Annual Report 2002
For the year ended March 31, 2002
Kyushu Electric Power Company, Incorporated1Contents
Consolidated Financial Highlights
Consolidated Six-Year Financial Summary
Financial Review
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Non-Consolidated Balance Sheets
Non-Consolidated Statements of Income
Non-Consolidated Statements of Shareholders’ Equity
Non-Consolidated Statements of Cash Flows
Notes to Non-Consolidated Financial Statements
Non-Consolidated Six-Year Financial Summary
Organization
Board of Directors
Main Facilities・Investor Information2346891011222425262734353637Note: All dollar figures herein refer to U.S. currency. Yen amounts have been translated, for convenience only,
at 133円.25=US1ドル.2Consolidated Financial Highlights
10,942,334ドル
1,484,113
458,687
00,0000ドル.970.4532,196,113ドル
6,190,8292002For the year:
Operating revenues
Operating income
Net income
Per share of common stock
(yen and U.S. dollars):
Net income:
Basic
Diluted
Cash dividends applicable
to the year
At year-end:
Total assets
Total shareholders’ equity
1,458,066円
197,758
61,120
0,0128円.90
60.00
4,290,132円
824,92820021,448,376円
212,032
59,191
0,0124円.83
123.65
60.00
4,166,489円
810,01820011,428,559円
181,768
22,934
0,0048円.37
48.21
50.00
4,141,718円
725,5162000Kyushu Electric Power Company,
Incorporated and Consolidated Subsidiaries
Years ended March 31, 2002,
2001 and 2000
Millions of yen
(except for per share data)
Thousands of
U.S. dollars
(except for
per share data)
Operating Revenues and Net Income
(Billions of yen) (Billions of yen)
Operating revenues (left scale)
Net income (right scale)
1,200
1,500900600300060754530150
’98 ’99 ’00 ’01 ’02
1,444 1,430 1,429 1,448 1,45834262359 61
Total Assets
(Billions of yen)
4,000
5,000
3,000
2,000
1,0000’98 ’99 ’00 ’01 ’02
4,165 4,124 4,142 4,166 4,290310,942,334ドル
10,367,280
575,054
9,458,221
8,888,420
569,801
642,799
746,447
298,747
458,687
$ 0.970.4532,196,133ドル
26,985,321
16,032,090
6,190,8292002For the year:
Operating revenues:
Electric
Other
Operating expenses:
Electric
Other
Interest charges
Income before
income taxes
and minority interests
Income taxes
Net income
Per share of common stock
(yen and U.S. dollars):
Net income:
Basic
Diluted
Cash dividends
applicable to the year
At year-end:
Total assets
Net property
Long-term debt, less
current maturities
Total shareholders’ equity
1,458,066円
1,381,440
76,626
1,260,308
1,184,382
75,926
85,653
99,464
39,808
61,120
\ 128.90
60.00
4,290,132円
3,595,794
2,136,276
824,92820021,430,164円
1,387,855
42,309
1,259,056
1,219,999
39,057
111,753
60,077
33,885
25,835
\ 54.48
54.21
50.00
4,123,686円
3,596,203
2,276,929
659,5881999Consolidated Six-Year Financial Summary
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Years ended March 31
Millions of yen
(except for per share data)
Thousands of
U.S. dollars
(except for
per share data)
1,444,068円
1,409,492
34,576
1,238,582
1,206,622
31,960
134,781
71,475
37,420
33,655
\ 70.97
70.45
50.00
4,165,131円
3,665,153
2,365,687
659,98919981,413,983円
1,379,549
34,434
1,206,787
1,175,421
31,366
140,454
66,633
26,684
39,621
\ 83.56
82.86
50.00
4,162,484円
3,698,901
2,322,673
650,31219971,428,559円
1,392,148
36,411
1,246,791
1,211,227
35,564
107,190
39,490
16,058
22,934
\ 48.37
48.21
50.00
4,141,718円
3,528,297
2,137,509
725,51620001,448,376円
1,410,010
38,366
1,236,344
1,199,237
37,107
89,952
97,447
37,595
59,191
\ 124.83
123.65
60.00
4,166,489円
3,459,859
2,071,192
810,0182001Note: All dollar figures herein refer to U.S. currency. Yen amounts have been translated, for convenience only, at 133円.25=US1ドル.4The expanded scope of consolidation caused an increase
in costs, but Groupwide efforts to enhance efficiency and
cut capital expenditures resulted in a rise in total operating
expenses of just 1.9%, to 1,260円.3 billion.
Operating income fell 6.7%, to 197円.8 billion, while
net income gained 3.3%, to 61円.1 billion. This was largely
because the Company posted equity in earnings of
associated companies in the period under review,
compared with equity in loss of associated companies
in the previous term.
Capital Investment Policy: Kyushu Electric’s capital
expenditure plans focus on lowering the costs of
providing electricity, while, at the same time, stabilizing
long-term supplies.
Management is striving to improve the efficiency of
its capital spending by accurately projecting future
demand, while increasing the reliability of its facilities
and operating technologies by streamlining the facilities
setup, reviewing design and construction standards and
diversifying purchasing.
Financial Review
Operating Results: In fiscal 2001, ended March 31, 2002,
the Japanese economy remained sluggish. The global
economy slowed, while domestic demand was weak,
causing both production and capital investment to plunge.
In addition, personal consumption remained low in response
to the worsening unemployment situation and falling
incomes, while deflation persisted.
Against this backdrop, the Kyushu Electric Group’s
power sales volume dropped 3.0%. This was due to
adjustments in the manufacture of electrical equipment
among large industrial consumers following to a downturn
in information technology (IT) demand, reduced iron and
steel production and the increased use of on-site power
generation at some plants. Residential (lighting) and
commercial demand rose 1.3%.
As a result of these factors, the Company’s sales advanced
0.1%, to 75.3 billion kilowatt-hours. In October 2000,
Kyushu Electric reduced its rates, but a greater number of
subsidiaries have since come under the scope of
consolidation, so operating revenues in the period under
review increased 0.7%, to 1,458円.1 billion.
Hydroelectric
Thermal
Nuclear
Internal-combustion engine
Generating facilities
Transmission, transformation
and distribution facilities
Upgrading of existing facilities
Nuclear fuel and other facilities
Generating Capacity
(Thousands of megawatts)162012840
Capital Investments
(Billions of yen)320400240160800
98 99 00 01 02 98 99 00 01 025To satisfy the growth in demand for power, the Company
is taking comprehensive steps that will allow it to maintain
secure energy supplies while balancing its power
development, centered on nuclear power, to ensure
economy and reduce environmental impact.
We are expanding our 500-kilovolt trunk line system to
support new power development and serve demand
increases as well as installing more efficient transmission and
distribution facilities in keeping with medium- and long-
term demand prospects. In addition, we are laying
distribution lines underground as part of our efforts to
reduce the impact of our activities on the environment.
Capital expenditures were 3.0%, or 9円.1 billion, lower
than envisaged, at 297円.9 billion. This followed reviews of
construction and replacement plan standards as well as
design and construction cost-cutting efforts.
The construction of new generating facilities is
proceeding smoothly. The 700-megawatt Unit No. 2 of the
Reihoku Thermal Power Station will come on line in July
2003. A 1,200-megawatt pumped storage hydroelectric
power station in Omarugawa will start commercial
operations when the first 600 megawatts come on line
in July 2006, followed by a second 600 megawatts in
July 2008.
Financing: Kyushu Electric relies mainly on internal
funding for its capital investment requirements,
complemented by diverse sources of low-cost external
financing.
In fiscal 2001, capital investment and the redemption
of corporate bonds and borrowings accounted for 891円.8
billion, up 0.9% from the previous fiscal year. Bond
redemptions and loan repayments were down 1.5%,
to 593円.9 billion.
Internal reserves declined 4.8%, to 338円.7 billion.
Proceeds from the issue of bonds and notes increased 14.3%,
to 160円.0 billion, of which net proceeds were 159円.4
billion. Borrowings were up 1.2%, to 393円.7 billion.
Japan’s Electric Utility Law: The Electric Utility Law of
1964 governs Japan’s electric power companies and
their activities. The law’s principal objectives are to
protect the interests of users, to promote the
development of the electric power industry, and to
assure that the production and provision of electric
power is conducted in a safe and nonpolluting manner.
The law effectively permits the country’s nine regional
electric power companies to monopolize the retail sale
of electric power in their respective areas, but it also
requires that electric power rates be set at levels that
reflect the companies’ actual operating costs and are
fair to both suppliers and consumers.
On March 21, 2000, the government implemented
the revised Electric Utility Law, deregulating the
retailing of high-voltage power.
Internal reserves
Bonds
Borrowings
Sources of Funds
(Billions of yen)8001,0006004002000
98 99 00 01 02662,020,052ドル
2,521,809
64,541,861
863,467
36,693,073
37,556,540
26,985,321
1,639,775
855,775
361,351
591,445
200,172
2,008,743
398,567
8,705
724,203
(9,629)
361,786
60,443
18,199
1,562,274
32,196,113ドル2002PROPERTY (Note 3):
Plant and equipment
Construction in progress
Total
Less—
Contributions in aid of construction
Accumulated depreciation
Total
Net property
NUCLEAR FUEL
INVESTMENTS AND OTHER ASSETS:
Investment securities (Note 4)
Investments in and advances to non-consolidated subsidiaries
and associated companies
Deferred tax assets (Note 8)
Other assets
Total investments and other assets
CURRENT ASSETS:
Cash and cash equivalents
Short-term investments
Receivables
Allowance for doubtful accounts
Inventories, principally fuel, at average cost
Deferred tax assets (Note 8)
Prepaid expenses and other
Total current assets
TOTAL
\ 8,264,172
336,031
8,600,203
115,057
4,889,352
5,004,409
3,595,794
218,500
114,032
48,150
78,810
26,673
267,665
53,109
1,160
96,500
(1,283)
48,208
8,054
2,425
208,173
\ 4,290,1322002\ 7,823,732
357,136
8,180,868
110,221
4,610,788
4,721,009
3,459,859
201,024
144,937
63,910
65,346
21,593
295,786
67,948
1,660
85,440
(1,076)
41,786
11,549
2,513
209,820
\ 4,166,4892001Consolidated Balance Sheets
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
March 31, 2002 and 2001
Millions of yen
Thousands of
U.S. dollars (Note 1)
See notes to consolidated financial statements.
ASSETS716,032,090ドル
1,322,680
2,000,210
729,516
20,084,496
1,779,310
2,091,069
427,767
596,225
90,447
584,878
285,133
5,854,829
65,959
1,780,901
233,298
3,894,934
282,079
(383)
6,190,829
32,196,113ドル
LONG-TERM LIABILITIES:
Long-term debt, less current maturities (Note 5)
Liability for employees’ retirement benefits (Note 6)
Reserve for reprocessing of irradiated nuclear fuel
Reserve for decommissioning of nuclear power units
Total long-term liabilities
CURRENT LIABILITIES:
Current maturities of long-term debt (Note 5)
Short-term borrowings (Note 7)
Commercial paper
Notes and accounts payable (Note 12)
Accrued income taxes
Accrued expenses
Other
Total current liabilities
MINORITY INTERESTS
COMMITMENTS AND CONTINGENCIES (Note 14)
SHAREHOLDERS’ EQUITY (Note 9):
Common stock, authorized, 1,000,000,000 shares;
issued 474,183,951 shares in 2002 and 2001
Additional paid-in capital
Retained earnings
Unrealized gain on available-for-sale securities
Treasury stock, at cost—26,132 shares in 2002 and 1,220 shares in 2001
Total shareholders’ equity
TOTAL
\ 2,136,276
176,247
266,528
97,208
2,676,259
237,093
278,635
57,000
79,447
12,052
77,935
37,994
780,156
8,789
237,305
31,087
519,000
37,587(51)824,928
\ 4,290,132
\ 2,071,192
170,993
229,481
92,611
2,564,277
254,724
292,405
89,982
30,687
79,257
36,832
783,887
8,307
237,305
31,087
484,964
56,664(2)810,018
\ 4,166,489
LIABILITIES AND SHAREHOLDERS’ EQUITY 2002
2002 2001
Millions of yen
Thousands of
U.S. dollars (Note 1)810,367,280ドル
575,054
10,942,334
8,888,420
569,801
9,458,221
1,484,113
642,799
58,387
(3,715)
40,195
737,666
746,447
746,447
286,837
11,910
298,747
447,700
10,987
$ 458,6872002OPERATING REVENUES:
Electric
Other
Total operating revenues
OPERATING EXPENSES (Notes 10 and 13):
Electric
Other
Total operating expenses
OPERATING INCOME
OTHER EXPENSES (INCOME):
Interest charges (Note 3)
Loss on devaluation of investment securities
and investments in associated companies
Equity in loss (earnings) of associated companies
Provision for liability for severance payments (Note 2. i.)
Other—net
Total other expenses—net
INCOME BEFORE INCOME TAXES AND
PROVISION FOR (REVERSAL OF) RESERVE FOR
FLUCTUATIONS IN WATER LEVEL AND
MINORITY INTERESTS
PROVISION FOR (REVERSAL OF) RESERVE FOR
FLUCTUATIONS IN WATER LEVEL
INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS
INCOME TAXES (Note 8)
Current
Deferred
Total income taxes
INCOME BEFORE MINORITY INTERESTS IN NET
LOSS (INCOME) OF CONSOLIDATED SUBSIDIARIES
MINORITY INTERESTS IN NET LOSS (INCOME) OF
CONSOLIDATED SUBSIDIARIES
NET INCOME
\ 1,381,440
76,626
1,458,066
1,184,382
75,926
1,260,308
197,758
85,653
7,780
(495)
5,356
98,294
99,464
99,464
38,221
1,587
39,808
59,656
1,464
\ 61,1202002\ 1,410,010
38,366
1,448,376
1,199,237
37,107
1,236,344
212,032
89,952
2,902
21,842(58)114,638
97,394(53)97,447
50,249
(12,654)
37,595
59,852
(661)
\ 59,1912001Consolidated Statements of Income
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Years ended March 31, 2002, 2001 and 2000
See notes to consolidated financial statements.
\ 1,392,148
36,411
1,428,559
1,211,227
35,564
1,246,791
181,768
107,19019112,057
22,328459142,225
39,5435339,490
40,142
(24,084)
16,058
23,432
(498)
\ 22,9342000PER SHARE OF COMMON STOCK (Note 2. p.):
Net income:
Basic
Diluted
Cash dividends applicable to the year
\ 128.90
60.00
\ 124.83
123.65
60.00
48円.37
48.21
50.00
0ドル.970.45Millions of yen
Thousands of
U.S. dollars (Note 1)
Yen U.S. dollars9BALANCE AT APRIL 1, 1999
Adjustment of retained earnings for the
adoption of deferred tax accounting method
Adjustment of retained earnings for a newly
consolidated subsidiary
Adjustment of retained earnings for change in
scope of application of equity method
Net income
Cash dividends, 50円 per share
Bonuses to directors and corporate auditors
Net increase in treasury stock
BALANCE AT MARCH 31, 2000
Adjustment of retained earnings for exclusion
of an equity method accounted company
Net income
Cash dividends, 55円 per share
Bonuses to directors and corporate auditors
Net increase in treasury stock
Net increase in unrealized gain on
available-for-sale securities
BALANCE AT MARCH 31, 2001
Adjustment of retained earnings for newly
consolidated subsidiaries
Adjustment of retained earnings for change in
scope of application of equity method
Net income
Cash dividends, 60円 per share
Bonuses to directors and corporate auditors
Net increase in treasury stock
Net decrease in unrealized gain on
available-for-sale securities
BALANCE AT MARCH 31, 2002
474,184
474,184
474,184
474,184
Consolidated Statements of Shareholders’ Equity
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Years ended March 31, 2002, 2001 and 2000
Millions of yen
Thousands
See notes to consolidated financial statements.
Issued
Number of
shares of
common stock
237,305円
237,305
237,305
237,305円
Common
stock
31,087円
31,087
31,087
31,087円
Additional
paid-in
capital
391,198円
62,1887044,080
22,934
(23,709)
(269)
457,126
(4,990)
59,191
(26,080)
(283)
484,964
(116)
1,773
61,120
(28,451)
(290)
519,000円
Retained
earnings
BALANCE AT MARCH 31, 2001
Adjustment of retained earnings for newly
consolidated subsidiaries
Adjustment of retained earnings for change in
scope of application of equity method
Net income
Cash dividends, 0ドル.45 per share
Bonuses to directors and corporate auditors
Net increase in treasury stock
Net decrease in unrealized gain on
available-for-sale securities
BALANCE AT MARCH 31, 2002
1,780,901ドル
1,780,901ドル
233,298ドル
233,298ドル
3,639,505ドル
(871)
13,305
458,687
(213,516)
(2,176)
3,894,934ドル
0ドル(15)
(368)
$(383)
0円(2)(0)(2)(0)(2)(49)\ (51)
Treasury
stock
\(00,000
56,664円
56,664
(19,077)
\(37,587
Unrealized
gain on
available-for-
sale securities
$(425,246
(143,167)
$(282,079
Thousands of U.S. dollars (Note 1)
Common
stock
Additional
paid-in
capital
Retained
earnings
Treasury
stock
Unrealized
gain on
available-for-
sale securities10Consolidated Statements of Cash Flows
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Year ended March 31, 2002, 2001 and 2000
See notes to consolidated financial statements.
$ 746,447
(425,118)
2,209,486
23,190
278,026
34,499
74,994
21,764
58,387
(3,715)
(28,113)
(2,574)
(11,730)
(52,886)
(15,872)
24,150
2,184,488
2,930,935
(2,465,636)
(133,674)
27,152
37,734
(7,730)
(2,542,154)
1,194,919
(1,361,869)
627,805
(1,038,852)
(142,214)
427,767
(213,478)
(1,245)
(507,167)
(118,386)
7,024
509,929
$ 398,5672002CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes—paid
Depreciation and amortization
Provision for liability for employees’ retirement benefits
Provision for reserve for reprocessing of irradiated nuclear fuel
Provision for reserve for decommissioning of nuclear power units
Loss on disposal of plant and equipment
Nuclear fuel transferred to reprocessing costs
Provision for (reversal of ) reserve for fluctuations in water level
Loss on devaluation of investment securities and investments in
associated companies
Equity in loss (earnings) of associated companies
Cash contribution for liquidation of an associated company
Changes in assets and liabilities, net of effects from newly
consolidated subsidiaries:
Decrease (increase) in trade receivables
Increase in inventories
Increase (decrease) in trade payable
Decrease in interest payable
Other—net
Total adjustments
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures including nuclear fuel
Payments for investments and advances
Proceeds from sales of investment securities
and collections of advances
Proceeds from acquisition of additional interests of a subsidiary
which caused initial consolidation, net of cash acquired (Note 11)
Other—net
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of bonds
Repayments of bonds and notes
Proceeds from long-term bank loans
Repayments of long-term bank loans
Net increase (decrease) in short-term borrowings
Net increase in commercial paper
Cash dividends paid
Other—net
Net cash used in financing activities
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS OF NEWLY CONSOLIDATED
SUBSIDIARIES AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
\(099,464
(56,647)
294,414
3,090
37,047
4,597
9,993
2,900
7,780
(495)
(3,746)
(343)
(1,563)
(7,047)
(2,115)
3,218
291,083
390,547
(328,546)
(17,812)
3,618
5,028
(1,030)
(338,742)
159,223
(181,469)
83,655
(138,427)
(18,950)
57,000
(28,446)
(166)
(67,580)
(15,775)93667,948
\(053,1092002\(039,490
(31,627)
319,394
44,193
29,099
6,304
11,070
10,26753191
12,057
(3,103)
(4,138)
3,232
(2,197)
(4,735)
390,060
429,550
(288,945)
(10,413)
8,353
4,431
(286,574)
149,339
(186,360)
67,688
(157,033)
(13,567)
(23,698)(18)(163,649)
(20,673)4669,990
\(049,3632000\(097,447
(42,742)
302,559
14,454
19,199
6,898
13,030826(53)
2,902
21,842
(14,099)
4,584
(1,920)
6,139
(2,228)
(15,507)
315,884
413,331
(283,293)
(11,211)
6,057
8,967
(279,480)
139,419
(206,767)
87,945
(122,985)
13,205
(26,065)(18)(115,266)
18,585
49,363
\(067,9482001Millions of yen
Thousands of
U.S. dollars (Note 1)11Notes to Consolidated Financial Statements
Kyushu Electric Power Company, Incorporated and Consolidated Subsidiaries
Years ended March 31, 2002, 2001 and 2000
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been
prepared in accordance with the provisions set forth in the Japanese
Securities and Exchange Law and the Japanese Electric Utility Law
and their related accounting regulations. Kyushu Electric Power
Company, Incorporated (the "Company") and its consolidated
subsidiaries (together the "Companies") maintain their accounts
and records in accordance with the provisions set forth in the
Commercial Code of Japan (the "Code") and in conformity with
accounting principles and practices generally accepted in Japan,
which are different in certain respects as to application and
disclosure requirements of International Accounting Standards. The
consolidated financial statements are not intended to present the
financial position, results of operations and cash flows in accordance
with accounting principles and practices generally accepted in
countries and jurisdictions other than Japan.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to the
financial statements issued domestically in order to present them in
a form that is more familiar to readers outside Japan.
The United States dollar amounts included herein are provided
solely for the convenience of readers and are stated at the rate of
133円.25=US1,ドル the approximate exchange rate prevailing on
March 31, 2002. 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.
Certain reclassifications have been made to the consolidated financial
statements for 2001 and 2000 to conform to classifications used
in 2002.
2. Summary of Significant Accounting Policies
a. Consolidation and Application of the Equity Method—The consolidated
financial statements as of March 31, 2002 include the accounts of
the Company and its thirteen (eight for 2001 and 2000) significant
subsidiaries. All significant intercompany transactions and balances
have been eliminated in consolidation. Investments in six (five for
2001 and six for 2000) significant associated companies are accounted
for by the equity method.
As for the consolidation scope of subsidiaries and associated
companies, the Company adopts the control or influence concept.
Under the control or influence concept, those companies in which
the Company, directly or indirectly, is able to exercise control over
operations are fully consolidated, and those companies over which
the Companies have the ability to exercise significant influence are
accounted for by the equity method.
The excess of the cost of an acquisition over the fair value of the
net assets of the acquired subsidiary at the date of acquisition is
being amortized over a period of 5 years.
Consolidation of the remaining subsidiaries and the application
of the equity method to the remaining associated companies would
not have a material effect on the accompanying consolidated
financial statements.
b. Property and Depreciation—Property is stated at cost. Prior to April
1, 2000, the cost of property includes certain interest costs on the
specific borrowed funds incurred during the construction period of
the related assets. Effective April 1, 2000, interest expense has not
been capitalized in accordance with a recent revision to the
accounting rules for electric utility companies. The effect of this
change was not incurred. 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.
c. Amortization of Nuclear Fuel—Amortization of nuclear fuel is
computed based on the proportion of current heat production to
the estimated total heat production over the estimated useful life of
the nuclear fuel.
d. Investment Securities—Prior to April 1, 2000, investment securities
were stated at cost determined by the average method.
Effective April 1, 2000, the Companies adopted a new accounting
standard for financial instruments, including investment securities. It
requires all applicable securities to be classified and accounted for,
depending on management’s intent, as follows: i) held-to-maturity
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 invest-
ment securities in non-consolidated subsidiaries and associated com-
panies, are stated at market value; and securities without market
value are stated at cost. The Companies record unrealized gain or
loss on available-for-sale securities, net of deferred taxes, in
shareholders’ equity presented as "Unrealized gain on available-for-
sale securities." For other than temporary declines in fair value,
investments securities are written down to net realized value by a
charge to income.
e. Investments in Non-Consolidated Subsidiaries and Associated
Companies—Investments in non-consolidated subsidiaries and
associated companies, except those of the six (five for 2001 and
six for 2000) associated companies accounted for by the equity
method, are stated at cost; however, they are written down to
appropriate values if the investments have been significantly
impaired in value of a permanent nature.12f. Cash Equivalents—Cash equivalents are certain 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 investing in bonds that
represent short-term investments, all of which mature or become
due within three months of the date of acquisition.
g. Foreign Currency Transactions—Prior to April 1, 2000, current
receivables and payables denominated in foreign currencies were
translated into Japanese yen at the rates in effect at each balance
sheet date, whereas noncurrent receivables and payables were
translated at the rates in effect when acquired or incurred.
Effective April 1, 2000, the Companies adopted a revised
accounting standard for foreign currency transactions. In accordance
with the revised standard, receivables and payables denominated
in foreign currencies are translated into Japanese yen at the rates in
effect at each balance sheet date. The effect of this change was
immaterial.
h. Derivatives and Hedging Activities—The Company enters into
derivative financial instruments ("derivatives"), including foreign
exchange forward contracts and currency swaps, to hedge market
risk from the fluctuations in foreign exchange rates associated with
liabilities denominated in foreign currencies.
Also, Oita Liquefied Natural Gas Company Inc. ("Oita LNG"), a
consolidated subsidiary of the Company, enters into interest swaps to
hedge market risk from the changes in interest rates associated with
floating rate liabilities.
Effective April 1, 2000, the Companies adopted a new
accounting standard for derivative financial instruments and a
revised accounting standard for foreign currency transactions.
These standards require that: a) all derivatives be recognized as
either assets or liabilities and measured at market value, and gains or
losses on the derivatives be recognized currently in the income
statements and
b) for derivatives for hedging purposes, if derivatives qualify for
hedge accounting because of high correlation and high hedge
effectiveness between the hedging instruments and the hedged items,
gains or losses on the derivatives be deferred until maturities of the
hedged transactions.
The long-term debt denominated in foreign currencies for
which the foreign exchange forward contracts are used to hedge
the foreign currency fluctuations are translated at the contracted
rate, since such treatment is also allowed to be incorporated under
the standards if the forward contracts qualify for hedge accounting.
The interest rate swaps which qualify for hedge accounting are
not remeasured at market value but the differential paid or received
under the swap agreements are recognized in interest expense,
which treatment is also allowed under the standards.
The adoption of the new accounting standard for derivative
financial instruments and the revised accounting standard for
foreign currency transactions did not have a material effect on the
Companies’ consolidated financial statements.
The Company and Oita LNG do not enter into derivatives for
trading or speculative purposes.
i. Severance Payments and Pension Plans—The Companies have
unfunded retirement plans for all 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.
Prior to April 1, 2000, with respect to the unfunded plans, the
annual provision for employees’ severance payments were
calculated to state the present value of the amount that would be
required if all employees voluntarily terminated their services with
the Company at each balance sheet date. For the funded pension
plan, the amounts contributed to the fund, except for prior service
costs, were charged to income when paid. Prior service costs were
accrued when incurred.
In the fiscal year ended March 31, 2000, the Company amended
the rate of present value for calculating the annual provisions for
employees’ severance payments from 40% to 55% which is based on
the average remaining service period of employees and the discount
rate considering the recent condition of lower interest rates. The
effect of this change, which was recorded as other expenses, totaled
22,328円 million.
Effective April 1, 2000, the Companies adopted a new
accounting standard for employees’ retirement benefits. Under the
new standard, the amount of the liability for employees’ retirement
benefits is determined based on the projected benefit obligations
and plan assets of the pension fund at the balance sheet date. The
full amount of the transitional obligation of 32,394円 million,
determined as of April 1, 2000, was amortized on a lump-sum
basis in the fiscal year ended March 31, 2001.
The net effect of the adoption of the new standard on the
statements of income was to increase operating expenses by
30,592円 million and to decrease income before income taxes and
minority interests by 34,653円 million including a cumulative effect
of 32,394円 million for the year ended March 31, 2001.
Retirement benefits for directors and corporate auditors are
charged to income when authorized by the shareholders.
j. Reserve for Reprocessing of Irradiated Nuclear Fuel—The annual
provision for the costs of reprocessing irradiated nuclear fuel is
calculated to state the related reserve at 60% of the amount that
would be required to reprocess all of the irradiated nuclear fuel in
accordance with the regulatory authority.
k. Reserve for Decommissioning of Nuclear Power Units—Provision is
made for future disposition costs of nuclear power units based on a
proportion of the current generation of electric power to the
estimated total generation of electric power of each unit.
l. Income Taxes—The provision for income taxes is computed based
on the pretax income included in the consolidated statements of
income. 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.13m. Appropriations of Retained Earnings—Appropriations of retained
earnings at each year end are reflected in the financial statements
for the following year upon shareholders’ approval.
n. Special Reserves—The Japanese Special Taxation Measures Law
permits companies in Japan to take as tax deductions certain
reserves, if recorded in the books of account, that are not required
for financial reporting purposes. These reserves must be reversed to
taxable income in future periods in accordance with the law.
The Code requires that the special reserves, except for the
reserve for fluctuations in water level, be recorded as a component
of shareholders’ equity (see Note 9).
A reserve for fluctuations in water level 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, in accordance with
the Japanese Electric Utility Law and related accounting
regulations. Under the law and regulations, this reserve must be
shown
as a liability.
o. Bond Issuance Costs and Bond Discount Charges—Bond issuance costs
are charged to income when paid or incurred.
Prior to April 1, 2000, bond discount charges were charged to
income when incurred. Effective April 1, 2000, bond discount
charges are amortized over the term of the related bonds in
accordance with a new accounting standard for financial
instruments. The effect of this change was immaterial.
p. Net Income and Cash Dividends per Share—Basic earnings per share
is computed based on the weighted average number of shares of
common stock outstanding during the year after giving effect to
retroactive adjustment for subsequent stock splits (if any).
Diluted earnings per share is computed assuming full conversion
of the outstanding convertible debt at the beginning of the year or
on the date of the subsequent issuance with an applicable adjustment
for related interest expense, net of income tax.
Diluted earnings per share is not disclosed for the year ended
March 31, 2002, because the convertible debt had beer redeemed
in the current fiscal year.
Cash dividends per share represent actual amounts applicable to
earnings of the respective year.
q. Research and Development Costs—Research and development costs
are charged to income as incurred.
r. Leases—All leases are accounted for as operating leases. Under
the Japanese accounting standard for leases, finance leases that
deem to transfer ownership of the leased property to the lessee
are to be capitalized, while other finance leases are permitted to
be accounted for as operating lease transactions if certain "as if
capitalized" information is disclosed in the notes to the lessee’s
financial statements.
3. Property
The major classes of property as of March 31, 2002 and 2001 were as follows:
$ 4,018,822
11,956,615
11,307,985
904,053
28,187,475
10,602,071
6,383,767
9,565,396
2,603,632
43,392
4,634,319
2,521,809
64,541,861
863,467
36,693,073
$ 26,985,3212002Original costs:
Electric power production facilities:
Hydroelectric power
Thermal power
Nuclear power
Internal-combustion engine power
Total
Transmission facilities
Transformation facilities
Distribution facilities
General facilities
Other electricity-related facilities
Other plant and equipment
Construction in progress
Total
Less contributions in aid of construction
Less accumulated depreciation
Carrying value
\ 535,508
1,593,219
1,506,789
120,465
3,755,981
1,412,726
850,637
1,274,589
346,934
5,782
617,523
336,031
8,600,203
115,057
4,889,352
\ 3,595,7942002\ 531,641
1,483,041
1,470,995
119,642
3,605,319
1,396,447
848,260
1,264,020
342,641
5,782
361,263
357,136
8,180,868
110,221
4,610,788
\ 3,459,8592001Millions of yen
Thousands of
U.S. dollars
Interest costs capitalized for the year ended March 31, 2000 was 30円 million.1407,999,415ドル
572,533
451,647
259,287
3,467,730
300,000
4,690,627
70,161
17,811,400
1,779,310
16,032,090ドル2002Domestic bonds, 0.3% to 6.9%, due serially to 2020
Domestic convertible bonds, 2.0%, due 2002
U.S. dollar bonds and notes, 6.375% to 7.25%, due 2002 to 2008
Swiss franc bonds, 4.0% to 4.25%, due 2003 to 2007
Deutsche mark bonds, 4.75%, due 2003
Canadian dollar bonds, 10.25%, due 2002
Loans from The Development Bank of Japan, 1.2% to 7.4%, due serially to 2023
Loans, principally from banks and insurance companies, 0.25% to 7.5%, due serially to 2023
Collateralized
Unsecured
Other
Total
Less current maturities
Long-term debt, less current maturities
1,065,922円
76,290
60,182
34,550
462,075
39,975
625,026
9,349
2,373,369
237,093
2,136,276円20021,011,985円
18,321
110,115
60,182
34,550
23,410
474,572
43,165
535,260
14,356
2,325,916
254,724
2,071,192円2001Long-term debt consisted of the following at March 31, 2002 and 2001:
5. Long-term Debt
Millions of yen
Thousands of
U.S. dollars
4. Investment Securities
The carrying amounts and aggregate fair values of investment securities at March 31, 2002 and 2001 were as follows:
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other securities
Held-to-maturity
16,954円93750959,777円6700円676,031円931515Cost
Unrealized
gains
Unrealized
losses
Fair value
Available-for sale securities and held-to-maturity securities whose fair value are not readily determinable as of March 31, 2002 and 2001
were as follows:
16,533円94331089,401円7513円8105,421円935317127,234ドル67278
3,820
448,608ドル455,253ドル45570,589ドル67233
3,865
244,743ドル
12,608
23,715
281,066ドル2002Available-for-sale:
Equity securities
Other securities
Held-to-maturity
Total
32,612円
1,680
3,160
37,452円200228,084円
7,657
3,421
39,162円2001Millions of yen
Thousands of
U.S. dollars2002Cost
Unrealized
gains
Unrealized
losses
Fair value2001Cost
Unrealized
gains
Unrealized
losses
Fair value2002Millions of yen
Thousands of
U.S. dollars156. 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
their rate of pay at the time of termination, 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 plans20032004200520062007Thereafter
Total
Thousands of
U.S. dollars
Millions of yen
0,237,093円
278,439
213,120
222,179
254,619
1,167,919
2,373,369円
01,779,310ドル
2,089,598
1,599,400
1,667,385
1,910,837
8,764,870
17,811,400ドル
Year ending
March 31
The outstanding domestic bonds and Swiss franc bonds may be
redeemed prior to maturity at the option of the Company, in whole
or in part, at prices 100% of the principal amount for the domestic
bonds and in whole at prices ranging from 100.25% to 101% of the
principal amount for Swiss franc bonds.
All of the Company’s assets are subject to certain statutory
preferential rights established to secure bonds, notes, loans received
from The Development Bank of Japan and bonds transferred to
banks under debt assumption agreements (see Note 14).
Certain assets of the consolidated subsidiaries, amounting to
92,274円 million (692,488ドル thousand), are pledged as collateral for
a portion of their long-term debt.
Certain long-term loan agreements include, among other things,
provisions that allow the lenders the right to approve, if desired, any
appropriations of retained earnings including dividends. However, to
date, no lender has exercised this right.
The annual maturities of long-term debt outstanding at March
31, 2002 were as follows:
covering substantially all of their employees. In general, eligible
employees retiring at the mandatory retirement age receive pension
payments for the remainder of their lives. 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 for a period of 10 years.
As discussed in Note 2. i., effective April 1, 2000, the Companies
adopted a new accounting standard for employees’ retirement benefits.
The components of net periodic benefit costs for the years ended March 31, 2002 and 2001 are as follows:
$(3,616,046
(1,868,623)
(426,349)
1,606
$(1,322,6802002Projected benefit obligation
Fair value of plan assets
Unrecognized actuarial loss
Unrecognized prior service cost
Net liability
\(481,838
(248,994)
(56,811)214\(176,2472002\(470,795
(239,171)
(60,631)
\(170,9932001The liability for employees’ retirement benefits at March 31, 2002 and 2001 consisted of the following:
Millions of yen
Thousands of
U.S. dollars
117,681ドル
87,947
(13,268)
87,985
(398)
279,947ドル2002Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of prior service cost
Amortization of transitional obligation
Net periodic benefit costs
15,681円
11,719
(1,768)
11,724(53)37,303円200213,723円
12,714
(6,119)
32,394
52,712円2001Millions of yen
Thousands of
U.S. dollars167. Short-term Borrowings
Short-term borrowings are generally represented by 365-day notes, bearing interest at rates ranging from 0.15917% to 1.0% and from
0.14857% to 1.5% at March 31, 2002 and 2001, respectively.
8. Income Taxes
The Companies are subject to several income taxes. The aggregate normal statutory tax rates for the Company approximated 36.1% for 2002,
2001 and 2000.
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities at March 31, 2002 and 2001 are as follows:
Deferred tax assets:
Pension and severance costs
Depreciation
Reserve for reprocessing of irradiated nuclear fuel
Reserve for decommissioning of nuclear power units
Deferred charges
Unrealized profits arising from the elimination of intercompany transactions in consolidation
Other
Less valuation allowance
Deferred tax assets
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Reserve for depreciation of nuclear power production facilities under construction
Other
Deferred tax liabilities
Net deferred tax assets
Assumptions for actuarial computations for the years ended March 31, 2002 and 2001 are as follows:
2002 2001
Discount rate 2.5% 2.5%
Expected rate of return on plan assets mainly 0.5% mainly 2.5%
Recognition period of actuarial gain/loss mainly 5 years mainly 5 years
Amortization period of prior service cost 5 years
Amortization period of transitional obligation 1 year
Total charge to income under the plans was 87,935円 million for the year ended March 31, 2000.
363,144ドル
96,045
78,777
76,428
71,572
71,159
161,921
(65,373)
853,673ドル
160,705ドル
31,662
9,599
201,966ドル
651,707ドル2002\ 048,389
12,798
10,497
10,184
9,537
9,482
21,576
(8,711)
\ 113,752
\ 021,414
4,219
1,279
\ 026,912
\ 086,8402002\ 045,774
7,716
10,497
10,184
14,423
9,131
18,925
(144)
\ 116,506
\ 032,122
6,328
1,161
\ 039,611
\ 076,8952001Millions of yen
Thousands of
U.S. dollars1784,060ドル18884,248ドル2002Reserve for:
Depreciation of nuclear power production facilities under construction
Losses on overseas investments
Total
\ 11,20125\ 11,2262002\ 19,32827\ 19,35520019. Shareholders’ Equity
As described in Note 2. n., certain special reserves were included in retained earnings. Such reserves at March 31, 2002 and 2001 were
as follows:
Japanese companies are subject to the Code to which certain
amendments became effective from October, 2001.
Prior to October 1, 2001, the Code required at least 50% of the
issue price of new shares, with a minimum of the par value thereof,
to be designated as stated capital as determined by resolution of the
Board of Directors. Proceeds in excess of amounts designated as
stated capital were credited to additional paid-in capital. Effective
October 1, 2001, the Code was revised and common stock par
values were eliminated resulting in all shares being recorded with
no par value.
Prior to October 1, 2001, the Code also provided that an
amount at least equal to 10% of the aggregate amount of cash
dividends and certain other cash payments which are made as an
appropriation of retained earnings applicable to each fiscal period
shall be appropriated and set aside as a legal reserve until such
reserve equals 25% of stated capital. Effective October 1, 2001,
the revised Code allows for such appropriations to be set aside as
a legal reserve until the total additional paid-in capital and legal
reserve equals 25% of stated capital. The amount of total additional
paid-in capital and legal reserve which exceeds 25% of stated
capital can be transferred to retained earnings by resolution of
the shareholders, which may be available for dividends. The
Company’s legal reserve amount, which is included in retained
earnings, totales 59,326円 million (445,223ドル thousand) as of March
31, 2002 and 2001, respectively. Under the Code, companies
may issue new common shares to existing shareholders without
consideration as a stock split pursuant to a resolution of the Board
of Directors. Prior to October, 1, 2001, the amount calculated by
dividing the total amount of shareholders’ equity by the number of
outstanding shares after the stock split could not be less than 500円.
The revised Code eliminated this restriction.
Prior to October 1, 2001, the Code imposed certain restrictions
on the repurchase and use of treasury stock. Effective October 1,
2001, the Code eliminated these restrictions allowing companies to
repurchase treasury stock by a resolution of the shareholders at the
general shareholders’ meeting and dispose of such treasury stock
by resolution of the Board of Directors after March 31, 2002.
The repurchased amount of treasury stock cannot exceed the
amount available for future dividends plus an amount of stated
capital, additional paid-in capital or legal reserve to be reduced
in the case where such reduction was resolved at the general
shareholders’ meeting.
The Code permits companies to transfer a portion of additional
paid-in capital and legal reserve to stated capital by resolution of
the Board of Directors. The Code also permits companies to
transfer a portion of unappropriated retained earnings, available
for dividends, to stated capital by resolution of the shareholders.
Dividends are approved by the shareholders at a meeting held
subsequent to the fiscal year to which the dividends are applicable.
Semiannual interim dividends may also be paid upon resolution of
the Board of Directors, subject to certain limitations imposed by
the Code.
Millions of yen
Thousands of
U.S. dollars
10. Research and Development Costs
Research and development costs charged to income were 12,163円 million (91,280ドル thousand), 12,998円 million and 12,648円 million for the years
ended March 31, 2002, 2001 and 2000, respectively.
A reconciliation between the normal effective statutory tax rate for the years ended March 31, 2002, 2001 and 2000, and the actual effective
tax rate reflected in the accompanying consolidated statements of income is as follows:
Normal effective statutory tax rate
Equity in loss (earnings) of associated companies
Valuation allowance
Expenses not deductible for income tax purposes
Other—net
Actual effective tax rate20012002
36.1%
(0.2)2.80.80.540.0%
36.1%1.50.10.70.2
38.6%200036.1%2.32.00.340.7%18Millions of yen
Acquisition cost
Accumulated depreciation
Net leased equipment
March 31, 2002
372,405ドル
174,154
198,251ドル
157,943ドル
73,711
084,232ドル
214,462ドル
100,443
114,019ドル
Acquisition cost
Accumulated depreciation
Net leased equipment200207,372円
19,045
26,417円
Due within one year
Due after one year
Total
Millions of yen
13. Leases
The Companies lease certain computer and other equipment.
Total lease payments under finance lease arrangements were 7,405円
million (55,572ドル thousand), 5,970円 million and 5,444円 million for
the years ended March 31, 2002, 2001 and 2000, respectively.
Pro forma information of leased equipment such as acquisition
cost, accumulated depreciation and lease obligations, all of which
included imputed interest expense, under finance leases that do not
transfer ownership of the leased equipment to the lessee on an "as
if capitalized" basis at March 31, 2002 and 2001 were as follows:
Obligations under finance leases which included the imputed
interest expense at March 31, 2002 and 2001 were as follows:
$ 55,324
142,927
198,251ドル200106,365円
16,456
22,821円2002Thousands of
U.S. dollars
General facilities Other
Thousands of U.S. dollars
Total
March 31, 2002
49,623円
23,206
26,417円
21,046円
9,822
11,224円
28,577円
13,384
15,193円
General facilities Other Total
Millions of yen
Acquisition cost
Accumulated depreciation
Net leased equipment
March 31, 2001
41,439円
18,618
22,821円
14,021円
7,502
06,519円
27,418円
11,116
16,302円
General facilities Other Total
12. Related Party Transactions
Significant transactions of the Company with associated companies for the years ended March 31, 2002 and 2001 were as follows:
KYUDENKO CORPORATION
Transactions:
Order for construction works of distribution facilities
Balances at year ended:
Payables for construction works
ASTEL Kyushu Corporation
Transactions:
Cash contribution for liquidation
367,257ドル
50,687200248,937円
6,754
\ —2002\ 50,174
6,982
\ 14,0992001Millions of yen
Thousands of
U.S. dollars
11. Additional Cash Flow Information
The Company acquired a majority of an associated company, Kyushu Telecommunication Network Co., Inc. on April 3, 2001. Assets acquired
and liabilities assumed in acquisition were as follows:
$(913,396
(800,180)
(15,655)
$(097,561
$(135,295
(97,561)
$(037,734
Assets acquired
Liabilities assumed
Minority interests in consolidated subsidiaries
Cost of acquisition of common stock of Kyushu Telecommunication Network Co., Inc.
Cash and cash equivalents held by Kyushu Telecommunication Network Co., Inc.
Cost of acquisition of common stock of Kyushu Telecommunication Network Co., Inc.
Net proceeds
\(121,710
(106,624)
(2,086)
\(013,000
\(018,028
(13,000)
\(005,028
Millions of yen
Thousands of
U.S. dollars1914. Commitments and Contingencies
At March 31, 2002, the Companies had a number of fuel purchase commitments, most of which specify quantities and dates for fuel deliveries.
However, purchase prices are contingent upon fluctuations in market prices.
Contingent liabilities as of March 31, 2002 were as follows:
Under the debt assumption agreements, the Company was contingently liable for the redemption of the domestic bonds transferred to banks.
15. Segment Information
Information by business segments for the year ended March 31, 2002 is as follows:
a. Sales and Operating Income
Co-guarantees of loans, mainly in connection with procurement of fuel
Guarantees of employees’ housing loans
Guarantees under debt assumption agreements
Other
114,133円
54,853
191,055
6,090
0,856,533ドル
411,655
1,433,809
45,704
Millions of yen Thousands of U.S. dollars
Total assets
Depreciation
Capital expenditures
32,196,113ドル
2,209,486
2,460,848
3,537,606ドル
217,846
338,957
$(759,932)
(24,578)
(30,904)
29,418,439ドル
2,016,218
2,152,795
Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income
1,458,066円
1,458,066
1,260,308
0,197,758円
076,626円
122,058
198,684
193,211
005,473円
\ —
(125,120)
(125,120)
(125,438)
\(000,318
Millions of yen
March 31, 2002
1,381,440円
3,062
1,384,502
1,192,535
0,191,967円
Electric Other
Eliminations/
corporate
Consolidated
Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income
10,942,334ドル
10,942,334
9,458,221
01,484,113ドル
0,575,054ドル
916,008
1,491,062
1,449,989
0,041,073ドル
$ —
(938,987)
(938,987)
(941,374)
$(002,387
10,367,280ドル
22,979
10,390,259
8,949,606
01,440,653ドル
b. Total Assets, Depreciation and Capital Expenditures
Total assets
Depreciation
Capital expenditures
4,290,132円
294,414
327,908
471,386円
29,028
45,166
\(101,261)
(3,275)
(4,118)
3,920,007円
268,661
286,860
Thousands of U.S. dollars
March 31, 2002
Electric Other
Eliminations/
corporate
Consolidated
Millions of yen
March 31, 2002
Electric Other
Eliminations/
corporate
Consolidated
Thousands of U.S. dollars
March 31, 2002
Electric Other
Eliminations/
corporate
Consolidated2016. Subsequent Events
At the general shareholders’ meeting held on June 27, 2002, the Company’s shareholders approved the following appropriations of retained
earnings as of March 31, 2002, and the purchase of treasury stock:
a. Appropriations of Retained Earnings
Year-end cash dividends, 30円.00 (0ドル.23) per share
Bonuses to directors and corporate auditors
106,754ドル
1,051
14,225円140Millions of yen Thousands of U.S. dollars
b. Purchase of Treasury Stock
The Company is authorized to repurchase up to 20 million shares of the Company’s common stock (aggregate amount of 35円 billion), which
is effective until the next general shareholders’ meeting.
Information by business segment for the years ended March 31
2001 and 2000 are not disclosed because the electric service
segment, which is the Companies’ main business, represented more
than 90% of their operations.
Other consisted of providing telephone lines and wirelines,
cellular, obtaining, storing, gasifying and supplying LNG, heat
supply business and others.
Geographic segment information is not shown due to the
Company having no overseas operations nor foreign consolidated
subsidiaries.
Information for overseas sales is not disclosed due to overseas
sales being immaterial compared with consolidated net sales.21To the Board of Directors of
Kyushu Electric Power Company, Incorporated:
We have examined the consolidated balance sheets of Kyushu Electric Power Company, Incorporated and consolidated subsidiaries as of
March 31, 2002 and 2001, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years
in the period ended March 31, 2002, all expressed in Japanese yen. Our examinations were made in accordance with auditing standards,
procedures and practices generally accepted and applied in Japan and, accordingly, included such tests of the accounting records and such
other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the financial position of Kyushu Electric Power
Company, Incorporated and consolidated subsidiaries as of March 31, 2002 and 2001, and the results of their operations and their cash flows
for each of the three years in the period ended March 31, 2002, in conformity with accounting principles and practices generally accepted in
Japan applied on a consistent basis.
As described in Note 2, effective April 1, 2000, the consolidated financial statements have been prepared in accordance with new accounting
standards for employees’ retirement benefits and financial instruments and a revised accounting standard for foreign currency transactions.
Our examinations also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for the convenience of readers
outside Japan.
June 27, 2002
INDEPENDENT AUDITORS’ REPORT
Tohmatsu & Co.
Fukuoka Sanwa Building,
10-24, Tenjin 1-chome,
Chuo-ku, Fukuoka 810-0001, Japan
Tel: +81-92-751-0931
Fax: +81-92-714-5585
www.tohmatsu.co.jp2258,403,535ドル
2,501,133
60,904,668
836,713
35,136,998
35,973,711
24,930,957
1,639,775
830,634
790,859
482,191
125,674
2,229,358
250,311
595,700
(8,480)
205,201
48,683
12,735
1,104,150
29,904,240ドル2002PROPERTY (Note 3):
Plant and equipment
Construction in progress
Total
Less—
Contributions in aid of construction
Accumulated depreciation
Total
Net property
NUCLEAR FUEL
INVESTMENTS AND OTHER ASSETS:
Investment securities
Investments in and advances to subsidiaries and
associated companies (Note 4)
Deferred tax assets (Note 8)
Other assets
Total investments and other assets
CURRENT ASSETS:
Cash and cash equivalents
Receivables
Allowance for doubtful accounts
Fuel and supplies, at average cost
Deferred tax assets (Note 8)
Prepaid expenses and other
Total current assets
TOTAL
\ 7,782,271
333,276
8,115,547
111,492
4,682,005
4,793,497
3,332,050
218,500
110,682
105,382
64,252
16,746
297,062
33,354
79,377
(1,130)
27,343
6,487
1,697
147,128
3,984,740円2002\ 7,560,010
361,182
7,921,192
109,173
4,472,145
4,581,318
3,339,874
201,024
142,192
83,238
51,999
18,697
296,126
54,238
74,695
(1,023)
29,060
10,269
1,994
169,233
4,006,257円2001Non-Consolidated Balance Sheets
Kyushu Electric Power Company, Incorporated
March 31, 2002 and 2001
See notes to non-consolidated financial statements.
Millions of yen
Thousands of
U.S. dollars (Note 1)
ASSETS2314,815,977ドル
1,210,274
2,000,210
729,516
18,755,977
1,539,175
1,939,625
427,767
434,094
77,298
627,122
227,362
5,272,443
1,780,901
233,298
445,223
3,137,944
278,837
(383)
5,875,820
29,904,240ドル2002LONG-TERM LIABILITIES:
Long-term debt, less current maturities (Note 5)
Liability for employee’s retirement benefits (Note 6)
Reserve for reprocessing of irradiated nuclear fuel
Reserve for decommissioning nuclear power units
Total long-term liabilities
CURRENT LIABILITIES:
Current maturities of long-term debt (Note 5)
Short-term borrowings (Note 7)
Commercial paper
Accounts payable
Accrued income taxes
Accrued expenses
Other
Total current liabilities
COMMITMENTS AND CONTINGENCIES (Note 12)
SHAREHOLDERS’ EQUITY (Note 9):
Common stock, authorized, 1,000,000,000 shares;
issued, 474,183,951 shares in 2002 and 2001
Additional paid-in capital
Legal reserve
Retained earnings
Unrealized gain on available-for-sale securities
Treasury stock—at cost, 26,132 shares in 2002
Total shareholders’ equity
TOTAL
1,974,229円
161,269
266,528
97,208
2,499,234
205,095
258,455
57,000
57,843
10,300
83,564
30,296
702,553
237,305
31,087
59,326
418,131
37,155(51)782,953
3,984,740円20022,016,036円
158,547
229,481
92,611
2,496,675
238,384
280,455
74,035
28,578
86,994
35,466
743,912
237,305
31,087
59,326
381,570
56,382
765,670
4,006,257円2001LIABILITIES AND SHAREHOLDERS’ EQUITY
Millions of yen
Thousands of
U.S. dollars (Note 1)2410,390,259ドル
1,402,401
1,132,901
735,715
1,838,244
1,335,550
296,653
34,499
57,336
151,332
699,707
440,060
278,056
547,152
8,949,606
1,440,653
609,553
56,803
7,062
673,418
767,235
767,235
260,345
17,944
278,289
$ 488,9462002OPERATING REVENUES
OPERATING EXPENSES (Notes 10 and 11):
PersonnelFuelPurchased power
Depreciation
Maintenance
Reprocessing costs of irradiated nuclear fuel
Decommissioning costs of nuclear power units
Disposal cost of high-level radioactive waste (Note 2. k.)
Disposition of property
Taxes other than income taxes
Subcontract feeRentOther
Total operating expenses
OPERATING INCOME
OTHER EXPENSE
Interest charges
Provision for liability for severance payments (Note 2. h.)
Loss on devaluation of investment securities and
investments in associated companies
Loss on liquidation of an associated company
Other—net
Total other expenses—net
INCOME BEFORE INCOME TAXES AND
PROVISION FOR (REVERSAL OF) RESERVE
FOR FLUCTUATIONS IN WATER LEVEL
PROVISION FOR (REVERSAL OF) RESERVE
FOR FLUCTUATIONS IN WATER LEVEL
INCOME BEFORE INCOME TAXES
INCOME TAXES (Note 8):
Current
Deferred
Total income taxes
NET INCOME
1,384,502円
186,870
150,959
98,034
244,946
177,962
39,529
4,597
7,640
20,165
93,236
58,638
37,051
72,908
1,192,535
191,967
81,223
7,56994189,733
102,234
102,234
34,691
2,391
37,082
0,065,152円20021,393,650円
214,311
122,886
93,725
278,897
183,902
41,070
6,304
18,582
94,842
61,364
35,249
68,237
1,219,369
174,281
104,426
22,328
9,756
1,634
138,144
36,1375336,084
36,376
(23,278)
13,098
0,022,986円2000Non-Consolidated Statements of Income
Kyushu Electric Power Company, Incorporated
Years ended March 31, 2002, 2001 and 2000
See notes to non-consolidated financial statements.
1,411,500円
203,897
146,097
94,098
263,043
173,521
22,510
6,898
11,411
21,465
94,448
64,457
36,168
69,955
1,207,968
203,532
87,724
2,706
17,949
1,131
109,510
94,022(53)94,075
46,570
(12,635)
33,935
0,060,140円2001PER SHARE OF COMMON STOCK (Note 2. p.):
Net income
Basic
Diluted
Cash dividends applicable to the year
137円.40
60.00
126円.83
125.63
60.00
48円.47
48.32
50.00
1ドル.030.45Millions of yen
Thousands of
U.S. dollars (Note 1)
Yen U.S. dollars25BALANCE AT APRIL 1, 1999
Adjustment of retained earnings for
the adoption of deferred tax
accounting method
Net income
Cash dividends, 50円 per share
Transfer to legal reserve
Bonuses to directors and
corporate auditors
BALANCE AT MARCH 31, 2000
Net income
Cash dividends, 55円 per share
Transfer to legal reserve
Bonuses to directors and
corporate auditors
Net increase in unrealized gain
on available-for-sale securities
BALANCE AT MARCH 31, 2001
Net income
Cash dividends, 60円 per share
Bonuses to directors and
corporate auditors
Net increase in treasury stock
Net decrease in unrealized gain on
available-for-sale securities
BALANCE AT MARCH 31, 2002
474,184
474,184
474,184
474,184
Non-Consolidated Statements of Shareholders’ Equity
Kyushu Electric Power Company, Incorporated
Years ended March 31, 2002, 2001 and 2000
See notes to non-consolidated financial statements.
237,305円
237,305
237,305
237,305円
31,087円
31,087
31,087
31,087円
54,435円
2,385
56,820
2,506
59,326
2,506
59,326円
295,197円
58,207
22,986
(23,709)
(2,385)
(140)
350,156
60,140
(26,080)
(2,506)
(140)
381,570
65,152
(28,451)
(140)
418,131円
BALANCE AT MARCH 31, 2001
Net income
Cash dividends, 0ドル.45 per share
Bonuses to directors and corporate auditors
Net increase in treasury stock
Net decrease in unrealized gain on
available-for-sale securities
BALANCE AT MARCH 31, 2002
Thousands of U.S. dollars (Note 1)
1,780,901ドル
1,780,901ドル
Common
stock
233,298ドル
233,298ドル
Additional
paid-in
capital
445,223ドル
445,223ドル
Legal
reserve
2,863,565ドル
488,946
(213,516)
(1,051)
3,137,944ドル
Retained
earnings
\(00,000
\(56,382
56,382
(19,227)
\(37,155
$(423,130
(144,293)
$(278,837
Unrealized
gain on
available-for-
sale securities
Millions of yen
Thousands
Issued
number of
shares of
common stock
Common
stock
Additional
paid-in
capital
Retained
earnings
Legal
reserve
Unrealized
gain on
available-for-
sale securities\(00\(51)
\(51)
Treasury
stock
$(000
$(383)
$(383)
Treasury
stock26$(0,767,235
(397,509)
2,036,293
20,428
278,026
34,499
64,165
21,764—56,803—(28,113)
13,081
12,885
(37,824)
(15,940)
(59,069)
1,999,489
2,766,724
(2,243,865)
(218,522)
19,017
40,135
(2,403,235)
1,196,045
(1,364,157)
437,336
(838,259)
(165,104)
427,767
(213,478)
(367)
(520,217)
(156,728)
407,039
$(0,250,3112002CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes—paid
Depreciation and amortization
Provision for liability for employees’ retirement benefits
Provision for reserve for reprocessing of irradiated nuclear fuel
Provision for reserve for decommissioning of nuclear power units
Loss on disposal of plant and equipment
Nuclear fuel transferred to reprocessing costs
Provision for (reversal of ) reserve for fluctuations in water level
Loss on devaluation of investment securities and
investments in associated companies
Loss on liquidation of an associated company
Cash contribution for liquidation of an associated company
Changes in assets and liabilities:
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payable
Decrease in interest payables
Other—net
Total adjustments
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures including nuclear fuel
Payments for investments and advances
Proceeds from sales of investment securities and
collections of advances
Other—net
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of bonds
Repayments of bonds and notes
Proceeds from long-term bank loans
Repayments of long-term bank loans
Net increase (decrease) in short-term borrowings
Net increase in commercial paper
Cash dividends paid
Other—net
Net cash used in financing activities
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
\(102,234
(52,968)
271,336
2,722
37,047
4,597
8,550
2,900—7,569—(3,746)
1,743
1,717
(5,040)
(2,124)
(7,871)
266,432
368,666
(298,995)
(29,118)
2,534
5,348
(320,231)
159,373
(181,774)
58,275
(111,698)
(22,000)
57,000
(28,446)(49)(69,319)
(20,884)
54,238
\(033,3542002\(036,084
(28,794)
307,022
42,554
29,099
6,304
10,818
10,267539,756——
(3,801)
(2,374)
4,211
(2,116)
(8,658)
374,341
410,425
(280,631)
(8,245)
6,416
4,261
(278,199)
149,339
(186,358)
63,777
(145,055)
(12,390)—(23,698)—(154,385)
(22,159)
63,264
\(041,1052000Non-Consolidated Statements of Cash Flows
Kyushu Electric Power Company, Incorporated
Years ended March 31, 2002, 2001 and 2000
See notes to non-consolidated financial statements.
\(094,075
(38,462)
290,533
14,305
19,199
6,898
12,917826(53)
2,706
17,949
(14,099)
2,532
(4,614)855(2,249)
(10,421)
298,822
392,897
(283,600)
(8,871)
4,475
8,612
(279,384)
139,419
(206,767)
76,496
(99,268)
15,805—(26,065)—(100,380)
13,133
41,105
\(054,2382001Millions of yen
Thousands of
U.S. dollars (Note 1)27Notes to Non-Consolidated Financial Statements
Kyushu Electric Power Company, Incorporated
Years ended March 31, 2002, 2001 and 2000
1. Basis of Presenting Non-Consolidated Financial Statements
The accompanying non-consolidated financial statements of
Kyushu Electric Power Company, Incorporated (the "Company")
have been prepared in accordance with the provisions set forth in
the Commercial Code of Japan (the "Code") and the Japanese
Electric Utility Law and their related accounting regulations, and in
conformity with accounting principles and practices generally
accepted in Japan, which are different in certain respects as to
application and disclosure requirements of International
Accounting Standards. The non-consolidated financial statements
are not intended to present the financial position, results of
operations and cash flows in accordance with accounting principles
and practices generally accepted in countries and jurisdictions other
than Japan. The non-consolidated statements of cash flows are not
required as part of the basic financial statements in Japan but are
presented herein as additional information.
In preparing these non-consolidated financial statements, certain
reclassifications and rearrangements have been made to the
financial statements issued domestically in order to present them in
a form that is more familiar to readers outside Japan.
The United States dollar amounts included herein are provided
solely for the convenience of readers and are stated at the rate of
133円.25=US1,ドル the approximate exchange rate prevailing on
March 31, 2002. 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. Property and Depreciation—Property is stated at cost. Prior to April
1, 2000, the cost of property includes certain interest costs on the
specific borrowed funds incurred during the construction period
of the related assets. Effective April 1, 2000, interest expense has
not been capitalized in accordance with a recent revision to the
accounting rules for electric utility companies. The effect of this
change was not incurred. Contributions in aid of construction
including those made by customers are deducted from the cost of
the related assets.
Depreciation is computed using the declining-balance method
based on the estimated useful lives of the assets.
b. Amortization of Nuclear Fuel—Amortization of nuclear fuel is
computed based on the proportion of current heat production to
the estimated total heat production over the estimated useful life of
the nuclear fuel.
c. Investment Securities—Prior to April 1, 2000, investment securities
were stated at cost determined by the average method.
Effective April 1, 2000, the Company adopted a new accounting
standard for financial instruments, including investment securities. It
requires all applicable securities to be classified and accounted for,
depending on management’s intent, as follows: i) held-to-maturity
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 subsidiaries and associated companies, are
stated at market value; and securities without market value are
stated at cost.
The Company records unrealized gain or loss on available-for-
sale securities, net of deferred taxes, in shareholders’ equity presented
as "Unrealized gain on available-for-sale securities."
For other than temporary declines in fair value, investment
securities are written down to net realized value by a charge
to income.
d. Investments in Subsidiaries and Associated Companies—Investments
in subsidiaries and associated companies are stated at cost; however,
they are written down to appropriate values if the investments
have been significantly impaired in value of a permanent nature.
e. Cash Equivalents—Cash equivalents are certain 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, which mature or become due within three
months of the date of acquisition.
f. Foreign Currency Transactions—Prior to April 1, 2000, current
receivables and payables denominated in foreign currencies were
translated into Japanese yen at the rates in effect at each balance
sheet date, whereas noncurrent receivables and payables were
translated at the rates in effect when acquired or incurred.
Effective April 1, 2000, the Company adopted a revised
accounting standard for foreign currency transactions. In accordance
with the revised standard, receivables and payables denominated
in foreign currencies are translated into Japanese yen at the rates
in effect at each balance sheet date. The effect of this change
was immaterial.
g. Derivatives and Hedging Activities—The Company enters into
derivative financial instruments ("derivatives"), including foreign
exchange forward contracts and currency swaps, to hedge market
risk from the fluctuations in foreign exchange rates associated with
liabilities denominated in foreign currencies.28Effective April 1, 2000, the Company adopted a new accounting
standard for derivative financial instruments and a revised
accounting standard for foreign currency transactions. These
standards require that: a) all derivatives be recognized as either assets
or liabilities and measured at market value, and gains or losses on the
derivatives be recognized currently in the income statement and
b) for derivatives for hedging purposes, if derivatives qualify for
hedge accounting because of high correlation and high hedge
effectiveness between the hedging instruments and the hedged items,
gains or losses on the derivatives are deferred until maturities of the
hedged transactions.
The long-term debt denominated in foreign currencies for
which the foreign exchange forward contracts are used to hedge
the foreign currency fluctuations are translated at the contracted
rate, since such treatment is also allowed to be incorporated under
the standards if the forward contracts qualify for hedge accounting.
The adoption of the new accounting standard for derivative
financial instruments and the revised accounting standard for
foreign currency transactions did not have a material effect on the
Company’s non-consolidated financial statements.
The Company does not enter into derivatives for trading or
speculative purposes.
h. Severance Payments and Pension Plans—The Company has an
unfunded retirement plan for all of its employees and a contributory
funded defined benefit pension plan covering substantially all of its
employees.
Prior to April 1, 2000, with respect to the unfunded plan, the
annual provision for employees’ severance payments were
calculated to state the present value of the amount that would be
required if all employees voluntarily terminated their services with
the Company at each balance sheet date. For the funded pension
plan, the amounts contributed to the fund except for prior service
costs were charged to income when paid. Prior service costs were
accrued when incurred.
In the fiscal year ended March 31, 2000, the Company amended
the rate of present value for calculating the annual provisions for
employees’ severance payments from 40% to 55% which is based on
the average remaining service period of employees and the discount
rate considering the recent condition of lower interest rates. The
effect of this change, which was recorded as other expenses, totaled
22,328円 million.
Effective April 1, 2000, the Company adopted a new accounting
standard for employees’ retirement benefits. Under the new
standard, the amount of the liability for employees’ retirement
benefits is determined based on the projected benefit obligations
and plan assets of the pension fund at the balance sheet date. The
full amount of the transitional obligation of 32,289円 million,
determined as of April 1, 2000, was amortized on a lump-sum basis
in the fiscal year ended March 31, 2001.
The net effect of the adoption of the new standard on the
statement of income was to decrease income before income taxes
by 29,901円 million including a cumulative effect of 32,289円
million for the year ended March 31, 2001.
Retirement benefits for directors and corporate auditors are
charged to income when authorized by the shareholders.
i. Reserve for Reprocessing of Irradiated Nuclear Fuel—The annual
provision for the costs of reprocessing irradiated nuclear fuel is
calculated to state the related reserve at 60% of the amount that
would be required to reprocess all of the irradiated nuclear fuel in
accordance with the regulatory authority.
j. Reserve for Decommissioning of Nuclear Power Units—Provision is
made for future disposition costs of nuclear power units based on a
proportion of the current generation of electric power to the
estimated total generation of electric power of each unit.
k. Disposal Cost of High-Level Radioactive Waste—The Company pays
contributions to Nuclear Waste Management Organization of Japan
in order to fund costs for the ultimate disposal of high-level radio-
active waste. The contributions are charged to income when paid.
l. Income Taxes—The provision for income taxes is computed based
on the pretax income included in the non-consolidated statements
of income. 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.
m. Special Reserves—The Japanese Special Taxation Measures Law
permits companies in Japan to take as tax deductions certain
reserves, if recorded in the books of account, that are not required
for financial reporting purposes. These reserves must be reversed to
taxable income in future periods in accordance with the law.
The Code requires that the special reserves, except for the
reserve for fluctuations in water level, be recorded as a component
of shareholders’ equity (see Note 9).
A reserve for fluctuations in water level 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, in accordance with
the Japanese Electric Utility Law and related accounting
regulations. Under the law and regulations, this reserve must be
shown
as a liability.
n. Bond Issuance Costs and Bond Discount Charges—Bond issuance
costs are charged to income when paid or incurred.
Prior to April 1, 2000, bond discount charges were charged to
income when incurred. Effective April 1, 2000, bond discount
charges are amortized over the term of the related bonds in
accordance with a new accounting standard for financial
instruments. The effect of this change was immaterial.
o. Treasury Stock—Prior to October 1, 2001, treasury stock was
included in prepaid expenses and other. Effective October 1, 2001,
such stock is presented as a separate component of shareholders’
equity in accordance with the new disclosure requirement for
treasury stock.29Original costs:
Electric power production facilities:
Hydroelectric power
Thermal power
Nuclear power
Internal-combustion engine power
Total
Transmission facilities
Transformation facilities
Distribution facilities
General facilities
Property leased to others
Construction in progress
Total
Less contributions in aid of construction
Less accumulated depreciation
Carrying value
3. Property
The major classes of property as of March 31, 2002 and 2001 were as follows:
$ 4,028,758
12,054,326
11,384,743
922,064
28,389,891
10,648,946
6,486,762
9,835,565
2,998,979
43,392
2,501,133
60,904,668
836,713
35,136,998
$ 24,930,9572002\ 536,832
1,606,239
1,517,017
122,865
3,782,953
1,418,972
864,361
1,310,589
399,614
5,782
333,276
8,115,547
111,492
4,682,005
\ 3,322,0502002\ 532,626
1,493,946
1,480,291
120,457
3,627,320
1,400,822
854,958
1,289,318
381,810
5,782
361,182
7,921,192
109,173
4,472,145
\ 3,339,8742001Millions of yen
Thousands of
U.S. dollars
p. Net Income and Cash Dividends per Share—Basic earnings per share
is computed based on the weighted average number of shares of
common stock outstanding during the year after giving effect to
retroactive adjustment for subsequent stock splits (if any).
Diluted earnings per share is computed assuming full conversion
of the outstanding convertible debt at the beginning of the year
or on the date of the subsequent issuance with an applicable
adjustment for related interest expense, net of income tax. Diluted
earnings per share is not disclosed for the year ended March 31,
2002, because the convertible debt was redeemed in the current
fiscal year.
Cash dividends per share represent actual amounts applicable
to earnings of the respective year.
q. Research and Development Costs—Research and development costs
are charged to income as incurred.
r. Leases—All leases are accounted for as operating leases. Under
Japanese accounting standard for leases, finance leases that
deem to transfer ownership of the leased property to the lessee
are to be capitalized, while other finance leases are permitted to
be accounted for as operating lease transactions if certain "as if
capitalized" information is disclosed in the notes to the lessee’s
financial statements.
4. Investments in Subsidiaries and Associated Companies
The carrying amounts and aggregate fair values of investments in subsidiaries and associated companies whose market values were available at
March 31, 2002 and 2001 are as follows:
Associated company 2,766円 7,898円 5,132円 2,766円 6,582円 3,816円 20,758ドル 59,272ドル 38,514ドル
2002 2001
Carrying
amount
Fair value
Unrealizedgain2002
Millions of yen
Thousands of
U.S. dollars
Carrying
amount
Fair value
UnrealizedgainCarrying
amount
Fair value
Unrealizedgain30
6. Severance Payments and Pension Plans
Employees terminating their employment with the Company,
either voluntarily or upon reaching mandatory retirement age, are
entitled, under most circumstances, to severance payments based
on their rate of pay at the time of termination, length of service
and certain other factors. 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 has a contributory funded defined
benefit pension plan covering substantially all of its employees. In
general, eligible employees retiring at the mandatory retirement
age receive pension payments for the remainder of their lives.
7. Short-term Borrowings
Short-term borrowings are generally represented by 365-day notes, bearing interest at the rates ranging from 0.15917% to 0.38750% and
from 0.14857% to 0.81821% at March 31, 2002 and 2001, respectively.
The outstanding domestic bonds and Swiss franc bonds may be
redeemed prior to maturity at the option of the Company, in whole
or in part at prices 100% of the principal amount for the domestic
bonds and in whole at prices ranging from 100.25% to 101% of the
principal amount for Swiss franc bonds.
All of the Company’s assets are subject to certain statutory
preferential rights established to secure bonds, notes, loans received
from The Development Bank of Japan and bonds transferred to
banks under debt assumption agreements (see Note 12).
Certain long-term loan agreements include, among other things,
provisions that allow the lenders the right to approve, if desired,
any appropriations of retained earnings including dividends.
However, to date, no lender has exercised this right.
The annual maturities of long-term debt outstanding at March
31, 2002 were as follows:20032004200520062007Thereafter
Total
Thousands of
U.S. dollars
Millions of yen
0,205,095円
247,273
185,484
187,747
236,868
1,116,857
2,179,324円
01,539,175ドル
1,855,707
1,392,000
1,408,983
1,777,621
8,381,666
16,355,152ドル
Year ending
March 31
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 for a period of 10 years.
As discussed in Note 2. h., effective April 1, 2000, the Company
adopted a new accounting standard for employees’ retirement
benefits. Net periodic benefit costs under the new standard for
the years ended March 31, 2002 and 2001 were 34,116円 million
(256,030ドル thousand) and 50,566円 million, and total charge to
income under the plans for the year ended March 31, 2000 was
85,828円 million.
Domestic bonds, 0.3% to 6.9%, due serially to 2020
Domestic convertible bonds, 2.0%, due 2002
U.S. dollar bonds and notes, 6.375% to 7.25%, due 2002 to 2008
Swiss franc bonds, 4.0% to 4.25%, due 2003 to 2007
Deutsche mark bonds, 4.75%, due 2003
Canadian dollar bonds, 10.25%, due 2002
Loans from The Development Bank of Japan, 1.65% to 6.9%, due serially to 2023
Unsecured loans, principally from banks and insurance companies, 0.25% to 5.7%, due serially to 2021
Other
Total
Less current maturities
Long-term debt, less current maturities
5. Long-term Debt
Long-term debt consisted of the following at March 31, 2002 and 2001:
08,002,799ドル—572,533
451,647
259,287—2,915,010
4,108,450
45,426
16,355,152
1,539,175
14,815,977ドル20021,066,373円—76,290
60,182
34,550—388,425
547,451
6,053
2,179,324
205,095
1,974,229円20021,012,585円
18,326
110,115
60,182
34,550
23,410
456,312
532,987
5,953
2,254,420
238,384
2,016,036円2001Millions of yen
Thousands of
U.S. dollars
8. Income Taxes
The Company is subject to Japanese national and local income taxes which, in the aggregate, resulted in normal effective statutory tax rates of
approximately 36.1% for 2002, 2001 and 2000.31A reconciliation between the normal effective statutory tax
rate for the years ended March 31, 2002, 2001 and 2000 and
the actual effective tax rate reflected in the accompanying
non-consolidated statements of income is not disclosed because the
difference between those rates is immaterial.
9. Shareholders’ Equity
As described in Note 2. m., certain special reserves were included in retained earnings. Such reserves at March 31, 2002 and 2001 were as follows:
Deferred tax assets:
Pension and severance costs
Depreciation
Reserve for reprocessing of irradiated nuclear fuel
Reserve for decommissioning of nuclear power units
Deferred charges
Other
Deferred tax assets
Deferred tax liabilities
Unrealized gain on available-for-sale securities
Reserve for depreciation of nuclear power production facilities under construction
Other
Deferred tax liabilities
Net deferred tax assets
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities at March 31, 2002 and 2001 are as follows:
84,060ドル18884,248ドル2002Reserve for:
Depreciation of nuclear power production facilities under construction
Losses on overseas investments
Total
11,201円2511,226円200219,328円2719,355円2001Millions of yen
Thousands of
U.S. dollars
At March 31, 2001 and 2000
331,219ドル
86,702
78,777
76,428
70,829
76,307
720,262ドル
157,523ドル
31,662203189,388ドル
530,874ドル200244,135円
11,553
10,497
10,184
9,438
10,168
95,975円
20,990円
4,2192725,236円
70,739円2002042,355円
7,086
10,497
10,184
14,282
23,146
100,464円
031,852円
6,32816038,196円
062,268円2001Millions of yen
Thousands of
U.S. dollars
The Company is subject to the Code to which certain amendments
became effective from October 1, 2001.
Prior to October 1, 2001, the Code required at least 50% of the
issue price of new shares, with a minimum of the par value thereof,
to be designated as stated capital as determined by resolution of the
Board of Directors. Proceeds in excess of amounts designated as
stated capital were credited to additional paid-in capital. Effective
October 1, 2001, the Code was revised and common stock par
values were eliminated resulting in all shares being recorded with
no par value.
Prior to October 1, 2001, the Code also provided that an
amount at least equal to 10% of the aggregate amount of cash
dividends and certain other cash payments which are made as an
appropriation of retained earnings applicable to each fiscal period
shall be appropriated and set aside as a legal reserve until such
reserve equals 25% of stated capital. Effective October 1, 2001,
the revised Code allows for such appropriations to be set aside as
a legal reserve until the total additional paid-in capital and legal
reserve equals 25% of stated capital. The amount of total additional
paid-in capital and legal reserve which exceeds 25% of stated
capital can be transferred to retained earnings by resolution of the
shareholders, which may be available for dividends. Under the
Code, the Company may issue new common shares to existing
shareholders without consideration as a stock split pursuant to a
resolution of the Board of Directors. Prior to October, 1, 2001,
the amount calculated by dividing the total amount of sharehold-
ers’ equity by the number of outstanding shares after the stock
split could not be less than 500円. The revised Code eliminated
this restriction.
Prior to October 1, 2001, the Code imposed certain restrictions
on the repurchase and use of treasury stock. Effective October 1,
2001, the Code eliminated these restrictions allowing the
Company to repurchase treasury stock by a resolution of the
shareholders at the general shareholders’ meeting and dispose of
such treasury stock by resolution of the Board of directors after
March 31, 2002. The repurchased amount of treasury stock cannot
exceed the amount available for future dividends plus amount of
stated capital, additional paid-in capital or legal reserve to be
reduced in the case where such reduction was resolved at the
general shareholders’ meetings.
The Code permits the Company to transfer a portion of addi-
tional paid-in capital and legal reserve to stated capital by resolution
of the Board of Directors. The Code also permits the Company to
transfer a portion of unappropriated retained earnings, available
for dividends, to stated capital by resolution of the shareholders.
Dividends are approved by the shareholders at a meeting held
subsequent to the fiscal year to which the dividends are applicable.
Semiannual interim dividends may also be paid upon resolution of
the Board of Directors, subject to certain limitations imposed by
the Code.3210. Research and Development Costs
Research and development costs charged to income were 11,273円 million (84,600ドル thousand), 12,515円 million and 12,037円 million for the years
ended March 31, 2002, 2001 and 2000, respectively.
11. Leases
The Company leases certain computer and other equipment. Total
lease payments under finance lease arrangements were 6,240円
million (46,829ドル thousand), 5,669円 million and 5,250円 million for
the years ended March 31, 2002, 2001 and 2000, respectively.
Pro forma information of leased equipment such as acquisition
cost, accumulated depreciation and lease obligations, all of which
included imputed interest expense, under finance leases that do not
transfer ownership of the leased equipment to the lessee on an "as
if capitalized" basis at March 31, 2002 and 2001 were as follows:
Obligations under finance leases which included the imputed
interest expense at March 31, 2002 and 2001 were as follows:
12. Commitments and Contingencies
At March 31, 2002, the Company had a number of fuel purchase commitments, most of which specify quantities and dates for fuel deliveries.
However, purchase prices are contingent upon fluctuations in market prices.
Contingent liabilities as of March 31, 2002 were as follows:
Under the debt assumption agreements, the Company was contingently liable for the redemption of the domestic bonds transferred to banks.
Millions of yen
Acquisition cost
Accumulated depreciation
Net leased equipment
March 31, 2002
295,542ドル
147,940
147,602ドル
10,686ドル
4,150
06,536ドル
284,856ドル
143,790
141,066ドル
Acquisition cost
Accumulated depreciation
Net leased equipment200205,801円
13,867
19,668円
Due within one year
Due after one year
Total
Millions of yen
043,535ドル
104,067
147,602ドル200105,843円
15,731
21,574円2002Thousands of
U.S. dollars
General facilities Other
Thousands of U.S. dollars
Total
March 31, 2002
\ 39,381
19,713
\ 19,668
\ 1,424553\ 0,871
\ 37,957
19,160
\ 18,797
General facilities Other Total
Millions of yen
Acquisition cost
Accumulated depreciation
Net leased equipment
March 31, 2001
38,744円
17,170
21,574円
1,423円7270,696円
37,321円
16,443
20,878円
General facilities Other Total
Co-guarantees of loans, mainly in connection with procurement of fuel
Guarantees of employees’ housing loans
Guarantees under debt assumption agreements
Other
114,133円
54,853
191,055
8,061
0,856,533ドル
411,655
1,433,809
60,495
Millions of yen Thousands of U.S. dollars
13. Subsequent Events
At the general shareholders’ meeting held on June 27, 2002, the Company’s shareholders approved the following appropriations of retained
earnings as of March 31, 2002, and the purchase of treasury stock:
a. Appropriations of Retained Earnings
Year-end cash dividends, 30円.00 (0ドル.23) per share
Bonuses to directors and corporate auditors
106,754ドル
1,051
14,225円140Millions of yen Thousands of U.S. dollars
b. Purchase of Treasury Stock
The Company is authorized to repurchase up to 20 million shares of the Company’s common stock (aggregate amount of 35円 billion), which
is effective until the next general shareholders’ meeting.33To the Board of Directors of
Kyushu Electric Power Company, Incorporated:
We have examined the non-consolidated balance sheets of Kyushu Electric Power Company, Incorporated as of March 31, 2002 and 2001,
and the related non-consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended
March 31, 2002, all expressed in Japanese yen. Our examinations were made in accordance with auditing standards, procedures and practices
generally accepted and applied in Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as
we considered necessary in the circumstances.
In our opinion, the non-consolidated financial statements referred to above present fairly the financial position of Kyushu Electric Power
Company, Incorporated as of March 31, 2002 and 2001, and the results of its operations and its cash flows for each of the three years in the
period ended March 31, 2002, in conformity with accounting principles and practices generally accepted in Japan applied on a consistent basis.
As described in Note 2, effective April 1, 2000, the non-consolidated financial statements have been prepared in accordance with new
accounting standards for employees’ retirement benefits and financial instruments and a revised accounting standard for foreign currency
transactions.
Our examinations also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for the convenience of readers
outside Japan.
June 27, 2002
INDEPENDENT AUDITORS’ REPORT
Tohmatsu & Co.
Fukuoka Sanwa Building,
10-24, Tenjin 1-chome,
Chuo-ku, Fukuoka 810-0001, Japan
Tel: +81-92-751-0931
Fax: +81-92-714-5585
www.tohmatsu.co.jp34Millions of yen
(except for per share data)
10,390,259ドル
4,256,885
5,714,807
418,567
8,949,606
1,402,401
1,132,901
735,715
1,838,244
1,335,550
296,653
34,499
151,332
699,707
440,060
278,056
604,488
609,553
767,235
488,946
$ 1.03—0.45
29,904,240ドル
24,930,957
14,815,977
5,875,8202002For the year:
Operating revenues:
Residential (lighting)
Commercial and
industrial
Other
Operating expenses:
PersonnelFuelPurchased power
Depreciation
Maintenance
Reprocessing costs
of irradiated
nuclear fuel
Decommissioning
costs of nuclear
power units
Disposition of
property
Taxes other than
income taxes
Subcontract feeRentOther
Interest charges
Income before
income taxes
Net income
Per share of common
stock (yen and
U.S. dollars):
Net income
Basic
Diluted
Cash dividends
applicable to the year
At year-end:
Total assets
Property, net
Long-term debt, less
current maturities
Total shareholders’ equity
Number of employees
1,384,502円
567,230
761,498
55,774
1,192,535
186,870
150,959
98,034
244,946
177,962
39,529
4,597
20,165
93,236
58,638
37,051
80,548
81,223
102,234
65,152
0,0137円.40—60.00
3,984,740円
3,322,050
1,974,229
782,953
14,19120021,389,306円
561,808
776,828
50,670
1,226,308
219,815
123,499
89,423
290,068
181,616
28,618
5,886
16,701
97,039
67,190
35,340
71,113
109,039
53,509
23,434
\ 49.42
49.21
50.00
3,948,892円
3,453,364
2,203,865
618,024
14,4451999Non-Consolidated Six-Year Financial Summary
Kyushu Electric Power Company, Incorporated
Years ended March 31
Note: All dollar figures herein refer to U.S. currency. Yen amounts have been translated, for convenience only, at 133円.25=US1ドル.
1,410,921円
562,675
815,263
32,983
1,213,446
187,491
129,631
87,685
312,497
187,860
19,457
5,513
17,047
94,787
67,813
33,458
70,207
131,791
65,735
30,702
\ 64.75
64.30
50.00
3,994,351円
3,523,684
2,301,914
618,439
14,60919981,381,013円
555,110
792,602
33,301
1,183,217
176,554
154,196
78,238
287,680
186,429
14,542
5,067
15,615
93,066
71,667
30,897
69,266
137,065
61,087
36,873
\ 77.76
77.15
50.00
3,992,602円
3,561,060
2,258,127
611,587
14,57219971,393,650円
564,029
768,596
61,025
1,219,369
214,311
122,886
93,725
278,897
183,902
41,070
6,304
18,582
94,842
61,364
35,249
68,237
104,426
36,084
22,986
\ 48.47
48.32
50.00
3,959,244円
3,396,462
2,078,459
675,368
14,42820001,411,500円
570,045
777,747
63,708
1,207,968
203,897
146,097
94,098
263,043
173,521
22,510
6,898
21,465
94,448
64,457
36,168
81,366
87,724
94,075
60,140
\ 126.83
125.63
60.00
4,006,257円
3,339,874
2,016,036
765,670
14,3482001Thousands of
U.S. dollars
(except for
per share data)5335
Organization
(As of July 1, 2002)
General Meeting
of Stockholders
Nuclear Power Operation Dept.
Nuclear Power Projects Dept.
Power System Engineering Dept.
Power System Operation Dept.
Transmission and
System Operation
Division
Thermal Power Dept.
Thermal Power
Generation Division
Business Development Dept.
Business Development
Division
Plant Siting and
Environmental
Affairs Headquarters
Information and
Communications
Business
Development
Headquarters
Marketing Dept.
Energy Solutions Dept.
Overseas Business Dept.
Distribution Dept.
Customer Services
Division
Corporate Planning Office
Management Administration Office
Secretary Sec.
Public Relations Dept.
General Affairs Dept.
Human Resources Dept.
Accounting and Finance Dept.
Materials and Fuels Dept.
Civil Engineering Dept.
Information Systems Dept.
Telecommunications Dept.
Research Laboratory
Branch Offices
Construction Office (Power Plants)
Construction Office
(Transmission and Substation)
Tokyo Branch Office
Themal Power Stations
Nuclear Power Stations
Customer Service Offices
Power System Maintenance Offices
Geothermal Power Stations
Board of Directors
Chairman
President
Executive
Vice-Presidents
Managing Directors
Directors
Board of
Managing Directors
Corporate Auditors
Board of Corporate
Auditors
Power Plant Siting Affairs Dept.
Facilities Siting Dept.
Environmental Affairs Dept.
Corporate Auditors’ Office
Nuclear Power
Generation Division3136
Chairman
President
Executive Vice-Presidents
Managing Directors
Directors
Corporate Auditor
Auditors
Honorary Advisor
Board of Directors
Shigeru Ohno
Michisada Kamata
Keiichi Ishikawa
Noritaka Toyoshima
Noriyuki Ueda
Shingo Matsuo
Hidemi Ashizuka
Hiroaki Okui
Shigehiko Matsumoto
Kowashi Imamura
Kiyohiko Matsushita
Mitsuaki Sato
Koichi Hashida
Yukio Tanaka
Taku Ishii
Takahiro Higuchi
Keiji Mizuguchi
Katsumi Okamoto
Shozo Maeda
Takeshi Koga
Ikuya Fukamachi
Yoshihiro Tomizawa
Kiyoko Nishimura
Tatsuo Kawai
(As of July 1, 2002)37Main Facilities
(As of March 31, 2002)
Investor Information
Head Office
1-82, Watanabe-dori 2-chome,
Chuo-ku, Fukuoka 810-8720, Japan
Tel: (092) 761-3031
http://www.kyuden.co.jp
Tokyo Branch Office
7-1, Yurakucho 1-chome,
Chiyoda-ku, Tokyo 100-0006, Japan
Tel: (03) 3281-4931
Date of Establishment
May 1, 1951
Paid-in Capital
237,304,863,699円
Number of Shares Authorized
1,000,000,000
Number of Shares Issued
474,183,951
Number of Employees
14,191
(As of March 31, 2002)
Printed in Japan
September 2002
1-82, Watanabe-dori 2-chome, Chuo-ku, Fukuoka 810-8720, Japan