Annual Report 2012 Kyushu Electric Power Company 25
Financial Section
Contents
26 Consolidated Eleven-Year Financial Summary
28 Management Discussion and Analysis
30 Business Risk Factors
32 Consolidated Balance Sheet
34 Consolidated Statement of Operations
35 Consolidated Statement of Comprehensive Income
36 Consolidated Statement of Changes in Equity
37 Consolidated Statement of Cash Flows
38 Notes to Consolidated Financial Statements
54 Independent Auditor’s Report
55 Non-consolidated Five-Year Financial Summary
56 Non-consolidated Balance Sheet
58 Non-consolidated Statement of Operations
26 Kyushu Electric Power Company Annual Report 2012
Consolidated Eleven-Year Financial Summary
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Years Ended March 31
For the Year: 2002 2003 2004 2005 2006
Operating revenues �� 1,458,066円 1,421,310円 1,391,684円 1,408,728円 1,401,752円
Electric �� 1,381,440 1,350,675 1,308,843 1,320,581 1,311,996
Other �� 76,626 70,635 82,841 88,147 89,756
Operating expenses �� 1,260,308 1,241,296 1,192,718 1,194,993 1,230,467
Electric �� 1,184,382 1,170,655 1,108,104 1,107,744 1,140,797
Other �� 75,926 70,641 84,614 87,249 89,670
Interest charges �� 85,653 77,897 77,121 49,522 41,130
Income (loss) before income taxes and
minority interests �� 99,464 102,363 112,451 146,797 120,790
Income taxes �� 39,808 38,417 39,086 57,858 43,038
Net income (loss) �� 61,120 64,319 72,792 89,288 76,850
Per share of common stock:
Basic net income (loss) �� 128円.90 135円.13 153円.05 187円.91 161円.67
Cash dividends applicable to the year �� 60.00 50.00 50.00 60.00 60.00
At year-end:
Total assets �� 4,290,132円 4,204,566円 4,114,378円 4,049,713円 4,102,319円
Net property �� 3,595,794 3,523,273 3,394,855 3,300,740 3,217,982
Long-term debt, less current portion �� 2,130,149 1,984,702 1,858,512 1,739,660 1,724,179
Total equity �� 824,928 840,245 910,838 979,252 1,052,785
(U.S. dollar amounts have been translated from yen, for convenience, at the rate of 82円.14 = U.S.1,ドル the approximate rate of exchange at March 31, 2012.)
Two straight years of earnings growth and profit decline
In the electricity business:n Electricity sales increased due to an increase in charge unit prices
due to the effect of fuel cost adjustments and other factors while
electricity sales volume decreased.n Thermal fuel expenses and power purchase expenses increased due
to the influence of the deferred resumption of the operations of reac-
tors of our nuclear power stations and the rise of fuel prices.
Summary of the year ended March 31, 2012
Annual Report 2012 Kyushu Electric Power Company 27
Millions of Yen
Thousands of
U.S. Dollars
2007 2008 2009 2010 2011 2012 2012
1,408,328円 1,482,352円 1,524,193円 1,444,941円 1,486,083円 1,508,084円 18,359,922ドル
1,307,737 1,363,424 1,398,577 1,310,085 1,354,204 1,367,610 16,649,744
100,591 118,928 125,616 134,856 131,879 140,474 1,710,178
1,253,155 1,376,811 1,439,470 1,345,214 1,387,174 1,692,939 20,610,409
1,155,414 1,260,616 1,317,216 1,220,537 1,261,426 1,562,056 19,016,995
97,741 116,195 122,254 124,677 125,748 130,883 1,593,414
38,354 36,938 35,771 35,292 34,026 34,025 414,232
112,887 72,463 55,859 67,610 48,319 (214,751) (2,614,451)
46,075 29,853 21,481 25,405 19,246 (48,760) (593,621)
65,968 41,727 33,992 41,813 28,730 (166,391) (2,025,700)
Yen U.S. Dollars
139円.37 88円.19 71円.84 88円.38 60円.73 \(351.80) $(4.28)
60.00 60.00 60.00 60.00 60.00 50.00 0.61
Millions of Yen
Thousands of
U.S. Dollars
4,038,839円 4,059,775円 4,110,878円 4,054,192円 4,185,461円 4,428,094円 53,909,106ドル
3,140,200 3,109,293 3,080,447 3,037,055 3,033,125 2,997,233 36,489,323
1,689,107 1,712,949 1,811,744 1,724,973 1,714,430 2,188,601 26,644,765
1,092,601 1,084,213 1,072,375 1,089,066 1,079,679 888,132 10,812,417
Operating Revenues
Billions of Yen
Operating Income (Loss)/Net Income (Loss)
Billions of Yen
Operating Income (Loss) Net Income (Loss)800400
1,200
1,600
0 ’12
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’09
’08
’07
’06
’05
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’02 –2200–110110220
’12
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Download data
28 Kyushu Electric Power Company Annual Report 2012
Operating Results
In the year ended March 31, 2012 (fiscal
2011), Kyushu Electric Power recorded a
1.5% year-on-year increase in consolidated
operating revenues to 1,508円.0 billion,
marking a second consecutive year of
growth. While electricity sales volume in
the electricity business was lower for the
year, revenues were lifted mainly by the
charge unit prices that were increased due
to the fuel cost adjustment system and
other factors.
With regard to expenditures, operating
expenses increased by 22.0% to 1,692円.9
billion due to increases in thermal fuel costs
and costs for power purchases in the
electric business caused mainly by delays
in the restart of nuclear power stations and
higher fuel prices. As a result, operating
income fell by 283円.7 billion to end in a
loss of 184円.8 billion.
Other revenues rose by 13.8% year on
year to 13円.9 billion, primarily as gains on
negative goodwill outweighed declines in
investment returns from equity method
affiliates and other factors. Other expenses
declined by 4.0% to 42円.5 billion.
As a result, ordinary revenues rose by
1.6% from the previous year to 1,521円.9
billion, and ordinary expenses rose by
21.2% to 1,735円.5 billion. Consequently,
ordinary income fell 280円.2 billion to end
in a loss of 213円.5 billion.
Furthermore, the water flow rate rose
5.9% above average (100%) during the year
under review. For this reason, Kyushu
Electric Power posted a reser ve for
fluctuations in water level of 1円.2 billion
in preparation for increased expenses
associated with future water shortages.
As a result, net income fell by 195円.1
billion from the previous year to end in a
loss of 166円.3 billion. The net loss per
share was 351円.80, reflecting a decline of
412円.53 from the previous year’s net
earnings per share.
Segment Information
(Before Elimination of Internal Transactions)
(1) Electric Power
Electricity sales volume fell by 3.5% from
the previous fiscal year due to a decrease
in general demand, including domestic
lighting and commercial demand, as a
result of factors such as lower air
conditioning demand caused by customers
power saving and lower temperatures than
in the previous fiscal year from August to
September. Power demand from large-scale
industrial customers rose 0.4% year on
year, due to an increase in production of
steel and iron, chemicals in the first half
of the fiscal year, despite a decrease in
production of electric machinery and the
impact of customers’ power saving. As a
result, total electricity sales volume fell by
2.4% year on year to 85.35 billion kWh.
On the supply side, we were impacted
by the deferred restarting of operations at
our nuclear power stations and other
factors, but we responded mainly by
increasing both our own thermal power
generation and electricity purchased from
other companies. Analysis of the energy
mix, including power generated by Kyushu
Electric Power and power purchased from
other companies, shows nuclear power
accounted for 16%, thermal power for 74%,
hydroelectric for 7% and new energy sources
for 3% of total power.
Electricity Sales Volume and Peak Load
Millions of kWh Thousands of kW
Management Discussion and Analysis
IT and Telecommunications
Billions of Yen
Energy-related Business
Billions of Yen
Electric Power
Billions of Yen
–5000500
1,000
1,500
–2000200400600
1,365.7
1,400.7
1,312.1
1,356.394.374.182.986.5
1,369.5
–199.9
’12
’11
’10
’09
’08
–250502575100–2.505.07.52.510.088.492.799.196.2–1.60.76.36.496.96.6’12
’11
’10
’09
’08050100150200036912
147.0
157.2
163.8
158.08.57.57.43.0
164.54.7’12
’11
’10
’09
’08010,000
30,000
20,000
40,000
50,000
60,000
70,000011,000
13,000
12,000
14,000
15,000
16,000
17,000
55,334
16,362
15,346
15,560
16,094 15,890 16,807 16,934 16,978 16,013
16,760
14,951
56,318
56,684
58,982
60,765
60,706
62,873
61,859
60,985
63,636
61,408
’12
’11
’10
’09
’08
’07
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’05
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19,993
20,318
20,584
21,217
22,191
23,693
25,209
24,024
22,407
23,838
23,944
Sales (left) Operating Income (Loss) (right)
Peak Load (right) General Demand (left) Large-scale Industrial (left)
Sales (left) Operating Income (right)
Sales (left) Operating Income (Loss) (right)
Annual Report 2012 Kyushu Electric Power Company 29
For the electric power segment, operating
revenues rose by 1.0% from the previous
fiscal year to 1,369円.5 billion, due to higher
charge unit prices resulting from the impact
of the fuel cost adjustment system and
other factors, despite a decrease in
electricity sales volume. The segment
posted an operating loss of 199円.9 billion,
a decrease by 286円.5 billion from the
segment profit in the previous fiscal year,
mainly due to increases in thermal fuel
costs and costs for power purchases.
(2) Energy-related Business
The operating revenues increased by 4.1%
year on year to 164円.5 billion, mainly due
to increased income resulting from a rise
in the gas selling price. Operating income
increased by 58.1% to 4円.7 billion, mainly
due to decreased depreciation.
(3) IT and Telecommunications
The operating revenues increased by 0.8%
year on year to 96円.9 billion, mainly due
to an increase in sales of data transmission
services for mobile phone operators.
Operating income increased by 2.2% to
6円.6 billion.
(4) Other
The operating revenues increased by 4.6%
year on year to 27円.3 billion, mainly due to
the impact of newly consolidated
subsidiaries. Operating income decreased
by 7.0% to 3円.1 billion as a result of various
factors including an increase in the repair
costs of rental buildings.
Financial Position
(1) Cash Flows
Cash flows from operating activities
decreased by 94.4% from the previous fiscal
year to 16円.9 billion, mainly due to
increases in thermal power fuel costs and
in costs for power purchases, despite an
increase in electricity sales revenue in the
electric power business.
Cash flows from investing activities
decreased by 22.9% from the previous fiscal
year to 228円.2 billion, mainly due to
decreased payments for the acquisition of
investment securities.
Cash flows from financing activities
increased by 586.3% to 363円.3 billion.
As a result, cash and cash equivalents
on March 31, 2012 stood at 277円.9 billion,
an increase of 151円.9 billion from the end
of the previous fiscal year.
(2) Assets, Liabilities and Net Assets
Total assets at the end of the fiscal year
under review were 4,428円.0 billion, an
increase of 5.8% from the end of the
previous fiscal year. This increase was
mainly due to a rise in current assets such
as short-term investments and cash and
cash equivalents, and also an increase in
fixed assets such as deferred tax assets.
Total liabilities at the end of the fiscal
year under review were 3,539円.9 billion,
an increase of 14.0% from the end of the
previous fiscal year. The increase was
mainly attributable to higher interest-bearing
debt. Outstanding interest-bearing debt
increased 393円.8 billion to 2,483円.2 billion.
Net assets fell by 17.7% from the end
of the previous fiscal year to 888円.1 billion,
mainly because of the net loss and the
payment of cash dividends. The equity ratio
was 19.7%.
Consolidated Interest-bearing Debt and Equity Ratio
Billions of Yen %ROA%
Other
Billions of Yen010203001.53.04.524.824.426.526.03.41.63.23.327.33.1
’12
’11
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’09
’08
–5.0
–2.502.5 1.71.31.6 1.5
–2.7
’12
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’0801,000
3,000
2,000
4,000
5,0000618122430
’12
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4,290.1
4,204.5
4,114.3
4,049.7
4,102.3
4,038.8
4,059.7
4,110.8
4,054.1
4,185.4
4,428.0
2,699.6
2,503.7
2,336.2
2,139.4
2,104.9
2,031.7
2,040.0
2,110.6
2,004.7
2,089.4
2,483.2
824.9
840.2
910.8
979.2
1,052.7
1,081.6
1,067.0
1,054.7
1,071.7
1,062.4
870.319.220.024.222.125.726.8 26.325.726.425.419.7
Sales (left) Operating Income (right)
Total Assets (left) Interest-bearing Debt (left) Shareholders’ Equity (left) Equity Ratio (right)ROE%
–20
–100103.93.23.92.7
–17.2
’12
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’08
30 Kyushu Electric Power Company Annual Report 2012
Business Risk Factors
The following is a list of some significant risk factors that may impact on the
operating results, financial position, and other aspects of the Group (consolidated).
Forward-looking statements in this report reflect the judgment of the Company
as of June 28, 2012 and may be affected by factors including the Japanese
government’s review of energy policy.1.Changes in Systems
Affecting the
Electricity Business
Currently, a debate is being held on a national level regarding the ideal energy mix and
revisions in the nuclear power policy, as well as revisions in the electricity business
system, including power system reform. Changes such as these to the systems affecting
the electricity business could have an impact on the Group’s performance.2.Fluctuations in
Electricity Sales
Volume
Electricity sales volume in the electricity business fluctuates according to factors such
as economic trends, temperature changes, increases in captive consumption volume
stemming from the spread of residential solar power systems, and trends in regulations
and institutional reforms relating to energy conservation. As a result, changes in these
factors could have an impact on the Group’s performance.3.Operational Status
of Nuclear Power
Stations
Items such as fuel costs and financing costs could rise further depending on the
operational status of nuclear power stations as determined by factors such as
Comprehensive Assessments for the Safety of Existing Power Reactor Facilities (stress
tests) and revisions to the national energy policy. Such increases could have an impact
on the Group’s performance.
The Company has enacted safety initiatives in response to the accident at Tokyo
Electric Power’s Fukushima Daiichi Nuclear Power Station. Should new information
present itself in the future, the Group will respond in a prompt and appropriate manner.
4. Fuel Price
Fluctuations
Fuel expenses in the electricity business fluctuate as a result of trends in CIF prices
and in foreign exchange rates because we procure fuel for thermal power generation,
including liquefied natural gas (LNG) and coal from overseas.
However, fluctuations in fuel prices are reflected in electricity rates through the fuel
cost adjustment system, which helps to ease the impact of fuel price volatility on the
Group’s performance.
5. Nuclear Fuel
Cycle Costs
Uncertainties in the long-term prospects of nuclear fuel cycle operations pose a risk,
but operator risk is being reduced through measures proposed by the Japanese
government. However, the Group’s performance could be affected by the direction of
discussions related to nuclear fuel cycle policy and increased costs based on revised
estimates for future expenses.6.Cost of Measures
to Combat Global
Warming
In response to global warming, the Group aims for more efficient, lower-carbon power
generation, and to this end the Group conducts a variety of measures, such as safe
and stable nuclear power station operations, active development and introduction of
renewable energy, and maintenance and enhancement of total thermal efficiency for
thermal power stations. However, future changes in government policies related to
global warming could have an impact on the Group’s performance.
Annual Report 2012 Kyushu Electric Power Company 31
7. Businesses Other
Than Electricity
The Group is enhancing its revenue base by utilizing the Group’s management
resources to steadily develop new business areas beyond the electricity business.
In business operations, we put emphasis on profitability and work to improve efficiency
while pursuing growth. However, if profits cannot be generated according to plan due
to worsening business conditions and other factors, the Group’s performance may
be affected.
8. Interest Rate
Fluctuations
The Kyushu Electric Power Group’s balance of interest-bearing debt as of the end of
March 2012 was 2,483円.2 billion, representing the equivalent of 56% of the Group’s
total assets. Future changes in interest rates have the potential to affect the Kyushu
Electric Power Group’s financial condition.
However, 95% of the outstanding interest-bearing debt comprises corporate bonds
and long-term debt with the majority procured at fixed interest rates. Therefore, the
impact of fluctuating interest rates on the Kyushu Electric Power Group is viewed
as limited.
9. Leakage of
Information
The Kyushu Electric Power Group has strict internal frameworks to manage in-house
information and personal information, which Group companies hold, to ensure information
security. Additionally, we implement thorough information management by establishing
internal policies and guidelines on handling information as well as familiarizing employees
with handling procedures. However, in the event in-house information or personal
information is leaked, the Kyushu Electric Power Group’s performance may be affected.
10. Natural Disasters
To ensure a stable supply of electricity to its customers, the Kyushu Electric Power
Group systematically inspects and maintains facilities to prevent any trouble from
occurring. However, large-scale natural disasters such as typhoons, torrential rain,
earthquakes or tsunamis, or unexpected accidents or illicit acts could affect the Kyushu
Electric Power Group’s performance by damaging facilities, causing the extended
suspension of operations at power plants and other impacts.
We are also developing a risk management system and preparing for numerous risks
that may have a material impact on business operations. However, the inability to take
proper actions in an emergency situation may adversely affect the Group’s performance.
11. Compliance
To be worthy of the trust of all its stakeholders, the Group conducts its business
activities from the perspective of its customers and local people in the regions it
operates in by working as Group to fully instill an awareness of compliance and by
complying with laws and regulations. However, if a compliance violation undermines
the Group’s social credibility, the Group’s performance may be affected.
The Group will continue to work to build trust-based relationships with all its
stakeholders.
32 Kyushu Electric Power Company Annual Report 2012
Millions of Yen
Thousands of
U.S. Dollars (Note 1)
2012 2011 2012
ASSETS
PROPERTY (Note 3):
Plant and equipment �� 9,562,225円 9,367,143円 116,413,745ドル
Construction in progress �� 184,857 247,837 2,250,511
Total �� 9,747,082 9,614,980 118,664,256
Less–
Contributions in aid of construction �� 160,083 157,208 1,948,904
Accumulated depreciation �� 6,589,766 6,424,647 80,226,029
Total �� 6,749,849 6,581,855 82,174,933
Net property �� 2,997,233 3,033,125 36,489,323
NUCLEAR FUEL �� 267,124 263,381 3,252,057
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 4 and 15) �� 114,699 113,188 1,396,384
Investments in and advances to non-consolidated subsidiaries and
affiliated companies (Note 15) �� 101,212 98,106 1,232,189
Reserve funds for reprocessing of irradiated nuclear fuel
(Notes 8 and 15) �� 220,294 197,273 2,681,934
Deferred tax assets (Note 11) �� 178,753 136,028 2,176,199
Other assets �� 15,351 14,523 186,888
Total investments and other assets �� 630,309 559,118 7,673,594
CURRENT ASSETS:
Cash and cash equivalents (Note 15) �� 277,945 125,989 3,383,796
Receivables (Note 15) �� 135,396 113,883 1,648,356
Allowance for doubtful accounts �� (828) (975) (10,080)
Inventories, principally fuel �� 77,909 58,621 948,490
Deferred tax assets (Note 11) �� 28,203 17,996 343,353
Prepaid expenses and other �� 14,803 14,323 180,217
Total current assets �� 533,428 329,837 6,494,132
TOTAL �� 4,428,094円 4,185,461円 $ 53,909,106
Consolidated Balance Sheet
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
March 31, 2012
See notes to consolidated financial statements.
Annual Report 2012 Kyushu Electric Power Company 33
Millions of Yen
Thousands of
U.S. Dollars (Note 1)
2012 2011 2012
LIABILITIES AND EQUITY
LONG-TERM LIABILITIES:
Long-term debt, less current portion (Notes 6 and 15) �� 2,188,601円 1,714,430円 26,644,765ドル
Liability for employees’ retirement benefits (Note 7) �� 153,851 144,687 1,873,034
Reserve for reprocessing of irradiated nuclear fuel (Note 8) �� 358,652 368,931 4,366,350
Asset retirement obligations (Note 9) �� 211,990 207,855 2,580,838
Other �� 44,455 39,486 541,210
Total long-term liabilities �� 2,957,549 2,475,389 36,006,197
CURRENT LIABILITIES:
Current portion of long-term debt (Notes 6 and 15) �� 186,295 232,082 2,268,018
Short-term borrowings (Notes 10 and 15) �� 118,001 120,771 1,436,584
Commercial paper (Note 15) �� 30,000
Notes and accounts payable (Notes 14 and 15) �� 151,331 117,302 1,842,355
Accrued income taxes (Note 15) �� 2,586 18,737 31,483
Accrued expenses �� 83,785 72,870 1,020,027
Deferred tax liability �� 100 1,217
Other �� 39,099 38,631 476,004
Total current liabilities �� 581,197 630,393 7,075,688
RESERVE FOR FLUCTUATIONS IN WATER LEVEL �� 1,216 14,804
COMMITMENTS AND CONTINGENCIES (Note 17)
EQUITY (Note 12):
Common stock, authorized, 1,000,000,000 shares; issued,
474,183,951 shares in 2012 and 2011 �� 237,305 237,305 2,889,031
Capital surplus �� 31,133 31,138 379,023
Retained earnings �� 594,080 788,867 7,232,530
Treasury stock–at cost 1,236,366 shares in 2012 and
1,202,882 shares in 2011 �� (2,367) (2,334) (28,817)
Accumulated other comprehensive income
Unrealized gain (loss) on available-for-sale securities �� 12,332 11,356 150,134
Deferred gain (loss) on derivatives under hedge accounting �� (179) (1,871) (2,179)
Foreign currency translation adjustments �� (1,907) (2,003) (23,217)
Total �� 870,397 1,062,458 10,596,505
Minority interests �� 17,735 17,221 215,912
Total equity �� 888,132 1,079,679 10,812,417
TOTAL �� 4,428,094円 4,185,461円 53,909,106ドル
34 Kyushu Electric Power Company Annual Report 2012
Consolidated Statement of Operations
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Year Ended March 31, 2012
Millions of Yen
Thousands of
U.S. Dollars (Note 1)
2012 2011 2012
OPERATING REVENUES:
Electric �� 1,367,610円 1,354,204円 16,649,744ドル
Other �� 140,474 131,879 1,710,178
Total operating revenues �� 1,508,084 1,486,083 18,359,922
OPERATING EXPENSES (Note 13):
Electric �� 1,562,056 1,261,426 19,016,995
Other �� 130,883 125,748 1,593,414
Total operating expenses �� 1,692,939 1,387,174 20,610,409
OPERATING (LOSS) INCOME �� (184,855) 98,909 (2,250,487)
OTHER EXPENSES (INCOME):
Interest charges �� 34,025 34,026 414,232
Gain on sales of investment securities (Note 4) �� (2,276)
Gain on negative goodwill �� (2,592) (173) (31,556)
Loss on adjustment for changes of accounting standard
for asset retirement obligations (Note 9) �� 18,429
Other–net �� (2,753) 584 (33,516)
Total other expenses–net �� 28,680 50,590 349,160
(LOSS) INCOME BEFORE INCOME TAXES AND PROVISION FOR RESERVE
FOR FLUCTUATIONS IN WATER LEVEL AND
MINORITY INTERESTS �� (213,535) 48,319 (2,599,647)
PROVISION FOR RESERVE FOR FLUCTUATIONS IN WATER LEVEL �� 1,216 14,804
(LOSS) INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS �� (214,751) 48,319 (2,614,451)
INCOME TAXES (Note 11):
Current �� 3,585 32,107 43,645
Prior years �� 495 6,026
Deferred �� (52,840) (12,861) (643,292)
Total income taxes �� (48,760) 19,246 (593,621)
NET (LOSS) INCOME BEFORE MINORITY INTERESTS �� (165,991) 29,073 (2,020,830)
MINORITY INTERESTS IN NET INCOME OF
CONSOLIDATED SUBSIDIARIES �� (400) (343) (4,870)
NET (LOSS) INCOME �� \ (166,391) \ 28,730 $ (2,025,700)
Yen U.S. Dollars
PER SHARE OF COMMON STOCK (Note 2.r.):
Basic net (loss) income �� \(351.80) 60円.73 $(4.28)
Cash dividends applicable to the year �� 50.00 60.00 0.61
See notes to consolidated financial statements.
Annual Report 2012 Kyushu Electric Power Company 35
Millions of Yen
Thousands of
U.S. Dollars (Note 1)
2012 2011 2012
NET (LOSS) INCOME BEFORE MINORITY INTERESTS �� \(165,991) 29,073円 $(2,020,830)
OTHER COMPREHENSIVE INCOME (LOSS) (Note 18):
Unrealized gain (loss) on available-for-sale securities �� 921 (4,891) 11,213
Deferred gain (loss) on derivatives under hedge accounting �� 1,696 (3,752) 20,648
Foreign currency translation adjustments �� 731 (336) 8,899
Share of other comprehensive income in non-consolidated
subsidiaries
and affiliated companies �� (594) (523) (7,232)
Total other comprehensive income (loss) �� 2,754 (9,502) 33,528
COMPREHENSIVE (LOSS) INCOME �� \(163,237) 19,571円 $(1,987,302)
TOTAL COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO:
Owners of the parent �� \(163,627) 19,238円 $(1,992,050)
Minority interests �� 390 333 4,748
Consolidated Statement of Comprehensive Income
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Year Ended March 31, 2012
See notes to consolidated financial statements.
36 Kyushu Electric Power Company Annual Report 2012
Consolidated Statement of Changes in Equity
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Year Ended March 31, 2012
Thousands of Shares/Millions of Yen
Common Stock Treasury Stock Accumulated Other Comprehensive Income
Shares Amount
Capital
Surplus
Retained
Earnings
Shares Amount
Unrealized
Gain (Loss) on
Available-for-
Sale Securities
Deferred Gain
(Loss) on
Derivatives under
Hedge Accounting
Foreign
Currency
Translation
Adjustments
Total
Minority
Interests
Total Equity
BALANCE AT APRIL 1, 2010 �� 474,184 237,305円 31,141円 \ 788,538 1,111 \(2,165) 16,383円 \ 1,880 \(1,290) 1,071,792円 17,274円 1,089,066円
Net income�� 28,730 28,730 28,730
Cash dividends, 60円 per share �� (28,401) (28,401) (28,401)
Purchase of treasury stock �� 98 (184) (184) (184)
Disposal of treasury stock �� (3) (6) 15 12 12
Net change in the year �� (5,027) (3,751) (713) (9,491) (53) (9,544)
BALANCE AT MARCH 31, 2011 �� 474,184 237,305 31,138 788,867 1,203 (2,334) 11,356 (1,871) (2,003) 1,062,458 17,221 1,079,679
Net loss �� (166,391) (166,391) (166,391)
Cash dividends, 60円 per share �� (28,396) (28,396) (28,396)
Purchase of treasury stock �� 38 (43) (43) (43)
Disposal of treasury stock �� (5) (5) 10 5 5
Net change in the year �� 976 1,692 96 2,764 514 3,278
BALANCE AT MARCH 31, 2012 �� 474,184 237,305円 31,133円 \ 594,080 1,236 \(2,367) 12,332円 \ (179) \(1,907) \ 870,397 17,735円 \ 888,132
Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income
Common
Stock
Capital
Surplus
Retained
Earnings
Treasury
Stock
Unrealized
Gain (Loss) on
Available-for-
Sale Securities
Deferred Gain
(Loss) on
Derivatives under
Hedge Accounting
Foreign
Currency
Translation
Adjustments
Total
Minority
Interests
Total Equity
BALANCE AT MARCH 31, 2011 �� 2,889,031ドル 379,084ドル $ 9,603,932 $(28,415) 138,252ドル $(22,778) $(24,385) 12,934,721ドル 209,654ドル 13,144,375ドル
Net loss �� (2,025,700) (2,025,700) (2,025,700)
Cash dividends, 0ドル.73 per share �� (345,702) (345,702) (345,702)
Purchase of treasury stock �� (524) (524) (524)
Disposal of treasury stock �� (61) 122 61 61
Net change in the year �� 11,882 20,599 1,168 33,649 6,258 39,907
BALANCE AT MARCH 31, 2012 �� 2,889,031ドル 379,023ドル $ 7,232,530 $(28,817) 150,134ドル $ (2,179) $(23,217) 10,596,505ドル 215,912ドル 10,812,417ドル
See notes to consolidated financial statements.
Annual Report 2012 Kyushu Electric Power Company 37
Millions of Yen
Thousands of
U.S. Dollars (Note 1)
2012 2011 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
(Loss) income before income taxes and minority interests �� \(214,751) \ 48,319 $(2,614,451)
Adjustments for:
Income taxes–paid �� (20,524) (34,741) (249,866)
Depreciation and amortization �� 244,470 259,078 2,976,260
Decommissioning costs of nuclear power units �� 3,106 7,524 37,813
Provision for liability for employees’ retirement benefits �� 9,129 2,986 111,140
Reversal of reserve for reprocessing of irradiated nuclear fuel �� (10,279) (289) (125,140)
Loss on disposal of plant and equipment �� 9,785 8,436 119,126
Loss on adjustment for changes of accounting standard for
asset retirement obligations �� 18,429
Provision for reserve for fluctuation in water level �� 1,216 14,804
Gain on sales of investment securities �� (2,276)
Gain on negative goodwill �� (2,592) (173) (31,556)
Changes in assets and liabilities, net of effects from
merger of a non-consolidated subsidiary with a consolidated subsidiary:
Increase in reserve funds for reprocessing of irradiated nuclear fuel �� (23,021) (29,503) (280,265)
Increase in trade receivables �� (13,961) (4,825) (169,966)
(Increase) decrease in inventories �� (19,288) 5,225 (234,819)
Increase in trade payables �� 40,553 9,148 493,706
Other–net �� 13,066 14,009 159,070
Total adjustments �� 231,660 253,028 2,820,307
Net cash provided by operating activities �� 16,909 301,347 205,856
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures including nuclear fuel �� (229,352) (243,750) (2,792,208)
Payments for investments and advances �� (6,729) (64,210) (81,921)
Proceeds from sales of investment securities and collections of advances �� 4,205 8,547 51,193
Other–net �� 3,597 3,398 43,791
Net cash used in investing activities �� (228,279) (296,015) (2,779,145)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of bonds �� 129,574
Repayments of bonds �� (150,000) (69,950) (1,826,151)
Proceeds from long-term loans �� 657,635 88,830 8,006,270
Repayments of long-term loans �� (80,553) (103,871) (980,679)
Net (decrease) increase in short-term borrowings �� (2,771) 8,884 (33,735)
Net (decrease) increase in commercial paper �� (30,000) 30,000 (365,230)
Cash dividends paid �� (28,409) (28,413) (345,861)
Other–net �� (2,583) (2,111) (31,446)
Net cash provided by financing activities �� 363,319 52,943 4,423,168
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS �� 7 (485) 85
NET INCREASE IN CASH AND CASH EQUIVALENTS �� 151,956 57,790 1,849,964
CASH AND CASH EQUIVALENTS OF A NON-CONSOLIDATED SUBSIDIARY
MERGED WITH A CONSOLIDATED SUBSIDIARY �� 21
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR �� 125,989 68,178 1,533,832
CASH AND CASH EQUIVALENTS AT END OF YEAR �� \ 277,945 \ 125,989 $ 3,383,796
Consolidated Statement of Cash Flows
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Year Ended March 31, 2012
See notes to consolidated financial statements.
38 Kyushu Electric Power Company Annual Report 2012
1. Basis of Presenting Consolidated Financial Statements
Kyushu Electric Power Company, Incorporated (the "Company")
has prepared the accompanying consolidated financial statements
in accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act, the Electricity Business Act and
their related accounting regulations and in conformity with accounting
principles generally accepted in Japan ("Japanese GAAP"), which
are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
Especially accounting related to the nuclear power generation is
regulated by the above accounting regulations which are dependent
on a governmental long term nuclear energy policy.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to the
consolidated financial statements issued domestically in order to
present them in a form which is more familiar to readers outside
Japan. In addition, certain reclassifications have been made to
the consolidated financial statements for the year ended March
31, 2011 to conform to the classifications used in the consolidated
financial statements for the year ended March 31, 2012.
The United States dollar amounts included herein are provided
solely for the convenience of readers and are stated at the rate
of 82円.14 = U.S.1,ドル the approximate exchange rate prevailing on
March 31, 2012. The translations should not be construed as
representations that the Japanese yen amounts could be converted
into United States dollars at that or any other rate.
2. Summary of Significant Accounting Policies
a. Consolidation and Application of the Equity Method — The
consolidated financial statements as of March 31, 2012 include
the accounts of the Company and its thirty-nine (thirty-six for 2011)
subsidiaries (together, the "Companies"). All significant intercompany
transactions and balances have been eliminated in consolidation.
Investments in sixteen non-consolidated subsidiaries and fourteen
affiliated companies are accounted for by the equity method.
The Company adopts the control or influence concept. Under
the concept, those companies in which the Company, directly or
indirectly, is able to exercise control over operations are treated
as subsidiaries and those companies over which the Companies
have the ability to exercise significant influence are treated as
affiliated companies.
The excess of the cost of an acquisition over the fair value of
the net assets of an acquired subsidiary at the date of acquisition
is being amortized over a period of five years.
Consolidation of the remaining subsidiaries and the application
of the equity method to the remaining affiliated companies would
not have a material effect on the accompanying consolidated
financial statements.
The fiscal year-end of four consolidated subsidiaries and several
non-consolidated subsidiaries and affiliated companies is December
31. The Company consolidates such consolidated subsidiaries’
financial statements and accounts for investments in such non-
consolidated subsidiaries and affiliated companies by the equity
method using their financial results for the year ended December
31. The effects of any significant transactions during the period
between the subsidiaries’ and affiliated companies’ fiscal year-end
and the Company’s fiscal year-end are reflected in the consolidated
financial statements.
b. Business Combination — "Accounting Standard for Business
Combinations" are as follows: (1) The standard requires accounting
for business combinations only by the purchase method. (2) Under
the standard, in-process research and development (IPR&D)
acquired in the business combination is capitalized as an
intangible asset. (3) Under the standard, the acquirer recognizes
the bargain purchase gain in profit or loss immediately on the
acquisition date after reassessing and confirming that all of
the assets acquired and all of the liabilities assumed have
been identified after a review of the procedures used in the
purchase allocation.
c. Property and Depreciation — Property is stated at cost.
Contributions in aid of construction including those made by
customers are deducted from the cost of the related assets.
Depreciation is principally computed using the declining-balance
method based on the estimated useful lives of the assets. Depreciation
of easements is computed using the straight-line method based on
the estimated useful lives of the transmission lines.
d. Impairment of Fixed Assets — The Companies review their fixed
assets for impairment whenever events or changes in circumstance
indicate the carrying amount of an asset or asset group may not
be recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the sum of
the undiscounted future cash flows expected to result from the
continued use and eventual disposition of the asset or asset group.
The impairment loss would be measured as the amount by which
the carrying amount of the asset exceeds its recoverable amount,
which is the higher of the discounted cash flows from the continued
use and eventual disposition of the asset or the net selling price
at disposition.
e. Amortization of Nuclear Fuel — Amortization of nuclear fuel is
computed based on the proportion of current heat produced to
the estimated total potential heat production over the estimated
useful life of the nuclear fuel.
Notes to Consolidated Financial Statements
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Year Ended March 31, 2012
Annual Report 2012 Kyushu Electric Power Company 39
f. Investment Securities — Investment securities are classified and
accounted for, depending on management’s intent, as follows:
i) Held-to-maturity debt securities are stated at cost with discounts
or premiums amortized throughout the holding periods; ii) Available-
for-sale securities, which are not classified as the
aforementioned
securities and investment securities in non-consolidated subsidiaries
and affiliated companies, are stated at market value; and non-
marketable securities are stated at cost.
The Companies record unrealized gains or losses on available-
for-sale securities, net of deferred taxes, in equity presented as
"Unrealized gain (loss) on available-for-sale securities."
For other than temporary declines in fair value, investment
securities are written down to net realizable value by a charge
to income.
g. Cash Equivalents — Cash equivalents are short-term investments
that are readily convertible into cash and that are exposed to
insignificant risk of changes in value. Cash equivalents include
time deposits and mutual funds investments in bonds that represent
short-term investments, all of which mature or become due within
three months of the date of acquisition.
h. Inventories — Inventories are stated at the lower of cost,
principally determined by the average method, or net selling value.
i. Foreign Currency Transactions — Receivables and payables
denominated in foreign currencies are translated into Japanese
yen at the rates in effect as of the each balance sheet date.
j. Foreign Currency Financial Statements — The balance sheet
accounts of the consolidated foreign subsidiary, and non-
consolidated foreign subsidiaries and foreign affiliated companies
which are accounted for by the equity method, are translated into
Japanese yen at the current exchange rate as of the balance sheet
date except for equity, which is translated at the historical rate.
Differences arising from such translation are shown as "Foreign
currency translation adjustments" under accumulated other
comprehensive income in a separate component of equity.
Revenue and expense accounts of consolidated foreign
subsidiary are translated into yen at the average exchange rate.
k. Derivatives and Hedging Activities — Derivative financial
instruments and foreign currency transactions are classified and
accounted for as follows: a) All derivatives are recognized as either
assets or liabilities and measured at fair value, and gains or losses
on derivative transactions are recognized in the consolidated
statement of operations and b) for such derivatives used for hedging
purposes, if derivatives qualify for hedge accounting because of
high correlation and effectiveness between the hedging instruments
and the hedged items, gains or losses on derivatives are deferred
until maturity of the hedged transactions.
Liabilities denominated in foreign currencies for which foreign
exchange forward contracts and currency swaps are used to hedge
the foreign currency fluctuations are translated at the contracted
rate if the forward contracts and currency swaps qualify for hedge
accounting. Forward contracts and currency swaps applied for
committed transactions are measured at fair value and the
unrealized gains/losses are deferred until the underlying transactions
are completed.
The interest rate swaps which qualify for hedge accounting and
meet specific matching criteria are not remeasured at market value
but the differential paid or received under the swap agreements
are recognized and included in interest charges.
l. Severance Payments and Pension Plans — The Companies have
unfunded retirement plans for most of their employees and the
Company and most of the consolidated subsidiaries also have
contributory funded defined benefit pension plans covering
substantially all of their employees.
The Companies account for the liability for employees’ retirement
benefits based on the projected benefit obligations and plan assets
of the pension fund at the end of the fiscal year.
m. Reserve for Reprocessing of Irradiated Nuclear Fuel — This
reserve is provided for reprocessing costs of irradiated nuclear
fuel. The annual provision is calculated in accordance with the
accounting regulations set by the Japanese Government applicable
to electric utility providers in Japan.
n. Asset Retirement Obligations — Under "Accounting Standard
for Asset Retirement Obligations," an asset retirement obligation
is defined as a legal obligation imposed either by law or contract
that results from the acquisition, construction, development and
the normal operation of a tangible fixed asset and is associated
with the retirement of such tangible fixed asset. The asset retirement
obligation is recognized as the sum of the discounted cash flows
required for the future asset retirement. The Company recognizes
the asset retirement obligation as the sum of the future
decommissioning costs imposed by the "Law on the
Regulation
of Nuclear Source Material, Nuclear Fuel Material and Reactors,"
discounted at 2.3%.
Asset retirement obligations as of April 1, 2010 include the
amount transferred from "Reserve for decommissioning of nuclear
power units" in the consolidated balance sheet as of March 31,
2010.
Upon initial recognition of a liability for an asset retirement
obligation, an asset retirement cost is capitalized by increasing
the carrying amount of the related fixed asset by the amount of
the liability. The asset retirement cost is subsequently allocated
to expense based on a proportion of the current generation of
electric power to the estimated total life-time generation of electric
power of each unit.
o. Income Taxes — The provision for income taxes is computed
based on the pretax income included in the consolidated statement
of operations. The asset and liability approach is used to recognize
deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities. Deferred
taxes are measured by applying currently enacted tax laws to the
temporary differences.
40 Kyushu Electric Power Company Annual Report 2012
p. Reserve for Fluctuations in Water Level — This reserve is
provided to stabilize the Company’s income level based on the
Electricity Business Act and related accounting regulations. This
reserve is recorded when the volume of water for generating
hydroelectric power is abundant and available for future power
generation, and reversed in years when there is an insufficient
volume of water. Also this reserve must be shown as a liability
under the act and regulations.
q. Treasury Stock — The accounting standard for treasury stock
requires that where an affiliated company holds a parent company’s
stock, a portion which is equivalent to the parent company’s interest
in such stock should be presented as treasury stock as a separate
component of equity and the carrying value of the investment in
the affiliated company should be reduced by the same amount.
r. Net Income and Cash Dividends per Share — Basic earnings
per share ("EPS") is computed by dividing net income available to
common shareholders by the weighted-average number of common
shares outstanding during the year and diluted EPS reflects the
potential dilution that could occur if securities were exercised or
converted into common stock.
Diluted EPS is not disclosed for the years ended March 31,
2012 and 2011, because potentially dilutive securities were not
outstanding.
Cash dividends per share represent actual amounts applicable
to earnings of the respective years.
s. Research and Development Costs — Research and development
costs are charged to income as incurred.
t. Accounting Changes and Error Corrections — In December 2009,
the Accounting Standards Board of Japan (the "ASBJ") issued ASBJ
Statement No. 24, "Accounting Standard for Accounting Changes
and Error Corrections" and ASBJ Guidance No. 24, "Guidance on
Accounting Standard for Accounting Changes and Error Corrections."
Accounting treatments under this standard and guidance are as
follows: (1) Changes in Accounting Policies–When a new accounting
policy is applied with revision of accounting standards, the new
policy is applied retrospectively unless the revised accounting
standards include specific transitional provisions. When the revised
accounting standards include specific transitional provisions, an
entity shall comply with the specific transitional provisions. (2)
Changes in Presentations–When the presentation of financial
statements is changed, prior-period financial statements are
reclassified in accordance with the new presentation. (3) Changes
in Accounting Estimates–A change in an accounting estimate is
accounted for in the period of the change if the change affects
that period only, and is accounted for prospectively if the change
affects both the period of the change and future periods. (4)
Corrections of Prior-Period Errors–When an error in prior-period
financial statements is discovered, those statements are restated.
This accounting standard and the guidance are applicable to
accounting changes and corrections of prior-period errors which
are made from the beginning of the fiscal year that begins on or
after April 1, 2011.
3. Property
The breakdown of property at March 31, 2012 and 2011 was as follows:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Costs:
Electric power production facilities:
Hydroelectric power �� \ 798,663 \ 771,572 $ 9,723,192
Thermal power �� 1,466,669 1,461,980 17,855,722
Nuclear power �� 1,611,232 1,603,145 19,615,681
Internal-combustion engine power �� 127,454 127,026 1,551,668
Renewable power �� 105,974 104,978 1,290,163
Total �� 4,109,992 4,068,701 50,036,426
Transmission facilities �� 1,733,940 1,648,706 21,109,569
Transformation facilities �� 976,102 964,429 11,883,394
Distribution facilities �� 1,360,361 1,345,637 16,561,493
General facilities �� 392,341 391,761 4,776,491
Other electricity-related facilities �� 40,915 41,460 498,113
Other plant and equipment �� 948,574 906,449 11,548,259
Construction in progress �� 184,857 247,837 2,250,511
Total �� 9,747,082 9,614,980 118,664,256
Less–
Contributions in aid of construction �� 160,083 157,208 1,948,904
Accumulated depreciation �� 6,589,766 6,424,647 80,226,029
Carrying amount �� 2,997,233円 3,033,125円 $ 36,489,323
Annual Report 2012 Kyushu Electric Power Company 41
4. Investment Securities
The costs and aggregate fair values of investment securities at March 31, 2012 and 2011 were as follows:
Millions of Yen
March 31, 2012 Cost Unrealized Gains Unrealized Losses Fair Value
Securities classified as:
Available-for-sale:
Equity securities�� 13,262円 19,366円 602円 32,026円
Debt securities�� 1,551 86 3 1,634
Other securities�� 420 5 26 399
Held-to-maturity�� 4,977 12 764 4,225
Millions of Yen
March 31, 2011 Cost Unrealized Gains Unrealized Losses Fair Value
Securities classified as:
Available-for-sale:
Equity securities�� 13,034円 19,298円 524円 31,808円
Debt securities�� 230 29 4 255
Other securities�� 420 7 28 399
Held-to-maturity�� 6,370 29 808 5,591
Thousands of U.S. Dollars
March 31, 2012 Cost Unrealized Gains Unrealized Losses Fair Value
Securities classified as:
Available-for-sale:
Equity securities�� 161,456ドル 235,768ドル 7,329ドル 389,895ドル
Debt securities�� 18,883 1,047 37 19,893
Other securities�� 5,113 61 317 4,857
Held-to-maturity �� 60,592 146 9,301 51,437
The information of the available-for-sale securities which were sold during the year ended March 31, 2012 was not disclosed because
that was immaterial. Such information for the year ended March 31, 2011 was as follows:
Millions of Yen
March 31, 2011 Proceeds Realized Gains Realized Losses
Available-for-sale:
Equity securities �� 2,930円 2,225円
Debt securities �� 653 61円
Other securities �� 6 4
Total �� 3,589円 2,225円 65円
5. Pledged Assets
All of the Company’s assets amounting to 4,110,951円 million
(50,048,101ドル thousand) are subject to certain statutory preferential
rights established to secure bonds and loans borrowed from The
Development Bank of Japan Inc. and bonds transferred to banks
under debt assumption agreements (see Note 17).
Certain assets of the consolidated subsidiaries, amounting
to 58,518円 million (712,418ドル thousand), are pledged as collateral
for a portion of their long-term debt at March 31, 2012.
Investments in affiliated companies held by a consolidated
subsidiary, amounting to 40,400円 million (491,843ドル thousand),
are pledged as collateral for bank loans of the
affiliated companies
and the subsidiary of the affiliated
company at March 31, 2012.
42 Kyushu Electric Power Company Annual Report 2012
6. Long-Term Debt
Long-term debt at March 31, 2012 and 2011, consisted of the following:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Yen bonds, 0.35% to 3.65%, due serially to 2031 �� 1,173,368円 1,323,342円 14,284,977ドル
Swiss franc bonds, 2.625%, due 2014 �� 18,887 18,913 229,937
Loans from The Development Bank of Japan Inc., 0.577% to 4.85%,
due serially to 2028 �� 224,717 149,472 2,735,780
Loans, principally from banks and insurance companies, 0.25% to 2.50%,
due serially to 2033
Collateralized �� 34,344 38,541 418,115
Unsecured �� 913,897 408,332 11,126,090
Obligations under finance leases �� 9,683 7,912 117,884
Total �� 2,374,896 1,946,512 28,912,783
Less current portion �� 186,295 232,082 2,268,018
Long-term debt, less current portion �� 2,188,601円 1,714,430円 26,644,765ドル
The annual maturities of long-term debt outstanding at March 31, 2012 were as follows:
Year ending March 31 Millions of Yen
Thousands of
U.S. Dollars
2013 �� \ 186,295 $ 2,268,018
2014 �� 238,859 2,907,950
2015 �� 186,441 2,269,795
2016 �� 255,035 3,104,882
2017 �� 236,911 2,884,234
Thereafter �� 1,271,355 15,477,904
Total �� 2,374,896円 28,912,783ドル
7. Severance Payments and Pension Plans
Employees terminating their employment with the Companies,
either voluntarily or upon reaching mandatory retirement age, are
entitled, under most circumstances, to severance payments based
on credits earned in each year of service, length of service and
certain other factors. As for the Company, if the termination is
made voluntarily at one of a number of specified ages, the employee
is entitled to certain additional payments.
Additionally, the Company and most of the consolidated
subsidiaries have contributory funded defined benefit pension
plans covering substantially all of their employees. In general,
eligible employees retiring at the mandatory retirement age receivepension payments for the several fixed terms selected by them.
As for the Company, eligible employees retiring after at least 20
years of service but before the mandatory retirement age, receive
a lump-sum payment upon retirement and annuities.
The liability for employees’ retirement benefits at March 31, 2012 and 2011 consisted of the following:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Projected benefit obligation �� \ 493,587 \ 493,205 $ 6,009,094
Fair value of plan assets �� (335,221) (330,737) (4,081,093)
Unrecognized actuarial loss �� (6,817) (17,921) (82,992)
Unrecognized prior service cost (deduction of liability) �� 2,260 140 27,514
Prepaid pension cost �� 42 511
Net liability �� \ 153,851 \ 144,687 $ 1,873,034
Annual Report 2012 Kyushu Electric Power Company 43
The components of net periodic benefit costs for the years ended March 31, 2012 and 2011 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Service cost �� 15,457円 15,204円 188,179ドル
Interest cost �� 9,651 9,678 117,494
Expected return on plan assets �� (6,708) (6,730) (81,665)
Recognized actuarial loss �� 9,328 4,143 113,562
Amortization of prior service cost �� (367) (943) (4,468)
Net periodic benefit costs �� 27,361円 21,352円 333,102ドル
Assumptions for actuarial computations for the years ended March 31, 2012 and 2011 were as follows:
2012 2011
Discount rate �� 2.0% 2.0%
Expected rate of return on plan assets �� mainly 2.0% mainly 2.0%
Recognition period of actuarial gain/loss �� mainly 5 years mainly 5 years
Amortization period of prior service cost �� mainly 5 years mainly 5 years
8. Reserve for Reprocessing of Irradiated Nuclear Fuel
The reserve is provided for reprocessing costs of irradiated nuclear
fuel resulting from operation of nuclear power production facilities.
The annual provision is calculated in accordance with the accounting
regulations set by the Japanese Government applicable to electric
utility providers in Japan.
The reserve is consisted of three portions and each of them
is calculated in different ways.
(a) The costs reprocessed in Japan Nuclear Fuel Limited ("JNFL")
are calculated based on the expected future cash flows
discounted at 1.6% and 1.5% at March 31, 2012 and 2011,
respectively,
(b) the costs reprocessed in the other reprocessing companies
are calculated based on the quantities to be reprocessed as
of each balance sheet date and contracted reprocessing rate,
(c) the costs of irradiated nuclear fuels which have no authorized
definite reprocessing plan are calculated based on the
expected future cash flows discounted at 4.0%.
As of April 1, 2005, unrecognized prior costs of 130,495円
million, which had not been recognized in the past as liability, were
incurred because new accounting regulations to estimate the
reprocessing costs for irradiated nuclear fuel were applicable on
or after April 1, 2005. These costs were amortized on a straight-line
basis over 15 years. The Company recalculated an estimate in
accordance with a specific law. As a result, the unrecognized prior
costs as of April 1, 2008 were changed from 104,397円 million to
90,977円 million, and these costs are amortized over 12 years,
beginning on April 1, 2008. The balance of unrecognized past costs
as of March 31, 2012 was 60,652円 million (738,398ドル thousand).
The Company is permitted to recover these reprocessing costs by
including them in the admitted cost elements for electric rate.
In addition, if any changes are made in the assumptions for
the calculations of the reserve, such as expected future cash flows
and the discount rate, unrecognized difference might be incurred.
The balance of unrecognized difference as of March 31, 2012 is
a gain of 7,595円 million (92,464ドル thousand). In accordance with
the accounting regulations, the difference will be amortized on a
straight-line basis beginning the following year the change was
made, over the period in which the irradiated nuclear fuel was
produced. The annual amortization is treated as operating expenses.
An independent fund managing body was set up based on a
specific law and the Company is obliged to contribute the same
amounts as the balance of reserve for reprocessing of irradiated
nuclear fuel to reserve funds in 15 years. The reserve funds is
provided to ensure the appropriate reprocessing of irradiated
nuclear fuel and presented as "Reserve funds for reprocessing of
irradiated nuclear fuel."
44 Kyushu Electric Power Company Annual Report 2012
9. Asset Retirement Obligations
The changes in asset retirement obligations for the years ended March 31, 2012 and 2011 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Balance at beginning of year �� 207,855円 203,325円 2,530,497ドル
Net change in the year �� 4,154 4,530 50,572
Balance at end of year �� 212,009 207,855 2,581,069
Less current portion �� 19 231
Asset retirement obligations, less current portion �� 211,990円 207,855円 2,580,838ドル
10. Short-Term Borrowings
Short-term borrowings were generally represented by bank loans, bearing interest at rates ranging from 0.24% to 1.88% for the years
ended March 31, 2012 and 2011, respectively.
11. Income Taxes
The Companies are subject to national and local income taxes. The aggregate normal statutory tax rates for the Company approximated
36.1% for the years ended March 31, 2012 and 2011.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities
at March 31, 2012 and 2011 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Deferred Tax Assets:
Tax loss carryforwards �� \ 60,249 \ 3,766 $ 733,492
Pension and severance costs �� 49,021 52,950 596,798
Depreciation �� 32,741 35,632 398,600
Asset retirement obligations �� 24,300 28,083 295,836
Reserve for reprocessing of irradiated nuclear fuel �� 20,959 23,443 255,162
Unrealized profits arising from the elimination of intercompany
transactions in consolidation �� 9,053 9,774 110,214
Repair costs �� 8,240 2,649 100,316
Other �� 45,496 40,803 553,884
Less valuation allowance �� (30,076) (28,546) (366,155)
Deferred tax assets �� 219,983円 168,554円 2,678,147ドル
Deferred Tax Liabilities:
Unrealized gain on available-for-sale securities �� \ 5,567 \ 6,551 $ 67,774
Capitalized asset retirement costs �� 5,523 6,122 67,239
Other �� 2,048 1,875 24,933
Deferred tax liabilities �� \ 13,138 \ 14,548 $ 159,946
Net deferred tax assets �� 206,845円 154,006円 2,518,201ドル
Annual Report 2012 Kyushu Electric Power Company 45
A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying
consolidated statements of operations for the years ended March 31, 2012 and 2011 were as follows:
2012 2011
Normal effective statutory tax rate �� 36.1% 36.1%
Adjustment of deferred tax assets at year-end resulting from tax-rate changes �� (12.5)
Valuation allowance �� (2.3) 4.0
Other–net �� 1.4 (0.3)
Actual effective tax rate �� 22.7% 39.8%
At March 31, 2012, the Company and certain subsidiaries have
tax loss carryforwards aggregating 191,321円 million (2,329,206ドル
thousand), which are available to be offset against taxable income
of the company and these subsidiaries and will expire in nine years.
At March 31, 2012, the tax loss carryforwards for the Company
amounting to 175,799円 million (2,140,236ドル thousand) will expire
in the year ending March 31, 2021.
On December 2, 2011, new tax reform laws were enacted in
Japan, which changed the normal effective statutory tax rate from
approximately 36.1% to 33.2% effective for the fiscal years beginning
on or after April 1, 2012 through March 31, 2015, and to 30.7%
afterwards. The effect of this change was to decrease deferred
taxes in the consolidated balance sheet as of March 31, 2012 by
25,858円 million (314,804ドル thousand), to increase income taxes-
deferred in the consolidated statement of operations for the year
then ended by 26,813円 million (326,430ドル thousand), and to
increase other comprehensive income in the consolidated statement
of comprehensive income by 952円 million (11,590ドル thousand).
12. Equity
Japanese companies are subject to the Companies Act of Japan
(the "Companies Act"). The significant provisions in the Companies
Act that affect financial and accounting matters are summarized
below:
(a) Dividends
Under the Companies Act, companies can pay dividends at any
time during the fiscal year in addition to the year-end dividend upon
resolution at the shareholders meeting. For companies that meet
certain criteria, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal year if
the Company has prescribed so in its articles of incorporation.
However, the Company cannot do so because it does not meet all
the above criteria.
The Companies Act permits companies to distribute dividends-
in-kind (non-cash assets) to shareholders subject to a certain
limitation and additional requirements.
Semiannual interim dividends may also be paid once a year
upon resolution by the Board of Directors if the articles of
incorporation of the Company so stipulate. The Companies Act
provides certain limitations on the amounts available for dividends
or the purchase of treasury stock. The limitation is defined as the
amount available for distribution to the shareholders, but the
amount of net assets after dividends must be maintained at no
less than 3円 million.
(b) Increases/decreases and transfer of common stock, reserve
and surplus
The Companies Act requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (a component
of retained earnings) or as additional paid-in capital (a component
of capital surplus) depending on the equity account that was
charged upon the payment of such dividends until the total of
aggregate amount of legal reserve and additional paid-in capital
equals 25% of the common stock. Under the Companies Act, the
total amount of additional paid-in capital and legal reserve may
be reversed without limitation. The Companies Act also provides
that common stock, legal reserve, additional paid-in capital, other
capital surplus and retained earnings can be transferred among
the accounts under certain conditions upon resolution of the
shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase
treasury stock and dispose of such treasury stock by resolution
of the Board of Directors. The amount of treasury stock purchased
cannot exceed the amount available for distribution to the
shareholders which is determined by specific formula. Under the
Companies Act, stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition rights
and treasury stock. Such treasury stock acquisition rights are
presented as a separate component of equity or deducted directly
from stock acquisition rights.
46 Kyushu Electric Power Company Annual Report 2012
13. Research and Development Costs
Research and development costs charged to income were 8,601円 million (104,711ドル thousand) and 10,692円 million for the years ended
March 31, 2012 and 2011, respectively.
14. Related Party Disclosures
Significant transactions of the Company with an affiliated company for the years ended March 31, 2012 and 2011 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
KYUDENKO CORPORATION
Transactions:
Purchase of construction works on distribution facilities and other �� 39,623円 45,362円 482,384ドル
Balances at year end:
Payables for construction works �� 4,953 4,504 60,299
15. Financial Instruments and Related Disclosures
Items Pertaining to Financial Instruments
(a) The Companies’ policy for financial instruments
The Companies use financial instruments, mainly long-term debt
including bonds and loans, to raise funds required for investments
in electric utility plant and equipment, and repayments of bonds
and loans. Cash surpluses, if any, are invested in low risk financial
assets. Derivatives are used, not for speculative purposes, but to
avoid financial risks as described in (b) below.
(b) Nature and extent of risks arising from financial instruments,
and risk control system
Investment securities, mainly held-to-maturity debt securities and
equity securities issued by companies related through business,
and investments in and advances to non-consolidated subsidiaries
and affiliated companies which have a quoted market price in an
active market, are exposed to the risk of market price fluctuations.
Such market risk is managed by monitoring market values and
financial position of issuers on a regular basis. Investment securities
and investments in and advances to non-consolidated subsidiaries
and affiliated companies which do not have a quoted market price
in an active market are managed by monitoring financial position
of issuers on a regular basis. In addition, the Company requires
its non-consolidated subsidiaries and affiliated companies to submit
business plans and performance reports, and to consult in advance
on any items that could have a significant impact on the Companies’
business activities.
Reserve funds for reprocessing of irradiated nuclear fuel is
provided in accordance with a specific law to ensure the appropriate
reprocessing of irradiated nuclear fuel resulting from operation of
nuclear power production facilities.
Receivables are exposed to customer credit risk. Payment term
is set forth in electric power supply agreements and so on. The
Companies manage their credit risk from receivables by monitoring
of payment term and balances of each customer and identifying
and reduction of the default risk of customers in early stage.
Bonds and loans are mainly used to raise funds for investments
in electric utility plant and equipment. Bonds in a foreign currency
are exposed to the market risk of fluctuation in foreign currency
exchange rates, which is mitigated by using currency swaps.
Although a part of loans are exposed to market risk from changes
in variable interest rates, a consolidated subsidiary of the
Company mitigates such risk from long-term loans by using
interest rate swaps.
Payments terms of notes and accounts payable are less than
one year. Although a part of accounts payable to purchase fuel in
foreign currencies are exposed to the market risk of fluctuations
in foreign exchange and fuel price, such risk is mitigated by using
foreign exchange forward contracts, currency swaps and energy
swap agreements.
The Companies use foreign exchange forward contracts, currency
swaps, interest rate swaps and energy swap agreements to manage
their exposures to fluctuations in foreign exchange, interest rates
and fuel price, respectively.
Please see Note 16 for more detail about derivatives.
Liquidity risk comprises the risk that the Companies cannot
meet their contractual obligations in full on maturity dates. The
Companies manage their liquidity risk by holding adequate
volumes
of liquid assets based on monthly financial planning and diversifying
sources of their financing.
Annual Report 2012 Kyushu Electric Power Company 47
Fair values of financial instruments
The carrying amounts and aggregate fair values of financial instruments at March 31, 2012 and 2011 were as follows:
Millions of yen
March 31, 2012 Carrying Amount Fair Value Unrecognized Loss
Investment securities:
Held-to-maturity debt securities �� \ 4,977 \ 4,225 \ 752Available-for-sale securities �� 34,059 34,059
Investments in and advances to non-consolidated subsidiaries and
affiliated companies �� 18,788 10,893 7,895
Reserve funds for reprocessing of irradiated nuclear fuel �� 220,294 220,294
Cash and cash equivalents �� 277,945 277,945
Receivables �� 135,396 135,396
Total �� \ 691,459 \ 682,812 \ 8,647
Long-term debt:
Bonds �� 1,192,255円 1,229,695円 37,440円
Loans �� 1,172,958 1,189,831 16,873
Short-term borrowings �� 118,001 118,001
Notes and accounts payable �� 151,331 151,331
Accrued income taxes �� 2,586 2,586
Total �� 2,637,131円 2,691,444円 54,313円
Derivatives �� \
(99) \ (99)Millions of yen
March 31, 2011 Carrying Amount Fair Value Unrecognized Loss
Investment securities:
Held-to-maturity debt securities �� \ 6,370 \ 5,591 \ 779Available-for-sale securities �� 32,462 32,462
Investments in and advances to non-consolidated subsidiaries and
affiliated companies �� 18,235 11,879 6,356
Reserve funds for reprocessing of irradiated nuclear fuel �� 197,273 197,273
Cash and cash equivalents �� 125,989 125,989
Receivables �� 113,883 113,883
Total �� \ 494,212 \ 487,077 \ 7,135
Long-term debt:
Bonds �� 1,342,255円 1,384,020円 41,765円
Loans �� 596,345 615,122 18,777
Short-term borrowings �� 120,771 120,771
Commercial paper �� 30,000 30,000
Notes and accounts payable �� 117,302 117,302
Accrued income taxes �� 18,737 18,737
Total �� 2,225,410円 2,285,952円 60,542円
Derivatives �� \
(2,746) \
(2,746)
48 Kyushu Electric Power Company Annual Report 2012
Thousands of U.S. Dollars
March 31, 2012 Carrying Amount Fair Value Unrecognized Loss
Investment securities:
Held-to-maturity debt securities �� $ 60,592 $ 51,437 $ 9,155
Available-for-sale securities �� 414,645 414,645
Investments in and advances to non-consolidated subsidiaries and
affiliated companies �� 228,732 132,615 96,117
Reserve funds for reprocessing of irradiated nuclear fuel �� 2,681,934 2,681,934
Cash and cash equivalents �� 3,383,796 3,383,796
Receivables �� 1,648,356 1,648,356
Total �� $ 8,418,055 $ 8,312,783 105,272ドル
Long-term debt:
Bonds �� 14,514,914ドル 14,970,720ドル 455,806ドル
Loans �� 14,279,985 14,485,403 205,418
Short-term borrowings �� 1,436,584 1,436,584
Notes and accounts payable �� 1,842,355 1,842,355
Accrued income taxes �� 31,483 31,483
Total �� 32,105,321ドル 32,766,545ドル 661,224ドル
Derivatives �� $
(1,205) $
(1,205)
The securities whose fair value cannot be reliably determined
are excluded from investment securities and investments in and
advances to non-consolidated subsidiaries and affiliated companies
(see (b) below).
Advances are excluded from investments in and advances to
non-consolidated subsidiaries and affiliated companies because
they are immaterial.
Long-term debt contains current portion of them, and obligations
under finance leases are excluded because they are immaterial.
Derivatives are stated at the net amount.
(a) Methods used to calculate fair values of financial instruments
Investment securities, and investments in and advances to non-
consolidated subsidiaries and affiliated companies
The fair values of investment securities and investments in and
advances to non-consolidated subsidiaries and affiliated companies
are measured at the quoted market price of the exchanges for the
equity securities and some of debt securities, and principally at
the quoted price obtained from the financial institution for other
debt securities. The information of the fair values for the investment
securities by classification is included in Note 4.
Reserve funds for reprocessing of irradiated nuclear fuel
Reserve funds for reprocessing of irradiated nuclear fuel is provided
in accordance with a specific law to ensure the appropriate
reprocessing of irradiated nuclear fuel resulting from operation of
nuclear power production facilities.
The funds must be used in accordance with a plan approved
by the Japanese Government. The fair value is based on the carrying
amount determined by discounting the cash flows related to the
using plan.
Cash and cash equivalent, and receivables
The carrying amounts of cash and cash equivalents, and receivables
approximate fair values because of their short maturities.
Bonds
The fair values of bonds are based on market price. Bonds
denominated in a foreign currency for which currency swaps are
used to hedge the foreign currency fluctuations (see Note 16) are
treated as yen-denominated bonds. The fair values are determined
by discounting the cash flows related to the bonds at the Company’s
assumed corporate borrowing rate.
Long-term loans
The fair values of long-term loans at fixed interest rates are
determined by discounting the cash flows related to the loans at
the Company’s assumed corporate borrowing rate. Because loans
at variable interest rates reflect short-term movements in market
interest rates and there has been no substantial change in the
Company’s credit position since the loans were implemented, the
carrying amounts approximate fair values. A part of loans are
subjected to interest rate swaps which qualify for hedge accounting
and meet specific matching criteria (see Note 16), the fair values
are determined by discounting the cash flows related to the loans
with the interest rate swaps at the Company’s assumed corporate
borrowing rate.
Short-term borrowings, commercial paper, notes and accounts
payable, and accrued income taxes
The carrying amounts of short-term borrowings, commercial paper,
notes and accounts payable and accrued income taxes approximate
fair values because of their short maturities.
Derivatives
The information of the fair value for derivatives is included in
Note 16.
Annual Report 2012 Kyushu Electric Power Company 49
(b) Financial instruments whose fair value cannot be reliably determined
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
Investment securities:
Available-for-sale:
Equity securities �� \ 73,117 \ 72,446 $ 890,151
Other securities �� 2,546 1,910 30,996
Investments in and advances to non-consolidated subsidiaries and
affiliated companies:
Equity securities �� 70,321 70,747 856,111
Other securities �� 6,996 6,986 85,172
Total �� 152,980円 152,089円 1,862,430ドル
Maturity analysis for financial assets and securities with contractual maturities
Millions of Yen
March 31, 2012 Due in one year or less
Due after one year
through five years
Due after five years
through ten years
Due after ten years
Investment securities:
Held-to-maturity debt securities �� \
690 675円 155円 3,457円
Available-for-sale securities with contractual maturities �� 238 34 1,382
Reserve funds for reprocessing of irradiated nuclear fuel �� 28,365
Cash and cash equivalents �� 277,945
Receivables �� 135,396
Total �� 442,396円 913円 189円 4,839円
Thousands of U.S. Dollars
March 31, 2012 Due in one year or less
Due after one year
through five years
Due after five years
through ten years
Due after ten years
Investment securities:
Held-to-maturity debt securities �� $ 8,400 $ 8,218 1,887ドル 42,087ドル
Available-for-sale securities with contractual maturities �� 2,897 414 16,825
Reserve funds for reprocessing of irradiated nuclear fuel �� 345,325
Cash and cash equivalents �� 3,383,796
Receivables �� 1,648,356
Total �� 5,385,877ドル 11,115ドル 2,301ドル 58,912ドル
Reserve funds for reprocessing of irradiated nuclear fuel is provided
for reprocessing costs of irradiated nuclear fuel charged by JNFL.
Using plan of the reserve funds is disclosed only about due in one
year or less, to comply with agreements with JNFL and to avoid
disadvantage, possibly caused by disclosure, to the interested parties.
Please see Note 6 for annual maturities of long-term debt.
50 Kyushu Electric Power Company Annual Report 2012
16. Derivatives
The Company enters into foreign exchange forward contracts,
currency swaps, interest rate swaps and energy swap agreements
to manage its exposures to fluctuations in foreign exchanges,
interest rates and fuel price, respectively.
A consolidated subsidiary of the Company enters into interest
rate swaps to manage exposure to fluctuations in interest rates.
The Companies do not enter into derivatives for trading or
speculative purposes.
Foreign exchange forward contracts, currency swaps, interest
rate swaps and energy swap agreements are not subject to any
market risk except for abandoning potential income by market
fluctuations in hedged items.
The Companies do not anticipate any losses arising from credit
risk which is the possibility that a loss may result from counterparties’
failure to perform according to the terms and conditions of the
contract, because the counterparties to those derivatives have
high credit ratings.
The derivative transactions are executed by the specificsections and administrative section monitors them based on
internal policies.
Derivative transactions to which hedge accounting is applied
Millions of Yen
At March 31, 2012 Hedged Item Contract Amount
Contract Amount
due after One Year
Fair Value
Currency swaps:
Buying CHF (Note b) �� Bonds 19,523円 19,184円
Buying USD (Note a) �� Accounts payable 48,091円 31,600円 \(667)
Energy swap agreements:
(fixed price payment, floating price receipt) (Note a) �� Accounts payable \ 6,660 \ 4,045 \ 568
Interest rate swaps:
(fixed rate payment, floating rate receipt) (Note b) �� Long-term loans \ 3,299 \ 2,592
Total �� \ (99)
Millions of Yen
At March 31, 2011 Hedged Item Contract Amount
Contract Amount
due after One Year
Fair Value
Currency swaps:
Buying CHF (Note b) �� Bonds 19,863円 19,523円
Buying USD (Note a) �� Accounts payable 52,147円 36,819円 \(3,129)
Energy swap agreements:
(fixed price payment, floating price receipt) (Note a) �� Accounts payable \ 9,275 \ 6,660 \ 383
Interest rate swaps:
(fixed rate payment, floating rate receipt) (Note b) �� Long-term loans \ 3,991 \ 3,299
Total �� \(2,746)
Thousands of U.S. Dollars
At March 31, 2012 Hedged Item Contract Amount
Contract Amount
due after One Year
Fair Value
Currency swaps:
Buying CHF (Note b) �� Bonds 237,680ドル 233,552ドル
Buying USD (Note a) �� Accounts payable 585,476ドル 384,709ドル $(8,120)
Energy swap agreements:
(fixed price payment, floating price receipt) (Note a) �� Accounts payable $ 81,081 $ 49,245 $ 6,915
Interest rate swaps:
(fixed rate payment, floating rate receipt) (Note b) �� Long-term loans $ 40,163 $ 31,556
Total �� $(1,205)
Notes:
(a) The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
(b) Bonds denominated in foreign currencies for which currency swaps are used to hedge the foreign currency fluctuations are translated at the contracted rate if the currency swaps
qualify for hedge accounting.
The interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at market value but the differential paid or received under
the swap agreements is recognized and included in interest charges.
As a result, the fair values of such currency swaps and interest rate swaps are included in those of hedged items (i.e. bonds and long-term loans, respectively) in Note 15.
(c) The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts exchanged by the parties and do not measure the Companies’
exposure to market risk.
Annual Report 2012 Kyushu Electric Power Company 51
17. Commitments and Contingencies
At March 31, 2012, the Companies had a number of fuel purchase commitments, most of which specify quantities and dates for fuel
deliveries. However, most of purchase prices are contingent upon fluctuations in market prices.
Contingent liabilities at March 31, 2012 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
Co-guarantees of loans, mainly in connection with procurement of fuel �� 95,964円 1,168,298ドル
Guarantees of employees’ loans �� 81,615 993,608
Guarantees under debt assumption agreements �� 70,000 852,204
Other �� 19,033 231,714
Under the debt assumption agreements, the Company was contingently liable for the redemption of the domestic bonds transferred
to banks.
18. Comprehensive Income
The components of other comprehensive income for the year ended March 31, 2012 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
Other comprehensive income:
Unrealized gain (loss) on available-for-sale securities
Gains arising during the year �� \ (114) $ (1,388)
Reclassification adjustments to profit or loss �� 27 329
Amount before income tax effect �� (87) (1,059)
Income tax effect �� 1,008 12,272
Total �� \ 921 $ 11,213
Deferred gain (loss) on derivatives under hedge accounting
Gains arising during the year �� \ 841 $ 10,239
Adjustments for amounts transferred to the initial carrying amounts of hedged items �� 1,807 21,999
Amount before income tax effect �� 2,648 32,238
Income tax effect �� (952) (11,590)
Total �� 1,696円 $ 20,648
Foreign currency translation adjustments
Adjustments arising during the year �� \ 731 $ 8,899
Share of other comprehensive income in non-consolidated subsidiaries and
affiliated companies
Gains arising during the year �� \ (626) $ (7,621)
Reclassification adjustments to profit or loss �� 32 389
Total �� \ (594) $ (7,232)
Total other comprehensive income �� 2,754円 $ 33,528
The corresponding information for the year ended March 31, 2011 was not required under the accounting standard for presentation
of comprehensive income as an exemption for the first year of adopting that standard and not disclosed herein.
52 Kyushu Electric Power Company Annual Report 2012
19. Segment Information
(1) Description of reportable segments
The Companies’ reportable segments are those for which separately
financial information is available and regular evaluation by the
Company’s management is being performed in order to decide
how resources are allocated among the Companies. Therefore,
the Companies consist of the industry electric power, energy
related business, information technology (IT) and telecommunications
and other.
Energy related business consists of obtaining, storing,
gasifying,
supplying and selling LNG and other businesses related to energy.
IT and telecommunications consists of provision of
telecommunications.
Other consists of environment and recycling, lifestyle-oriented
services and others.
(2) Methods of measurement for the amounts of sales, profit,
assets and other items for each reportable segment
The accounting policies of each reportable segment are consistent
to those disclosed in Note 2, "Summary of Significant Accounting
Policies."
(3) Information about sales, profit, assets and other items at March 31, 2012 and 2011 were as follows:
Millions of Yen2012Reportable segment
Electric Power
Energy related
Business
IT and
Telecommunications
Other Total Reconciliations Consolidated
Sales:
Sales to external customers �� 1,367,610円 \ 67,039 \ 61,151 \ 12,284 1,508,084円 1,508,084円
Intersegment sales or transfers �� 1,927 97,518 35,812 15,027 150,284 \(150,284)
Total �� 1,369,537円 164,557円 \ 96,963 \ 27,311 1,658,368円 \(150,284) 1,508,084円
Segment (loss) profit �� \ (199,996) \ 4,780 \ 6,628 \ 3,145 \ (185,443) \
588 \ (184,855)
Segment assets �� 3,962,356 312,340 146,244 155,275 4,576,215 (148,121) 4,428,094
Other:
Depreciation �� 211,075 12,060 19,066 5,266 247,467 (2,997) 244,470
Increase in property and nuclear fuel �� 193,857 20,231 21,432 11,680 247,200 (3,238) 243,962
Millions of Yen2011Reportable segment
Electric Power
Energy related
Business
IT and
Telecommunications
Other Total Reconciliations Consolidated
Sales:
Sales to external customers �� 1,354,204円 \ 59,768 \ 60,913 \ 11,198 1,486,083円 1,486,083円
Intersegment sales or transfers �� 2,114 98,247 35,315 14,899 150,575 \(150,575)
Total �� 1,356,318円 158,015円 \ 96,228 \ 26,097 1,636,658円 \(150,575) 1,486,083円
Segment profit �� \ 86,599 \ 3,023 \ 6,484 \ 3,381 \ 99,487 \
(578) \ 98,909
Segment assets �� 3,741,007 300,947 147,890 154,974 4,344,818 (159,357) 4,185,461
Other:
Depreciation �� 222,956 14,130 19,625 5,325 262,036 (2,958) 259,078
Increase in property and nuclear fuel �� 228,812 6,465 23,669 7,601 266,547 (4,731) 261,816
Annual Report 2012 Kyushu Electric Power Company 53
Thousands of U.S. Dollars2012Reportable segment
Electric Power
Energy related
Business
IT and
Telecommunications
Other Total Reconciliations Consolidated
Sales:
Sales to external customers �� 16,649,744ドル $ 816,155 $ 744,473 $ 149,550 18,359,922ドル 18,359,922ドル
Intersegment sales or transfers �� 23,460 1,187,217 435,987 182,944 1,829,608 $(1,829,608)
Total �� 16,673,204ドル 2,003,372ドル 1,180,460ドル $ 332,494 20,189,530ドル $(1,829,608) 18,359,922ドル
Segment (loss) profit �� $ (2,434,819) $ 58,193 $ 80,692 $ 38,289 $ (2,257,645) $
7,158 $ (2,250,487)
Segment assets �� 48,239,055 3,802,532 1,780,424 1,890,370 55,712,381 (1,803,275) 53,909,106
Other:
Depreciation �� 2,569,698 146,822 232,116 64,110 3,012,746 (36,486) 2,976,260
Increase in property and nuclear fuel �� 2,360,080 246,299 260,921 142,196 3,009,496 (39,421) 2,970,075
Notes:
(a) Reconciliations of the segment profit and the segment assets are intersegment transaction eliminations.
(b) Segment profit is adjusted to reflect operating income on the consolidated statement of operations.
(c) Significant negative goodwill was incurred in the other business segment for the year ended March 31, 2012, and the gain on negative goodwill was 2,470円 million
(30,071ドル thousand)
Geographic segment information is not disclosed because the Companies’ overseas operations are immaterial.
Information for overseas sales is not disclosed due to overseas sales being immaterial compared with consolidated net sales.
20. Subsequent Event
At the general shareholders meeting held on June 27, 2012, the Company’s shareholders approved the following appropriation of
retained earnings as of March 31, 2012:
Millions of Yen
Thousands of
U.S. Dollars
Year-end cash dividends, 20円.00 (0ドル.24) per share �� 9,465円 115,230ドル
54 Kyushu Electric Power Company Annual Report 2012
Annual Report 2012 Kyushu Electric Power Company 55
Non-consolidated Five-Year Financial Summary
Kyushu Electric Power Company, Incorporated
Years Ended March 31
Millions of Yen
Thousands of
U.S. Dollars
For the Year: 2012 2011 2010 2009 2008 2012
Operating revenues �� 1,406,770円 1,387,518円 1,339,808円 1,430,162円 1,392,060円 17,126,491ドル
Electric �� 1,369,537 1,356,318 1,312,104 1,400,792 1,365,701 16,673,204
Other �� 37,233 31,200 27,704 29,370 26,359 453,287
Operating expenses �� 1,569,533 1,269,719 1,229,155 1,326,654 1,271,380 19,108,023
Personnel �� 167,966 162,651 172,720 136,794 138,313 2,044,875
Fuel �� 520,282 284,858 213,008 305,600 279,930 6,334,088
Purchased power �� 206,042 137,063 113,668 149,940 123,276 2,508,425
Depreciation �� 202,151 197,978 196,742 195,232 197,343 2,461,054
Maintenance �� 176,007 175,986 195,118 197,807 184,938 2,142,768
Reprocessing costs of
irradiated nuclear fuel �� 21,632 30,796 33,787 34,167 41,579 263,355
Decommissioning costs of
nuclear power units �� 3,106 7,524 9,093 8,309 21,357 37,814
Disposal cost of high-level
radioactive waste �� 6,010 8,885 10,373 8,669 9,125 73,168
Disposition of property �� 15,334 15,181 16,478 22,877 16,329 186,681
Taxes other than income taxes �� 83,143 87,680 87,474 88,453 87,107 1,012,211
Subcontract fee �� 65,949 67,729 79,226 74,835 70,721 802,885
Rent �� 31,277 32,789 34,334 35,760 36,547 380,777
Other �� 70,634 60,599 67,134 68,211 64,815 859,922
Interest charges �� 32,267 32,151 33,145 33,444 34,426 392,829
Income (loss) before income taxes �� (229,755) 35,778 50,356 44,165 60,162 (2,797,115)
Net income (loss) �� (174,984) 20,444 28,308 26,917 35,683 (2,130,314)
Per share of common stock: Yen U.S. Dollars
Basic net income (loss) �� \(369.74) 43円.19 59円.80 56円.85 75円.37 $(4.50)
Cash dividends applicable to the year �� 50.00 60.00 60.00 60.00 60.00 0.61
At year-end: Millions of Yen
Thousands of
U.S. Dollars
Total assets �� 4,110,951円 3,890,891円 3,776,569円 3,834,125円 3,784,701円 50,048,101ドル
Net property �� 2,757,024 2,811,194 2,811,064 2,847,639 2,878,537 33,564,938
Long-term debt, less current portion�� 2,090,311 1,627,260 1,641,073 1,715,780 1,620,563 25,448,150
Total equity �� 766,701 967,516 984,109 981,540 999,679 9,334,076
(U.S. dollar amounts have been translated from yen, for convenience, at the rate of 82円.14 = U.S.1,ドル the approximate rate of exchange at March 31, 2012.)
Download data
56 Kyushu Electric Power Company Annual Report 2012
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
ASSETS
PROPERTY:
Plant and equipment �� 8,888,533円 8,732,411円 108,211,992ドル
Construction in progress �� 186,648 245,260 2,272,315
Total �� 9,075,181 8,977,671 110,484,307
Less–
Contributions in aid of construction �� 152,162 149,323 1,852,471
Accumulated depreciation �� 6,165,995 6,017,154 75,066,898
Total �� 6,318,157 6,166,477 76,919,369
Net property �� 2,757,024 2,811,194 33,564,938
NUCLEAR FUEL �� 267,124 263,381 3,252,057
INVESTMENTS AND OTHER ASSETS:
Investment securities �� 105,002 104,139 1,278,330
Investments in and advances to subsidiaries and
affiliated companies �� 151,627 150,753 1,845,958
Reserve funds for reprocessing of irradiated nuclear fuel �� 220,294 197,273 2,681,934
Deferred tax assets �� 161,467 117,874 1,965,753
Other assets �� 12,607 11,145 153,482
Total investments and other assets �� 650,997 581,184 7,925,457
CURRENT ASSETS:
Cash and cash equivalents �� 231,960 85,105 2,823,959
Receivables �� 109,315 90,882 1,330,838
Allowance for doubtful accounts �� (511) (596) (6,221)
Fuel and supplies �� 63,161 39,232 768,943
Deferred tax assets �� 24,784 13,164 301,729
Prepaid expenses and other �� 7,097 7,345 86,401
Total current assets �� 435,806 235,132 5,305,649
TOTAL �� 4,110,951円 3,890,891円 $ 50,048,101
Non-consolidated Balance Sheet
Kyushu Electric Power Company, Incorporated
March 31, 2012 (Unaudited)
(U.S. dollar amounts have been translated from yen, for convenience, at the rate of 82円.14 = U.S.1,ドル the approximate rate of exchange at March 31, 2012.)
Annual Report 2012 Kyushu Electric Power Company 57
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
LIABILITIES AND EQUITY
LONG-TERM LIABILITIES:
Long-term debt, less current portion �� 2,090,311円 1,627,260円 25,448,150ドル
Liability for employees’ retirement benefits �� 136,875 127,722 1,666,362
Reserve for reprocessing of irradiated nuclear fuel �� 358,652 368,931 4,366,350
Asset retirement obligations �� 211,841 207,690 2,579,024
Other �� 19,585 23,742 238,434
Total long-term liabilities �� 2,817,264 2,355,345 34,298,320
CURRENT LIABILITIES:
Current portion of long-term debt �� 164,403 200,512 2,001,498
Short-term borrowings �� 111,000 116,000 1,351,351
Commercial paper �� 30,000
Accounts payable �� 130,004 95,707 1,582,712
Accrued income taxes �� 16,856
Accrued expenses �� 92,420 80,756 1,125,152
Other �� 27,943 28,199 340,188
Total current liabilities �� 525,770 568,030 6,400,901
RESERVE FOR FLUCTUATIONS IN WATER LEVEL �� 1,216 14,804
EQUITY:
Common stock, authorized, 1,000,000,000 shares; issued,
474,183,951 shares in 2012 and 2011 �� 237,305 237,305 2,889,031
Capital surplus:
Additional paid-in capital �� 31,087 31,087 378,464
Other capital surplus �� 23 28 280
Retained earnings:
Legal reserve �� 59,326 59,326 722,254
Retained earnings–carryforward �� 429,513 632,893 5,229,036
Unrealized gain (loss) on available-for-sale securities �� 11,635 10,728 141,648
Deferred gain (loss) on derivatives under hedge accounting �� (59) (1,755) (718)
Treasury stock–at cost 938,904 shares in 2012 and
905,742 shares in 2011 �� (2,129) (2,096) (25,919)
Total equity �� 766,701 967,516 9,334,076
TOTAL �� 4,110,951円 3,890,891円 50,048,101ドル
58 Kyushu Electric Power Company Annual Report 2012
58 Kyushu Electric Power Company Annual Report 2012
Non-consolidated Statement of Operations
Kyushu Electric Power Company, Incorporated
Year Ended March 31, 2012 (Unaudited)
Millions of Yen
Thousands of
U.S. Dollars
2012 2011 2012
OPERATING REVENUES:
Electric �� 1,369,537円 1,356,318円 16,673,204ドル
Other �� 37,233 31,200 453,287
Total operating revenues �� 1,406,770 1,387,518 17,126,491
OPERATING EXPENSES:
Electric:
Personnel �� 167,966 162,651 2,044,875
Fuel �� 520,282 284,858 6,334,088
Purchased power �� 206,042 137,063 2,508,425
Depreciation �� 202,151 197,978 2,461,054
Maintenance �� 176,007 175,986 2,142,768
Reprocessing costs of irradiated nuclear fuel �� 21,632 30,796 263,355
Decommissioning costs of nuclear power units �� 3,106 7,524 37,814
Disposal cost of high-level radioactive waste �� 6,010 8,885 73,168
Disposition of property �� 15,334 15,181 186,681
Taxes other than income taxes �� 83,143 87,680 1,012,211
Subcontract fee �� 65,949 67,729 802,885
Rent �� 31,277 32,789 380,777
Other �� 70,634 60,599 859,922
Total �� 1,569,533 1,269,719 19,108,023
Other �� 32,959 32,726 401,254
Total operating expenses �� 1,602,492 1,302,445 19,509,277
OPERATING (LOSS) INCOME �� (195,722) 85,073 (2,382,786)
OTHER EXPENSES (INCOME):
Interest charges �� 32,267 32,151 392,829
Gain on sales of investment securities �� (2,225)
Loss on adjustment for changes of accounting standard
for asset retirement obligations �� 18,326
Other–net �� 550 1,043 6,696
Total other expenses–net �� 32,817 49,295 399,525
(LOSS) INCOME BEFORE INCOME TAXES AND PROVISION
FOR RESERVE FOR FLUCTUATIONS IN WATER LEVEL �� (228,539) 35,778 (2,782,311)
PROVISION FOR RESERVE FOR FLUCTUATIONS IN WATER LEVEL �� 1,216 14,804
(LOSS) INCOME BEFORE INCOME TAXES �� (229,755) 35,778 (2,797,115)
INCOME TAXES:
Current �� 28,334
Prior years �� 487 5,929
Deferred �� (55,258) (13,000) (672,730)
Total income taxes �� (54,771) 15,334 (666,801)
NET (LOSS) INCOME �� \ (174,984) \ 20,444 $ (2,130,314)
Yen U.S. Dollars
PER SHARE OF COMMON STOCK:
Basic net (loss) income �� \(369.74) 43円.19 $(4.50)
Cash dividends applicable to the year �� 50.00 60.00 0.61
(U.S. dollar amounts have been translated from yen, for convenience, at the rate of 82円.14 = U.S.1,ドル the approximate rate of exchange at March 31, 2012.)