(REIT) Financial Report for the Fiscal Period Ended June 2019
August 19, 2019
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 13, 2019
September 26, 2019

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 2019 (from January 1, 2019 to June 30, 2019)(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 2019
1,121
2.5
471
0.1
397
0.3
396
0.3
Ended Dec. 2018
1,093
3.4
471
(0.2)
395
0.1
395
0.1
Fiscal period

Net income per unit

Return on equity

yen
2,995
2,984

Ended June 2019
Ended Dec. 2018

Ratio of ordinary income to Ratio of ordinary income tototal assets
operating revenue
%
%
%
3.2
1.4
35.4
3.1
1.4
36.2

(2) Dividends

Fiscal period

Ended June 2019
Ended Dec. 2018

Dividends
per unit

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

yen
2,995
2,985

million yen
396
395

Dividends
in excess ofearnings
per unit

Total
dividends
in excess ofearnings

yen
499
460

million yen
66
60

Dividends
per unit

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

yen
3,494
3,445

million yen
462
455

Payout
ratio
%
100.0
100.0

Ratio ofdividends to
net assets
%
3.2
3.1

(Note 1) The breakdown of total dividends in excess of earnings for the fiscal period ended December 2018 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 59
million yen (451 yen per unit).
The breakdown of total dividends in excess of earnings for the fiscal period ended June 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(490 yen per unit).
(Note 2) The ratio of decreasing surplus, etc. attributable to distribution in excess of earnings (refund of investments in capital) for the fiscal period ended
December 2018 is 0.005 and for the fiscal period ended June 2019 is 0.006.
(Note 3) 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 201928,102Ended Dec. 201827,492

Net assets
million yen
12,551
12,610Equity ratio
%
44.7
45.9

Net assets per unit
yen
94,84095,290(4) Cash Flows
Fiscal period

Ended June 2019
Ended Dec. 2018

Net cashprovided by (used in)operating activities
million yen
666
772

Net cashprovided by (used in)investing activities
million yen
(780)
(84)

Net cashCash and cash equivalents
provided by (used in)at end of period
financing activities
million yen
million yen
229
1,704
(615)
1,589

2. Operating Forecasts for the Fiscal Period Ending December 2019 (from July 1, 2019 to December 31, 2019) andOperating Forecasts for the Fiscal Period Ending June 2020 (from January 1, 2020 to June 30, 2020)(% figures are the rate of period-on-period increase (decrease))
Fiscal periodEnding Dec. 2019
Ending June 2020

Operating revenue Operating income Ordinary income
mn yen
1,105
1,100

%
(1.3)
(0.5)

mn yen
468
469

%
(0.6)
0.2

mn yen
385
385

%
(3.0)
(0.0)

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
384
(3.1)
2,903
497
3,400
384
(0.0)
2,902
498
3,400

(Reference) Forecast net income per unit (Forecast net income ÷ Forecast average number of investment units during period)
Fiscal period ending December 2019: 2,903 yen
Fiscal period ending June 2020: 2,902 yen(Note) The rate of period-on-period increase (decrease) for the fiscal period ending December 2019 shows comparison with theactual figures for the fiscal period ended June 2019, and that for the fiscal period ending June 2020 shows comparison withthe forecast figures for the fiscal period ending December 2019.
* 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 2019
132,340 units② Number of treasury investment units at end of period
Fiscal period ended June 2019

0 units

Fiscal period ended Dec.2018132,340 units

Fiscal period ended Dec.2018

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 2019 (from July 1, 2019 to December 31, 2019) and Fiscal Period Ending
June 2020 (from January 1, 2020 to June 30, 2020)” on page 7.

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019

Table of Contents
1. Management Status .......................................................................................................................................................................... 2(1) Management Status ................................................................................................................................................................... 2(2) Investment Risks ........................................................................................................................................................................ 9
2. Financial Statements ....................................................................................................................................................................... 10(1) Balance Sheet .......................................................................................................................................................................... 10(2) Statement of Income ............................................................................................................................................................... 12(3) Statement of Unitholders’ Equity ............................................................................................................................................. 13(4) Statement of Distribution of Cash ............................................................................................................................................ 15(5) Statement of Cash Flows .......................................................................................................................................................... 16(6) Notes on the Going Concern Assumption ................................................................................................................................ 17(7) Notes on Matters Concerning Significant Accounting Policies ................................................................................................. 18－

1 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019

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) on February 5, 2016, and completed
the registration with the Kanto Local Finance Bureau on March 16, 2016 (Registration No. 113 with the Director-General of
the Kanto Local Finance Bureau). marimo REIT then implemented an issuance of new investment units through public offering(88,500 units) with July 28, 2016 as the payment due date, and listed on the Real Estate Investment Trust Securities Marketof Tokyo Stock Exchange, Inc. (hereinafter, the “J-REIT Market”) on July 29, 2016 (securities code: 3470). Later, 468 units were
issued through third-party allotment accompanying secondary offering through over-allotment on August 31, 2016.
Furthermore, marimo REIT implemented an issuance of new investment units through public offering (39,500 units) on
January 22, 2018 and issuance of new investment units through third-party allotment accompanying secondary offering
through overallotment (1,872 units) on February 16, 2018. These resulted in total number of investment units issued andoutstanding of 132,340 units as of the end of the fiscal period under review.
(Note) Amounts are rounded down to the nearest million yen. Unless otherwise stated, the same shall apply hereinafter.

② Investment Environment
In the fiscal period under review, the Japanese economy experienced positive growth with an annualized real GDP growthrate of 2.2% for the period from January to March 2019 (seasonally adjusted; second preliminary estimate). Compared withthe period from July to September 2018, domestic demand improved from -0.6% to +0.1%. The breakdown shows
improvements in private demand (from -0.7% to +0.1%) and private-sector capital investment (from -2.8% to +0.3%), both
turning to positive to bring about overall positive growth. Going forward, attention should be paid to the U.S.-China trade
friction, future course of the Brexit negotiations, trends of crude oil prices and such.
(Financial Market)
Due to the Bank of Japan’s monetary easing policy, the JBA 3-month Japanese Yen TIBOR maintained a stable level at
0.06909% since late January 2018, and the TIBOR for the fiscal period under review also remained at the same level until
May 30, 2019, when it was lowered to 0.06727%. Since the outlook continues to be uncertain due to the consumption tax
hike, moves for the U.S. presidential election, etc., the impact of volatility in financial markets should be carefully watchedgoing forward.
(Real Estate Transaction Market)
According to “ARES Monthly Report (June 2019)” published by The Association for Real Estate Securitization, the J-REIT realestate transaction market in the period from January to April 2019 contracted by approximately 331.5 billion yen year on
year (-33.4% year on year) to approximately 659.8 billion yen in terms of total acquisition price. The total sales pricedecreased by 111.4 billion yen year on year (-47.9% year on year) to approximately 121.1 billion yen. The decrease in realestate transaction amount is believed to have resulted from the rise in real estate prices due to funds that were procured at
low interest rates brought by the Bank of Japan’s monetary easing policy being invested in real estate, etc. Therefore,
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 2013 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 (non-wooden) is increasing, suggestingthat 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.

(Retail Property Market)
According to the “Current Survey of Commerce” by the Ministry of Economy, Trade and Industry, for the period from January
to March 2019, the rate of increase in sales value compared with the same period of the previous year for supermarkets was–0.3% on average nationally. However, by area, there were some areas that showed growth (+0.4% for the Kyushu area,+0.2% for the Shikoku area, +0.2% for the Hokkaido area). As for drug stores, the rate of increase was +5.0% on average－

2 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
nationally, with particularly high growth of +10.2% for the Okinawa area, +6.9% for the Chugoku area, +6.4% for the Shikoku
area, +6.2% for the Tohoku area, and +6.2% for the Chubu area, showing an upward trend across the nation. The sales valueof supermarkets and drug stores selling daily necessities is expected to continue to be stable.
(Hotel Market)
According to "Visitor Arrivals to Japan (estimate for May 2019)” by Japan National Tourism Organization, the number ofinternational visitors to Japan in the period from January to May 2019 increased to 13.75 million or up 4.2% year on year(including estimates). As a result, according to the “Overnight Travel Statistics Survey (April 2019/second preliminary
estimates, May 2019/first preliminary estimates)” by the Japan Tourism Agency of the Ministry of Land, Infrastructure,
Transport and Tourism, the total number of overnight international guests for April 2019 increased to 10.06 million (+13.3%
year on year); and the guest room occupancy rates by accommodation facility type continued to show upward trends with
82.8% (+0.7% year on year) for city hotels, 78.9% (+2.8% year on year) for business hotels and 57.5% (+1.8% year on year)
for resort hotels, suggesting that stable occupancy can be expected going forward as well.
(Office Leasing Market)
According to the “Japan Office MarketView Q1 2019” by CBRE K.K., in the first quarter of 2019, the vacancy rate for major
regional cities continued on a decreasing trend in general compared with the previous quarter, with 0.2% (-0.2 pts quarteron quarter) for Fukuoka City, 0.8% (-0.3 pts quarter on quarter) for Sapporo City, 1.0% (-0.1 pts quarter on quarter) for Nagoya
City, 1.3% (-0.4 pts quarter on quarter) for Osaka City and 3.2% (+0.9 pts quarter on quarter) for Hiroshima City. In addition,
assumed contract rents showed an upward trend, with 15,190 yen/tsubo (+2.6% quarter on quarter) for Fukuoka City and11,420 yen/tsubo (+1.7% quarter on quarter) for Hiroshima City. Thus, the ongoing upward trend in rent is likely to continue
amid tight a supply-demand balance.
③ Management Performance
In the fiscal period under review, marimo REIT newly acquired ArtizA Higashi-Shimada (acquisition price (Note): 700 million
yen) from the sponsor Marimo Co., Ltd. (hereinafter, “Marimo”) on January 4, 2019. In addition, management for maintaining
and enhancing the competitiveness of portfolio assets was performed through integrated promotion of property
management operations of the Asset Manager and each of the bases of the property management company, Marimo, at all
properties, conducting leasing activities according to the characteristics of each region, setting terms and conditions forseeking tenants according to the characteristics and occupancy status of individual properties, etc., and further implementing
value enhancement work to install wet-area facilities and equipment and flooring materials of outstanding design anddurability at residential properties upon tenant replacement, as well as additionally striving for enhancement of functionality,
convenience, etc., including installation of rooftop mobile phone base stations, installation of rental bikes and installation ofvending machines, and implementing measures for enhancement of customer satisfaction. As a result, marimo REIT’s
portfolio assets as of the end of the fiscal period under review (26 properties; total acquisition price: 25,225 million yen) has
an occupancy rate of 98.9% and period-average occupancy rate of 98.6%. In addition, cost-reduction measures implemented
included changing of surveillance cameras at ArtizA Kamimaezu; switching of the electric power utility at ArtizA HigashiShimada; and introduction of electronic breakers for reducing utility expenses at ArtizA Hakataeki-Minami and ArtizA Hakata
PREMIER. Furthermore, replacement of the air-conditioning system and installation of LED in the parking building were
implemented at MRR Delta Building and MRR Kumamoto, respectively, as initiatives for environmental consideration.
(Note) “Acquisition price” is the sale and purchase price of the real estate trust beneficiary right stated in the trust beneficiary right sale and purchase
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, 700 million yen was borrowed on January 4, 2019, upon the acquisition of ArtizA HigashiShimada. Of long-term loans borrowed on August 1, 2016 (Tranche D: loan balance of 1,432 million yen), funds on hand wereused to execute contractual repayment of 7 million yen on February 1, 2019, and 7 million yen on May 1, 2019. As a result,as at the end of the fiscal period under review (end of June 2019), the balance of loans outstanding was 13,787 million yen(Note) and the ratio of interest-bearing liabilities to total assets (hereinafter, “LTV ratio”) was 49.1%.
(Note)As described in “2. Significant Subsequent Events (Reference Information) (A) Borrowing of Funds” below, marimo REIT borrowed longterm loans of 4,030 million yen to repay a long-term loan of 3,330 million yen and short-term loan of 700 million yen on August 1, 2019.
On the same day, marimo REIT executed repayment of 7 million yen out of the abovementioned long-term loans (Tranche D) borrowed on
August 1, 2016. With these, the balance of loans outstanding of marimo REIT stands at 13,780 million yen as of the date of this document.

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3 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
⑤ Overview of Business Performance
As a result of the above, business performance for the fiscal period under review was operating revenue of 1,121 million yen,operating income of 471 million yen, ordinary income of 397 million yen and net income of 396 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 2,995 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 distribute66 million yen, which is the amount roughly equivalent to 30% 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 499 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 9 yen.
In addition, payout ratio (ratio of total dividends including distribution in excess of earnings to the amount of net income
plus depreciation) was 74.8%.
(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 with the end of the accounting period as the date of value that was
obtained for real estate, etc. held by marimo REIT; the same shall apply hereinafter) 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 theconcerned 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.
Total appraisal value of real estate, etc. at the end of the 6th fiscal period (fiscal period ended June 2019) was 29,496 million yen, which
exceeds the sum total of total book value of real estate, etc. (24,970 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 7th fiscal period (191 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 24,966
million yen and leasehold interest posted to intangible assets of 3 million yen.
(Note 3) For the 26 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 those falling under the category of renewal expenses (capital expenditures)) stated in the engineering reportis 60 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 53 million yen for the fiscal period ending December 2019 and 17 million yen for the fiscal period ending June
2020. 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.

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4 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
(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
collaboration with Marimo, which has seven 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 and renewal of urban functions of land in
urban areas.

(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-type master lease agreements andother various support pertaining to internal growth from Marimo by setting the securing of stable revenue from leasing overthe 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.
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.

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5 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
② Significant Subsequent Events
Not applicable.
(Reference Information)(A) Borrowing of Funds
marimo REIT decided at its Board of Directors' meeting held on July 23, 2019 to borrow funds to repay a long-term loan of
3,330 million yen and short-term loan of 700 million yen due for repayment on August 1, 2019, and borrowed funds on
August 1, 2019 as follows.
(1) Long-term loan (Tranche 4-A)①

Lender②

Loan amount③

Interest rate (Note 2)④

Drawdown dateAugust 1, 2019⑤

Borrowing method

Borrowing based on individual term loan agreement concluded with the lenders shown above
on July 30, 2019⑥

Maturity date⑦

Principle repayment
method⑧

Interest payment date⑨

Security

Loan syndicate with Sumitomo Mitsui Banking Corporation as arranger (Note 1)
2,015 million yen
Base rate (JBA 3-month Japanese Yen TIBOR) (Note 3) + 0.600% (floating rate)

August 1, 2022
Lump-sum repayment at maturity
The first interest payment date shall be November 1, 2019, and subsequent interest payment
dates shall be the 1st of every third calendar month thereafter as well as the maturity date (Note4)
Unsecured and unguaranteed(2) Long-term loan (Tranche 4-B)①

Lender②

Loan amount③

Interest rate (Note 2)④

Drawdown dateAugust 1, 2019⑤

Borrowing method

Borrowing based on individual term loan agreement concluded with the lenders shown above
on July 30, 2019⑥

Maturity date⑦

Principle repayment
method⑧

The first interest payment date shall be November 1, 2019, and subsequent interest payment
Interest payment date dates shall be the 1st of every third calendar month thereafter as well as the maturity date
(Note 4)⑨

Security

Loan syndicate with Sumitomo Mitsui Banking Corporation as arranger (Note 1)
2,015 million yen
Base rate (JBA 3-month Japanese Yen TIBOR) (Note 3) + 0.800% (floating rate)

August 1, 2024
Lump-sum repayment at maturity

Unsecured and unguaranteed(Note 1) The loan syndicate comprises Sumitomo Mitsui Banking Corporation, The Hiroshima Bank, Ltd., Sumitomo Mitsui Trust Bank, Ltd., Shinsei Bank,
Limited, The Mie Bank, Ltd., Resona Bank, Ltd., Chugoku Bank, Ltd. and Aozora Bank, Ltd.
(Note 2) Not including borrowing expenses, etc. payable to the lender.
(Note 3) The base rate applicable to the calculation period for the interest payable on each interest payment date shall be decided two business days
prior to each interest payment date (the drawdown date in the case of the first interest calculation period). For the JBA Japanese Yen TIBOR,
please check the website of JBA TIBOR Administration (http://www.jbatibor.or.jp/english/). If the JBA 3-month Japanese Yen TIBOR falls below
0%, then the base rate shall be 0%.
(Note 4) If the concerned date is not a business day, then it shall be the next business day, but if that next business day falls into the next calendar
month, then it shall be the business day preceding the concerned date.

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6 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
Assumptions Underlying the Operating Forecasts for the Fiscal Period Ending December 2019 (from July 1, 2019 to December 31, 2019)
and Fiscal Period Ending June 2020 (from January 1, 2020 to June 30, 2020)
Item

Assumptions

Accounting
period● Fiscal period ending December 2019 (7th fiscal period) (from July 1, 2019 to December 31, 2019) (184 days)● Fiscal period ending June 2020 (8th fiscal period) (from January 1, 2020 to June 30, 2020) (182 days)● The assumption is that marimo REIT will continue to hold the real estate trust beneficiary rights to 26 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 2020.
● In actual practice, change may arise due to acquisition of new properties, disposition of portfolio properties,etc.
● Operating revenue from leasing of 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.
● Of operating expenses from leasing, which are the main operating expenses, the expenses other thandepreciation are calculated on the basis of historical data, etc. and by reflecting the factors causing fluctuationin 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 631 million yen for the fiscal period ending
December 2019 and 622 million yen for the fiscal period ending June 2020.
● In general, fixed asset tax, city planning tax, etc. are calculated on a pro rata basis and reimbursed at the timeof acquisition 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, fiscal 2019 fixed asset tax, city planningtax, etc. are expensed starting from the fiscal period ending June 2020 in the case of the newly acquired assets.
Furthermore, the total amount of fixed asset tax, city planning tax, etc. to be expensed is expected to be 83
million yen for the fiscal period ending June 2020 and 83 million yen for the fiscal period ending December
2020. Of these, the amount of the effect of the acquisition of the newly acquired assets is expected to be 1
million yen for the fiscal period ending June 2020 and 1 million yen for the fiscal period ending December 2020.
● Repair expenses for buildings based on medium- to long-term repair plans formulated by the Asset Manager
are expected to be 26 million yen for the fiscal period ending December 2019 and 27 million yen for the fiscal
period ending June 2020. Furthermore, emergency repair expenses possibly arising from unforeseeable factors
causing building damage, etc., the amount generally varying materially from fiscal year to fiscal year and not
being an amount that arises periodically, etc. may result in repair expenses for each accounting period differing
materially from the forecast amount.
● Depreciation is calculated by the straight-line method inclusive of incidental expenses and other future
additional capital expenditures, and expected to be 219 million yen for the fiscal period ending December 2019and 220 million yen for the fiscal period ending June 2020.
● Interest expenses and other borrowing related expenses are expected to be 77 million yen for the fiscal period
ending December 2019 and 78 million yen for the fiscal period ending June 2020.
● Amortization of investment unit issuance expenses is expected to be 5 million yen for the fiscal period ending
December 2019 and 5 million yen for the fiscal period ending June 2020.
● 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 13,772 million yen at the end of the fiscal period
ending December 2019 and 13,757 million yen at the end of the fiscal period ending June 2020.
● The assumption is the total number of investment units issued and outstanding as of the date of this documentof 132,340 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 2020.
● 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
fluctuation in rent revenue accompanying change in assets under management, change in tenants or otherevent, or incurrence of unexpected repairs.

Assets undermanagement

Operatingrevenue

OperatingexpensesNon-operating
expenses

Loans

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

7 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
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 2019 and fiscal period ending June 2020, there are high needs to retain
certain funds to respond in the event that opportunities to acquire new properties as investment that would
serve to enhance the income-producing potential of the portfolio or such arises, but in light of marimo REIT’s
financial status, projected likelihood of refinancing borrowings, etc., the view is that it is not in a state that calls
for prioritized allocation of funds to reducing interest-bearing liabilities, etc. in both concerned accounting
periods.
● Depreciation for portfolio assets is expected to be 219 million yen for the fiscal period ending December 2019and 220 million yen for the fiscal period ending June 2020. Meanwhile, the 6-month average amount of thesum total amount of the estimated amount of emergency repair expenses, estimated amount of short-term
repair expenses and estimated amount of long-term repair expenses (each those falling under the category of
renewal expenses (capital expenditures)) stated in the engineering report for portfolio assets is 60 million yen.
In addition, the planned amount of repairs (those falling under the category of capital expenditures) currently
assumed by marimo REIT is no more than 53 million yen for the fiscal period ending December 2019 and 17
million yen for the fiscal period ending June 2020. 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 as described above 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.
● In light of the above, 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 2019 and fiscal period ending June 2020. As such, forthe fiscal period ending December 2019, total dividends in excess of earnings is expected to be 65 million yenof which total dividends of allowance for temporary difference adjustments is 1 million yen and total otherdividends in excess of earnings is 64 million yen, and for the fiscal period ending June 2020, total dividends inexcess of earnings is expected to be 65 million yen of which total dividends of allowance for temporary
difference adjustments is 1 million yen and other distribution in excess of earnings is 64 million yen (Note 1).
In this case, the total dividends in excess of earnings is expected to be the amount equivalent to 29.9% and29.9%, respectively, of the depreciation expected to be incurred in the concerned accounting period, andpayout ratio (Note 2) is expected to be 74.4% and 74.3%, respectively.
(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 with the end of the accounting period
as the date of value that was obtained for real estate, etc. held by marimo REIT) 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 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 7th fiscal period (fiscal period ending
December 2019) and 8th fiscal period (fiscal period ending June 2020) regardless of the forecast above in the event thatsuch conditions are not met.
In addition, as of the date of this document, marimo REIT adopts the policy of distributing as cash in excess of earnings anamount 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 forthe concerned accounting period and within the scope not to exceed payout ratio of 75%. Accordingly, the distribution inexcess of earnings may not take place or the amount of dividends in excess of earnings may decrease in the event of conflictwith 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 2019 and fiscal period
ending June 2020 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 2019 andfiscal period ending June 2020. 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. The same shall apply hereinafter.

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.
－

8 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019(2) Investment Risks
Disclosure is omitted, because there is no significant change from “Investment Risks” in the most recent securities report(submitted on March 28, 2019).

－

9 －marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019

2. Financial Statements(1) Balance Sheet(Unit: thousand yen)
5th fiscal period(As of Dec. 31, 2018)
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
Construction in progress 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

－

10 －

6th fiscal period(As of June 30, 2019)

1,018,870
1,923,690
8,474
39,272－93
2,990,402

1,086,844
1,935,258
7,729
29,236
5,121－
3,064,189

11,110,758(839,726)
10,271,031
265,363(25,391)
239,971
114,331(13,158)
101,173
10,129(1,749)8,379
13,790,968
112
24,411,637

11,649,518(1,050,836)
10,598,682
270,705(31,442)
239,262
118,437(15,911)
102,525
24,066(2,770)21,296
14,004,270－
24,966,037

4,094
2,951
7,045

3,967
2,360
6,327

37,31513
10,00013,50060,82824,479,511

25,26914
10,00013,50048,78325,021,148

22,516
22,51627,492,430

16,887
16,887
28,102,226

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019

(Unit: thousand yen)
5th fiscal period(As of Dec. 31, 2018)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans 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

－

11 －

6th fiscal period(As of June 30, 2019)97,585－3,360,000
135,768875
30,006
168,61251,817
3,622
3,848,288

119,623700,000
3,360,000
133,554899－
177,164
49,321
24,8594,565,423

9,742,500
1,272,545
18,241
78
11,033,366
14,881,654

9,727,500
1,239,750
18,261
43
10,985,555
15,550,97812,412,622

12,412,622(4,151)(192,771)(196,923)
12,215,699(5,342)(252,456)(257,799)
12,154,823

395,076
395,076
12,610,776
12,610,776
27,492,430

396,424
396,424
12,551,247
12,551,247
28,102,226

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019(2) Statement of Income(Unit: thousand yen)
5th fiscal period
From: July 1, 2018
To: Dec. 31, 2018
Operating revenue
Lease business revenue
Other lease business revenue
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
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)

－

12 －

6th fiscal period
From: Jan. 1, 2019
To: June 30, 2019

1,040,211
53,7281,093,940

1,066,125
54,9081,121,033

462,255
98,854
1,378
14,5182,400
9,746
33,585
622,739471,201

490,041
98,145
1,396
14,131
2,400
10,91632,422649,455
471,578

13
114
52
180

14
－
1,258
1,272

50,951
18,902
5,629
75,483395,898
395,898877
3
881
395,01659
395,076

50,80919,1285,629
75,567397,283
397,283902(1)
900396,38241
396,424

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019(3) Statement of Unitholders’ Equity
5th fiscal period (from July 1, 2018 to December 31, 2018)(Unit: thousand yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Allowance fortemporarydifference
adjustments

Unitholders’capitalBalance at beginning of current period

12,412,622(3,092)Other
deduction fromunitholders’capitalTotal
deduction fromunitholders’capitalUnitholders’capital, net(133,086)(136,179)

12,276,443(1,058)(1,058)(59,685)(59,685)(59,685)

Changes of items during period
Dividends of surplus
Distribution in excess of earnings
attributable to allowance for(1,058)

temporary difference adjustments
Other distribution in excess ofearnings
Net income
Total changes of items during period
Balance at end of current period-(1,058)(59,685)(60,744)(60,744)

12,412,622(4,151)(192,771)(196,923)

12,215,699(Unit: thousand yen)
Unitholders’ equity
Surplus
Unappropriatedretained earnings(undisposed loss)
Balance at beginning of current period

Totalunitholders’equityTotal
surplusTotal
net assets

394,697394,697

12,671,141

12,671,141(394,637)(394,637)(394,637)(394,637)(1,058)(1,058)(59,685)(59,685)

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

395,016

395,016

395,016

395,016378

378(60,365)(60,365)

395,076

395,076

12,610,776

12,610,776

－

13 －

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
6th fiscal period (from January 1, 2019 to June 30, 2019)(Unit: thousand yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Allowance fortemporarydifference
adjustments

Unitholders’capitalBalance at beginning of current period

12,412,622(4,151)Other
deduction fromunitholders’capitalTotal
deduction fromunitholders’capitalUnitholders’capital, net(192,771)(196,923)

12,215,699(1,191)(1,191)(59,685)(59,685)(59,685)

Changes of items during period
Dividends of surplus
Distribution in excess of earnings
attributable to allowance fortemporary difference adjustments(1,191)Other distribution in excess ofearnings
Net income
Total changes of items during period
Balance at end of current period-(1,191)(59,685)(60,876)(60,876)

12,412,622(5,342)(252,456)(257,799)

12,154,823(Unit: thousand yen)
Unitholders’ equity
Surplus
Unappropriatedretained earnings(undisposed loss)
Balance at beginning of current period

Total
surplusTotal
unitholders’equityTotal
net assets

395,076

395,076

12,610,776

12,610,776(395,034)(395,034)(395,034)(395,034)(1,191)(1,191)(59,685)(59,685)

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

396,382

396,382

396,382

396,382

1,347

1,347

(59,528)(59,528)

396,424

396,424

12,551,247

12,551,247

－

14 －

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019(4) Statement of Distribution of Cash
5th fiscal period
From: July 1, 2018
To: Dec. 31, 2018
I.

Unappropriated retained earnings

6th fiscal period
From: Jan. 1, 2019
To: June 30, 2019

395,076,553 yen

396,424,363 yen

60,876,400 yen

66,037,660 yen

1,191,060 yen
59,685,340 yen

1,191,060 yen
64,846,600 yen

455,911,300 yen

462,395,960 yen[3,445 yen]

[3,494 yen]

395,034,900 yen[2,985 yen]

396,358,300 yen[2,995 yen]

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

1,191,060 yen

1,191,060 yen(attributable toallowance for temporary difference adjustments)][9 yen][9 yen]Other dividends in excess of earnings[Dividends in excess of earnings per unit

59,685,340 yen

64,846,600 yen(attributable toother dividends in excess of earnings)][451 yen][490 yen]

41,653 yen

66,063 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 395,034,900 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 60,876,400 yen, which isthe amount roughly equivalent to 29%
of depreciation for the fiscal period
under review, as dividends in excess ofearnings. This resulted in dividends inexcess of earnings per unit of 460 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 396,358,300 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 66,037,660 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 499 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.

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

－

15 －

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019(5) Statement of Cash Flows(Unit: thousand yen)
5th fiscal period
From: July 1, 2018
To: Dec. 31, 2018
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 (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
Repayments of long-term loans payable
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

－

16 －

6th fiscal period
From: Jan. 1, 2019
To: June 30, 2019395,898
212,8505,629(13)
50,951(1,044)130,174
30,006(4,154)(23,586)
19,122(532)
12,800(3,523)
824,579
13(51,044)(952)
772,595

397,283
221,670
5,629(14)
50,809745(5,121)(30,006)
10,036
27,643(678)
8,551
12,046
20,784
719,38014(52,345)(878)
666,170(84,488)(0)(84,488)(780,938)(0)(780,938)－(160,000)(455,144)(615,144)
72,963
1,516,234
1,589,197

700,000(15,000)(455,399)
229,600
114,832
1,589,197
1,704,030

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019(6) Notes on the Going Concern Assumption
Not applicable.

－

17 －

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019(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 5th fiscal period
and 3,723 thousand yen for the 6th fiscal period.

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, etc. as trust assets held, 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 trust; Construction in progress in trust③ Leasehold interest 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.

－

18 －

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended June 2019
[Additional Information][Notes on Provision and Reversal of Allowance for Temporary Difference Adjustments]
5th fiscal period (from July 1, 2018 to December 31, 2018)
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.

6th fiscal period (from January 1, 2019 to June 30, 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.

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