[For Information Purpose Only]
August 21, 2015
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Name of representative:
Naoki Fukuda, Executive Director
Roppongi Hills Mori Tower
6-10-1 Roppongi, Minato-ku, Tokyo, Japan(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Akiko Watanabe,Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Revision of Forecast of Financial Results and Distributions for the 24th
Fiscal Period Ended June 2015, the 25th Fiscal Period Ending December 2015,
the 26th Fiscal Period Ending June 2016 and 27th Fiscal Period Ending December 2016
Invincible Investment Corporation (“INV”) announces the revision of its financial results anddistribution per unit (“DPU”) forecast for the fiscal period ended June 2015 (24th fiscal period), andthe fiscal periods ending December 2015 (25th fiscal period), June 2016 (26th fiscal period) and
December 2016 (27th fiscal period), as previously announced in the June 25, 2015 “Noticeconcerning Revision of Forecast of Financial Results and Distribution for the 24th Fiscal PeriodEnding June 2015 and the 25th Fiscal Period Ending December 2015, together with Forecast of
Financial Results and Distribution for the 26th Fiscal Period Ending June 2016 and 27th Fiscal
Period Ending December 2016” (including the correction dated July 1, 2015) as follows.
Details

1.

Revision of forecasts of financial results and DPU for the fiscal periods ended June 2015
(January 1, 2015 to June 30, 2015), ending December 2015 (July 1, 2015 to December 31,2015), June 2016 (January 1, 2016 to June 30, 2016) and December 2016 (July 1, 2016 to
December 31, 2016). The revised DPU is JPY 1,924 for 2015 and JPY 2,172 for 2016.

<Fiscal Period Ending June 2015>

Previous forecast (A)(announced onJune 25, 2015)

Operatingrevenues

OperatingincomeOrdinary
incomeMillion JPY

Million JPY

Million JPY

4,920

2,738

2,202

1

Net income
Million JPY
2,201

Total
distribution
amountMillion JPY
2,198

Revised forecast (B)Amount of Variance(B) – (A)Operatingrevenues

OperatingincomeOrdinary
incomeMillion JPY

Million JPY

Million JPY

4,974

2,810

Million JPY

2,295

Million JPY
2,295

Million JPY
2,295

Million JPY

Million JPY

Million JPY

Million JPY

54

72

93

93

96

%

%

%

%

%

1.1

2.6

4.3

4.3

4.4

Million JPY

Million JPY

Million JPY

Million JPY

Million JPY

4,610

2,769

1,958

1,958

1,956

Rate of variance((B) – (A)) / (A)(Reference)
Actual results(23rd fiscal period)

Reversal of
Earnings per
Surplus perunit
unit (Note 1)(Note 1)

Previous forecast (A)(announced onJune 25, 2015)

Total
distribution
amount

Net income(Note 2)Distribution
per unit(excludingexcess profit
distribution
per unit) (Note1)

Excessprofitdistribution
per unit(Note 1)

Distribution
per unit(Reference(includingexcess profit
distribution
per unit) (Note1)

Simulated
earnings perunit (Note 1))(Note 3)

JPY

JPY

JPY

JPY

JPY

824

0

824

0

824

JPY

JPY

JPY

JPY

JPY

860

0

860

0

860

Amount of Variance(B) – (A)

JPY

JPY

JPY

JPY

JPY

36

0

36

0

36

51

Rate of variance((B) – (A)) / (A)

%
4.4

%
－

%
4.4

%
－

%
4.4

5.6

(Reference)
Actual results(23rd fiscal period)

JPY

JPY

JPY

JPY

JPY

733

0

733

0

733

Revised forecast (B)(Note 1)
(Note 2)

917

968

The number of investment units issued and outstanding at the end of the fiscal period: 2,668,686 units.
Reversal of surplus resulting from the gain on negative goodwill recognized in connection with the merger in February2010 (the “Surplus”). The same shall apply hereinafter.

(Note 3)Distribution per unit for the fiscal periods ended June 2016 and ending December 2016 are affected by one-time costs inrelation to the global offering announced on June 25, 2015 in the “Notice concerning Issuance of New Investment Unitsand Secondary Distribution of Investment Units” (“Public Offering”), the refinancing as announced on June 25, 2015 in
the ”Notice concerning Debt Financing and Prepayment of Existing Borrowings” (“Refinancing”) and the acquisition of theassets announced on June 25, 2015 in the “Notice concerning Acquisition of Assets and Entering into Leasing Contract”(Acquisition with Public Offering, and together with the Public Offering and the Refinancing, collectively the “Transactions
with Public Offering”) and others. Therefore simulated earnings per unit are shown for reference purposes and are
calculated by applying adjustments excluding one-time costs in the fiscal period and assuming that (i) the acquisition of
three properties on February 6, 2015, (ii) the Public Offering, the Refinancing and the Acquisition with Public Offering and(iii) the acquisition of three properties to be acquired on August 28, 2015 (“Additional Acquisition”) and the new borrowing
to be implemented on August 28, 2015 (“Additional New Borrowing”) were implemented at the beginning of the fiscal
period ending June 2015. For details on the method for calculating simulated earnings per unit, please refer to Appendix
2. The simulated earnings per unit is purely a simulation intended to describe the effect of the transactions, etc. describedabove and is neither a forecast nor prospect relating to INV’s earnings or distribution per unit for a given operating period.

(Note 4)

As noted in Appendix 2, the simulated earning per unit for the fiscal period ending June 2015 is calculated based on theassumption that a total of 525,000 units (500,000 units to be issued during the fiscal period ending December 2015
through the Public Offering and 25,000 units through the Over-Allotment Option) were issued at the beginning of the2fiscal period ending June 2015 and the number of investment units issued and outstanding is 3,193,686. On the other
hand, the forecasts for the earnings per unit and distribution per unit for the fiscal period ending June 2015 is based on
the number of investment units issued and outstanding at the end of the fiscal period ending June 2015: 2,668,686 units.
The same shall apply hereinafter.
(Note 5)Figures (including earnings per unit, reversal of Surplus per unit and excess profit distribution per unit) are rounded down
to the indicated amount and percentages are rounded to first decimal place. The same shall apply hereinafter.

<Fiscal Period Ending December 2015>
Total
distribution
amountOperatingrevenues

OperatingincomeOrdinary
incomeMillion JPY

Million JPY

Million JPY

Million JPY

Million JPY

6,437

3,882

2,447

2,447

3,286

Revised forecast (B)Million JPY
6,601

Million JPY
3,986

Million JPY
2,528

Million JPY
2,527

Million JPY

Amount of Variance(B) – (A)Million JPY
164Million JPY
104Million JPY
80

Million JPY
80

Million JPY

%
2.6

%

%

%

%

2.7

3.3

3.3

3.4

Previous forecast (A)(announced onJune 25, 2015)

Rate of variance((B) – (A)) / (A)Reversal of
Earnings per Surplus perunit (Note 1) unit (Note 1)(Note 2)Previous forecast (A)(announced on
February 25, 2015)

Distribution
per unit(excludingexcess profit
distribution
per unit) (Note1)

Net income

Excessprofitdistribution
per unit(Note 1) (Note
2)

3,398
111

Distribution
per unit(Reference)(includingexcess profit
distribution
per unit) (Note1)

Simulated
earnings perunit (Note 1)

JPY

JPY

JPY

JPY

JPY

JPY

766

23

789

239

1,029

1,060

JPY

JPY

JPY

JPY

JPY

JPY

791

23

815

248

1,064

1,084

Amount of Variance(B) – (A)

JPY

JPY

JPY

JPY

JPY

JPY

25

－

26

9

35

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

24
%

3.3

－

3.3

3.8

3.4

2.3

Revised forecast (B)(Note 1)

The number of investment units issued and outstanding at the end of the fiscal period: 3,193,686 units.

(Note 2)

(Previous forecast)
Excess profit distribution per unit of JPY 239.1 = Distribution per unit of JPY 1,029 in the Fiscal Period Ending December
2015 - Earnings per unit of JPY 766.3 - Reversal of Surplus per unit of JPY 23.6
(Revised forecast)
Excess profit distribution per unit of JPY 248.8 = Distribution per unit of JPY 1,064 in the Fiscal Period Ending December
2015 - Earnings per unit of JPY 791.5 - Reversal of Surplus per unit of JPY 23.6
INV expects to distribute the remainder of the JPY 75 million surplus as part of the distribution for the fiscal period ending
June 2015. INV will use excess profit distribution to normalize the distribution because INV expects to issue newinvestment units, prepay the existing borrowings and acquire 11 hotel properties and three residential properties,
resulting in significant cost. Excess profit distribution is not a given assurance, as any potential distribution is dependent
on the operational status.

3

The expected aggregate amount of Excess profit distribution is based on the assumption of the normalized DPU in thefiscal period ending December 2015 as of today taking into consideration the costs mentioned above, the securing ofassets to maintain our asset value and the financial standing and liquidity after the Excess profit distribution. Please refer
to “3. Excess profit distribution policy” and Appendix 2 for the detail of the excess profit distribution policy and simulated
earnings per unit in the fiscal period ending December 2015.

<Fiscal Period Ending June 2016>
Total
distribution
amountOperatingrevenues

OperatingincomeOrdinary
incomeMillion JPY

Million JPY

Million JPY

Million JPY

Million JPY

6,315

3,532

3,148

3,147

3,145

Revised forecast (B)Million JPY
6,500

Million JPY
3,631

Million JPY
3,225

Million JPY
3,224

Million JPY

Amount of Variance(B) – (A)Million JPY
184Million JPY
98Million JPY
77Million JPY
77Million JPY

%
2.9

%

%

%

%

2.8

2.5

2.5

2.4

Previous forecast (A)(announced onJune 25, 2015)

Rate of variance((B) – (A)) / (A)Distribution
per unit
Reversal of
Earnings per
Surplus perunit (Note)unit (Note)Previous forecast (A)(announced on
February 25, 2015)(excludingexcess profit
distribution
per unit)(Note)Net income

Excessprofitdistribution
per unit(Note)

3,222
76

Distribution
per unit(Reference)(includingexcess profit
distribution
per unit)(Note)

Simulated
earnings perunit (Note)

JPY

JPY

JPY

JPY

JPY

JPY

985

0

985

0

985

985

JPY

JPY

JPY

JPY

JPY

JPY

1,009

0

1,009

0

1,009

998

Amount of Variance(B) – (A)

JPY

JPY

JPY

JPY

JPY

JPY

24

0

24

0

24

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

13
%

2.4

－

2.4

－

2.4

1.3

Revised forecast (B)(Note) The number of investment units issued and outstanding at the end of the fiscal period: 3,193,686 units.

4

<Fiscal period ending December 2016>
Total
distribution
amountOperatingrevenues

OperatingincomeOrdinary
incomeMillion JPY

Million JPY

Million JPY

Million JPY

Million JPY

6,821

4,021

3,633

3,632

3,631

Revised forecast (B)Million JPY
7,008

Million JPY
4,117Million JPY
3,717

Million JPY
3,716

Million JPY

Amount of Variance(B) – (A)Million JPY
187Million JPY
96Million JPY
84Million JPY
84Million JPY

%
2.7

%

%

%

%

2.4

2.3

2.3

2.3

Previous forecast (A)(announced onJune 25, 2015)

Rate of variance((B) – (A)) / (A)Distribution
per unit
Reversal of
Earnings per
Surplus perunit (Note)unit (Note)Previous forecast (A)(announced on
February 25, 2015)(excludingexcess profit
distribution
per unit)(Note)Net income

Excessprofitdistribution
per unit(Note)

3,714
83

Distribution
per unit(Reference)(includingexcess profit
distribution
per unit)(Note)

Simulated
earnings perunit (Note)

JPY

JPY

JPY

JPY

JPY

JPY

1,137

0

1,137

0

1,137

1,137

JPY

JPY

JPY

JPY

JPY

JPY

1,163

0

1,163

0

1,163

1,163

Amount of Variance(B) – (A)

JPY

JPY

JPY

JPY

JPY

JPY

26

0

26

0

26

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

26
%

2.3

－

2.3

－

2.3

2.3

Revised forecast (B)(Note) The number of investment units issued and outstanding at the end of the fiscal period: 3,193,686 units.

(Reference)
Assumptions underlying the forecast of financial results and distributions for the fiscal period ended June2015 and for the fiscal periods ending December 2015, June 2016 and December 2016 are provided inAppendix 1. For ease of reference, full-year figures for earnings per unit, distribution per unit (includingexcess profit distribution per unit) and simulated earnings per unit are summarized in the table below.

5Earnings per unit and distribution per unit for the calendar years 2015 and 2016 are as follows:<Full-year 2015> (Aggregate of the fiscal periods ending in June 2015 and December 2015)

Earnings
per unit

Reversal of
Surplus per
unit

Distribution
per unit(excludingexcessprofitdistribution
per unit)

Excessprofitdistribution
per unit

Distribution
per unit(includingexcessprofitdistribution
per unit)(Reference)
Simulated
earnings
per unit(Note 1) (Note
2)

JPY

JPY

JPY

JPY

JPY

JPY

1,590

23

1,613

239

1,853

1,977

JPY

JPY

JPY

JPY

JPY

JPY

1,651

23

1,675

248

1,924

2,052

Amount of variance(B)- (A)

JPY

JPY

JPY

JPY

JPY

JPY

61

－

62

9

71

75

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

%

3.8

－

3.8

3.8

3.8

3.8

Previous forecast (A)(June 25, 2015)
Revised forecast (B)<Full-year 2016> (Aggregate of the fiscal periods ending in June 2016 and December 2016)

Earnings
per unit

Reversal of
Surplus per
unit

Distribution
per unit(excludingexcessprofitdistribution
per unit)

Excessprofitdistribution
per unit

Distribution
per unit(includingexcessprofitdistribution
per unit)(Reference)
Simulated
earnings
per unit(Note 1) (Note
2)

JPY

JPY

JPY

JPY

JPY

JPY

2,122

0

2,122

0

2,122

2,122

JPY

JPY

JPY

JPY

JPY

JPY

2,172

0

2,172

0

2,172

2,161

Amount of variance(B)- (A)

JPY

JPY

JPY

JPY

JPY

JPY

50

－

50

－

50

39

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

%

2.4

－

2.4

－

2.4

1.8

Previous forecast (A)(June 25, 2015)
Revised forecast (B)62.

Reasons for the revision of forecast of financial results and distribution<Fiscal Period Ended June 2015>
The previous forecast of financial results for the fiscal period ended June 2015 was based on actual results for theperiod from January to April 2015 and the forecast for the period from May to June 2015. Financial results for the
fiscal period ended June 2015 have been mostly settled, therefore INV revised its financial results and distribution
forecast for the fiscal period ended June 2015.
Operating revenue is expected to increase by JPY 54 million (1.1%) from the previous forecast, primarily due tothe robust performance of the existing 23 hotels during the period from May to June 2015.
As a result, net income is expected to increase by JPY 93 million (4.3%), the total distribution amount for the fiscal
period ended June 2015 is JPY 2,295 million and the distribution per unit is JPY 860 (4.4% higher than theprevious forecast).
<Fiscal Period Ending December 2015, Fiscal Period Ending June 2016 and Fiscal Period Ending December
2016>
As announced today in the “Notice concerning Acquisition of Assets and Entering into Leasing Contract” and“Notice concerning Debt Financing”, INV expects to acquire three hotels on August 28, 2015, by utilizing part ofcash on hand and by procuring a new loan (“Additional Acquisition”, and together with the Additional New
Borrowing, collectively the “Additional Transactions”). Thus, INV has revised its financial results and distributions
forecast for fiscal periods ending December 2015, June 2016 and December 2016.
As a result of the Additional Transactions, ordinary income is expected to increase by JPY 80 million (3.3%) for the
fiscal period ending December 2015, by JPY 77 million (2.5%) for the fiscal period ending June 2016, and by JPY
84 million (2.3%) for the fiscal period ending December 2016 as compared with the previous forecast.
The total distribution amount is expected to be JPY 3,398 million (3.4% increase) (DPU: JPY 1,064) for the fiscal
period ending December 2015, JPY 3,222 million (2.4% increase) (DPU: JPY 1,009) for the fiscal period ending
June 2016, and JPY 3,714 million (2.3% increase) (DPU: JPY 1,163) for the fiscal period ending December 2016,
each increase is compared with the previous forecast.
3.

Excess profit distribution policy
INV believes maintaining the stability of cash distributions over the medium term is one of the mostimportant factors in determining the amount of distribution for a given fiscal period, and therefore, incases where significant expenses are to be recorded in connection with, among other things, theacquisition of assets or the raising of capital, leading to a significant decrease in earnings, INV has
decided to make distributions in excess of profits in order to stabilize distributions and be more reflectiveof INV’s simulated earnings.
With respect to the distribution per unit for the fiscal period ending December 2015, earnings are
expected to decrease due to various one-time expenses that are expected to be recorded in connection
with the Transactions with Public Offering. In addition, the Additional Transactions are implemented byutilizing the excess cash-on-hand obtained from the Public Offering. Therefore, from the perspective of
maintaining stable distributions, INV expects to pay distributions in excess of profits within the scope ofthe expected shortfall between actual earnings per unit and of the simulated earnings per unit after theTransactions with Public Offering and the Additional Transactions. INV believes that a distribution perunit (including distributions in excess of profits) of JPY 1,064 for the fiscal period ending December 2015,
which is more reflective of the simulated earnings per unit, is appropriate given the expected profit levels
that will be achieved after completion of the Transactions with Public Offering and the Additional7

Transactions. INV has determined that even though the actual distribution per unit exceeds forecasted
earnings per unit for the fiscal period ending December 2015, the Transactions with Public Offering and
the Additional Transactions as a whole are profitable for INV’s investors, and will result in higher future
earnings in excess of one-time costs in connection with implementing the Transactions with Public
Offering and the Additional Transactions. Further, at the present time, INV has also determined that sucha distribution will not adversely impact INV’s ability to pay for the maintenance of INV’s assets following
such distribution in excess of profits, its financial position or its liquidity. Therefore, INV believes thatmaking such a distribution in excess of profits for the fiscal period ending December 2015 is reasonable.
However, the payment is not guaranteed and it may not be made depending on the financial results, etc.
4.

Other: surplus
Following the distribution for the fiscal period ended December 2015, the balance of the Surplus is
expected to be JPY 0.

8

(Appendix 1)<Assumptions Underlying the Forecast of Financial Results and Distribution for the
th
th
th
th
24 Fiscal Period, the 25 Fiscal Period, the 26 Fiscal Period and the 27 Fiscal Period>
Item

Fiscal period

Assumptions
The 24th fiscal period: from January 1, 2015 to June 30, 2015 (181 days)
The 25th fiscal period: from July 1, 2015 to December 31, 2015 (184 days)
The 26th fiscal period: January 1, 2016 to June 30, 2016 (182 days)
The 27th fiscal period: from July 1, 2016 to December 31, 2016 (184 days)thProperties held as of the end of the 24 fiscal period: 94 properties
Properties held as of the end of the 25th fiscal period: 111 properties
Properties held as of the end of the 26th fiscal period: 111 properties
Properties held as of the end of the 27th fiscal period: 111 properties

Assets undermanagement

INV assumes that INV will newly acquire 3 hotel properties (Note) as of August 28, 2015
in addition to existing 108 properties, and there will be no change through the end of the
fiscal period ending December 2016.
(Note) Regarding the acquisition of properties as of August 28, 2015, please refer to “Noticeconcerning Acquisition of Assets and Entering into Leasing Contract” as of today.

Units outstanding

As of the end of the 24th fiscal period: 2,668,686 units
As of the end of the 25th fiscal period: 3,193,686 units
As of the end of the 26th fiscal period: 3,193,686 units
As of the end of the 27th fiscal period: 3,193,686 units
INV assumes that there will be no additional issuance of units thereafter through the endof the fiscal period ending December 2016.

Interest-bearing liabilities

Balance as of the end of the 24th fiscal period: JPY 72,301 mn
Balance as of the end of the 25th fiscal period: JPY 91,699mn (Note)
Balance as of the end of the 26th fiscal period: JPY 90,619 mn (Note)
Balance as of the end of the 27th fiscal period: JPY 90,619 mn (Note)(Note) JPY 321 million of the consumption tax loan of JPY 1,401 million implemented on
July 16, 2015 is assumed to be repaid by October 30, 2015 during the 25th fiscal period
and JPY 1,080 million of consumption tax loan of JPY 1,401 million is assumed to be
repaid by May 16, 2016 during the 26th fiscal period.
INV assumes that, as of August 28, 2015, it will draw down the New Term Loan A (fordetails, please refer to the “Notice concerning Debt Financing” dated today), and that
there will be no other borrowings or prepayments.

9

Item

Assumptions
INV expects to record rental revenues for each fiscal period as follows:
The 24th fiscal period
JPY 4,974 mn(JPY 2,382 mn)(JPY 942mn)(JPY 1,439mn)
The 26th fiscal period
JPY 6,500 mn(JPY 3,745 mn)(JPY 1,614mn)(JPY 2,130mn)

・Rental revenues(of these, hotel rents)(fixed hotel rents)(variable hotel rents)

Operating revenues

・Rental revenues(of these, hotel rents)(fixed hotel rents)(variable hotel rents)

The 25th fiscal period
JPY 6,601 mn(JPY 3,804 mn)(JPY1,645mn)(JPY2,159mn)
The 27th fiscal period
JPY 7,008 mn(JPY 4,186 mn)(JPY1,726mn)(JPY2,460mn)

Rental revenues in the fiscal period ending June 2015 and the fiscal period ending
December 2015 are calculated based on estimates as of today from January 2015 to
December 2015, and rental revenues in the fiscal period ending June 2016 and thefiscal period ending December 2016 are calculated based on estimates as of today fromJanuary 2016 to December 2016.
INV expects to incur property related expenses for each fiscal period as follows:・Facility management fees(of these, repair costs)
・Taxes and other public charges
・Insurance expenses
・Depreciation expenses
・ Other expenses
Total property related expenses

Operating expenses

・Facility management fees(of these, repair costs)
・Taxes and other public charges
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expensesth
The 24 fiscal period
JPY 468 mn(JPY 24 mn)
JPY 201 mn
JPY 7 mn
JPY 986 mn
JPY 169 mn
JPY 1,834 mn
The 26th fiscal period
JPY 482 mn(JPY 33 mn)
JPY 295 mn
JPY 8 mn
JPY 1,365 mn
JPY 191 mn
JPY 2,344 mn

The 25th fiscal period
JPY 503 mn(JPY 42 mn)
JPY 256 mn
JPY 8 mn
JPY 1,329 mn
JPY 150 mn
JPY 2,249 mn
The 27th fiscal period
JPY 505 mn(JPY 43 mn)
JPY 346 mn
JPY 8 mn
JPY 1,356 mn
JPY 151 mn
JPY 2,369 mn

INV expects to incur other operating expenses than the property related expenses foreach fiscal period as follows:th
The 24 fiscal period

The 25th fiscal period

・Other operating expenses

JPY 329 mn

JPY 365 mn(of these, asset management
fees)(JPY 180 mn)(JPY 180 mn)

The 26th fiscal period

The 27th fiscal period

・Other operating expenses

JPY 524 mn

JPY 521 mn(of these, asset management
fees)(JPY 358 mn)(JPY 359 mn)

INV expects to record net operating income for each fiscal period as follows:

Net Operating Income

The 24th fiscal period
JPY 4,127 mn(JPY 2,299 mn)
The 26th fiscal period
JPY 5,521 mn(JPY 3,558 mn)

・NOI(of these, hotel NOI)・NOI
(of these, hotel NOI)

10

The 25th fiscal period
JPY 5,681 mn(JPY 3,659 mn)
The 27th fiscal period
JPY 5,995 mn(JPY3,959 mn)

Item

Assumptions

INV expects to incur non-operating expenses for each fiscal period as follows:

Non-operating expensesth
The 24 fiscal period
JPY 379 mn
JPY 140 mn(－)

The 25th fiscal period
JPY 307 mn
JPY 1,008 mn(JPY 273 mn)－(－)

JPY 142 mn(JPY 142 mn)

JPY 519 mn
The 26 fiscal period
JPY 286 mn
・Interest expense
JPY 119 mn
・Finance related costs
・Other non-operating expenses
JPY － mn
Total Non-operating expenses
JPY 405 mn(Note) Prepayment penalty of Prudential LPS Loan

JPY 1,458 mn
The 27th fiscal period
JPY 287 mn
JPY 112 mn
JPY － mn
JPY 400 mn

・Interest expense
・Finance related costs(Prepayment premiums (Note))・Other non-operating expenses(expenses relating to theissuance of new units for theOffering)
Total Non-operating expensesthDistribution per unit

The distribution per unit is calculated in accordance with the cash distribution policy as
set forth in INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ending June 2015, INV expects todistribute an aggregate amount of JPY 2,295 million (distribution per unit: JPY 860)
based on the assumption that the earnings for the fiscal period ending June 2015 (JPY
2,295 million) will be used as funds.
With respect to the distribution for the fiscal period ending December 2015, INV expects
to distribute an aggregate amount of JPY 3,398 million (distribution per unit: JPY 1,064)
based on the assumption that the earnings for the fiscal period ending December 2015
(JPY 2,527 million) and all of the surplus based on the gain on negative goodwill
resulting from the merger (JPY 75 million) will be used as funds.
With respect to the distribution for the fiscal period ending June 2016, INV expects todistribute an aggregate amount of JPY 3,222 million (distribution per unit: JPY 1,009)
based on the assumption that the earnings for the fiscal period ending June 2016 (JPY
3,224 million) will be used as funds.
With respect to the distribution for the fiscal period ending December 2016, INV expects
to distribute an aggregate amount of JPY 3,714 million (distribution per unit: JPY 1,163)
based on the assumption that the earnings for the fiscal period ending December 2016
(JPY 3,716 million) will be used as funds.

INV will make distributions in excess of profits (Excess profit distribution per unit) for the
fiscal period ending December 2015 to bridge gap with simulated earnings per unit
Excess profit distribution
per unitth
The 24 fiscal period

Excess profit distribution per unit

Excess profit distribution per unit

Other

－

The 25th fiscal period
JPY 248

The 26th fiscal period

The 27th fiscal period－－

INV assumes there will be no amendments to applicable laws and regulations, thetaxation system, accounting standards and other regulations that would affect theforegoing forecasts.
In addition, INV assumes there will be no unforeseen material changes in general
economic trends, real estate market conditions and other trends and conditions.

11(Appendix 2)＜Simulated earnings per unit＞
Simulated earnings per unit refer to earnings per unit calculated by first assuming the forecast of financial results
for the fiscal period ending June 2015 and the fiscal period ending December 2015 and then, by applying thesimulated adjustments below, eliminating the effects of such factors as one-time expenses and treating the planned
acquisition of assets, the Public Offering, the Refinancing and the Additional Transactions as if it had occurred prior to
the beginning of the fiscal period ending June 2015.
Simulated adjustment is based on the total of the following adjustments:
1.

The impact based on the assumption that the acquisitions of the three hotels acquired as of February 6,
2015, 11 hotels and three residential properties acquired as of July 16, 2015, and the three hotels to beacquired as of August 28, 2015 described in the “Notice concerning Acquisition of Assets and Entering
into Leasing contract” dated as of August 21, 2015 were implemented prior to the beginning of the fiscal
period ending June 2015.

2.

The impact based on the assumption that the borrowings as of February 6, 2015, the refinancing as ofJune 25, 2015 and the Additional New Borrowing as of August 28, 2015 were implemented prior to thebeginning of the fiscal period ending June 2015.

3.

The tax amount based on the assumption that property taxes and city planning taxes will be expensed at
the beginning of the fiscal period ending June 2015 on the three hotels acquired as of February 6, 2015,
11 hotels and three residential properties acquired as of July 16, 2015, and the three hotels to beacquired as of August 28, 2015.

4.

Elimination of various one-time charges in connection with the implementation of the borrowing and theacquisition of assets as of February 6 2015, the Transactions with Public Offering and the Additional
Transactions.

5.

With respect to both the fiscal period ending June 2015 and the fiscal period ending December 2015,
calculation is based on the assumption that a total of 3,193,686 units (500,000 units through the Public
Offering and 25,000 units through the Over-Allotment Option) were issued at the beginning of the fiscal
period ending June 2015.
The simulated earnings per unit as compared to the estimated earnings per unit for the fiscal period ending

June 2015 and the fiscal period ending December 2015 is purely a simulation intended to describe the effectof the transactions, etc. described above and is neither a forecast nor prospect relating to INV’s earnings or
distribution per unit for a given operating period. Accordingly, there is no guarantee that the simulated
earnings per unit will ever be realized for any future operating period, and INV is not obligated to revise any of
the simulated figures regardless of any changes in circumstances that may affect the above simulation.

12