Provisional translation only
October 12, 2011EARNINGS BRIEFING
FOR THE PERIOD ENDED AUGUST 2011
Real estate investment trust: Fukuoka REIT Corporation (FRC)
Code number: 8968
Representative: Masayasu Saki
CEO &Representative
Director

URL: http://www.fukuoka-reit.jp/eng/
Stock listings: Tokyo Stock Exchange, andFukuoka Stock Exchange

Asset manager: Fukuoka Realty Co., Ltd.
Representative: Masayasu Saki
CEO & Representative Director
Contact: Etsuo Matsuyuki Managing Director
Phone: +81-92-272-3900
Expected date for submitting securities report:
November 25, 2011
Expected commencement date of dividend payments: November 18, 2011
(Figures rounded down to nearest million yen.)

1. PERFORMANCE AND SITUATION OF ASSETS FOR THE PERIOD ENDED AUGUST 2011
(March 1, 2011 to August 31, 2011)(1) Performance
Operating revenues
Millions of%yen
Period ended
August 2011
Period ended
February 2011

Operating income
Millions of%yen(% shows percentage change from previous period)
Ordinary income
Net income
Millions of%Millions of
%
yen
yen

7,045

24.4

2,729

17.8

2,083

18.1

2,082

18.1

5,662

(0.0)

2,317

(4.0)

1,763

(1.9)

1,762

(1.9)

Net income
per unit
Period ended
August 2011
Period ended
February 2011

Ratio ofordinary income to total
assetsReturn on
net assets

Ratio ofordinary income tooperating revenues

16,922 yen

3.1%

1.4%

29.6%

16,465 yen

2.8%

1.3%

31.1%

(2) Dividends
Dividend
per unit(excl. dividendin excess ofearnings)
Period ended
August 2011
Period ended
February 2011

Total
dividend

Dividendin excess ofearnings
per unit

Total
dividendin excess ofearnings

Payoutratio

Ratio ofdividend to
net assets

16,922 yen

2,082 million yen

0 yen

0 million yen

100.0%

2.9%

16,465 yen

1,762 million yen

0 yen

0 million yen

100.0%

2.8%(3) Financial condition
Total assets
Period ended
August 2011
Period ended
February 2011

155,657
million yen
132,497
million yen

Net assets

Ratio ofnet assets to total assets

Net assets per unit

71,259 million yen

45.8%

579,113 yen

62,026 million yen

46.8%

579,420 yen(4) Cash flows condition

Period ended
August 2011
Period ended
February 2011

Balance of
cash and cash equivalents at
end of period

Cash flows fromoperatingactivities

Cash flows frominvesting activities

3,294 million yen(20,086) million yen

17,548 million yen

7.197 million yen

2,545 million yen(162) million yen(1,871) million yen

6,440 million yen

Cash flows fromfinancing activities

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

2. FORECAST OF PERFORMANCE FOR THE PERIOD ENDING FEBRUARY 2012
(September 1, 2011 to February 29, 2012) AND THE PERIOD ENDING AUGUST 2012
(March 1, 2012 to August 31, 2012)
Operatingrevenues
Millionsof yenOperatingincome%Millionsof yenPeriodending
6,899
(2.1)
2,603
February
2012
Periodending
7,135
3.4
2,610
August2012(Reference) Forecast net income per unit:

Ordinary income(% shows percentage change from previous period)
Dividend
Net
Dividend
per unit
incomein excess of(excl.
earnings
dividend in
Millions%
per unit
excess ofof yenearnings)%

Millionsof yen

%

(4.6)

2,006

(3.7)

2,005

(3.7)

16,300 yen

0 yen

0.3

1,969

(1.8)

1,968

(1.8)

16,000 yen

0 yen

Period ending February 2012 16,300 yen
Period ending August 2012
16,000 yen

3. Other(1) Changes in accounting policies(i) Changes due to revisions of accounting standards, etc.:(ii) Changes other than above (i):No
No(2) Number of investment units issued and outstanding(i) Number of investment units issued and outstanding at end of period (including treasury investment units):
123,050 units at end of August 2011
107,050 units at end of February 2011(ii) Treasury investment units at end of period:—
units at end of August 2011—
units at end of February 2011
Note: Regarding the number of investment units, a basis for calculating net income per unit, please refer to “Perunit information,” on page 13.

* 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 February 2012 (September 1, 2011 to February 29, 2012) and the period ending August2012 (March 1, 2012 to August 31, 2012),” on page 6.

2

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

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 “Guidance for Preparation of Earnings Briefing for Listed Real Estate
Investment Trusts” (August 2009) released by Tokyo Stock Exchange, 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, 2011).

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, 2011).
(2) Management situation(i) Summary of the 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 ofJapan” (Law No. 198 in 1951 including later revisions, hereinafter the “Investment Trust Law”) and listedon the Tokyo Stock Exchange and Fukuoka Stock Exchange on June 21, 2005 as the nation’s first realestate investment trust specializing in regional properties (code number: 8968). FRC invests in real estatethroughout 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, into strengths.
FRC started asset management activities on November 9, 2004 after acquisition of four properties such ascommercial 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 are integrally developed (hereinafter “Canal City Hakata”). FRC
had a total of 16 properties (excluding anonymous partnership equity interests) in its portfolio as of theend of the previous fiscal period (February 28, 2011), and further acquired a commercial facility in thecurrent fiscal period. As a result, FRC now manages a total of 17 properties comprising ten commercial
facilities, five office buildings and two residential properties as of the end of the current fiscal period(August 31, 2011).
(b) Investment environment and portfolio performance
In the fourteenth fiscal period, the Japanese economy experienced a major slowdown due to the impact of
the Great East Japan Earthquake in March 2011. However, the economy as a whole is slowly picking up
with the halt to the trends of decreases in production and exports, and other such factors being observed.
Nevertheless, difficult conditions still persist, given the impact of the appreciating yen and deflation as
well as lingering concerns over the employment situation worsening among other things. In Kyushu, theprime investment area for FRC, an upturn is seen in production and capital investment amid the fading
impact of a limited supply due to the earthquake, and the region as a whole is expected to get back on
track to recovery. Still, the employment and income situations remain harsh and the future outlook
continues to be opaque.
According to the 2011 Prefectural Land Price Survey, land prices continued to fall throughout Japan for ayear since July 2010. However, the rate of decrease has slowed, and there was an increase in the numberof surveyed sites where the price rose or remained flat. In Fukuoka City, a core investment target area for
FRC, commercial land prices decreased by 2.9% and residential land prices decreased by 1.7% comparedto the previous year, the third consecutive year of decrease for both commercial and residential land.
However, the rate of decrease generally tapered, and some areas saw the land prices increase due to theimpact of the Kyushu Shinkansen (bullet train) starting full operations throughout its full span and otherfactors.
Under such circumstances, FRC practiced strict selection of assets in its investment activities based on its
investment policy. This resulted in the acquisition of Canal City Hakata B on March 2, 2011 for an
acquisition price of 28,700 million yen (the property represents the entire Canal City Hakata as of thesame date excluding the Canal City Hakata retail section, Canal City Theater and offices; hereafter thesame), by executing the right to consummate the reservation of acquiring the property based on theacquisition reservation contract concluded with CCH Bridge Y.K., in which FRC had senior anonymous
partnership equity interest. For existing properties, FRC focused on maintaining and raising occupancy
rates of its owned properties while pouring continuous efforts into operations to enhance competitivenessand customer drawing power at major commercial facilities such as Canal City Hakata. As a result, the3

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

average occupancy rate rose to 99.6% for all properties FRC owns as of the end of the fourteenth fiscal
period.
When analyzing FRC’s portfolio (on an acquisition value basis) by geographic location, properties in the
Fukuoka urban area occupy 75.9% of its portfolio; when analyzing by property type, commercial facilities,
office buildings, and residential properties account for 69.1%, 28.8% and 2.1%, respectively.
(c) Summary of fundraising
In the current fiscal period, FRC raised funds of 8,913 million yen through the issuance of new investment
units (16,000 units) on March 1, 2011 and newly procured funds of 10,500 million yen in total throughborrowings, both for the purpose of acquiring the above-mentioned Canal City Hakata B. For the 7,000
million yen in long-term debt that matured in July 2011, FRC conducted refinance of the entire amountwith loan periods of 7 years (1,000 million yen), 6 years (4,000 million yen in total), 5 years (1,000
million yen) and 4 years (1,000 million yen). As a result, the balance of debt outstanding at the end of thecurrent fiscal period totaled 69,500 million yen, with the loan-to-value ratio at end of period at 44.6%.
Moreover, with regard to the commitment lines that were set up as backup lines for fund procurement,
FRC renewed a commitment line that was to expire in July 2011, with a credit limit of 6,000 million yen
and commitment period of 2 years (in contrast to 5,000 million yen and one year before the revision).
To reduce refinancing risks, FRC will continue to disperse the debt repayment date and increase theaverage length of time until debt maturity.
Furthermore, the credit ratings assigned to FRC as of the end of the current fiscal period are as follows.
Credit Rating Agency
Standard & Poor's Ratings
Japan K.K. (S&P)
Rating and Investment
Information, Inc. (R&I)
Japan Credit Rating Agency,
Ltd. (JCR)

Rating Type
Long-term Corporate Credit Rating

Rating Outlook
StableShort-term Corporate Credit Rating
Issuer Rating

RatingA−
A−2
A+

Long-term Senior Debts Rating

A A−

StableStable(d) Summary of performance and dividend
As a result of these management efforts, operating revenues totaled 7,045 million yen and operating
income after excluding operating expenses such as real estate rent expenses and asset management fees
totaled 2,729 million yen. Ordinary income was 2,083 million yen and net income was 2,082 million yen.
Management decided to make a dividend of 16,922 yen per investment unit to meet the requirements ofspecial 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 ofdividends paid to investors from its taxable income.
(ii) Forecast for the next fiscal period(a) Portfolio management policy
FRC will increase management and rent 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 the most use of their advantages.
FRC will invest 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” that are in“high growth potential markets.” By geographic location, of all of Kyushu and Yamaguchi Prefecture,
FRC invests 60% to 90% of its assets in the Fukuoka urban area, since the Fukuoka urban area is expected
to have 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.
4

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011(b) Significant events that have occurred after the end of the current fiscal period
No relevant items(c) Performance forecast for the next fiscal period
FRC aims to achieve the following performance goals for the period ending February 2012 (September 1,
2011 to February 29, 2012) and the period ending August 2012 (March 1, 2012 to August 31, 2012).
Concerning preconditions for the forecast, please refer to “Preconditions for the performance forecast forthe period ending February 2012 (September 1, 2011 to February 29, 2012) and the period ending August2012 (March 1, 2012 to August 31, 2012),” on page 6.
Period ending February 2012
Operating revenues
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

6,899 million yen
2,006 million yen
2,005 million yen
16,300 yen
0 yen

Period ending August 2012
Operating revenues
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

7,135 million yen
1,969 million yen
1,968 million yen
16,000 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.
(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, 2011).

5

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

Preconditions for the performance forecast for the period ending February 2012 (September 1, 2011 to February 29,2012) and for the period ending August 2012 (March 1, 2012 to August 31, 2012)
Item
Calculation period
Assets undermanagement

Preconditions
15th fiscal period: from September 1, 2011 to February 29, 2012 (182 days)
16th fiscal period: from March 1, 2012 to August 31, 2012 (184 days)
 It is assumed that the portfolio will be comprised of the 17 properties FRC owned as ofAugust 31, 2011 plus a property scheduled to be acquired in the 16th fiscal period.

 In practice, they may fluctuate due to changes in assets under management.
Number of It is assumed that there will be no issuance of new investment units until the end of theinvestment units
fiscal period ending August 2012.
issued and outstanding The balance of interest-bearing debt outstanding on August 31, 2012 is expected to total
73,350 million yen, an increase of 3,850 million yen from the end of the current period(August 31, 2011). The loan-to-value ratio (interest-bearing debt  total assets  100) is
expected to stand at around 46.1% (as of August 31, 2011, the loan-to-value ratio stands at
44.6%).
Interest-bearing debt  In the period ending February 2012, it is assumed that FRC will refinance short-term debt
of 4,500 million yen into long-term debt and that it will refinance long-term debt of 1,500
and refinancing
million yen that will become due for repayment in December 2011 into long-term debt.
 In the period ending August 2012, it is assumed that FRC will newly procure 4,000
million yen (in short-term debt) and refinance long-term debt of 6,000 million yen thatwill become due for repayment in June 2012 into long-term debt.

Operating revenues

Operating expenses

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

 Of real estate rent revenues, revenues from properties FRC has already acquired are
calculated based on tenancy agreements that are valid as of today by taking into accountthe competitiveness of the properties and the market environment.
Of real estate rent revenues, revenues from percentage lease contracts are calculated basedon past results by taking into account sales fluctuation factors of the relevant tenants.
 Concerning real estate rent revenues, tenant vacancies are taken into account to a certain
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 February 2012 and August 2012. 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 1,619 million yen for the period
ending February 2012 and 1,511 million yen for the period ending August 2012.
 Concerning taxes and other public charges, FRC anticipates 412 million yen for the period
ending February 2012 and 584 million yen for the period ending August 2012.
 Concerning depreciation and amortization expenses, FRC anticipates 1,187 million yen forthe period ending February 2012 and 1,262 million yen for the period ending August 2012.
 Concerning interest payment and expenses related to financing, FRC anticipates 594
million yen for the period ending February 2012 and 638 million yen for the period ending
August 2012.
 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 changes in
assets under management and tenants or various factors including unexpected occurrencesof 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.

6

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

3. Financial Statements(1) Balance sheets(thousands of yen)Account

13th fiscal period(as of February 28, 2011)

14th fiscal period(as of August 31, 2011)

AssetsCurrent assets
Cash and deposits

2,437,057

2,568,007

Cash and deposits in trust

4,003,389

4,629,187

Operating account receivable482,755

359,285

Prepaid expenses

207,244

312,106—

451,247

Consumption taxes receivable
Deferred tax assets
Other
Total current assets

19

20

41,59442,984

7,172,061

8,362,839

Noncurrent assets
Property, plant and equipment
Buildings in trust, netAggregate of accumulated depreciation
Structures in trust, netAggregate of accumulated depreciation
Machinery and equipment in trust, netAggregate of accumulated depreciation
Tools and fixtures in trust, netAggregate of accumulated depreciation

55,323,513(8,872,050)

66,104,394
46,451,463

872,899(233,389)

639,509

Lands in trust(262,904)

840,624

351,214231,337

947,475(433,769)

56,176,670

1,103,529

343,702(112,365)(9,927,723)(122,812)

228,402

1,035,745
513,706(500,302)

535,442

68,810,414

87,057,619

Construction in progress in trust

—

7,350

Total property, plant and equipment

116,646,430

144,846,109

1,765,318

1,765,318—

17,385

1,765,318

1,782,704

6,437,933-

Lease and guarantee deposits

10,00010,000

Lease and guarantee deposits in trust

100,000

100,000

Long-term prepaid expenses

365,570

533,100

Total investment and other assets

6,913,504

643,100

125,325,253

147,271,914

Investment unit issuance expenses—

22,394

Total deferred assets—

22,394132,497,314

155,657,148

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

Total noncurrent assets
Deferred assets

Total assets

7

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

(thousands of yen)Account

13th fiscal period(as of February 28, 2011)

14th fiscal period(as of August 31, 2011)

Operating accounts payable

854,716

410,201—4,500,000

8,650,000

7,650,000

Account payable-other

20,995

10,296

Accrued expenses

258,934

296,215

Liabilities
Current liabilities
Short-term debt
Current maturities of long-term debt

Income taxes payable

745

751

Accrued consumption taxes

29,669—Advances received

664,399845,995

Deposits received

518,916

949,491

Total current liabilities

10,998,377

14,662,952

50,425,000

57,350,000

331,515331,515

8,715,440

12,052,750

59,471,955

69,734,265

70,470,333

84,397,218

60,264,380

69,177,628

1,762,601

2,082,302

Total surplus

1,762,601

2,082,302

Total Net Assets

62,026,981

71,259,930

Total net assets

62,026,981

71,259,930

Total liabilities and net assets

132,497,314

155,657,148

Noncurrent liabilities
Long-term debt payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits received intrust
Total noncurrent liabilities
Total liabilities
Net assets
Net Assets
Shareholders’ capital
Surplus
Unappropriated surplus

8

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011(2) Statements of income(thousands of yen)Account

13th fiscal period(September 1, 2010 to
February 28, 2011)

14th fiscal period(March 1, 2011 toAugust 31, 2011)

1. Operating revenues
Rent revenue- real estate

5,281,795

6,826,999

Other rental revenue-real-estate

172,400

218,505

Anonymous partnership distribution

208,000

5,662,195—

7,045,505

2. Operating expenses
Expenses related to rent business

2,874,581

3,803,541

346,129405,509

Asset custody fees

4,922

5,009

Administrative service fees

37,656

38,766

Director’s compensations

9,600

9,600

Other operating expenses

71,933

Asset management fees

Operating income

3,344,823

53,6282,317,372

4,316,055
2,729,450

3. Non-operating revenues
Interest received

708

Other

512

674
1,220

521

1,196

4. Non-operating expenses
Interest payment

458,556

497,140—

4,478

Amortization of investment unit issuance expenses
Financing related expenses

96,362

Other—

107,705
554,918

37,933647,257

Ordinary income

1,763,674

2,083,388

Net income before tax

1,763,674

2,083,388

Income taxes-current

1,094

Income taxes-deferred(0)

Net income

1,110
1,094

(0)

1,110

1,762,579

2,082,278

Retained earnings brought forward

22

23

Unappropriated retained earnings

1,762,601

2,082,302

9

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011(3) Statement of changes in net assets
13th fiscal period (September 1, 2010 to February 28, 2011)(thousands of yen)
Net Assets
Item

Balance as of August 31, 2010

Retained earnings

Shareholders’capitalUnappropriatedretained earnings

Total
Net Assets

Total
net assets

60,246,380

1,796,642

62,061,022

62,061,022

Dividend of retained earnings—(1,796,620)(1,796,620)(1,796,620)

Net income—

1,762,579

1,762,579

1,762,579—(34,040)(34,040)(34,040)

60,264,380

1,762,601

62,026,981

62,026,981

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of February 28, 2011

14th fiscal period (March 1, 2011 to August 31, 2011)(thousands of yen)
Net Assets
Item

Balance as of February 28, 2011

Retained earnings

Shareholders’capitalUnappropriatedretained earnings

Total
Net Assets

Total
net assets

60,246,380

1,762,601

62,026,981

62,026,981

8,913,248—

8,913,248

8,913,248

Dividend of retained earnings—(1,762,578)(1,762,578)(1,762,578)

Net income—

2,082,278

2,082,278

2,082,278

Total of changes in the current fiscal period

8,913,248

319,700

9,232,948

9,232,948

Balance as of August 31, 2011

69,177,628

2,082,302

71,259,930

71,259,930

Changes in the current fiscal period
Issuance of new investment units

10Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

(4) Dividend statement
13th fiscal period(September 1, 2010 to February 28, 2011)

14th fiscal period(March 1, 2011 to August 31, 2011)

I. Unappropriated retained earnings

1,762,601 thousand yen

2,082,302 thousand yen

II. Total

1,762,578 thousand yen

2,082,252 thousand yen(16,465 yen)

(16,922 yen)

23 thousand yen

50 thousand yen

Account(Dividend per investment unit)

III. Retained earnings brought forward

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 profits as stipulated
in Article 67-15 of the Special Taxation
Measures Law of Japan. Following theabove policy, FRC shall decide to
distribute 2,082,252 thousand yen,which is almost the entire amount of
unappropriated retained earnings, asearnings dividends. Moreover, dividendin excess 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.
Method for calculating dividends

The amount of dividends shall be decidedin accordance with the dividend policy
stipulated in Article 38-1-1 of FRC’s
Articles of Incorporation and must exceed
90% of FRC’s distributable profits as
stipulated in Article 67-15 of the Special
Taxation Measures Law of Japan.
Following the above policy, FRC shalldecide to distribute 1,762,578 thousand
yen, which is almost the entire amount of
unappropriated retained earnings, asearnings dividends. Moreover, dividend inexcess of earnings as stipulated in Article38-2 of FRC’s Articles of Incorporation
will not be provided.

11

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

(5) Cash flows statements(thousands of yen)
13th fiscal period(September 1, 2010 to
February 28, 2011)

Account

14th fiscal period(March 1, 2011 toAugust 31, 2011)

I. Net cash provided by (used in) operating activities
Net income before taxes
Depreciation expenses
Amortization of investment unit issuance expenses
Interest received
Interest payment
Decrease (increase) in operating account receivables
Decrease (increase) in consumption taxes receivable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in operating account payable
Increase (decrease) in account payable-other
Increase (decrease) in accrued expenses
Increase (decrease) in advance received
Increase (decrease) in deposits expenses
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest received
Interest payment
Income tax paid
Income tax refund
Net cash provided by (used in)operating activities

1,763,674
958,204—(708)
458,556
42,922—(13,211)71,045(47,605)(7,820)(4,852)(256,776)
36,03837,433
1,229
3,038,128
708(463,894)(42,471)
13,4372,545,908

2,083,388
1,164,305
4,478
(674)
497,140
123,469(451,247)(29,669)(4,657)(10,354)
36,571
181,596
430,574(104,861)(167,350)
38,493
3,791,114
674(496,431)(42,479)
41,392
3,294,270

II. Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets in trust
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits in trust
Repayment of tenant leasehold and security deposits in trust
Redemption of investment securities
Net cash provided by (used in) investment activities(148,945)
—
120
(60)
34,494(48,426)—(162,817)(29,805,063)(18,704)30(30)
3,606,951(269,641)
6,400,000(20,086,457)

III. Net cash provided by (used in) financing activities
Increase in short-term debt payable
Decrease in short-term debt payable
Proceeds from long-term debt payable
Repayment of long-term debt payable
Proceeds from issuance of investment units
Dividends paid
Payment of investment unit issuance expenses
Net cash provided by (used in) financing activities—(300,000)
1,800,000(1,575,000)—(1,796,614)—(1,871,614)

31,500,000(27,000,000)
1,300,000(7,075,000)
8,913,248(1,762,440)(26,872)(17,548,935)

IV. Net increase (decrease) in cash and cash deposits

511,476

756,747

V. Balance of cash and cash deposits at beginning of period

5,928,970

6,440,447

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

6,440,447

7,197,195

12

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

(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 May 27, 2010).
(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 andrental properties, since it does not find substantial need for disclosure in the earnings briefing.
(Per unit information)
13th fiscal period(September 1, 2010 to February 28, 2011)
Net assets per investment unit:
579,420 yen
Net income per investment unit: 16,465 yen

14th fiscal period(March 1, 2011 to August 31, 2011)
Net assets per investment unit:
579,113 yen
Net income per investment unit: 16,922 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.

Net income per investment unit is calculated by dividing
net income by the weighted average number of investment
units issued and outstanding during the fiscal period.

Diluted net income per investment unit is not shownsince there are no potential investment units.

Diluted net income per investment unit is not shown since
there are no potential investment units.

Note: Calculation of net income per investment unit is based on the following.
13th fiscal period(September 1, 2010
to February 28, 2011)

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)

14th fiscal period(March 1, 2011 toAugust 31, 2011)

1,762,579

2,082,278——

1,762,579

2,082,278

107,050

123,050(Significant subsequent events)
13th fiscal period(September 1, 2010 to February 28, 2011)
Based on the basic asset investment policy stipulated in
the Articles of Incorporation, we acquired the following
property:
Property acquired: Real estate trust beneficiaryinterest
Property name: Canal City Hakata B
Location: Fukuoka City, Fukuoka
Acquisition price: 28,700 million yen
Acquisition date: March 2, 2011
Seller: CCH Bridge Y.K.

14th fiscal period(March 1, 2011 to August 31, 2011)—13

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011(9) Change in the number of investment units issued and outstanding
Changes in unitholders’ capital from the incorporation of FRC to the end of the current fiscal period are as follows.
Date
July 2, 2004

Item

Number of investment units
issued and outstanding (units)
Increase
Balance250
250Unitholders’ capital(millions of yen)
Increase
Balance125
125Remarks

Established through private(Note 1)placement
November 8, 2004 Additional issue of investment
82,80083,05041,40041,525 (Note 2)units through private offering
June 20, 2005
Additional issue of new
7,000
90,0505,944
47,469 (Note 3)
investment units through initialpublic offering
July 21, 2005
Additional issue of new
2,000
92,0501,698
49,167 (Note 4)
investment units throughthird-party allotment
September 7, 2006 Additional issue of new
15,000107,050
11,09660,264 (Note 5)
investment units through public
offering
March 1, 2011
Additional issue of new
16,000123,050
8,913
69,177 (Note 6)
investment units through public
offering
Note 1: FRC was established with an issue of investment units at 500,000 yen per unit.
Note 2: New investment units were issued through private offering at the issue price of 500,000 yen per unit for the purpose of
procuring funds for acquiring new properties, etc.
Note 3: New investment units were issued through public offering at the issue price of 880,000 yen per unit (purchase price of
849,200 yen) for the purpose of procuring funds for acquiring new properties, etc.
Note 4: New investment units were issued through third-party allotment at the issue price of 849,200 yen per unit.
Note 5: New investment units were issued through public offering at the issue price of 766,300 yen per unit (purchase price of
739,772 yen) for the purpose of procuring funds for acquiring new properties, etc.
Note 6: New investment units were issued through public offering at the issue price of 576,083 yen per unit (purchase price of
557,078 yen) for the purpose of procuring funds for acquiring new properties, etc.

14

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

4. Change in Directors(1) Change in directors in FRC
No relevant items.
(2) Change in directors in Fukuoka Realty Co., Ltd.
(June 21, 2011) Resignation of Akira Eto as Director (part-time)(June 21, 2011) Appointment of Etsuo Matsuyuki as Managing Director
Directors of FRC are as follows as of October 12, 2011.
Title

Name

CEO and
Representative
Director

Masayasu Saki

Career Summary
April 1969

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

April 1985

Assistant Branch Manager of London Branch of the
Nippon Credit Bank, Ltd.

June 1987

President of Nippon Credit International (a securities
company incorporated in England)

June 1992

Member of the Board and Tokyo Branch Manager

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.
(currently, Promise 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 position)

15

Number ofshares held
0

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

Title
Managing
Director

Managing
Director

Name
Yoichi Nishio

Etsuo Matsuyuki

Career Summary
April 1985

Joined The Nippon Credit Bank, Ltd. (presently
Aozora Bank, Ltd.)

September 2005

General Manager, Real Estate Finance Division at
Aozora Bank.

July 2008

Senior Vice President of New City Corporation

January 2009Managing Director and CFO of Fukuoka Realty Co.,Ltd.

June 2011

Managing Director of Fukuoka Realty Co., Ltd.
(current position)
Joined Japan Development Bank (presently
Development Bank of Japan)

April 1980
June 2004

Senior Counselor, Human Resources Management
Department at Japan Development Bank

April 2005

General Manager, General Affairs Department at
Japan Development Bank

July 2006

Seconded to Fukuoka Jisho Co., Ltd.

Number ofshares held
00

Deputy Director of Development Unit of Fukuoka
Jisho Co., Ltd.
July 2009

Joined Fukuoka Jisho Co., Ltd.
Executive Director of Fukuoka Jisho Co., Ltd.
(current position)
Deputy Director of Development Unit and General
Manager of Building Division

August 2010

Officer in Accounting Division and representative incharge of Administration Division of Fukuoka Jisho
Co., Ltd.

June 2011

Managing Director and Head of Planning Dept. of
Fukuoka Realty Co., Ltd. (current position)
Note: Masayasu Saki, CEO & Representative Director of Fukuoka REIT Corporation also serves as CEO of Fukuoka Realty Co.,
Ltd. The concurrent assignment was approved by the Commissioner of the Financial Services Agency as of June 22, 2006,
based on Article 13 of the Act on Investment Trusts and Investment Corporations before revision, pursuant to the provisionsof Article 5 of the Act for Partial Revision of the Securities and Exchange Act (Act No. 65 of 2006).

16

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

Title

Name

Director(part-time)

Yasumichi
HinagoDirector(part-time)

Auditor(part-time)

Hiroshi
Shimuta

Masanori Tasaka

Career Summary
April 1968

Joined Kyushu Electric Power Co., Inc.

June 2000

General Manager, Material Department of Kyushu
Electric Power Co., Inc.

July 2002

General Manager, Material and Fuel Department of
Kyushu Electric Power Co., Inc.

June 2003

Saga Branch Manager of Kyushu Electric Power Co.,Inc.

July 2003

Executive Officer and Saga Branch Manager ofKyushu Electric Power Co., Inc.

June 2005

Senior Managing Executive Officer of Kyushu
Electric Power Co., Inc.

June 2007

Executive Vice President of Kyushu Electric Power
Co., Inc.

June 2007

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

June 2009
October 2000

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

December 2003

Auditor of Fukuoka Realty Co., Ltd.

April 2004

General Manager, Compliance Office of Fukuoka
Realty Co., Ltd.

April 2005

General Manager, Compliance Department of
Fukuoka Realty Co., Ltd.

June 2007

Joined Nishimura & Tokiwa (presently Nishimura &Asahi) (current position)

June 2007

Director of Fukuoka Realty Co., Ltd. (current
position)
Joined The Fukuoka Sogo Bank, Ltd. (presently The
Nishi-Nippon City Bank, Ltd.)

April 1978
August 2000

July 2003

Deputy General Manager, Planning Division of The
Fukuoka Sogo Bank, Ltd.
General Manager, Planning Division and General
Manager, Risk Management Office of the Fukuoka
Sogo Bank, Ltd.

October 2004

Senior Manager in the Corporate Planning Division,
The Nishi-Nippon City Bank, Ltd.

April 2005

Seconded to NCB Management Information Service
Co., Ltd. (presently NCB Research & Consulting Co.,
Ltd.), appointed General Manager of the Business
Alliance Division

April 2006

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

June 2006

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

17

Number ofshares held000

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011

5. Reference Information(1) Investment situation(as of August 31, 2011)
Type of asset

PurposeCommercial
facility
Real estate in
Trust

Office building
Residential
property

Total value of
properties held(millions of yen)
(Note 2)

Location(Note 1)

Percentage of
total assets(%)(Note 3)

Fukuoka urban area

66,886

43.0

Other Kyushu areas

35,902

23.1

Fukuoka urban area

40,802

26.2

Other Kyushu areas——

Fukuoka urban area

3,029

1.9

Other Kyushu areas——

146,62194.2

Subtotal

Deposits and other assets
9,035
5.8
Total amount of assets
155,657
100.0(Note 5)(146,628)(94.2)
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 2005 census, which states “the number of workers and students aged 15 years orolder 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) and Yamaguchi Prefecture.
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 numbers 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 August 31, 2011)
Percentage of total amount of assets(%)

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

84,397

54.2

Total amount of net assets

71,25945.8(2) Investment assets(i) Primary issues of investment securities
No relevant items.

18

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011(ii) Real estate investment portfolio(a) Values and investment ratios at end of period are as follows.
(as of August 31, 2011)
Acquisition
value(millions ofyen)(Note 1)

Value onbalancesheet(millions ofyen)

Period-end
appraisal value(millions ofyen)(Note 2)

Investment
ratio
(%)
(Note 3)

Canal City Hakata

32,00031,35733,400

21.4

Tanizawa Sogo Appraisal
Co., Ltd.

Park Place Oita

15,70016,70816,700

10.5

Japan Real Estate Institute

SunLive City Kokura

6,633

6,211

7,350

4.4

Japan Real Estate Institute

5,300

4,911

4,910

3.5

Japan Real Estate Institute

2,400

2,247

2,430

1.6

Japan Real Estate Institute

5,410

5,462

4,690

3.6

Japan Real Estate InstituteHanahata SC

1,130

1,091

1,170

0.8

Kurume Higashi
Kushiwara SC

2,500

2,382

2,520

1.7

K’s Denki Kagoshima

3,550

3,440

3,400

2.4

Canal City Hakata B

28,70028,97328,70019.2

103,323

102,789

105,270

69.1

14,60014,091

14,9009.8

11,200

10,22012,900

7.5

4,400

4,289

4,690

2.9

Japan Real Estate Institute

7,000

6,643

6,640

4.7

Japan Real Estate Institute

5,900

5,557

6,070

3.9

Tanizawa Sogo Appraisal
Co., Ltd.

43,10040,80245,200

28.8

2,060

1,948

1,650

1.4

City House Keyaki Dori

1,111

1,081

1,000

0.7

Residential properties
subtotal:

3,171

3,029

2,650

2.1

Total

149,594

146,621

153,120

100.0

Name of property

Square Mall
Kagoshima Usuki
Kumamoto
Intercommunity SC
AEON Hara Shopping
Center (Note 4)

Commercial facilities
subtotal:
Canal City BusinessCenter Building
Gofukumachi
Business Center
Sanix Hakata Building
Taihaku Street
Business Center
Higashi Hie
Business Center
Office buildings
subtotal:
Amex
Akasakamon Tower

Real estate appraiser

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal 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 numbers are rounded off to one decimal place.
Note 4: Hara SATY’s (asset under management) name was changed to AEON Hara Shopping Center as of March 1, 2011;
hereafter the same.

19

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2011(b) Summary of the real estate rental business

Name of property

Number oftenants(Note 1)

Occupancy
Total
Total
rate
leasable space leased space
(%)
(m2)
(m2)
(Note 3)(as of August 31, 2011)
Percentage of
Total
total
rental revenues
rental revenues(millions of yen)(%)
(Note 4)(Note 5)
1,286
18.3

Canal City Hakata

1 (50)

99.5

45,978.62

45,769.82

Park Place Oita
SunLive
City Kokura
Square Mall
Kagoshima Usuki
Kumamoto
Intercommunity SC
AEON Hara Shopping
CenterHanahata SC
Kurume Higashi
Kushiwara SC
K’s Denki Kagoshima

1

99.7

103,949.58

103,650.66

990

14.1

1

100.0

61,450.22

61,450.22

292

4.2

11

100.0

14,661.72

14,661.72

253

3.6

2

100.0

6,968.66

6,968.66

90

1.3

1

100.0

27,580.75

27,580.75

212

3.0

2

100.0

2,801.15

2,801.15

40

0.6

1

100.0

6,467.80

6,467.80

88

1.2

1

100.0

7,296.17

7,296.17

111

1.6

1 (45)
22 (219)(Note 2)100.0

63,684.73

63,684.73

1.619

23.0

99.9

340,839.40

340,331.68

4,986

70.8

1

99.4

23,050.30

22,904.60

600

8.5

21

97.2

19,907.91

19,354.70

519

7.4

15

95.8

6,293.76

6,029.55

193

2.8

Canal City Hakata B
Commercial
facilities subtotal:
Canal City BusinessCenter Building
Gofukumachi
Business Center
Sanix Hakata
Building
Taihaku Street
Business Center
Higashi Hie BusinessCenterOffice buildings
subtotal:
Amex
Akasakamon Tower
City House
Keyaki DoriResidential
properties subtotal:
Note 1:

Note 2:
Note 3:Note 4:Note 5:

(105)

(59)

1

(66)

98.0

14,653.95

14,357.44

299

4.3

1

(14)

100.0

13,695.51

13,695.51

341

4.8

39 (175)(Note 2)

98.4

77,601.43

76,341.80

1,955

27.7

1

(65)

98.7

4,755.14

4,694.94

66

0.9

1

(43)

100.0

2,710.86

2,710.86

37

0.5

2 (108)99.2
7,466.00
7,405.80
104
1.5(Note 2)63 [502]
Total
99.6
425,906.83
424,079.28
7,045
100.0
(Note 2)
“Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for commercial andoffice buildings among relevant properties. For the number of tenants in pass-through master leasing properties, the numberof sections stipulated in the tenancy agreements with end tenants is shown in parentheses. The Taihaku Street BusinessCenter is an office building with a residential tower. Its number of tenants comprises 11 offices and 55 residents.
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.”“Occupancy rate” refers to the percentage of total leased space to total leasable space and the numbers are rounded off to
one decimal place.
“Total rental revenues” are the total of real estate rent revenues and other revenues from real estate rent in the current fiscal
period.
“Percentage of total rental revenues” is obtained by dividing each property’s total rental revenues by the total amount of
total rental revenues. The total of individual percentages in the above table may not equal 100%, since the numbers arerounded off to one decimal place.

(3) Investment target
The disclosure is omitted, since there are no significant changes from “Investment target” disclosed by the latest
securities report (submitted on May 27, 2011).

20