Provisional translation only
April 8, 2010

EARNINGS BRIEFING
FOR THE PERIOD ENDED FEBRUARY 2010
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: Yoichi Nishio
Managing Director, and Head of Finance Department
Phone: +81-92-272-3900
Expected date for submitting securities report:
May 20, 2010
Expected commencement date of dividend payments: May 18, 2010
(Figures rounded down to nearest million yen.)

1. PERFORMANCE AND SITUATION OF ASSETS FOR THE PERIOD ENDED FEBRUARY
2010 (September 1, 2009 to February 28, 2010)(1) Performance
Operating revenues
Millions of%yen
Period ended
February 2010
Period ended
August 2009

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

5,640

0.3

2,408

1.5

1,863

0.1

1,862

0.1

5,621

2.8

2,371

(1.4)

1,861

(3.7)

1,860

(3.7)

Net income
per unit
Period ended
February 2010
Period ended
August 2009

Ratio ofordinary income to total
assetsReturn on
net assets

Ratio ofordinary income tooperating revenues

17,397 yen

3.0%

1.4%

33.0%

17,376 yen

3.0%

1.5%

33.1%

(2) Dividends
Dividend
per unit(excl. dividendin excess ofearnings)
Period ended
February 2010
Period ended
August 2009

Total
dividend

Dividendin excess ofearnings
per unit

Total
dividendin excess ofearnings

Payoutratio

Ratio ofdividend to
net assets

17,397 yen

1,862 million yen

0 yen

0 million yen

100.0%

3.0%

17,377 yen

1,860 million yen

0 yen

0 million yen

100.0%

3.0%(3) Financial condition
Total assets
Period ended
February 2010
Period ended
August 2009

130,705
million yen
130,836
million yen

Net assets

Ratio ofnet assets to total assets

Net assets per unit

62,126 million yen

47.5%

580,352 yen

62,124 million yen

47.5%

580,332 yen(4) Cash flows condition
Cash flows fromoperatingactivities
Period ended
February 2010
Period ended
August 2009

Cash flows frominvesting activities

Cash flows fromfinancing activities

Balance of
cash and cash equivalents at
end of period

3,150 million yen(233) million yen(1,928) million yen

6,877 million yen

2,338 million yen(5,966) million yen

3,467 million yen

5,889 million yen

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

2. FORECAST OF PERFORMANCE FOR THE PERIOD ENDING AUGUST 2010
(March 1, 2010 to August 31, 2010) AND THE PERIOD ENDING FEBRUARY 2011
(September 1, 2010 to February 28, 2011)

Operatingrevenues
Millionsof yenOperatingincome%Millionsof yenOrdinary
income%Millionsof yen%(% shows percentage change from previous period.)
Dividend
Net
Dividend
per unit
incomein excess of(excl. dividend
earnings
Millions
in excess of%
per unitof yenearnings)

Periodending
5,619
(0.4)
2,355
(2.2)
1,788
(4.0)
1,787
(4.0)
August2010
Periodending
5,595
(0.4)
2,350
(0.2)
1,777
(0.6)
1,776
(0.6)
February
2011(Reference)Forecast net income per unit: Period ending August 2010 16,700 yen
Period ending February 2011 16,600 yen

16,700 yen

0 yen

16,600 yen

0 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):
107,050 units at end of February 2010
107,050 units at end of August 2009(ii) Treasury investment units at end of period:— units at end of February 2010
— units at end of August 2009
(Note) Regarding the number of investment units, a basis for calculating net income per unit, please refer to “Perunit 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 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 2010 (March 1, 2010 to August 31, 2010) and the period ending February 2011
(September 1, 2010 to February 28, 2011),” on page 5.

2

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

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 November 24, 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 November 24, 2009).
(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
now has a total of 16 properties (excluding anonymous partnership equity interests)—nine commercial
facilities, five office buildings, and two residential properties—in its portfolio as of the end of the current
fiscal period (February 28, 2010).
(b) Investment environment and portfolio performance
In the current fiscal period, the Japanese economy entered a phase of recovery, leaving the worst behind,backed by increases in production and exports, the effects of economic policies and other factors. However,due in part to the prolonged severe employment and income situation, it was still early yet for afull-fledged recovery. Similarly in the Kyushu area, a primary area of FRC’s investment target area,
although the worst is behind, the economy still continues to be under severe circumstances, as evident by
the ratio of job offers to job seekers being at levels below the national average, large-scale retail store sales
performing poorly and other statistics.
According to the land price trends indicated by the 2010 Public Notice of Land Prices (by the Ministry ofLand, Infrastructure, Transport and Tourism), land prices declined for 99.6% of sites in Japan. In Fukuoka
City, a core investment target area for FRC, commercial land prices decreased by 10.1% and residential
land prices decreased by 3.3% compared to the previous year, for the second consecutive year of decreasein land prices for both commercial and residential land.
Under such circumstances, FRC remained dedicated to enhancing the competitiveness and ability to draw
customers of major commercial facilities such as Canal City Hakata and focused on maintaining andraising the occupancy rate of owned properties. Consequently, the occupancy rate of all properties FRC
owns stood at 99.1% on average 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 by property 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 implemented no new borrowing of funds, and refinanced a part (600
million yen) of its debt under committed line of credit into long-term debt. As a result, the balance of debt
outstanding at the end of the current fiscal period totaled 57,225 million yen, with the loan-to-value ratio
at 43.8%. To reduce refinancing risks, FRC will continue to disperse the debt repayment date and increase
the average length of time until debt maturity.
3

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010(d) Summary of performance and dividend
As a result of these management efforts, operating revenues totaled 5,640 million yen and operating
income after excluding operating expenses such as real estate rent expenses and asset management fees
totaled 2,408 million yen. Ordinary income was 1,863 million yen and net income was 1,862 million yen.
Management decided to make a dividend of 17,397 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 the greatest population growth of any urban area in Japan in the future. In addition to the Fukuoka
urban area, management has decided to actively acquire properties in major cities, if there are regions orproperties where FRC can generate 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 with the local business communityand governments, so that investors 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) Performance forecast for the next fiscal period
FRC aims to achieve the following performance goals for the period ending August 2010 (March 1, 2010
to August 31, 2010) and the period ending February 2011 (September 1, 2010 to February 28, 2011).
Concerning preconditions for the forecast, please refer to “Preconditions for the performance forecast forthe period ending August 2010 (March 1, 2010 to August 31, 2010) and the period ending February 2011
(September 1, 2010 to February 28, 2011),” on page 5.
Period ending August 2010
Operating revenues
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

5,619 million yen
1,788 million yen
1,787 million yen
16,700 yen
0 yen

Period ending February 2011
Operating revenues
Ordinary income
Net income
Dividend per unit
Dividend in excess of earnings per unit

5,595 million yen
1,777 million yen
1,776 million yen
16,600 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.
(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 November 24, 2009).
4

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

Preconditions for the performance forecast for the period ending August 2010 (March 1, 2010 to August 31, 2010) andfor the period ending February 2011 (September 1, 2010 to February 28, 2011)
Item
Calculation period
Assets undermanagement

Preconditions
12th fiscal period: from March 1, 2010 to August 31, 2010 (184 days)
13th fiscal period: from September 1, 2010 to February 28, 2011 (181 days)• It is assumed that there will be the 16 properties and senior anonymous partnership equity
interests (including the interests of 3,000 million yen additionally acquired on March 11,2010) FRC owns as of February 28, 2010.
• 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 February 28,
investment units
2011.
issued and outstanding• The balance of interest-bearing debt outstanding on February 28, 2011 is expected to total
59,075 million yen, an increase of 1,850 million yen from the end of the current period(February 28, 2010). The loan-to-value ratio (interest-bearing debt ÷ total assets × 100) is
expected to stand at around 44.8% (as of February 28, 2010, the loan-to-value ratio stands
at 43.8%).
Interest-bearing debt • In the period ending August 2010, it is assumed that FRC will refinance short-tem debt of
2,000 million yen that was borrowed to acquire senior anonymous partnership equity
and refinancing
interests and a part of short-term debt into long-term debt, and refinance long-term debt of
10,000 million yen that will become due for repayment in July 2010 into long-term debt.
• In the period ending February 2011, it is assumed that FRC will refinance long-term debt
of 1,500 million yen that will become due for repayment in December 2010 into long-term
debt.
• 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.
Operating revenues• 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.
• Concerning senior anonymous partnership equity interests, anonymous partnership
distribution is calculated based on the conditions stipulated in each anonymous partnershipcontract.
• 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 2010 and February 2011. Actual repair costs may differ significantly fromthe estimated amounts since there is the possibility that repair costs are incurred urgently
Operating expenses
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 1,001 million yen for the period
ending August 2010 and 992 million yen for the period ending February 2011.
• Concerning taxes and other public charges, FRC anticipates 415 million yen for the period
ending August 2010 and 415 million yen for the period ending February 2011.
• Concerning depreciation and amortization expenses, FRC anticipates 960 million yen forthe period ending August 2010 and 972 million yen for the period ending February 2011.
• Concerning interest payment and expenses related to financing related expenses, FRC
Non-operating
anticipates 568 million yen for the period ending August 2010 and 574 million yen for the
expensesperiod ending February 2011.
• Dividend (dividend per unit) is calculated based on the dividend policy stipulated in
FRC’s Articles of Incorporation.
Dividend per unit
• 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• Dividend in excess of earnings (dividend in excess of earnings per unit) is not planned atof earnings per unit
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.
Other• It is also assumed that there will be no significant unexpected changes in general
economic conditions and the real estate market.

5

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

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

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

11th fiscal period(as of February 28, 2010)

AssetsCurrent assets
Cash and diposits

1,908,355

2,910,719

Cash and deposits in trust

3,980,854

3,966,739

Operating account receivable

418,382

367,673

Prepaid expenses

200,943

138,275

Consumption taxes receivable

151,714—

Deferred tax assets
Other
Total current assets

19

20

31,29931,333

6,691,569

7,414,761

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

54,642,221(6,282,662)

54,741,293
48,359,558

828,689(151,445)

677,243

Lands in trust
Total property, plant and equipment(181,303)

650,355

342,282
256,665

701,261(270,466)

47,598,557

831,659

338,698(82,033)(7,142,735)(92,081)250,200

736,664
430,795(325,447)

411,217

68,810,414

68,810,414

118,534,677

117,720,747

1,765,318

1,765,318

1,765,318

1,765,318

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

3,421,633

3,421,633

Lease and guarantee deposits

10,00010,000

Lease and guarantee deposits in trust

100,000

100,000

Long-term prepaid expenses

312,920

273,205

Total investment and other assets

3,844,554

3,804,839

124,144,549

123,290,904

130,836,119

130,705,666

Total noncurrent assets
Total assets

6

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

(thousands of yen)Account

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

11th fiscal period(as of February 28, 2010)

Liabilities
Current liabilities
Operating accounts payable

270,844431,609

Short-term debt

3,800,000

3,200,000

Current maturities of long-term debt

10,150,000

11,650,000

Account payable-other

19,111

22,571

Accrued expenses

266,317

267,770

Income taxes payable

634

701

Accrued consumption taxes—

168,865

Advances received

672,539

653,952

Deposits received

775,560

535,740

Total current liabilities

15,955,007

16,931,211

43,350,000

42,375,000

331,485

331,575

9,075,039

8,941,128

52,756,524

51,647,703

68,711,531

68,578,914

60,264,380

60,264,380

1,860,208

1,862,371

Total surplus

1,860,208

1,862,371

Total Net Assets

62,124,588

62,126,751

Total net assets

62,124,588

62,126,751

Total liabilities and net assets

130,836,119

130,705,666

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

7

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010(2) Statements of income(thousands of yen)Account

10th fiscal period(March 1, 2009 toAugust 31, 2009)

11th fiscal period(September 1, 2009 to
February 28, 2010)

1. Operating revenues
Rent revenue- real estate

5,300,111

5,318,986

Other rental revenue-real-estate

185,458

185,666

Anonymous partnership distribution

136,000

5,621,570

136,000

5,640,652

2. Operating expenses
Expenses related to rent business

2,780,027

2,761,070

Asset management fees

344,255

345,484

Asset custody fees

11,047

11,354

Administrative service fees

34,91038,372

Director’s compensations

9,600

9,600

Other operating expenses

69,974

Operating income

3,249,815

66,437

2,371,754

3,232,319
2,408,333

3. Non-operating revenues
Interest received

2,839

Other

872

1,673
3,711

2,813

4,487

4. Non-operating expenses
Interest payment

439,899472,636

Amortization of investment unit issuance expenses

8,412

—

Financing related expenses

65,903

Ordinary income

514,215

76,704

1,861,250

Net income before tax

1,863,479

1,861,250

Income taxes-current

1,074

Income taxes-deferred(1)

Net income

549,341

1,863,479
1,109

1,073

(1)

1,107

1,860,176

1,862,371

Retained earnings brought forward

31

0

Unappropriated retained earnings

1,860,208

1,862,371

8

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010(3) Statement of changes in Net Assets
10th fiscal period (March 1, 2009 to August 31, 2009)(thousands of yen)
Net Assets
Item

Balance as of February 28, 2009

Shareholders’capitalRetained earnings
Unappropriatedretained earnings

Total
Net Assets

Total
net assets

60,264,380

1,932,176

62,196,556

62,196,556

Dividend of retained earnings—(1,932,145)(1,932,145)(1,932,145)

Net income—

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

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of August 31, 2009

11th fiscal period (September 1, 2009 to February 28, 2010)(thousands of yen)
Net Assets
Item

Balance as of August 31, 2009

Shareholders’capitalRetained earnings
Unappropriatedretained earnings

Total
Net Assets

Total
net assets

60,246,380

1,860,208

62,124,588

62,124,588

Dividend of retained earnings—(1,860,207)(1,860,207)(1,860,207)

Net income—

1,862,371

1,862,371

1,862,371

—

2,163

2,163

2,163

60,264,380

1,862,371

62,126,751

62,126,751

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of February 28, 20109

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

(4) Dividend statement
Account

10th fiscal period

11th fiscal period(March 1, 2009 to August 31, 2009)(September 1, 2009 to February 28, 2010)

I. Unappropriated retained earnings

1,860,208 thousand yen

1,862,371 thousand yen

II. Total

1,860,207 thousand yen

1,862,348 thousand yen(17,377 yen)

(17,397 yen)

0 thousand yen

22 thousand yen(Dividend per investment unit)

III. Retained earnings brought forward

The amount of dividends shall be
The amount of dividends shall bedecided in accordance with thedecided in accordance with thedividend policy stipulated in Article dividend policy stipulated in Article
38-1-1 of FRC’s Articles of38-1-1 of FRC’s Articles ofIncorporation and must exceed 90% Incorporation and must exceed 90%
of FRC’s distributable earnings asof FRC’s distributable earnings as
stipulated in Article 67-15 of the
stipulated in Article 67-15 of theSpecial Taxation Measures Law ofSpecial Taxation Measures Law ofJapan. Following the above policy,
Japan. Following the above policy,
FRC shall decide to distribute
FRC shall decide to distribute
1,862,348 thousand yen, which is1,860,207 thousand yen, which isalmost the entire amount ofalmost the entire amount of
unappropriated retained earnings, as unappropriated retained earnings, asearnings dividends. Moreover,earnings dividends. Moreover,dividend in excess of earnings as
dividend in excess of earnings as
stipulated in Article 38-2 of FRC’s
stipulated in Article 38-2 of FRC’s
Articles of Incorporation will not be Articles of Incorporation will not beprovided.
provided.
(Note) Concerning amounts other than dividend per investment unit, fractions of 1,000 yen are omitted.
Method for calculating dividends

10Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

(5) Cash flows statements(thousands of yen)
10th fiscal period(March 1, 2009 toAugust 31, 2009)

Account

11th fiscal period(September 1, 2009 to
February 28, 2010)

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 taxed refund 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

1,861,250
950,963
8,412(2,839)439,899(133,682)(151,714)(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

1,863,479
954,958—(1,673)472,636
50,709151,714
168,865
120,360(3,359)1,645(18,587)(240,825)
62,66839,715210
3,622,518
1,673(472,829)(28,168)
27,326
3,150,519

II. Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible asset 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
Payments of lease and guarantee deposits in trust
Net cash provided by (used in) investment activities(4,283,002)(1,765,318)
331,695(210)
103,294(253,300)(100,000)(5,966,841)(100,061)—
90—
77,511(211,422)—(233,882)

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
Dividends paid
Net cash provided by (used in) financing activities

30,400,000(28,000,000)
15,000,000(12,000,000)(1,932,132)
3,467,867

19,200,000(19,800,000)
600,000(75,000)(1,853,388)(1,928,388)

IV. Net increase (decrease) in cash and cash deposits(160,268)

988,248

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

6,049,478

5,889,210

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

5,889,210

6,877,458(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 24, 2009).
11

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 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, securities, derivative transactions, retirement benefits,
tax-effect accounting, and related-party transactions, since it does not find substantial need for disclosure in theearnings briefing.
(Per unit information)
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

11th fiscal period(September 1, 2009 to February 28, 2010)
Net assets per investment unit:
580,352 yen
Net income per investment unit: 17,397 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 ofinvestment 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 shownsince there are no potential investment units.

(Note) Calculation of net income per investment unit is based on the following.
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)

10th fiscal period(March 1, 2009 toAugust 31, 2009)

11th fiscal period(September 1, 2009 to
February 28, 2010)

1,860,176

1,862,371——

1,860,176

1,862,371

107,050

107,050(Significant subsequent events)
10th fiscal period(March 1, 2009 to August 31, 2009)
No relevant items

11th fiscal period(September 1, 2009 to February 28, 2010)Same as on the left

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

12

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

4. Change in Directors(1) Change in directors in FRC
No relevant items(2) Change in directors in Fukuoka Realty Co., Ltd.
(October 7, 2009) New appointment of Shinya Kato as Senior Managing Director
Directors of Fukuoka Realty Co., Ltd. are as follows as of April 8, 2010.
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

Number ofshares held0

CEO & Representative Director of
Fukuoka REIT Corporation (current
position)(Note) Masayasu Saki, CEO of Fukuoka Realty Co., Ltd., also serves as CEO & Representative Director of Fukuoka REIT
Corporation. In conformity with Article 13 of the Investment Trust Law (before revision), he obtained approval for
concurrently serving the positions from the Commissioner of the Financial Services Agency as of June 22, 2006.

13

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

Title

Name

Career Summary

Vice President
and Director

Takeshi Okuma

April 1975

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.)

SeniorManaging
Director

SeniorManaging
Director

Yoichi Nishio

Shinya Kato

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 UFJ, Ltd.)

April 1990

Number ofshares held000Joined Fitch Ratings Japan
October 2001
September 2007

Joined Deutsche Bank AG, Real Estate
Finance Division
Advisor of Fukuoka Realty Co., Ltd.

September 2009

Director(part-time)

Akira Eto

October 2009
February 1987

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

14

0

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

Title

Name

Career Summary

Director(part-time)

Yasumichi
HinagoApril 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.)

Director(part-time)

Auditor(part-time)

Hiroshi
Shimuta

Masanori
TasakaApril 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)

15

Number ofshares held000

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010

5. Reference Information(1) Investment situation(as of February 28, 2010)
Type of asset

Real estate in
Trust

Location(Note 1)

PurposeCommercial
facility
Office building
Residential
property

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

Percentage of
total assets(%)(Note 3)

Fukuoka urban area

38,14829.2

Other Kyushu areas

36,508

27.9

Fukuoka urban area

41,695

31.9

Other Kyushu areas——

Fukuoka urban area

3,133

2.4

Other Kyushu areas——

119,486

91.4

3,421

2.6

Subtotal
Equity interests in anonymous partnership (Note 4)

Deposits and other assets
7,797
6.0
Total amount of assets
130,705100.0(Note 5)(122,907)(94.0)
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 Bureauof 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 book value
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: “Equity interests in anonymous partnership” are capital contributions to an SPC (CCH Bridge LLC), which owns andmanages a section of Canal City Hakata excluding the section FRC already holds (Canal City Hakata SPC holding section).
Note 5: Figures in parentheses for “Total amount of assets” refer to the value and percentage of real estate held in effect to the total
amount of assets.
(as of February 28, 2010)
Percentage of total amount of assets(%)

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

68,578

52.5

Total amount of net assets

62,12647.5(2) Investment assets(i) Primary issues of investment securities(as of February 28, 2010)Type

Description

Book value(millions of yen)

Evaluated amount(millions of yen)
(Note)

Percentage of
total assets(%)

Interests inSenior anonymous partnershipanonymous
equity interest to CCH Bridge
3,421
3,400
2.6
partnership
LLC(Note) The evaluated amount is provided by the operator of the anonymous partnership in conformity with rules stipulated by theInvestment Trusts Association, Japan.

16

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010(ii) Real estate investment portfolio(a) Values and investment ratios at end of period are as follows.
(as of February 28, 2010)
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

32,00031,51034,700

26.5

Tanizawa Sogo Appraisal
Co., Ltd.

Park Place Oita

15,70016,833

17,90013.0

Japan Real Estate Institute

SunLive City Kokura

6,633

6,349

7,410

5.5

Japan Real Estate Institute

5,300

5,042

4,970

4.4

Japan Real Estate Institute

2,400

2,302

2,420

2.0

Japan Real Estate InstituteHara SATY

5,410

5,524

5,200

4.5

Japan Real Estate InstituteHanahata SC

1,130

1,113

1,150

0.9

Kurume Higashi
Kushiwara SC

2,500

2,449

2,510

2.1

K’s Denki Kagoshima

3,550

3,531

3,380

2.9

14,60014,19815,60012.1

11,200

10,48912,900

9.3

4,400

4,392

4,950

3.6

Japan Real Estate Institute

7,000

6,821

6,730

5.8

Japan Real Estate Institute

5,900

5,793

5,910

4.9

2,060

2,014

1,710

1.7

City House Keyaki Dori

1,111

1,119

1,000

0.9

Total

120,894

119,486

128,440

100.0

Name of property

Square Mall
Kagoshima Usuki
Kumamoto
Intercommunity SC

Canal City BusinessCenter Building
Gofukumachi
Business Center
Sanix Hakata Building
Taihaku Street
Business Center
Higashi Hie
Business Center
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 forthe 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 withthe method and standards for asset evaluation stipulated in FRC’s Articles of Incorporation and rules stipulated by theInvestment 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.

17

Fukuoka REIT Corporation (8968), Earnings briefing for the period ended February 2010(b) Summary of the real estate rental businessOccupancy
rate(%)(Note 3)Name of property

Numberof tenants(Note 1)

Canal City Hakata

1 (49)

99.5

45,990.34

45,767.66

Park Place Oita
SunLive
City Kokura
Square Mall
Kagoshima Usuki
Kumamoto
Intercommunity SC
Hara SATY

1 (101)

100.0

103,963.39

103,933.19

978

17.8

1

100.0

61,450.22

61,450.22

292

5.3

11

100.0

14,661.72

14,661.72

254

4.6

2

100.0

6,968.66

6,968.66

89

1.6

1

100.0

27,580.75

27,580.75

212

3.9

2

100.0

2,801.15

2,801.15

40

0.7

1

100.0

6,467.80

6,467.80

88

1.6

1

100.0

7,296.17

7,296.17

111

2.0

93.4

23,040.18

21,530.80

628

11.4

20

93.9

19,906.22

18,696.02

523

9.5

14

100.0

6,293.76

6,293.76

195

3.6

Hanahata SC
Kurume Higashi
Kushiwara SC
K’s Denki
Kagoshima
Canal City
Business Center
Building
Gofukumachi
Business Center
Sanix Hakata
Building
Taihaku Street
Business Center
Higashi Hie
Business Center
Amex
Akasakamon Tower
City House
Keyaki Dori

1

(53)

Total
leasable space(m2)(as of February 28, 2010)
Percentage of
Total
total
rental revenues
rental revenues(millions of yen)(%)
(Note 4)(Note 5)
1,348
24.5

Total
leased space
(m2)

1

(67)

98.3

14,653.95

14,408.27

297

5.4

1

(15)

100.0

13,695.51

13,695.51

338

6.2

1

(65)

98.8

4,755.14

4,699.32

65

1.2

1

(42)

100.0

2,710.86

2,710.86

38

0.7

60 [445]99.1
362,235.82
358,961.86
5,504
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 12 offices and 55 residents.
The total of all the tenants in other than pass-through master leasing properties and the number of sections stipulated in thetenancy agreements with end tenants for pass-through master leasing properties is shown in parentheses in the 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.

Total
Note 1:

Note 2:

Note 3:Note 4:Note 5:(3) Investment target
The disclosure is omitted, since there are no significant changes from “Investment target” disclosed by the latest
securities report (submitted on November 24, 2009).

18