(REIT) Financial Report for the Fiscal Period Ended June 2020
August 19, 2020
Listing: Tokyo Stock Exchange
URL: https://www.marimo-reit.co.jp/en/

REIT Securities Issuer:
Securities Code:
Representative:

marimo Regional Revitalization REIT, Inc.
3470
Takashi Kitagata, Executive Director

Asset Manager:
Representative:
Contact:

Marimo Asset Management Co., Ltd.
Takashi Kitagata, CEO
Katsuhiro Shimada, Financial Management Officer
TEL: +81-3-6205-4755

Scheduled date of commencement of dividends payment:
Scheduled date of submission of securities report:

September 18, 2020
September 24, 2020

Preparation of supplementary financial results briefing materials:
Holding of financial results briefing session:

Yes
Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)

1. Status of Management and Assets for the Fiscal Period Ended June 2020 (from January 1, 2020, to June 30, 2020)(1) Operating Results(% figures are the rate of period-on-period increase (decrease))
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income
million yen%
million yen%
million yen%
million yen%
Ended June 2020
1,265
12.1
571
18.4
468
17.4
467
17.5
Ended Dec. 2019
1,129
0.7
482
2.4
398
0.4
398
0.4
Fiscal period

Net income per unit

Return on equity

yen
3,109
3,008

Ended June 2020
Ended Dec. 2019

Ratio of ordinary income to Ratio of ordinary income tototal assets
operating revenue
%
%
%
3.4
1.5
37.0
3.2
1.4
35.3

(2) Dividends

Fiscal period

Ended June 2020
Ended Dec. 2019
(Note 1)

(Note 2)
(Note 3)

Dividends
per unit

Total
dividends(excluding
dividends
in excess ofearnings)(excluding
dividends
in excess ofearnings)

yen
3,063
3,008

million yen
467
398

Dividends
in excess ofearnings
per unit

Total
dividends
in excess ofearnings

yen
431
496

million yen
65
65

Dividends
per unit

Total
dividends(including
dividends
in excess ofearnings)(including
dividends
in excess ofearnings)

yen
3,494
3,504

million yen
533
463

Payout
ratio
%
100.0
100.0

Ratio ofdividends to
net assets
%
3.2
3.2

The breakdown of total dividends in excess of earnings for the fiscal period ended December 2019 is total dividends from allowance for temporary
difference adjustments of 1 million yen (9 yen per unit) and total dividends from distribution accompanying decrease in capital, etc. under tax law of
64 million yen (487 yen per unit).
The breakdown of total dividends in excess of earnings for the fiscal period ended June 2020 is total dividends from allowance for temporary difference
adjustments of 1 million yen (7 yen per unit) and total dividends from distribution accompanying decrease in capital, etc. under tax law of 64 million
yen (424 yen per unit).
The ratio of decreasing surplus, etc. attributable to distribution in excess of earnings (refund of investments in capital) is 0.006 for the fiscal period
ended December 2019 and 0.005 for the fiscal period ended June 2020.
Payout ratio is the figure calculated by the following formula, rounded to the first decimal place.
Payout ratio = Total dividends (excluding dividends in excess of earnings) ÷ Net income × 100(3) Financial Position
Fiscal period
Total assets
million yen
Ended June 2020
32,766
Ended Dec. 201927,960Net assets
million yen
14,94812,486Equity ratio
%
45.6
44.7

Net assets per unit
yen
97,90594,355

(4) Cash Flows
Fiscal period

Ended June 2020
Ended Dec. 2019

Net cashprovided by (used in)operating activities
million yen
693
783

Net cashprovided by (used in)investing activities
million yen(5,099)(62)

Net cashCash and cash equivalents
provided by (used in)at end of period
financing activities
million yen
million yen
4,089
1,631
(476)
1,947

2. Operating Forecasts for the Fiscal Period Ending December 2020 (from July 1, 2020, to December 31, 2020) andOperating Forecasts for the Fiscal Period Ending June 2021 (from January 1, 2021, to June 30, 2021)(% figures are the rate of period-on-period increase (decrease))
Fiscal periodEnding Dec. 2020
Ending June 2021

Operating revenue Operating income Ordinary income
mn yen
1,283
1,283

%
1.4
0.0

mn yen
575
563

%
0.7
(2.0)

mn yen
471
461

%
0.6
(2.2)

Dividends per unit
Dividends per unit
Dividends(excluding dividends(including dividends
Net income
in excess ofin excess ofin excess ofearnings per unit
earnings)
earnings)
mn yen
%
yen
yen
yen
470
0.6
3,082
425
3,507
460
(2.2)
3,015
449
3,464

(Reference) Forecast net income per unit (Forecast net income ÷ Forecast number of investment units at end of period)
Fiscal period ending December 2020: 3,082 yen
Fiscal period ending June 2021: 3,015 yen(Note) The rate of period-on-period increase (decrease) for the fiscal period ending December 2020 shows comparison with the actual
figures for the fiscal period ended June 2020, and that for the fiscal period ending June 2021 shows comparison with theforecast figures for the fiscal period ending December 2020.
* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatements① Changes in accounting policies accompanying amendments to accounting standards, etc.: None
② Changes in accounting policies other than ①:None③ Changes in accounting estimates:
None④ Retrospective restatements:
None(2) Total Number of Investment Units Issued and Outstanding① Total number of investment units issued and outstanding (including treasury investment units) at end of period
Fiscal period ended June 2020
152,680 units② Number of treasury investment units at end of period
Fiscal period ended June 2020

0 units

Fiscal period ended Dec. 2019

132,340 units

Fiscal period ended Dec. 2019

0 units* Financial reports are exempt from the audit by a certified public accountant or an auditing firm.
* Special note
The operating forecasts and other forward-looking statements contained in this document are based on information currently
available to and certain assumptions deemed reasonable by marimo Regional Revitalization REIT, Inc. (hereinafter, “marimo REIT”).
Accordingly, the actual operating results, etc. may differ materially due to various factors. In addition, the forecasts are not aguarantee of the amount of dividends.
Furthermore, for details on the assumptions underlying the forecast figures above, please refer to “Assumptions Underlying the
Operating Forecasts for the Fiscal Period Ending December 2020 (from July 1, 2020, to December 31, 2020) and Fiscal Period Ending
June 2021 (from January 1, 2021, to June 30, 2021)” on page 6.

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020

Table of Contents
1. Management Status .......................................................................................................................................................................... 2(1) Management Status ................................................................................................................................................................... 2(2) Investment Risks ........................................................................................................................................................................ 8
2. Financial Statements ......................................................................................................................................................................... 9(1) Balance Sheet ............................................................................................................................................................................ 9(2) Statement of Income ............................................................................................................................................................... 11(3) Statement of Unitholders’ Equity ............................................................................................................................................. 12(4) Statement of Distribution of Cash ............................................................................................................................................ 14(5) Statement of Cash Flows .......................................................................................................................................................... 15(6) Notes on the Going Concern Assumption ................................................................................................................................ 16(7) Notes on Matters Concerning Significant Accounting Policies ................................................................................................. 17-1-

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020

1. Management Status(1) Management Status(Overview of the Fiscal Period under Review)① Brief History of the Investment Corporation
marimo REIT was incorporated under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as
amended; hereinafter, the “Investment Trusts Act”) with Marimo Asset Management Co., Ltd. (hereinafter, the “AssetManager”) as the organizer and investments in capital of 200 million yen (2,000 units) (Note) on February 5, 2016, andcompleted the registration with the Kanto Local Finance Bureau on March 16, 2016 (Registration No. 113 with the DirectorGeneral of the Kanto Local Finance Bureau). marimo REIT then implemented an issuance of new investment units throughpublic offering (88,500 units) with July 28, 2016 as the payment due date, and listed on the Real Estate Investment Trust
Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, the “J-REIT Market”) on July 29, 2016 (securities code: 3470).
During the fiscal period under review, marimo REIT implemented an issuance of new investment units through public offering(19,371 units) on January 20, 2020, and issuance of new investment units through third-party allotment accompanying
secondary offering through overallotment (969 units) on February 17, 2020. These resulted in total number of investment
units issued and outstanding of 152,680 units as of the end of the fiscal period under review.
(Note)

Amounts are rounded down to the nearest million yen if such applies. Unless otherwise stated, the same shall apply hereinafter.

② Investment Environment
In the fiscal period under review, the Japanese economy experienced negative growth with an annualized real GDP growthrate of -2.2% for the period from January to March 2020 (seasonally adjusted; second preliminary estimate). Compared withthe period from July to September 2019, domestic demand deteriorated from +0.6% to -0.4%. Specifically, economic trends
have weakened rapidly in the wake of the global spread of COVID-19, and economic activities centering on individual
consumption, etc. slowed down significantly in and after April 2020 in particular following the declaration of a state of
emergency accompanying the stay-at-home request and request for business closure.
Although the declaration of a state of emergency was later lifted, the COVID-19 pandemic is ongoing. As global travel remains
restricted and people face continued requests to stay home, etc. in Japan as well, it is assumed that more time will be neededin order for economic activities to recover.
(Financial Market)
With the Bank of Japan’s monetary easing policy, the JBA 3-month Japanese Yen TIBOR remained at 0.06909% between
December 27, 2019, and June 30, 2020. Because the outlook continues to be uncertain due to the impact of the COVID-19
pandemic, the outcome of the U.S. presidential election, etc., the impact of volatility in financial markets should be carefully
watched going forward.
(Real Estate Transaction Market)
According to “ARES Monthly Report (June 2020)” published by The Association for Real Estate Securitization, actual
acquisition of real estate by J-REITs in the period from January to the end of May 2020 increased by approximately 14.5 billion
yen year on year (+2.2% year on year) to 674.3 billion yen in terms of total acquisition price. As for actual sales, the total saleprice also increased by 3.3 billion yen year on year (+2.7% year on year) to approximately 124.4 billion yen. These are likely
to be attributable to some investment corporations selling their portfolio properties as real estate prices are on the rise.
Accordingly, attention should continue to be paid to factors including interest rates.
(Residential Leasing Market)
According to the number of households by type of rental housing from 1993 to 2018 for the Tokyo metropolitan area (Note)and the rest of Japan (“Housing and Land Survey” by the Statistics Bureau of the Ministry of Internal Affairs andCommunications), the number of households living in privately owned rental housing is increasing, suggesting that demand
for rental housing is stable and demand for rental housing in Japan is likely to continue to grow.
(Note) “Tokyo metropolitan area” refers to Tokyo, Kanagawa, Chiba and Saitama.

-2-marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
(Retail Property Market)
According to “Current Survey of Commerce” by the Ministry of Economy, Trade and Industry, for the period from January to
March 2020, the rate of increase in sales value compared with the same period of the previous year for supermarkets
increased by 2.5% on average nationally. By area, the Chubu area was +3.4%, the Shikoku area was +2.7%, the Kyushu area
was +1.7%, and the Chugoku area was +1.6%. As for drug stores, the rate of increase was +10.8% on average nationally, withparticularly high growth of +15.0% for the Tohoku area, +14.5% for the Chubu area, +10.1% for the Chugoku area, +9.4% for
the Shikoku area, and +8.3% for the Kyushu area, showing an upward trend across the nation. The sales value of supermarkets
and drug stores selling daily necessities is expected to remain stable regardless of the impact of COVID-19.
(Hotel Market)
According to "Visitor Arrivals to Japan (estimate for May 2020)” by Japan National Tourism Organization, the number ofinternational visitors to Japan in the period from January to May 2020 decreased significantly to 3.94 million or -71.3% year
on year (including estimates). As a result, according to “Overnight Travel Statistics Survey (April 2020/second preliminary
estimates, May 2020/first preliminary estimates)” by Japan Tourism Agency of the Ministry of Land, Infrastructure, Transport
and Tourism, the total number of overnight international guests for April 2020 decreased significantly to 0.20 million (-98.2%
year on year); and guest room occupancy rate by type of accommodation facility dropped significantly to 24.7% (-54.5% year
on year) for business hotels, 11.9% (-71.1% year on year) for city hotels, 5.9% (-51.9% year on year) for resort hotels. Close
attention should be paid going forward since the number of international visitors to Japan may not increase due to the impact
of COVID-19.
(Office Leasing Market)
According to “Japan Office Market View Q1 2020” by CBRE K.K., in the first quarter of 2020, the vacancy rate for major
regional cities appeared to be on a decreasing trend in general compared with the previous quarter, with 0.4% (+0.2 pts
quarter on quarter) for Fukuoka City, 0.4% (-0.5 pts quarter on quarter) for Osaka City, 0.6% (-0.4 pts quarter on quarter) for
Nagoya City, 0.4% (-0.4 pts quarter on quarter) for Sapporo City, and 1.8% (-1.4 pts quarter on quarter) for Hiroshima City.
However, assumed contract rents showed an upward trend, with 16,450 yen/tsubo (+8.3% quarter on quarter) for Fukuoka
City and 11,870 yen/tsubo (+3.9% quarter on quarter) for Hiroshima City. However, because demand for offices is expected
to change with the prevalence of telework in response to the COVID-19 pandemic, close attention should be paid to
occupancy rates, etc.
③ Management Performance
During the fiscal period under review, leasing activities according to the characteristics of each region and setting of terms
and conditions for seeking tenants according to the characteristics and occupancy status of individual properties, etc. were
implemented through integrated promotion of property management operations of the Asset Manager and each of the basesof the property management company, Marimo Co., Ltd. (hereinafter, “Marimo”), and resulted in successful stable operationof properties under management and reduction of downtime. In addition, as part of measures for internal growth, valueenhancement work was implemented at ArtizA Hakataeki-Minami to introduce solid wood flooring and a new parking lot
was constructed at MRR Akita II (Note 1), thereby achieving an increase in rent revenue, etc. In terms of cost reduction,
expenses were reduced at MRR Kumamoto through partial review of the building maintenance contract. In addition, theAsset Manager conducted management aimed at improvement of functionality and convenience and enhancement ofcustomer satisfaction, including the painting of the exterior walls of the parking building and installation of disaster-response
vending machines at MRR Kumamoto, as well as renovation of elevators at ArtizA Sobudai. Despite such efforts, move-outsby large tenants at some residential properties lowered occupancy rates temporarily to result in an occupancy rate of 98.1%
and period-average occupancy rate of 98.5% for marimo REIT’s portfolio assets as of the end of the fiscal period under review(31 properties; total acquisition price (Note 2): 29,955 million yen).
(Note 1) As to the four properties presented in the securities report submitted on March 26, 2020, under names after change, “(Tentative name)
ArtizA Matsumoto” has been changed to “ArtizA Matsumoto,” “(Tentative name) MRR Akita II” to “MRR Akita II,” “(Tentative name) MRR
Ichihara (land ownership interests)” to “MRR Ichihara (land ownership interest),” and “(Tentative name) MRR Kitamoto (land ownershipinterest)” to “K’s Denki Kitamoto Store (land ownership interests).”(Note 2) “Acquisition price” is the sale and purchase price of the real estate trust beneficiary right stated in the trust beneficiary right sale andpurchase contract for the acquired asset, not including consumption tax and local consumption tax or brokerage fees and other various
expenses.

④ Financing Status
In the fiscal period under review, 2,340 million yen was procured through an issuance of new investment units through public-3-marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
offering on January 20, 2020, and 117 million yen was procured through issuance of new investment units through thirdparty allotment accompanying secondary offering through overallotment on February 17, 2020, upon acquisition of realestate trust beneficiary rights to 6 properties. In addition, 2,250 million yen was borrowed on January 21, 2020, to partiallyfund the acquisition of the real estate trust beneficiary rights to 6 properties and related expenses.
Of long-term loans, early repayment of the long-term loan borrowed on January 21, 2020 (Tranche 5-B: loan balance of 110
million yen), was carried out on April 1, 2020, using funds procured through third-party allotment. Furthermore, of long-termloans borrowed on August 1, 2016 (Tranche D: loan balance of 1,402 million yen), funds on hand were used to executecontractual repayment of 7 million yen on February 3, 2020, and 7 million yen on May 1, 2020. As a result, as at the end of
the fiscal period under review (end of June 2020), the balance of loans outstanding was 15,897 million yen and the ratio ofinterest-bearing liabilities to total assets (hereinafter, “LTV ratio”) was 48.5%.
(Note)

Of long-term loans borrowed on August 1, 2016 (Tranche D), 7 million yen was repaid on August 3, 2020. As a result of these, loan balanceof marimo REIT as of the date of this document stands at 15,890 million yen.

⑤ Overview of Business Performance and Distribution
As a result of the above, business performance for the fiscal period under review was operating revenue of 1,265 million yen,operating income of 571 million yen, ordinary income of 468 million yen and net income of 467 million yen.
In addition, concerning dividends, in accordance with the distribution policy provided in marimo REIT’s Articles ofIncorporation, the decision was made to distribute the entire amount of unappropriated retained earnings, excluding
fractions of dividends per unit of less than 1 yen, by application of special provisions for taxation on investment corporations(Article 67-15 of the Act on Special Measures Concerning Taxation). This resulted in dividends per unit of 3,063 yen.
In addition to this, marimo REIT shall execute distribution of cash in excess of earnings (hereinafter, “distribution in excess ofearnings”) in the fiscal period under review as part of cash management. Based on this, the decision was made to distribute
65 million yen, which is the amount roughly equivalent to 27% of depreciation for the fiscal period under review, as dividends
in excess of earnings. This resulted in dividends in excess of earnings per unit of 431 yen. Furthermore, included in thedividends in excess of earnings is distribution of allowance for temporary difference adjustments of 1 million yen, resulting
in allowance for temporary difference adjustments per unit of 7 yen.
In addition, payout ratio (ratio of total dividends including distribution in excess of earnings to the amount of net income
plus depreciation) was 75.0%.
(Note 1) Distribution in excess of earnings shall be executed only when total appraisal value of real estate, etc. held as at the end of the accounting
period (refers to the appraisal value in the real estate appraisal report obtained with the end of the accounting period as the date of value
for real estate, etc. held by marimo REIT; the same shall apply hereinafter) exceeds total book value of real estate, etc. for the concerned
accounting period plus total planned capital expenditures (refers to the total amount of reserve for capital expenditures) for the concerned
accounting period’s next period, but after also considering other options, such as utilization for repair expenses and capital expenditures andallocation to funds for repayment of borrowings or acquisition of new properties.
Total appraisal value of real estate, etc. at the end of the 8th fiscal period (fiscal period ended June 2020) was 35,542 million yen, which
exceeds the sum total of total book value of real estate, etc. (29,441 million yen) and the total amount of reserve for the planned amount ofconstruction of repair and renewal expenses (capital expenditures) planned to be implemented in the 9th fiscal period (169 million yen).
(Note 2) The breakdown of total book value of real estate, etc. is the sum total of the carrying amount of property, plant and equipment of 29,438
million yen and leasehold interest posted to intangible assets of 3 million yen.
(Note 3) For the 31 properties held by marimo REIT as of the end of the fiscal period under review, the 6-month average amount of the sum total
amount of the estimated amount of emergency repair expenses, estimated amount of short-term repair expenses and estimated amount oflong-term repair expenses (each falling under the category of renewal expenses (capital expenditures)) stated in the engineering report is 56
million yen. In addition, the planned amount of repairs (those falling under the category of capital expenditures) currently assumed bymarimo REIT is no more than 45 million yen for the fiscal period ending December 2020 and 61 million yen for the fiscal period ending June
2021. Therefore, even if an amount equivalent to the funds expected as reserve for the purpose of future capital expenditures for maintaining
the function of buildings, etc. or working capital, etc. and certain funds in preparation for investment that would serve to enhance theincome-producing potential of the portfolio are retained from the cash and deposits on hand in an amount equivalent to depreciation on
the last day of each accounting period, there is still expected to be residual free cash flows. Accordingly, the decision was made to executethe abovementioned distribution in excess of earnings as part of cash management under the judgment that it is within the scope that soundfinancial stability will be maintained.

(Outlook for the Next Fiscal Period)① General Management Outlook(A) External Growth Strategy
The policy is to build a stable and highly profitable diversified portfolio, centering on regional areas, by increasing
opportunities to acquire mainly “residential” properties, for which leasing demand is relatively stable with the increase in
the number of households, and “retail” properties, such as food supermarkets, drug stores, hardware stores and discountstores selling daily necessities, and conducting activities that lead to future external growth, while pursuing close-4-marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
collaboration with Marimo, which has six bases across Japan, through which a wide variety of real estate information
gathered from all over Japan is shared and analysis of asset value and assurance of liquidity and substitutability are verified
with deep insight based on the many years of experience in regional areas.
In addition, the policy is to pursue expansion of asset size while being granted preferential negotiation rights for sales
transactions pertaining to the acquisition of properties, including the “ArtizA” series of rental condominiums developed by
Marimo, income-producing real estate held or purchased by Marimo and retail or hotel properties developed in Marimo’s
urban redevelopment (Note) business, etc., based on the sponsor pipeline and support agreement. Along with this, the policy
is to keep fully utilizing the abundant property network, property information sourcing strengths, etc. of Marimo and theeight supporting companies (The Mie Bank, Ltd., The Michinoku Bank, Ltd., The Tokyo Star Bank, Limited, The Chugoku Bank,
Limited, Kansai Mirai Bank, Ltd., The Hiroshima Bank, Ltd., The Ashikaga Bank, Ltd. and ReBITA Inc.) and also property
information obtained based on the network accumulated in the real estate industry by the employees of the Asset Manager
and property information obtained based on maintaining favorable relationships with the tenants of portfolio properties forthe steady external growth of marimo REIT.
Moreover, sale or replacement of properties are considered in cases where deemed appropriate over the medium to longterm in portfolio building in light of market conditions.
(Note) Urban redevelopment refers to redevelopment to promote reasonable and sound high-level use of land in urban areas and renewal of urban
functions.

(B) Internal Growth Strategy
Through appropriate management of assets with the provision of property management services, etc., provision of leasing
support, provision of support in renovation of portfolio assets, provision of fixed-rent master lease agreements and othervarious support pertaining to internal growth from Marimo by setting the securing of stable revenue from leasing over the
medium to long term as a target, marimo REIT shall aim for stability of revenue and enhancement of income-producing
potential and thereby aim for maximization of unitholder value over the medium to long term.
Concerning the impact of the COVID-19 pandemic, since the assets under management of marimo REIT mostly consist ofretail and residential properties in regional areas, the impact was limited although some tenants have requested rent
reduction. As such, the impact on the next fiscal period is expected to be minimal.
Continuing on from the fiscal period under review, marimo REIT shall work to enhance lease business revenue, such as
maintain asset value and competitiveness by implementing strategic value enhancement work, enhance occupancy rate,
raise rent upon tenant replacement, and increase parking revenue and other incidental revenue, in light of the operational
status of portfolio assets, surrounding competitive property trends and other real estate market conditions.
In addition, along with the measures serving to enhance lease business revenue, marimo REIT shall work to enhance revenue
from leasing by striving for reduction of restoration and other repair and construction expenses, reduction of utility expenses
by switching the electric power utility, environmental consideration/initiatives and cost reduction by switching lighting incommon areas to LED, and reduction of offering expenses and other various expenses.
(C) Financial Strategy
marimo REIT shall engage in financing that would be for the realization of building of a stable asset management base,efficiency of asset management and soundness of financial standing over the medium to long term.
marimo REIT shall execute debt financing with staggering of debt maturities, lengthening of borrowing periods and loweringof borrowing interest rates in mind, and shall make efforts to maintain a bank formation comprising several financial
institutions, including city banks, trust banks, and regional financial institutions that fully understand the characteristics ofeach region.
Issuance of new investment units shall be decided in light of the financial environment in due consideration of the dilutionof existing unitholders’ rights and accompanying investment unit transaction price trends, etc., and also comprehensively
taking into account various factors, such as the demand for funds for acquisition of properties, level of LTV ratio andrepayment plan for interest-bearing liabilities.
② Significant Subsequent Events
Not applicable.

-5-marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
Assumptions Underlying the Operating Forecasts for the Fiscal Period Ending December 2020 (from July 1, 2020, to December 31, 2020)and Fiscal Period Ending June 2021 (from January 1, 2021, to June 30, 2021)
Item

Assumptions

Accounting
period● Fiscal period ending December 2020 (9th fiscal period) (from July 1, 2020, to December 31, 2020) (184 days)● Fiscal period ending June 2021 (10th fiscal period) (from January 1, 2021, to June 30, 2021) (181 days)● The assumption is that marimo REIT will continue to hold the real estate trust beneficiary rights to 31 properties
held as of the date of this document and that there will be no acquisition of new properties other than thosethrough to the end of the fiscal period ending June 2021.
● In actual practice, change may arise due to acquisition of new properties, disposition of portfolio properties, etc.
● Operating revenue from leasing of the portfolio assets is calculated on the basis of rent, etc. stated in lease
contracts in effect as of the date of this document, historical data, etc.
● The assumption is that there will be no delinquent or unpaid rent by tenants.
● Some degree of decrease in operating revenue from leasing, etc. due to the impact of COVID-19 is taken into
account when calculation is made.
● Of operating expenses from leasing, the main operating expenses, expenses other than depreciation arecalculated on the basis of historical data, etc. and by reflecting the factors causing fluctuation in expenses.
● Operating income from leasing after operating expenses from leasing (including depreciation) is deducted(excluding gain on sales of real estate properties) is expected to be 763 million yen for the fiscal period ending
December 2020 and 747 million yen for the fiscal period ending June 2021.
● In general, fixed asset tax, city planning tax, etc. are calculated on a pro rata basis and reimbursed at the time ofacquisition with the previous beneficiary, etc. upon transactions of real estate, etc., but because the amountequivalent to the reimbursement is included in the cost of acquisition, fixed asset tax, city planning tax, etc. forfiscal 2020 are expensed starting from the fiscal period ending June 2021 for the real estate trust beneficiaryrights to 6 properties acquired on January 21, 2020 (hereinafter, the “Newly Acquired Assets”). Furthermore, thetotal amount of fixed asset tax, city planning tax, etc. to be expensed is expected to be 83 million yen for the
fiscal period ending December 2020 and 98 million yen for the fiscal period ending June 2021. Of these, theamount of the effect of the acquisition of the newly acquired assets is expected to be 15 million yen for the fiscal
period ending June 2021 and 15 million yen for the fiscal period ending December 2021.
● Repair expenses for buildings based on medium- to long-term repair plans formulated by the Asset Manager are
expected to be 33 million yen for the fiscal period ending December 2020 and 42 million yen for the fiscal period
ending June 2021. Furthermore, concerning emergency repair expenses possibly arising from unforeseeable
factors causing building damage, etc., the amount generally varies materially from fiscal year to fiscal year anddoes not arise periodically, etc., which may result in repair expenses for each accounting period differing
materially from the forecast amount.
● Depreciation is calculated under the straight-line method inclusive of incidental expenses and other future
additional capital expenditures, and is expected to be 242 million yen for the fiscal period ending December 2020
and 244 million yen for the fiscal period ending June 2021.
● Interest expenses and other borrowing-related expenses are expected to be 93 million yen for the fiscal period
ending December 2020 and 97 million yen for the fiscal period ending June 2021.
● Expenses associated with the issuance of new investment units and issuance of new investment units throughthird-party allotment for which resolution was passed at meetings of marimo REIT’s board of directors held on
January 6, 2020, and January 14, 2020, are expected to be 28 million yen and amortized under the straight-line
method over a period of 3 years. Amortization of investment unit issuance expenses inclusive of the above are
expected to be 10 million yen for the fiscal period ending December 2020 and 4 million yen for the fiscal period
ending June 2021.
● The assumption is that internal reserves from a portion of depreciation will be used as the source of funds torepay principal of 15 million yen every fiscal period.
● The assumption is that total interest-bearing liabilities will be 15,882 million yen at the end of the fiscal period
ending December 2020 and 15,867 million yen at the end of the fiscal period ending June 2021.
● The assumption is the total number of investment units issued and outstanding as of the date of this documentof 152,680 units.
● The assumption is that there will be no change in the number of investment units due to issuance of new
investment units, etc. through to the end of the fiscal period ending June 2021.
● Dividends per unit (excluding dividends in excess of earnings) is calculated based on the assumption that
distribution will be in accordance with the policy on distribution of cash provided in marimo REIT’s Articles ofIncorporation.
● Dividends per unit (excluding dividends in excess of earnings) may vary due to various factors, such as fluctuationin rent revenue accompanying change in assets under management, change in tenants or other event, or
incurrence of unexpected repairs.

Assets undermanagement

Operatingrevenue

OperatingexpensesNon-operating
expenses

Loans

Investment
units
Dividends
per unit(excluding
dividends
in excess ofearnings)-6-

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
Item

Dividends
in excess ofearnings
per unit

Assumptions● Dividends in excess of earnings per unit is calculated in accordance with the policy provided in marimo REIT’s
Articles of Incorporation and the management guidelines that are the internal rules of the Asset Manager.
● Distribution in excess of earnings is calculated based on the assumption that the sum total amount of taxation
and accounting discrepancies are distributed as allowance for temporary difference adjustments for the
purpose of tax reduction.
● As of the date of this document, marimo REIT deems there to be no specific concerns of substantial
deterioration in the external economic environment, real estate market conditions and financial status ofmarimo REIT.
● For the fiscal period ending December 2020 and fiscal period ending June 2021, there are high needs to retain
certain funds to respond in the event that opportunities for acquiring new properties as investment that would
serve to enhance the income-producing potential of the portfolio or such arise, but in light of marimo REIT’s
financial status, projected likelihood of refinancing borrowings, etc., the view is that marimo REIT is not in astate that calls for prioritized allocation of funds to reduce interest-bearing liabilities, etc. in both concerned
accounting periods. As of the date of this document, execution of distribution in excess of earnings is deemed
to be reasonable for the fiscal period ending December 2020 and fiscal period ending June 2021. As such, forthe fiscal period ending December 2020, total dividends in excess of earnings is expected to be 64 million yen,of which total dividends of allowance for temporary difference adjustments is 1 million yen and total otherdividends in excess of earnings is 63 million yen, and for the fiscal period ending June 2021, total dividends inexcess of earnings is expected to be 68 million yen, of which total dividends of allowance for temporary
difference adjustments is 1 million yen and other distribution in excess of earnings is 67 million yen (Note 1).
(Note 1) Distribution in excess of earnings shall be executed only when total appraisal value of real estate, etc. held as at the end of
the accounting period (refers to the appraisal value in the real estate appraisal report obtained with the end of the accounting
period as the date of value for real estate, etc. held by marimo REIT) exceeds total book value of real estate, etc. for theconcerned accounting period plus total planned capital expenditures (refers to the total amount of reserve for capital
expenditures) for the concerned accounting period’s next period, but after also considering other options, such as utilization
for repair expenses and capital expenditures and allocation to funds for repayment of borrowings or acquisition of new
properties. To that end, distribution in excess of earnings is not executed even in the 9th fiscal period (fiscal period ending
December 2020) and 10th fiscal period (fiscal period ending June 2021) regardless of the forecast above in the event thatsuch conditions are not met.
In addition, concerning the fiscal period ending December 2020 and fiscal period ending June 2021, as of the date of thisdocument, marimo REIT adopts the policy of distributing as cash in excess of earnings an amount decided by marimo REIT
each accounting period that is not to exceed the amount provided in the rules of The Investment Trusts Association, Japan(hereinafter, “JITA”), no more than the amount equivalent to 30% of depreciation for the concerned accounting period andwithin the scope not to exceed payout ratio (Note 2) of 75%. Accordingly, the distribution in excess of earnings may not takeplace or the amount of dividends in excess of earnings may decrease in the event of conflict with these limits.
Moreover, in the event that substantial deterioration in the external economic environment, real estate market conditions,financial status of marimo REIT, etc. or such newly arise in the future, the policy as of the date of this document to execute
distribution in excess of earnings as part of cash management in the fiscal period ending December 2020 and fiscal period
ending June 2021 may be changed and there may also be cases where the distribution in excess of earnings may not takeplace or the amount of dividends in excess of earnings may decrease even in the fiscal period ending December 2020 andfiscal period ending June 2021. For instance, each accounting period’s limits on the amount of dividends in excess of earnings
like those above may be revised in the case that large-scale additional incorporation of new assets or other factors lead tolarge fluctuation in the revenue and expense structure of the portfolio or such newly arising, in the case of material change
in the financial environment, real estate investment trust market conditions, etc. or in other cases in the period up to when
the distribution in excess of earnings for the concerned accounting period is ultimately executed.
(Note 2) “Payout ratio” refers to the ratio of total dividends including distribution in excess of earnings to the amount of net income
plus depreciation.

Other● The assumption is that there will be no amendment of laws and regulations, tax systems, accounting standards,
listing regulations, JITA rules, etc. that will impact the forecast figures above.
● The assumption is that there will be no unforeseen material change in general economic trends, real estatemarket conditions, etc.

-7-

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020(2) Investment Risks“Investment Risks” in the most recent securities report (submitted on March 26, 2020) have been revised as follows. Revisions
are underlined.
1) Risk factors(Omitted)⑥ Other(i) Risk concerning reliance on opinions of real estate appraisers and other experts(ii) Risk concerning application of asset-impairment accounting(iii) Risk concerning investment in silent partnership interest(iv) Risk concerning investment in preferred equity securities of special purpose companies(v) Risk concerning the small size of marimo REIT’s assets(vi) Risk concerning being impacted by infectious diseases① Risk concerning merchantability of the investment securities(i) Risk concerning fluctuation of the market value of the investment securities
The spread of COVID-19 in Japan and abroad has caused business stagnation and is negatively affecting economic
activities centering particularly on urban areas. Because the assets under management of marimo REIT mostly
consist of retail and residential properties in regional areas, the degree of the impact is believed to be relatively
small. However, if COVID-19 spreads further and lingers over the long term going forward, regional economies inwhich portfolio properties of marimo REIT are located could be further affected. As a result, the market value ofmarimo REIT’s investment units may be negatively affected.
In addition to the above, because marimo REIT is a closed-end investment corporation, investment securities are notredeemable at the demand of unitholders and conversion of investment securities into cash is restricted to sale tothird parties. (However, marimo REIT can purchase its investment units for compensation through agreement withunitholders (Article 7, Paragraph 2 of marimo REIT’s Articles of Incorporation).)The market value of the investment securities is affected by the supply-demand balance on the stock exchange, andsharp decreases in value are possible when a massive amount is put up for sale within a certain period. Furthermore,market values may fluctuate due to various factors including interest rates, the economic climate, real estate market,
and other market-related factors.
Decrease in the market value of the investment securities may also result from administrative measures
recommended or conducted by regulatory authorities concerning marimo REIT or the Asset Manager, or concerning
other investment corporations and other asset managers.
In cases where the market value of the investment securities declines, unitholders may not be able to sell theinvestment securities at the acquisition price and may incur losses as a result.
(Omitted)⑥ Other(Omitted)(vi) Risk concerning being impacted by infectious diseases
Due to the impact of the global pandemic of COVID-19, economic activities have stagnated significantly not only inJapan but also around the world. While the declaration of a state of emergency for COVID-19 issued on April 7, 2020,
was lifted on May 25, 2020, social economic activities have not returned to normal and a possible resurgence of
infections is also anticipated. In the case the impact of the pandemic lingers over the long term, tenants may request
rent reduction or may fall behind on rent in addition to the possible emergence of risk of vacancy in line with moveouts by tenants due to reasons such as deterioration of tenant earnings and decrease in their creditworthiness.
When infectious diseases, including COVID-19, spread or linger over the long term, officers and employees of theAsset Manger are assumed to work from home to prevent the spread of infection. However, some of their duties are
unsuited for such work style, and if the impact of infection lingers over the long term, business operations of theAsset Manager may slow down, negatively affecting the management of marimo REIT.
(Following section omitted)-8-

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020

2. Financial Statements(1) Balance Sheet(Unit: thousand yen)
7th fiscal period(As of Dec. 31, 2019)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
Leasehold rights in trust
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Guarantee deposits
Lease and guarantee deposits in trust
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance expenses
Total deferred assets
Total assets-9-

8th fiscal period(As of June 30, 2020)

1,359,172
1,878,767
7,614
53,837－4,654
3,304,045

921,559
2,160,966
11,03554,31459,542－
3,207,419

11,675,924(1,259,445)
10,416,478
270,705(37,493)
233,212
118,437(18,835)
99,602
29,976(4,909)25,067
13,780,877
24,555,237

12,939,840(1,490,003)
11,449,837
324,513(44,438)
280,074
118,437(21,759)
96,67834,803(7,388)27,414
17,584,254
29,438,259

3,839
1,769
5,609

3,712
1,179
4,891

60,97914
10,00013,50084,49324,645,340

63,611
16
10,00013,50087,12829,530,279

11,258
11,25827,960,644

28,95828,95832,766,657

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020

(Unit: thousand yen)
7th fiscal period(As of Dec. 31, 2019)
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Current portion of tenant leasehold and security deposits in trust
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits in trust
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Allowance for temporary difference adjustments
Other deduction from unitholders’ capital
Total deduction from unitholders’ capital
Unitholders’ capital, net
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets- 10 -

8th fiscal period(As of June 30, 2020)

73,16030,000140,493892
28,206
173,414
48,121
5,614
499,902124,8024,870,000
147,565944－
200,580
48,121
6,849
5,398,864

13,742,500
1,212,964
18,28054
14,973,800
15,473,703

11,027,500
1,373,594
18,300163
12,419,558
17,818,422

12,412,622

14,869,979(6,533)(317,303)(323,837)
12,088,785(7,724)(381,753)(389,477)
14,480,501

398,155
398,155
12,486,940
12,486,940
27,960,644

467,732
467,732
14,948,234
14,948,234
32,766,657

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
(2) Statement of Income(Unit: thousand yen)
7th fiscal period
From: July 1, 2019
To: Dec. 31, 2019
Operating revenue
Lease business revenue
Other lease business revenue
Gain on sales of real estate properties
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations
Taxes and dues
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distributions payable
Interest on refund
Insurance income
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Amortization of investment unit issuance expenses
Total non-operating expenses
Ordinary income
Net income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)- 11 -

8th fiscal period
From: Jan. 1, 2020
To: June 30, 2020

1,073,574
51,9083,818
1,129,301

1,210,246
55,433－
1,265,679

479,297
101,589
1,397
12,1902,400
13,75535,957646,588482,713

520,645
107,749
1,595
13,2172,400
15,33733,320694,266
571,413

14
－
24
846
885

14
275
－
315
605

54,397
24,586
5,629
84,613398,984
398,984894
0
894
398,08966
398,155

60,76532,358
10,295
103,419
468,599
468,599946(2)
943
467,65576
467,732

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
(3) Statement of Unitholders’ Equity
7th fiscal period (from July 1, 2019, to December 31, 2019)(Unit: thousand yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Unitholders’capitalBalance at beginning of current period

Allowance fortemporarydifference
adjustments

12,412,622(5,342)Other
deduction fromunitholders’capitalTotal
deduction fromunitholders’capitalUnitholders’capital, net(252,456)(257,799)

12,154,823(1,191)(1,191)(64,846)(64,846)(64,846)

Changes of items during period
Dividends of surplus
Distribution in excess of earnings
attributable to allowance for(1,191)

temporary difference adjustments
Other distribution in excess ofearnings
Net income
Total changes of items during period
Balance at end of current period－(1,191)(64,846)(66,037)(66,037)

12,412,622(6,533)(317,303)(323,837)

12,088,785(Unit: thousand yen)
Unitholders’ equity
Surplus
Unappropriatedretained earnings(undisposed loss)
Balance at beginning of current period

Total
surplusTotal
unitholders’equityTotal
net assets

396,424

396,424

12,551,247

12,551,247(396,358)(396,358)(396,358)(396,358)(1,191)(1,191)(64,846)(64,846)

Changes of items during period
Dividends of surplus
Distribution in excess of earnings
attributable to allowance fortemporary difference adjustments
Other distribution in excess ofearnings
Net income
Total changes of items during period
Balance at end of current period

398,089

398,089

398,089

398,089

1,731

1,731

(64,306)(64,306)

398,155

398,155

12,486,940

12,486,940- 12 -

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
8th fiscal period (from January 1, 2020, to June 30, 2020)(Unit: thousand yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Unitholders’capitalBalance at beginning of current period

Allowance fortemporarydifference
adjustments

12,412,622(6,533)Other
deduction fromunitholders’capitalTotal
deduction fromunitholders’capitalUnitholders’capital, net(317,303)(323,837)

12,088,785

Changes of items during period
Issuance of new investment units

2,457,356

2,457,356

Dividends of surplus
Distribution in excess of earnings
attributable to allowance fortemporary difference adjustments(1,191)Other distribution in excess ofearnings(1,191)(1,191)(64,449)(64,449)(64,449)

Net income
Total changes of items during period

2,457,356(1,191)(64,449)(65,640)

2,391,716

Balance at end of current period

14,869,979(7,724)(381,753)(389,477)

14,480,501(Unit: thousand yen)
Unitholders’ equity
Surplus
Unappropriatedretained earnings(undisposed loss)
Balance at beginning of current period

398,155

Total
surplus398,155

Total
unitholders’equityTotal
net assets

12,486,940

12,486,940

2,457,356

2,457,356(398,078)(398,078)(1,191)(1,191)(64,449)(64,449)

Changes of items during period
Issuance of new investment units
Dividends of surplus(398,078)(398,078)

Distribution in excess of earnings
attributable to allowance fortemporary difference adjustments
Other distribution in excess ofearnings
Net income

467,655

467,655

467,655

467,655

Total changes of items during period

69,577

69,5772,461,293

2,461,293

Balance at end of current period

467,732

467,732

14,948,234

14,948,234- 13 -

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
(4) Statement of Distribution of Cash
7th fiscal period
From: July 1, 2019
To: Dec. 31, 2019I.

Unappropriated retained earnings

8th fiscal period
From: Jan. 1, 2020
To: June 30, 2020

398,155,403 yen

467,732,414 yen

65,640,640 yen

65,805,080 yen

1,191,060 yen
64,449,580 yen

1,068,760 yen
64,736,320 yen

463,719,360 yen

533,463,920 yen[3,504 yen]

[3,494 yen]

398,078,720 yen[3,008 yen]

467,658,840 yen[3,063 yen]

Allowance for temporary difference adjustments[Dividends in excess of earnings per unit

1,191,060 yen

1,068,760 yen(attributable toallowance for temporary difference adjustments)][9 yen][7 yen]Other dividends in excess of earnings[Dividends in excess of earnings per unit

64,449,580 yen

64,736,320 yen(attributable toother dividends in excess of earnings)][487 yen][424 yen]

76,683 yen

73,574 yen

In accordance with the policy on
distribution of cash provided in Article
25, Paragraph 1 of marimo REIT’s
Articles of Incorporation, dividends
shall be the amount of distribution inexcess of the amount equivalent to
90% of the amount of marimo REIT’s
earnings available for distribution
provided in Article 67-15, Paragraph 1of the Act on Special Measures
Concerning Taxation.
Based on such policy, the decision wasmade to distribute 398,078,720 yen,which is the largest integral multipleof the total number of investment
units issued and outstanding at end of
period in an amount not in excess ofunappropriated retained earnings, as
dividends of earnings.
Furthermore, in accordance with thepolicy on distribution of cash provided
in Article 25, Paragraph 2 of the
Articles of Incorporation, marimo REIT
shall execute distribution in excess ofearnings in the fiscal period underreview as part of cash management.
Based on this, the decision was madeto distribute 65,640,640 yen, which isthe amount roughly equivalent to 30%
of depreciation for the fiscal period
under review, as dividends in excess ofearnings. This resulted in dividends inexcess of earnings per unit of 496 yen.
Furthermore, included in thedividends in excess of earnings is
distributionofallowance
for
temporary difference adjustments of
1,191,060 yen, resulting in allowancefor temporary difference adjustments
per unit of 9 yen.

In accordance with the policy on
distribution of cash provided in Article
25, Paragraph 1 of marimo REIT’s
Articles of Incorporation, dividends
shall be the amount of distribution inexcess of the amount equivalent to
90% of the amount of marimo REIT’s
earnings available for distribution
provided in Article 67-15, Paragraph 1of the Act on Special Measures
Concerning Taxation.
Based on such policy, the decision wasmade to distribute 467,658,840 yen,which is the largest integral multipleof the total number of investment
units issued and outstanding at end of
period in an amount not in excess ofunappropriated retained earnings, as
dividends of earnings.
Furthermore, in accordance with thepolicy on distribution of cash provided
in Article 25, Paragraph 2 of the
Articles of Incorporation, marimo REIT
shall execute distribution in excess ofearnings in the fiscal period underreview as part of cash management.
Based on this, the decision was madeto distribute 65,805,080 yen, which isthe amount roughly equivalent to 27%
of depreciation for the fiscal period
under review, as dividends in excess ofearnings. This resulted in dividends inexcess of earnings per unit of 431 yen.
Furthermore, included in thedividends in excess of earnings is
distributionofallowance
for
temporary difference adjustments of
1,068,760 yen, resulting in allowancefor temporary difference adjustments
per unit of 7 yen.

II. Addition of dividends in excess of earnings
Of which,
Allowance for temporary difference adjustments
Other deduction from unitholders’ capital
III. Dividends[Dividends per unit]
Of which,
Dividends of earnings[Dividends of earnings per unit]

IV. Retained earnings carried forward
Method of calculation of dividends- 14 -

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
(5) Statement of Cash Flows(Unit: thousand yen)
7th fiscal period
From: July 1, 2019
To: Dec. 31, 2019
Cash flows from operating activities
Net income before income taxes
Depreciation
Amortization of investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Decrease in property, plant and equipment in trust due to sale
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Payments into restricted deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 15 -

8th fiscal period
From: Jan. 1, 2020
To: June 30, 2020

398,984
220,4605,629(14)
54,397114
5,121
28,206(24,600)(15,798)
4,028(3,749)223,392(35,710)(24,741)
835,720
14(51,487)(902)
783,344468,599
243,644
10,295(14)
60,765(3,421)(59,542)(28,206)(477)
25,642
7,073
27,166－(2,632)
6,754
755,646
14(60,766)(894)
693,999(62,980)(0)(62,980)(5,099,769)(0)(5,099,769)－(700,000)
4,030,000(3,345,000)－(461,541)(476,541)
243,822
1,704,030
1,947,852

110,000(110,000)
2,140,000(15,000)
2,429,361(464,636)
4,089,725(316,043)
1,947,852
1,631,808

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
(6) Notes on the Going Concern Assumption
Not applicable.

- 16 -

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
(7) Notes on Matters Concerning Significant Accounting Policies
1.

Method of depreciationof non-current assets(1) Property, plant and equipment
The straight-line method is adopted.
Furthermore, the useful life of core property, plant and equipment is as follows:
Buildings in trust
2–64 years
Structures in trust
Machinery and equipment in trust

5–58 years
10–27 years

Tools, furniture and fixtures in trust(2) Intangible assets

3–15 years

The straight-line method is adopted.
Furthermore, the remaining or useful life of core intangible assets is as follows:
Leasehold rights in trust
Software19 years
5 years(3) Long-term prepaid expenses
The straight-line method is adopted.
2.

Accounting fordeferred assets

Investment unit issuance expenses
Amortized using the straight-line method over 3 years.

3.

Standards for

Accounting for fixed asset tax, etc.

revenue and expense
recognition

For fixed asset tax, city planning tax, depreciable asset tax, etc. (hereinafter, “fixed asset
tax, etc.”) on real estate or trust beneficiary rights that have real estate as trust assets
held, the accounting is that, of the tax amount assessed and determined, the amountcorresponding to the concerned accounting period is expensed as expenses related torent business.
Furthermore, the amount equivalent to fixed asset tax, etc. in the initial fiscal year borneby marimo REIT upon acquisition of real estate or trust beneficiary rights that have realestate as trust assets is not recognized as expenses but included in the cost of acquisitionof the concerned real estate, etc. The amount equivalent to fixed asset tax, etc. includedin the cost of acquisition of real estate, etc. was not applicable for the 7th fiscal period
and the amount applicable for the 8th fiscal period is 22,964 thousand yen .

4.

Scope of funds in the

The funds (cash and cash equivalents) in the statement of cash flows comprise cash on handstatement of cash flows

and cash in trust, demand deposits and deposits in trust, and short-term investments with amaturity of 3 months or less from the date of acquisition that are readily convertible to cash
and that are subject to an insignificant risk of changes in value.

5.

Other significant mattersserving as the basis for
preparation of thefinancial statements(1) Accounting for trust beneficiary rights that have real estate, etc. as trust assets
Concerning trust beneficiary rights that have real estate held, etc. as trust assets, allaccounts of assets and liabilities within trust assets and all accounts of revenue andexpenses from the trust assets are recognized in the relevant account item of thebalance sheet and the statement of income. Furthermore, the following material itemsof the trust assets recognized in the relevant account item are separately listed on thebalance sheet.
① Cash and deposits in trust② Buildings in trust; Structures in trust; Machinery and equipment in trust;Tools, furniture and fixtures in trust; Land in trust③ Leasehold rights in trust④ Lease and guarantee deposits in trust⑤ Current portion of tenant leasehold and security deposits in trust⑥ Tenant leasehold and security deposits in trust(2) Accounting for consumption tax, etc.
The accounting for consumption tax and local consumption tax is that the taxes are
excluded from transaction amounts. Furthermore, non-deductible consumption tax onacquisition of assets is included in the cost of acquisition of each asset.

- 17 -

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2020
[Additional Information][Notes on Provision and Reversal of Allowance for Temporary Difference Adjustments]
7th fiscal period (from July 1, 2019, to December 31, 2019)
1. Reason, related assets, etc. and amount of provision
The posting of MRR Omuta’s amortization of leasehold interest for leasehold interest in trust and amount in excess ofdepreciation limit and also asset retirement obligation-related expenses led to taxation and accounting discrepancies.
Accordingly, allowance for temporary difference adjustments of 1,191 thousand yen was posted in the statement of
distribution of cash.
2.

Specific method of reversal
For the allowance for temporary difference adjustments of the amortization of leasehold rights for leasehold rights in trust
and amount in excess of depreciation limit, the plan is reversal of the corresponding amount at the time of inclusion in
deductible expenses upon redemption and sale of leasehold rights and accompanying building removal and also building
sale, etc.
In addition, for the allowance for temporary difference adjustments of the asset retirement obligation-related expenses,
the plan is reversal of the corresponding amount at the time of inclusion in deductible expenses upon building removal
and sale, etc.

8th fiscal period (from January 1, 2020, to June 30, 2020)
1.

Reason, related assets, etc. and amount of provision
The posting of MRR Omuta’s amortization of leasehold interest for leasehold interest in trust and amount in excess ofdepreciation limit and also asset retirement obligation-related expenses led to taxation and accounting discrepancies.
Accordingly, allowance for temporary difference adjustments of 1,068 thousand yen was posted in the statement of
distribution of cash.

2.

Specific method of reversal
For the allowance for temporary difference adjustments of the amortization of leasehold rights for leasehold rights in trust
and amount in excess of depreciation limit, the plan is reversal of the corresponding amount at the time of inclusion in
deductible expenses upon redemption and sale of leasehold rights and accompanying building removal and also building
sale, etc.
In addition, for the allowance for temporary difference adjustments of the asset retirement obligation-related expenses,
the plan is reversal of the corresponding amount at the time of inclusion in deductible expenses upon building removal
and sale, etc.

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