19th Fiscal Period

Report on Performance andManagement Status (Semiannual Report)
September 1, 2013 to February 28, 2014

Fukuoka REIT
Corporation

1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
http://www.fukuoka-reit.jp/eng/

I. Overview of Fukuoka REIT Corporation
To Our Unitholders
We would like to express our sincere appreciation to all unitholders for their continued support of
Fukuoka REIT Corporation (FRC).
I am Etsuo Matsuyuki, appointed as CEO & Representative Director of Fukuoka REIT
Corporation (FRC) at its Sixth General Meeting of Unitholders.
I would like to express my sincere appreciation for your continued support as we pursue our
mission of maximizing investor interests based on FRC's management philosophy of “Act Local,
Think Global.”
FRC started as Japan's first REIT specializing in regional properties. Its mission is to raise
capital for the Fukuoka and Kyushu areas from Japanese and overseas prime investors by
incorporating high quality properties into its portfolio, and thus contribute to the vitalization andenhancement of the attractiveness of the urban landscape of the areas. Since our listing in June
2005, we have exhibited steady growth and achieved stable performance through the support ofour unitholders and sponsor companies.

Etsuo Matsuyuki
CEO & Representative Director
Fukuoka REIT Corporation

This year marks the tenth anniversary since listing of FRC. Limiting its investments to Fukuoka and Kyushu areas
geographically, FRC acts as a REIT with an integrated portfolio of properties, owning and managing 24 properties that include
large-scale facilities, class A office buildings in downtown Fukuoka, residential properties and a hotel. Furthermore, highoccupancy rates have been maintained at all 24 of FRC’s owned properties.
FRC’s assets under management, which totaled 73.5 billion yen upon listing in 2005, have expanded to 164.7 billion yen(based on acquisition price), more than double the initial size. Moreover, on March 28 this year, a logistics facility (located in
Tosu, Saga Prefecture) was acquired for the first time in its portfolio for 1,250 million yen. FRC will hereafter continue to workon the diversification of its owned properties in terms of investment types.
With regard to financial operations, FRC issued investment corporation bonds, the first in its history, at the end of December
2013 totaling 2 billion yen with the redemption period of ten years. We will also work to reduce risks of rising interest rates andfinancing risks by pursuing diversification in financing methods.
In addition, FRC implemented a 5-for-1 split of its investment units in March aiming to expand its investor base and enhance
the liquidity of the investment units in light of the introduction of the Japanese version of the Individual Saving Account (NISA)
this year.
Going forward, FRC will continue to exert its strengths as a REIT specializing in regional properties and quickly respond tomarket changes, while receiving support and cooperation from powerful sponsors who are leaders in the Kyushu businessworld. As we do so, we will strive to achieve stable growth of our portfolio in the medium to long term and secure stableearnings through steady asset management.
We greatly appreciate your continued support and cooperation.
[Notice] A 5-for-1 Split of Investment Units Implemented
FRC implemented a 5-for-1 split of its investment units held by its unitholders stated or recorded on the final unitholder registry as of February 28,
2014, with March 1, 2014 as the effective date.
The split is intended to establish an environment where investors can invest with more ease as well as to further widen FRC’s investors baseand increase the liquidity of FRC’s investment units by decreasing the per unit price of the investment units in light of the introduction of theJapanese version of the Individual Saving Account (NISA) on January 1, 2014.

CONTENTS
I.

Overview of Fukuoka REIT Corporation
To Our Unitholders
Financial Summary
ProfileIncrease in the Size of Assets under Management
Acquisition of Tosu Logistics Center

1
2
3
5
5

II. Semiannual Report
III. Independent Auditor's Report
IV. Balance Sheets
V. Statements of Income
VI. Statements of Changes in Net Assets
VII. Cash Flow Statements
VIII. Notes to Financial Statements

FUKUOKA REIT CORPORATION

1

6
22
23
25
26
27
28

I. Overview of Fukuoka REIT Corporation

Financial Summary
Financial Highlights for 19th Fiscal Period (ended February 2014)
Dividend per unit came to 16,219 yen, surpassing the forecast by 19 yen.
Category(unit)

15th fiscal period

16th fiscal period

17th fiscal period

18th fiscal period

19th fiscal period(September 1, 2011 to
February 29, 2012)(March 1, 2012 toAugust 31, 2012)(September 1, 2012 toFebruary 28, 2013)(March 1, 2013 toAugust 31, 2013)(September 1, 2013 to
February 28, 2014)

Operating revenues

mm yen

6,931

7,094

7,200

7,565

7,574

Leasing NOI (Note 1)
Depreciation and amortization
expenses
Operating income

mm yen

4,351

4,372

4,444

4,751

4,732

mm yen

1,177

1,242

1,268

1,343

1,354

mm yen

2,637

2,595

2,622

2,848

2,801

Ordinary income

mm yen

2,046

2,005

2,005

2,272

2,239

Net income

mm yen

2,045

1,992

2,004

2,271

2,238

yen

16,621

16,193

16,28916,458

16,219units

123,050

123,050

123,050

138,000

138,000

Total assets (at end of period)

mm yen155,792

159,601

160,574

167,857

167,492

Total net assets (at end of period)

mm yen71,222

71,17071,182

81,712

81,679days
Days in fiscal period
Number of investment
properties
properties at end of period
Number of tenants (at end of period) (Note 3)

182

184

181

184

181

17

19

20

23

23

Dividend per unit
Total number of investment units
outstanding (at end of period) (Note 2)

515

701

751

886

868

Total leasable floor space (at end of period)m2

425,773.30

445,001.37

448,867.34

466,824.38

466,087.01

Occupancy rate (at end of period) (Note 4)

%

98.1

97.0

99.3

98.8

98.1

(Note 1) “Leasing NOI” is calculated using "Leasing business revenues - Expenses related to leasing business + Depreciation and amortization expenses".
(Note 2) Concerning the number of investment units, FRC implemented a 5-for-1 split of its investment units with March 1, 2014 as the effective date.
(Note 3) “Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for properties owned. For the number of tenants in pass-through master leasing properties, thetotal number of sections stipulated in the tenancy agreements with end tenants is shown.
(Note 4) “Occupancy rate” refers to the percentage of total leased floor space at end of period to total leasable floor space at end of period.

Business Forecasts for 20th and 21st Fiscal Periods
19th fiscal period

20th fiscal period

21st fiscal period(September 1, 2013 to February 28, 2014)(March 1, 2014 to August 31, 2014)(September 1, 2014 to February 28, 2015)(unit)

Results

Forecast

Forecast

Operating revenues

mm yen

7,574

7,701

7,739

Leasing NOI (Note 1)

mm yen

4,732

4,775

4,771

Depreciation and amortization
expenses

mm yen

1,354

1,391

1,405

Operating income

mm yen

2,801

2,792

2,781

Ordinary income

mm yen

2,239

2,222

2,236

Net income

mm yen

2,238

2,221

2,235

Dividend per unityen (1)

16,219--Latest dividend forecast per unityen (2)

16,200

3,220

3,240

Difference from forecast

yen (1)-(2)

+19

-

-

138,000

690,000

690,000

Category

Total number of investment units
outstanding (at end of period) (Note 2)

units(Note 1) “Leasing NOI” is calculated using "Leasing business revenues - Expenses related to leasing business + Depreciation and amortization expenses".
(Note 2) Concerning the total number of investment units, FRC implemented a 5-for-1 split of its investment units with March 1, 2014 as the effective date.

FUKUOKA REIT CORPORATION

2

I. Overview of Fukuoka REIT Corporation

ProfileStatus of the Investment Corporation
FRC is Japan's first REIT specializing in regional properties. FRC manages a portfolio centering on retail facilities featuring
excellent design and entertainment qualities and Class A office buildings throughout all of Kyushu, with a central focus on
Fukuoka, and in Yamaguchi Prefecture and Okinawa Prefecture utilizing our strength of knowing the local characteristics ofreal estate, which is a very regional-specific business.

Overview of the Investment Corporation
Name:

Fukuoka REIT Corporation

Representative:

Etsuo Matsuyuki, CEO & Representative Director

Asset manager:

Fukuoka Realty Co., Ltd. (Fukuoka Local Finance Branch Bureau (financial instruments) No. 10)

Listed date:June 21, 2005 (Tokyo Stock Exchange, and Fukuoka Stock Exchange)

Sponsors

5%
The Bank of Fukuoka, Ltd.

5%

5%

5%

The Nishi-Nippon City Bank, Ltd. Development Bank of Japan Inc.

50%
Fukuoka Jisho Co., Ltd. (Note 1)

Outsidedirector

10%

Outsidedirector

Fukuoka Realty Co., Ltd.

Saibu Gas Co., Ltd.

Kyushu Electric Power Co., Inc.

(Asset Manager)

5%

5%

5%

5%

Kyudenko Corporation

Nishi-Nippon Railroad Co., Ltd.

Kyushu Railway Company

Royal Holdings Co., Ltd.

(Note 1) Concluded MOU with Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. concerning pipeline support.

Financial Highlights
Total assets

167.4 bn yen (as of February 28, 2014)

Total debt

71.0 bn yen (as of February 28, 2014)

LTV (Total debt / Total assets)

S&P
Credit ratings

42.4% (as of February 28, 2014)

A−(Stable)R&I

A＋(Stable)JCR

AA−(Stable)Investment Unit Price
Investment unit price (Note 2)

171,400 yen(as of February 28, 2014)

Total number of investment units outstanding

138,000 units(as of February 28, 2014)

Market capitalization

118.2 bn yen(Unit price × Units outstanding × 5)
(as of February 28, 2014)

Net assets per unit (Note 3)

118,376 yen(as of February 28, 2014)

Market net assets per unit (Note 4)

131,618 yen(as of February 28, 2014)

FUKUOKA REIT CORPORATION

3(Note 2) FRC implemented a 5-for-1 split of its investment units
with March 1, 2014 as the effective date. Accordingly, theinvestment units are traded at the price after the 5-for-1 split,
starting on February 26, 2014.
(Note 3) Net assets per unit = Net assets / Total number of investment
units outstanding x 5(Note 4) Market net assets per unit = {(Total appraisal value at end of
period based on appraisal reports of real estate held at endof period − Total value on balance sheets of real estate heldat end of period (excluding construction in progress in trust))+ (Net assets at end of period)} / Total number of investment
units outstanding x 5

I. Overview of Fukuoka REIT Corporation

ProfileDividend Performance
19th fiscal period end

February 28, 2014

19th fiscal period dividend

16,219 yen per unit

(semiannual periods ending every February and August)19th fiscal period days

181 days

Dividend yield

3.8% {(Dividend / Days × 365) / Unit price (as of February 28, 2014) / 5}

(Note) Unit price is as of February 28, 2014.

(yen)
20,000 19,014

18,438 18,632

17,341

18,360 18,499 18,373 18,049

17,377 17,397 16,783

16,465 16,922 16,621 16,193 16,289 16,458 16,219

10th

13th

15,00010,000

5,000

0

2nd

3rd

4th

5th

6th

7th

8th

9th

11th

12th

14th

15th

16th

17th

18th

99.3

98.8

17th

18th

19th

Portfolio Property Occupancy Rate (at end of period)
FRC has maintained a portfolio property occupancy rate of 97% or higher since listing.
（%）
100

99.8

99.0

99.4

99.4

99.7

98.8

99.4

99.2

98.8

99.1

99.0

99.6

98.6

98.1

95

98.1

97.0

90

85

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

19th

(Note) “Occupancy rate” refers to the percentage of total leased floor space at end of period to total leasable floor space at end of period.

Overview of the AssetManagerName:

Fukuoka Realty Co., Ltd.

Representative:

Etsuo Matsuyuki
CEO & Representative
Director

Address:

Portfolio (Note)
Investment type (based on acquisition price)+81-92-272-3900

Established:

December 26, 2003

Capital:200,000,000 yen

29.7%

Investment area (based on acquisition price)

1-2-25 Sumiyoshi,
Hakata Ward, Fukuoka
City

TEL:

Office buildings

Retail63.2%

Fukuoka metropolitan area

77.0%

Others 7.1%

Other
Kyushu areas

23.0%

Total leasable floor space

Occupancy rate at end of period

466,087.01m2

98.1%(Note) Figures are based on properties owned as of February 28, 2014.

FUKUOKA REIT CORPORATION

4

I. Overview of Fukuoka REIT Corporation

Increase in the Size of Assets under Management
Assets have grown to more than double the size upon listing, and property types have become increasingly diversified.
Retail (total acquisition price, left axis)

Office buildings (total acquisition price, left axis)

Others (total acquisition price, left axis)

23

Number of properties (right axis)(mm yen)200,000

150,000

50,000

0

5

6

3,171

3,171

3,171

3,171

3,171

43,10043,100

3,171

3,171

37,20037,20037,20043,10043,10043,10043,10037,20062,03367,44371,07374,62374,62374,62374,62374,62374,623

5th

6th

7th

8th

9th

10th

11th

12th

13th

10
30,200

3,171

3,171

2,060

25,800

16

15

2,060

37,200

17

16

15

14

100,000

17
16

37,200

11

7,251

7,251

43,10045,70024(Properties)
20

20

19
16

23

11,581

11,581

12,831

15
48,50048,50048,50010

754,33354,33354,333

2nd

3rd

4th

103,323

103,323

103,323

103,323

103,323

103,323

14th

15th

16th

17th

18th

19th As ofMar. 31,2014(Note) Kominedai Community Mall, acquired in the 3rd fiscal period and sold in the 6th fiscal period, was omitted from the acquired assets presented above.

103,323

Acquisition of Tosu Logistics Center
Let me explain the background of the acquisition of the first logistics property for FRC.
As FRC specializes in Fukuoka and Kyushu areas as its investment target areas, we are always
investigating the possibility of expanding the types of investment properties, and have conducted
research and surveys for logistics facilities as well. The acquisition of Tosu Logistics Center showsthat such endeavors have finally borne results.
FRC invests primarily in retail facilities and Class A office buildings in the Fukuoka and Kyushu
areas. For other properties, however, it is our policy to acquire them as part of the portfolio, as thelatest acquisition shows, by taking advantage of our strengths of community-oriented operations
as long as they allow us to secure stable earnings over the medium to long term. By doing so, we
believe that we can improve risk diversification within the target areas.

Etsuo Matsuyuki
CEO & Representative Director
Fukuoka Realty Co., Ltd.

Property Overview
Property nameTosu Logistics Center

Location

Himekatamachi, Tosu City, Saga prefecture

Total leasable floor space

4,173.29m2

Acquisition price

1,250 mm yen

Appraisal value

1,250 mm yen

Acquisition cap at acquisition

5.9%

Acquisition date

March 28, 2014

Property manager company

Fukuoka Jisho

FUKUOKA REIT CORPORATION

5

5

0

II. Semiannual Report
Overview of Asset Management
1. Changes in operating results and financial position
15th

Fiscal Period(unit)

Operating revenues

mm yen[Leasing business revenues]

mm yenOperating expenses

mm yenTotal number of investment
units outstanding

19th(September 1, 2013 to
February 28, 2014)

mm yen7,565[7,565]
4,716[4,157]
2,848
2,272
2,271
167,857[4.5]
81,712[14.8]
79,441

7,574[7,574]
4,773[4,197]
2,801
2,239
2,238
167,492[(0.2)]
81,679[(0.0)]
79,441mm yenmm yen(a)

mm yen(b)

mm yen(c)

mm yen%[Change from previous period]

18th(March 1, 2013 toAugust 31, 2013)

7,200[7,200]
4,578[4,025]
2,622
2,005
2,004
160,574[0.6]
71,182[0.0]
69,177mm yen%Unitholders’ equity

17th(September 1, 2012 toFebruary 28, 2013)

7,094[7,094]
4,498[3,964]
2,595
2,005
1,992
159,601[2.4]
71,170[(0.1)]
69,177

Operating income
Ordinary income
Net income
Total assets[Change from previous period]

16th(March 1, 2012 toAugust 31, 2012)

6,931[6,931]
4,294[3,757]
2,637
2,046
2,045
155,792[0.1]
71,222[(0.1)]
69,177[Expenses related to leasing business]

Net assets(September 1, 2011 to
February 29, 2012)

units

123,050

123,050

123,050

138,000

138,000

Net assets per unit

(Note 3)(c)/(d)yen

578,812578,384

578,480

118,423

118,376

Total dividend
Dividend per unit(e)

mm yen(e)/(d)yen

1,992
16,193[16,193][–]

2,004
16,289[16,289][–]

2,271
16,458[16,458][–]

2,238
16,219[16,219][–](d)[Earnings dividend per unit]

yen[Dividend in excess of earnings per unit]

yen

2,045
16,621[16,621][–](Note 4)%

1.3 [2.6]

1.3 [2.5](Note 4)%

2.9 [5.8]

2.8 [5.6]

2.8 [5.7]

3.0 [5.9]

2.7 [5.5](c)/(b)

%

45.7

44.6

44.3

48.7

48.8

%
(e)/(a)%[(0.1)]
100.0[(1.1)]
100.0[(0.3)]
100.0

[4.4]
100.0

[0.1]
100.0

17

19

20

23

23

425,773.30

445,001.37

448,867.34

466,824.38

466,087.01

98.1

97.0

99.3

98.8

98.1

1,177

1,242

1,268

1,343

1,354

1,031
4,351
182

1,285
4,372
184

431
4,444
181

612
4,751
184

848
4,732
181

Ratio of ordinary income tototal assets
Return on net assets
Ratio of net assets to total
assets[Change from previous period]

Payout ratio【Other reference information】
Number of investment
properties
properties at end of period
Total leasable floor space atm2
end of period
Occupancy rate at end of%
periodDepreciation and amortization
mm yenexpenses
mm yenCapital expenditures(Note 4) mm yen
Leasing NOI
days
Days in fiscal period

1.3 [ 2.5]

1.4 [2.7]

1.3 [2.7](Note 1) Consumption tax is not included in operating revenues, etc.
(Note 2) In the above table, monetary amounts are rounded down to the nearest specified unit and percentage figures are rounded off to one decimal place.
(Note 3) FRC implemented a 5-for-1 split of its investment units with March 1, 2014 as the effective date. Accordingly, net assets per unit have been calculated based on the assumption that the split ofinvestment units was conducted at the beginning of the 18th fiscal period.
(Note 4) The indicators are calculated by using the following methods. Furthermore, the figures in square brackets represent annualized value based on the number of days in each fiscal period.
Ratio of ordinary income tototal assets
Return on net assets
Leasing NOI

Ordinary income / average total assets
Average total assets = (Total assets at beginning of period ＋total assets at end of period ) / 2
Net income/average net assets
Average net assets = (Net assets at beginning of period ＋net assets at end of period) / 2
Leasing business revenues−expenses related to leasing business＋depreciation and amortization expenses

FUKUOKA REIT CORPORATION

6

II. Semiannual Report

Overview of Asset Management
2. Management situation(1) Brief history of the investment corporation
Fukuoka REIT Corporation (hereinafter “FRC”) was established on July 2, 2004 based on the “Act on Investment Trusts andInvestment Corporations” (Act No. 198 in 1951 including later revisions, hereinafter the “Investment Trusts Act”) and listed on
the Tokyo Stock Exchange Group Inc. and the Fukuoka Stock Exchange on June 21, 2005 as the nation’s first real estate
investment trust specializing in regional properties (code number: 8968). FRC invests in real estate throughout Kyushu (including
Okinawa Prefecture), with a central focus on Fukuoka City, and Yamaguchi Prefecture (hereinafter the “Fukuoka/Kyushu area”)
by turning regional characteristics in the real estate industry into strength.
FRC started asset management activities on November 9, 2004 after acquisition of four properties including Retail in Canal
City Hakata (excluding some areas of specialty shops, hotels, theaters, offices and common space), a commercial complex
where specialty shops, cinema complex, theaters, amusement facilities, hotels and offices are integrally developed (hereinafter“Canal City Hakata”). As of the end of the 19th fiscal period (February 28, 2014), FRC manages a total of 23 properties
comprising 10 Retail, 7 Office buildings and 6 Others.

(2) Investment environment and portfolio performance
During the 19th fiscal period, the Japanese economy remained on course for a modest recovery, with capital investment
picking up along with an increase in public investment and housing investment, given an improvement in corporate earnings aswell as the employment and income environment. Looking ahead, the recovery trend of the economy is expected to continue,as household income and investment will increase bolstered by various political measures proving effective. The Fukuoka andKyushu area, the core investment target area for FRC, is also recovering gradually as a whole, with consumer spending, capital
investment and employment picking up while housing investment and public investment showing increasing trends.
As for the land price trend, a decrease in the national average was still underway but the rate of decrease continued toshrink over the past year from January 2013 according to the 2014 Land Price Survey. The three major urban areas of Tokyo,
Osaka and Nagoya saw the average price take an upward turn both for residential land and commercial land. In Fukuoka City,
the central area of FRC’s investment targets, the land prices continued rising for two consecutive years, recording a year-onyear increase of 2.9% for commercial land and 1.8% for residential land. With demand increasing primarily in the urban areas,real estate transactions have been activated in Fukuoka City.
Under such circumstances, FRC continued its efforts to reinforce its competitive advantages and ability to attract shoppers
to Canal City Hakata and other major retail facilities, and focused on maintaining and increasing the occupancy rate of its
owned properties. As a result of these endeavors, the average occupancy rate of all properties FRC owns was 98.1% at theend of the 19th fiscal period.
When analyzing FRC’s portfolio (on an acquisition price basis) by investment target area, the investment ratio in the Fukuoka
urban area accounted for 77.0%; when analyzing by property type, Retail, Office buildings, and Others accounted for 63.2%,
29.7% and 7.1%, respectively.

(3) Summary of fundraising
In the 19th fiscal period, FRC refinanced 2,000 mm yen in long-term debt that matured in December 2013 by issuing the First
Series of Unsecured Bonds (with the redemption period of ten years), which marked the first issuance of investment corporation
bonds for FRC and represented the longest procurement period. As a result, the balance of interest-bearing debt (including theinvestment corporation bonds) at the end of the 19th fiscal period totaled 71,025 mm yen, with the loan-to-value ratio (ratio ofinterest-bearing debt (including the investment corporation bonds) to total assets) at 42.4%. With regard to the commitment
lines FRC has established as a backup of fund procurement, a commitment line expired in February 2014 and FRC renewed
and expanded it with credit limit of 7,000 mm yen (an increase of 1,000 mm yen) and commitment period of two years. Goingforward, FRC will continue its efforts to reduce refinancing risks by dispersing the debt maturities and increasing the duration,and to mitigate risks of rising interest rates by shifting to fixed-interest rate borrowings and through other measures.
Moreover, the credit ratings assigned to FRC as of the end of the 19th fiscal period are as follows.

FUKUOKA REIT CORPORATION

7

II. Semiannual Report

Overview of Asset Management
Credit Rating Agency
Standard & Poor's Ratings Japan K.K. (S&P)

Rating Type

RatingRating Outlook

Long-term Corporate Credit Rating
Short-term Corporate Credit RatingA−
A−2

StableIssuer Rating

A+

StableLong-term Senior Debts Rating

AA−

StableRating and Investment Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd. (JCR)(4) Summary of performance and dividend
As a result of these management efforts, operating revenues totaled 7,574 mm yen and operating income after excluding
operating expenses such as expenses related to leasing business and asset management fees totaled 2,801 mm yen.
Ordinary income was 2,239 mm yen and net income was 2,238 mm yen.
Management declared a dividend of 16,219 yen per investment unit to meet the requirements of special tax measures for aninvestment corporation (as stipulated in Article 67-15 of the Act on Special Measures Concerning Taxation [Act No. 26 in 1957
including later revisions, hereinafter the “Special Taxation Measures Act”]). Under this law, an investment corporation is allowed
to deduct the maximum amount of dividends paid to investors from its taxable income.

3. Change in the number of investment units issued
Changes in unitholders’ capital from the incorporation of FRC to the end of the 19th fiscal period are as follows.
Number of investment units
issued (units)
Increase
Balance
July 2, 2004
Established through private placement250
250November 8, 2004 Additional issue of investment units through private offering
82,80083,050June 20, 2005
Additional issue of new investment units through public offering
7,000
90,050July 21, 2005
Additional issue of new investment units through third-party allotment
2,000
92,050
September 7, 2006 Additional issue of new investment units through public offering
15,000107,050
March 1, 2011
Additional issue of new investment units through public offering
16,000123,050
March 1, 2013
Additional issue of new investment units through public offering
14,950138,000
Date

Item

Unitholders’ capital

Remarks(millions of yen)

Increase
125
41,4005,944
1,698
11,096
8,913
10,263

Balance
125
41,52547,46949,16760,264
69,17779,441(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 1) FRC was established with an issue of investment units at 500,000 yen per unit.
(Note 2) New investment units were issued through private offering at the issue price of 500,000 yen per unit for the purpose of procuring funds for acquiring new properties, etc.
(Note 3) New investment units were issued through public offering at the issue price of 880,000 yen per unit (purchase price of 849,200 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 4) New investment units were issued through third-party allotment at the issue price of 849,200 yen per unit.
(Note 5) New investment units were issued through public offering at the issue price of 766,360 yen per unit (purchase price of 739,772 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 6) New investment units were issued through public offering at the issue price of 576,083 yen per unit (purchase price of 557,078 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 7) New investment units were issued through public offering at the issue price of 710,580 yen per unit (purchase price of 686,529 yen) for the purpose of procuring funds for acquiring new properties, etc.

[Changes in market price of investment certificates]
The highest and lowest (closing price) market prices on the Real Estate Investment Trust Section of the Tokyo Stock
Exchange, on which FRC’s investment certificates are listed, in each fiscal period are as follows:
Fiscal period
HighestLowest15th(September 1, 2011 to
February 29, 2012)

542,000 yen
465,500 yen

16th(March 1, 2012 toAugust 31, 2012)

599,000 yen
525,000 yen

17th(September 1, 2012 toFebruary 28, 2013)

18th(March 1, 2013 toAugust 31, 2013)

769,000 yen
536,000 yen

893,000 yen
704,000 yen

19th

19th

(before ex rights)(September 1, 2013 to
February 28, 2014)(after ex rights) (Note 2)(September 1, 2013 to
February 28, 2014)

868,000 yen
708,000 yen

171,400 yen
171,000 yen(Note 1) The highest and lowest prices of the investment unit price are based on the closing prices on the Real Estate Investment Trust Section of the Tokyo Stock Exchange.
(Note 2) In accordance with the 5-for-1 split of FRC’s investment units with March 1, 2014 as the effective date, the investment units are traded at the price after ex rights, starting on February 26, 2014.

4. Results of divideds
With respect to the dividend for the 19th fiscal period, FRC determined to distribute the whole unappropriated surplus (except
for the fraction amount, which is the dividend per unit of less than 1 yen) to be eligible for special tax measures for an investment
corporation (as stipulated in Article 67-15 of the Special Taxation Measures Act) that allow FRC to deduct the maximum amountof earnings dividend from its taxable income. Accordingly, dividend per unit for the fiscal period was 16,219 yen.
FUKUOKA REIT CORPORATION

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II. Semiannual Report

Overview of Asset Management(thousands of yen)
Fiscal period

15th

16th

(September 1, 2011 to
February 29, 2012)

Unappropriated surplus
Undistributed earnings
Total dividends[Dividend per unit]

Earnings dividends[Earnings dividend per unit]

Contribution refund[Contribution refund per unit]

17th(March 1, 2012 toAugust 31, 2012)

2,045,264
50
2,045,214[16,621 yen]
2,045,214[16,621 yen]

–

[–]

18th

(September 1, 2012 toFebruary 28, 2013)

1,992,637
89
1,992,548[16,193 yen]
1,992,548[16,193 yen]

2,004,391
29
2,004,361[16,289 yen]
2,004,361[16,289 yen]

–

–

[–]

19th

(March 1, 2013 toAugust 31, 2013)[–](September 1, 2013 to
February 28, 2014)

2,271,226
22
2,271,204[16,458 yen]
2,271,204[16,458 yen]–[–]

2,238,288
66
2,238,222[16,219 yen]
2,238,222[16,219 yen]–[–]

5. Future portfolio management policy and vital issues
FRC will further reinforce management and leasing capabilities by cooperating with property management companies including
sponsor companies even in a weak consumer spending environment, and secure and maintain the stable operation of theproperties by making the most use of their advantages.
FRC will make investments based on the basic policy stipulated in its Articles of Incorporation and its basic philosophy:
focusing on “specialized areas in which FRC can demonstrate its competitive edge” that are in “high growth potential markets.”
By geographic location, of Fukuoka and Kyushu areas, FRC will invest 60% to 90% of its assets in the Fukuoka urban area,
since the Fukuoka urban area is expected to have a high population growth rate in the future. In addition to the Fukuoka urban
area, management has decided to actively acquire properties in major cities, if there are regions or properties where FRC cangenerate investment through its knowledge of the local land. FRC will acquire high quality properties with adequate use of its
advantages, such as information gathering ability in the areas, good knowledge of regional properties and close relations withthe local business community and governments, so that investors can continue to invest in FRC with assurance.
Meanwhile, FRC will build stronger relationships with financial institutions to realize stable fundraising and try to maintain asolid financial structure.

6. Significant events that have occurred after the end of the 19th fiscal period
FRC implemented a 5-for-1 split of its investment units with February 28, 2014 and March 1, 2014 as the record date and theeffective date, respectively.

(1) Purpose of split
FRC implemented the split of investment units in order to establish an environment where investors can invest with ease as wellas to further widen FRC’s investors base and increase the liquidity of FRC’s investment units by decreasing the per price ofinvestment units in light of the introduction of the Japanese Individual Saving Account (NISA) on January 1, 2014.

(2) Method of split
FRC implemented a 5-for-1 split of its investment units held by its unitholders stated or recorded on that date’s final unitholder
registry, with February 28, 2014 as the record date.

(3) Increase in the number of investment units through split, etc.
1) Number of FRC investment units outstanding before split: 138,000 units
2) Increase in number of investment units through split: 552,000 units
3) Number of FRC investment units outstanding after split: 690,000 units
4) Total number of investment units authorized after split: 10,000,000 units

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II. Semiannual Report

Overview of the Investment Corporation
1. Summary of unitholders’ capital
Fiscal period
Total number of authorized
investment units
Total number of investment
units outstanding
Number of unitholders

15th

as of February 29, 201216th

as of August 31, 201217th

as of February 28, 201318th

as of August 31, 201319th

as of February 28, 2014

2,000,000 units

2,000,000 units

2,000,000 units

2,000,000 units

2,000,000 units

123,050 units

123,050 units

123,050 units

138,000 units

138,000 units

8,685

8,290

7,495

8,470

7,156

2. Matters related to investment units
The following table sets forth the Top 10 unitholders of FRC as of February 28, 2014.
Investment units held (units)

NameJapan Trustee Service Bank, Ltd. (Investment trust account)
Fukuoka Jisho Co., Ltd.
Trust & Custody Service Bank, Ltd. (Securities investment trust account)
The Nomura Trust and Banking Co., Ltd. (Investment trust account)
The Master Trust Bank of Japan, Ltd. (Trust account)
MetLife Alico Insurance Company K. K. GA Company JPY
NOMURA BANK (LUXEMBOURG) S.A.
Kazuhiko Enomoto
The Fuji Fire and Marine Insurance Co., Ltd.
Shikoku Railway Company
Total

41,354
13,955
7,706
7,054
6,840
3,409
3,229
2,567
2,046
1,826
89,986Percentage of total number ofinvestment units outstanding (%) (Note)
29.96
10.11
5.58
5.11
4.95
2.47
2.33
1.86
1.48
1.32
65.20

(Note) Percentage of total number of investment units outstanding is rounded down to the nearest specified unit.

3. Matters related to directors(1) The names of FRC’s directors, etc. and their fees for the 19th fiscal period are
as follows.
Title

Name of directors, etc.

Major concurrent assignments

Total fee for each title forthe 19th fiscal period(thousands of yen) (Note 2)

CEO and Representative Director
Supervisory Directors
Independent Auditor

Masayasu Saki
Takashi Shinohara
Hiroyasu Shindo
PricewaterhouseCoopers Aarata

Chairman, Fukuoka Realty Co., Ltd.
Representative Partner, Shinohara CPA Office
Representative Council, Shindo Law Firm
–

6,000
3,600
11,300(Note 1) The CEO and Representative Director and Supervisory Directors do not possess investment units of FRC under their own name or under another person’s name. Although there are cases where theSupervisory Directors may be directors of companies other than those stated above, none of the companies or those stated above have vested interest in FRC.
(Note 2) The fees for the CEO and Representative Director and Supervisory Directors are the amounts paid to them in the 19th fiscal period, and the fee to the Independent Auditor is the amount payable to it(estimate) for audits pertaining to the 19th fiscal period.
(Note 3) The total fee payable to PricewaterhouseCoopers Aarata includes fees for its services other than those stipulated in Article 2-1 of the Certified Public Accountants Act.

(2) Policy on deciding to dismiss and not to reappoint the Independent Auditor
FRC will review at its Board of Directors meetings regarding the dismissal of the Independent Auditor in accordance withthe provisions of the Investment Trusts Act, and review decisions not to reappoint the Independent Auditor following thecomprehensive consideration of the audit quality, audit fee and other various conditions.

FUKUOKA REIT CORPORATION

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II. Semiannual Report

Overview of the Investment Corporation
4. Names of asset management company, asset custodian and generaladministrators as of the end of the 19th fiscal period
The following table sets forth the asset management company, asset custodian and general administrators of FRC as ofFebruary 28, 2014.
Category of entrustment

Name

Asset Management Company

Fukuoka Realty Co., Ltd.

Asset Custodian

Mitsubishi UFJ Trust and Banking Corporation

General Administrator (accounting matters, etc.)

Mitsubishi UFJ Trust and Banking Corporation

General Administrator (administration of unitholders’ list)

Sumitomo Mitsui Trust Bank, Limited

General Administrator (administration of investment corporation bonds registry)

Sumitomo Mitsui Banking Corporation

Status of FRC’s Assets under Management
1. FRC’s asset structure
18th fiscal period
Type of asset

Area

Use

19th fiscal period

as of August 31, 2013

Total value of
properties held

(Note 1)as of February 28, 2014

Percentage of
total assets(mm of yen) (Note 2)

Total value of
properties held(%) (Note 3)

Percentage of
total assets(mm of yen) (Note 2)(%) (Note 3)

Fukuoka urban area

66,404

39.6

66,15039.5

Other Kyushu areas

35,732

21.3

35,603

21.3

Fukuoka urban area

45,36327.0

44,986

26.9

Other Kyushu areas

–

–

–

–

Fukuoka urban area

9,812

5.8

9,748

5.8

Other Kyushu areas

1,537

0.9

1,518

0.9

Deposits and other assets

9,006

5.4

9,484

5.7

Total amount of assets (Note 4)

167,857[159,043]

100.0[94.7]

167,492[158,491]

100.0[94.6]

RetailReal estate in trust

Office buildings

Others(Note 1) “Fukuoka urban area” refers to cities, towns and villages where 10% or more of the population commute to Fukuoka City for school and work, according to the 2010 census, which states “the numberof workers and students aged 15 years or older (students including those aged 14 years or younger: particular reference) commuting between their homes and places of work or school” conducted by
Fukuoka City and the Statistics Bureau of the Ministry of Internal Affairs and Communications.
“Other Kyushu area” refers to the Fukuoka and Kyushu area excluding the Fukuoka urban area.
(Note 2) “Total value of properties held” is based on the value on the balance sheet (the value of real estate in trust is the book value after depreciation).
(Note 3) Concerning the “Percentage of total assets,” the numbers are rounded off to one decimal place. The total of individual percentages in the above table may not equal 100%.
(Note 4) Figures in square brackets for “Total amount of assets” refer to the value and percentage of real estate held in effect to the total amount of assets.

FUKUOKA REIT CORPORATION

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II. Semiannual Report

Status of FRC’s Assets under Management
2. Major assets owned by FRC
The following is an overview of the major assets owned by FRC as of February 28, 2014.
Real estate property name (Note 1)

Book value(mm of yen)

Total leasable floor Total leased floor
space (m2)space (m2)Occupancy rate(%) (Note 2)

Percentage of total
leasing businessrevenue (%)(Note 3)

Main use

Canal City Hakata

31,182

46,483.44

46,457.85

99.9

15.4

RetailCanal City Hakata･B

28,54968,813.13

67,791.66

98.5

21.2

RetailPark Place Oita

16,982

104,181.76

101,577.20

97.5

14.9

RetailSunLive City Kokura

6,101

61,450.22

61,450.22

100.0

3.7

RetailSquare Mall Kagoshima Usuki

4,802

14,602.59

14,602.59

100.0

3.3

RetailKumamoto Intercommunity SC

2,157

6,968.66

6,968.66

100.0

1.2

RetailAEON Hara Shopping Center

5,360

27,313.53

27,313.53

100.0

2.8

RetailHanahata SC

1,057

2,801.15

2,801.15

100.0

0.5

RetailKurume Higashi Kushiwara SC

2,271

6,467.80

6,467.80

100.0

1.2

RetailK’s Denki Kagoshima

3,288

7,296.17

7,296.17

100.0

1.5

Retail101,754346,378.45

342,726.83

98.9

65.7

Canal City Business Center Building

13,76523,022.21

22,158.16

96.2

8.1

Office building

Gofukumachi Business Center

9,754

19,906.33

17,940.47

90.1

6.5

Office building

Sanix Hakata Building

4,132

6,293.76

6,293.76

100.0

2.6

Office building

Taihaku Street Business Center

6,643

14,677.27

14,205.93

96.8

3.9

Office building

Higashi Hie Business Center

5,165

13,695.51

13,695.51

100.0

4.4

Office building

Tenjin Nishi-Dori Center Building

2,694

3,339.32

3,339.32

100.0

1.1

Office building

Tenjin North Front Building

2,830

5,233.98

5,233.98

100.0

1.7

Office building

44,986

86,168.38

82,867.13

96.2

28.4

Amex Akasakamon Tower

1,862

4,821.25

4,537.04

94.1

0.8

OthersCity House Keyaki Dori

1,020

2,710.86

2,427.59

89.6

0.5

OthersAqualia Kego

2,752

7,415.36

6,741.60

90.9

1.5

OthersAqualia Chihaya

1,258

5,619.69

5,440.42

96.8

0.7

Others

D-Wing Tower

2,854

7,187.58

6,903.75

96.1

1.5

OthersHotel FORZA Oita

1,518

5,785.44

5,785.44

100.0

0.8

OthersOthers subtotal:

11,26633,540.18

31,835.84

94.9

5.9

Total

158,007466,087.01

457,429.80

98.1

100.0

Retail subtotal:

Office buildings subtotal:(Note 1) The properties listed above are owned in the form of trust beneficiary interest.
(Note 2) “Occupancy rate” refers to the percentage of total leased floor space to total leasable floor space and the numbers are rounded off to one decimal place.
(Note 3) “Percentage of total leasing business revenue” is rounded off to one decimal place. The percentage of total leasing business revenue of respective properties in the above table may not equal 100%.

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II. Semiannual Report

Status of FRC’s Assets under Management
3. Details of real estate properties in the portfolio
The following table provides details of the real estate properties owned by FRC as of February 28, 2014.

Real estate property name

Canal City Hakata
Canal City Hakata･B
Park Place Oita
SunLive City Kokura
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
AEON Hara Shopping Center
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima

Form ofownership

Location

2-22, 1-Chome, Sumiyoshi,
Hakata Ward, Fukuoka City
2-1, 1-Chome, Sumiyoshi,
Hakata Ward, Fukuoka City1, 2-Chome, Koen Dori Nishi,
Oita City
14-1, 2-Chome, Kami Kuzuhara,
Kokura Minami Ward, Kitakyushu
City, Fukuoka
2-18, 2-Chome, Usuki
Kagoshima City
1-5, 1-Chome, Kozono HigashiWard, Kumamoto City
27-52, 6-Chome, Sawara Ward,
Fukuoka City
9-12. 4-Chome Hanahata,
Minami Ward, Fukuoka City
370-3 Higashi Kushiwara,
Kurume City, Fukuoka

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiary
4-12, Tokai-cho, Kagoshima City
interest

Retail subtotal:
2-25, 1-Chome, Sumiyoshi,
Canal City Business Center Building
Hakata Ward, Fukuoka City
10-10, Kami Gofukumachi,
Gofukumachi Business Center
Hakata Ward, Fukuoka City
1-23, 2-Chome, Hakataeki
Sanix Hakata Building
Higashi, Hakata Ward, Fukuoka
City
3-21 Gokushomachi, Hakata
Taihaku Street Business Center
Ward, Fukuoka City
3-1-2 Higashi Hie, Hakata-ku,
Higashi Hie Business Center
Fukuoka City,
5-28, 2-chome, Chuo-ku,
Tenjin Nishi-Dori Center Building
Fukuoka City
4-20, 4-chome Chuo-ku
Tenjin North Front Building
Fukuoka City
Office buildings subtotal:
4-23, 2-Chome Maizuru, Chuo
Amex Akasakamon Tower
Ward, Fukuoka City
16-21, Kego 2-chome, Chuo
City House Keyaki DoriWard, Fukuoka City
13-17, 2-Chome Chuo Ward,
Aqualia Kego
Fukuoka City
3-12, 4-Chome, Higashi Ward,
Aqualia Chihaya
Fukuoka City
10-38, 2-Chome Daimyo Chuo
D-Wing Tower
Ward, Fukuoka City
Hotel FORZA Oita
Others subtotal:
Total

1-5-18, Chuo-cho, Oita City

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest

Total leasable
floor space (m2)Period-end
appraisalvalue(mm of yen)
(Note)

Book value
at end ofperiodReal estate appraiser(mm of yen)

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

46,483.44

32,20031,182

68,813.13

28,90028,549104,181.76

16,735

16,982

Japan Real Estate Institute61,450.22

7,410

6,101

Japan Real Estate Institute14,602.59

4,920

4,802

Japan Real Estate Institute6,968.66

2,450

2,157

Japan Real Estate Institute27,313.53

4,490

5,360

Japan Real Estate Institute2,801.15

1,120

1,057

6,467.80

2,550

2,271

7,296.17

3,410

3,288

346,378.45

104,185

101,754

23,022.21

14,60013,765

19,906.33

12,8009,754

6,293.76

4,720

4,132

Japan Real Estate Institute

14,677.27

6,770

6,643

Japan Real Estate Institute13,695.51

6,140

5,165

Tanizawa Sogo Appraisal
Co., Ltd.

3,339.32

2,750

2,694

Japan Real Estate Institute

5,233.98

2,950

2,830

Japan Real Estate Institute86,168.38

50,73044,986

4,821.25

1,730

1,862

2,710.86

1,050

1,020

7,415.36

3,370

2,752

Japan Real Estate Institute

5,619.69

1,460

1,258

Japan Real Estate Institute7,187.58

3,060

2,854

Tanizawa Sogo Appraisal
Co., Ltd.

5,785.44

1,560

1,518

Japan Real Estate Institute33,540.18
466,087.01

12,230167,145

11,266
158,007

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

(Note) "Period-end appraisal value” refers to the evaluation value based on appraisals by a real estate appraiser in conformity with the method and standards for asset evaluation stipulated in FRC’s Articles ofIncorporation and rules stipulated by the Investment Trusts Association, Japan.

FUKUOKA REIT CORPORATION

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II. Semiannual Report

Status of FRC’s Assets under Management

19th fiscal period

18th fiscal period

March 1, 2013 to August 31, 2013

Real estate property name

Number ofOccupancy
tenants at end rate at end ofof period
period(Note 1)(%) (Note 3)

September 1, 2013 to February 28, 2014

Total leasing Percentage ofTotal leasing Percentage of
Number ofOccupancy
business
total leasing
business
total leasing
tenants at end rate at end ofrevenuebusiness
revenuebusinessof period
periodduring period
revenueduring period
revenue(Note 1)(%) (Note 3)(mm of yen)(%) (Note 4)

1 [48]
1 [51]
1 [104]
1
12
2
1
2
1
1
23 [223]

99.7
99.6
97.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0

1,177
1,601
1,114
274
254
89
212
40
88
111

15.6
21.2
14.7
3.6
3.4
1.2
2.8
0.5
1.2
1.5

99.3

4,965

65.6

1 [60]
29
18
1 [65]
1 [21]
1
11
62 [205]

100.0
97.0
95.8
97.6
99.3
100.0
100.0

620
502
197
295
335
86
111

8.2
6.6
2.6
3.9
4.4
1.1
1.5

98.5

2,148

28.4

93.9
92.2
91.6
98.9
94.0
100.0

66
36
116
57
110
63

0.9
0.5
1.5
0.8
1.5
0.8

Others subtotal:

1 [62]
1 [39]
1 [122]
1 [104]
1 [130]1
6 [458]

95.2

450

Total

91 [886]

Canal City Hakata
Canal City Hakata･B
Park Place Oita
SunLive City Kokura
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
AEON Hara Shopping Center
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima
Retail subtotal:
Canal City Business Center Building
Gofukumachi Business Center
Sanix Hakata Building
Taihaku Street Business Center
Higashi Hie Business Center
Tenjin Nishi-Dori Center Building
Tenjin North Front Building
Office buildings subtotal:
Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Kego
Aqualia Chihaya
D-Wing Tower
Hotel FORZA Oita

(Note 2)

(Note 2)

(Note 2)
(Note 2)

98.8

7,565

(mm of yen)(%) (Note 4)

1 [48]
1 [47]
1 [93]
1
12
2
1
2
1
1
23 [208]

99.9
98.5
97.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0

1,167
1,602
1,128
282
253
90
212
40
88
111

15.4
21.2
14.9
3.7
3.3
1.2
2.8
0.5
1.2
1.5

98.9

4,976

65.7

1 [58]
31
19
1 [63]
1 [22]
1
11
65 [205]

96.2
90.1
100.0
96.8
100.0
100.0
100.0

613
489
197
298
334
86
129

8.1
6.5
2.6
3.9
4.4
1.1
1.7

96.2

2,150

28.4

94.1
89.6
90.9
96.8
96.1
100.0

63
37
115
56
112
63

0.8
0.5
1.5
0.7
1.5
0.8

6.0

1 [63]
1 [38]
1 [119]1 [102]
1 [132]
1
6 [455]

94.9

447

5.9

100.0

91 [868]

98.1

7,574

100.0

(Note 2)

(Note 2)

(Note 2)
(Note 2)

(Note 1) “Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for retail and office buildings among relevant properties. For the number of tenants in pass-throughmaster leasing properties, the number of sections stipulated in the tenancy agreements with end tenants is shown in square brackets. The Taihaku Street Business Center is an office building with aresidential tower. Its number of tenants comprises 12 office buildings and 51 residences in the 19th fiscal period (12 office buildings and 53 residences in the 18th fiscal period).
(Note 2) The subtotal and total of all the tenants in other than pass-through master leasing properties and the number of sections stipulated in the tenancy agreements with end tenants for pass-throughmaster leasing properties is shown in square brackets in the totals column for “Number of tenants.”(Note 3) “Occupancy rate” refers to the percentage of total leased floor space to total leasable floor space and the numbers are rounded off to one decimal place.
(Note 4) “Percentage of total leasing business revenue” is rounded off to one decimal place, and the total of individual percentages in the above table may not equal 100%.

FUKUOKA REIT CORPORATION

14

II. Semiannual Report

Status of FRC’s Assets under Management
4. Securities incorporated in the portfolio
No relevant items

5. List of specific transaction contract amount and status of fair value
The following table provides the contract amount of specific transaction by FRC and the status of its fair value as of February 28,
2014.
Contract amount, etc.
Category

Of which,exceeding 1 year

(Note 1)

Interest rate swap transaction(Payable fixed; Receivable floating)

Off-market transaction
Total

Fair value(mm of yen)Type

(mm of yen)
(Note 2)

18,300

8,000

(38)

18,300

8,000

(38)

(Note 1) The contract amount, etc. of the interest rate swap transaction is based on the notional principal amount.
(Note 2) The fair value is calculated by the counterparty of the transaction contract based on the actual interest rate on the market and other factors.

6. Status of other assets
All real estate trust beneficiary interests owned by FRC and described in note 3. “Details of real estate properties in theportfolio” above. There is no incorporation of other specified assets as of the end of the 19th fiscal period.

FUKUOKA REIT CORPORATION

15

II. Semiannual Report

Capital Expenditures for Owned Real Estate
1. Planned capital expenditures
The following table provides major items of capital expenditures associated with currently planned renovations. for real estate
properties owned by FRC as of the date of this Semiannual Report. Furthermore, the planned construction costs indicatedbelow include portions that are classified as expenses in accounting. In addition, FRC will implement renewal construction
work in order to maintain and improve the competitiveness of properties in the market as well as tenant satisfaction, on top of
the construction, facilities and replacement work for which expenditures will be made regularly.
Planned construction cost
(mm of yen)

Real estate property
nameLocation

PurposeSchedule
Total

Canal City Hakata

Hakata Ward,
Fukuoka City

Canal City Hakata･ B

Hakata Ward,
Fukuoka City

Amount paid
Amountduring thealready paid
periodCommon area repairs and improvements

From May 2014 to November
2014

68

–

–

Common area repairs and improvements

From May 2014 to February
2015

216

–

–

Renovation work

March 2014

21

–

–

Common area repairs and improvements

From March 2014 to February
2015

115

–

–

Floor expansion at Magnolia Court

From August 2013 to April
2014

984

291

483

Environmental beautification

November 2014

27

–

–

Common area repairs and improvements

From April 2014 to November
2014

49

–

–

Renovation work

April 2014

14

–

–

Gofukumachi Business Hakata Ward,
CenterFukuoka City

Common area repairs and improvements

From September 2014 to
February 2015

43

–

–

Taihaku Street
Business Center

Common area repairs and improvements

February 2015

74

–

–

Park Place Oita

Canal City BusinessCenter Building

Oita City

Hakata Ward,
Fukuoka City

Hakata Ward,
Fukuoka City

2. Capital expenditures during the 19th fiscal period
The following table provides the overview of major construction work that was completed in the 19th fiscal period out of thecapital expenditures totaling 848 million yen. Furthermore, FRC conducted construction of 1,013 million yen in total in the
19th fiscal period, combined with the 157 million yen in repair and maintenance expenses that were classified as expenses inaccounting and 7 million yen in expenses for restoration to former state.
Real estate property name
Canal City Hakata
Canal City Hakata･B

Park Place Oita

LocationHakata Ward, Fukuoka City
Hakata Ward, Fukuoka City

Construction cost

Purpose

PeriodEnvironmental beautification

November 201318

Replacement of air-conditioning equipment

December 201329

Environmental beautification

November 201337

Common area repairs and improvements

February 2014

61

Common area repairs and improvements

From September 2013 to
February 2014

83

Renovation work

From October 2013
to February 2014

125

Oita City(mm of yen)

SunLive City Kokura

Kokura Minami Ward,
Kitakyushu City

Common area repairs and improvements

January 201438

Taihaku Street Business Center

Hakata Ward, Fukuoka City

Common area repairs and improvements

September 201317

Aqualia Kego

Chuo Ward, Fukuoka City

Renovation work

September 201313

FUKUOKA REIT CORPORATION

16

II. Semiannual Report

Capital Expenditures for Owned Real Estate
3. Reserves for long-term repair and maintenance plans
FRC has deposited the following amounts from the cash flows generated during the 19th fiscal period in order to fund largescale repair and maintenance work in the medium to long term future, based on long-term repairs and maintenance plans
prepared for respective properties.
(mm of yen)
15th fiscal period

Fiscal period

16th fiscal period

September 1, 2011 to
February 29, 2012

17th fiscal period

March 1, 2012 toAugust 31, 2012

September 1, 2012 toFebruary 28, 2013

18th fiscal period
March 1, 2013 toAugust 31, 2013

19th fiscal period
September 1, 2013 to
February 28, 2014

Balance of deposits at beginning of period

769

1,116

838

350

700

Deposits during the period

347

351

350

350

–

–

630

838

–

–

1,116

838

350

700

700

Amounts used from deposits during the period
Deposits carried forward to the next period

Expenses and Liabilities
1. Details of expenses related to asset management(thousands of yen)Item

18th fiscal period(a) Asset management fees

19th fiscal period
445,912446,921(b) Asset custody fees

6,071

6,242

(c) Administrative service fees

47,022

48,863(d) Directors’ compensations

9,600

9,600

(e) Other operating expenses

50,62764,188

Total

559,233

575,817(Note) Aside from the amounts of the asset management fees shown above, a total of 31,825 thousand yen for the 18th fiscal period has been paid for asset management of D-Wing Tower, Hotel FORZA Oita
and Tenjin North Front Building. The amount has been included in the acquisition cost of respective properties.

2. Status of debt
As of the end of the 19th fiscal period (February 28, 2014), FRC has the following debt from respective financial institutions.
Category
LenderSumitomo Mitsui Banking
Corporation
Mizuho Bank
The Norinchukin Bank
The Hiroshima Bank
The Kitakyushu Bank
Current
The Iyo Bank
maturities
of long-term The Bank of Saga
The Higo Bank
debt
The Shinwa Bank
Development Bank of Japan
Resona Bank
Subtotal

Balance as
Balance as Average
Drawdown of September 1, of February 28, interest
date
2013
2014
rate (%)(mm of yen)

(mm of yen)

Repayment
date

Repayment
methodUse offunds

Description(Note 1)

June 30, 2010

2,000

–

1.030

December 30, Lump-sum Refinance No collateral/
2013
upon maturity
fund
No guarantee

July 30, 2010

2,600
4,000
1,400
800
500
500
300
200

2,600
4,000
1,400
800
500
500
300
200

1.410

July 31, 2014

4,000

4,000

–

300

16,30014,600August 31,
2009
September 30,
2010

Lump-sum Refinance No collateral/
upon maturity
fund
No guarantee

August 29,
Lump-sum Refinance No collateral/
2014
upon maturity
fund
No guarantee
September 30, Lump-sum Refinance No collateral/
1.325
2014
upon maturity
fund
No guarantee
1.710

FUKUOKA REIT CORPORATION

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II. Semiannual Report

Expenses and Liabilities
Category
LenderBalance as Average
Balance as
Drawdown of September 1, of February 28, interest
date
2014
rate (%)
2013

Development Bank of Japan June 30, 2009
August 31,
2009
August 31,
Development Bank of Japan
2009
Sumitomo Mitsui Banking
June 30,
Corporation
2010
SeptemberResona Bank30, 2010
December 30,
The Bank of Fukuoka
2010
March 1,The Bank of Fukuoka
2011
March 1,The Nishi-Nippon City Bank
2011
March 1,Development Bank of Japan
2011
July 29,
The Bank of Fukuoka
2011
July 29,
The Nishi-Nippon City Bank
2011
The Dai-Ichi Life Insurance
July 29,
Company
2011
July 29,
Shinsei Bank
2011
Sumitomo Mitsui Trust
July 29,
Bank
2011
December 30,
The Bank of Fukuoka
2011
December 30,
The Hiroshima Bank
2011
December 30,
The Oita Bank
2011
December 30,
The Eighteenth Bank
2011
December 30,
The Shinwa Bank
2011
December 30,
The Kitakyushu Bank
2011
January 31,
The Kagoshima Bank
2012
January 31,
Resona Bank
2012
Sumitomo Mitsui Banking
January 31,
Corporation2012
February 29,
Mizuho Bank
2012
Mitsubishi UFJ Trust andMarch 1,Banking Corporation2012
Sumitomo Mitsui Banking
March 30,
Corporation
2012
March 30,
Resona Bank
2012
March 30,
The Higo Bank
2012
Development Bank of Japan

Long-term
debt(mm of yen)

(mm of yen)

Repayment
date

Repayment
methodUse offunds

Description

Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinancefund
Acquisition
fund
Acquisition
fund
Acquisition
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinancefund
Acquisition
fund
Refinance
fund
Refinance
fund
Refinance
fund

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee(Note 1)

2,400

2,325

4,000

4,000

4,000

4,000

1,200

1,200

300

–

1,500

1,500

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

1,000

1,000

1,000

1,000

1,000

1,000

1,500

1,500

500

500

500

500

500

500

500

500

500

500

100

100

400

400

500

500

500

500

2,000

2,000

500

500

600

600

300

300

2.200 June 30, 2017

Lump-sumupon maturity
Lump-sum
2.170
upon maturity
Lump-sum
1.127 June 30, 2015
upon maturity
September 30, Lump-sum
1.325
2014
upon maturity
December 30, Lump-sum
0.677
2016
upon maturity
February 29,
Lump-sum
0.675
2016
upon maturity
February 29,
Lump-sum
0.774
2016
upon maturity
February 29,
Lump-sum
0.825
2016
upon maturity
Lump-sum
1.305 July 31, 2017upon maturity
Lump-sum
1.305 July 31, 2017upon maturity
Lump-sum
1.800 July 31, 2018upon maturity
Lump-sum
1.208 July 29, 2016
upon maturity
Lump-sum1.041 July 31, 2015
upon maturity
December 30, Lump-sum
0.827
2017
upon maturity
December 30, Lump-sum
1.182
2016
upon maturity
December 30, Lump-sum
1.182
2016
upon maturity
December 30, Lump-sum
1.182
2016
upon maturity
December 30, Lump-sum
1.182
2016
upon maturity
December 30, Lump-sum
1.182
2016
upon maturity
January 31,
Lump-sum
1.168
2017
upon maturity
January 31,
Lump-sum
1.218
2017
upon maturity
January 31,
Lump-sum
1.338
2019
upon maturity
February 29,
Lump-sum
1.117
2016
upon maturity
Lump-sum
1.170 March 31, 2017upon maturity
March 31,
Lump-sum
1.203
2017
upon maturity
March 31,
Lump-sum
1.253
2017
upon maturity
March 31,
Lump-sum
1.203
2017
upon maturity
1.950

FUKUOKA REIT CORPORATION

18

August 31,
2015
August 31,
2016(Note 2)

II. Semiannual Report

Expenses and Liabilities
Category
LenderLong-term
debt

Balance as Average
Balance as
Drawdown of September 1, of February 28, interest
date
2014
rate (%)
2013(mm of yen)

The Bank of Fukuoka
The Nishi-Nippon City BankThe Oita Bank
The Miyazaki BankThe Shinwa Bank
June 29, 2012
The Iyo Bank
The Bank of Saga
The Eighteenth Bank
The Kitakyushu Bank
September
Sumitomo Mitsui TrustBank28, 2012
SeptemberResona Bank28, 2012
February 1,
The Nishi-Nippon City Bank
2013
February 28,
The Nishi-Nippon City Bank
2013
February 28,
Mizuho Bank
2013
Sumitomo Mitsui Trust
February 28,
Bank
2013
Mitsubishi UFJ Trust andFebruary 28,
Banking Corporation2013
February 28,
Aozora Bank
2013
Mitsubishi UFJ Trust andMarch 29,
Banking Corporation
2013
Aozora Bank

June 28, 2013

Subtotal
Total(mm of yen)

Repayment
date

Repayment
methodUse offunds

Description

0.858 June 30, 2017

Lump-sumupon maturity

Refinance
fund

No collateral/
No guarantee(Note 1)

1,000
1,000
700
700
600
500
500
500
500

1,000
1,000
700
700
600
500
500
500
500

600

600

0.627

2,000

2,000

1.033

2,500

2,500

0.725

1,900

1,900

0.725

1,700

1,700

0.725

1,100

1,100

0.775

1,500

1,500

0.575

600

600

0.575

600

600

0.577

1,000

1,000

0.627

54,80071,10054,42569,025September 30, Lump-sum
Refinance No collateral/
2016
upon maturity
fund
No guarantee
September 29, Lump-sum
Refinance No collateral/
2017
upon maturity
fund
No guarantee
February 29,
Lump-sum Acquisition No collateral/
2020
upon maturity
fund
No guarantee
February 28,
Lump-sum
Refinance No collateral/
2018
upon maturity
fund
No guarantee
February 29,
Lump-sum
Refinance No collateral/
2020
upon maturity
fund
No guarantee
February 28,
Lump-sum
Refinance No collateral/
2018
upon maturity
fund
No guarantee
February 28,
Lump-sum
Refinance No collateral/
2018
upon maturity
fund
No guarantee
February 28,
Lump-sum
Refinance No collateral/
2018
upon maturity
fund
No guarantee
March 30,
Lump-sum
Refinance No collateral/
2018
upon maturity
fund
No guarantee
Lump-sum
Refinance No collateral/
June 30, 2020
upon maturity
fund
No guarantee(Note 1) The average interest is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest of debt for which FRC conducted interest rate
swap transactions is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swap.
(Note 2) The debt is subject to repayment of 75 million yen on the final day of every 6 months following the final day of December 2009 as the initial repayment date, with 1,875 million yen to be repaid on
the final repayment date. Furthermore, as the 150 million yen scheduled for repayment within a year is included in Long-term debt for the convenience of comparison, the balances do not match thefigures recorded in the balance sheets as Current maturities of long-term debt and Long term debt payable.

3. Status of investment corporation bonds
As of February 28, 2014, FRC has the following investment corporation bonds outstanding.
Issue

Issue date

Balance as of
Balance as
Decrease during
September 1,of February 28,
the fiscal period
2013
2014
(mm of yen)
(mm of yen)

The first series of December 30,
unsecured bonds
2013

CouponMaturity date

Maturity
methodUse

Description

1.32

December 29,
2023

Lump-sumupon maturity

Repaymentof debt

No collateral/
No guarantee(%)(mm of yen)

–

–

2,000

(Note 1)

(Note 1) The Bonds may be repurchased and cancelled by FRC at any time on and after the date following the payment date, unless otherwise determined by the book-entry transfer agent.
(Note 2) The bonds are subject to the limited pari passu clause among specified investment corporation bonds.

FUKUOKA REIT CORPORATION

19(Note 2)

II. Semiannual Report

Acquisitions and Sales during the 19th Fiscal Period
1. Acquisition and sale of real estate and asset-backed securities, etc.
No relevant items

2. Acquisition and sale of other assets
No relevant items

3. Survey on prices of specified assets, etc.
(1) Real estate, etc.
No relevant items(2) Other
No relevant items

4. Transactions with interested parties and major unitholders(1) Transaction status
No relevant items(2) Amount of fees paid, etc.
FRC paid the following fees to the interested parties, etc. and major unitholders during the 19th fiscal period.
Category
Property leasing brokerage fees (Note 3)
Property management fees (Note 2)
Outsourcing fees (Note 3) (Note 5)

Other operating expenses (Note 3)

Total paid fees Breakdown of transactions with interested parties, etc. and major unitholders(A)
Paid amount (B)Paid party(thousand yen)(thousand yen)
Fukuoka Jisho Co., Ltd.
Park Place Oita Co., Ltd.
Fukuoka Jisho Co., Ltd.
276,505
Park Place Oita Co., Ltd.
Fukuoka Jisho Co., Ltd.
1,255,608 Park Place Oita Co., Ltd.
Sunlife Co., Ltd.
Fukuoka Jisho Co., Ltd.
1,103,015 Park Place Oita Co., Ltd.
Sunlife Co., Ltd.

9,549
3,725
170,374
95,048898,349
196,681
56,42682,700180,954
3,895

21,463(B)/(A)
(%)

44.5
17.4
61.6
34.4
71.5
15.7
4.5
7.5
16.4
0.4

(Note 1) Interested parties, etc. and major unitholders refer to the interested parties, etc. of the asset management company who has concluded an asset management agreement with FRC, as designatedin Article 123 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations, and major unitholders of the asset management company as defined in Article 29-4-2 of the
Financial Instruments and Exchange Act. Of these interested parties, etc. and major unitholders, the above table indicates the paid parties to which FRC paid fees during the 19th fiscal period.
Fukuoka Jisho Co., Ltd. is an interested party, etc. as well as a major shareholder, while Park Place Oita Co., Ltd. and Sunlife Co., Ltd. are interested parties, etc.
(Note 2) The property management fees do not include the following construction supervision fees. In addition, of the fees below, the construction supervision fees paid upon acquiring real estate are includedin the acquisition cost of the relevant real estate.
Fukuoka Jisho Co., Ltd.
7,508 thousand yen
Park Place Oita Co., Ltd.
10,504 thousand yen(Note 3) The real estate leasing brokerage fees, outsourcing fees and other operating expenses include property leasing brokerage fees, etc. paid to third parties through interested parties, etc.
(Note 4) Aside from the paid fees shown above, FRC paid the following amounts for repairs, etc. that were ordered to interested parties, etc. during the 19th fiscal period. The amounts include construction
work fees paid to third parties through interested parties, etc.
Fukuoka Jisho Co., Ltd.
261,371 thousand yen
Park Place Oita Co., Ltd.
334,014 thousand yen
Sunlife Co., Ltd.
30,308 thousand yen(Note 5) The outsourcing fees shown above are paid fees, etc. regarding building management outsourcing fees, and do not coincide with the Outsourcing fees described in VI. Notes to financial statements (Notes
to Statements of income) that include property management fees and others.

FUKUOKA REIT CORPORATION

20

II. Semiannual Report

Acquisitions and Sales during the 19th Fiscal Period
5. Transactions with the asset management company regarding
concurrent work conducted by the asset management company
The asset management company (Fukuoka Realty Co., Ltd.) concurrently conducts land and building transaction business but
there was no relevant transaction conducted in the 19th fiscal period. Moreover, the asset management company does notconcurrently conduct any of the class 1 financial instruments transaction business, class 2 financial instruments transaction
business or real estate syndication business, and has no such transactions with FRC.

Overview of Accounting
1. Assets, liabilities, principal and profits/loss
Please refer to the IV. Balance Sheets, V. Statements of Income, VI. Statements of Changes in Net Assets, VII. Cash Flow
Statements, and VIII. Notes to Financial Statements on later pages of this report.

2. Changes in calculation method of depreciation
No relevant items

3. Changes in valuation method of real estate
No relevant items

4. Overview of self-managed investment trust beneficiary certificatesNo relevant items

Other
Handling of fractions of monetary amounts and percentage figures
Unless otherwise stated, the figures less than the specified unit are rounded down for monetary amounts and rounded off to
one decimal place for percentage figures throughout this Semiannual Report.

FUKUOKA REIT CORPORATION

21

III. Independent Auditor's Report

FUKUOKA REIT CORPORATION

22

IV. Balance Sheets(thousands of yen)
19th fiscal period

18th fiscal period

Account(as of August 31, 2013)(as of February 28, 2014)

AssetsCurrent assets
Cash and deposits

2,986,790

3,687,020

Cash and deposits in trust

4,457,189

4,185,847

Operating accounts receivable

350,841

267,760

Prepaid expenses

333,377

259,075

Consumption taxes receivable

74,887

–

17

43

5,167

6,507

8,208,271

8,406,255

Deferred tax assets
OthersTotal current assets
Noncurrent assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation*1

76,005,077

Structures in trust

1,158,771

Accumulated depreciation(380,913)

Machinery and equipment in trust

546,092

Accumulated depreciation(179,676)

Vehicles and transport equipment in trust
Accumulated depreciation

61,516,335
777,857(413,896)

366,415(199,688)

Accumulated depreciation(729,560)

60,650,833
773,347

565,696
366,007747(7)
1,139,208

76,360,548(15,709,714)
1,187,244

747

Tools and fixtures in trust
Lands in trust*1(14,488,742)

739

(55)

691

1,225,444
409,647
93,998,578*1(787,134)

438,309*1

93,998,578

192,182

483,356

157,261,757

156,711,124

1,765,318

1,765,318

16,205

14,681

1,781,523

1,779,999

Lease and guarantee deposits

10,00010,000

Lease and guarantee deposits in trust

100,000

100,000

Long-term prepaid expenses

463,384

443,574

Total investment and other assets

573,384

553,574

159,616,665

159,044,698–

19,32232,19022,169Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold right in trust
Other intangible assets in trust
Total intangible assets
Investment and other assets

Total noncurrent assets
Deferred assets
Investment corporation bond issuance expenses
Investment unit issuance expenses
Total deferred assets
Total assets

32,19041,492

167,857,128

167,492,446

FUKUOKA REIT CORPORATION

23

IV. Balance Sheets(thousands of yen)Account

19th fiscal period

18th fiscal period
as of August 31, 2013

as of February 28, 2014

Liabilities
Current liabilities
Operating accounts payable
Current maturities of long-term debt

592,753497,966

16,450,000

14,750,000

Account payable-other

17,40928,621

Accrued expenses

325,769

321,216

Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities

885

1,402

–

159,101

896,621854,397904,777

641,086

19,188,217

17,253,792

Noncurrent liabilities
Investment corporation bonds
Long-term debt–

2,000,000

54,650,000

54,275,000

321,369

325,105

Tenant leasehold and security deposits
Tenant leasehold and security deposits received in trust*1

Total noncurrent liabilities

11,985,078*1

11,959,023

66,956,447

68,559,128

86,144,664

85,812,921

79,441,236

79,441,236

Unappropriated surplus

2,271,226

2,238,288

Total surplus

2,271,226

2,238,288

81,712,463

81,679,524

Total liabilities
Net Assets
Unitholders' equity
Unitholders’ capital
Surplus

Total unitholders' equity
Total net assets*3

Total liabilities and net assets

81,712,463
167,857,128

FUKUOKA REIT CORPORATION

24*3

81,679,524
167,492,446

V. Statements of Income(thousands of yen)
19th fiscal period

18th fiscal period

Account(March 1, 2013 to August 31, 2013)(September 1, 2013 to February 28, 2014)

Operating revenues
Leasing revenues - real estate*1

7,095,131*1

7,085,436

Other leasing revenues - real estate*1

470,254

7,565,385 *1

489,353*1, *2

4,157,501

7,574,790

Operating expenses
Expenses related to leasing business
Asset management fees

*1, *2445,912

4,197,450
446,921

Asset custody fees

6,071

6,242

Administrative service fees

47,022

48,863

Director’s compensations

9,600

9,600

Other operating expenses

50,627

Operating income

4,716,734

64,1882,848,650

4,773,267
2,801,522

Non-operating revenues
Interest received

758

Others

485

725
1,243

1,638

2,364

Non-operating expenses
Interest payment

443,830

427,174

Interest expenses on investment corporation bonds

–

4,412

Amortization of investment corporation bond issuance
expenses–

327

Amortization of investment unit issuance expenses

10,021

10,021

Financing related expenses

123,802

Ordinary income

577,654

122,163

2,272,239

Net income before income taxes

2,239,788

2,272,239

Income taxes-current

1,038

Income taxes-deferred

4

Net income

564,098
2,239,788

1,548
1,042

(25)

1,522

2,271,196

2,238,265

Surplus brought forward

29

22

Unappropriated surplus

2,271,226

2,238,288

FUKUOKA REIT CORPORATION

25

VI. Statements of Changes in Net Assets
18th fiscal period (March 1, 2013 to August 31, 2013)
Item
Balance as of March 1, 2013
Changes in the current fiscal period
Issuance of new investment units
Dividends
Net income
Total of changes in the current fiscal period
Balance as of August 31, 2013

Unitholders’ capital
69,177,628(thousands of yen)
Unitholders’ equity
Surplus
Unappropriated surplus
2,004,391

10,263,608

10,263,608
79,441,236(2,004,361)
2,271,196
266,835
2,271,226

Total unitholders’ equity
71,182,019

71,182,019

10,263,608(2,004,361)
2,271,196
10,530,444
81,712,463

10,263,608(2,004,361)
2,271,196
10,530,444
81,712,463

19th fiscal period (September 1, 2013 to February 28, 2014)

Item
Balance as of September 1, 2013
Changes in the current fiscal period
Dividends
Net income
Total of changes in the current fiscal period
Balance as of February 28, 2014

Total net assets(thousands of yen)
Total unitholders’ equity

79,441,236

Unitholders’ equity
Surplus
Unappropriated surplus
2,271,226

81,712,463

81,712,463–
79,441,236(2,271,204)
2,238,265(32,938)
2,238,288(2,271,204)
2,238,265(32,938)
81,679,524(2,271,204)
2,238,265(32,938)
81,679,524

Unitholders’ capital

FUKUOKA REIT CORPORATION

26

Total net assets

VII. Cash Flow Statements(thousands of yen)
18th fiscal period

Account

19th fiscal period

March 1, 2013 toAugust 31, 2013

September 1, 2013 to
February 28, 2014

Net cash provided by (used in) operating activities
Net income before income taxes

2,272,239

2,239,788

Depreciation and amortization expenses

1,343,234

1,354,793—

327

Amortization of investment corporation bond issuance expenses
Amortization of investment unit issuance expenses

10,021

10,021

Interest received

(758)

(725)

Interest payment

443,830

431,586

Decrease (increase) in operating account receivables(72,305)

83,080Decrease (increase) in consumption taxes receivable(74,887)

74,887

Increase (decrease) in accrued consumption taxes(157,514)

159,101

Increase (decrease) in operating account payable

23,264(55,099)

Increase (decrease) in account payable-other(15,345)

5,855

Increase (decrease) in accrued expenses

14,403825

Increase (decrease) in advances received

49,131(42,223)

Increase (decrease) in deposits expenses

319,125(263,690)

Decrease (increase) in prepaid expenses(97,364)

74,302

Decrease (increase) in long-term prepaid expenses(13,955)

19,810

Others, net

10,264

44,169Subtotal

4,053,386

4,136,811

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in)operating activities

758

725

(443,951)(436,965)(1,136)(1,031)

3,609,056

3,699,539(7,858,163)(887,097)—(1,280)

4,410

3,765

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets in trust
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits

—

(30)

Proceeds from tenant leasehold and security deposits in trust

359,717

121,652

Repayment of tenant leasehold and security deposits in trust(375,748)(147,707)

Proceeds from restricted trust deposits

4,119

6,373

Payments for restricted trust deposits(32,165)(11,907)(7,897,830)(916,231)

Decrease in short-term debt

(2,700,000)—

Proceeds from long-term debt

1,600,000—

Repayment of long-term debt

(2,475,000)(2,075,000)—

2,000,000

Net cash provided by (used in) investment activities
Net cash provided by (used in) financial activities

Proceeds from issuance of investment corporation bonds
Proceeds from issuance of investment units

10,263,608—

Dividends paid

(2,003,994)(2,268,893)

Payment of investment corporation bond issuance expenses—(16,062)

Payment of investment unit issuance expenses(33,254)—

Net cash provided by (used in) financial activities

4,651,360(2,359,955)

Net increase (decrease) in cash and cash equivalents

362,586

423,353

Balance of cash and cash equivalents at beginning of period
Balance of cash and cash equivalents at end of period

7,024,869
7,387,455*1

FUKUOKA REIT CORPORATION

27

7,387,455*1

7,810,809

VIII. Notes to Financial Statements(Significant accounting policies)
1. Depreciation method for noncurrent assets(1) Property, plant and equipment
Depreciation is calculated using the straight-line method.
The useful lives of major items of property, plant and equipment are as follows:
Buildings in trust:
10–50 years
Structures in trust:
15–50 years
Machinery and equipment in trust:
15–17 years
Vehicles and transport equipment in trust:
7 years
Tools and fixtures in trust:
5–15 years(2) Long-term prepaid expenses
Long-term prepaid expenses are amortized utilizing the straight-line method.

2. Accounting for deferred assets

Investment unit issuance expenses
Investment unit issuance expenses are amortized utilizing the straight-line method over three years.
Investment corporation bond issuance expenses
Investment corporation bond issuance expenses are amortized utilizing the straight-line method overthe period through redemption.

3. Standards for recognition of revenues and expenses

Accounting treatment of property taxes, etc.
In connection with property taxes, city planning taxes and depreciated asset taxes, FRC uses themethod of charging the corresponding amounts of assessed taxes to the current fiscal period as expenses
related to leasing business.
Furthermore, FRC includes an amount equivalent to the property taxes, etc. paid to the sellers during
the first fiscal year as an acquisition cost, not as expenses, in connection with the acquisition of real estateor entrusted beneficiary interests in real estate as entrusted property.

4. Method of hedge accounting(1) Method of hedge accounting
Deferred hedge accounting is applied for interest rate swap transactions. However, special treatment
is applied for interest rate swap transactions that satisfy the requirement for special treatment.
(2) Hedging instruments and hedged items
Hedging instrument: interest rate swap transactions
Hedged items: interest rates of borrowings(3) Hedging policy
FRC conducts derivative transactions to hedge interest rate fluctuation risks for floating-rate borrowings
based on FRC’s Articles of Incorporation.
(4) Method for assessing the effectiveness of hedging
Assessment of the effectiveness of hedging is omitted as requirements are satisfied for special
treatment for interest rate swap transactions.

5. Scope of funds (cash and cash equivalents) in Cashflows statements

The funds (cash and cash equivalents) in the cash flow statements consist of cash on hand and cashin trust; deposits that can be withdrawn at any time and deposits in trust; and short-term investments witha maturity of 3 months or less from the date of acquisition, which are readily convertible to cash and bear
only an insignificant risk of value fluctuation.

6. Other significant items fundamental to preparing
the financial statements(1) Accounting methods for trust beneficiary interests in real estate as entrusted property
Regarding trust beneficiary interests in owned real estate as entrusted property, all asset and liability
accounts of the entrusted properties as well as all revenue and expense accounts generated by theentrusted properties are recorded in relevant accounts on the balance sheets and statements of income.
Furthermore, the following material accounts are separately stated in the balance sheets for entrusted
properties recorded in relevant accounts.
① Cash and deposits in trust② Buildings in trust, structures in trust, machinery and equipment in trust, vehicles and transport
equipment in trust, tools and fixtures in trust, lands in trust and construction in progress in trust③ Leasehold right in trust④ Other intangible assets in trust⑤ Lease and guarantee deposits in trust⑥ Tenant leasehold and security deposits received in trust(2) Accounting for consumption taxes
National and local consumption taxes are accounted with the consumption taxes excluded.

FUKUOKA REIT CORPORATION

28

VIII. Notes to Financial Statements(Notes to balance sheets)
18th fiscal period

19th fiscal period

as of August 31, 2013

as of February 28, 2014

*1. Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:
Buildings in trust
Lands in trust
Total
Secured liabilities are as follows:*1. Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:(thousands of yen)
5,734,249
11,618,595
17,352,844(thousands of yen)
Tenant leasehold and security deposits
2,130,751
received in trust
2. Balance of unused committed line of credit
FRC has executed committed line of credit agreements with its banks primarily
to conduct efficient and dynamic cash management.
Committed line of credit agreement 1(thousands of yen)Contract dateJuly 29, 2013
Credit limit
6,000,000
Outstanding debt at end of period–
Unused committed line of credit at end of
6,000,000
periodCommitted line of credit agreement 2(thousands of yen)Contract dateFebruary 27, 2012
Credit limit
6,000,000
Outstanding debt at end of period–
Unused committed line of credit at end of
6,000,000
period
*3. Minimum net assets designated in Article 67- 4 in the Act on
Investment Trusts and Investment Corporations

Buildings in trust
Lands in trust
Total
Secured liabilities are as follows:(thousands of yen)
5,714,468
11,618,595
17,333,064(thousands of yen)
Tenant leasehold and security deposits
2,107,231
received in trust
2. Balance of unused committed line of credit
FRC has executed committed line of credit agreements with its banks primarily
to conduct efficient and dynamic cash management.
Committed line of credit agreement 1(thousands of yen)Contract dateJuly 29, 2013
Credit limit
6,000,000
Outstanding debt at end of period–
Unused committed line of credit at
6,000,000
end of period
Committed line of credit agreement 2(thousands of yen)Contract dateFebruary 26, 2014
Credit limit
7,000,000
Outstanding debt at end of period–
Unused committed line of credit at
7,000,000
end of period*3. Minimum net assets designated in Article 67- 4 in the Act on
Investment Trusts and Investment Corporations(thousands of yen)(thousands of yen)

50,00050,000FUKUOKA REIT CORPORATION

29

VIII. Notes to Financial Statements(Notes to statements of income)18th fiscal period

19th fiscal period(March 1, 2013 to August 31, 2013)(September 1, 2013 to February 28, 2014)*1. Breakdown of revenues and expenses related to real estate leasing business
A. Real estate leasing business revenues(thousands of yen)
Leasing revenues - real estate
Rents
5,625,804
Common charges
1,036,880
Parking revenues
432,446
Total
7,095,131
Other leasing revenues - real estate
Incidental income
435,120
Other miscellaneous income
35,133
Total
470,254
Total real estate leasing business revenues
7,565,385
1,532,776
B. Expenses related to real estate leasing
business
Expenses related to leasing businessOutsourcing fees
Repair and maintenance expenses
147,861
Taxes and other public charges
551,509
Insurance premiums and trust compensation
52,759
Utilities expenses
411,171
Depreciation and amortization expenses
1,343,234
Other expenses related to real estate leasing
118,189business
4,157,501
Total expenses related to real estate leasing
business
3,407,883
C. Revenues and expenses related to real estateleasing business (A - B)
*2. Transactions with major unitholders(thousands of yen)
1,222,021
Expenses related to real estate leasing
business*1. Breakdown of revenues and expenses related to real estate leasing business(thousands of yen)
A. Real estate leasing business revenues
Leasing revenues - real estate
Rents
5,621,912
Common charges
1,036,864
Parking revenues
426,660
Total
7,085,436
Other leasing revenues - real estate
Incidental income
406,133
Other miscellaneous income
83,219Total
489,353
Total real estate leasing business revenues
7,574,790
B. Expenses related to real estate leasing
business
Expenses related to leasing businessOutsourcing fees
1,532,114
Repair and maintenance expenses
157,179
Taxes and other public charges
551,344
Insurance premiums and trust compensation
51,949
Utilities expenses
386,833
Depreciation and amortization expenses
1,354,793
163,235
Other expenses related to real estate leasing
business
4,197,450
Total expenses related to real estate leasing
business
3,377,339
C. Revenues and expenses related to real estateleasing business (A - B)
*2. Transactions with major unitholders(thousands of yen)
1,192,756
Expenses related to real estate leasing
business(Notes to statements of changes in net assets)
18th fiscal period

19th fiscal period

as of August 31, 2013

as of February 28, 2014

Total number of authorized investment units and total number of investment
units issued
Total number of authorized investment units
2,000,000 units
Total number of investment units issued
138,000 units

Total number of authorized investment units and total number of investment
units issued
Total number of authorized investment units
2,000,000 units
Total number of investment units issued
138,000 units

FUKUOKA REIT CORPORATION

30

VIII. Notes to Financial Statements(Notes to cash flow statements)(thousands of yen)

18th fiscal period

19th fiscal period(March 1, 2013 to August 31, 2013)(September 1, 2013 to February 28, 2014)*1. Relationship between the balance of cash and cash equivalents at end of period *1. Relationship between the balance of cash and cash equivalents at end of period
and the amounts of the corresponding accounts on the balance sheets
and the amounts of the corresponding accounts on the balance sheets(as of August 31, 2013)(as of February 28, 2014)
Cash and deposits
2,986,790
Cash and deposits
3,687,020
Cash and deposits in trust
4,457,189
Cash and deposits in trust
4,185,847
Restricted trust deposits (Note)(56,524)
Restricted trust deposits (Note)(62,059)
Cash and cash equivalents
7,387,455
Cash and cash equivalents
7,810,809(Note) Restricted trust deposits are trust deposits reserved for refunding tenant(Note) Restricted trust deposits are trust deposits reserved for refunding tenantleasehold and security deposits deposited by tenants and for otherleasehold and security deposits deposited by tenants and for otherpurposes.
purposes.

(Notes to leases)(thousands of yen)

18th fiscal period

19th fiscal period

as of August 31, 2013

as of February 28, 2014

The future lease revenues under the non-cancellable operating leases were as
follows.
(as of August 31, 2013)
Due within 1 year
6,146,906
Due after 1 year
30,428,244
Total
36,575,150

The future lease revenues under the non-cancellable operating leases were as
follows.
(as of February 28, 2014)
Due within 1 year
6,209,527
Due after 1 year
27,934,690
Total
34,144,218(Notes to financial instruments)
1. Matters concerning status of financial instruments(1) Policy on handling financial instruments
In order to secure stable earnings and steady growth of assets under management, FRC procures funds primarily throughborrowings from financial institutions, issuance of investment corporation bonds or issuance of investment units forproperty acquisitions, repair and maintenance work, repayment of interest-bearing debt and other purposes.
In procuring interest-bearing debt, FRC borrows funds primarily in long-term, fixed interest debt based on the policyof establishing a solid financial structure, and conducts conservative operations intended to secure financial stability andliquidity by dispersing debt maturity dates and utilizing committed lines of credit and through other measures.
With regard to surplus funds, FRC manages them as various deposits and savings, etc. to support efficient management
while considering safety.
FRC may conduct derivative transactions only for the purpose of hedging the interest rate fluctuation risks in the future,and not conduct any speculative transactions.
(2) Description of financial instruments and associated risks, and risk management structure
Short-term debt, long-term debt and investment corporation bonds are funds procured primarily for acquiring real estate
trust beneficiary interests and refinancing of borrowings. Borrowings and investment corporation bonds are exposed toliquidity risks upon debt maturity dates, but FRC works to mitigate the risks by such measures as appropriately controlling
the ratio of interest-bearing debt to total assets while executing commitment line agreements with local financial institutions
that are sponsors to secure liquidity at hand.
In addition, borrowings with floating interest rates are exposed to interest rate fluctuation risks. However, FRC works to
reduce the risks by such measures as adjusting the ratio of the balance of borrowings with floating interest rates to totalborrowings in accordance with the financial environment and other factors. FRC conducts derivative transactions (interest
rate swap transactions) for part of the borrowings with floating interest rates in order to hedge the risk of fluctuations in therates of interests to be paid. Furthermore, with regard to the method to access the effectiveness of hedging, assessment of
the effectiveness is omitted as it has been judged that requirements are satisfied for special treatment for interest rate swap
transactions. As for derivative transactions, FRC executes and manages them in accordance with its financial derivative
FUKUOKA REIT CORPORATION

31

VIII. Notes to Financial Statements

transaction management policies and, when conducting them, it does so only with financial institutions it judges to havecertain creditworthiness in reference to their credit ratings so that the counterparty risks are reduced.
FRC manages surplus funds in large time deposits, etc. Such deposits have inherent risks of failure of the financial
institutions holding the deposits and other credit risks. FRC mitigates the risks by limiting the financial institutions to thosewith certain creditworthiness in reference to their credit ratings and by setting the duration of deposits only at shorter
periods.
As for tenant leasehold and security deposits received in trust, they are deposits from tenants and are exposed toliquidity risks where tenants may move out before the contracts expire. FRC mitigates the risks by such measures as
securing liquidity on hand.
(3) Supplementary explanation on matters concerning fair value of financial instruments
The fair value of financial instruments, aside from values based on market price, may include values based on reasonablecalculations when there is no market price. Certain assumptions are adopted in calculating those values, and there may becases where the values will vary when different assumptions are adopted.
As for the contract value and other conditions of derivative transactions indicated in “2. Matters concerning fair value offinancial instruments”, the value itself is not an indicator showing the market risks related to such transactions.

2. Matters concerning fair value of financial instruments
The following are the book values recorded on the balance sheets, fair values and the difference between these amounts as ofAugust 31, 2013. Please note that the following table does not include those for which discerning of fair value is recognized to
be extremely difficult (refer to (Note 2)).
(thousands of yen)

(1) Cash and deposits(2) Cash and deposits in trust
Total of assets(3) Short-term debt
(4) Current maturities of long-term debt
(5) Long-term debt
(6) Tenant leasehold and security deposits received in trust
Total of liabilities(7) Derivative transactions
Total of derivative transactions

Book value recorded on thebalance sheets
2,986,790
4,457,189
7,443,980

Fair value

Difference(Note 1)

–

–

–
–
–
–

16,450,000
54,650,000
1,526,511
72,626,511

16,563,805
54,933,212
1,481,530
72,978,547

113,805
283,212(44,980)
352,036

–
–

–
–

–
–

2,986,790
4,457,189
7,443,980

The following are the book values recorded on the balance sheets, fair values and the difference between these amounts as ofFebruary 28, 2014. Please note that the following table does not include those for which discerning of fair value is recognized
to be extremely difficult (refer to (Note 2)).
(thousands of yen)

(1) Cash and deposits(2) Cash and deposits in trust
Total of assets(3) Short-term debt
(4) Current maturities of long-term debt
(5) Investment corporation bonds(6) Long-term debt
(7) Tenant leasehold and security deposits received in trust
Total of liabilities(8) Derivative transactions
Total of derivative transactions

Book value recorded on the
Balance sheets
3,687,020
4,185,847
7,872,868

Fair value

Difference(Note 1)

–

–

–
–
–
–

14,750,000
2,000,000
54,275,000
1,494,657
72,519,657

14,865,713
2,023,312
54,941,203
1,467,867
73,298,095

115,713
23,312666,203(26,790)
778,438

–
–

–
–

–
–

3,687,020
4,185,847
7,872,868(Note 1)		 Calculation method for fair value of financial instruments(1)		Cash and deposits and (2) Cash and deposits in trust
		 As these are settled within a short period of time, the fair value is approximately the same as the book value and is thus stated at that book value.

FUKUOKA REIT CORPORATION

32

VIII. Notes to Financial Statements(4) Current maturities of long-term debt, (5) investment corporation bonds and (6) Long-term debt
		 Of the fair value of these financial instruments, the fair value of long-term debt with fixed interest rates (including debt with practical fixed interest rates through interest rate swaps) and investment
		 corporation bonds (the “debt, etc.”) is based on the method of calculating by discounting the total amount of principal and interest by the rate assumed as being applicable in the event of a new
drawdown of similar debt, etc.
		 The fair value of long-term debt with floating interest rates is based on the book value, as the contract terms require the interest rates to be revised in a certain period of time (within 6 months) andthus is considered to be nearly equal to the book value.
(7) Tenant leasehold and security deposits received in trust
		 Tenant leasehold and security deposits received in trust, which are deposited by the lessees, are calculated using the method to discount the future cash flows of such by a reasonably estimated ratethat takes into account the term remaining until the reimbursement deadline and credit risks.
(8) Derivative transactions
		 Please refer to (Notes to derivative transactions)(Note 2)		 Financial instruments for which discerning of fair value is recognized to be extremely difficult.

(thousands of yen)
18th fiscal period
as of August 31, 2013

Tenant leasehold and security
deposits received in trust

19th fiscal period

as of February 28, 2014

10,458,566

10,464,365

		 Recorded on the balance sheets as tenant leasehold and security deposits received in trust is not subject to disclosure of fair value as it is recognized to be extremely difficult to discern the fair value.
		 This is because future cash flows cannot be estimated since there is no market price and it is difficult to assume the reimbursement dates since there is a possibility of cancellation, renewal and		 re-execution of lease contracts by lessees even if the contract terms are fixed and since there is no telling of any tendency of tenants moving out of the properties owned by FRC from analyses of		 past results as they are too individually specific.
(Note 3)		 Amount of redemption of monetary claims scheduled to be due after closing of accounts (as of August 31, 2013)(thousands of yen)Due in 1 year or less
2,986,790
4,457,189
7,443,980

Cash and deposits
Cash and deposits in trust
Total

		Amount of redemption of monetary claims scheduled to be due after closing of accounts (as of February 28, 2014)(thousands of yen)Due in 1 year or less
3,687,020
4,185,847
7,872,868

Cash and deposits
Cash and deposits in trust
Total(Note 4)		 Amount of repayment of long-term debt scheduled to be due after closing of accounts (as of August 31, 2013)

(thousands of yen)Due in 1 year or less
16,450,000

1 to 2 years
6,650,000

2 to 3 years
11,650,000

3 to 4 years
20,450,000

4 to 5 years
10,200,000

Due after 5 years
5,700,000

		 Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of February 28, 2014)(thousands of yen)
Long-term debt
Investment corporation bonds

Due in 1 year or less
14,750,000－

1 to 2 years
12,850,000－

2 to 3 years
10,250,000－

FUKUOKA REIT CORPORATION

3 to 4 years
23,875,000－

33

4 to 5 years
2,100,000－

Due after 5 years
5,200,000
2,000,000

VIII. Notes to Financial Statements(Notes to derivative transactions)
The following is the contract amount or amount equivalent to the principal provided in the contract, etc. as of the closing ofaccounts for each method of hedge accounting. (as of August 31, 2013)

(thousands of yen)
Method of hedge accounting

Type of derivative transactions, etc.

Main hedged
item

Special treatment for interest rate swaps

Interest rate swap transaction
Payable fixed; Receivable floating

Long-term debt

Contract amount, etc.
Of which,exceeding 1year
18,300,000

8,000,000

Calculation
Fair value method for thefair value(25,575)(Note 1)

(Note 2)

(Note 1) Transactions for which special treatment for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of therelevant long-term debt (Please refer to “Notes to financial instruments” 2. Matters concerning fair value of financial instruments (Note 1) (6)).
(Note 2) The following is the contract amount or amount equivalent to the principal provided in the contract, etc. as of the closing of accounts for each method of hedge accounting. (February 28, 2014)

The following is the contract amount or amount equivalent to the principal provided in the contract, etc. as of the closing ofaccounts for each method of hedge accounting. (as of February 28, 2014)(thousands of yen)
Method of hedge accounting

Type of derivative transactions, etc.

Main hedged
item

Special treatment for interest rate swaps

Interest rate swap transaction
Payable fixed; Receivable floating

Long-term debt

Contract amount, etc.
Calculation
Fair value method for theOf which,fair value
exceeding 1 year
(38,297)(Note 2)
18,300,000
8,000,000(Note 1)

(Note 1) Transactions for which special treatment for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of therelevant long-term debt (Please refer to “Notes to financial instruments” 2. Matters concerning fair value of financial instruments (Note 1) (6)).
(Note 2) The fair value is calculated by the counterparty of the transaction contract based on the actual interest rate on the market and other factors.

(Notes to tax effect accounting)
18th fiscal period

19th fiscal period

as of August 31, 2013

as of February 28, 2014

1. Breakdown of primary causes for occurrence of deferred tax assets anddeferred tax liabilities(Deferred tax assets)(thousands of yen)Amount of accrued business taxes notdeductible from taxable income
17
Total deferred tax assets
17(Deferred tax assets, net)
17
2. Breakdown of significant components that caused difference between effective
statutory income tax rate and effective income tax rate after application of tax
effect accounting(%)
Effective statutory income tax rate
36.38
Deductible dividend amount(36.37)
Other
0.03
Effective income tax rate after
application of tax effect accounting
0.05

1. Breakdown of primary causes for occurrence of deferred tax assets and deferred
tax liabilities(Deferred tax assets)(thousands of yen)Amount of accrued business taxes notdeductible from taxable income
43
Total deferred tax assets
43(Deferred tax assets, net)
43
2. Breakdown of significant components that caused difference between effective
statutory income tax rate and effective income tax rate after application of tax
effect accounting(%)
Effective statutory income tax rate
36.38
Deductible dividend amount(36.36)Other
0.04
Effective income tax rate after
application of tax effect accounting
0.07
3. Tax rate change after closing of accounts
The Act on Partial Revision for the Income Tax Act, etc. (Act No. 10 of 2014)
was promulgated on March 31, 2014, which stipulates that special corporate
tax for reconstruction will not be levied for the business year starting on April 1,2014 and thereafter. Accordingly, with regard to the temporary differences thatare anticipated to be cancelled in the business year starting on September 1,
2014, the effective statutory income tax rate used in the calculation of deferred
tax assets and deferred tax liabilities will be changed from the previous 36.38%
to 33.96%. The tax rate change will have only a minimum impact on FRC.

FUKUOKA REIT CORPORATION

34

VIII. Notes to Financial Statements(Notes to transactions with related parties)(1) Other affiliates and their parent companies and subsidiaries
18th fiscal period (from March 1, 2013 to August 31, 2013)

(thousands of yen)Classification

Name

Location

Capital

Fukuoka Jisho Hakata Ward,
4,000,000
Other affiliates Co., Ltd.
Fukuoka City
(Note 3)Business
description or
occupation

Generalreal estatebusiness

FRC’s share of
voting rights,
etc.
[or ownership ofsuch in FRC]

Ownership in
FRC
Direct[10.11%]

Indirect[0.39%]

Description ofrelationship

Description of Transaction
Categorytransaction
amountPurchase of
1,530,000
Purchase of–real estate(Note 4)
real estate,(Note 1)consignment
Consignment
Operatingof real estateof real estate 1,222,021 accounts(Note 4)
management, etc. management,
payableetc. (Note 2)

Balanceat end ofperiod–60,980(Note 4)(Note 1) Transaction terms and conditions are determined in reference to appraisal values by third parties and after negotiating on prices.
(Note 2) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 3) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Canal City Hakata, Canal City Hakata·B, Canal City Business Center and Taihaku
Street Business Center. The lease contract is a master lease type with pass-through rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s
revenues. For properties covered by the said type of agreements, the above table shows figures that regard end tenants as direct lessees.
(Note 4) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

19th fiscal period (from September 1, 2013 to February 28, 2014)(thousands of yen)Classification

Name

Location

Capital

FRC’s share ofBusinessvoting rights,
description or
etc.
occupation[or ownership ofDescription of Transaction
Categorytransaction
amountBalanceat end ofperiodConsignment
Consignment
Operatingof real estate 1,192,756
of real estateaccounts(Note3)
management,
management, etc.
payableetc. (Note 1)

36,997

Description ofrelationshipsuch in FRC]

Other affiliates

Fukuoka Jisho Hakata Ward,
Co., Ltd.
Fukuoka City
(Note 2)4,000,000

Generalreal estatebusiness

Ownership in
FRC
Direct[10.11%]

Indirect(Note 3)[0.39%](Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Canal City Hakata, Canal City Hakata·B, Canal City Business Center and Taihaku
Street Business Center. The lease contract is a master lease type with pass-through rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s
revenues. For properties covered by the said type of agreements, the above table shows figures that regard end tenants as direct lessees.
(Note 3) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

FUKUOKA REIT CORPORATION

35

VIII. Notes to Financial Statements(2) Affiliated companies, etc.
18th fiscal period (from March 1, 2013 to August 31, 2013)

(thousands of yen)Classification

Name

Location

Capital

FRC’s share ofBusinessvoting rights,
description or
etc.
occupation[or ownership ofDescription ofrelationship

Description of Transaction
Categorytransaction
amountBalanceat end ofperiodsuch in FRC]

Subsidiaries
of otheraffiliates

Park Place
Oita Co., Ltd Oita City, Oita

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

Real estatebusiness–Assetmanagement
200,000of FRCand otherbusinesses–

400,000(Note 2)

Hakata Ward,
Fukuoka City

Consignment
Consignmentof real estateof real estate
management,
management, etc.
etc. (Note 1)
Asset
Payment
managementof assetof FRC, etc.
and concurrent management
service of officer fees (Note 4)

566,384(Note 5)445,912(Note 5)

Operatingaccounts
payable160,595

Accruedexpenses

207,563(Note 5)(Note 5)(Note 3)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded a real estate lease and management consignment agreement with Park Place Oita Co., Ltd. for Park Place Oita. The lease contract is a master lease type with pass-through rent,
in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues. For the property covered by the said type of agreement, the above table shows
figures that regard end tenants as direct lessees.
(Note 3) Masayasu Saki, CEO & Representative Director of FRC, concurrently serves as Director of Fukuoka Realty Co., Ltd.
(Note 4) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 5) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

19th fiscal period (from September 1, 2013 to February 28, 2014)(thousands of yen)Classification

Name

Location

Capital

FRC’s share ofBusinessvoting rights,
description or
etc.
occupation[or ownership ofDescription ofrelationship

Description of Transaction
Categorytransaction
amountBalanceat end ofperiodsuch in FRC]

Subsidiaries
of otheraffiliates

Park Place
Oita Co., Ltd Oita City, Oita

400,000

Real estatebusiness–

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,
Ltd.

Asset
management
200,000of FRCand otherbusinesses–(Note 2)

Hakata Ward,
Fukuoka City

Consignment
Consignmentof real estateof real estate
management,
management, etc.
etc. (Note 1)
Asset
Payment
managementof assetof FRC, etc.
and concurrent management
service of officer fees (Note 4)

569,649(Note 5)466,921(Note 5)

Operatingaccounts
payable166,359

Accruedexpenses

207,066(Note 5)(Note 5)(Note 3)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded a real estate lease and management consignment agreement with Park Place Oita Co., Ltd. for Park Place Oita. The lease contract is a master lease type with pass-through rent,
in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues. For the property covered by the said type of agreement, the above table shows
figures that regard end tenants as direct lessees.
(Note 3) Masayasu Saki, CEO & Representative Director of FRC, concurrently serves as a Director of Fukuoka Realty Co., Ltd. Furthermore, Etsuo Matsuyuki was appointed as CEO & Representative Director of
FRC at the General Meeting of Unitholders held on May 22, 2014 and concurrently serves as a Director of Fukuoka Realty Co., Ltd. as of the date of this document.
(Note 4) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 5) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

FUKUOKA REIT CORPORATION

36

VIII. Notes to Financial Statements(Notes to properties for lease)
FRC owns retail, office buildings and residential properties for lease in the Kyushu area centering on Fukuoka Prefecture. The
following table provides the book value recorded on the balance sheets, amount of change during the period and fair value ofthese properties for lease.
(thousands of yen)
18th fiscal period

Use

RetailOffice buildings

OthersTotal(March 1, 2013 toAugust 31, 2013)

Amount recorded on the balance sheets
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheets
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheets
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheets
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period

19th fiscal period(September 1, 2013 to
February 28, 2014)

102,565,767(235,789)
102,329,978104,255,000

102,329,978(92,207)102,237,770
104,185,000

42,840,110
2,523,508
45,363,618
50,800,000

45,363,618(376,737)
44,986,880
50,730,000

7,016,229
4,333,454
11,349,683
12,040,000

11,349,683(83,211)
11,266,472
12,230,000

152,422,107
6,621,173
159,043,280
167,095,000

159,043,280(552,156)
158,491,123
167,145,000(Note 1) Amount recorded on the balance sheets is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of change during the 18th fiscal period, the amount of increase is primarily attributable to the new acquisition of properties (7,351 million yen in total) and capital expenditures (612million yen), and the amount of decrease is primarily attributable to depreciation and amortization expenses (1,343 million yen). Of the amount of change during the 19th fiscal period, the amount of
increase is primarily attributable to capital expenditures (848 million yen), and the amount of decrease is primarily attributable to depreciation and amortization expenses (1,354 million yen).
(Note 3) The fair value at end of period is the appraisal value provided by outside real estate appraisers.

The following table provides the income (loss) from properties for lease.
(thousands of yen)
18th fiscal period

Use

RetailOffice buildings

OthersTotal(March 1, 2013 toAugust 31, 2013)

Amount recorded on the statements of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statements of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statements of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statements of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing business19th fiscal period(September 1, 2013 to
February 28, 2014)

4,965,784
2,864,757
2,101,026

4,976,604
2,913,431
2,063,172

2,148,870
1,106,894
1,041,975

2,150,298
1,097,542
1,052,756

450,730
185,849
264,881447,887
186,475
261,4117,565,385
4,157,501
3,407,883

7,574,790
4,197,450
3,377,339(Note) Real estate leasing business revenues and expenses related to real estate leasing business comprise leasing business revenues and accompanying expenses (outsourcing fees, depreciation andamortization expenses, taxes and other public charges, etc.), and are recorded as Leasing revenues - real estate, Other leasing revenues - real estate and Expenses related to leasing business,
respectively.

FUKUOKA REIT CORPORATION

37

VIII. Notes to Financial Statements(Notes to segment information)[Segment information]
Descriptions omitted as FRC has a single business segment of real estate leasing business.

[Related information]

18th fiscal period (from March 1, 2013 to August 31, 2013)(1) Information by product and service
Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers
exceed 90% of operating revenues recorded in the statements of income.
(2) Information by region(a) Operating revenue
		 Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating revenues
		 recorded on the statements of income.
(b) Property, plant and equipment
		 Descriptions are omitted as the amount of FRC’s property, plant and equipment located in Japan exceeds 90% of		 property, plant and equipment recorded in the balance sheet.
(3) Information by major customer
Descriptions are omitted as FRC’s operating revenues for an individual outside customer are less than 10% of operating
revenues recorded in the statements of income.

19th fiscal period (from September 1, 2013 to February 28, 2014)(1) Information by product and service
Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers
exceed 90% of operating revenues recorded on the statements of income.
(2) Information by region(a) Operating revenue
		 Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating
		 revenues recorded in the statements of income.
(b) Property, plant and equipment
		 Descriptions are omitted as the amount of FRC’s property, plant and equipment located in Japan exceeds 90% of		 property, plant and equipment recorded in the balance sheet.
(3) Information by major customer
		 Descriptions are omitted as FRC’s operating revenues for an individual outside customer are less than 10% of operating
		 revenues recorded in the statements of income.

(Notes to per unit information)
18th fiscal period

19th fiscal period(March 1, 2013 to August 31, 2013)(September 1, 2013 to February 28, 2014)

1. Net assets per unit
118,423 yen
2. Net income per unit
3,291 yen
Net income per unit was calculated by dividing net income by the day-weighted
average number of units issued during the fiscal period.
Diluted net income per unit was not presented as there are no diluted units since
no warrants and convertible bonds were outstanding.

1. Net assets per unit
118,376 yen
2. Net income per unit
3,243 yen
Net income per unit was calculated by dividing net income by the day-weighted
average number of units issued during the fiscal period.
Diluted net income per unit was not presented as there are no diluted units since
no warrants and convertible bonds were outstanding.

(Note) FRC implemented a 5-for-1 split of its investment units with March 1, 2014 as the effective date. Accordingly, net assets per unit and net income per unit have been calculated on the assumption thatthe split of investment units was conducted at the beginning of the 18th fiscal period.

FUKUOKA REIT CORPORATION

38

VIII. Notes to Financial Statements(Note 2) Net income per unit was calculated based on the following data:

18th fiscal period
March 1, 2013 toAugust 31, 2013

Net income (thousands of yen)Amounts not attributable to ordinary unitholders (thousands of yen)
Net income attributable to ordinary investment units (thousands of yen)
Average number of units during the fiscal period (units)

19th fiscal period
September 1, 2013 to
February 28, 2014

2,271,196–
2,271,196
690,000

2,238,265–
2,238,265
690,000(Note) FRC implemented a 5-for-1 split of its investment units with March 1, 2014 as the effective date. Accordingly, the average number of units during the fiscal period has been calculated on theassumption that the split of investment units was conducted at the beginning of the 18th fiscal period.

(Notes to distribution information)(thousands of yen)Account
I. Unappropriated surplus
II. Total dividend [Dividend per unit]
III. Surplus brought forward

Method for calculating dividends

18th fiscal period

19th fiscal period

2,271,226
2,271,204[16,458 yen]22
The amount of dividends shall be decided inaccordance with the dividend policy stipulated in
Article 38-1-1 of FRC’s Articles of Incorporationand shall exceed 90% of FRC’s distributable profits
as stipulated in Article 67-15 of the Act on Special
Taxation Measures.
Following the above policy, FRC proposed to
distribute 2,271,204 thousand yen, which is almost
the entire amount of unappropriated surplus, asearnings dividends. Moreover, dividend in excessof earnings as stipulated in Article 38-2 of FRC’s
Articles of Incorporation will not be provided.

2,238,288
2,238,222[16,219 yen]66
The amount of dividends shall be decided inaccordance with the dividend policy stipulated in
Article 38-1-1 of FRC’s Articles of Incorporationand shall exceed 90% of FRC’s distributable profits
as stipulated in Article 67-15 of the Act on Special
Taxation Measures.
Following the above policy, FRC proposed to
distribute 2,238,222 thousand yen, which is almost
the entire amount of unappropriated surplus, asearnings dividends. Moreover, dividend in excessof earnings as stipulated in Article 38-2 of FRC’s
Articles of Incorporation will not be provided.

March 1, 2013 toAugust 31, 2013

September 1, 2013 to
February 28, 2014

(Note) Amounts other than the amounts of dividend per unit are rounded down to the nearest thousand yen.

(Notes to significant subsequent events)
FRC implemented a 5-for-1 split of its investment units with February 28, 2014 and March 1, 2014 as the record date and theeffective date, respectively.
I. Purpose of split
FRC implemented the split of investment units in order to establish an environment where investors can invest with ease as
well as to further widen FRC’s investors base and increase the liquidity of FRC’s investment units by decreasing the per priceof investment units in light of the introduction of the Japanese version of the Individual Saving Account (NISA) on January 1,
2014.
II. Method of split
FRC implemented a 5-for-1 split of its investment units held by its unitholders stated or recorded on that date’s final
unitholder registry, with February 28, 2014 as the record date.
III. Increase in the number of investment units through split, etc.
1) Number of FRC investment units outstanding before split: 138,000 units
2) Increase in number of investment units through split: 552,000 units
3) Number of FRC investment units outstanding after split: 690,000 units
4) Total number of investment units authorized after split: 10,000,000 units

FUKUOKA REIT CORPORATION

39

VIII. Notes to Financial Statements(Schedule of property, plant and equipment, and intangible assets)
The following table provides the contract amount of specific transaction by FRC and the status of its fair value as of February
28, 2014.
(thousands of yen)Type of asset

Balance asof September
1, 2013

Increase

Decrease

Buildings in trust

76,005,077

418,136

62,66576,360,548

15,709,714

1,237,841

60,650,833(Note)

1,158,771

28,472–

1,187,244

413,896

32,982

773,347(Note)

546,092

19,603–565,696

199,688

20,012366,007(Note)

747

–

–

747

55

47

691

1,139,208

90,024

3,789

1,225,444

787,134

61,106438,309Land in trust
93,998,578
Construction in progress in
192,182
trust
Subtotal
173,040,659––

93,998,578––

93,998,578

291,174–

483,356––

483,356

Structures in trust
Machinery and equipmentin trust
Total property, Vehicles and transport
plant and equipment in trust
equipment Tools and fixtures in trust

Total
intangible
assetsLeasehold right in trust
Other intangible assets intrust
Subtotal
Total

Balance as
Net property
Accumulated Depreciationof February 28,
andDescription
depreciation for the period
2014
equipment

847,41066,455

173,821,614

17,110,490

1,765,318––

1,765,318––

1,765,318

27,823

1,280–

29,103

14,422

2,803

14,681

1,793,141

1,280

–

1,794,421

14,422

2,803

1,779,999

174,833,800

848,690

66,455

175,616,036

17,124,912(Note)(Note)

1,351,989 156,711,124

1,354,793 158,491,123(Note) The main increases are occurred by acquiring new properties for building in trust, structure in trust, machinery and equipment in trust, tools and fixtures in trust, land in trust.

(Notes to status of debt)
Category
LenderBalance as
Balance as Average
Drawdown of September 1, Increase
Decrease of February 28, interest Repayment Repayment Use of Description(thousands of yen) (thousands of yen)
date
date
method
funds
2013
2014
rate

Sumitomo Mitsui
June 30, 2010
Banking Corporation
Mizuho Bank
The Norinchukin Bank
The Hiroshima Bank
The Kitakyushu Bank
July 30,
Current The Iyo Bank2010
maturities
The Bank of Sagaof long-term
The Higo Bank
debt
The Shinwa Bank
Development Bank of August 31,
Japan
2009
September 30,
Resona Bank
2010
Subtotal(thousands of yen)(thousands of yen) (%) (Note 1)

1.030

December 30, Lump-sum Refinance No collateral/
2013
upon maturity fundNo guarantee

2,000,000–

2,000,000–

2,600,000
4,000,000
1,400,000
800,000
500,000
500,000
300,000
200,000

–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–

2,600,000
4,000,000
1,400,000
800,000
500,000
500,000
300,000
200,000

Lump-sum Refinance No collateral/
1.410 July 31, 2014 upon maturity fund No guarantee

4,000,000––

4,000,000

1.710

–

300,000–

300,000

1.325

16,300,000

300,000

2,000,000

14,600,000

FUKUOKA REIT CORPORATION

40

August 29,
Lump-sum Refinance No collateral/
2014
upon maturity fundNo guarantee
September 30, Lump-sum Refinance No collateral/
2014
upon maturity fundNo guarantee

VIII. Notes to Financial Statements

Category
LenderBalance as Average
Balance as
Drawdown of September 1, Increase
Decrease of February 28, interest Repayment Repayment Use of Description(thousands of yen) (thousands of yen)datemethod
funds
date
2014
rate
2013

Development Bank ofJune 30, 2009
Japan
Development Bank of August 31,
Japan
2009
Development Bank of August 31,
Japan
2009
Sumitomo Mitsui
June 30,
Banking Corporation
2010
September 30,
Resona Bank
2010
December 30,
The Bank of Fukuoka
2010
March 1,The Bank of Fukuoka
2011
The Nishi-Nippon City
March 1,
Bank
2011
Development Bank ofMarch 1,
Japan
2011
July 29,
The Bank of Fukuoka
2011
The Nishi-Nippon City
July 29,
Bank
2011
The Dai-Ichi Life
July 29,
Insurance Company
2011
July 29,
Shinsei Bank
2011
Sumitomo Mitsui
July 29,
Trust Bank
2011
December 30,
The Bank of Fukuoka
2011
December 30,
The Hiroshima Bank
2011
December 30,
Long-term The Oita Bank
2011
debt
December 30,
The Eighteenth Bank
2011
December 30,
The Shinwa Bank
2011
December 30,
The Kitakyushu Bank
2011
January 31,
The Kagoshima Bank
2012
January 31,
Resona Bank
2012
Sumitomo Mitsui
January 31,
Banking Corporation2012
February 29,
Mizuho Bank
2012
Mitsubishi UFJ
Trust and Banking
March 1, 2012
Corporation
Sumitomo Mitsui
March 30,
Banking Corporation
2012
March 30,
Resona Bank
2012
March 30,
The Higo Bank
2012
The Bank of Fukuoka
The Nishi-Nippon CityBankThe Oita Bank
The Miyazaki Bank
June 29, 2012
The Shinwa BankThe Iyo Bank
The Bank of Saga
The Eighteenth Bank
The Kitakyushu Bank

(thousands of yen)(thousands of yen) (%) (Note 1)

2,400,000–

75,0002,325,000

2.200

4,000,000––

4,000,000

1.950

4,000,000––

4,000,000

2.170

1,200,000––

1,200,000

1.127

300,000–

3,000,000

–

1.325

1,500,000––

1,500,000

0.677

2,000,000––

2,000,000

0.675

2,000,000––

2,000,000

0.774

2,000,000––

2,000,000

0.825

2,000,000––

2,000,000

1.305

2,000,000––

2,000,000

1.305

1,000,000––

1,000,000

1.800

1,000,000––

1,000,000

1.208

1,000,000––

1,000,000

1.041

1,500,000––

1,500,000

0.827

500,000––

500,000

1.182

500,000––

500,000

1.182

500,000––

500,000

1.182

500,000––

500,000

1.182

500,000––

500,000

1.182

100,000––

100,000

1.168

400,000––

400,000

1.218

500,000––

500,000

1.338

500,000––

500,000

1.117

2,000,000––

2,000,000

1.170

500,000––

500,000

1.203

600,000––

600,000

1.253
1.203

300,000––

300,000

1,000,000––

1,000,000

1,000,000––

1,000,000

700,000
700,000
600,000
500,000
500,000
500,000
500,000

–
–
–
–
–
–
–

–
–
–
–
–
–
–

700,000
700,000
600,000
500,000
500,000
500,000
500,000

FUKUOKA REIT CORPORATION

41

0.858

Refinance No collateral/fund
No guarantee
August 31,
Lump-sum Refinance No collateral/
2015
upon maturity
fund
No guarantee
August 31,
Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
Lump-sum Refinance No collateral/
June 30, 2015
upon maturity
fund
No guarantee
September 30, Lump-sum Refinance No collateral/
2014
upon maturity
fund
No guarantee
December 30, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
February 29, Lump-sum Acquisition No collateral/
2016
upon maturity
fund
No guarantee
February 29, Lump-sum Acquisition No collateral/
2016
upon maturity
fund
No guarantee
February 29, Lump-sum Acquisition No collateral/
2016
upon maturity
fund
No guarantee
July 31,
Lump-sum Refinance No collateral/
2017
upon maturity
fund
No guarantee
July 31,
Lump-sum Refinance No collateral/
2017
upon maturity
fund
No guarantee
Lump-sum Refinance No collateral/
July 31, 2018upon maturity
fund
No guarantee
Lump-sum Refinance No collateral/
July 29, 2016
upon maturity
fund
No guarantee
Lump-sum Refinance No collateral/
July 31, 2015
upon maturity
fund
No guarantee
December 30, Lump-sum Refinance No collateral/
2017
upon maturity
fund
No guarantee
December 30, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
December 30, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
December 30, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
December 30, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
December 30, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
January 31,
Lump-sum Refinance No collateral/
2017
upon maturity
fund
No guarantee
January 31,
Lump-sum Refinance No collateral/
2017
upon maturity
fund
No guarantee
January 31,
Lump-sum Refinance No collateral/
2019
upon maturity
fund
No guarantee
February 29, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
June 30, 2017

(Note 2)

March 31,2017

Lump-sum Acquisition No collateral/
upon maturity
fund
No guarantee

March 31,2017
March 31,2017
March 31,2017

Lump-sum Refinanceupon maturity
fund
Lump-sum Refinanceupon maturity
fund
Lump-sum Refinanceupon maturity
fundJune 30, 2017

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

Lump-sum Refinance No collateral/
upon maturity
fund
No guarantee

VIII. Notes to Financial Statements

Balance as Average
Balance as
Drawdown of September 1, Increase
Decrease of February 28, interest Repayment Repayment Use of Description(thousands of yen) (thousands of yen)datemethod
funds
date
2014
rate (%)
2013

Category
Lender(thousands of yen)

Sumitomo Mitsui
Trust Bank

September 28,
2012
September 28,
Resona Bank
2012
The Nishi-Nippon City February 1,
Bank
2013
The Nishi-Nippon City February 28,
Bank
2013
February 28,
Mizuho Bank
2013
February 28,
Long-term Sumitomo Mitsui
Trust Bank
2013
debt
Mitsubishi UFJ
February 28,
Trust and Banking
2013
Corporation
February 28,
Aozora Bank
2013
Mitsubishi UFJ
March 29,
Trust and Banking
2013
Corporation
Aozora Bank

June 28, 2013

Subtotal

Total(thousands of yen)

(Note 1)

September 30, Lump-sum Refinance No collateral/
2016
upon maturity
fund
No guarantee
September 29, Lump-sum Refinance No collateral/
2017
upon maturity
fund
No guarantee
February 29, Lump-sum Acquisition No collateral/
2020
upon maturity
fund
No guarantee
February 28, Lump-sum Refinance No collateral/
2018
upon maturity
fund
No guarantee
February 29, Lump-sum Refinance No collateral/
2020
upon maturity
fund
No guarantee
February 28, Lump-sum Refinance No collateral/
2018
upon maturity
fund
No guarantee

600,000––

600,000

0.627

2,000,000––

2,000,000

1.033

2,500,000––

2,500,000

0.725

1,900,000––

1,900,000

0.725

1,700,000––

1,700,000

0.725

1,100,000––

1,100,000

0.775

1,500,000––

1,500,000

0.575

February 28, Lump-sum Refinance No collateral/
2018
upon maturity
fund
No guarantee

600,000––

600,000

0.575

February 28, Lump-sum Refinance No collateral/
2018
upon maturity
fund
No guarantee

600,000––

600,000

0.577

March 30,
2018

Lump-sum Refinance No collateral/
upon maturity
fund
No guarantee

1,000,000––

1,000,000

0.627

June 30, 2020

Lump-sum Refinance No collateral/
upon maturity
fund
No guarantee

54,800,000–

375,000

54,425,000

71,100,000

300,000

2,375,000

69,025,000(Note 1) The average interest is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest of debt for which FRC conducted interest rate
swap transactions is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swap.
(Note 2) The debt is subject to repayment of 75 million yen on the final day of every 6 months following the final day of December 2009 as the initial repayment date, with 1,875 million yen to be repaid on
the final repayment date. Furthermore, as the 150 million yen scheduled for repayment within a year is included in Long-term debt for the convenience of comparison, the balances do not match thefigures recorded in the balance sheets as Current maturities of long-term debt and Long term debt.
(Note 3) Amount of repayment of long-term debt scheduled to be due within 5 years after closing of accounts.

(thousands of yen)
Long-term debt

1 to 2 years
12,850,000

2 to 3 years
10,250,000

3 to 4 years
23,875,000

4 to 5 years
2,100,000(Note to Status of investment corporation bonds)
As of February 28, 2014, FRC has the following investment corporation bonds outstanding.
Issue

Issue date

Balance as of
Balance as
Decrease during
September 1,of February 28,
the fiscal period
2013
2014
(thousands of yen)

CouponMaturity date

Maturity
methodUse

Description

2,000,000

1.32

December 29,
2023

Lump-sumupon maturity

Repaymentof debt

No collateral/
No guarantee(thousands of yen)First Series ofUnsecured
Bonds

December 30,
2013

－

(%)

(thousands of yen)－

(Note 1)

(Note 1) The Bonds may be repurchased and cancelled by FRC at any time on and after the date following the payment date, unless otherwise determined by the book-entry transfer agent.
(Note 2) The bonds are subject to the limited pari passu clause among specified investment corporation bonds.

FUKUOKA REIT CORPORATION

42(Note 2)