Annual Report 2011
Year ended March 31, 2011

Philosophy
Seeking to link diverse values and coexist in harmony with society,as symbolized by the Mitsui Fudosan logo
, we will work to fostersocial and economic development and benefit the environment.

Evolution and Value Creation
By bringing knowledge and experience together in diverse ways,
we seek to advance the real estate business and create new value,both at home and abroad, appropriate to global changes in social
environments and market structures.

A Profitable and Growing Mitsui Fudosan GroupWe seek to create a profitable and growing Mitsui Fudosan Group,
acting honestly and fairly to realize the capabilities of the entire
organization.

Contents
Consolidated Financial Highlights

2

An Interview with President and CEO
Masanobu Komoda

3

Review of Operations

10

Mitsui Fudosan at a Glance

10

Leasing Business

12

Property Sales Business16

Management Business

21

Mitsui Fudosan Group Growth Strategy 23
Corporate Governance

24

Management Team28

Mitsui Fudosan Group’s Socialand Environmental Initiatives

30

Financial Section
Six-Year Summary

34

Management’s Discussion and Analysis

35

Consolidated Balance Sheets46

Consolidated Statements of Income

48

Consolidated Statements ofComprehensive Income

49

Consolidated Statements of
Changes in Net Assets

50

Consolidated Statements of Cash Flows51

Notes to Consolidated
Financial Statements

52

Independent Auditors’ Report

76

Corporate Information

77

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

1

Consolidated Financial Highlights
Mitsui Fudosan Co., Ltd. and its Subsidiaries
Years ended March 31, 2011, 2010 and 2009

Percent change

Thousands of U.S. dollars
except per share amounts(Note 1)

2011

2010

2009

2011/20102011

For the Year
Revenue from operations
Operating income
Net income
Cash dividends¥1,405,270
120,092
49,90919,313¥1,384,807
120,585
60,084
19,317¥1,418,946
171,547
83,572
19,3241.5%(0.4)(16.9)(0.0)$16,900,421
1,444,281
600,229
232,267

At Year-End
Total assets
Total net assets
Interest-bearing debt

¥3,780,700
1,042,386
1,740,048¥3,710,424
1,029,226
1,746,719¥3,758,387
999,860
1,733,559

1.9%
1.3
(0.4)

$45,468,431
12,536,212
20,926,615

Percent change

U.S. dollars (Note 1)

Millions of yen
except per share amounts

Yen

Per Share Data
Net income (Basic)
Cash dividends¥

Key Indicators
Net income/revenue from operations (%)
Total net assets/total assets (%)
Debt/equity ratio (times) (Note 2)
ROA (%) (Note 3)
ROE (%) (Note 4)

56.8
22.0

¥

68.4
22.0

3.6
27.6
1.71
3.39
4.92

¥

4.3
27.7
1.73
3.41
6.05

95.1
22.0

(17.0)%
0.0

$

0.683
0.265

5.9
26.6
1.77
5.06
8.57

Notes: 1. U.S. dollar amounts are translated from yen at the rate of ¥83.15 = U.S.$1.00, the approximate exchange rate at March 31, 2011.
2. Debt/equity ratio = Interest-bearing debt / (Net assets – Subscription rights to shares – Minority interests)
3. ROA = (Operating income + Interest, dividends and miscellaneous revenues + Equity in net income of affiliated companies - Extraordinary gains) / Average total
assets over the period
4. ROE = Net income / (Net assets – Subscription rights to shares – Minority interests, Average over the period)

Revenue from Operations

Operating Income andOperating Margin(Billions of yen)

Net Income and
Net Income per Share

(Billions of yen; %)1,500
1,360.0

1,200

1,418.9 1,384.8 1,405.3

1,229.2

20
179.3

160

161.8
13.2

900

(Billions of yen; Yen)

200

87.4

171.5

16
13.2

12.1

120

120.6

120.1

80

300

40

0

2007

2008

2009

2010

(Years ended March 31)

2011

0

2009

2010

(Years ended March 31)

60.1

50

4

2008

150

99.4
85.5

95.1

2011

0

49.9

100

68.4

8

8.7

2007

75

83.6

75.2

12

8.5

600

200

100

25

0

56.8

2007

2008

2009

2010

2011

50

0

(Years ended March 31)

Forward-Looking Statements
This report contains forward-looking statements that are based on management’s estimates, assumptions and projections at the time of publication. Some factors, which include, but are notlimited to, the risks and uncertainty associated with the worldwide economy, competitive activity and fluctuations in currency exchange and interest rates, could cause actual results to differ
materially from expectations.

2

An Interview with
President and CEO
Masanobu Komoda

Masanobu Komoda
President andChief Executive Officer

On Becoming President and CEO
Being Chairman Iwasa’s right-hand man inestablishing Mitsui Fudosan Residential Co., Ltd.
and getting it on a growth track was one of themany management challenges you have taken on
over your long career with Mitsui Fudosan before
becoming president and CEO in June 2011.
Overall, what are your aspirations as Mitsui
Fudosan’s new president and CEO?
First we will overcome the challenges posed by the Great
East Japan Earthquake, and then steadily implement the
Mitsui Fudosan Group’s medium-term growth strategy.

I have a good understanding of the direction the Mitsui
Fudosan Group has targeted and the issues it faces from mytime as the general manager of the Corporate Planning
Department and my involvement in management with thenpresident, now Chairman Iwasa.
As the new president and CEO of Mitsui Fudosan, I
intend to work with Chairman Iwasa to overcome thechallenges posed by the Great East Japan Earthquake, andthen formulate a new medium-to-long-term management
plan that will be the blueprint for new growth.
While I will cover the direction of the new medium-tolong-term management plan in detail shortly, we will bedecisive in responding to Japan’s maturing society and theglobalizing economy, in determining how we want ourbusinesses to evolve, and in dealing with the changes in ouroperating environment following the earthquake. Basically,
we will be focusing with even greater urgency on how toprovide safety, security and sustainability in people’s lives.

3

Overview of Fiscal 2010
Basically, Mitsui Fudosan achieved the forecast targets it announced at the beginningof fiscal 2010, the year ended March 2011. Please provide an overview of fiscal 2010.
The Mitsui Fudosan Group prepared for the next phase of growth during fiscal 2010. We exceeded
our capital expenditure plan at the beginning of the fiscal year for investing in quality assets thatwill contribute to future earnings.
I would like to offer once again our deepest sympathies and our prayers for swift recovery forthe victims of the Great East Japan Earthquake. The earthquake seriously damaged Japan’ssociety and economy. While it has undeniably had a short-term impact on the real estateindustry in which we operate and on our profitability, over the medium-term we see the trend
toward recovery that has been in place since the financial crisis. Mitsui Fudosan did not suffer
substantial harm to personnel or property, and overall, the impact on our results for fiscal 2010
was light because it was largely limited to suspended operations or shortened operating hours
at certain retail facilities.
Despite the impact of the earthquake, our results moved steadily upward on a track toslightly exceed our forecast at the beginning of the fiscal year. Consolidated revenue fromoperations increased 1.5 percent year on year to ¥1,405.3 billion. Operating income was
essentially unchanged year on year, decreasing 0.4 percent to ¥120.1 billion. Net income
decreased 16.9 percent year on year to ¥49.9 billion, with loss on disposal of property andequipment due largely to the retirement of the Hibiya Mitsui Building (Chiyoda-ku, Tokyo)
pending redevelopment, loss on disaster in connection with the Great East Japan Earthquake
totaling ¥4.6 billion, and provision for loss on disaster of ¥3.5 billion offsetting gain on sale ofinvestment securities from the sale of shares in former affiliate Oriental Land Co., Ltd. Major
performance indicators were generally in line with our forecast at the start of the fiscal year.
My overview of fiscal 2010 encompasses three key points.
First is the progress we made in preparing for the next phase of growth. The Mitsui FudosanGroup had positioned fiscal 2010 as a year to prepare for the next phase of growth, and weaggressively invested in property. At the start of the fiscal year we maintained our usual
selectivity, anticipating new investments totaling ¥140.0 billion. However, we made newinvestments totaling ¥229.3 billion because of the many outstanding opportunities we had.
These projects are reinforcing our rock-solid earnings base, enabling both quantitative
expansion and qualitative improvement of our portfolio. We will continue to invest bothaggressively and selectively in future growth.
Second, the Mitsui Fudosan Group has a business model for cooperating with investors in
the real estate investment market. Ten years have passed since we listed the first Japanese realestate investment trust (J-REIT), Nippon Building Fund Inc., in 2001. During that time,
corporate and individual investors from Japan and overseas have committed funds to the realestate investment market. With the convergence of finance and real estate, the Mitsui FudosanGroup has significantly broadened its operations.
In the J-REIT market, factors such as the steady progress of restructuring, the resumption of
public investment unit offerings, and revitalization have resulted in steady improvement in

4

An Interview with President and CEO Masanobu Komoda

market conditions since the establishment of the real estate market stabilization fund in 2009.
In fiscal 2010, the Mitsui Fudosan Group demonstrated its development and operations
capabilities by selling properties valued at ¥80.0 billion to the three J-REITs that it sponsors. In
addition, we sold properties to external corporate customers as well as to private funds andinvestment corporations structured and managed by Mitsui Fudosan Investment Advisors, Inc.
This model for cooperating with investors is a core strategy of the Mitsui Fudosan Group, andour approaches to developing it further will include establishing relationships with newinvestors and expanding the types of assets we manage.
Third is property sales to individuals. I believe we have much room for improvement in thiscategory. Operating revenues in the property sales to individuals category were robust during
fiscal 2010, with a substantial increase in contracts during the term to 6,609 from 4,805 for theprevious fiscal year. Units booked also increased by 900 units year on year to 6,380. Our
performance in this business therefore exceeded our projections at the beginning of the fiscal
year. The operating margin, however, was low at 3.1 percent because we booked sales of many
properties on land acquired when real estate prices were high during fiscal 2006 and fiscal
2007. Also, high-value-added properties and large-scale properties that create their own
environment, which are both highly profitable and a Mitsui Fudosan strength, contributed lessto operating income than in the previous fiscal year. Over the past several years, profitability
has decreased in the property sales to individuals category because we have largely been
selling higher-cost properties we acquired prior to the collapse of Lehman Brothers, but selling
prices have been soft. Going forward, we will primarily be selling properties acquired at morefavorable prices after the so-called Lehman Shock, so I expect gradual improvement in
profitability, although it may take some time. In addition, the Mitsui Fudosan Group has astrong pipeline of properties, which also gives shareholders and investors reason to expect
improved profitability in the future.

Operating Environment
The ultimate impact of the Great East Japan Earthquake on Japan’s economy remains
unclear. What is your view of the operating environment?
We need to carefully monitor the impact of the earthquake, but we are looking ahead to the future
as fundamentals are becoming more sound.
I would like to explain real estate market conditions in fiscal 2010 and in the future bysegment.
Leasing – Office Buildings: The central Tokyo office building market has largely bottomed.
Overall, base office vacancy rates in central Tokyo are level and the downward trend of asking
rents for new contracts has also moderated. Even with ongoing moves among tenants toconsolidate office space to reduce operating costs, we see demand improving because sometenants are now moving to larger offices or expanding the floor space they lease. While we
forecast that the volume of new supply will increase in fiscal 2011 and fiscal 2012, we also5expect that improved demand will allow the market to absorb it and lease rates will remain atcurrent levels. We are not seeing obvious effects from the Great East Japan Earthquake at the
moment, but we do need to carefully monitor any future impact it may have on the economic
trends that drive demand for office space.
Leasing – Retail Facilities: Following the Great East Japan Earthquake, sales of discretionary
consumer goods such as clothing and jewelry dropped sharply as consumers turned
conservative. Since April 2011, however, shoppers have been relaxing their sense of voluntary
restraint and purchasing activity has generally reverted to normal levels.
Property Sales to Individuals: Recovery in the property sales to individuals category has beensteady despite developments such as a temporary halt in sales activity. Prior to the earthquake,the initial contract rate in the market for new condominium units in the Tokyo metropolitan
area from January to March 2011 was 73 percent to 85 percent. Also, it had been over 70
percent, generally considered an indicator of a strong market, for 16 consecutive months from
December 2009. Other indicators such as inventory of unsold condominiums in metropolitan
Tokyo below 4,700 units as of March 31, 2011 point to steady market recovery. The initial
contract rates for April and May 2011 were also strong, which kept inventory down. We
forecast that the market will remain strong and the impact of the earthquake on customer
sentiment will be mild due to factors such as low interest rates on loans and government
policies including tax breaks for mortgages.
Property Sales to Investors (Real Estate Investment Market): The earthquake caused limited
damage to properties in Tokyo, where the real estate market is stable. This was particularly truein the J-REIT market, which drew stability from the minimal impact of the earthquake on
properties owned by J-REITs and the effect of measures including an increase in the budget for
J-REIT purchases under the Bank of Japan’s asset purchase program to ¥100.0 billion from¥50.0 billion. The Tokyo Stock Exchange J-REIT Index was firm. Moreover, in May 2011 J-REITs
began regularly issuing new investment units and acquiring assets for the first time since theearthquake, indicating that active fund procurement and property acquisition will continue in
the J-REIT market

Strategies for Fiscal 2011
What are the Mitsui Fudosan Group’s strategies for fiscal 2011?
While we forecast that both revenue from operations and operating income will decrease, in the
post-earthquake environment the Mitsui Fudosan Group will exercise its resilience andcompetitiveness with the objective of improving results year on year.
We had planned to start a new medium-term management plan during fiscal 2011, but wepostponed it because the effects of the earthquake were unclear. At the same time,
fundamentals are becoming more sound in office building and retail facility leasing and

6

An Interview with President and CEO Masanobu Komoda

property sales to individuals and investors, so we forecast that earnings will be stable in thesecore businesses. While we will continue to carefully monitor the external environment andmarket conditions, during fiscal 2011 our strategy of continuing to respond to the social andeconomic changes brought on by accelerating maturity and globalization will not change. We
have also reaffirmed commitments such as strengthening earnings from property sales toindividuals, where the operating margin has been basically flat, and will proceed with
re-engineering to enhance operations.
In April 2011, we announced our performance forecast for fiscal 2011, including a decreaseof 0.4 percent in revenue from operations to ¥1,400.0 billion, a decrease of 4.2 percent in
operating income to ¥115.0 billion, and a decrease of 5.8 percent in net income to ¥47.0
billion. This performance forecast is predicated on the risk factors of the resolution of thenuclear power plant accident, an electricity shortage in the Tokyo area during summer 2011,
recovery of corporate supply chains, and the impact of these factors on corporate activity andconsumer sentiment. These risks in the external environment may well turn out better than
expected, so I feel strongly that the Mitsui Fudosan Group’s resilience and competitiveness will
support results that meet or exceed performance in the previous fiscal year.

Medium-to-Long-Term Growth Strategy
The operating environment has changed significantly since Mitsui Fudosan formulated
New Challenge Plan 2016. What are your thoughts concerning your medium-to-longterm growth strategy?
We will strengthen competitiveness and earnings by continuing to respond to the changes broughton by accelerating maturity and globalization while deploying the tangibles and intangibles at our
disposal with even greater sophistication to meet the desire of Japanese society following theGreat East Japan Earthquake for safety, security and sustainability.
Before explaining the strategic orientation of the Mitsui Fudosan Group, I would like toreiterate our two perspectives on the structural changes in Japan’s society and economy.
The first is accelerating maturity. Customers and their needs are changing and becoming
more diverse even more quickly than in the past. Throughout its history, Mitsui Fudosan has
responded to markets and customers that are changing because of social and economic growthand maturity, and we continue to do so today. Our March 2011 decision to take an equity stakein Mitsui Home Remodeling Co., Ltd. is representative. We moved to strengthen and expand
remodeling operations because they make use of Group resources in what we see as a growing
business that accommodates diverse customer values.
The second is accelerating globalization. A critical issue in every industry is that markets
and customers are becoming more global and borderless. The Mitsui Fudosan Group is
deploying its core skills in multiple projects in the East Asian growth market of China, including
the Shanjing Outlet Plaza• Ningbo, Shanghai New Town Development, House Huang Ma Yuen
(Malu Project), Tianjin Eco-City and Dalian Software Park Phase 2. We are also strengthening
our ability to meet the cross-border needs of Japanese and foreign customers by providing solutions

7

as partners with foreign customers operating in Japan and Japanese customers operating
overseas.
In addition to these two perspectives, we believe that the experience of the Great East Japan
Earthquake, an unprecedented disaster, will further strengthen the desire of Japanese society as
a whole for safety, security and sustainability. The Mitsui Fudosan Group will therefore enhance
its competitiveness and profitability by creating business models that deliver tangible andintangible products and services with even more sophisticated levels of safety, security andsustainability.
The Mitsui Fudosan Group’s strategic direction is predicated on the above assumptions. We
intend to reinforce, evolve and grow our existing businesses in Japan and to concretely develop
businesses in new growth sectors.
Reinforce, evolve and grow our existing businesses in Japan: We will build on our core skill ofgenerating value by creating entire neighborhoods while promoting the evolution of ourbusiness model of cooperating with investors. Recognizing increasing maturity in our markets,
we will also strengthen our involvement in housing-related businesses on a Group basis. In
addition, we will concentrate on responding to the values emerging in the aftermath of theGreat East Japan Earthquake that I mentioned earlier. These will entail numerous considerations
including the priority of customer needs, optimum cost effectiveness, and regulations.
Concretely develop businesses in new growth sectors: We have already launched specificinitiatives to enhance our ability to respond to the cross-border needs of customers as they
continue to accelerate business development in China and other East Asian countries.
Moreover, we intend to meaningfully expand into new asset classes in Japan.
At the same time, a sound financial structure is essential to our ability to invest in our corebusinesses and take on the challenge of new businesses, so we will maintain the financial
position we have built to date.

Corporate Governance
Under your leadership, new executives joined the Mitsui Fudosan Group’s
management team in June 2011. How will the Group strengthen corporate
governance?
We will further enhance soundness, transparency and efficiency while enhancing our risk
management system so that we can handle unforeseen contingencies quickly.
The Mitsui Fudosan Group is improving management soundness, transparency and efficiency
in order to earn the trust of all stakeholders. In 2011, two new outside directors joined theBoard of Directors: Eiji Hosoya, Chairman and Representative Executive Officer of Resona
Holdings, Inc., and Masayuki Matsushima, Chairman of Credit Suisse Securities (Japan) Limited(formerly Executive Director, Bank of Japan). Their participation in the management of the
Mitsui Fudosan Group puts their broad management insight and experience at the service of8

An Interview with President and CEO Masanobu Komoda

customers and shareholders. With their appointment, Mitsui Fudosan now has 13 Members of
the Board, 4 of whom are outside directors.
The Great East Japan Earthquake reaffirmed the importance of risk management. Mitsui
Fudosan already had a business continuity plan (BCP) in place for a large-scale earthquakewith the Group companies responsible for managing properties and had conducted training
based on it. We immediately established an emergency response headquarters in confirming
the status of damage and implementing countermeasures. Scheduled blackouts and the nuclear
power plant accident were beyond the assumptions of our BCP, but we collected theinformation that we could and used it as the basis for flexibly managing facilities and quickly
notifying tenants, thus avoiding major disorder. We will employ this experience in revising our
BCP to enhance our risk management systems for all types of disasters.

Shareholder Returns
What is Mitsui Fudosan’s stance regarding shareholder returns?
We will work to maintain and increase dividends as we further expand corporate value.
We aim to further increase corporate value, and will enhance our internal reserves so that we
can invest in highly profitable business opportunities. At the same time, we will take theoperating environment, our performance, investment demand and our financial condition into
account in working to maintain and increase dividends.
Mitsui Fudosan comprehensively considered its performance in fiscal 2010, outlook for the
future and dividend policy in paying cash dividends per share totaling ¥22.00, consisting ofinterim and year-end cash dividends of ¥11.00 per share. We expect cash dividends per shareto be the same in fiscal 2011.

Message to Shareholders
In closing, what message do you have for shareholders?
While the Great East Japan Earthquake has impacted our operating environment, we will exercise
our resilience and competitiveness to the fullest to achieve the next phase of growth.
Our operating environment is fraught with uncertainties, including those associated with theGreat East Japan Earthquake. While difficult conditions lie ahead, my predecessor created a
Mitsui Fudosan Group that is resilient and competitive. We will exercise these qualities to thefullest to quickly achieve the next phase of growth and increase corporate value.
As we do so, we will be counting on the continued support of our shareholders andinvestors.

9

Review of Operations

StableMitsui Fudosan at a Glance

Mitsui Fudosan is adapting to changing markets and emerging customer needs. Seeking to provide safety, security and sustainability,
we will strengthen our core businesses while embracing new opportunities to create value for stakeholders as we evolve in tandemwith accelerating external changes. Building outward from a strong base in Japan, Mitsui Fudosan intends to participate fully in the
globalization of real estate markets.

Leasing Business
The leasing business consists of leasing office buildings
and retail facilities. Mitsui Fudosan continues toenhance the quality of assets in its portfolio to improve
competitiveness and profitability. Our strategy centerson rapidly bringing highly competitive and profitableproperties on stream.

Property Sales Business
The property sales business consists of sales of housing
to individual end users and the development and sale ofoffice buildings, retail facilities and rental condominiums to investors. Our goals include strengthening
profitability. A highly competitive product mix is astrength in property sales to individuals. Relationships
with a broad range of investors and high-quality assets
are strengths in property sales to investors.

Management Business
The management business encompasses property
management and asset management for J-REITs andprivate funds. Our strategy centers on expanding assets
under management and increasing fee income. Thisbusiness contributes to increased ROE. Subsidiaries
play a key role in generating fee income from providing
solutions.

10Value Creation
From the fiscal year ended March 31, 2011, Mitsui Fudosan has changed its reportable segments to the five segments of Leasing,
Property Sales, Management, Mitsui Home and Other, based on its management accounting classifications. Accordingly, the former
management accounting segments of Holding, Trading and Management have been reorganized as Leasing, Property Sales andManagement.

Composition of Leasing Segment Revenue

Operating Income(Year ended March 31, 2011)(Billions of yen)

Leasing segment revenue: ¥423.5 billion
Other¥5.9 billion
Retail Facilities
ilitieslion¥125.8 billion¥94.2 billion¥95.6 billion

2009

2010

¥85.1 billion¥88.9 billion

1%
30 %

69 %
Office Buildings¥291.
¥291.7 billion

2008

2011

(Years ended March 31)

Composition of Operating Income

Operating Income(Billions of yen)(Billions of yen)60

¥57.2 billion
26.4

40
26.5

¥49.2 billion
28.8

20
30.8
22.3

20.4

1.1

6.5

11.4

9.7

2010

2011

0

2007

2008

2009

¥12.5 billion¥16.2 billion(Years ended March 31)■ Operating income from property sales to individuals■ Operating income from property sales to investors

2008

2010

2009

2011

(Years ended March 31)

Composition of Operating Income

Operating Income(Billions of yen)(Billions of yen)

50
Brokerage, Asset management, etc.
Property management

40
30

26.0

¥47.4 billion

25.4¥38.8 billion
18.6
8.4

10.2

20
10

20.6

21.9

20.3

21.3

21.9

2007

2008

2009

2010

2011

¥29.7 billion¥32.1 billion

2010

2011

0
(Years ended March 31)

Note: Figures for the years ending March 2007 through2009 are for reference.

2008

2009

(Years ended March 31)

11

Review of Operations

Leasing Business
A Portfolio Balanced between

Segment revenue from operations
decreased 1.7 percent year on year,or ¥7.5 billion, to ¥423.5 billion.
Segment operating income

Office Buildings and Retail Facilities
The leasing business rents floor space in office buildings
and retail facilities to tenants. Retail facilities
complement office buildings to add diversity to ourleasing portfolio, which effectively limits overall revenue
volatility in the leasing segment. For fiscal 2010, officedecreased 6.9 percent year on year,

buildings generated approximately 69 percent ofor ¥6.6 billion, to ¥88.9 billion.

segment revenue from operations, or ¥291.7 billion,
while retail facilities generated approximately 30
percent, or ¥125.8 billion.
Our fundamental strategy involves maintaining andPortfolio Growth Strategy:
Sustained improvement in asset
quality and selective investment ingrowthimproving competitiveness and profitability byenhancing the quality of assets in our portfolio. We
execute urban renaissance projects to enhance asset
quality. One example is the Sumitomo Mitsui Banking
Corporation Head Office Building (Chiyoda-ku, Tokyo),which was completed in July 2010. In addition,

Operating Income(Billions of yen)redevelopment of existing assets to generate strong return

100

94.2

95.6

88.9

85.1

on investment is central our strategy of enhancing asset
quality. Current redevelopment projects include the80

Muromachi East District Development Project (Chuo-ku,
Tokyo). The first phase of this project was the60

Muromachi-Higashi Mitsui Building, which was
40completed in October 2010.

20

Central Tokyo Portfolio Map
Chiyoda Line■ Newly Operational Projects(Operational in 2010,
under development, in planning)■ Existing Properties
Mi since 2009)(Operational
ta
Lin
e

Office Building Revenue by Area
Regional

Otemachi(scheduled for completion in 2011)

Muromachi East District
Development Projects
Areas 1-5 & 2-3

Shinnihonbashi(scheduled for completion in 2013)

Nihonbashi Honcho
Ningyocho
2-Chome Area
Project(scheduled for completion in 2012)

Mitsukoshimae

7%

Muromachi-Higashi Mitsui Buildinge(Completedin2010)

OtemachiOtemachi

16 %

i
Toe

sw

ay

Sumitomo Mitsui Banking
Corporation Head Office Building

Tok
yo
Exp
res

(Completed 2010)

Tokyo
StationKayabacho

Nihonbashi 2-Chome Project

5 Wards ofCentral Tokyo

JR
To
ka
ido
Sh
ink
an
se
n

77 %

L

Nihonbashi

Tokyo
Nijyubashimae

usa

ak

As

on
om
nz ineHa L

OtherMetropolitan
olitanTokyo

Yo LinNihonbashi Honcho 3-Chome
Reconstruction Project

Kanda
StationOtemachi 1-Chome
Mitsui Building(Year ended March 31, 2011)

JR uka
s
ko e

Kanda

e

2011

Lin

2010

iya

2009

(Years ended March 31)

Hib

2008

JR Y
Keih amanotin-T
oho e Line
ku L
ine
JR T
oho
ku J
oets
u Sh
inka
nsen

0

(Tentative Name)Tokyo
HibiyaYurakucho

Yurakucho
StationKyobashiGinza
1-chomeHibiyaTakaracho

Hacchobori

Sanshin Building/
Hibiya Mitsui Building
Reconstruction Project

12

Ginza

Li

ne

Ginza

za

JR Ke
Hacchobori

Shintomicho

iyo Line

Major Newly Operational Projects (Office Buildings)
FY
Completed

Project Name(* indicates master-leased or jointly owned property)

Location

2010

Sumitomo Mitsui Banking Corporation Head Office Building
Muromachi-Higashi Mitsui Building
Hiroshima Kamiyacho Project*
Nagoya Mitsui Building New Building
Shimbashi M-SQUARE
Onarimon M-SQUARE
Nihonbashi Honcho 3-Chome Project*
Hamarikyu Mitsui Building*
Yokohama Mitsui Building
Nihonbashi Honcho 2-Chome Project*
Aomi Q Area Project*
Muromachi East District Development Projects Area 2-3*
Muromachi East District Development Projects Area 1-5*

Chiyoda-ku, Tokyo
Chuo-ku, Tokyo
Naka-ku, Hiroshima
Nakamura-ku, Nagoya
Minato-ku, Tokyo
Minato-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Nishi-ku, Yokohama
Chuo-ku, Tokyo
Koto-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo

2011

2012
2013

Scheduled forcompletion in
FY2014 and after

Rentable Floor Space

46,000 m2
14,000 m2
14,000 m2
11,000 m2
5,000 m2
6,000 m2
8,000 m2
12,000 m2
49,000 m2
14,000 m2
44,000 m2
19,000 m2
8,000 m2

Sapporo Mitsui Building Reconstruction Project (Sapporo)
Chiyoda Fujimi 2-Chome Project (Chiyoda-ku, Tokyo)
Kita-Shinagawa 5-Chome Area 1 Redevelopment Project (Shinagawa-ku, Tokyo)
Sanshin Building/Hibiya Mitsui Building Reconstruction Project (Chiyoda-ku, Tokyo)
Nihonbashi 2-Chome Project (Chuo-ku, Tokyo)
Otemachi 1-Chome Mitsui Building (Chiyoda-ku, Tokyo)

FY completed and rentable floor space may change in the future. Some project names are tentative.

Concentration in Central Tokyo and

200,000m2 in Chiyoda-ku, 100,000m2 in both Shinjuku-

Relationships with Quality Tenants

ku and Minato-ku, and 30,000m2 in Shinagawa-ku.

Moreover, approximately 77 percent of our portfolio is

Similarly, our project pipeline concentrates on central

concentrated in the five central wards of Tokyo, with

Tokyo properties as well.

approximately 300,000m of floor space in Chuo-ku,
2

The leasing business emphasizes top-grade properties
in outstanding locations. Occupancy rates at these

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

properties are typically near 100 percent, which supports
stable rents. Furthermore, Mitsui Fudosan limits volatility
in rent revenues by maintaining long-term relationships
with its tenants and through programs to enhance asset
quality. Stable, long-term relationships withapproximately 3,000 tenant companies support Mitsui
Fudosan’s performance in the leasing business. In
addition, Mitsui Fudosan has well-developed leasing
capabilities that help keep the vacancy rate for its
properties below that of the market and fill newly
developed space with tenants.
Mitsui Fudosan will continue to stay abreast of tenant
demand trends and factors that influence them such as
the overall economy and newly developed properties
that come onto the market. At the same time, we will

13

Review of Operations
MITSUI OUTLET PARK Shiga Ryuo
(Retail facilities / Opened in July 2010)

Retail Facility Revenue by Category(Year ended March 31, 2011)

10%
5%

5%
Other

Urban facilities

Lifestyle center

50%

Regional mall30%

continue to enhance the quality of assets in our portfolio

fiscal 2010. This success is the direct result of a

to maintain and increase their competitiveness.

comprehensive approach to retail facility development

Mitsui Fudosan expects to add 105,000m of office2

space to its portfolio during fiscal 2011.

and management that maximizes value for both Mitsui
Fudosan and tenants.
Mitsui Fudosan has been developing and operating

Diverse Expertise Generates Growth fromretail facilities for three decades since opening

Retail Facility Leasing

LaLaport Funabashi (now LaLaport TOKYO-BAY) in

Although growth in consumer spending has been weak

1981. Using the management experience we havein Japan for the past several years, Mitsui Fudosanacquired and relationships with more than 1,900

generated revenue growth at its retail facilities during

tenant companies, Mitsui Fudosan operates in a diverse

Major Newly Operational Projects (Retail Facilities)
FY
OpenedProject Name(* indicates master-leased or jointly owned property)

Location

2010

Ginza Trecious*
MITSUI OUTLET PARK Sapporo Kita-Hiroshima
MITSUI OUTLET PARK Shiga Ryuo
Ginza Yanagidori Building (formerly G1 Project)*
COREDO Muromachi
Ginza Komatsu Reconstruction Project*
Shanjing Outlet Plaza s Ningbo*
MITSUI OUTLET PARK Jazz Dream Nagashima (Phase 4)
MITSUI OUTLET PARK Kurashiki ProjectAomi Q Area Project*
MITSUI OUTLET PARK Kisarazu Kaneda ProjectChuo-ku, Tokyo
Kita-Hiroshima, Hokkaido
Gamo-gun, Shiga
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Ningbo, Zhejiang, China
Kuwana, Mie
Kurashiki, Okayama
Koto-ku, Tokyo
Kisarazu, Chiba

2011

2012

FY opened and store floor space may change in the future. Some project names are tentative.

MITSUI OUTLET PARK
Sapporo Kita-Hiroshima(Retail facilities / Opened in April 2010)14

Store Floor Space(approximate)

4,500 m2
23,000 m2
27,000 m2
8,000 m2
3,600 m2
8,000 m2
16,000 m2
9,000 m2
20,000 m2
49,000 m2
25,000 m2

array of facility categories, from LaLaport regional
shopping centers and MITSUI OUTLET PARK outlet
malls to LaLagarden neighborhood retail facilities
known as lifestyle parks and urban retail facilities. We
further enhance solid tenant relationships through our“Growing Together” approach, which has provenhighly effective in helping stores increase sales. Rents
from the overall retail facility portfolio are structured
for stable earnings, with approximately 80 percent
fixed and 20 percent linked to store performance.
With a portfolio that centers on metropolitan Tokyo,
we continue to add shopping centers that we own andmanage in areas with good potential to generate
profitable growth.
Mitsui Fudosan’s strengths in leasing retail facilities
are its broad menu of facility formats, its development
capabilities and its ability to operate retail facilities
directly using the management resources of the Mitsui
Fudosan Group. A key to operating at full occupancy is
Muromachi-Higashi Mitsui Buildingbuilding strong relationships with the stores that are(Office building / Completed in October 2010)tenants.
We plan to add 53,000m2 to our retail facility

concept of preserving and revitalizing the past while

portfolio during fiscal 2011. This will include twocreating the future. Mitsui Fudosan is not simply

MITSUI OUTLET PARK properties totaling

constructing boxes for office and retail facility space.

approximately 29,000m in Japan and a 16,000m
22

retail facility in China.

Instead, we are working to revitalize the area by
creating a bustling venue for venerable shops,
refurbishing streets, and considering the streetscape

The Nihonbashi East Muromachi District

and scenery. We believe this will also enhance theDevelopment Projectcompetitiveness of our buildings and raise their value

Mitsui Fudosan completed the Nihonbashi 1-Chomeas assets. Since the Edo era, companies involved in

Building and COREDO Nihonbashi in fiscal 2003,

industries such as textiles, pharmaceuticals andfollowed by Nihonbashi Mitsui Tower in fiscal 2005.

finance have operated in Nihonbashi. Mitsui Fudosan

In fiscal 2010, we completed the Muromachi-Higashi

is working in an alliance with leading companies in

Mitsui Building and COREDO Muromachi. Ourthese and other industries in Nihonbashi to structure

portfolio of recently completed, high-quality assets inmutually beneficial relationships with them as tenants

Nihonbashi has thus expanded from one to severalof our buildings. The overall project is scheduled forlocations, and now to whole neighborhoods.

completion in 2014.

We are redeveloping the Nihonbashi area under a15

Review of Operations

Property Sales Business
A Rebound in Performance and Earnings
The property sales business encompasses two

Segment revenue operations

categories: property sales to individuals and property

increased 4.9 percent year on year, or

sales to investors. Fiscal 2010 operating income in theproperty sales business increased 29.6 percent, or¥19.0 billion, to ¥405.2 billion.

¥3.7 billion, compared with the previous fiscal year to

Segment operating income increased¥16.2 billion as the real estate market continued to29.6 percent year on year, or ¥3.7

recover from the negative effects of the financial crisis

billion, to ¥16.2 billion.

of 2008.

Property Sales to Individuals:
Solid Performance in a Robust Market

Portfolio Growth Strategy:
Build earnings in a robust market

The sales environment in the property sales toindividuals category is robust, and the operating

Operating Income

margin has bottomed out. The operating margin was(Billions of yen)

comparatively low at 3.1 percent for fiscal 2010

80

because Mitsui Fudosan sold many properties
60

constructed on higher-cost land purchased in fiscal

57.2

2006 and 2007. The number of units sold increased

49.2

from the previous period because the revenue from40

operations remained strong, but the operating income
declined partly because many highly profitable large-

16.2

20
12.5

scale properties were accounted in the previous
0

2008

2009

2010

period. Mitsui Fudosan’s brands range from high-grade2011(Years ended March 31)

and middle-grade condominiums to large-scale

Sales by Brand & Region(Year ended March 31, 2011)
High-grade
condominiums
deMiddle-grade
condominiums
ums

40 %

30 %

Sales by Brand

30 %Large-scale
developments

16

Other regions
Kansai &
Chubu

5%

10 %

Sales by Region

85 %Metropolitan Tokyo

Park Court Azabu-Juban The Tower(Property sales to individuals / Completed in May 2010)

developments. Contracts during the term increased
substantially to 6,609 from 4,805 for the previous
fiscal year. We also believe that the strength of ourbrands will support improved profitability as the
housing market continues its recovery. Properties
completed during the fiscal year included Park Tower
GranSky (Shinagawa-ku, Tokyo), Park Court AzabuJuban The Tower (Minato-ku, Tokyo) and Park Court
Tower Ikenohata (Taito-ku, Tokyo).
The housing sales market has benefited from priceadjustments and government measures to stimulate thehousing market, including enhanced and extended
home loan tax reductions, expanded gift tax

exemptions for housing purchases, increased tax
breaks for interest on home loans and the creation of
the Eco-Point system for housing. Cost recovery was
therefore a key theme of fiscal 2010 in this category as
we moved to benefit from a solid market, and we
reduced completed units in inventory to 684 as ofMarch 31, 2011 from 912 a year earlier. Mitsui
Fudosan remains committed to the property sales toindividuals category, and is maintaining acquisitions at

Condominium Units Booked, Contracts during
the Year and Inventories at End of the Fiscal Year
8,000
7,000

(Units)Units Booked

Contracts during the FY

Inventories at End of FY

6,339

6,000
5,249

5,000

4,487

5,455 5,628

5,206

4,000

5,000

4,651

4,331

3,889
3,321

3,000
2,000
1,000
0

453

267

2007

2008

826

872

2009
2010
(Years to March 31)638

2011 2012 (E)Park Court Ueno Ikenohata(Property sales to individuals / Completed in August 2010)17

Review of Operations

Major Projects for Future Booking (Property Sales to Individuals)
Booking
Year

2011

2012

2013

Property Name

Location

Park City Minami Senrioka
Park City Kashiwanoha Campus Nibangai
THE ROPPONGI TOKYOPark Homes Meguro The ResidencePark City Kokubunji
Park Court Roppongi Hill Top
Park Homes Okurayama
Nakano Mark Twin Tower
Park Tower Shibakouen
Hiroo Garden Forest (Tsubaki Residence)Grand Terminal Tower Motoyawata
Musashikosugi Station South Exit Area Redevelopment Project

Settsu-shi, Osaka
Kashiwa, Chiba
Minato-ku, Tokyo
Meguro-ku, Tokyo
Kokubunji, Tokyo
Minato-ku, Tokyo
Yokohama, Kanagawa
Nakano-ku, Tokyo
Minato-ku, Tokyo
Shibuya-ku, Tokyo
Ichikawa, Chiba
Kawasaki, Kanagawa

FY2014 and after

Total Units(Mitsui Fudosan Share)

586
880
611
237
331
211
177
234
98
193
381

(100%)(100%)(45%)(100%)(100%)(100%)(100%)(40%)(100%)(50%)(44%)

To be determined

Iidabashi Station West Exit Redevelopment Project
Kita-Shinagawa 5-Chome Area Redevelopment Project
Kashimada Station West Area Redevelopment Project
Sakurajosui Apartment Houses Reconstruction Project
Tsukishima 1-Chome 3, 4, 5 Redevelopment ProjectChuo-ku Harumi 2-Chome Project

Units become available for sale over multiple fiscal years at some properties. Moreover, the fiscal year in which units become available for sale may change in the future.
Some project names are tentative.

a stable level. Acquisitions of real property for sale
totaled ¥118.4 billion during fiscal 2010, comparedwith ¥107.4 billion in the previous fiscal year. As of
March 31, 2011, the Mitsui Fudosan Group had a landbank sufficient for approximately 18,000 units, withapproximately 10,000 total units before sharing in the
project stage, including redevelopment projects.
Although Japan’s population is projected tocontract, Mitsui Fudosan’s focus on high-grade
properties in metropolitan Tokyo will support stableperformance in the property sales to individuals
category. Moreover, Group company Mitsui Fudosan
Residential Co., Ltd. integrates the entire residential
value chain from land acquisition through sales,carefully studying market trends and customer needsin order to offer an attractive portfolio of brands thatPark Tower GranSky
18(Property sales to individuals / Completed in June 2010)

meet the needs of prospective homeowners. A key
strength differentiating Mitsui Fudosan Residential isthat it handles all phases from planning andconstruction through sales, which supports its ability
to consistently provide competitive properties.

Property Sales to Investors:
Improved Performance in a Recovering Market
A core Mitsui Fudosan strength is its relationships witha broad range of investors through channels including
the three J-REITs for which the Mitsui Fudosan Group
provides asset management services as well as private

Park City Hamadayama(Property sales to individuals / Completed in April 2010)

funds and investment corporations. Together, thesechannels provide a variety of exit options Mitsui
Fudosan can use for developed projects.

housing properties including Park Axis Utsubo Park

In fiscal 2010, J-REITs acquired a number of(Osaka, Osaka) and Park Axis Itabashi Honcho

properties from Mitsui Fudosan. Nippon Building

Nibankan (Itabashi-ku, Tokyo). In addition, acquisitions

Fund, Inc. acquired office buildings including Riverby Frontier Real Estate Investment Corporation included

City M-SQUARE (Chuo-ku, Tokyo) and Nihonbashi

the retail facilities LaLaport IWATA (Iwata, Shizuoka) and

Kabutocho M-SQUARE (Chuo-ku, Tokyo), while

Ginza Glasse (Chuo-ku, Tokyo).

Nippon Accommodations Fund Inc. acquired 10 rental

Our strategy involves an integrated value chain thatMultiple Exit Strategies and a Model for Cooperation with Investors
Private funds structured & managed by the Mitsui Fudosan Group

Corporations
Sales

Sales

Management

Management

Mitsui Fudosan Group

Sales

Management

J-REITs managed by the Mitsui Fudosan Group

Nippon Building Fund, Inc.

Nippon Accommodations Fund, Inc.

Frontier Real Estate Investment Corporation19

offers a number of advantages for institutional

inventories, with operating office buildings, retailinvestors because they can rely on the Mitsui Fudosan

facilities and rental housing accounting for theGroup for property and asset management services

remainder. These are prime assets that are recognizedwithin the core management business. After sellingas superior relative to the market. Mitsui Fudosan’s

properties to funds, we typically receive thesuccessful efforts to enhance the attractiveness ofmanagement contract for the properties as well. Our

properties to investors will continue to support

integrated value chain therefore provides opportunities

competitiveness.

to benefit well after the development process iscomplete. Mitsui Fudosan maintains ample inventories
of properties for sale to investors totaling ¥442.0
billion, with ¥228.0 billion on the balance sheet andapproximately ¥214.0 billion in SPCs. As of March 31,
2011, properties planned and under development
accounted for approximately 45 percent of theseInventory of Property for Sales to Investors
Jingumae M-SQUARE

Total: ¥442.0 billion (As of March 31, 2011)
On balance sheet: ¥228.0 billion
Off balance sheet: ¥214.0 billion
Shibaura Island Air Tower
Operatingofficebuildings

25 %
45 %
20 %

Completed in 2009

LaLaport SHIN MISATO

Planned &underdevelopment

Operatingretailfacilities

10 %Operatingrentalhousing
properties

Completed in 2007

Note: Consolidated basis. On-balance sheet real properties for sale including advances paid for purchases,
and assets held by SPCs for the property sales business
Opened in 200920

Review of Operations

Management Business
Leveraging Core Competencies to Increase
Assets under Management and Fee Income

Segment revenue from operations

The management business consists of two main
businesses: 1) the property management category, which

increased 4.2 percent year on year,or ¥11.3 billion, to ¥277.9 billion.

generates stable revenue growth from increases inproperties under management; and 2) the brokerage andasset management, etc. category, which uses Mitsui

Segment operating income

Fudosan Group expertise to generate fee income in ways

increased 8.1 percent year on year,

and for private funds, including those that Mitsuior ¥2.4 billion, to ¥32.1 billion.

services for individuals and corporations. Comprehensive

such as providing asset management services for J-REITs
Fudosan structures and manages, along with brokeragecapabilities covering diverse asset classes ranging fromoffice buildings to retail facilities and housing is a sourceof strength in the management business.

Portfolio Growth Strategy:
Use expertise to enhance fee-based
businesses that support ROE

Property Management and Asset Management
Generate Stable Fee Income
Mitsui Fudosan is well able to meet client needs in theproperty management business because of its ability tohandle a broad range of responsibilities in diverse asset

Operating Income

classes. For example, in the office building sector Mitsui(Billions of yen)

Fudosan Building Management Co., Ltd. has 663

80

buildings under management, while First Facilities Co.,
Ltd. has 355 buildings under management. In the retail60

facility sector, LaLaport Management Co., Ltd. has 55
47.4

facilities. In the housing sector, Mitsui Fudosan Housing

38.8

40

29.7

32.1

Lease Co., Ltd. has 44,215 subleased and consigned units
under management, while Mitsui Fudosan Housing Service

20Co., Ltd. has 210,000 units under management. Growth inconsigned properties and the number of rental housing

0

2008

2009

2010

(Years ended March 31)

2011

units under management are supporting steady earnings.
In asset management, Mitsui Fudosan is emphasizing
its capabilities as a trustee and contract service provider
on behalf of investors and originators, which has
supported growth in assets under management andstable fee income. The Mitsui Fudosan Group also
includes the management companies for three listed
J-REITs. Mitsui Fudosan is one supplier of properties tothese J-REITs, which are also a significant source of asset
and property management fees. We have also expanded
the number of private funds we manage with theobjective of stable returns.
21

Private funds and other investors complement J-REITs
as acquirers of properties that the Mitsui Fudosan Grouphas developed, and then contract with the Mitsui

Assets under Management: Track Record(Trillions of yen)

3.0

Fudosan Group for property management services.

2.5

Businesses such as subleasing and development

2.0

management for external clients also generate fee

1.5

income.

1.0

2.70 2.80 2.70 2.80
2.35
2.15
1.80
1.44
1.20

0.5

Fee Income Supports ROE
Mitsui Fudosan’s skills as a solutions provider are the02003 2004 2005 2006 2007 2008 2009 2010 2011

core of the management business. The fee income theseskills generate enhances ROE because it does not require
an increase in assets. Consequently, fee income has been

(Years ended March 31)

Assets under Management(Year ended March 31, 2011)

steady despite the downturn in the real estate investment
market in recent years.

30 %Diverse Fee Opportunities

41 %Group company Mitsui Real Estate Sales Co., Ltd.
provides brokerage services within the management

7%
7%

business. Transaction volume in the Japanese secondary
market relative to the primary market is low compared toInvestors

15 %the corresponding ratio in the U.S. and Europe, which
Originators

suggests that future growth potential of Japan’s brokerage
market is significant. The Mitsui Fudosan Group’s Mitsui
Rehouse brand has been number one in Japan’s brokerage

markets, the individual brokerage business achieved amarket for individuals in terms of transaction volume forsecond consecutive year of record transaction volume in

25 consecutive years since 1986. Having cut its costs

fiscal 2010. This ongoing success indicates solid

while enhancing responsiveness and its focus on urban

potential in an attractive sector of the real estate market.

Comprehensive Management Capabilities Covering Diverse Asset Classes
Office Buildingss -ITSUI &UDOSAN "UILDING -ANAGEMENT #O ,TDs &IRST &ACILITIES #O ,TD

Diverse AssetClasses

22

Retail Facilities

Housings ,A,APORT -ANAGEMENT #O ,TDs -ITSUI &UDOSAN (OUSING ,EASE #O ,TDs -ITSUI &UDOSAN (OUSING 3ERVICE #O ,TD

Mitsui Fudosan Group Growth Strategy
Response to Accelerating Maturity
Customers and their needs are becoming more diverse

Mitsui Home Remodeling Co., Ltd.
Began operations in 2002; owned 70% by Mitsui Fudosan

While customers and their needs are changing and becoming
more diverse more quickly than ever, Mitsui Fudosan
consistently succeeds in adapting to markets and customers thatare evolving because of social and economic growth andmaturity. For example, we are strengthening and expanding
remodeling operations because they make use of Group
resources in a growing business that accommodates diverse
customer values in a mature market.

Response to Accelerating Globalization
Markets and customers are globalizing and becoming borderless

Adapting to increasingly global
and borderless markets andcustomers, the Mitsui FudosanGroup is deploying its core skills
in multiple projects in China,
Shanjing Outlet Plaza NingbosNingbo, Zhejiang, China
Start of operations in fall 2011
Rentable floor space: 16,000m2

complementing businessShanghai New Town Development,
House Huang Ma Yuen (Malu Project)

opportunities such as property

Shanghai, China
720 units in southern district will becompleted in December 2011
460 units in northern district will becompleted in December 2012

sales in Singapore. We areworking with strong partners as
we expand internationally tocontrol risk. We are also
strengthening our ability to meetthe cross-border needs ofJapanese and foreign customers
by providing solutions aspartners with foreign customers
operating in Japan and Japanese

Tianjin Eco-City
Tianjin, China
Full completion in February 2014
2,250 condominiums,
400 detached houses

customers operating overseas.

Dalian Software Park Phase 2
Dalian, Liaoning, China
Full completion in October 2014
1,900 housing units/retail facility withfloor area of 47,000m2

23

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

Sound and Efficient Management

In addition, the Strategy Planning Special Committee, theMitsui Fudosan has adopted a corporate officer system to

Risk Management Special Committee, the Social Contribution

build a business execution framework appropriate to its

Special Committee and the Environmental Special Committee

operating environment and business activities, enhancing thefunction as advisory and strategy coordination bodies to thesoundness and efficiency of management by separating andExecutive Management Committee. The Strategy Planningstrengthening management and executive functions. In

Special Committee formulates and deliberates Group strategy

addition, the Group Corporate Officer System, in which

and management plans and engages in risk management forcorporate officers of both Mitsui Fudosan and its Group

Mitsui Fudosan and the Mitsui Fudosan Group in collaborationcompanies share an equal status and mission, was establishedwith the Risk Management Special Committee. The Social

to further strengthen Group management.

Contribution Special Committee and Environmental Special
Committee are responsible for reviewing overall social

Improving Transparency and Expanding the
Perspective of Management

contribution activities and environmental activities.

Mitsui Fudosan invites and appoints outside directors in orderto strengthen the oversight functions of the directors andBoard of Directors and Board of
Corporate Auditors

enhance management transparency. The outside directors

The Board of Directors, comprising thirteen members

provide input as necessary on the reasonableness andincluding four outside directors, makes decisions on material

adequacy of Mitsui Fudosan’s decision-making.

issues of Mitsui Fudosan and supervises the status of the

Furthermore, Mitsui Fudosan has established the Advisory

directors’ execution of business. The corporate auditors attend

Committee, consisting of experts from business and academia,

meetings of the Board of Directors and provide opinions as

to diversify the perspective of management by providing

necessary.

comprehensive and forward-looking advice from an objective

In addition, Mitsui Fudosan has designated a special

viewpoint. The committee met twice in fiscal 2010, and eachdirector who may pass judgment on the urgent acquisition ormember offered valuable advice.

sale of assets when so empowered by the Board of Directors.
Mitsui Fudosan has adopted a corporate auditor system.

Decision-Making

The Board of Corporate Auditors, comprising five corporate

The Executive Management Committee, consisting ofauditors, including three outside auditors, formulates auditing

executive managing directors and executive corporate

policies and determines duty assignments. It also receives

officers, meets weekly to deliberate and report on important

reports and discusses material items on audits conducted

matters related to business execution. Fulltime corporate

according to these policies and assignments. The corporate

auditors also attend meetings to stay informed of important

auditors receive periodic reports from the Audit Department

decision-making processes and the status of businessand the certified public accountant and exchange information

execution, and provide opinions as necessary. The Executive

in working toward mutual cooperation.

Management Committee also supervises internal control andrisk management.

24

As an internal auditing structure, the Audit Department
carries out regular audits of all business departments andreports the results of its audits. It also works to enhance theOutside Directors and Outside Auditors

effectiveness of internal control by identifying and providing

Mitsui Fudosan has four outside directors and three outside

guidance to audited divisions on areas requiring

auditors.

improvement.
Mitsui Fudosan has concluded an auditing contract with

Outside Directors

KPMG AZSA LLC as its certified public accountant, which

Mitsui Fudosan has appointed Yoshiharu Hayakawa, Mitsudo

conducts appropriate audits as necessary in addition to the

Urano, Eiji Hosoya and Masayuki Matsushima after a

audit at the end of the fiscal year.

comprehensive evaluation of their characters, capabilities,

Mitsui Fudosan has no conflicts of interest with either theexperience and other factors. None of the four has a conflictcertified public accountant or the employees of the certified

of interest with general shareholders.

public accountant that audits the Company.

Outside Auditors
Mitsui Fudosan has appointed Akishige Okada, Keiu Nishida
and Toshiaki Hasegawa after a comprehensive evaluation of
their characters, capabilities, experience and other factors.
None of the three has a conflict of interest with generalshareholders.

Corporate Governance Organization(As of June 29, 2011)

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/Divisions

25

Revisions to the Tokyo Stock Exchange Securities Listing

Mitsui Fudosan has concluded an auditing contract with

Regulations in December 2009 made it obligatory for listed

KPMG AZSA LLC as its certified public accountant, which

companies to secure independent officers to act from theconducts appropriate audits as necessary in addition to thepoint of view of protecting general shareholders. Mitsuiaudit at the end of the fiscal year.

Fudosan has appointed the aforementioned four outside

Mitsui Fudosan has no conflicts of interest with either the

directors and three outside auditors as independent officers.

certified public accountant or the employees of the certified
public accountant that audits the Company.

Compensation for Officers andCorporate Auditors

for the certified public accountant is decided through rational

The amount of compensation for officers and the method of its

consideration of factors including the number of days of

calculation utilize the basic compensation in a total amountauditing, the size of Mitsui Fudosan and special

within the scope set and approved by resolution of the 95th

characteristics of its business.

Mitsui Fudosan’s policy to determine audit compensation

Total audit compensation for fiscal 2010 was ¥399.0 million,

Ordinary General Meeting of Shareholders, a bonus paid as ashort-term incentive that comprehensively takes intoof which ¥394.0 million was used for audit certificationconsideration such things as business results achieved in eachcompensation. Mitsui Fudosan America, Inc., a consolidated

fiscal year and must be approved by resolution at thesubsidiary, paid ¥27.0 million in compensation to KPMG LLP,

Ordinary General Meeting of Shareholders, and stock options

a member of the same network as Mitsui Fudosan’s certified

paid as medium-term incentive in an amount within the scope

public accountant.

set and approved by resolution of the 95th Ordinary General

Internal Control System

Meeting of Shareholders.

While promoting the enhancement and operation of a system

Internal Audit System

of internal control, Mitsui Fudosan is strengthening the system

As an internal auditing system, the Audit Department, with aaccording to its basic policy on building an internal control

staff of 16, carries out regular audits of all businesssystem formulated in October 2006 to ensure thedepartments and reports the results of its audits. It also works

appropriateness of business including the conformance of

to enhance the effectiveness of internal control by identifying

business execution with laws and the articles of incorporation.

and providing guidance to audited divisions on areas
requiring improvement.

Compensation for Directors and Corporate Auditors
Title

Directors (Excluding outside directors)
Corporate Auditors (Excluding outside directors)
Outside directors
Compensation of Directors Exceeding ¥100 Million

President and Chief Executive Officer Hiromichi Iwasa
Executive Vice President Koichi Omuro
Executive Vice President Tatsuo Soda

26

Amount of Compensation by Type (Millions of yen)

Total Compensation(Millions of yen)

Basic Compensation

Stock Options

Bonus

Number ofApplicable Officers

756
84
66

461
84
66

68
—
—

225
—
—

8
2
6

Total Compensation(Millions of yen)

Basic Compensation

Stock Options

Bonus

170
102
106

99
61
65

15
9
9

56
31
31

Amount of Compensation by Type (Millions of yen)Corporate Governance

Response to Internal Control Report System
Based on the Financial Instruments and Exchange
Law (J-SOX)

Committee and Risk Management Special Committee manage

The Internal Control Report System requires listed companies

In addition, the Crisis Management Subcommittee, as ato establish and evaluate internal control related to financial

subordinate body of the Risk Management Special Committee,

reports, to prepare written reports, and to have auditors audit

apprehends the circumstances of accidents or other incidents

those reports. The Mitsui Fudosan Group set up a project teamthat occur and determines response policies and other mattersin April 2006 and has continued preparing for the system

as necessary.

business risk and administrative risk, respectively, delineate
and apprehend risk issues and propose response measures.

while integrating the opinions of outside specialists. The
establishment of the Operating Administration Department inCompliance

April 2007 as a J-SOX supervisory department completed a

The Mitsui Fudosan Group promotes compliance that extends

structure to enhance and operate internal control for the entire

beyond legal compliance and adherence to corporate ethics,

Group as well as to evaluate enhancements and operations.

with a strong awareness of social norms and principles, andthe social responsibilities of a company. With the

Risk Management

establishment of the Mitsui Fudosan Group Compliance

The Mitsui Fudosan Group believes that appropriately

Policies as behavioral guidelines for all Group executives andhandling various business risks and minimizing their impact

employees, the Group works to prevent violations of laws andon management are the foundation for achieving soundits articles of incorporation by upgrading the Compliancebusiness activities and CSR objectives.

Rules and other internal rules and establishing the Risk

Under the Executive Management Committee, which

Management Special Committee. Each Mitsui Fudosan Groupsupervises overall risk management for Mitsui Fudosan andcompany has also set up an Internal Consultation System on

the Mitsui Fudosan Group, the Strategy Planning Special

compliance for employees.

Risk Management Organization(As of June 29, 2011)

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

Management Team(As of July 1, 2011)

Front row, from left: Eiji Hosoya, Yoshiharu Hayakawa, Hiromichi Iwasa, Masanobu Komoda, Mitsudo Urano, Masayuki Matsushima
Back row, from left: Kenji Iino, Toshihide Ichikawa, Yoshiaki Iinuma, Mitsuhiro Matsumoto, Hitoshi Saito, Yoshikazu Kitahara, Hiroshi Asai

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

Executive Managing Directors

Hiromichi Iwasa

Hitoshi Saito

President and Chief Executive Officer

Masanobu Komoda
Senior Executive Managing Directors

Mitsuhiro Matsumoto

Toshihide Ichikawa
Yoshikazu Kitahara
Hiroshi Asai
Kenji Iino

Yoshiaki Iinuma
Managing Directors (Outside Directors)

Yoshiharu Hayakawa
Mitsudo Urano
Eiji Hosoya
Masayuki Matsushima

Auditors
Senior Corporate Auditor

Corporate Auditors (Outside Auditors)

Seizo Kuramoto

Akishige Okada

Corporate Auditor

Masayuki Isobe

28

Keiu NishidaToshiaki Hasegawa

Corporate Officers
Chairman and Chief Executive Officer

Kenji Iino

Hiromichi Iwasa

In charge of Executive Secretarial Department, Corporate Communications Department,
Personnel Department, Appraisal Department, Affiliated Business Department

President and Chief Executive Officer

Yasuhiko Yamashiro

Masanobu Komoda

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

In charge of Audit Department, Corporate Planning Department

Senior Executive Managing Officers

Yasuo Onozawa
Deputy Chief Operating Officer, Office Building Division

Mitsuhiro Matsumoto
In charge of Housing Sales Business;
President, Mitsui Fudosan Residential Co., Ltd.

Managing Officers

Eiichi Sawai

Deputy Chief Operating Officer, Retail Properties Division

In charge of Planning and Research Department, Space & Environment Institute

Hiroyuki Ishigami
Masatoshi Satou

Yoshiaki Iinuma

General Manager, International Department

In charge of Toyosu-Project Development Planning Department,
Kashiwanoha Campus City Project Development Planning Department,
Development Planning Department, Gotanda Project Department, Branch Offices;
Chief Operating Officer, Retail Properties Division

Takashi Yamamoto

Executive Managing Officers

Akihiko Funaoka

Hitoshi Saito

General Manager, Planning and Research Department

In charge of International Department

Shuji Tomikawa

Toshihide Ichikawa

Chief Operating Officer, Real Estate Solution Services Division

In charge of Tokyo Midtown Development Department;
Chief Operating Officer, Accommodations Business Division

Takashi Ueda

Yoshikazu Kitahara

General Manager, Tokyo Midtown Development Department;
President, Tokyo Midtown Management Co., Ltd.

Deputy Chief Operating Officer, Office Building Division;
General Manager, Office Building Project Planning Department

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

Hiroshi Asai
In charge of General Administration Department, Accounting and Finance Department,
Operating Administration Department, Information Systems Department

Group Officers
Group Senior Officers

Group Officers

Hidehisa Takei

Takeshi Suzuki

Mitsui Real Estate Sales Co., Ltd.

Mitsui Fudosan Residential Co., Ltd.

Shogo Nakai

Yoichi Arita

Mitsui Fudosan Investment Advisors, inc.

Mitsui Fudosan Building Management Co., Ltd.

Masatoshi Ozaki

Tadashi Ando

Mitsui Home Remodeling Co., Ltd.

LaLaport Management Co., Ltd.

Kiyotaka Fujibayashi

Tooru Inoue

Mitsui Fudosan Residential Co., Ltd.

Mitsui Fudosan Residential Co., Ltd.

29

Mitsui Fudosan Group’s Social and Environmental Initiatives*
We consider that the social responsibilities that the Mitsui Fudosan Group aims to fulfill are to contribute tosocio-economic development as well as global environmental conservation. In order to achieve the practiceand realization of “Urban Enrichment and Comfort,” as stated in the Group Statement, we have set thethree themes of “environment,” “quality” and “challenges for creating new values and markets.”

Environment

Mitsui Fudosan Group’s
initiatives for the environment

Along with providing buildings and services with a lightenvironmental load, we are also working on reducing theenvironmental load of management operations.

,” expresses
Mitsui Fudosan Group’s environmental communication word, “
the fact that our activities are always done together with the Earth, based on theconcept of “harmonious coexistence” as symbolized by the “ ” mark.

▶▶

To reduce CO2▶▶

Rather than merely using energy-saving devices, heat insulationand heat shielding performance at the planning stage, we are also
working actively on reducing the amount of CO2 we produce during
the management and operation phases.

To preserve the water environment

In addition to working on designs that take into account water saving,
the effective use of water, and subterranean water recharging, we arealso active in arousing awareness of water saving.
Precipitation
Evaporation

Pavement

Park Axis Tatsumi Stage▶▶

We are also introducing these power
generation systems for retail andother properties.

To reduce toxic substances

Water
permeation

Returning Rainfall to the Soil

Suggested Water Level Sticker

We are introducing permeablepaving and permeable drains.

We provide suggested waterlevel marks for hotel bathtubs.

▶▶

We are moving ahead with the use of materials and machinerythat do not include toxic substances, checking for soil pollution,and reducing the use of chemicals.

WaterpenetrationBasecourseSubgradeWind and Solar Power Generation
LaLaport SHIN-MISATO

SurfacecourseTo reduce waste and conserve resources

In order to reduce building resources and prolong their life, we
also use the “3R” (reduce, reuse and recycle) approach.
Stamped concreteRound-shaped
photocatalyst water purifier

Reduction of Waste During
Construction

Photocatalyst Water Purifiers
We are introducing chemical-free
purifiers in waterscapes andglass surfaces of office buildings.

For preserving
greenery

GreeneryComplementing
Building Features

Along with preserving andcreating greenery, precious
homes to living things, we arealso maintain and manage it,
as well as make use of it.

At Fine Court
LaLa City, we havecreated a landscaperich in greenery
using a large
number of trees.

▶▶

30

Big Canopy, Tokyo Midtown

We use stamped concrete that does
not generate waste remnants.

Fine Court LaLa City

* From Mitsui Fudosan’s Corporate Profile 2010

Initiatives at the
Mitsui Garden Hotels
We are changing to refillable
containers for shampoo andother liquids.

Forests Owned by
the Group
We are active inpreserving andmaking use of ourforests.
This conference room
table was made from woodfrom a forest we own.

CSR’s
Ideas

CSR’s
ThemesGroup Statement

Urban Enrichment and Comfort

Environment

Quality

Challenges for
new value andthe creation of markets

We contribute to the global
environment based on the concept of“harmonious coexistence,” assymbolized by our “ ” mark.

We are constantly looking at thingsfrom our customers’ points of view,
aiming to provide safe and secure goods
and services that will satisfy them.

We are constantly contributing to thedevelopment of society through thecreation of new value in accordancewith social and economic changes.

We are involved in a number of initiatives
that aim for a town where we can live in harmony with nature.

“Eco Hello!” for retail properties

At retail properties of the Mitsui Fudosan Group, we hold a number of various
ecology-related events and contributions to society.

Keeping Air-CoolingTemperatures Mild
We have a campaign for
milder air conditioning insummer, to combat global
warming.

Clothing Support Project
We collect unwanted household
clothing, and donate it to refugees anddisaster victims around the world.

Tokyo Midtown initiatives

Tokyo Midtown is a town where detailed consideration of the environment reaches toevery corner, thanks to “the value and aesthetics one finds only in Japan.”

Saving Water
By processing waste water from daily life, we
can save an amount of water equivalent to that
consumed by about 416 households annually.

Louvers

Rooftop Greenery

To effectively shut out sunlight.

Some 2,300m2 of greenery alleviates the heat island effect.

Kashiwanoha Campus City Initiatives

With the theme of “the environment, healthy living, creativity, andcommunication,” research between the public, private, and academic
sectors is moving ahead.

CO 2 Visualization ProjectThis Project increases
environmental awareness.

Mirai Hatake(Future Fields)
The Kashiwanoha Smart Cycle
Eco Monitors to measure andrecord CO 2 emissions

A rental cycle returnable to a different
location.

A small-scale plant
nursery of about 6.5 m 2 set
in the middle of LaLaport
KASHIWANOHA.

31

Quality

An insistence on the quality needed to support the satisfying,secure, and pleasant lifestyle of our customers
We continually work to sustain customer aspirations, increase customer satisfaction, and provide quality management.
▶▶

Initiatives to increase
Customer Satisfaction (CS)▶▶

Making each one of our customers satisfied is something we consider
vital in improving our quality.

Initiatives for quality management

In each of our projects, we set directions and guidelines for our quality
management.

TQPM (Total Quality ProjectManagement)

Customer Opinions Boxes

Full quality management
is practiced at all our
condominiums.

Set up at our retail properties.

▶▶

Initiatives for safety and security

We realize that socially there are an increasing number of unstableelements in terms of safety, and are strengthening our approaches.

PRISM EYE

Thinking about security from design

A condominium security
system that that provides
all-round protection ofyour lifestyle.

Happy Smile Campaign
A campaign at Mitsui Garden Hotels.

Thinking about security from functions
Thinking about security from operation

Challenges for new value andthe creation of markets

Linking in harmony with society, taking on the challenge of creationand spreading the word about new market values
We are constantly creating new values from changes in society and the economy, contributing to the development of society.
▶▶

Creating new value

Values change as society changes.
We continue to work to increase still further the values of the local community.

80 years ago
Rising from the rubble of
the great earthquake
Mitsui Main Building

A humanness returns
to the megacity

Kasumigaseki Building

Today
Bringing together
and fusing“knowledge” andpromoting “health”
among people andthe earth
At Tokyo Midtown, we arebuilding a unique town,
creating new Japanesevalues, and showcasing themfor the world to see.
Tokyo Midtown Award32

40 years ago

The Mitsui Main Building wascompleted in 1929, about six years
after the Great Kanto Earthquake.

To the Future

Tokyo Midtown

Award Committee andRecipients for 2009

In 1968, the Kasumigaseki
Building, at 36 floors, wasthe first ultra-high risecompleted in Japan.

Co-existing in harmony
with the naturalenvironment andthe local community
TrophyKashiwanoha Campus City
Project aims to create asustainable town.

Kashiwanoha Campus City
(Perspective drawing is CGI)

Mitsui Fudosan Group's Social and Environmental Initiatives▶▶

Co-existing with the local community

Based on our concepts of “harmonious coexistence” and “linking diverse value perceptions,”
when we carry out large-scale residential developments we shall work to create a communitythat responds to the special nature of its area.

Self-governing Body for
Shibaura Island
A cause that we support.

Pinocchio ProjectA project in the Kashiwanoha Campus
area providing children with the chance
to look at how communities work.

Roppongi Mission Uchimizu
A Tokyo Midtown event in collaboration
with the local community.

Iwata City Community Center
Inside LaLaport IWATA, the centerspreads information about local bodies.

▶▶

Social contributions and support for cultural activities

As a member of society charged with the creation of towns, we are active in supporting
culture and exchange to revitalize the local area.

Sumida River Fireworks Festival“The cat who wished to be a man”

Photo: Ken Arai

Kokoro no Gekijo (Theater of the Heart)

A favorite Tokyo summer festival.
(Restarted in 1978, and supported
and sponsored by us since 1985)

A project by the Shiki Theatre Company held for children all over the country.
(Our support started in 2008)

Atrium Concerts
We hold free concerts inthe atrium of Nihonbashi
Mitsui Tower.

Sanno Festival andthe Kanda Festival
We take part in the
mikoshi parades.

33

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

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

2011

2010

2009

2008

2007

2006

2011

¥1,405,270¥1,384,807¥1,418,946¥1,360,023¥1,229,194¥1,159,280$16,900,421

27,044

31,152

9,389

27,50923,946

16,949325,243

1,382,293

1,356,870

1,349,178

1,305,778

1,180,528

1,121,676

16,624,088

689
(801)
49,9092,027(1,032)60,084

5,980(1,565)83,572

7,064(1,440)87,3784,410(1,808)75,214

3,155(1,167)56,541

8,286(9,633)600,229¥3,780,700¥3,710,424¥3,758,387¥3,634,489¥3,294,190¥2,986,502$45,468,431

1,019,941
174,296
16,288

1,007,811
174,296
15,922

978,667
174,296
15,476

971,310
174,296
14,788944,196
174,296
13,299858,364
174,296
13,053

12,266,278
2,096,164¥¥

Years ended March 31

FOR THE YEAR

Revenue from operations..................
Interest, dividends andmiscellaneous .....................................
Costs and expenses(including tax) .....................................
Equity in net income ofaffiliated companies .........................
Minority interests .................................
Net income .............................................

AT YEAR-END

Total assets .............................................
Shareholders’ equity and accumulated
other comprehensive income ..............
Common stock ......................................
Number of employees ........................

PER SHARE DATA

Net income (basic) ...............................
Cash dividends applicable to the year ....

56.8
22.0

68.4
22.0

¥

95.1
22.0

¥

99.4
20.0

¥

85.5
14.0

¥

67.5
10.0

$

0.683
0.265

RATIOS

Equity ratio (%) (Note 2) ........................
Return on assets (%) (Note 3)..............

27.0
3.39

27.2
3.41

26.0
5.06

26.7
5.53

28.7
5.50

28.7
4.92

Notes: 1. U.S. dollar amounts are translated from yen at the rate of ¥83.15 = U.S.$1.00, the approximate exchange rate at March 31, 2011.
2. Equity ratio = (Net assets – Subscription rights to shares – Minority interests) / Total assets
3. Return on assets (ROA) = (Operating income + Interest, dividends and miscellaneous revenues, excluding extraordinary gains + Equity in net income of affiliated companies)/ Average total assets over the period

34

Management’s Discussion and Analysis
Mitsui Fudosan Co., Ltd. and its Subsidiaries

Income Analysis(Billions of yen, %)2011

Years ended March 31

2010

Revenue from operations................................................................................

¥1,405.3

100.0%¥1,384.8

2009
100.0%¥1,418.9

100.0%

Cost of revenue from operations .................................................................

1,138.0

81.0

1,120.1

80.9

1,098.4

77.4

Selling, general and administrative expenses.........................................

147.2

10.5

144.1

10.4

149.0

10.5

Operating income ..............................................................................................

120.1

8.5

120.6

8.7

171.5

12.1

Other revenues....................................................................................................

27.0

2.0

31.1

2.2

9.4

0.7

Interest expenses ...............................................................................................

27.5

2.0

29.5

2.1

29.8

2.1

Other expenses ...................................................................................................

36.6

2.6

26.5

1.9

41.1

2.9

Equity in net income of affiliated companies .........................................

0.7

0.1

2.0

0.1

6.0

0.4

Income before income taxes and minority interests ............................

83.7

6.0

97.7

7.0

116.0

8.2

Income taxes ........................................................................................................

33.0

2.3

36.6

2.6

30.8

2.2

Minority interests ...............................................................................................

(0.8)

(0.1)

(1.0)

(0.1)

(1.6)

(0.1)

49.9

3.6

60.1

4.3

83.6

5.9

Net income ...........................................................................................................

¥

¥

¥

Earthquake caused some retail facilities to be suspended or to

Revenue from Operations
For fiscal 2010, the year ended March 31, 2011, consolidated
revenue from operations increased 1.5 percent year on year, or¥20.4 billion, to ¥1,405.2 billion.
The “Leasing” segment benefited from new projects andthose that made a contribution for the entire period. These
included projects that came on-stream during the period,
notably Sumitomo Mitsui Banking Corporation Head Office
Building (Chiyoda-ku, Tokyo) and Mitsui Outlet Park Shiga Ryuo
(Gamou-gun, Shiga). Meanwhile, the vacancy rate of theexisting office buildings throughout the period was up from theprevious period, Hibiya Mitsui Building (Chiyoda-ku, Tokyo) wassuspended for reconstruction, and the Great East Japan

reduce open hours. In the “Property Sales” segment, thenumber of units sold in the “Property Sales to Individuals”
category increased from the previous period because therevenue from operations remained strong. In the "Property
Sales to Investors" category, revenue increased due to property
sales to the listed J-REITs such as Nippon Building Fund, Nippon
Accommodations Fund, and Frontier Real Estate Investment
Corporation. In the “Management” segment, revenue
increased. This was mainly due to the increased number ofconsigned properties with contribution of newly on-stream
outlet and other retail facilities as well as the increased numberof rental housing units under management in the “Property
Management” category. “Brokerage and Asset Management,etc.” category also reported improved revenue, due mainly to ahigher number of properties handled in our brokerage business

Revenue from Operations

Operating Income

for individuals including Mitsui Rehouse.

(Billions of yen)(Billions of yen)

Cost of Revenue from Operations and
SGA Expenses

1,360.0

1,500

1,418.9 1,384.8 1,405.3

200

1,229.2

179.3
161.8

150
1,000

171.5

120.6 120.1

Cost of revenue from operations increased 1.6 percent year on
year, or ¥18.0 billion, to ¥1,138.0 billion. Cost of properties
booked in the “Property Sales” segment increased because of100

higher sales volume in both the “Property Sales to Individuals”

500

category and the “Property Sales to Investors ”category.

50

However, cost of revenue from operations included only02007 2008 2009 2010 2011
(Years ended March 31)02007 2008 2009 2010 2011

approximately ¥1.0 billion in nonrecurring loss on devaluation(Years ended March 31)

35

of real property for sale, compared with the amount recognized

as the sum of operating income and interest, dividends andin the previous fiscal year. As a result, gross profit frommiscellaneous revenue divided by interest expenses, was 5.4

operations increased 0.9 percent year on year, or ¥2.5 billion, totimes compared with 5.1 times for the previous fiscal year.

¥267.2 billion, and the gross margin decreased to 19.0 percent

Other costs and expenses increased 38.3 percent, or ¥10.2

from 19.1 percent for the previous fiscal year.

billion, to ¥36.7 billion. While impairment loss on fixed assets

Selling, general and administrative (SGA) expenses increased

decreased to ¥4.1 billion from ¥18.9 billion in the previous fiscal

2.1 percent year on year, or ¥3.0 billion, to ¥147.2 billion

year, Mitsui Fudosan recognized loss on disposal of property

because advertising expenses rose in tandem with the increaseand equipment of ¥12.3 billion, due largely to the retirement ofin unit sales in the “Property Sales to Individuals” category.

the Hibiya Mitsui Building pending redevelopment, andimpairment loss on investment securities of ¥6.2 billion.

Operating Income

Moreover, loss on disaster in connection with the Great East

The accompanying consolidated financial statements do notinclude operating income as a discrete line item. Calculated asrevenue from operations less cost of revenue from operations
and SGA expenses, operating income was essentially unchanged
year on year at ¥120.1 billion.

Interest, Dividends and Miscellaneous
Income, and Other Costs and Expenses
Interest, dividends and miscellaneous revenue decreased 13.2
percent, or ¥4.1 billion, to ¥27.0 billion. This decrease reflected
reduced gain on sale of investment securities, which totaled¥21.0 billion for fiscal 2010 compared with ¥25.7 billion forfiscal 2009. Gain on sale of investment securities for both fiscal
years was primarily the result of the sale of shares in former
affiliate Oriental Land Co., Ltd. in response to share buyback
offers from that company. Note 20 of the Notes to Consolidated
Financial Statements provides additional information. Interest
expenses decreased 7.1 percent, or ¥2.1 billion, to ¥27.5 billion
because Mitsui Fudosan has steadily replaced maturing debt
with lower-cost funding. The interest coverage ratio, calculated

Net Income(Billions of yen)90

Net Income per Share

87.4

(Yen)

83.6

99.4

100

95.1

85.5

75.2
60.1
60

75

68.4

56.8

49.9
50

30
25

0

2007 2008 2009 2010 2011
(Years ended March 31)3602007 2008 2009 2010 2011
(Years ended March 31)

Japan Earthquake totaled ¥4.6 billion, and Mitsui Fudosan also
recognized provision for loss on disaster of ¥3.6 billion. Notes
19 and 21 of the Notes to Consolidated Financial Statements
provide additional information.

Income before Income Taxes andMinority Interests and Net Income
Equity in net income of affiliated companies decreased 66.0
percent year on year, or ¥1.3 billion, to ¥0.7 billion, in part
because units booked by a property sales affiliate in Singapore
decreased year on year. Income before income taxes andminority interests decreased 14.3 percent year on year, or ¥14.0
billion, to ¥83.7 billion, primarily reflecting the increase in othercosts and expenses related to the Great East Japan Earthquake.
Income taxes net of deferrals decreased 9.8 percent, or ¥3.6
billion, to ¥33.0 billion. Consequently, net income decreased
16.9 percent year on year, or ¥10.2 billion, to ¥49.9 billion. Net
income per share decreased to ¥56.8 from ¥68.4 for theprevious fiscal year. Although net income decreased, Mitsui
Fudosan maintained annual cash dividends per share at ¥22.0.

Management’s Discussion and Analysis

Segment Information
Leasing(Millions of yen)

2011

2010

Office Buildings

291,721303,093

Retail Facilities

125,810

121,920

4,383

4,411

Owned

1,240

1,278

Managed

1,531

1,544

Owned

971

1,007

Managed

640

583

5,936

5,961

Total Revenue

423,468

430,976

Operating Income

88,92995,554Years ended March 31

Revenue

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

Office Buildings

Retail Facilities

Other

Revenue

This segment projects that came on-stream during the period, notably
Sumitomo Mitsui Banking Corporation Head Office Building (Chiyoda-ku,
Tokyo) and Mitsui Outlet Park Shiga Ryuo (Gamou-gun, Shiga), as well as
projects that were completed in the previous fiscal year and made a full-

Vacancy Rate for Tokyo Metropolitan Area Office Buildings(Nonconsolidated)(%)

8

term contribution in the period under review, namely Mitsui Shopping Park
LaLaport Shin-Misato (Misato, Saitama). However, the segment revenue

6

was down ¥7.5 billion and operating income down ¥6.6 billion from theprevious fiscal year. This was due to the impact of increasing vacancy rates

4.0

2010

2011

2.5

in existing office buildings that were up from the previous period
throughout the period, as well as the suspension of operations at Hibiya

3.9
4

2

1.6

1.3

2007

2008

Mitsui Building (Chiyoda-ku, Tokyo) for planned reconstruction and theinfluence of the Great East Japan Earthquake that caused Mitsui Outlet

0

suspended or reduce open hours.
On a nonconsolidated basis, the vacancy rate of the Company's officebuildings in the Tokyo Metropolitan Area rose to 4.9 percent at the end of
the third quarter but declined to 4.0 percent at the fiscal year end by later
recovery efforts.

2009(As of March 31)

Park Sendai Port (Sendai, Miyagi) and some other retail facilities to be
Revenue from Operations

Operating Income(Billions of yen)(Billions of yen)

100

600
500

431.0

423.5

95.6

88.9

75

400
50

300
200

25
100
0

2010

2011

(Years ended March 31)

0

2010

2011

(Years ended March 31)

37

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

Years ended March 31/As of March 31

Condominiums

Property Sales
to Individuals

2011
Units

Average Unit Price

Revenue

Units

Average Unit Price

Tokyo Metropolitan Area

218,0134,048

54

233,190

3,941

59

Other

48,0371,407

34

23,305710

33

Subtotal

266,0515,455

49256,495

4,651

55

Tokyo Metropolitan Area

45,098825

55

40,483

751

54

5,187

100

52

3,988

78

51

Subtotal

50,285925

5444,472

829

54

Revenue

316,3366,380

50

300,967

5,480

55

Detached Housing Other

Property Sales toInvestors
Total

2010

Revenue

Operating Income

9,735

11,366

Revenue

88,90585,288Operating Income

6,458

1,126

Revenue

405,243386,256

Operating Income

16,193

12,493Inventories (Property Sales to Individuals)(Units)

As of March 31

2011

2010

2009

2008

2007

Condominiums

638

872

826

453

267

Detached Housing

46

40

93

115

109

Total

684

912

919

568

376

In the “Property Sales to Individuals” category, the number of residential

Revenue from Operations

Operating Income(Billions of yen)(Billions of yen)units increased 900 from the previous period and the revenue increased¥15.3 billion year on year due to strong sales. The operating income,however, was down ¥1.6 billion due mainly to the large number of highly
profitable, large-scale properties sold in the previous period.
In the ”Property Sales to Investors” category, the revenue was up ¥3.6
billion year on year and earnings increased ¥5.3 billion from the previous

20

500
400

386.3

405.2

Investment Corporation.

12.5

300
10

period, owing mainly to the sale of properties to J-REITs, such as Nippon
Building Fund, Nippon Accommodations Fund, and Frontier Real Estate

16.2
15

200
5

100

In the entire segment, revenue was up ¥18.9 billion and operating
income was up ¥3.7 billion from the previous year.
As a result of favorable market sales conditions in the “Property Sales
to Individuals” category, the completed housing inventories of residential
units declined to 684 from 912 at the end of the previous period.

38

0

2010

2011

(Years ended March 31)

0

2010

2011

(Years ended March 31)

Management’s Discussion and Analysis

Management(Millions of yen)

2011

2010

Revenue

206,085

199,305

Operating Income

21,905

21,275

Revenue

71,86067,356

Operating Income

10,215

8,439

Revenue

277,947

266,662

Operating Income

32,121

29,714Years ended March 31

Property Management

Brokerage, Asset Management, etc.

Total

In the current period, revenue increased in the ”Property Management“
category due mainly to the increased number of consigned properties with

Revenue from Operations

Operating Income(Billions of yen)(Billions of yen)contribution of newly on-stream outlet and other retail facilities as well as
the higher number of rental housing units under management.

300”Brokerage and Asset Management, etc.“ category also reported

266.7

277.9

32.1
29.7

improvrd revenue, due mainly to a higher number of properties handled inour brokerage business for individuals including Mitsui Rehouse.

30
200

In the entire segment, revenue increased ¥11.2 billion from the previous
period and operating income was also up ¥2.4 billion.

40

20
100
10

0

2010

2011

(Years ended March 31)

0

2010

2011

(Years ended March 31)

39

Mitsui Home
(Millions of yen)

2011

2010

Revenue

152,816

152,435

Orders142,753

137,725

Revenue

26,901

26,658Orders31,23529,692

Lease Management

17,223

16,289

Other

8,189

7,481

205,131202,865

3,764

3,640

Years ended March 31

New Construction

Reform/Renewal

Total Revenue
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 fromoperations.

In the current period, although, the time of delivery was late under the

Revenue from Operations

Operating Income(Billions of yen)(Billions of yen)

impact of the Great Eastern Japan Earthquake for some newly constructedhousing operated by our Company in the northeastern and Tokyo
Metropolitan areas, revenue was up ¥2.2 billion and operating income was250

up ¥0.1 billion with the increase of the number of buildings sold for theentire segment.

5

202.9

205.1

200

4

150

3

100

2

50

1

0

2010

2011

0

(Years ended March 31)

3.6

2010

3.8

2011

(Years ended March 31)

Other(Millions of yen)

Revenue from Operations

Operating Income(Billions of yen)(Billions of yen)

Years ended March 31

2011

2010

Facility Operations

49,92348,540

Merchandise

40,272

41,827

100

Other

3,284

7,678

80

Total Revenue

93,481

98,048Operating Income

1,002

228

98.0

93.5

1.5

1.0
1.0

60
40
0.5

In the “Merchandise” category, revenue declined due to the closing of retail

0.2

20

stores by a subsidiary. In the “Facility Operations” category, however, newhotels were opened in Mitsui Garden Hotel chain and the operating ratio
was improved.
For the entire segment, therefore, revenue was down ¥4.5 billion andoperating income was up ¥0.7 billion from the previous year.

40

0

2010

2011

(Years ended March 31)

0

2010

2011

(Years ended March 31)

Management’s Discussion and Analysis

Liquidity, Capital Resources and Financial Position
Assets(Billions of yen, %)2011

As of March 31

Cash and cash equivalents .............................................................................

¥

2010

56.7

1.5%

Inventories ............................................................................................................

651.2

Other current assets ..........................................................................................

221.3

Investments and other assets .......................................................................

612.8

¥

2009

62.7

1.7%

17.2

684.8

5.9

240.0

16.2

630.6

¥

62.9

1.7%

18.4

773.9

20.6

6.5

290.7

7.7

17.0

596.6

15.9

Net property and equipment .........................................................................

2,238.7

59.2

2,092.3

56.4

2,034.3

54.1

Total .........................................................................................................................

¥3,780.7

100.0%¥3,710.4

100.0%¥3,758.4

100.0%

Liabilities and Net Assets(Billions of yen, %)2011

As of March 31

2010

2009

Interest-bearing debt—Short term .............................................................

¥ 296.7

7.8%¥ 313.4

8.5%¥ 226.2

6.0%

Interest-bearing debt—Long term ..............................................................

1,443.3

38.2

1,433.3

38.6

1,507.3

40.1

Total interest-bearing debt .......................................................................

1,740.0

46.0

1,746.7

47.1

1,733.5

46.1

Other current liabilities1 ...................................................................................

359.1

9.5

280.0

7.5

398.3

10.6

Other long-term liabilities .............................................................................

639.2

16.9

654.5

17.6

626.7

16.7

2

Minority interests ...............................................................................................

21.9

0.6

21.0

0.6

21.0

0.6

Net assets (other than minority interests)................................................

1,020.5

27.0

1,008.2

27.2

978.9

26.0

Total .........................................................................................................................

¥3,780.7

100.0%¥3,710.4

100.0%¥3,758.4

100.0%

Notes: 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

Investments and Other Assets

Current assets decreased 5.9 percent from the previous fiscal year-

Investments and other assets decreased 2.8 percent from a year

end, or ¥58.4 billion, to ¥929.2 billion. Cash and cash equivalents

earlier, or ¥17.8 billion, to ¥612.8 billion. Investments indecreased 9.7 percent from the previous fiscal year-end, or ¥6.1

unconsolidated subsidiaries and affiliated companies decreased 1.4

billion, to ¥56.7 billion, reflecting an increase in the proportion ofpercent, or ¥1.6 billion, to ¥113.8 billion. Investment securities

internal cash used to fund investing activities. Inventories decreased

decreased 4.9 percent, or ¥13.6 billion, to ¥263.7 billion due to

4.9 percent from a year earlier, or ¥33.6 billion, to ¥651.2 billion.

factors including the sale of Oriental Land shares and a decline in the

Factors included a year-on-year increase in cost recovery. Equity

fair value of securities holdings during the fiscal year.

investments in properties for sale, which primarily represent
securitized interests in properties for sale, decreased 10.5 percent, orProperty and Equipment¥7.7 billion, to ¥65.7 billion. Factors included the liquidation andNet property and equipment increased 7.0 percent from a year

impairment of investments in SPCs and other vehicles for distributing

earlier, or ¥146.5 billion, to ¥2,238.7 billion. Acquisition ofproperties to external investors. Working capital decreased 30.7

properties by the parent company and subsidiaries totaled ¥215.5

percent from a year earlier to ¥273.3 billion, and the current ratio

billion, reflecting investments such as the acquisition of 50-percent

was 1.42 times, compared with 1.66 times at the end of thejoint ownership in the Otemachi Pal Building. Consequently, capital

previous fiscal year.

expenditures increased 3.7 times year on year, or ¥167.4 billion, to¥229.4 billion, while depreciation totaled ¥53.0 billion.

41

Current Liabilities

Net Assets and Total Capital

Current liabilities increased 10.5 percent from a year earlier, or ¥62.5

For fiscal 2010, net assets increased 1.3 percent from a year earlier,billion, to ¥655.8 billion. The increase was in large part the result ofor ¥13.2 billion, to ¥1,042.4 billion. Retained earnings increased

timing issues involved in the increase in other current liabilities.

10.2 percent, or ¥30.7 billion, to ¥332.3 billion. Reserve on land

Mitsui Fudosan has established committed lines of credit totaling

revaluation, which is recorded as a component of net assets under¥230.0 billion with several financial institutions to ensure access toJapanese GAAP, was essentially unchanged. Net unrealized holding

funds and adequate liquidity. The Company had not accessed thesegains on securities, which is recorded as a component of net assets

lines of credit as of the balance sheet date.

under Japanese GAAP, decreased 19.1 percent, or ¥9.9 billion, to¥42.0 billion, largely as a result of the sale of Oriental Land shares.

Long-term Liabilities

Negative foreign currency translation adjustments resulting from theLong-term liabilities decreased marginally from a year earlier toyen’s value relative to the U.S. dollar and the British pound at the¥2,082.5 billion. Long-term debt due after one year increased 0.7

fiscal year-end decreased net assets by ¥42.5 billion. Total capital, thepercent from a year earlier, or ¥10.0 billion, to ¥1,443.3 billion.

sum of bank loans, commercial paper, long-term debt due within

While making the substantial capital investments discussed earlier,

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

Mitsui Fudosan stressed sound finances and selectivity in investing inincreased ¥6.5 billion to ¥2,782.4 billion from ¥2,775.9 billion a year

opportunities for growth, and supplemented funds for investment

earlier. Net assets increased while interest-bearing debt decreased.

through cost recovery from property sales. Interest-bearing debt

Consequently, net assets represented 37.5 percent of total capital,

decreased 0.4 percent, or ¥6.7 billion, to ¥1,740.0 billion. Mitsuicompared with 37.1 percent at the previous fiscal year-end. The debt /Fudosan also raised ¥50.0 billion through four issues of notes due

equity ratio1 decreased to 1.71 times from 1.73 times as a result.

2020, with respective interest rates of 1.50 percent, 1.19 percent,

Return on assets (ROA) 2 was 3.39 percent, compared with 3.41

1.06 percent and 1.32 percent, and one issue of notes due 2030

percent a year earlier. Return on equity (ROE)3 was 4.92 percent,with an interest rate of 2.30 percent.

compared to 6.05 percent a year earlier.

Notes: 1. Debt / equity ratio = Interest-bearing debt / (Net assets - Subscription rights to shares - Minority interests)
2. Return on assets (ROA) = (Operating income + Interest, dividends and miscellaneous revenues + Equity in net income of affiliated companies - Extraordinary gains*) / Average
total assets*Extraordinary gains totaling ¥26.3 billion for fiscal 2009 are included in Interest, dividends and miscellaneous revenues, which totaled ¥31.2 billion for fiscal 2009.
3. Return on equity (ROE) = Net income / (Net assets - Subscription rights to shares - Minority interests, Average over the period)

Total Assets

ROA(Billions of yen)

4,000

3,634.5

3,758.4 3,710.4 3,780.7

(%)

6.0

5.50 5.53

Interest-Bearing Debt

Net Assets (Other than Minority Interests)
and Equity Ratio(Billions of yen)(Billions of yen)

2,000

1,500

1,733.5 1,746.7 1,740.0

5.06

3,294.2
5.0
4.0
2,000

1,550.4

1,600

3,000

3.41 3.39

1,258.4

1,250
1,000

(%)

27.2

28.7
26.7

27.0

30

26.0

944.2 971.4 978.9

1,008.2 1,020.5
20

1,200
750

3.0
800

500

2.0
1,000

400

1.0
0

2007 2008 2009 2010 2011
(As of March 31)02007 2008 2009 2010 2011
(Years ended March 31)

0

10

250

2007 2008 2009 2010 2011
(As of March 31)02007 2008 2009 2010 2011
(As of March 31)

Net Assets(Other than Minority Interests)
Equity Ratio

420Management’s Discussion and Analysis

Cash Flows(Billions of yen)

Years ended March 31

Cash flows from operating activities ............................................................
Cash flows from investing activities .............................................................
Cash flows from financing activities .............................................................
Effect of exchange rate changes on cash and cash equivalents ........
Net (decrease) increase in cash and cash equivalents ...........................
Cash and cash equivalents at beginning of year .....................................
Cash and cash equivalents at end of year ..................................................

2011

2010

2009

¥ 185.1(170.6)(20.4)
(0.2)
(6.0)
62.7
¥ 56.7¥ 84.4(64.8)(19.8)
0.1
(0.2)
62.9
¥ 62.7¥ (41.0)(141.6)
182.2
(0.2)
(0.6)
63.5
¥ 62.9Cash Flows
Despite the decrease in income before income taxes, net cash

joint acquisition with Mitsui & Co., Ltd. of the Otemachi Pal

provided by operating activities totaled ¥185.1 billion, compared

Building. Net changes in deposits from tenants and in leasewith ¥84.4 billion in the previous fiscal year. The main factor indeposits used cash totaling ¥9.0 billion, compared with ¥0.6

the year-on-year change was that net decrease in inventories

billion for the previous fiscal year. Net proceeds from sale ofprovided cash totaling ¥46.3 billion, while in the previous fiscal

marketable and investment securities totaled ¥9.7 billion,

year net increase in inventories used cash totaling ¥50.2 billion.

compared with net proceeds of ¥12.2 billion for the previous

The line item “Decrease (increase) in real property for sale andfiscal year.

advances paid for purchases” represents the net effect of cost
recovery and purchase of inventories, which consist primarily of
property held for sale. Depreciation and amortization increased to¥53.0 billion.
Net cash used in investing activities totaled ¥170.6 billion,
compared with ¥64.8 billion for the previous fiscal year. Mitsui
Fudosan continues to acquire properties with long-term potential
when circumstances are favorable. Purchases of property andequipment totaled ¥179.0 billion, compared with ¥70.7 billion for(Millions of yen)
Years ended March 31

Increase in deposits from tenants ....
Decrease in deposits from tenants ..
Increase in lease deposits ....................
Decrease in lease deposits ..................
Total .............................................................

2011

2010

¥ 52,669(64,805)(8,395)
11,557¥ (8,974)¥ 50,164(53,797)(12,261)
15,339¥ (555)the previous fiscal year. This included outlays to complete the
Muromachi-Higashi Mitsui Building (Chuo-ku, Tokyo), and theDebt/Equity Ratio

Cash Flows fromOperating Activities(Times)(Billions of yen)

2.0

1.77
1.60

1.5

Free Cash Flow

1.73 1.71(Billions of yen)

185.1

200

(19.0) (294.4) (182.6)

150

1.33

19.6 14.5

0

97.8

84.4

100

58.0

1.0

100

-100

50

(41.0)

0.5

002007 2008 2009 2010 2011
(As of March 31)-50

2007 2008 2009 2010 2011
(Years ended March 31)

-200

-300

2007 2008 2009 2010 2011
(Years ended March 31)

43

Net cash used in financing activities totaled ¥20.4 billion,

Outlook for Fiscal 2011

primarily representing cash dividends paid of ¥19.3 billion. In the(Year Ending March 31, 2012)previous fiscal year, financing activities used net cash totaling¥19.8 billion. Net repayments of bank loans and commercial

As for the forecast for the next period, we believe that the businesspaper totaled ¥1.5 billion, compared with ¥11.0 billion for theconditions which surround our company are at present unclear due

previous fiscal year. Proceeds from long-term debt totaled ¥217.6

to the following points originating in Great Eastern Japanbillion, compared with ¥133.0 billion for the previous fiscal year.

Earthquake, and we shall calculate their impact on certain

Repayments of long-term debt, consisting primarily of long-term

assumptions as a basis.

bank loans, totaled ¥254.0 billion, compared with ¥119.3 billion- The prospects of resolution of the accident at the nuclear power

for the previous fiscal year. Proceeds from issuance of bondstation in Fukushima

totaling ¥50.0 billion represented four issues of notes due 2020,- The impact of the shortage of electric power supply in the Tokyo

with respective interest rates of 1.50 percent, 1.19 percent, 1.06

metropolitan area during this summer

percent and 1.32 percent, and one issue of notes due 2030 with- The state of recovery of supply chain

an interest rate of 2.30 percent., while payments for redemption- The changes of the business activities and changes in theof bond totaled ¥10.0 billion. Net proceeds from long-term debt

customers’ minds regarding personal consumption originating inand bonds therefore totaled ¥3.6 billion on a cash basis,

the above

compared with ¥13.7 billion in the previous fiscal year. Mitsui

As a result of the above, in the next period we forecast a

Fudosan maintains a conservative level of operating leverage and¥1,400.0 billion in revenue from operations at almost the same level

largely drew on internal capital resources in investing for futureas the current period, and forecast a ¥5.0 billion decrease in

growth during fiscal 2010. Cash dividends paid were essentiallyoperating income to ¥115.0 billion. We also forecast a ¥4.2 billion

unchanged year on year.

decrease in ordinary income to ¥92.0 billion due to a decrease inoperating income. Net income is likely to decrease by ¥2.9 billion to(Millions of yen)

Years ended March 31

2011

Proceeds from long-term debt ........... ¥ 217,597
Repayments of long-term debt ......... (253,952)
Proceeds from issuance of bond .......
50,000
Payments for redemption of bond ...
(10,000)
Total ............................................................. ¥ 3,645

2010¥ 133,014(119,267)
40,000(40,000)¥ 13,747¥47.0 billion as a result of posting of a ¥10.0 billion net
extraordinary gains and losses.
As for the year ending March, 2012, we have omitted to list theforecast of performance results for the six months as we arepresently carrying out management of business results on the annual
basis.

Segment Forecasts
Leasing: While there is profit increase due to the contribution bysuch office buildings operating full year that was completed andstarted operation in the current term as Sumitomo Mitsui Banking
Corporation Head Office Building and Muromachi East Mitsui
Building, taking into consideration the impact of the decrease inrevenue from the existing buildings and the impact of theearthquake to retail facilities, for the entire segment we expect anincrease of revenue by ¥0.5 billion and we expect operating income
to remain on the same level.
Property Sales: In "Property Sales to Individuals" category, we
expect a decrease both in revenue and operating income since thenumber of houses posted will decline due to a delay in completion
under the impact of the earthquake. In "Property Sales to Investors"
category, on the other hand, we expect increased operating income.
For the entire segment, a ¥35.2 billion decrease in revenue and ¥0.8
billion increased operating income are expected.

44

Management’s Discussion and Analysis

Management: Although there will be an increase of revenue due to

Risk Information

an increase in the number of building entrusted for property
management, there will also be a decrease in revenue fromThe operations of the Mitsui Fudosan Group are subject to a number

development management fee of Mitsui Fudosan etc., thus weof risks, some of which are outlined below along with issues that

expect a decrease in revenue by ¥1.9 billion and a decrease of

may not necessarily constitute risk factors but that may influence

operating income by ¥1.1 billion in the entire segment.

investor decisions.

Other: Although there will be an increase of revenue by reporting

Changes in Demand

revenue from the reform business reclassified from Mitsui Home

Economic conditions influence demand among tenant companies forsegment accompanying the corporate reorganization in the group,

space in the office buildings that the Mitsui Fudosan Group owns

etc., taking into consideration the impact of the earthquake to theand manages, and influence demand among individuals for housing.

hotel/resort business, we expect an increase of revenue by ¥10.5

A downturn in the Japanese economy may exert a material impact

billion and a decrease of operating income by ¥5.0 billion in theon the Mitsui Fudosan Group’s performance and the value of its

entire segment.

assets.

Mitsui Fudosan plans to pay total cash dividends of ¥22.00 per

Interest Rates

share, consisting of an ¥11.00 interim dividend and an ¥11.00 year-

Higher interest rates in the future could increase the Mitsui Fudosan

end dividend.

Group’s funding costs, raise the returns investors expect from realestate investments and reduce demand among individuals forhousing, and may therefore exert a material impact on the Mitsui
Fudosan Group’s performance and the value of its assets.

Changes in Real Estate Taxes
Changes in real estate taxes that increase the cost of owning,acquiring or selling real estate or reduce consumer willingness topurchase housing may exert a material impact on the Mitsui FudosanGroup’s performance and the value of its assets.

Changes in Real Estate and Finance Laws
Future changes in laws or regulations relevant to Mitsui Fudosan’sbusinesses, including the Building Standard Law, the City Planning
Act and the Financial Instruments and Exchange Law, that reduce thevalue of assets or limit the scope of operations by incurring new
obligations, increasing costs or limiting asset ownership rights mayexert a material impact on the Mitsui Fudosan Group’s performance.

Natural Disasters
Natural disasters may damage or destroy the Mitsui Fudosan Group’s
assets, and may therefore exert a material impact on the Mitsui
Fudosan Group’s performance and the value of its assets.

45

Consolidated Balance Sheets
Mitsui Fudosan Co., Ltd. and its Subsidiaries
As of March 31, 2011 and 2010

Thousands of
U.S. dollars (Note 1)

Millions of yen

2011

2010

2011

ASSETS
CURRENT ASSETS

Cash and cash equivalents (Note 4) .................................................................................
Marketable securities (Notes 4, 5) ....................................................................................
Notes and accounts receivable — trade (Note 4) .......................................................
Short-term loans receivable .................................................................................................
Allowance for doubtful accounts .......................................................................................
Inventories (Note 8) ................................................................................................................
Advances paid for purchases (Note 9) .............................................................................
Equity investments in properties for sale (Notes 4, 5, 24) .......................................
Deferred income taxes (Note 11) ......................................................................................
Other current assets ................................................................................................................

62,740244
24,4789,321(1,303)684,753
14,44973,412
43,77175,708$929,166

987,573

11,174,576

Investments in unconsolidated subsidiaries and affiliated companies ..............
Investment securities (Notes 4, 5, 24) ..............................................................................
Non-current loans and accounts receivable ..................................................................
Allowance for doubtful accounts .......................................................................................
Lease deposits (Notes 4, 10) ...............................................................................................
Deferred income taxes (Note 11) ......................................................................................
Deferred tax assets on land revaluation .........................................................................
Other .............................................................................................................................................

113,832
263,688
45,533(6,917)
171,556
10,104
1,451
13,564

115,430
277,315
42,747(7,138)
175,775
11,494
1,406
13,566

1,368,996
3,171,233
547,601(83,187)
2,063,211
121,515
17,450163,127

Total investments and other assets ............................................................................

612,811

630,595

7,369,946

Land (Notes 7, 13) ...................................................................................................................
Buildings and structures (Notes 7, 13) ............................................................................
Machinery and equipment ...................................................................................................
Construction in progress .......................................................................................................

1,605,148
1,045,763
104,936
34,611

1,484,260
1,001,729
99,96333,845

19,304,245
12,576,825
1,262,008
416,249

Accumulated depreciation ...................................................................................................

2,790,458(551,735)

2,619,797(527,541)

33,559,327(6,635,418)

Net property and equipment .........................................................................................

2,238,723

2,092,256

26,923,909¥3,780,700¥3,710,424$45,468,431

Total current assets.............................................................................................................

¥

56,676—24,042
11,511(1,245)651,178
3,452
65,73946,94670,867¥

681,612—289,140
138,437(14,973)
7,831,365
41,515
790,607564,594852,279

INVESTMENTS and OTHER ASSETSPROPERTY and EQUIPMENT, at cost:

See accompanying notes.

46

Thousands of
U.S. dollars (Note 1)

Millions of yen

2011

2010

2011

LIABILITIES AND NET ASSETSCURRENT LIABILITIESBank loans (Notes 4, 13) .......................................................................................................
Commercial paper (Notes 4, 13) .........................................................................................
Long-term debt due within one year (Notes 4, 13) ....................................................
Notes and accounts payable — trade (Note 4) ............................................................
Accrued expenses ....................................................................................................................
Income taxes payable ............................................................................................................
Advances and deposits received ........................................................................................
Deferred income taxes (Note 11) ......................................................................................
Other current liabilities (Note 14) .....................................................................................
Total current liabilities ......................................................................................................

¥

36,322
24,000236,390
87,13821,557
24,250133,630486
92,048¥38,852
24,000250,551
76,75021,8096,807
131,425456
42,706$436,825
288,635
2,842,934
1,047,962
259,254291,642
1,607,096
5,845
1,107,011

655,821593,356

7,887,204

Allowance for employees’ retirement benefits (Note 12) .........................................
Allowance for directors’ and corporate auditors’ retirement benefits ................
Long-term debt due after one year (Notes 4, 13) .......................................................
Deposits from tenants (Notes 4, 15) ................................................................................
Deferred income taxes (Note 11) ......................................................................................
Deferred tax liabilities on land revaluation ....................................................................
Other long-term liabilities (Note 14) .................................................................................

31,494
1,186
1,443,336
354,858
20,048
192,374
39,197

31,5291,087
1,433,316
366,770
26,375
192,238
36,527

378,761
14,263
17,358,220
4,267,685
241,106
2,313,578
471,402

Total long-term liabilities .................................................................................................

2,082,493

2,087,842

25,045,015

174,296

174,296

2,096,164

Capital surplus ..........................................................................................................................

248,310248,320

2,986,290

Retained earnings ....................................................................................................................

332,336

301,654

3,996,825

LONG-TERM LIABILITIESCONTINGENT LIABILITIES (Note 26)
NET ASSETS (Notes 16, 17)
Shareholders’ equity
Common stock ...........................................................................................................................

Authorized — 3,290,000,000 shares
Issued — 881,424,727 shares in 2011 and 2010

Treasury stock — 3,087,750 shares in 2011 and
2,946,614 shares in 2010 ................................................................................................

(5,397)(5,190)(64,907)

Total shareholders’ equity................................................................................................

749,545719,080

9,014,372

41,99551,914505,051

Accumulated other comprehensive income (loss) .............................................................
Net unrealized holding gains on securities ...................................................................
Net unrealized losses on hedging derivatives ..............................................................

(371)

(588)

(4,462)

Reserve on land revaluation .................................................................................................

271,242

271,337

3,262,081

Foreign currency translation adjustments ......................................................................

(42,470)(33,932)(510,764)

Total accumulated other comprehensive income ...................................................

270,396288,7313,251,906

Subscription rights to shares (Note 18) ................................................................................
Minority interests ............................................................................................................................

521
21,924378
21,037

6,266
263,668

Total net assets .....................................................................................................................

1,042,386

1,029,226

12,536,212¥3,780,700¥3,710,424$45,468,431

See accompanying notes.

47

Consolidated Statements of Income
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the years ended March 31, 2011, 2010 and 2009

Thousands of
U.S. dollars (Note 1)

Millions of yen

2011

2010

2009

2011

¥1,405,270
27,044¥1,384,807
31,152¥1,418,946
9,389$16,900,421
325,2431,432,314

1,415,959

1,428,335

17,225,664

COSTS AND EXPENSES
Cost of revenue from operations ....................................................................
Selling, general and administrative expenses............................................
Interest ......................................................................................................................
Other (Notes 19, 21) ............................................................................................

1,138,048
147,129
27,456
36,681

1,120,091
144,130
29,544
26,5301,098,425
148,973
29,76841,168

13,686,687
1,769,441
330,198
441,142

EQUITY IN NET INCOME OF AFFILIATED COMPANIES ...............................

1,349,314
689

1,320,295
2,027

1,318,334
5,980

16,227,468
8,286

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS ................

83,68997,691

115,9811,006,482

INCOME TAXES (Note 11)
Current ......................................................................................................................
Deferred ....................................................................................................................

34,046(1,067)28,014
8,561

24,785
6,059

409,453(12,833)

REVENUES
Revenue from operations (Note 25) ..............................................................
Interest, dividends and miscellaneous (Note 20) .....................................

Total ......................................................................................................................

32,97936,57530,844

396,620NET INCOME BEFORE MINORITY INTERESTS ..................................................

50,71061,116

85,137

609,862

MINORITY INTERESTS ..............................................................................................

(801)(1,032)(1,565)(9,633)NET INCOME ...............................................................................................................

48¥

49,909¥60,084¥

83,572$600,229

Consolidated Statements of Comprehensive Income
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the year ended March 31, 2011

Net income before minority interests ..................................................
Other comprehensive income (loss): ...................................................
Net unrealized holding losses on securities ....................................
Net unrealized gains on hedging derivatives .................................
Foreign currency translation adjustments .......................................
Reserve on land revaluation ...........................................................
Equity in other comprehensive loss of affiliated companies ...........
Total other comprehensive loss ......................................................
Total comprehensive income ..........................................................
Comprehensive income attributable to:Shareholders of the Company ........................................................
Minority interests ...........................................................................
Total ...........................................................................................

Millions of yen

Thousands of
U.S. dollars (Note 1)

2011

2011

¥ 50,710$ 609,862(9,832)
189(7,223)43(1,315)(18,138)¥ 32,572(118,244)
2,273(86,867)517(15,815)(218,136)$ 391,726¥ 31,693
879¥ 32,572$ 381,155
10,571$ 391,726

See Note 22.

Yen

PER SHARE INFORMATION
Net assets per share* ..........................................................................................
Net income per share— Basic ....................................................................................................................
— Diluted ................................................................................................................
Cash dividends .......................................................................................................

U.S. dollars (Note 1)

2011

2010

2009

2011

¥ 1,161.2¥ 1,147.2¥ 1,113.9$ 13.965

56.8
56.8
22.0

68.4
68.4
22.0

95.1
95.1
22.0

0.683
0.683
0.265

* Net assets per share information does not include subscription rights to shares and minority interests.
See accompanying notes.

49Consolidated Statements of Changes in Net Assets
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the years ended March 31, 2011, 2010 and 2009

Millions of yen

Shareholders’ equity

Accumulated other comprehensive income (loss)

Shares ofcommon stock(thousands)

Commonstock

CapitalsurplusRetainedearnings

Treasury
stock

Net
Net
unrealized
unrealized
holding gains gains (losses)(losses) onon hedging
securities
derivatives

BALANCE AT MARCH 31, 2008 ..................

881,425¥174,296¥248,329¥278,749¥(4,334)¥ 32,576¥(106)¥257,728¥(15,928)¥ 86¥20,607¥ 992,003

Prior-period adjustments due to adoption of
new accounting standard (Note 2 (H)) .......................
Cash dividends paid .............................................
Net income .........................................................
Reversal of reserve on land revaluation, net of tax .....
Purchase of treasury stock .....................................
Sales of treasury stock .........................................
Net unrealized holding losses on securities ...............
Net unrealized losses on hedging derivatives .............
Foreign currency translation adjustments..................
Subscription rights to shares ..................................
Minority interests.................................................
Other.................................................................

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
3
—
—
—
—
—
—

(5,338)(19,335)
83,572(5,313)
—
—
—
—
—
—
—
(1)

—
—
—
—
(851)
182
—
—
—
—
—
—

—
—
—
—
—
—
(30,783)
—
—
—
—
—

—
—
—
—
—
—
—
(353)
—
—
—
—

—
—
—
5,335
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
(19,761)
—
—
—

—
—
—
—
—
—
—
—
—
134
—
—

—
—
—
—
—
—
—
—
—
—
366
—

(5,338)(19,335)
83,57222(851)
185(30,783)(353)(19,761)
134
366
(1)

881,425
—
—
—
—
—
—
—
—
—
—
—

174,296
—
—
—
—
—
—
—
—
—
—
—

248,332
—
—
—
—
—
(12)
—
—
—
—
—

332,334(62,443)(19,329)60,084(8,992)
—
—
—
—
—
—
—

(5,003)
—
—
—
—
(275)
88
—
—
—
—
—

1,793
—
—
—
—
—
—
50,121
—
—
—
—

(459)
—
—
—
—
—
—
—
(129)
—
—
—

263,063
—
—
—
8,274
—
—
—
—
—
—
—

(35,689)
—
—
—
—
—
—
—
—
1,757
—
—

220
—
—
—
—
—
—
—
—
—
158
—

20,973
—
—
—
—
—
—
—
—
—
—
64

999,860(62,443)(19,329)60,084
(718)
(275)
76
50,121
(129)
1,757
158
64

Decrease in number of affiliated companies .................
Cash dividends paid .............................................
Net income .........................................................
Reversal of reserve on land revaluation, net of tax .....
Purchase of treasury stock ....................................
Sales of treasury stock ..........................................
Net unrealized holding losses on securities ................
Net unrealized gains on hedging derivatives ............
Foreign currency translation adjustments .................
Subscription rights to shares .................................
Minority interests.................................................

881,425
—
—
—
—
—
—
—
—
—
—
—

174,296
—
—
—
—
—
—
—
—
—
—
—

248,320
—
—
—
—
—
(10)
—
—
—
—
—

301,654(20)(19,327)
49,909
120
—
—
—
—
—
—
—

(5,190)
—
—
—
—
(268)
61
—
—
—
—
—

51,914——————(9,919)
—
—
—
—

(588)
—
—
—
—
—
—
—
217
—
—
—

271,337
—
—
—
(95)
—
—
—
—
—
—
—

(33,932)
—
—
—
—
—
—
—
—
(8,538)
—
—

378
—
—
—
—
—
—
—
—
—
143
—

21,037
—
—
—
—
—
—
—
—
—
—
887

1,029,226(20)(19,327)
49,90925(268)
51(9,919)217(8,538)143
887

BALANCE AT MARCH 31, 2011 ..................

881,425¥174,296¥248,310¥332,336¥(5,397)¥ 41,995¥(371)¥271,242¥(42,470)¥521¥21,924¥1,042,386$253,001 $12,377,944
—
(241)
—
(232,435)—
600,229—
301—(3,223)—613—(119,291)—
2,610—(102,682)—
1,720
10,667
10,667BALANCE AT MARCH 31, 2009 ..................
Decrease in number of affiliated companies .................
Cash dividends paid .............................................
Net income .........................................................
Reversal of reserve on land revaluation, net of tax .....
Purchase of treasury stock ....................................
Sales of treasury stock ..........................................
Net unrealized holding gains on securities .................
Net unrealized losses on hedging derivatives ............
Foreign currency translation adjustments .................
Subscription rights to shares .................................
Minority interests.................................................

BALANCE AT MARCH 31, 2010 ..................

Reserveon landrevaluation

Foreigncurrency Subscription
translationrights toadjustments
sharesMinority
interests

Total net
assetsThousands of U.S. dollars (Note 1)

BALANCE AT MARCH 31, 2010 .......................................
Decrease in number of affiliated companies ..........................................
Cash dividends paid ..................................................................
Net income ..............................................................................
Reversal of reserve on land revaluation, net of tax ..........................
Purchase of treasury stock .........................................................
Sales of treasury stock ...............................................................
Net unrealized holding losses on securities ....................................
Net unrealized gains on hedging derivatives .................................
Foreign currency translation adjustments ......................................
Subscription rights to shares ......................................................
Minority interests .....................................................................

$2,096,164 $2,986,410 $3,627,829
—
—
(241)
—
—
(232,435)——
600,229
—
—
1,443
—
—
—
—
(120)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

BALANCE AT MARCH 31, 2011 ....................................... $2,096,164 $2,986,290 $3,996,825
See accompanying notes.

50$(62,417) $ 624,342 $(7,072)
—
—
—
—
—
—
—
—
—
—
—
—
(3,223)
—
—
733
—
—
—
(119,291)
—
—
—
2,610
—
—
—
—
—
—
—
—
—

$3,263,223———(1,142)
—
—
—
—
—
—
—

$(408,082)
—
—
—
—
—
—
—
—
(102,682)——$4,546
—
—
—
—
—
—
—
—
—
1,720
—

$(64,907) $ 505,051$3,262,081$(510,764)$6,266 $263,668 $12,536,212$(4,462)

Consolidated Statements of Cash Flows
Mitsui Fudosan Co., Ltd. and its Subsidiaries
For the years ended March 31, 2011, 2010 and 2009

Thousands of
U.S. dollars (Note 1)

Millions of yen

2011
Cash flows from operating activities:
Income before income taxes ................................................................................
Adjustments to reconcile income before income taxes to net cash
provided by operating activities
Depreciation and amortization .....................................................................
Equity in net income of affiliated companies............................................
Loss on impairment of fixed assets ..................................................
Cumulative effect of initial application of new
accounting standards for asset retirement obligations ......................
Loss on disposal of property and equipment ............................................
Loss on devaluation of real property for sale............................................
Interest and dividend income ........................................................................
Interest expense ................................................................................................
Gain on sales of marketable securities, net ..............................................
Impairment loss on investment securities ................................................
Decrease in accounts receivable ...................................................................
Decrease (increase) in real property for sale andadvances paid for purchases ......................................................................
Decrease (increase) in equity investments in properties for sale ........
Increase (decrease) in accounts payable ....................................................
Increase in allowance for casualty loss.......................................................
Interests and dividends received ..................................................................
Interests paid ......................................................................................................
Income taxes paid .............................................................................................
Other, net .............................................................................................................
Net cash provided by (used in) operating activities ..........................
Cash flows from investing activities:
Purchases of property and equipment ..............................................................
Proceeds from sale of property and equipment .............................................
Increase in deposits from tenants ......................................................................
Decrease in deposits from tenants.....................................................................
Increase in lease deposits .....................................................................................
Decrease in lease deposits ...................................................................................
Purchases of marketable and investment securities .....................................
Proceeds from sale of marketable and investment securities ....................
Increase in non-current loans and accounts receivable ...............................
Decrease in non-current loans and accounts receivable .............................
Other, net ..................................................................................................................
Net cash used in investing activities .....................................................
Cash flows from financing activities:
Proceeds from long-term debt ............................................................................
Repayments of long-term debt ...........................................................................
Proceeds from bank loans and commercial paper ........................................
Repayments of bank loans and commercial paper .......................................
Proceeds from issuance of bond .........................................................................
Payments for redemption of bond......................................................................
Cash dividends paid ...............................................................................................
Payments of dividends to minority shareholders ...........................................
Repayments of lease obligations........................................................................
Net increase in treasury stocks ...........................................................................
Net cash (used in) provided by financing activities...........................
Effect of exchange rate changes on cash and cash equivalents .....................
Net decrease in cash and cash equivalents ...........................................................
Cash and cash equivalents at beginning of year .................................................
Cash and cash equivalents at end of year .............................................................

2010

2009

2011

97,691¥ 115,981$ 1,006,482

52,955(689)
4,115

50,287(2,027)
18,93848,891(4,510)—636,861(8,286)49,489

1,425
8,374
—
(3,410)27,456(20,965)
6,212
299

—
—
19,797(2,755)29,544(25,713)
—
6,840

—
3,595
15,896(3,044)29,768—17,5592,534

17,138100,710—(41,010)330,198(252,135)
74,7083,596

46,320(4,921)(2,647)
3,571
5,334(27,775)(14,740)
20,452
185,055(50,241)(2,876)(2,942)—
4,810(29,640)(21,821)(5,503)84,389(125,796)
509
345
—
4,902
(28,732)(62,664)(56,231)(40,997)

557,066(59,182)(31,834)
42,94664,149(334,035)(177,270)
245,965
2,225,556(178,966)
3,364
52,669(64,805)(8,395)
11,557(11,950)
21,624(12,055)
12,106
4,298(170,553)(70,658)595
50,164(53,797)(12,261)
15,339(13,896)
26,134(11,266)
10,908(6,096)(64,834)(152,972)
2,887
55,020(43,198)(11,126)
27,760(36,987)
5,327(11,514)
13,7889,381(141,634)(2,152,327)
40,457
633,422(779,375)(100,962)
138,990(143,716)
260,060(144,979)
145,592
51,689(2,051,149)

217,597(253,952)
1,524,501(1,526,031)
50,000(10,000)(19,313)(803)(2,175)(224)(20,400)(166)(6,064)62,740¥56,676

133,014(119,267)
1,264,417(1,275,426)
40,000(40,000)(19,317)(1,007)(1,977)(199)(19,762)55(152)
62,892¥ 62,740

389,452(119,354)
1,625,544(1,670,745)
10,000(30,000)(19,324)(958)(1,767)(632)
182,216(189)(604)
63,496¥ 62,892

2,616,921(3,054,143)
18,334,348(18,352,748)
601,323(120,265)(232,267)(9,657)(26,158)(2,694)(245,340)(1,995)(72,928)754,540$
681,612¥83,689¥See accompanying notes.

51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 FudosanCo., Ltd. (the “Company”) have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange
Law and its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
The accounts of overseas subsidiaries are based on their accounting
records maintained in conformity with generally accepted accounting
principles prevailing in the respective countries of domicile. In connection
with adopting the accounting standard, “Practical Solution on Unificationof Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements” (PITF No. 18 issued by the Accounting Standards
Board of Japan, hereafter, “PITF No. 18”), commencing from the year
ended March 31, 2009, certain adjustments, which are not recorded in thestatutory books of overseas subsidiaries, are incorporated in the
consolidated financial statements of the Company prepared in accordancewith Japanese GAAP and filed with the appropriate Local Finance Bureauof the Ministry of Finance as required by the Financial Instruments andExchange 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 forfair presentation, is not presented in the accompanying consolidated
financial statements.
The translations of the Japanese yen amounts into U.S. dollars areincluded solely for the convenience of readers, using the prevailingexchange rate at March 31, 2011, which was ¥83.15 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.

2 SIGNIFICANT ACCOUNTING POLICIES(A) CONSOLIDATIONThe consolidated financial statements include the accounts of the Company
and its subsidiaries. The difference between the cost and the 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 isimmaterial, it is fully recognized currently in earnings. The difference
between the cost and the underlying net equity at fair value of investments
in consolidated subsidiaries is recorded as goodwill.
All significant inter-company accounts and transactions have been
eliminated. In the elimination of investments in subsidiaries, the assets andliabilities of the subsidiaries, including the portion attributable to minority
shareholders, are recorded based on the fair value at the time the Company
acquired control of the respective subsidiaries.
(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 the accompanying notes. Actual
results could differ from those estimates.
(C) EQUITY METHOD
Investments in all significant affiliated companies are accounted for by theequity method and, accordingly, stated at cost adjusted for equity inundistributed earnings and losses from the date of acquisition.
Commencing from the year ended March 31, 2011, the Company andits consolidated subsidiaries adopted “Accounting Standard for Equity
Method of Accounting for Investments (ASBJ Statement No. 16; March 10,2008) and “Practical Solution on Unification of Accounting Policies
Applied to Associates Accounted for Using the Equity Method” (PITF
No. 24; March 10, 2008). Those standards require unification of accounting
policies applied to affiliated companies accounted for under the equity
method. There is no impact on the consolidated financial statements as ofand for the year ended March 31, 2011 as a result of adopting thosestandards.

52(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 and income
statement items resulting from transactions with the Company at therates used by the Company.
Differences arising from translation are presented as “Foreign currencytranslation 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 time ofpurchase 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 are reported, net of
applicable income taxes, as a separate component of accumulated othercomprehensive 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 thedifference between the fair value and the carrying amount when the fairvalue significantly declines. The Company and its consolidated subsidiaries
consider the decline to be significant when the fair value of the othersecurities declines more than 50% of the carrying amount. When the fairvalue of the other securities declines from 30% to less than 50% of thecarrying amount, the decline 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”(Statement No. 9 issued by the Accounting Standards Board of Japan),
Under the standard, inventories are initially recorded at acquisition cost,
and when net realizable value 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.
The Company and its consolidated subsidiaries recognized loss ondevaluation of real property for sale of ¥19,797 million and ¥15,896
million for the years ended March 31, 2010 and 2009 which was charged
to cost of revenue from operations. Loss on devaluation of real property
for sale was not significant for the year ended March 31, 2011.
Revenue from leasing is recognized on an accrual basis over the lease
term.
Revenue from sale of properties is recognized in full when delivered
and accepted by the customers.
For the years ended on and before March 31, 2009, revenue fromconstruction work was recognized by the completed-contract method,
except long-term contracts exceeding certain amounts, which were
accounted for by the percentage-of-completion method, and related costs
are recognized as incurred. In the year ended March 31, 2010, theCompany and its consolidated subsidiaries adopted Accounting Standard
for Construction Contracts (ASBJ Statement No. 15; December 27, 2007)
and the Guidance on Accounting Standard for Construction Contracts(ASBJ Guidance No. 18; December 27, 2007). The percentage-ofcompletion method shall be applied if the outcome of the construction
activity is deemed certain during the course of the activity, otherwise thecompleted-contract method shall be applied. There is no significant impact
on income as a result of adopting those standards.
(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 orrevaluation of property and equipment are removed from the respective
accounts and the net difference, less any amounts realized on disposal, isreflected in the statements of income.
Depreciation of property and equipment is mainly computed by the
declining-balance method over the estimated useful lives of the assets,
except for those listed below which are calculated using the straight-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.
Effective from the year ended March 31, 2009, the Company adopted
the accounting standard, “PITF No. 18”, (refer to Note 1) and as a result,land and buildings owned by a consolidated subsidiary in the United
Kingdom, formerly stated at fair value with unrealized gains and losses
directly charged or credited to retained earnings, are stated at acquisition
cost less accumulated depreciation. Prior-year depreciations and otheradjustments of ¥5,338 million were charged to the beginning balance ofretained earnings of the year ended March 31, 2009. There was no
significant impact on income for the year ended March 31, 2009 as aresult of adopting the standard.
(I) IMPAIRMENT LOSSES ON FIXED ASSETSThe Company and its consolidated subsidiaries have followed accounting
standards for impairment of fixed assets (“Opinion on Establishment of
Accounting Standards for Impairment of Fixed Assets” issued by theBusiness Accounting Deliberation Council) and the guidance on accounting
standards for impairment of fixed assets (the “Financial AccountingStandard Guidance No. 6” issued by the Accounting Standards Board ofJapan). The accounting standards require that fixed assets be tested forrecoverability whenever events or changes in circumstances indicate thatthe assets may be impaired. When the undiscounted cash flows estimatedto be generated by those assets are less than the carrying amount of
those assets, the net carrying value of assets not recoverable is reduced torecoverable amounts. Recoverable amounts are measured by net realizablevalues or values in current use. Net realizable values are determined
mainly based upon appraisal value calculated by real-estate appraisers.
Values in current use are calculated based on the present values of future
cash flows.
Accumulated impairment losses are deducted from book values ofrelated 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 the appraisal
prices by real estate appraisers in accordance with Article 2, Paragraph 5of the Enforcement Ordinance Concerning Land Revaluation. The
difference between quoted appraisal value and the carrying amount isrecorded, 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 (including negative goodwill) is amortized over a period of 5
years under straight-line method. If the amount is immaterial, it is fullyrecognized currently in earnings.
Other intangible assets are amortized under the straight-line method.
Software (for internal use) is amortized over its estimated useful 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
53amount based on the analysis of certain individual accounts, including
claims in bankruptcy.
(M) ALLOWANCE FOR CASUALTY LOSSESThe Company and its consolidated subsidiaries have estimated restoration
expenses to recover tangible fixed assets and inventories damaged due tothe Great East Japan Earthquake and provided allowance for casualty
losses as a component of other current liabilities on the consolidatedbalance sheets at March 31, 2011, which amounts to ¥3,571 million($42,946 thousand).
(N) ALLOWANCE FOR EMPLOYEES’ RETIREMENT BENEFITSThe Company has a retirement plan which provides for lump-sum payment
and annuity. Upon retirement age or at 60, a regular employee is entitled
to receive a lump-sum payment and an annuity, or in certain cases at theoption 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 ofretirement.
The allowance and expenses for retirement benefits are determinedbased on the amounts actuarially calculated using certain assumptions.
The Company and its consolidated subsidiaries provide allowance for
employees’ retirement benefits at fiscal year end based on the estimatedamounts of projected benefit obligation and the fair value of the plan
assets at that date.
In the year ended March 31, 2010, the Company and its consolidated
subsidiaries adopted Accounting Standard “Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)” (ASBJ Statement
No. 19; July 31, 2008). The objective of the Accounting Standard is toremove the treatment which provides that an entity may use the discountrate determined taking into consideration fluctuations in the yield ofbonds over a certain period. There is no impact on income for the year
ended March 31, 2010 as a result of adopting the standard since actuarial
differences that arose in the current year are to be amortized starting in
the next fiscal year.
(O) ALLOWANCE FOR DIRECTORS’ AND CORPORATE
AUDITORS’ RETIREMENT BENEFITS
Allowance for retirement benefits for directors and corporate auditors of
the Company and its 36 consolidated subsidiaries are also provided at theamounts to be paid if all eligible directors and corporate auditors would
have retired at year end under the internal guidelines.
(P) ACCOUNTING FOR LEASE TRANSACTIONS
Effective from the year ended March 31, 2009, the Company and its
consolidated subsidiaries adopted the new accounting standards,“Accounting Standard for Lease Transactions” (Statement No. 13 originallyissued by the First Committee of the Business Accounting Council on June
17, 1993 and revised by the Accounting Standards Board of Japan on
March 30, 2007) and the “Implementation Guidance on AccountingStandard for Lease Transactions” (the Financial Accounting Standard
Implementation Guidance No. 16 issued originally by the Accounting
System Committee of the Japanese Institute of Certified Public
Accountants on January 18, 1994 and revised by the Accounting Standards
Board of Japan 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 financeleases with recognition of depreciation and interest expenses. Capitalized
leased assets are depreciated under the straight-line method, over the54lease term assuming no residual value. Lessors are required to recognize
lease receivables or investments in leased assets along with related lease(interest) income.
Under the previous accounting standards, finance leases which do nottransfer ownership of the leased assets to lessees were accounted for as
operating leases. It should be noted that such finance leases whose
commencement day falls on or prior to March 31, 2008 are still accounted
for as operating leases under the new standards.
(Q) INCOME TAXESThe Company and its consolidated domestic subsidiaries are subject to a
corporate tax of 30%, an inhabitants tax of approximately 6% and adeductible enterprise tax of approximately 8%, which in the aggregate
resulted in a statutory income tax rate of approximately 41% for the years
ended March 31, 2011, 2010 and 2009.
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 andincome tax purposes is recognized as deferred income taxes.
(R) DERIVATIVES AND HEDGE ACCOUNTING
1. Hedge accounting
The Company and its consolidated subsidiaries defer recognition of gains
or losses resulting from changes in fair value of derivative financial
instruments until the related losses or gains on the hedged items arerecognized, if derivative financial instruments are used as hedges andmeet certain hedging criteria.
However, in cases where forward foreign exchange contracts are usedas hedges and meet certain hedging criteria, forward foreign exchange
contracts and hedged items are accounted for in the following manner:(1) If a forward foreign exchange contract is executed to hedge anexisting foreign currency receivable or payable,(a) the difference, if any, between the Japanese yen amount of
the hedged foreign currency receivable or payabletranslated using the spot rate at the inception date of thecontract and the book value of the receivable or payable isrecognized in the income statements in the period which
includes the inception date, and(b) the discount or premium on the contract (that is, thedifference between the Japanese yen amount of thecontract translated using the contracted forward rate andthat 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, the futuretransaction will be recorded using the contracted forward rate, andno gains or losses on the forward foreign exchange contract arerecognized.
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 usedby the Company and its consolidated subsidiaries and items hedged:
Hedging instruments:
Forward foreign exchange contracts
Foreign currency swap contracts
Interest rate swap contracts

Notes to Consolidated Financial Statements

Hedged items:
Expected foreign currency transactions
Foreign currency debt
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 borrowings anddebentures 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 be settled 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 sameand the risk of changes in foreign exchange rates and interest 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 specific purpose
companies (“TMK”) and others regarding real estate securitization-related
business (collectively, “equity investments”) are presented 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 otherthan 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”.

Based Payment” (the Financial Accounting Standard Implementation
Guidance No. 11 issued by the Accounting Standards Board of Japan).
Those standards require that the cost of stock options be measured
based on the grant-date fair value. Outstanding options are presented as
subscription rights to shares as a component of net assets in the balance
sheet.
(W) COMPREHENSIVE INCOME
Commencing the year ended March 31, 2011, the Company and its
consolidated subsidiaries adopted “Accounting Standard for Presentationof Comprehensive Income” (ASBJ Statement No. 25; June 30, 2010).
Amounts of “accumulated other comprehensive income (loss)” and “total
accumulated other comprehensive income” for the prior year represent
those of “valuation and translation adjustments” and “total valuation andtranslation adjustments”, respectively. Refer to Note 22 for the prior-year
information.
(X) ASSET RETIREMENT OBLIGATIONS
Commencing the year ended March 31, 2011, the Company and its
consolidated subsidiaries adopted “Accounting Standard for Asset
Retirement Obligations” (ASBJ Statement No. 18; March 31, 2008) and the“Guidance on Accounting Standard for Asset Retirement Obligations”(Guidance No. 21; March 31, 2008). According to the standards,
obligations associated with the retirement of tangible fixed assets arerecorded as liabilities when those obligations are incurred, with theamount of the liability initially measured by discounting the future cash
flows. The associated asset retirement costs are capitalized as part of thecarrying amount of the fixed asset and allocated as period expenses.
As a result of adopting the standards, income before income taxes andminority interests decreased by ¥1,944 million ($23,379 thousand) of
which ¥1,425 million ($17,138 thousand) represents the cumulative effectof initially applying the standards.

(U) DIRECTORS’ BONUS
The Company and its consolidated subsidiaries have followed theaccounting standard, “Accounting Standard for Directors’ Bonus”(Statement No. 4 issued by the Accounting Standards Board of Japan).
Directors’ bonuses are charged to income as selling, general andadministrative expenses.

(Y) EARNINGS PER SHARE
Basic income per share is computed by dividing the net income available
for distribution to shareholders of common stock by the weighted 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 issue common stock were exercised orconverted into common stock.

(V) SHARE-BASED PAYMENTS
The Company and its consolidated subsidiaries have followed theaccounting standards, “Accounting Standard for Share-Based Payment”(Statement No. 8 issued by the Accounting Standards Board of Japan) andthe “Implementation Guidance for the Accounting Standard for Share-(Z) RECLASSIFICATIONS
Certain prior years’ amounts have been reclassified to conform to thecurrent presentation.

3 BUSINESS REORGANIZATIONSThe Company and its consolidated subsidiaries have followed accounting
standards, “Accounting Standards for Business Combinations” (issued byBusiness Accounting Council), “Accounting Standard for Business
Divestitures” (Statement No. 7 issued by the Accounting Standards Board ofJapan) and “Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures” (Guidance No. 10 issued
by the Accounting Standards Board of Japan) (collectively, “accounting
standards for business combinations and divestitures”).
1. Business reorganizations for the year ended March 31, 2009
Reorganization of building business of Minato Estate Co., Ltd.:On October 1, 2008, Minato Estate Co., Ltd. transferred its building
business with any associated rights and obligations to the Company. The
business transfer was made for the purposes of enhancing efficiency andcompetitiveness of the business. The reorganization has been accounted
for as transactions among entities under common control in accordancewith the accounting standards for business combinations and divestitures.
2. Business reorganizations for the years ended March 31, 2011 and 2010
There were no significant business reorganizations for the years ended
March 31, 2011 and 2010.

55

44. MARKET
FINANCIALVALUEINSTRUMENTS
INFORMATION OF MARKETABLE SECURITIES, INVESTMENT SECURITIES AND OTHERS(1) Risk management policy regarding financial instrumentsa. Policy on financial instruments
The Company and its consolidated subsidiaries make fundprocurements 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 highvolatility on fair value.
b. Risk management
Notes and accounts receivable and lease deposits are subject tocustomers’ credit risk. Each business division monitors due dates
and balances for each counterparty to mitigate the risk of thosereceivables being uncollectible due to financial difficulties and otherfactors.
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 thematurities are due within 20 years from the balance sheet date, aremainly used for capital expenditures. Debt with floating interest
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 floating interest
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 u sing d erivativ e in strum ents, the Com p a ny and its
consolidated subsidiaries are exposed to counterparty’s credit risk
and market risks such as interest rate risk and exchange rate risk.
The Company and its consolidated subsidiaries manage the credit
risk by carefully evaluating the financial positions of major financial
institutions before entering into contracts. The derivativetransactions are executed and managed by procedures set forth in
the policies established in each group company and are reported
periodically to directors in charge.
Payables, debt and deposits from customers are subject toliquidity risk. The risk is managed by preparing and monitoring
through monthly cash schedules.

(2) Estimated fair value of financial instruments
The carrying amount, estimated fair value and the difference of financial instruments as of March 31, 2011 and 2010 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

2011
Carrying
amountEstimated
fair value Difference

Thousands of U.S. dollars

2010
Carrying
amountEstimated
fair value

2011
Difference

AssetsCash and bank deposits *1 ..................................... ¥ 57,223 ¥ 57,223 ¥ — ¥ 63,292 ¥ 63,292 ¥ —Notes and accounts receivable–trade .......................
24,042
24,042—
24,47824,478—Marketable and investment securities.......................
167,794
167,80713
183,344
183,338(6)
Liabilities
87,13887,138—76,75076,750—Notes and accounts payable–trade ..........................
Bank loans and long-term debt due within one year ...
272,712273,697985
289,403
290,591
1,188
Commercial paper ................................................
24,00024,000—24,00024,000—Long-term debt due after one year........................... 1,443,336 1,478,892 35,556 1,433,316 1,465,025 31,709
Derivative instruments *2 ............................................
4,984
4,984
—
2,859
2,859
—

Carrying
amountEstimated
fair value

Difference$ 688,190 $ 688,190 $
289,140
289,140
2,017,968 2,018,124

—
—
156

1,047,962 1,047,962—
3,279,759 3,291,605 11,846
288,635
288,635—
17,358,220 17,785,833 427,613
59,94059,940—*1. Carrying amount of cash and bank deposits consists of ¥56,676 million ($681,612 thousand) and ¥62,740 million of cash and cash equivalents and ¥547 million ($6,578 thousand) and ¥552 millionof bank deposits with maturities exceeding 3 months, which are included in other current assets in the accompanying consolidated balance sheets as of March 31, 2011 and 2010, respectively.
*2. Carrying amount and estimated fair value of derivative instruments represent derivative assets netted against derivative liabilities.

56

Notes to Consolidated Financial Statements

a. Estimation of fair value
The following methods and significant assumptions were used to estimate
the fair value of financial instruments for which the fair value is reasonably
measurable.

Cash and bank deposits and notes and accounts receivable–trade
The carrying amount of cash and bank deposits and notes and accounts
receivable–trade approximates fair value due to their relatively shortmaturity.
Marketable and investment securities
Fair value of those securities is based on quoted market prices. Refer toNote 5 for detailed information.
Notes and accounts payable–trade and commercial paper
The carrying amount of notes and accounts payable–trade and commercial
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 theirrelatively 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 discount rates.

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 discount rates.
Derivative instruments – Refer to Note 6.
Fair value of financial instruments includes amounts based on quoted
market prices and amounts reasonably calculated. Fair value reasonably
calculated, incorporating fluctuating factors, is subject to change under
different assumptions. Nominal amount shown in Note 6 does not
represent the market risk regarding the derivative transactions.
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.

Millions of yen

Thousands of U.S. dollars

2011

2010

2011

¥ 65,739¥ 73,412$ 790,607

Other securities
Unlisted stocks (excluding OTC securities) ...........................................

16,534

16,413

198,845

Other (TK investments, preferred securities and others).......................

76,26775,757917,222

Lease deposits * .......................................................................................

171,556

175,775

2,063,211

Liabilities:
Deposits from tenants *............................................................................

354,858

366,770

4,267,685

Assets:Equity investments in properties for sale ..................................................

* While fair value accounting is applied to some of 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, 2011 and 2010 is as follows.
Refer to Note 13 for redemption schedule for long-term debt.
Millions of yen

2011

Cash and bank deposits * ..........................................................................
Notes and accounts receivable–trade ........................................................
Other securities
National and local government bonds, etc. ...........................................
Total .........................................................................................................

Due within
1 yearDue after 1
year and within
5 years

Due after 5
years andwithin 10 years

Due after
10 years¥57,223
24,042

¥ —
—

¥ —
—

¥—
—

—
¥81,265

589
¥589

908
¥908

—
¥ 0

57

Millions of yen

2010

Cash and bank deposits * ..........................................................................
Notes and accounts receivable–trade ........................................................
Other securities
National and local government bonds, etc. ...........................................
Total .........................................................................................................

Due within
1 yearDue after 1
year and within
5 years

Due after 5
years andwithin 10 years

Due after
10 years¥63,292
24,478

¥ —
—

¥ —
—

¥ —
—

244
¥88,014

168
¥168

672
¥672

—
¥ —

Thousands of U.S. dollars

2011
Due after 1
year and within
5 years

Due after 5
years andwithin 10 years$688,190
289,140$$—$977,330

7,084$7,084

Due within
1 yearCash and bank deposits * ................................................................................................
Notes and accounts receivable–trade.........................................................................
Other securities
National and local government bonds, etc. ........................................................
Total ........................................................................................................................................

——

Due after
10 years

—
—

$—
—

10,920$10,920—$—* Carrying amount of cash and bank deposits consists of ¥56,676 million ($681,612 thousand) and ¥62,740 million of cash and cash equivalents and ¥547 million ($6,578 thousand) and¥552 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, 2011
and 2010, respectively.

54. MARKET
FAIR VALUEVALUEINFORMATIONINFORMATION
OF MARKETABLE
OF MARKETABLE
SECURITIES,SECURITIES,INVESTMENTINVESTMENT
SECURITIESSECURITIESANDAND
OTHERS
OTHERS(1) The following tables summarize historical cost, book value and fair value of securities as of March 31, 2011 and 2010:(a) Held-to-maturity securities:
Millions of yen

2011
Book
value

Securities whose fair value exceeds book value
National and local government bonds, etc. .................... ¥ 991
Securities whose fair value does not exceed book value
506
National and local government bonds, etc. ....................
Total ................................................................................... ¥1,497

58

Fair
value

Thousands of U.S. dollars

2010

2011

Difference

Book
value

Fair
value

Book
value

Difference

Fair
value

Difference¥1,007

¥16

¥ 322

¥ 324

¥2

$11,918$12,111$193

503¥1,510

(3)
¥13

762
¥1,084754¥1,078

(8)
¥(6)

6,086
$18,004

6,049$18,160(37)$156

Notes to Consolidated Financial Statements(b) Other securities:
Millions of yen

2011Book value(Fair value)

Securities whose book value (fair value)
exceeds historical cost
Stocks ............................................................... ¥107,875
Other ................................................................
31,744
Subtotal ............................................................ 139,619
Securities whose book value (fair value)
does not exceed historical cost
Stocks ...............................................................
26,678Other ................................................................
—
Subtotal ............................................................
26,678
Total .................................................................... ¥166,297

Historicalcost

Thousands of U.S. dollars

2010

2011

DifferenceBook value(Fair value)

HistoricalcostBook value(Fair value)

Historical
cost

Difference¥38,524
25,217
63,741¥69,351
6,527
75,878¥131,611
25,623
157,234¥45,170
21,033
66,203¥86,441
4,590
91,031$1,297,354 $ 463,307 $834,047
381,768
303,271
78,497
1,679,122
766,578 912,544

31,641—
31,641¥95,382(4,963)—(4,963)¥70,915

21,964
3,062
25,026¥182,260

25,2743,300
28,574¥94,777(3,310)(238)(3,548)¥87,483

320,842
380,530 (59,688)———
320,842
380,530 (59,688)$1,999,964 $1,147,108 $852,856

Difference(2) The following table summarizes other securities sold in the years ended March 31, 2011 and 2010:
Millions of yen

2011
Sales
amountGains

Stocks ......................................................................................... ¥21,374 ¥20,965
Total ................................................................................... ¥21,374 ¥20,965

Thousands of U.S. dollars

2010

2011

LossesSalesamountGains

LossesSalesamount¥(1)¥(1)¥26,028¥26,028¥25,713¥25,713

¥(88)
¥(88)

$257,054 $252,135 $(12)$257,054 $252,135 $(12)Gains

Losses(3) The following table summarizes other securities sold in the year ended March 31, 2009:
Millions of yen

2009
Sales
amountGains

Losses¥5,311¥1,328¥(684)(4) The Company and its consolidated subsidiaries recognized ¥6,212 million ($74,708 thousand) of impairment loss on investment securities forthe year ended March 31, 2011.
(5) Reclassification
During the year ended March 31, 2010, equity securities of Oriental Land Co., Ltd., formerly classified as investments in affiliated companies, werereclassified to other securities, which is a component of investment securities, after which some of the securities were sold. As a result, retained
earnings decreased by ¥62,443 million, investment securities increased by ¥5,580 million, and net unrealized holding gains on securities
increased by ¥40,646 million during the year ended March 31, 2010.

59

6 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS
The following summarizes hedging derivative financial instruments accounted for under hedge accounting as of March 31, 2011 and 2010:
Millions of yen

2011 20102011
Nominal amount
Hedged items

Interest rate swap *1
Pay: fixed rate
Receive: floating rate ............. Long-term debt
Foreign currency swap *2 ........ Long-term debt
Foreign exchange forward *3 ... Forecasted transactions denominatedin foreign currencies
Total ..................................................

Total

Due after 1 year

Fair value¥670,500
30,000¥537,500
30,000*1¥4,9781,085¥701,585—¥567,500

6¥4,984

Millions of yen

2011 2010

2010
Nominal amount
Hedged items

Interest rate swap *1
Pay: fixed rate
Receive: floating rate ............. Long-term debt
Interest rate swap *1
Pay: floating rate
Receive: fixed rate................... Long-term debt due within one year
Foreign currency swap *2 ........... Long-term debt
Total ..................................................

Total

Due after 1 year

Fair value¥601,500¥512,500*1

5,000
40,383¥646,883—
30,000¥542,500¥2,859¥2,859*1

Thousands of U.S. dollars

2011 20102011
Nominal amount
Hedged items

Interest rate swap *1
Pay: fixed rate
Receive: floating rate ............. Long-term debt
Foreign currency swap *2 ........... Long-term debt
Foreign exchange forward *3
Future transactions denominatedin foreign currencies
Total ..................................................

Total

Due after 1 year

Fair value$8,063,740
360,794$6,464,221
360,794$59,868

13,049$8,437,583—$6,825,015

72$59,940*1*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 value of the interest rate swap is included in the fair value of short-term and long-term debt.
*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 arerecognized.
*4. Fair values are calculated mainly by discounting the future cash flows.

60

Notes to Consolidated Financial Statements

7 INVESTMENT AND LEASING PROPERTIES
Commencing the year ended March 31, 2010, the Company and its consolidated subsidiaries adopted “Accounting Standard for Disclosures about Fair Valueof Investment and Rental Property” (ASBJ Statement No. 20; November 28, 2008) and its implementation guidance “Guidance on Accounting Standard forDisclosures about Fair Value of Investment 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 properties and (3) leasing properties other than (1)and (2).
The Company and its certain subsidiaries own office buildings for rent, commercial facilities and other properties in Tokyo and other areas. Net rent
income and loss on disposal of property and equipment regarding those investment and leasing properties are ¥76,486 million ($919,856 thousand) and¥10,931 million ($131,461 thousand) for the year ended March 31, 2011. Net rent income and impairment loss regarding those investment and leasing
properties were ¥79,447 million and ¥12,970 million for the year ended March 31, 2010. Gross rent revenue is included in revenue from operations andgross cost for rent is included in cost of revenue from operations. Impairment loss and loss on disposal of property and equipment are included in othercosts 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, 2011 and 2010 are stated below:
Millions of yen

Millions of yen

2011
Carrying amount2010
Fair value

Beginningof year

Net increaseduring the year End of year

¥1,845,886¥140,980

Thousands of U.S. dollars

2011

Carrying amountEnd of year

Beginningof year¥1,986,866 ¥2,827,636¥1,785,512

Fair value

Net increaseduring the year End of year

¥60,374

Beginningof yearEnd of year

¥1,845,886¥2,599,878

Carrying amount

Fair value

Net increaseduring the year End of year

End of year

$22,199,471 $1,695,490 $23,894,961 $34,006,446

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 amount to ¥201,515 million ($2,423,512 thousand) and¥39,581 million, for the years ended March 31, 2011 and 2010, respectively.
Estimated fair value was calculated internally based on Japanese Real Estate Appraisal Standards.

8 INVENTORIESInventories at March 31, 2011 and 2010 comprise the following:
Millions of yen

Thousands of U.S. dollars

2011

2010

2011

Real property for saleCompleted............................................................................................................................

¥249,236¥328,844$2,997,426

In progress ...........................................................................................................................

207,221

164,5112,492,135

Land held for development ...........................................................................................

174,570

174,732

2,099,459

Expenditure on contracts in progress .............................................................................

11,2288,336

135,033

Other ............................................................................................................................................

8,923

8,330

107,312

Total ............................................................................................................................................

¥651,178¥684,753$7,831,365

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 tosubtenants. In these transactions, the Company and its consolidated subsidiaries pay lease deposits to the owners and receive deposits from subtenants(See Note 15).

61

11 INCOME TAXES
Significant components of the Company’s deferred tax assets and liabilities as of March 31, 2011 and 2010 are as follows:
Millions of yen

Deferred tax assets:
Allowance for loss on devaluation of real property held for sale ..................
Unrealized inter-company transactions ....................................................................
Allowance for loss on valuation of securities ........................................................
Net operating loss carryforwards................................................................................
Excess allowance for retirement benefits ...............................................................
Accrued employees’ bonuses .......................................................................................
Unrealized loss on valuation of other securities ...................................................
Excess depreciation expense ........................................................................................
Loss on impairment of fixed assets............................................................................
Unrealized loss on valuation of lease deposits .....................................................
Loss on disposal of property and equipment..........................................................
Accrued enterprise tax.....................................................................................................
Other ......................................................................................................................................
Total ..................................................................................................................................
Deferred tax liabilities:
Deferred gain on sale of land and buildings for tax purposes ........................
Unrealized loss on valuation of shares held in consolidated subsidiaries..
Unrealized inter-company transactions ....................................................................
Unrealized gain on valuation of securities ..............................................................
Consolidation difference in real property ................................................................
Unrealized gain on valuation of lease deposits ....................................................
Unrealized gain on contribution of securities to retirement benefit trust .......
Other ......................................................................................................................................
Total ..................................................................................................................................
Net deferred tax assets .........................................................................................................

Thousands of U.S. dollars

2011

2010

2011

¥ 16,128
5,796
9,178
2,597
13,372
6,238
2,021
3,700
30,241
4,747
3,245
2,619
24,654¥124,536¥ 21,777
5,539
7,811
5,570
12,947
6,265
1,404
3,447
31,5904,580——
20,827¥121,757$¥ (24,532)(3,921)(449)(30,847)(424)(4,625)(1,656)(21,566)¥ (88,020)¥ 36,516¥ (24,691)(3,921)(430)(37,004)(541)(4,447)(1,656)(20,633)¥ (93,323)¥ 28,434$ (295,033)(47,156)(5,400)(370,980)(5,099)(55,622)(19,916)(259,363)$(1,058,569)$ 439,158

193,963
69,705
110,379
31,233160,818
75,021
24,30544,498363,692
57,09039,026
31,497
296,500$ 1,497,727

Amounts of total deferred tax assets as of March 31, 2011 and 2010 are presented net of valuation allowances of ¥16,345 million ($196,572 thousand)and ¥16,685 million, respectively.
Significant differences between the statutory tax rate and the Company’s effective tax rate for the years ended March 31, 2010 and 2009 are as follows:

Statutory tax rate ...................................................................................................................
(Adjustments)
Amortization of goodwill ....................................................................................................
Effect of lower tax rates on foreign subsidiaries .......................................................
Unrealized loss on securities .............................................................................................
Allowance for doubtful accounts .....................................................................................
Impairment loss on investment in affiliated company ............................................
Equity in net income of affiliated companies .............................................................
Permanent differences:Entertainment expenses and other ...........................................................................
Dividend income and other...........................................................................................
Other ...........................................................................................................................................
Effective tax rate ....................................................................................................................
Information as of March 31, 2011 has not been disclosed as the differences are insignificant.
62

2010

2009

40.66%

40.66%

0.33%(1.78)———(0.84)——(8.17)(6.67)
0.52(2.11)

0.89(3.13)
1.31
37.44%

1.09—
1.27
26.59%

Notes to Consolidated Financial Statements

12 EMPLOYEES’ RETIREMENT BENEFITS(1) Outline of retirement plan:
The Company has adopted a corporate pension plan and lump-sum
pension plans, both of which are defined benefit plans. The Company has
also adopted a retirement benefit trust. 9 consolidated subsidiaries haveadopted tax qualified pension plans. 65 consolidated subsidiaries haveadopted lump-sum pension plans. One consolidated subsidiary has
adopted employees’ pension funds. 9 consolidated subsidiaries haveadopted defined benefit corporate pension plans. One consolidated
subsidiary has adopted defined contribution pension plan.

(2) Details of projected benefit obligation:
Millions of yen

1. Projected benefit obligation ......................................................................................
2. Fair value of plan assets ..............................................................................................
3. Unaccrued projected benefit obligation (1+2) ...................................................
4. Unrecognized actuarial differences .........................................................................
5. Unrecognized prior service costs .............................................................................
6. Prepaid pension expenses ..........................................................................................
7. Allowance for employees’ retirement benefits (3+4+5–6) ...........................

Thousands of U.S. dollars

2011

2010

2011

¥(110,097)
63,923¥ (46,174)
14,442333
95¥ (31,494)¥(104,230)
59,207¥ (45,023)
13,907281
694¥ (31,529)$(1,324,077)
768,767$ (555,310)
173,686
4,005
1,142$ (378,761)

Note: Some consolidated subsidiaries adopt the simplified method to calculate projected benefit obligation.

(3) Details of retirement benefit expenses:
Millions of yen

Thousands of U.S. dollars

2011

2010

2009

2011

1. Service costs–benefits earned during the year .................................................
2. Interest costs on projected benefit obligation ..................................................
3. Expected return on plan assets ...............................................................................
4. Amortization of actuarial differences ....................................................................
5. Amortization of prior service costs ........................................................................
6. Supplemental benefits ................................................................................................

¥ 5,053
2,453(1,388)
3,334
(17)
107

¥ 4,929
2,376(1,119)
3,890
(5)
3

¥ 5,066
2,265(1,228)
2,878
212
180

$ 60,770
29,501(16,693)
40,096(204)
1,287

7. Retirement benefit expenses (1+2+3+4+5+6) ................................................

¥ 9,542¥10,074¥ 9,373$114,757

Notes: 1. Retirement benefit expenses of consolidated subsidiaries adopting the simplified method are included in service costs.
2. Supplemental benefits for the year ended March 31, 2009 includes ¥180 million of premium retirement benefits paid specifically for early retirement of employees of a consolidated
subsidiary which is included in “Other“ as a component of “COSTS AND EXPENSES”.

(4) Basis for measurement of projected benefit obligation and other items:

2011

2010

2009

1. Allocation method for the projected Straight-line method
retirement benefits

Straight-line method

Straight-line method

2. Discount rates

1.2 - 2.5%

2.5%

1.2-2.5%

3. Expected rates of return on plan assets 1.0-2.5%
1.0 - 2.5%
4. Years over which the prior service
1-10 years Straight-line method over a
1-10 years
costs are allocatedcertain number of years within
the average remaining service
years
5-10 years
5. Years over which the actuarial
5-10 years Straight-line method over adifferences obligations are allocatedcertain number of years within
the average remaining service
years

1.0 - 2.5%
Straight-line method over a
1-10 years
certain number of years within
the average remaining service
years

Straight-line method over acertain number of years within
the average remaining service
years

Straight-line method over a
5-10 years
certain number of years within
the average remaining service
years

Straight-line method over acertain number of years within
the average remaining service
years

63

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, 2011 and 2010 are as follows:
Millions of yen

Bank loans, with the weighted average interest rates of
0.46% in 2011 and 0.58% in 2010 .......................................................................
Commercial paper, with the weighted average interest rates of
0.15% in 2011 and 0.13% in 2010 .......................................................................

Thousands of U.S. dollars

2011

2010

2011

¥36,322¥38,852$436,825

24,00024,000288,635(2) Long-term debt
Long-term debt at March 31, 2011 and 2010 comprise the following:
Millions of yen

Long-term loans, principally from banks and insurance companies:
Loans secured by collateral or bank guarantees ..............................................
Unsecured loans ............................................................................................................
Total long-term loans, principally from banks and insurance companies ......
Bonds and debentures
Domestic:
3.00% yen notes due 2013 ......................................................................................
2.25% yen notes due 2012 ......................................................................................
2.04% yen notes due 2010 ......................................................................................
1.04% yen notes due 2013 .......................................................................................
1.81% yen notes due 2014 .......................................................................................
1.64% yen notes due 2014 .......................................................................................
1.65% yen notes due 2015 .......................................................................................
1.81% yen notes due 2016 .......................................................................................
1.99% yen notes due 2016 .......................................................................................
1.91% yen notes due 2016 .......................................................................................
1.54% yen notes due 2014 .......................................................................................
1.84% yen notes due 2017 .......................................................................................
2.06% yen notes due 2017 ......................................................................................
1.65% yen notes due 2014 ......................................................................................
1.97% yen notes due 2017 ......................................................................................
1.92% yen notes due 2018 ......................................................................................
2.09% yen notes due 2019 ......................................................................................
1.72% yen notes due 2019 ......................................................................................
1.63% yen notes due 2019 ......................................................................................
1.49% yen notes due 2019 ......................................................................................
1.50% yen notes due 2020 ....................................................................
1.19% yen notes due 2020 ....................................................................
1.06% yen notes due 2020 ....................................................................
1.32% yen notes due 2020 ....................................................................
2.30% yen notes due 2030 ....................................................................
Total bonds and debentures ....................................................................................
Less amount due within one year ................................................................................
Long-term debt due after one year ..........................................................................

64

Thousands of U.S. dollars

2011

2010

2011

¥

9,772
1,384,954
1,394,726¥ 21,089
1,417,778
1,438,867$ 117,523
16,656,091
16,773,614

10,0005,000—
10,00010,00010,00010,00020,00010,00020,00020,00010,00020,00010,00020,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,000285,000
236,390¥1,443,336

10,0005,000
10,00010,00010,00010,00010,00020,00010,00020,00020,00010,00020,00010,00020,00010,00010,00010,00010,00010,000—————245,000
250,551¥1,433,316

120,265
60,130—120,265
120,265
120,265
120,265
240,528
120,265
240,528
240,528
120,265
240,528
120,265
240,528
120,265
120,265
120,265
120,265
120,265
120,265
120,265
120,265
120,265
120,265
3,427,540
2,842,934$17,358,220

Notes to Consolidated Financial Statements

Long-term loans, principally from banks and insurance companies consist of the following:
Millions of yen

Due within one year, with the weighted average interest rates of
1.23% in 2011 and 1.63% in 2010 .......................................................................
Due after one year, with the weighted average interest rates of
1.61% in 2011 and 1.63% in 2010 .......................................................................
Total ........................................................................................................................................

Thousands of U.S. dollars

2011

2010

2011

¥ 236,390¥ 240,551$ 2,842,934

1,158,336¥1,394,726

1,198,316¥1,438,867

13,930,680$16,773,614

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

Collateralized assets
Land ....................................................................................................................................
Buildings and structures and others ......................................................................
Total ........................................................................................................................................

As is customary in Japan, collateral must be given if requested, undercertain circumstances, by a lending bank and such bank has the right tooffset cash deposited with it against any debt or obligation that becomesdue and, in case of default and certain other specified events, against all

Thousands of U.S. dollars

2011

2010

2011

¥15,927
23,215¥39,142¥16,931
25,949¥42,880$191,546
279,194$470,740

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, 2011 and 2010 are as follows:
Millions of yen

Thousands of U.S. dollars

2011

2010

2011

Due within 1 year.......................................................................................
Due after 1 to 2 years ................................................................................
Due after 2 to 3 years ................................................................................
Due after 3 to 4 years ................................................................................
Due after 4 to 5 years ................................................................................
Thereafter...................................................................................................

¥ 236,390
231,433
211,072
193,349
181,753625,729¥ 250,551
236,400
238,681
202,080
159,862596,293$ 2,842,934
2,783,319
2,538,449
2,325,304
2,185,845
7,525,303

Total .........................................................................................................

¥1,679,726¥1,683,867$20,201,154

14 ASSET RETIREMENT OBLIGATIONS(1) Asset retirement obligations recognized in the consolidated balance
sheets as of March 31, 2011
The Company and its consolidated subsidiaries, in connection with operating
commercial facilities and parking business (Mitsui Repark), have enteredinto 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 the Company and its consolidated subsidiaries to thelandlords to remove 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.

65

The following table summarizes the changes in the aggregate carrying amount of asset retirement obligations for the year ended March 31, 2011:
Millions of yen

Thousands of U.S. dollars

2011

2011

Beginning of year *1......................................................................................................................
Net increase due to revisions to original estimate *2 ....................................................................
Decrease due to settlement ..........................................................................................................
Other ............................................................................................................................................

¥ 2,418
1,561(1,598)230$ 29,080
18,773(19,218)
2,766

End of year ...................................................................................................................................

¥ 2,611$ 31,401

Notes: 1. Balance at beginning of the year under initial application of new accounting standards. Refer to Note 2 (X).
2. Increased 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, 2011
The Company and its consolidated subsidiaries own properties containing
asbestos material and are obligated to remove those materials upon
disposition of the properties. However, since sufficient information is notavailable to reasonably estimate the obligation amount due to uncertainty
about the method and timing of settlement, asset retirement obligation is
not recognized for the obligations to remove asbestos materials.

The Company and its consolidated subsidiaries, in connection withsome commercial facilities, hotels and retail premises, have entered into
real estate lease contracts and are obligated to the landlords to dismantle
the facilities upon exit. However, sufficient information is not available toreasonably estimate the obligation amount due to uncertainty about thetiming of settlement or lack of plan to settle. Thus asset retirement
obligation regarding reestablishing the status quo is not recognized except
for those mentioned in *1 above.

15 DEPOSITS FROM TENANTS
Deposits from tenants at March 31, 2011 and 2010 comprise the following:
Millions of yen

Non-interest-bearing ........................................................................................................
Interest-bearing ..................................................................................................................
Total ........................................................................................................................................
Average interest rate .........................................................................................................
The Company and its consolidated subsidiaries generally make leaseagreements with tenants under which they receive both interest-bearing
deposits and non-interest-bearing deposits from tenants. The non-interestbearing deposits and some of the interest-bearing deposits are notThousands of U.S. dollars

2011

2010

2011

¥345,467
9,391¥354,858
1.30%¥358,974
7,796¥366,770
1.47%$4,154,745
112,940$4,267,685

refundable during the life of the lease. 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 thegrace 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 sharesand 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 Board of Directors,
designate an amount not exceeding one-half of the price of the newshares as additional paid-in capital, which is included in capital surplus.
Under the Law, in cases where a dividend distribution of surplus ismade, the smaller of an amount equal to 10% of the dividend or theexcess, if any, of 25% of common stock over the total of additional paidin-capital and legal earnings reserve must be set aside as additional paid-

66

in-capital or legal earnings reserve. Legal earnings reserve is included inretained 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 byresolution of the shareholders' meeting. Additional paid-in capital andlegal earnings reserve may not be distributed as dividends. However, alladditional paid-in capital and all legal earnings reserve may be transferred
to other capital surplus and retained earnings, respectively, which arepotentially available for dividends.
The maximum amount that the Company can distribute as dividends is
calculated based on the non-consolidated financial statements of theCompany in accordance with Japanese laws and regulations.

Notes to Consolidated Financial Statements

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, 2011, 2010 and 2009 are as follows:(Thousands)

Numbers of shares as of March 31, 2008.............
Numbers of shares increased *1 ...........................
Numbers of shares decreased *2 ..........................
Numbers of shares as of March 31, 2009.............
Numbers of shares increased *3 ...........................
Numbers of shares decreased *2 ..........................
Numbers of shares as of March 31, 2010.............
Numbers of shares increased *3 ...........................
Numbers of shares decreased *4 ..........................
Numbers of shares as of March 31, 2011.............

IssuedCommon stock

Treasury stock
Common stock

881,425——
881,425——
881,425——
881,425

2,493
429
(102)
2,820
176
(49)
2,947
175
(34)
3,088

*1. Treasury stock increased due to purchase of 313
thousand odd shares, purchase of 84 thousand shares
upon appraisal remedy in connection with transfer ofbusiness from Minato Estate Co., Ltd. and purchase of
31 thousand shares of the Company’s stock by anaffiliated company.
*2. Treasury stock decreased due to sale of odd shares.
*3. Treasury stock increased due to purchase of odd
shares.
*4. Treasury stock decreased due to sale of 31 thousand
odd shares and exercise of 3 thousand shares ofsubscription rights.

(2) Information of subscription rights to shares is summarized as follows:

Type of subscription rights to shares .........................
Balance as of March 31, 2009 .....................................
Balance as of March 31, 2010 .....................................
Balance as of March 31, 2011 .....................................

Company

Millions of yen
Consolidated
subsidiaries

Total

Stock option
¥220
¥378
¥520

—
—
—

¥220
¥378
¥520

Company

Thousands of U.S. dollars
Consolidated
subsidiaries

Total$6,254—$6,254

Number of shares regarding stock options as of March 31, 2011, 2010 and 2009 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 29, 2010, June 26, 2009 and June 27, 2008:
Date of shareholders’ meeting
June 29, 2010
June 26, 2009
June 27, 2008
Type of stock
Common stock
Common stock
Common stock
Total amount¥9,664 million ($116,224 thousand)¥9,665 million¥9,668 million
Per share amount¥11 ($0.132)¥11¥11
Record date
March 31, 2010
March 31, 2009
March 31, 2008
Effective dateJune 30, 2010
June 29, 2009
June 30, 2008
The following resolution was approved by the Board of Directors’ meeting held on October 29, 2010, October 29, 2009 and October 30, 2008:
Date of board of directors’ meeting
October 29, 2010
October 29, 2009
October 30, 2008
Type of stock
Common stock
Common stock
Common stock
Total amount¥9,663 million ($116,211 thousand)¥9,664 million¥9,667 million
Per share amount¥11 ($0.132)¥11¥11
Record date
September 30, 2010
September 30, 2009
September 30, 2008
Effective date
December 2, 2010
December 2, 2009
December 2, 2008(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 29, 2011, June 29 2010 and June 26, 2009:
Date of shareholders’ meeting
June 29, 2011
June 29, 2010
June 26, 2009
Type of stock
Common stock
Common stock
Common stock
Total amount¥9,662 million ($116,200 thousand)¥9,664 million¥9,665 million
SourceRetained earnings
Retained earnings
Retained earnings
Per share amount¥11 ($0.132)¥11¥11
Record date
March 31, 2011
March 31, 2010
March 31, 2009
Effective dateJune 30, 2011
June 30, 2010
June 29, 200967

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, 2011, 2010 and 2009 are as follows:
Millions of yen

Cost of revenue from operations ........................................
Selling, general and administrative expenses ...............
Total ...............................................................................................

Thousands of U.S. dollars

2011

2010

2009

2011

¥ 34
115
¥149

¥ 34
124
¥158

¥ 43
91
¥134

$ 409
1,383
$1,792

The following table summarizes the contents and activity of stock options as of March 31, 2011 and for the year then ended:2010 plan
Grantees ............................................................

2009 plan2008 plan2007 plan

Type of stock and number of shares granted .....
Grant date .........................................................
Vesting conditions ...........................................
Requisite service period ..................................
Exercise period *2 ............................................

Directors, corporate officers and group Directors, corporate officers and group Directors, corporate officers and group Directors, corporate officers and groupmanaging officers; 25 in total *1managing officers; 25 in total *1managing officers; 26 in total *1managing officers; 27 in total *1
140,420 shares of common stock 109,650 shares of common stock 71,250 shares of common stock
48,880 shares of common stock
August 13, 2010
August 14, 2009
August 15, 2008
September 18, 2007
*2
*2
*2
*2
Not specified
Not specified
Not specified
Not specified
August 14, 2010 - August 13, 2040 August 15, 2009 - August 14, 2039 August 16, 2008 - August 15, 2038 September 19, 2007 - September 18, 2037

Non-vested options (number of shares):
Outstanding at beginning of year .................
Granted ........................................................
Forfeited .......................................................
Vested...........................................................
Outstanding at end of year ............................

—
140,420——
140,420

109,650———
109,650

71,250——(1,960)69,29048,880——(1,330)47,550

Vested options (number of shares):
Outstanding at beginning of year .................
Vested...........................................................
Exercised ......................................................
Expired .........................................................
Outstanding at end of year ............................

—
—
—
—
—

—
—
—
—
—

—
1,960
(1,960)
—
—

—
1,330
(1,330)——Exercise price ....................................................
Average stock price on exercise date ...........
Grant-date fair value .......................................

Yen

U.S. dollars

1—¥1,029$ 0.01—$12.38

¥

Yen

Yen

¥

1
—
¥1,493¥1
1,407¥1,967

Yen

¥

1
1,407
¥2,357*1. Grantees consist of 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 groupmanaging 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.

The fair value of options was estimated using the Black-Scholes option pricing-model under the following assumptions:2010 plan
Expected volatility *1 ......................................
Expected life *2 ................................................
Expected dividend *3.......................................
Risk-free rate *4 ...............................................

40%
15 years¥22 ($0.26) per share
1.41%

2009 plan2008 plan40%
15 years¥22 per share
1.88%

36%
15 years¥22 per share
1.83%*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.

68Notes to Consolidated Financial Statements

19 IMPAIRMENT LOSS ON FIXED ASSETS
During the year ended March 31, 2011, the Company and certain consolidated subsidiaries recognized impairment losses for the following groups ofassets.
Primary use
Type of assets
Location
Leasing properties ....................................................................................................................
Buildings, land, etc.
Chuo Ward, Tokyo, etc.
Operating facilities ...................................................................................................................
Buildings, land, etc.
Usuki City, Oita, 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 of assets. 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 incurrent rental rates, adverse changes in market conditions and otherfactors, the Company reduced the book values of operating facilities totheir recoverable amounts and recognized impairment losses.

Impairment losses totaling ¥4,115 million ($49,489 thousand) arecomprised of ¥1,885 million ($22,670 thousand) of land, ¥1,134 million($13,638 thousand) of buildings and structures, and ¥1,096 million($13,181 thousand) of others.
Recoverable amounts are measured by net realizable values or values
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, 2010, the Company and certain consolidated subsidiaries recognized impairment losses for the following
groups of assets.
Primary use
Type of assets
Location
Leasing properties ....................................................................................................................
Buildings, land, etc.
Minato Ward, Tokyo, etc.
Operating facilities ...................................................................................................................
Buildings, land, etc.
Yoichi County, Hokkaido, 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 of assets. 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 incurrent rental rates, adverse changes in market conditions and otherfactors, the Company reduced the book values of operating facilities totheir recoverable amounts and recognized impairment losses.
Impairment losses totaling ¥18,938 million are comprised of ¥8,425
million of land, ¥9,783 million of buildings and structures, and ¥730
million of others.
Recoverable amounts are measured by net realizable values or values
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%.

20 MAJOR COMPONENTS OF INTEREST, DIVIDENDS AND MISCELLANEOUS
Thousands of
U.S. dollars

Millions of yen

2011

Years ended March 31,,

Interest income ....................................................................................................................
Dividend income ..................................................................................................................
Gain on sale of investment securities .........................................................................
Other ........................................................................................................................................
Total ........................................................................................................................................

¥

209
3,201
20,9652,669¥27,044

2010

2009

301
2,454
25,713
2,684¥31,152

¥ 520
2,524
—
6,345
¥9,389

¥

2011
$

2,513
38,497
252,135
32,098$325,243

69

21 MAJOR COMPONENTS OF COSTS AND EXPENSES — OTHER
Thousands of
U.S. dollars

Millions of yen

2011

2010

¥ 4,115
12,325
6,212
4,628
3,571
5,830
¥36,681¥18,938
—
—
—
—
7,592
¥26,530

Years ended March 31,

Impairment loss on fixed assets ...................................................................................
Loss on disposal of property and equipment ..........................................................
Impairment loss on investment securities ...............................................................
Casualty losses...........................................................................................
Provision for casualty losses ......................................................................
Other ........................................................................................................................................
Total ........................................................................................................................................

2009

2011

—
6,095
17,559——17,514¥41,168$ 49,489
148,226
74,70855,65842,946
70,115$441,142¥

22 COMPREHENSIVE INCOME
Comprehensive income and other comprehensive income for the year ended March 31, 2010 are stated below. Refer to Note 2 (W).
Millions of yen

2010
Other comprehensive income (loss):
Net unrealized holding gains on securities ........................................
Net unrealized losses on hedging derivatives ....................................
Reserve on land revaluation ..............................................................
Foreign currency translation adjustments ..........................................
Equity in other comprehensive income of affiliated companies .........
Total other comprehensive income ........................................................
Comprehensive income attributable to:Shareholders of the Company ...........................................................
Minority interests ..............................................................................
Total comprehensive income ..................................................................

¥ 49,862
(184)
(718)
1,039
984
50,983¥111,038
1,061¥112,099

23 LEASES
As described in Note 2 (P), effective from the year ended March 31, 2009, the Company and its consolidated subsidiaries adopted the new accounting
standards for leases.
As lessee:(A) Finance leases
Assets leased under finance leases that do not transfer ownership to the lessee as of March 31, 2011 and 2010 consist mainly of Parking Facilities (Mitsui
Repark). Commencing the year ended March 31, 2009, such assets are capitalized as assets and depreciated using the straight-line method over their leaseterm assuming no residual value.
Finance leases that do not transfer ownership to the lessee whose commencement day falls on or before March 31, 2008 are accounted for as operatingleases under both the previous and the new accounting standards. Information on such leases is summarized as follows:(1) Pro forma amounts of acquisition cost, accumulated depreciation and net book value at March 31, 2011 and 2010:
Millions of yen

2011

Acquisition cost ..............................................................................................................
Accumulated depreciation..........................................................................................
Net book value ................................................................................................................
70

Buildings
andstructures

Machineryandequipment¥4,593
2,174¥2,419¥1,653
1,375
¥ 278

2010
Total

Buildings
andstructures

Machineryandequipment

Total¥6,246
3,549¥2,697¥4,792
1,919¥2,873¥1,763
1,132¥ 631¥6,5553,051¥3,504

Notes to Consolidated Financial Statements

Thousands of U.S. dollars

2011

Acquisition cost ..............................................................................................................
Accumulated depreciation..........................................................................................
Net book value ................................................................................................................

Buildings
andstructures

Machineryandequipment

Total$55,238
26,146$29,092$19,879
16,536$ 3,343$75,117
42,682$32,435(2) Future lease payment inclusive of interest at March 31, 2011 and 2010:
Millions of yen

Amount due within one year..........................................................................................
Amount due after one year .............................................................................................
Total ........................................................................................................................................

Thousands of U.S. dollars

2011

2010

2011

¥ 671
2,026
¥2,697¥ 790
2,714¥3,504$ 8,070
24,365$32,435(3) Lease expense and the pro forma amount of depreciation expense for the years ended March 31, 2011, 2010 and 2009:
Thousands of
U.S. dollars

Millions of yen

Lease expense ......................................................................................................................
Depreciation expense ........................................................................................................

2011

2010

2009

2011

¥749
749

¥800
800

¥973
973

$9,0089,008(4) Calculation of the pro forma amount of depreciation expense:
Pro forma 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, 2011 and 2010:
Millions of yen

Amount due within one year..........................................................................................
Amount due after one year .............................................................................................
Total ........................................................................................................................................

Thousands of U.S. dollars

2011

2010

2011

¥ 59,340
170,382¥229,722¥ 61,793
203,536¥265,329$ 713,650
2,049,092$2,762,742

As lessor:
Operating leases
Future lease revenue under non-cancellable operating leases at March 31, 2011 and 2010:
Millions of yen

Amount due within one year..........................................................................................
Amount due after one year .............................................................................................
Total ........................................................................................................................................

Thousands of U.S. dollars

2011

2010

2011

¥ 36,421
183,930¥220,351¥ 42,099
187,127¥229,226$ 438,016
2,212,026$2,650,042

71

24 BUSINESS TRANSACTIONS WITH SPECIAL PURPOSE ENTITIESThe Company invests in 30, 32 and 35 special purpose entities (SPEs) for
securitizing its customers’ real estate as of March 31, 2011, 2010 and 2009,
respectively. SPEs utilized consist mainly of tokurei-yugen-kaisha, or limited
liability companies, and tokutei-mokuteki-kaisha, or specific purpose companies(“TMK”) under Securitization Law. The SPEs mainly acquire real estate anddevelop 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 andasset 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, 2011 and 2010, 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 “investment securities”.
The following tables summarize transactions with the SPEs as of March
31, 2011 and 2010 and for the years ended March 31, 2011, 2010 and 2009.
Millions of yen

Balance

Investments *1..............
..................................
Management ................

Revenues and costs

2011

2010

¥112,684¥120,157——

Revenue from operations *2
Cost of revenue from operations *3
Revenue from operations *4

2011

2010

2009

¥8,254342
1,401¥24,925
143
1,252¥31,176
38
6,698

Thousands of U.S. dollars
Balance

Revenues and costs

2011
Investments *1..............
..................................
Management ................

2011$1,355,189—

Revenue from operations *2
Cost of revenue from operations *3
Revenue from operations *4$99,266
4,113
16,849

*1. Consists of ¥59,921 million ($720,637 thousand) and ¥68,291 million of “equity investments in properties for sale” and ¥52,763 million ($634,552 thousand) and ¥51,866 million of“investment securities” as of March 31, 2011 and 2010, respectively, 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 ¥5,044 million ($60,661 thousand) for leasing segment and ¥3,210 million ($38,605 thousand) for property sales
segment for the year ended March 31, 2011. Consists of ¥5,227 million and ¥5,527 million for the leasing segment and ¥19,698 million and ¥25,649 million for the sales of housing,office buildings and land segment for the years ended March 31, 2010 and 2009, respectively.
*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 ¥322 million ($3,872 thousand)for the leasing segment and ¥20 million ($241 thousand) for the property sales segment for the year ended March 31, 2011.
Consists of ¥143 million and ¥nil million for the leasing segment and ¥nil million and ¥38 million for the sales of housing, office buildings and land segment for the years ended
March 31, 2010 and 2009, respectively.
*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, 2011, andin the brokerage, consignment sales and consulting segment for the years ended, March 31, 2010 and 2009.
It should be noted that segments mentioned above for the year ended March 31, 2011 refer to those under the new standards while segments mentioned above for the years ended
March 31, 2010 and 2009 refer to the former segments. See Note 25 for details.
The Company has no directors and/or employees dispatched to any SPE as of March 31, 2011 and 2010.

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

Thousands of U.S. dollars

2011

2010

2009

¥464,946
39,947¥504,893¥482,179
52,611¥534,790$5,591,654
480,421$6,072,075

AssetsReal property ........................................................................................................................
Other ........................................................................................................................................
Total ........................................................................................................................................

Millions of yen

Thousands of U.S. dollars

2011

2010

2009

¥341,552
161,855
1,486¥504,893¥392,746
134,160
7,884¥534,790$4,107,661
1,946,542
17,872$6,072,075

Liabilities and net assets

Borrowings *5 ......................................................................................................................
Capital *6 ...............................................................................................................................
Other ........................................................................................................................................
Total ........................................................................................................................................

*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.)72

Notes to Consolidated Financial Statements

25 SEGMENT INFORMATION
Effective from the year ended March 31, 2011, the Company and its consolidated subsidiaries adopted “Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information” (ASBJ Statement No. 17; March 27, 2009) and the “Guidance on Accounting Standard for Disclosuresabout Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20; March 21, 2008).
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 in deciding how to allocate resources and assessing segment performance.
The Company’s Head Office organizes its business units based on 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 by business unit organized by Head Office and by services provided. The Company’s
segments have been aggregated based on the nature 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.

(3) Management
Property management and brokerage and asset management, etc.

(2) Property Sales
Sales of condominiums and detached housing to individuals, and sales ofrental housing and office buildings, etc. to investors.

(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, 2011 and 2010 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 from operations, cost of revenue
from operations and selling, general and administrative expenses. Transactions and transfers between segments are made at amounts based on prevailingmarket prices.
Millions of yen
Adjustments *1

Consolidated¥ 93,481
3,551

¥

—
(69,567)¥1,405,270—¥214,130¥ 3,764¥ 97,032¥ 1,002¥ (69,567)¥ (21,916)¥1,405,270¥ 120,093

207,064

114,366

107,543

178,6093,780,700

1,438
—
1,530

5,858
95
8,208

3,876
—
3,354

3,775
2,277
4,924

1,398
—
781

52,955
4,115
229,394

(1)

(2)

(3)

(4)

(5)

Adjustments *2

Revenue from operations:
Outside customers .............................................................
Inter-segment .....................................................................

¥ 430,976
16,837¥386,25614¥266,662
41,002¥202,865
7,059¥ 98,048
3,973

¥

—
(68,885)¥1,384,807—

Total revenue from operations ....................................
Segment operating income ..................................................

¥ 447,813¥ 95,554¥386,270¥ 12,493¥307,664¥ 29,714¥209,924¥ 3,640¥102,021¥228¥ (68,885)¥ (21,043)¥1,384,807¥ 120,586

Segment assets ..................................................................

2,273,046

796,794

208,325

113,068

110,112

209,079

3,710,424

Depreciation ........................................................................
Loss on impairment of fixed assets ................................
Additions to property and equipment and intangible assets ..

34,53814,05638,877

1,177
—
4,216

5,308
836
5,875

3,840
—
2,777

3,985
4,046
7,377

1,439
—
2,850

50,287
18,93861,972

Year ended March 31, 2011

(1)

(2)

(3)

(4)

(5)

Inter-segment .....................................................................

¥ 423,468
15,849¥405,243—¥277,947
41,168¥205,131
8,999

Total revenue from operations ....................................
Segment operating income ..................................................

¥ 439,317¥ 88,929¥405,243¥ 16,193¥319,115¥ 32,121

Segment assets ..................................................................

2,427,493

745,625

Depreciation ........................................................................
Loss on impairment of fixed assets ................................
Additions to property and equipment and intangible assets ..

36,6101,743
210,597

Revenue from operations:
Outside customers .............................................................

Millions of yen
Year ended March 31, 2010

Consolidated73

Thousands of U.S. dollars
Year ended March 31, 2011

Adjustments *1

Consolidated$1,124,245
42,706$—(836,644)$16,900,421—$2,575,225$ 45,268$1,166,951$ 12,051$ (836,644)$ (263,573)$16,900,421$ 1,444,293

2,490,247

1,375,418

1,293,361

2,148,034

45,468,431

70,451
1,143
98,713

46,615—40,33745,40027,384
59,21816,812—
9,393

636,861
49,4892,758,797

(1)

(2)

(3)

(4)

Revenue from operations:
Outside customers .............................................................
Inter-segment .....................................................................

$ 5,092,821
190,607$4,873,638—$3,342,718
495,105$2,466,999
108,226

Total revenue from operations ....................................
Segment operating income ..................................................

$ 5,283,428$ 1,069,501$4,873,638$ 194,744$3,837,823$ 386,302

Segment assets ..................................................................

29,194,143

8,967,228

Depreciation ........................................................................
Loss on impairment of fixed assets ................................
Additions to property and equipment and intangible assets ...

440,289
20,9622,532,736

17,294—
18,400(5)*1. Adjustments to segment operating income of ¥(21,916) million ($(263,573) thousand) consists of ¥230 million ($2,766 thousand) of inter-segment elimination and ¥(22,146) million($(266,339) 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 ¥178,609 million ($2,148,034 thousand) consists of ¥(721,668) million ($(8,679,110) thousand) of inter-segment elimination, ¥786,445 million($9,458,148 thousand) of corporate assets and investments in affiliated companies of ¥113,832 million ($1,368,996 thousand).
*2. Adjustments to segment operating income of ¥(21,043) million consists of ¥908 million of inter-segment elimination and ¥(21,951) 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 ¥209,079 million consists of¥(718,189) million of inter-segment elimination, ¥812,332 million of corporate assets and investments in affiliated companies of ¥114,936 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 located in the Japan
area accounted for more than 90% of revenue from operations on the consolidated income statements and property and equipment on the consolidatedbalance 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.
Segment information under the prior accounting standards for the years ended March 31, 2010 and 2009:(1) Leasing
Leasing of office buildings, commercial facilities, residential properties, etc.

(5) Property Management
Property management services (including tenant improvement).

(2) Sales of Housing, Office Buildings and Land
Sales of detached housing, condominiums, buildings, and land, etc.

(6) Sales of Housing Materials and Merchandise
Manufacture and sales of housing materials, as well as wholesale andretail sale of general goods.

(3) Construction
Construction of detached housing, apartments, etc. (including planningand design).
(4) Brokerage, Consignment Sales and Consulting
Real estate agency, sales agency, and sales consignment services, as wellas project management services for development of office buildings,
commercial facilities, etc., and asset management services for investors.

74(7) Facility Operations
Operation of hotels, golf courses and resort facilities, etc.
(8) Other
Financing operations for housing loans and leasing business, etc.

Notes to Consolidated Financial Statements

Millions of yen
Year ended March 31, 2010

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Revenue from operations:
Outside customers ............
Inter-segment ....................

¥ 546,763
8,159¥392,08713¥159,802
6,696¥62,585
3,184¥100,536
37,595¥ 63,018
32,506¥48,519400¥11,497
9,924

Total revenue from operations ..
Costs and expenses *1 .....

554,922455,134

392,100
380,015

166,498
164,295

65,76958,278138,131
122,159

95,524
94,53948,91952,474

Elimination
or Corporate¥

Consolidated—(98,477)¥1,384,807—

21,421
16,402(98,477)(79,075)

1,384,807
1,264,221

Operating income (loss) ...

¥99,788¥ 12,085¥ 2,203¥ 7,491¥ 15,972¥985¥ (3,555)¥ 5,019¥ (19,402)¥ 120,586

Assets ..................................
Depreciation .......................
Impairment loss on fixed assets .
Capital expenditures ........

¥2,402,916
37,53314,08240,932¥808,451
1,181
—
4,216

¥ 53,170
2,848
—
2,307

¥59,894
909
810
1,301

¥ 87,080
1,458
—
2,411

¥ 42,096
846—
677¥96,535
3,492
4,046
6,730

¥23,054583—
549¥137,228
1,437
—
2,849

¥3,710,424
50,287
18,93861,972Elimination
or Corporate

Consolidated

Millions of yen
Year ended March 31, 2009

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Revenue from operations:
Outside customers ............
Inter-segment ....................

¥ 529,756
8,701¥396,239
11¥182,074
4,956¥75,195
3,372¥102,491
35,703¥ 69,115
36,427¥52,318462¥11,758
10,172

Total revenue from operations ..
Costs and expenses *1 .....

538,457
438,928

396,250
347,639

187,030
184,299

78,56760,416138,194
122,620

105,542
104,119

52,78053,572¥—(99,804)¥1,418,946—

21,93017,319(99,804)(81,514)

1,418,946
1,247,398

Operating income (loss) ...

¥99,529¥ 48,611¥ 2,731¥18,151¥ 15,574¥ 1,423¥ (792)¥ 4,611¥ (18,290)¥ 171,548

Assets ..................................
Depreciation .......................
Capital expenditures ........

¥2,318,875
36,447
148,811¥923,258
1,205
2,335

¥ 50,818
3,072
1,832

¥57,908
976
1,138¥ 79,916
1,308
1,783

¥ 44,053
962
653¥95,550
3,155
4,698

¥23,865677
440¥164,144
1,089
3,334

¥3,758,387
48,891
165,024*1. Includes cost of revenue from operations and selling, general and administrative expenses.

The Japan area accounted for more than 90% of the consolidated revenue of all segments and the total amount of all segment assets. Consequently,
disclosure of segment information by geographic area has been omitted.
Overseas sales accounted for less than 10% of the consolidated revenue. Consequently, disclosure of overseas sales information has been omitted.

26 CONTINGENT LIABILITIESContingent liabilities at March 31, 2011 and 2010 are as follows:
Millions of yen

Loans guaranteed ...............................................................................................................

Thousands of U.S. dollars

2011

2010

2011

¥48,837¥58,383$587,336

27 SUBSEQUENT EVENTS
There were no applicable items under this category.

75

Independent Auditors’ Report76Corporate Information
Contents

Overview of Development Projects ................ 78
Domestic and Overseas Networks.................. 82
History .......................................................... 84
Investor Information ...................................... 86

77

Overview of Development Projects

Office Buildings

Mitsui Fudosan operates approximately 200 office buildings that are occupied bymore than 3,000 corporate tenants. Strong in Tokyo’s central business district, Mitsui
Fudosan’s office portfolio also covers Japan’s other major urban areas.

Mitsui Main Building

Kasumigaseki BuildingThis 36-story high-risebuilding was Japan’s firstskyscraper.
(Completed in 1968 /Renewal in 2001 /153,000m2)

The Mitsui Main Building was designated a Registered
Important Cultural Property in 1998.
(Completed in 1929 / 36,000m2)

Shinjuku Mitsui Building

Nihonbashi 1-chome Building

Built more than 30 years
ago, this skyscraper
remains a landmark inShinjuku, the new urban
This new landmark features

hub of Tokyo.
(Completed in 1974 /Renewal in 2000 /180,000m2)

Nihonbashi Mitsui Tower

Tokyo Midtown

A 39-story high-risecombining office space with
the Mandarin Oriental Hotel.
(Completed in 2005 /
130,000m2)

78

a striking plaza and atrium.
(Completed in 2004 /
98,000m2)

Combines office, retail andresidential facilities.
(Completed in 2007 /569,000m2)

GranTokyo North Tower

Akasaka Biz Tower

A mixed-use skyscraper
located in one of Tokyo’s
most prestigious business
districts.
(Completed in 2008 /
218,000m2)

Japan’s tallest office building
is conveniently integrated
with Tokyo Station.
(Completed in 2007 /195,000m2)

Sumitomo Mitsui Banking Corporation
Head Office Building

Muromachi-Higashi Mitsui Building

The first phase of the
Muromachi East District
Development Project, thiscomplex encompasses
office space, retail facilities
and a multi-purpose hall.
(Completed in 2010 /
41,000m2)

A state-of-the-art officebuilding serving as abusiness base in an
outstanding location.
(Completed in 2010 /80,000m2)

1251 Avenue of the Americas

20 Old Bailey

This midtown Manhattan skyscraper towers above
Rockefeller Center.
(Completed in 1986 / 214,000m2)

A high-quality office building in the global financial centerof the City of London.
(Completed in 1989 / 23,000m2)

79

Retail Facilities

80

Mitsui Fudosan operates approximately 60 retail facilities throughout Japan,
including regional malls, factory outlet malls and urban facilities.

LaLaport TOKYO-BAY

LAZONA Kawasaki plaza

The first large-scale suburban shopping center in Japan.
(Opened in 1981 / 282,000m2 / 540 stores)

A large-scale shopping center adjacent to a 667-unit
residential building.
(Opened in 2006 / 172,000m2 / 300 stores)

LaLaport YOKOHAMAMITSUI OUTLET PARK Jazz Dream Nagashima

One of the largest shopping centers in Kanagawa Prefecture.
(Opened in 2007 / 227,000m2 / 280 stores)

The largest outlet mall in Japan’s Tokai region.
(Opened in 2002 / 45,000m2 / 190 stores)

MITSUI OUTLET PARK Shiga Ryuo

LaLaport SHIN MISATO

The first outlet mall in the Keiji area.
(Opened in 2010 / 27,000m2 / 165 stores)

A shopping center that forms the core of a large-scale joint
development project.
(Opened in 2009 / 143,000m2 / 180 stores)

Overview of Development Projects

Housing

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

Park Court Akasaka The Tower

Park Court Azabu-Juban The Tower

A high-rise condominium tower surrounded by greenery in thecenter of Tokyo.
(Completed in 2009 / 518 units)

Superb views abound at this high-rise condominium in the heart ofTokyo.
(Completed in 2010 / 440 units)

Park Tower GranSky

Park City Yokohama Nakayama

A high-rise condominium with a residential environment intouch with the four seasons.
(Completed in 2010 / 613 units)

A large-scale development of detached housing in a location
with abundant water and greenery.
(Completed in 2011 / 117 houses)

Other

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

Halekulani HotelA luxury hotel on Waikiki Beach in Honolulu, Hawaii, theHalekulani Hotel is known for comfort and fine service.
(Opened in 1984 / 453 rooms)

Mitsui Garden Hotel Ginza Premier

The Garden Hotel chain
operates approximately
4,500 hotel rooms at 17
locations throughout Japan.
(Completed in 2005 / 361
rooms)

81

Domestic and Overseas Networks

Hokkaido Branch

Mitsui Fudosan(U.K.) Ltd.

Tohoku Branch

Kansai Head Office
HEAD OFFICE
Chiba Branch
Chugoku Branch
Yokohama Branch
Chubu Branch
Kyoto Branch
Kyushu Branch

Domestic Network
HEAD OFFICE

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

82

Kansai Head Office

Chiba Branch

Kyoto Branch

Midosuji Mitsui Building
1-3, Bingo-machi 4-chome, Chuo-ku,
Osaka-shi, Osaka
541-0051

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

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

Hokkaido Branch

Yokohama Branch

Chugoku Branch

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

Yokohama Creation Square
5-1, Sakae-cho, Kanagawa-ku,
Yokohama-shi, Kanagawa
221-0052

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

Tohoku Branch

Chubu Branch

Kyushu Branch

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

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

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

Mitsui Fudosan Consulting(Beijing) Co., Ltd.

Mitsui Fudosan
America, Inc.
Halekulani
Corporation
Mitsui Fudosan (Shanghai)Consulting Co., Ltd.
Mitsui Fudosan Consulting (Guangzhou) Co., Ltd.
Mitsui Fudosan (Asia) Pte. Ltd.

Overseas Network
Mitsui Fudosan America, Inc.

Mitsui Fudosan (Asia) Pte. Ltd.

1251 Avenue of the Americas, Suite 800,
New York, N.Y. 10020, U.S.A.
Tel: 1-212-403-5600
Fax: 1-212-403-5657

16 Raffles Quay, #37-01 Hong Leong Building,Singapore 048581
Tel: 65-6-220-8358
Fax: 65-6-224-8783

Halekulani Corporation

Mitsui Fudosan (Shanghai) Consulting Co., Ltd.

2222 Kalakaua Avenue, Suite 900,
Honolulu, Hawaii 96815, U.S.A.
Tel: 1-808-526-1186
Fax: 1-808-531-5651

Room 1805, Lippo Plaza,
222 Huai Hai Zhong Road, Luwan District,
Shanghai, 200020, China
Tel: 86-21-5396-6969
Fax: 86-21-5396-6899

Mitsui Fudosan (U.K.) Ltd.
7th Floor, Berger House, 38 Berkeley Square,
London, W1J 5AE, United Kingdom
Tel: 44-20-7318-4370
Fax: 44-20-7318-4371

Mitsui Fudosan Consulting (Beijing) Co., Ltd.
17th Floor, Unit 17, China World Office I,
No.1 Jianguomenwai Avenue,
Beijing, 100004, China
Tel: 86-10-6505-3101
Fax: 86-10-6505-3115

Mitsui Fudosan Consulting (Guangzhou) Co., Ltd.
Room 1405, R&F CENTRE No.10
Huaxia Road, Zhujiang New Town,
Guangzhou, 510623, China
Tel: 86-20-2802-3188
83

History*
1673

Opening of the Echigo-ya clothing store in Nihonbashi by Takatoshi Mitsui, founder of theHouse of Mitsui

1914

Establishment of Mitsui Companyand its real estate section

1929

Completion of Mitsui Main Building A

1941

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

1949

Listing of stock

1951

Foundation of Daiichi Engei Co., Ltd.

1956

Liquidation and absorption of the Mitsui Company by Mitsui Fudosan

1959

Capital participation in Fuji Sogo Development (now Cany Corporation )1960

Foundation of Oriental Land Co., Ltd.

1961

Start of development and sales of residential and vacation property

1968

Start of development and sales of condominiums
Completion of Kasumigaseki Building (Tokyo), the first skyscraper in Japan B

A

B

C

D

E

Start of construction and sales of houses

1969

Establishment of Mitsui Real Estate Sales Co., Ltd.
1971

Completion of Mita Tsunamachi Park Mansion (Tokyo)

1972

Completion of Ginza Mitsui Building (Tokyo)

1973

Foundation of Mitsui Fudosan America, Inc.

1974

Completion of Shinjuku Mitsui Building (Tokyo) C
Establishment of Mitsui Home Co., Ltd.

1975

Foundation of Mashiko Country Club (Tochigi)

1976

Foundation of Uniliving Co., Ltd.

1980

Establishment of "1981

Opening of LaLaport (now LaLaport TOKYO-BAY ), Japan’s first large-scale regional
shopping center (Chiba) D" system of joint development

1983

Opening of Tokyo Disneyland (Chiba)

1984

Opening of Mitsui Garden Hotel Osaka (now Mitsui Garden Hotel Osaka Yodoyabashi ),Mitsui Fudosan's first hotel in Japan (Osaka)
Opening of Halekulani Hotel in Hawaii

E

1986

Acquisition of Exxon Building , (now 1251 Avenue of the Americas ) (New York)

1987

Opening of Waikiki Parc Hotel (Hawaii)

1990

Opening of Alpark (Hiroshima)

50th anniversaryof Mitsui Fudosan;

"

1991

Creation of new corporate logo "1993

Full completion of Okawabata River City 21, West Block (Tokyo)
Full completion of Bell Park City (Osaka)

1994

Listing of Mitsui Home Co., Ltd. on Tokyo Stock Exchange
Opening of Shonan Village (Kanagawa)

1995

Opening of Tsurumi Hanaport Blossom (now MITSUI OUTLET PARK OSAKA TSURUMI ),the first factory outlet mall in Japan (Osaka)

1998

Registration of Mitsui Main Building as Important Cultural Property
Completion of Yokohama Bayside Marina Shops and Restaurants (now MITSUI OUTLETPARK YOKOHAMA BAYSIDE ) (Kanagawa)

1999

Establishment of the Mitsui Fudosan Group Vision and Mission* From Mitsui Fudosan’s Corporate Profile 201084

Completion of Gate City Osaki (Tokyo)

F

G

H

I

Completion of MARINE PIA KOBE PORTO BAZAR Factory Outlets (nowMITSUI OUTLET PARK MARINE PIA KOBE ) (Hyogo)
2000

Start of Office Building Fund operation
Completion of La Fete Tama Minami Osawa (now MITSUI OUTLET PARKTAMA MINAMI OSAWA) (Tokyo)
Completion of Mitsui Garden Hotel Okayama (Okayama)Completion of Garden Walk Makuhari (now MITSUI OUTLET PARKMAKUHARI ) (Chiba)

2002Completion of Nakanoshima Mitsui Building (Osaka)F

Completion of JAZZ DREAM NAGASHIMA (now MITSUI OUTLETPARKJAZZ DREAM NAGASHIMA ) (Mie)2003

Completion of Shiodome City Center (Tokyo) G
Establishment of Challenge Plan 2008 , Mitsui Fudosan Group's longterm business strategy
Completion of Roppongi T-CUBE (Tokyo)
Completion of Aoyama Park Tower (Tokyo)
Completion of Goodwood Gardens (Singapore)

2004

Opening of Nihonbashi 1-Chome Building (COREDO Nihonbashi ) (Tokyo)

2005

Opening of office in Shanghai, China
Completion of Nihonbashi Mitsui Tower (Tokyo) H
Opening of Mitsui Garden Hotel Ginza Premier (Tokyo)

I

Establishment of Mitsui Fudosan Residential Co. Ltd.
2006

Opening of Urban Dock LaLaport TOYOSU (Tokyo)
Opening of LAZONA Kawasaki plaza (Kanagawa)Opening of LaLaport KASHIWANOHA (Chiba)

2007

Opening of LaLaport YOKOHAMA (Kanagawa)Opening of Tokyo Midtown (Tokyo)

JJ

Establishment of New Challenge Plan 2016, Mitsui Fudosan Group's
long-term business strategy
Completion of Gran Tokyo North Tower (Tokyo)
2008

Completion of Akasaka Biz Tower (in akasaka Sacas)(Tokyo)
Completion of Yodoyabashi Mitsui Building (Yodoyabashi odona)(Osaka)
Opening of MITSUI OUTLET PARK IRUMA (Saitama)
Opening of MITSUI OUTLET PARK SENDAI PORT (Miyagi)

2009

Opening of Mitsui Garden Hotel Yotsuya (Tokyo)
Completion of Sendai Hon-cho Mitsui Building (Miyagi)
Opening of LaLaport IWATA (Shizuoka)
Opening of LaLaport SHIN-MISATO (Saitama)

2010

Opening of MITSUI OUTLET PARK SAPPORO KITA HIROSHIMA (Hokkaido)
Opening of Mitsui Garden Hotel Sapporo (Hokkaido)
Full Completion of Tokyo Southern Garden (Tokyo)
Opening of MITSUI OUTLET PARK SHIGA RYUO (Shiga)

85

Investor Information(Parent company; as of March 31, 2011)

Mitsui Fudosan Co., Ltd.
Head Office:Listings:

1-1, Nihonbashi-Muromachi 2-chome,
Chuo-ku, Tokyo,
103-0022, JapanTokyo, Osaka (Ticker: 8801)

Date of Establishment:

July 15, 1941
Common Stock:¥174,296 million

Number of Employees:

1,213 (Consolidated 16,288)

Number of Shares:

Authorized: 3,290,000,000
Issued and outstanding: 881,424,727

URL:

Number of Shareholders:E-mail:35,104mfir@mitsuifudosan.co.jp

http://www.mitsuifudosan.co.jp/english

Transfer Agent:

The Chuo Mitsui Trust and Banking
Company, Limited
Major Shareholders:

The Master Trust Bank of Japan, Ltd. (Trust account)
Japan Trustee Services Bank, Ltd. (Trust account)
Cbldn Stichting PGGM Depository
Sumitomo Mitsui Banking Corporation
The Chuo Mitsui Trust & Banking Co., Ltd.
SSBT ODO5 OMNIBUS ACCOUNT - TREATY CLIENTSState Street Bank and Trust Company
State Street Bank and Trust Company 505223
Kajima Corporation
Mellon Bank, N.A. as Agent for
its Client Mellon Omnibus US Pension
Total

Number ofshares held(Thousands)

Percentage of
total sharesin issue

72,11957,56922,354
18,546
17,565
16,932
16,046
13,45913,362

8.18
6.53
2.54
2.10
1.99
1.92
1.82
1.53
1.52

12,885
260,840

1.46
29.59

Composition of Shareholders:
Securities Companies
Other Japanese Companies
Individuals

1.49%
8.09%
6.44%

Financial
Institutions

ForeignInvestors

48.30%

35.64%

Monthly Stock Data (TSE):
Monthly stock price range (¥)

Topix

4,000

2,000

3,000

1,500

1,000

2,000
Common stock price range (¥)
Tokyo Price Index Close

1,000

500

0

0

Monthly trading volume (thousand shares)
300,000

200,000

100,000

0
Apr. 0786

FY2007Mar. 08 Apr. 08

FY2008Mar. 09 Apr. 09

FY2009Mar. 10 Apr. 10

FY2010Mar. 11

This report was produced in August 2011.
Printed in Japan