Independent Auditor’s Report

The Board of Directors
MORI TRUST Reit, Inc.
The audit of the financial statements
OpinionWe have audited the accompanying financial statements of MORI TRUST Reit, Inc. (theCompany), which comprise the balance sheet as at August 31, 2023, and the statements ofincome and retained earnings, changes in net assets, cash distributions, and cash flows for thesix-month period then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at August 31, 2023, and its financial performance and its
cash flows for the six-month period then ended in accordance with accounting principles
generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to our audit of the financial statements
in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Other Information
The other information comprises the information included in the Audited Financial Statementsthat contains audited financial statements but does not include the financial statements and our
auditor’s report thereon.
We have concluded that the other information did not exist. Accordingly, we have not performed
any work related to the other information.
Responsibilities of Management and the Supervisory Director for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal control
as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles generally
accepted in Japan, matters related to going concern.
The Supervisory Director is responsible for overseeing the Company’s financial reporting process.
Ernst & Young ShinNihon LLC

Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Company’s ability to continue asa going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation in accordance with accounting principles
generally accepted in Japan.
We communicate with the Executive Director regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide the Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
Fee-related Information
The fees paid or payable to us and other EY Member Firms for the audits of the financial
statements of the Company and other non-audit fees charged in the audit period to theCompany are 18 million yen and 5 million yen, respectively.
Ernst & Young ShinNihon LLC

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Ernst & Young ShinNihon LLC
Tokyo, Japan
November 24, 2023

/s/吉田 雅彦
Masahiko Yoshida
Designated Engagement Partner
Certified Public Accountant/s/井上 裕人
Hiroto Inoue
Designated Engagement Partner
Certified Public Accountant

Ernst & Young ShinNihon LLC

FINANCIAL STATEMENTS
BALANCE SHEETS
Thousands of yen
As of August 31, 2023

As of February 28, 2023
AssetsCurrent assets
Cash and deposits

14,729,422

16,376,466

2,413,662

4,894,721

Operating accounts receivable
Accounts receivable - other97,513130,31828

12

Prepaid expenses
Consumption taxes refund receivable

55,631-

72,178130,928

Other

64,91523,14017,361,173

21,627,766

Cash and deposits in trust

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation

34,742,923

34,290,253(18,302,773)(18,238,814)

Buildings, net

16,440,150

16,051,438

Structures
Accumulated depreciation

443,960

442,844(413,398)(413,317)

Structures, net

30,561

29,526

Machinery and equipment
Accumulated depreciation

128,457

121,199(105,502)(85,112)

22,95536,087

Machinery and equipment, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

-

194

-

(29)

-

165

113,212160,993(89,644)(95,587)

23,56765,405Land

109,001,394

103,417,452

Buildings in trust
Accumulated depreciation

35,354,628(13,931,696)

59,153,104(14,654,666)

Buildings in trust, net

21,422,932

44,498,437

Structures in trust
Accumulated depreciation

187,941

269,320(119,677)(128,499)

Structures in trust, net

68,264140,821

Machinery and equipment in trust
Accumulated depreciation

70,137116,384(10,557)(15,541)

Machinery and equipment in trust, net

59,579100,843

Tools, furniture and fixtures in trust
Accumulated depreciation

105,717(72,856)

132,357(79,447)

Tools, furniture and fixtures in trust, net

32,86052,9091

Thousands of yen
As of August 31, 2023

As of February 28, 2023
Land in trust

157,795,399

286,365,778

Total property, plant and equipment

304,897,665

450,758,867-

613,524

Software
Other

240

2,232
240

Total intangible assets

240

615,997

Investments and other assets
Guarantee deposits
Deferred tax assets

10,00020,000-875
103,802

Intangible assets
Goodwill

Long-term prepaid expenses
Other

57,8972,815

Total investments and other assets

70,713

127,492

304,968,618

451,502,357

68,95061,156

Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets

2,815

68,95061,156322,398,742

473,191,280

Liabilities
Current liabilities
Operating accounts payable

220,285

725,716

Short-term loans payable

6,000,000

10,000,000

Current portion of investment corporation bonds
Current portion of long-term loans payable

3,000,000

3,000,000

15,000,000

42,500,000

Accrued expenses

349,524444,375

67,657569,221

Dividends payable

7,955

9,387

718

10,57561,744-

814,808214

1,251,425
38,81825,899,627

58,172,803

Accounts payable – other

Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Investment corporation bonds

11,000,000

11,000,000

Long-term loans payable

117,500,000

158,000,000

7,698,469

12,799,156

943,131959,194

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Deferred tax liabilities

631,732--

9

Total non-current liabilities

137,773,333

182,758,360

Total liabilities

163,672,960

240,931,164

Other

2

Thousands of yen
As of August 31, 2023

As of February 28, 2023
Net assets
Unitholders' equity
Unitholders' capital

153,990,040

153,990,040-

69,736,000

1,121,637

1,376,341

1,121,637

1,376,341

3,614,104

7,157,734

SurplusCapital surplus
Voluntary retained earnings
Reserve for reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets
The accompanying notes form an integral part of these financial statements.

3

4,735,741

78,270,076

158,725,781

232,260,116

158,725,781

232,260,116

322,398,742

473,191,280

STATEMENTS OF INCOME AND RETAINED EARNINGSFor the five-month period ended February 28, 2023 and the six-month period ended August 31,2023
Thousands of yen
For the period
from March 1, 2023
to August 31, 2023

For the period
from October 1, 2022
to February 28, 2023
Operating revenue
Lease business revenue

5,620,653

10,113,102

207,435

261,802

Other lease business revenue
Gain on sale of investment property

1,430,579

1,437,186

Total operating revenue

7,258,668

11,812,092

2,710,417

3,382,852

Asset custody fee

275,258
10,829749,387
16,155Administrative service fees

50,842

69,609Directors' compensations
Merger-related expenses

3,000

3,600

61,360250,000

Other operating expenses

88,983

15,731
136,137

Total operating expenses

3,200,691

4,623,473

4,057,976

7,188,618

Operating expenses
Expenses related to rent business
Asset management fee

Amortization of goodwill

Operating income
Non-operating income
Interest income
Reversal of dividends payable
Interest on tax refund
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
otherTotal non-operating expenses

94

94

647

918

-

89

741

1,102

291,515
24,397594,518
38,941

7,679

7,794

3,376

12,741

326,968

653,996

Ordinary income

3,731,749

6,535,724

Profit before income taxes

3,731,749

6,535,724

Income taxes - current
Income taxes - deferred
Total income taxes

732

10,590116,912(632,600)

117,644(622,010)

Profit

3,614,104

7,157,734

Unappropriated retained earnings

3,614,104

7,157,734

The accompanying notes form an integral part of these financial statements.

4

STATEMENTS OF CHANGES IN NET ASSETSFor the five-month period ended October 1, 2022 and February 28, 2023
Thousands of yen
Unitholders' equity
SurplusCapital surplus

Unitholders' capital

Capital surplus
Balance at beginning ofcurrent period
Changes of items during
periodReversal of reserve for
reduction entry

Voluntary retained earnings

Capital surplus, net

153,990,040--

Reserve for reduction
entry

Total voluntary retained
earnings

1,750,398

1,750,398(628,761)(628,761)

Dividends of surplus
ProfitTotal changes of items
during period

-

-

-

(628,761)(628,761)

Balance at end of current
period153,990,040--

1,121,637

1,121,637

Unitholders' equity
Surplus
Unappropriatedretained earnings(undisposed loss)
Balance at beginningof current period
Changes of items
during period
Reversal of reserve
for reduction entry

Total net assets

Total unitholders'equityTotal surplus

3,331,238

5,081,637

159,071,677

159,071,677

628,761---

Dividends of surplus(3,960,000)(3,960,000)(3,960,000)(3,960,000)

Profit

3,614,104

3,614,104

3,614,104

3,614,104

282,865(345,895)(345,895)(345,895)

3,614,104

4,735,741

158,725,781

158,725,781

Total changes of items
during period
Balance at end ofcurrent period

The accompanying notes form an integral part of these financial statements.

5For the five-month period ended February 28, 2023 and the six-month period ended August 31,2023
Thousands of yen
Unitholders' equity
SurplusCapital surplus

Unitholders' capital

Capital surplus
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus, net

153,990,040

Increase by merger

Voluntary retained earnings--

69,736,000

69,736,000

Provision of reserve for
reduction entry

Reserve for reduction
entry

Total voluntary retained
earnings

1,121,637

1,121,637

254,704

254,704

Dividends of surplus
ProfitTotal changes of items
during period-

69,736,000

69,736,000

254,704

254,704

Balance at end of current
period153,990,040

69,736,000

69,736,000

1,376,341

1,376,341

Unitholders' equity
Surplus
Unappropriatedretained earnings(undisposed loss)
Balance at beginning ofcurrent period
Changes of items during
period3,614,104

Increase by merger

Total net assets

Total unitholders'equityTotal surplus
4,735,741

158,725,781

158,725,781

69,736,000

69,736,000

69,736,000

Provision of reserve
for reduction entry(254,704)---

Dividends of surplus(3,359,400)(3,359,400)(3,359,400)(3,359,400)

Profit7,157,734

7,157,734

7,157,734

7,157,734

3,543,630

73,534,334

73,534,334

73,534,334

7,157,734

78,270,076

232,260,116

232,260,116

Total changes of items
during period
Balance at end ofcurrent period

The accompanying notes form an integral part of these financial statements.

6

STATEMENTS OF CASH DISTRIBUTIONS
For the five-month period ended February 28, 2023 and the six-month period ended August 31,2023
Fiscal period ended
February 28, 2023
(October 1, 2022 to February 28, 2023)

Unit: yen
Fiscal period ended
August 31, 2023
(March 1, 2023 to August 31, 2023)

I. Unappropriated retained earnings

3,614,104,524

7,157,734,912

Ⅱ. Distribution amount

3,359,400,000

6,052,000,000(2,545)(1,700)254,704,524

1,105,734,912(Distribution amount per unit)
Ⅲ. Voluntary retained earnings
Provision of reserve for reduction
entry
Ⅳ. Retained earnings carried forward
Calculation
amountmethodofdistribution--

In accordance with Paragraph 1,

In accordance with Paragraph 1,

Article 29 of the Investment
Corporation’s Articles of Incorporation,

Article 29 of the Investment
Corporation’s Articles of Incorporation,

MTR decided to distribute the total

MTR decided to distribute the totalbalance of unappropriated retainedbalance of unappropriated retained

earnings after deducting provision of theearnings after deducting provision of thereserve for reduction entry under Article65-7 of the Act on Special Measuresreserve for reduction entry under the
Act on Special Measures Concerning

Concerning Taxation, the amount of

Taxation that has been recorded aswhich is 3,359,400,000 yen.

deferred tax liabilities, and the reserve

In addition, MTR does not distributefor reduction entry under Article 65-7 ofdividends in excess of accounting profit
as set forth in Paragraph 2, Article 29 of

the Act on Special Measures Concerning
Taxation, the amount of which is

the Investment Corporation’s Articles of

6,052,000,000 yen.

Incorporation.

In addition, MTR does not distributedividends in excess of accounting profit
as set forth in Paragraph 2, Article 29 of
the Investment Corporation’s Articles ofIncorporation.

7

STATEMENTS OF CASH FLOWSFor the five-month period ended February 28, 2023 and the six-month period ended August 31,2023
Thousands of yen
For the period
from March 1, 2023
to August 31, 2023

For the period
from October 1, 2022
to February 28, 2023
Cash flows from operating activities
Profit before income taxes

3,731,749
914,440

6,535,724
966,640-

15,731

7,679

7,794

(94)
315,912(94)
633,460

Decrease (Increase) in operating accounts receivable(19,978)(32,805)

Increase (Decrease) in operating accounts payable
Decrease(increase)in
consumption
taxes
refundreceivable
Increase (Decrease) in accrued consumption taxes(10,954)504,944-(129,917)(172,139)(61,744)5,584

29,598Decrease due to sale of investment property
Other, net

5,829,179

5,822,521

73,655(68,973)

Subtotal

10,675,035

14,252,880

Interest income received
Interest expenses paid

94

94

(348,757)(625,255)(881)(1,495)

10,325,489

13,626,223(16,911)(5,405,860)(370,239)(29,341,494)

Depreciation
Amortization of goodwill
Amortization of investment corporation bond issuance
costs
Interest income
Interest expenses

Increase (Decrease) in advances received

Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Repayments of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits intrust
Proceeds from tenant leasehold and security deposits intrust
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings-(1,334)(122,170)(186,227)

184,460

772,650(8,391)(7,955)37,476

19,938(5,331,397)(29,114,663)-(1,475,000)

6,000,000(8,500,000)

32,500,000(13,000,000)

Proceeds from issuance of investment corporation bonds

3,000,000-

Redemption of investment corporation bonds
Payments for investment corporation bond issuance costs(4,000,000)-(15,045)(2,600)

Dividends paid

(3,960,117)(4,069,618)

Proceeds from long-term loans payable
Repayments of long-term loans payable

Net each provided by (used in) financing activities(7,475,163)

13,952,781

Net increase (decrease) in cash and cash equivalents(2,481,070)(1,535,658)

19,624,156

17,143,085-

5,663,761

17,143,085

21,271,188

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting frommergerCash and cash equivalents at end of period8The accompanying notes form an integral part of these financial statements.

9

NOTES TO FINANCIAL STATEMENTS
For the six-month period from March 1, 2023 to August 31, 2023

1. ORGANIZATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
Organization
MORI TRUST Reit, Inc. (“MTR”), a Japanese real estate investment corporation, was incorporated on October 2, 2001 under the
Law Concerning Investment Trusts and Investment Corporations of Japan, or the Investment Trust Law. MTR was originallyformed by Mori Trust Co., Ltd., and commenced operations on March 28, 2002 by acquiring a property. MTR is provided
professional asset management services of properties of various types by a licensed asset management company, MORI TRUST
Asset Management Co., Ltd. (“MTAM”). MTAM is currently owned 95% by MORI TRUST Co., Ltd., and 5% by Mori Trust
Hotels & Resorts Co., Ltd. On February 13, 2004, MTR was listed on the J-REIT section of the Tokyo Stock Exchange(securities code: 8961). As of August 31, 2023, MTR owned a portfolio of 22 properties with a total rentable area of 532,410.36
sq. meters occupied by 117 tenants. The occupancy rate was 98.9%.

Basis of presentation of financial statements
MTR maintains its accounting records and prepares its financial statements in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Law, the Financial Instruments andExchange Law of Japan and the related regulations, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards. The accompanying financial statements are a translation of thefinancial statements of MTR, which were prepared in accordance with Japanese GAAP and were presented in the Securities
Report of MTR filed with the Kanto Local Finance Bureau. In preparing the accompanying financial statements, certain
reclassifications have been made to the financial statements issued domestically in order to present them in a format which ismore familiar to readers outside Japan. In addition, the notes to financial statements include information which might not be
required under Japanese GAAP but is presented herein as additional information. As permitted under the Japanese Financial
Instruments and Exchange Law, amounts of less than one million yen have been omitted. As a result, the totals shown in theaccompanying financial statements do not necessarily agree with the sum of the individual amounts. MTR does not prepare
consolidated financial statements as it has no subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESProperty and equipment
Property and equipment is stated at cost less accumulated depreciation. The costs of land, buildings and building improvements
include the purchase prices of properties, legal fees and acquisition costs. Depreciation of property and equipment is calculated
on a straight-line basis over the estimated useful lives of the respective assets ranging as follows:
Buildings including trust accounts.................................................. 3 - 81 years
Structures including trust accounts..................................................2 - 45 years
Machinery and equipment including trust accounts........................ 2 - 17 years
Vehicles including trust accounts. .................................................
3 years
Tools, furniture and fixtures including trust accounts..................... 2 - 18 years
Expenditures for repairs and maintenance are charged to expenses as incurred. Significant renewals and betterments arecapitalized.

Intangible assets
Intangible assets are amortized on a straight-line basis.
Goodwill is amortized over 20 years on a straight-line basis.

Deferred assets
Deferred investment corporation bond issuance costs are amortized using the straight-line method over the respective terms of thebonds.

Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally
expensed during the period. The sellers of the properties were liable for property taxes for the calendar year including the period
from the date of purchase by MTR through the end of the year since the taxes were imposed on the registered owners as ofJanuary 1, based on assessments made by local governments.

Revenue recognition
The main performance obligations related to revenue arising from contracts with customers of the MTR and the normal time for10satisfying such performance obligations (the normal time for recognizing revenue) are as follows.
(1) Sales of real estate and other assets
MTR recognizes revenue from the sale of real estate and other assets when the buyer, as the customer, obtains control of the realestate and other assets by fulfilling the delivery obligations stipulated in the contract for the sale of real estate and other assets.
(2) Utility revenues
Utility revenues are recognized based on the supply of electricity, water, etc. to the lessee, the customer, in accordance with theterms of the real estate lease contract and related agreements.
With regard to utility charge reimbursements which MTR deems to fall under that for an agent, the net amount sought by
subtracting the amount paid to another party from the amount that is received as charge for electric power, gas, etc. which issupplied by another concerned party is recognized as revenue.

Accounting treatment of beneficiary interests in trust assets including real estate
For trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust as well as all income
generated and expenses incurred from assets in trust are recorded in the relevant balance sheets and statements of income andretained earnings accounts.

Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks and short-term investments which are highly liquid,readily convertible to cash and with an insignificant risk of price fluctuation, and with an original maturity of three months or
less.

3. CHANGES IN ACCOUNTING ESTIMATES
Taking the opportunity of the merger with Mori Trust Hotel REIT Investment Corporation on March 1, 2023, MTR has decided
to carry out building repair and management in accordance with a long-term repair and maintenance plan formulated based on an
external expert's report, with the aim of achieving longer-term rental operations by systematically implementing repair andrenewal work that better matches the actual conditions of individual managed properties. As a result, it became possible toforesee the operating period more precisely, and therefore, the method of applying the economic useful forecast period to theuseful lives of some buildings and buildings in trust was changed from the current operating period. As a result, operating
expenses for the current period decreased by 446,057 thousand yen, and operating income, ordinary income, and profit before
income taxes increased by the same amount.

4. PROPERTY AND EQUIPMENT
Property and equipment at February 28, 2023 and August 31, 2023 consisted of the following:

Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
VehiclesAccumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Total

Thousands of yen
As of February 28, 2023
As of August 31, 2023
Acquisition Cost
Book Value
Acquisition Cost
Book Value
109,001,394
109,001,394
103,417,452
103,417,452
35,186,883
34,733,097(18,716,171)
16,470,711(18,652,132)
16,080,964
128,457
121,199(105,502)
22,955(85,112)36,087194(29)
165
113,212160,993(89,644)
23,567(95,587)
65,405
157,795,399
157,795,399
286,365,778
286,365,778
35,542,569
59,422,424(14,051,373)
21,491,196(14,783,165)
44,639,259
70,137116,384(10,557)
59,579(15,541)
100,843
105,717
132,357(72,856)
32,860(79,447)
52,909304,897,665
450,758,867

The compressed amount of tangible assets with government grants under the Corporation Tax Law of Japan was ¥38,340
thousand at February 28, 2023 and ¥38,340 thousand at August 31, 2023.

11

5. NET ASSETS
MTR is required to maintain net assets of at least ¥50 million as required pursuant to the Investment Trust Law.

6. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
A breakdown of property-related revenues and expenses for the five-month period ended February 28, 2023 and the six-month
period ended August 31, 2023 is summarized as follows:(1) Rental revenues and property-related expenses

Property-Related Revenues:
Property rental revenues
Common charges
Land rental revenues
Other rental revenues
Parking revenues
Utilities revenues
Penalty revenues
Other revenues
Property-Related Expenses:
Property management fees
Utilities expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Depreciation
Other rental expenses
ProfitThousands of yen
October 1, 2022 toMarch 1, 2023 to
February 28, 2023
August 31, 2023
5,620,653
10,113,102
5,321,121
9,755,149
196,524
234,344
103,007
123,609
207,435
261,80276,370104,676
99,674
116,870－－

31,3902,710,417
600,789
211,827
879,362
16,23562,957914,440
24,805
3,117,671

40,255
3,382,852
741,024
253,324
1,202,202
26,730130,971996,640
31,958
6,992,053(2) Gain on sale of real estate

Income from sale of real estate
Cost of real estate sales
Other expenses on sale
Gain on sale of real estate

Thousands of yen
October 1, 2022 toMarch 1, 2023 to
February 28, 2023
August 31, 2023
Shinbashiekimae MTR Building Shinbashiekimae MTR Building
7,266,666
7,266,666
5,829,179
5,822,521
6,907
6,959
1,430,579
1,437,186

12

7. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of February 28, 2023 and August 31, 2023 were as follows:

Cash and deposits
Cash and deposits in trust
Cash and cash equivalents
Significant non-cash transactions

Thousands of yen
As of August 31, 2023
16,376,466
4,894,721
21,271,188－ Assets received and liabilities assumed
from Mori Trust Hotel REIT Investment
Corporation, which merged with MTR
during the period under review, are as
follows.
The increase in capital surplus due to themerger is 69,736,000 thousand yen.
5,689,456
Current assets
123,270,538
Non-current assets
128,959,994
Total assets
21,338,409
Current liabilities
38,514,841
Non-current liabilities
59,853,250
Total liabilities

As of February 28, 2023
14,729,422
2,413,662
17,143,085

8. LEASES
MTR leases properties and earns rental revenues. Future lease revenues subsequent to February 28, 2023 and August 31, 2023
under non-cancelable operating leases were as follows:

Due within one year
Due after one year
Total

Thousands of yen
As of February 28, 2023
As of August 31, 2023
7,096,745
11,191,790
30,292,749
37,067,567
37,389,494
48,259,357

13

9. FINANCIAL INSTRUMENTS
Overview(1) Policy for financial instruments
For efficient and stable management operations, MTR raises funds required for acquisition and renovation of assets, payment ofdividends and debt and regular operations mainly through bank borrowings, issuance of investment corporation bonds andissuance of new investment shares. MTR manages cash surpluses carefully in consideration of safety, liquidity, interest rateenvironment and cash flow plans.
(2) Types of financial instruments, related risk and risk management for financial instruments
Loans, issuance of investment corporation bonds and issuance of new investment shares are undertaken for acquisition of realestate or real estate trust beneficiary rights.
Loans and security deposits are exposed to liquidity risk. MTR prepares and updates its cash flow plans based on reports fromeach division and maintains the ready liquidity to manage liquidity risk.
In addition, MTR has established commitment lines of credit to ensure flexible fund procurement.
(3) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market priceavailable, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value,
different assumptions and factors could result in different fair values.

Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of February 28, 2023 and estimated fair value are shown in
the following table. Notes on “Cash and deposits,” “Cash and deposits in trust,” and “Short-term loans payable” are omitted
because their fair value approximates their book value due to cash and short term settlements.
Thousands of yen
Carrying
Value

Estimated
Fair Value (1)Difference1) Current portion of
investment corporation bonds2) Current portion of long-termloans payable3) Investment corporation bonds

3,000,000

2,972,527(27,472)

15,000,000

14,942,401(57,598)

11,000,000

10,305,120(694,879)

4) Long-term loans payable

117,500,000

113,879,368(3,620,631)

7,698,469

6,667,125(1,031,343)

943,131

831,117(112,013)

155,141,600

149,597,661(5,543,938)

5)Tenant leasehold and security deposits
6)Tenant leasehold and security deposits
in trust
Total Liabilities

The carrying value of financial instruments on the balance sheet as of August 31, 2023 and estimated fair value are shown in thefollowing table. Notes on “Cash and deposits,” “Cash and deposits in trust,” and “Short-term loans payable” are omitted because
their fair value approximates their book value due to cash and short term settlements.
Thousands of yen
Carrying
Value

1) Current portion of
investment corporation bonds2) Current portion of long-termloans payable3) Investment corporation bonds

Estimated
Fair Value (1)Difference

3,000,000

2,972,500(27,499)

42,500,000

42,365,757(134,242)

11,000,000

10,305,576(694,423)

144) Long-term loans payable

158,000,000

154,500,189(3,499,810)

5)Tenant leasehold and security deposits
6)Tenant leasehold and security deposits
in trust
Total Liabilities

12,799,156

11,035,950(1,763,205)

959,194

853,468(105,725)

228,258,350

222,033,443(6,224,907)(1) Methods to determine the estimated fair value of financial instruments
Current portion of investment corporation bonds and investment corporation bonds
The fair value of investment corporation bonds is calculated based on the present value of the total of principal and interest
discounted at the current interest rate estimated by taking into consideration the remaining term of the investment
corporation bonds and their credit risk.
Current portion of long-term loans payable and long-term loans payable
The fair value of long-term loans is based on the present value of the total of principal and interest discounted by the interest
rate to be applied if similar new borrowings were entered into.
Tenant leasehold and security deposits and Tenant leasehold and security deposits in trust
The fair value of tenant leasehold and security deposits including trust accounts is based on the present value of the total of
cash flow discounted by an interest rate determined taking into account the remaining period of each item and current creditrisk.
(2) The redemption schedule for loans(As of February 28, 2023)
Due in1 year or lessCurrent portion of investment
corporation bonds
Current portion of long-term loans
payableInvestment corporation bonds

3,000,000-

15,000,000

Long-term loans payable

Thousands of yen
Due inDue in2 to 3 years
3 to 4 years

Due in1 to 2 years--

Due in4 to 5 years--

Due after
5 years
-

-

-

-

-

-

1,000,000-

1,000,000

2,000,000

7,000,000-

27,000,000

21,500,000

18,000,000

19,000,000

32,000,000

Due in1 to 2 years

Thousands of yen
Due inDue in2 to 3 years
3 to 4 years

Due in4 to 5 years

Due after
5 years(As of August 31, 2023)
Due in1 year or lessCurrent portion of investment
corporation bonds
Current portion of long-term loans
payableInvestment corporation bonds
Long-term loans payable

3,000,000-

42,500,000

-

-

-

-

-

-

-

-

-

-

1,000,000-

1,000,000

2,000,000

7,000,000-

38,500,000

29,000,000

29,500,000

24,500,000

36,500,000

1510. RELATED PARTY TRANSACTIONSMTR entered into the following related party transactions:(1) Parent company and major corporate shareholders: None applicable(2) Subsidiaries: None applicable(3) Sister companies:(For the five-month period ended February 28, 2023)
Party type
Subsidiary of other related company*
Party nameMori Trust Co., Ltd.
Address
Minato-ku Tokyo, Japan
Capital¥30,000,000 thousand
Urban development; hotel management andBusiness
investment business
Percentage of voting rights held
Concurrent board appointment
Business relationship
Leasing
Details of transactions
Buying property
Transaction amount¥5,266,666 thousand
Sale of property¥7,266,666 thousand
Rental revenues¥1,603,874 thousand
Property management expenses¥183,045 thousand
Account name and balance at Rental and other receivables¥7,180 thousand
period end
Rents received in advance¥24,761 thousand
Tenant leasehold and security deposits¥894,581 thousand
Trade accounts payable¥42,409 thousand
Accrued expenses¥59 thousand
Party type
Party name
Address
CapitalBusiness
Percentage of voting rights held
Concurrent board appointment
Business relationship
Details of transactions
Transaction amountAccount name and balance atperiod end

Subsidiary of other related company*
MORI TRUST Asset Management Co., Ltd.
Minato-ku Tokyo, Japan¥400,000 thousand
Investment management business
Concurrently serving as
Outsourcing of asset management operations
Payment of asset management fees
¥299,958 thousand
Accrued expenses¥185,579 thousand* MTR deemed Mori Trust Co., Ltd. to be a “Subsidiary of other related company” under Article 8 of Regulations Concerning
Financial Statements.

16

(For the six-month period ended August 31, 2023)
Party type
Subsidiary of other related company*
Party nameMori Trust Co., Ltd.
Address
Minato-ku Tokyo, Japan
Capital¥30,000,000 thousand
Urban development; hotel management andBusiness
investment business
Percentage of voting rights held
Concurrent board appointment
Business relationship
Leasing
Details of transactions
Buying property
Transaction amount¥28,966,666 thousand
Sale of property¥7,266,666 thousand
Rental revenues¥4,428,336 thousand
Property management expenses¥256,055 thousand
Account name and balance at Rental and other receivables¥30,396 thousand
period end
Rents received in advance¥171,260 thousand
Tenant leasehold and security deposits¥4,089,023 thousand
Trade accounts payable¥59,088 thousand
Accrued expenses¥419 thousand
Party type
Party name
Address
CapitalBusiness
Percentage of voting rights held
Concurrent board appointment
Business relationship
Details of transactions
Transaction amountAccount name and balance atperiod end

Subsidiary of other related company*
MORI TRUST Asset Management Co., Ltd.
Minato-ku Tokyo, Japan¥400,000 thousand
Investment management business
Concurrently serving as
Outsourcing of asset management operations
Payment of asset management fees
¥842,787 thousand
Accrued expenses¥311,747 thousand* MTR deemed Mori Trust Co., Ltd. to be a “Subsidiary of other related company” under Article 8 of Regulations Concerning
Financial Statements.

(4) Directors and major individual shareholders:(For the five-month period ended February 28, 2023)
Transactions conducted by MTR Executive Director Masayuki Yagi on behalf of a third party (Mori Trust Asset Management
Co., Ltd.) are as described in (3) Sister companies, etc., above.
(For the six-month period ended August 31, 2023)
Transactions conducted by MTR Executive Director Hiroshi Naitou on behalf of a third party (Mori Trust Asset Management Co.,
Ltd.) are as described in (3) Sister companies, etc., above.

17

11. Business Combination
For the five-month period ended February 28, 2023
Not applicable.
For the six-month period ended August 31, 2023
Business Combination through Acquisition
1. Overview of Business Combination(1) Name and Business Description of Acquiree
Name of acquiree : MORI TRUST Hotel REIT, Inc. (“MTH”)
Business description : Real estate investment trust(2) Main Reasons for Business Combination
MTR and MTH will build a portfolio that combines the stability of office assets with the growth potential of hotel
assets. In addition, it is expected that maximizing the sponsor's support and returning to a growth path will lead tofurther improvement in unitholder value. The merger agreement was executed on November 22, 2022 and became
effective on March 1, 2023.
(3) Date of Business Combination
March 1,2023(4) Legal Form of Business Combination
An absorption-type merger: MTR as the surviving corporation and MTH as the dissolved corporation.
(5) Name of the Investment Corporation after Business Combination
MORI TRUST Reit, Inc.
(6) Main Reasons for Determining Acquiring Company
MTR was determined to be the acquiring corporation after comprehensively considering the relative voting rights of
the unitholders in the combined entity, the composition of the board of directors and other factors, based on theaccounting standard for business combination.
2. Operating Period of Acquiree Included in the Statement of Income and Retained Earnings
From March 1,2023 to August 31,2023
3. Acquisition Cost of Acquiree and the Breakdown
Acquisition cost
Fair value of the Investment Corporation’s investment units allotted on the date of business combination
69,736,000 thousand yen
Acquisition cost
69,736,000 thousand yen
4. Exchange Raito, Method of Determining the Exchange Raito and Number of Investment Units Allotted for the Acquisition(1) Exchange Raito of Investment Units
1.84 units of the Investment Corporation were allotted for 1 unit of MTH through the Merger.
The Investment Corporation implemented a 2-for-1 investment unit split with a record date of February 28, 2023 andan effective date of March 1, 2023 before the Merger.
(2) Method of Determining the Exchange Raito
In calculating the merger ratio used for the Investment Corporation Merger, for the sake of securing fairness, MTR
selected SMBC Nikko Securities Inc. and MTH selected Mizuho Securities Co., Ltd. As the financial advisors(“FAs”),
respectively, and requested them to calculate the merger ratio. Comprehensive considerations were made regarding
such factors as the financial results and the status of assets and liabilities of MTR and MTH, prospects of business
operations in the future, advantages of the Investment Corporation Merger and the results of financial analyses
conducted by the FAs, and discussions and negotiations were repeatedly conducted in a prudent manner. As a result, it
was determined that the above merger ratio is reasonable.
(3) Number of Investment Units Allotted
920,000units
5. Breakdown of Major Acquisition-Related Expenses
Item Amount
FA fees 250,000thousand yen
Merger-related fees 313,667 thousand yen
6. Goodwill Recognized and Reason(1) Amount of Goodwill
629,256 thousand yen(2) Reason
Goodwill represents the difference between the acquisition cost of MTH in the amount of 69,736,000 thousand yen
and fair value of MTH’s net assets acquired in the amount of 69,106,743 thousand yen as of the business combination
date.

18

7.

8.

Breakdown of Assets Acquired and Liabilities Assumed on the Date of Business Combination
Current assets 5,689,456 thousand yen
Non-current assets 123,959,994 thousand yen
Total assets 128,959,994 thousand yen
Current liabilities 21,338,409 thousand yen
Non-current liabilities 38,514,841 thousand yen
Total liabilities 59,853,250 thousand yen
Estimated Impact on the Statement of Income and Retained Earnings for the Six-month Period Ended August 31, 2023
There is no impact as the business combination date was the same date as the beginning of the fiscal period.

12. INCOME TAXESAt February 28, 2023 and August 31, 2023 MTR’s deferred tax assets consisted mainly of enterprise tax payable, which is notdeductible for tax purposes.
The significant components of deferred tax assets and liabilities as of February 28, 2023 and August 31, 2023 were as follows:
As of February 28, 2023

As of August 31, 2023

Thousands of yen

Deferred tax assets:
Accrued enterprise tax
Total deferred tax assets
Deferred tax liabilities:
Reserve for advanced depreciation of non-current assets
Total deferred tax liabilities
Net deferred tax assets (liabilities)

10
10

875
875

631,743
631,743(631,732)

－
－

(875)

A reconciliation of the tax rate differences between the adjusted statutory tax rate and the effective tax rates for the five-month
period ended February 28,2023 and the six-month period ended August 31,2023 was as follows:
October 1, 2022 toMarch 1, 2023 to
February 28, 2023
August 31, 2023
Statutory tax rate
31.46%
34.59%
Deductible dividend distribution(28.32%)(32.03%)－(13.14%)
Reserve for advanced depreciation of non-current assets
Others0.01%
1.06%
Effective tax rates
3.15%(9.52%)
MTR is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation Measures
Law (STML) of Japan, an investment corporation is allowed to deduct dividends of accounting profits, or dividend distributions,paid to investors from its taxable income if certain tax requirements are satisfied. Such tax requirements include dividend
distributions in excess of 90% of the investment corporation’s distributable profit for the accounting period as stipulated in
Article 67-15 of the STML. Based on the distribution policy provided by its Articles of Incorporation, MTR made a dividend
distribution of approximately 100% of retained earnings in the amount of ¥6,052,000 thousand at August 31, 2023 and treated it
as a tax-deductible distribution. MTR does not distribute dividends in excess of accounting profit in accordance with its Articles
of Incorporation.

1913. REVENUE RECOGNITION
1.Breakdown of revenue from contracts with customers
For the period from October 1, 2022 to February 28, 2023

Sales of real estate properties *2
Utilities income
Others
Total

Thousands of yen
Revenue from contracts with customers *1
Revenue from external customers
7,266,666
1,430,579
99,85099,8505,728,237
7,366,517
7,258,668

For the period from March 1, 2023 to August 31, 2023

Sales of real estate properties *2
Utilities income
Others
Total

Thousands of yen
Revenue from contracts with customers *1
Revenue from external customers
7,266,666
1,437,186
117,172
117,172
10,257,733
7,383,839
11,812,092*1 Rent revenues subject to Accounting Standard for Lease Transactions (ASBJ Statement No. 13) are excluded from “Revenue
from contracts with customers” as such revenues are not subject to Accounting Standard for Revenue Recognition. Revenue
from contracts with customers mainly represents revenues from the sale of real estate and utilities.
*2 Sales of real estate properties are recorded as gains or losses on sales of real estate properties in the statements of income areretained earnings in accordance with Article 48-2 of the Regulations on Accounting of Investment Corporation (Cabinet
Office Ordinance No. 47 of 2006), and therefore the amount represents the proceeds from sales of real estate properties, lessthe cost of real estate properties sold and other sales expenses.
2. Information that provides a basis for understanding revenue from contracts with customers
For the period from October 1, 2022 to February 28, 2023
As described in the Summary of Significant Accounting Policies.
For the period from March 1, 2023 to August 31, 2023
As described in the Summary of Significant Accounting Policies.
3. Information about the relationship between the fulfillment of performance obligations under contracts with customers and cash
flows arising from those contracts, and the amount and timing of revenue expected to be recognized in subsequent periods fromcontracts with customers that existed at the end of the current period
For the period from October 1, 2022 to February 28, 2023
(1) Balance of contract assets and contract liabilities

Claims arising from contracts with customers (At beginning of period)
Claims arising from contracts with customers (At end of period)
Contract assets (At beginning of period)
Contract assets (At end of period)
Contract liabilities (At beginning of period)
Contract liabilities (At end of period)

20

Thousands of yen
October 1, 2022 toFebruary 28, 2023
36,98039,506-

(2) Transaction price allocated to remaining performance obligations
As of February 28, 2023, the total transaction price allocated to the remaining performance obligations for the sale of realestate is 14,533,333 thousand yen for the real estate for which a sale contract was executed on July 28, 2022.
MTR expects to recognize revenue for such remaining performance obligations upon delivery of such real estate properties,
which is expected to occur on, August 31, 2023 and February 29, 2024.
In accordance with Paragraph 19 of the Guidance on Accounting Standard for Revenue Recognition, MTR recognizes
utility revenues at the amount it has the right to charge, because MTR has the right to receive from the customer the amountof consideration that directly corresponds to the value to the customer, the lessee, of the portion of the performancecompleted by the end of the fiscal year. Accordingly, MTR has applied the provisions of paragraph 80-22(2) of the
Accounting Standard for Revenue Recognition and has not included in the notes the transaction price allocated to theremaining performance obligations.
For the period from March 1, 2023 to August 31, 2023
(1) Balance of contract assets and contract liabilities

Claims arising from contracts with customers (At beginning of period)
Claims arising from contracts with customers (At end of period)
Contract assets (At beginning of period)
Contract assets (At end of period)
Contract liabilities (At beginning of period)
Contract liabilities (At end of period)

Thousands of yen
March 1, 2023 toAugust 31, 2023
39,50654,790-(2) Transaction price allocated to remaining performance obligations
As of August 31, 2023, the total transaction price allocated to the remaining performance obligations for the sale of realestate is 7,266,666 thousand yen for the real estate for which a sale contract was executed on July 28,2022.
MTR expects to recognize revenue for such remaining performance obligations upon delivery of such real estate properties,
which is expected to occur on February 29, 2024.
In accordance with Paragraph 19 of the Guidance on Accounting Standard for Revenue Recognition, MTR recognizes
utility revenues at the amount it has the right to charge, because MTR has the right to receive from the customer the amountof consideration that directly corresponds to the value to the customer, the lessee, of the portion of the performancecompleted by the end of the fiscal year. Accordingly, MTR has applied the provisions of paragraph 80-22(2) of the
Accounting Standard for Revenue Recognition and has not included in the notes the transaction price allocated to theremaining performance obligations.

21

14. SEGMENT AND RELATED INFORMATION
Segment Information
Since the business of MTR consists of only the “real estate leasing business”, there are no reporting segments. Therefore,
segment disclosures have been omitted.
(For the five-month period ended February 28,2023)

Related Information(1)Information about products and services
Since the proportion of operating revenues from external customers for each product and service exceeds 90% of operating
revenues, product and service disclosures have been omitted.
(2)Information about geographical areas①Operating revenues
Since the proportion of operating revenues from external customers in Japan exceeds 90% of operating revenues,
geographic area disclosures have been omitted.
②Property and equipment
Since the proportion of property and equipment located in Japan exceeds 90% of property and equipment located in all
countries, property and equipment disclosures have been omitted.
(3)Information about major customers
Thousands of yen

Name of major customers
Mori Trust Co., Ltd.

Operating Revenues
1,603,874

Related Segment
Leasing Business(For the six-month period ended August 31,2023)

Related Information(1)Information about products and services
Since the proportion of operating revenues from external customers for each product and service exceeds 90% of operating
revenues, product and service disclosures have been omitted.
(2)Information about geographical areas①Operating revenues
Since the proportion of operating revenues from external customers in Japan exceeds 90% of operating revenues,
geographic area disclosures have been omitted.
②Property and equipment
Since the proportion of property and equipment located in Japan exceeds 90% of property and equipment located in all
countries, property and equipment disclosures have been omitted.
(3)Information about major customers
Thousands of yen

Name of major customers
Operating Revenues
Related Segment
Mori Trust Co., Ltd.
4,428,336
Leasing Business
Gains on sales of real estate to Mori Trust Co., Ltd. are described in "6. BREAKDOWN OF PROPERTY-RELATEDREVENUES AND EXPENSES " and "Additional Information”.

2215. INVESTMENT AND RENTAL PROPERTIESMTR owns office buildings and retail facilities for lease mainly in Tokyo and other areas. The carrying value in the balance
sheet and corresponding fair value of those properties are as follows:
Thousands of yen
Fair Value(3)

Carrying Value(1)

Use
Officebuildings
Accommodations
OthersTotal

As of
September
30, 2022

Net Changes

Carrying Value
(1)

As of
February28, 2023

As ofFebruary28, 2023

Net Changes

(2)

As of
February28, 2023

218,911,274

4,765,105

223,676,380

249,530,000

15,395,063(156,722)

15,238,341

71,660,538(5,677,594)

65,982,943

Fair Value
(3)

(2)

As of
August31, 2023

As ofAugust31, 2023

223,676,380

28,781,423

252,457,803

277,620,000

16,900,000

15,238,341

122,986,258

138,224,599

140,567,000

82,390,000

65,982,943(5,906,479)

60,076,464

74,220,000

305,966,876(1,069,211)
304,897,665
348,820,000
304,897,665
145,861,201
450,758,867
492,407,000(1)The carrying value represents the acquisition cost less accumulated depreciation.
(2) The main reason for the increase in the amount of change from the previous period was the acquisition of Sendai MT
Building, while the reason for the decrease was the transfer of Shinbashi Ekimae MTR Building and depreciation. The main
reason for the increase during the period was the acquisition of real estate, etc. taken over from MTH, which merged with MTR
on March 1, 2023, Kamiyacho Trust Tower and Sendai MT Building, while the reason for the decrease was the transfer of
Shinbashi Ekimae MTR Building and depreciation.
(3)The fair value is an appraisal value or a price estimated by real estate appraisers outside MTR.
The profit and loss for the five-month period ended February 28, 2023 and the six-month period ended August 31, 2023
concerning rental properties is as follows:
Thousands of yen

October 1, 2022 toFebruary 28, 2023
Use

Officebuildings
Accommodations
OthersTotal

March 1, 2023 toAugust 31, 2023
Gain onSale ofInvestment
Property(2)

RentalRevenues(1)

PropertyrelatedExpenses(1)

Net Income

Gain onSale ofInvestment
Property(2)

1,836,752-

5,793,327

2,284,480

3,508,847-

262,734

262,060-

2,985,122

785,948

2,199,174-

317,171

1,018,858

1,430,579

1,596,455

312,423

1,284,031

1,437,186

RentalRevenues(1)

PropertyrelatedExpenses(1)

3,967,263

2,130,511

524,794
1,336,030

Net Income

5,828,088
2,710,417
3,117,671 1,430,579
10,374,905
3,382,852
6,992,053 1,437,186(1)“Rental revenues” and “Property-related expenses”, which are rental revenues and related expenses (depreciation, repairs andmaintenance, casualty insurance, property and other taxes etc.), are presented in the statements of income and retained earnings
as “Operating revenue” and “Operating expenses”.
(2)“Gain on sale of investment property” is presented in the statements of income and retained earnings under “Operating
revenue”.

23

16. PER SHARE INFORMATION
The following table summarizes information about net assets per share and net income per share at February 28, 2023 and August
31, 2023 and for the five-month period and six-month period,respectively, then ended:Yen
Net assets per share at period end
Net income per share
Weighted-average number of shares

October 1, 2022 toFebruary 28, 2023
60,1231,368
2,640,000 shares

March 1, 2023 toAugust 31, 2023
65,241
2,010
3,560,000 shares

In calculating net assets per share, the amount of the net assets has been adjusted for the cash distribution declared in thesubsequent period. Net income per share is computed by dividing net income by the weighted-average number of shares
outstanding during each period. Diluted net income per share has not been presented since no warrants or convertible bonds were
outstanding during the period.
Since MTR conducted a 2-for-1 unit split effective March 1, 2023, net asset value per unit and net income per unit are calculated
based on the assumption that the said unit split was conducted at the beginning of the previous fiscal period.

17. SUBSEQUENT EVENTS
None applicable.
(Additional Information)
Transfer of property
Pursuant to a purchase agreement executed on July 29, 2022, MTR has transferred the second time installment of
the following asset as of August 31, 2023.
Shinbashi ekimae MTR Building(i) Outline of the transfer
Property to be transferred:
Real estate trust beneficiary interest
Transfer price:¥21,800,000,000(1st: ¥7,266,666,667; 2nd: ¥7,266,666,667 ;and 3rd: ¥7,266,666,666)(Excluding transfer cost, property taxes, city planning taxes and consumption
taxes)
Gain on transfer:
MTR plans to record gains on sales of real estate in operating revenues ofapproximately 1.4 billion yen in the fiscal period ending August 31, 2023 andapproximately 1.3 billion yen in the fiscal perod ending February 28, 2024.
Date of transfer:
1st: February 28, 2023; 2nd: August 31, 2023 ;and 3rd: February 29, 2024
Buyer:MORI TRUST CO., LTD.
Remarks:
The property will be transferred in three installments: the first installment will betransferred after establishing a trust for one-third of the co-ownership interest as ofFebruary 28, 2023, the second installment will be transferred after placing an
additional trust for one-third of the co-ownership interest as of August 31, 2023,
and the third installment will be transferred after placing an additional trust for
one-third of the co-ownership interest as of February 29, 2024.
Other:
This transfer constitutes a forward commitment, etc. as defined in the“Comprehensive Supervisory Guidelines for Financial Instruments Business
Operators, etc.” established by the Financial Services Agency. The Transfer may
be terminated only in the case of willful misconduct or gross negligence on thepart of the other party, on the grounds of a material breach by the other party of its
obligations under the purchase agreement relating to the Transfer. If the Transfer isterminated due to a breach of obligation, the party causing the termination shall
pay to the other party an amount equivalent to 20% of the relevant purchase priceas a penalty.

24Acquisition of property
Pursuant to a purchase agreement executed on July 29, 2022, MTR acquired the second installment of thefollowing asset effective August 31, 2023.
Sendai MT Building(i) Outline of the acquisition
Property to be acquired:

Acquisition price:

Date of acquisition:
Seller:Remarks:

Other:

Real estate trust’s beneficiary interest
Land ownership and land lease rights (co-owned interest 90,845 of 1,000,000)
Sectionally owned building¥15,800,000,000(1st: ¥5,266,666,667;2nd: ¥5,266,666,667;and 3rd: ¥5,266,666,666 )(Excluding acquisition cost, property taxes, city planning taxes and consumption
taxes)
1st:February 28, 2023; 2nd:August 31, 2023;and 3rd:February 29, 2024
MORI TRUST CO., LTD.
The acquisition is planned to be made in three installments, with the first
installment being made on February 28, 2023 with 90,845/300,000 of
co-ownership interests held in trust, the second installment being made on August
31, 2023 with an additional 90,845/300,000 of co-ownership interests held in trust
and the third installment being made on February 29, 2024 with an additional
90,845/300,000 of co-ownership interests held in trust, respectively.
The Acquisition constitutes a forward commitment, etc. as defined in the“Comprehensive Supervisory Guidelines for Financial Instruments Business
Operators, etc.” established by the Financial Services Agency. The Acquisition
may be terminated only in the case of willful misconduct or gross negligence on
the part of the other party, on the grounds of a material breach by the other partyof its obligations under the purchase agreement for the Acquisition. If theAcquisition is cancelled due to a breach of obligation, the party causing thecancellation shall pay to the other party an amount equivalent to 20% of therelevant purchase price as a penalty.

25

18. INVESTMENT CORPORATION BONDS
Investment corporation bonds at February 28, 2023 and August 31, 2023 consisted of the following:

Unsecured bonds due on February 25 2021
Unsecured bonds due on February 21, 2022
Unsecured bonds due on February 26, 2015
Unsecured bonds due on June 20, 2022
Unsecured bonds due on February 17, 2023
Unsecured bonds due on February 25, 2021
Unsecured bonds due on February 21, 2022
Unsecured bonds due on February 25, 2021
Unsecured bonds due on February 23, 2017
Total

Thousands of yen
As of
As of
August 31,
February 28,
2023
2023
3,000,000
3,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
3,000,000
3,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
14,000,000
14,000,000

Averageinterest rate
(%)
0.17
0.11
1.07
0.42
0.79
0.50
0.50
0.75
1.08
－

Due onFebruary 22, 2024
February 28, 2025
February 26, 2027
February 29, 2028
February 28, 2029
February 25, 2031
February 27, 2032
February 25, 2036
February 23, 2037－

Use of
funds

Note

(1)

(2)

−

−

(1) Use of the above funds includes acquisition of real estate or beneficiary interests.
(2) The above loans are unsecured and non-guaranteed with floating rates.
(3) Investment corporation bonds repayable expected to be repaid during each of the 5 years subsequent tothe current balance sheet date are summarized as follows (except for investment corporation bonds due within one year):Investment corporation bonds(Thousands of yen)

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

1,000,000−

1,000,000

2,000,000

19. SHORT-TERM LOANS PAYABLE
Short-term loans payable at February 28, 2023 and August 31, 2023 consisted of the following:

LenderMizuho Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Banking Corporation.
Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
Resona Bank, Limited
Mizuho Bank, Ltd.
Total short-term loans

(1)
(2)
(3)
(4)

Thousands of yen
As of
As of
August 31,
February 28,
2023
2023
2,000,000－
1,000,000－
2,500,000
2,500,000
500,000
500,000－
2,000,000－
2,000,000－
1,500,000－
1,000,000－
500,000
6,000,000
10,000,000

Averageinterest rate(%) (1)
－
－
0.19
0.19
0.19
0.20
0.20
－(2)
0.20
－

Due on－－October 6, 2023
October 13, 2023
March 29, 2024
August 30,2024
August 30,2024
August 30,2024
August 30,2024－

Use of
funds

Note

－

－

(3)

(4)

－

－

Average interest rate for each loan has been rounded to the second decimal place.
Average interest rate is not shown because interest is calculated on one end putting.
Use of the above funds includes acquisition of real estate or beneficiary interests.
The above loans are unsecured and non-guaranteed with floating rates.

MTR has entered into line of credit loan agreements totaling ¥20,000 million with banks to reduce refinancing risk. The unused
amount of such credit lines was ¥20,000 million at August 31, 2023.

26

20. LONG-TERM LOANS PAYABLE
Long-term loans payable at February 28, 2023 and August 31, 2023 consisted of the following:

LenderMizuho Bank, Ltd
The Bank of Fukuoka, Ltd.
The Nishi-Nippon City Bank, Ltd.
Mizuho Bank, Ltd
MUFG Bank, Ltd.
Development Bank of Japan Inc.
Resona Bank, Limited.
Development Bank of Japan Inc.
Resona Bank, Limited.
Mizuho Bank, Ltd (2)Mizuho Bank, Ltd (2)Sumitomo Mitsui Banking Corporation. (2)Sumitomo Mitsui Banking Corporation. (2)Development Bank of Japan Inc. (2)Resona Bank, Limited. (2)Mizuho Bank, Ltd
Mizuho Bank, Ltd (2)Development Bank of Japan Inc.
Aozora Bank, Ltd.
Shinkin Central Bank
Sumitomo Mitsui Banking Corporation
Development Bank of Japan Inc.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd (2)Mizuho Bank, Ltd (2)MUFG Bank, Ltd. (2)Sumitomo Mitsui Trust Bank, Ltd. (2)Sumitomo Mitsui Banking Corporation. (2)Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Trust Bank, Ltd. (2)Development Bank of Japan Inc. (2)The Nishi-Nippon City Bank, Ltd.
Mizuho Bank, Ltd
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Mizuho Bank, Ltd
Sumitomo Mitsui Banking Corporation.
The 82 Bank, Ltd.
MUFG Bank, Ltd.
Development Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
MUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd. (2)Mizuho Trust & Banking Co., Ltd. (2)Shinkin Central Bank (2)Shinkin Central Bank (2)Thousands of yen
As of
As of
February 28,
August 31,
2023
2023
3,500,000－
1,000,000－
500,000－
1,500,000－
500,000－
1,000,000－
1,000,000－
500,000
500,000
1,000,000
1,000,000－
2,000,000－
1,000,000－
2,000,000－
1,000,000－
1,500,000－
1,000,000
3,000,000
3,000,000－
2,000,000
1,500,000
1,500,000
2,000,000
2,000,000
2,000,000
2,000,000
3,000,000
3,000,000
2,000,000
2,000,000
1,000,000
1,000,000
3,000,000
3,000,000
1,000,000
1,000,000－
5,000,000－
1,000,000－
3,000,000－
2,000,000－
1,000,000
3,000,000
3,000,000
1,000,000
1,000,000－
3,000,000－
1,500,000
500,000
500,000
1,500,000
1,500,000
500,000
500,000
3,000,000
3,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
500,000
1,000,000
1,000,000
2,500,000
2,500,000
4,000,000
4,000,000
1,000,000
1,000,000
3,000,000
3,000,000
3,000,000
3,000,000－
2,000,000－
500,000－
1,000,000－
1,000,000

27

Averageinterest rate(%) (1)
－
－
－
－
－
－
－
0.54
0.46
0.64
0.30
0.64
0.30
0.64
0.29
0.17
0.33
0.64
0.54
0.57
0.27
0.36
0.36
0.56
0.56
0.36
0.45
0.52
0.45
0.45
0.29
0.30
0.53
0.53
0.43
0.56
0.56
0.32
0.65
0.65
0.34
0.65
0.64
0.33
0.37
0.32
0.46
0.68
0.68
0.30
0.30
0.68

Due on
－
－
－
－
－
－
－
September 29, 2023
October 18, 2023
November 30,2023
November 30,2023
November 30,2023
November 30,2023
November 30,2023
November 30,2023
February 29, 2024
February 29, 2024
February 29, 2024
March 11, 2024
March 19, 2024
April 9, 2024
April 11, 2024
April 11, 2024
April 24, 2024
May 31, 2024
August 30,2024
August 30,2024
August 30,2024
August 30,2024
August 30,2024
October 9, 2024
October 9, 2024
November 29,2024
November 29,2024
December 26, 2024
January 17, 2025
January 17, 2025
February 28, 2025
February 28, 2025
February 28, 2025
February 28, 2025
February 28, 2025
March 19, 2025
April 9, 2025
April 11, 2025
April 11, 2025
April 24, 2025
August 29, 2025
August 29, 2025
August 29, 2025
August 29, 2025
August 29, 2025

Use of
funds

Note

－

－

(4)

(5)

Sumitomo Mitsui Banking Corporation. (2)Development Bank of Japan Inc. (2)Resona Bank, Limited. (2)The 77 Bank, Ltd. (2)Sumitomo Mitsui Trust Bank, Ltd. (2)MUFG Bank, Ltd. (2)Sumitomo Mitsui Banking Corporation.
The Bank of Fukuoka, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Trust Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
SBI Shinsei Bank, Limited
The Chiba Bank,Ltd.
The Yamanashi Chuo Bank, Ltd.
Development Bank of Japan Inc.
The Bank of Fukuoka, Ltd.
The Nishi-Nippon City Bank, Ltd.
Nippon Life Insurance Company
Resona Bank, Limited.
Aozora Bank, Ltd.
Sumitomo Mitsui Banking Corporation (2)Mizuho Bank, Ltd (2)Sumitomo Mitsui Trust Bank, Ltd. (2)Resona Bank, Limited.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Mizuho Bank, Ltd (2)Development Bank of Japan Inc.
The Nishi-Nippon City Bank, Ltd.
The 77 Bank, Ltd.
Nippon Life Insurance Company
Mitsui Sumitomo Insurance Company, Limited
Sumitomo Mitsui Banking Corporation (2)Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
Resona Bank, Limited.
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd
The Bank of Fukuoka, Ltd.
The Norinchukin Bank
Sumitomo Mitsui Trust Bank, Ltd.
The Ashikaga Bank, Ltd.
Aozora Bank, Ltd.
SUMITOMO LIFE INSURANCE COMPANY
The Bank of Fukuoka, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Resona Bank, Limited.
Resona Bank, Limited.
The Norinchukin Bank
The Nishi-Nippon City Bank, Ltd.
SUMITOMO LIFE INSURANCE COMPANY
The Dai-ichi Life Insurance Company, Limited
Development Bank of Japan Inc.
Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.

－
－
－
－
－
－
1,000,000
1,000,000
1,500,000－
1,000,000
1,500,000
1,000,000－－－
1,000,000－－
500,000
1,000,000
500,000－－－
500,000－
2,000,000－
1,000,000
1,000,000
500,000
500,000
500,000－
1,000,000
1,000,000
500,000
500,000
500,000
1,000,000
3,000,000
1,500,000
1,000,000
500,000
500,000
1,000,000－
1,500,000
1,000,000－
500,000
1,500,000
1,500,000
500,000
500,000
1,000,000
1,000,000
1,500,000

500,000
500,000
500,000
500,000
500,000
500,000
1,000,000
1,000,000
1,500,000
1,500,000
1,000,000
1,500,000
1,000,000
1,000,000
500,000
500,000
1,000,000
1,000,000
500,000
500,000
1,000,000
500,000
2,000,000
1,000,000
1,000,000
500,000
3,000,000
2,000,000
1,000,000
1,000,000
1,000,000
500,000
500,000
500,000
5,500,000
1,000,000
1,000,000
500,000
500,000
500,000
1,000,000
3,000,000
1,500,000
1,000,000
500,000
500,000
1,000,000
3,000,000
1,500,000
1,000,000
1,000,000
500,000
1,500,000
1,500,000
500,000
500,000
1,000,000
1,000,000
1,500,000

28

0.44
0.30
0.30
0.68
0.83
0.83
0.43
0.42
0.47
0.50
0.52
0.41
0.50
0.63
0.62
0.62
0.41
0.53
0.52
0.36
0.39
0.72
0.75
0.75
0.75
0.39
0.70
0.55
0.36
0.33
0.41
0.31
0.40
0.39
0.50
0.42
0.40
0.56
0.56
0.50
0.51
0.38
0.59
0.63
0.45
0.59
0.55
0.84
0.63
0.84
－(3)
0.48
0.38
0.48
0.38
0.56
0.43
0.74
0.50

August 29, 2025
August 29, 2025
August 29, 2025
August 29, 2025
November 28,2025
November 28,2025
January 19, 2026
January 30, 2026
February 27, 2026
February 27, 2026
February 27, 2026
February 27, 2026
February 27, 2026
February 27, 2026
February 27, 2026
February 27, 2026
March 12, 2026
March 31,2026
March 31,2026
March 31, 2026
April 22, 2026
April 24, 2026
May 29,2026
May 29,2026
May 29,2026
May 29, 2026
August 31,2026
August 31, 2026
August 31, 2026
August 31, 2026
August 31, 2026
August 31, 2026
September 18, 2026
September 30, 2026
November 30,2026
December 24, 2026
December 25, 2026
December 25, 2026
December 25, 2026
January 19, 2027
January 29, 2027
February 26, 2027
February 26, 2027
April 22, 2027
June 24, 2027
June 25, 2027
July 30, 2027
August 31,2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
September 10, 2027
September 30, 2027
October 13, 2027

Mizuho Bank, Ltd
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Sumitomo Mitsui Trust Bank, Ltd.
Development Bank of Japan Inc.
Resona Bank, Limited.
The Ashikaga Bank, Ltd.
Development Bank of Japan Inc.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Banking Corporation.
Aozora Bank, Ltd.
Mizuho Bank, Ltd
Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
SBI Shinsei Bank, Limited
The 77 Bank, Ltd.
Nippon Life Insurance Company
Mitsui Sumitomo Insurance Company, Limited
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Mizuho Trust & Banking Co., Ltd.
Aozora Bank, Ltd.
Mizuho Bank, Ltd
Aozora Bank, Ltd.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Sumitomo Mitsui Banking Corporation.
MUFG Bank, Ltd.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Banking Corporation.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Mizuho Bank, Ltd
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Total long-term loans

(1)
(2)
(3)
(4)
(5)

1,000,000
1,000,000
1,000,000
500,000
1,500,000
500,000－－－
1,500,000
1,500,000
1,500,000
1,000,000
1,500,000－－
1,000,000
1,000,000－
1,500,000
2,000,000－
3,000,000
1,000,000－－
1,000,000
1,500,000－－－
500,000－
1,500,000
2,000,000
1,000,000
1,500,000－
1,000,000
500,000－
2,000,000
1,500,000
1,500,000
138,500,000

1,000,000
1,000,000
1,000,000
500,000
1,500,000
500,000
1,000,000
1,000,000
1,000,000
1,500,000
1,500,000
1,500,000
1,000,000
1,500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,500,000
2,000,000
1,000,000
3,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,500,000
500,000
1,500,000
1,000,000
500,000
3,500,000
1,500,000
2,000,000
1,000,000
1,500,000
2,500,000
1,000,000
500,000
1,500,000
2,000,000
1,500,000
1,500,000
210,500,000

0.63
0.47
0.55
0.99
0.99
0.47
0.91
0.91
0.91
0.53
0.54
0.51
0.71
0.51
0.84
0.99
0.53
0.54
0.76
0.59
1.07
1.07
0.71
1.07
1.07
1.07
0.82
0.59
1.02
1.23
1.23
0.79
1.07
0.90
0.92
0.65
0.76
1.18
0.62
0.63
1.18
0.98
0.66
0.98
－

December 24, 2027
January 19, 2028
January 19, 2028
January 19, 2028
January 19, 2028
January 19, 2028
February 29,2028
February 29,2028
March 1,2028
March 31, 2028
April 7, 2028
April 11, 2028
April 11, 2028
April 17, 2028
May 31,2028
August 31,2028
August 31, 2028
August 31, 2028
August 31, 2028
October 31, 2028
February 28, 2029
February 28, 2029
February 28, 2029
February 28, 2029
February 28, 2029
February 28, 2029
April 11, 2029
April 23, 2029
August 31,2029
February 28, 2030
February 28, 2030
February 28, 2030
March 29,2030
April 11, 2030
April 12, 2030
June 24, 2030
July 19, 2030
August 30,2030
August 30, 2030
August 30, 2030
August 30, 2030
October 28, 2030
February 28, 2031
April 11, 2031－－－

Average interest rate for each loan has been rounded to the second decimal place.
Loans payable assumed as a result of the merger with MTH on March 1, 2023.
Use of the above funds includes acquisition of real estate or beneficiary interests.
The above loans are unsecured and non-guaranteed with fixed interest rates.
The total amounts of long-term loans repayable expected to be repaid during each of the 5 years subsequent to the current
balance sheet date are summarized as follows (except for long-term loans payable due within one year):
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
Amount of loans
38,500,000
29,000,000
29,500,000
24,500,000(Thousands of yen)29