This is an English translation of summarized financial results prepared for reference purposes only. Should there be any
inconsistency between the translation and the official Japanese text, the latter shall prevail.
August 20, 2014

Financial Report for the Midterm of Fiscal Period Ending December 2014
(January 1, 2014 – June 30, 2014)
Japan Hotel REIT Investment Corporation
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange8985
http://www.jhrth.co.jp/
Yukio Isa, Executive Director

Asset management company:
Representative:
Contact:

Japan Hotel REIT Advisors Co., Ltd.
Hisashi Furukawa, Representative Director and President
Noboru Itabashi,
General Manager of Accounting and Reporting
Finance and Accounting Division
Phone: +81-3-6422-0530

Scheduled date to file midterm Securities Report: September 19, 2014
Preparation of supplementary material on financial report: Yes
Holding the financial results briefing (for analysts and institutional investors): Yes

1. Summary of financial results for the midterm of the fiscal period ending December 31, 2014
(January 1, 2014 – June 30, 2014)(1) Operating results% Millions of yen
15.1
3,011
2,220

(Percentages show changes from the previous period)
Current net profit for theOrdinary income
midterm (full term)% Millions of yen% Millions of yen%
35.7
2,235
57.5
2,234
56.4
1,418
1,429
-

57.5

106.8

Operating income
Midterm period ended
June 30, 2014
June 30, 2013
Fiscal period ended
December 31, 2013

Millions of yen
5,504
4,780
11,472

Operating profit

5,367

3,740

164.8

3,233

(83.0)

Current net profit per unit
for the midterm (fullterm)
Yen
852
615

Midterm period ended
June 30, 2014
June 30, 2013
Fiscal period ended
1,307
December 31, 2013
(Note 1) Current net profit per unit for the midterm (full term) is calculated based on the average number of investment units during the fiscalperiod.
(Note 2) The midterm ended June 30, 2013 is the first midterm after change of the fiscal period. Therefore, comparison between the midterm
results for this year and that of the previous year is not available.
(Note 3) Net profit for the midterm ended June 30, 2013 includes capital loss (223 million yen).
(Note 4) Current net profit for the fiscal period ended December 31, 2013 includes capital loss resulting from real estate disposition (1,189million yen) and asset impairment (516 million yen).

(2) Financial position
Total assets
Net assets
Equity ratio
Net assets per unit
Midterm period ended
Millions of yen
Millions of yen%
Yen
June 30, 2014
166,687
86,71952.0
33,083June 30, 2013
167,446
88,10752.6
33,612
Fiscal period ended
170,727
89,75652.6
34,241
December 31, 2013
(Note)Net asset per unit is calculated based on the number of investment units issued at the end of the midterm (full term).

(3) Cash flows
Midterm period ended
June 30, 2014
June 30, 2013
Fiscal period ended
December 31, 2013

Cash flows fromoperating activities
Millions of yen
4,215
3,287

Cash flows frominvesting activities
Millions of yen(860)(26,063)

9,991(33,349)

Cash flows from
Cash and cash equivalents
financing activities
at end of period
Millions of yen
Millions of yen(6,025)
9,883
25,707
11,853
26,98812,553

2. Forecasts of results for the fiscal period ending December 31, 2014 (January 1, 2014 - December
31, 2014)

Operating income

Millionsof yen%

Operating profit

Millionsof yen%(Percentages show changes from the previous period)
Dividend
per unit
Dividend(Dividendfrom excess
Ordinary income Current net profit
from excessof earningsof earnings
per unitexclusive)
Millions
Millions%%
Yen
Yenof yenof yen

Fiscal period ending
12,667 10.4
7,260 35.3
5,496 46.9
5,494 69.9
2,058
0
December 31, 2014
(Reference)
Forecasted current net profit per unit for this fiscal period: JPY2,054.- (calculated based on the average number of investment
units during the period of 2,674,377 units).
(Note 1) For operating forecast with full year impact of Best Western Hotel Sapporo Nakajima Koen, which was acquired in the 15th fiscal

period ending December 31, 2014, and of Mercure Sapporo and Mercure Okinawa Naha, which are scheduled to be acquired, see
below “<Reference 1> Growth history of JHR and the annualized effect of asset acquisition” on p.3.
(Note 2) The allowance for the dividend, JPY251M, is scheduled to be the source of this dividend.

3. Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of prior period
financial statements after error corrections
a.
b.
c.
d.

Changes in accounting policies due to revisions to accounting standards and other regulations: No change
Changes in accounting policies due to other reasons: No change
Changes in accounting estimates: No change
Restatement of prior period financial statements after error corrections: No change(2) Number of units issueda.

b.

Total number of units issued at end of period (including treasury units)
As of June 30, 2014

2,621,281 units

As of June 30, 2013

2,621,281 units

As of December 31, 2013

2,621,281 units

Number of treasury units at end of period
As of June 30, 2014

0 unitAs of June 30, 2013

0 unitAs of December 31, 2013

0 unit* Status of audit procedures
As of the time of disclosure of this financial report, audit procedures for the midterm financial statements pursuant to theFinancial Instruments and Exchange Act of Japan are incomplete.
* Appropriate use of forecasts of results and other special items• Forward-looking statements presented in this financial report including forecasts of results are based on information
currently available to us and on certain assumptions we deem to be reasonable. As such, actual operating and otherresults may differ materially from these forecasts due to a number of factors. Furthermore, we do not intend toguarantee any dividend amount by these forecasts.

<Reference 1> Growth history of JHR and the annualized effect of asset acquisition

No. of properties

Effective dateof merger(Note 1)

End of
FY12/2012

End of
FY12/2013

Previously
forecasted

After acquiring(scheduled)assets

2828

28

2730

Acquisition price(scheduledacquisition inclusive)(Note 2)

JPY1M

122,285

130,883

158,902

157,632

173,429

Appraisal value(Note 3)

JPY1M

117,706

131,227

166,237

165,537

188,123

NOI yield(Note 4)

％

5.9

6.2

6.2

6.5

6.6

NOI yield after
depreciation(Note 5)

％

3.9

4.5

4.8

5.0

5.2

LTV (Acquisitionprice) (Note 6)

％

49.4

49.8

47.1

46.9

46.9

Appraisal LTV(Note 6)

％

51.4

49.7

45.0

44.6

43.2

Market cap(Note 7)

JPY1M

34,71250,417132,112-155,195

Distribution per unit

JPY-

1,621

1,939

1,940

2,146(Note 8)(Note 1) Referring to the NOI yield and NOI yield after depreciation on the effective date of merger, the actual of Fiscal
period ended March 2012 (12th period) has been applied for the properties owned by former Nippon Hotel Fund
Investment Corporation (NHF), and the actual of Fiscal period ended March 2012 (7th period) has been appliedfor the properties owned by former Japan Hotel and Resort, Inc. (JHR).
(Note 2) Acquisition prices (Scheduled acquisition inclusive) indicate acquisition prices stated on the Purchase and Sales
Agreement for the Beneficial Interest in Trust or Real Estate Purchase and Sale Agreement (Consumption tax,local consumption tax and the acquisition expense such as broker’s fee are not included.) As for Mercure Sapporo
and Mercure Okinawa Naha, (both scheduled to be acquired), acquisition prices (scheduled) are indicated.
(Note 3) As for appraisal value at the end of each fiscal year, in accordance with the asset appraisal method and standards
stipulated in the Articles of Incorporation and also with the rules set by The Investment Trusts Association, Japan,
appraisal value with the appraisal date at the end of relevant fiscal year is indicated. Dormy Inn Namba was soldas of January 24, 2014. Accordingly, the appraisal value of the property in the appraisal value column for End ofFY12/2013 (14th period) indicates the selling price. Appraisal value for previously forecasted indicates appraisalvalue at the end of FY12/2013 (14th period) excluding Dormy Inn Namba. Appraisal value for After acquiring(scheduled) assets indicates the sum total of the appraisal value with the appraisal date at the end of June 2014
and the appraisal value for assets (scheduled to be) acquired, Best Western Hotel Sapporo Nakajimakoen,Mercure Hotel Sapporo and Mercure Hotel Okinawa Naha, based on the real estate appraisal report prepared byJapan Real Estate Institute with May 26, 2014, May 16, 2014 and June 1, 2014 as the pricing date, respectively.
(Note 4) NOI = Real estate operating profit – Real estate operating expense + Depreciation expense + Loss on retirementof noncurrent assets
NOI yield = NOI ÷ Acquisition price (or scheduled acquisition price)(Note 5) NOI After depreciation = Real estate operating profit – Real estate operating expense
NOI yield after depreciation = NOI after depreciation ÷ Acquisition price (or scheduled acquisition price)(Note 6) LTV (Acquisition price) = Total interest bearing debt ÷ Acquisition price (or scheduled acquisition price) ×100
Appraisal LTV = Total interest bearing debt ÷ total appraisal value × 100
Interest bearing debt as of Previously forecasted and for After acquiring assets (scheduled to be acquired) arecalculated with the figures of interest bearing debt as of the end of the midterm period ended December 31, 2014
added by JPY 7,426M of planned borrowing for new acquisition.
(Note 7) The amount is the market cap calculated by using the closing price of the regular transaction at Tokyo Stock
Exchange, Inc. on relevant timing for each. However, the market cap on effective date of merger indicated on
April 2, 2012.
Market cap after acquiring assets (scheduled to be acquired) is calculated by multiplying the sum (2,791,281units) of the number of investment units issued (2,621,281 units) and the number of new investment units(170,000 units) which is resolved at today’s board meeting by the closing price of the regular transaction atTokyo Exchange, Inc. on August 8, 2014.
(Note 8) The dividend per unit when the asset acquision effect for the full year was calculated.
(Note 9) The amounts less than JPY1M are rounded down. Fractions less than two decimal places are rounded off.

<Reference 2> Assumptions for forecast of the full year Numerical figures of Best Western Hotel Sapporo Nakajimakoen, Mercure Hotel Sapporo and Mercure Hotel Okinawa
Naha are forecast calculated for the period for one year based on the information provided by the seller, etc. It is assumed
that JPY85M (9 months) will be posted as the fixed asset tax and city planning tax.
 As to non-operating expenses, redeeming handling charges for borrowings associated with refinancing due to early
repayment in September 2014 and redemption expenses, etc. for derivative products (Interest-cap) are excluded fromfinance expense.