[For Information Purpose Only]
May 21, 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)
URL: http: //www.invincible-inv.co.jp/eng/
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President and CEO
Contact: 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
Invincible Investment Corporation (INV) has decided to revise its forecast of financial results anddistribution per unit for the fiscal period ending June 2014 (22nd fiscal period: from January 1, 2014
to June 30, 2014) announced in the Financial Summary dated February 26, 2014, as described
below.
Details
1.

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

OperatingincomeDistribution perunit

Ordinary
incomeNet income(excluding excess
profit distribution perunit) (Note 2)Previous forecast (A)(February 26, 2014)

Million JPY2,760

Million JPY
1,191

Million JPY
731

Million JPY
731

JPY
464

Revised forecast (B)Million JPY
3,749

Million JPY
2,172

Million JPY
1,219

Million JPY
1,218

JPY
550

Million JPY

Million JPY

988

981

Million JPY
487

Million JPY
487

JPY
86

Amount of Variance(B) – (A)This English language notice is a translation of the Japanese-language notice released on May 21, 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

Operating
revenues

OperatingincomeOrdinary
incomeDistribution perunit

Net income(excluding excess
profit distribution perunit) (Note 2)

Rate of variance[(B) − (A)] ÷ (A)%35.8%
82.3%
66.6%
66.7%
18.5

(Reference)
Actual results(21st fiscal period)

Million JPY

Million JPY

Million JPY

Million JPY

JPY

2,740

1,265353352237

Million JPY－Totaldistribution
amountMillion JPY
729

0Million JPY－

Million JPY
865

Amount of Variance(B) – (A)JPY

Million JPY

Million JPY－－135

Rate of variance[(B) − (A)] ÷ (A)%%%－－18.5

JPY

Million JPY

Million JPY

020372Previous forecast (A)(February 26, 2014)
Revised forecast (B)(Reference.)
Actual results(21st fiscal period)

Excess profit
distribution perunit
JPY0JPY

Reversal ofsurplus(Note 1) The number of investment units issued and outstanding at the end of the fiscal period: 1,573,179 units(Note 2) Assuming the dividend payout ratio is 100%, distribution per unit would be JPY774. However, with respect tothe distribution for the current fiscal period, INV expects 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.
(Note 3) Figures are rounded down to the indicated amount and percentages are rounded to first decimal place.

2.

Reason for revision of forecast of financial results and distribution for the fiscal period ending June
2014
As announced today in the “Notice concerning Debt Financing and Prepayment of Existing
Borrowings,” “Notice concerning Acquisition and Sale of Assets, Entering into Leasing Contract
as well as Commencement of Management of New Class of Assets ” and the “Noticeconcerning Series of Transactions” (the series of transactions contemplated by INV asannounced in these press releases, hereinafter collectively referred to as the “Transactions”),
INV expects to reposition its portfolio as well as to obtain new debt financing (“New Syndicate
Loan (B)”) in order to prepay the Prudential LPS Loan and partially prepay the New Syndicate
Loan (A) and to reduce interest expenses (such financing transaction hereinafter referred to as
the “Refinancing”).

This English language notice is a translation of the Japanese-language notice released on May 21, 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The revision of the forecast of financial results and distribution for the fiscal period ending June2014 announced in the Financial Summary dated February 26, 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) Increase of Operating Revenues
Operating revenues are expected to increase by JPY988 million from the previous forecast
due to gains on sale of real estate from the sale of seven senior housing properties on May
22, 2014 and other factors.
(2) Increase of Operating Expenses
Operating expenses are expected to increase by JPY7 million from the previous forecast due
to the increase of advertising expenses and commission for new contract in connection with
the new leasing contract for two floors of Lexington Plaza Nishigotanda.
(3) Increase of Non-operating Expenses
Interest expenses are expected to decrease by JPY20 million from the previous forecast due
to reduced interest payment resulting from the Transactions. On the other hand,finance-related costs are expected to increase by JPY515 million from the previous forecast
due to various one-time charges associated with entering into the Transactions. As a result,non-operating expenses are expected to increase by JPY493 million from the previous
forecast as a whole.
(4) Increase of Distribution
As a result of the above, net income per unit is expected to increase by JPY310 from theprevious forecast. However, INV will retain a portion of the net income as reserves for future
distributions, as described in “1. Revision of forecast of financial results for the fiscal period
ending June 2014 (from January 1, 2014 to June 30, 2014)” and “3. Forecast ofdistribution and satisfaction of conduit requirements” below.
Accordingly, the distribution per unit is expected to increase by JPY86 from the previousforecast.
3.

Forecast of distribution and satisfaction of conduit requirements
INV believes it is vital to maintain stable distributions in the mid-term. With respect to thedistribution for the fiscal period ending June 2014, INV expects to retain a portion (JPY353
million) of net income as reserves for future distributions and extraordinary one-time fees. INV
believes such measures will stabilize the dividend level in the mid-to long-term. Accordingly,INV expects that the distribution per unit (“DPU”) for the fiscal period ending June 2014 will be
JPY550. INV believes the amount of DPU for the fiscal period ending June 2014 represents a
more appropriate approximation of targeted DPU levels in the medium-term (excludingThis English language notice is a translation of the Japanese-language notice released on May 21, 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extraordinary effects and factors) based upon a review of its future prospects including its
ongoing initiatives for increasing revenue andreducing borrowing costs, as well as thecontinued implementation of our business strategy.
The above-mentioned DPU for the fiscal period ending June 2014 will be less than 90% of theamount of distributable income for the relevant period, and will therefore not satisfy the dividend
payment requirement under the conduit requirements. Nonetheless, INV does not expect toincur any additional tax liability for the fiscal period due to the availability of tax loss carriedforwards totaling JPY21.6 billion (as of the end of the fiscal period ended Decmeber 2013)(Note).
(Note) Conduit requirements and distribution payment by INV
Unlike ordinary stock companies, investment corporations under the J-REIT system are granted a tax
exemption for profits that are equivalent to the distributions they deliver to their unitholders, on the condition
that they satisfy the conduit requirements. Only the unitholders are taxed for the delivered profit to prevent
double taxation. One of the conduit requirements is the dividend payment requirement that requires
investment corporations to distribute at least 90% of their distributable income.
However, INV revised its Articles of Incorporation in relation to the distribution policy, as resolved at its
unitholders’ meeting held on November 30, 2012, taking into account the circumstances described in 1) and2) below. While INV generally distributes an amount that exceeds 90% of the amount of its distributable
income, the revision enables INV to determine the amount of distributions on a rational basis based on acomprehensive analysis of INV’s financial status, historical distribution amounts, trends in interest rate levels
and the real estate market, etc., as well as the stability of distribution amounts, in the event income for tax
purposes does not arise due to the carried-over deduction of tax loss carried forwards .
1)
Usually, net income before income taxes is equal to the amount of distributable income. At INV,
however, distributable income is equal to the amount obtained by adding JPY59 million to net income before
income taxes, as it must amortize the amount of gain on negative goodwill (JPY11,843 million) resulting fromthe merger effected in the fiscal period ended December 2010 (15th fiscal period), which is a profit foraccounting purposes, over a 100-year period after the merger.
2)
On the other hand, since INV has tax loss carried forwards totaling JPY21.6 billion (as of December31, 2013) which may be carried forward until and up to the 35th fiscal period (the period ending December2020) due to the sale of assets in the past and other factors. Even if INV does not satisfy the conduit
requirements, it is expected that INV will not incur additional tax liability as long as such carryforwards are
made by the deadline and within the balance of such loss carried forwards since such loss carried forwards
are set off against the taxable income of INV.

4.

Other: regarding surplus
The balance of surplus following the distribution for the 22nd fiscal period ending June 30, 2014
(the surplus based on gains from the negative goodwill recorded in the fiscal period endedDecember 2010) will not change from the balance (JPY73 million) following the distribution forthe 21st fiscal period ended December 2013.

This English language notice is a translation of the Japanese-language notice released on May 21, 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5.

Future outlook
As announced today in the “Notice concerning Series of Transactions”, INV may conductacquisitions of assets and related financing transactions and may incur considerable one-timecharges when such potential acquisiton and/or financing were to be made. INV may incursuch additional one-time charges during the fiscal period ending June 2014 or any future fiscal
period, and may make a significant downward revision of the forecast of net income for thefiscal period ending June 2014 if such one-time charges are incurred in such fiscal period. If
there are any further changes beyond a certain level to the forecast of financial results anddistribution, INV will promptly make such announcement.

This English language notice is a translation of the Japanese-language notice released on May 21, 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(Appendix)< Assumptions Underlying Forecast of Financial Results and Distribution
ndfor the 22 Fiscal Period (From January 1, 2014 to June 30, 2014)>
Item
Fiscal period

Assumptions
The 22nd fiscal period : from January 1, 2014 to June 30, 2014 (181 days)
Properties held as of the end of the 22nd fiscal period: 73 properties

Assets under management

INV assumes that, of the 78 properities it holds as of today, it will sell seven senior
housing properties on May 22, 2014 and acquire two hotels on May 23, 2014, andthere will be no change to the managed assets thereafter through the end of the 22ndfiscal period.
As of the end of the 22nd fiscal period: 1,573,179 units

Units outstanding

The number is based on the number of units issued and outstanding (1,573,179units) as of today, and INV assumes there will be no additional issuance of units
thereafter through the end of the fiscal period ending June 2014.

Balance as of the end of the 22nd fiscal period: JPY41,000 million
Interest-bearing liabilities

INV assumes that it will enter into the New Syndicate Loan (B), prepay thePrudential LPS Loan and partially prepay the New Syndicate Loan (A). (For details,
please refer to the “Notice concerning Debt Financing and Prepayment of Existing
Borrowings” released today), and there will be no other borrowings or prepayments.

INV expects to record rental revenues of JPY2,764 million*.

Operating revenues*Rental revenues are calculated based on historical data and taking into accounttenant trends, property competitiveness, market environment and other factors. Inaddition, INV assumes there are no delinquencies or non-payments of rent bytenants.
With respect to operating revenues other than rental revenues, INV expects torecord gains on sale of real estate of JPY984 million from the sale of seven senior
housing properties as of May 23, 2014.
INV expects to incur property related expenses of JPY1,338 million.
The breakdown is as follows:・Facility management fees

Operating expenses

JPY464 million(of these, JPY40 million
are repair costs)
・Taxes and other public charges JPY168 million
JPY4 million
・Insurance expenses
JPY160 million
・Other expenses
JPY539 million
・Depreciation expenses

In addition to the property-related expenses, IINV expects to incur other operating
expenses in the amount of JPY238 million.

This English language notice is a translation of the Japanese-language notice released on May 21, 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

Item

Assumptions

INV expects to incur non-operating expenses of JPY953 million. The breakdown isas follows:・Interest expense

Non-operating expensesJPY375 million
JPY578 million(of these, JPY515 million
・Finance related costs
are one-time charges forRefinancing)・Other non-operating expenses NoneFor details on the new borrowing and the prepayment (Refinancing) on May 23,
2014, please refer to the “Notice concerning Debt Financing and Prepayment of
Existing Borrowings” dated as of today.

Distribution per unit

The distribution per unit is calculated in accordance with the cash distribution policy
as set forth in INV’s Articles of Incorporation.
INV expects to distribute JPY865 million (JPY550 per unit) of its net income, andretain the remaining (JPY353 million) as reserves for future distributions.

Excess profit distribution
per unit

INV currently does not expect to make distributions in excess of profits (excess profit
distribution per unit).

Other

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 May 21, 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