This is an English translation of summarized financial results prepared for reference purposes only. Should there be any
inconsistency between the translation and the official Japanese text, the latter shall prevail.

February 20, 2014

Financial Report for the Fiscal Period Ended December 31, 2013
(January 1, 2013 – December 31, 2013)
Japan Hotel REIT Investment Corporation
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange8985
http://www.jhrth.co.jp/
Yukio Isa, Executive Director

Asset management company:
Representative:
Contact:

Japan Hotel REIT Advisors Co., Ltd.
Hiroyuki Suzui, Representative Director
Noboru Itabashi,
General Manager of Accounting
Finance and Accounting Division
Phone: +81-3-6422-0530

Scheduled date to file Securities Report:
Scheduled date to start dividend payment:

March 20, 2014
March 20, 2014

Preparation of supplementary material on financial report: Yes
Schedule for presentation of financial results: Yes (Analysts and institutional investors only)(Amounts truncated to the nearest million yen)

1. Summary of financial results for the fiscal period ended December 2013
(January 1, 2013 – December 31, 2013)(1) Operating results(Percentages show changes from the previous period)
Operating income

Fiscal period ended

Millions of yen

Operating profit

Ordinary income% Millions of yen

Current net profit% Millions of yen% Millions of yen%

December 31, 2013

11,472

57.5%

5,367

106.8

3,740

164.8

3,233

(83.0)

December 31, 2012

7,283

408.8

2,595

246.0

1,412

197.5

19,031-

Fiscal period ended

Current net profit per unit

Return on equity (ROE)

Ordinary income to total
assetsOrdinary income to operating
income

Yen%%%

December 31, 2013

1,307

4.1

2.4

32.6

December 31, 20129,711

41.1

1.5

19.4

(Note 1)
(Note 2)

(Note 3)(Note 4)Current net profit per unit is calculated based on the average number of investment units during the fiscal period.
Current net profit for the fiscal period ended December 2013 includes loss on sale of real estate (1,189 million yen) and impairment
loss (516 million yen). Please see “<Reference 1> Operating results excluding extraordinary factors” on page 4 for the operating
status excluding extraordinary factors.
Because of the changed fiscal period, the fiscal period ended December 31, 2012 has the irregular financial settlement period that isfrom April 1, 2012 through December 31, 2012 (nine months). Accordingly, current net profit for the fiscal period ended December
31, 2012 is not the annualized net profit.
Current net profit for the fiscal period ended December 31, 2012 includes gain on negative goodwill (18,578 million yen) resulted
from the merger, loss on sale of real estate, etc. (1,393 million yen) and impairment loss (958 million yen). Please see “<Reference1> Operating results excluding extraordinary factors” on page 4 for the operating status excluding extraordinary factors.

1(2) Cash distributions

Fiscal period ended
December 31, 2013
December 31, 2012
(Note 1)
(Note 2)

(Note 3)(Note 4)

Dividend per unit
(Dividend fromexcess of earnings
exclusive)
JPY
1,939
1,427

Total dividends

Dividend fromexcess of earnings
per unit

JPY M
5,082
3,012

JPY
00

Total dividend
from excess ofearnings

Dividend to net
assetsPayout ratio

JPY M
00%
157.2
15.8%
5.8
4.3

The source of dividends for the fiscal period ended December 2012 is calculated by adding provision for dividends to unappropriatedretained earnings. Please see “<Reference 2> Dividend per unit and the provision for dividends” on page 4 for detail.
Current net profit for the fiscal period ended December 2012 includes gain on negative goodwill (18,578 million yen) recorded under
extraordinary income and it is not the source of dividends. The source of dividends is calculated by adding provision for dividends tounappropriated retained earnings after deducting gain on negative goodwill. Please see “<Reference 2> Dividend per unit and theprovision for dividends” on page 4 for detail.
The fiscal period ended December 2012 has irregular financial settlement period (nine months from April 1, 2012 through December
31, 2012). Accordingly, the dividend per unit for the fiscal period ended December 2012 is not the dividend for one year. The
annualized dividend per unit calculated under the certain conditions is 1,621 yen.
Payout ratio is calculated by the formula below. Fractions after two decimal places are rounded off.
Total amount for dividends (total dividend from excess of earnings exclusive) / Current net profit x 100(3) Financial position
Total assets
As ofNet assets

Equity ratio

Net assets per unit

Millions of yen

Millions of yen

December 31, 2013

170,727

89,75652.6

34,241

December 31, 2012

139,623

69,01049.4

32,686(Note)%Yen

Net assets per unit are calculated based on the number of investment units issued at the end of the period.

(4) Cash flows
Cash flows fromoperating activities
Fiscal period ended

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalentsat end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

December 31, 2013

9,991

(33,349)

26,98812,553

December 31, 2012

4,334

(11,349)

8,927

8,922

2. Forecasts of results for the fiscal period ending December 31, 2014
(January 1, 2014 - December 31, 2014)(Percentages show changes from the previous period)

Operating income

Fiscal period ending
June 30, 2014
(Midterm)
Fiscal period ending
December 31, 2014
(Full year)

Operating profit

Ordinary income

Current net profit

Millionsof yen%

Millionsof yen%

Millionsof yen%

Millionsof yen%

5,275

10.3

2,709

22.0

1,860

31.1

1,858

30.0

Dividend
per unit(Dividend
from excessof earningsexclusive)

Dividend
from excessof earnings
per unit

Yen

Yen

1,940
11,964

4.3

6,684

24.5

5,074

(Reference) Estimated current net profit for full year: 1,935 yen(*) The dividend allowance, 13 million yen, is scheduled to be the source of dividends.

235.7

5,072

56.90

3. Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of prior period
financial statements after error corrections
a.
b.
c.
d.

Changes in accounting policies due to revisions to accounting standards and other regulations: No change
Changes in accounting policies due to other reasons: No change
Changes in accounting estimates: No change
Restatement of prior period financial statements after error corrections: No change(2) Number of units issueda.

b.

Total number of units issued at the end of period (treasury units inclusive)
As of December, 2013

2,621,281 units

As of December, 2012

2,111,281 units

Number of treasury units at end of period
As of December 2013

0 unitAs of December, 2012

0 unit* Status of audit procedures
As of the time of disclosure of this financial report, audit procedures for the financial statements pursuant to the Financial
Instruments and Exchange Act of Japan are incomplete.

* Appropriate use of forecasts of results and other special items
Forward-looking statements presented in this financial report including forecasts of results are based on information
currently available to us and on certain assumptions we deem to be reasonable. As such, actual operating and other results
may differ materially from these forecasts due to a number of factors. Furthermore, we do not intend to guarantee any
dividend amount by these forecasts.

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<Reference 1> Operating results excluding extraordinary factorsa. The operating results for the fiscal period ended December 2012 and December 2013 are as follows:
Fiscal period ended December 2012

Fiscal period ended December 2013

(Actual for nine months)(JPY M) (*1)

(Actual for twelve months)(JPY M) (*2)

Operating income

7,283

11,472

Operating profit

3,988

6,556

Ordinary income

2,806

4,929

Current net profit

2,805

4,939

NOI (*3)

6,216

9,907

(*1) Operating forecast excluding extraordinary factors such as gain on negative goodwill, loss on sale of real estate (Millennia
Hotel Matsuyama and Hotel Resol Sapporo Minaminijo), and impairment loss of Hotel Vista Hashimoto.
(*2) Operating forecast excluding extraordinary factors such as loss on sale of real estate (Hotel Vista Hashimoto and Pearl
Hotel Kayabacho), and impartment loss of Dormy Inn Namba.
(*3) NOI: Real estate operating income – Real estate operating expenses + Depreciation expenses + Loss on retirement ofnoncurrent assets (Only for your information.

Extraordinary factors do not affect NOI.)<Reference 2> Dividend per unit and the provision for dividends
Dividend per unit is calculated according to the following conditions:Fiscal period ended

Fiscal period ended

December 2012
(JPY M)

December 2013
(JPY M)

Unappropriated retained earnings for the period

19,031

3,235

Gain on negative goodwill (included in extraordinaryincome)(18,578)

-958

516

98

1,393

1,189

200

135

3,012

5,082

2,111,281 units

2,621,281 units

1,427

1,939

Provision forUtilization of negative goodwill

dividends(Impairment loss)
Utilization of negative goodwill (Loss onretirement of noncurrent assets)
Utilization of negative goodwill (Loss onsale of real estate)
Utilization of negative goodwill (Copedwith dilution)(*)

Total amount of dividends
Total number of investment units
Dividend per unit(*) Coped with dilution resulted from public offerings in the fiscal period ended December 2012 and December 2013.
<Reference 3> Balance of dividend allowance (negative goodwill)
Balance of dividend allowance after appropriation for dividend in the fiscal period ended December 2013 is as follows:
Gain on negative goodwill in the previous period (Transferred to dividend allowance)
Provision for dividends in the fiscal period ended December 2012

18,578 million(2,560 million)

Balance of dividend allowance at the end of this period
Provision for dividends in the fiscal period ended December 2013

16,017 million(1,848 million)

Balance of dividend allowance after providing to dividends

14,168 million

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