(REIT) Financial Report for the Fiscal Period Ended December 2019
February 18, 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:

March 19, 2020
March 26, 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 December 2019 (from July 1, 2019 to December 31, 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 Dec. 2019
1,129
0.7
482
2.4
398
0.4
398
0.4
Ended June 2019
1,121
2.5
471
0.1
397
0.3
396
0.3
Fiscal period

Net income per unit

Return on equity

yen
3,008
2,995

Ended Dec. 2019
Ended June 2019

Ratio of ordinary income to Ratio of ordinary income tototal assets
operating revenue
%
%
%
3.2
1.4
35.3
3.2
1.4
35.4

(2) Dividends

Fiscal period

Ended Dec. 2019
Ended June 2019
(Note 1)

(Note 2)
(Note 3)

Dividends
per unit

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

yen
3,008
2,995

million yen
398
396

Dividends
in excess ofearnings
per unit

Total
dividends
in excess ofearnings

yen
496
499

million yen
65
66

Dividends
per unit

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

yen
3,504
3,494

million yen
463
462

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 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).
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 ratio of decreasing surplus, etc. attributable to distribution in excess of earnings (refund of investments in capital) for the fiscal period ended June2019 is 0.006 and for the fiscal period ended December 2019 is 0.006.
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 Dec. 201927,960Ended June 201928,102

Net assets
million yen
12,486
12,551Equity ratio
%
44.7
44.7

Net assets per unit
yen
94,355
94,840(4) Cash Flows
Fiscal period

Ended Dec. 2019
Ended June 2019

Net cashprovided by (used in)operating activities
million yen
783
666

Net cashprovided by (used in)investing activities
million yen
(62)
(780)

Net cashCash and cash equivalents
provided by (used in)at end of period
financing activities
million yen
million yen
(476)
1,947
229
1,704

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

Operating revenue Operating income Ordinary income
mn yen
1,257
1,275

%
11.3
1.4

mn yen
563
574

%
16.8
1.9

mn yen
461
470

%
15.6
2.0

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
460
15.6
3,014
449
3,463
469
2.0
3,074
433
3,507

(Reference) Forecast net income per unit (Forecast net income ÷ Forecast number of investment units at end of period)
Fiscal period ending June 2020: 3,014 yen
Fiscal period ending December 2020: 3,074 yen(Note) The rate of period-on-period increase (decrease) for the fiscal period ending June 2020 shows comparison with the actual
figures for the fiscal period ended December 2019, and that for the fiscal period ending December 2020 shows comparison
with the forecast figures for the fiscal period ending June 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 Dec. 2019
132,340 units② Number of treasury investment units at end of period
Fiscal period ended Dec. 2019

0 units

Fiscal period ended June 2019

132,340 units

Fiscal period ended June 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 June 2020 (from January 1, 2020 to June 30, 2020) and Fiscal Period Ending
December 2020 (from July 1, 2020 to December 31, 2020)” on page 8.

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

Table of Contents
1. Management Status .......................................................................................................................................................................... 2(1) Management Status ................................................................................................................................................................... 2(2) Investment Risks ...................................................................................................................................................................... 10
2. Financial Statements ....................................................................................................................................................................... 11(1) Balance Sheet .......................................................................................................................................................................... 11(2) Statement of Income ............................................................................................................................................................... 13(3) Statement of Unitholders’ Equity ............................................................................................................................................. 14(4) Statement of Distribution of Cash ............................................................................................................................................ 16(5) Statement of Cash Flows .......................................................................................................................................................... 17(6) Notes on the Going Concern Assumption ................................................................................................................................ 18(7) Notes on Matters Concerning Significant Accounting Policies ................................................................................................. 19-1-

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 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) (Note 1) 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).
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 and outstanding of 132,340 units as of the end of the fiscal period under review (Note 2).
(Note 1)
(Note 2)

Amounts are rounded down to the nearest million yen if such applies. Unless otherwise stated, the same shall apply hereinafter.
marimo REIT issued new investment units on January 20, 2020, and February 17, 2020. For details, please refer to “(Outlook for the Next
Fiscal Period) ② Significant Subsequent Events (A) Issuance of New Investment Units” below.

② Investment Environment
In the fiscal period under review, the Japanese economy experienced positive growth with an annualized real GDP growthrate of 1.8% for the period from July to September 2019 (seasonally adjusted; second preliminary estimate). Compared withthe period from January to March 2019, domestic demand improved from +0.1% to +0.6%. The breakdown shows
improvements in private demand (from +0.1% to +0.6%) and private-sector capital investment (from +0.3% to +1.8%), both
turning to positive to bring about positive growth.
(Financial Market)
With the Bank of Japan’s monetary easing policy, the JBA 3-month Japanese Yen TIBOR has maintained a stable level of
0.06909% since late January 2018, but on May 30, 2019, the level was lowered to 0.06727%. During the fiscal period underreview, the TIBOR remained at the same level until December 27, 2019, when it was raised to 0.06909%. Since the outlook
continues to be uncertain due to the situation in the Middle East, the outcome of the U.S. presidential election, etc., theimpact of volatility in financial markets should be carefully watched going forward.
(Real Estate Transaction Market)
According to “ARES Monthly Report (December 2019)” published by The Association for Real Estate Securitization, actual
acquisition of real estate by J-REITs in the period from January to November 2019 contracted by approximately 380.6 billion
yen year on year (-22.5% year on year) to approximately 1,307.8 billion yen in terms of total acquisition price. As for actual
sales, the total sale price also decreased by around 57.5 billion yen year on year (-16.2% year on year) to approximately 296.0
billion yen. The contracting trend of the real estate market evidenced by these was caused by funds which flowed into realestate investment as a result of the Bank of Japan’s negative rate policy and led to higher priced real estate that consequently
lowered the investment yield. 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 December 2019
(Retail Property Market)
According to “Current Survey of Commerce” by the Ministry of Economy, Trade and Industry, for the period from July to
September 2019, the rate of increase in sales value compared with the same period of the previous year for supermarkets
increased by 0.3% on average nationally. By area, the Kyushu area was +2.9%, the Chugoku and Shikoku areas were each
+1.3%, the Chubu area was +1.2%, and Hokkaido was +0.9%. As for drug stores, the rate of increase was +9.7% on averagenationally, with particularly high growth of +12.4% for the Chugoku area, +11.2% for the Chubu area, +11.0% for the Shikoku
area, +9.8% for the Tohoku area, and +7.9% for the Kinki area, showing an upward trend across the nation. The sales valueof supermarkets and drug stores selling daily necessities is expected to remain stable.
(Hotel Market)
According to "Visitor Arrivals to Japan (estimate for November 2019)” by Japan National Tourism Organization, the numberof international visitors to Japan in the period from January to November 2019 increased to 29.35 million or +2.8% year on
year (including estimates). As a result, according to “Overnight Travel Statistics Survey (October 2019/second preliminary
estimates, November 2019/first preliminary estimates)” by Japan Tourism Agency of the Ministry of Land, Infrastructure,
Transport and Tourism, the total number of overnight international guests for October 2019 increased to 8.97 million (+8.8%
year on year); and the guest room occupancy rates by accommodation facility type remained high at 80.4% (-2.1% year onyear) for city hotels, 77.0% (-1.8% year on year) for business hotels and 57.4% (-2.4% year on year) for resort hotels. However,close attention should be paid as the number of international visitors to Japan may fluctuate due to the impact of the newcoronavirus.
(Office Leasing Market)
According to “Japan Office MarketView Q3 2019” by CBRE K.K., in the third quarter of 2019, the decrease in the vacancy rate
for major regional cities appeared to halt in some cities compared with the previous quarter, with 0.6% (+0.2 pts quarter onquarter) for Fukuoka City, 0.9% (-0.3 pts quarter on quarter) for Osaka City, 0.9% (±0.0 pts quarter on quarter) for Nagoya
City, 0.9% (+0.3 pts quarter on quarter) for Sapporo City and 2.1% (-1.0 pts quarter on quarter) for Hiroshima City. However,assumed contract rents showed an upward trend, with 15,850 yen/tsubo (+1.4% quarter on quarter) for Fukuoka City and11,600 yen/tsubo (+0.8% quarter on quarter) for Hiroshima City. Thus, the ongoing upward trend in rent is likely to continue
amidst a tight supply-demand balance.
③ Management Performance
During the fiscal period under review, leasing activities according to the characteristics of each region, setting terms andconditions 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 internal growth measures, rents at
residential properties were raised upon tenant replacement, contract rents were raised at MRR Delta Building following
negotiations with the existing tenants, and parking rents at MRR Kumamoto were raised accompanying the change in theparking management company, etc. In terms of cost reduction, reduction of insurance premiums, etc. was realized throughreview of the terms and conditions of fire insurance. In addition, the Asset Manager conducted management aimed atenhancement of functionality, convenience, etc., and enhancement of customer satisfaction, including installation of rooftop
mobile phone base stations, introduction of a bike-sharing service and installation of delivery boxes, while also carrying out
disposition of Seven-Eleven Kofu Aioi 1-chome Store (land ownership interests). As the result of such, marimo REIT’s portfolio
assets as of the end of the fiscal period under review (25 properties; total acquisition price (Note): 25,005 million yen) has
an occupancy rate of 98.8% and period-average occupancy rate of 99.1%.
(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, long-term loans of 4,030 million yen were borrowed in order to repay 3,330 million yen of
long-term loans and 700 million yen of short-term loans on August 1, 2019. For long-term loans borrowed on August 1, 2016
(Tranche D: loan balance of 1,417 million yen), cash on hand was used to execute contractual repayment of 7 million yen on
August 1, 2019, and 7 million yen on November 1, 2019. As a result, as at the end of the fiscal period under review (end of
December 2019), the balance of loans outstanding was 13,772 million yen (Note) and the ratio of interest-bearing liabilities
to total assets (hereinafter, “LTV ratio”) was 49.3%.
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marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019
(Note)As described in “(Outlook for the Next Fiscal Period) ② Significant Subsequent Events (B) Borrowing of Funds” below, marimo REIT
borrowed long-term loans of 2,250 million yen on January 21, 2020, to be allocated as part of the funds for acquisition and incidental
expenses for asset acquisition. In addition, on February 1, 2020, marimo REIT executed repayment of 7 million yen out of theabovementioned long-term loans (Tranche D) borrowed on August 1, 2016. With these, the balance of loans outstanding of marimo REIT
stands at 16,015 million yen as of the date of this document.

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 1,129 million yen,operating income of 482 million yen, ordinary income of 398 million yen and net income of 398 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 3,008 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 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 496 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 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 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 7th fiscal period (fiscal period ended December 2019) was 29,479 million yen, which
exceeds the sum total of total book value of real estate, etc. (24,559 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 8th fiscal period (151 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 24,555
million yen and leasehold interest posted to intangible assets of 3 million yen.
(Note 3) For the 25 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 report
is 51 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 52 million yen for the fiscal period ending June 2020 and 45 million yen for the fiscal period ending December
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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marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 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 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 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.

-5-marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019
② Significant Subsequent Events(A) Issuance of New Investment Units
marimo REIT passed resolution at its Board of Directors' meetings held on January 6, 2020, and January 14, 2020, for theissuance of new investment units as follows. Payment was completed on January 20, 2020, for the issuance of new investment
units through public offering and on February 17, 2020, for the issuance of new investment units through third-party
allotment.
As a result, unitholders’ capital stands at 14,869 million yen and the total number of investment units issued and outstandingat 152,680.
Issuance of New Investment Units Through Public Offering (Primary Offering)Number of new investment units issued:
Issue price:

19,371 units
125,580 yen per unit

Total amount of issue price:
Issue amount (Paid-in amount):

2,432,610,180 yen
120,814 yen per unit

Total issue amount (Paid-in amount):
Payment due date:

2,340,287,994 Yen
January 20, 2020

(Issuance of New Investment Units Through Third-Party Allotment)
Number of new investment units issued:
Issue amount (Paid-in amount):

969 units
120,814 yen per unit

Total issue amount (Paid-in amount):
Payment due date:

117,068,766 yen
February 17, 2020

Allottee

SMBC Nikko Securities Inc.

(Use of Funds)
The proceeds from the primary offering (2,340,287,994 yen) have been allocated to part of the acquisition funds andacquisition-related expenses of assets described in “(c) Acquisition of Assets” below.
The proceeds from the issuance of new investment units through third-party allotment (117,068,766 yen) will serve as cashon hand to be allocated to acquisition of specified assets or repayment of borrowings in the future.
(B) Borrowing of Funds
marimo REIT borrowed 2,140 million yen from Sumitomo Mitsui Banking Corporation, The Hiroshima Bank, Ltd., Sumitomo
Mitsui Trust Bank, Ltd., Shinsei Bank, Limited, The Mie Bank, Ltd., Aozora Bank, Ltd. and Resona Bank, Ltd. through a loan
syndicate with Sumitomo Mitsui Banking Corporation as an arranger, and 110 million yen from Sumitomo Mitsui Banking
Corporation on January 21, 2020, to be used as part of the funds for acquisition and incidental expenses of the six properties
described in “(c) Acquisition of Assets” below. Details are as follows.
LenderLoan amount(million yen)Interest rate (Note 2)

Drawdown
date

Maturity
date

Repayment
methodNote

Tranche5-A

Loan syndicate with
Sumitomo Mitsui
Banking Corporationas arranger (Note 1)

Base rate (JBA 3-monthJanuary 21,
January 21,
2,140 Japanese Yen TIBOR) (Note 3)
2023
2020
+ 0.600% (floating rate)(Note 4)Lump-sum
Unsecured andrepayment at
unguaranteedmaturity

Tranche5-B

Sumitomo Mitsui
Banking Corporation

Base rate (JBA 1-monthJanuary 21,
January 21,
110 Japanese Yen TIBOR) (Note 3)
2021
2020
+ 0.200% (floating rate)(Note 4)Lump-sum
Unsecured andrepayment at
unguaranteedmaturity(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., Aozora Bank, Ltd. and Resona 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 is the JBA TIBOR on the day twobusiness 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 the maturity date shall be the next business day, but if that next business day falls into thenext calendar month, then the maturity date shall be the business day preceding the concerned date.

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marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019(c) Acquisition of Assets
marimo REIT acquired the following six properties (acquisition price: 4,950 million yen) on January 21, 2020.
Property
number

Property nameLocation

Seller(Note 1)

Acquisition

Appraisal

price

value

(million yen) (million yen)
(Note 3)Naka-ku, Nagoya-

Rp-09

ArtizA Tsurumai

Rp-10

ArtizA Awajieki-higashi

Acquisition date

(Note 4)

Marimo Co., Ltd.

430

468 January 21, 2020

Marimo Co., Ltd.

1,180

1,290 January 21, 2020

Marimo Co., Ltd.

640

665 January 21, 2020

Marimo Co., Ltd.

970

994 January 21, 2020

Ichihara-shi, Chiba Marimo Co., Ltd.

700

1,190 January 21, 2020

1,030

1,120 January 21, 2020

4,950

5,727

shi, Aichi
Higashiyodogawaku, Osaka-shi,
Osaka

Rp-11
Cp-12
Ct-01
Ct-02

(Tentative name) ArtizA Matsumoto

Matsumoto-shi,(Note 2)

Nagano(Tentative name) MRR Akita II

Akita-shi, Akita(Note 2)(Tentative name) MRR Ichihara (landownership interests) (Note 2)(Tentative name) MRR Kitamoto (landownership interests) (Note 2)

Kitamoto-shi,

Godo Kaisha

Saitama

Kitamoto Project

Total (6 properties)-(Note 1) “Property number” is the number assigned to each property by combining the asset type classifications of “investment targets” and“investment ratio by region” for the assets acquired by marimo REIT. “Investment targets” are represented by “R” for residential, “C” forretail, “H” for hotel and “O” for office, while “p” is for regional and “t” is for Tokyo metropolitan area. In cases of mixed-use properties ofseveral uses (asset types), the investment target classification is based on the asset type that accounts for the largest percentage of lease
revenue when full occupancy is assumed.
(Note 2) “(Tentative name) ArtizA Matsumoto,” “(Tentative name) MRR Akita II,” “(Tentative name) MRR Ichihara (land ownership interests)” and“(Tentative name) MRR Kitamoto (land ownership interests)” are tentative names as of the date of this document, and the names will bedecided in the future. The same shall apply hereinafter.
(Note 3) ”Acquisition price” indicates the purchase price of each real estate trust beneficiary right stated in each trust beneficiary right sale andpurchase agreement (excluding consumption tax, local consumption tax and other miscellaneous expenses such as broker’s commissions) for
the assets acquired, rounded down to the nearest million yen.
(Note 4) “Appraisal value” indicates the appraisal value as of November 30, 2019, stated in each real estate appraisal report.

-7-

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

Assumptions

Accounting
period● Fiscal period ending June 2020 (8th fiscal period) (from January 1, 2020 to June 30, 2020) (182 days)● Fiscal period ending December 2020 (9th fiscal period) (from July 1, 2020 to December 31, 2020) (184 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 December 2020.
● 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, excluding newly acquired assets defined below, iscalculated on the basis of rent, etc. stated in lease contracts in effect as of the date of this document, historical
data, etc. Operating revenue from leasing of ArtizA Awajieki-higashi is calculated based on the fixed-rent-type
master lease agreement concluded between the trustee and Marimo for the period from January 21, 2020, tothe end of June 2020 which stipulates that (i) Regardless of the rent that Marimo receives from end tenants,
Marimo shall pay the trustee rent equivalent to 95% of the assumed full-occupancy lease revenue, and (ii) If
the rent that Marimo receives from end tenants exceeds the amount equivalent to 95% of the assumed fulloccupancy lease revenue, Marimo shall pay the trustee that excess amount. Operating revenue from leasingof the six properties (real estate trust beneficiary rights) acquired on January 21, 2020, (the “newly acquired
assets”) is calculated on the basis of the content of lease agreements provided by the previous beneficiary of
the newly acquired assets, etc. and past tenants, market trends, etc., as well as the content of lease agreementsin effect on the acquisition date, and by taking into account various factors, such as the assumed occupancy
rate and rent fluctuation projections based on post-acquisition tenant move-in/move-out and rent levelprojections.
● 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. (for the newly acquired assets, using historical
data, etc. provided by the previous beneficiary, 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 734 million yen for the fiscal period ending
June 2020 and 762 million yen for the fiscal period ending December 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 2020 fixed asset tax, city planningtax, etc. are expensed starting from the fiscal period ending June 2021 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 82
million yen for the fiscal period ending June 2021 and 83 million yen for the fiscal period ending December
2021. Of these, the amount 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 30 million yen for the fiscal period ending June 2020 and 33 million yen for the fiscal period
ending December 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 244 million yen for the fiscal period ending June 2020 and
244 million yen for the fiscal period ending December 2020.
● Interest expenses and other borrowing related expenses are expected to be 92 million yen for the fiscal period
ending June 2020 and 93 million yen for the fiscal period ending December 2020. In addition, expenses
associated with the issuance of new investment units and the issuance of new investment units through thirdparty allotment for which resolution was passed at meetings of the Board of Directors of marimo REIT held on
January 6, 2020, and January 14, 2020, are expected to be 28 million yen and amortized by the straight-line
method over a period of 3 years. Investment unit issuance expenses inclusive of the above are expected to be
10 million yen for the fiscal period ending June 2020 and 10 million yen for the fiscal period ending December
2020.
● marimo REIT borrowed 2,250 million yen on January 21, 2020, in line with the acquisition of the newly acquired

Assets undermanagement

Operatingrevenue

OperatingexpensesNon-operating
expenses

Loans

-8-

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

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

Dividends
in excess ofearnings
per unit

Assumptions
assets.
● 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 16,007 million yen at the end of the fiscal period
ending June 2020 and 15,992 million yen at the end of the fiscal period ending December 2020.
● 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 December 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.
● 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 June 2020 and fiscal period ending December 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 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 June 2020 and fiscal period ending December 2020. As such, forthe fiscal period ending June 2020, total dividends in excess of earnings is expected to be 68 million yen ofwhich total dividends of allowance for temporary difference adjustments is 1 million yen and total otherdividends in excess of earnings is 67 million yen, and for the fiscal period ending December 2020, total
dividends in excess of earnings is expected to be 66 million yen of which total dividends of allowance fortemporary difference adjustments is 1 million yen and other distribution in excess of earnings is 64 million yen(Note).
(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 8th fiscal period (fiscal period ending
June 2020) and 9th fiscal period (fiscal period ending December 2020) regardless of the forecast above in the event thatsuch conditions are not met.
In addition, concerning the fiscal period ending June 2020 and fiscal period ending December 2020, 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 June 2020 and fiscal period ending
December 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 June 2020 and fiscal
period ending December 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.
-9-marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019(2) Investment Risks
Disclosure is omitted because there is no significant change from “Investment Risks” in the most recent securities registration
statement (submitted on January 6, 2020, including amendments thereto).

- 10 -

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

2. Financial Statements(1) Balance Sheet(Unit: thousand yen)
6th fiscal period(As of June 30, 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- 11 -

7th fiscal period(As of Dec. 31, 2019)

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

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

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

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

3,967
2,360
6,327

3,839
1,769
5,609

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

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

16,887
16,887
28,102,226

11,258
11,25827,960,644

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

(Unit: thousand yen)
6th fiscal period(As of June 30, 2019)
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- 12 -

7th fiscal period(As of Dec. 31, 2019)

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

73,160－30,000140,493892
28,206
173,414
48,121
5,614
499,9029,727,500
1,239,750
18,261
43
10,985,555
15,550,978

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

12,412,622

12,412,622(5,342)(252,456)(257,799)
12,154,823(6,533)(317,303)(323,837)
12,088,785

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

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

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019(2) Statement of Income(Unit: thousand yen)
6th fiscal period
From: Jan. 1, 2019
To: June 30, 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
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)- 13 -

7th fiscal period
From: July 1, 2019
To: Dec. 31, 2019

1,066,125
54,908－1,121,033

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

490,041
98,145
1,396
14,131
2,400
10,91632,422649,455
471,578479,297
101,589
1,397
12,1902,400
13,75535,957646,588482,713

14
－
1,258
1,272

14
24
846
885

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

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

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019(3) Statement of Unitholders’ Equity
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 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)(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 December 2019
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 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)(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- 15 -

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019(4) Statement of Distribution of Cash
6th fiscal period
From: Jan. 1, 2019
To: June 30, 2019I.

Unappropriated retained earnings

7th fiscal period
From: July 1, 2019
To: Dec. 31, 2019

396,424,363 yen

398,155,403 yen

66,037,660 yen

65,640,640 yen

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

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

462,395,960 yen

463,719,360 yen[3,494 yen]

[3,504 yen]

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

398,078,720 yen[3,008 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

64,846,600 yen

64,449,580 yen(attributable toother dividends in excess of earnings)][490 yen][487 yen]

66,063 yen

76,683 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.

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.

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- 16 -

marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019(5) Statement of Cash Flows(Unit: thousand yen)
6th fiscal period
From: Jan. 1, 2019
To: June 30, 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
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- 17 -

7th fiscal period
From: July 1, 2019
To: Dec. 31, 2019397,283
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

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)
783,344(780,938)(0)(780,938)(62,980)(0)(62,980)

700,000－－(15,000)(455,399)
229,600
114,832
1,589,197
1,704,030－(700,000)
4,030,000(3,345,000)(461,541)(476,541)
243,822
1,704,030
1,947,852

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

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marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 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 3,723 thousand yen for the 6th fiscal
period. For the 7th fiscal period, there is no applicable amount.

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 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.

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marimo Regional Revitalization REIT, Inc. (3470) Financial Report for the Fiscal Period Ended December 2019
[Additional Information][Notes on Provision and Reversal of Allowance for Temporary Difference Adjustments]
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.

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.

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