61

Financial data

11-Year Consolidated Financial Highlights As of March 31, 20192009.32010.32011.32012.3

1,660,162

1,415,718

1,535,242

1,754,257

Operating Profit (¥ million)

65,20485,229122,451

77,075

Operating Profit Margin (%)

3.93

6.02

7.98

4.39

Ordinary Profit (¥ million)

58,337

83,519121,548

75,620

Profit attributable to owners of parent (¥ million)

41,70853,781

95,46746,060Net Sales (¥ million)

Equity (¥ million)

772,365

813,886

858,920

839,166

Total Assets (¥ million)

1,764,185

1,840,972

1,829,661

1,863,885

Interest-bearing Debt (¥ million)

593,230

555,919584,169

625,830

Operating Cash Flow (¥ million)

182,791

199,898

244,803

194,565

Free Cash Flow (¥ million)

36,862

51,712

94,60048,152

EBITDA (¥ million)

206,287

231,346

271,788

225,580

Capital Expenditure (¥ million)

145,929

148,186

150,202

146,413

Depreciation (¥ million)

141,083

146,117

149,336

148,505

15.37

19.86

35.63

17.70

EPS (Earnings per Share, fully diluted) (¥)
BPS (Book Value per Share) (¥)

284.72301.58320.70324.672,717,571

2,703,7612,684,193

2,590,7158999

DOE (Dividends on Equity) (%)

2.78

3.07

2.88

2.74

Payout Ratio (%)

51.18

45.32

25.26

50.85

Total Payout Ratio (%)

63.35

60.11

60.87

61.36

Current Ratio (%)

118.99120.93142.26156.89D/E (Debt-Equity) Ratio (times)

0.77

0.68

0.68

0.75

Equity Ratio (%)

43.78

44.21

46.94

45.02

ROE (Return on Equity) (%)

5.41

6.78

11.41

5.42

ROA (Return on Assets) (%)

2.41

2.98

5.20

2.49

Total Asset Turnover (times)

0.96

0.79

0.84

0.95

TEP (¥100 million)

-48

186

640

91

WACC (%)

3.4

3.2

3.3

3.1

Number of city gas customers (thousand)

10,513

10,637

10,73910,855

Gas Sales Volume (million m 3 )13,942

13,666

14,745

15,190

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

2020 vision basis*15,833

Number of electricity retail customers (thousand)Electric power sales volume (billion kWh)

8.27

Notes: * 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 forin-house use and LNG sales volume (excluding volume for Nijio) to consolidated gas sales volume.
* Depreciation includes amortization of long-term prepaid expenses.
* The financial information contained in this integrated report is based on annual securities report. However, it has not been audited by certified public accountants.
* 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).

62

TOKYO GAS INTEGRATED REPORT 20192013.32014.32015.32016.32017.32018.32019.3

1,915,639

2,112,117

2,292,548

1,884,656

1,587,085

1,777,344

1,962,308

145,633

166,044

171,753

192,008

58,365

116,30293,704

7.60

7.86

7.49

10.19

3.68

6.54

4.78

147,453

159,613

168,169

188,80955,688111,546

89,386

101,678

108,451

95,828111,936

53,13474,98784,555

927,634

1,011,787

1,069,515

1,100,271

1,101,498

1,136,027

1,159,055

1,992,403

2,176,816

2,257,662

2,251,518

2,230,269

2,334,316

2,428,149

642,550

713,823

730,739715,769

713,596

724,940

803,216

240,448

248,831237,680

257,122

217,439

240,328

246,436

56,651827

13,08425,08914,081

31,58322,655

284,403

306,424

313,605

337,194

222,670

281,643

255,585

183,797

248,004

224,596

232,033

203,358

208,745

223,781

138,770

140,380

141,852

145,187

164,305

165,342

161,881

39.52

43.10

39.15

46.68

23.02

164.12*

187.60360.70402.91438.28460.35479.742,487.58*

2,575.99

2,577,919

2,517,551

2,446,778

2,396,778

2,302,856

458,073*451,356

10

10

10

11

11

55*

60

2.91

2.59

2.34

2.42

2.29

2.25

2.35

25.30

23.20

25.55

23.57

47.79

33.51

31.98

60.70

60.00

60.80

60.10

60.71

60.17

60.31

162.16

156.67150.63155.48142.69135.59156.01

0.69

0.71

0.68

0.65

0.65

0.64

0.69

46.56

46.48

47.37

48.87

49.39

48.67

47.73

11.51

11.18

9.21

10.32

4.83

6.70

7.37

5.27

5.20

4.32

4.96

2.37

3.29

3.55

0.99

1.01

1.03

0.84

0.71

0.78

0.82

598

507

434

676

-62

244

68

3.2

3.2

3.6

3.4

3.0

3.1

3.0

10,978

11,111

11,263

11,398

11,536

11,678

11,81815,39014,735

15,541

15,436

15,72015,56815,19816,741

17,22518,36018,587

19,05319,052

18,397

667

1,130

1,774

12.65

14.66

15.48

9.98

9.71

10.61

10.96

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) = Profit after taxes and before interest payments – Cost of capital (invested capital x WACC)

WACC calculation data (fiscal 2018 actual)∙ Interest-bearing debt cost: Real interest rate of 0.85%(after tax)
∙ Cost of shareholders’ equity∙ Risk-free rate: 10-year JGB yield of 0.06%∙ Risk premium: 5.5%, Beta coefficient of 0.75

63

Financial data

Operating cash flow

Total payout ratio(¥ million)(%)

300,000

70.0

60.0

250,000

50.0
200,000
40.0
150,000
30.0
100,000
20.0
50,00010.0

002012.32013.32014.32015.32016.32017.32018.32012.32019.32013.32014.3Return on equity (ROE)

2015.32016.32017.3

2018.32019.32016.32017.32018.32019.32018.32019.3

TEP(%)(¥100 million)

12750

10600

8450

6300

4150

200-150
2012.32013.32014.32015.32016.32017.32018.32012.32019.3

Gas sales volume

2013.32014.32015.3

Electric power sales volume(million m )(billion kWh)

21,00018

17,50015

14,00012

10,50097,000

6

3,500

3

300
2012.32013.32014.32015.32016.32017.32018.32019.32012.32013.32014.32015.32016.32017.3

64

TOKYO GAS INTEGRATED REPORT 2019

Consolidated Balance Sheet2018.3.31

Consolidated Statement of Income(¥ million)
2019.3.31

AssetsNon-current assets
Property, plant and equipment
Production facilities
Distribution facilities
Service and maintenance facilities
Other facilities
Inactive facilities
Construction in progress

236,334
560,216
52,244406,221316
157,913

234,433
548,529
49,586447,608316
145,160

Total property, plant and equipment

1,413,246

1,425,634

Intangible assets
Goodwill
Other intangible assets

1,254
92,167

1,306
119,052

Total intangible assets

93,422

120,359

Investments and other assets
Investment securities
Long-term loans receivableRetirement benefit asset
Deferred tax assets
Other investments and other assets
Allowance for doubtful accounts

239,379
27,9291740,856
36,693(378)

225,212
40,15824
42,42547,950(362)(¥ million)
2017.4.1-2018.3.31

2018.4.1-2019.3.31

Net sales
Cost of sales

1,777,344
1,203,991

1,962,308
1,407,345

Gross profit

573,353554,963

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

392,680
64,370392,466
68,791

457,050

461,258

116,30293,704

1,158
2,967
1,6371,612
2,812
1,668

Total selling, general andadministrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income
Share of profit of entities accounted
for using equity method
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Miscellaneous expenses
Total non-operating expenses

2,493

2,794

4,800

4,883

13,057

13,771

11,6196,193

11,091
6,997

17,81318,089111,546

89,386

3,403
3,049

29,306
6,420

6,452

35,727

Total investments and other assets

344,497

335,409Total non-current assets

1,851,165

1,901,403

128,331
216,234
22,18815
2,494
12,41745,45456,897(884)

93,092
265,225
19,647

3,213

7,865

483,150

526,745

Profit before income taxes

114,784

117,248

2,334,316

2,428,149

Income taxes - current
Income taxes - deferred

31,527
7,957

26,113
6,823

Non-current liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Retirement benefit liability
Provision for gas holder repairs
Provision for safety measures
Provision for appliance warranties
Provision for point card certificates
Asset retirement obligations
Other non current liabilities

Total income taxes

39,48432,936294,998
358,680
10,89873,161
3,107
3,115
9,984
835
13,20061,572334,998
394,542
17,51775,262
2,990
1,776
14,0571,450
11,94064,640

Profit75,30084,311

312(244)

74,98784,555

Total non-current liabilities

829,554919,176

58,09480,8197,800
30,237
179,376

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

356,328

337,626

1,185,882

1,256,803

141,844
1,898
936,635(3,642)

141,844
1,634
976,550(4,111)

1,076,736

1,115,918

30,28222,756(251)
33,206(3,945)

1,604
24,770(5,994)59,291

43,137

Current assets
Cash and deposits
Notes and accounts receivable - trade
Lease receivables and investment assets
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total current assets
Total assets

2,194
12,73063,73571,306(1,186)

Liabilities

Current liabilities
Current portion of non-current liabilities
Notes and accounts payable - tradeShort-term loans payable
Income taxes payable
Other current liabilities
Total current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on availablefor-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated othercomprehensive income
Non-controlling interests

12,405

12,289Total net assets

1,148,433

1,171,345

Total liabilities and net assets

2,334,316

2,428,149

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on valuation of investment
securities

3,213
7,865

Total extraordinary losses

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

Consolidated Statement ofComprehensive Income
Profit before minority interests2017.4.1-2018.3.31(¥ million)
2018.4.1-2019.3.31

75,30084,311

3,145(7,528)Other comprehensive income
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans, net of tax
Share of other comprehensive
income of entities accounted forusing equity method

666

221

(3,537)(6,735)(8,784)(2,073)407(78)

Total other comprehensive income(8,101)(16,193)

67,198

68,11866,856

68,401

341(283)

Comprehensive income
Breakdown of comprehensive income
Comprehensive income
attributable to owners of parent
Comprehensive income attributable tonon-controlling interests

65

Financial data

Consolidated Statement of Cash Flows(¥ million)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of long-term prepaid expenses
Loss on retirement of property, plantand equipment
Loss (gain) on sales of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment
securities
Increase (decrease) in retirement benefit liability
Increase (decrease) in reserve for safetymeasures
Increase (decrease) in reserve for
fixtures assurance
Interest and dividend income
Interest expenses
Share of loss (profit) of entities
accounted for using equity method
Decrease (increase) in notes andaccounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes andaccounts 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
Cash flows from investing activities
Purchase of investment securities
Proceeds from sales and redemption of
investment securities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of long-term prepaid expenses
Proceeds from sale of non-current assets
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of shares of subsidiaries
resulting in change in scope of consolidation
Payments of long-term loans receivableCollection of long-term loans receivable
Net decrease (increase) in short-termloans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
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 ofperiod
Cash and cash equivalents at end of period

2017.4.12018.3.31

2018.4.12019.3.31

114,784
161,093
4,248

117,248
157,574
4,306

1,845

2,248

(3,397)(3,042)(29,283)(6,385)

435

7,865

(12,461)

1,039(1,596)(1,338)

(314)

4,073

(4,125)
11,619(4,425)
11,091(2,493)(2,794)(20,602)(46,191)(4,948)(18,336)(631)(5,321)

3,000(3,002)

1,265(2,541)

36,578281,258
12,295(11,502)(22,312)259,738(16,526)
169,300
9,387(10,809)(26,571)
141,306(47,898)(17,603)

5,021

12,082(177,671)(27,638)(1,653)
3,799(168,144)(39,491)(8,561)
25,050-(1,054)99

1,768(3,101)
2,801(12,238)
4,074

(580)

3,686

(340)
(247,162)(3,030)(203,462)(2,645)(1,526)60,471(62,065)
20,000(7,082)(25,187)
1,385(16,651)(1,466)
10,000(1,613)59,354(23,726)
70,000(40,000)(20,051)(24,936)
68
27,628

(220)

(710)

(4,294)(35,238)

132,566

128,271

128,271

93,032

Factors Affecting Revenuesand Expenses
Gas Rate Adjustment System’s Medium-to
Long-Term Neutralizing Effect on Crude
Oil Price and Exchange Rate Fluctuations
Gas prices are determined using the gas rateadjustment system. Through this system, average
raw material prices over a three-month period
according to trade statistics are compared with theraw material cost that is used as the standard(standard average raw material cost), and the gasrates are adjusted using a defined calculation
method based on the differences. A time lag offour 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 andexchange rates may result in the under-recovery orover-recovery of raw material costs if this lag cuts
across a fiscal year, thereby affecting income.
Looking at the medium- to long-term, however, thegas 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
Timing of standard average raw material cost calculation
Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Dec.
Average raw
material price
Average raw
material price
Average raw
material price

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.

How the Sliding Time Lag in Rates Works
All Japan LNG price
Average raw material price reflected in gas rate

Under
recoveryFY NOverrecoveryFY N+1