[For Informational Purpose Only]
June 23, 2014
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
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(Tel. +81-3-5411-2731)

Notice concerning Revision of Forecast of Financial Results and Distribution
for the 22nd Fiscal Period Ending June 2014 and concerning Forecast of Financial Resultsand Distribution for the 23rd Fiscal Period Ending December 2014
Invincible Investment Corporation (INV) today announced the revision of its forecast of financial
results and distribution per unit for the fiscal period ending June 2014 (22nd fiscal period: fromJanuary 1, 2014 to June 30, 2014) announced in the press release titled “Notice concerning
Revision of Forecast of Financial Results and Distribution for the 22nd Fiscal Period Ending June2014” dated May 21, 2014 and its forecast of financial results and distribution per unit for the fiscal
period ending December 2014 (23rd fiscal period: from July 1, 2014 to December 31, 2014), as
described below.
Details

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

1

1.

Revision of forecast of financial results for the fiscal period ending June 2014 (from January 1,
2014 to June 30, 2014)
Earnings per
unit

Reversal of
Surplus per
unit

Operatingrevenues

OperatingincomeOrdinary
incomeNet income

Previous forecast(A)(May 21, 2014)

Million JPY
3,749

Million JPY
2,172

Million JPY
1,219

Million JPY
1,218

JPY
774

JPY

Revised forecast(B)

Million JPY
3,752

Million JPY
2,210

Million JPY
837

Million JPY
837

JPY
532

JPY

Amount of
Variance (B) – (A)Million JPY

Million JPY

37Million JPY
(381)

JPY
(242)

JPY

2

Million JPY(381)

Rate of variance[(B) − (A)] ÷ (A)

%
0.1

%
1.7

%
(31.3)%(31.3)%(31.3)%－(Reference)
Actual results(21st fiscal period)

Million JPY

Million JPY

Million JPY

Million JPY

JPY

JPY

2,740

1,265

353

352

224

12

Distribution
per unit

Total
distribution
amountExcess profit
distribution perunit(Note 1)

Previous forecast (A)(May 21, 2014)
Revised forecast (B)

JPY
0
JPY
0

Amount of Variance(B) – (A)JPY

Rate of variance[(B) − (A)] ÷ (A)%(Reference)
Actual results(21st fiscal period)(Note 1)
(Note 2)
(Note 3)(Note 4)－(excluding excess
profit distribution
per unit) (Note 1)(Note 1)

JPY
550

JPY
550

Million JPY
865

JPY
550

JPY
－

Million JPY

JPY
－

－
JPY
0

%

17
17

(including excess
profit distribution perunit) (Note 1)

Million JPY
865

%
－

－

Distribution
per unit

JPY
550

－

(Note 1) (Note 2)

－

%
－

JPY

Million JPY

JPY

237

372

237

The number of investment units issued and outstanding at the end of the fiscal period: 1,573,179 units.
Reversal of surplus resulting from the gain on negative goodwill recognized in connection with the merger in
February 2010 (the “Surplus”)).
Figures (including earnings per unit, reversal of Surplus per unit and excess profit distribution per unit) arerounded down to the indicated amount and percentages are rounded to first decimal place.
In our previous forecast announced on May 21, 2014, assuming the dividend payout ratio of 100% anddistribution per unit being JPY774, INV expected to retain a portion (JPY353 million) of the net income asreserves for future distributions in order to make the dividend level more stable in the mid-to long term.

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

2However, based on this forecast revision, since INV expects to distribute the entire amount of the net income of
the current fiscal period plus the amount of Surplus reversal, there would be no amount to retain as reserves for
future distributions.

2.

Forecast of financial results and distribution per unit for the fiscal period ending December 2014
(from July 1, 2014 to December 31, 2014)

Forecast for the
fiscal period
endingDecember
2014

Operatingrevenues

OperatingincomeOrdinary
incomeNet income

Million JPY
4,090

Million JPY
2,160

Million JPY
1,279

Million JPY
1,279

Excess profit
distribution perunit
Forecast for the
fiscal period ending
December 2014

Distribution perunit(Note 1) (Note 2)(excluding excess
profit distribution
per unit) (Note 1)

JPY

JPY

103

496

Total
distribution
amountMillion JPY
1,601

Earnings
per unit

Reversal of
Surplus per unit

(Note 1)

(Note 1) (Note 2)

JPY
479

JPY
16

Distribution
per unit(including excess
profit distribution
per unit) (Note 1)

JPY
600

(Note 1) The number of investment units issued and outstanding at the end of the fiscal period: 2,668,686 units.
(Note 2) The forecasted excess profit distribution per unit of JPY103.5 is equal to the simulated distribution per unit of
JPY600 for the fiscal period ending December 2014 (see Appendix 2) minus the forecasted distribution(excluding excess profit distribution) per unit of JPY496.5.
After the payment of distributions for the fiscal period ending June 30, 2014, INV plans to reverse and use theentire balance of the Surplus remaining as of the end of the fiscal period ending June 2014 (JPY45 million) for
distributions for the fiscal period ending December 31, 2014. Further, INV plans to make distributions in excess
of profits for the purpose of stabilizing distributions, due to the significant expenses that are anticipated to berecorded during the fiscal period ending December 2014 in connection with the Transactions, as discussed
below. However, the payment is not guaranteed and it may not be made depending on the financial results, etc.
With respect to the forecasted distribution in excess of profits, after considering the actual financial results forthe fiscal period ending December 2014, INV will make a determination on such distribution in excess of profits
based on factors such as providing stable distributions in light of the expenses mentioned above, securing thenecessary properties for maintaining asset value, the financial condition of INV following such distribution inexcess of profits, if made, and INV’s liquidity. For details regarding INV’s excess profit distribution policy and therelated simulated earnings per unit for the fiscal period ending December 2014, please consult “4. Excess profit
distribution policy” and Appendix 2 below.
(Note 3) Figures (including earnings per unit, reversal of Surplus per unit and excess profit distribution per unit) arerounded down to the indicated amount and percentages are rounded to first decimal place.

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

3<For Reference>
As part of the global offering announced today in the “Notice concerning Issuance of New
Investment Units and Secondary Distribution of Investment Units”, INV plans to issue 1,040,000
units in a public offering (the “Public Offering”) and, in addition, to issue up to 55,507 units throughthe exercise of an over-allotment option (the “Over-Allotment Option” and, together with the Public
Offering, the “Offering”). Further, as announced in the press release above, using the proceedsfrom the equity financing and refinancing of loans (the “Refinancing”) as announced today in the“Notice concerning Debt Financing and Prepayment of Existing Borrowings”, INV plans to acquire
18 limited service hotels (the “Acquisitions”, and, together with the Offering and the Refinancing, the“Transactions”). Assumptions underlying the forecast of financial results and distributions for the
fiscal period ending June 2014 and the fiscal period ending December 2014 are provided inAppendix 1. For ease of reference, figures for earnings per unit, distribution per unit (includingexcess profit distribution per unit) and simulated earnings per unit are summarized in the tablebelow. Forecasts for simulated earnings per unit are shown for reference purposes, and indicate
simulated earnings per unit after excluding one-time costs associated with the Transactions andtreating the Acquisitions, the Offering and the Refinancing as if they had taken place prior to thebeginning of fiscal period ending June 2014. For details on the method for calculating simulated
earnings per unit, please refer to Appendix 2. The simulated earnings per unit is purely asimulation intended to describe the effect of the transactions, etc. described above and is neither aforecast nor prospect relating to INV’s earnings or distribution per unit for a given operating period.

Earnings perunit (Note 2)
Forecast for the fiscal
period ending June
2014
Forecast for the fiscal
period ending
December 2014

Distribution per
unit

Simulated
earnings perunit(including excess
profit distribution
per unit) (Note 2)(Note 1) (Note 2)

JPY
532

JPY
550

JPY
589

JPY
479

JPY
600

JPY
627

(Note 1) For details on the simulated earnings per unit, please refer to Appendix 2. As noted in Appendix 2, the simulated
earning per unit for the fiscal period ending June 2014 is calculated based on the assumption that a total of
1,095,507 units (1,040,000 units to be issued during the fiscal period ending December 2014 through the Public
Offering and 55,507 units through the Over-Allotment Option) were issued at the beginning of the fiscal period
ending June 2014 and the number of investment units issued and outstanding is 2,668,686. On the other hand,the forecasts for the earnings per unit and distribution per unit for the fiscal period ending June 2014 is based on
the number of investment units issued and outstanding at the end of the fiscal period ending June 2014:
1,573,179 units.
(Note 2) The number of investment units issued and outstanding at the end of the fiscal period ending December 2014:
2,668,686 units.
This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

4

(Note 3) Figures (including earnings per unit, reversal of Surplus per unit and excess profit distribution per unit) arerounded down to the indicated amount and percentages are rounded to first decimal place.

The above forecast is based on the assumption that the Over-Allotment Option is fully exercised.
The forecast in the table below represents the distribution amounts in the case where no shares areissued through the Over-Allotment Option.
The forecast is also based on the assumption that the expected number of investment units issued
and outstanding following the Offering will be 2,613,179 and that there will be no additional
issuance of units thereafter through the end of the fiscal period ending December 2014. Other
assumptions underlying the forecast are provided in Appendix 1. Further, the calculation method for
simulated earnings per share, except with respect to the assumption that the number of investment
units issued and outstanding at the beginning of the fiscal period ending June 2014 is 2,613,179, isprovided in Appendix 2.
The simulated earnings per unit is purely a simulation intended to describe the effect of thetransactions, etc. described above and is neither a forecast nor prospect relating to INV’s earnings
or distribution per unit for a given operating period.

Earnings perunit (Note 5)
Forecast for the fiscal
period ending June
2014
Forecast for the fiscal
period ending
December 2014

Distribution per
unit

Simulated
earnings perunit(including excess
profit distribution
per unit) (Note 5)(Note 4) (Note 5)

JPY
532

JPY
550

JPY
602

JPY
489

JPY
600

JPY
640

(Note 4) For details on the simulated earnings per unit, please refer to Appendix 2. The simulated earning per unit for the
fiscal period ending June 2014 is calculated based on the assumption that the 1,040,000 units to be issued
through the Public Offering during the fiscal period ending December 2014 were issued at the beginning of the
fiscal period ending June 2014 and the number of investment units issued and outstanding is 2,613,179. On
the other hand, the forecasts for the earnings per unit and distribution per unit for the fiscal period ending June2014 is based on the number of investment units issued and outstanding at the end of the fiscal period ending
June 2014: 1,573,179 units.
(Note 5) The number of investment units issued and outstanding at the end of the fiscal period ending December 2014:
2,613,179 units.
(Note 6) Figures (including earnings per unit, reversal of Surplus per unit and excess profit distribution per unit) arerounded down to the indicated amount and percentages are rounded to first decimal place.

3.

Reason for revision of forecast of financial results and distribution for the fiscal period ending June2014 and forecast of financial results and distribution for the fiscal period ending December 2014

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

5<Fiscal Period Ending June 2014>
As announced today in the “Notice concerning Acquisition of Assets and Entering into Leasing
Contract”, the “Notice concerning Issuance of New Investment Units and Secondary
Distribution of Investment Units” and the “Notice concerning Debt Financing and Prepayment of
Existing Borrowings”, INV expects to conduct the Transactions in order to acquire 18 hotels.
The revision of the forecast of financial results and distribution for the fiscal period ending June2014 announced in the press release titled “Notice concerning Revision of Forecast of
Financial Results and Distribution for the 22nd Fiscal Period Ending June 2014” dated May 21,
2014, is based on INV’s current review of its previous forecast of financial results in connection
with the Transactions.
The main factors resulting in the changes to the forecast are as follows:(1) Decrease in Operating Expenses
Operating expenses are expected to decrease by JPY35 million from the previous forecast
as a whole due to such factors as restoration costs decreasing by JPY14 million from theprevious forecast and expenses such as new contract commissions and advertisement
expenses decreasing by JPY18 million from the previous forecast.
(2) Increase of Non-operating Expenses
Finance-related costs are expected to increase by JPY291 million from the previous
forecast due to various one-time charges associated with entering into the Transactions
and costs related to the issuance of investment units for the Offering in the amount of
JPY130 million are expected to be newly recorded. As a result, non-operating expenses
are expected to increase by JPY420 million from the previous forecast as a whole.
(3) Increase of Surplus Reversal
With respect to the fiscal period ending June 2014, we expect to reverse the Surplus balancein the amount of JPY 28 million.
As a result of the above three factors, the total distribution amount for the fiscal period ending June2014 is JPY865 million and the distribution per unit has not changed from the previous forecast(JPY550).
<Fiscal Period Ending December 2014>
INV is announcing the forecast of the financial results and distribution for the fiscal period
ending December 2014, based on currently available information and certain assumptions
which INV judges to be reasonable, for the purpose of providing useful information to investors.
This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

6

As noted in “2. Forecast of financial results and distribution per unit for the fiscal period ending
December 2014 (from July 1, 2014 to December 31, 2014)” above, with respect to the
distribution for the fiscal period ending December 2014, based on the simulated earnings perunit based on the current forecast, it is expected that, in addition to the net income for the fiscal
period ending December 2014 (JPY 1,279 million), the entire Surplus (JPY45 million) remaining
after distributions are made for the fiscal period ending June 2014 will be reversed for
distribution of excess profit in the amount of JPY280 million. As a result, the total distribution
amount will be JPY1,601 million and the distribution per unit is expected to be JPY600 for the
fiscal period ending December 2014. However, the payment is not guaranteed and it may not
be made depending on the financial results, etc. For details on the basis for calculating
distributions in excess of profits and the decision-making procedure associated therewith,please see note 2 of “2. Forecast of financial results and distribution per unit for the fiscal period
ending December 2014 (from July 1, 2014 to December 31, 2014)” above. For further details
on the policy relating to distributions in excess of profits, please refer to “4. Excess profit
distribution policy” below, and for details on the assumptions underlying the revision and theforecast, please refer to Appendix 1.
4.

Excess profit distribution policy
INV has calculated the simulated earnings per unit to be JPY589 for the fiscal period ending
June 2014 and JPY627 for the fiscal period ending December 2014 based on the assumptionthat the acquisition of the 18 hotels, the equity financing through the Offering and the newborrowings through the Refinancing all took place prior to the fiscal period ending June 2014
and also by excluding adjusted items such as one-time charges associated with implementing
the Transactions. For details on the simulated earnings per unit, please refer to Appendix 2.
INV believes maintaining the stability of cash distributions over the medium term is one of themost important factors in determining the amount of distribution for a given fiscal period, andtherefore, in cases where significant expenses are to be recorded in connection with, among
other things, the acquisition of assets or the raising of capital, leading to a significant decreasein earnings, INV has decided to make distributions in excess of profits in order to stabilize
distributions and be more reflective of the simulated earnings of the INV. With respect to the
distribution per unit for the fiscal period ending December 2014, due to various expenses thatare expected to be recorded in connection with the Transactions in such fiscal period, it isexpected that earnings will decrease significantly. Therefore, from the perspective of
maintaining stable distributions, INV expects to pay distributions in excess of profits within thescope of the expected shortfall between actual earnings per unit and of the simulated earnings
per unit. INV believes that a distribution per unit (including distributions in excess of profits) of
JPY600 for the fiscal period ending December 2014, which is more reflective of the simulatedThis English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

7earnings per unit, is appropriate given the expected profit levels that will be achieved after
completion of the Transactions. INV has determined that even though the actual distribution
per unit exceeds forecasted earnings per unit for the fiscal period ending December 2014, theTransactions 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. Further,at the present time, INV has also determined that such a 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 that making such a
distribution in excess of profits for the fiscal period ending December 2014 is reasonable.
However, the payment is not guaranteed and it may not be made depending on the financial
results, etc.
Accordingly, INV expects that the distribution per unit for the fiscal period ending June 2014 will
be JPY550 and the distribution per unit for the fiscal period ending December 2014 will be
JPY600.
In connection with the above, Consonant Investment Management Co., Ltd., the asset
manager for INV, is revising its Investment Guidelines to allow for INV to make distributions inexcess of profits in either of the following circumstances: (i) to ensure compliance with therequirements of the Special Taxation Measures Act in cases where distributions do not exceed
90% of distributable income and (ii) to stabilize distributions in situations where earnings are
expected to decrease significantly as a result of significant expenses being recorded inconnection with the acquisition of assets or the raising of capital. As a general rule, other thanin the above-noted circumstances, INV is not to make distributions in excess of profits and theInvestment Guidelines will also set forth a list of considerations and decision-making processes
to be taken into account when deciding to make distributions in excess of profits. For details,
please refer to the “Notice concerning Partial Revision of Internal Rules (the Investment
Guidelines) of the Asset Management Company” announced today.
5.

Other: regarding Surplus
Following the distribution for the fiscal period ending December 2014, the balance of the
Surplus is expected to be JPY0.

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

8

(Appendix 1)< Assumptions Underlying Forecast of Financial Results and Distributionndfor the 22 Fiscal Period (From January 1, 2014 to June 30, 2014) andrd
for the 23 Fiscal Period (From July 1, 2014 to December 31, 2014)>
Item
Fiscal period

Assumptionsnd
The 22 fiscal period : from January 1, 2014 to June 30, 2014 (181 days)
The 23rd fiscal period: from July 1, 2014 to December 31, 2014 (184 days)nd
Properties held as of the end of the 22 fiscal period: 73 propertiesrd
Properties held as of the end of the 23 fiscal period: 91 properties

Assets under management

INV assumes that, in addition to the 73 properties it holds as of today, it will acquire
18 hotels on July 17, 2014, and there will be no change to the managed assets
thereafter through the end of the 23rd fiscal period.
nd
As of the end of the 22 fiscal period: 1,573,179 unitsrd
As of the end of the 23 fiscal period: 2,668,686 units

Units outstanding

INV assumes that a total of 1,095,507 new investment units will be issued throughthe Public Offering (1,040,000 new investment units) and the Over-Allotment Option(up to 55,507 new investment units), that the expected number of investment units
issued and outstanding following the Offering will be 2,668,686 units, and that there
will be no additional issuance of units thereafter through the end of the fiscal period
ending December 2014.
ndBalance as of the end of the 22 fiscal period: JPY41,000 million
Balance as of the end of the 23rd fiscal period: JPY67,260 million

Interest-bearing liabilities

INV assumes that, as of July 17, 2014, it will enter into the New Syndicate Loan (C)and prepay the New Syndicate Loan (A) and New Syndicate Loan (B) (for details,
please refer to the “Notice concerning Debt Financing and Prepayment of Existing
Borrowings” dated today), and that there will be no other borrowings or
prepayments.
INV expects to record rental revenues of JPY2,746 million for the fiscal period
ending June 2014, and JPY4,090 million for the fiscal period ending December
2014. The breakdown is as follows:nd・Rental revenues
Operating revenues

The 22 fiscal period
JPY2,746 million(of these, JPY38 million
are hotel rents)//

The 23rd fiscal period
JPY4,090 million(of these, JPY1,501 million
are hotel rents)

Rental revenues are calculated based on historical data and taking into accounttenant trends, property competitiveness, market environment and other factors. In
addition, INV assumes there will be no delinquencies or non-payment of rent bytenants.
In addition, for the fiscal period ending June 2014, we expect to record operating
revenues other than rental revenues from gains in connection with the sale of sevensenior housing properties on May 23, 2014 in the amount of JPY1,005 million.

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

9

Item

Assumptions
INV expects to incur property related expenses of JPY1,300 million for the fiscal
period ending June 2014 and JPY1,669 million for the fiscal period ending
December 2014. The breakdown is as follows:

Operating expenses

The 22nd fiscal period
JPY450 million
・Facility management fees(of these, JPY41 million
are repair costs)
・Taxes and other public charges JPY164 million
JPY5 million
・Insurance expenses
JPY139 million
・Other expenses
JPY541 million
・Depreciation expenses

The 23rd fiscal period
JPY477 million(of these, JPY40 million
are repair costs)
JPY163 million
JPY6 million
JPY141 million
JPY880 million

In addition to the property related expenses, INV expects to incur other operating
expenses in the amount of JPY241 million for the fiscal period ending June 2014
and JPY260 million for the fiscal period ending December 2014.
INV expects to incur non-operating expenses of JPY1,373 million for the fiscal
period ending June 2014 and JPY880 million for the fiscal period ending December
2014. The breakdown is as follows:
The 22nd fiscal period
JPY374 million
JPY869 million(of these, JPY300
million are one-timecharges for
Refinancing)・Other non-operating expenses JPY130 million(of these, JPY130
million are expenses
relating to the issuanceof new units for theOffering)
・Interest expense
・Finance related costs

Non-operating expenses

The 23rd fiscal period
JPY361 million
JPY349 million(of these, JPY244
million are one-timecharges for
Refinancing)
JPY170 million(of these, JPY170
million are expenses
relating to the issuanceof new units for theOffering)

For details on the Offering, please refer to the “Notice concerning Issuance of New
Investment Units and Secondary Distribution of Investment Units” dated as of today.
For details on the expected new borrowings and prepayment (Refinancing) on July17, 2014, please refer to the “Notice concerning Debt Financing and Prepayment of
Existing Borrowings” dated as of today.
The distribution per unit is calculated in accordance with the cash distribution policy
as set forth in INV’s Articles of Incorporation.

Distribution per unit

With respect to the distribution for the fiscal period ending June 2014, INV expects todistribute an aggregate amount of JPY865 million (distribution per unit: JPY550)
based on the assumption that the earnings for the fiscal period ending June 2014
will be JPY837 million and also that a portion of the Surplus in the amount of JPY28
million will be reversed.
With respect to the distribution for the fiscal period ending December 2014, INV
expects to distribute an aggregate amount of JPY1,601 million (distribution per unit:
JPY600) based on the assumption that the earnings for the fiscal period ending
December 2014 will be JPY1,279 million and also that an excess profit distribution inThis English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

10

Item

Assumptions
the amount of JPY280 million will be made after the entire remaining balance of the
Surplus in the amount of JPY45 million will be reversed.
With respect to the distribution per unit for the fiscal period ending December 2014,
INV expects to pay any amount expected to fall short of the simulated earnings perunit level by making distributions in excess of profits.

Excess profit distribution
per unit

The 22nd fiscal period
JPY－

・Excess profit distribution
per unit

Other

The 23rd fiscal period
JPY103

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.

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

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(Appendix 2)< Simulated Earnings Per Unit>

Simulated earnings per unit refer to earnings per unit calculated by first assuming the forecast offinancial results for the fiscal period ending June 2014 and the fiscal period ending December 2014
and then, by applying the simulated adjustments below, eliminating the effects of such factors as
one-time expenses and treating the planned acquisition of assets as if it had occurred prior to thestart of the fiscal period ending June 2014.
Simulated adjustment is based on the total of the following adjustments:
1. Elimination of the gains from the sale of seven senior housing properties described in the “Noticeconcerning Acquisition and Sale of Assets, Entering into and Termination of Leasing Contract andCommencement of Management of New Class of Assets”, dated as of May 21, 2014 (as amended;hereinafter the same).
2. The impact based on the assumption that the repositioning of the portfolio described in the “Noticeconcerning Acquisition and Sale of Assets, Entering into and Termination of Leasing Contract andCommencement of Management of New Class of Assets”, dated as of May 21, 2014, and theAcquisitions were implemented prior to beginning of the fiscal period ending June 2014.
3. The impact based on the assumption that the refinancing described in the “Notice concerning Debt
Financing and Prepayment of Existing Borrowings”, dated as of May 21, 2014, and the Refinancing
were implemented prior to the fiscal period ending June 2014.
4. The tax amount based on the assumption that property taxes and city planning taxes will be
expensed beginning the fiscal period ending June 2014 on the two acquired hotels described in the“Notice concerning Acquisition and Sale of Assets, Entering into and Termination of Leasing Contract
and Commencement of Management of New Class of Assets”, dated as of May 21, 2014 and on the
18 hotels to be acquired pursuant to the Acquisitions.
5. Elimination of various one-time charges in connection with the implementation of the Transactions.
6. With respect to both the fiscal period ending June 2014 and the fiscal period ending December 2014,
calculation is based on the assumption that a total of 1,095,507 units (1,040,000 units through the
Public Offering and 55,507 units through the Over-Allotment Option) were issued at the beginning of
the fiscal period ending June 2014 and the number of investment units issued and outstanding is
2,668,686.
The simulated earnings per unit as compared to the estimated earnings per unit for the fiscal period ending
June 2014 and the fiscal period ending December 2014 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 simulatedThis English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

12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.

This English language notice is a translation of the Japanese-language notice released on June 23, 2014 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

13