the Company has made reclassifications to the Consolidated Financial Statements for the year ended March 31, 2025.
As a result, ¥7,429 million in "Impairment losses," ¥7,320 million in "Loss (gain) on sale of non-current assets,"
¥(25,124) million in "Decrease (increase) in other current assets," and ¥24,884 million in "Other" under "Cash flows from operating activities," which were presented as separate line items in the year ended March 31, 2025 have been reclassified to ¥14,510 million in "Other."
6. Additional Information
Introduction of performance-based stock compensation plan
Based on the resolution passed at the 100th annual stockholders' meeting held on June 26, 2024, the Company has introduced a performance-based stock compensation plan "Board Benefit Trust (BBT)" (hereinafter "the Plan") for the Company's directors who are not external directors (excluding directors of Audit and Supervisory Committee) and executive officers (excluding those who concurrently serve as directors. Hereinafter, collectively "Directors, etc.").
(1) Plan overview
The Plan is a performance-based stock compensation plan that is funded by money contributed by the Company. The Company's stock will be acquired through the trust (hereinafter the trust set up based on the Plan will be called "the Trust"). In accordance with "Officer Stock Benefit Rules" established by the Company, the Company's stock and money equivalent to the current market value of the Company's stock (hereinafter collectively, the "Company's stock, etc.") will be provided to Directors, etc. through the Trust.
As a general rule, Directors, etc. will receive the Company's stock, etc. when they resign from the positions of Directors, etc.
(2) Shares of the Company remaining in the trust account
Shares of the Company remaining in the trust account are recorded as treasury shares under net assets with the book value (excluding the amount of incidental expenses) in the trust account. As of March 31, 2026 and 2025, the book values of such treasury shares were ¥648 million and ¥674 million, respectively, and the number of shares of such treasury shares were 632 thousand and 658 thousand, respectively.
(Related to the Consolidated Balance Sheets)
7. Reduction Entry from Acceptance of Contributions in Aid for Construction within Fixed Assets (accumulated)
Millions of yen
2026 2025
¥140,490 ¥139,042
8. Accumulated Depreciation of Tangible Assets
Millions of yen
2026 2025
¥4,647,466 ¥4,559,830
-15-9. Shares, etc. of Non-Consolidated Subsidiaries and Affiliated Companies
Millions of yen
2026 2025
Shares ¥227,415 ¥206,544
(Amount invested in jointly controlled companies) (38,579) (28,094)
Available-for-sale securities 10,328 10,458
(Amount invested in jointly controlled companies) (249) (285)
10. Bonds Payable, Long-term Borrowings and Lease Obligations
Millions of yen
2026 2025
Bonds payable due through 2061 ¥1,281,690 ¥1,326,290 at rates of 0.23% to 5.742%
Long-term borrowings from the Development Bank
of Japan Inc., other banks and insurance companies 2,011,549 1,747,568 due through 2062
Lease obligations 2,686 2,094
¥3,295,925 ¥3,075,953
Less amounts due within one year (257,398) (218,867)
Total ¥3,038,527 ¥2,857,085
The annual maturities of bonds payable and long-term borrowings at March 31, 2026 and 2025 were as follows:
At March 31,2026
Year ending March 31 Millions of yen
2026 ¥ 256,694
2027 193,244
2028 281,369
2029 280,461
Thereafter 2,281,470
At March 31,2025
Year ending March 31 Millions of yen
2025 ¥ 218,439
2026 256,227
2027 190,577
2028 281,681
Thereafter 2,126,932
(Note) Excluding lease obligations.
-16-
11. Pledged Assets and Pledged Debt
(1) The Company Pledged assets
All assets are pledged as general collateral for bonds payable and borrowings from the Development Bank of Japan Inc.
Pledged debt
Millions of yen
2026 2025
Bonds payable(Including those due within 1
year) ¥1,141,690 ¥1,226,290
Borrowings from the Development Bank of
Japan Inc. 100,000 130,000
(Including those due within1 year)
(2) Consolidated subsidiaries Pledged assets
Millions of yen
2026 2025
Other non-current assets ¥619 ¥605
Cash and deposits 6 6
Other current assets 6,306 7,161
Pledged debt
Millions of yen
2026 2025
Long-term borrowings
(Including those due within1 year) ¥150 ¥300
Other current liabilities 5,237 5,795
(3) Assets pledged as collateral for loans from financial institutions in the certain consolidated subsidiaries' invested companies
Millions of yen
2026 2025
Long-term investments in subsidiaries and
associates ¥22,890 ¥20,947
When consolidated subsidiaries' invested companies default on debts, the liable amounts on consolidated subsidiaries are limited to their invested amounts.
-17-
12. Assets generated from Contracts with Customers and Contract Assets included in Receivables and Contract Assets
Millions of yen
2026 2025
Notes receivable ¥1,309 ¥918
Accounts receivable 106,096 127,428
Contract Assets 998 723
13. Contingent Liabilities
At March 31, 2026 and 2025, the Companies were contingently liable as guarantors for loans of other companies and employees in the amount of ¥78,783 million and ¥76,409 million, respectively.
(Related to the Consolidated Statements of Income)
14. Revenue from Contracts with Customers
Revenue from contracts with customers and other revenue are not classified in separate accounts under operating revenue. For the amount of revenue from contracts with customers, please refer to Note 27 "Segment Information".
15. Research and Development Expenses
Research and development expenses charged to operating expenses were ¥5,507 million and ¥6,798 million for the years ended March 31, 2026 and 2025, respectively.
16. Content of Extraordinary Losses
The year ended March 31, 2025
(1) Loss on sale of non-current assets
The Company recorded a loss on sales of property due to the transfer of the land, buildings and equipment of the former Shimonoseki Power Station.
(2) Impairment losses
Impairment losses were recorded by Chugoku Electric Power Australia Resources Pty. Ltd., a consolidated subsidiary of the Company, due to the transfer of interests in the Boggabri coal mine in Australia.
① Grouping method
Among the electric power business, property, plant and equipment used in the power generation and electric power sales business are considered as a single asset group due to the fact that all assets from power generation to sales activity are used together to generate a cash flow.
Among the electric power business, property, plant and equipment used in the power transmission and distribution business are considered as a single asset group due to the fact that all assets from power transmission, power transformation and power distribution, etc. are used together to generate a cash flow.
Property, plant and equipment used in businesses other than the electric power business are grouped by business or by location.
Property, plant and equipment other than those described above are grouped by location or by
individual asset, in principle.
-18-
② Assets overview and amounts
Impairment losses recognized based on the grouping were ¥6,970 million (Other non-current assets, construction and retirement in progress) and the details of the fixed assets were as follows:
Impairment loss
Usage Place Type (Millions of yen)
Coal mine interests Land ¥184
(Chugoku Electric Power Australia Buildings 1,585
Australia Resources Pty. Ltd.) Machinery and others 5,200 Total ¥6,970
③ Method for calculating recoverable amount
A net realizable value is used for the recoverable amount of the applicable assets. The net realizable value is measured based on reasonable estimates, such as a sales value.
(Related to the Consolidated Statements of Changes in Equity)
17. Related to the Consolidated Statements of Changes in Equity
Year ended March 31, 2026
(1) Matters concerning issued shares
At the beginning At the end of the
Class of shares of the year ended Increase Decrease year ended March March 31, 2026 31, 2026
Common stock (shares) 387,154,692 － － 387,154,692
(2) Matters concerning treasury shares
At the beginning At the end of the
Class of shares of the year ended Increase Decrease year ended March March 31, 2026 31, 2026
Common stock (shares) 27,589,469 15,418 26,536 27,578,351 (Note) Treasury shares at the beginning and end of the year ended March 31, 2026 include 658,000 shares and 632,000 shares, respectively, of the Company held by the "Board Benefit Trust (BBT)."
(Reasons of the increase / decrease) Breakdown of increases
Increase due to purchase of shares of less than one unit 9,335shares
Increase in treasury shares (shares of the Company) attributable to the Company due to
an increase in the shareholding ratio of an equity method affiliated company 6,083shares Breakdown of decreases
Decrease due to grants of treasury shares (shares of the Company) related to BBT 26,000shares
Decrease due to sales of shares of less than one unit 536shares
-19-
(3) Matters concerning dividends
① Cash dividends paid
Resolution Class of Total dividends Dividends per
shares (million yen) share (yen) Record date Effective date
(Note 1)
Annual stockholders' Common ¥7,924 March 31, June 27, meeting held on ¥22.00
June 26, 2025 stock (Note 2) 2025 2025
Board of Directors' Common 3,602 September 30, November 28, meeting held on 10.00
October 31, 2025 stock (Note 3) 2025 2025
(Notes) 1 The total dividend amounts are the amount after the elimination of intercompany transactions.
2 The total dividend amount resolved by the Annual stockholders' meeting held on June 26, 2025 includes ¥14 million of dividends for shares held by the "Board Benefit Trust (BBT)."
3 The total dividend amount resolved by the Board of Directors' meeting held on October 31, 2025 includes ¥6 million of dividends for shares held by the "Board Benefit Trust (BBT)."
② Dividends for which the record date belongs to the year ended March 31, 2026 but the effective date comes after the year-end
Class of Dividends Total Dividends Record Effective Resolution dividends per share
shares source (million yen) (yen) date date
Annual stockholders'
meeting held on Common Retained March 31, June 26,
June 25, 2026 stock earnings ¥6,123 ¥17.00 2026 2026
(Note) 1 The total dividend amount is the amount after the elimination of intercompany transactions.
2 The total dividend amount resolved by the Annual stockholders' meeting held on June 25, 2026 includes ¥10 million of dividends for shares held by the "Board Benefit Trust (BBT)."
Year ended March 31, 2025
(1) Matters concerning issued shares
At the beginning At the end of
Class of shares of the year ended Increase Decrease the year ended March 31, 2025 March 31, 2025
Common stock (shares) 387,154,692 － － 387,154,692
(2) Matters concerning treasury shares
At the beginning At the end of
Class of shares of the year ended Increase Decrease the year ended March 31, 2025 March 31, 2025
Common stock (shares) 26,920,110 669,694 335 27,589,469 (Reasons of increase / decrease)
Breakdown of increases
Increase in treasury shares (shares of the Company) acquired by BBT 658,000shares Increase due to purchase of shares of less than one unit 11,359shares
Increase in treasury shares (shares of the Company) attributable to the Company due to
an increase in the shareholding ratio of an equity method affiliated company 335shares Breakdown of decreases
Decrease due to sales of shares of less than one unit 335shares
-20-(3) Matters concerning dividends
① Cash dividends paid
Resolution Class of Total dividends Dividends per
shares (million yen) share (yen) Record date Effective date
(Note 1)
Annual stockholders' Common March 31, June 27, meeting held on ¥10,807 ¥30.00
June 26, 2024 stock 2024 2024
Board of Directors' Common 1,801 September 30, November meeting held on 5.00 29,
October 31, 2024 stock (Note 2) 2024 2024
(Note) 1 The total dividend amount is the amount after the elimination of intercompany transactions.
2 The total dividend amount resolved by the Board of Directors' meeting held on October 31, 2024 includes ¥3 million of dividends for shares held by the "Board Benefit Trust (BBT)."
② Dividends for which the record date belongs to the year ended March 31, 2025 but the effective date comes after the year-end
Total Dividends
Resolution Class of Dividends dividends per share Record Effective
shares source (million yen) (yen) date date
Annual stockholders'
meeting held on Common Retained March 31, June 27,
June 26, 2025 stock earnings ¥7,924 ¥22.00 2025 2025
(Note) 1 The total dividend amount is the amount after the elimination of intercompany transactions.
2 The total dividend amount resolved by the Annual stockholders' meeting held on June 26, 2025 includes ¥14 million of dividends for shares held by the "Board Benefit Trust (BBT)."
(Related to the Consolidated Statements of Cash Flows)
18. Cash and Cash Equivalents
The relationship between the balance of cash and cash equivalents at the end of the period and the amount recorded in the Consolidated Balance Sheets was as follows:
Millions of yen
2026 2025
Cash and deposits ¥423,362 ¥286,731 Time deposits with maturities exceeding 3 months (58) (58) Cash and cash equivalents ¥423,303 ¥286,672
19. Financial Instruments
(1) Matters concerning financial instruments
① Approach to financial instruments
Most of the Companies' business consists of electric power business and funds that are necessary for capital investment and operations are raised from bonds payable, long-term borrowings, short-term borrowings and commercial paper ("CP") according to the Companies' plans for financing.
The Companies' fund management involves only highly safe monetary assets pursuant to these plans.
The derivative transactions are only for receivables and payables (actual demand transactions) arising from the business of the Company and certain consolidated subsidiaries. There are no transactions for
speculative purposes.
-21-
② Details and risks of financial instruments and our risk management structure
Long-term investments (available-for-sale securities) mainly consists of stocks that holding them contributes to maintaining and enhancing the Companies' medium-to-long term corporate value. The fair value of the stocks and the financial condition of the relevant companies are monitored regularly.
The majority of the Companies' notes and accounts receivable consist of receivables related to the electric power business and are exposed to customer credit risk. For the relevant risk, each customer's due date and balance are controlled in accordance with electricity supply contracts and other relevant terms and conditions.
Bonds payable and loans payable are procured mainly for capital investment. While many interest-bearing debts consist of long-term funds with fixed interest rates (bonds payable and long-term borrowings), some interest-bearing debts are procured with variable interest rates and are exposed to the risk arising from changes in interest rates. This risk is monitored on a regular basis, with the interest rate environment taken into account. Some long-term funds are used for derivative transactions (interest rate swaps and currency swaps) as a means to hedge risk to mitigate or avoid market fluctuation risk.
Due dates of the most accounts payable are within one year.
The Company utilizes interest rate swap contracts, commodity swap contracts, currency swap contracts, and forward foreign exchange transactions to mitigate and avoid market fluctuation risk. The Company has adopted hedge accounting for interest rate swap contracts, commodity swap contracts and currency swap contracts.
The Company believes that the related credit risk arising from the event of contract nonperformance by counterparties is extremely low, since the Company uses highly creditworthy financial institutions as counterparties to its derivative transactions and determines fair values and credit information on a periodic basis.
The Company has established a management function independent from the execution function of derivatives and manages derivative transactions in accordance with internal regulations providing authorization limits, methods of execution, reporting and management, etc.
Although bonds payable and loans payable are exposed to liquidity risk, the Companies manage liquidity risk by monthly cash management ensuring liquidity that is necessary for operation of the Companies and diversifying financing methods.
③ Supplemental explanation for financial instruments' fair value
Since fair value calculation of financial instruments reflects variable factors, the relevant value may change depending on the assumptions used.
Note that the contract amount for derivative transactions in Note 21, "Derivatives and Hedge
Accounting," does not reflect the market risk for the derivative transaction itself.
-22-(2) Matters concerning fair value of financial instruments
The following are the book values, the fair values and the differences at March 31, 2026 and 2025.
Millions of yen 2026
Book value Fair value Difference
Assets
①Long-term investment: ¥8,574 ¥8,574 ¥－ Available-for-sale securities
Liabilities
②Bonds payable ¥1,281,690 ¥1,122,791 ¥(158,898)
③Long-term borrowings 2,011,549 1,940,291 (71,258)
④Derivative transactions
Ⅰ. Hedge accounting is not applied ¥5,569 ¥5,569 ¥－
Ⅱ. Hedge accounting is applied 13,417 13,417 －
(*a) Since "Cash and deposits", "Notes and accounts receivable", "Accounts payable" and "Short-term borrowings" are cash or are settled in a short period of time, their fair values approximate the book values and therefore notes are not presented.
(*b) Equity securities without fair value
Millions of yen Book value 2026
Unlisted stocks ¥36,936
Investments in capital 7,555
Total ¥44,491
The above securities are not included in "① Long-term investment: Available-for-sale securities"
(*c) Descriptions for investments in unions or related business entities where the equity is recorded on the Consolidated Balance Sheets as a net amount are not presented. The amount recorded on the Consolidated Balance Sheets for the investment was ¥500 million as of March 31, 2026.
Millions of yen 2025
Book value Fair value Difference
Assets
①Long-term investment: ¥9,419 ¥9,419 ¥－ Available-for-sale securities
Liabilities
②Bonds payable ¥1,326,290 ¥1,225,347 ¥(100,942)
③Long-term borrowings 1,747,568 1,699,309 (48,259)
④Derivative transactions
Ⅰ. Hedge accounting is not applied ¥(1,721) ¥(1,721) ¥－
Ⅱ. Hedge accounting is applied 9,355 9,355 －
(*a) Since "Cash and deposits", "Notes and accounts receivable", "Notes and accounts payable" and "Short-term borrowings" are cash or are settled in a short period of time, their fair values approximate
the book values and therefore notes are not presented.
-23-(*b) Equity securities without fair value
Millions of yen Book value 2025
Unlisted stocks ¥37,176
Investments in capital 9,351
Total ¥46,528
The above securities are not included in "① Long-term investment: Available-for-sale securities".
(*c) Descriptions for investments in unions or related business entities where the equity is recorded on the Consolidated Balance Sheets as a net amount are not presented. The amount recorded on the Consolidated Balance Sheets for the investment was ¥332 million as of March 31, 2025.
(Note 1) Anticipated redemption schedule for monetary claims and securities with maturities subsequent to the fiscal year-end
Millions of yen Within 1 year
2026 2025
Cash and deposits ¥423,362 ¥286,731
Notes receivable 1,309 918
Accounts receivable 106,152 128,008
Total ¥530,824 ¥415,658
-24-
(Note 2) Anticipated redemption schedule for bonds, long-term borrowings and other interest-bearing debt
subsequent to the fiscal year-end
Millions of yen 2026
Within 1 year 1 year 2 years 3 years 4 years
- 2 years - 3 years - 4 years - 5 years Over 5 years
Bonds payable ¥65,000 ¥70,000 ¥131,000 ¥105,000 ¥100,000 ¥810,690 Long-term borrowings 191,694 123,244 150,369 175,461 231,195 1,139,585
Short-term borrowings 7,000 － － － － － Commercial paper － － － － － － Total ¥263,694 ¥193,244 ¥281,369 ¥280,461 ¥331,195 ¥1,950,275
Millions of yen 2025
Within 1 1 year 2 years 3 years 4 years Over 5
year - 2 years - 3 years - 4 years - 5 years years Bonds payable ¥84,600 ¥65,000 ¥70,000 ¥131,000 ¥105,000 ¥870,690 Long-term borrowings 133,839 191,227 120,577 150,681 174,210 977,031
Short-term borrowings 76,295 － － － － － Commercial paper － － － － － － Total ¥294,734 ¥256,227 ¥190,577 ¥281,681 ¥279,210 ¥1,847,721
(Note 3) Bonds payable and long-term borrowings include items whose payment is due within one year.
(Note 4) Receivables and liabilities generated from derivative transactions are shown in net amounts. When the total amount is negative (liabilities), the amount is shown in parentheses ( ).
(3) Fair value information of financial instruments by level of inputs
Based on the observability and the significance of the inputs used to determine fair values, fair value information of financial instruments is presented by categorizing measurements into the following three levels:
Level 1 fair value: the fair value measured by quoted prices of identical assets or liabilities in active markets.
Level 2 fair value: the fair value measured using observable inputs other than Level 1. Level 3 fair value: fair values measured using unobservable inputs.
When multiple inputs of different categories are used in measuring fair value, the Company and its subsidiaries classify fair values into the lowest level within the fair value hierarchy to which any of the
significant inputs is assigned.
-25-
① Financial instruments measured at fair values in the Consolidated Balance Sheets
Millions of yen
Categories 2026
Level 1 Level 2 Level 3 Total
Long-term investments Available-for-sale securities
Equity securities ¥8,574 ¥－ ¥－ ¥8,574 Derivative transactions
Commodities ¥－ ¥6,214 ¥－ ¥6,214
Currencies － 4,732 － 4,732
Total assets ¥8,574 ¥10,946 ¥－ ¥19,521 Derivative transactions
Commodities ¥－ ¥1,872 ¥－ ¥1,872
Total liabilities ¥－ ¥1,872 ¥－ ¥1,872
Millions of yen
Categories 2025
Level 1 Level 2 Level 3 Total
Long-term investments Available-for-sale securities
Equity securities ¥9,419 ¥－ ¥－ ¥9,419 Derivative transactions
Commodities ¥－ ¥275 ¥－ ¥275
Currencies － 10,401 － 10,401
Total assets ¥9,419 ¥10,676 ¥－ ¥20,095 Derivative transactions
Commodities ¥－ ¥2,655 ¥－ ¥2,655
Currencies － 387 － 387
Total liabilities ¥－ ¥3,043 ¥－ ¥3,043
-26-
② Financial instruments other than those measured at fair values in the Consolidated Balance Sheets
Millions of yen
Categories 2026
Level 1 Level 2 Level 3 Total
Bonds payable － ¥1,122,791 － ¥1,122,791
Long-term borrowings － 1,940,291 － 1,940,291
Total － ¥3,063,082 － ¥3,063,082
Millions of yen
Categories 2025
Level 1 Level 2 Level 3 Total
Bonds payable － ¥1,225,347 － ¥1,225,347
Long-term borrowings － 1,699,309 － 1,699,309
Total － ¥2,924,657 － ¥2,924,657
(Note) Valuation techniques and inputs used in measuring fair values
Long-term investments
The fair value for listed stocks is measured by their quoted prices. The fair value for listed stocks is categorized as a Level 1 fair value because listed stocks are traded in active markets.
Derivative transactions
The fair value for derivative transactions is categorized as Level 2 fair value with a market price as the fair value if a market price exists. If a market price does not exist, since the presented value is deemed to be using factors such as the observable interest rate or future prices for foreign currency exchange and coal, a value presented by a corresponding financial institution or a value calculated based on the presented value is used as the fair value.
Bonds payable
Bonds with market value are valued at the market value. For bonds without market value, the fair value is calculated by discounting the sum of the principal and the interest using an interest rate that would be applicable if comparable bonds were issued. Each is categorized as Level 2 fair value. Some bonds are subject to the assignment of currency swaps (Please refer to Note 21 "Derivatives and Hedge Accounting"). The fair value is calculated by discounting the sum of the principal and the interest processed together with the relevant currency swaps using an interest rate assumed as if comparable bonds were issued.
Long-term borrowings
For long-term borrowings with fixed interest rates, the fair value is calculated by discounting the sum of the principal and the interest using an interest rate that would be applicable if comparable borrowings were made. These are categorized as Level 2 fair value. For long-term borrowings with variable interest rates, the market interest rate is reflected in the short period of time, and the fair values can be deemed to approximate the relevant book values because the Companies' credit status has not changed significantly since the borrowings were made. Therefore, the book values are used and are categorized as Level 2 fair
value.
-27-20. Securities
(1) Available-for-sale securities
Millions of yen
2026 2025
Categories Book value Acquisition Difference Book value Acquisition Difference cost cost
Available-for-sale securities with book values exceeding acquisition costs
Equity securities ¥8,496 ¥1,223 ¥7,272 ¥9,383 ¥2,143 ¥7,239 Available-for-sale securities with
book values not exceeding acquisition costs
Equity securities ¥78 ¥134 ¥(55) ¥36 ¥49 ¥(13) Total ¥8,574 ¥1,357 ¥7,216 ¥9,419 ¥2,193 ¥7,226
At March 31, 2026 and 2025, equity securities without fair value of ¥44,491 million and ¥46,528 million and investments in unions or related business entities where the equity is recorded on the Consolidated Balance Sheets as a net amount of ¥500 million and ¥332 million are not included in the "Available-for-sale securities".
(2) Available-for-sale securities sold during the year ended March 31, 2026 and 2025
Millions of yen
Category 2026
Sales value Total profit Total loss
on sales on sales
Equity securities ¥2,976 ¥2,144 ¥3
Total ¥2,976 ¥2,144 ¥3
Millions of yen
Category 2025
Sales value Total profit Total loss
on sales on sales
Equity securities ¥3,648 ¥2,358 ¥15
Total ¥3,648 ¥2,358 ¥15
-28-
21. Derivatives and Hedge Accounting
(1) Derivative transactions for which hedge accounting was not applied
① Currencies
Millions of yen
2026 2025
Amount of Unrealized Amount of Unrealized Categories Type of Amount of contract Fair value gains Amount of contract Fair value gains
transaction contract longer than contract longer than
1 year (losses) 1 year (losses)
Forward foreign
Non-market exchange
transactions transactions ¥41,575 ¥－ 2,574 ¥2,574 ¥28,442 ¥－ ¥73 ¥73
Long
U.S. dollars
② Commodities
Millions of yen
2026 2025
Amount of Unrealized Amount of Unrealized Categories Type of Amount of contract Fair value gains Amount of contract Fair value gains
transaction contract longer than contract longer than
1 year (losses) 1 year (losses)
Commodity swap
Fixed-rate receipt and
Market flexible-rate ¥9,818 ¥－ ¥(1,085) ¥(1,085) ¥4,482 ¥－ ¥83 ¥83
transactions payment
Fixed-rate
payment and ¥7,229 ¥－ ¥107 ¥107 ¥336 ¥－ ¥(62) ¥(62) flexible-rate
receipt
Commodity swap
Fixed-rate receipt and
Non-market flexible-rate ¥3,812 ¥－ ¥(510) ¥(510) ¥5,382 ¥－ ¥12 ¥12
transactions payment
Fixed-rate
payment and ¥22,266 ¥－ ¥4,483 ¥4,483 ¥13,054 ¥－ ¥(1,829) ¥(1,829) flexible-rate
receipt
(Note) The fair value of derivative transactions is measured at quoted prices from the financial institutions.
(2) Derivative transactions for which hedge accounting was applied
① Currencies
Millions of yen
2026 2025
Amount of Amount of
Hedge Type of Items to be Amount of contract Amount of contract
accounting Fair value Fair value
method transaction hedged contract longer than contract longer than
1 year 1 year
Assignment Currency swap
of currency Japanese yen Bonds ¥78,990 ¥78,990 (Note) ¥78,990 ¥78,990 (Note) swaps payment & U.S. payable
dollars receipt
Forward foreign Planned General exchange transactions
method transactions in foreign ¥38,618 ¥30,349 ¥12,069 ¥55,119 ¥38,376 ¥9,939
Long
U.S. dollars currency
(Note) Since currency swaps that are treated in "Assignment of currency swaps" are treated together with hedged bonds, the relevant fair value is included in the fair value of the bonds.
-29-② Commodities
Millions of yen
2026 2025
Amount of Amount of
Hedge Type of Items to be Amount of contract Amount of contract
accounting transaction hedged contract longer than Fair value contract longer than Fair value method 1 year 1 year
Commodity swap Fuel import General Fixed-rate payment payment debt
method & flexible-rate (projected ¥5,702 ¥－ ¥1,347 ¥5,710 ¥－ ¥(584)
receipt transaction)
(Note) The fair value of derivative transactions is measured at quoted prices from the financial institutions.
22. Retirement Benefits
(1) Overview of the retirement benefit plan adopted
The Companies provide a defined benefit type plan (a defined benefit corporate pension scheme and a lump sum plan) and a defined contribution pension plan. A premium severance payment is also sometimes made when employees retire or otherwise terminate their employment.
Under the defined benefit corporate pension schemes and retirement lump sum schemes of some of the subsidiaries, the simplified valuation method is used for calculating retirement benefit asset, retirement benefit liability and retirement benefit expenses.
(2) Defined benefit plans
① Movement in retirement benefit obligations
Millions of yen
2026 2025
Balance at the beginning of the fiscal year ¥197,566 ¥211,949 Service cost 6,710 7,162
Interest cost 3,276 1,839
Actuarial loss (gain) (6,517) (5,561)
Benefits paid (13,791) (15,230)
Other － (2,591)
Balance at the end of the fiscal year ¥187,245 ¥197,566
② Movement in plan assets
Millions of yen
2026 2025
Balance at the beginning of the fiscal year ¥217,099 ¥225,311 Expected return on plan assets 4,138 3,175
Actuarial loss (gain) 2,893 (1,775)
Contributions paid by the Companies 3,580 3,312
Benefits paid (9,701) (11,031)
Other － (1,894)
Balance at the end of the fiscal year ¥218,010 ¥217,099
-30-③ Reconciliation from retirement benefit obligations and plan assets to retirement benefit liability (asset)
Millions of yen
2026 2025
Retirement benefit obligations for defined benefit
corporate pension schemes ¥141,566 ¥147,475
Plan assets (218,010) (217,099)
(76,444) (69,623)
Retirement benefit obligations for retirement lump 45,678 50,091 sum schemes
Total net retirement benefit liability (asset) at the ¥(30,765) ¥(19,532) end of the fiscal year
Millions of yen
2026 2025
Retirement benefit liability ¥45,867 ¥50,270
Retirement benefit asset (76,633) (69,802)
Total net retirement benefit liability (asset) at the
end of the fiscal year ¥(30,765) ¥(19,532)
④ Retirement benefit expenses
Millions of yen
2026 2025
Service cost ¥6,710 ¥7,162
Interest cost 3,276 1,839
Expected return on plan assets (4,138) (3,175)
Net actuarial loss (gain) amortization (5,053) (3,438)
Net past service costs amortization 44 44
Other 136 77
Retirement benefit expenses for
defined benefit plans at the end of the fiscal year ¥975 ¥2,509
⑤ Remeasurements of defined benefit plans
A breakdown of the items (before income taxes and tax effect deduction) that have been reported as remeasurements of defined benefit plans was as follows.
Millions of yen
2026 2025
Past service costs ¥44 ¥44
Actuarial loss (gain) 4,358 347
Total ¥4,402 ¥392
-31-⑥ Remeasurements of defined benefit plans (related to the Consolidated Statements of Changes in Equity)
A breakdown of the items (before income taxes and tax effect deduction) that have been reported as remeasurements of defined benefit plans (accumulated) was as follows.
Millions of yen
2026 2025
Unrecognized past service costs ¥82 ¥127
Unrecognized actuarial loss (gain) ¥(14,533) ¥(10,175)
Total ¥(14,451) ¥(10,048)
⑦ Plan assets
Ⅰ. The percentages of the main categories of plan assets were as follows.
2026 2025
Bonds 27% 16%
Equity securities 10% 9%
Cash and deposits 1% 14%
Life insurance general accounts 42% 45%
Other 20% 16%
Total 100% 100%
Ⅱ. Long-term expected rates of return
The long-term expected rate of return on plan assets is determined by taking into account the allocation of current and expected plan assets as well the long-term rates of return to be expected currently and in the future for the various assets that consist of the plan assets.
Actuarial assumptions
The major actuarial assumptions were as follows.
2026 2025
Discount rate mainly 2.7% mainly 1.7%
Long-term expected rate of return mainly 1.9% mainly 1.4%
(3) Defined contribution pension plan
The contributions required from the Companies to the defined contribution pension plan amounted to ¥999 million and ¥991 million for the years ended March 31, 2026 and 2025, respectively.
-32-
23. Income Taxes
(1) The Company is subject to a number of taxes based on income.
Significant components of the Companies' deferred tax assets and liabilities at March 31, 2026 and 2025 were as follows:
Millions of yen
2026 2025
Deferred tax assets:
Excess depreciation ¥26,343 ¥26,896
Contribution payable for nuclear reactor 26,149 27,053 decommissioning
Retirement benefit liability 16,651 17,201
Adjustment for unrealized intercompany profits 12,181 11,158
Accrued bonuses and other expenses 4,509 4,182
Contract liabilities 3,416 4,305
Construction and repair costs 3,053 527
Net operating loss carryforwards (Note) 1,575 14,481
Other 19,127 20,528
Total gross deferred tax assets ¥113,008 ¥126,335 Valuation allowance for net operating loss
carryforwards (Note) ¥(1,428) ¥(1,521)
Valuation allowance for temporary difference (17,340) (19,357)
Less valuation allowance (18,768) (20,879)
Total deferred tax assets ¥94,239 ¥105,456 Deferred tax liabilities:
Retirement benefit asset ¥(25,531) ¥(22,732) Provision for decommissioning of nuclear power units (13,008) (13,458) Deferred gains or losses on hedges (3,907) (2,865)
Valuation difference on available-for-sale securities (3,538) (2,818)
Other (716) (2,534)
Total deferred tax liabilities ¥(46,703) ¥(44,409)
Net deferred tax assets ¥47,536 ¥61,047
(Changes in presentation)
"Construction and repair costs" included in "Other" under "Deferred tax assets" in the year ended March 31, 2025, are disclosed as a separate line item starting from the year ended March 31, 2026 due to their increased importance in amount. In order to reflect these changes in presentation, the Company has made reclassifications to the Consolidated Financial Statements for the year ended March 31, 2025.
As a result, ¥21,056 million in "Other" which was presented under "Deferred tax assets" in the year ended March 31, 2025 has been reclassified to ¥527 million in "Construction and repair costs," and ¥20,528 million
in "Other."
-33-(Note) Breakdown by fiscal year of expiration of net operating loss carryforwards, the related less valuation
allowances and the resulting net deferred tax assets
Millions of yen 2026
Within 1 year 2 years 3 years 4 years Over
1 year - 2years -3 years - 4 years - 5years 5 years Total
Net operating
loss carryforwards (a) ¥91 ¥－ ¥993 ¥－ ¥－ ¥490 ¥1,575
Less valuation
allowance (54) － (993) － － (379) (1,428)
Deferred tax assets ¥36 ¥－ ¥－ ¥－ ¥－ ¥110 (b)¥147
Millions of yen 2025
Within 1 year 2 years 3 years 4 years Over
1 year - 2years -3 years - 4 years - 5years 5 years Total
Net operating ¥－ ¥143 ¥－ ¥993 ¥－ ¥13,344 ¥14,481 loss carryforwards (a)
Less valuation － (116) － (993) － (410) (1,521) allowance
Deferred tax assets ¥－ ¥26 ¥－ ¥－ ¥－ ¥12,934 (b)¥12,960
(a) The net operating loss carryforwards are amounts multiplied by the statutory effective tax rate.
(b) The net operating loss carryforwards are primarily due to a cut-off effect in the Fuel Cost Adjustment System in the Company resulting from increasing fuel prices in past fiscal years. The amount of the relevant tax loss carryforwards which were deemed to be recoverable through expectations of future taxable income based on the medium-term management plan approved by the management is recorded as deferred tax assets.
(2) The effective tax rate reflected in the Consolidated Statements of Income for the year ended March 31, 2026 and 2025 differs from the statutory tax rate for the following reasons.
2026 2025
Statutory tax rate 27.96% 27.96%
(Adjustment)
Share of profit of entities accounted for using equity (2.42)% (1.83)% method
Effect of enterprise tax (1.62)% (0.18)%
Revision of increase in deferred tax assets at the end － (1.06)% of the period due to tax rate changes
Other 0.81% (2.33)%
Effective tax rate 24.73% 22.56%
-34-(Changes in presentation)
"Valuation allowance," which was presented as a separate line item in the year ended March 31, 2025, is included in "Other" starting from the year ended March 31, 2026, due to its decreased importance. In addition, "Effect of enterprise tax," which was included in "Other" in the year ended March 31, 2025, is presented as a separate line item starting from the year ended March 31, 2026, due to its increased importance. In order to reflect these changes in presentation, the Company has made reclassifications to the notes to the Consolidated Financial Statements for the year ended March 31, 2025.
As a result, (2.19)% in "Valuation allowance" and (0.32)% in "Other" in the year ended March 31, 2025, have been reclassified to (0.18)% in "Effect of enterprise tax" and (2.33)% in "Other."
(3) Revision of deferred tax assets and deferred tax liabilities due to changes in the rate of income taxes
In accordance with the enactment of the "Act on Partial Amendment of the Income Tax Act, etc." (Act No. 13 of 2025) on March 31, 2025, the effective tax rate used in the calculation of deferred tax assets and deferred tax liabilities as of the end of the year ended March 31, 2025 has been changed to the new rate.
Due to this change in the effective tax rate, "Deferred tax assets" increased ¥852 million, "Income taxes -deferred" decreased ¥1,096 million, and "Accumulated other comprehensive income" decreased ¥273 million.
(4) Accounting for corporation and local corporation taxes or tax effect accounting
The Company and some of its domestic consolidated subsidiaries have applied the group tax sharing system. Also, accounting and disclosure of corporation and local corporation taxes or tax effect accounting involved therein are carried out in accordance with the "Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System" (PITF No. 42, August 12, 2021).
24. Asset Retirement Obligations
Asset retirement obligations included in the Consolidated Balance Sheets
(1) Outline of the asset retirement obligations
Until the year ended March 31, 2024, asset retirement obligations were recorded mainly in conjunction with measures to decommission specified nuclear power generation facilities under the "Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors". In accordance with the "Ministerial Ordinance concerning Reserve Fund for Dismantling Nuclear Power Facilities" (Ordinance of the Ministry of International Trade and Industry No. 30 of 1989, the "Ministerial Ordinance concerning Dismantlement"), the cost was calculated by applying the straight-line method to the estimated total decommissioning cost for the facilities' forecasted operating period.
With the enforcement of the "Act for Partial Revision of the Electricity Business Act and Other Acts for Establishing Electricity Supply Systems for Realizing a Decarbonized Society" (Act No. 44 of 2023) and the "Ministerial Order on Arrangement of Related Ministerial Orders in Conjunction with Enforcement of the Act for Partial Revision of the Electricity Business Act and Other Acts for Establishing Electricity Supply Systems for Realizing a Decarbonized Society" (Order of the Ministry of Economy, Trade and Industry No. 21 of 2024) in the year ended March 31, 2025, the "Ministerial Ordinance concerning Dismantlement" was terminated. As a result, asset retirement obligations of ¥103,197 million were reversed.
(2) Method of calculating the value of the asset retirement obligations
Until the year ended March 31, 2024, the value of the asset retirement obligations was calculated mainly by taking the estimated useful life as the accumulation period (generation facilities' forecasted operating period) which was prescribed in the "Ministerial Ordinance concerning Dismantlement", and using a discount rate of
2.3%.
-35-(3) Variation in the total value of the asset retirement obligations during the year ended March 31, 2025:
Millions of yen 2025
Balance at the beginning of the fiscal year ¥106,511
Changes in estimated obligations and accretion (102,801)
Balance at the end of the fiscal year ¥3,709
25. Revenue Recognition
(1) Breakdown of revenue from contracts with customers
Breakdown information of revenue from contracts with customers is presented in Note 27 "Segment Information."
(2) Basic information for understanding revenue from contracts with customers
Basic information for understanding revenue is described in "Accounting policy for recognition of significant revenues and expenses" under Note 2 "Significant Accounting Policies".
(3) Relationship between satisfaction of performance obligations under contracts with customers and the cash flows resulting from the contracts, as well as the information of the amount and timing of revenue expected to be recognized in the years from the year ending March 31, 2027 and thereafter, based on the contracts with customers existed as of March 31, 2026
① Balance of contract assets and contract liabilities, etc.
Contract assets and contract liabilities are not presented due to their unimportance in balance and insignificance in fluctuation. Also, revenue recognized in the year ended March 31, 2026 for the performance obligations satisfied (or partially satisfied) during past years is not presented due to their unimportance in amount.
② Transaction amount allocated to remaining performance obligations
The Companies apply practical conventions on notes to the transaction amount allocated to remaining performance obligations, as such the notes do not disclose the contract amount where the initial expected contract period is within one year. The following describes the total amount and period where the revenue recognition can be expected regarding the transaction amount allocated to remaining performance obligations in the Companies' main businesses.
Millions of yen
2026 2025
Within1 year ¥36,290 ¥17,039
1 year - 3 years 104,582 75,213
Over 3 years 88,459 58,716
Total ¥229,332 ¥150,969
-36-(Note) The total transaction amount expected to be recognized as revenue does not include revenue
acquirable from long-term decarbonization energy auctions. The revenue acquirable from long-term decarbonization energy auctions will be the amount agreed upon in the capacity agreement minus approximately 90% of the refund generated from the wholesale market, non-fossil fuel market, etc. during the same period of time. However, since the amount to be refunded will fluctuate depending on future market prices, it is difficult to estimate the portion of the variable consideration for which it is highly probable that a significant reversal of revenue recognized to date will not occur when the uncertainty is resolved. Therefore, it is not included in the scope of the notes.
26. Net assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as share capital.
However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new shares as legal capital surplus, which is included in capital surplus.
Under the Company Law, in cases in which a dividend distribution of surplus is made, companies are required to set aside an amount equal to at least 10% of the aggregate amount of cash dividends as legal capital surplus or as legal retained earnings until the total of these equals 25% of share capital. Legal retained earnings is included in retained earnings in the accompanying Consolidated Balance Sheets.
Neither legal capital surplus nor legal retained earnings can be distributed as dividends. However, all legal capital surplus and all legal retained earnings may be transferred to other capital surplus and retained earnings, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-Consolidated Financial Statements of the Company in accordance with Japanese law and regulations.
At the annual stockholders' meeting held on June 25, 2026, the stockholders approved cash dividends amounting to ¥6,128 million. The appropriations had not been accrued in the Consolidated Financial Statements at March 31, 2026. Such appropriations are recognized in the period in which they are approved by the stockholders.
27. Segment Information
The Companies' reporting segments are structural units of the Companies that are separated from the others and for which separate financial information is available. This information is the subject of periodic deliberations by the Board of Directors in order to decide the allocation of business resources and evaluate business results.
With electric power as their core, the Companies are developing total solution operations by focusing their business resources on strategic business domains that can exploit the Companies' strengths.
Thus, the Companies are composed of three reporting segments: combining power generation and electric power sales business with comprehensive energy supply business to be a single business unit the "Comprehensive energy", the "Power transmission and distribution", and the "Information and
telecommunications".
-37-A summary by segment for the years ended March 31, 2026 and 2025 was as follows
Millions of yen 2026
Reporting segment
Other Adjustment Consolidated Comprehensive Power Information (Note1) Total (Note2) (Note3)
energy transmission and tele- Total
and distribution communications
Operating revenues:
Revenue from contracts
with customers ¥1,164,355 ¥176,771 ¥33,765 ¥1,374,891 ¥27,016 ¥1,401,908 ¥－ ¥1,401,908
Other (Note4) 37,575 132 240 37,948 2,446 40,394 － 40,394
Outside customers 1,201,930 176,903 34,005 1,412,840 29,462 1,442,302 － 1,442,302
Intersegment 112,369 296,951 15,841 425,162 82,932 508,094 (508,094) －
Total 1,314,300 473,854 49,847 1,838,002 112,394 1,950,397 (508,094) 1,442,302 Segment income ¥70,278 ¥12,095 ¥4,883 ¥87,257 ¥6,779 ¥94,037 ¥(3,820) ¥90,216 Segment assets 4,201,568 1,239,029 80,002 5,520,600 207,858 5,728,459 (1,107,958) 4,620,500
Other items:
Depreciation expense ¥84,149 ¥43,622 ¥8,593 ¥136,365 ¥3,151 ¥139,517 ¥(377) ¥139,139
Value increase in tangible 172,742 100,551 9,017 282,311 3,899 286,211 (5,522) 280,688
and intangible assets
(Note) 1 The "Other" category refers to consolidated subsidiaries not included in any of the reporting segments.
2 "Adjustments" were as follows:
(1) "Adjustment" of "Segment income" in an amount of ¥(3,820) million refers to intersegment elimination.
(2) "Adjustment" of "Segment assets" in an amount of ¥(1,107,958) million refers to intersegment elimination.
(3) "Adjustment" of "Value increase in tangible and intangible assets" in an amount of ¥(5,522) million refers to intersegment elimination.
3 Reconciliations have been made between "Segment income" and "Operating income" in Consolidated Statements of Income.
4 "Other" under "Comprehensive energy" and "Power transmission and distribution" include subsidies of ¥33,081 million and ¥132 million, respectively, received from the Japanese Government under the "Project for Drastic Mitigation Measures of Electricity and Gas Charges" implemented in accordance with the "Comprehensive Economic Measures to Foster the Safety and Security of Citizens and Sustained Growth," the "Emergency Response Package in Response to U.S. Tariff Measures," and the "Comprehensive Economic Measures to Build a 'Strong Japanese Economy.'"
Millions of yen 2025
Reporting segment
Other Adjustment Consolidated Comprehensive Power Information (Note1) Total (Note2) (Note3)
energy transmission and tele- Total
and distribution communications
Operating revenues:
Revenue from contracts
with customers ¥1,218,029 ¥203,687 ¥33,158 ¥1,454,875 ¥27,926 ¥1,482,802 ¥－ ¥1,482,802
Other (Note4) 43,698 182 204 44,085 2,330 46,415 － 46,415
Outside customers 1,261,727 203,870 33,363 1,498,961 30,257 1,529,218 － 1,529,218
Intersegment 146,279 307,681 16,059 470,021 80,298 550,319 (550,319) －
Total 1,408,007 511,551 49,423 1,968,982 110,555 2,079,537 (550,319) 1,529,218 Segment income ¥95,184 ¥25,217 ¥4,705 ¥125,108 ¥7,507 ¥132,615 ¥(3,467) ¥129,148 Segment assets 3,966,895 1,160,857 91,611 5,219,365 195,139 5,414,504 (1,053,544) 4,360,959
Other items:
Depreciation expense ¥62,128 ¥41,912 ¥8,410 ¥112,451 ¥2,782 ¥115,233 ¥(395) ¥114,837
Value increase in tangible
and intangible assets 256,531 78,550 7,726 342,809 4,419 347,228 (6,716) 340,511
-38-