Provisional translation only
April 8, 2015
EARNINGS BRIEFING
FOR THE PERIOD ENDED FEBRUARY 2015
URL: http://www.fukuoka-reit.jp/eng/
Stock listings: Tokyo Stock Exchange, andFukuoka Stock Exchange
Representative: Etsuo Matsuyuki CEO & Representative Director

Real estate investment trust: Fukuoka REIT Corporation (FRC)
Code number: 8968

Asset manager: Fukuoka Realty Co., Ltd.
Representative: Etsuo Matsuyuki CEO & Representative Director
Contact: Hidenori Hara
Managing Director and Head of Planning Dept.
Phone: +81-92-272-3900
Expected date for submitting securities report:
Expected commencement date of dividend payments:
Supplementary documents for earnings briefing
Analyst meeting (for institutional investors and analysts)

May 26, 2015
May 18, 2015
Yes
Yes
(Figures rounded down to nearest mm yen.)

1. PERFORMANCE AND SITUATION OF ASSETS FOR THE PERIOD ENDED FEBRUARY 2015
(September 1, 2014 to February 28, 2015)(1) Performance
Operating revenues
mm of yen%
Period ended
February 2015
Period ended
August 2014(% shows percentage change from previous period)
Ordinary income
Net income
mm of yen%
mm of yen
%

7,789

0.1

2,860

1.3

2,370

4.7

2,369

4.8

7,779

2.7

2,824

0.8

2,263

1.1

2,262

1.1

Net income
per unit
Period ended
February 2015
Period ended
August 2014

Operating income
mm of yen%

Ratio ofordinary income tototal assets

Return on
net assets

Ratio ofordinary income tooperating revenues

3,434 yen

2.9%

1.4%

30.4%

3,278 yen

2.8%

1.3%

29.1%

(2) Dividends
Dividend
per unit(excl. dividend inexcess of earnings)

Total
dividend(excl. dividend inexcess of earnings)

Dividendin excess ofearnings
per unit

Total
dividendin excess ofearnings

Payoutratio

Ratio ofdividend to
net assets

3,435 yen

2,370 mm yen

0 yen

0 mm yen

100.0%

2.9%

3,278 yen

2,261 mm yen

0 yen

0 mm yen

100.0%

2.8%

Period ended
February 2015
Period ended
August 2014

(3) Financial condition
Period ended
February 2015
Period ended
August 2014

Ratio ofnet assets to total assets

Total assets

Net assets

167,369 mm yen

81,811 mm yen

48.9%

118,567 yen

167,824 mm yen

81,703 mm yen

48.7%

118,410 yen

Net assets per unit

(4) Cash flows condition
Cash flows fromoperating activities
Period ended
February 2015
Period ended
August 2014

Cash flows frominvesting activities

Cash flows fromfinancing activities

Balance of cash andcash equivalents at endof period

3,735 mm yen(1,452) mm yen(2,635) mm yen

6,920 mm yen

3,890 mm yen(2,312) mm yen(2,115) mm yen

7,273 mm yen

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

2. FORECAST OF PERFORMANCE FOR THE PERIOD ENDING AUGUST 2015 (March 1, 2015 toAugust 31, 2015) AND THE PERIOD ENDING FEBRUARY 2016 (September 1, 2015 to February
29, 2016)(% shows percentage change from previous period)
Dividend
Net
Dividend
Operating revenues Operating income Ordinary income
per unit
incomein excess of(excl. dividend
earnings
mm of yen
% mm of yen% mm of yen% mm of yen% in excess of
per unit
earnings)
PeriodendingAugust2015
PeriodendingFebruary
2016

8,163

4.8

3,086

7.9

2,578

8.8

2,577

8.8

3,450 yen

0 yen

8,204

0.5

3,063

(0.7)

2,585

0.3

2,584

0.3

3,460 yen

0 yen(Reference) Forecast net income per unit: Period ending August 2015
Forecast net income per unit: Period ending February 2016

3,450 yen
3,460 yen

3. Other(1) Changes in accounting policies, changes in accounting estimates and restatement of accounting errors(i) Changes in accounting policies accompanying amendments to accounting standards, etc.:No(ii) Changes in accounting policies other than above (i):No
(iii) Changes in accounting estimates:No(iv) Restatement of accounting errors:No(2) Number of investment units outstanding(i) Number of investment units outstanding at end of period (including treasury investment units):
690,000 units at end of February 2015
690,000 units at end of August 2014(ii) Treasury investment units at end of period:— units at end of February 2015
— units at end of August 2014
Note: Regarding the number of investment units, a basis for calculating net income per unit, please refer to “Perunit information,” on page 13.

* Statement on Implementation Status of Audit Procedure
This Earnings Briefing (“Kessan Tanshin” in Japanese) report is outside the scope of the auditing
procedure under the Financial Instruments and Exchange Act. As of the publication of this report, noauditing procedure under the Financial Instruments and Exchange Act has been completed for thefinancial statements.
* 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 changes in the business environment. The
forecast 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 August 2015 (March 1, 2015 to August 31, 2015) and the period ending February 2016
(September 1, 2015 to February 29, 2016)” on page 6.
* (Reference) Forecast net income per unit is calculated by the formula of forecast net income / forecast
number of investment units outstanding at end of period.

2

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

Concerning the contents hereinafter, items that FRC judges that “can be omitted from the disclosure from the standpointof importance” are not shown in conformity with the “Format and Guidance for Preparation of Earnings Briefing for
REITs” (December 2014).

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 November 28, 2014).

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 November 28, 2014).
(2) Management situation(i) Summary of the current fiscal period(a) Brief history of the investment corporation
Fukuoka REIT Corporation (hereinafter “FRC”) was established on July 2, 2004 based on the “Act on
Investment Trusts and Investment Corporations” (Act No. 198 in 1951 including later revisions) and listedon the Tokyo Stock Exchange Group Inc. and the Fukuoka Stock Exchange on June 21, 2005 as thenation’s first real estate investment trust specializing in regional properties (code number: 8968). FRC
invests in real estate throughout all of Kyushu (including Okinawa Prefecture), with a central focus on
Fukuoka City, and Yamaguchi Prefecture (hereinafter the “Fukuoka/Kyushu area) by turning regionality,
characteristics in the real estate industry, into strengths.
FRC started asset management activities on November 9, 2004 after acquisition of four properties such as
Retail in Canal City Hakata (excluding some areas of specialty shops, hotels, theaters, offices andcommon space), a commercial complex where specialty shops, cinema complex, theaters, amusement
facilities, hotels and offices are integrally developed (hereinafter “Canal City Hakata”). As of the end of
the current fiscal period (February 28, 2015), FRC manages a total of 25 properties comprising ten Retail,seven Office buildings and eight Others.
(b) Investment environment and portfolio performance
During the fiscal period under review, the Japanese economy remained on course for a modest recovery
despite weakness observed in consumer spending and other aspects. Looking ahead, with the employment
and income environment continuing to improve, the economy is expected to keep recovering thanks to adrop in crude oil prices as well as various political measures proving effective. In the Fukuoka andKyushu area, the core investment target area for FRC, the economy was also on track for a modest
recovery, with public investment kept at a high level and capital investment steadily picking up due to theconsistently improving employment and income environment, although consumer spending remained
somewhat weak in certain areas.
As for land price trends, the national average over the past year from January 2014 decreased at a slower
pace for residential land and shifted from a decrease to a leveling-off for commercial land for the first timein seven years, according to the Land Price Survey 2015. In Fukuoka City, the central area of FRC’s
investment targets, land prices continued rising for the third consecutive year, recording a year-on-yearincrease of 3.8% for commercial land and 2.2% for residential land and at an accelerated pace.
Under such circumstances, FRC focused on stringently selective investment in accordance with its
investment policy. This led to the acquisition of Granfore Yakuin Minami (acquisition price: 1,100 mmyen) on November 4, 2014. For existing properties, FRC continued its efforts to reinforce competitive
advantages and customer drawing ability at Canal City Hakata and other major retail facilities, andfocused on maintaining and increasing the occupancy rate of its owned properties. As a result of theseendeavors, the average occupancy rate of all properties FRC owns was 99.6% at the end of the 21st fiscal
period.
When analyzing FRC’s portfolio (on an acquisition price basis) by investment target area, the investment
ratio in the Fukuoka urban area accounted for 76.6%; when analyzing by property type, Retail, Officebuildings, and Others accounted for 62.3%, 29.3% and 8.4%, respectively.

3

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015(c) Summary of fundraising
In the 21st fiscal period, FRC refinanced 500 mm yen in short-term debt that matured in September 2014
for the same amount in debt of five years. As a result, the balance of interest-bearing debt outstanding(including the investment corporation bonds) at the end of the 21st fiscal period totaled 70,775 mm yen,with the loan-to-value ratio (ratio of interest-bearing debt (including the investment corporation bonds) tototal assets) at 42.3%. In addition, FRC concluded an interest rate swap agreement (notional principal of
2,500 mm yen) on February 25, 2015. This brought the ratio of fixed-interest rate debt (including
investment corporation bonds) at the end of the fiscal period to 75.7%. Going forward, FRC will continue
its efforts to reduce refinancing risks by dispersing the debt repayment dates and increasing the average
length of time until debt maturity, and to mitigate risks of rising interest rates by shifting to fixed-interest
rate borrowings and through other measures.
Furthermore, FRC today made a resolution on the issuance of new investment units (57,000 units) in orderto procure funds for acquiring a new specified asset.
Moreover, the credit ratings assigned to FRC as of the end of the current fiscal period are as follows.
Credit Rating Agency
Rating Type
RatingRating Outlook
Standard & Poor's Ratings
Long-term Corporate Credit Rating
StableA−
Japan K.K. (S&P)
Short-term Corporate Credit Rating
A−2
Rating and Investment
Issuer Rating
A+
StableInformation, Inc. (R&I)
Japan Credit Rating Agency,
Long-term Senior Debts Rating
A A−
StableLtd. (JCR)(d) Summary of performance and dividend
As a result of these management efforts, operating revenues totaled 7,789 mm yen and operating income
after excluding operating expenses such as expenses related to the leasing business and asset management
fees totaled 2,860 mm yen. Ordinary income was 2,370 mm yen and net income was 2,369 mm yen.
Management decided to make a dividend of 3,435 yen per investment unit to meet the requirements ofspecial tax measures for an investment corporation (as stipulated in Article 67-15 of the Act on Special
Measures Concerning Taxation of Japan [Act No. 26 in 1957 including later revisions, hereinafter the“Special Taxation Measures Act”]). Under this law, an investment corporation is allowed to deduct the
maximum amount of dividends paid to investors from its taxable income.
(ii) Forecast for the next fiscal period(a) Portfolio management policy
FRC will further reinforce management and leasing capabilities by cooperating with property managementcompanies including sponsor companies even in a weak consumer spending environment, and secure andmaintain the stable operation of the properties by making the most use of their advantages.
FRC will make investments based on the basic policy stipulated in its Articles of Incorporation and its
basic philosophy: focusing on “specialized areas in which FRC can demonstrate its competitive edge” thatare in “high growth potential markets.” By geographic location, of Fukuoka and Kyushu areas, FRC will
invest 60% to 90% of its assets in the Fukuoka urban area, since the Fukuoka urban area is expected tohave a high population growth rate in the future. In addition to the Fukuoka urban area, management has
decided to actively acquire properties in major cities, if there are regions or properties where FRC cangenerate 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 ofregional properties and close relations with the local business community and governments, so thatinvestors can continue to invest in FRC with assurance.
Meanwhile, FRC will build stronger relationships with financial institutions to realize stable fundraisingand try to maintain a solid financial structure.
(b) Significant events that have occurred after the end of the current fiscal period
No relevant items.
(Reference information)
FRC made a resolution at its Board of Directors meeting held today to issue new investment units (57,000
units) in order to procure funds to acquire a new specified asset.
(c) Performance forecast for the next fiscal period
4

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

FRC aims to achieve the following performance goals for the period ending August 2015 (March 1, 2015
to August 31, 2015) and the period ending February 2016 (September 1, 2015 to February 29, 2016).
Concerning preconditions for the forecast, please refer to “Preconditions for the performance forecast forthe period ending August 2015 (March 1, 2015 to August 31, 2015) and the period ending February 2016
(September 1, 2015 to February 29, 2016)” on page 6.
Period ending August 2015
Operating revenues
Operating income
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

8,163 mm yen
3,086 mm yen
2,578 mm yen
2,577 mm yen
3,450 yen
0 yen

Period ending February 2016
Operating revenues
Operating income
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

8,204 mm yen
3,063 mm yen
2,585 mm yen
2,584 mm yen
3,460 yen
0 yen

Note: The above forecast figures are calculated based on certain preconditions. The forecast should not
be construed as a guarantee of actual performance since actual operating revenues, ordinary
income, net income, dividend per unit and dividend in excess of earnings per unit may differ due
to changes in the business environment.

5

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

Preconditions for the performance forecast for the period ending August 2015 (March 1, 2015 to August 31, 2015) andthe period ending February 2016 (September 1, 2015 to February 29, 2016)
Item
Calculation period
Assets undermanagement
Total number ofinvestment units
outstanding

Interest-bearing debt
and refinancing

Operating revenues

Operating expenses

Non-operating
expensesDividend per unit
Dividend in excessof earnings per unit
Other

Preconditions
22nd fiscal period: from March 1, 2015 to August 31, 2015 (184 days)
23rd fiscal period: from September 1, 2015 to February 29, 2016 (182 days)
 It is assumed that there will be 27 properties, comprising the 25 properties FRC owned asof February 28, 2015 plus LOGIPORT Island-city Hakata it acquired on March 27, 2015
and Marinoa City Fukuoka (Marina Side Building) it plans to acquire on May 1, 2015.
 In practice, they may fluctuate due to changzes in assets under management.
 It is assumed that the number of investment units will be 747,000 units including the newinvestment units (57,000 units) to be issued through public offering that was resolved at
the Board of Directors meeting held today.
 The balance of interest-bearing debt outstanding on August 31, 2015 is expected to total
72,500 mm yen, an increase of 1,725 mm yen from the end of the current period (February
28, 2015). The loan-to-value ratio (interest-bearing debt  total assets  100) is expected
to stand at around 40.1% (as of February 28, 2015, the loan-to-value ratio stands at
42.3%).
 The balance of interest-bearing debt outstanding on February 29, 2016 is expected to total
72,425 mm yen, a decrease of 75 mm yen from the end of the period ending August 2015
(August 31, 2015). The loan-to-value ratio (interest-bearing debt  total assets  100) is
expected to stand at around 39.9%.
 Of real estate leasing revenues, revenues from properties FRC has already acquired are
calculated based on tenancy agreements that are valid as of April 8, 2015 by taking into
account the competitiveness of the properties and the market environment. Revenues fromthe property FRC plans to acquire are calculated by taking into account the terms andconditions of the tenancy agreements that are valid as of the planned acquisition date andthereafter, etc.
Of real estate leasing revenues, revenues from percentage lease contracts are calculated
based on past results by taking into account sales fluctuation factors of the relevant
tenants.
 Concerning real estate leasing revenues, tenant vacancies are taken into account to acertain extent. It is assumed that there will be no rent arrears or non-payments by tenants.
 When acquiring assets under management, the fixed property tax and city planning tax forthe assets will be proportionally calculated according to the holding period and adjustedwith the former owner. FRC will not write them off since it will include the relevant
adjusted amount in the acquisition cost.
 FRC writes off estimated repair costs for buildings for the calculation periods, the periods
ending August 2015 and February 2016. Actual repair costs may differ significantly fromthe 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, and repair costs are not regularly incurred.
 Concerning outsourcing expenses, FRC anticipates 1,568 mm yen for the period ending
August 2015 and 1,560 mm yen for the period ending February 2016.
 Concerning taxes and other public charges, FRC anticipates 607 mm yen for the period
ending August 2015 and 607 mm yen for the period ending February 2016.
 Concerning depreciation and amortization expenses, FRC anticipates 1,471 mm yen forthe period ending August 2015 and 1,497 mm yen for the period ending February 2016.
 Concerning interest expenses (including interest expenses on investment corporation
bonds) and expenses related to financing, FRC anticipates 497 mm yen for the period
ending August 2015 and 466 mm yen for the period ending February 2016
 It is planned that the expenses associated with the issuance of new investment units will beamortized utilizing the straight-line method over three years.
 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 leasing revenues caused by changes
in assets under management and tenants or various factors including unexpectedoccurrences of repair.
 Dividend in excess of earnings (dividend in excess of earnings per unit) is not planned at
the moment.
 It is assumed that there will be no significant revisions to laws and regulations, the tax
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.

(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 November 28, 2014).

6

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

3. Financial Statements(1) Balance sheets
Account(thousands of yen)
21st fiscal period(as of February 28, 2015)

20th fiscal period(as of August 31, 2014)

AssetsCurrent assets
Cash and deposits

2,694,272

2,545,162

Cash and deposits in trust

4,639,900

4,438,305

Operating accounts receivable

402,318

318,677

Prepaid expenses

300,402248,214

Deferred tax assets

27

9

4,606

4,209

8,041,528

7,554,578

OthersTotal current assets
Noncurrent assets
Property, plant and equipment
Buildings in trust
Aggregate of accumulated depreciation
Structures in trust

78,108,929(16,980,269)

61,128,659

1,302,682

Aggregate of accumulated depreciation(448,860)

Machinery and equipment in trust(220,194)

Vehicles and transport equipment in trust

747

Aggregate of accumulated depreciation(103)

853,822(833,434)

Lands in trust

60,841,364(484,118)

827,846585,826
363,880(241,057)

344,768747
643

1,211,618

Aggregate of accumulated depreciation(18,259,209)
1,311,964

584,075

Aggregate of accumulated depreciation

Tools and fixtures in trust

79,100,573

(151)

596

1,248,071
378,183(877,740)

370,331

94,622,667

95,084,266

Construction in progress in trust－

18,696

Total property, plant and equipment

157,347,858

157,487,870

1,765,318

1,765,318

15,661

12,318

1,780,979

1,777,637

Lease and guarantee deposits

10,00010,000

Lease and guarantee deposits in trust

100,000

100,000

Long-term prepaid expenses

508,992

411,366

Total investment and other assets

618,992

521,366

159,747,830

159,786,874

Investment corporation bond issuance expenses

18,34017,357

Investment unit issuance expenses

16,627

11,084

Total deferred assets

34,96728,442

167,824,326

167,369,896

Intangible assets
Leasehold right in trust
Other intangible assets in trust
Total intangible assets
Investment and other assets

Total noncurrent assets
Deferred assets

Total assets

7

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

Account

20th fiscal period(as of August 31, 2014)(thousands of yen)
21st fiscal period(as of February 28, 2015)

Liabilities
Current liabilities
Operating accounts payable

411,578

507,169

Short-term debt

500,000－

6,650,000

12,850,000

Accounts payable-other

18,55524,807

Accrued expenses

332,545

330,419

1,162

734

Accrued consumption taxes

115,105

168,301

Advances received

924,259

930,019

Deposits received

1,042,954

673,421

Total current liabilities

9,996,162

15,484,873

Investment corporation bonds

2,000,000

2,000,000

Long-term debt payable

62,000,000

55,925,000

316,668

316,031

11,808,124

11,832,568

76,124,793

70,073,599

86,120,955

85,558,472

79,441,236

79,441,236

2,262,134

2,370,187

Total surplus

2,262,134

2,370,187

Total Net Assets

81,703,371

81,811,423

Total net assets

81,703,371

81,811,423

Total liabilities and net assets

167,824,326

167,369,896

Current maturities of long-term debt

Income taxes payableNoncurrent liabilities

Tenant leasehold and security deposits
Tenant leasehold and security deposits received intrust
Total noncurrent liabilities
Total liabilities
Net assets
Net Assets
Unitholders’ capital
Surplus
Unappropriated surplus

8

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015(2) Statements of income(thousands of yen)
20th fiscal period(March 1, 2014 toAugust 31, 2014)

21st fiscal period(September 1, 2014 to
February 28, 2015)

7,285,942

7,342,920

Account
1. Operating revenues
Leasing revenues-real estate
Other leasing revenues-real-estate

494,039

7,779,981

446,484

7,789,404

2. Operating expenses
Expenses related to leasing business

4,366,790

4,350,094

456,040

454,652

Asset custody fees

6,332

6,241

Administrative service fees

51,17347,800

Director’s compensations

9,600

9,600

Other operating expenses

65,200Asset management fees

Operating income

4,955,136

60,2462,824,845

4,928,634
2,860,769

3. Non-operating revenues
Interest received

696

Others

370

660
1,067

1,675

2,336

4. Non-operating expenses
Interest expenses

419,763

365,592

Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance expenses
Amortization of investment unit issuance expenses

13,265

13,098

982

982

5,542

5,542

Financing related expenses

122,956

107,117

Others15562,52615

492,348

Ordinary income

2,263,386

2,370,757

Net income before income taxes

2,263,386

2,370,757

Income taxes-current

1,301

Income taxes-deferred

15

Net income

867
1,317

18

885

2,262,068

2,369,872

Surplus brought forward

66

314

Unappropriated surplus

2,262,134

2,370,187

9

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015(3) Statement of changes in net assets
20th fiscal period (March 1, 2014 to August 31, 2014)(thousands of yen)
Net Assets
Item

Balance as of March 1, 2014

Surplus

Unitholders’capitalUnappropriatedsurplus

Total
Net Assets

Total
net assets

79,441,236

2,238,288

81,679,524

81,679,524

Dividend of surplus—(2,238,222)(2,238,222)(2,238,222)

Net income—

2,262,068

2,262,068

2,262,068—

23,846

23,846

23,84679,441,236

2,262,134

81,703,371

81,703,371

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of August 31, 2014

21st fiscal period (September 1, 2014 to February 28, 2015)(thousands of yen)
Net Assets
Item

Balance as of September 1, 2014

Surplus

Unitholders’capitalUnappropriatedsurplus

Total
Net Assets

Total
net assets

79,441,236

2,262,134

81,703,371

81,703,371

Dividend of surplus—(2,261,820)(2,261,820)(2,261,820)

Net income—

2,369,872

2,369,872

2,369,872—

108,052

108,052

108,052

79,441,236

2,370,187

81,811,423

81,811,423

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of February 28, 201510

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

(4) Dividend statement
Account

20th fiscal period(March 1, 2014 toAugust 31, 2014)

21st fiscal period(September 1, 2014 to
February 28, 2015)

I. Unappropriated surplus

2,262,134 thousand yen

2,370,187 thousand yen

II. Total

2,261,820 thousand yen

2,370,150 thousand yen(3,278 yen)

(3,435 yen)

314 thousand yen

37 thousand yen(Dividend per investment unit)

III. Surplus brought forward
Method for calculating dividends

The amount of dividends shall be decided The amount of dividends shall be decidedin accordance with the dividend policyin accordance with the dividend policy
stipulated in Article 38-1-1 of FRC’s
stipulated in Article 38-1-1 of FRC’s
Articles of Incorporation and must exceed Articles of Incorporation and must exceed
90% of FRC’s distributable profits as
90% of FRC’s distributable profits as
stipulated in Article 67-15 of the Special stipulated in Article 67-15 of the Special
Taxation Measures Act. Following theTaxation Measures Act. Following theabove policy, FRC shall decide toabove policy, FRC shall decide to
distribute 2,261,820 thousand yen, which distribute 2,370,150 thousand yen, whichis almost the entire amount ofis almost the entire amount of
unappropriated surplus, as earnings
unappropriated surplus, as earnings
dividends. Moreover, dividend in excess dividends. Moreover, dividend in excessof earnings as stipulated in Article 38-2 of of earnings as stipulated in Article 38-2 of
FRC’s Articles of Incorporation will not FRC’s Articles of Incorporation will not
be provided.
be provided.
(Note) Concerning amounts other than dividend per investment unit, fractions of 1,000 yen are omitted.

11

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

(5) Cash flows statements(thousands of yen)Account

20th fiscal period

21st fiscal period(March 1, 2014 to(September 1, 2014 toAugust 31, 2014)

February 28, 2015)

I. Net cash provided by (used in) operating activities
Net income before income taxes

2,263,386

2,370,757

Depreciation and amortization expenses

1,387,232

1,390,656

982

982

5,542

5,542

Amortization of investment corporation bond issuance
expenses
Amortization of investment unit issuance expenses
Interest received

(696)

(660)

Interest expenses

433,029

378,691

Decrease (increase) in operating account receivables(134,557)

83,640

Increase (decrease) in accrued consumption taxes(43,995)

53,196

Increase (decrease) in operating accounts payable

47,85839,903

Increase (decrease) in accounts payable-other(7,758)

6,930

Increase (decrease) in accrued expenses

12,717

2,084

Increase (decrease) in advances received

69,862

5,759

Increase (decrease) in deposits expenses

377,724(369,533)

Decrease (increase) in prepaid expenses(41,327)

52,187

Decrease (increase) in long-term prepaid expenses(65,418)

97,625

Others, net

21,465865

Subtotal

4,326,046

4,118,629

696

660

(434,417)(382,901)(1,542)(1,295)3,890,783

3,735,093(2,174,806)(1,473,781)

Purchase of intangible assets in trust(4,322)－

Proceeds from tenant leasehold and security deposits

5,098

30

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in)operating activities
II. Net cash provided by (used in) investment activities
Purchase of property, plant and equipment in trust

Repayments of tenant leasehold and security deposits(13,534)(667)

Proceeds from tenant leasehold and security deposits in trust

272,627

84,091

Repayments of tenant leasehold and security deposits in trust(399,382)(59,648)

8,018

5,754

Proceeds from restricted trust deposits
Payments for restricted trust deposits(6,419)(8,406)(2,312,721)(1,452,627)

3,000,000－

Decrease in short-term debt payable(2,500,000)(500,000)

Proceeds from long-term debt payable

14,000,000

500,000

Repayments of long-term debt payable(14,375,000)(375,000)

Dividends paid

(2,240,158)(2,260,823)(2,115,158)(2,635,823)(537,096)(353,356)

Net cash provided by (used in) investment activities
III. Net cash provided by (used in) financial activities
Proceeds from short-term debt payable

Net cash provided by (used in) financial activities
IV. Net increase (decrease) in cash and cash equivalents
V. Balance of cash and cash equivalents at beginning of period

7,810,809

7,273,713

VI. Balance of cash and cash equivalents at end of period

7,273,713

6,920,356

12

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015(6) Notes on the going concern assumption
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 November 28, 2014).
(8) Notes to financial statements
FRC omits the disclosure of notes to balance sheets, statements of income, statements of changes in net assets, andcash flows statements, as well as notes on lease transactions, financial instruments, securities, derivativetransactions, related-party transactions, tax-effect accounting, retirement benefits, asset retirement obligations,rental properties, segment information and equity method income, etc. since it does not find substantial need fordisclosure in the earnings briefing.
(Per unit information)
20th fiscal period
21st fiscal period(March 1, 2014 to(September 1, 2014 toAugust 31, 2014)
February 28, 2015)
Net assets per investment unit:
118,410 yen
Net assets per investment unit:
118,567 yen
Net income per investment unit: 3,278 yen
Net income per investment unit: 3,434 yen
Note 1: Net income per investment unit is calculated by dividing net income by the weighted average number of investment units
outstanding during the fiscal period. Diluted net income per investment unit is not shown since there are no potential
investment units.
Note 2: Calculation of net income per investment unit is based on the following.
20th fiscal period(March 1, 2014 toAugust 31, 2014)

Account
Net income (thousands of yen)Amount not attributable to common shareholders (thousands of yen)
Net income attributable to common investment units (thousands of yen)
Average number of investment units during the fiscal period (units) (Note 3)(Significant subsequent events)
No relevant items.
(9) Change in the number of investment units outstanding
No relevant items.

13

21st fiscal period(September 1, 2014 to
February 28, 2015)

2,262,068

2,369,872——

2,262,068

2,369,872

690,000

690,000

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015

4. Change in Directors(1) Change in directors in FRC
No relevant items.
(2) Change in directors in Fukuoka Realty Co., Ltd.
No relevant items.

5. Reference Information(1) Investment situation(as of February 28, 2015)
Type of asset

RetailReal estate in
Trust

Office buildings

OthersTotal value of
properties held
(mm of yen)
(Note 2)

Location(Note 1)

Purpose

Percentage of
total assets(%)(Note 3)

Fukuoka urban area

65,542

39.2

Other Kyushu areas

35,885

21.4

Fukuoka urban area

44,25926.4

Other Kyushu areas——

Fukuoka urban area

10,799

6.5

Other Kyushu areas

2,759

1.6

159,246

95.1

8,123

4.9

167,369

100.0(159,265)(95.2)

Subtotal
Deposits and other assets
Total amount of assets(Note 4)Note 1: “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 2010 census, which states “the number of workers and students aged 15 years orolder (students including those aged 14 years or younger: particular reference) including commuting between their homes
and places of work or school” conducted by Fukuoka City and the Statistics Bureau of the Ministry of Internal Affairs
and Communications. “Other Kyushu areas” refers to all other parts of Kyushu (excluding the Fukuoka urban area).
Note 2: “Total value of properties held” is based on the value on the balance sheet (the value of real estate in trust is the bookvalue after depreciation).
Note 3: Concerning the “Percentage of total assets,” the figures are rounded off to one decimal place. The total of individual
percentages in the above table may not equal 100%.
Note 4: Figures in parentheses for “Total amount of assets” refer to the value and percentage of real estate held in effect to thetotal amount of assets.
(as of February 28, 2015)
Percentage of total amount of assets(%)

Value on balance sheet(mm of yen)
Total amount of liabilities

85,558

51.1

Total amount of net assets

81,81148.9(2) Investment assets(i) Primary issues of investment securities
No relevant items.
(ii) Real estate investment portfolio
No relevant items.

14

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015(iii) Other primary investment assets(a) Values and investment ratios at end of period are as follows.
(as of February 28, 2015)
Investment
ratio
Real estate appraiser(%)(Note 3)
Tanizawa Sogo
19.3
Appraisal Co., Ltd.
Tanizawa Sogo
17.3
Appraisal Co., Ltd.
Japan Real Estate
9.5
InstituteJapan Real Estate
4.0
InstituteJapan Real Estate
3.2
InstituteJapan Real Estate
1.4
InstituteJapan Real Estate
3.3
InstituteTanizawa Sogo
0.7
Appraisal Co., Ltd.
Tanizawa Sogo
1.5
Appraisal Co., Ltd.
Tanizawa Sogo
2.1
Appraisal Co., Ltd.

Acquisitionvalue(mm of yen)
(Note 1)

Value on balancesheet(mm of yen)

Period-end
appraisal value(mm of yen)
(Note 2)

Canal City Hakata

32,00030,78432,600Canal City Hakata B

28,70028,39829,300Park Place Oita

15,70017,59918,131

SunLive City Kokura

6,633

6,006

7,750

Square Mall Kagoshima Usuki

5,300

4,701

5,200

Kumamoto Intercommunity SC

2,400

2,120

2,610

AEON Hara Shopping Center

5,410

5,316

4,540

Hanahata SC

1,130

1,043

1,180

Kurume Higashi Kushiwara SC

2,500

2,227

2,660

K’s Denki Kagoshima

3,550

3,228

3,550

Retail subtotal:

103,323

101,427

107,52162.3

Canal City Business Center
Building

14,60013,635

14,5008.8

Gofukumachi Business Center

11,2009,578

12,700Sanix Hakata Building

4,400

4,059

4,860

Taihaku Street Business Center

7,000

6,498

6,900

Higashi Hie Business Center

5,900

5,009

6,260

Tenjin Nishi-Dori Center Building

2,600

2,711

2,850

Tenjin North Front Building

2,800

2,766

3,020

Office buildings subtotal:

48,50044,25951,09029.3

Amex Akasakamon Tower

2,060

1,826

1,810

1.2

City House Keyaki Dori

1,111

999

1,000

Aqualia Kego

2,800

2,707

3,470

Aqualia Chihaya

1,280

1,241

1,530

D-WING TOWER

2,800

2,828

3,170

Hotel FORZA Oita

1,530

1,480

1,610

Tosu Logistics Center

1,250

1,279

1,290

Granfore Yakuin Minami

1,100

1,195

1,190

Others subtotal:

13,931

13,55915,0708.4

165,754

159,246

173,681100.0

Real estate property name

Total

Tanizawa Sogo
Appraisal Co., Ltd.
Tanizawa Sogo
6.8
Appraisal Co., Ltd.
Japan Real Estate
2.7
InstituteJapan Real Estate
4.2
InstituteTanizawa Sogo
3.6
Appraisal Co., Ltd.
Japan Real Estate
1.6
InstituteJapan Real Estate
1.7
Institute
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real Estate
0.7
Appraisal Co., Ltd.
Japan Real Estate
1.7
InstituteJapan Real Estate
0.8
InstituteTanizawa Sogo
1.7
Appraisal Co., Ltd.
Japan Real Estate
0.9
InstituteJapan Real Estate
0.8
InstituteTanizawa Sogo
0.7
Appraisal Co., Ltd.

Note 1: “Acquisition value” refers to the amount (purchasing prices shown on the purchasing contracts) not including expenses
for the acquisition of relevant properties (agency fees and taxes and other public charges).
Note 2: “Period-end appraisal value” refers to the evaluation value based on appraisals by a real estate appraiser in conformity
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 ofindividual percentages in the above table may not equal 100%, since the figures are rounded off to one decimal place.
.

15

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended February 2015(b) Summary of the real estate leasing business

Real estate property name

Number oftenants(Note 1)

Occupancy
rate(%)(Note 3)Total
leasable floor
space
(m2)

Total
leased floor
space
(m2)

(as of February 28, 2015)
Percentage of
Total
total
leasingleasing revenues
revenues(%)(mm of yen)
(Note 5)(Note 4)
1,230
15.8

Canal City Hakata

1 [48]

100.0

46,483.22

46,483.22

Canal City Hakata B

1 [50]

100.0

68,806.12

68,806.12

1,607

20.6

Park Place Oita

1 [104]

99.7

109,603.80

109,281.06

1,183

15.2

SunLive City Kokura

1

100.0

61,450.22

61,450. 22

292

3.8

Square Mall Kagoshima Usuki

12

100.0

14,602.88

14,602.88

254

3.3

Kumamoto Intercommunity SC

2

100.0

6,968.66

6,968.66

89

1.2

AEON Hara Shopping Center

1

100.0

27,313.53

27,313.53

212

2.7

Hanahata SC

2

100.0

2,801.15

2,801.15

40

0.5

Kurume Higashi Kushiwara SC

1

100.0

6,467.80

6,467.80

88

1.1

K’s Denki Kagoshima

1
23 [222](Note 2)100.0

7,296.17

7,296.17

111

1.4

99.9

351,793.55

351,470.81

5,111

65.6

1

100.0

23,030.44

23,030.44

622

8.0

36

99.5

19,905.34

19,802.20

497

6.4

19

100.0

6,293.76

6,293.76

195

2.5

Retail subtotal:
Canal City Business Center
Building
Gofukumachi Business Center
Sanix Hakata Building[61]

Taihaku Street Business Center

1

[70]

99.5

14,677.27

14,601.45

297

3.8

Higashi Hie Business Center
Tenjin Nishi-Dori Center
Building
Tenjin North Front Building

1

[22]

98.7

13,695.51

13,518.89

332

4.3

1

100.0

3,339.32

3,339.32

86

1.1

13
72 [222](Note 2)
1 [66]

100.0

5,252.38

5,252.38

129

1.7

99.6

86,194.02

85,838.44

2,161

27.7

98.6

4,821.25

4,755.14

65

0.8

1

[41]

97.2

2,710.86

2,635.91

37

0.5

Office buildings subtotal:
Amex Akasakamon Tower
City House
Keyaki Dori
Aqualia Kego

1

[123]

94.2

7,415.36

6,981.74

113

1.5

Aqualia Chihaya

1

[103]

98.2

5,619.69

5,520.03

57

0.7

D-WING TOWER

1 [131]

94.6

7,187.58

6,796.62

113

1.5

Hotel FORZA Oita

1

100.0

5,785.44

5,785.44

63

0.8

Tosu Logistics Center

1

100.0

4,173.29

4,173.29

42

0.5

Granfore Yakuin Minami

1 [93]
94.0
2,496.06
2,346.46
24
0.3
8 [559]Others subtotal:
97.0
40,209.53
38,994.63516
6.6(Note 2)
103
Total
[1,003]
99.6
478,197.10
476,303.88
7,789
100.0
(Note 2)
Note 1: “Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for retail and officebuildings among relevant properties. For the number of tenants in pass-through master leasing properties, the number ofsections stipulated in the tenancy agreements with end tenants is shown in parentheses. The Taihaku Street Business Centeris an office building with a residential tower. Its number of tenants comprises 12 offices and 58 residences.
Note 2: The subtotal and 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 in parentheses inthe totals column for “Number of tenants.”
Note 3: “Occupancy rate” refers to the percentage of total leased floor space to total leasable floor space and the figures arerounded off to one decimal place.
Note 4: “Total leasing revenues” are the total of real estate leasing revenues and other revenues from real estate rent in the current
fiscal period.
Note 5: “Percentage of total leasing revenues” is obtained by dividing each property’s total leasing revenues by the total amount of
total leasing revenues. The total of individual percentages in the above table may not equal 100%, since the figures arerounded off to one decimal place.

(3) Investment target
The disclosure is omitted, since there are no significant changes from the “Investment target” disclosed by the latest
securities report (submitted on November 28, 2014).
16