Moving to THE NEXT STAGE*mf̲ar14̲0808.indd c2

Annual Report 2014 Year ended March 31, 20142014/08/08 15:04

Contents
2 At a Glance
4 Introducing the Group’s
Premium Assets

6 An Interview with the
President

11 Financial Highlights
12 Special Feature
14 Review of Operations
24 Corporate Governance
28 Management Team
30 Financial Section
76 Major Properties
80 Domestic and Overseas
Networks
81 History
82 Investor Information

Note:
Graphs and charts in this Annual Report are
all years ended, ending or as of March 31.

*mf̲ar14̲0808.indd c3

2014/08/08 15:04

Accelerating innovation to move to
THE NEXT STAGE
As a company marking over seventy years since its founding, Mitsui Fudosan has maintained a tradition of continuous
innovation that has allowed the Company to evolve into Japan’s #1 real estate company. With innovation as its cornerstone,
Mitsui Fudosan has consistently read the trends of the times while developing new markets. The Company was a major
player in coastal development businesses and the construction of large-scale residential zones on which post-war economic
growth was founded. We built the Kasumigaseki Building, famed as the first skyscraper in Japan, and helped create the realestate securitization market. Focusing on the Nihonbashi area, the base of our operations, we are accelerating the pace ofurban-type multi-use property development. Essentially, Mitsui Fudosan’s DNA is about understanding new senses of value
and the real nature of issues, needs, and desires, then matching the creative challenge of providing solutions.

THREE STRATEGIES TO REALIZE INNOVATION

Customer-centered
management

Business model
innovation• Provide solutions for customer needs
created by maturing society andeconomy• Integrate tangibles and intangibles• Provide solutions that meet customer
needs on a global basis• Create new value throughcollaboration with different industries• Create communities

Full implementationof Groupmanagement• Pursue economies of scale• Offer one-stop services• Network with partners

1*mf̲ar14̲0808.indd 1

2014/08/08 15:04

AT A GLANCEThe Mitsui Fudosan Group is taking steps to carry out Innovation 2017, our long-term business plan. Launched with the start offiscal 2012, this plan pursues the innovation required to create value in the coming era and to evolve into a group that canachieve strong growth and profitability. Recognizing the opportunities afforded by changes in our business environment, including the growing maturity of domestic markets and market globalization, we are accelerating the pace at which we strengthen
the competitiveness of our domestic business and develop global operations. In fiscal 2013, the second year of Innovation 2017,
we succeeded in achieving our profit targets one year ahead of schedule. Buoyed by the positive flow-on effects of the recovery
in Japan’s economy, we were also able to secure favorable results by continuing to promote our multi-faceted holding, trading,and management business strategies.
The Mitsui Fudosan Group has put forward the core strategies of customer-centered management, business model innovation, and full implementation of Group management. Working to continuously create value in Japan and overseas while securing
profit growth, we aim to consistently grasp the changing needs of our customers and strive to realize further growth.

Operating Income
and Net Income

Investment Plan
(Billions of yen)

(Millions of yen)

Area and TypeFY2012(Actual)

FY2013(Actual)

FY2014
Estimates asof May 2014

3 Years
Total

Domestic capital
expenditures

66.0

123.0

163

Overseas capital
expenditures(Europe, North
America & Asia)

48.0

37.0

Real property
for sale (Domestic)

389.0

378.0

76,844

148,185

126,038

120,000

172,568

180,000

59,45150,13060,00001213Operating Income

14
Net Income

Mitsui Fudosan achieved both operating
income and net income targets one year inadvance of the fiscal 2014 schedule identified
in its long-term business plan.

Long-Term Business Plan Innovation 2017
(on a April 2012 disclosure basis)
FY2012~2014

FY2015~2017

FY2012~2017 Total

352

300~400

400~500

Approx. 800(cost recovery 200)

102

187

200~300

200~300

Approx. 500(cost recovery 100)

395

1,162

1,000~1,100 1,300~1,400

Approx. 2,400(cost recovery 2,400)

The Company is making steady progress under its investment plan. Mitsui Fudosan has in fact set an investment goal of around ¥800 billion with respect to its capital expenditure in Japan on the back of the Company’s
rich development pipeline in such areas as urban-type redevelopment projects and nationwide retail facilities.

Core initiatives

Strengthen the competitiveness of our domestic business
Create neighborhoods
Our basic approach involves a virtuous cycle of integrating diverse functions and features, creating communities and neighborhoods that mature with age to create high-value-added neighborhoods. Leveraging our Smart City concept, we will strive to create attractive neighborhoods by creating high-quality communities.
Creating neighborhoods in Nihonbashi
Enter the specified electricity utility business; Kick-off the
Nihonbashi Smart City Initiatives

Creation of the Kashiwanoha Campus City neighborhood
Kashiwanoha Smart City
A neighborhood of the future
Environment
friendly

Health &longevity

Creation ofnewindustries

Public/private/
academiacollaboration

Advancedknowledge
accumulation2*mf̲ar14̲0808.indd 2

2014/08/08 15:04

Evolve the housing business
The Mitsui Fudosan Group is focusing on fee-based businesses such as housing brokerage and remodeling while developing
products and services for active seniors.
Reinforce the Group’s competitive advantage by opening the Mitsui Housing Mall to offer customers a one-stop source ofsolutions and offering Mitsui Housing Loop, a menu of housing and lifestyle-related services
Expand businesses related to existing homes including the housing brokerage activities undertaken by Mitsui Fudosan Realty
Co., Ltd. and the remodeling endeavors carried out by Mitsui Fudosan Reform Co., Ltd.

Evolution of our model for cooperation with investors
We will stimulate and expand the Japanese real estate investment market in terms of both real estate and finance by adding
logistics facilities to our existing asset classes, improving liquidity in the real estate market by meeting the needs of both public
and private customers, and developing new investment products.
Expand variety by adding logistics facilities to our existing asset classes
Make CRE, PRE, PFI and PPP proposals
Develop attractive investment products (Mitsui Fudosan Private REIT, etc.)

Develop global operations
Overseas business development
The Mitsui Fudosan Group is building up an outstanding portfolio in North America and Europe while replacing assets andactively pursuing development-type projects. In Asia, the Group is adopting an aggressive stance toward developing a variety
of properties including retail facilities, houses, and office buildings while proactively participating in city development projects.
In order to achieve each of these objectives, the Group is putting in place a robust business platform through a variety of measures including the formation of alliances.

LondonBeijing

DalianTianjin
ShanghaiTokyo

NingboTaipei
FoshanBangkokHong Kong
Kuala Lumpur
Singapore
Jakarta

San Francisco

New York
Washington D.C.

Hawaii

Provide solutions for cross-border needs
Provide solutions as a partner for customers in Japan (such as tenant companies) doing business overseas
Provide solutions for overseas customers doing business in Japan3*mf̲ar14̲0808.indd 3

2014/08/08 15:04

INTRODUCING THE GROUP’S PREMIUM ASSETSMIXEED-USE DEVVELOPMENT BUSINESS
Mitsui Fudosan continues to expand the scope of its operations. In addition to the development of mixed-use properties thatconverge to address a wide variety of office, retail facility, housing, hotel, and entertainment needs, the Company has a keen
eye on extending its operation beyond the development field to design smart communities.

GATE SQUARE(Kashiwanoha Campus Block 148)

Tokyo Midtown

Nihonbashi Muromachi East District
Development Projects

RETAIL FACILITIES
Mitsui Fudosan operates approximately 70 retail facilities throughout
Japan, including regional malls, factory outlet malls and urban facilities.

LaLaport TOKYO-BAY

MITSUI OUTLET PARK KISARAZU

LaLagarden KASUKABE(Opened in 1981)(Opened in 2012)(Opened in 2007)4*mf̲ar14̲0808.indd 4

2014/08/08 15:04

OFFFICE BUILD
DINGSMitsui Fudosan operates approximately 150 office buildings that are occupied by morethan 3,000 corporate tenants. Strong in Tokyo’s central business district, Mitsui Fudosan’s
office portfolio also covers Japan’s other major urban areas.

Sumitomo Mitsui Banking Corporation
Head Office Building(Completed in 2010)

Kasumigaseki Building

Gran Tokyo North Tower

1251 Avenue of the Americas Building(Completed in 1968)(Completed in 2007)(Acquired in 1986)

HOUSIING

OTHER

Quality and value are the hallmarks of the condominiums anddetached houses that Mitsui Fudosan develops for sale and lease.

Hotels and serviced apartments are among the other areas of
the real estate market in which Mitsui Fudosan has a presence.

Halekulani Hotel(Opened in 1984)

FINE COURT SEIBU TACHIKAWA
AYUMO CITY(Completed in 2013)

Park Tower Shinonome

Mitsui Garden Hotel
Osaka Premier(Completed in 2014)(Opened in 2014)5*mf̲ar14̲0808.indd 5

2014/08/08 15:04

AN INTERVIEW WITH THE PRESIDENT

Masanobu Komoda
President andChief Executive Officer

Q.1

This past year the economy experienced a considerable transition. Pleaseprovide us with your thoughts on the market conditions faced by the Mitsui
Fudosan Group in fiscal 2013.

In fiscal 2013, signs of a recovery in the JapaneseIn the real estate industry, demand remained

economy emerged as a result of economic andstrong in the office leasing market with a focus onmonetary policies implemented by the government

safety and business continuity, while tenantsince the previous fiscal year. The overall economy

companies were prompted by the economic

remained firm as concerns about deflation wererecovery and growth in corporate earnings todispelled amid robust consumer demand. In

expand their office space or move into larger offices.

addition, the decision that Tokyo would host the

The retail facility leasing market was robust overall,2020 Olympics and Paralympics fanned

supported by strong consumer spending amid the

expectations for economic growth over the

opening of new properties and large-scale property

longer term.

renovations. The housing sales market was also6*mf̲ar14̲0808.indd 6

2014/08/08 15:04

strong with supply volume and contract rates higher

Strategic Special Zones. Mitsui Fudosan will step up

than the previous year as individual buyers wereits marketing activities to stay ahead of theencouraged by persistently low interest rates for

economic recovery while remaining sensitive tomortgages and government policies that supportchanges in market conditions and consumer

home buyers. In the real estate investment sector,

sentiment. The real estate industry has played a

the J-REIT market continued to expand smoothly as

critical role in the government’s growth strategy forreal estate holdings exceeded ¥11 trillion at J-REITs,

bolstering the international competitiveness of major

including those of newly listed REITs, and the Tokyo

cities, promoting growth in the office building, retail

Stock Exchange REIT Index returned to levels lastand housing markets, and reinvigorating the real

seen prior to the 2008 financial crisis.

estate investment market. Moving forward, we will

We believe the economic recovery is likely toaccelerate our activities in these areas while taking

continue as the government steadily implements its

full advantage of the government’s new policies.

growth strategy for Japan, including the National

Q.2

How would you assess the Group’s performance in fiscal 2013?

In fiscal 2013, revenue from operations increased toof brokerage properties handled in the Mitsui¥1,515.2 billion, up 4.8% from the previous fiscal

Rehouse business. Revenue from operations

year. Profits exceeded our initial forecasts withreached a new record high, and targets for operating

operating income rising to ¥172.6 billion, an increase

income and net income were achieved one year inof 16.5% year on year and net income surging toadvance of the fiscal 2014 deadline under the long-¥76.8 billion, up 29.3%. This growth was attributableterm business plan Innovation 2017. We believe thisto stronger leasing revenues after the completion ofaccomplishment was the outcome of our multi-

large-scale renovations at retail facilities such as the

faceted business strategy coupled with a rebound in

LAZONA Kawasaki Plaza, an increase in thethe real estate market. We are pleased with ourreported number of units in the property sales toperformance in the second year of Innovation 2017.

individuals business, and an increase in the number7*mf̲ar14̲0808.indd 7

2014/08/08 15:04

Q.3

What progress has been made on the core initiatives of Innovation 2017?

Mitsui Fudosan recognizes that changes in its

Loop is one of these efforts. Although membership

operating environment, including the speed at which

has already surpassed the 100,000 mark, we are

the domestic market is maturing and the manner inworking to enhance services even further in Mitsui

which markets in general are globalizing, offer new

Housing Loop. Mitsui Fudosan also expanded

opportunities for business development and growth.

brokerage and remodeling businesses for existingWith this in mind, we are working to accelerate thehousing, which it views as growth fields, andpace at which we strengthen the competitiveness ofretained its first-place crown for the 28th straight

our domestic business and develop global

year in terms of the number of residential units

operations under Innovation 2017.

brokered nationwide in fiscal 2013.

To strengthen the competitiveness of our

In property sales to investors, asset acquisitions

domestic business in the Leasing Segment, we planby J-REITs exceeded ¥2.2 trillion in the previous

to solidify our development pipeline and steadilyfiscal year, a new record that underscores the vibrant

improve the operational status of the urban

activity on the real estate investment market. Mitsui

redevelopment projects centered on office buildings.

Fudosan made further inroads into the logistics

In addition, the prospect of carrying out the majority

business as a new asset class, steadily acquiringof the ¥800 billion budget allocated under Innovation

business opportunities with projects for nine2017 for investment in domestic capital expenditureproperties in total currently underway.

looks bright, thanks to solid progress in theWith regard to the development of global

acquisition of new retail facility business

operations, Mitsui Fudosan has adopted a two-opportunities.

pronged strategy. Operations in the advanced

In February 2014, Mitsui Fudosan announced

economies of Europe and North America primarily

details of the second stage of the Nihonbashi

aim to steadily increase “Leasing” segment cash

Revitalization Plan, a neighborhood we are creatingflows, while operations in the emerging economies

in the Nihonbashi and Yaesu areas. Most of ourof Asia aim to tap into growth markets. Thanks inneighborhood creation projects are scheduled forpart to the success of its partner strategy, Mitsui

completion after 2017, sustaining growth at Mitsui

Fudosan saw major successes in terms of

Fudosan beyond the conclusion of Innovation 2017.

expanding both its product scope and businessWe believe the neighborhoods we are creating will

presence worldwide. For example, in the United

help strengthen the global competitiveness of Tokyo.

States, we won the opportunity to develop a new

Mitsui Fudosan is negotiating with landowners andoffice building in San Francisco. In the United

government agencies to advance these projects on

Kingdom, we are redeveloping an office building inschedule to commercialization.

the City of London. And in China, we have gained

In property sales to individuals, Mitsui Fudosan
strengthened efforts to make the housing businessthe master lease to a commercial facility underdevelopment in Shanghai.

more like a services-based business. Mitsui Housing8*mf̲ar14̲0808.indd 8

2014/08/08 15:04

Q.4

Please give specific examples of how Mitsui Fudosan is creatingneighborhoods, as shown by the second stage of
the Nihonbashi Revitalization Plan.

One initiative to strengthen the competitiveness of

combine the tangible and intangible qualities ofour domestic business under Innovation 2017 is our

Nihonbashi into a higher form, thereby increasing theneighborhood creation project for the Nihonbashi

appeal of Tokyo from an international perspective.

area. In February 2014, Mitsui Fudosan completed

Looking ahead, we expect such neighborhood

construction on the Muromachi Furukawa Mitsui

creation to accelerate in the heart of Tokyo as the

Building (COREDO Muromachi 2) and theJapanese economy embarks on a full-fledged

Muromachi Chibagin Mitsui Building (COREDO

recovery and Tokyo’s presence in the world grows.

Muromachi 3), and initial feedback from tenants has

To capitalize on this opportunity, Mitsui Fudosan

been overwhelmingly positive. The retail facilities

raised ¥330.9 billion through the issuance of new

opened in March to a strong flow of customer traffic.

shares in June 2014 for the purpose of reinforcing its

With these buildings now open for business, thefinancial foundation in order to have the ability toappeal of the Nihonbashi area is increasing.

flexibly acquire business opportunities in the future.

In creating the Nihonbashi neighborhood, we aim

To sustain growth, Mitsui Fudosan must steadily

higher than just the construction of modern office

execute its existing neighborhood creation projects

buildings. Neighborhoods should be places where

and aggressively seek new business opportunities.

people work, live, play, and take breaks. Nihonbashi

We are in an excellent position to accelerate thehas a strong identity as a place with a unique history,

creation of neighborhoods that enhance theculture, waterfront space and community. By

international competitiveness of Tokyo.

combining these various characteristics, we aim to

Q.5

What is the Group’s forecast for the fiscal year ending March 31, 2015?

For fiscal 2014, management expects revenues torevenues in the property sales to individuals businessincrease but earnings to decrease in the Leasing

owing to a decline in the reported number of units,

segment, owing to positives including full-term

but higher earnings owing to improvement in thecontributions from the office buildings and retail

operating income ratio from firm sales conditions. In

facilities that opened in Nihonbashi in fiscal 2013 andthe property sales to investors business, Mitsui

partial-year contributions from Iidabashi Grand Bloom

Fudosan expects higher revenues and earnings. In all,and LaLaport Izumi (tentative name) that are slated to

we forecast that revenue from operations will increase

finish in fiscal 2014, but also negatives including anby ¥24.7 billion year on year to ¥1,540.0 billion,

increase in depreciation from the opening of new

operating income will rise by ¥10.4 billion to ¥183.0

buildings, the closing of operations at somebillion, and net income will grow by ¥13.1 billion toproperties for redevelopment, and the sales of¥90.0 billion. These forecasts for fiscal 2014 represent

properties in the previous fiscal year. In the Property

record-setting levels for revenue from operations,

Sales segment, Mitsui Fudosan expects weaker

operating income and net income.
9*mf̲ar14̲0808.indd 9

2014/08/08 15:04

Q.6

Please describe Mitsui Fudosan’s basic stance on returning profits toshareholders.

Mitsui Fudosan makes every effort to maintain andTaking into consideration the Company’s

increase dividends within the framework of businessperformance in fiscal 2013 as a part of its dividend

conditions, performance and its financial situation,

policy, Mitsui Fudosan plans to pay an annual cash

while aiming to expand retained earnings for thedividend of ¥22.00 per share in fiscal 2014,

purpose of investing in high-margin businesses inconsisting of interim and fiscal year-end cashorder to further enhance corporate value.

dividends of ¥11.00 per share.

Q.7

In closing, what is your message to shareholders?

Our performance was sound in fiscal 2013 withacquisitions due to the recovering real estate market.

profit targets achieved earlier than planned andGiven these circumstances, it is important that we

steady progress made on our new businessnot rely on favorable market conditions, but work to

strategy. We have set ambitious record-setting

achieve strong growth and profitability by responding

targets for fiscal 2014 for both operating income

to these issues with speed while continuing to makeand net income. We aim to solidly achieve ourevery effort to strengthen earnings potential, invest ingoals for sharp profit growth in the second half

future growth and bolster our customer base.

of Innovation 2017.
However, we project that construction costs willrise due to labor shortages and higher material

As we work toward achieving our goals, we kindly
request the continued support and understanding of
our shareholders and investors.

prices, and that competition will heat up for land

10

*mf̲ar14̲0808.indd 10

2014/08/08 15:04

FINANCIAL HIGHLIGHTS
Years ended March 31

(%)
24.0

(Millions of yen)
100,000

18.0

75,00012.0

50,0006.0

25,000

0

0

11.4

0

(Millions of yen)
2,500,000(%)
5.0

2,000,000

4.0

1,042,386

1,100,407

11

12

1,325,420

1,029,226
10

1,233,081

1,000,000

1.73

1.71

1.62

2,040,072

1,500,000

2,000,000

1,000,000

4,548,822

4,390,075

3,868,412

3,780,700

3,710,424

3,000,000

Total Assets

14

10

11

13

14

10

1.60

12

13

0

14

12

Debt/Equity ratio

ROE

(%)
6.0

59,451

(%)
30

2.0

1.80

0

11

Interest-bearing Debt

ROA

14

1.0

10

Total Net Assets

13

20

0

13

12

3.0

500,000

0

11

Shareholders’ Equity/Total Assets

Interest-bearing Debt andDebt/Equity ratio(Millions of yen)
5,000,000

4,000,000

10

14
13
Operating Margin

Net Income per Share

(%)
10.0

(Yen)
100

8.0

80

87.5

Total Assets and Total Net Assets

12

28.0

10
11
Operating Income

26.9

14

2,120,226

13

1,743,411

12

1,740,048

11

1,746,719

10

27.9

0

8.5

27.0

8.7

50,00027.2

400,000

10.3

9.4

50,13076,844

172,568

148,185

126,038

100,000

120,092

800,000

150,000

120,585

1,515,252

1,445,644

1,338,102

1,384,807

1,405,270(Millions of yen)
200,000

49,909(Millions of yen)
1,600,000

1,200,000

Net Income

Operating Income andOperating Margin

60,084

Revenue from Operations

3.39

3.55

5.27

4.0

4.92

67.7

60
6.26

6.05

57.1

3.41

6.0

56.8

4.07
3.66

68.4

4.0

11

12

40

4.78

2.0
2.0

0

20

0

10

11

12

13

14

0

10

11

12

13

14

10

13

14

11

*mf̲ar14̲0808.indd 11

2014/08/08 15:04

SPECIAL FEATURE: NIHONBASHI REVITALIZATION PLAN

Reaffirming the Value of
the Nihonbashi Area
Nihonbashi—
The Birthplace of Modern Tokyo and the Mitsui Group
The Mitsui Group traces its roots to the kimono store, “Echigo-ya,” which opened
its doors in the Nihonbashi area during the Edo period in 1673. Today, all five ofJapan’s major trunk-lines radiate from Nihonbashi, which also used to serve as a
key junction for marine transportation. Nihonbashi has evolved into one of theworld’s pre-eminent economic zones and a strategic commercial, financial,

Echigo-ya, a kimono store, opened
its doors in 1673.

logistics, and cultural hub.
As the birthplace of modern Tokyo, Nihonbashi exhibits an exquisite mixof tradition and the ambiance of an advanced economic metropolis that ishome to financial institutions and corporate entities of the highest standing.
Mitsui Fudosan is one such entity that has inherited a deep history and thefortitude to consistently lay a sound foundation for the future.

Stage 1

The former Mitsui Main Building in
1902.

of the Nihonbashi Revitalization Plan—
Creating While Retaining and Reviving

Working from its birthplace in the Nihonbashi area, Mitsui
Fudosan has continued to promote a next-generation,
multi-faceted urban development project that addresses
the needs of the era, encompassing disaster prevention
and energy efficiency, while retaining the inherent history,
tradition and culture of the area. Through the completionof several key developments including Nihonbashi
1-chome Mitsui Building (COREDO Nihonbashi) in 2004,
Nihonbashi Mitsui Tower in 2005 and Muromachi Higashi
Mitsui Building (COREDO Muromachi) in 2010, Mitsui
Fudosan is not only creating one of Tokyo’s foremost
office building districts, but also a center that services a
multitude of office, retail, accommodation and otherneeds as well as entertainment and the arts.

Developments Completed During Stage 1 of the Plan
(2004 to 2013)
Nihonbashi 1-chome Mitsui Building(COREDO Nihonbashi)

2004

Nihonbashi Mitsui Tower

2005

Muromachi Higashi Mitsui Building(COREDO Muromachi)

2010

Nihonbashi Astellas Mitsui Building

2013

12

*mf̲ar14̲0808.indd 12

2014/08/08 15:04

Stage 2of the Nihonbashi Revitalization Plan

Nihonbashi entered a new phase in its development withthe completion of Muromachi Furukawa Mitsui Building(COREDO Muromachi 2) and Muromachi Chibagin Mitsui
Building (COREDO Muromachi 3) in February 2014. This
new phase introduces a host of fresh features. In addition
to a focus on entertainment facilities that include rental
accommodation and cinema complexes, this second
stage strives to revive the history, culture and tradition of
the old Nihonbashi area. Emphasis has been placed on
creating a lively atmosphere with streets facing the district
lined with traditional older stores with facades based on
the motifs of traditional Japanese shop curtains andlighting. These added features are expected to attract
a growing number of visitors not only on weekdays, butalso weekends.

Mitsui Fudosan has positioned an urban smart city
concept at the heart of its Nihonbashi development
activities. Drawing on the skills and know-how gained
through the Kashiwanoha Campus City (Kashiwanoha
Gate Square) project scheduled to open in July 2014, theCompany will retain the Nihonbashi area’s inherent
tradition, culture, waterways and community as its base,and incorporate a variety of advanced features. Whilereviving and developing the tangible aspects of the area,
Mitsui Fudosan will place equal weight on adding value
through innovative intangible, “soft” applications to further
enhance the competitiveness of Tokyo as an international
destination.

Four Key Words Define the Second Stage of Development
Mitsui Fudosan has grounded second stage development activities around four key words.
(1) Reenergizing Industry
Mitsui Fudosan is looking to position Nihonbashi as a place for companies
and individuals to meet. By providing a forum for the exchange of ideas,
the Company is endeavoring to help create new businesses and industry
through innovation. The goals are to promote the ongoing development ofexisting growth industries while promoting synergy effects.

Economic
Vitality

Reenergizing
Industry
Symbiotic
Society

Attractive
SpacesNurturing
Neighborhoods

Enterprising and Stylish
People-Centric

PromotingNatural Harmony(2) Nurturing Neighborhoods
Energies are being channeled toward the creation of a combinedcommercial and entertainment zone with its own unique identity. By
promoting collaboration throughout the area and expanding networks,
Mitsui Fudosan is endeavoring to disseminate information and initiate
events that will lead to increased contact and communication.
(3) Promoting Natural Harmony
Mitsui Fudosan will pursue opportunities in the electric powerbusiness and heat supply business as part of its efforts to strengthenenergy management and business continuity planning (BCP)
initiatives in the Nihonbashi area. The Company will introduce largescale, highly efficient power generation facilities. Plans are in place towork beyond urban district boundaries and to supply electricity andheat to existing buildings owned and operated by other companies.

Revitalizing
Waterways
Infrastructure
Development

Introduction of gas cogeneration electric power facilities

Developments Completed /Planned Completion Schedule for Stage 2 (2014-)

Nihonbashi Muromachi
3-chome Project

Muromachi Furukawa Mitsui Building (COREDO Muromachi 2)

2014

Muromachi Chibagin Mitsui Building (COREDO Muromachi 3)

2014

Nihonbashi Honcho 2-Chome Specified Block Project

2017

Electricity

Nihonbashi 2-Chome Redevelopment Project

2018

Highly efficient electric
power generation facility

Nihonbashi Muromachi 3-Chome Urban Redevelopment Project

2019

Nihonbashi Muromachi 1-Chome Project

Nihonbashi 1-Chome Central Block (4-12 Square) Project
Yaesu 2-Chome North Block Project
Yaesu 2-Chome Central Block Project

Yet to be
determine

Building B

Building C

Heat
Electricity HeatElectricity

Highly efficient heatsource equipment

Nihonbashi 1-Chome Block 1, 2 Project

Outside the development area
Building A

Electricity

Heat

Electricity

Designated connection

Heat

Designated connection[Hot and cold water, steam](4) Revitalizing Waterways
Mitsui Fudosan will undertake a variety of initiatives aimed at maximizing the beauty of the area waterways.

13*mf̲ar14̲0808.indd 13

2014/08/08 15:04

REVIEW OF OPERATIONS

Achieving

GROWTHthrough value creation
DEFINING FEATURES AND STRENGTHS OF
MITSUI FUDOSAN’S FIVE SEGMENTS
Office buildings
Retail facilities

Core Segment 1

Leasing
Property sales
to individuals
Property sales
to investors

Core Segment 2

Core Segment 3

Property sales

Management

Property
management
Brokerage,
Asset management, etc.

Mitsui Home
Other

14

*mf̲ar14̲0808.indd 14

2014/08/08 15:04

Core Segment 1 Leasing Segment

Core Segment 2 Property Sales Segment

Core Segment 3 Management Segment

In the Leasing segment, Mitsui Fudosan maintains a quality portfolio of office buildings and retail facilities including shopping centers. In addition to their prime location, properties are complemented by a broad and diverse pool of blue-chiptenants. Revenues from the Leasing segment in fiscal 2012 and 2013 were¥441,712 million and ¥449,700 million, respectively, representing approximately
29.7% of the Company’s total revenue from operations. Harnessing its development capabilities, Mitsui Fudosan will continue to enhance portfolio quality as thecornerstone of its stable revenue structure.

Revenue from Operations
FY2012FY2013¥441,712 million ¥449,700 million

BREAKDOWN OF LEASING SEGMENT REVENUE

284.5

286.9

283.6

291.7

303.4

400

303.0

(Billions of yen)
500

Retail facilities

Other¥157.8 billion
35%¥7.2 billion
1%300

Revenue

3/20113/2012

157.8

131.5

3/2010

148.6

125.8

107.3

100

121.9

200

3/20133/2014¥449.7billion0

FY ended

3/2009Retail Facilities

Office Buildings

Overseas
office buildings

Domestic
office buildings¥29.7 billion
7%¥254.8 billion
57%

Mitsui Fudosan maintains a balanced portfolio with office buildings andretail facilities comprising 64% and 35%, respectively, of the total. In
recent years, the Company has continued to accelerate the pace of overseas business development drawing on the strengths of its development,
leasing, and operating know-how nurtured in Japan.

15*mf̲ar14̲0808.indd 15

2014/08/08 15:04

Office Buildings
Office Building Revenue by Area

Major New Projects Operational for the Full Period under Review(FY ended March 2014; non-consolidated)(Office buildings completed during FY2013 and FY2014)
FY
Completed

Regions

7%

2013

2014

Project Name

Location

Rentable Floor
Space

Muromachi Furukawa Mitsui
Building*

Chuo-ku,Tokyo≈ 19,600m2

Muromachi Chibagin Mitsui
Building*

Chuo-ku,Tokyo≈ 9,300m2

8-10 Moorgate

City, London≈ 12,500m2

GATE SQUARE(Kashiwanoha Campus Block 148)

Kashiwa,
Chiba≈ 8,000m2

Sapporo Mitsui JP Building*

5 wards ofcentral Tokyo

Sapporo,Hokkaido≈ 25,400m2

Other metropolitan
Tokyo

1200 17th Street Project *Washington
D.C.

≈ 15,600m2

15%

78%

Iidabashi Grand Bloom*

Chiyoda-ku,
Tokyo≈ 71,300m2

Mark Lane Project

City, London≈ 16,000m2

Mitsui Fudosan’s strength lies in the integrity of its brand prowessin the Tokyo Metropolitan Area. This is particularly evident withmore than 70% of its portfolio located in the five wards of central
Tokyo, where demand for office space is highest. While office leasing vacancy rates continue to exhibit a downward trend, vacancy
rates for the Company’s holdings are below the market average.

* Jointly owned property

Completed and total floor space may change in future fiscal years.
Some project names are tentative.

Major Development Projects from Fiscal 2015
FY
Completed
2015
2017
2018
2019

After 2020

TBD

Project Name

Total Floor Space(Site area)

Location

Kita-Shinagawa 5-Chome Block 1 Redevelopment Project*

Shinagawa-ku, Tokyo

270 Brannan Project*

San Francisco—≈ 16,800m2

Hibiya Project

Chiyoda-ku, Tokyo≈ 185,000m2

Nihonbashi Honcho 2-Chome Specified Block Project*

Chuo-ku, Tokyo

TBD (≈4,000m2)

Nihonbashi 2-Chome Redevelopment Project (Block C)*
Nihonbashi Muromachi 3-Chome Urban
Redevelopment Project*
OH-1 Project (Otemachi 1-Chome Block 2)*

Chuo-ku, Tokyo≈ 143,400m2

Chuo-ku, Tokyo≈ 165,700m2

Chiyoda-ku, Tokyo

Yaesu 2-Chome Central Block Project*

Chuo-ku, Tokyo

TBD (≈ 19,800m2)

Yaesu 2-Chome North Block Project*

Chuo-ku, Tokyo

TBD (≈ 14,900m2)

Nihonbashi Muromachi 1-Chome Project*

Chuo-ku, Tokyo

TBD (≈ 8,000m2)

Nihonbashi 1-Chome Block 1, 2 Project*

Chuo-ku, Tokyo

TBD (≈ 7,000m2)

Nihonbashi 1-Chome Central Block (4~12 Square) Project*

Chuo-ku, Tokyo

TBD (≈ 23,000m2)

1 Angel Court Project*

City, London≈ 27,500m2

Toyosu 2-, 3-Chome Block 2 Project*

Koto-ku, Tokyo≈ 243,200m2≈ 352,000m2

Moving forward, Mitsui Fudosan
will continue to enhance the quality of its portfolio by pushing forward the abundance of projects
in which the Company can fully
harness its development capabilities currently in hand. At thesame time, Mitsui Fudosan will
maintain its focus on bolstering
long-standing ties with its
approximate 3,000 corporate
tenants.

* Jointly owned property

Retail facilities
Retail Facility Revenue by Category (FY ended March 2014)*
Mitsui Fudosan is engaged in the development of a diverse
range of retail facilities. Located in major metropolitan andsurrounding areas, the Company’s shopping centers serve
as key hubs of activity and entertainment for the residentsof each region. In addition to facilities that epitomize theconcept of “Lifestyle Parks,” deeply-rooted in each community, Mitsui Fudosan is also active in the outlet park field.
Moving forward, the Company is increasing its earnings byaggressively promoting the development of new facilities
while at the same time anticipating market needs andengaging in large-scale renewals on an ongoing basis.
16*mf̲ar14̲0808.indd 16

Other

5%

6%
Lifestyle Parks 8%
Urban Facilities

Regional Mall

47%

Mitsui Outlet Park

34%
*Includes master-leased properties

2014/08/08 15:04

Core Segment 1 Leasing Segment

Core Segment 2 Property Sales Segment

Ratio of Fixed & Sales-Linked Rent by Category

Core Segment 3 Management Segment

Sales at Mitsui Fudosan Retail Facilities(FY ended March 2014)*

≈ 35

≈ 20
80

≈ 22

(Billions of yen)80

≈ 93 ≈ 7

(%)
100

≈ 78

≈ 80

60

≈ 65

60

40

40
20
20

0

0

LaLaport
Fixed rent

OutletOthersAll Facilities

Sales‐linked rent

*Includes master-leased properties

FY ended

3/20103/20113/20123/2013

LaLaport TOKYO BAYLAZONA Kawasaki

LaLaport TOYOSU

LaLaport YOKOHAMA

3/2014*Revenue from operations derived from LaLaport Tokyo Bay has declined during the
fiscal year ended March 31, 2013 owing to the partial closure of facilities.

Mitsui Fudosan has been developing and operating retail facilities for just over three decades since opening LaLaport Funabashi (now LaLaport TOKYO-BAY) in 1981, andcurrently operates in a diverse array of facility categories. Rents from the overall retail facility portfolio are structured for stable earnings, with approximately 78% fixedand 22% linked to store performance. Stable earnings are also underpinned by robust efforts to ensure that sales remain high at facilities where sales-linked rents apply.

Major Newly Opened Projects (Retail Facilities)
FY
Opened
2013

2014

2015

TBD

Major Newly Opened Projects (Managed)

Location

Store Floor
Space

MITSUI OUTLET PARK SHIGA RYUO
(2nd stage)

Gamo-gun, Shiga≈ 10,000m2

LoveLa2

Niigata, Niigata≈ 11,200m

LaLaport TOKYO-BAY West Area
(Reconstruction Project)

Funabashi, Chiba≈ 24,000m2

COREDO Muromachi 2

Chuo-ku, Tokyo≈ 13,600m2

COREDO Muromachi 3

Chuo-ku, Tokyo≈ 5,000m

Ikebukuro Globe

Toshima-ku,Tokyo≈ 4,400m2

LaLaTerrace MUSASHIKOSUGI*

Kawasaki, Kanagawa≈ 8,100m2

Project owned property

FY
Opened≈ 7,700m2

MITSUI OUTLET PARK KISARAZU(2nd stage)

Kisarazu, Chiba≈ 8,500m2

LaLaport Kashiwanoha (North Building)Kashiwa, Chiba≈ 7,500m2

Akarenga TERRACE*

Sapporo, Hokkaido≈ 8,500m2

IIDABASHI SAKURA TERRACE*

Chiyoda-ku, Tokyo≈ 4,900m2

LaLaport Izumi

Izumi, Osaka≈55,000m2

MITSUI OUTLET PARK KUALA LUMPUR
INTERNATIONAL AIRPORT*

Kuala Lumpur, Malaysia≈ 46,300m2

LaLaport Fujimi

Fujimi, Saitama≈ 80,000m2

Kashimada Project

Kawasaki, Kanagawa≈ 10,800m2

MITSUI OUTLET PARK HOKURIKU OYABE

Oyabe, Toyama≈ 26,000m2

MITSUI OUTLET PARK MAKUHARI(3rd stage)

Chiba, Chiba

LaLaport Ebina
Osaka Expoland Site Plan

≈6,400m

2

Ebina, Kanagawa≈54,000m

2

Suita, Osaka≈ 88,000m2

Store Floor
Space

Taito-ku,Tokyo≈ 9,400m2

SHINJUKU
NAKAMURAYA
BUILDING(Reconstruction
Project)

Shinjuku-ku,Tokyo≈ 4,200m2

2015

Retail Facility
Development
Project inTachikawa-Tachihi

Tachikawa,Tokyo≈ 60,000m2

2017

LaLaport
SHANGHAIJINQIAO

PudongJinqiao,
Shanghai≈ 74,000m2

2

Kita-Hiroshima,
Hokkaido

Location

Okachimachi
Yoshiike HeadStore Building

2014

2

MITSUI OUTLET PARK SAPPORO
KITA-HIROSHIMA (2nd stage)

Project Name

Large-scale Renewal Projects
Execution Period

Facility Name

No. of Stores
Renewed /Total No. ofStoresFebruarySeptember 2013

LaLaport
YOKOHAMA

133/279

March-April 2013

LaLaport
KASHIWANOHA

76/150April 2013

Tokyo Midtown

42/135February-April
2014

ALPARK (Hiroshima)

27/160

Linkou Enterprise Zone Project*(Taiwan, Outlet Project)

Linkou District, Taiwan≈ 45,000m2

Retail Facility Development Projectin Hiratsuka

Hiratsuka, Kanagawa

TBD

March-April 2014

LaLaport
TOKYO-BAY

75/450Retail Facility Development Projectin Nagoya

Nagoya, Aichi

TBD

February-April
2014

LaLaport KOSHIEN

24/150Retail Facility Development Projectin Togocho, Aichi

Aichi-gun, Aichi

TBD* Jointly owned property
Each FY opened and store floor space may change in the future. Some project names are tentative.

A diversity of facility types and stable revenue structure supported by robust relationships with 2,100 tenant companies

17*mf̲ar14̲0808.indd 17

2014/08/08 15:04

Mitsui Fudosan has classified its Property Sales business activities into two distinct
categories: “Property Sales to Individuals” and “Property Sales to Investors.” Under
the Group’s long-term business plan, Mitsui Fudosan has identified efforts to evolvethe housing business as well as its model for cooperation with investors as important
strategies aimed at strengthening the competitiveness of its domestic business.
Revenues from the Property Sales segment in fiscal 2012 and 2013 were¥393,454 million and ¥409,466 million, respectively, representing 27.0% of theCompany’s total consolidated revenue from operations.

Revenue from Operations
FY2012FY2013¥393,454 million ¥409,466 million

Property Sales to Individuals

TRENDS IN PROPERTY SALES SEGMENT OPERATINGINCOME

Sales and Operating Margin
Property Sales Segment: Operating Income(Millions of yen)

(%)
12.0

400

345.1

200

9.0
8.0

282.6

21.5

40

257.2

300.9

316.3

300

306.0

(Billions of yen)
60

6.0

6.6

Sales
(LHS)

4.3

5.4
3.8

4.0
3.1

24.5

22.7

10.2 5.4

9.7 6.4

1.1
11.3

0
FY ended

15.3 7.7

100

20

3.0

0

0
FY endedOperatingmargin(RHS)

3/2010 3/2011 3/2012 3/2013 3/2014 3/2015(E)3/2010 3/2011 3/2012 3/2013 3/2014 3/2015(E)Property sales to investors
Property sales to individuals

Condominium Units Booked Contracts during theYear and Inventories at End of FY(Units)

5,000

6,557

6,678

Units
booked

170

4,956

4,512

5,628

5,455

5,362
380

223

0
FY ended

638

2,000

3,889

4,000

4,651

6,000

7,590

8,000

872

In property sales to individuals, Mitsui Fudosan is engaged in thedevelopment and sale of high value-added condominiums anddetached housing. Maintaining its industry leading position in Japan,
the Company is particularly strong in the development and sale ofcondominiums, consistently providing around 5,000 condominiums
each year. In its property sales to investors endeavors, Mitsui
Fudosan has established a business model based on cooperation
with investors including three J-REITs managed by the Mitsui
Fudosan Group. In this manner, the Company maintains a variety ofexit strategies.

Contracts
duringthe FY
Inventories
at endof FY

3/2010 3/2011 3/2012 3/2013 3/2014 3/2015(E)The bulk of Mitsui Fudosan’s condominiums are located in metropolitan Tokyo.

18*mf̲ar14̲0808.indd 18

2014/08/08 15:04

Core Segment 1 Leasing Segment

Core Segment 2 Property Sales Segment

Core Segment 3 Management Segment

Land Bank (Condominiums)(As of March 31, 2014)Land acquired equivalent to approximately

21,000units(Includes project stage of redevelopment)

Property Sales to Investors
Business Model based on Cooperation with
Investors
As a Group, Mitsui Fudosan maintains a variety of exit strategies.

Sales

Management
contracts

to a diverse arrayof investors

after sales

J-REITs managed by the Mitsui Fudosan GroupAUM: ¥1,074.3 bn (73 properties)

AUM: ¥287.7 bn (112 properties)

Asset Class Growth
In recent years, demand for highly functional logistics facilities has become
increasingly prominent. This reflects continued growth in third-party logistics(3PL), mail-order, and e-commerce markets. To address this burgeoning
demand, Mitsui Fudosan is actively engaging in the development of advanced
logistics facilities that can accommodate a vast array of needs. The Company
has already commenced construction on nine facilities. Mitsui Fudosan ismaking steady progress in implementing its investment plan that entails capital expenditures of ¥200 billion over the six-year period from 2012 to 2017.
FY
Completed

Project Name

Location

Total
Floor Space

Acquiredin 2013

Mitsui Fudosan Logistics
Park Yokohama
Daikoku*1

Yokohama,
Kanagawa≈ 131,800m2

2013

GLP MFLP Ichikawa
Shiohama *1

Ichikawa,
Chiba≈ 122,000m2

2014

Mitsui Fudosan Logistics
Park Yashio

Yashio,Saitama≈ 41,600m2

Mitsui Fudosan Logistics
Park Kuki

Kuki, Saitama≈ 74,500m2

Mitsui Fudosan Logistics
Park Sakai

Sakai, Osaka≈ 133,000m2

Mitsui Fudosan Logistics
Park Funabashi Nishiura

Funabashi,
Chiba≈ 31,000m2

Mitsui Fudosan Logistics
Park Hino

Hino, Tokyo

TBD*2

Mitsui Fudosan Logistics
Park Atsugi

Aiko-gun,Kanagawa≈ 43,700m2

Mitsui Fudosan Logistics
Park Funabashi

Funabashi,
Chiba

TBD*3

AUM: ¥270.1 bn (30 properties)

Private funds structured and managed by the Mitsui Fudosan Group(Structures and manages private funds) AUM: ¥1,236.0 bn

2015

AUM: ¥167.5 bn (31 properties)

Institutional investors, corporations, etc.
(As of March 31, 2014)

TBD

Inventory of Property for Sales to Investors
Operating officebuildings

27%
Operatingretail facilities

27%

Planned &under development¥557.0billion40%*1 Jointly owned property*2 Site area: Approx. 97,500m2*3 Site area: Approx. 60,000m2

Operating rental
housing properties

4%

Operating logistics
facilities

2%
19

The management business consists of: 1) the property management category,
which generates stable revenue growth from increases in properties undermanagement; and 2) the brokerage and asset management, etc. category,
which uses the Group’s expertise to generate fee income in ways such as providing asset management services for J-REITs and for private funds and brokerage services for individuals and corporations. Revenues from theManagement segment in fiscal 2012 and 2013 were ¥297,934 million and¥314,230 million, respectively, representing approximately 20.7% of theCompany’s total revenue from operations.

Revenue from Operations
FY2012FY2013¥297,934 million ¥314,230 million

Property Management (FY ended March 2014)

TRENDS IN OPERATING INCOMEManagement Business Operating Income

Property management
is highly stable

27.8

Office buildings
26.4

10.2
21.9

20

23.7

8.4
21.2

30

10.5

15.1

40

50.0

22.1

(Billions of yen)
50

Retail facilities

Office Buildings

Retail Facilities

Mitsui Fudosan Building
Management Co., Ltd.
(635 buildings undermanagement)
Mitsui Fudosan
Facilities Co., Ltd.
(361 buildings
under management)

Mitsui Fudosan RetailManagement Co., Ltd.
(61 facilities)

Housing

10

Car park leasing

Diverse Asset Classes

0
FY ended

3/2010 3/2011 3/2012 3/2013 3/2014 3/2015(E)

Housing

Car Park Leasing

Mitsui Fudosan
Housing Lease Co., Ltd.
(51,939 subleased
and consigned units)
Mitsui Fudosan
Residential Service
Co., Ltd.
(238,027 units
under management)

Mitsui Repark(154,643 parking
spaces)Brokerage, Asset management, etc.
Property management

Growth in its property management activities is based on a fee income stream that isderived from stable contract management. This stability also reflects the Company’s ability
to cover diverse asset classes including office buildings, retail facilities, housing and carpark leasing. At the same time, Mitsui Fudosan’s brokerage and asset management businesses are buoyed by the overall know-how of the Group.

Mitsui Fudosan boasts comprehensive management capabilities that extend over diverse asset classes. The
Company is defined by its strengths in office buildings,
retail facilities housing and car park leasing.

20*mf̲ar14̲0808.indd 20

2014/08/08 15:04

Core Segment 1 Leasing Segment

Core Segment 2 Property Sales Segment

Car Park Leasing: Track Record

Core Segment 3 Management Segment

Property Management (Sales condominiums):
Track Record

184

172

160

155

143

133

124

121

118

120

97

117

100

160

238

229

222

210

196

200
150

217

(Thousand units)
240(Thousand units)
200

80

76

50

40
0

0

3/2006 3/2007 3/2008 3/2009 3/2010 3/2011 3/2012 3/2013 3/2014

FY ended

FY ended

Property Management (Leasing condominiums):
Track Record

3/2006 3/2007 3/2008 3/2009 3/2010 3/2011 3/2012 3/2013 3/2014

Asset Management
Assets under Management(Thousand units)
60(FY ended March 2014)

32%
8%

52

50

47

44

Privatefunds, etc.

37%

30

34

30

41

38

40

46

50

20

Frontier Real
Estate Investment
Corporation

10
0

17%

6%

3/2006 3/2007 3/2008 3/2009 3/2010 3/2011 3/2012 3/2013 3/2014

FY ended

Originators

Another key strength of Mitsui Fudosan’s management business is its ability todeliver services through three REITs and private funds.
Transactions(Unit)

Numberof stores

1

Mitsui Fudosan Realty
Co., Ltd.

74.6

42,550273

2Sumitomo Real Estate
Sales Co., Ltd.

52.6

35,455251

3Tokyu Livable, Inc.

40.0

19,465138

4

Nomura Real Estate
Holdings, Inc.

24.5

7,437

60

5

Sumitomo Mitsui Trust
Realty Co., Ltd.

14.6

Assets under Management: Track Record(Trillions of yen)
3.5

7,043

71

2.92

2.80

2.70

2.35

2.15

2.0

2.70

2.5

2.80

3.0

3.32

Fee/Revenue(Billions of yen)

3.19

Brokerage (FY ended March 2014)

1.5

Source: Real Estate Economic Institute1.0

Mitsui Fudosan Realty Co., Ltd., which is engaged in the arrangement and0.5

brokerage of housing sales under the Mitsui Rehouse name, has led the market in the number of properties handled in Japan for 28 consecutive periods
from fiscal 1986 to fiscal 2013.

0
FY ended

3/2006 3/2007 3/2008 3/2009 3/2010 3/2011 3/2012 3/2013 3/2014

Mitsui Fudosan continues to secure steady growth in assets undermanagement.

21*mf̲ar14̲0808.indd 21

2014/08/08 15:04

As Japan’s premier builder of 2x4 “platform-frame” single-family homes, MitsuiHome Co., Ltd. is positioned at the core of the Group’s custom-built housing business.
Mitsui Home is engaged in a wide range of activities focusing on living environments.
In recent years, interest in safe and secure homes as well as energy
conservation and the need to secure electric power during emergency situations
has steadily mounted.
Under these circumstances, Mitsui Home has channeled its energies towardputting forward proposals that showcase the outstanding environmental
properties of the wooden house 2x4 construction method. In combining these
proposals with Smart 2x4 initiatives, Mitsui Home is working to further increasecustom-build housing orders.
In the Mitsui Home segment, revenues in fiscal 2012 and 2013 were
¥209,029 million and ¥237,069 million, respectively, representing approximately
15.6% of the Company’s total revenue from operations.
Revenue from Operations
FY2012FY2013¥209,029 million ¥237,069 million
Results of Mitsui Home Co., Ltd.
(Millions of Yen)
Year Ended March 31
2014

2013

Change(amount)

Revenue¥173,188¥156,330¥16,857

Orders

171,139

155,621

15,518

Revenue

29,673

21,634

8,038

Orders34,234

26,2907,944

Lease Management

20,05918,904

1,154

Other

14,14812,1591,989¥237,069¥209,029¥28,040

New
Construction
Reform/Renewal

Total Revenue

In the housing industry, the environment for orders was generally strong. In
addition to the ongoing emphasis placed on housing safety and security, thisfavorable environment was largely attributable to the heightened awarenesstoward energy efficiency, the need to secure adequate supplies of energy during emergency situations, and the rush in demand in the lead to Japan’s consumption tax rate hike. Under these circumstances, Mitsui Home was
successful in showcasing the appeal of its design capabilities, most notably
through its strengths in custom-built homes, further enhancing its brand prowess, and expanding orders.
As a result, Mitsui Home reported substantial increases in both revenue andearnings for the fiscal year ended March 31, 2014. The amount of orders at the
beginning of the period was higher than for the previous period in the “NewConstruction” and “Reform/Renewal” categories. Buoyed also by such factors as
the increase in orders for the fiscal year under review, revenue for the segment
as a whole climbed ¥28.0 billion compared with the previous fiscal year.

Note: The above revenue figures differ from those disclosed by Mitsui Home,
because sales to the Mitsui Fudosan Group are deducted from Mitsui Home’s consolidated revenue from operations.

22*mf̲ar14̲0808.indd 22

2014/08/08 15:04

In the other segment, Mitsui Fudosan is active across a wide variety of fields.
Principal fields of activity comprise facility operations, merchandise and other.
Revenue from Operations (Millions of yen)
Fiscal 2013

Share

49,781

47.5%

Facility Operations
Merchandise

35,856

34.2%

Other

19,149

18.3%

Total

104,787

100.0%

Revenue from Operations
FY2012FY2013¥103,515 million ¥104,787 million
Facility Operations

Merchandise

In the facility operations field, the Mitsui Fudosan Group operates the Mitsui
Garden Hotels chain, the Celestine Hotel, and resort hotels in Japan, as well as
the Halekulani and other hotels in Hawaii. The Group also operates a numberof golf clubs in Japan. Revenue from operations and operating income in the
hotel operation business increased substantially. In addition to robust conditions in the business and leisure sectors, this largely reflected the positive
impact of overseas in-bound activity.

The Mitsui Garden Hotel Chain is spreading acrossthe country.

In the merchandise field, Group
company Uniliving Co., Ltd.*
operates the Unidy chain of home
centers located mainly in theTokyo Metropolitan area. AnotherGroup company, Daiichi Engei
Co., Ltd. sells seasonal flowers
and plants.
Note: Uniliving Co., Ltd. was sold on April 1,
2014.

Daiichi Engei Co., Ltd.

Other

Hokkaido
yMitsui Garden Hotel Sapporo

Kyoto
yMitsui Garden Hotel Kyoto Sanjo
yMitsui Garden Hotel Kyoto ShijoyMitsui Garden Hotel Kyoto
Shinmachi Bettei

Hiroshima
yMitsui Garden Hotel
Hiroshima

MiyagiyMitsui Garden
Hotel Sendai

OkayamaKumamotoyMitsui Garden
Hotel Okayama

yMitsui Garden
Hotel Kumamoto

Chiba
Osaka
yMitsui Garden Hotel
Osaka Yodoyabashi
yMitsui Garden Hotel
Osaka PremierTokyo

yMitsui Garden Hotel
PRANA Tokyo Bay
yMitsui Garden Hotel Chiba
yMitsui Garden Hotel Kashiwa-no-ha

yMitsui Garden Hotel Ginza PremieryMitsui Garden Hotel Shiodome Italia-gai
yMitsui Garden Hotel Yotsuya
yMitsui Garden Hotel Ueno
Aichi
yMitsui Garden Hotel Nagoya yMillennium Mitsui Garden Hotel Tokyo(Tentative name, Scheduled to (Scheduled to open in Dec. 2014)
open in spring 2017)*mf̲ar14̲0808.indd 23

In the other field, Mitsui Fudosan Reform Co., Ltd. engages in remodeling
operations.
Japan’s housing market continues to undergo structural change in
response to the ongoing maturity of both society and the economy. Against thisbackdrop, Mitsui Fudosan is positioning renovation services, which are projected to experience demand growth, as a key component of the Group’s
housing business.
Business activities will remain within Japan’s three major metropolitan
areas for the foreseeable future. In addition to promoting the renovation of
detached housing, condominiums, medical facilities and business assets,
Mitsui Fudosan will strive to secure a position as a leading high-value-added
renovation brand.

23

2014/08/08 15:04

CORPORATE GOVERNANCE

The Mitsui Fudosan Group aims for sound, transparent and efficient management inbuilding optimum corporate governance to earn the trust of all stakeholders. Measures tostrengthen its internal system are one part of achieving that goal.

 Sound and Efficient Management

In addition, the Strategy Planning Special Committee, theRisk Management Special Committee, the Social

Mitsui Fudosan has adopted a corporate officer system tobuild a business execution framework appropriate to its
operating environment and business activities, enhancing
the soundness and efficiency of management by separating
and strengthening management and executive functions. In
addition, the Group Corporate Officer System, in which corporate officers of both Mitsui Fudosan and its Group companies share an equal status and mission, was establishedto further strengthen Group management.

 Improving Transparency andExpanding the Perspective ofManagement
Mitsui Fudosan invites and appoints outside directors inorder to strengthen the oversight functions of the directors
and enhance management transparency. The outside directors provide input as necessary on the reasonableness andadequacy of Mitsui Fudosan’s decision-making.
Furthermore, Mitsui Fudosan has established theAdvisory Committee, consisting of experts from businessand academia, to diversify the perspective of management
by providing comprehensive and forward-looking advice
from an objective viewpoint.

Contribution Special Committee and the Environmental
Special Committee function as advisory and strategy coordination bodies to the Executive Management Committee.
The Strategy Planning Special Committee formulates anddeliberates Group strategy and management plans andengages in risk management for Mitsui Fudosan and the
Mitsui Fudosan Group in collaboration with the Risk
Management Special Committee. The Social Contribution
Special Committee and Environmental Special Committee
are responsible for reviewing overall social contribution
activities and environmental activities.

 Board of Directors and Board of
Corporate Auditors
The Board of Directors, comprising twelve members including four outside directors, makes decisions on material
issues of Mitsui Fudosan and supervises the status of thedirectors’ execution of business. The corporate auditors
attend meetings of the Board of Directors and provide opinions as necessary.
In addition, Mitsui Fudosan has designated a special
director who may pass judgment on the urgent acquisitionor sale of assets when so empowered by the Board of Decision-Making

Directors.

The Executive Management Committee, consisting of exec-

The Board of Corporate Auditors, comprising five corporate

utive managing directors and executive corporate officers,

auditors, including three outside auditors, formulates auditing

meets weekly to deliberate and report on important matterspolicies and determines duty assignments. It also receives

related to business execution. Fulltime corporate auditors

reports and discusses material items on audits conductedalso attend meetings to stay informed of important deci-according to these policies and assignments. The corporatesion-making processes and the status of business execu-

auditors receive periodic reports from the Audit Department

tion, and provide opinions as necessary. The Executive

and the certified public accountant and exchange information

Management Committee also supervises internal control

in working toward mutual cooperation.

Mitsui Fudosan has adopted a corporate auditor system.

and risk management.
24*mf̲ar14̲0808.indd 24

2014/08/08 15:04

As an internal auditing structure, the Audit Department

 Outside Auditors

carries out regular audits of all business departments andreports the results of its audits. It also works to enhance theeffectiveness of internal control by identifying and providing
guidance to audited divisions on areas requiring improvement. Moreover, steps are taken to undertake a management assessment and audit concerning internal control overfinancial reporting as stipulated under Japan’s Financial
Instruments and Exchange Act.

 Outside Directors and Outside
Auditors
Mitsui Fudosan has four outside directors and three outside
auditors.

Mitsui Fudosan has appointed Akishige Okada, Keiu
Nishida and Toshiaki Hasegawa after a comprehensive evaluation of their characters, capabilities, experience and otherfactors. None of the three has a conflict of interest with general shareholders.

 Overview of Criteria concerning theIndependence of Outside Directors
and Outside Auditors as well as
Personal, Capital or Business
Relationships or Other Conflicts ofInterest with the Company
Outside officers and independent officers are appointed

 Outside Directors

after taking into consideration a comprehensive range of

Mitsui Fudosan has appointed Mitsudo Urano, Masayuki

personal and career history. While vested interests may exist

Matsushima, Toru Yamashita and Toshiaki Egashira after abetween the Company and some of its outside directors

comprehensive evaluation of their characters, capabilities,

and outside auditors, in each case a determination was

experience and other factors. None of the four has a conflictmade that there is no potential conflict of interest with gen-of interest with general shareholders.

eral shareholders. As a result, outside directors and outside

factors including personality traits, capabilities as well as

auditors are deemed independent.

Corporate Governance Organization(As of June 27, 2014)
2013)

Shareholders’ Meeting

Board of Corporate Auditors (Auditors)
Corporate Auditors
Department

Board of Directors(Directors)

Certified Public Accountant (Audit Corporation)

Business Execution and Internal Control
Advisory
Committee

President and Chief Executive Officer
Corporate Officers

Executive Management Committee(Executive Managing Directors,
Executive Corporate Officers)
Committees

Audit Department
Strategy Planning Special Committee
Risk Management Special Committee
Social Contribution Special Committee
Environmental Special Committee
Departments/Divisions25*mf̲ar14̲0808.indd 25

2014/08/08 15:04

With respect to outside directors, Mitsudo Urano held thetionships between each of the aforementioned companies

position of Representative Director and Chairman at businessand Mitsui Fudosan, and in the context of transactional

partner NICHIREI CORPORATION until June 2013. Withdetails, it was determined that there was no potential of any

re s p e c t t o t h e re l a t i o n s h i p b e t w e e n N I C H I R E I

impact on the decisions for shareholders and investors.

CORPORATION and Mitsui Fudosan, and any influence Mr.

Accordingly, details have been omitted. In addition, Mitsui

Urano may exert, taking into consideration the context of

Fudosan has not formulated criteria concerning the inde-transactional details, it was determined that there was nopendence of outside directors and outside auditors.

potential of any impact on his decisions for shareholders andRevisions to the Tokyo Stock Exchange Securities Listing

investors. Masayuki Matsushima was Chairman of Credit

Regulations in December 2009 made it obligatory for listed

Suisse Securities (Japan) Limited. There are no special vest-

companies to secure independent officers to act from theed interests between Credit Suisse Securities (Japan) Limited

point of view of protecting general shareholders. Mitsui

and the Company. Toru Yamashita held the position of

Fudosan has appointed the aforementioned four outside

Representative Director, President and Chief Executive Officer

directors and three outside auditors as independent officers.

at business partner NTT DATA Corporation until June 2012.
Corporation and Mitsui Fudosan, and any influence Mr.

 Compensation for Officers andCorporate Auditors

Yamashita may exert, taking into consideration the context of

The amount of compensation for officers and the method oftransactional details, it was determined that there was noits calculation utilize the basic compensation in a total

potential of any impact on his decisions for shareholders andamount within the scope set and approved by resolution of

investors. Toshiaki Egashira holds the position of Chairman of

the Ordinary General Meeting of Shareholders, a bonus paid

the Board at business partner Mitsui Sumitomo Insurance

as a short-term incentive that comprehensively takes into

Company, Limited. With respect to the relationship between

consideration such things as business results achieved in

Mitsui Sumitomo Insurance Company, Limited and Mitsuieach fiscal year and must be approved by resolution at the

Fudosan, and any influence Mr. Egashira may exert, taking

Ordinary General Meeting of Shareholders, and stock

into consideration the context of transactional details, it was

options paid as medium-term incentive in an amount within

determined that there was no potential of any impact on his

the scope set and approved by resolution of the Ordinary

decisions for shareholders and investors.

General Meeting of Shareholders.

With respect to the relationship between NTT DATA

Turning to outside auditors, Toshiaki Hasegawa isRepresentative of Toshiaki Hasegawa Law Firm, and Internal Audit System

Akishige Okada was formerly Chairman and Director of
Sumitomo Mitsui Financial Group Inc. with respect to rela-

As an internal auditing system, the Audit Department, with aCompensation for Directors and Corporate Auditors
Total
Compensation(Millions of yen)

Basic Compensation

Stock Options

Bonus

Number ofApplicable Officers

Directors (Excluding outside directors)

830

482

84

263

10

Corporate Auditors (Excluding outside directors)

81

81

—

—

2

Outside Directors

76

76

—

—

8

Total
Compensation(Millions of yen)

Basic Compensation

Stock Options

Bonus

Chairman of the Board and Chief Executive Officer
Hiromichi Iwasa

177

99

17

60

President and Chief Executive Officer
Masanobu Komoda

177

99

17

60

Managing Director
Yoshiaki Iinuma

110

65

10

34

Title

Compensation of Directors Exceeding ¥100 Million

Amount of Compensation by Type (Millions of yen)Amount of Compensation by Type (Millions of yen)26

*mf̲ar14̲0808.indd 26

2014/08/08 15:04

staff of 17, carries out regular audits of all business depart-

activities and CSR objectives.

ments and reports the results of its audits. It also works to

Under the Executive Management Committee, which

enhance the effectiveness of internal control by identifying

supervises overall risk management for Mitsui Fudosan andand providing guidance to audited divisions on areas requir-

the Mitsui Fudosan Group, the Strategy Planning Special

ing improvement.

Committee and the Risk Management Special Committee

Mitsui Fudosan has concluded an auditing contract withmanage business risk and administrative risk, respectively,

KPMG AZSA LLC as its certified public accountant, which

delineate and apprehend risk issues, and propose response

conducts appropriate audits as necessary in addition to themeasures.

audit at the end of the fiscal year.

In addition, the Crisis Management Subcommittee, as a

Mitsui Fudosan has no conflicts of interest with either thesubordinate body of the Risk Management Special

certified public accountant or the employees of the certified

Committee, apprehends the circumstances of accidents or

public accountant that audit the Company.

other incidents that occur and determines response policies

Mitsui Fudosan’s policy to determine audit compensation
for the certified public accountant is decided through rational consideration of factors including the number of days ofauditing, the size of Mitsui Fudosan and special characteristics of its business.

and other matters as necessary.

 Compliance
The Mitsui Fudosan Group promotes compliance that
extends beyond legal compliance and adherence to corpo-

Total audit compensation for fiscal 2013 was ¥412 million. Mitsui Fudosan America, Inc., a consolidated subsidiary, paid ¥76 million in compensation to KPMG LLP, amember of the same network as Mitsui Fudosan’s certified
public accountant.

rate ethics, with a strong awareness of social norms andprinciples, and the social responsibilities of a company. With
the establishment of the Mitsui Fudosan Group Compliance
Policies as behavioral guidelines for all Group executives
and employees, the Group works to prevent violations of Risk Management

laws and its articles of incorporation by upgrading the

The Mitsui Fudosan Group believes that appropriately han-the Risk Management Special Committee. Each Mitsuidling various business risks and minimizing their impact on

Fudosan Group company has also set up an Internalmanagement is the foundation for achieving sound business

Consultation System on compliance for employees.

Compliance Rules and other internal rules and establishing

Risk Management Organization(As of June 27, 2014)
2013)

Board of Directors
President and CEO

Executive Management Committee
Strategy Planning Special Committee(Business risk management)
Risk Management Special Committee(Administrative risk management)

Crisis Management Subcommittee

Disaster Risk Management
Department

System Risk Management
Department

Clerical Risk Management
Department

Compliance Management
Department

Respective headquarters, departments, etc.

Group companies

27*mf̲ar14̲0808.indd 27

2014/08/08 15:04

MANAGEMENT TEAM
(As of June 27, 2014)

Front row from left: Toshiaki Egashira, Masayuki Matsushima, Hiromichi Iwasa, Masanobu Komoda, Mitsudo Urano, Toru Yamashita
Back row from left: Kenji Iino, Yoshikazu Kitahara, Yoshiaki Iinuma, Hitoshi Saito, Hiroshi Asai, Kiyotaka Fujibayashi

Members Of The Board
Chairman of the Board and Chief Executive Officer

Managing Directors (Outside Directors)

Hiromichi Iwasa

Mitsudo Urano
Masayuki Matsushima
Toru Yamashita
Toshiaki EgashiraPresident and Chief Executive Officer

Masanobu Komoda
Managing Director and Executive Vice President

Yoshiaki Iinuma
Managing Directors

Hitoshi Saito
Yoshikazu Kitahara
Hiroshi Asai
Kenji Iino
Kiyotaka Fujibayashi

Auditors
Senior Corporate Auditor

Corporate Auditors (Outside Auditors)

Seizo Kuramoto

Akishige Okada
Keiu NishidaToshiaki Hasegawa

Corporate Auditor

Koichi Nishiyama28*mf̲ar14̲0808.indd 28

2014/08/08 18:21

Corporate Officers
Chairman and Chief Executive Officer

Takeshi Suzuki

Hiromichi Iwasa

In charge of China and Asia Business Department

President and Chief Executive Officer

Masanobu Komoda
In charge of Audit Department, Corporate Planning Department

Hiroyuki Ishigami
Chief Operating Officer, Retail Properties Division

Masatoshi Satou
In charge of Accounting and Finance Department, Planning and Research Department;
General Manager, Accounting and Finance Department

Executive Vice President

Yoshiaki Iinuma

Takashi Yamamoto

In charge of Smart City Promotion Department, Affiliated Business Department

Chief Operating Officer, Accommodations Business Division

Senior Executive Managing Officers

Managing Officers

Hitoshi Saito

Akihiko Funaoka

In charge of International Department

General Manager, Corporate Planning Department and Smart City Promotion Department

Yoshikazu Kitahara

Shuji Tomikawa

In charge of Architectural and Construction Services Department,
Nihonbashi Urban Planning and Development Department;
Chief Operating Officer, Office Building Division

Chief Operating Officer, Real Estate Solution Services Division

Takashi Ueda
Deputy Chief Operating Officer, Office Building Division

Executive Managing Officers

Hiroshi Asai
In charge of General Administration Department, Information Systems Department,
Space & Environment InstituteKenji Iino

Yosuke Seko
General Manager, General Administration Department

Takayuki Miki
General Manager, Logistics Properties Department

In charge of Executive Secretarial Department, Corporate Communications Department,
Personnel Department, Branch Offices

Satoshi Hironaka

Kiyotaka Fujibayashi

Wataru Hamamoto

In charge of Housing Sales Business;
President and Chief Executive Officer, Mitsui Fudosan Residential Co.,Ltd.

General Manager, Development Planning Department and Toyosu-Project Development
Planning Department

Yasuhiko Yamashiro

Yoshihiro Hirokawa

In charge of Kansai Head Office; General Manager, Kansai Head Office

General Manager, Personnel Department

General Manager, International Department

Yasuo Onozawa
In charge of Hibiya Urban Planning and Development Department, Tokyo Midtown
Development Department, Toyosu-Project Development Planning Department,
Kashiwanoha Urban Planning and Development Department, Development Planning
Department, Gotanda Project Department

Group Officers
Group Senior Officers

Group Officers

Hidehisa Takei

Tadashi Ando

Mitsui Fudosan Realty Co., Ltd.

Mitsui Fudosan Retail Management Co., Ltd.

Shogo Nakai

Tooru Inoue

Mitsui Fudosan Investment Advisors, inc.

Mitsui Fudosan Residential Co., Ltd.

Masatoshi Ozaki
Mitsui Fudosan Reform Co., Ltd.

29

*mf̲ar14̲0808.indd 29

2014/08/08 15:04

FINANCIAL SECTION
Six-Year Summary
Mitsui Fudosan Co., Ltd. and its Subsidiaries

Thousands of
U.S. dollars
except per shareamounts(Note 1)Millions of yen
except per share amounts and number of employees

2014

Years ended March 31

2013

2012

2011

2010

2009

2014

FOR THE YEAR:
Revenue from operations¥1,515,252 ¥1,445,644 ¥1,338,102 ¥1,405,270 ¥1,384,807 ¥1,418,946 $14,722,620

Interest, dividends andmiscellaneous Income

21,387

15,674

5,854

27,044

31,152

9,389

207,802

Costs and expenses(including tax)

1,458,383

1,403,605

1,296,948

1,382,293

1,356,870

1,349,178

14,170,064

Equity in net income of affiliatedcompanies

1,420

2,850

3,702

689

2,027

5,980

13,797

Minority interests(2,832)(1,112)

(580)

(801)

(1,032)(1,565)(27,517)

Net income

76,84459,45150,13049,90960,084

83,572746,638

AT YEAR-END:
Total assets¥4,548,822 ¥4,390,075 ¥3,868,412 ¥3,780,700 ¥3,710,424 ¥3,758,387 $44,197,649

Shareholders’ equity andaccumulated othercomprehensive income

1,274,355

1,181,174

1,078,183

1,019,941

1,007,811

Common stock¥ 174,296

174,296

174,296

174,296

174,296

174,296 $ 1,693,510

16,585

16,377

16,666

16,28815,922

15,476

Number of employees

978,667

12,381,995

PER SHARE DATA:
Net income (basic)
Cash dividends applicableto the year

¥

87.5

¥

67.7

¥

57.1

¥

56.8

¥

68.4

¥

95.1 $

0.850
0.214

22.0

22.0

22.0

22.0

22.0

22.0

Equity ratio (%) (Note 2)

28.0

26.9

27.9

27.0

27.2

26.0

Return on assets (%) (Note 3)

4.07

3.66

3.55

3.39

3.41

5.06

RATIOS:

Notes: 1. U.S. dollar amounts are translated from yen at the rate of ¥102.92=U.S.$1.00, the approximate exchange rate at March 31, 2014.
2. Equity ratio = (Net assets – Subscription rights to shares – Minority interests) / Total assets
3. Return on assets (ROA) = (Operating income + Interest, dividends and miscellaneous income, excluding extraordinary gains + Equity in net income of affiliated companies) / Average total assets overthe period30

mfc̲ar̲14̲p28-72̲0808.indd 30

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Management’s Discussion and Analysis

Income Analysis(Billions of yen, %)2014

Years ended March 31

2013

2012

Revenue from operations¥1,515.3

100.0%¥1,445.6

100.0%¥1,338.1

100.0%

Cost of revenue from operations

1,189.7

78.5

1,147.1

79.3

1,067.0

79.7

Selling, general and administrative expenses

152.9

10.1

150.3

10.4

145.1

10.9

Operating income

172.6

11.4

148.2

10.3

126.0

9.4

Other revenues

21.4

1.4

15.6

1.0

5.8

0.4

Interest expenses

30.9

2.0

29.4

2.0

26.7

2.0

Other expenses

37.8

2.5

26.4

1.8

14.3

1.1

Equity in net income of affiliated companies

1.4

0.1

2.9

0.2

3.7

0.3

Income before income taxes and minority interests

126.7

8.4

110.9

7.7

94.5

7.0

Income taxes

47.1

3.1

50.3

3.5

43.8

3.3

(2.8)

(0.2)

(1.1)

(0.1)

(0.6)

(0.0)

76.8

5.1%

59.5

4.1%

50.1

3.7%

Minority interests¥

Net income¥¥

aggressive efforts to complete large-scale renovations and

OPERATING CONDITIONS AND AN
OVERVIEW OF RESULTS

reflected the underlying strength of personal consumption.
Property sales in the housing market benefitted from Japan’sIn fiscal 2013, the year ended March 31, 2014, operating

persistently low interest rate environment as well as an eager-

conditions throughout the Japanese economy were gener-

ness by individuals to pursue property purchases. The real

ally firm. In addition to the fiscal and monetary policy initia-

estate investment market also exhibited an upward trend withtives put forward by the government as well as the Bank of

the Tokyo Stock Exchange REIT Index rebounding to levels

Japan from April 2013, which helped to trigger expectations

recorded prior to the financial crisis of 2008. Together withof an economic recovery in the short term, the decision toseveral new listings and existing players within Japan’s realaward Tokyo the 2020 Olympic Games gave impetus to aestate investment trust market, the total amount of invest-

more prolonged positive outlook.

ment property holdings in Japan surpassed ¥11 trillion.

In the real estate sector, conditions in the office building

Against the backdrop of this favorable operating environ-leasing market were strong. This reflected the persistentment, the Mitsui Fudosan Group continued to carry out thefocus on security and business continuity by the corporate

three core strategies of its Innovation 2017 long-term busi-

sector, which translated into robust tenant demand, andness plan. Accordingly, the Group focused on customer-

resulted in an improvement in vacancy rates most notably incentered management, took steps to promote businessmajor metropolitan areas. A positive operating environment

model innovation and pursued the full implementation ofalso characterized the retail facility leasing market. This wasGroup management. At the same time, energies were chan-mainly attributable to the opening of new facilities andneled toward accelerating the pace of efforts aimed atstrengthening the competitiveness of the Group’s domestic

Revenue from Operations

Taking these factors into consideration, revenue fromoperations in the fiscal year under review was ¥1,515.3 billion, up 4.8 percent, or ¥69.6 billion, compared with the

80

300

40

0

0

previous fiscal year. This was largely attributable to increases in both the reported number of units in the “Property

148.2

600

126.0

120

120.6

900

172.6

160

120.1

1,515.3

1,445.6

1,338.1

1,405.3

1,384.8

business and developing global operations.

(Billions of yen)
200

(Billions of yen)
1,500

1,200

Operating Income

Sales to Individuals” category and the number of brokerage
properties handled in the “Mitsui Rehouse” business.
Earnings also grew with operating income improving 16.5
percent, or ¥24.4 billion year on year, to ¥172.6 billion. Net
income climbed 29.3 percent, or ¥17.4 billion from the previous fiscal year, to ¥76.8 billion.

10

11

12

13

14

A detailed analysis of costs and expenses is presented
10

11

12

13

14

as follows.

(Years ended March 31)

31

mfc̲ar̲14̲p28-72̲0808.indd 31

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COST OF REVENUE FROM OPERATIONSAND SG&A EXPENSES

INTEREST, DIVIDENDS ANDMISCELLANEOUS INCOME, AND OTHERCOSTS AND EXPENSES

The cost of revenue from operations increased 3.7 percent
year on year, or ¥42.6 billion, to ¥1,189.7 billion. Gross prof-

Interest, dividends, and miscellaneous income grew 36.4

it from operations grew 9.0 percent, or ¥27.0 billion, topercent, or ¥5.7 billion, to ¥21.4 billion. Despite the¥325.5 billion for a gross margin of 21.5 percent up fromabsence of the gain on sale of investment securities and the20.6 percent in the previous fiscal year

gain on sale of investments in unconsolidated subsidiaries

Selling, general and administrative (SG&A) expenses

and affiliated companies recorded in the previous fiscal year,

increased 1.7 percent year on year, or ¥2.6 billion, tothis growth was largely attributed to the substantial jump in¥152.9 billion. While salaries and wages as well as researchgain on sale of property and equipment. Despite a year-on-

and development expenses were essentially unchanged

year decrease in the balance of total interest-bearing debt

from the previous fiscal year, and retirement benefit expens-of ¥80.2 billion, interest expense totaled ¥30.9 billion, up

es were down year on year, this increase was largely attrib-

4.8% year on year, or ¥1.4 billion. Other expenses jumped

utable to higher advertising and promotion expenses.

43.6 percent, or ¥11.5 billion, to ¥37.8 billion. The major
components were loss on sale of property and equipment,
impairment loss on fixed assets, loss on disposal of proper-

OPERATING INCOME

ty and equipment, loss on liquidation of consolidated sub-Operating income was ¥172.6 billion, up 16.5 percent year

sidiaries, and other of ¥9.1 billion, ¥11.6 billion, ¥8.3 billion,

on year, or ¥24.4 billion. This positive result was due mainly¥2.1 billion, and ¥6.7 billion, respectively. Notes 19 and 21

to the overall improvement in revenue from operationsof the Notes to Consolidated Financial Statements provide

across all business segments. Operating income was also

additional information.

up across all business segments. Of particular note were
the robust conditions in the existing homes markets as wellas the increase in the number of brokerage transactions.

INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS AND NET
INCOME
Equity in net income of affiliated companies decreased
50.2% year on year, or ¥1.4 billion, to ¥1.4 billion. Income
before income taxes and minority interests climbed 14.2
percent, or ¥15.8 billion, to ¥126.7 billion. The effective tax
rate for the fiscal year under review was essentiallyunchanged from the previous fiscal year. As a result, total
income taxes came to ¥47.0 billion, down 6.6% year on
year, or ¥3.3 billion. After accounting for income taxes andminority interests, net income amounted to ¥76.8 billion, up

Net Income

Net Income per Share

(Billions of yen)
100

(Yen)
100

80

80

29.3%, or ¥17.4 billion. Turning to per share information,
net income per share increased to ¥87.5 from ¥67.7 in fiscal 2012. For fiscal 2013, Mitsui Fudosan maintained an

67.7
57.1

40

50.1

49.9

59.5

60.1

60

56.8

60

68.4

76.8

87.5

annual cash dividend per share of ¥22.0.

11

12

40

20

20

0

0

10

11

12

13

14

10

13

14

(Years ended March 31)

32

mfc̲ar̲14̲p28-72̲0808.indd 32

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SEGMENT INFORMATION
Leasing(Millions of yen)

2014

2013

Office Buildings¥284,530¥286,934

Retail Facilities

157,887

148,620

4,452

4,594

Years ended March 31

Revenue
Total Leased Floor Space (1,000 m2):
Office Buildings
and Retail Facilities

Office Buildings
Retail Facilities

Other

Owned

1,550

1,662

Managed

1,188

1,199

Owned

1,201

1,228

Managed513

505

Revenue

7,282

6,156

Total Revenue

449,700

441,712

Operating Income

109,206

104,352

For the period under review, overall revenue from operations

ed in the Tokyo Metropolitan and regional areas were 3.3

in the “Leasing” segment increased 1.8 percent, or ¥8.0 bil-percent and 4.3 percent, respectively, on a non-consolidat-

lion, compared with the previous fiscal year, to ¥449.7 bil-

ed basis as of March 31, 2014. The total vacancy rate for all

lion. Operating income for this segment grew 4.7 percent,of the Company’s office buildings was 3.5 percent, downor ¥4.9 billion, to ¥109.2 billion. These improvements in rev-from 4.0 percent for the previous fiscal year. In contrast,enue and earnings were largely due to the full-term contri-

vacancy rates for retail facilities edged up year on year. In

butions provided by Nihonbashi Astellas Mitsui Building andspecific terms, the retail facility vacancy rates for theother properties, which were completed during the previous

Company’s properties in the Tokyo Metropolitan and region-

period, contributions from properties opened during theal areas were 2.1 percent and 0.9 percent, respectively. The

period under review, the positive effects of large-scale

total retail facility vacancy rate as of March 31, 2014 stood

renewals at such retail facilities as LAZONA Kawasaki Plaza,at 1.6 percent, up from 1.3 percent compared with the pre-and the impact of foreign currency exchange rates on thevious fiscal year-end. This was largely attributable to theoperations of the Mitsui Fudosan America Group.

temporary impact of property renewals.

Turning to vacancy rates, the office building leasing market continues to witness a steady decline in vacancy rates.
The vacancy rates for the Company’s office buildings locat-

400

4.4
3.9

4.0

3.3
2.5

1.6

1

80

3.8

3

2

449.7

4

(Billions of yen)
100

441.7

(Billions of yen)
500

Operating Income
109.2

(%)
5

Revenue from Operations

104.4

Vacancy Rate for Tokyo Metropolitan Area Office Buildings(Non-consolidated)

1.3

300

60

200

40

100

20

1.0
0

0

06

07

08

09

10

11

12

13

14

(As of March 31)

0

13

14

13

14
(Years ended March 31)

33

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Property Sales
Property Sales to Individuals and Investors(Millions of yen)

2014

Years ended March 31/As of March 31
RevenueUnits¥241,517

5,082

¥48

¥206,518

4,161

¥50

Other

53,9641,475

37

29,656795

37

Subtotal

295,4826,557

45236,1744,956

48

Tokyo Metropolitan
Area42,322757

56

38,698

636

61

Other

7,366

159

46

7,788

159

49

Tokyo Metropolitan
Area
Condominiums
Property Sales
to Individuals
Detached Housing

Property Sales to Investors
Total

2013
Average Unit
Price

Revenue

Units

Average Unit
Price

Subtotal

49,689916

5446,487795

58

Revenue

345,1727,473

46282,6625,751

49

Operating Income

22,781

15,300

Revenue

64,294

110,792

4,317

7,758

Revenue

409,466

393,454

Operating Income

27,10023,059Operating Income

Inventories (Property Sales to Individuals)(Units)
As of March 31

2014

2013

2012

2011

2010

Condominiums

170

223

380

638

872

Detached Housing

65

57

24

46

40

Total

235

280

404

684

912

In the “Property Sales” segment revenue from operations

percentage points to 6.6 percent. Operating income inwas up 4.1 percent, or ¥16.0 billion, compared with the“Property Sales to Investors” declined 44.4 percent, or ¥3.4

previous fiscal year, to ¥409.5 billion. On a category basis,billion, to ¥4.3 billion. Turning to key highlights and principal

revenue from operations in the “Property Sales tobenchmarks, the number of units booked climbed from

Individuals” category climbed 22.1 percent, or ¥62.5 billion,

5,751 units to 7,473 units, an increase of 1,722 units. Thereto ¥345.2 billion. This mainly reflected an increase in thewere several major condominium projects undertaken dur-reported number of units. In specific terms, condominium

ing the fiscal year under review including Park Tower

sales to individuals grew 25.1 percent, or ¥59.3 billion, to¥295.5 billion, and detached housing sales to individualsrose 6.9 percent, or ¥3.2 billion, to ¥49.7 billion. Revenue

Revenue from Operations

Operating Income(Billions of yen)
500

(Billions of yen)
30

400

24

from operations in the “Property Sales to Investors” catego-

Fund Inc., this downturn was mainly due to corrections fol-

27.1
23.1

as the sale of rental housing to Nippon Accommodations

409.5

compared with the previous fiscal year. Despite such factors

393.5

ry was ¥64.3 billion, down 42.0 percent, or ¥46.5 billion

300

18

200

12

100

6

lowing the sale of large-scale properties during the previous
period. From a profit perspective, operating income in the“Property Sales” segment increased 17.5 percent, or ¥4.0
billion, to ¥27.1 billion. Looking closer, operating income in“Property Sales to Individuals” rose 49.0 percent, or ¥7.5
billion, to ¥22.8 billion, with the profit margin climbing 1.2

0

0

13

14

13

14
(Years ended March 31)

34

mfc̲ar̲14̲p28-72̲0808.indd 34

2014/08/08 15:05

Shinonome in Koto Ward, Tokyo and Park City

contracts at the end of the term came to 5,249, up 1,067

Musashikosugi the Grand Wing Tower in Kawasaki,from 4,182. This was the highest level of contracts in

Kanagawa Prefecture. During the period, the Mitsui

Japan. Total inventories of condominiums and detached

Fudosan Group also undertook Fine Court Seibu Tachikawa

housing declined from 280 units as of March 31, 2013 to

AYUMO CITY in Tachikawa, Tokyo, a major detached hous-

235 units as of March 31, 2014. The unit price of properties

ing project. In the “Property Sales to Individuals” category,decreased ¥2,960,000 year on year to ¥46,190,000.

Management(Millions of yen)
Years ended March 31

Property Management
Brokerage, Asset Management, etc.
Total

Revenue

2014

2013

¥225,438¥218,911

Operating Income

27,81926,427

Revenue

88,791

79,023Operating Income

22,12615,151

Revenue314,230

297,934

Operating Income

49,945

41,579In fiscal 2013, revenue from operations and operating

action volume of ¥126.8 billion, up 59.0%, or ¥47.0 billion.

income improved in the “Management” segment due pri-

Accounting for these factors, revenue from operations in themarily to the increase in the number of managed units in the“Brokerage, Asset Management, etc.” category was ¥88.8“Repark” (Car Park Leasing) business, continued healthy

billion, an increase of 12.4 percent, or ¥9.8 billion.

conditions in the existing house market in the “Brokerage

Operating income came to ¥22.1 billion, up 46.0 percent, orand Asset Management, etc.” business, and an upswing in¥6.9 billion year on year.

the number of brokerage properties handled in the “Mitsui
Rehouse” business. As a result revenue from operations forthe segment as a whole rose 5.5 percent, or ¥16.3 billion
compared with the previous fiscal year, to ¥314.2 billion,
and operating income improved 20.1 percent, or ¥8.4 billion
year on year, to ¥49.9 billion. Looking specifically at the“Property Management” category, the total number of carpark leasing managed units climbed 11,193 units fromMarch 31, 2014. Revenue from operations and operating
income in this category amounted to ¥225.4 billion andRevenue from Operations

Operating Income(Billions of yen)
50

(Billions of yen)
350

49.9

143,450 units as of March 31, 2013 to 154,643 units as ofpercent, or ¥1.4 billion higher than the previous fiscal year.
In the “Brokerage” business, undertaken by the Mitsui

40

210

30

140

20

70

10

41.6

280

314.2

This was, respectively, 3.0 percent, or ¥6.5 billion, and 5.3

297.9¥27.8 billion, respectively, for the fiscal year under review.

Fudosan Realty Group, including Rehouse, an equity-method affiliate, the number of transactions came to 42,550 for
the fiscal year under review, an increase of 3,166 over theprevious fiscal year. In volume terms, transactions rose 10.5
percent, or ¥133.5 billion, to ¥1,401.7 billion. In the“Consignment Sales” business, the number of consignment
sales units increased 455 year on year to 1,903 for a trans-

0

0

13

14

13

14
(Years ended March 31)

35

mfc̲ar̲14̲p28-72̲0808.indd 35

2014/08/08 15:05

Mitsui Home
(Millions of yen)

2014

2013

Revenue¥173,188¥156,330

Orders

171,139

155,621

Revenue

29,673

21,634

OrdersYears ended March 31

New Construction
Reform/Renewal

34,234

26,290

Lease Management

20,05918,904

Housing-Related Material Sales

14,14812,159Total Revenue

237,069

209,029

4,192

566

Operating Income

Note: The above revenue figures differ from those disclosed by Mitsui Home, because sales to the Mitsui Fudosan Group are deducted from Mitsui Home’s consolidated revenue from operations.

For the fiscal year ended March 31, 2014, the amount oftions continued to perform favorably both in Japan andorders at the beginning of the period was higher than for theoverseas in the “Facility Operations” business. In contrast,

previous period in the “New Construction” and “Reform/

such factors as the sale of Cany Corporation shares in the

Renewal” businesses. In addition, orders for the fiscal year

previous period placed downward pressure on revenue.

under review increased. As a result, revenue from operations for the “Mitsui Home” segment as a whole climbed
13.4 percent, or ¥28.0 billion year on year, to ¥237.1 billion.
or ¥3.6 billion compared with the previous fiscal year, to¥4.2 billion. In specific terms, revenue from operations in the

Revenue from Operations(Billions of yen)
250

(Billions of yen)5or ¥15.5 billion, to ¥171.1 billion. In the “Reform/Renewal”
business, revenue from operations rose 37.2 percent, or

209.0

200

237.1

“New Construction” business grew 10.8 percent, or ¥16.9
billion, to ¥173.2 billion with orders climbing 10.0 percent,Operating Income

4

150

3

100

2

50

1

4.2

Operating income for the segment jumped 639.3 percent,¥8.0 billion, to ¥29.7 billion with orders improving 30.0 percent, or ¥7.9 billion, to ¥34.2 billion. In the “Lease
Management” business, revenue from operations increased
6.1 percent, or ¥1.2 billion, to ¥20.1 billion. In the “Housingwas up 16.4 percent, or ¥2.0 billion, to ¥14.1 billion.

0

Other

¥ 50,672

Merchandise

35,85638,197

Other

19,14914,645

Total Revenue

104,787

103,515

3,072

(85)

Operating Income

13

14

In the fiscal year ended March 31, 2014, revenue from(Billions of yen)
120

(Billions of yen)
4.0

100

3.0

80
2.0
60

operations in the “Other” segment edged up 1.2 percent, or¥1.3 billion year on year, to ¥104.8 billion. In the fiscal year

Operating Income

3.1¥ 49,781

Revenue from Operations

104.8

2013

103.5

2014

Facility Operations

14(Years ended March 31)(Millions of yen)
Years ended March 31

0

13

0.6

Related Material Sales” business, revenue from operations

1.0
40

under review, Mitsui Fudosan reported operating income of

0.0

20

from the operating loss of ¥0.1 billion incurred in the previous fiscal year. Looking at specific activities, hotel opera--0.1¥3.1 billion for the “Other” segment, a positive turnaround
0

-1.0

13

14

13

14
(Years ended March 31)

36

mfc̲ar̲14̲p28-72̲0808.indd 36

2014/08/08 15:05

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION
Assets(Billions of yen, %)2014

As of March 31

Cash and cash equivalents¥ 127.3

2013

2.8%

¥ 101.6

2012

2.3%

¥

61.7

1.6%

Inventories

978.2

21.5

924.7

21.1

651.0

16.8

Other current assets

210.7

4.7

176.6

4.0

229.0

5.9

Net property and equipment

2,508.5

55.1

2,488.1

56.7

2,292.9

59.3

Investments and other assets

724.1

15.9

699.1

15.9

633.8

16.4

¥4,548.8

100.0%¥4,390.1

100.0%¥3,868.4

100.0%

Total

Liabilities and Net Assets(Billions of yen, %)2014

As of March 31

2013

2012

Interest-bearing debt—Short term

¥ 334.1

7.3%¥ 266.4

6.1%¥ 296.9

7.7%Interest-bearing debt—Long term

1,705.9

37.5

1,853.8

42.2

1,446.5

37.4

Total interest-bearing debt

2,040.0

44.8

2,120.2

48.3

1,743.4

45.1

512.2

11.3

385.7

8.8

395.4

10.2

Other long-term liabilities *

671.2

14.8

651.1

14.8

629.2

16.3

Minority interests

50.2

1.1

51.2

1.2

21.6

0.5

1

Other current liabilities *2

Net assets (other than minority interests)

1,275.2

28.0

1,181.9

26.9

1,078.8

27.9

Total

¥4,548.8

100.0%¥4,390.1

100.0%¥3,868.4

100.0%*1: Consists of current liabilities other than bank loans, commercial paper and long-term debt due within one year presented on the balance sheets.
*2: Consists of long-term liabilities other than long-term debt due after one year presented on the balance sheets.

CURRENT ASSETS¥724.1 billion. Investments in unconsolidated subsidiaries

Current assets increased 9.4 percent, or ¥113.3 billion,

and affiliated companies climbed 14.4 percent, or ¥19.7 bil-compared with the end of the previous fiscal year, tolion, to ¥156.1 billion. Investment securities increased 3.1¥1,316.2 billion. Cash and cash equivalents climbed 25.3

percent, or ¥10.2 billion, to ¥339.7 billion.

percent, or ¥25.7 billion, to ¥127.3 billion. Inventories grew
5.8 percent, or ¥53.5 billion, to ¥978.2 billion. During the fis-

TANGIBLE AND INTANGIBLE FIXED ASSETS,

cal year under review, the balance of real property for sale

PROPERTY AND EQUIPMENT

stood at ¥961.5 billion. This represented an increase of 5.1

The balance of tangible and intangible fixed assets stood atpercent, or ¥46.2 billion compared with the previous fiscal¥2,526.1 billion as of March 31, 2014, up 0.9 percent, or

year-end. Equity investments in properties for sale, which¥22.2 billion compared with the balance as of the end of the

primarily represent securitized interests in properties forprevious fiscal year on a consolidated basis. While Mitsui

sale, increased 10.0 percent, or ¥1.1 billion, to ¥12.1 billion.

Fudosan, the Mitsui Fudosan America Group, and SPCs

Deferred income taxes rose to ¥28.6 billion, an increase ofundertook such activities as the sale of properties, this19.7 percent, or ¥4.7 billion, year on year. Other current

increase stemmed partly from new investments by theassets grew 26.0 percent, or ¥23.5 billion, to ¥114.2 billion.

Company in the Nihonbashi Muromachi 3-Chome Urban

As of March 31, 2014, the current ratio declined to 1.56

Development Project (provisional name) as well as by thetimes, compared with 1.84 times as of the end of the previ-

Mitsui Fudosan UK Group and the impact of foreign currency

ous fiscal year.

exchange rates on the operations of the Mitsui Fudosan
America Group. Net property and equipment edged up 0.8

INVESTMENTS AND OTHER ASSETS

percent, or ¥20.4 billion from a year earlier, to ¥2,508.5 bil-Investments and other assets increased 3.6 percent, orlion. The Company and certain of its subsidiaries own office¥25.0 billion compared with the previous fiscal year-end, tobuildings for rent, commercial facilities and other properties in37

mfc̲ar̲14̲p28-72̲0808.indd 37

2014/08/08 15:05

Tokyo and other areas. Net rent income, gain on disposal ofsources, the Company takes all necessary measures toproperty and equipment, impairment loss, and loss on dis-ensure an appropriate debt profile and maturity ladder.

posal of property and equipment regarding those investments and leasing properties were ¥97.4 billion, ¥13.2 billion,

NET ASSETS AND TOTAL CAPITAL¥10.1 billion, and ¥9.1 billion for the fiscal year ended March

For fiscal 2013, net assets increased 7.5 percent, or ¥92.3

31, 2014. Capital expenditures increased/decrease 54.3 per-billion, compared with the previous fiscal year-end, tocent, or ¥52.6 billion year on year, to ¥149.5 billion, while¥1,325.4 billion. Retained earnings increased 13.1 percent,depreciation and amortization amounted to ¥56.0 billion.

or ¥52.5 billion, to ¥454.8 billion. Reserve on land revaluation, which is recorded as a component of net assets under

CURRENT LIABILITIESJapanese GAAP, edged up 1.5 percent, or ¥4.3 billion, year

Current liabilities increased 29.8 percent, or ¥194.2 billion,

on year, to ¥296.7 billion. Net unrealized holding gains oncompared with the end of the previous fiscal year, to ¥846.3

securities, which are also recorded as a component of net

billion. While the balance of commercial paper declined,

assets under Japanese GAAP, increased 8.2 percent, or

major increases in current liabilities during fiscal 2013 includ-¥8.4 billion, to ¥111.1 billion. Foreign currency translation

ed bank loans as well as long-term debt due within one year

adjustments, resulting from the yen’s value relative to theand advances and deposits received. Mitsui Fudosan has

U.S. dollar and the British pound at the fiscal year-end,

established committed lines of credit totaling ¥250.0 billion

decreased net assets by ¥1.4 billion. Total capital (the sumwith several financial institutions to ensure access to fundsof bank loans, commercial paper, long-term debt due within

and adequate liquidity. The Company had not accessed

one year, long-term debt due after one year, and net assets)

these lines of credit as of the balance sheet date.

saw a light upswing of 0.4 percent, or ¥12.2 billion, to¥3,365.5 billion from ¥3,353.3 billion a year earlier. During

LONG-TERM LIABILITIES

the fiscal year under review net assets increased while inter-

Long-term liabilities decreased 5.1 percent, or ¥127.8 bil-

est-bearing debt decreased. Net assets represented 39.4

lion, compared with the previous fiscal year-end, topercent of total capital, compared with 36.8 percent as of¥2,377.1 billion. Long-term debt due after one year fell 8.0

the previous fiscal year-end.

percent, or ¥147.9 billion, to ¥1,705.9 billion.

Turning to key management indices, the equity ratio
increased to 28.0 percent from 26.9 percent. Return on

INTEREST-BEARING DEBT

assets (ROA) rose to 4.07 percent, compared with 3.66

As of March 31, 2014, interest-bearing debt stood atpercent a year earlier. Return on equity (ROE) moved higher¥2,040.0 billion on an overall consolidated basis, ato 6.26 percent, compared with 5.27 percent a year earlier

decrease of ¥80.2 billion compared with the end of the pre-and the debt-to-equity ratio decreased to 1.6 times fromvious fiscal year. Mitsui Fudosan continues to adopt a pru-

1.8 times.

dent approach toward the management of its assets anddebt financing. In addition to diversifying procurement(Billions of yen)
1,200

2,000

28.0 (%)
30

1,275.2

1,181.9

1,078.8

1,020.5

1,000

800

1,000

26.9

27.2 27.0 27.9

1,008.2

1,743.4

1,500

1,740.0

4.07

3.66

3.55

3

3.39

4

2,120.2(Billions of yen)
2,000

3.41

3,868.4

3,780.7

3,000

3,710.4

4,000

4,548.8(%)
54,390.1(Billions of yen)
5,000

Net Assets (Other than Minority
Interests) and Equity Ratio

Interest-Bearing Debt

2,040.0

ROA

1,746.7

Total Assets

25

20

600

15

400

10

200

5

2

500
1,000

1

0

0

10

11

12

13

14

(As of March 31)

38

mfc̲ar̲14̲p28-72̲0808.indd 38

0

10

11

12

13

14

(Years ended March 31)

0

10

11

12

13

14

(As of March 31)

0

10

11

12

13

14

(As of March 31)
Net Assets (Other than Minority Interests)
Equity Ratio

2014/08/08 15:05

Cash Flows(Billions of yen)

2014

2013

2012

¥ 189.9¥ 99.7¥ 148.2

Cash flows from investing activities(44.1)(71.1)(124.4)

Cash flows from financing activities(123.7)(7.9)(18.7)

Years ended March 31

Cash flows from operating activities

Effect of exchange rate changes on cash and cash equivalents

3.6

0.5

(0.1)

Net increase (decrease) in cash and cash equivalents

25.7

21.2

5.0

Cash and cash equivalents at beginning of year

101.6

61.7

56.7

Increase in cash and cash equivalents due to inclusion of subsidiaries
in consolidation
Cash and cash equivalents at end of year

—

18.7

—

¥ 127.3¥101.6¥ 61.7

CASH FLOWS

ties, proceeds from collection of lease deposits, proceeds

Net cash provided by operating activities came to ¥189.9

from deposits from tenants, and proceeds from collections

billion, compared with ¥99.7 billion in the previous fiscalof non-current loans and accounts receivable of ¥79.5 bil-year. Major cash inflows included net income before income

lion, ¥1.7 billion, ¥18.2 billion, ¥47.0 billion, and ¥11.1 bil-taxes and minority interests of ¥126.7 billion and net otherlion, respectively.

operating cash flows of ¥47.0 billion. This more than offset

Net cash used in financing activities totaled ¥123.7 bil-principal cash outflows including interest paid and income

lion, which included cash dividends paid of ¥19.3 billion,

taxes paid of ¥31.5 billion and ¥48.2 billion, respectively.

essentially unchanged from the previous fiscal year. In the

Net cash used in investing activities totaled ¥44.1 billion,

previous fiscal year, financing activities used net cash total-

down from ¥71.1 billion in fiscal 2012. Mitsui Fudosan con-(Millions of yen)tinues to acquire properties with long-term potential when

2014

2013

Proceeds from deposits fromtenants¥ 46,954¥ 35,300

securities totaled ¥13.0 billion, compared with ¥30.5 billion

Repayments of deposits fromtenants(48,196)(49,169)

for fiscal 2012. These core outflows were more than offset

Payments of lease deposits(5,960)(8,490)by major inflows including proceeds from sale of property

Proceeds from collections of leasedeposits

18,202

21,518circumstances are favorable. Purchases of property andequipment totaled ¥123.2 billion, compared with ¥76.7 billion for the previous fiscal year. Purchases of investment

and equipment, proceeds from sale of investment securi-

Cash Flows fromOperating Activities(Times)
2.0

189.9

120

150

148.2

1.60

(841)

(Billions of yen)
150

185.1

1.80
1.62

1.71

¥

Free Cash Flow

(Billions of yen)
200

1.73

1.5

¥(11,000)

Total

145.8

Debt/Equity Ratio

Years ended March 31

90

100

99.7

1.0

84.4

60

0.5

50

0

0

10

11

12

13

14

(As of March 31)

10

11

12

13

14

(Years ended March 31)

10

11

12

28.6

23.8

14.5

0.0

19.6

30

13

14

(Years ended March 31)

39

mfc̲ar̲14̲p28-72̲0808.indd 39

2014/08/08 15:05

ing ¥7.9 billion. Reflecting the downturn in debt, repay-

OUTLOOK FOR FISCAL 2014 (Year Ending March 31, 2015)

ments of bank loans and commercial paper, repayments oflong-term debt, and payments for redemption of bonds ofIn the fiscal year ending March 31, 2015, Mitsui Fudosan is¥2,202.2 billion, ¥207.0 billion, and ¥45.0 billion, respective-

expected to report historic highs in revenue from opera-

ly, were collectively higher than proceeds from bank loanstions, operating income, and net income. Revenue fromand commercial paper, proceeds from long-term debt, andoperations is projected to reach ¥1,540.0 billion, up ¥24.7

proceeds from issuance of bond of ¥2,170.4 billion, ¥173.5

billion year on year. Operating income is estimated to climb

billion, and ¥11.4 billion, respectively. Mitsui Fudosan main-¥10.4 billion, to ¥183.0 billion and net income is forecast to

tains a conservative level of operating leverage and largely

grow ¥13.2 billion, to ¥90.0 billion.

drew on internal capital resources in investing for future
SEGMENT FORECASTS

growth during fiscal 2013.
Accounting for each of the aforementioned activities,

Leasing: Overall segment revenue from operations is fore-

cash and cash equivalents at end of year amounted tocast to climb ¥8.3 billion, to ¥458.0 billion, while operating¥127.3 billion, up from ¥101.6 billion in fiscal 2012.

income is projected to decline ¥7.2 billion compared withthe fiscal year under review, to ¥102.0 billion. Contributions
from Muromachi Furukawa Mitsui Building (COREDO(Millions of yen)

Muromachi 2) and Muromachi Chibagin Mitsui Building

2014

2013

(COREDO Muromachi 3) completed during the fiscal year

Proceeds from long-term debt

¥ 173,450¥ 464,260

ended March 31, 2014 as well as Iidabashi Grand Bloom

Repayments of long-term debt

(207,023)(355,665)

and LaLaport Izumi (provisional name) scheduled for com-

Years ended March 31

Proceeds from issuance of bond

11,42061,915

pletion during the fiscal year ending March 31, 2015 are

Payments for redemption of bond

(44,963)(146,183)

expected to boost revenue from operations. Other factors¥ (67,116) ¥ 24,327

expected to impact revenue from operations and earnings

Total

include an increase in depreciation expenses as a result of
the new opening of properties, the termination of operations
due mainly to redevelopment activities, and the sale ofproperties during the fiscal year under review.
Property Sales: Revenue from operations and operating
income are expected to climb ¥32.5 billion and ¥18.9 billion, respectively, in this segment as a whole, bringing revenue from operations to ¥442.0 billion and operating income
to ¥46.0 billion. Despite a forecast drop in revenue fromoperations attributable to a decline in the reported numberof units in the “Property Sales to Individuals” category, thisupswing is largely the result of an increase in earnings on
the back of such factors as anticipated improvements inoperating income margins as well as forecast contributions
from higher revenue and earnings in the “Property Sales toInvestors” category.
Management: Revenue from operations in this segment as
a whole is projected to improve ¥6.8 billion, to ¥321.0 billion, while operating income forecast to remain flat at ¥50.0
billion. These forecast results reflect a variety of factors
including ongoing robust trends in the brokerage businessfor individuals and the Repark (Car Park Leasing) businessundertaken by Mitsui Fudosan Realty.

40

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Other: Revenue from operations is anticipated to fall ¥24.8

CHANGES IN REAL ESTATE TAXES

billion, to ¥80.0 billion. Operating income, on the other

Changes in real estate taxes that increase the cost of own-

hand, is projected to edge up ¥0.9 billion, to ¥4.0 billion.

ing, acquiring or selling real estate or reduce consumer will-

The drop in revenue from operations is largely attributable toingness to purchase housing may exert a material impact

the sale of Uniliving Co., Ltd, shares in the “Merchandise”

on the Mitsui Fudosan Group’s performance and the value

category. In contrast, results are expected to be favorablyof its assets.

impacted by ongoing robust trends in the “Hotel Operation”
business.

CHANGES IN REAL ESTATE AND FINANCE LAWS
Future changes in laws or regulations relevant to Mitsui

DIVIDENDS

Fudosan’s businesses, including the Building Standard Law,

The Company plans to pay a year-end dividend of ¥11.00

the City Planning Act and the Financial Instruments andper share for the fiscal year ended March 31, 2014 (for an

Exchange Law, that reduce the value of assets or limit theannual cash dividend of ¥22.00 per share), as announced atscope of operations by incurring new obligations, increasing

the start of the period.

costs or limiting asset ownership rights may exert a material
impact on the Mitsui Fudosan Group’s performance.

RISK INFORMATION

NATURAL DISASTERS, ENVIRONMENTAL ISSUES AND

The operations of the Mitsui Fudosan Group are subject to

OTHER EXTRAORDINARY PHENOMENA

a number of risks, some of which are outlined below along

Natural disasters, environmental issues, soil contamination

with issues that may not necessarily constitute risk factors

and other factors including any defect in real estate andbut may still influence investor decisions.

property may lead to the damage of assets held by the
Mitsui Fudosan Group or give rise to a performance warran-

TRENDS IN ECONOMIC CONDITIONS

ty obligation. This in turn may impact the Group’s perfor-

The operations of the Mitsui Fudosan Group are impacted

mance and the value of its assets.

by a variety of factors. Trends in economic conditions influence demand for the office buildings and retail facilities that

REAL ESTATE DEVELOPMENT AND OTHER RELATED

the Group owns and manages in Japan and overseas, while

ACTIVITIES

employment and economic conditions also influence

Instances where the Mitsui Fudosan Group engages in realdemand among individuals for housing. Other factors

estate development and other activities, excluding thoseinclude trends in real estate market conditions, which cancases where the Group’s directors and employees are

trigger a slump in land and other property prices. A down-

directly involved, may be affected by many factors outside

turn in economic conditions in Japan and overseas mayof our control including contracting with third parties withtherefore exert a material impact on the Mitsui Fudosan

specialized skills such as construction companies, increas-

Group’s performance and the value of its assets. Moreover,es in the price of land and development costs, and inade-a drop in the value of investment securities held may cause

quacies relating to such key activities as construction.

the Group’s financial condition to deteriorate.

These factors may then lead to an unexpected substantial
increase in expenditure or give rise to the delay or suspen-

INTEREST RATES

sion of a project. Accordingly, unforeseen circumstances

Higher interest rates in the future could increase the Mitsui

may exert a material impact on the Mitsui Fudosan Group’s

Fudosan Group’s funding costs, raise the returns investors

performance.

expect from real estate investments and reduce demand
among individuals for housing, and may therefore exert amaterial impact on the Mitsui Fudosan Group’s performanceand the value of its assets. Moreover, the interest rates
applicable to interest-bearing debt may be affected bychanges in the Group’s credit ratings.

41

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Consolidated Balance Sheets
Mitsui Fudosan Co., Ltd. and its Subsidiaries
As of March 31, 2014, 2013 and 2012

Thousands of
U.S. dollars (Note 1)

Millions of yen

2014

2013

2012

2014

¥ 127,337¥ 101,589

244

25

15

2,371

Notes and accounts receivable - trade (Note 4)

34,40029,266

26,539334,240

Short-term loans receivable

10,205

11,2799,620

99,155

(330)

(801)

(879)

(3,206)Inventories (Note 8, 13)

978,190924,708

650,956

9,504,372

Advances paid for purchases (Note 9)

11,209

11,212

9,757

108,910Equity investments in properties for sale (Note 4, 5, 24)

12,065

10,96657,569117,227

Deferred income taxes (Note 11)28,61823,91834,544

278,061

Other current assets

114,232

90,692

91,882

1,109,909

1,316,170

1,202,854

941,730

12,788,282

Land (Note 7, 13)

1,784,429

1,777,293

1,637,381

17,338,020

Buildings and structures (Note 7, 13)

1,163,108

1,171,258

1,098,664

11,301,088

Machinery and equipment

126,215

119,678

112,6151,226,341

Construction in progress

55,576

34,682

31,430539,993

3,129,328

3,102,911

2,880,090

30,405,442

Accumulated depreciation(620,784)(614,785)(587,187)(6,031,714)

Net property and equipment

2,508,544

2,488,126

2,292,903

24,373,728

Investments in unconsolidated subsidiaries and affiliated companies

156,076

136,390122,156

1,516,479

Investment securities (Note 4, 5, 24)

339,650

329,489

275,492

3,300,136

Non-current loans and accounts receivable

64,722

61,67058,914

628,857

Allowance for doubtful accounts(3,078)(6,212)(6,529)(29,907)

135,770

148,736

160,846

1,319,180

ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 4)
Marketable securities (Note 4, 5)

Allowance for doubtful accounts

Total current assets¥

61,727$ 1,237,243

PROPERTY and EQUIPMENT, at cost:

INVESTMENTS and OTHER ASSETS

Lease deposits (Note 4, 10)
Net defined benefit asset
Deferred income taxes (Note 11)
Deferred tax assets on land revaluation
Other
Total investments and other assets
Total assets

80

—

—

777

13,287

11,9369,761

129,100

3

1,233

1,233

29

17,59815,853

11,906

170,988724,108

699,095

633,779

7,035,639¥4,548,822¥4,390,075¥3,868,412$44,197,649

See accompanying notes.

42

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Thousands of
U.S. dollars (Note 1)

Millions of yen

2014

2013

2012

2014

LIABILITIES AND NET ASSETSCURRENT LIABILITIESBank loans (Note 4, 13)Commercial paper (Note 4, 13)¥

28,566¥27,086¥32,157$

277,555—

27,00037,000—Long-term debt due within one year (Note 4, 13)

305,583

212,347

227,7652,969,131

Notes and accounts payable - trade (Note 4)

130,695

100,705

101,321

1,269,870

Accrued expenses

27,047

23,641

25,483

262,796

Accrued income taxes

22,374

26,69911,651

217,392

Advances and deposits received

211,963

147,686

162,1222,059,493

Deferred income taxes (Note 11)

2,113

355

396

20,531Other current liabilities (Note 14)

117,971

86,603

94,415

1,146,240

Total current liabilities

846,312652,122692,310

8,223,008

LONG-TERM LIABILITIESAllowance for employees’ retirement benefits (Note 12)
Net defined benefit liability
Allowance for directors’ and corporate auditors’ retirement benefits
Long-term debt due after one year (Note 4, 13)—

34,32433,002—37,406——363,447

795

999

957

7,724

1,705,923

1,853,793

1,446,489

16,575,234

Deposits from tenants (Note 4, 15)345,617344,923

353,837

3,358,113

Deferred income taxes (Note 11)

79,761

67,68432,471

774,981Deferred tax liabilities on land revaluation

170,148

166,957

168,130

1,653,206

Other long-term liabilities (Note 14)

37,44036,19240,809363,778

Total long-term liabilities

2,377,090

2,504,872

2,075,695

23,096,483

174,296

174,296

174,296

1,693,510

Capital surplus

248,293248,299

248,297

2,412,485

Retained earnings

454,750402,224

363,877

4,418,480(5,926)(5,533)(5,386)(57,579)

871,413819,286

781,084

8,466,896

111,121102,694

50,355

1,079,683(840)(1,094)(869)(8,162)296,704

292,384

294,1102,882,861(1,442)(32,096)(46,497)(14,011)

CONTINGENT LIABILITIES (Note 27)
NET ASSETS (Note 16, 17)
Shareholders’ equity
Common stock
Authorized - 3,290,000,000 shares
Issued - 881,424,727 shares in 2014, 2013 and 2012

Treasury stock—3,270,884 shares in 2014, 3,179,938 shares in2013 and 3,098,596 shares in 2012
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Net unrealized holding gains on securities
Deferred losses on hedging instruments
Reserve on land revaluation
Foreign currency translation adjustments
Accumulated adjustments for retirement benefit
Total accumulated other comprehensive income
Subscription rights to shares (Note 18)
Minority interests(2,601)——-25,272

402,942

361,888

297,099

3,915,099

824

729

588

8,006

50,241

51,17821,636488,157

Total net assets

1,325,420

1,233,081

1,100,407

12,878,158

Total liabilities and net assets¥4,548,822¥4,390,075¥3,868,412$44,197,649

See accompanying notes.

43

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Consolidated Statements of Income
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the years ended March 31, 2014, 2013 and 2012

Thousands of
U.S. dollars (Note 1)

Millions of yen

2014

2013

2012

2014

Revenue from operations (Note 25)¥ 1,515,252¥ 1,445,644¥ 1,338,102$ 14,722,620

Cost of revenue from operations(1,189,743)(1,147,139)(1,066,968)(11,559,882)

Selling, general and administrative expenses(152,941)(150,320)(145,096)(1,486,018)

Operating income (Note 25)

172,568

148,185

126,038

1,676,720

Interest, dividends and miscellaneous income(Note 20)

21,387

15,674

5,854

207,802

Interest expense(30,864)(29,443)(26,748)(299,883)

Other expenses (Note 19, 21)(37,800)(26,320)(14,345)(367,276)

1,420

2,850

3,702

13,797

126,711

110,946

94,501

1,231,160

43,992

40,77017,611

427,439

Equity in net income of affiliated companies
INCOME BEFORE INCOME TAXES AND MINORITY
INTERESTSINCOME TAXES (Note 11)
Current
Deferred

3,043

9,613

26,18029,566

Total

47,03550,383

43,791

457,005

NET INCOME BEFORE MINORITY INTERESTS

79,67660,56350,710774,155

MINORITY INTERESTS(2,832)(1,112)(580)(27,517)NET INCOME¥

76,844¥59,451¥50,130$746,638

See accompanying notes.

44

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Consolidated Statements of Comprehensive Income
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the years ended March 31, 2014, 2013 and 2012

Thousands of
U.S. dollars (Note 1)

Millions of yen

Net income before minority interests

2014

2013

2012

2014

¥ 79,676¥ 60,563¥50,710$ 774,155

8,360

52,2808,348

81,228

248

(226)

(531)

2,410

Other comprehensive income (loss):
Net unrealized holding gains on securities
Deferred gains (losses) on hedging instruments
Reserve on land revaluation(1,203)26

23,503(11,689)

Foreign currency translation adjustments

20,564

8,872(2,775)

199,806

Equity in other comprehensive income (loss) ofaffiliated companies

10,438

5,852(1,210)101,418

Total other comprehensive income

38,40766,80427,335373,173¥118,083¥127,367¥78,045$1,147,328¥115,501¥125,992¥77,551$1,122,241

Total comprehensive income
Comprehensive income attributable to:Shareholders of the Company
Minority interests
Total

2,582

1,375

494

25,087¥118,083¥127,367¥78,045$1,147,328

See Note 22.

Yen

U.S. dollars (Note 1)

PER SHARE INFORMATION

2014

2013

2012

2014

Net assets per share*¥1,451.2¥1,344.9¥1,227.5$14.100— Basic

87.5

67.7

57.1

0.850

— Diluted

87.4

67.7

57.0

0.849

Cash dividends

22.0

22.0

22.0

0.214

Net income per share* Net assets per share information does not include subscription rights to shares and minority interests. Net assets per share decreased by ¥3.0 as a result of adopting new accounting standards on retirement
benefits, which is described in Note 2 (N).
See accompanying notes.

45

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Consolidated Statements of Changes in Net Assets
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the years ended March 31, 2014, 2013 and 2012

Millions of yen
Shareholders' equity

BALANCE AT APRIL 1, 2011

Accumulated other comprehensive income (loss)
Accumulated
Foreign
Deferredadjustments Subscription
currency
Net unrealized losses on
hedging Reserve on land translation for retirement rights toholding gains
sharesbenefitadjustmentson securities instruments revaluation

Shares ofcommonstock(thousands) Common stock Capital surplus

Retainedearnings

Treasury stock

881,425 ¥174,296¥248,310¥332,336¥(5,397)¥ 41,995¥ (371)¥271,242¥(42,470)¥—

Minority
Interests

Total net assets¥521¥21,924¥1,042,386

Change in number of affiliated companies

—

—

—

17

—

—

—

—

—

—

—

—

17

Cash dividends paid

—

—

—

(19,324)

—

—

—

—

—

—

—

—

(19,324)

Net income

—

—

—

50,130

—

—

—

—

—

—

—

—

50,130

Reversal of reserve on land revaluation, net of
tax

—

—

—

718

—

—

—

22,868————23,586(99)

Purchase of treasury stock

—

—

—

—

(99)

—

—

—

—

—

—

—

Sales of treasury stock

—

—

(13)

—

110

—

—

—

—

—

—

—

97

Net unrealized holding gains on securities

—

—

—

—

—

8,360

—

—

—

—

—

—

8,360

Deferred losses on hedging instruments

—

—

—

—

—

—

(498)

—

—

—

—

—

(498)

Foreign currency translation adjustment

—

—

—

—

—

—

—

—

(4,027)———(4,027)

Subscription rights to shares

—

—

—

—

—

—

—

—

—

—

67

—

67

Minority interests

—

—

—

—

—

—

—

—

—

—

—

(288)

(288)

BALANCE AT MARCH 31, 2012

881,425 ¥174,296¥248,297¥363,877¥(5,386)¥ 50,355¥ (869)¥294,110¥(46,497)

¥—

¥588

¥21,636¥1,100,407

BALANCE AT APRIL 1, 2012

881,425

174,296248,297363,877(5,386)50,355(869)

294,110(46,497)—588

21,636

1,100,407

Change in number of consolidated subsidiaries

—

—

—

(3,531)

—

—

—

—

—

—

—

20,281

16,750Cash dividends paid

—

—

—

(19,324)

—

—

—

—

—

—

—

—

(19,324)

Net income

—

—

—

59,451

—

—

—

—

—

—

—

—

59,451

Reversal of reserve on land revaluation, net of
tax

—

—

—

1,751

—

—

—

(1,726)

—

—

—

—

25

Purchase of treasury stock

—

—

—

—

(175)

—

—

—

—

—

—

—

(175)

Sales of treasury stock

—

—

2

—

28

—

—

—

—

—

—

—

30

Net unrealized holding gains on securities

—

—

—

—

—

52,339

—

—

—

—

—

—

52,339Deferred losses on hedging instruments

—

—

—

—

—

—

(225)

—

—

—

—

—

(225)

Foreign currency translation adjustment

—

—

—

—

—

—

—

—

14,401———

14,401

Subscription rights to shares

—

—

—

—

—

—

—

—

—

—

141

—

141

Minority interests

—

—

—

—

—

—

—

—

—

—

—

9,261

9,261

BALANCE AT MARCH 31, 2013

881,425 ¥174,296¥248,299¥402,224¥(5,533)¥102,694¥(1,094)¥292,384¥(32,096)

¥—

¥729

¥51,178¥1,233,081

BALANCE AT APRIL 1, 2013

881,425

174,296248,299402,224(5,533)

102,694(1,094)292,384(32,096)—729

51,1781,233,081

Cash dividends paid

—

—

—

(19,322)

—

—

—

—

—

—

—

—

(19,322)

Net income

—

—

—

76,844

—

—

—

—

—

—

—

—

76,844

Reversal of reserve on land revaluation, net of
tax

—

—

—

(4,996)

—

—

—

4,320

—

—

—

—

(676)

Purchase of treasury stock

—

—

—

—

(498)

—

—

—

—

—

—

—

(498)

Sales of treasury stock

—

—

(6)

—

105

—

—

—

—

—

—

—

99

Net unrealized holding gains on securities

—

—

—

—

—

8,427

—

—

—

—

—

—

8,427

Deferred losses on hedging instruments

—

—

—

—

—

—

254

—

—

—

—

—

254

Foreign currency translation adjustment

—

—

—

—

—

—

—

—

30,654———30,654

Defined benefit pension plans

—

—

—

—

—

—

—

—

—

(2,601)——(2,601)

Subscription rights to shares

—

—

—

—

—

—

—

—

—

—

95

—

95

Minority interests

—

—

—

—

—

—

—

—

—

—

—

(937)

(937)

881,425 ¥174,296¥248,293¥454,750¥(5,926)¥111,121¥(840)¥296,704¥(1,442)¥(2,601)¥824¥50,241¥1,325,420$1,693,510 $2,412,544 $3,908,123$(53,760)$997,804 $(10,630) $2,840,886 $(311,854)$—

BALANCE AT MARCH 31, 2014

Thousands of U.S. Dollars (Note 1)

BALANCE AT APRIL 1, 2013

$7,083 $497,260 $11,980,966

Cash dividends paid——

(187,738)

—

—

—

—

—

—

—

—

(187,738)

Net income——

746,638

—

—

—

—

—

—

—

—

746,638

Reversal of reserve on land revaluation, net of
tax

—

—

(48,543)———

41,975————(6,568)Purchase of treasury stock

—

—

—

(4,839)

—

—

—

—

—

—

—

(4,839)

Sales of treasury stock

—

(59)

—

1,020

—

—

—

—

—

—

—

961

Net unrealized holding gains on securities

—

—

—

—

81,879

—

—

—

—

—

—

81,879Deferred losses on hedging instruments

—

—

—

—

—

2,468

—

—

—

—

—

2,468

Foreign currency translation adjustment

—

—

—

—

—

—

—

297,843———

297,843

Defined benefit pension plans

—

—

—

—

—

—

—

—

(25,272)——(25,272)

Subscription rights to shares

—

—

—

—

—

—

—

—

—

923

—

923

Minority interests

—

—

—

—

—

—

—

—

—

—

(9,103)(9,103)BALANCE AT MARCH 31, 2014

$1,693,510 $2,412,485 $4,418,480$(57,579) $1,079,683$(8,162) $2,882,861$(14,011) $(25,272)$8,006 $488,157 $12,878,158

See accompanying notes.

46

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Consolidated Statements of Cash Flows
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the years ended March 31, 2014, 2013 and 2012

Thousands of
U.S. dollars (Note 1)

Millions of yen

2014

Cash flows from operating activities:
Net income before income taxes and minority
interests
Adjustments to reconcile income before income
taxes and minority interests to net cash provided
by operating activities
Depreciation and amortization
Loss on impairment of fixed assets
Interest and dividend income
Interest expense
Equity in net income of affiliated companies
Loss on disposal of property and equipment(Gain) loss on sale of property and equipment
Gain on sales of securities
Gain on sales of investments in unconsolidated
subsidiaries and affiliated companies
Increase in accounts receivable
Increase in accounts payable
Increase in real property for sale and advances
paid for purchases
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of property and equipment
Proceeds from sale of property and equipment
Purchases of investment securities
Proceeds from sale of investment securities
Payments of lease deposits
Proceeds from collections of lease deposits
Repayments of deposits from tenants
Proceeds from deposits from tenants
Increase in non-current loans and accounts receivable
Proceeds from collections of non-current loans
and accounts receivable
Purchases of consolidated subsidiaries
Proceeds from sales of consolidated subsidiaries, net
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from bank loans and commercial paper
Repayments of bank loans and commercial paper
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bondPayments for redemption of bondProceeds from minority shareholders
Cash dividends paid
Payments of dividends to minority shareholders
Repayments of lease obligations
Net increase in treasury stocks
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to inclusionof subsidiaries in consolidation
Cash and cash equivalents at end of year¥¥

126,7112013¥

110,946

2012

¥

2014

94,501¥ 1,231,160

56,03011,557(4,344)30,864(1,420)2,498(4,080)(797)

59,022
7,769(3,714)29,443(2,850)1,550
5,947(3,440)53,231—(3,462)
26,748(3,702)
4,396——

544,403112,291(42,208)
299,883(13,797)
24,271(39,642)(7,744)—(5,071)
7,574(2,369)(3,093)4,189—(2,601)
3,237—(49,271)
73,591(3,008)47,016
263,530
6,062(31,513)(48,176)
189,903(64,740)(875)
137,785
5,068(29,976)(13,192)
99,685(10,053)
49,620211,915
4,751(26,771)(41,734)
148,161(29,227)
456,8222,560,532
58,900(306,188)(468,092)
1,845,152(123,161)
79,516(12,977)
1,695(5,960)18,202(48,196)
46,954(11,948)(76,665)
47,673(30,482)
4,338(8,940)21,518(49,169)
35,300(14,371)(105,535)
717(24,986)
2,851(8,157)
17,862(43,110)40,902(16,219)(1,196,667)
772,600(126,088)
16,469(57,909)
176,856(468,286)
456,218(116,090)

11,065(3,035)4,117(328)(44,056)

10,807(14,388)2,953
294(71,132)

13,077——(1,756)(124,354)

107,511(29,489)
40,002(3,188)(428,061)

2,170,431(2,202,184)
173,450(207,023)
11,420(44,964)
1,023(19,333)(1,884)(2,780)(486)(1,383)(123,713)

2,176,126(2,191,781)
464,260(355,665)
61,915(146,183)
6,575(19,322)(968)(2,697)(165)(40)(7,945)

1,358,719(1,350,542)
221,832(245,257)
20,000—234(19,317)(932)(2,277)(70)(1,040)(18,650)

21,088,525(21,397,046)
1,685,290(2,011,494)
110,960(436,883)
9,940(187,845)(18,305)(27,011)(4,722)(13,440)(1,202,031)

3,614
25,748
101,589588
21,196
61,727(106)
5,051
56,67635,115
250,175
987,068—
61,727—¥ 1,237,243—
127,337¥

18,666
101,589¥

See accompanying notes.

47

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Notes to Consolidated Financial Statements
Mitsui Fudosan Co., Ltd. and its Subsidiaries

1.

BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements of Mitsui
Fudosan Co., Ltd. (the “Company”) have been prepared in accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Law and its related accounting regulations, and in conformity with accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards.
The accounts of overseas subsidiaries are based on theiraccounting records maintained in conformity with generally accepted accounting principles prevailing in the respective countries of
domicile. In compliance with the accounting standard, “Practical
Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements” (ASBJ PITF
No. 18, hereafter, “PITF No. 18”), certain adjustments, which are
not recorded in the statutory books of overseas subsidiaries, areincorporated in the consolidated financial statements of theCompany prepared in accordance with Japanese GAAP and filed2.

with the appropriate Local Finance Bureau of the Ministry of
Finance as required by the Financial Instruments and Exchange
Law (“statutory Japanese language consolidated financial statements”). The accompanying consolidated financial statements havebeen restructured and translated into English (with some expanded
descriptions) from the statutory Japanese language consolidated
financial statements. Some supplementary information included in
the statutory Japanese language consolidated financial statements,
but not required for fair presentation, is not presented in theaccompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars
are included solely for the convenience of readers, using the prevailing exchange rate at March 31, 2014, which was ¥102.92 to
U.S. $1.00. The convenience translations should not be construed
as representations that the Japanese yen amounts have been,
could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

SIGNIFICANT ACCOUNTING POLICIES(A) CONSOLIDATIONThe consolidated financial statements include the accounts of theCompany and its subsidiaries. The difference between the cost andthe underlying net equity at fair value of investments in consolidated
subsidiaries and in equity method investees is amortized over a
period of 5 years. If the amount is immaterial, it is fully recognizedcurrently in earnings.
The difference between the cost and the underlying net equity atfair value of investments in consolidated subsidiaries is recorded as
goodwill.
All significant inter-company accounts and transactions havebeen eliminated. In the elimination of investments in subsidiaries,
the assets and liabilities of the subsidiaries, including the portion
attributable to minority shareholders, are recorded based on the fairvalue at the time the Company acquired control of the respective
subsidiaries.
Commencing from the year ended March 31, 2013, theCompany and its consolidated subsidiaries adopted “AccountingStandard for Consolidated Financial Statements” (ASBJ Statement
No. 22, revised on March 25, 2011), “Guidance on Disclosuresabout Certain Special Purpose Entities” (ASBJ Guidance No.15,
revised on March 25, 2011), “Guidance on Determining a
Subsidiary and an Affiliate” (ASBJ Guidance No.22, revised on
March 25, 2011) and “Practical Solution on Application of theControl Criteria and Influence Criteria to Investment Associations”(ASBJ PITF No.20, revised on March 25, 2011). As a result, certain
special purpose entities in which the Company invests are includedin scope of consolidation commencing on April 1, 2012. The
assets, liabilities and minority interests of those newly consolidated
subsidiaries were included in the consolidated balance sheets as ofApril 1, 2012 at proper book values that would have amounted to
had the special purpose entities been consolidated upon theirestablishment. As a result of adopting those standards, the retained
earnings at April 1, 2012 decreased by ¥3,531 million.
(B) USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with the generally accepted accounting principles requires
management to make certain estimates and assumptions that
affect the reported amounts in the financial statements and theaccompanying notes. Actual results could differ from those estimates.
(C) EQUITY METHOD
Investments in all significant affiliated companies are accounted for by
the equity method and, accordingly, stated at cost adjusted for equity
in undistributed earnings and losses from the date of acquisition.
(D) TRANSLATION OF FOREIGN CURRENCY ACCOUNTS
Foreign currency receivables and payables are translated at appropriate year-end rates and the resulting translation gains or losses
are taken into income currently.
Financial statements of consolidated overseas subsidiaries aretranslated into Japanese yen at the year-end rate, except thatshareholders’ equity accounts are translated at historical rates andincome statement items resulting from transactions with theCompany at the rates used by the Company.
Differences arising from translation are presented as “Foreign
currency translation adjustments” in accumulated other comprehensive income under net assets section.
(E) CASH AND CASH EQUIVALENTS
Deposits in banks and short-term investments which are highly liquid, readily convertible to cash and with insignificant risk of market
value fluctuation, with a maturity of three months or less at the timeof purchase are treated as cash equivalents.
(F) SECURITIES
Held-to-maturity securities are stated at amortized cost.
Other securities with fair values are stated at fair value.
Unrealized gains and unrealized losses on these securities arereported, net of applicable income taxes, as a separate componentof accumulated other comprehensive income under net assets section. Realized gains and losses on sale of such securities are computed using moving-average cost.
Other securities without fair values are stated at moving-average
cost.
The Company and its consolidated subsidiaries recognize losses
for the difference between the fair value and the carrying amountwhen the fair value significantly declines. The Company and its
consolidated subsidiaries consider the decline to be significant
when the fair value of the other securities declines more than 50%of the carrying amount. When the fair value of the other securities

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declines from 30% to less than 50% of the carrying amount, thedecline is also determined to be significant if the fair value of the
securities is considered not to be recoverable to the carrying
amount.
If the net realizable value of the securities without fair value
declines significantly below the carrying amount, it is written down
to net realizable value with a corresponding charge in the statements of income.
(G) INVENTORIES, REVENUE AND RELATED COSTS
The Company and its consolidated subsidiaries have followed
accounting standard, “Accounting Standard for Measurement of
Inventories” (ASBJ Statement No.9). Under the standard, inventories are initially recorded at acquisition cost, and when net realizablevalue is less than the cost (i.e., profitability of inventory has
declined), the cost basis is reduced to net realizable value. Costs
are determined mainly by the specific identification method and do
not include interest and administrative expenses incurred during or
after development of real estate, which are charged to income
when incurred.
Revenue from leasing is recognized on an accrual basis over thelease term.
Revenue from sale of properties is recognized in full when delivered and accepted by the customers.
The Company and its consolidated subsidiaries have followed“Accounting Standard for Construction Contracts” (ASBJ
Statement No.15; December 27, 2007) and ”Guidance on
Accounting Standard for Construction Contracts” (ASBJ Guidance
No.18; December 27, 2007). The percentage-of-completion method shall be applied if the outcome of the construction activity isdeemed certain during the course of the activity, otherwise thecompleted-contract method shall be applied.
(H) PROPERTY AND EQUIPMENT, RELATED DEPRECIATION
AND REVALUATION – excluding leased assets
Property and equipment are carried mainly at cost.
When disposed of, the cost and related accumulated depreciation or revaluation of property and equipment are removed from therespective accounts and the net difference, less any amounts realized on disposal, is reflected in the statements of income.
Depreciation of property and equipment is mainly computed by
the declining-balance method over the estimated useful lives of theassets, except for those listed below which are calculated using thestraight-line method.
1. Office buildings of the Company
2. Buildings acquired by the domestic consolidated subsidiaries
after April 1, 1998
3. Property and equipment of the overseas consolidated subsidiaries
Estimated useful lives used in the computation of depreciation
are generally as follows:
Buildings
29-50 years
Structures
15-17 years
Machinery
7-15 years
Equipment
3-15 years
For buildings on fixed term leasehold, the Company computes
depreciation using the straight-line method, over its lease term
assuming no residual value.
(I) IMPAIRMENT LOSSES ON FIXED ASSETSThe Company and its consolidated subsidiaries have followed“Accounting Standard for Impairment of Fixed Assets” (“Opinion on
Establishment of Accounting Standards for Impairment of Fixed
Assets” issued by the Business Accounting Deliberation Council)
and “Guidance on Accounting Standard for Impairment of Fixed

Assets” (ASBJ Guidance No. 6). The accounting standards requirethat fixed assets be tested for recoverability whenever events orchanges in circumstances indicate that the assets may be
impaired. When the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of thoseassets, the net carrying value of assets not recoverable is reduced
to recoverable amounts. Recoverable amounts are measured by
net realizable values or values in current use. Net realizable values
are determined mainly based upon appraisal value calculated byreal-estate appraisers. Values in current use are calculated basedon the present values of future cash flows.
Accumulated impairment losses are deducted from book valuesof related fixed assets.
(J) LAND REVALUATION
Pursuant to the Law Concerning Land Revaluation and the revisions thereof, the Company and certain consolidated subsidiaries
revalued land used for business activities on March 31, 2002.
The land prices for revaluation were determined based on theappraisal prices by real estate appraisers in accordance with Article
2, Paragraph 5 of the Enforcement Ordinance Concerning Land
Revaluation. The difference between quoted appraisal value andthe carrying amount is recorded, net of applicable income taxes, as“Reserve on land revaluation” as a separate component of accumulated other comprehensive income under the net assets section.
(K) GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and other intangible assets are included in “Other” undercaption of “INVESTMENTS and OTHER ASSETS.”
Goodwill is amortized over a period of 5 years under straight-line
method. If the amount is immaterial, it is fully recognized currently inearnings.
Other intangible assets are amortized under the straight-line
method. Software (for internal use) is amortized over its estimateduseful lives of 5 years.
(L) ALLOWANCE FOR DOUBTFUL ACCOUNTSThe Company and its consolidated subsidiaries provide for doubtful
accounts principally at an amount computed based on the historical bad debt ratio during a certain reference period plus an estimated uncollectible amount based on the analysis of certain individual
accounts, including claims in bankruptcy.
(M) ALLOWANCE FOR CASUALTY LOSSESThe Company and its consolidated subsidiaries have estimatedrestoration expenses to recover tangible fixed assets and inventories damaged due to the Great East Japan Earthquake and provided allowance for casualty losses as a component of other current
liabilities on the consolidated balance sheets.
(N) EMPLOYEES’ RETIREMENT BENEFITSThe Company has a retirement plan which provides for lump-sum
payment and annuity. Upon retirement age, a regular employee isentitled to receive a lump-sum payment and an annuity, or in certain cases at the option of the retiring employee, the full amount of
the retirement benefits may be paid in a lump-sum. The retirement
benefits are based primarily upon the years of employee’s service
and monthly pay at the time of retirement.
The Company and its consolidated subsidiaries record net
defined benefit asset and liability at fiscal year end based on theestimated amounts of projected benefit obligation and the fair valueof the plan assets at that date.
The straight-line method is adopted as an allocation method forthe projected retirement benefits. Prior service costs are allocatedunder the straight-line method over a certain number of years within the average remaining service years (1-10 years). Actuarial differences are allocated, beginning in the year following their49

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occurrence, under the straight-line method over a certain numberof years within the average remaining service years (5-10 years).
The Company and its consolidated subsidiaries adopted“Accounting Standard for Retirement Benefits” (ASBJ Statement
No. 26, revised on May 17, 2012), except for the main text ofArticle 35, and “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No.25, revised on May 17, 2012), except
for the main text of Article 67, at March 31, 2014. Those standards
require that net defined benefit liability be recorded at an amount ofprojected benefit obligations less an amount of plan assets, andunrecognized actuarial differences and unrecognized prior service
costs be included in net defined benefit liability.
In accordance with transitional treatment described in Article 37
of “Accounting Standard for Retirement Benefits”, effects of thechanges in accounting policies arising from initial application arerecognized in accumulated adjustments for retirement benefit as aseparate component of the net assets section.
As a result, net defined benefit liability is recorded at ¥37,406 million ($363,447 thousand) and accumulated other comprehensive
income decreased by ¥2,601 million ($25,272 thousand). Refer to
PER SHARE INFORMATION for the effect on net assets per share.
(O) ALLOWANCE FOR DIRECTORS’ AND CORPORATE
AUDITORS’ RETIREMENT BENEFITS
Allowance for retirement benefits for directors and corporate auditors of the Company and its 31 consolidated subsidiaries are also
provided at the amounts to be paid if all eligible directors and corporate auditors would have retired at year end under the internal
guidelines.
(P) ACCOUNTING FOR LEASE TRANSACTIONSThe Company and its consolidated subsidiaries have followed“Accounting Standard for Lease Transactions” (Statement No.13
originally issued by the First Committee of the Business Accounting
Council on June 17, 1993 and revised by ASBJ on March 30,2007) and the “Implementation Guidance on Accounting Standard
for Lease Transactions” (the Financial Accounting Standard
Implementation Guidance No.16 issued originally by the
Accounting System Committee of the Japanese Institute ofCertified Public Accountants on January 18,1994 and revised by
ASBJ on March 30, 2007).
Those standards require finance leases to be accounted for in amanner similar to the accounting treatment for ordinary sales transactions. Lessees are required to record assets and liabilities regarding finance leases with recognition of depreciation and interest
expenses. Capitalized leased assets are depreciated under thestraight-line method, over the lease term assuming no residual
value. Lessors are required to recognize lease receivables or investments in leased assets along with related lease (interest) income.
It should be noted that finance leases which do not transfer ownership of the leased assets to lessees whose commencement day
falls on or prior to March 31, 2008 are accounted for as operatingleases.
(Q) INCOME TAXESThe Company and its consolidated domestic subsidiaries are subject
to a corporate tax of approximately 28%, an inhabitants tax ofapproximately 5% and a deductible enterprise tax of approximately
8%, which in the aggregate resulted in a statutory income tax rate of
approximately 38% for the years ended March 31, 2014 and 2013.
The Company and its consolidated domestic subsidiaries were
subject to a corporate tax of 30%, an inhabitants tax of approximately 6% and a deductible enterprise tax of approximately 8%,
which in the aggregate resulted in a statutory income tax rate of
approximately 41% for the year ended March 31, 2012.

The changes in tax rates for the year ended on March 31, 2013
were due to the “Amendment to income tax law, etc. in response to
the changing economic structure” and the “Special measures tosecure the financial resources to implement the restoration from theGreat East Japan Earthquake.” promulgated on December 2, 2011.
Those promulgations reduce the corporate income tax rate, withthe restoration surtax charged for a certain period of time, to be
applied commencing the year beginning on April 1, 2012.
As a result of promulgation of the amended tax laws on March
31, 2014, the restoration surtax referred to above was abolished ayear ahead of the original schedule, reducing the effective corporate tax rate from 38% to 36% for the year beginning on or after
April 1, 2014.
Income taxes are provided for on the basis of income for financial
statement purposes. The tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial
statements and income tax purposes is recognized as deferredincome taxes.
(R) DERIVATIVES AND HEDGE ACCOUNTING
1. Hedge accounting
The Company and its consolidated subsidiaries defer recognition ofgains or losses resulting from changes in fair value of derivative
financial instruments until the related losses or gains on the hedged
items are recognized, if derivative financial instruments are used ashedges and meet certain hedging criteria.
However, in cases where forward foreign exchange contracts areused as hedges and meet certain hedging criteria, forward foreignexchange contracts and hedged items are accounted for in the following manner:(1) If a forward foreign exchange contract is executed to hedge
an existing foreign currency receivable or payable,(a) the difference, if any, between the Japanese yen amount of
the hedged foreign currency receivable or payable translated using the spot rate at the inception date of the contract
and the book value of the receivable or payable is recognized in the income statements in the period which includes
the inception date, and(b) the discount or premium on the contract (that is, the difference between the Japanese yen amount of the contract
translated using the contracted forward rate and that translated using the spot rate at the inception date of the contract) is recognized over the term of the contract.
(2) If a forward foreign exchange contract is executed to hedge afuture transaction denominated in a foreign currency, thefuture transaction will be recorded using the contracted forward rate, and no gains or losses on the forward foreignexchange contract are recognized.
Also, if interest rate swap contracts are used as hedge and meetcertain hedging criteria, the net amount to be paid or received
under the interest rate swap contract is added to or deducted fromthe interest on the assets or liabilities for which the swap contract
was executed.
2. The following summarizes hedging derivative financial instruments used by the Company and its consolidated subsidiaries
and items hedged:
Hedging instruments:
Forward foreign exchange contracts
Foreign currency swap contracts
Interest rate swap contracts
Hedged items:
Expected foreign currency transactions
Foreign currency debt

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Borrowings and debentures
3. Hedge policy
The Company and its consolidated subsidiaries use interest rate
swap contracts to mitigate risk of fair value changes of borrowingsand debentures due to fluctuating interest rates and risk of changes
in cash flows. Exchange rate risk on borrowings made and debentures issued in non-functional currencies is hedged by utilizing currency swaps. Exchange rate risk on forecasted transactions to besettled in non-functional currencies is hedged by using forward foreign exchange contracts.
4. Assessment of hedge effectivenessThe assessment of hedge effectiveness is omitted because significant terms of hedging instruments and those of the items hedged
are the same and the risk of changes in foreign exchange rates andinterest rates would be entirely eliminated.
(S) EQUITY INVESTMENTS REGARDING REAL ESTATESECURITIZATION-RELATED BUSINESS
Equity investments in tokumei-kumiai, or silent partnerships (“TK”),
preferred securities issued by tokutei-mokuteki-kaisha, or specificpurpose companies (“TMK”) and others regarding real estate securitization-related business (collectively, “equity investments”) arepresented in the balance sheets as follows.
Equity investments held for sale are presented as “Equity investments in properties for sale” under “CURRENT ASSETS” and those
held other than for sale are presented as “Investment securities”
under “INVESTMENTS and OTHER ASSETS”.
(T) REVENUE FROM JAPANESE REAL ESTATE INVESTMENT
TRUST (J-REIT)
Revenue from J-REIT is included in “Revenue from operations”.
(U) DIRECTORS’ BONUS
The Company and its consolidated subsidiaries have followed theaccounting standard, “Accounting Standard for Directors’ Bonus”(ASBJ Statement No.4). Directors’ bonuses are charged to income
as selling, general and administrative expenses.
(V) SHARE-BASED PAYMENTS
The Company and its consolidated subsidiaries have followed theaccounting standards, “Accounting Standard for Share-Based
Payment” (ASBJ Statement No.8 ) and the “Implementation
Guidance for the Accounting Standard for Share-Based Payment”
ASBJ Guidance No.11).
Those standards require that the cost of stock options be measured based on the grant-date fair value. Outstanding options arepresented as subscription rights to shares as a component of net
assets in the balance sheet.
(W) ASSET RETIREMENT OBLIGATIONSThe Company and its consolidated subsidiaries have followed“Accounting Standard for Asset Retirement Obligations” (ASBJ
Statement No.18; March 31, 2008) and “Guidance on AccountingStandard for Asset Retirement Obligations” (ASBJ Guidance No.21;
March 31, 2008). According to the standards, obligations associated with the retirement of tangible fixed assets are recorded as liabilities when those obligations are incurred, with the amount of theliability initially measured by discounting the future cash flows. The
associated asset retirement costs are capitalized as part of the carrying amount of the fixed asset and allocated as period expenses.
(X) ACCOUNTING CHANGES AND ERROR CORRECTIONS
Commencing the year ended March 31, 2012, the Company andits consolidated subsidiaries adopted “Accounting Standard for
Accounting Changes and Error Corrections” (ASBJ Statement
No.24, December 4, 2009) and “Guidance on Accounting Standard
for Accounting Changes and Error Corrections” (ASBJ Guidance
No.24, December 4, 2009). Those standards require that changes

in accounting policies, changes in presentations and corrections ofprior period errors be accounted for retrospectively, and changes inaccounting estimates be accounted for prospectively. Thoserequirements are applied to accounting changes and corrections ofprior period errors made on and after the beginning of the year
ended on March 31, 2012.
(Y) EARNINGS PER SHARE
Basic income per share is computed by dividing the net income
available for distribution to shareholders of common stock by theweighted average number of shares of common stock outstanding
during each year. Diluted net income per share reflects the potential
dilution that could occur if securities or other contracts to issuecommon stock were exercised or converted into common stock.
(Z) RECLASSIFICATIONS
Certain prior years’ amounts have been reclassified to conform tothe current presentation.
(AA) NEW ACCOUNTING STANDARDS NOT YET ADOPTED
The new accounting standards and other pronouncements thathave been issued which the Company and its consolidated subsidiaries have not yet adopted as of March 31, 2014, are as follows.
1. Accounting for retirement benefits• Accounting Standard for Retirement Benefits (ASBJ Statement
No. 26, revised on May 17, 2012)• Guidance on Accounting Standard for Retirement Benefits (ASBJ
Guidance No.25, revised on May 17, 2012)
Those standards have been revised in light of improvements tofinancial reporting and international convergence, mainly focusingon (a) treatment of actuarial differences and prior service costs, (b)determination of retirement benefit obligations and current service
costs and (c) enhanced disclosures. The Company and its consolidated subsidiaries will adopt the revisions related to retirement
benefit obligations and service costs at the beginning of the year
commencing on April 1, 2014. The effect that the adoption of thosestandards will have on the consolidated financial statements isimmaterial.
2. Accounting for business combinations• Accounting Standard for Business Combinations (ASBJ
Statement No.21, revised on September 13, 2013)• Accounting Standard for Consolidated Financial Statements(ASBJ Statement No.22, revised on September 13, 2013)• Accounting Standard for Business Divestitures (ASBJ Statement
No.7, revised on September 13, 2013)• Accounting Standard for Earnings Per Share (ASBJ Statement
No.2, revised on September 13, 2013)• Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures (ASBJ
Guidance No.10, revised on September 13, 2013)• Guidance on Accounting Standard for Earnings Per Share (ASBJ
Guidance No.4, revised on September 13, 2013)
Those standards have been revised mainly focusing on (a)accounting for the changes in a parent’s ownership interest in its
subsidiary, due to a parent’s additional purchase of ownership interests in its subsidiary or other cases, while the parent retains its controlling interest in its subsidiary, (b) accounting for acquisition-related
costs, (c) accounting for finalization of provisional purchase price allocation and (d) presentation of net income and name change from“minority interests” to “non-controlling interests.” The Company andits consolidated subsidiaries will adopt the revised standards at the
beginning of the year commencing on April 1, 2015. The effect thatthe adoption of those standards will have on the consolidated financial statements is currently under evaluation.

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3.

BUSINESS REORGANIZATIONSThere were no significant business reorganizations for the years

4.

ended March 31, 2014, 2013 and 2012.

FINANCIAL INSTRUMENTS(1) Risk management policy regarding financial instrumentsa. Policy on financial instruments
The Company and its consolidated subsidiaries make fund procurements mainly through bank loans and issuance of bonds.
The temporary surplus funds are invested in low-risk financial
assets. Derivative instruments are used to mitigate risks referred
to below, and the Company and its consolidated subsidiaries do
not enter into speculative derivative transactions or transactions
with high volatility on fair value.
b. Risk management
Notes and accounts receivable and lease deposits are subject tocustomers’ credit risk (risk related to customers’ failure to perform a contract). Each business division monitors due dates andbalances for each counterparty to mitigate the risk of thosereceivables being uncollectible due to financial difficulties andother factors.
Investment in equity securities is exposed to market-price risk.
The securities are mainly those of companies with business relationships. The Company and its consolidated subsidiaries periodically monitor market prices and continuously review whether
the securities should be held.
Notes and accounts payable are mostly due within one year.
Short-term debt is mainly used for funding working capital.
Procurement from long-term debt and bonds payable, of which

the maturities are due within 20 years from the balance sheet
date, are mainly used for capital expenditures. Debt with floatinginterest rates is subject to interest-rate risk. The Company and its
consolidated subsidiaries utilize derivatives (interest rate swaps)
as hedging instruments for some long-term debt with floatinginterest rates to fix the cash flows of interest payments.
Exchange rate risk on borrowings made and bonds issued in
non-functional currencies are hedged by utilizing currency
swaps. Refer to Note 2 (R) for details on hedge accounting,hedge policy, assessment of hedge effectiveness and other matters.
By using derivative instruments, the Company and its consolidated subsidiaries are exposed to counterparty’s credit risk andmarket risks such as interest rate risk and exchange rate risk.
The Company and its consolidated subsidiaries manage thecredit risk by carefully evaluating the financial positions of major
financial institutions before entering into contracts. The derivativetransactions are executed and managed by procedures set forthin the policies established in each group company and arereported periodically to directors in charge.
Payables, debt and deposits from customers are subject toliquidity risk (risk of being unable to pay on a due date). The risk
is managed by preparing and updating monthly cash schedules
and by preserving liquidity on hand.

(2) Estimated fair value of financial instruments
The carrying amount, estimated fair value and the difference of financial instruments as of March 31, 2014, 2013 and 2012 are summarized in
the following table. Information on financial instruments for which the fair value is not reliably measurable is not included in the below table(refer to b).
Millions of yen

Thousands of U.S. dollars (See Note 1)

2014

AssetsCash and bank deposits *1
Notes and accounts receivable—tradeMarketable and investment securities
Liabilities
Notes and accounts payable—trade
Bank loans and long—term debt due within one year
Non—recourse
Other
Long—term debt due after one year
Non—recourse
Other
Derivative instruments *2

Carrying
amountEstimated
fair value¥ 127,883
34,400291,533¥ 127,883
34,400291,589

130,695

130,695—

1,269,870

1,269,870—

115,316
218,833

115,316
219,995—
1,162

1,120,442
2,126,244

1,120,442
2,137,534—
11,290120,950
1,584,973
3,325

121,079
1,631,497
3,325

129
46,524—

1,175,185
15,400,049
32,307

1,176,438
15,852,089
32,3071,253
452,040—

Difference

¥

—
—
56

Carrying
amountEstimated
fair value$ 1,242,548 $ 1,242,548
334,240
334,240
2,832,618
2,833,162

Difference

$

—
—
544

52

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Millions of yen

2013

AssetsCash and bank deposits *1
Notes and accounts receivable-tradeMarketable and investment securities
Liabilities
Notes and accounts payable-trade
Bank loans and long-term debt due within one year
Non-recourse
Other
Commercial paper
Long-term debt due after one year
Non-recourse
Other
Derivative instruments *2

Carrying
amountEstimated
fair value¥ 102,234
29,266277,181¥ 102,234
29,266277,251

100,705

100,705—

1,780
237,653
27,000

1,782
239,083
27,0002
1,430—

234,358
1,619,435
2,001

235,482
1,674,777
2,001

1,124
55,342—Difference

¥

—
—
70

Millions of yen

2012
Carrying
amountAssetsCash and bank deposits *1
Notes and accounts receivable-tradeMarketable and investment securities
Liabilities
Notes and accounts payable-trade
Bank loans and long-term debt due within one year
Non-recourse
Other
Commercial paper
Long-term debt due after one year
Non-recourse
Other
Derivative instruments *2¥

62,274
26,539
175,733

Estimated
fair value¥

62,274
26,539
175,770

Difference

¥

—
—
37

101,321

101,321—83
259,839
37,00084
260,835
37,000

1
996
—

8,931
1,437,558
4,366

9,764
1,479,005
4,366

833
41,446—*1 Carrying amount of cash and bank deposits consists of ¥127,337 million ($1,237,243 thousand), ¥101,589 million and ¥61,727 million of cash and cash equivalents and ¥546 million ($5,305 thousand),¥645 million and ¥547 million of bank deposits with maturities exceeding 3 months, which are included in other current assets in the accompanying consolidated balance sheets as of March 31, 2014, 2013
and 2012, respectively.
*2 Carrying amount and estimated fair value of derivative instruments represent derivative assets netted against derivative liabilities.

a. Estimation of fair value
The following methods and significant assumptions were used toestimate the fair value of financial instruments for which the fairvalue is reasonably measurable.
Cash and bank deposits and notes and accounts receivabletrade—The carrying amount of cash and bank deposits and notes
and accounts receivable-trade approximates fair value due to theirrelatively short maturity.
Marketable and investment securities—Fair value of those securities is based on quoted market prices. Refer to Note 5 for detailed
information.
Notes and accounts payable-trade and commercial paper—
The carrying amount of notes and accounts payable-trade andcommercial paper approximates fair value due to their relatively
short maturity.
Bank loans and long-term debt due within one year—The carrying amount of bank loans approximates fair value due to their relatively short maturity. Fair value of long-term debt and bonds

payable due within one year is calculated by discounting the future
cash flows, using the borrowing interest rates expected to be currently available for the Company and its consolidated subsidiaries
for debt with similar terms and remaining maturities as the discountrates.
Long-term debt due after one year—Fair value of long-term debt
due after one year is calculated by discounting the future cash
flows, using the borrowing interest rates expected to be currently
available for the Company and its consolidated subsidiaries fordebt with similar terms and remaining maturities as the discountrates.
Derivative instruments—Refer to Note 6.
Fair value of financial instruments includes amounts based onquoted market prices and amounts reasonably calculated. Fairvalue reasonably calculated, incorporating fluctuating factors, issubject to change under different assumptions. Nominal amountshown in Note 6 does not represent the market risk regarding thederivative transactions.

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b. Financial instruments for which the fair value is not reliably measurable
For the following financial instruments, for which there were no quoted market prices, reasonable estimates of fair values could not be madewithout incurring excessive costs because of the difficulty in estimating future cash flows. Thus, information on those instruments is not presented in the above table.
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

¥ 12,065¥ 10,966¥ 57,569$ 117,227

Unlisted stocks (excluding OTC securities)

14,731

14,897

16,172

143,131

Other (TK investments, preferred securities and others)

33,50237,292

83,473

325,515

135,770

148,736

160,846

1,319,180

345,617344,923

353,837

3,358,113

Assets:Equity investments in properties for sale
Other securities

Lease deposits *Liabilities:
Deposits from tenants ** While fair value accounting is applied to some lease deposits and deposits from tenants, they are not separately disclosed since they are not material.

c. Redemption schedule
The redemption schedule on cash and cash equivalents, receivables and securities with maturities as of March 31, 2014, 2013 and 2012 is as follows.
Refer to Note 13 for redemption schedule for long-term debt.
Millions of yen

2014

Cash and bank deposits *Notes and accounts receivable-trade

Due within 1 year

Due after 1 year
and within 5 years¥127,883¥ —34,400—Due after 5 Years
and within 10 Years¥

Due after 10 Years

—

¥—

—

—

Other securities
National and local government bonds, etc.

249

603

1,260

—

¥162,532¥603¥1,260¥—Due after 5 Years
and within 10 Years

Due after 10 Years

Millions of yen

2013

Cash and bank deposits *Notes and accounts receivable-trade

Due within 1 year

Due after 1 year
and within 5 years¥102,234¥ —29,266

¥

—

¥—

—

—

—

35

753

1,121

—

¥131,535¥753¥1,121¥—

Due after 5 Years
and within 10 Years

Due after 10 Years

Other securities
National and local government bonds, etc.

Millions of yen

2012
Due within 1 year

Due after 1 year
and within 5 years

Cash and bank deposits *¥62,274¥ —Notes and accounts receivable-trade26,539

—

¥

—

¥—

—

—

Other securities
National and local government bonds, etc.

15

717

1,011

—

¥88,828¥717¥1,011¥—Thousands of U.S. dollars (See Note 1)

2014
Due within 1 year

Cash and bank deposits *Notes and accounts receivable-trade$1,242,548
334,240

Due after 1 year
and within 5 years$——

Due after 5 Years
and within 10 Years$

Due after 10 Years

—

$—

—

—

Other securities
National and local government bonds, etc.

54

2,419

5,859

12,243—$1,579,207$5,859$12,243$—* Carrying amount of cash and bank deposits consists of ¥127,337 million ($1,237,243 thousand), ¥101,589 million and ¥61,727 million of cash and cash equivalents and ¥546 million ($5,305 thousand), ¥645
million and ¥547 million of bank deposits with maturities exceeding 3 months, which are included in other current assets in the accompanying consolidated balance sheets as of March 31, 2014, 2013 and2012, respectively.

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5.

FAIR VALUE INFORMATION OF MARKETABLE SECURITIES, INVESTMENT SECURITIES AND OTHERS(1) The following tables summarize historical cost, book value and fair value of securities as of March 31, 2014, 2013 and 2012:(a) Held-to-maturity securities:
Millions of yen

2014

2013

Book Value Fair Value

Difference Book Value Fair Value

2012
Difference Book Value Fair Value

Difference

Securities whose fair value exceeds book value
National and local government bonds, etc.

¥1,815¥1,874¥59¥1,777¥1,848¥71¥1,507¥1,545¥38

Securities whose fair value does not exceed book value
National and local government bonds, etc.
Total

297

294

(3)

132

131

(1)

236

235

(1)

¥2,112¥2,168¥56¥1,909¥1,979¥70¥1,743¥1,780¥37

DifferenceBook Value(Fair Value)

Historical
CostThousands of U.S. dollars(See Note 1)

2014
Book Value Fair Value

Difference$17,635 $18,208$573

Securities whose fair value exceeds book value
National and local government bonds, etc.
Securities whose fair value does not exceed book value
National and local government bonds, etc.

2,886

Total

2,857

(29)

$20,521 $21,065$544(b) Other securities:
Millions of yen

2014Book Value(Fair Value)

Historical
Cost

2013
DifferenceBook Value(Fair Value)

Historical
Cost

2012
Difference

Securities whose book value (fair value)
exceeds historical cost
Stocks¥227,534 ¥72,964 ¥154,570¥214,972 ¥74,103¥140,869¥114,426 ¥35,955 ¥78,471

Other

47,91830,241

25,842

4,399

Subtotal

275,452 101,564 173,888 262,554 101,611 160,943 144,667

61,797

82,870Stocks13,96915,353(1,384)

12,71814,146(1,428)29,32333,893(4,570)Subtotal

13,96915,353(1,384)

12,71814,146(1,428)29,32333,893(4,570)28,60019,31847,58227,50820,074

Securities whose book value (fair value)
does not exceed historical cost

Total

¥289,421 ¥116,917 ¥172,504¥275,272¥115,757¥159,515¥173,990 ¥95,690 ¥78,300
Thousands of U.S. dollars (See Note 1)

2014
Book Value(Fair Value)

Historical Cost

Difference

Securities whose book value (fair value)
exceeds historical cost
Stocks$2,210,785

Other

465,585$708,939 $1,501,846
277,886

187,699

Subtotal

2,676,370

986,825

1,689,545

Stocks135,727

149,174(13,447)

Subtotal

135,727

149,174(13,447)

Securities whose book value (fair value) does
not exceed historical costTotal

$2,812,097 $1,135,999 $1,676,098

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(2) The following table summarizes other securities sold in the years ended March 31, 2014, 2013 and 2012:
Millions of yen

2014

2013

2012

Sales amount

Gains

LossesSales amount

Gains

LossesSales amount

Gains

LossesStocks¥1,547¥85¥(32)¥4,199¥3,442

¥—

¥342

¥9

¥(69)

Total

¥1,547¥85¥(32)¥4,199¥3,442

¥—

¥342

¥9

¥(69)

Thousands of U.S. dollars (See Note 1)

2014
Sales amount

Gains

LossesStocks$15,031$826$(311)

Total$15,031$826$(311)(3) The Company and its consolidated subsidiaries recognized ¥nil million ($nil thousand), ¥4 million and ¥1,256 million of impairment loss on
investment securities for the years ended March 31, 2014, 2013 and 2012, respectively.

6.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS

The following summarizes hedging derivative financial instruments accounted for under hedge accounting as of March 31, 2014, 2013 and2012:
Millions of yen

2014
Nominal Amount
Hedged items
1

Interest rate swap *Pay: fixed rate
Receive: floating rate
Foreign currency swap *2
Foreign exchange forward *3

Total

Due after 1 year

Fair Value*4¥775,000
20,000¥691,500
20,000

¥ —*1
3,323

1,607

—

2

¥796,607¥711,500¥3,325Long-term debt

Long-term debt
Forecasted transactions denominated inforeign currencies

Total

Millions of yen

2013
Nominal Amount
Hedged items

Interest rate swap *1
Pay: fixed rate
Receive: floating rate
Foreign currency swap *2
Foreign exchange forward *3

Total

Due after 1 year

Fair Value*4¥782,500
30,000¥719,000
20,000

¥ —*1
1,976

1,024

—

25

¥813,524¥739,000¥2,001Long-term debt

Long-term debt
Forecasted transactions denominated inforeign currencies

Total

Millions of yen

2012
Nominal Amount
Hedged items

Interest rate swap *1
Pay: fixed rate
Receive: floating rate
Foreign currency swap *2
Foreign exchange forward *3
Total

Total

Due after 1 year

Fair Value*4¥659,000
30,000¥515,000
30,000

¥ —*1
5,079

743

—

30

¥689,743¥545,000¥5,109Long-term debt

Long-term debt
Forecasted transactions denominated inforeign currencies

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Thousands of U.S. dollars (See Note 1)

2014
Nominal Amount
Hedged items
1

Interest rate swap *Total

Fair Value*4

Due after 1 year

Long-term debt

Pay: fixed rate
Receive: floating rate
Foreign currency swap *2
Foreign exchange forward *3

Long-term debt
Future transactions denominated inforeign currencies

Total

$

—*1
32,288$7,530,120
194,326$6,718,810
194,326

15,614—19$7,740,060$6,913,136$32,307* 1: The net amount to be paid or received under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap contract was executed. Thus, the fair valueof the interest rate swap is included in the fair value of long-term debt including those due within one year.
*2: Recognition of gains or losses resulting from changes in fair value of foreign currency swap contracts are deferred until the related losses or gains on the hedged items are recognized.
*3: Future transactions denominated in foreign currencies will be recorded using the contracted forward rate, and no gains and losses on the foreign exchange forward contract are recognized.
*4: Fair values are calculated mainly by discounting the future cash flows.

7.

INVESTMENT AND LEASING PROPERTIESThe Company and its consolidated subsidiaries have followed“Accounting Standard for Disclosures about Fair Value ofInvestment and Rental Property” (ASBJ Statement No.20;
November 28, 2008) and its implementation guidance “Guidanceon Accounting Standard for Disclosures about Fair Value ofInvestment and Rental Property” (ASBJ Guidance No.23,
November 28, 2008) which require explanations on investment andleasing properties and disclosure of fair value of those properties.
Investment and leasing properties are properties held to earn rentals or for capital appreciation, and include (1) properties classified
as investment properties in the balance sheet, (2) idle propertiesand (3) leasing properties other than (1) and (2).
The Company and its certain subsidiaries own office buildings forrent, commercial facilities and other properties in Tokyo and otherareas. Net rent income, gain on disposal of property and equipment, impairment loss and loss on disposal of property and equip-

ment regarding those investments and leasing properties were¥97,359 million ($945,968 thousand), ¥13,178 million ($128,041
thousand), ¥10,131 million ($98,436 thousand) and ¥9,070 million($88,127 thousand) for the year ended March 31, 2014. Net rent
income, loss on disposal of property and equipment and impairment loss regarding those investments and leasing properties were
¥92,808 million, ¥8,710 million and ¥6,996 million for the year
ended March 31, 2013. Net rent income and loss on disposal ofproperty and equipment regarding those investments and leasing
properties were ¥83,794 million and ¥3,969 million for the year
ended March 31, 2012. Gross rent revenue is included in revenue
from operations and gross cost for rent is included in cost of revenue from operations. Gain on disposal of property and equipment isincluded in interest, dividends and miscellaneous income (see Note20). Impairment loss and loss on disposal of property and equipment are included in other costs and expenses (see Note 21).

The carrying amounts, net changes in the carrying amounts and the fair value of the investment and leasing properties as of and for the years
ended March 31, 2014, 2013 and 2012 are stated below:
Millions of yen

2014

2013

Carrying amount
Beginning ofyear

Net Increaseduringthe year¥2,247,555¥9,231

End of year

Fair value

Carrying amountEnd of year

Net Increaseduringthe year

Beginning ofyear

End of year

2012
Fair value

Carrying amountEnd of year

Net Increaseduringthe year

Beginning ofyear

Fair value

End of year

End of year

¥2,256,786¥3,472,694¥2,049,667 ¥197,888 ¥2,247,555¥3,168,024¥1,986,866 ¥62,801 ¥2,049,667¥2,860,072

Thousands of U.S. dollars (See Note 1)

2014
Carrying amount

Fair value

Beginning of year

Net Increase during
the yearEnd of year

End of year

$21,837,884$89,691$21,927,575$33,741,683

Carrying amount represents acquisition cost less accumulated depreciation and accumulated loss on impairment.
The net increase in the carrying amounts mainly consists of acquisitions of real estate which amounts to ¥112,638 million ($1,094,423
thousand) and sales of real estate which amounts to ¥83,463 million ($810,950 thousand) for the year ended March 31, 2014.
The net increase in the carrying amounts mainly consists of adoption of “Accounting Standard for Consolidated Financial Statements”(ASBJ Statement No. 22, revised on March 25, 2011) and other related statements which amounts to ¥234,327 million for the year ended
March 31, 2013.
The net increase in the carrying amounts mainly consists of acquisitions of real estate which amounts to ¥86,407 million for the year ended
March 31, 2012.
Estimated fair value was calculated internally based on Japanese Real Estate Appraisal Standards.

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8.

INVENTORIESInventories at March 31, 2014, 2013 and 2012 comprise the following:Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Completed¥483,669¥450,504¥241,139$4,699,466

In progress

270,060

239,301

241,5812,623,980

Land held for development

196,512214,206

150,333

1,909,366

Expenditure on contracts in progress

17,446

11,601

9,235

169,510Other

10,503

9,096

8,668

102,050

Total¥978,190¥924,708¥650,956$9,504,372

Real property for sale

9.

ADVANCES PAID FOR PURCHASES

Advances paid for purchases comprise primarily advance payments for purchasing real estate for sale.

10. LEASE DEPOSITSThe Company and its consolidated subsidiaries lease certain office buildings and commercial facilities from the owners thereof and sublease
them to subtenants. In these transactions, the Company and its consolidated subsidiaries pay lease deposits to the owners and receive
deposits from subtenants (See Note 15).

11. INCOME TAXES
Significant components of the Company’s deferred tax assets and liabilities as of March 31, 2014, 2013 and 2012 are as follows:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Deferred tax assets:
Net defined benefit liability
Excess allowance for retirement benefits¥ 14,049

¥

—

¥

—

$

136,504—

12,894

11,988—Loss on impairment of fixed assets

10,681

9,098

11,857103,780

Allowance for loss on devaluation of real property held
for sale

9,359

10,965

11,62990,935

Allowance for loss on valuation of securities

9,153

8,587

8,610

88,933

Unrealized inter-company transactions

7,389

7,710

6,306

71,794

Accrued employees’ bonuses

6,218

6,205

6,011

60,416

Excess depreciation expense

4,155

3,883

3,655

40,371

Unrealized loss on valuation of lease deposits

4,035

4,010

3,951

39,205

Accrued enterprise tax

2,730

2,675

1,102

26,525

Other

22,921

19,72328,214

222,707

Total¥ 90,690¥ 85,750¥ 93,323$

881,170

Deferred tax liabilities:
Unrealized gain on valuation of securities(61,965)(57,354)(29,514)(602,070)

Deferred gain on sale of land and buildings for tax
purposes(17,209)(21,321)(21,362)(167,207)

Consolidation difference in real property(7,367)(3,177)(371)(71,580)

Unrealized loss on valuation of shares held inconsolidated subsidiaries(4,805)(3,378)(3,444)(46,687)

Unrealized gain on valuation of lease deposits(3,967)(3,917)(3,864)(38,545)

Other(35,346)(28,788)(23,330)(343,432)

Total¥(130,659)¥(117,935)¥(81,885)$(1,269,521)¥(39,969)¥(32,185)¥11,438$(388,351)

Net deferred tax assets (liabilities)

Amounts of total deferred tax assets as of March 31, 2014, 2013 and 2012 are presented net of valuation allowances of ¥7,177 million($69,734 thousand), ¥14,237 million and ¥16,447 million, respectively.

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Significant differences between the statutory tax rate and the Company’s effective tax rate for the years ended March 31, 2013 and 2012
are as follows:
Statutory tax rate

2013

2012

37.99%

40.66%(Adjustments)
Allowance for doubtful accounts

3.68

—-

Change in tax rate

—-

3.64

Higher tax rates on foreign subsidiaries

0.87

1.37

Equity in net income of affiliated companies(0.98)(2.07)

Entertainment expenses and other (permanent differences)

0.97

1.28

Other

2.88

1.46

Effective tax rate

45.41%

46.34%

Information as of March 31, 2014 is not disclosed as the difference is insignificant.
As a result of promulgation of the amended tax laws on March
31, 2014, the Company and its domestic consolidated subsidiaries
are no longer subject to the restoration surtax for the years beginning on or after April 1, 2014 (Refer to Note 2(Q)).
As a result of the amendment, income taxes increased by¥1,258 million ($12,223 thousand). Current deferred income tax

assets, non-current deferred income tax assets, current deferredincome tax liabilities, non-current deferred income tax liabilities anddeferred income tax liabilities on land revaluation decreased by¥1,202 million ($11,679 thousand), ¥119 million ($1,156 thousand),¥40 million ($389 thousand), ¥24 million ($233 thousand) and ¥33
million ($321 thousand), respectively. Reserve on land revaluation
increased by ¥33 million ($321 thousand).

12. EMPLOYEES’ RETIREMENT BENEFITS(1) Outline of retirement benefit plan
The Company and its consolidated subsidiaries have adopted
funded and unfunded defined benefit plans and defined contribution plans for employees’ retirement benefits.
The Company and its consolidated subsidiaries have adopted a
corporate pension plan and lump-sum pension plans as defined
benefit plans, under which employees are entitled to lump-sum or
annuity payments based on their respective salaries and service

periods. The Company has established a retirement benefit trust for
its corporate pension plan. The Company’s certain consolidated
subsidiaries have calculated net defined benefit liability and retirement benefit expenses using the simplified method, under which
actuarial calculation is not adopted.
(2) Defined benefit plans
Information at March 31, 2014 and for the year then ended(a) Change in benefit obligation, excluding plans accounted for under the simplified method, for the year ended March 31, 2014:
Millions of yen

Thousands of U.S.
dollars (See Note 1)

2014

2014

¥128,709$1,250,573

Service cost

5,800

56,354

Interest cost

2,263

21,988Benefit obligation at beginning of year

Actuarial differences

215

2,089

Prior service costs(223)(2,167)(3,764)(36,572)

Benefits paid
Other
Benefit obligation at end of year

76

739

¥133,076$1,293,004(b) Change in plan assets, excluding plans accounted for under the simplified method, for the year ended March 31, 2014:
Millions of yen

Thousands of U.S.
dollars (See Note 1)

2014

2014

¥86,799$843,364

Expected return on plan assets

1,877

18,237

Actuarial differences

4,743

46,084

Employer contribution

7,537

73,232

Benefits paid

(2,567)(24,942)Fair value of plan assets at beginning of year

Other
Fair value of plan assets at end of year

69

671

¥98,458$956,646

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(c) Change in net defined benefit liability under simplified method for the year ended March 31, 2014:
Millions of yen

Net defined benefit liability at beginning of year

Thousands of U.S.
dollars (See Note 1)

2014

2014

¥2,696$26,195

Retirement benefit expenses

341

3,313

Benefits paid

(272)

(2,643)Contribution to the plan

(34)

(330)

Other

(25)

(243)

¥2,706$26,292

Net defined benefit liability at end of year(d) Amount recognized in the consolidated balance sheets, including plans accounted for under the simplified method, at March 31, 2014:
Millions of yen

Benefit obligation for funded plan
Plan assets

Thousands of U.S.
dollars (See Note 1)

2014

2014

¥110,405$1,072,726(98,737)(959,357)¥11,668$113,369

Benefit obligation for unfunded plan

25,658249,301

Net amount recognized on the consolidated balance sheets¥37,326$362,670

Net defined benefit liability

37,406363,447

Net defined benefit asset

(80)

(777)

¥ 37,326$ 362,670

Millions of yen

Thousands of U.S.
dollars (See Note 1)

2014

2014

Service cost

¥ 5,800$ 56,354

Interest cost

2,263

21,988

Expected return on plan assets(1,877)(18,237)

Actuarial differences recognized in earnings

1,494

14,516

Prior service costs recognized in earnings

42

408

Retirement benefit expenses under simplified method

341

3,313

¥ 8,063$ 78,342

Millions of yen

Thousands of U.S.
dollars (See Note 1)

2014

2014

Unrecognized prior service costs¥ (139)$ (1,350)

Unrecognized actuarial differences

4,518

43,898

Total¥4,379$42,548

Net amount recognized on the consolidated balance sheets(e) Details of retirement benefit expenses for the year ended March 31, 2014:

Defined benefit expenses(f) Amount recognized in accumulated other comprehensive income (pretax) at March 31, 2014:(g) The asset allocation for the plans, excluding plans accounted for under the simplified method, at March 31, 2014:
2014

Domestic bonds

25.1%

Domestic stocks

21.7

Life insurance company general accounts

14.1

Foreign stocks

13.2

Foreign bonds

5.3

Cash and bank deposits

4.9

Other

15.7

Total

100.0%* The plan assets include retirement benefit trust established for corporate pension plan which accounts for 7.3% of the total plan assets.

The expected long-term rate of return on plan assets is determined based on the actual return on the plan asset portfolios and the expected rate of return on those portfolios.

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(h) Basis for actuarial calculation:
2014

Discount rates

1.2 – 1.9%

Expected long-term rates of return on plan assets

1.0 – 2.5%

Information at March 31, 2013 and 2012 and for the years then ended(a) Details of projected benefit obligation as of March 31, 2013 and 2012:
Millions of yen

1. Projected benefit obligation
2. Fair value of plan assets

2013

2012

¥(131,791)¥(126,817)

87,18670,250¥ (44,605)¥ (56,567)

4. Unrecognized actuarial differences

10,54723,471

5. Unrecognized prior service costs

125

143

6. Prepaid pension expenses

391

49

¥ (34,324)¥ (33,002)

3. Unaccrued projected benefit obligation (1+2)

7. Allowance for employees’ retirement benefits (3+4+5-6)
Note: Certain consolidated subsidiaries adopt the simplified method to calculate projected benefit obligation.

(b) Details of retirement benefit expenses for the years ended March 31, 2013 and 2012:
Millions of yen

1. Service costs—benefits earned during the year

2013

2012

¥ 6,040¥ 5,906

2. Interest costs on projected benefit obligation

2,254

2,461

3. Expected return on plan assets(1,483)(1,500)4. Amortization of actuarial differences

3,602

3,465

5. Amortization of prior service costs

26

176

6. Other(11)

36¥10,428¥10,544

7. Retirement benefit expenses (1+2+3+4+5+6)
Note: Retirement benefit expenses of consolidated subsidiaries adopting the simplified method are included in service costs.

(c) Basis for measurement of projected benefit obligation and other items for the years ended March 31, 2013 and 2012:
2013

2012

1. Allocation method for the projected retirement benefits

Straight-line method

Straight-line method

2. Discount rates

1.2–1.9%

1.2–2.2%

3. Expected rates of return on plan assets

1.0–2.5%

4. Years over which the prior service costs are allocated

1–10
years

Straight-line method
over a certain numberof years within the
average remaining
service years

1–10
years

Straight-line method
over a certain numberof years within the
average remaining
service years

5. Years over which the actuarial differences obligations areallocated

5–10
years

Straight-line method
over a certain numberof years within the
average remaining
service years

5–10
years

Straight-line method
over a certain numberof years within the
average remaining
service years

1.0–2.5%(3) Defined contribution plans
Contribution made to the defined contribution plans by the Company’s certain consolidated subsidiaries amounted to ¥88 million ($855 thousand) for the year ended March 31, 2014.

13. BANK LOANS, COMMERCIAL PAPER AND LONG-TERM DEBT
(1) Bank loans and commercial paper
Bank loans consist mainly of short-term notes and short-term borrowings under the loan agreements. The Company and its consolidated subsidiaries have had no difficulty in renewing such notes
and borrowings, when they considered it appropriate to do so.

The amounts and the weighted average interest rates of bank loans
and commercial paper at March 31, 2014, 2013 and 2012 are as
follows:

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Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Bank loans
Non-recourse, with the weighted average interest rates
of 0.20% in 2014

¥ 8,000——$ 77,730

Other, with the weighted average interest rates of 0.81%
in 2014, 0.55% in 2013 and 0.52% in 2012

20,566¥27,086¥32,157

199,825

Commercial paper, with the weighted average interest rates
of 0.11% in 2013 and in 2012—

27,00037,000—(2) Long-term debt
Long-term debt at March 31, 2014, 2013 and 2012 comprise the following:Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Long-term loans, principally from banks and insurancecompanies:
Loans secured by collateral or bank guarantees¥ 189,814¥ 186,156

¥

9,270

$ 1,844,287

Unsecured loans

1,475,007

1,499,755

1,359,984

14,331,587

Total long-term loans, principally from banks and insurance companies

1,664,821

1,685,911

1,369,254

16,175,874

3.00% yen notes due 2013—

10,00010,000—2.25% yen notes due 2012

—

—

5,000

—

1.04% yen notes due 2013—

10,00010,000

—1.81%yen notes due 2014

10,00010,00010,00097,163

1.64%yen notes due 2014

10,00010,00010,00097,163

1.65%yen notes due 2015

10,00010,00010,00097,163

1.81%yen notes due 2016

20,00020,00020,000

194,325

1.99%yen notes due 2016

10,00010,00010,00097,163

1.91%yen notes due 2016

20,00020,00020,000

194,325

1.54%yen notes due 2014—

20,00020,000

—1.84%yen notes due 2017

10,00010,00010,00097,163

2.06%yen notes due 2017

20,00020,00020,000

194,325

1.65%yen notes due 2014

10,00010,00010,00097,163

1.97%yen notes due 2017

20,00020,00020,000

194,325

1.92%yen notes due 2018

10,00010,00010,00097,163

2.09%yen notes due 201910,00010,00010,00097,163

1.72%yen notes due 201910,00010,00010,00097,163

1.63%yen notes due 201910,00010,00010,00097,163

1.49%yen notes due 201910,00010,00010,00097,163

1.50%yen notes due 2020

10,00010,00010,00097,163

1.19%yen notes due 2020

10,00010,00010,00097,163

1.06%yen notes due 2020

10,00010,00010,00097,163

1.32%yen notes due 2020

10,00010,00010,00097,163

2.30%yen notes due 2030

10,00010,00010,00097,163

1.27%yen notes due 2021

10,00010,00010,00097,163

1.17%yen notes due 2021

10,00010,00010,00097,163

1.00%yen notes due 2022

10,00010,000—97,163

0.96%yen notes due 2022

10,00010,000—97,163

1.95%yen notes due 2032

10,00010,000—97,163

2.05%yen notes due 2033

10,000——97,163

0.25% — 1.35% notes due 2014 — 2017 (*1)

46,68550,229—453,605

Total bonds and debentures

346,685

380,229305,000

3,368,491

Bonds and debentures

Less amount due within one year
Long-term debt due after one year

(305,583)(212,347)(227,765)(2,969,131)¥1,705,923¥1,853,793¥1,446,489$16,575,234(*1) Represents the total balance of asset backed securities issued by the Company’s consolidated special purpose entities. The interest rates include both fixed rates and floating rates.

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Long-term loans, principally from banks and insurance companies consist of the following:Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Due within one year
Non-recourse, with the weighted average interest rate of
0.56% in 2014 and 1.33% in 2013¥

Other, with the weighted average interest rate of 1.43%
in 2014 and 1.76% in 2013

87,216

¥

1,647

¥

83

$

847,415

168,267

170,567

222,682

1,634,930¥ 255,483¥ 172,214¥ 222,765$ 2,482,345

Non-recourse, with the weighted average interest rate of
1.11% in 2014 and 1.14% in 2013

94,365

184,262

8,931

916,877

Other, with the weighted average interest rate of 1.38%
in 2014 and 1.37% in 2013

12,776,652

Subtotal
Due after one year

1,314,973

1,329,435

1,137,558

Subtotal

1,409,338

1,513,697

1,146,489

13,693,529

Total¥1,664,821¥1,685,911¥1,369,254$16,175,874

The weighted average interest rates of long-term loans, principally from banks and insurance companies in 2012 were 1.39% for those due
within one year and 1.55% for those due after one year.
Bonds and debentures consist of the following:Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Due within one year
Non-recourse
Other¥ 20,100

¥

133

¥

—

$ 195,297

30,00040,0005,000

291,489¥ 50,100

40,1335,000$ 486,786

Non-recourse

26,58550,096—258,308

Other

2,623,397

Sub-total
Due after one year

270,000

290,000

300,000

Sub-total

296,585

340,096

300,000

2,881,705

Total¥346,685¥380,229¥305,000$3,368,491

Long-term debt secured by collateral or bank guarantees consist of the following:Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

¥189,581¥185,909

¥ 257

233

247

9,013

2,264

189,814

186,156

9,270

1,844,287

Non-recourse

46,22048,790—449,086

Sub-total

46,22048,790—449,086¥236,034¥234,946¥9,270$2,293,373

Secured loans
Long-term loans, principally from banks and insurancecompanies
Non-recourse
Other
Sub-total$1,842,023

Bonds and debentures

Total

The following assets are pledged as collateral for secured loans:
Millions of yen

2014

2013

2012

Total

Non-recourse *Total

Non-recourse *Total

Real property for sale

¥213,703¥213,703¥199,425¥199,425

Buildings and structures

35,742

31,24959,15154,441

22,04017,096

Land

56,454

48,23932,52724,312

15,572

7,358

Other

36,24036,222

28,92028,899

549

525

Total

¥342,139¥329,413¥320,023¥307,077¥38,161¥24,979¥

Non-recourse *

—

¥

—

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Thousands of U.S.
dollars (See Note 1)

2014
Total

Real property for saleNon-recourse *$2,076,399 $2,076,399

Buildings and structures

347,279

303,624

Land

548,523

468,704

Other

352,119

351,943

Total$3,324,320 $3,200,670* Represents assets pledged as collateral for non-recourse loans.

As is customary in Japan, collateral must be given if requested,under certain circumstances, by a lending bank and such bank has
the right to offset cash deposited with it against any debt or obligation that becomes due and, in case of default and certain otherspecified events, against all debt payable to the bank. The
Company and its consolidated subsidiaries have never received any

such requests nor do they expect that any such request will be
made.
The annual maturities of long-term debt at March 31, 2014, 2013
and 2012 are as follows:
Millions of yen

2014
Non-recourse

Due within 1 year

¥107,316

2013

Other

Total

Non-recourse¥ 198,267 ¥ 305,583 ¥

1,780

Other

2012
Total

¥ 210,567 ¥ 212,347

Non-recourse

¥

83

Other

Total

¥ 227,682 ¥ 227,765

Due after 1 to 2 years

9,185

189,057

198,242

124,735

198,252

322,987

87

208,688

208,775

Due after 2 to 3 years

30,151

164,837

194,988

9,016

185,325

194,34192

198,252

198,344

Due after 3 to 4 years

66,314136,037

202,351

31,147

164,022

195,169

3,985

176,361

180,346

Due after 4 to 5 years

15,300161,736

177,036

69,460136,022

205,482

4,766

161,022

165,788—933,306

933,306—

935,814935,814—693,236

693,236¥1,830,002 ¥2,066,140¥9,013

Thereafter
Total¥228,266¥1,783,240 ¥2,011,506 ¥236,138¥1,665,241 ¥1,674,254

Thousands of U.S. dollars (See Note 1)

2014
Non-recourse

Due within 1 year

Other

Total

$1,042,712 $ 1,926,419 $ 2,969,131

Due after 1 to 2 years

89,244

1,836,932

1,926,176

Due after 2 to 3 years

292,956

1,601,603

1,894,559

Due after 3 to 4 years

644,326

1,321,774

1,966,100

Due after 4 to 5 years

148,659

1,571,473

1,720,132—

9,068,267

9,068,267

Thereafter
Total$2,217,897 $17,326,468 $19,544,365

14. ASSET RETIREMENT OBLIGATIONS(1) Asset retirement obligations recognized in the consolidated balance sheets as of March 31, 2014, 2013 and 2012
The Company and its consolidated subsidiaries, in connection with
operating commercial facilities and parking business (Mitsui
Repark), have entered into real estate lease contracts with terms
ranging from several months to 20 years. Asset retirement obligations have been recognized in respect of the obligation of theCompany and its consolidated subsidiaries to the landlords toremove the facilities from leased real estate at the end of thosecontracts. The liability has been calculated with expected useful
lives ranging from several months to 20 years and discount rates
ranging from 0 to 2.5%.
Asset retirement obligations are included in other current liabilities
and other long-term liabilities on the consolidated balance sheets.

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The following table summarizes the changes in the aggregate carrying amount of asset retirement obligations for the years ended March 31,
2014, 2013 and 2012:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

¥3,146¥2,945¥2,611$30,567

Increase due to acquisition of fixed assets

356

313

269

3,459

Net increase due to revisions to original estimate*

54

26

246

525

(122)

(175)

(420)

(1,185)

41

37

239

398

¥3,475¥3,146¥2,945$33,764

Beginning of year

Decrease due to settlement
Other
End of year

* Increase for the years ended March 31, 2014 and 2013 was mainly due to additions of decommissioning costs that have become measurable in a more accurate manner. Increase for the year ended March 31,
2012 was mainly due to additions of asbestos removal costs that have become reasonably measurable.

(2) Asset retirement obligations not recognized in the consolidatedbalance sheets as of March 31, 2014, 2013 and 2012
The Company and its consolidated subsidiaries own properties
containing asbestos material and are obligated to remove thosematerials upon disposition of the properties. However, since sufficient information is not available to reasonably estimate the obligation amount due to uncertainty about the method and timing ofsettlement, asset retirement obligation is not recognized for the
obligations to remove asbestos materials.

The Company and its consolidated subsidiaries, in connection
with some commercial facilities, hotels and retail premises, haveentered into real estate lease contracts and are obligated to thelandlords to dismantle the facilities upon exit. However, sufficient
information is not available to reasonably estimate the obligation
amount due to uncertainty about the timing of settlement or lack ofplan to settle. Thus asset retirement obligation regarding reestablishing the previous state is not recognized except for those mentioned in (1) above.

15. DEPOSITS FROM TENANTS
Deposits from tenants at March 31, 2014, 2013 and 2012 comprise the following:Thousands of U.S.
dollars (See Note 1)

Millions of yen

Non-interest-bearing

2014

2013

2012

2014

¥343,172¥341,525¥349,694$3,334,357

Interest-bearing
Total

2,445

3,398

4,143

23,756¥345,617¥344,923¥353,837$3,358,113

1.02%

1.10%

1.20%

Average interest rate
The Company and its consolidated subsidiaries generally makelease agreements with tenants under which they receive both interest-bearing deposits and non-interest-bearing deposits from tenants. The non-interest-bearing deposits and some of theinterest-bearing deposits are not refundable during the life of thelease. The rest of the interest-bearing deposits are generally refundable to the tenant in equal annual or monthly payments with interest
over certain periods of time commencing after the grace periods,
depending on the terms of the contracts.

16. NET ASSETS
Net assets comprises four subsections, which are shareholders’equity, accumulated other comprehensive income, subscription
rights to shares and minority interests, as applicable.
Under the Japanese Company Law (the “Law”), the entire
amount paid for new shares is required to be designated as common stock. However, a company may, by resolution of the Boardof Directors, designate an amount not exceeding one-half of theprices of the new shares as additional paid-in capital, which isincluded in capital surplus.
Under the Law, in cases where a dividend distribution of surplus
is made, the smaller of an amount equal to 10% of the dividend or
the excess, if any, of 25% of common stock over the total of additional paid-in-capital and legal earnings reserve must be set aside
as additional paid-in-capital or legal earnings reserve. Legal earn-ings reserve is included in retained earnings in the accompanying
consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital may be used to eliminate or reduce a deficit, or may be capitalized by resolution of the shareholders’ meeting. Additional paid-in
capital and legal earnings reserve may not be distributed as dividends. However, all additional paid-in capital and all legal earnings
reserve may be transferred to other capital surplus and retained
earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of the Company in accordance with Japanese laws andregulations.

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17. SUPPLEMENTAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS(1) Changes in number of shares issued and outstanding during the years ended March 31, 2014, 2013 and 2012 are as follows:(Thousands)

Numbers of shares as of March 31, 2011

IssuedTreasury stock

Common stock

Common stock

881,425

3,088

Numbers of shares increased (*1)—

74

Numbers of shares decreased (*2)

—

(63)

881,425

3,099

Numbers of shares as of March 31, 2012
Numbers of shares increased (*1)—

97

Numbers of shares decreased (*3)

—

(16)

Numbers of shares as of March 31, 2013

881,425

3,180

Numbers of shares increased (*1)—

149

Numbers of shares decreased (*4)

—

(58)

881,425

3,271

Numbers of shares as of March 31, 2014(*1) Treasury stock increased due to purchase of odd shares.
(*2) Treasury stock decreased due to sale of 23 thousand odd shares and exercise of 40 thousand shares of subscription rights.
(*3) Treasury stock decreased due to sale of 6 thousand odd shares and exercise of 10 thousand shares of subscription rights.
(*4) Treasury stock decreased due to sale of 4 thousand odd shares and exercise of 54 thousand shares of subscription rights.

(2) Information of subscription rights to shares is summarized as follows:
Thousands of U.S. dollars (See Note 1)

Millions of yen
Company

Type of subscription rights to shares

Consolidated
subsidiaries

Total

¥588

Company

Consolidated
subsidiaries

Total$8,006—¥8,006

Stock option

Balance as of March 31, 2012

¥588

—

Balance as of March 31, 2013

¥729

—

¥729

Balance as of March 31, 2014

¥824

—

¥824

Number of shares regarding stock options as of March 31, 2014, 2013 and 2012 and number of such shares increased and decreased during the years then ended are not presented as they are insignificant.

(3) Information of dividends is summarized as follows:(a) Dividends paid
The following resolution was approved by the ordinary general shareholders’ meeting held on June 27, 2013, June 28, 2012 and June 29,
2011:
Date of shareholders’ meeting
Type of stock
Total amount
Per share amount
Record date
Effective dateJune 27, 2013
Common stock¥9,661 million ($93,869 thousand)¥11 ($0.107)
March 31, 2013
June 28, 2013

June 28, 2012
Common stock¥9,662 million¥11
March 31, 2012
June 29, 2012

June 29, 2011
Common stock¥9,662 million¥11
March 31, 2011
June 30, 2011

The following resolution was approved by the Board of Directors’ meeting held on November 7, 2013, November 1, 2012 and October 31,
2011:
Date of board of directors’ meeting
Type of stock
Total amount
Per share amount
Record date
Effective dateNovember 7, 2013
Common stock¥9,661 million ($93,869 thousand)¥11 ($0.107)
September 30, 2013
December 3, 2013

November 1, 2012
Common stock¥9,662 million¥11
September 30, 2012
December 4, 2012

October 31, 2011
Common stock¥9,662 million¥11
September 30, 2011
December 2, 201166

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(b) Dividend whose record date falls within the current fiscal year but to be effective in the following fiscal year
The following resolution was approved by the ordinary general shareholders’ meeting held on June 27, 2014, June 27, 2013 and June 28,
2012:
Date of shareholders’ meeting
Type of stock
Total amount
SourcePer share amount
Record date
Effective dateJune 27, 2014
Common stock¥9,660 million ($93,859 thousand)
Retained earnings¥11 ($0.107)
March 31, 2014
June 30, 2014

June 27, 2013
Common stock¥9,661 million
Retained earnings¥11
March 31, 2013
June 28, 2013

June 28, 2012
Common stock¥9,662 million
Retained earnings¥11
March 31, 2012
June 29, 2012

18. STOCK OPTION PLANS
The following table summarizes the stock option plans introduced by the Company.
Stock option expenses charged to income for the years ended March 31, 2014, 2013 and 2012 are as follows:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Cost of revenue from operations

¥ 48

¥ 42

¥ 28

$ 466

Selling, general and administrative expenses

134

119

107

1,302

Total

¥182

¥161

¥135

$1,768The following table summarizes the contents and activity of stock options as of March 31, 2014 and for the year then ended:2013 plan
Grantees2012 plan2011 plan2010 plan2009 plan2008 plan2007 plan

Type of stock and number of shares
grantedDirectors,
Directors,
Directors,
Directors,
Directors,
Directors,
Directors,
corporate officers corporate officers corporate officers corporate officers corporate officers corporate officers corporate officers
and groupand groupand groupand groupand groupand groupand group
managing officers; managing officers; managing officers; managing officers; managing officers; managing officers; managing officers;
27 in total (*1)
25 in total (*1)
25 in total (*1)
25 in total (*1)
25 in total (*1)
26 in total (*1)
27 in total (*1)
66,650 shares of 134,640 shares of 143,040 shares of 140,420 shares of 109,650 shares of 71,250 shares of 48,880 shares ofcommon stock
common stock
common stock
common stock
common stock
common stock
common stock

Grant dateAugust 23, 2013

Vesting conditions
Requisite service period
Exercise period(*2)

August 17, 2012

August 12, 2011

August 13, 2010

August 14, 2009

August 15, 2008

September 18, 2007

(*2)

(*2)

(*2)

(*2)

(*2)

(*2)

(*2)

Not specified

Not specified

Not specified

Not specified

Not specified

Not specified

Not specified

August 24, 2013 – August 18, 2012 – August 13, 2011 – August 14, 2010 – August 15, 2009 – August 16, 2008 –August 23, 2043 August 17, 2042 August 12, 2041 August 13, 2040 August 14, 2039 August 15, 2038

September 19,
2007 –September
18, 2037

Non-vested options (number ofshares):Outstanding at beginning of year—

134,640

143,040

131,390

94,79053,83036,840Granted

66,650

—

—

—

—

—

—

Forfeited

—

—

—

—

—

—

—

Vested———(16,000)(17,360)(12,640)(8,420)66,650134,640

143,040

115,390

77,43041,19028,420

Outstanding at beginning of year

—

—

—

—

—

—

—

Vested———16,00017,36012,6408,420

Exercised———(16,000)(17,360)(12,640)(8,420)

Expired

—

—

—

—

—

—

—

Outstanding at end of year

—

—

—

—

—

—

—

Outstanding at end of year
Vested options (number of shares):

Yen/U.S. dollars(See Note 1)

Exercise price
Average stock price on exercise date
Grant-date fair value

Yen

Yen

Yen

Yen

Yen

Yen

¥1/$0.01

¥1

¥1

¥1

¥1

¥1

¥1

—/—

—

—

3,166

3,147

3,185

3,187

¥1,265¥919¥1,029¥1,493¥1,967¥2,357¥2,796/$27.17(*1) Grantees consist of 8 directors (excluding outside directors), 14 corporate officers (non-directors) and 5 group managing officers for 2013 plan, 9 directors (excluding outside directors), 9 corporate officers(non-directors) and 7 group managing officers for 2012 plan, 9 directors (excluding outside directors), 8 corporate officers (non-directors) and 8 group managing officers for 2011 plan, 8 directors (excluding outside directors), 9 corporate officers (non-directors) and 8 group managing officers for 2010 plan and 2009 plan, 6 directors (excluding outside directors), 12 corporate officers (non-directors) and 8 group managing officers for 2008 plan, and 6 directors (excluding outside directors), 13 corporate officers (non-directors) and 8 group managing officers for the 2007 plan.
(*2) Vesting conditions and exercise period:
Stock options granted are exercisable on the day following grantees leaving the positions of director, corporate officer or group managing officer, and for 5 years commencing on that date.

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The fair value of options was estimated using the Black-Scholes option pricing-model under the following assumptions:2013 plan

Expected volatility (*1)

2011 plan

40%

40%

15 years

15 years

15 years¥22 ($0.21) per share¥22 per share¥22 per share

1.28%

1.39%

1.58%

Expected life (*2)
Expected dividend (*3)

2012 plan

40%

Risk-free rate (*4)(*1) Expected volatility is calculated based on the historical stock price for the 15-year period ending on the grant date.
(*2) Options are assumed to be exercised at the midpoint of the exercise period because of the difficulty to reasonably estimate expected life due to insufficient historical data.
(*3) Expected dividend is the expected dividend amount for the fiscal year in which the options are granted, estimated as of the grant date.
(*4) Risk-free rate represents the interest rate of Japanese government bonds whose life corresponds to the expected life of stock options.

Number of vesting options is estimated based on actual forfeitures due to difficulty in reasonably estimating future forfeitures.

19. IMPAIRMENT LOSS ON FIXED ASSETS
During the year ended March 31, 2014, the Company and certain
consolidated subsidiaries recognized impairment losses for the fol-lowing groups of assets.

Primary use

Type of assets

Location

Leasing properties, etc.

Buildings, land, etc.

New York State, U.S.A., etc.

For the purpose of identifying fixed assets that are impaired, theCompany and certain consolidated subsidiaries grouped their fixed
assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets or groups ofassets. The corporate headquarters’ facilities are treated as common assets.
In the light of a significant decrease in the projected recoverable
amount due to the Company’s decision to sell the leasing properties early, the Company recorded impairment loss on those proper-

ties. In addition, considering significant deterioration of profitability
due to a decline in current rental rates, adverse changes in market
conditions and other factors, the Company reduced the book values of operating facilities to their recoverable amounts and recognized impairment losses.
Impairment losses totaling ¥11,557 million ($112,291 thousand)are comprised of ¥4,642 million ($45,103 thousand) of buildings
and structures and ¥6,915 million ($67,188 thousand) of land.

During the year ended March 31, 2013, the Company and certain consolidated subsidiaries recognized impairment losses for the following
groups of assets.
Primary use

Type of assets

Leasing properties, etc.

Buildings, land, etc.

Nagoya City, Aichi, etc.

Operating facilities

Buildings, land, etc.

Nara City, Nara

For the purpose of identifying fixed assets that are impaired, theCompany and certain consolidated subsidiaries grouped their fixed
assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets or groups ofassets. The corporate headquarters’ facilities are treated as common assets.
In the light of a significant decrease in the projected recoverable
amount due to the Company’s decision to sell the leasing properties early, the Company recorded impairment loss on those properties. In addition, considering significant deterioration of profitability
due to a decline in current rental rates, adverse changes in market
conditions and other factors, the Company reduced the book values of operating facilities to their recoverable amounts and recog-

Location

nized impairment losses.
Impairment losses totaling ¥7,769 million are comprised of¥4,405 million of buildings and structures, ¥3,284 million of landand ¥80 million of others.
Recoverable amounts are measured by net realizable values orvalues in current use. Net realizable values are determined mainly
based upon appraisal values calculated by real-estate appraisers.
Values in current use are calculated based on the present values of
future cash flows, using a discount rate of 5%.
During the year ended March 31, 2012, there were no impairment losses recognized by the Company and its consolidated subsidiaries.

68

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20. MAJOR COMPONENTS OF INTEREST, DIVIDENDS AND MISCELLANEOUS INCOME
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

382

¥ 241

3,760

3,332

3,221

36,533

—

3,442

—

—

13,1902,859—

128,158

Years ended March 31,

Interest income
Dividend income¥

584

Gain on sale of investment securities
Gain on sale of property and equipment
Gain on sales of investments in unconsolidated subsidiaries
and affiliated companies

¥

2014

$

5,675

—

2,369

—

—

Other

3,853

3,290

2,392

37,436

Total¥21,387¥15,674¥5,854$207,802

21. MAJOR COMPONENTS OF OTHER EXPENSES
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

Loss on sale of property and equipment¥ 9,110¥ 8,806

Impairment loss on fixed assets

11,557

Loss on disposal of property and equipment

8,273

Loss on liquidation of consolidated subsidiaries

2,127

Years ended March 31,

2012

¥

2014

—

$ 88,515

7,769—

112,291

4,216

5,635

80,383——

20,667

Other

6,733

5,529

8,710

65,420Total¥37,800¥26,320¥14,345$367,276

22. COMPREHENSIVE INCOME
An analysis of each component of other comprehensive income (loss) and related tax effects for the years ended March 31, 2014, 2013 and2012 is presented as follows.
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

¥13,000¥81,225¥ 7,036$126,312

—

—

352

—

Pretax amount

13,00081,225

7,387

126,312Tax (expense) benefit(4,640)(28,945)961(45,084)

Net-of-tax amount

8,360

52,2808,348

81,228Deferred losses arising during the year(304)

(1,150)(1,731)(2,954)

Reclassification to income for the year

990

773

716

9,619

Pretax amount

686

(377)

(1,015)

6,665

Tax (expense) benefit

438

151

483

(4,255)Net-of-tax amount

248

(226)

(531)

2,410

(1,203)26

23,503(11,689)

20,564

8,872(2,775)

199,806

Net unrealized holding gains on securities
Unrealized holding gains arising during the year
Reclassification to income for the year

Deferred losses on hedging instruments

Reserve on land revaluation
Tax (expense) benefit
Foreign currency translation adjustments
Aggregated adjustment during the year resulting
from foreign currency translation
Equity in other comprehensive loss of affiliatedcompanies
Unrealized losses arising during the year
Total other comprehensive income

10,438

5,852(1,210)101,418¥38,407¥66,804¥27,335$373,17369

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23. LEASESAs lessee:(A) Finance leases
Assets leased under finance leases that do not transfer ownershipto the lessee consist mainly of buildings and structures used inleasing business. Such assets are capitalized as assets and depreciated using the straight-line method over their lease term assuming no residual value.

As described in Note 2 (P), finance leases that do not transfer ownership to the lessee whose commencement day falls on or before March
31, 2008 are accounted for as operating lease. Information on such leases is summarized as follows:(1) Assumed amounts of acquisition cost, accumulated depreciation and net book value at March 31, 2014, 2013 and 2012:
Millions of yen

2014
Buildings andstructures

Acquisition cost

¥2,184

Machinery andequipment

¥49

2013
Total

Buildings andstructures¥2,233¥2,6182012

Machinery andequipment

¥65

Total

Buildings andstructures

Machinery andequipment

Total¥2,683¥4,593¥1,124¥5,717

Accumulated
depreciation

1,469

36

1,505

1,680

45

1,725

2,602

Net book value

¥ 715

¥13

¥ 728

¥ 938

¥20

¥ 958

¥1,991

1,064

3,666

60

¥2,051¥Thousands of U.S. dollars (See Note 1)

2014
Buildings andstructures

Acquisition cost

$21,220

Machinery andequipment

$476

Total

$21,696

Accumulated
depreciation

14,273350

14,623

Net book value$ 6,947$126$ 7,073(2) Future lease payment inclusive of interest at March 31, 2014, 2013 and 2012:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

Amount due within one year

2014

2013

2012

2014

¥195

¥227

¥ 391

$1,894

Amount due after one year

533

731

1,660

5,179

Total

¥728

¥958

¥2,051$7,073(3) Lease expense and the assumed amount of depreciation expense for the years ended March 31, 2014, 2013 and 2012:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

2014

2013

2012

2014

Lease expense

¥227

¥389

¥597

$2,206

Depreciation expense

227

389

597

2,206

(4) Calculation of the assumed amount of depreciation expense:
Assumed depreciation amounts are computed using the straight-line method over the lease terms assuming no residual value.
(B) Operating leases
Future lease payments under non-cancellable operating leases at March 31, 2014, 2013 and 2012:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

Amount due within one year

2014

2013

2012

2014

¥ 52,603¥ 63,593¥ 64,383$ 511,106

Amount due after one year

108,341

136,866

151,417

1,052,672

Total¥160,944¥200,459¥215,800$1,563,778

70

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As lessor:
Operating leases
Future lease revenue under non-cancellable operating leases at March 31, 2014, 2013 and 2012:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

Amount due within one year

2014

2013

2012

2014

¥ 46,937¥ 45,696¥ 42,800$ 456,053

Amount due after one year

228,777

216,510

209,522

2,222,863

Total¥275,714¥262,206¥252,322$2,678,916

24. BUSINESS TRANSACTIONS WITH SPECIAL PURPOSE ENTITIESThe Company invests in special purpose entities (SPEs) for securitizing its customers’ real estate. SPEs utilized consist mainly of
tokurei-yugen-kaisha, or limited liability companies, and tokuteimokuteki-kaisha, or specific purpose companies (“TMK”) under
Securitization Law. The SPEs mainly acquire real estate and develop real estate projects, and developed properties are sold to investors.
Other than investments by the Company, SPEs are funded byborrowings from financial institutions, such as non-recourse loans
and asset backed securities issued by TMK.
The Company plans to collect the appropriate amount of its

investments at the exit of those projects referred to above. As of
March 31, 2014, those projects are making progress as initiallyplanned. The Company’s risk exposure is limited to the amount of“equity investments in properties for sale” and etc.
The Company has no directors and/or employees dispatched to
any SPE.
The Company invested in 25 SPEs which are subject to disclosure as of March 31, 2012. There are no SPEs subject to disclosure as of March 31, 2014 and 2013 since SPEs referred to above
are included in scope of consolidation commencing the year ended
March 31, 2013, as described in Note 2 (A).

The following tables summarize transactions with the SPEs as of March 31, 2012 and for the year then ended.
Millions of yen
Balance

Revenue and costs

2012

Investments (*1)
Management

2012¥96,385—

Revenue from operations (*2)

¥5,232

Cost of revenue from operations (*3)

662

Revenue from operations (*4)868(*1) Consists of ¥47,211 million of “equity investments in properties for sale” and ¥49,174 million of “investment securities” as of March 31, 2012, and includes investments in tokumei-kumiai (TK), or silent partnerships and preferred securities issued by TMK.
(*2) Dividends on the investments earned by the Company, and consists of ¥5,232 million for leasing segment and ¥nil million for property sales segment for the year ended March 31, 2012.
(*3) Costs and losses incurred by the Company in connection with the investment such as costs incurred during development of real estate, and consists of ¥442 million for the leasing segment and ¥220 million
for the property sales segment for the year ended March 31, 2012.
(*4) Asset management fees earned by the Company and Mitsui Fudosan Investment Advisers, Inc., and are included in the management segment for the year ended March 31, 2012.

Combined assets, liabilities and net assets of SPEs as of the latest closing date of each SPE is summarized as follows:
Millions of yen

2012

AssetsReal property
Other
Total

¥445,433
32,421¥477,854
Millions of yen

Liabilities and net assets

2012

Borrowings (*5)¥351,003

Capital (*6)

119,210

Other
Total

7,641
¥477,854(*5) Consists of non-recourse loans and asset backed securities issued by TMK.
(*6) Consists of capital deposit in TK and preferred capital in TMK, and includes investments by the Company. (Refer to (*1) for respective ending balances.)71

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25. SEGMENT INFORMATION
Reportable Segment Information:
The reportable segments of the Company represent its components for which operating results are regularly reviewed, utilizing
separately available financial information, by the management indeciding how to allocate resources and assessing segment performance.
The Company’s Head Office organizes its business units basedon products and services, with each unit controlling subsidiaries
with related business, mainly consisting of leasing, property sales
and management.
The Company employs a matrix form of segment categorized bybusiness unit organized by Head Office and by services provided.
The Company’s segments have been aggregated based on thenature of products and services into the 5 reportable segments of“Leasing”, “Property Sales”, “Management”, “Mitsui Home”, a listed

subsidiary, and “Other”.
Descriptions of reportable segments are stated below.
(1) Leasing
Leasing of office buildings and commercial facilities, etc.
(2) Property Sales
Sales of condominiums and detached housing to individuals, andsales of rental housing and office buildings, etc. to investors.
(3) Management
Property management and brokerage and asset management, etc.
(4) Mitsui Home
New housing construction and renovation, etc.
(5) Other
Facility operations and merchandise sales, etc.

Financial information about reportable segments for the years ended March 31, 2014, 2013 and 2012 is summarized in the following tables.
The accounting policies of segments are almost the same as those described in Note 2. Segment operating income is based on revenue fromoperations, cost of revenue from operations and selling, general and administrative expenses. Transactions and transfers between segments
are made at amounts based on prevailing market prices.
Millions of yen
Year ended March 31, 2014

(1)

(2)

¥ 449,700
17,060Total revenue from operations

Adjustments (*1)

Consolidated¥¥1,515,252

(3)

(4)

(5)

¥ 409,466¥314,230¥237,069¥104,787—

58,296

10,165

4,480(90,001)—¥ 466,760¥ 409,466¥372,526¥247,234¥109,267¥ (90,001)¥1,515,252

Segment operating income¥ 109,206¥

27,100¥ 49,945

¥

¥

3,072

¥ (20,947)¥ 172,568

Segment assets

2,670,436

1,189,779

301,105

135,143

90,851

161,508

4,548,822

Depreciation

39,477

1,214

6,920

3,079

4,296

1,044

56,030Loss on impairment of fixed assets

10,270

—

1,287

—

—

—

11,557

Additions to property and equipment
and intangible assets

117,284

1,041

18,688

3,521

6,698

1,024

148,256

Adjustments (*1)

Consolidated

Revenue from operations:
Outside customers
Inter-segment

4,192

—

Millions of yen
Year ended March 31, 2013

(1)

(2)

(3)

(4)

(5)

¥ 441,712
16,644¥ 393,454¥297,934¥209,029¥103,515

80

50,662

9,359

3,731

(80,476)

Total revenue from operations—¥ 458,356¥ 393,534¥348,596¥218,388¥107,246¥(80,476)¥1,445,644

Segment operating income¥ 104,352¥

23,058¥ 41,579

¥

¥

(85)

¥(21,286)¥148,185

Segment assets

2,646,294

1,104,782

269,568

119,660

105,236

144,535

4,390,075

Depreciation

42,733

1,259

6,533

3,281

3,925

1,291

59,022

Loss on impairment of fixed assets

6,995

—

69

—

705

—

7,769

Additions to property and equipment
and intangible assets

47,615

1,302

9,730

5,176

7,611

922

72,356

(1)

(2)

(3)

(4)

(5)

Adjustments (*2)

Consolidated¥ 420,528¥321,352¥286,639¥207,568¥102,015

15,680—42,462

9,271

3,383

(70,796)—

Total revenue from operations¥ 436,208¥321,352¥329,101¥216,839¥105,398¥(70,796)¥1,338,102

Segment operating income

¥

¥

¥

Revenue from operations:
Outside customers
Inter-segment

567

¥

—

¥1,445,644

Millions of yen
Year ended March 31, 2012

Revenue from operations:
Outside customers
Inter-segment—¥1,338,102

95,700¥ 15,734¥ 34,364(807)¥(23,140)¥ 126,038

2,474,791

753,266

240,120

113,152

110,232

176,851

3,868,412

Depreciation

37,141

1,470

6,053

3,579

3,615

1,373

53,231

Additions to property and equipment
and intangible assets

91,341

762

10,438

3,680

4,566

969

111,756

Segment assets

4,187

¥

72

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Thousands of U.S. dollars
Year ended March 31, 2014

(1)

(2)

(3)

(4)

(5)

Adjustments (*1)

Consolidated

Revenue from operations:
Outside customers$ 4,369,413 $ 3,978,488$3,053,148$2,303,430$1,018,141—

566,421

98,766

43,528

Total revenue from operations$ 4,535,173 $ 3,978,488$3,619,569$2,402,196$1,061,669$ (874,475) $14,722,620

Segment operating income$ 1,061,077 $

263,311$ 485,280$$

29,848$ (203,527) $ 1,676,720

Segment assets

Inter-segment

165,760

40,731$—$14,722,620(874,475)—

25,946,716

11,560,231

2,925,622

1,313,088

882,734

1,569,258

Depreciation

383,570

11,796

67,237

29,916

41,74010,14444,197,649
544,403

Loss on impairment of fixed assets

99,786—

12,505———112,291

Additions to property and equipment
and intangible assets

1,139,565

10,115

181,578

34,21165,0799,949

1,440,497(*1) Adjustments to segment operating income of ¥(20,947) million ($(203,527) thousand) consists of ¥(362) million ($(3,517) thousand) of inter-segment elimination and ¥(20,585) million ($(200,010) thousand)of corporate expenses, which mainly represent the Company’s general and administrative expenses that are not allocable to any of the reportable segments. Adjustments to segment assets of ¥161,508 million ($1,569,258 thousand) consists of ¥(658,609) million ($(6,399,232) thousand) of inter-segment elimination, ¥664,041 million ($6,452,011 thousand) of corporate assets and investments in affiliatedcompanies of ¥156,076 million ($1,516,479 thousand).
(*2) Adjustments to segment operating income of ¥(21,286) million consists of ¥116 million of inter-segment elimination and ¥(21,402) million of corporate expenses, which mainly represent the Company’s general and administrative expenses that are not allocable to any of the reportable segments. Adjustments to segment assets of ¥144,535 million consists of ¥(728,009) million of inter-segment elimination,¥736,154 million of corporate assets and investments in affiliated companies of ¥136,390 million.
(*3) Adjustments to segment operating income of ¥(23,140) million consists of ¥15 million of inter-segment elimination and ¥(23,155) million of corporate expenses, which mainly represent the Company’s general and administrative expenses that are not allocable to any of the reportable segments. Adjustments to segment assets of ¥176,851 million consists of ¥(730,484) million of inter-segment elimination,¥785,179 million of corporate assets and investments in affiliated companies of ¥122,156 million.

Reportable segment information regarding carrying amount and amortization of goodwill and income recognized from negative goodwill has
been omitted due to their immateriality.
Products and Services Information:
Refer to reportable segment information.
Geographic Area Information:
Geographic area information has been omitted since revenue from outside customers in the Japan area and property and equipment locatedin the Japan area accounted for more than 90% of revenue from operations on the consolidated income statements and property and equipment on the consolidated balance sheets, respectively.
Customer Information:
Customer information has been omitted since revenue from no single customer exceeded 10% of revenue from operations on the consolidated income statements.

26. RELATED PARTIES
Significant related party transactions for the year ended March 31, 2014 are summarized as follows:
Transaction with the Company’s directors and major individual shareholders
Millions of yen

Thousands of U.S. dollars (See Note 1)

2014

Type

Name

Ownership ratio Nature of transof voting sharesactionDirector

Kenji Iino

Directly owns
0.00%

Construction ofresidence

Transaction
amountBalance outstanding at year
end

Transaction
amountBalance outstanding at year
end

59

—

573

—

Policies for terms and conditions of the transaction:
The price of residence is determined in reference to market prices.
There were no significant related party transaction for the years ended March 31, 2013 and 2012.

27. CONTINGENT LIABILITIESContingent liabilities at March 31, 2014, 2013 and 2012 are as follows:
Thousands of U.S.
dollars (See Note 1)

Millions of yen

Loans guaranteed

2014

2013

2012

2014

¥26,535¥32,988¥42,014$257,82273

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28. SUBSEQUENT EVENTSIssuance of new shares through public offering and third-party allotment, and a secondary offering of shares
On May 27, 2014, the Board of Directors adopted the resolutions of an issuance of new shares and a secondary offering of shares. The payment for the issuance of new shares through public offering was completed on June 23, 2014. The outline is described below.
(1) Issuance of new shares through public offering(a) Class and number of shares to be offered
100,000,000 shares of common stock of the Company(b) Issue price¥3,138 ($30.490) per share(c) Total amount of issue price¥313,800,000,000 ($3,048,970,074)(d) Amount paid in¥3,008.56 ($29.232) per share(e) Total amount paid in¥300,856,000,000 ($2,923,202,487)(f) Common stock and capital surplus increased
Increase in common stock: ¥150,428,000,000 ($1,461,601,244)
Increase in capital surplus: ¥150,428,000,000 ($1,461,601,244)(g) Method of offering
Domestic offering and international offering(h) Payment dateJune 23, 2014(2) Secondary offering of shares through over-allotment(a) Class and number of shares to be sold
10,000,000 shares of common stock(b) Seller
Nomura Securities Co., Ltd.
(c) Selling price¥3,138 ($30.490) per share(d) Total amount of selling price¥31,380,000,000 ($304,897,007)(e) Method of secondary offering
Nomura Securities Co., Ltd. conducted a secondary domestic offering of shares that it borrowed from a shareholder of the Company.
(f) Delivery dateJune 24, 2014(3) Issuance of new shares through third-party allotment(a) Class and number of shares to be offered
Up to 10,000,000 shares of common stock of the Company(b) Amount paid in¥3,008.56 ($29.232) per share(c) Total amount paid in
Up to ¥30,085,600,000 ($292,320,249)(d) Common stock and capital surplus increased
Increase in common stock: up to ¥15,042,800,000 ($146,160,124)
Increase in capital surplus: up to ¥15,042,800,000 ($146,160,124)(e) Allottee
Nomura Securities Co., Ltd.
(f) Subscription due date
Friday, July 18, 2014(g) Payment due date
Tuesday, July 22, 2014
(4) Use of proceeds
The proceeds are to be used as a part of capital investment fund.

74

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INDEPENDENT AUDITORS’ REPORT75*mf̲ar14̲0808.indd 75

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MAJOR PROPERTIES

1

LEASING SEGMENT

Company Name

Property Name (Location)

Type of Property

Structure and Scale

Date ofConstruction
Completion /Acquisition

Total Floor
Area (m2)Book Value (Millions of Yen)

Mar.
1929

32,245

Feb.
1985

26,490Jul.
2005

133,727

Jan.
1952

17,785

1,984

2,961

11,631

6

14,599Nov.
1956

14,300

1,468

1,062

12,67910

13,752

Oct.
201040,363

2,454

13,20025,088444

38,733Feb.
2014

25,439*1

1,534*1

6,980

7,487

602

15,070Feb.
2014

13,380*1

771*1,*2

3,573

8,395

320

12,289Jan.
2004

98,0638,185*1

17,41958,848261

76,529Jun.
1965

22,520*1 1,865*1,*2

1,141

15,811*2

17

16,970May
199472,456*1 5,529*1,*2

10,142—

72

10,215Sep.
2004

13,662*1

1,316*1

2,718

7,832

54

10,604

Total Land
Area (m2)

Building

Land

Other

Total

1) Properties
Mitsui Main Building
Office(Chuo Ward, Tokyo)
Mitsui Building No.2
(Chuo Ward, Tokyo)

OfficeNihonbashi Mitsui
Tower (Chuo Ward,
Tokyo)

OfficeMitsui Building
Annex (Chuo Ward,
Tokyo)
Mitsui Building
MitsuiAnnex No.2 (Chuo
Fudosan Co., Ward, Tokyo)
Ltd.
Muromachi HigashiMitsui Building(Chuo Ward, Tokyo)
MuromachiFurukawa Mitsui
Building (Chuo Ward,
Tokyo)

OfficeOfficeOffice,Retailfacility
Office,Retailfacility,
Residential

Muromachi Chibagin Office,Mitsui Building
Retail(Chuo Ward, Tokyo) facility
Mitsui
Fudosan Co., Nihonbashi 1-Chome Office,Ltd.
Building (Chuo Ward, RetailTokyo)*3
facility
T Tower
Corporation
Yaesu Mitsui
Building (Chuo Ward, Office
Tokyo)

St. Luke’s Tower(Chuo Ward, Tokyo)

Office,Hotel,
Residential

Mitsui
Fudosan Co.,Ltd.
Kojun Building (Chuo RetailWard, Tokyo)
facility

Steel-reinforced concrete structure
7 floors above ground2 basement floors
Steel-reinforced concrete structure
11 floors above ground3 basement floors
Steel construction / steel-reinforced
concrete structure (portion)
39 floors above ground4 basement floors
Steel-reinforced concrete structure
9 floors above ground2 basement floors
Steel-reinforced concrete structure
9 floors above ground2 basement floors
Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
22 floors above ground4 basement floors
Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
22 floors above ground4 basement floors
Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
17 floors above ground4 basement floors
Steel construction / steel-reinforced
concrete structure (portion)
20 floors above ground4 basement floors
Steel-reinforced concrete structure
10 floors above ground3 basement floors
Office Tower
Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
51 floors above ground4 basement floors
Hotel, Residential Tower
Steel-reinforced concrete structure /reinforced concrete structure (portion)
38 floors above ground
1 basement floor
Steel-reinforced concrete structure
10 floors above ground2 basement floors

3,107

14,2564,461

26

122,472

35,67338

660

Sumitomo Mitsui
Banking Corporation
Head Office Building Office(Chiyoda Ward,
Tokyo)

Steel construction
23 floors above ground4 basement floors

Jul.
2010

80,0475,430

21,77889,148362

Kasumigaseki
Building (Chiyoda
Ward, Tokyo)

Steel construction / steel-reinforced
concrete structure (portion)
36 floors above ground3 basement floors

Apr.
1968

145,494*1 8,264*1,*2

17,432

1,356*2980

Office166,439

111,289

19,76976*mf̲ar14̲0808.indd 76

2014/08/08 15:05

Shin-Kasumigaseki
Building (Chiyoda
Ward, Tokyo)

OfficeToranomon Mitsui
Building (Chiyoda
Ward, Tokyo)

OfficeMarunouchi Mitsui
Building (Chiyoda
Ward, Tokyo)

OfficeJimbocho Mitsui
Building (Chiyoda
Ward, Tokyo)

OfficeOtemachi 1-Chome
Mitsui Building(Chiyoda Ward,
Tokyo)

OfficeGran Tokyo North
Tower (Chiyoda
Ward, Tokyo)

OfficeOtemachi PAL
Building (Chiyoda
Ward, Tokyo)

OfficeShiodome City
Center (Minato
Ward, Tokyo)

OfficeCelestine Shiba
Mitsui Building
Office(Minato Ward, Tokyo)
Mitsui
FudosanCo., Ltd.
RP Beta
Tokutei
Mokuteki
KaishaRP Gamma
Tokutei
Mokuteki
KaishaRP EtaTokutei
Mokuteki
KaishaRP Delta
Tokutei
Mokuteki
KaishaRP Epsilon
Tokutei
Mokuteki
KaishaOffice,RetailTokyo Midtown(Minato Ward, Tokyo) facility,
Residential

Gate City Ohsaki(Shinagawa Ward,
Tokyo)

OfficeMitsuiShinjuku Mitsui
Fudosan Co.,
Building (Shinjuku
Ltd.
Ward, Tokyo)

OfficeUrban Dock LaLaport
RetailTOYOSU (Koto Ward,facility
Tokyo)

Steel construction / steel-reinforced
concrete structure (portion)
20 floors above ground3 basement floors
Steel construction / steel-reinforced
concrete structure (portion)
14 floors above ground2 basement floors
Steel-reinforced concrete structure
11 floors above ground2 basement floors
Steel construction / steel-reinforced
concrete structure (portion)
23 floors above ground2 basement floors
Steel construction / reinforced concrete
structure (portion)
12 floors above ground3 basement floors
Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
43 floors above ground4 basement floors
Steel-reinforced concrete structure
9 floors above ground3 basement floors
Steel construction / steel-reinforced
concrete structure (portion)
43 floors above ground4 basement floors
Steel construction / steel-reinforced
concrete structure (portion)
17 floors above ground2 basement floors

Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
54 floors above ground5 basement floors

Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
24 floors above ground4 basement floors
Steel construction / reinforced concrete
structure (portion)
55 floors above ground3 basement floors
Steel construction / steel-reinforced
concrete structure (portion)
5 floors above ground
1 basement floor

Feb.
1987

14,895*1

2,891*1

1,207

16,597

8

17,813Sep.
1972

23,606

3,264

1,596

32,292

21

33,910Feb.
1981

20,373

1,851

3,106

23,69023

26,820Mar.
2003

45,476*1

4,152*1

13,59925,114

96

38,811

Nov.
2007

48,282

5,372

1,330

117,3098

118,648Oct.
2007

82,001*1

3,723*1

18,105

43,778377

62,262

Mar.
2011

13,962*1

1,380*1

272

37,153037,427

Jan.
2003

15,775*1

1,322*1

2,271

9,486

13

11,753Apr.
2002

18,967*1

2,431*1

3,093

8,777

60

11,931

Jan.
2007

281,901*1 34,465*1

57,242

148,163

1,940

207,346

Jan.
1999

33,633*1

5,393*1

6,795

13,376

127

20,299Sep.
1974

179,697

14,44912,617

186,668271

199,557

Aug.
2006

164,364 67,499*2

8,651

—

780

9,431

77

*mf̲ar14̲0808.indd 77

2014/08/08 15:05

LAZONA Kawasaki
plaza (Kawasaki City, Retail
Kanagawa
facility
Prefecture)
Yokohama Mitsui
Building (Yokohama
City, Kanagawa
Prefecture)

OfficeLaLaPort Mitsui
Building (Funabashi
City, Chiba
Prefecture)

OfficeLaLaport TOKYORetail
BAY (Funabashi City,
facility
Chiba Prefecture)
Nagoya Mitsui Main
Building (Nagoya
City, Aichi
Prefecture)
Otemachi Tatemono
Nagoya Station
Mitsui
Building (Nagoya
Fudosan Co., City, Aichi
Ltd.
Prefecture)

26,022261

30,041Feb.
2012

90,35624,542

7,466

1,750

33,759Jun.
1988

23,558

7,799

1,971
157,850Apr.
1981

280,52922
48,91924,492

77,8842,479

31,257

3,526

3,088

9,875

75

13,039

Office,Retailfacility

Steel-reinforced concrete structure
11 floors above ground2 basement floors

Aug.
2007

37,834

2,976

388

14,242

11

14,642

Aug.
2002

71,2694,456

10,176

12,131

247

22,554

Mar,.
2008

38,838*1

3,087*1

7,219

14,556

184

21,960Dec.
1976

28,715

2,724

5,545

15,06060

20,667

Jul.
1999

61,961

78,205

2,198

11,096

1,132

14,427

Jul.
2010

91,831 174,231*2

7,830

2,550*2

2,241

12,621

MITSUI OUTLETPARK MARINE PIA
KOBE (Kobe City,
Hyogo Prefecture)

Retailfacility

MITSUI OUTLETPARK SHIGA RYUO
(Gamo-gun, Shiga
Prefecture)

Retailfacility

5 Hanover Square(London. U.K.)

3,756

Mar.
1987

Midosuji Mitsui
Building (Osaka City, OfficeOsaka Prefecture)

MITSUIFUDOSAN(U.K.) LTD.
(Overseas
subsidiary)

69,081*1 72,013*2

Steel construction
18 floors above ground2 basement floor

Yodoyabashi Mitsui Office,
Building (Osaka City, Retail
Osaka Prefecture)facility

MITSUIFUDOSANAMERICA,
INC.
(Overseas
subsidiary)

Sep.
2006

OfficeNakanoshima Mitsui
Building (Osaka City, OfficeOsaka Prefecture)

1251 Avenue of theAmericas (New York
City, New York,U.S.A.)
527 Madison
Avenue (New York
City, New York,U.S.A.)
Homer Building(Washington D.C.,
U.S.A.)

Steel construction / reinforced concrete
structure (portion)
6 floors above ground
1 basement floor
Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
30 floors above ground2 basement floors
Steel-reinforced concrete structure /partial steel construction
14 floors above ground
1 basement floor
Reinforced concrete structure / partial
steel construction / steel-reinforced
concrete structure (portion)
10 floors above ground
1 basement floor

Steel construction / steel-reinforced
concrete structure (portion)
31 floors above ground2 basement floors
Steel construction / steel-reinforced
concrete structure (portion) / reinforced
concrete structure (portion)
16 floors above ground3 basement floors
Steel-reinforced concrete structure
12 floors above ground3 basement floors
Factory Outlet
Steel construction,
3 floors above ground
Annex
Steel construction,
2 floors above ground
1st Stage
Steel construction 2 floors above
ground
2nd Stage
Steel construction 3 floors above
groundOfficeSteel construction
54 floors above ground4 basement floors

Dec.
1986

214,106

9,232

34,32323,426—57,750

OfficeSteel construction
26 floors above ground
1 basement floor

Sep.
2008

22,017

1,082

14,724

11,338—26,062

OfficeSteel construction
12 floors above ground5 basement floors

Jan.
2012

56,731

4,024*2

27,904

4,105*2—

32,009

OfficeSteel construction
7 floors above ground
1 basement floor

Mar.
2012

7,957

1,122

4,003

10,561

1,441

16,00678*mf̲ar14̲0808.indd 78

2014/08/08 15:05

2) Other
Mitsui
Fudosan Co.,
Ltd., M3 Real Chuo Ward, Tokyo
Estate Co.,
Ltd., Murosan Land and building
Real EstateCo., Ltd.
Fujimi, Chiyoda
Ward, Tokyo Land
Mitsui
Yurakucho, Chiyoda
Fudosan Co.,
Ward, Tokyo Land
Ltd.
Funabashi City,
Chiba Prefecture
Land

Land andbuilding
development
project
Plannedconstruction
site
Plannedconstruction
site
Lot for rent—

48,385

7,455

7,028

55,14851

62,228

—

—

7,928

—

74,181—

74,181——

10,702—

121,375—

121,375——

216,229*2—

10,842*2

24

10,866*1 Data for the subject land, buildings, and structures is based on the area in which the Group maintains an equity interest.
*2 Includes leasehold*3 Nihonbashi 1-Chome Building changed its name to Nihonbashi 1-Chome Mitsui Building on April 1, 2014.
Note: Land includes leasehold. Other is tangible fixed assets excluding buildings, land, and construction in progress.

2

OTHER

Company Name

Property Name (Location)

Mitsui
Fudosan Co.,Ltd.
Celestine
Hotel Co., Ltd. Mitsui Garden Hotel
Ginza Premier
MitsuiOther domestic
Fudosanhotels in
HotelManagement 12 locations*3Co., Ltd.
Hotel
Management
Co., Ltd.
MITSUI
Halekulani
FUDOSANOne other
AMERICA,
INC.
overseas hotel in(Overseas
another location
subsidiary)
Mitsui
Fudosan Co.,Ltd.
Mitsui
Fudosan Golf Mitsuinomori
Properties
Karuizawa Country
Co., Ltd.
Club
Nippon Midori Five other locations
Development
Co., Ltd.
KyusinKaihatsu Inc.
Tsunamachi Mitsui
Mitsui
Fudosan Co., Club (Minato Ward,
Ltd.
Tokyo)

Structure and Scale

Date ofConstruction
Completion /Acquisition

Hotel

—

—

Hotel

—

—

77,172

Golf course—

Type of Property

Floors: reinforced concrete structureState guest Walls: masonry construction
2 floors above groundhouse
1 basement floor

Book Value (Millions of Yen)
Total Floor
Area (m2)

Total Land
Area (m2)

Land

Other

Total

128,076*1 17,452*1,*2 17,229

14,035*2

1,133

32,3988,124

2,598*2

1,813

12,536—28,157 5,785,415*2 1,808

5,135*2

7,207

14,150

Feb.
1913

5,427

23,571261

24,92820,927*2

28,563

Building

1,095*1 Data for the subject land, buildings, and structures is based on the area in which the Group maintains an equity interest.
*2 Includes leasehold*3 Includes Mitsui Garden Hotel Kashiwa, which closed on April 30, 2014.
Note: Land includes leasehold. Other is tangible fixed assets excluding buildings, land, and construction in progress.

79*mf̲ar14̲0808.indd 79

2014/08/08 15:05

DOMESTIC AND OVERSEAS NETWORKSDOMESTIC NETWORKOVERSEAS NETWORKHead Office

Mitsui Fudosan America, Inc.

1-1, Nihonbashi-Muromachi 2-chome,
Chuo-ku, Tokyo 103-0022

1251 Avenue of the Americas, Suite 800,
New York, N.Y. 10020, U.S.A.
Tel: 1-212-403-5600

Branch Offices
Kansai Head Office
Midosuji Mitsui Building
1-3, Bingo-machi 4-chome, Chuo-ku, Osaka-shi, Osaka
541-0051

Kyoto Branch
Kyoto Mitsui Building
8 Naginataboko-cho, Shijodori-Karasuma, Higashiiru,
Shimogyo-ku, Kyoto-shi, Kyoto 600-8008

Hokkaido Branch
Sapporo HS Building
10-2, Kitasanjyo Nishi 2-chome, Chuo-ku,
Sapporo-shi, Hokkaido 060-0003

Tohoku Branch
Sendai Honcho Mitsui Building
4-6, Honcho 2-chome, Aoba-ku, Sendai-shi,
Miyagi 980-0014

Chiba Branch
Chiba Chuo Twin Building No.1
11-1, Chuo 1-chome, Chuo-ku, Chiba-shi,
Chiba 260-0013

Yokohama Branch
Yokohama Mitsui Building
1-2, Takashima 1-chome, Nishi-ku,
Yokohama-shi, Kanagawa 220-0011

Mitsui Fudosan America, Inc. San Francisco Branch
100 First Street, Suite 2350
San Francisco, CA 94105 U.S.A.
Tel: 1-415-840-2500

Halekulani Corporation
2222 Kalakaua Avenue, Suite 900,
Honolulu, Hawaii 96815, U.S.A.
Tel: 1-808-526-1186

Mitsui Fudosan (U.K.) Ltd.
7th Floor, Berger House, 38 Berkeley Square,
London, W1J 5AE, United Kingdom
Tel: 44-20-7318-4370

Mitsui Fudosan (Asia) Pte. Ltd.
16 Raffles Quay, #37-01 Hong Leong Building,Singapore 048581
Tel: 65-6220-8358

Mitsui Fudosan (Asia) Pte. Ltd. Malaysia Branch
Falcon Room KL Airport Hotel SDN BHD(Sama-Sama Hotel KL International Airport)
Jalan CTA 4B, 64000, KLIA, Sepang, Selangor
Tel: 60-3-8778-0075

Mitsui Fudosan (Asia) Pte. Ltd. Taipei Branch
15F, No.18, Nanjing East Road, Sec.4,
Taipei, 10553, Taiwan
Tel: 886-2-2570-7665

Mitsui Fudosan (Shanghai) Consulting Co., Ltd.

Nagoya Mitsui Main Building
24-30, Meieki Minami 1-chome,
Nakamura-ku, Nagoya-shi, Aichi 450-0003

Unit 2101, One ICC,
Shanghai International Commerce Center,999 Middle Huaihai Road Xuhui District Shanghai,
200031, China
Tel: 86-21-5396-6969

Chugoku Branch

Mitsui Fudosan Consulting (Beijing) Co., Ltd.

Nakamachi Mitsui Building
9-12, Nakamachi, Naka-ku, Hiroshima-shi,
Hiroshima 730-0037

17th Floor, Unit 17, China World Office ,No.1 Jianguomenwai Avenue, Beijing, 100004, China
Tel: 86-10-6505-3101

Kyushu Branch

Mitsui Fudosan Consulting (Guangzhou) Co., Ltd.

Hakata Mitsui Building
10-1, Kami Gofuku-machi, Hakata-ku, Fukuoka-shi,
Fukuoka 812-0036

Room 1405, R&F CENTRE No.10
Huaxia Road, Zhujiang New Town, Guangzhou,
510623, China
Tel: 86-20-2802-3188

Chubu Branch

Mitsui Fudosan Co., Ltd. Hong Kong Branch
Level 3, Three Pacific Place,
1 Queen’s Road East, Admiralty, Hong Kong
Tel: 852-2855-6951
80*mf̲ar14̲0808.indd 80

2014/08/08 15:05

HISTORY(From Mitsui Fudosan’s Corporate Profile 2014)

1673
1914
1929
1941

1949
1951
1956
1959
1960
1961
1968

1969
1971
1972
1973
1974
1975
1976
1980
1981
1984

z

Opening of the Echigo-ya clothing store in Nihonbashi by
Takatoshi Mitsui, founder of the House of Mitsuiz Establishment of Mitsui Company and its real estatesectionz Completion of Mitsui Main Buildingz Separation of real estate division from the Mitsui
Company, establishment of Mitsui Fudosan Co., Ltd. with
3 million yen in capital, wholly owned by the Mitsui family

2000

Listing of stock
Foundation of Daiichi Engei Co., Ltd.
z Liquidation and absorption of the Mitsui Company by
Mitsui Fudosanz Capital participation in Fuji Sogo Development (now Cany
Corporation)z Foundation of Oriental Land Co., Ltd.
z Start of development and sales of residential and vacation
propertyz Start of development and sales of condominiums
z Completion of Kasumigaseki Building (Tokyo), the firstskyscraper in Japanz Start of construction and sales of houses
z Establishment of Mitsui Real Estate Sales Co., Ltd.
z Completion of Mita Tsunamachi Park Mansion (Tokyo)
z Completion of Ginza Mitsui Building (Tokyo)
z Foundation of Mitsui Fudosan America, Inc.
z Completion of Shinjuku Mitsui Building (Tokyo)z Establishment of Mitsui Home Co., Ltd.
z Foundation of Mashiko Country Club (Tochigi)
z Foundation of Uniliving Co., Ltd.
z Establishment of “
” system of joint developmentz Opening of LaLaport (now LaLaport TOKYO-BAY),
Japan’s first large-scale regional shopping center (Chiba)z Opening of Mitsui Garden Hotel Osaka (now Mitsui
Garden Hotel Osaka Yodoyabashi), Mitsui Fudosan’s firsthotel in Japan (Osaka)

2002

2003

2004
2005

2006

2007

2008

2009

z

1986
1987
1990
1991
1993

1994

1995

1998

1999

Opening of Halekulani Hotel in Hawaiiz Acquisition of Exxon Building, (now 1251 Avenue of theAmericas ) (New York)z Opening of Waikiki Parc Hotel (Hawaii)z Opening of Alpark (Hiroshima)z Creation of new corporate logo “”
z Full completion of Okawabata River City 21, West Block(Tokyo)z Full completion of Bell Park City (Osaka)z Listing of Mitsui Home Co., Ltd. on Tokyo Stock
Exchangez Opening of Shonan Village (Kanagawa)z Opening of Tsurumi Hanaport Blossom (now MITSUIOUTLET PARK OSAKA TSURUMI), the first factory outlet
mall in Japan (Osaka)z

Registration of Mitsui Main Building as Important Cultural
Propertyz Completion of Yokohama Bayside Marina Shops andRestaurants (now MITSUI OUTLET PARK YOKOHAMABAYSIDE) (Kanagawa)

2010

2011

2012

z

Establishment of Innovation 2017, Mitsui FudosanGroup’s long-term business strategy
z Opening of MITSUI OUTLET PARK KISARAZU (Chiba)zzEstablishment of the Mitsui Fudosan Group Vision andMissionz Completion of Gate City Ohsaki (Tokyo)
z Completion of MARINE PIA KOBE PORTO BAZAR
Factory Outlets (now MITSUI OUTLET PARK MARINE PIA
KOBE) (Hyogo)

Start of Office Building Fund operation
Completion of La Fete Tama Minami Osawa (now MITSUIOUTLET PARK TAMA MINAMI OSAWA) (Tokyo)
z Completion of Mitsui Garden Hotel Okayama (Okayama)z Completion of Garden Walk Makuhari (now MITSUIOUTLET PARK MAKUHARI ) (Chiba)z Completion of Nakanoshima Mitsui Building (Osaka)z Completion of JAZZ DREAM NAGASHIMA (now MITSUIOUTLET PARK JAZZ DREAM NAGASHIMA ) (Mie)z Completion of Shiodome City Center (Tokyo)z Establishment of Challenge Plan 2008, Mitsui FudosanGroup’s long-term business strategyz Completion of Roppongi T-CUBE (Tokyo)
z Completion of Aoyama Park Tower (Tokyo)
z Completion of Goodwood Gardens (Singapore)z Opening of Nihonbashi 1-Chome Building (COREDO
Nihonbashi ) (Tokyo)
z Opening of office in Shanghai, Chinaz Completion of Nihonbashi Mitsui Tower (Tokyo)
z Opening of Mitsui Garden Hotel Ginza Premier (Tokyo)z Establishment of Mitsui Fudosan Residential Co. Ltd.
z Opening of Urban Dock LaLaport TOYOSU (Tokyo)
z Opening of LAZONA Kawasaki Plaza (Kanagawa)z Opening of LaLaport KASHIWANOHA (Chiba)z Opening of LaLaport YOKOHAMA (Kanagawa)z Opening of Tokyo Midtown (Tokyo)z Establishment of New Challenge Plan 2016, Mitsui
Fudosan Group’s long-term business strategyz Completion of Gran Tokyo North Tower (Tokyo)
z Completion of Akasaka Biz Tower (in Akasaka Sacas)(Tokyo)z Opening of MITSUI OUTLET PARK IRUMA (Saitama)z Opening of MITSUI OUTLET PARK SENDAI PORT
(Miyagi)z Opening of Mitsui Garden Hotel Yotsuya (Tokyo)
z Completion of Sendai Hon-cho Mitsui Building (Miyagi)z Opening of LaLaport IWATA (Shizuoka)z Opening of LaLaport SHIN-MISATO (Saitama)z Opening of MITSUI OUTLET PARK SAPPORO KITAHIROSHIMA (Hokkaido)
z Opening of Mitsui Garden Hotel Sapporo (Hokkaido)
z Full Completion of Tokyo Southern Garden (Tokyo)
z Opening of MITSUI OUTLET PARK SHIGA RYUO (Shiga)z Opening of Mitsui Garden Hotel Ueno (Tokyo)
z Completion of Muromachi Higashi Mitsui Building(COREDO Muromachi) (Tokyo)
z Opening of Shanjing Outlet Plaza, Ningbo (Zhejiang
Province, PRC)z Opening of MITSUI OUTLET PARK KURASHIKI(Okayama)z Completion of Yokohama Mitsui Building (Kanagawa)
z

z
z

z

2013
2014

Opening of DiverCity Tokyo (Tokyo)
Completion of Nihonbashi Astellas Mitsui Building (Tokyo)
z Opening of Mitsui Garden Hotel Osaka Premier (Osaka)zzOpening of Mitsui Garden Hotel Kyoto Shinmachi Bettei (Kyoto)
Completion of Muromachi Furukawa Mitsui Building(COREDO Muromachi 2) (Tokyo)
z Completion of Muromachi Chibagin Mitsui Building(COREDO Muromachi 3) (Tokyo)z81*mf̲ar14̲0808.indd 81

2014/08/08 15:05

INVESTOR INFORMATION(Parent company; as of March 31, 2014)

Mitsui Fudosan Co., Ltd.
Head Office:Number of Shareholders:

1-1, Nihonbashi-Muromachi 2-chome,
Chuo-ku, Tokyo, 103-0022, Japan

28,112

Date of Establishment:

Sumitomo Mitsui Trust Bank, Limited

July 15, 1941

Number of Employees:

Capital:1,296 (Consolidated 16,585)¥174,296 million

URL:

Listing:

http://www.mitsuifudosan.co.jp/english

Transfer Agent:Tokyo (Ticker: 8801)

Number of Shares:
Authorized: 3,290,000,000
Issued and outstanding: 881,424,727

Major Shareholders

Composition of Shareholders
Number ofshares held(Thousands)

Percentage of
total sharesin issue

The Master Trust Bank of Japan, Ltd. (Trust account)
Japan Trustee Services Bank, Ltd. (Trust account)

72,42950,494

8.22
5.73

Cbldn Stichting PGGM Depositary

23,4202.66

The Bank of New York Treaty JASDEC AccountState Street Bank and Trust Company
Sumitomo Mitsui Banking Corporation
State Street Bank and Trust Company 505223
Kajima Corporation
Mitsui Sumitomo Insurance Company
State Street Bank and Trust Company 505225
Total

22,742
19,02918,546
18,215
13,362
12,727
11,925

2.58
2.16
2.10
2.07
1.52
1.44
1.35

262,893

29.83

Securities
Companies

1.91%
Other JapaneseCompanies

8.43%
Individuals

5.05%

Financial
Institutions

ForeignInvestors

50.33%

34.24%

Monthly Stock Data (TSE)Common stock price range
Tokyo Price Index Close

Monthly stock price range

(¥)
4,000

Topix
2,000

3,000

1,500

2,000

1,000

1,000

500

0

0

(million shares)

Monthly trading volume

300
200
100
0

Apr.10FY2010Mar.11 Apr.11

FY2011

Mar.12 Apr.12

FY2012

Mar.13 Apr.13

FY2013

Mar.14

Notice concerning social and environment activities
Details of the Mitsui Fudosan Group’s efforts to contribute to society and the environment are posted on the following website.

http://www.mitsuifudosan.co.jp/english/corporate/csr/2013/index.html
82*mf̲ar14̲0808.indd 82

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*mf̲ar14̲0808.indd c1

2014/08/08 15:04