MATTERS DISCLOSED ON THE INTERNETRELATED TO THE
NOTICE OF CONVOCATION OF
THE 121st ORDINARY GENERAL MEETING OF SHAREHOLDERS

Consolidated Statement of Changes in Net Assets…………………

1

Notes to the Consolidated Financial Statements…………………

2

Non-consolidated Statement of Changes in Net Assets …………………

16

Notes to the Non-consolidated Financial Statements

18…………………

The content of this document is posted on the website of Mitsubishi Estate Co., Ltd.
(“the Company”) (https://www.mec.co.jp/e/investor/stock/shareholder/index.html),
pursuant to laws and regulations and Article 16 of the Articles of Incorporation of the Company.

[Translation for Reference and Convenience Purposes Only]

Consolidated Statement of Changes in Net Assets(From April 1, 2019, to March 31, 2020)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at the beginning ofcurrent period
Changes in the fiscal year
under review

Capital surplus

Retained earnings

142,023

162,498

858,581124

124

Issuance of new shares

Total shareholders’equityTreasury stock(5,278)1,157,824

249

Dividend from surplus(44,112)(44,112)

Profit attributable to ownersof parent

148,451

148,451

Purchase of treasury stock
Disposal of treasury stock(2)

Change of scope of
consolidation
Change in equity of the parent
company on transactions with
non-controlling interests
Net changes in items other thanthose in shareholders’ equity
Total of changes in the fiscal
year under review
Balance at the end of current
period(100,020)(100,020)

16

13

(78)

(78)

1,418

1,418

124

1,543

104,258(100,004)

5,922

142,147

164,041

962,840(105,282)

1,163,746

Other accumulated comprehensive incomeNet
unrealized
gain onavailablefor-salesecurities
Balance at the beginning ofcurrent period
Changes in the fiscal year underreview

115,452

DeferredRemeasureStock
Foreign
Total othergains orLand
mentscurrency
accumulated acquisition
losses on revaluationof definedrightstranslation
comprehenhedging
reservebenefitadjustments
sive income
instruments
plans
(64)

526,623(30,144)952

612,819302

Noncontrollinginterests

Total net
assets186,159 1,957,105

Issuance of new shares

249

Dividend from surplus(44,112)

Profit attributable to owners ofparent148,451

Purchase of treasury stock(100,020)

Disposal of treasury stock

13

Change of scope of
consolidation(78)

Change in equity of the parent
company on transactions with
non-controlling interests

1,418

Net changes in items otherthan those in shareholders’equity(35,925)(1,883)

Total of changes in the fiscal
year under review(35,925)(1,883)

Balance at the end of current
period79,527(1,948)822(5,116)(42,102)(13)

20,294(21,821)–822(5,116)(42,102)(13)

20,294(15,898)

526,623(29,321)(4,163)570,716288

206,454 1,941,206-1-[Translation for Reference and Convenience Purposes Only]

Notes to the Consolidated Financial Statements
Notes to Important Matters for the Preparation of the Consolidated Financial Statements
1. Matters related to the Scope of Consolidation(1) Number of Consolidated Subsidiaries: 241
The names of major subsidiaries are as stated in “I. Current Situation of the Mitsubishi Estate Group, 8.
Situation of Material Subsidiaries, (1) Situation of Material Subsidiaries” of the “Business Report.”
Newly included in the list of consolidated subsidiaries of the Company are PT. Mitsubishi Estate
Indonesia and twenty-eight (28) other companies due to a new establishment, etc.
Excluded from the list of consolidated subsidiaries are MEC Thailand Investment Pte. Ltd. and eight (8)other companies due to a dissolution, etc.
(2) Names, etc. of Major Non-consolidated Subsidiaries
A major non-consolidated subsidiary is Higashi-Shizuoka 15Gaiku Development Tokutei Mokuteki
Kaisya.
Non-consolidated subsidiaries are excluded from the scope of consolidation because their respective sumsof total assets, revenue from operations, profit (loss) (corresponding to the equity ratio owned by theCompany) and retained earnings (corresponding to the equity ratio owned by the Company) have nosignificant impact on the consolidated financial statements.
2. Matters related to Application of the Equity Method(1) Number of Non-consolidated Subsidiaries Accounted for by the Equity Method: 0(2) Number of Affiliates Accounted for by the Equity Method: 120
A major affiliate in this category is Tokumei Kumiai Otemachi Kaihatsu.
Included in the affiliates accounted for by the equity method are CPN Village Company Limited andfourteen (14) other companies due to a new establishment, etc.
Meanwhile, Primetruss Co., Ltd. is excluded from the affiliates accounted for by the equity method due toa disposal of its shares, while RG-MWV OFFICE I LLC and three (3) other companies are excluded fromthe affiliates accounted for by the equity method due to a dissolution, etc.
(3) Names, etc. of Major Companies Not Accounted for by the Equity Method
A major non-consolidated subsidiary not accounted for by the equity method is Higashi-Shizuoka 15Gaiku
Development Tokutei Mokuteki Kaisya and a major affiliate not accounted for by the equity method is
Tokiwabashi Investment Tokutei Mokuteki Kaisya. The equity method is not applied to the Company’s
investments in these corporations because their respective sums of profit (loss) (corresponding to theequity ratio owned by the Company) and retained earnings (corresponding to the equity ratio owned by theCompany) have no significant impact on the consolidated financial statements.
(4) Others
Concerning the companies accounted for by the equity method, the financial statements for the respective
fiscal years are used for those that have a closing date that differs from the consolidated closing date.
3. Matters related to Business Year, etc. of Consolidated Subsidiaries
The closing date of MEC Group International, Inc. (Rockefeller Group, Inc. changed its trade name to MEC
Group International Inc. on January 1, 2020.), which is a consolidated subsidiary, and one hundred ninety-four(194) overseas subsidiaries, MEC eco LIFE Co., Ltd. and four (4) other consolidated subsidiaries is December
31 and the closing date of Keiyo Tochi Kaihatsu Co., Ltd. and two (2) other consolidated subsidiaries is
January 31. In preparing the consolidated financial statements, the financial statements as of and for the year
ended respective closing dates are used for these companies with necessary adjustments provided forconsolidation purposes with regard to material transactions between their closing dates and the consolidated
closing date (March 31).

-2-

[Translation for Reference and Convenience Purposes Only]
4. Matters related to Accounting Policies(1) Valuation Basis and Method for Important Assets
Securities:
Held-to-maturity debt securities:
Carried at amortized cost (determined by the straight-line method for the Company and its
consolidated domestic subsidiaries and by the interest method for consolidated foreign subsidiaries.)
Other securities:
Investment securities:
Available-for-sale securities with market values:
Stated at the market value as of the balance sheet date, based on quoted market prices, etc.
(Unrealized gains and losses are reported, net of applicable taxes, in a separate component of
net assets. The cost of securities sold is determined mainly by the moving-average method.)
Available-for-sale securities without market values:
Stated at cost determined by the moving-average method
Equity investments:
Available-for-sale securities with market values:
Stated at the market value as of the balance sheet date, based on quoted market prices, etc.
(Unrealized gains and losses are reported, net of applicable taxes, in a separate component of
net assets. The cost of equity investments sold is determined mainly by the moving-averagemethod.)Available-for-sale securities without market values:
Stated at cost determined by the moving-average method
Derivatives:
Stated at market values
Inventories:
Real estate for sale: mainly stated at cost determined by the identified cost method. (The amountposted in the Balance Sheets was computed by writing down the book value with regard to theinventories for which profitability was clearly declining.)
Work-in-process real estate for sale: Same as the above
Real estate for development: Same as the above
Expenditures for uncompleted works: Same as the above
Fixed Assets:
The Company and its consolidated domestic subsidiaries adopt asset-impairment accounting.
Consolidated subsidiaries overseas apply International Financial Reporting Standards and U.S.
accounting standards.
(2) Depreciation Method of Important Depreciable Assets
Property and equipment:
Depreciation of property and equipment of the Company and its consolidated domestic subsidiaries iscalculated principally by the declining-balance method at fixed rates.
However, the straight-line method is adopted for buildings (excluding building improvements) acquiredon or after April 1, 1998 and building improvements and structures acquired on or after April 1, 2016.
Depreciation of property and equipment of consolidated foreign subsidiaries is calculated by thestraight-line method.
Intangible assets:
The amortization of intangible assets is computed by the straight-line method. Capitalized software forinternal use is amortized by the straight-line method over the estimated internal useful life (mainly 5
years).

-3-

[Translation for Reference and Convenience Purposes Only](3) Accounting Standards for Important Reserves
Allowance for doubtful receivables:
An allowance for doubtful receivables is provided, for possible losses from uncollectible loans andreceivables, at the amount calculated based on the actual rate of losses from the bad debt for ordinary
receivables, and on the estimated recoverability for specific receivables such as doubtful receivables.
Accrued directors’ retirement benefits:
In consolidated subsidiaries, accrued directors’ retirement benefits is provided at 100% of the amountthat would be required at the end of the consolidated fiscal year under review in accordance withinternal regulations.
Provision for environmental measures:
An estimated amount of loss that could be caused along with environmental measures including
treatment of PCB (Polychlorinated biphenyl) waste is provided.
(4) Accounting Method for Retirement Allowances
1) Method to attribute estimated retirement allowances to period of services
To calculate the Company’s liability for retirement allowances, the method of benefit formula basis ismainly adopted to attribute the estimated amounts of retirement allowance obligations to the period up
to the end of the consolidated fiscal year under review.
2) Accounting method for actuarial gains or losses and prior service cost
Prior service cost is mainly amortized on a straight-line basis over a certain period (1 year–10 years)
within an average remaining period of service of employees at the time of each occurrence.
Actuarial gains or losses are mainly amortized on a straight-line basis over a certain period (1 year–15
years) within an average remaining period of service of employees at the time of their occurrence, witheach amount recognized as an expense starting from the following consolidated fiscal year.
(5) Translation of Important Assets and Liabilities Denominated in Foreign Currencies into Yen
The assets and liabilities denominated in foreign currencies of foreign subsidiaries are translated into yen
at the spot rate of foreign exchange in effect at the balance sheet date of the respective subsidiaries. The
revenue and expense accounts of foreign subsidiaries are translated into yen using the average rate offoreign exchange during the consolidated fiscal year under review. The resulting translation exchange
differences have been presented as “Foreign currency translation adjustments” under “Net assets.”(6) Important Hedge Accounting
1) Hedge Accounting
The Company adopts the deferral hedge accounting, in principle. For interest rate swaps, thepreferential treatment is applied to the swaps which satisfy the requirements of such preferential
treatment. For currency swaps, the appropriation treatment is applied to the swaps which satisfy therequirements of such appropriation treatment.
2) Hedging Instruments and Hedged Items
Hedging instruments:
Hedged items:
Interest rate swaps
Borrowings
Currency swaps
Borrowings and corporate bonds
Borrowings
Equity of the foreign subsidiaries
3) Hedging Policy
The risk hedging transactions are intended to hedge the exposure to fluctuation risks in interest rates
and foreign currency exchange rates, in accordance with the internal regulations such as “Market Risk
Management Rules” and “Management Guideline by Risk.”
4) Method of Assessing Hedge Effectiveness
The Company compares the cumulative amounts of fluctuations in the rates or in the cash flows of thehedged items with the cumulative amounts of fluctuations in the rates or in the cash flows of thehedging instruments, and assesses the effectiveness of hedging transactions based on the ratio between
the two amounts.
However, the assessment of hedge effectiveness is omitted for interest rate swaps to which special
treatment is applied.
(7) Accounting for Consumption Taxes, etc.
Transactions subject to the consumption tax and the local consumption tax are recorded at amounts
exclusive of the consumption tax. Non-deductible consumption tax and local consumption tax are charged
to income for the consolidated fiscal year under review.
(8) Accounting Standards for Revenue from Operations
Recognition criteria for net sales of completed construction contracts and cost of sales of completed
construction contracts-4-

[Translation for Reference and Convenience Purposes Only]
To account for revenue from contract work operations, the percentage of completion method (thepercentage of completion of work is estimated based on cost method) is adopted for work that has been
completed and whose guaranteed performance has been recognized by the end of the consolidated fiscal
year under review. For other work, the complete-contract method is adopted.
Recognition criteria for revenue related to finance lease transactions
The Company recognizes net sales and cost of sales related to finance lease transactions at the time ofreceipt of the lease payments.
(9) Amortization Method and Amortization Period of Goodwill
Goodwill is equally amortized over five (5) years on a straight-line basis. However, if the effect-emerging
period can be reasonably estimated, the amount is equally amortized over the estimated period or if theamount is small, it is amortized for one (1) time.
Note to the Consolidated Balance Sheet
1. Accumulated Depreciation for Property and Equipment: ¥1,696,217 million
The accumulated depreciation above includes the accumulated impairment loss.
2. Assets Subject to Collateral and Secured Debt
(1) Assets Subject to Collateral:
Buildings and structures
Machinery and equipment and vehicles
Land
Other (other property and equipment)
Total(2) Debt Secured by the Above:
Short-term borrowings
Long-term debt to be repaid within one (1) year
Long-term debt
Total

¥197,659 million¥1,601 million¥235,297 million¥2 million¥434,561 million¥100 million¥19,889 million¥76,798 million¥96,787 million-5-[Translation for Reference and Convenience Purposes Only]
3. Contingent Obligations(1) Guarantee Obligations
Warrantee
Amount of Obligation
Substance of Obligation
Home buyers¥49,313 million
Borrowings from financial institutions
Others¥8 million
Borrowings from financial institutions
Total¥49,321 million
The guarantee obligations for home buyers mainly mean the Company’s joint and several guarantees tosecure the repayment of housing loans of home buyers in favor of financial institutions, which continue
until the registration of the creation of the corresponding mortgages has been completed.
(2) Guarantee of Acceptance of Businesses
Warrantee
Amount of Obligation
Substance of Obligation¥3,268 million
NoMad 29th Street
Borrowings from financial institutions(US$29,829 thousand)
TRCC/Rock Outlet¥2,131 million
Borrowings from financial institutions
Center, LLC(US$19,455 thousand)¥1,224 million
Meeyahta Development, Ltd.
Borrowings from financial institutions(US$11,250 thousand)¥5,431 million
CL Office Trustee Pte. Ltd.
Borrowings from financial institutions(S$67,000 thousand)¥989 million
Glory SR Trustee Pte. Ltd.
Borrowings from financial institutions(S$12,200 thousand)¥1,718 million
Lendlease (Melbourne Quarter R1)(¥384 million,
Borrowings from financial institutions
Pty Limited
S$16,456 thousand)¥10,069 million
PT. Windas Development(US$84,747 thousand,Borrowings from financial institutions
IDR100,052 million)¥1,470 million
RML548Co., Ltd.
Borrowings from financial institutions(THB440 million)
Total¥26,302 million
The Company guarantees acceptance of businesses in favor of creditors of Meeyahta Development, Ltd.
and RML548Co., Ltd. in the amount equivalent to the percentage of equity interest owned by theCompany.
MEC Group International Inc. guarantees acceptance of businesses in favor of creditors of NoMad 29th
Street and TRCC/Rock Outlet Center, LLC in the amount equivalent to the percentage of equity interest
owned by the MEC Group International Inc.
Mitsubishi Estate Asia Pte. Limited guarantees acceptance of businesses in favor of creditors of CL Office
Trustee Pte. Ltd. and Glory SR Trustee Pte. Ltd. in the amount equivalent to the percentage of equity
interest owned by Mitsubishi Estate Asia Pte. Limited.
Mitsubishi Estate Asia Pte. Limited and Mitsubishi Estate Residence Co., Ltd. guarantees acceptance ofbusinesses in favor of creditors of Lendlease (Melbourne Quarter R1) Pty Limited in the amount equivalent
to the percentage of equity interest owned by Mitsubishi Estate Asia Pte. Limited and Mitsubishi Estate
Residence Co., Ltd.
Mitsubishi Estate Asia Pte. Limited and MEA Commercial Holdings Pte. Ltd. guarantee acceptance ofbusinesses in favor of creditors of PT. Windas Development. Furthermore, for the amount in excess of theamount equivalent to the percentage of equity interest owned by Mitsubishi Estate Asia Pte. Limited and
MEA Commercial Holdings Pte. Ltd., the Company has received either the provision of collateral or
guarantees from its business partners.
4. Revaluation of Land
The Company and some of its consolidated subsidiaries revalued the land used for its business in accordancewith the “Law Concerning Revaluation of Land” (Law No. 34, March 31, 1998) and the “Law for Partial
Revision to the Law Concerning Revaluation of Land” (Law No. 19, March 31, 2001). The revaluationdifference has been included in “Net assets” as “Land revaluation reserve,” net of the related tax that isincluded in “Liabilities” as “Deferred tax liabilities for revaluation.”
Revaluation method: The value of land is determined based on the assessed value of the fixed property tax
adjusted reasonably, as stipulated in Article 2, Item 3, of the Ordinance for-6-[Translation for Reference and Convenience Purposes Only]
Enforcement of the Law Concerning Revaluation of Land (Government Ordinance
No. 119, March 31, 1998).
Date of revaluation: March 31, 2002

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[Translation for Reference and Convenience Purposes Only]
Notes to the Consolidated Statement of Changes in Net Assets
1. Type and Total Number of Issued Shares and Type and Number of Shares of Treasury Stock(Thousands of shares)
Number of Shares
Number of Shares
Increase during
Decrease during
as of the beginning
as of the end of
the Consolidated
the Consolidatedof Consolidated
Consolidated
Fiscal Year
Fiscal Year
Fiscal Year under
Fiscal Year under
under review
under review
review
review
Issued Shares:
Shares of
1,391,038
136—
1,391,174
commonstock(Note 1)
Total
1,391,038
136—
1,391,174
Treasury stock:
Shares ofcommon2,888
49,797
8
52,677stock(Note 2)
Total
2,888
49,797
8
52,677
Notes:
1. The increase in the number of issued shares was due to the issuance of new shares through third-party
allotment (136 thousand shares).
2. The increase of 49,797 thousand shares in the number of the shares of treasury stock of the Company wasdue to the purchase of shares of treasury stock based on the resolution by the Board of Directors (49,700
thousand shares), the purchase of restricted stock (86 thousand shares) and the purchase of shares less thanone (1) unit (10 thousand shares). The decrease of 8 thousand shares was due to the exercise of stock
options (8 thousand shares), etc.
2. Matters related to Dividends from Surplus(1) Dividends Paid
Date of Resolution
Ordinary General Meetingof Shareholders held on
June 27, 2019
Meeting of Board of
Directors held on
November 7, 2019

Type of
SharesTotal
Amount ofDividends(Millions ofyen)

Dividendper Share(Yen)

Commonstock

23,59817

March 31,2019

June 28,
2019

Commonstock

20,51415

September
30, 2019

December 4,
2019

Record Date

Effective
Date(2) Of the Dividends for which the Record Date belongs to the Consolidated Fiscal Year under review, thosefor which the Effective Date of the Dividends will be in the following Fiscal Year
Total
AmountSource of DividendRecordEffective
Type ofofFunds for per SharePlanned Date of Resolution
Date
Date
SharesDividends(Yen)
Dividends(Millionsof yen)Ordinary General Meeting
CommonRetained
March 31, June 29,of Shareholders to be held
24,09218
stockearnings
2020
2020
on June 26, 2020-8-

[Translation for Reference and Convenience Purposes Only]
3. Matters related to Stock Acquisition Rights

Breakdown of Stock
Acquisition Rights

Type of
Sharessubject toStock
Acquisition
RightsNumber of the Shares subject to Stock Acquisition Rights(Shares)
As of thebeginning ofConsolidated
Fiscal Yearunder review

Increaseduring theConsolidated
Fiscal Yearunder review

Decreaseduring theConsolidated
Fiscal Yearunder review

As of the endofConsolidated
Fiscal Yearunder review

Stock acquisition rights granted
by a resolution at the meeting
Common
2,000
—
—
2,000
of the Board of Directors heldstock
on July 26, 2007
Stock acquisition rights granted
by a resolution at the meeting
Common
3,000
—
—
3,000
of the Board of Directors heldstock
on July 31, 2008
Stock acquisition rights granted
by a resolution at the meeting
Common11,000——11,000of the Board of Directors heldstock
on July 31, 2009
Stock acquisition rights granted
by a resolution at the meeting
Common24,000—3,000
21,000of the Board of Directors heldstock
1
on July 30, 2010
Stock acquisition rights granted
Commonby a resolution at the meeting
31,000—2,000
29,000stockof the Board of Directors held
2
on July 29, 2011
Stock acquisition rights granted
by a resolution at the meeting
Common26,000——26,000of the Board of Directors heldstock
on July 31, 2012
Stock acquisition rights granted
by a resolution at the meeting
Common21,000——21,000of the Board of Directors heldstock
on July 31, 2013
Stock acquisition rights granted
Commonby a resolution at the meeting
28,000——28,000stockof the Board of Directors heldon July 31, 2014
Stock acquisition rights granted
by a resolution at the meeting
Common27,000—3,000
24,000of the Board of Directors heldstock
3
on July 31, 2015
Notes:
1. The decrease in the number of stock acquisition rights, which were granted by a resolution at the meetingof the Board of Directors held on July 30, 2010, for the consolidated fiscal year under review resulted
from the exercise of the stock acquisition rights.
2. The decrease in the number of stock acquisition rights, which were granted by a resolution at the meetingof the Board of Directors held on July 29, 2011, for the consolidated fiscal year under review resulted
from the exercise of the stock acquisition rights.
3. The decrease in the number of stock acquisition rights, which were granted by a resolution at the meetingof the Board of Directors held on July 31, 2015, for the consolidated fiscal year under review resulted
from the exercise of the stock acquisition rights.

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Notes to Financial Instruments
1. Matters relating to Financial Instruments(1) Policies to approach to financial instruments
The Group raises the necessary funds (mainly bank borrowings and bond issues) in light of the capital
investment plan. In terms of fund management, it makes every effort to avoid market risks by emphasizing
liquidity and shortening the fund management period. As for derivative transactions, the Group makes it apolicy not to engage in speculative transactions, focusing primarily on hedging exposures to fluctuation ofinterest rates, reducing interest expenses, and hedging the exposure to fluctuation risks in foreign currency
exchange rates.
(2) Contents and risks of financial instruments
Notes and accounts receivable - trade, which are trade receivables, are exposed to the credit risks ofcustomers. Trade receivables in foreign currencies arising from overseas operations are exposed to risks ofcurrency fluctuations.
Securities and investment securities include mainly held-to-maturity debt securities and shares ofcompanies with which we have business relationships, and are exposed to risks of fluctuations in market
prices.
Equity investments includes mainly preferred equity investments in special-purpose companies under
the Law Concerning Liquidation of Assets, investments in investment units of real estate investment trusts,
and investments in anonymous partnerships into special-purpose companies. They are exposed to credit
risks of respective issuers, risks of changes in interest rates, and risks of fluctuations in market prices.
Guarantee money and deposits paid for leased premises are exposed to credit risks of business partners.
Most of notes and accounts payable - trade, which are trade payables, are due within one (1) year. Someof them in foreign currencies are exposed to risks of currency fluctuations.
Borrowings and corporate bonds are intended to raise funds required mainly for capital expenditures,and their maturity dates and repayment dates are in a maximum of fifty-six (56) years after the closing
date. Although some of them have floating rates and are exposed to interest rate risks, they are hedged
through derivative transactions (interest rate swaps.)
Derivative transactions include interest rate swaps, currency swaps and forward exchange contracts.
Interest rate swaps hedge exposures to interest rates by fixing interest rates for financing at floatinginterest rates. Some of the consolidated subsidiaries trade interest rate and currency swaps based on thesame trading policies and for the same utilization purposes as the Company adopts.
(3) Risk management systems relating to financial instruments(i) Management of credit risks (risks of contractual defaults by business partners)
The Group periodically monitors trade receivables, and guarantee money and deposits paid of major
business partners through the department in charge of each segment, manages the due date and thebalance by business partner, and discovers promptly and reduces the risks of failures to collectmoney due to their deteriorating financial positions(ii) Management of market risks (risks of fluctuations in foreign exchange rates and interest rates)
The Group capitalizes on interest rate swap and currency swap transactions to limit the risks offluctuations in interest rates on debts and corporate bonds. In terms of securities and investment
securities, the Group assesses the market values and financial positions of issuers (business partners)
on a regular basis. As for those excluding held-to-maturity debt securities, the Group continuously
reviews positions in consideration of the market conditions and relationships with business partners.
(iii) Management of liquidity risks of financing (risks of failure to pay on the due date)
The Group in a timely way develops and updates the financing plans through departments in charge
based on reports from each department, and manages liquidity risks by maintaining cash balances.
(4) Supplemental explanation for matters relating to market values, etc. of financial instruments
Market values of financial instruments include values based on market prices and values reasonably
calculated if they have no market prices. Since calculations of the relevant values incorporate variablefactors, the relevant values may vary depending on the assumptions adopted.

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[Translation for Reference and Convenience Purposes Only]
2. Matters related to Market Values, etc. of Financial Instruments
Amounts stated on the consolidated balance sheet as of March 31, 2020, market values, and their differences
are shown as follows. Items, of which market values are considered extremely difficult to determine, are notincluded in the table below (see Note 2).
(Millions of Yen)
Reported amounts on
Market Value
Difference
the consolidatedbalance sheet(1) Cash on hand and in banks
207,896
207,896—(2) Notes and accounts
50,340receivable – trade
Allowance for doubtful(294)
receivables (*1)
50,04650,046—(3) Securities and Investment
securities(i) Held-to-maturity debt
5,916
6,058
141
securities(ii) Other securities
177,971
177,971—(iii) Shares of subsidiaries
60
346
285
and affiliated companies(4) Equity investments
15,264
15,264—
Total assets
457,156
457,583426(1) Notes and accounts payable
66,36866,368—– trade(2) Short-term borrowings
115,306
115,306—(3) Long-term debt to be repaid
156,778
156,778—
within one (1) year
(4) Commercial paper
50,00050,000—(5) Corporate bonds to be
51,55051,550—redeemed within one (1) year
(6) Corporate bonds
775,584
806,628
31,044(7) Long-term debt
1,278,678
1,312,176
33,497
Total liabilities
2,494,266
2,558,809
64,542(*1) Allowances for doubtful notes and accounts receivables are excluded.
Notes:
1. Methods of calculating market values of financial instruments
Assets(1) Cash on hand and in banks
They are based on the relevant book values, as they are quickly settled and their market values
are close to their book values.
(2) Notes and accounts receivable - trade
They are based on the relevant book values, as they are quickly settled and their market values
are close to their book values.
(3) Securities and Investment securities
The market values of stocks, etc. are based on the prices on stock exchanges and those of debt
securities are based on the prices presented mainly by correspondent financial institutions.
(4) Equity investments
The market values of equity investments are based on the prices on stock exchanges.

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[Translation for Reference and Convenience Purposes Only]
Liabilities(1) Notes and accounts payable - trade
They are based on the relevant book values, as they are quickly settled and their market values
are close to their book values.
(2) Short-term borrowings
They are based on the relevant book values, as they are quickly settled and their market values
are close to their book values.
(3) Long-term debt to be repaid within one (1) year
They are based on the relevant book values, as they are quickly settled and their market values
are close to their book values.
(4) Commercial paper
They are based on the relevant book values, as they are quickly settled and their market values
are close to their book values.
(5) Corporate bonds to be redeemed within one (1) year
They are based on the relevant book values, as they are quickly settled and their market values
are close to their book values.
(6) Corporate bonds
The market values of corporate bonds are based on the market prices, etc.
(7) Long-term debt
Of long-term debt, those with variable interest rates are calculated based on the relevant bookvalues as they promptly reflect market interest rates and their market values are considered to
be close to their book values. Those with fixed interest rates are calculated based on the present
values derived by discounting the total amount of principal and interest at rates obtained bycomparison with similar debts that would be newly employed.
2. Financial instruments whose market values are deemed to be extremely difficult to assess
Reported amounts
on theCategory
consolidatedbalance sheet(Millions of yen)
60,677(i) Unlisted stocks (*1)
435,256(ii) Equity investments (*2)
126,092(iii) Guarantee money and deposits paid (*3)
459,177(iv) Guarantee money and deposits received (*4)(*1) Unlisted stocks are not subject to the disclosure of market values, as they have no market prices andtheir market values are deemed to be extremely difficult to assess.
(*2) Of equity investments, those without market prices are not subject to the disclosure of market values, as
their market values are deemed to be extremely difficult to determine.
(*3) Guarantee money and deposits paid for leased premises are not subject to the disclosure of market
values, as they have no market prices and the real deposit period from the move-in date to the move-out
date is difficult to calculate. Consequently, their reasonable cash flows are deemed to be extremely
difficult to estimate.
(*4) Guarantee money and deposits received for leased premises by tenants are not subject to the disclosureof market values, as their reasonable cash flows are deemed to be extremely difficult to estimate, giventhat they have no market prices and it is hard to calculate the real deposit period from the move-in dateto the move-out date of the tenants. In addition, other fund deposits are not subject to the disclosure ofmarket values, as their real deposit period is deemed to be difficult to calculate. Consequently, theirreasonable cash flows are deemed to be considered extremely difficult to estimate.

- 12 -

[Translation for Reference and Convenience Purposes Only]
Notes to Leased Real Estate
The Company and some of its consolidated subsidiaries own office buildings for rent, commercial facilities
for rent and others in Tokyo and other areas including overseas areas (the United States, United Kingdom,etc.) for the purpose of obtaining revenue from leases.
Some office buildings for rent in Japan are regarded as real estate including parts used as leased real estatesince they are used by the Company and some of its consolidated subsidiaries.
The reported amounts on the consolidated balance sheet and the fair values of these leased real estate andreal estate including parts used as leased real estate at the end of the consolidated fiscal year under review are
as follows:
Reported amounts on the consolidatedbalance sheet (Millions of yen)
Leased real estate
Real estate including spaces used asleased real estate

Fair Value(Millions of yen)

3,502,759

7,356,741

545,580

914,103

Notes:
1. The reported amounts on the consolidated balance sheet have deducted accumulated depreciation
costs and accumulated impairment losses from the acquisition cost.
2. Fair values at the end of the consolidated fiscal year under review are based on the following:(1) Fair values of real estate in Japan are calculated by the Company based mainly on the Real EstateAppraisal Standards.
(2) Fair values of real estate overseas are values appraised principally by local real estate appraisers.
(3) The impact of the novel coronavirus disease (COVID-19) on the estimate was calculated on
certain assumptions based on earnings forecasts, but the impact on the estimate is immaterial.
Note to Per-Share Information
Net assets per share
Earnings per share¥1,295.83¥108.64- 13 -

[Translation for Reference and Convenience Purposes Only]
Other Notes
1. Impairment Loss
The impairment loss is recorded for the following asset groups for the consolidated fiscal year under review.
Major Application
Leased assets, etc.
(total 17 groups)

Category
Land and Buildings, etc.

Location
Nishinomiya-shi, Hyogo; etc.

Asset grouping for the Group was made based on a minimum unit that generates cash flows, which issubstantially independent from cash flows of other assets or asset groups. Company condominiums are
regarded as shared assets.
As a result, the book values of seventeen (17) asset groups, consisting of those for which the market prices
fell considerably compared with the book values due to the decline of land prices and those for which
profitability decreased considerably due to fallen rent levels or deteriorated market conditions, etc., werereduced to the respective collectible amounts and such reduced amounts were recorded as an impairment
loss (¥10,844 million) under extraordinary loss.
The breakdown of such impairment loss was ¥3,128 million in land and ¥7,715 million in buildings,
structures and others. The collectible amounts of asset groups are measured with net sale value or use value,
and the net sale value is principally expressed as an appraised value by a real estate appraiser. Future cash
flows discounted at a rate of five (5) % are principally used to compute the use value.
2. Asset Retirement Obligations(1) Asset retirement obligations posted on the Consolidated Balance Sheet
1) Outline of the asset retirement obligations
These obligations include obligations to restore the original state related to periodically renewed
land lease contracts and building lease contracts.
2) Computation method for the asset retirement obligations
Asset retirement obligations are computed regarding the remaining contract years as an expected
use period and using a discount rate between 0.0% and 2.3%.
3) Increase (decrease) of asset retirement obligations for the consolidated fiscal year under review
Balance at the beginning of the fiscal year under review:¥5,859 million
Increase due to the acquisition of property and equipment:¥1,854 million
Adjustments due to the elapse of time:¥74 million
Decrease due to the fulfillment of asset retirement obligations:¥(13) million
Increase (decrease) due to other reasons:¥(1,538) million
Balance at the end of the fiscal year:¥6,236 million(2) Asset retirement obligations that are not posted on the Consolidated Balance Sheet
The following asset retirement obligations are excluded from the posted amounts:
1) Obligation to remove asbestos that is used for some property and equipment at the time of removalof the property and equipment in a particular way required by the Ordinance on Preventing Asbestos
Hazards
For some of the property and equipment of the Company, the demolition of a building involves anobligation to remove asbestos. However, no demolition has taken place yet other than demolition
related to redevelopment or other projects that required arrangements with many businessassociates. It is difficult to estimate the timing to fulfill such obligation due to causes such asdeterioration, based on the estimated physically usable period of the asset. We cannot estimate
when to demolish the property and equipment without relevant specific management plans.
To address the issue of asbestos, we have been voluntarily conducting asbestos removal workwhen tenants move out or when other opportunities allows us to do so. However, we cannot makea reasonable estimate of how such voluntary asbestos removal work will progress in the future
based on the data such as how long past tenants stayed. Also we cannot estimate the remaining
amount of asbestos when such property and equipment are demolished. Moreover, it is difficult toonly estimate the asbestos removal cost separately from regular demolition costs. For thesereasons, an asbestos removal-related probability assessment relative to the domain and amounts ofasset retirement obligation is difficult. Therefore, an obligation to remove asbestos is excluded
from the reported asset retirement obligations although we made a best estimate taking into
account the evidence available as of the closing date.

- 14 -

[Translation for Reference and Convenience Purposes Only]
2) Obligation to restore the original state based on some real estate rental agreements
Periodically renewed land lease contracts for some commercial facilities require restoration to theoriginal state when the contract term ends and the facility must be returned. In reality, however, it
is possible to continue to use such facilities by renewing such contracts and some contracts set
forth a special provision to reduce the possibility of performing such obligation to restore theoriginal state, which makes the timing to fulfill the obligation somewhat vague. In terms of ourbusiness strategies and the business environment, we do intend to continue with our operations andtherefore fulfillment of this obligation is not intended. For these reasons, a probability assessment
relative to the domain and amounts of asset retirement obligation is difficult to ascertain.
Therefore, an obligation to restore the original state is excluded from the reported asset retirement
obligations although we made a best estimate taking into account the evidence available as of theclosing date.

- 15 -

[Translation for Reference and Convenience Purposes Only]

Non-consolidated Statement of Changes in Net Assets(From April 1, 2019, to March 31, 2020)(Millions of yen)
Shareholders’ equity
Retained earnings

Capital surplus

Other retained earnings
Capitalstock

Balance at the
beginning ofcurrent period
Changes in thefiscal year underreviewIssuance of newsharesDividend fromsurplusCapitalreserve

Total
capitalsurplus142,023

171,135

171,135

124

124

124

Retainedearnings

Reserve for
specialdepreciation

Reserve foradvanceddepreciationof fixed
assetsGeneralreserve

Earnedsurpluscarriedforward21,6632,845

134,007108,254294,780

Treasury
stock

Total
shareholders’equity561,550(5,278)869,431

249

ProfitPurchase oftreasury stock
Disposal oftreasury stockReversal ofreserve for
specialdepreciation
Provision forreserve foradvanceddepreciation of
fixed assets
Reversal ofreserve foradvanceddepreciation of
fixed assets
Net changes in
items other thanthose inshareholders’equityTotal of changes in
the fiscal year
under review
Balance at the endof current period

Total
retainedearnings(44,112)(44,112)(44,112)109,251

109,251

109,251(2)(1,355)(100,020)(100,020)

(2)

16

13

1,355

23,714(23,714)(3,683)

3,683

124

124

124

—

(1,355)20,031—

46,461

65,137(100,004)(34,618)

142,147

171,260

171,260

21,663

1,489

154,038108,254314,242626,687(105,282)

834,812- 16 -

[Translation for Reference and Convenience Purposes Only](Millions of yen)
Valuation, translation adjustments and others

Balance at the beginningof current period
Changes in the fiscal year
under review

Net unrealized
gain onavailable-for-salesecurities

Deferred gains orlosses on hedging
instruments

Land revaluation
reserve

Total valuation,translation
adjustments andothersStockacquisitionrights

115,447(286)

529,965

645,127

302

Total net
assets1,514,860

Issuance of new shares

249

Dividend from surplus(44,112)

Profit109,251

Purchase of treasury
stock(100,020)

Disposal of treasury
stock

13

Reversal of reserve for
special depreciation—

Provision for reserve foradvanced depreciation of
fixed assets
Reversal of reserve foradvanced depreciation of
fixed assets
Net changes in items
other than those inshareholders’ equity——(35,915)(1,585)

Total of changes in thefiscal year under review(35,915)(1,585)

Balance at the end ofcurrent period

79,532(1,872)- 17 -(37,501)(13)(37,514)—(37,501)(13)(72,132)

529,965

607,626288

1,442,727

[Translation for Reference and Convenience Purposes Only]

Notes to the Non-consolidated Financial Statements
Notes to Matters Related to Significant Accounting Policies
1. Valuation Basis and Method for Securities
Held-to-maturity debt securities:
Carried at amortized cost (straight-line method)
Shares of subsidiaries and affiliates:
Stated at cost determined by the moving-averagemethodOther securities:
Investment securities:
Available-for-sale securities with market values:
Stated at the market value as of the balance sheet
date, based on quoted market prices etc. Unrealized
gains and losses are reported, net of applicable taxes,
in a separate component of net assets. The cost of
securities sold is determined by the moving-averagemethodAvailable-for-sale securities without market values: Stated at cost determined by the moving-averagemethodEquity investments:
Available-for-sale securities with market values:
Stated at the market value as of the balance sheet
date, based on quoted market prices, etc. Unrealized
gains and losses are reported, net of applicable taxes,
in a separate component of net assets. The cost ofequity investments sold is determined by themoving-average method
Available-for-sale securities without market values: Stated at cost determined by the moving-averagemethod
2. Valuation Basis and Method for Derivatives
3. Valuation Basis and Method for Inventories
Real estate for sale:

Work-in-process real estate for sale:
Real estate for development:

Stated at market values
Stated at cost determined by the identified cost method (Theamount posted in the Balance Sheets was computed by writing
down the book value with regard to the inventories for which
profitability was clearly declining.)
The same as above
The same as above

4. Depreciation Method of Fixed Assets
Property and equipment:
Depreciation is computed by the declining-balance method at fixed
rates.
However, the straight-line method is adopted for the Yokohama
Landmark Tower and buildings (excluding building
improvements) acquired on or after April 1, 1998 and building
improvements and structures acquired on or after April 1, 2016.
Intangible assets:
The amortization of intangible assets is computed by the straight-line
method.
Capitalized software for internal use is amortized by the straightline method over the estimated internal useful life (5 years).

- 18 -

[Translation for Reference and Convenience Purposes Only]
5. Accounting Standards for Reserves
Allowance for doubtful receivables:

Reserve for retirement allowances:

Reserve for accepting the fulfillment of obligations:

Provision for environmental measures:

An allowance for doubtful receivables is provided,for possible losses from uncollectible loans andreceivables, at the amount calculated based on theactual rate of losses from the bad debt for ordinary
receivables, and on the estimated recoverability forspecific receivables such as doubtful receivables.
A reserve for retirement allowances is provided at
the amount calculated based on the projectedamounts of retirement benefit obligations and plan
assets at the end of the fiscal year under review forordinary employees, and at 100% of the amountthat would be required at the end of the fiscal year
under review in accordance with internal
regulations for executive officers.
To calculate the Company’s liability for retirement
allowances to employees, the method of benefit
formula basis is adopted to attribute the estimatedretirement allowances to accounting periods up to
the end of the fiscal year under review.
Prior service cost is amortized, starting from thetime of its occurrence, on a straight-line basis overa certain period (10 years) within an averageremaining service period of employees at the timeof its occurrence. Actuarial gains or losses areamortized, starting from the following fiscal year,
on a straight-line basis over a certain period (10years) within an average remaining service periodof employees at the time of their occurrence.
A reserve for accepting the fulfillment of
obligations is provided at the estimated amount oflosses that may be caused by accepting thefulfillment of obligations.
An estimated amount of loss that could be caused
along with environmental measures including
treatment of PCB (Polychlorinated biphenyl) waste
is provided.

6. Accounting for Deferred Assets
The costs are fully charged to income when disbursed.
7. Hedge Accounting(1) Hedge accounting:
The Company adopts the deferral hedge accounting, in principle. For interest rate swaps, the preferential
treatment is applied to the swaps which satisfy the requirements of such preferential treatment. For
currency swaps and forward exchange contracts, the appropriation treatment is applied to the contracts
which satisfy the requirements of such appropriation treatment.
(2) Hedging instruments and hedged items:
Hedging instruments:
Hedged items:
Interest rate swaps
Borrowings
Currency swaps
Borrowings, corporate bonds
Forward exchange contracts
Shares of affiliated companies(3) Hedging policy:
The risk hedging transactions of the Company are intended to hedge its exposure to fluctuation risks ininterest rates and foreign currency exchange rates, in accordance with the Company’s internal regulations
such as “Market Risk Management Rules” and “Management Guideline by Risk.”(4) Method of Assessing Hedge Effectiveness
The Company compares the cumulative amounts of fluctuations in the rates or in the cash flows of thehedged items with the cumulative amounts of fluctuations in the rates or in the cash flows of the hedging- 19 -

[Translation for Reference and Convenience Purposes Only]
instruments, and assesses the effectiveness of hedging transactions based on the ratio between the two
amounts.
However, the assessment of hedge effectiveness is omitted for interest rate swaps to which special
treatment is applied.
8. Accounting for the Consumption Taxes, etc.
Transactions subject to the consumption tax and local consumption tax are recorded at amounts exclusive of
the consumption tax. Non-deductible consumption tax and local consumption tax are charged to income forthe fiscal year under review.
Notes to the Non-consolidated Balance Sheet
1. Accumulated Depreciation for Property and Equipment:¥1,124,874 million
The accumulated depreciation above includes the accumulated impairment loss.
2. Contingent Obligations(1) Guarantee Obligations
Warrantee
Mitsubishi Estate London Limited
MEC Global Partners Holdings
LLC
MITSUBISHI ESTATE NEWYORK Inc.
RML548Co., Ltd.
MEA Commercial Holdings Pte.
Ltd.
Meeyatha Development, Ltd.
Ryoei Life Service Co., Ltd.
Total
(2) Keep-well agreement
Warrantee

Amount of Obligation¥74,919 million(GBP501,600 thousand,€67,300 thousand)¥22,298 million(US$121,800 thousand,
GBP21,200 thousand,€52,000 thousand)¥21,766 million(US$200,000 thousand)¥1,470 million(THB440 million)¥1,436 million(IDR214,416 million)¥1,224 million(US$11,250 thousand)

Substance of Obligation
Borrowings from financial
institutions
Borrowings from financial
institutions

Borrowings from financial
institutions
Borrowings from financial
institutions
Guarantee of obligation fulfillment toa project company
Borrowings from financial
institutions
Deposits for repayment obligation to¥117 million
residents¥123,292 million

Amount of Obligation
Substance of Obligation¥3,809 million Borrowings from financial
MEC Finance USA, Inc.
(US$35,000 thousand) institutions
Total¥3,809 million
The Company signed keep-well agreement to complement the credit for funding by MEC Finance USA, Inc.
3. Monetary Receivables/Payables due from/to Affiliated Companies
Short-term receivables due
Long-term receivables due¥13,307 million
from affiliated companies
from affiliated companies
Short-term payables due toLong-term payables due to¥186,508 million
affiliated companies
affiliated companies- 20 -¥41,473 million¥9,231 million

[Translation for Reference and Convenience Purposes Only]
4. Revaluation of Land
The Company revalued the land used for its business in accordance with the “Law Concerning Revaluation ofLand” (Law No. 34, March 31, 1998) and the “Law for Partial Revision to the Law Concerning Revaluation ofLand” (Law No. 19, March 31, 2001). The revaluation difference has been included in “Net assets” as “Landrevaluation reserve,” net of the related tax that is included in “Liabilities” as “Deferred tax liabilities forrevaluation.”
Revaluation method: The value of land is determined based on the assessed value of the fixed property tax
adjusted reasonably, as stipulated in Article 2, Item 3, of the Ordinance for
Enforcement of the Law Concerning Revaluation of Land (Government Ordinance
No. 119, March 31, 1998).
Date of revaluation: March 31, 2002
5. Equity Investments
Of the equity investments projects, the total amount of investments in anonymous partnership and preferred
equity investments, etc. into anonymous partnerships and special-purpose companies that fall under the
category of affiliated companies is ¥303,474 million.
Note to the Non-consolidated Statement of Income
Transactions with Affiliated Companies
Revenue from operations:
Cost of revenue from operations:
Transactions other than operating transactions:¥35,171 million¥71,566 million¥31,536 million

Note to the Non-consolidated Statement of Changes in Net Assets
Type and Number of Shares of Treasury Stock at the End of the Fiscal Year under Review
Common stock:
52,677,152 shares
Note to Tax-effect Accounting
The significant components of deferred tax assets and liability are summarized as follows:
Deferred tax assets:(Millions of yen)
Reserve for retirement allowances
4,779
Accrued bonus
1,133
Loss on devaluation of investment securities
5,114
Loss on devaluation of inventories
491
Loss on devaluation of golf memberships
268
Loss on devaluation of fixed assets
45,992Land revaluation reserve
22,727
Reserve for accepting the fulfillment of obligations
1,713
Impairment loss on equity investments
3,990
Transfer of business due to reorganization
8,899
Other
35,346
Subtotal deferred tax assets
130,458
Valuation reserve(72,259)
Total deferred tax assets
58,199Deferred tax liability:
Reserve for advanced depreciation of fixed assets
Gain on establishing a trust for retirement benefits
Land revaluation reserve
Net unrealized gain on available-for-sale securities
Fixed assets valuation difference
Other
Total deferred tax liability
Net deferred tax liability- 21 -

67,983
7,393
265,658
35,20453,242
21,838451,321393,122

[Translation for Reference and Convenience Purposes Only]
Note to Transactions with Related Parties
Subsidiaries and Affiliates, etc.
Category

Name ofCompany, etc.

Ownership
Percentage of
VotingRights, etc.

Subsidiary

Mitsubishi
Estate London
LimitedIndirectly
holding(100%)

Subsidiary

Mitsubishi
EstateResidence
Co., Ltd.

Directly
holding(100%)

The
Company’s
Relationshipwith theRelated Party
Guarantee
obligation
Interlocking
directors
Provision ofloansInterlocking
directors

Transaction
Amount(Millions ofyen)Account
Item

Guarantee obligation 1

74,919—Provision of loans 2104,000

Collection of loans

98,000

Short-termloans ofaffiliatedcompanies

Interest income 2

1,575

—

Description of Transactions

Fiscal Yearend Balance(Millions ofyen)—

411,000

Transaction conditions and decision policy thereof, etc.:
Notes:
1. The amount represents guarantee obligation to secure bank borrowings (GBP501,600 thousand, €67,300
thousand) of Mitsubishi Estate London Limited.
2. Interest rates on loans are determined in consideration of market interest rates.
Note to Per-share Information
Net assets per share¥1,077.66
Earnings per share¥79.95- 22 -—