This report does not constitute a rating action. Overview Key strengths Key risks Highly predicable cost recovery thanks to monopoly under existing regulations Exposure to large contingent liabilities related to the disaster at the Fukushima No. 1 nuclear power plant and off-balance sheet liabilities Leading position in greater Tokyo's electricity market, accounting for roughly 20% of national electricity sales Strong pressure on the earnings capacity of the retail business due to resurgent competition Expected earnings growth and improved supply stability due to the restart of the Kashiwazaki-Kariwa nuclear power plant Huge free cash flow deficit continuing as capital expenditures remain high Likely extraordinary support under stressed conditions given continued government involvement in management Limited prospects for a material improvement in
