Financial data

TOKYO GAS INTEGRATED REPORT 2020

58

10-Year Consolidated Financial Highlights*1

2011.32012.32013.32014.32015.32016.32017.32018.32019.32020.3

1,535,242

1,754,257

1,915,639

2,112,117

2,292,548

1,884,656

1,587,085

1,777,344

1,962,308

1,925,235

Operating Profit (¥ million)

122,451

77,075

145,633

166,044

171,753

192,008

58,365

116,30293,704

101,508

Operating Profit Margin (%)

7.98

4.39

7.60

7.86

7.49

10.19

3.68

6.54

4.78

5.27

Ordinary Profit (¥ million)

121,548

75,620147,453

159,613168,169

188,80955,688111,546

89,386

102,735

Profit attributable to owners of parent (¥ million)

95,46746,060101,678

108,451

95,828111,936

53,13474,98784,55543,382Equity (¥ million)

858,920

839,166

927,634

1,011,787

1,069,515

1,100,271

1,101,498

1,136,027

1,159,055

1,147,836

1,829,661

1,863,885

1,992,403

2,176,816

2,257,662

2,251,518

2,230,269

2,334,316

2,428,149

2,537,724

Interest-bearing Debt (¥ million)

584,169

625,830

642,550

713,823

730,739715,769

713,596

724,940

803,216

905,066

Operating Cash Flow (¥ million)

244,803

194,565

240,448

248,831237,680

257,122

217,439

240,328

246,436

213,055

Free Cash Flow (¥ million)

94,60048,15256,651827

13,08425,08914,081

31,58322,655(14,003)

EBITDA (¥ million)

271,788

225,580

284,403

306,424

313,605

337,194

222,670

281,643

255,585

271,181

Capital Expenditure (¥ million)

150,202

146,413

183,797

248,004

224,596

232,033

203,358

208,745

223,781

227,058

Depreciation (¥ million)* 2

149,336

148,505

138,770

140,380

141,852

145,187

164,305

165,342

161,881

169,673

EPS (Earnings per Share) (¥)

35.63

17.70

39.52

43.10

39.15

46.68

23.02

164.12* 3

187.6098.07

BPS (Book Value per Share) (¥)

320.70324.67360.70402.91438.28460.35479.742,487.58* 3

2,575.99

2,602.74

2,684,193

2,590,715

2,577,919

2,517,551

2,446,778

2,396,778

2,302,856

458,073* 3

451,356

442,436

9

9

10

10

10

11

11

55* 3

6060

DOE (Dividends on Equity) (%)

2.88

2.74

2.91

2.59

2.34

2.42

2.29

2.25

2.352.29

Payout Ratio (%)

25.26

50.85

25.30

23.20

25.55

23.57

47.79

33.51

31.98

61.18

Total Payout Ratio (%)

60.87

61.36

60.70

60.00

60.80

60.10

60.71

60.17

60.31

60.99

Net Sales (¥ million)

Total Assets (¥ million)

Number of Issued Shares(Common Stock) (thousands of shares)
Dividend per Share (¥)

Financial data

TOKYO GAS INTEGRATED REPORT 20202011.32012.32013.32014.32015.32016.32017.32018.32019.359

2020.3142.26156.89162.16

156.67150.63155.48142.69135.59156.01152.10D/E (Debt-Equity) Ratio (times)

0.68

0.75

0.69

0.71

0.68

0.65

0.65

0.64

0.69

0.79

Equity Ratio(%)

46.94

45.02

46.56

46.48

47.37

48.87

49.39

48.67

47.73

45.23

ROE (Return on Equity) (%)

11.41

5.42

11.51

11.18

9.21

10.32

4.83

6.70

7.37

3.76

ROA (Return on Assets) (%)

5.20

2.49

5.27

5.20

4.32

4.96

2.37

3.29

3.55

1.75

Total Asset Turnover (times)

0.84

0.95

0.99

1.01

1.03

0.84

0.71

0.78

0.82

0.78

TEP (¥100 million)

640

91

598

507

434

676-6224468207

WACC (%)

3.33.1

3.2

3.2

3.6

3.4

3.0

3.1

3.0

2.7

Number of city gas retail customers (thousand)

9,542.3

9,615.4

9,721.1

9,844.8

9,982.3

10,125.7

10,269.4

10,209.0

9,821.0

9,129.0

Gas Sales Volume

14,745

15,19015,39014,735

15,541

15,436

15,72015,56815,19813,855–

15,833

16,741

17,22518,36018,587

19,05319,052

18,397

17,666

Number of electricity retail customers (thousand)

––

–

–

–

–

667

1,130

1,774

2,363

Electric power sales volume (billion kWh)

–

8.2

9.9

9.710.6

10.9

12.6

14.6

15.4

20.6

Current Ratio (%)(million m 3 )2020 Vision basis*4Notes: *1 The financial information contained in this integrated report is based on annual securities report. However, it has not been audited by Audit firms etc.
*2 Depreciation includes amortization of long-term prepaid expenses.
*3 The Company carried out a share consolidation at a ratio of 5 common shares to 1 on October 1, 2017.
The dividend per share of 55.0 yen is calculated on the post-consolidation basis (the interim dividend of 5.50 yen per share before the share consolidation and the year-end dividend of 27.50 yen per share after the share consolidation).
*4 2020 Vision basis … The figures represent baseline values for sales volume targets set forth in our management vision, Challenge 2020 Vision. They are obtained by adding volume for in-house use and LNG sales volume (excluding volume for Nijio) to consolidated gas sales volume.

Computations
Operating Cash Flow = Profit attributable to owners of parent + Amortization of Long-term Prepaid Expenses + Depreciation
Free Cash Flow = Profit attributable to owners of parent + Amortization of Long-term Prepaid Expenses + Depreciation – Capital Expenditure
Current Ratio = Current Assets (year-end) / Current Liabilities (year-end) x 100
Debt-Equity Ratio = Interest-bearing Debt (year-end) / Equity (year-end)

Equity Ratio = Equity (year-end) / Total Assets (year-end) x 100
Total Asset Turnover = Net Sales / Total Assets (average)
TEP (Tokyo Gas Economic Profit) = NOPAT – Cost of capital(invested capital x WACC)

WACC calculation data (fiscal 2019 actual)∙ Interest-bearing debt cost: Real interest rate of 0.75% (after tax)
∙ Cost of shareholders’ equity∙ Risk-free rate: 10-year JGB yield of -0.096%∙ Risk premium: 5.5%, Beta coefficient of 0.75

Financial data

TOKYO GAS INTEGRATED REPORT 2020

60

Consolidated Balance Sheet(¥ million)

2019.3.31(¥ million)

2020.3.31

2019.3.31

AssetsLiabilities

Non-current assets

2020.3.31

2429

Deferred tax assets

42,425

49,132

Non-current liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Retirement benefit liability
Provision for gas holder repairsProvision for safety measures
Provision for appliance warranties
Provision for point card certificates
Asset retirement obligations
Other non current liabilities
Total non-current liabilities
Current liabilities
Current portion of non-current liabilities
Notes and accounts payable - trade
Short-term loans payable
Income taxes payable
Other current liabilities
Total current liabilities
Total liabilities

Other investments

47,95046,407

Net assets

Allowance for doubtful accounts

(362)

(405)

355,409361,831

Capital stock

141,844

1,901,403

1,975,292Capital surplus

1,634

2,067

976,550

967,808

Property, plant and equipment
Production facilities

234,433

224,515

Distribution facilities

548,529

548,095

Service and maintenance facilities

49,58648,492Other facilities

447,608

475,093

Inactive facilities
Construction in progress
Total property, plant and equipment

316

316

145,160

162,862

1,425,634

1,459,377

Intangible assets
Goodwill

1,306

16,269Other intangible assets

119,052

137,814

Total intangible assets

120,359

154,084

Investment securities

225,212

216,052

Long-term loans receivable

40,15850,615Investments and other assets

Retirement benefit asset

Total investments and other assets
Total non-current assets
Cash and deposits

93,092

151,288

Treasury shares
Total shareholders’ equity

Notes and accounts receivable - trade265,225

221,123

Lease receivables and investments in leases

19,647

20,363404,998
429,541
18,531
71,976
3,122593
12,9851,000
14,42451,555
1,008,730

51,566
69,605
5,133
31,283
180,037
337,626

54,42878,593
6,507
29,708200,527
369,765

1,256,803

1,378,495

141,844

Shareholders’ equityRetained earnings

Current assets

334,998
394,542
17,51775,262
2,990
1,776
14,0571,450
11,94064,640919,176(4,111)(3,875)

1,115,918

1,107,844

22,756

15,843Merchandise and finished goods

2,194

1,905

Work in process

12,73011,868

Accumulated other comprehensive income
Valuation difference on available-forsale
securities
Deferred gains or losses on hedges

1,604

1,444

Raw materials and supplies

63,73564,703Foreign currency translation adjustment

24,77022,412Other current assets

71,306

91,748Remeasurements of defined benefit plans

Allowance for doubtful accounts(1,186)(570)

Total accumulated other comprehensive income( 5,994)
43,13739,992

Total current assets

526,745

562,4312,428,149

2,537,724

Total assets

Non-controlling interests

292

12,28911,391

Total net assets

1,171,345

1,159,228

Total liabilities and net assets

2,428,149

2,537,724

Financial data

TOKYO GAS INTEGRATED REPORT 2020

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income(¥ million)(¥ million)

2018.4.1-2019.3.31

2018.4.1-2019.3.31

2019.4.1-2020.3.31

Net sales

1,962,308

1,925,235

ProfitCost of sales

1,407,345

1,343,965

Other comprehensive income

Gross profit

554,963581,269

Valuation difference on available-for-salesecurities

392,466

408,857

Deferred gains or losses on hedges

Selling, general and administrative expenses
Supply and sales expenses
General and administrative expenses

68,79170,903

Total selling, general and administrative expenses

461,258

479,761

93,704

101,508

Interest income

1,612

2,330

Dividend income

2,812

5,433

Share of profit of entities accounted for usingequity method

2,794

5,211

Miscellaneous income

6,551

7,453

Total non-operating income

13,771

20,429Interest expenses

11,091

11,412

Balance on commissioned construction

1,750

2,151

Miscellaneous expenses

5,247

5,637

Operating profit
Non-operating income

Non-operating expenses

Total non-operating expenses

18,08919,202

89,386

102,735

Gain on sales of non-current assets

29,306–

Gain on sales of investment securities

6,420

––

11,62735,727

11,627

Ordinary profit
Extraordinary income

Gain on settlement of contract
Total extraordinary incomeExtraordinary losses
Impairment loss
Loss on valuation of investment securities–

28,152

7,865

18,643

Total extraordinary losses

7,865

46,796

Profit before income taxes

117,248

67,566

Income taxes - current

26,11331,196

Income taxes - deferred

6,823(7,197)

Total income taxes

32,93623,999Profit84,311

43,567

Profit (loss) attributable to noncontrolling interests
Profit attributable to owners of parent

61

(244)

184

84,55543,382

2019.4.1-2020.3.31

84,311

43,567(7,528)(6,878)221(850)

Foreign currency translation adjustment(6,735)(1,916)

Remeasurements of defined benefit plans, net of tax(2,073)

6,150

(78)

178

(16,193)(3,316)

68,11840,25068,401

40,238(283)

12Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown of comprehensive income)Comprehensive income attributable to owners ofparent
Comprehensive income attributable to noncontrolling interests

Financial data

TOKYO GAS INTEGRATED REPORT 2020

62

Consolidated Statement of Cash Flows(¥ million)

2018.4.1-2019.3.31
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Gain on settlement of contract
Amortization of long-term prepaid expenses
Loss on retirement of property, plant and equipment
Loss (gain) on valuation of investment securities
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for safety measures
Increase (decrease) in provision for appliancewarranties
Interest and dividend income
Interest expenses
Share of loss (profit) of entities
accounted for using equity method
Decrease (increase) in notes andaccounts receivable - tradeDecrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in accrued consumption taxes
Decrease (increase) in accounts receivable - other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

Purchase of intangible assets
Purchase of long-term prepaid expenses
Payments of long-term loans receivableCollection of long-term loans receivable
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities

2018.4.1-2019.3.31

2019.4.1-2020.3.31

Cash flows from financing activities

117,248
157,574
888
–
4,306
2,248
7,865
1,039
(1,338)67,566
165,410
28,152(11,627)
4,263
2,164
18,643
5,206(1,182)

4,073(1,072)(4,425)
11,091(7,763)
11,412(2,794)(5,211)(46,191)

52,646(18,336)

172(5,321)

8,952(3,002)(2,541)(53,083)
169,300
9,387(10,809)(26,571)
141,306

7,979(1,619)(9,541)
334,549
14,510(11,087)(31,676)
306,296(17,603)(23,989)

12,082

1,916(168,144)(39,491)(8,561)(12,238)
4,074
(788)
88

(177,664)(41,908)(2,183)(16,989)
4,853(2,709)1,855(1,054)(17,908)

28,174(203,462)

3,930(270,798)

Cash flows from investing activities
Purchase of investment securities
Proceeds from sales and redemption of investment
securities
Purchase of property, plant and equipment(¥ million)

2019.4.1-2020.3.31
Net increase (decrease) in commercial papers
Repayments of lease obligations
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury shares
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents
resulting from change in scope of consolidation
Cash and cash equivalents at end of period

10,000(1,613)59,354(23,726)
70,000(40,000)(20,051)(24,936)(1,397)
27,628(10,000)(2,646)
71,542(43,390)
90,000(30,000)(24,038)(27,839)(454)
23,171

(710)

(489)

(35,238)
128,271

58,17993,032–

6

93,032

151,218

Financial data

TOKYO GAS INTEGRATED REPORT 2020

63

Delayed Impact of Gas Rate Adjustment System

Gas Rate Adjustment System’s Medium- to Long-Term Neutralizing Effect on Crude
Oil Price and Exchange Rate Formation
Gas prices are determined using the gas rate adjustment system. Through this system, average
raw material prices over a three-month period according to trade statistics are compared withthe raw material cost that is used as the standard (standard average raw material cost), andthe gas rates are adjusted using a defined calculation method based on the differences. A
time lag of four months on average (called a sliding time lag) exists between the payment of

raw material costs and the reflection of such changes in gas rates.
Consequently, fluctuations in crude oil prices and exchange rates may result in the underrecovery or over recovery of raw material costs if this lag cuts across a fiscal year, thereby affecting
income. Looking at the medium- to long-term, however, the gas rate adjustment system has
a neutralizing effect on the income impacts of fluctuations in raw material costs.

Timing of the Standard Average Raw Material Cost Calculation and Reflection in Gas Rates

How the Sliding Time Lag in Rates Works

Timing of standard average raw material cost calculation
Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Dec.

Average rawmaterial priceOver
recoveryUnder
recoveryAverage raw
material price
Average raw
material price

Average all Japan LNG price
Average raw material price reflected in gas rate

Reflection in gas rates

Jun.

Jul.

Aug.

The average raw material price over the past three months is calculated every month and thenreflected in the gas rate three months later.

FY N

FY N+1