Securities code : 9531
Investor Relations

President's Message

(2014/06/27)

Greetings

It was my honor to be appointed the new president of Tokyo Gas Co., Ltd. this April. It is a breathtaking experience to be given a position with such grave responsibility at this time of great change. I will work sincerely with all my abilities.

The Tokyo Gas Group prepared and released "The Tokyo Gas Group's Vision for Energy and the Future - Challenge 2020 Vision" in November 2011. I believe my mission is to steadily realize "Challenge 2020 Vision" and ensure the steadfast growth of the Tokyo Gas Group into the future.

In the energy sector the times are changing at an unconceivable pace with the full liberalization of retail power sales in 2016 and continued reforms to Japan's gas system. The Tokyo Gas Group is being called on to change itself with a sense of urgency that will not fall behind such developments.

We will grasp these external changes as an ideal opportunity to boldly embrace new challenges. Thank you for your continued understanding and support.

Financial Results for FY 2013

In FY2013 (ended March 31, 2014), gas sales volume declined 4.3% year-on-year to 14,735 million m3 with a decline in residential sales from high average temperatures and a drop in electric power generation and other industrial uses. The decrease in electric power generation resulted from a change in accounting procedures which now categorize gas sales for in-house power generation as self-use (tolling). The total sales volume after adjusting for that amount actually rose 1.6% year-on-year to 16,245 million m3.

Net sales increased from the sliding time lag effect. Operating income rose despite higher gas raw materials costs from the depreciation of the yen.

Progress of Challenge 2020 Vision

The Tokyo Gas Group develops business under the "LNG value chain" from LNG procurement and transport through to the production and supply of city gas and the provision of energy solutions to meet diverse customer needs. "Challenge 2020 Vision" aims at enhancing the LNG value chain to provide greater value to customers and society.

During FY2013, the Tokyo Gas Group steadily advanced efforts toward enhancing the LNG value chain.

In raw materials procurement, in September 2013 the U.S. Cove Point LNG Project received approval from the U.S, Department of Energy to export LNG to countries with which the U.S. has not signed Free Trade Agreements. For Tokyo Gas, this is a major step forward toward the first long-term procurement with the price linked to U.S. natural gas market prices (the Henry Hub index). Tokyo Gas established ST Cove Point LLC as a joint venture with Sumitomo Corporation in February 2014 and is otherwise moving forward toward initiating imports in 2017.

In upgrades to infrastructure, we are advancing construction works on the Hitachi LNG Terminal as the Company's fourth LNG terminal and on the Ibaraki-Tochigi Line. We are also moving forward with investigations on the Hitachi-Kashima Line (tentative name) which would run from the terminal to the Kashima Waterfront Industrial Zone.

Efforts to promote the advanced utilization of natural gas and fuel conversion are generating visible progress with the development of approximately 800 million m3 in demand centered on the Kashima Waterfront Industrial Zone through March 2014 following the initiation of supply through the Chiba-Kashima Line from March 2012.

In efforts toward expanding the electric power business, construction works on a third unit at the Ohgishima Power Station are steadily proceeding toward the launch of operations within FY2015.

Return to Shareholders

The Company will firmly maintain our shareholder returns policy of targeting a total payout ratio of 60% each year. In FY2013, the company provided an annual dividend of \10 per share (with an interim dividend of \5 per share). The Company also resolved to purchase \40 billion in treasury stock during the current fiscal year to increase the value per share.

Michiaki Hirose

Representative Director, President

June 27, 2014

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