Provisional translation only

October 13, 2009EARNINGS BRIEFING
FOR THE PERIOD ENDED AUGUST 2009
Name of real estate
investment trust

Fukuoka REIT Corporation (FRC)

Code number

8968

Representative
Name of asset manager
Representative
Contact

Operating Officer
Masayasu Saki
Fukuoka Realty Co., Ltd.
President and CEO Masayasu Saki
Senior Managing
Yoichi Nishio
Director, General
Phone: +81-92-272-3900
Manager ofFinance Division
November 24, 2009

Expected date forsubmitting securities
reportExpected commencement
date of dividend

Listed Stock
Exchanges

Tokyo Stock
Exchange, Fukuoka
Stock Exchange(URL: http://www.fukuokareit.jp/eng/)

November 17, 2009

(Figures rounded off to nearest million yen.)

1. PERFORMANCE AND SITUATION OF ASSETS FOR THE PERIOD ENDED AUGUST 2009
(March 1, 2009 to August 31, 2009)(1) Performance

Period ended August 2009
Period ended February
2009

Operating revenues
Millions of
%
yen
5,621
2.8
5,466
-0.3
Net income per
unit

Period ended August 2009
Period ended February 2009(% shows percentage change from previous period.)
Operating income
Ordinary income
Net income
Millions of% Millions of% Millions of
%
yen
yen
yen
2,371
-1.4
1,861
-3.7
1,860
-3.7
2,405
-1.5
1,933
-1.8
1,932
-1.8
Return on net
assetsYen
17,376
18,048%3.0
3.1

Ratio of ordinary
income to total
liabilities and net
assets%1.5
1.5

Ratio of ordinary
income tooperating revenue
%
33.1
35.4

(2) Dividends

Period ended
August 2009
Period ended
February
2009

Dividend perunit (excl.
dividend inexcess of
earnings)
17,377 yen
18,049 yen

Total
dividend

1,860
million yen
1,932
million yen

Dividend inexcess of
earnings per
unit

Total dividendin excess ofearnings

Payout ratio

Ratio ofdividend toperiod-end
net assets

0 yen

0 million yen

100.0%

3.0%

0 yen

0 million yen

100.0%

3.1%

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

(3) Financial condition

Period ended August
2009
Period ended
February 2009

Total assets

Net assets

Net assets per unit

62,124 million yen

Ratio of net assets tototal assets
47.5%

130,836 million yen
125,222 million yen

62,196 million yen

49.7%

581,004 yen

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

2,338 million yen-5,966 million yen

3,467 million yen

Balance of cash andcash equivalents atperiod end
5,889 million yen

2,681 million yen-485 million yen-1,969 million yen

6,049 million yen

580,332 yen(4) Cash flows condition

Period ended August
2009
Period ended
February 2009

2. FORECAST OF PERFORMANCE FOR THE PERIOD ENDING FEBRUARY 2010
(September 1, 2009 to February 28, 2010) AND THE PERIOD ENDING AUGUST 2010
(March 1, 2010 to August 31, 2010)
Operatingrevenue

Millionsof yen5,592

Operatingincome%Millionsof yen2,335(% shows percentage change from previous period.)
Net income
Dividend per
Dividend inunit (excl.
excess ofdividend in
earnings per
excess ofunit
earnings)% Millions
%
yen
yen
of yen
-4.4
1,777
-4.5
16,6000Ordinary
income%Millionsof yen1,778

Period-0.5-1.5
endingFebruary
2010
Period
5,674
1.5
2,374
1.7
1,789
0.6
1,787
0.6
endingAugust2010(Reference) Forecast net income per unit: (Period ending February 2010) 16,600 yen;
(Period ending August 2010) 16,700 yen

2

16,7000Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

3. Others(1) Changes in accounting policies:(i) Changes due to revisions of accounting standards, etc.:
No(ii) Changes other than above (i):No(2) Number of investment units issued and outstanding(i) Number of investment units issued and outstanding at the end of period (including treasury
investment units):
107,050 units at end of Aug 2009; 107,050 units at end of Feb 2009(ii) Treasury investment units at the end of period:— units at end of Aug 2009; — units at end of Feb 2009
(Note) Regarding the number of investment units, a basis for calculating net income per unit, pleaserefer to “Per unit information,” on page 12.
* On the adequate use of performance forecasts and other items warranting special mention
Forecast figures are calculated based on information available on the date of release of the forecast andcontain uncertain factors to a large extent. Actual operating revenues, operating income, ordinary
income, net income, and dividend per unit may differ due to change in the business environment.
Forecasts should not be construed as a guarantee of actual dividend. Concerning details of thepreconditions for the above forecast figures please refer to “2. Portfolio management policy andmanagement situation, (2) Management situation – Preconditions for the performance forecast for theperiod ending February 2010 (September 1, 2009 to February 28, 2010) and the period ending August2010 (March 1, 2010 to August 31, 2010),” on page 7.

3

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

Concerning the contents hereinafter, items that FRC judges that “can be omitted from the disclosure fromthe standpoint of importance” are not shown in conformity with “Guidance for Preparation of Earnings
Briefing for Listed Real Estate Investment Trusts” (August 2009) released by Tokyo Stock ExchangeGroup, Inc.

1. Investment Corporation-Related Organizations
The disclosure is omitted, since there are no significant changes from the “Structure of the Investment
Corporation” disclosed by the latest Securities Report (submitted on May 27, 2009).

2. Portfolio Management Policy and Management Situation(1) Portfolio management policy
The disclosure is omitted, since there are no significant changes from “investment policy,”“investment target” and “dividend policy” disclosed by the latest Securities Report (submitted on
May 27, 2009).
(2) Management situation(i) Summary of current fiscal period(a) Brief history of the investment corporation
FRC was established on July 2, 2004 based on the “Investment Trust and Investment
Corporation Law of Japan” (Law No. 198 in 1951 including later revisions, hereinafter the“Investment Trust Law”) and listed on the Tokyo Stock Exchange and Fukuoka Stock
Exchange on June 21, 2005 as the nation’s first real estate investment trust specializing inregional properties (code number: 8968). FRC invests in real estates throughout all of
Kyushu (including Okinawa Prefecture), with a central focus on Fukuoka City, and in
Yamaguchi Prefecture by turning regionality, characteristics in the real estate industry, intostrength.
FRC started asset management activities on November 9, 2004 after acquisition of four
properties such as commercial facilities in Canal City Hakata (excluding some areas of
specialty shops, hotels, theaters, offices and common space), a commercial complex where
specialty shops, cinema complex, theaters, amusement facilities, hotels and offices areintegrally developed (hereinafter “Canal City Hakata”). FRC had 15 properties (excluding
silent partnership interests) in its portfolio as of the end of the previous fiscal period(February 28, 2009) and acquired one office building in the current fiscal period. As a result,
FRC now manages the operation of 16 properties (excluding silent partnership interests)—
nine commercial facilities, five office buildings, and two residential properties—in its
portfolio as of the end of the current fiscal period (August 31, 2009).
(b) Investment environment and portfolio performance
Suffering from the global financial turmoil and economic downturn, the Japanese economy
went through difficult times in the current fiscal period. Although there were some signs of arecovery in production, imports and exports, and the stock markets etc., consumer spending
remained sluggish, since the employment situation further deteriorated with a record highunemployment rate. In the Kyushu area, a primary area of FRC’s investment target area,
consumption was still weak, since capital expenditures continued to decrease and the job
market was still bleak, despite we saw destocking complete and production start recovering.
According to the Prefectural Land Price Survey in 2009 (by the Ministry of Land,
Infrastructure, Transport and Tourism), national land prices, in all categories including
residential and commercial lands, extended their decline. In Fukuoka City, a core of FRC’s
investment target area, commercial land prices, which had increased three years in a row,plunged by 15.9% , while residential land prices decreased by 3.4% over the previous year.
In such a business environment, FRC, based on its investment policy, strived to invest in
high-quality properties through careful selection. As a result, we acquired Higashi Hie
Business Center Building, a top-class new office building in a superb location in Hakata

4

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

ward, Fukuoka City with high traffic convenience, for 5,900 million yen on March 13, 2009.
The property recorded a 100% occupancy rate as of the end of the current fiscal term, sincesome listed companies etc. moved into the building soon after the completion, although the
Fukuoka office building leasing market was depressed. In addition, we made continuous
efforts to enhance competitiveness and customer drawing power in existing majorcommercial facilities such as Canal City Hakata. Consequently, the occupancy rate ofproperties FRC owns stood at 98.8% as of the end of the current fiscal period.
When analyzing FRC’s portfolio (on an acquisition value basis) by geographic location,
properties in the Fukuoka urban area occupy 70.2% of its portfolio; when analyzing byproperty type, commercial facilities, office buildings, and residential properties account for
61.7%, 35.7% and 2.6%, respectively.
(c) Summary of fundraising
In the current fiscal period, FRC raised a new fund of 5,400 million yen with the aim toacquire the said Higashi Hie Business Center Building. In order to disperse the repayment
date and increase the duration of debts, we refinanced a short-term debt under thecommitted line of credit of 3,000 million yen (out of 6,800 million yen) into long-term debt
(eight years) in June 2009. And we refinanced the debt of 12,000 million yen due andrepayable in August 2009 into long-term debts: five-year debt of 4,000 million yen, six-year
debt of 4,000 million yen and seven-year debt of 4,000 million yen. As a result, outstanding
debt totaled 57,300 million yen at the end of the current fiscal period, with the loan-to-value
ratio at 43.8%. To reduce refinancing risks in future debt, FRC will continue to disperse therepayment date and increase the average length of time until maturity.
(d) Summary of performance and dividend
As results of these management efforts, operating revenue totaled 5,621 million yen andoperating income after excluding operating expenses such as rental business expenses andasset management fees totaled 2,371 million yen. Ordinary income and net income reached1,861 million yen and 1,860 million yen, respectively.
Management decided to make a dividend of 17,377 yen per investment unit to meet therequirements of special tax measures for an investment corporation (as stipulated in Article
67-15 of the Special Taxation Measures Law of Japan [Law No. 26 in 1957 including later
revisions, hereinafter the “Special Taxation Measures Law”]). Under this law, an investment
corporation is allowed to deduct the maximum amount of dividends paid to investors fromits taxable income.
(ii) Forecast for the next fiscal year(a) Portfolio management policy
FRC will increase management and leasing capabilities by cooperating with property
management companies including sponsor companies even in a worsening consumer
spending environment and maintain the stable operation of the properties by making themost use of their advantages.
The Company will invest based on the basic policy stipulated in its Articles of Incorporationand its basic philosophy: focusing on “high growth potential markets in which FRC candemonstrate its competitive edge.” By geographic location, FRC invests 60% to 90% of its
assets in the Fukuoka urban area, since the Fukuoka urban area is expected to have thegreatest population growth of any urban area in Japan. In addition to the Fukuoka urban
area, management has decided to actively acquire properties in major cities, if FRC cangenerate sufficient investment merits from community-oriented viewpoints. FRC will
acquire high quality properties with adequate use of its advantages, such as information
gathering ability in the areas, good knowledge of regional properties and close relations withthe local business community and governments, so that investors can continue to invest in
FRC with assurance.
Meanwhile, FRC will build stronger relationships with financial institutions to realize stable5

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

fundraising and try to maintain a solid financial structure.
(b) Performance forecast for the next fiscal period
FRC aims to achieve the following performance goals for the period ending February 2010
(September 1, 2009 to February 28, 2010) and the period ending August 2010 (March 1,
2010 to August 31, 2010). Concerning preconditions for the forecast, please refer to“Preconditions for the performance forecast for the period ending February 2010
(September 1, 2009 to February 28, 2010) and the period ending August 2010 (March 1,
2010 to August 31, 2010),” on page 7.
Period ending February 2010
Operating revenue
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

5,592 million yen
1,778 million yen
1,777 million yen
16,600 yen
0 yen

Period ending August 2010
Operating revenue
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

5,674 million yen
1,789 million yen
1,787 million yen
16,700 yen
0 yen(Note) The above forecast figures are calculated based on certain assumptions. The forecast
should not be construed as a guarantee of actual performance since actual operating
revenue, ordinary income, net income, dividend per unit and dividend in excess ofearnings per unit may differ due to changes in the business environment.
(c) Significant facts after the closing of accounts
No relevant items(3) Investment risks
The disclosure is omitted, since there are no significant changes from the “Investment risks”
disclosed in the latest Securities Report (submitted on May 27, 2009).

6

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

Preconditions for the performance forecast for the period ending February 2010 (September 1, 2009 to
February 28, 2010) and for the period ending August 2010 (March 1, 2010 to August 31, 2010)
Item
Calculation period
Assets under management

Number of investment units
issued and outstanding
Interest-bearing debt andrefinancing

Preconditions
11th fiscal period, from September 1, 2009 to February 28, 2010 (181 days)
12th fiscal period, from March 1, 2010 to August 31, 2010 (184 days)• It is assumed that 16 properties and silent partnership interests FRC owns as ofAugust 31, 2009.
• In practice, they may fluctuate due to changes in assets under management.

• It is assumed that there will be no issuance of new investment units until August
31, 2010.

• Outstanding interest bearing debts on August 31, 2010 are expected to total 57,150

million yen, a decrease of 150 million yen from the end of the current period(August 31, 2009). The loan-to-value ratio (Interest-bearing debt ÷ total assets ×100) is expected to stand at around 43.8% (as of August 31, 2009, the loan-to-value
ratio stands at 43.8%).

• In the fiscal period ending February 2010, it is assumed that FRC will refinance apart of short-term debt into long-term debt.

• In the fiscal period ending August 2010, it is assumed that FRC will refinance longterm debt that will come due on July 2010 into long-term debt.

Operating revenues• Of revenues from the real estate rental business, revenues from properties FRC has

already acquired are calculated based on tenancy agreements that are valid as oftoday by taking into account the competitiveness of the properties and the market
environment.
Of revenues from the real estate rental business, revenues from the percentage lease
contracts are calculated based on past results by taking into account sales
fluctuation factors of the relevant tenants.

• Concerning revenues from the real estate rental business, vacancies are taken into

Operating expenses

account to a certain extent. It is assumed that there will be no rent arrears or nonpayments by tenants.
• Concerning interests in silent partnerships, dividends from silent partnerships arecalculated based on the conditions stipulated in each silent partnership contract.
• When acquiring assets under management, the fixed property tax and city planningtax for the assets will be proportionally calculated according to the holding period
and adjusted with the former owner. FRC will not write them off since theCompany will include the relevant adjusted amount in the acquisition cost.

• FRC writes off estimated repair costs for buildings for the calculation periods, theperiods ending February 2010 and August 2010. Actual repair costs may differ
significantly from the estimated amounts since there is the possibility that repair
costs are incurred urgently due to damages to buildings caused by unforeseeable
factors; repair costs generally differ largely from period to period; repair costs are
not regularly incurred.

• Concerning outsourcing expenses, FRC anticipates 997 million yen for the period
ending February 28, 2010 and 1,010 million yen for the period ending August 31,
2010.

• Concerning taxes and other public charges, FRC anticipates 392 million yen for theperiod ending February 28, 2010 and 425 million yen for the period ending August
31, 2010.

• Concerning depreciation and amortization expenses, FRC anticipates 956 million
yen for the period ending February 28, 2010 and 960 million yen for the period
ending August 31, 2010.

Non-operating expenses

Dividend per unit

• Concerning interests paid and expenses related to loans, FRC anticipates 562

million yen for the period ending February 28, 2010 and 590 million yen for theperiod ending August 31, 2010.
• Dividend (dividend per unit) is calculated based on the dividend policy stipulated
in FRC’s Articles of Incorporation.

• Dividend per unit may fluctuate due to fluctuations in rent revenues caused by
7

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

Dividend in excess ofearnings per unit
Otherchanges in assets under management and tenants or various factors including
unexpected occurrences of repair.
• The dividends of excess earnings are not planned at the moment.
• It is assumed that there will be no significant revisions to laws and regulations, thetax system, and accounting standards that may influence the forecast figures.
• It is also assumed that there will be no significant unexpected changes in general
economic conditions and the real estate market.

8

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

3. Financial Statements(1) Balance sheets
Account

9th fiscal period(as of February 28, 2009)
Amount%(thousands of yen)

10th fiscal period(as of August 31, 2009)
Amount(thousands of yen)

Assets%Current assets
Cash andequivalents
Cash and depositin trust
Operatingreceivable
Prepaid expenses
Consumption
taxes receivable
Deferred tax
assetsOther current
assetsTotal current assets
Fixed assets
Tangible fixed assets
Buildings in trust
Aggregate ofaccumulated
depreciation
Structures in trust
Aggregate ofaccumulated
depreciation
Machinery andequipment intrust
Aggregate ofaccumulated
depreciation
Tools and fixturesin trust
Aggregate ofaccumulated
depreciation
Lands in trust
Total tangible fixed
assets2,570,213

1,908,355

3,479,265

3,980,854

284,700

418,382

122,925—

200,943
151,71417

19

34,97831,2996,492,099

6,691,569

50,430,314
5,424,456

45,005,858

54,642,221
6,282,662

48,359,558

768,153
121,612646,540

828,689
151,445677,243

338,698
72,003

338,698
266,695

82,033683,096
217,572

256,665

701,261465,523

270,466

430,795

68,810,414
115,195,033

68,810,414
118,534,677—

1,765,318—

1,765,318

3,421,633

3,421,633

10,00010,000—100,000

Intangible fixed assets
Leasehold right in
trust
Total intangible fixed
assetsInvestment and otherassetsInvestment
securities
Lease andguarantee
deposits
Lease andguarantee
deposits in trust%9Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

Long-term
prepaid expenses
Total investment
and other assets
Total fixed assets
Deferred assets
Expenses for
issuing newinvestment units
Total deferredassetsTotal assets
Account

95,666

312,920

3,527,300

3,844,554

118,722,333

124,144,549

8,412

—

8,412

—

125,222,845

130,836,119

9th fiscal period(as of February 28, 2009)
Amount%(thousands of yen)

10th fiscal period(as of August 31, 2009)
Amount(thousands of yen)%

Liabilities%

Current liabilities
Operating accounts
payableShort-term debt
Current maturities oflong-term debt
Accrued liabilities
Accrued expenses
payableAccrued income
taxes
Accruedconsumption taxes
Advances received
Deposits received
Total current liabilities
Fixed liabilities
Long-term debt
Lease and guarantee
deposits received
Lease and guarantee
deposits received intrust
Total fixed liabilities
Total liabilities
Net assets
Net Assets
Shareholders’ capital
Retained earnings
Unappropriatedretained earnings
Total retained earnings
Total Net Assets
Total net assets
Total liabilities and net
assets353,113

270,844

1,400,000
12,000,000

3,800,000
10,150,000

16,867323,764

19,111
266,317331

634

110,935—

602,580493,649
15,301,242

672,539
775,560
15,955,007

38,500,000—

43,350,000
331,485

9,225,045

9,075,039

47,725,045
63,026,288

52,756,524
68,711,531

60,264,380

60,264,380

1,932,176

1,860,208

1,932,176
62,196,556
62,196,556
125,222,845

1,860,208
62,124,588
62,124,588
130,836,119(2) Statements of Income
Account

9th fiscal period(September 1, 2008 to February 28,
2009)
Amount%(thousands of yen)

10th fiscal period(March 1, 2009 to August 31, 2009)
Amount(thousands of yen)10%

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

1. Operating revenues
Real estateleasing revenues
Other revenues
from real estateleasing
Silent partnership
dividend
2. Operating expenses
Real estateleasing expenses
Assetmanagement fees
Asset custodian
fees
Generaladministration
fees
Directors
compensation
Other operating
expenses
Total operating
income3. Non-operating
revenues
Interest received
Other nonoperating revenue
4. Non-operating
expenses
Interest payment
Amortization of
establishment
cost
Investment unit
issuance fee write
offExpenses related
to debt financing
Other nonoperating
expenses
Ordinary income
Net income before
tax
Corporation,
inhabitant andbusiness tax
Adjustment toincome tax
Net income
Retained earnings
brought forwardfrom previous
periodUnappropriatedretained earnings
for the period

5,111,304

5,300,111

219,007

185,458

136,000

5,466,311

136,000

2,597,820

2,780,027

336,157

344,255

10,93011,04735,711

34,910

9,600

9,600

70,865

3,061,085

69,974

2,405,225

9,513
2,453

2,839
872

11,967439,899
—

8,412

8,412

55,592

65,903483,987—

1,933,205
1,933,205

3,711

514,215

1,861,250
1,861,250

1,039
43

3,249,815
2,371,754

414,387
5,595—

5,621,570

1,074
1,083

-1

1,073

1,932,122
54

1,860,176
31

1,932,176

1,860,208

11

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009(3) Statement of changes in net assets
9th Fiscal Period (September 1, 2008 to February 28, 2009)
Item

Net Assets
Shareholders’capitalBalance as ofAugust 31, 2008
Changes in thecurrent fiscal
periodDividend ofretainedearnings
Net income forthe current
fiscal period
Deferredhedge profit orloss
Total of changes
in the current
fiscal period
Balance as ofFebruary 28,
2009

Total Net
AssetsDifferences from valuation andtranslation
Deferred hedge
Total difference
profit or loss
from valuationand translation——(thousands of yen)
Total net assets

60,264,380

Retained earnings
Unappropriatedretained earnings
1,966,884—-1,966,829-1,966,829——-1,966,829—

1,932,122

1,932,122——

1,932,122

—

—

—

—

—

—

—

-34,707-34, 707——-34,70760,264,380

1,932,176

62,196,556——

62,196,556

62,231,264

62,231,264

10th Fiscal Period (March 1, 2009 to August 31, 2009)
Item

Net Assets
Shareholders’capitalBalance as ofFebruary 28,
2009
Changes in thecurrent fiscal
periodDividend ofretainedearnings
Net income forthe current
fiscal period
Deferredhedge profit orloss
Total of changes
in the current
fiscal period
Balance as ofAugust 31, 2009

Total Net
AssetsDifferences from valuation andtranslation
Deferred hedge
Total difference
profit or loss
from valuationand translation——(thousands of yen)
Total net assets

60,264,380

Retained earnings
Unappropriatedretained earnings
1,932,176—-1,932,145-1,932,145——-1,932,145—

1,860,176

1,860,176——

1,860,176

—

—

—

—

—

—

—

-71,968-71,968——-71,968

60,264,380

1,860,208

62,124,588——

62,124,588

62,196,556

12

62,196,556

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

(4) Dividend Statement
Account
I. Unappropriated retained earnings
II. Total(Dividend per unit)
III. Retained earnings brought forward
Method for calculating dividends

9th fiscal period (September 1,
2008 to February 28, 2009)
1,932,176 thousand yen
1,932,145 thousand yen(18,049 yen)
31 thousand yen
FRC shall decide the amount ofdividends, which must exceed 90%
of FRC’s distributable income as
stipulated in Article 67-15 of theSpecial Taxation Measures Law ofJapan (Article 38-1-1 of FRC’s
Articles of Incorporation). For thecurrent fiscal period, dividend as
income dividends totaled 1,932,145
thousand yen, which is almost theentire amount of unappropriatedearnings. Moreover, dividend inexcess of earnings as stipulated in
Article 38-2 of FRC’s Articles ofIncorporation will not be provided.

10th fiscal period (March 1, 2009 toAugust 31, 2009)
1,860,208 thousand yen
1,860,207 thousand yen(17,377 yen)
0 thousand yen

The amount of dividends shall bedecided in accordance with thedividend policy stipulated in Article
38-1-1 of FRC’s Articles ofIncorporation and must exceed 90%
of FRC’s distributable income as
stipulated in Article 67-15 of theSpecial Taxation Measures Law ofJapan. Following the above policy,
FRC shall decide to distribute
1,860,207 thousand yen, which isalmost the entire amount of
unappropriated earnings for thecurrent fiscal period, as income
dividends. Moreover, dividend inexcess of earnings as stipulated in
Article 38-2 of FRC’s Articles ofIncorporation will not be provided.
(Note) Concerning amounts other than dividend per investment unit, fractions of 1,000 yen are omitted.

13

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

(5) Cash flows statements
Account

9th fiscal period(September 1, 2008 to
February 28, 2009)
Amount(thousands of yen)

I. Cash flows from operating activities
Net income before taxes
Depreciation expenses
Amortization of establishment expenses
Investment unit issuance depreciation
Interest received
Interest payment
Increase or decrease in operating receivables
Increase or decrease in uncollected consumption tax
receivables
Increase or decrease in consumption tax payable
Increase or decrease in operating payable
Increase or decrease in account payable
Increase or decrease in payable expenses
Increase or decrease in rent received in advance
Increase or decrease in deposits
Increase or decrease in prepaid expenses
Increase or decrease in long-term prepaid expenses
OthersSubtotalInterest received
Interest payment
Income for Corporation tax payment, etc.
Income from Corporation tax payment
Cash flows from operating activities

10th fiscal period(March 1, 2009 toAugust 31, 2009)
Amount(thousands of yen)

1,933,205
864,630
5,595
8,412-9,513414,387
17,533—

1,861,250
950,963—
8,412-2,839439,899-133,682-151,714

70,08187,594
4,422-3,040-67,815-310,186
42,65532,093-1,016
3,089,038
9,513-414,690-29,673
27,5632,681,751-110,935-89,418
2,231
2,173
69,958282,063-78,018-217,254
2,002
2,835,091
2,839-499,519-28,098
28,392
2,338,705-553,500—-4,283,002-1,765,318——
95,125

331,695-210
103,294-515,517-253,300—-100,000

488,662-485,230—-5,966,841

IV. Net increase or decrease in cash and cash equivalents

6,200,000-8,200,000
2,000,000—-1,969,105-1,969,105
227,415

30,400,000-28,000,000
15,000,000-12,000,000-1,932,132
3,467,867-160,268

V. Balance of cash and cash equivalents at beginning of

5,822,063

6,049,478

II. Cash flows from investing activities
Payment for purchase of tangible fixed assets in trust
Payment for purchase of intangible fixed assets intrust
Proceeds from lease and guarantee deposits received
Repayment of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received
in trust
Repayment of lease and guarantee deposits received
in trust
Payment of lease and guarantee deposits received intrust
Proceeds from payout of restricted deposits in trust
Net cash used for investing activities
III. Cash flows from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Payment of dividends
Cash flows from financing activities

14

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

period6,049,478

VI. Balance of cash and cash equivalents at end of
period5,889,210(6) Footnotes in precondition of a going concern
No relevant items(7) Significant accounting policies
The disclosure is omitted, since there are no significant changes from contents disclosed by the latest
Securities Report (submitted on May 27, 2009).
(8) Footnotes in financial statements
FRC omits the disclosure of footnoted items on the balance sheet, income statement, statement ofchanges in net assets, cash flows statement, lease transactions, securities, derivative transactions,retirement benefits, tax effect accounting, and related party transactions, since the Company does notfind substantial need for disclosure in the earnings briefing.
(Data per investment unit)
9th Fiscal Period
September 1, 2008 to February 28, 2009
Net assets per investment unit:
581,004 yen
Net income per investment unit: 18,048 yen
Net income per investment unit is calculated by dividing
net income by the weighted average number ofinvestment units issued and outstanding during the fiscal
period. Diluted net income per investment unit is notshown since there are no potential investment units.

10th Fiscal Period
March 1, 2009 to August 31, 2009
Net assets per investment unit:
580,332 yen
Net income per investment unit: 17,376 yen
Net income per investment unit is calculated by dividing
net income by the weighted average number ofinvestment units issued and outstanding during the fiscal
period. Diluted net income per investment unit is notshown since there are no potential investment units.

15

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

(Note) Calculation of net income per investment unit is based on the following.
Account
9th Fiscal Period(September 1, 2008 to
February 28, 2009)
Net income (thousands of yen)
1,932,122
Net income not distributed to shareholders—(thousands of yen)
Net income distributed to shareholders
1,932,122(thousands of yen)
Number of average investment units during the
107,050
fiscal period (units)

10th Fiscal Period (March1,
2009 to August 31, 2009)
1,860,176—
1,860,176
107,050(Subsequent critical events)
9th Fiscal Period(September 1, 2008 to February 28, 2009)
No relevant items

10th Fiscal Period(March1, 2009 to August 31, 2009)Same as on the left

(9) Change in the number of investment units issued and outstanding
No relevant items

4. Change in Directors(1) Change in directors in Fukuoka REIT Corporation
No relevant items(2) Change in directors in Fukuoka Realty Co., Ltd.
(June 18, 2009) Retirement of Soichiro Shigefuchi as Director(June 18, 2009) New appointment of Akira Eto as Director(October 7, 2009) New appointment of Shinya Kato as Senior Managing Director
Directors of Fukuoka Realty Co., Ltd. are as follows as of October 13, 2009.
Title

Name

Career Summary

CEO and
Representative
Director

Masayasu Saki

April 1969

Joined The Nippon Fudosan Bank,
Limited. (later, The Nippon Credit Bank,
Ltd.; currently, Aozora Bank, Ltd.)

June 1992

Member of the Board and Tokyo BranchManager

February 1994

Member of the Board and Director for
Financial Product Development

June 1995

Member of the Board and Director forMarketing Planning Division 2

June 1996

Executive Director

June 1998

Senior Executive Director

November 1999

Director at CSK KK

November 2000

Executive Officer at Sanyo Shinpan
Finance Co., Ltd.

July 2003

CEO of Fitch Ratings Japan

April 2006

Advisor of Fukuoka Realty Co., Ltd.

June 2006

CEO of Fukuoka Realty Co., Ltd.
(current position)

July 2006

CEO & Representative Director of
Fukuoka REIT Corporation (current

16

Number ofshares held
0

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

Vice President
and Director

SeniorManaging
Director

SeniorManaging
DirectorTakeshi Okuma

Yoichi Nishio

Shinya Kato

April 1975

position)
Joined Japan Development Bank,(currently Development Bank of Japan
Inc.)

June 2000

General Manager, Department for
Regional Development

June 2002

General Manager, Department for Urban
Development

June 2004

Kyushu Branch Manager

June 2006

Director, Research Institute of Capital
Formation

October 2007

Vice President and Director of Fukuoka
Realty Co., Ltd. (current position)
Joined The Nippon Credit Bank, Ltd.
(currently, Aozora Bank, Ltd.)

April 1985
September 2005

General Manager, Real Estate Finance
Division

July 2008

Joined as Senior Vice President of New
City Corporation.

January 2009

Joined as Senior Managing Director andHead of Finance Department of Fukuoka
Realty Co., Ltd. (current position)
Joined The Sanwa Bank, Ltd. (currently,
The Bank of Tokyo-Mitsubishi UFJI,
Ltd.)

April 1990

October 2001

Joined Fitch Ratings Japan

September 2007

Joined Deutsche Bank AG, Real Estate
Finance Division

September 2009

Advisor of Fukuoka Realty Co., Ltd.

October 2009

Senior Managing Director of Fukuoka
Realty Co., Ltd. (current position)

0

0

0

(Note) Masayasu Saki, CEO of Fukuoka Realty Co., Ltd., also serves as CEO & Representative Directorof Fukuoka REIT Corporation. In conformity with Article 13 of Securities Investment Trust Act (before
revision), he obtained approval for serving concurrently from Minister for the Financial Services Agency
as of June 22, 2006.
Title

Name

Career Summary

Director (parttime)

Akira Eto

February1987

Joined Sunlife Co., Ltd.

October 1993

Joined Fukuoka Jisho Co., Ltd.

October 2005

General Manager, Development Unit

August 2008

Executive Officer (current position)

June 2009

Director of Fukuoka Realty Co., Ltd.
(current position)

August 2009

General Manager, Regional Development
Unit, Fukuoka Jisho Co., Ltd.
(current position)

17

Number ofshares held
0

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

Director (parttime)

Director (parttime)

Auditor(part-time)

Yasumichi
HinagoHiroshi
Shimuta

Masanori
TasakaApril 1968

Joined Kyushu Electric Power Co., Inc.

July 1998

General Manager, Material Procurement
Division

July 2002

General Manager, Material & Fuel
Procurement Division

June 2003

Saga Branch Manager

July 2003

Executive Officer and Saga BranchManagerJune 2005

Director

June 2007

Senior Managing Executive Officer

June 2007

Director of Fukuoka Realty Co., Ltd.
(current position)

June 2009
October 2000

Executive Vice President of Kyushu
Electric Power Co., Inc.
(current position)
Registered as lawyer

April 2004

Joined Fukuoka Realty Co., Ltd.

April 2005

General Manager, Compliance Division

June 2007

Joined Nishimura & Tochiwa (currently,
Nishimura & Asahi) (current position)

June 2007

Director of Fukuoka Realty Co., Ltd.
(current position)
Joined The Fukuoka Sogo Bank, Ltd.
(currently, The NISHI-NIPPON CITY
BANK, LTD.)

April 1978

August 2000

Deputy General Manager, Planning
Division

July 2003

General Manager for Planning Division
and Risk Control Manager

October 2004

General Manager, General Planning
Division

April 2005

Loaned to NCB Management Information
Service Co., Ltd., General Manager for
Business Alliance

April 2006

Head of Tasaka Masanori Certified Tax
Accountant Office (current position)

June 2006

Auditor of Fukuoka Realty Co., Ltd.
(current position)

18

0

0

0

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009

5. Reference Information(1) Investment situation(as of August 31, 2009)
Total value of properties
Percentage of total
heldassets (%)(Millions of yen)
(Note 3)(Note 2)
Real estate
Commercial
Fukuoka urban area
38,32829.3
facility
Other Kyushu areas
36,797
28.1
Office building
Fukuoka urban area
42,01032.1——
Other Kyushu areas
Residential
Fukuoka urban area
3,164
2.4
property——
Other Kyushu areas
Subtotal
120,299
91.9
Interests in silent partnership (Note 4)
3,421
2.6
Deposits and other assets
7,114
5.4
Total assets
130,836100.0(Note 5)(123,721)(94.6)
Note 1: The Fukuoka urban area refers to cities, towns and villages where 10% or more of the population commute
to Fukuoka City for school and work, according to the 2005 census, which states “the number of workers
and students aged 15 years or older commuting between their homes and places of work or school”
conducted by Fukuoka City and the Statistics Bureau of the Ministry of Internal Affairs andCommunications.
“ Other Kyushu areas” refers to all other parts of Kyushu (excluding the Fukuoka urban area) andYamaguchi Prefecture.
Note 2: “Total value of properties held” is based on figures on the balance sheet (the value of real estate in trust is abook value after depreciation).
Note 3: Concerning the “Percentage of total assets,” the numbers are rounded off to one decimal place. The total ofindividual percentages in the above table may not equal 100 percent.
Note 4: Preferred interests in silent partnerships are capital contributions to an SPC (CCH Bridge LLC), who owns
and manages a section of Canal City Hakata excluding the section the Company already holds (Canal City
Hakata SPC holding section).
Note 5: Figures in parentheses for “Total assets” refer to the value and percentage of real estates held in effect tototal assets.
Type of asset

PurposeLocation (Note 1)

Figures on balance sheet (millions of yen)

(as of August 31, 2009)
Percentage of total assets (%)

68,711
62,12452.5
47.5

Book value(millions of yen)

(as of August 31, 2009)
Evaluated amount
Percentage of(millions of yen)
total assets(Note)(%)

Total amount of debt
Total amount of net assets(2) Investment assets(i) Primary issues of investment securities
Type

Description

Preferred silent
Preferred interest in silent
3,421
3,400
2.6
partnership interest
partnerships to CCH Bridge LLC(Note) The evaluated amount is provided by the operator of a silent partnership in conformity with rules stipulated by
the Investment Trusts Association, Japan.

19

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009(ii) Real estate investment portfolio(a) Values and investment ratios at end of year are as follows.
Name of property

Acquisition
value(millions ofyen)(Note 1)
32,000

Value onbalancesheet(millions ofyen)
31,668Period-end
appraisal value(millions ofyen)(Note 2)35,000Investment
ratio
(%)
(Note 3)

Park Place Oita

15,70016,963

18,100

13.0

SunLive City Kokura

6,633

6,395

7,400

5.5

Square Mall Kagoshima
Usuki
Kumamoto
Intercommunity SC
Hara SATY

5,300

5,082

4,960

4.4

2,400

2,321

2,420

2.0

5,410

5,539

5,210

4.5

Hanahata SC

1,130

1,120

1,150

0.9

Kurume Higashi
Kushiwara SC
K’s Denki Kagoshima

2,500

2,472

2,510

2.1

3,550

3,561

3,380

2.9

Canal City BusinessCenter Building
Gofukumachi BusinessCenter Building
Sanix Hakata Building

14,60014,26916,00012.1

11,20010,56913,100

9.3

4,400

4,424

4,950

3.6

Taihaku Street BusinessCenter Building
Higashi Hie BusinessCenter Building
Amex Akasakamon
Tower
City House Keyaki Dori

7,000

6,875

6,730

5.8

5,900

5,872

5,930

4.9

2,060

2,031

1,760

1.7

1,111

1,132

1,000

0.9

Canal City Hakata

26.5(as of August 31, 2009)
Real estate appraiser

TANIZAWA SOGOAPPRAISAL CO., LTD.
Japan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
Institute
TANIZAWA SOGOAPPRAISAL CO., LTD.
TANIZAWA SOGOAPPRAISAL CO., LTD.
TANIZAWA SOGOAPPRAISAL CO., LTD.
TANIZAWA SOGOAPPRAISAL CO., LTD.
TANIZAWA SOGOAPPRAISAL CO., LTD.
Japan Real Estate
InstituteJapan Real Estate
Institute
TANIZAWA SOGOAPPRAISAL CO., LTD.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

Total
120,894
120,299
129,600
100.0
Note 1: “Acquisition value” refers to be amount (purchasing prices shown on the purchasing contracts) not
including expenses for the acquisition of relevant properties (agency fees and taxes and other publiccharges).
Note 2: “Period-end appraisal value” refers to the evaluation value based on appraisals by a real estate appraiser inconformity with the method and standards for asset evaluation stipulated in FRC’s Articles of Incorporation
and rules stipulated by the Investment Trusts Association, Japan.
Note 3: “Investment ratio” is obtained by dividing each property’s acquisition value by the total acquisition value.
The total of individual percentages in the above table may not equal 100 percent, since the numbers arerounded off to one decimal place.

20

Fukuoka REIT Corporation (8968), Earnings briefing for the term ended August 2009(b) Summary of the real estate rental business
Name of property

Numberof tenants(Note 1)

Canal City Hakata
Park Place Oita

1 (49)
1 (103)

SunLive City
KokuraSquare Mall
Kagoshima Usuki
Kumamoto
Intercommunity SC
Hara SATY
Hanahata SC
Kurume Higashi
Kushiwara SC
K’s Denki
Kagoshima
Canal City
Business Center
Building
Gofukumachi
Business Center
Building
Sanix Hakata
Building
Taihaku Street
Business Center
Building(Note 4)
Higashi Hie
Business Center
Building
Amex Akasakamon
Tower
City House Keyaki
Dori
Total

(as of August 31, 2009)
Total rental
Percentage ofrevenue
total rental(millions of yen)revenue(Note 4)
(%)
1,337
24.4
997
18.2

Occupancy
rate(%)(Note 3)
100.0
100.0

Total
leasable
space (m2)

Total leased
space (m2)

45,982.24
103,963.39

45,982.24
103,963.39

1

100.0

61,450.22

61,450.22

292

5.3

11

100.0

14,661.72

14,661.72

258

4.7

2

100.0

6,968.66

6,968.66

89

1.6

1
2
1

100.0
100.0
100.0

27,580.75
2,801.15
6,467.80

27,580.75
2,801.15
6,467.80

212
41
88

3.9
0.8
1.6

1

100.0

7,296.17

7,296.17

111

2.0

1 (53)

90.1

23,018.91

20,735.36

690

12.6

20

96.5

19,906.22

19,211.16

535

9.8

13

95.8

6,293.77

6,027.06

199

3.6

1 (66)

96.6

14,653.94

14,150.47

297

5.4

1 (15)

100.0

13,695.51

13,695.51

232

4.2

1 (59)

85.7

4,755.14

4,076.90

62

1.1

1 (42)

100.0

2,710.86

2,710.86

37

0.7

59 [439]98.8 362,206.45
357,779.42
5,485
100.0
(Note 2)
Note 1: The number of tenants shown is based on the total number of sections stipulated in the tenancy agreements
for commercial and office buildings among relevant properties. For the number of tenants in pass-throughmaster leasing properties, the number of sections stipulated in the tenancy agreements with end tenants isshown in parentheses. The Taihaku Street Business Center Building is an office building with residential
blocks. Its number of tenants comprises nine offices and 57 residents.
Note 2: The total of all the tenants in other than pass-through master leasing properties and the number of sections
stipulated in the tenancy agreements with end tenants for pass-through master leasing properties is shown inparentheses in the totals column.
Note 3: “Occupancy rate” refers to the percentage of total leased space to total leasable space and the numbers arerounded off to one decimal place.
Note 4: The total rental revenues shown are the total of revenues from the real estate rental business and revenues
from other real estate rental business in the current fiscal period.
Note 5: The percentage of total rental revenue is obtained by dividing each property’s total rental revenue by the total
rental revenue. The total of individual percentages in the above table may not equal 100 percent, since thenumbers are rounded off to one decimal place(3) Investment Target
The disclosure is omitted, since there are no significant changes from “Investment Target” disclosedby the latest Securities Report (submitted on May 27, 2009).

21