Tokyo Gas : Financial Results for FY2019 ended March 2020

April 28, 2020

Consolidated Financial Results Bulletin for the Fiscal Year Ended March 31, 2020 (J-GAAP)

Tokyo Gas Co., Ltd.

Securities code: 9531

(URL https://www.tokyo-gas.co.jp/IR/english/index.html)

Representative:	Mr. Takashi UCHIDA, President
Contact:	Mr. Rikiya KOMORI, Chief Manager,
	Consolidated Settlements Sect.

General shareholders' meeting schedule: Scheduled date of the filing of securities report: Scheduled date of the start of dividend payments: Preparation of earnings presentation material (yes/no): Holding of earnings announcement (yes/no):

Stock listings:

Tokyo Stock Exchange, Nagoya Stock Exchange

Location of head office: Tokyo

June 26, 2020

June 26, 2020

June 29, 2020

Yes

Yes (for institutional investors)

(Amounts are rounded down to the nearest million yen)

1. Consolidated Performance for FY2019 ended March 31, 2020 (from April 1, 2019 to March 31, 2020)

(Unit: million yen)

(1) Consolidated Business Performance

(% of change from the corresponding period of previous year)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

FY2019 ended

1,925,235

-1.9%

101,508

8.3%

102,735

14.9%

43,382

-48.7%

Mar. 31, 2020

FY2018 ended

1,962,308

10.4%

93,704

-19.4%

89,386

-19.9%

84,555

12.8%

Mar. 31, 2019

Note: Total comprehensive income

FY2019 ended March 31, 2020: 40,250 million yen (-40.9%)

FY2018 ended March 31, 2019: 68,118 million yen (1.4%)

Diluted profit

Ratio of profit to

Ratio of

Ratio of

Profit per share

ordinary profit to

operating profit to

per share

shareholders' equity

total assets

net sales

FY2019 ended

98.07 yen

-

3.8%

4.1%

5.3%

Mar. 31, 2020

FY2018 ended

187.60 yen

-

7.4%

3.8%

4.8%

Mar. 31, 2019

Reference: Profit or loss on investment accounted for by equity method

FY2019 ended March 31, 2020: 5,211 million yen

FY2018 ended March 31, 2019: 2,794 million yen

(2) Consolidated Financial Position

(Unit: million yen)

Total assets

Total net assets

Equity ratio

Net assets per share

As of Mar. 31, 2020

2,537,724

1,159,228

45.2%

2,602.74

yen

As of Mar. 31, 2019

2,428,149

1,171,345

47.7%

2,575.99

yen

Reference: Shareholders' equity

As of March 31, 2020: 1,147,836 million yen

As of March 31, 2019: 1,159,055 million yen

(3) Consolidated Cash Flows

(Unit: million yen)

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at end of period

FY2019 ended

306,296

(270,798)

23,171

151,218

Mar. 31, 2020

FY2018 ended

141,306

(203,462)

27,628

93,032

Mar. 31, 2019

2. Dividend
		Dividend per share (Unit: yen)		Total dividend		Dividend
						payments	Payout ratio
	End of	End of	End of	End of		on equity
	Full-year	(Full-year)	(Consolidated)
	(Consolidated)
	1Q	2Q	3Q	4Q
	(Unit: million yen)
FY2018 ended	-	27.50	-	32.50	60.00	26,996	32.0%	2.4%
Mar. 31, 2019
FY2019 ended	-	30.00	-	30.00	60.00	26,460	61.2%	2.3%
Mar. 31, 2020
FY2020 ending	-	30.00	-	30.00	60.00		-
Mar. 31, 2021 (Forecast)

3. Consolidated Results Forecast for FY2020 ending March 31, 2021 (April 1, 2020 - March 31, 2021)

The consolidated results forecast for the FY2020 ending March 31, 2021 has not been determined as it is difficult to reasonably quantify the impact of the new coronavirus pandemic at this moment. We will disclose our forecast as soon as it can be reasonably calculated.

*Notes

1. Significant changes in consolidated subsidiaries (changes in specified subsidiaries resulting in change of scope of consolidation during the year) (yes/no): No
   Reference: Scope of consolidation and application of equity method
   Number of consolidated subsidiaries: 82 (Increased by 8 companies and decreased by 4 companies)
   Number of subsidiaries and affiliates accounted for by equity method: 15 (Increased by 1 company)
2. Change in accounting policies or estimates and retrospective restatements
3. 1. Change in accounting policies in accordance with revision of accounting standards: No
   2. Change in accounting policies other than item 1) above: No
   3. Change in accounting estimates: No
   4. Retrospective restatements: No
4. Number of issued shares (common stock)

							(Unit: share)
1)	Number of issued shares at end of		Mar. 31, 2020	442,436,059		Mar. 31, 2019	451,355,759
	period (including treasury stock):
2)	Number of shares of treasury stock		Mar. 31, 2020	1,424,746		Mar. 31, 2019	1,410,673
	at end of period:
3)	Average number of shares during		Apr. 2019- Mar. 2020	442,379,702		Apr. 2018- Mar. 2019	450,718,735
	period:

(Reference)

Non-Consolidated Business Results for FY2019 ended March 31, 2020 (April 1, 2019 - March 31, 2020)

(1) Non-Consolidated Business Performance

(Unit: million yen) (% of change from the corresponding period of previous year)

			Net sales	Operating profit	Ordinary profit	Net income
	FY2019 ended		1,787,975	1.1%	62,044	26.8%	68,342	8.6%	56,703	5.6%
	Mar. 31, 2020
	FY2018 ended		1,768,567	10.6%	48,920	-40.7%	62,910	-34.4%	53,717	-29.2%
	Mar. 31, 2019
			Profit per share	Diluted profit
			per share
	FY2019 ended			128.18 yen		-
	Mar. 31, 2020
	FY2018 ended			119.18 yen		-
	Mar. 31, 2019
(2) Non-Consolidated Financial Position
									(Unit: million yen)
			Total assets	Total net assets	Equity ratio	Net assets per share
	As of Mar. 31, 2020			2,094,493		818,433		39.1%	1,855.81 yen
	As of Mar. 31, 2019			2,078,862		891,212		42.9%	1,980.71 yen
Reference: Shareholders' equity
	As of March 31, 2020: 818,433 million yen		As of March 31, 2019: 891,212 million yen

• Quarterly review procedures by a certified public accountant or an audit firm do not apply to quarterly consolidated financial results bulletins.
• Explanation related to appropriate use of results forecasts and other items warranting special mention

1. The consolidated results forecast for the FY2020 ending March 31, 2021 has not been determined as it is difficult to reasonably quantify the impact of the new coronavirus pandemic at this moment. We will disclose our forecast as soon as it can be reasonably calculated.
2. The information related to this Financial Results will be posted on the Web site of the Company.

Contents of Attachment

I. Overview of Business Performance, etc. ...................................................................................................................	2
(1)		Overview of business performance and financial position of FY2019....................................................................	2
(2)		Future outlook .............................................................................................................................................................	6
II.	Group Companies .......................................................................................................................................................	7
III. Basic Concept Regarding Selection of Accounting Standards ................................................................................	8
IV. Consolidated Financial Statements and Main Notes ...............................................................................................	9
(1)		Consolidated balance sheets .......................................................................................................................................	9
(2)		Consolidated statements of income and comprehensive income ...........................................................................	11
		(Consolidated statement of income).........................................................................................................................	11
		(Consolidated statement of comprehensive income) ..............................................................................................	12
(3)		Consolidated statements of changes in net assets ...................................................................................................	13
(4)		Consolidated statements of cash flows ...................................................................................................................	15
(5)		Notes on consolidated financial statements .............................................................................................................	17
	1)	(Note on going concerns' premise) ...........................................................................................................................	17
	2)	(Additional information)...........................................................................................................................................	17
	3)	(Segment information, etc.) ......................................................................................................................................	17
	4)	(Per share information).............................................................................................................................................	20
	5)	(Material subsequent events)....................................................................................................................................	20
V.	Non-Consolidated Financial Statements .................................................................................................................	21
(1)		Balance sheets ............................................................................................................................................................	21
(2)		Statements of income.................................................................................................................................................	23

1

1. Overview of Business Performance, etc.

1. Overview of business performance and financial position of FY2019 (Business performance of FY2019)
   In the fiscal year under review, the economy in Japan lacked strength in consumer spending due to a series of natural disasters and the consumption tax hike, despite being on a mild recovery trend on the back of improvement in the employment and income environments although exports and production remained slightly weak. The addition of the spread of new coronavirus infections has made the economic situation extremely uncertain, with the development of the Japanese and global economies impossible to foresee.
   Amid this economic climate, the competition between energy business operators in the energy industry and competition beyond industry borders have intensified due to the full deregulation of retail electric power sales in April 2016 and the full deregulation of gas sales that followed in April 2017. In addition, decarbonization has become a global trend, which has dramatically changed the environment surrounding the energy business. Against this backdrop, we actively undertook various measures to enhance the added value we deliver to customers in Japan and abroad through the development of a comprehensive energy business and globalization.
   In light of these economic conditions and changes in the business climate, electric power sales increased due to a rise in the number of retail customers, but city gas sales declined owing to a drop in the number of customers. Reflecting this and other factors, consolidated sales in the year under review totaled ¥1,925.2 billion, a decline of 1.9% year on year.
   Meanwhile, operating expenses came to ¥1,823.7 billion, a drop of 2.4%. This reflected a drop in city gas raw material prices due to the decline of crude oil prices and the Company's utmost efforts to curb costs by further improving management efficiency, despite an increase in sales costs in electric power sales.
   Extrapolating from this performance, operating profit was ¥101.5 billion, an increase of 8.3% year on year, and ordinary profit totaled ¥102.7 billion, a rise of 14.9%. Profit attributable to owners of the parent came to ¥43.3 billion, a drop of 48.7%, after posting a ¥11.6 billion contract settlement gain on raw materials as an extraordinary profit, a ¥28.1 billion impairment loss and a ¥18.6 billion loss on valuation of investment securities for overseas upstream projects, etc. as extraordinary losses, and income taxes.

1) Gas

The sales volume of the city gas business, which is the main business of the gas segment was 13,855 million m3 in the period under review, a decrease of 8.8% year on year. Breaking this down, residential demand was 3,124 million m3, a drop of 3.6%, despite low weather temperatures in comparison with a year earlier.

Commercial demand was 2,497 million m3, a decline of 4.3% year on year, owing in part to a decrease in the number of customers.

Industrial demand was 6,397 million m3, a drop of 13.7%, due in part to a decrease in sales volume to users dedicated to power generation.

Supply to other utilities was 1,837 million m3, a fall of 5.1%, owing in part to a drop in customer demand.

In addition, gas sales came to ¥1,355.4 billion, a decrease of ¥58.3 billion or -4.1% year on year, owing mainly to a year- on-year decrease in city gas sales volume as well as a drop in gas unit price reflecting gas rate adjustments.

As a result of a drop in gas sales volume and a decrease in city gas raw material prices due to a declining trend in crude oil prices compared to the previous fiscal year, the overall operating expenses decreased ¥68.5 billion or -5.2%. Consequently, segment profit totaled ¥102.4 billion, an increase of ¥10.2 billion or 11.1% year on year.

2

				FY2019	FY2018	Change	% change
No. of customers for city	Thousands	9,129	9,821	-691	-7.0
gas retail sales
No. of customers (meters)	Thousands	11,954	11,818	136	1.1
volume	Residential	Mil. m3	3,124	3,240	-116	-3.6
	Commercial	Mil. m3	2,497	2,609	-112	-4.3
sales		Industrial	Mil. m3	6,397	7,413	-1,016	-13.7
	Subtotal	Mil. m3	8,894	10,022	-1,128	-11.3
gas
Supplies to other utilities	Mil. m3	1,837	1,936	-99	-5.1
City
Total	3	13,855	15,198	-1,343	-8.8
	Mil. m
Average temperature	°C	16.7	17.0	-0.3	-
Notes:

1. No. of customers for city gas retail sales indicates the number of billed customers for city gas retail sales.
2. No. of customers (meters) indicates the number of meters that includes inactive meters and meters for gas supply from other retail companies.
3. "Commercial" indicates sales to commercial, public and medical institutions.
4. City gas sales volumes are on the basis of 45MJ/m3.
5. Average temperature is the average temperature during the period of use by each customer (from date of initial month's

meter reading to final month's meter reading).

The aforementioned notes also apply to the relevant tables.

	FY2019	FY2018	Change	Crude oil	FY2019	FY2018	Change
¥/$ rate	price
108.71	110.92	-2.21	67.79	72.15	-4.36
	($/bbl)

2) Electric power

Sales totaled ¥358.6 billion, an increase of ¥78.3 billion or 27.9% year on year. Operating expenses rose ¥78.3 billion or 29.0%.

In light of this, segment profit totaled ¥10.1 billion, roughly the same as the previous fiscal year.

			FY2019	FY2018	Change	% change
No. of customers for city	Thousands	2,350	1,742	608	34.9
gas retail sales
Electric	Retail	million kWh	8,522	6,555	1,967	30.0
power
Wholesale etc.	million kWh	12,082	8,926	3,156	35.4
sales
Total	million kWh	20,604	15,482	5,122	33.1
volume

Note: No. of customers for electric power retail sales indicates the number of billed customers for electric power retail sales

3

3) Overseas

Sales came to ¥43.9 billion, a decline of ¥7.0 billion or 13.6% year on year. Operating expenses fell ¥2.4 billion or 6.4%. Accordingly, segment profit totaled ¥13.2 billion, a drop of ¥2.1 billion or 13.4% year on year, owing to an increase in equity-method investment gains.

In addition, a ¥22.4 billion impairment loss and a ¥15.9 billion loss on valuation of investment securities have been recorded as extraordinary losses on overseas upstream projects.

4) Energy-related

Sales amounted to ¥351.9 billion, a drop of ¥11.6 billion or 3.2% year on year. Operating expenses shrunk ¥17.5 billion or 5.0%.

Reflecting this, segment profit was ¥16.9 billion, an increase of ¥5.8 billion or 51.9% year on year.

5) Real estate

Sales reached ¥44.5 billion, a decrease of ¥0.1 billion or 0.2% year on year. Operating expenses fell ¥0.7 billion or 1.9%. Reflecting this, segment profit was ¥9.6 billion, a growth of ¥0.5 billion or 6.2% year on year.

6) Others

Sales totaled ¥123.2 billion, an increase of ¥15.4 billion or 14.2% year on year. Operating expenses rose ¥15.9 billion or 15.6%.

Reflecting this, segment profit was ¥5.7 billion, a drop of ¥0.5 billion or 8.4% year on year, owing to a drop in equity- method investment gains.

< Summary by segment>	(Unit: hundred million yen )
			Gas	Electric	Overseas	Energy-	Real estate	Others
			power	related
	FY2019		13,554	3,586	439	3,519	445	1,232
	(% of total)		(59.5%)	(15.7%)	(1.9%)	(15.5%)	(2.0%)	(5.4%)
Sales	FY2018		14,137	2,803	509	3,635	446	1,078
(% of total)		(62.4%)	(12.4%)	(2.3%)	(16.1%)	(2.0%)	(4.8%)
	Amount of change	-583	783	-70	-116	-1	154
	(Rate of change)	-4.1%	27.9%	-13.6%	-3.2%	-0.2%	14.2%
	FY2019		12,529	3,484	353	3,349	353	1,174
	(% of total)		(58.9%)	(16.4%)	(1.7%)	(15.8%)	(1.7%)	(5.5%)
Operating	FY2018		13,214	2,701	377	3,524	360	1,015
expenses	(% of total)		(62.4%)	(12.7%)	(1.8%)	(16.6%)	(1.7%)	(4.8%)
	Amount of change	-685	783	-24	-175	-7	159
	(Rate of change)	-5.2%	29.0%	-6.4%	-5.0%	-1.9%	15.6%
	FY2019		1,024	101	132	169	96	57
	(% of total)		(64.8%)	(6.4%)	(8.4%)	(10.7%)	(6.1%)	(3.6%)
Segment	FY2018		922	101	153	111	91	62
profit	(% of total)		(63.9%)	(7.0%)	(10.6%)	(7.8%)	(6.3%)	(4.4%)
	Amount of change	102	-0	-21	58	5	-5
	(Rate of change)	11.1%	-0.2%	-13.4%	51.9%	6.2%	-8.4%

Note: Figures for sales include internal transactions. Figures for operating expenses do not include expenses that cannot be allocated to specific segments. Figures for segment profit are adjust against the amount based on operating profit in the consolidated financial statements plus or minus equity-method investment gains or losses.

4

(Financial position in FY2019)

1) Situation of assets, debt and net assets

Assets as of March 31, 2020 totaled ¥2,537.7 billion, an increase of ¥109.6 billion versus March 31, 2019, primarily attributable to an increase in the outstanding balances for other facilities (¥27.4 billion) and other intangible non-current assets (¥18.8 billion).

Liabilities stood at ¥1,378.4 billion, an increase of ¥121.6 billion. This was primarily attributable to an increase in the outstanding balance for interest-bearing debt (¥101.8 billion) due to an increase in corporate bonds.

Net assets totaled ¥1,159.2 billion, a drop of ¥12.1 billion. Although net assets were positively impacted by factors including the posting of profit attributable to the owners of the parent (¥43.3 billion), there was an overall decrease attributable to distribution of capital surplus (-¥27.8 billion) and the purchase of treasury stock in the open market (-¥23.9 billion).

In contrast with the growth of total assets, equity (total shareholders' equity + accumulated other comprehensive income) was smaller. As a result, the equity ratio was 45.2% on March 31, 2020, down 2.5 points from March 31, 2019.

			(Unit: hundred million yen)
			FY2019	FY2018	Change		% change
Gas	Production facilities		101	186	-85	-45.3%
Supply facilities		1,057	966	91	9.4%
Tokyo
Total		1,642	1,787	-145	-8.2%
	Operational facilities, etc.		482	634	-152	-24.0%
Consolidated subsidiaries		677	491	186	37.8%
Adjustments		-48	-41	-7		-
Total		2,270	2,237	33	1.5%
2) Situation of cash flow
					(Unit: hundred million yen)
				FY2019	FY2018		Change
Cash flow from operating activities		3,062	1,413		1,649
Cash flow from investing activities		-2,707	-2,034		-673
Cash flow from financing activities		231	276		-45
Effect of exchange rate change on cash and cash equivalents	-4	-7		3
Net increase (decrease) in cash and cash equivalents	581	-352		933
Cash and cash equivalents at beginning of year		930	1,282		-352
Cash and cash equivalents at end of year		1,512	930		582

a) Cash flow from operating activities

Cash and cash equivalents obtained as a result of operating activities totaled ¥306.2 billion, an increase versus a year earlier. This was primarily attributable to the posting of income before income taxes (¥67.5 billion) and depreciation and amortization (¥165.4 billion), despite income taxes paid (-¥31.6 billion) and interest paid (-¥11.0 billion).

b) Cash flow from investing activities

Cash and cash equivalents used in investing activities totaled ¥270.7 billion, a decrease versus a year earlier. Although there was a collection of long-term loans receivable (¥4.8 billion), there was a cash outflow due to the purchase of property, plant and equipment (-¥177.6 billion) associated with capital expenditures, and for the purchase of intangible assets (- ¥41.9 billion).

c) Cash flow from financing activities

Cash and cash equivalents obtained in financing activities totaled ¥23.1 billion, an increase versus a year earlier. Although there were expenditures due to repayment of long-term loans payable (-¥43.3 billion), bond redemption (-¥30.0 billion), and dividends payable (-¥27.8 billion), cash and cash equivalents rose owing to proceeds from the issuance of bonds (¥90.0 billion) and long-term loans payable (¥71.5 billion).

5

(2) Future outlook

The consolidated results forecast for the FY2020 ending March 31, 2021 has not been determined as it is difficult to reasonably quantify the impact of the new coronavirus pandemic at this moment. We will disclose our forecast as soon as it can be reasonably calculated.

6

II. Group Companies

1) The scope of consolidation

- Newly included subsidiaries in scope of consolidation: 8 companies

Kyoto Ayabe Solar Power LLC, TG Renewables 1 LLC, Tokyo Gas Liv Solutions Co., Ltd., Sumilena Co., Ltd., Hinatao Energy Co., Gunma Annaka Solar LLC, Annaka Solar Godo Kaisha, Ishikawa Hakui Solar Power GK (all have been newly added to the scope of consolidation)

- Excluded: 4 companies

Tokyo Gas Site Development Co., Ltd. (absorption-type merger), Tokyo Gas Real Estate Holdings Co., Ltd. (absorption- type merger), Tokyo Gas Lifeval Nishiota Co., Ltd. (absorption-type merger), TG Europower B.V. (liquidation)

2) Application of equity method

• Included in the equity method: 1 company Heolios EnTG S.A.P.I. de C.V. (new application)

Information about other consolidated subsidiaries and affiliates are not disclosed because there are no significant changes from articles of "business diagram" and "situation of subsidiaries and affiliates" in the latest securities report. [filed on June 27, 2019]

7

III. Basic Concept Regarding Selection of Accounting Standards

The Tokyo Gas Group is considering application of IFRS in the future, taking into account the business circumstance and influence by the application of IFRS.

8

IV. Consolidated Financial Statements

(1) Consolidated balance sheets

					(Million yen)
				As of March 31,2019	As of March 31,2020
Assets
	Non-current assets
		Property, plant and equipment
		Production facilities	234,433	224,515
		Distribution facilities		548,529	548,095
		Service and maintenance facilities	49,586	48,492
		Other facilities		447,608	475,093
		Inactive facilities	316	316
		Construction in progress		145,160	162,862
		Total property, plant and equipment	1,425,634	1,459,377
		Intangible assets
		Goodwill	1,306	16,269
		Other intangible assets		119,052	137,814
		Total intangible assets	120,359	154,084
		Investments and other assets
		Investment securities	225,212	216,052
		Long-term loans receivable		40,158	50,615
		Retirement benefit asset	24	29
		Deferred tax assets		42,425	49,132
		Other investments and other assets	47,950	46,407
		Allowance for doubtful accounts		-362	-405
		Total investments and other assets	355,409	361,831
		Total non-current assets	1,901,403	1,975,292
	Current assets
		Cash and deposits	93,092	151,288
		Notes and accounts receivable - trade	265,225	221,123
		Lease receivables and investments in	19,647	20,363
		leases
		Merchandise and finished goods	2,194	1,905
		Work in process	12,730	11,868
		Raw materials and supplies	63,735	64,703
		Other current assets	71,306	91,748
		Allowance for doubtful accounts	-1,186	-570
		Total current assets	526,745	562,431
	Total assets		2,428,149	2,537,724

9

				(Million yen)
			As of March 31,2019	As of March 31,2020
Liabilities
	Non-current liabilities
		Bonds payable	334,998	404,998
		Long-term borrowings	394,542	429,541
		Deferred tax liabilities	17,517	18,531
		Retirement benefit liability	75,262	71,976
		Provision for gas holder repairs	2,990	3,122
		Provision for safety measures	1,776	593
		Provision for appliance warranties	14,057	12,985
		Provision for point card certificates	1,450	1,000
		Asset retirement obligations	11,940	14,424
		Other noncurrent liabilities	64,640	51,555
		Total non-current liabilities	919,176	1,008,730
	Current liabilities
		Current portion of non-current liabilities	51,566	54,428
		Notes and accounts payable - trade	69,605	78,593
		Short-term borrowings	5,133	6,507
		Income taxes payable	31,283	29,708
		Other current liabilities	180,037	200,527
		Total current liabilities	337,626	369,765
	Total liabilities	1,256,803	1,378,495
Net assets
	Shareholders' equity
		Share capital	141,844	141,844
		Capital surplus	1,634	2,067
		Retained earnings	976,550	967,808
		Treasury shares	-4,111	-3,875
		Total shareholders' equity	1,115,918	1,107,844
	Accumulated other comprehensive income
		Valuation difference on available-for-sale	22,756	15,843
		securities
		Deferred gains or losses on hedges	1,604	1,444
		Foreign currency translation adjustment	24,770	22,412
		Remeasurements of defined benefit plans	-5,994	292
		Total accumulated other comprehensive	43,137	39,992
		income
	Non-controlling interests	12,289	11,391
	Total net assets	1,171,345	1,159,228
Total liabilities and net assets	2,428,149	2,537,724

10

(2)Consolidated statements of income and comprehensive income (Consolidated statement of income)

			(Million yen)
		Fiscal year	Fiscal year
		ended March 31,2019	ended March 31,2020
Net sales	1,962,308	1,925,235
Cost of sales	1,407,345	1,343,965
Gross profit	554,963	581,269
Selling, general and administrative expenses
	Supply and sales expenses	392,466	408,857
	General and administrative expenses	68,791	70,903
	Total selling, general and administrative expenses	461,258	479,761
Operating profit	93,704	101,508
Non-operating income
	Interest income	1,612	2,330
	Dividend income	2,812	5,433
	Share of profit of entities accounted for using equity	2,794	5,211
	method
	Miscellaneous income	6,551	7,453
	Total non-operating income	13,771	20,429
Non-operating expenses
	Interest expenses	11,091	11,412
	Balance on commissioned construction	1,750	2,151
	Miscellaneous expenses	5,247	5,637
	Total non-operating expenses	18,089	19,202
Ordinary profit	89,386	102,735
Extraordinary income
	Gain on sales of non-current assets	29,306	-
	Gain on sales of investment securities	6,420	-
	Gain on settlement of contract	-	11,627
	Total extraordinary income	35,727	11,627
Extraordinary losses
	Impairment loss	-	28,152
	Loss on valuation of investment securities	7,865	18,643
	Total extraordinary losses	7,865	46,796
Profit before income taxes	117,248	67,566
Income taxes - current	26,113	31,196
Income taxes - deferred	6,823	-7,197
Total income taxes	32,936	23,999
Profit	84,311	43,567
Profit (loss) attributable to non-controlling interests	-244	184
Profit attributable to owners of parent	84,555	43,382

11

(Consolidated statement of comprehensive income)

						(Millions of yen)
				Fiscal year ended		Fiscal year ended
				March 31, 2018		March 31, 2019
	Profit			84,311		43,567
	Other comprehensive income
	Valuation difference on available-for-sale			-7,528		-6,878
	securities
	Deferred gains or losses on hedges	221	-850
	Foreign currency translation adjustment			-6,735		-1,916
	Remeasurements of defined benefit plans,	-2,073	6,150
	net of tax
	Share of other comprehensive income of			-78		178
	entities accounted for using equity method
	Total other comprehensive income		-16,193	-3,316
	Comprehensive income		68,118		40,250
	Comprehensive income attributable to
	Comprehensive income attributable to			68,401		40,238
	owners of parent
	Comprehensive income attributable to non-	-283	12
	controlling interests

12

(3) Consolidated statements of changes in net assets

Fiscal year ended March 31, 2019 (from Apr. 1, 2018 - Mar. 31, 2019)

																(Million yen)
										Shareholders' equity
			Share capital			Capital surplus		Retained earnings	Treasury shares		Total shareholders'
							equity
	Balance at beginning of period		141,844			1,898			936,635	-3,642	1,076,736
	Cumulative effects of changes in																-
	accounting policies
	Restated balance		141,844			1,898			936,635	-3,642	1,076,736
	Changes during period
	Dividends of surplus										-24,932					-24,932
	Profit attributable to owners of										84,555					84,555
	parent
	Purchase of treasury shares												-20,051		-20,051
	Disposal of treasury shares												2			2
	Cancellation of treasury shares										-19,580	19,580
	Increase in the number of																-
	consolidated subsidiaries
	Decrease in the number of										-128					-128
	consolidated subsidiaries
	Change in ownership interest							-263									-263
	of parent due to transactions
	with non-controlling interests
	Net changes in items other
	than shareholders' equity
	Total changes during period				-			-263			39,914	-469		39,182
	Balance at end of period		141,844			1,634			976,550	-4,111	1,115,918
						Accumulated other comprehensive income
				Valuation				Foreign			Total			Non-	Total net
						Deferred	Remeasureme		accumulated		controlling
				difference on			currency			assets
				gains or losses	nts of defined		other			interests
				available-for-	translation
					on hedges	benefit plans		comprehensive
				sale securities		adjustment
									income
Balance at beginning of period		30,282		-251	33,206	-3,945		59,291			12,405	1,148,433
Cumulative effects of changes in															-
accounting policies
Restated balance		30,282		-251	33,206	-3,945		59,291			12,405	1,148,433
Changes during period
Dividends of surplus															-24,932
Profit attributable to owners of parent															84,555
Purchase of treasury shares															-20,051
Disposal of treasury shares															2
Cancellation of treasury shares															-
Increase in the number of consolidated															-
subsidiaries
Decrease in the number of consolidated															-128
subsidiaries
Change in ownership interest of parent															-263
due to transactions with non-controlling
interests
Net changes in items other than		-7,525		1,856		-8,435	-2,049		-16,154			-115	-16,269
shareholders' equity
Total changes during period		-7,525		1,856		-8,435	-2,049		-16,154			-115	22,912
Balance at end of period		22,756		1,604	24,770	-5,994		43,137			12,289	1,171,345

13

Fiscal year ended March 31, 2020 (from Apr. 1, 2019 - Mar. 31, 2020)

														(Million yen)
							Shareholders' equity
	Share capital		Capital surplus	Retained earnings		Treasury shares	Total shareholders'
			equity
Balance at beginning of period		141,844			1,634		976,550			-4,111	1,115,918
Cumulative effects of changes in								6							6
accounting policies
Restated balance		141,844			1,634		976,556			-4,111	1,115,925
Changes during period
Dividends of surplus								-27,853							-27,853
Profit attributable to owners of								43,382							43,382
parent
Purchase of treasury shares												-24,038			-24,038
Disposal of treasury shares												1				1
Cancellation of treasury shares								-24,272			24,272
Increase in the number of								-5							-5
consolidated subsidiaries
Decrease in the number of																-
consolidated subsidiaries
Change in ownership interest
of parent due to transactions					432										432
with non-controlling interests
Net changes in items other
than shareholders' equity
Total changes during period		-			432		-8,748			235				-8,080
Balance at end of period		141,844			2,067		967,808			-3,875	1,107,844
					Accumulated other comprehensive income
		Valuation				Foreign					Total		Non-		Total net
			Deferred			Remeasureme	accumulated		controlling
		difference on		currency				assets
		gains or losses			nts of defined	other		interests
		available-for-		translation
		on hedges			benefit plans	comprehensiv
		sale securities		adjustment
								e income
Balance at beginning of period	22,756	1,604		24,770			-5,994	43,137		12,289		1,171,345
Cumulative effects of changes in															6
accounting policies
Restated balance	22,756	1,604		24,770			-5,994	43,137		12,289		1,171,352
Changes during period
Dividends of surplus															-27,853
Profit attributable to owners of parent															43,382
Purchase of treasury shares															-24,038
Disposal of treasury shares															1
Cancellation of treasury shares															-
Increase in the number of consolidated															-5
subsidiaries
Decrease in the number of consolidated															-
subsidiaries
Change in ownership interest of parent
due to transactions with non-controlling															432
interests
Net changes in items other than	-6,913	-160		-2,358		6,287	-3,144		-898		-4,042
shareholders' equity
Total changes during period	-6,913	-160		-2,358		6,287	-3,144		-898		-12,123
Balance at end of period	15,843	1,444		22,412			292	39,992		11,391		1,159,228

14

(4) Consolidated statements of cash flows

			(Million yen)
		Fiscal year	Fiscal year
		ended March 31,2019	ended March 31,2020
Cash flows from operating activities
	Profit before income taxes	117,248	67,566
	Depreciation	157,574	165,410
	Impairment loss	888	28,152
	Gain on settlement of contract	-	-11,627
	Amortization of long-term prepaid expenses	4,306	4,263
	Loss on retirement of property, plant and	2,248	2,164
	equipment
	Loss (gain) on valuation of investment securities	7,865	18,643
	Increase (decrease) in retirement benefit	1,039	5,206
	liability
	Increase (decrease) in provision for safety	-1,338	-1,182
	measures
	Increase (decrease) in provision for appliance	4,073	-1,072
	warranties
	Interest and dividend income	-4,425	-7,763
	Interest expenses	11,091	11,412
	Share of loss (profit) of entities accounted for	-2,794	-5,211
	using equity method
	Decrease (increase) in trade receivables	-46,191	52,646
	Decrease (increase) in inventories	-18,336	172
	Increase (decrease) in trade payables	-5,321	8,952
	Increase (decrease) in accrued consumption	-3,002	7,979
	taxes
	Decrease (increase) in accounts receivable -	-2,541	-1,619
	other
	Other, net	-53,083	-9,541

Subtotal

Interest and dividends received

Interest 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 Long-term loan advances

Collection of long-term loans receivable Payments of guarantee deposits

Proceeds from refund of guarantee deposits

Purchase of shares of subsidiaries resulting in change in scope of consolidation

Other, net

Net cash provided by (used in) investing activities

169,300	334,549
9,387	14,510
-10,809	-11,087
-26,571	-31,676
141,306	306,296
-17,603	-23,989
12,082	1,916
-168,144	-177,664
-39,491	-41,908
-8,561	-2,183
-12,238	-16,989
4,074	4,853
-788	-2,709
88	1,855
-1,054	-15,134
28,174	1,156
-203,462	-270,798

15

				(Million yen)
			Fiscal year	Fiscal year
			ended March 31,2019	ended March 31,2020
Cash flows from financing activities
	Net increase (decrease) in commercial papers	10,000	-10,000
	Repayments of lease obligations	-1,613	-2,646
	Proceeds from long-term borrowings	59,354	71,542
	Repayments of long-term borrowings	-23,726	-43,390
	Proceeds from issuance of bonds	70,000	90,000
	Redemption of bonds	-40,000	-30,000
	Purchase of treasury shares	-20,051	-24,038
	Dividends paid	-24,936	-27,839
	Other, net	-1,397	-454
	Net cash provided by (used in) financing	27,628	23,171
	activities
Effect of exchange rate change on cash and cash	-710	-489
equivalents
Net increase (decrease) in cash and cash	-35,238	58,179
equivalents
Cash and cash equivalents at beginning of period	128,271	93,032
Increase (decrease) in cash and cash equivalents	-	6
resulting from change in scope of consolidation
Cash and cash equivalents at end of period		93,032	151,218

16

1. Notes on consolidated financial statements

1. (Note on going concerns' premise) Not applicable
2. (Additional information)

The Company purchased a large-scale mission critical system that was newly established during the fiscal year under review for ¥30,767 million as an intangible fixed asset. As a result of estimating the usable period, the Company has determined the useful life to be ten years.

1. (Segment information, etc.)

1. Overview of reporting segments

The Group's reporting segments are regularly reviewed by the Board of Directors using the segregated financial information available within each segment to determine the allocation of management resources and evaluate business results.

The Tokyo Gas Group is deploying business activities in the following areas-in addition to the core of the Group's operating structure, which consists of city gas, liquid gas, and gas (including LNG sales), which are all energy produced using natural gas as a resource, the Group also delves in the electric power business, which is a new pillar of the Group's revenues, the overseas business to remake ourselves as a global company group, and the engineering solutions business, which utilizes energy.

Furthermore, businesses involving the efficient utilization of the Group's real estate holdings represent another earnings base, and the Group therefore employs the five reporting segments of "gas," "electric power," "overseas," "energy related," including the engineering solutions, which utilize energy and "real estate."

The main products and services of each reporting segment are as follows:

Gas:	City gas, liquid gas business (LNG, industrial gas), LNG sales, etc.
Electric power:	Electric power
Overseas:	Overseas resource development and investment, energy supply, etc.

Energy related: Engineering solutions business (engineering, energy service, etc.), gas appliances, gas

	installation work, construction, etc.
Real estate:	Leasing, management, etc. of land and buildings

2. Calculation of net sales, profit and loss, and assets, etc.

The accounting method of reported business segments has not been changed from what is described in the important matters that form the basis of preparation of consolidated financial statements in the latest securities report (submitted June 27, 2019).

Income of reporting segment is based on operating profit plus or minus investment gain or loss on equity method. Intersegment sales and transfers are attributable to transactions within group companies, and calculated based on market value.

17

3. Information related to net sales, profit and loss, and assets, etc. by reporting segment

Fiscal year ended March 31, 2019 (from Apr. 1, 2018 to Mar. 31, 2019)

(Unit: million yen)

			Reporting segment						Amount
							Others			recorded on
		Electric		Energy-	Real		Total	Adjustments	consolidated
	Gas	Overseas	Total	(Note 1)	(Note 2)	statement of
	power	related	estate
							income
										(Note 3)
Net sales
External sales	1,302,131	280,178	38,845	308,679	21,880	1,951,716	10,591	1,962,308	-	1,962,308
Intersegment sales	111,578	130	12,068	54,918	22,720	201,415	97,270	298,685	(298,685)	-
& transfers
Total	1,413,709	280,308	50,913	363,598	44,601	2,153,131	107,862	2,260,994	(298,685)	1,962,308
Segment profit
Operating profit	92,227	10,164	13,135	11,188	8,535	135,251	6,272	141,524	(47,819)	93,704
(loss)
Investment gain on	-	-	2,174	-	599	2,774	19	2,794	-	2,794
equity method
Total	92,227	10,164	15,309	11,188	9,135	138,026	6,292	144,318	(47,819)	96,498
Segment Assets	1,301,618	110,967	285,749	251,591	229,642	2,179,569	47,043	2,226,613	201,535	2,428,149
Others
Depreciation	123,138	7,844	9,594	10,174	7,272	158,024	3,259	161,283	(3,708)	157,574
expenses
Increase in
property, plant,	154,313	7,326	6,483	22,069	26,518	216,710	2,903	219,613	(4,394)	215,219
equipment, and
intangible assets

Notes:

1. The "Others" segment indicates businesses not included in the reporting segments, including information processing service, shipping business, etc.
2. The "Adjustments" indicates as follows;

1. The ¥(47,819) million segment profit adjustment includes ¥(547) million in eliminations for intersegment transactions and ¥(47,272) million of companywide expenses not allocated to the respective reporting segments. Companywide expenses are primarily, general and administrative expenses that are not assignable to a reporting segment.
2. The ¥201,535 million segment assets adjustment includes ¥266,977 million of companywide assets not allocated to the respective reporting segments, and ¥(65,442) million of net eliminations for intersegment obligations. Companywide assets are primarily, financial assets that are not assignable to a reporting segment.

1. Segment profit is adjusted to reflect operating profit recorded in the consolidated statement of income which is adjusted by investment gain or loss on equity method.

18

Fiscal year ended March 31, 2020 (from Apr. 1, 2019 to Mar. 31, 2020)

(Unit: million yen)

			Reporting segment						Amount
							Others			recorded on
		Electric		Energy-	Real		Total	Adjustments	consolidated
	Gas	Overseas	Total	(Note 1)	(Note 2)	statement of
	power	related	estate
							income
										(Note 3)
Net sales
External sales	1,195,898	358,005	36,838	302,761	21,575	1,915,079	10,156	1,925,235	-	1,925,235
Intersegment sales	159,526	625	7,144	49,148	22,954	239,399	113,050	352,450	(352,450)	-
& transfers
Total	1,355,425	358,630	43,983	351,910	44,529	2,154,479	123,207	2,277,686	(352,450)	1,925,235
Segment profit
Operating profit	102,433	10,141	8,606	16,995	9,151	147,328	5,750	153,079	(51,571)	101,508
(loss)
Investment gain on	-	-	4,649	-	547	5,196	15	5,211	-	5,211
equity method
Total	102,433	10,141	13,255	16,995	9,698	152,525	5,766	158,291	(51,571)	106,720
Segment Assets	1,309,752	167,301	258,780	254,294	258,050	2,248,178	46,163	2,294,342	243,381	2,537,724
Others
Depreciation	126,383	8,743	11,128	11,103	7,132	164,491	4,924	169,415	(4,005)	165,410
expenses
Increase in
property, plant,	162,385	6,185	9,032	18,017	31,464	227,085	2,747	229,833	(4,958)	224,874
equipment, and
intangible assets

Notes:

1. The "Others" segment indicates businesses not included in the reporting segments, including information processing service, shipping business, etc.
2. The "Adjustments" indicates as follows;

1. The ¥(51,571) million segment profit adjustment includes ¥(237) million in eliminations for intersegment transactions and ¥(51,333) million of companywide expenses not allocated to the respective reporting segments. Companywide expenses are primarily, general and administrative expenses that are not assignable to a reporting segment.
2. The ¥243,381 million segment assets adjustment includes ¥327,645 million of companywide assets not allocated to the respective reporting segments, and ¥(84,263) million of net eliminations for intersegment obligations. Companywide assets are primarily, financial assets that are not assignable to a reporting segment.

1. Segment profit is adjusted to reflect operating profit recorded in the consolidated statement of income which is adjusted by investment gain or loss on equity method.

19

4) (Per share information)

		(Unit: yen)
	FY2018	FY2019
	(Apr. 2018-	(Apr. 2019 -
	Mar. 2019)	Mar. 2020)
Shareholders' equity per share	2,575.99	2,602.74
Profit per share	187.60	98.07
Notes:

1. Diluted profit per share is not disclosed as no latent shares exist.
2. Basis for calculation of profit per share is as follows.

	FY2018	FY2019
	(Apr. 2018 -	(Apr. 2019 -
	Mar. 2019)	Mar. 2020)
Profit attributable to owners of parent (million yen)	84,555	43,382
Not attributable to common shareholders (million yen)	-	-
Profit attributable to owners of parent with regard to the common	84,555	43,382
shares (million yen)
Average number of common shares outstanding (thousand shares )	450,719	442,380
3. Basis for calculation of BPS is as follows.
	FY2018	FY2019
	(as of Mar. 31, 2019)	(as of Mar. 31, 2020)
Shareholders' equity (million yen)	1,171,345	1,159,228
Deduction from shareholders' equity (million yen)	12,289	11,391
-Shares of minority shareholders (million yen)	12,289	11,391
Net shareholders' equity attributable to common shares (million yen)	1,159,055	1,147,836
Number of shares to calculate BPS (thousand shares)	449,945	441,011

1. (Significant subsequent events)

Although the decline in crude oil and natural gas prices on the back of a drop in demand for crude oil after the consolidated closing date may have an impact on the Group's business performance and financial position, it is difficult to reasonably quantify the impact at this moment.

20

V. Non-Consolidated Financial Statements

(1) Non-Consolidated Balance sheets

			(Million yen)
		As of March 31,2019	As of March 31,2020
Assets
Non-current assets
Property, plant and equipment
Production facilities	238,636	228,801
Distribution facilities	541,740	541,353
Service and maintenance facilities	64,729	45,482
Facilities for incidental businesses	5,587	5,461
Inactive facilities	316	316
Construction in progress	109,756	82,475
Total property, plant and equipment	960,766	903,890
Intangible assets
Patent right	10	10
Leasehold interests in land	1,763	1,805
Goodwill	100	86
Other intangible assets	95,815	121,706
Total intangible assets	97,690	123,608
Investments and other assets
Investment securities	65,711	54,421
Investments in subsidiaries and associates	364,614	375,889
Long-term loans receivable	41	35
Long-term loans receivable from subsidiaries and	133,053	156,738
associates
Investments in capital	13	13
Long-term prepaid expenses	23,848	14,956
Deferred tax assets	26,914	29,943
Other investments and other assets	8,534	7,789
		-	-
Allowance for doubtful accounts	336	442
Total investments and other assets	622,395	639,344
Total non-current assets	1,680,852	1,666,843
Current assets
Cash and deposits	37,225	84,563
Notes receivable - trade	1,139	1,785
Accounts receivable - trade	187,677	148,758
Accounts receivable from subsidiaries and associates - trade	39,152	44,284
Accounts receivable - other	7,848	7,077
Finished goods	113	94
Raw materials	44,350	36,937
Supplies	10,339	11,456
Advance payments	1,156	1,162
Prepaid expenses	1,126	1,606
Short-term receivables from subsidiaries and associates	25,919	34,327
Other current assets	43,183	56,234
		-	-
Allowance for doubtful accounts	1,223	638
Total current assets	398,009	427,650
Total assets	2,078,862	2,094,493

21

		(Million yen)
	As of March 31,2019	As of March 31,2020
Liabilities
Non-current liabilities
Bonds payable	334,998	404,998
Long-term borrowings	331,762	341,932
Long-term debt to subsidiaries and associates	361	0
Provision for retirement benefits	59,078	64,656
Provision for gas holder repairs	2,631	2,695
Provision for safety measures	1,776	593
Provision for appliance warranties	14,057	12,985
Allowance for points redemption	1,450	1,000
Asset retirement obligations	316	318
Other noncurrent liabilities	36,484	17,933
Total non-current liabilities	782,917	847,114
Current liabilities
Current portion of non-current liabilities	40,536	45,968
Accounts payable - trade	39,923	45,492
Accounts payable - other	43,239	55,912
Accrued expenses	50,517	49,115
Income taxes payable	22,552	22,574
Advances received	7,912	7,743
Deposits received	1,534	1,482
Short-term borrowings from subsidiaries and associates	135,962	119,501
Short-term debt to subsidiaries and associates	48,233	63,082
Asset retirement obligations	-	411
Other current liabilities	14,319	17,662
Total current liabilities	404,732	428,946
Total liabilities	1,187,649	1,276,060
Net assets
Shareholders' equity
Share capital	141,844	141,844
Capital surplus
Legal capital surplus	2,065	2,065
Total capital surpluses	2,065	2,065
Retained earnings
Legal retained earnings	35,454	35,454
Other retained earnings
Reserve for tax purpose reduction entry of non-	6,161	6,013
current assets
Reserve for overseas investment loss	6,766	4,393
Reserve for adjustment of cost fluctuations	141,000	141,000
General reserve	339,000	339,000
Retained earnings brought forward	210,782	146,578
Total retained earnings	739,165	672,439
	-	-
Treasury shares	4,111	3,875
Total shareholders' equity	878,964	812,473
Valuation and translation adjustments
Valuation difference on available-for-sale securities	22,271	15,287
	-	-
Deferred gains or losses on hedges	10,023	9,327
Total valuation and translation adjustments	12,248	5,959
Total net assets	891,212	818,433
Total liabilities and net assets	2,078,862	2,094,493

22

(2) Non-Consolidated Statements of income

			(Million yen)
		Fiscal year	Fiscal year
		ended March 31,2019	ended March 31,2020
Sales from gas business
Gas sales	1,193,670	1,071,736
Gas transportation service revenue	10,374	27,567
Revenue from interoperator settlement	7,212	7,202
Total sales from gas business	1,211,256	1,106,506
Cost of sales
Beginning inventories	110	113
Cost of products manufactured	763,479	643,530
Purchase of finished goods	9,432	10,385
Costs of gas for own use	1,928	1,786
Ending inventories	113	94
Total cost of sales	770,980	652,148
Gross profit	440,276	454,357
Supply and sales expenses	343,410	355,373
General and administrative expenses	70,090	72,965
Total selling, general and administrative expenses	413,500	428,339
Profit on core business	26,776	26,018
Miscellaneous operating revenue
Revenue from installation work	41,805	42,437
Other miscellaneous operating revenue	117,709	118,923
Total miscellaneous operating revenue	159,515	161,361
Miscellaneous operating expenses
Installation work expenses	40,259	41,565
Other miscellaneous operating expenses	104,058	94,355
Total miscellaneous operating expenses	144,318	135,921
Revenue from incidental businesses	397,794	520,107
Expenses for incidental businesses	390,847	509,521
Operating profit	48,920	62,044

23

			(Million yen)
		Fiscal year	Fiscal year
		ended March 31,2019	ended March 31,2020
Non-operating income
Interest income	417	418
Dividend income	1,885	1,730
Dividends from subsidiaries and affiliates	14,201	12,181
Rental income	5,703	3,553
Miscellaneous income	7,536	6,399
Total non-operating income	29,745	24,283
Non-operating expenses
Interest expenses	4,111	4,065
Interest on bonds	5,033	5,286
Amortization of bond issuance costs	384	472
Balance on commissioned construction	1,791	2,181
Miscellaneous expenses	4,435	5,980
Total non-operating expenses	15,755	17,986
Ordinary profit	62,910	68,342
Extraordinary income
Gain on sales of investment securities	4,419	-
Gain on settlement of contract	-	9,689
Total extraordinary income	4,419	9,689
Extraordinary losses
Loss on valuation of investment securities	-	2,040
Total extraordinary losses	-	2,040
Profit before income taxes	67,329	75,991
Income taxes - current	13,850	20,488
		-	-
Income taxes - deferred	237	1,200
Total income taxes	13,612	19,287
Profit	53,717	56,703

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