Medium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

Provide energy and services based on a businessmodel that fuses digital and physical operations.

Tokyo Gas Group FY2020 - 2022

Use assets to provide LNG withincreased value as a product toutility and other customers
both at home and abroad.

Medium-TermManagement Plan
This Medium-Term Management Plan has been
established to enable us to work to make steadyprogress and to reinforce the foundations of ourbusiness for future growth and expansion in thethree-year period starting in FY2020, despite therecent difficult circumstances.

33KeyStrategies

Utilize accumulated strengths andachievements to provide customers
in other parts of Asia and elsewherewith solutions aimed at achieving
effective use of natural gas.

Key Strategy

1

Evolution of customer
solutions

Key Strategy

2

Key Strategy

3

From the Tokyo
metropolitan area toother parts of Japan andto other countries

Key Straties

Expansion of LNG
business4

Acceleration of overseas
business

Shaping of Net-Zero CO2

Overview of theMedium-Term
Management Plan
In preparation for future growth and expansion, we will
establish the following as key strategies:
1 Evolution of customer solutions
2 Expansion of LNG business3 Acceleration of overseas business4 Shaping of Net-Zero CO2
We will strive to
1 Implement cost structure reform
2 Continue the digital transformation (DX)* and3 Build a flexible organization towards changes
in order to change the revenue and expenditure structure,create resources for future growth and also strengthen ourbusiness foundation.

* DX: Digital transformation. The use of data and digital technologies to transformproducts, services and business models based on customer and societal needs,and also transform work operations themselves as well as organizations,processes, and corporate culture and climate.

Strengtheningof businessfoundation

Strengthening ofbusiness foundation

1

Implementationof coststructure reform

Strengthening ofbusiness foundation

2

Continuationof DX*

3

Establishment of aflexible organization
towards changes

Challenge

Challenge

Leadership in theeffort to achieve
Net-Zero CO2

Transformation of
the LNG value
chain

1

3 challenges ofCompass
2030

Strengthening ofbusiness foundation

3

Challenge

2

Establishment of avalue co-creation
ecosystem

Offer solutions that
optimize natural gas andrenewable energies, andseek new technologies that
hold promise for the future.

Medium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

Key figures

Supplementary reference

We will achieve operating profits + equity method income of JPY 140.0 billion in FY2022 through a balance between
cost structure reform (primarily in the gas business), the expansion of electricity, solutions, etc., and investment in growth.

Profit planning by segment
FY2019 forecast*1

Real estate

Other

JPY 11.1 billion

Project portfolio composition:
Operating profit + equity method income

JPY 6.3 billion

Energy-related25%

Overseas*1

JPY 14.5 billion
Overseas12%10 %

JPY 12.5 billion

25%Solutions, etc* 2

50 %Energy* 3(Gas+Electricity)

28%

27%

60 %

63%

Total for segment

JPY118.5billion*2

JPY 10.0 billion

FY2022 targets* 3Others

JPY 10.0 billion

JPY 15.0 billion
FY2019 forecast*

FY2022

Management Guidelines andkey figures in Compass 2030

KGI
Operating profit + equity method
incomeEnergy-related

JPY 16.0 billion
Overseas

JPY 118.5 billion

JPY 140.0 billion

Approx. JPY 200.0 billion

JPY 109.1 billion

Electricity

Real estate4Gas

JPY 16.0 billion

Total for segment

JPY140.0billion*2Gas

JPY 108.0 billion

Electricity

JPY 20.0 billion

Financial indicators
ROA

3.1%

Approx. 4%

ROE

6.6%

Approx. 8%

D/E ratio

0.78

Approx. 0.9

KPI

Segment

Main activities

Gas

Factor in increased depreciation costs and intensifiedcompetition while carrying out drastic cost structurereform and boosting LNG sales (trading).

Electricity

Achieve a balance between reducing marketing costs
and increasing the number of accounts.

12.20 million

14.80 million

20.00 million

Overseas

Growth of upstream, midstream and downstream
projects, primarily in North America.

Natural gas transaction volume

16.70 million tons

17.00 million tons

20.00 million tons

Segment profit from Overseas Business

JPY 12.5 billion

JPY 16.0 billion

Energyrelated

Promote cost structure reform including making
services for profit.

5.0 million tons

6.50 million tons

10.00 million tons

Real estate

Take into account the full-fledged start of theTamachi Project.

0.59 million kW

2.00 million kW

5.00 million kW

OthersPromote cost structure reform and create profitabilityof M&A.

--JPY 30.0 billion

No. of customer accounts(as of the end of FY)

Contribution to CO2 emission reductions(as compared to FY2013 levels)

Renewable power source transaction volume(as of the end of FY)

Cost structure reform(compared to FY2019)--*1 Overseas business: All overseas business *2 Solutions, etc.: Energy-related, real estate, other *3 Energy: Gas and electricity business in Japan *4 At time of 3Q results*1 At time of 3Q results
FY2019 3Q results frame: Oil price $68.42/bbl, Exchange rate ¥109.00/$*2 Including consolidation adjustment (-¥45.0 billion)*3 FY2022 anticipated frame: Oil price $60/bbl, Exchange rate ¥110/$34

Medium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

Cash flow allocation plan and shareholder return policy
Using as a primary resource cash flow extended by cost structure reform and increase in sales, we will invest in future growth
while maintaining the balance of asset efficiency, fiscal health and shareholder return.

Cash flow allocation(total for three years)

Cash inCash out
Capital investment

Consolidated
operating cash flow

JPY

900.0billion

JPY600.0billion

Breakdown of capital investment and loans and investment
Overseas business(renewable energy, upstream and LNG infrastructure)

Loans and investment

JPY

400.0

billionOutside borrowing,

etc. JPY

250.0

billionJPY
200.0
billionShareholder return

150.0

JPY
billionShareholder return
Distributable income will be applied to the improvement of customer services
and to the achievement of a sustainable society, and also distributed toshareholders in a timely and appropriate manner.
Acquisition of treasury stock for retirement will be considered as one wayof providing shareholder return in addition to dividends, and targets for total
payout ratio (ratio of dividends on current consolidated net income andacquisition of own shares) will be approximately 60% in each fiscal year up
through FY2022.
With regard to dividends, we will continue to provide stable dividends andwill gradually increase dividends in accordance with growth while
comprehensively taking into consideration the profit level over the medium- tolong-term.

Renewableenergy*JPY 110.0billion

New services
JPY 50.0 billion

Energy services
and district
heating andcooling
JPY 70.0 billion

Upstreamand LNGinfrastructure
JPY 90.0 billion

Solutions, etc.
Real estate
JPY 80.0 billion

JPY200.0billion* Total renewable energy including domestic comes to
JPY 140.0 billion.

Electric power:
Thermal power
plants and otherexisting facilities
JPY 30.0 billion
Electricity:
Renewable energy
related investment
JPY 30.0 billion

EnergyJPY380.0billion

CommonGas:
Manufactureand supply
equipment
JPY 320.0billion

M&A: Expansion ofscale of electricity andgas businesses,
upgrading of service
lineup, acquisition oftechnology related toNet-Zero CO2 emissions
JPY 100.0 billion

JPY220.0billion

DX(new services,customerinformation system)
JPY 120.0 billion

35

Medium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

Evolution of customer solutions

Key Strategy 1

Through a business model that fuses digital and physical operations, we will provide an improved customer experience to meetincreasingly diverse customer needs, and achieve increase of the number of customer accounts and improvement of profitability.
To provide gas, electricity and services widely, we will deploy a second brand especially designed for digital operations, and build a
new business model by collaborating with our business partners.

Main activities in FY2020 - 2022

Restructuring of
the retail sector

Prioritize operations to balance improved
customer service with more efficient sales costs.
Carefully examine and abolish tariffs and operations in order to create menus that are easy forcustomers to choose.
Reassess and improve the quality of customer contact activities (increasing speed by the use of tech in
the operation of reception and task allocation and make preparations for the use of electronic billing).

2022 KPI

No. of customer accounts(total no. of contracts for gas, electricity and services)

12.2 million

Promotion ofelectric powersales based on a
new approach

Conduct business development that is not limited tothe existing areas by employing a second brand.

Establishment of abusiness modelutilizing the “lastone mile” and theuse of digitaltechnology

Provide a new customer experience by using digitaltechnology and equipment-related strengths.

Expanding business areas with electricity as a foothold for customers who do not have gas contracts
or who have potential service needs.
Establish a Hinatao Energy Co., a second brand that is especially designed for internet sales ofelectricity and gas in order to provide a menu of various services that can meet the wide-ranging
needs of primarily digitally oriented customers.

In addition to conventional appliance sales centering on face-to-face contacts, collaborate with
e-commerce companies as well to establish installation and maintenance services, etc. for customer
appliances and systems (“last one mile”) so as to meet customer needs that include electricity andplumbing.
Create new solution menus beginning with photovoltaic power generation services for homes andbusinesses and gas appliances and home equipment services with fixed payment that include
installation and maintenance (Sumilena).
Provide an improved customer experience, by working with business partners as well as using AI toprovide each customer with optimized menus of services to match needs of each customer.

2019 forecast

14.8 million

2022 KPIOf that amount, electricity

3.8 million

2.4 million

2019 forecast

2022 KPI36

Medium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

Expansion of LNG business

Key Strategy 2

We have seen LNG as a raw material for gas and electricity business, but we will reassess LNG as a product that provides value tocustomers. Through establishing a new company, we will grow a LNG trading to a mainstay for the Tokyo Gas Group.
As LNG demand continues to increase worldwide, we will optimize LNG supply and demand by utilizing the Tokyo Gas Group assets
and deepening cooperation with other companies in order to expand both transaction volumes and profits.

Main activities in FY2020 - 2022

Expand LNG
trading

Use assets and collaborate with other companies
to pursue transaction opportunities.
Cooperation with Centrica, RWE and other business partners will provide flexibility with respect toprocurement and sales contracts and expand LNG swap transactions* that utilize ships, LNG
terminals, thermal power plants and other assets.

2022 KPI
Natural gas transaction volume

16.7 million tons

17 million tons

2019 forecast

2022 KPI* Transactions in which the price differential is determined in accordance with LNG time, heat quantity and location.

Strengthen
operational
structure

Optimize supply and demand to expand LNG
transaction volumes and increase profits.
Formulate and promote a comprehensive strategy for accommodating LNG supply and demand, andupgrade operational functions for gas and power source procurement, LNG transactions and so on(by establishing a new Asset Optimization & Trading division).
Establish a new company for LNG trading to ensure agile transactions.

Conduct
procurement tohelp expand LNG
business

Achieve a flexible and competitive LNG procurement portfolio.
Meet the diverse needs of domestic gas and electric power customers (mainly industrial users andpower generation use), and domestic and foreign utilities.

* Including overseas business

37Medium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

Acceleration of overseas business

Key Strategy 3

Using our accumulated LNG strengths and achievements, we will focus on LNG infrastructure business development in Asia wherethe demand for natural gas is increasing. We will also work to expand the scale of renewable power generation and increase thevalue of natural resource development business.
We intend to conduct “growth engine type investment” where we invest in business corporations and get involved in themanagement. We will use the management resources of invested-in companies to quickly expand business and increase value.

Main activities in FY2020 - 2022

Development ofLNG infrastructurebusiness (Asia)

Expansion of scaleof renewableenergy powergeneration (NorthAmerica and Europe)

Increase the valueof upstream
business(North America)

Secure LNG demand and develop new LNG terminals in
an integrated manner.
Participate in LNG infrastructure study to discover and develop new projects in each country from themaster plan stage.
Conduct integrated development of LNG terminals and gas power generation business (LNG toPower), utilizing the strengths and achievements of LNG user’s know-how cultivated in the course ofconducting domestic gas operations.

Expand scale by using business expertise.
Acquire development and business management knowledge through collaboration with Engie in
Mexico and deploy this knowledge in North America and Europe.
Participate in the management of renewable energy development operators, with involvement fromthe initial stages of development, in order to improve profitability.

Increase profits by using the resources of invested-in companies.
Participate in the management of shale gas business corporations and take a leading role throughrefinancing and the expansion of interests to increase asset efficiency.

2022 KPI
Overseas segment profit

JPY 12.5 billion

2019 forecast

JPY16.0 billion

2022 KPI

38

Medium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

39

Shaping of Net-Zero CO2

Key Strategy 4

To achieve Net-Zero CO2 emissions, we will expand the scale of virtual power plants (VPP) in order to develop a power business that
integrates both renewable energies and natural gas.
We will also make use of investment in domestic and foreign companies that possess new technologies in order to explore
technologies that can aid in decarbonization and pursue innovation of these technologies.

Main activities in FY2020 - 2022

Develop solutions
that combine
renewableenergies andnatural gas

Balance the effective use of natural gas with expand of
renewable energies and VPP.
Utilize digital technologies to combine thermal power, renewable energy and other centralized powersources with photovoltaic power, storage battery, CHP and other distributed power sources toconsolidate diverse customer resources and expand the scale of VPP.
Participate in photovoltaic power, biomass and wind power projects from the initial stages of development
and insource operation and maintenance to expand scale while increasing business profits.
Pursue development of offshore wind farms in Kashima and other promotion zones and take on thechallenge of floating structures that have great development potential.
Make effective use of natural gas by further advancing smart energy systems and energy services thathave been successfully implemented at Nihonbashi Muromachi and Kiyohara Industrial Park and so on,
and by combining with our group’s property development projects.

2022 KPI
CO2

Contribution to CO2 emissions reductions
5 million tons

2019 forecast

6.5 million tons

2022 KPI* As compared to FY2013 levels, including contribution at customer site

Renewable power source
transaction volume

2 million kW

590,000 kW

Developing andcommercializationof new
technologies byutilizing open
innovation

Acquire technologies for CO2 emissions reduction,capture and use, and zero emissions.
Promote technical development by using technologies and expertise accumulated through fuel cell
development and the like.
- Develop commercially viable fuel cells with the world’s highest power generation efficiency (65%).
- Conduct demonstration tests and begin services regarding CO 2 capture and use systems inredevelopment areas and at factories.
- Develop the core element technologies for hydrogen production systems.
Pursue innovation through collaboration that includes investment in companies that possess
renewable energy, CCUS and other new technologies.

2019 forecast

2022 KPI* Domestic and international, including purchases

Natural gas transaction volume (reposted)
16.7 million tons

17 million tons

2019 forecast

2022 KPI* Including overseas businessMedium-Term Management PlanTOKYO GAS INTEGRATED REPORT 2020

Implementation of cost structure reform, continuation of DX,
establishment of a flexible organization towards changes

Strengthening ofbusiness foundation

Implement cost structure reform to generate growth resources that can be allocated to key strategies.
Continue to implement digital transformation (DX) in order to increase operational efficiency, improve the customer experience andincrease resilience.
Take action with regard to the legal unbundling of the Pipeline Network Division and other changes within and outside the Group,and reassess organization, governance and personnel to increase the engagement of the Group overall.

Main activities in FY2020 - 2022
Strengthening ofbusiness foundation 1

Implementation ofcost structure reform

Conduct a drastic review of operations and mechanisms.

2022 KPI
Cost structure reform

Reduce the workload by simplifying increasingly complex gas fees and IT systems.
Review (with no exceptions) in-house criteria and operations based on appropriate quality.
Reduce costs by means of procurement reform achieved through value engineering* andcrystallization of business operations.

2022 KPI* Compared to FY2019* A systematic method for maximizing the value per cost of products and services (in terms of function, performance, degree of satisfaction, etc.).

-JPY
Strengthening ofbusiness foundation 2

Continuation of DX

Strengthening ofbusiness foundation 3

Establishment of aflexible organization
towards changes

Increase operational efficiency, improve thecustomer experience and increase resilience.
Increase operational efficiency through prediction and optimization based on AI and data.
Increase customer convenience by making services available online, and by offering optimized
proposals and so on, based on understanding of the customer.
Make use of digital technologies to build a system that achieves a balance between ensuring safety/stable supply and achieving low costs.
Increase meter reading efficiency and build a system that is capable of rapid restoration inpreparation for the comprehensive introduction of smart meters.

Take steps regarding legal unbundling and review theorganization, governance and personnel.
Implement thorough preparations for legal unbundling (introduce a pipeline network company in2020 and establish a new company in 2022).
Reassess Group governance in the light of heightened expectations for the role of subordinates (inaddition to the new pipeline company, a new business company owned by Tokyo Gas Liv Solutions
and a new trading company will be established).
Welcome and train diverse personnel, and create the mechanisms and corporate culture needed totake on challenges.

30.0 billion

40