Investment
Invincible Corporation

Audited Financial Statements
for the 32nd Fiscal Period(from January 1, 2019 to June 30, 2019)

INDEX TO FINANCIAL STATEMENTS
Page

Greetings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 1

Independent Auditor’s Report ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 3

Balance Sheet as June 30, 2019 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 4

Statement of Income and Retained Earnings for the six months ended June 30, 2019∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 6

Statement of Changes in Net Assets for the six months ended June 30, 2019 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 7

Statement of Cash Flows for the six months ended June 30, 2019 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 9

Notes to Financial Statements as of and for the six months ended June 30, 2019∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 10

Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation and President& CEO of Consonant Investment Management Co., Ltd.
We would like to take this opportunity to express our sincere gratitude to all unitholders of Invincible
Investment Corporation (“INV”) for your continued support.
We hereby provide you with a report on INV’s asset management and financial results for the 32nd fiscal
period (covering the period from January 1, 2019 to June 30, 2019; the “Reporting Period”).
During the Reporting Period, INV changed the investment structure for two overseas hotels to a directownership structure of the underlying assets from investments in anonymous associations on May 9, 2019.
The change in ownership structure was made to adapt to an amended Act on Special Measures Concerning
Taxation executed on April 1, 2019 and completely resolves the tax issue regarding conduit requirements.
In June 2019, INV sold two residential assets for extremely favorable terms as a continuation of its asset
recycling program. The total sale price was JPY 39.9 billion, resulting in a gain of JPY 11.1 billion. The
gain on sale was retained as internal reserves in order to stabilize future distributions. INV has achieved
steady NOI growth for both hotel and residential assets, the core assets in the portfolio.
As a result of the initiatives and factors mentioned above, operating revenues reached JPY 27,339 million,
operating income JPY 22,185 million, and net income JPY 21,239 million. INV decided on a distribution
per unit (DPU) of JPY 1,656 for June 2019 fiscal period (+15.8% year on year (1)), and expects annual
DPU of JPY 3,381 for 2019. INV reserved a portion of the net income, which increased in part due to thestructure change of the overseas hotels and the sales of the two residential assets, in order to maintain stable
distributions in the future.
With the updated 2019 DPU forecast of JPY 3,381, INV has already achieved 45.7% of its medium-termplan outlined in “Vision 2022”(2) and maintains its target to achieve an annual DPU of JPY 3,700 in 2022.
On July 1, 2019, INV launched its sixth Global Share Offering (after the reporting period), and seventh
share offering in total since Fortress became its Sponsor. The funds from the issuance of new units alongwith new borrowings and cash were used to acquire 18 domestic hotels. As a result, our asset size exceeds
JPY 500 billion (based on acquisition price), and we have the largest hotel portfolio among all J-REITs (asof August 31, 2019). INV believes the July 2019 acquisition benefits the portfolio by providing further
diversification in terms of area and asset type, and will contribute to stability and growth of revenue.
The 18 high quality hotels(3) above are mainly located in "Prime Tourism Area"(4), where we believe thedemand for tourists, especially inbound tourists, is and will be strong such as Hokkaido, Fuji area, andIshigaki Island. We also believe that the Rugby World Cup held this fall and the Tokyo Olympics andParalympics held next year will draw an increase in attention to Japan, helping to promote robust demandof inbound tourists in the future.
INV will continue to implement its basic policy to “increase distribution per unit,” and will ensure theimplementation of measures to maximize unitholder value.
Your continued support is highly appreciated.
Naoki Fukuda
Executive Director, Invincible Investment Corporation
President & CEO, Consonant Investment Management Co., Ltd.
(1) Comparison with the fiscal period ended June 2018. In order to eliminate the seasonal effects of hotel
variable rent, which is one of the major revenues of INV, the comparison is made with the same period in
the previous year and not with the previous fiscal period (ended December 2018).
(2) This is a target based on various assumptions and conditions, and there is no guarantee that INV canachieve this target in 2022 or later(3) Hotels we consider as highly competitive in terms of location, appearance, interior, specifications,ancillary facilities and facilities.
(4) We define as areas with strong tourism demand particularly from inbound visitors due to attractive
tourism resources
Distribution per unit for the 32nd fiscal period(the fiscal period ended June 2019)

JPY 1,656(Note) The forward-looking statements, forecasts and goals described in this report are based on available information,
assumptions and estimates as of August 31, 2019. These assumptions and estimates are unavoidably uncertain, andcould be affected by various risks and factors beyond INV’s control. Thus, no guarantee can be made regarding therealization of such future forecasts and targets, and actual results may vary significantly.

INVINCIBLE INVESTMENT CORPORATIONBALANCE SHEETAs of June 30, 2019
As ofJune 30,2019

December 31,
2018

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
ASSETS
Current assets:
Cash and bank deposits (Notes 6 and 18) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥Cash and bank deposits in trust (Notes 6 and 18) ∙∙∙∙∙∙
Accounts receivable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Rental receivables ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deposits paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Prepaid expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes receivable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Consumption taxes receivable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Allowance for doubtful accounts ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐current assets:
Property and equipment (Notes 7 and 8):
Buildings, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities, at cost ∙∙∙∙∙∙∙∙∙∙∙∙
Tools, furniture and fixtures, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Construction in progress∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying
facilities in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Tools, furniture and fixtures in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Construction in progress in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Subtotal ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Less: Accumulated depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total property and equipment, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Intangible assets:
Leasehold rights ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total intangible assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Investments and other assets:
Investment securities (Note 19 and 23)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Guarantee deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term prepaid expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Derivatives assets (Note 20) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total investments and other assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred assets:
Investment corporation bond issuance costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total deferred assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL ASSETS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

3,985,335
7,079,268
583,0122,591,368‐
539,442
172,912434,3260(86)¥

48,833,358
6,766,348
647,2102,758,865
371,720
483,656
168,970
‐
‐
(148)

$

453,041
62,773
6,004
25,594
3,448
4,487
1,567
‐
‐

(1)

15,385,582

60,029,983

556,916

‐
‐
3,192
‐
144,380,745

19,142,244
5,111,168
1,069,418
9,817
130,105,036

177,588
47,4179,921
911,207,023

32,567,092

29,757,547

276,069

228,964
1,690,363
203,881,464‐
382,751,823(20,117,593)
362,634,229

227,665
1,816,296
199,037,787
14,364386,291,346(21,466,694)
364,824,652

2,112
16,8501,846,532
133
3,583,740(199,152)
3,384,587‐
20,015,700
20,015,700

10,637,811
12,864,608
23,502,420

98,690
119,348
218,038

54,640,213
1,700,670
708,191
216,555
22,66757,288,298
439,938,228

17,856,387
803,721
601,259
255,404
22,667
19,539,440
407,866,513

165,659
7,456
5,578
2,369
210
181,273
3,783,899

38,98538,985455,362,796

35,47835,478467,931,975

329
329
4,341,144¥$4

As ofJune 30,2019

December 31,
2018

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
LIABILITIESCurrent liabilities:
Accounts payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥
Short‐term loans payable (Note 10) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of long‐term loans payable(Note 10) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Accounts payable‐other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Accrued expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Consumption taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Advances received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deposits received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total current liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐current liabilities:
Investment corporation bonds (Note 9) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable (Notes 10 and 18) ∙∙∙∙∙∙∙∙∙∙∙∙
Tenant leasehold and security deposits in trust(Note 18) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Tenant leasehold and security deposits (Note 18) ∙∙∙Asset retirement obligations (Note 21) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐current liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL LIABILITIES ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙NET ASSETS (Note 11)
Unitholders’ equity:
Unitholders’ capital ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Surplus:Capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Allowance for temporary differences
Adjustment (Note 4) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other deduction of capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total deduction of capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Capital surplus (net)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Voluntary reserve
Retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total unitholders’ equity ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Valuation and translation adjustments:
Deferred gains or losses on hedges ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total valuation and translation adjustments ∙∙∙∙∙∙∙TOTAL NET ASSETS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL LIABILITIES AND NET ASSETS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

431,891
1,099,000¥

511,902
‐

$

4,749
‐

54,745,000

51,744,000

480,044

651,992
200,203605‐
571,668
134,085
57,834,445

136,155
362,920605
2,764,397
454,614
26,15956,000,754

1,263
3,366
5
25,646
4,217
242
519,535

4,000,000
170,029,000

4,000,000
173,030,000

37,1091,605,250

2,009,816

1,746,941

16,206

92,525
32,107
176,163,449
233,997,895

75,54332,321
178,884,805
234,885,560

700
299
1,659,567
2,179,103

211,092,540

211,092,540

1,958,368

6,264,432

6,264,432

58,117(46,329)(131,332)(1,218)(5,194,798)(5,241,128)
1,023,303(5,398,804)(5,530,137)
734,294(50,086)(51,304)
6,812

9,140,372
10,163,675
221,256,215

21,131,966
21,866,261
232,958,801

196,047
202,859
2,161,228

108,684
108,684
221,364,900
455,362,796

87,612
87,612233,046,414
467,931,975

812
812
2,162,041
4,341,144¥$

The accompanying notes are an integral part of these financial statements.

5

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the six months ended June 30, 2019
For the six months ended
June 30,2019

December 31,
2018

June 30,2019(in thousands of U.S.
dollars)(in thousands of yen)
Operating revenue
Rental revenue－real estate (Note 13) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Management contract revenue (Note 14) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Gain on sales of properties (Note 15) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Dividend income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distribution income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total operating revenue ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Operating expenses
Property related expenses (Note 13) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Management contract expenses (Note 14) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset management fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Directors’ compensation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset custody fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Administrative service fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Provision of allowance for doubtful accounts ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total operating expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Operating income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐operating income
Interest income∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange gains ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest on tax refund∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐operating income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐operating expenses
Interest expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange losses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

13,604,224‐‐
846,780‐
14,451,005¥

12,153,399
580,588
11,117,983
827,477
2,660,220
27,339,670$

112,750
5,386
103,144
7,676
24,679253,638

4,450,676‐
275,000
5,200
18,64552,60786
134,032
4,936,248
9,514,756

4,490,658
164,376
300,000
4,800
22,23347,312148
125,069
5,154,599
22,185,070

41,661
1,524
2,783
44
206
438
1
1,160
47,820205,81782
34,46872
906
35,528

811
‐
1,005
800
2,617

7
‐
9
7
24

555,811
‐
8,490
2,625
407,683

5,460
312
105
32
2,876
‐

Investment unit issuance costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

186,997588,555
33,648
11,405
3,506
310,089‐

Other‐non‐operating expenses∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐operating expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Ordinary income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Extraordinary income
Subsidy income∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total extraordinary income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Extraordinary losses
Loss on reduction entry of non‐current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total extraordinary losses∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income before income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes (Note 16):
Current ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Retained earnings / losses brought forward ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Unappropriated retained earnings / losses (Note 12)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

3,999
1,165,608
8,384,676

0947,206
21,240,482

0
8,787
197,054‐‐

115,319
115,319

1,069
1,069

‐
‐
8,384,676

115,319
115,319
21,240,482

1,069
1,069
197,054605
605
8,384,071
756,300
9,140,372

605
605
21,239,877(107,910)
21,131,966

5
5
197,048(1,001)
196,047¥$

The accompanying notes are an integral part of these financial statements.

6

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CHANGES IN NET ASSETSFor the six months ended June 30, 2019
Unitholdersʹ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholdersʹ
capitalCapital surplus

Allowance fortemporarydifferences
adjustment¥¥

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of yen)
Balance as of July 1, 2018 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥168,798,455

6,264,432(46,329)¥(1,194,818)¥(1,241,148)¥

5,023,283

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Issuance of new investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

42,294,085

Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Acquisition of own investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Cancellation of own investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,999,980)(3,999,980)(3,999,980)

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

42,294,085

Balance as of December 31, 2018 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥211,092,540‐¥‐

6,264,432¥(46,329)(3,999,980)¥(5,194,798)(3,999,980)¥(3,999,980)(5,241,128)¥

1,023,303

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions in excess of retained earnings from

(85,002)

allowance for temporary differences adjustment ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other distributions in excess of retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(204,006)(85,002)(85,002)(204,006)(204,006)

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2019 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥211,092,540‐¥(85,002)6,264,432¥(131,332)(204,006)¥(5,398,804)

Unitholdersʹ equity
SurplusRetainedearnings(289,008)(5,530,137)¥

734,294

Valuation and translation adjustments

Own
investment
units

Total surplus(289,008)¥

Total unitholdersʹ
equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets

¥

¥

¥

(in thousands of yen)
Balance as of July 1, 2018 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

7,610,548¥

12,633,832

¥

‐

¥

181,432,288

90,97590,975

181,523,263

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
42,294,085

42,294,085(6,854,248)(6,854,248)(3,999,980)(3,999,980)(3,999,980)

3,999,980‐‐

8,384,071

8,384,071

Issuance of new investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(6,854,248)(6,854,248)

Acquisition of own investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Cancellation of own investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,999,980)

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

8,384,071

8,384,071

1,529,823(2,470,157)

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of December 31, 2018 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

9,140,372¥

10,163,675‐¥‐

39,823,927¥

221,256,215¥

17,70917,70917,70917,70917,70939,841,636

108,684¥

108,684¥

221,364,900

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(9,248,282)

Distributions in excess of retained earnings fromallowance for temporary differences adjustment ∙∙∙∙∙∙
Other distributions in excess of retained earnings ∙∙∙∙∙Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(9,248,282)(9,248,282)(9,248,282)(85,002)(85,002)(85,002)(204,006)(204,006)(204,006)

21,239,877

21,239,877

21,239,877

21,239,877

11,991,594

11,702,585

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2019 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

21,131,966¥

21,866,261‐¥‐

11,702,585¥

232,958,801¥(21,072)(21,072)(21,072)(21,072)(21,072)

11,681,513

87,612¥

87,612¥233,046,414

7

Unitholdersʹ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholdersʹ
capitalCapital surplus

Allowance fortemporarydifferences
adjustment$$

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of U.S dollars)
Balance as of December 31, 2018 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $1,958,368

58,117(429)$(48,193)$(48,623)$

9,493

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions in excess of retained earnings fromallowance for temporary differences adjustment ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(788)

Other distributions in excess of retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,892)

(788)

(788)

(1,892)(1,892)

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Balance as of June 30, 2019 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $1,958,368

‐
$

(788)

58,117$(1,218)(1,892)$(50,086)

Unitholdersʹ equity
SurplusRetainedearnings(2,681)(51,304)$

6,812

Valuation and translation adjustments
Own
investment
units

Total surplus(2,681)$

Total
unitholdersʹ
equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets

$

$

$

(in thousands of U.S dollars)
Balance as of December 31, 2018 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

84,797$

94,291$‐

2,052,659

1,008

1,008

2,053,668

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(85,799)

Distributions in excess of retained earnings fromallowance for temporary differences adjustment ∙∙∙∙∙∙
Other distributions in excess of retained earnings ∙∙∙∙∙
197,048

Net income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(85,799)(85,799)(85,799)

(788)

(788)

(788)

(1,892)(1,892)(1,892)

197,048

197,048

197,048

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙(195)

Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2019 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

111,249$

196,047‐

108,568$

202,859

$

‐

(195)

108,568$

2,161,228

(195)

$

812

(195)

(195)
$

812

108,372$

The accompanying notes are an integral part of these financial statements.

8

2,162,041

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CASH FLOWSFor the six months ended June 30, 2019
For the six months ended
June 30,2019

December 31,
2018

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Cash flows from operating activities:
Income before income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥
Depreciation and amortization ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loss on reduction entry of non‐current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Investment unit issuance costs∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Amortization of investment corporation bond issuance costs∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes in assets and liabilities
Foreign exchange losses (gains) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in allowance for doubtful accounts ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in rental receivables ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in deposits paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in receivable income taxes∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in consumption taxes receivable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accounts payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in consumption taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accounts payable‐other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accrued expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in advances received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in deposits received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease in property and equipment in trust due to sale ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease in leasehold rights in trust due to sale ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Subtotal ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest income received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(7,261)(3)(764,772)‐(23,292)(434,326)(32,970)(14,902)(49,755)(2,611)
20,161(75,818)‐‐
9,283
11,208,966
82(553,985)(605)(23,481)62
285,339
96,4703,830
434,326
22,952
2,764,397
40,334
118,454(117,053)(347,981)
21,268,952
7,047,749(617,969)
56,413,251
811(603,432)
(605)

(217)
0
2,647
894
35
4,029
212
25,646374
1,098(1,085)(3,228)
197,318
65,384(5,733)523,362
7(5,598)(5)

8,384,676
3,039,033‐
186,997
2,625
407,683(82)
564,302¥21,240,482
3,168,320
115,319‐
3,506
310,089(811)
599,960$

197,054
29,393
1,069
‐
32
2,876
(7)
5,566

Net cash provided by operating activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

10,654,458

55,810,025

517,766

Cash flows from investing activities:
Purchases of property and equipment in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Purchases of leasehold rights in trust∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of tenant leasehold and security deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Collection of tenant leasehold and security deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of TK investment ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from withdrawal of TK investment∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(45,485,560)(3,421,194)(64,862)
49,032(19,105)‐(37,534,886)
751,060(12,784)(1,302,310)‐(323,779)
61,654‐
896,949‐‐(58,789)(12,081)‐(3,003)
571
‐
8,321
‐
‐
(545)

Net cash used in investing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(85,738,300)(726,275)(6,737)

1,099,000(2,000,000)
68,338,000(28,979,000)
1,980,352(804,736)(3,999,980)(6,664,830)‐(1,099,000)
17,684,000(17,684,000)‐(167,123)‐(8,993,502)‐(10,195)
164,059(164,059)‐(1,550)‐(83,435)‐(85,002)(788)‐
42,107,087(204,006)‐(1,892)‐

Net cash provided by (used in) financing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

71,075,892(10,548,635)(97,862)

Effect of exchange rate change on cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net increase (decrease) in cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Cash and cash equivalents at beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐(4,007,949)
15,072,553(12)
44,535,115
11,064,604

0
413,165
102,649

Cash and cash equivalents at end of period (Note 6) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

11,064,604

Cash flows from financing activities:
Proceeds from short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of short‐term loans payable∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from issuance of investment corporation bonds∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments for loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments for Acquisition of Own investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of distributions of earnings∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of distributions in excess of retained earnings from allowance for temporary
differences adjustment ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of other distributions in excess of retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from issuance of investment units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

55,599,707$

515,815

The accompanying notes are an integral part of these financial statements.

9

INVINCIBLE INVESTMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS
As of and for the six months ended June 30, 2019

1. Organization
Invincible Investment Corporation (the“Company”), a real estate investment corporation, was incorporated on January 18, 2002, underthe Act on Investment Trusts and Investment Corporations of Japan (the“Investment Trust Act”) with initial capital of ¥200 million.
The Company is externally managed by a registered asset management company, Consonant Investment Management Co., Ltd. (the“Asset Manager”). The Asset Manager is currently owned 100% by Calliope Godo Kaisha (Calliope). The Company was formed toinvest primarily in properties in Japan.
On May 17, 2004, the Company raised ¥3,377,250 thousand through an initial public offering of 9,000 investment units. As a“comprehensive investment REIT focusing on the Tokyo metropolitan area and on residential properties,” the Company was listed on
the Osaka Securities Exchange in May 2004.
On February 7, 2005, the Company completed its second public offering of 10,650 investment units at a price of ¥369,734 per unit inconnection with a public offering in Japan.
On July 31, 2006, the Company completed its third public offering of 25,000 investment units at a price of ¥332,045 per unit in connection
with a public offering in Japan. The Company was listed on the J‐REIT market of the Tokyo Stock Exchange in August 2006 (in order tofocus trading on one securities exchange and reduce administrative tasks and costs accompanying a duplicate listing, the Company
delisted from the Osaka Securities Exchange on October 6, 2007).
Effective on February 1, 2010, the Company executed a five‐to‐one unit split and 215,596 investment units were issued in connection
with the unit split. Effective on the same day, the Company also merged with LCP Investment Corporation (LCP) and allocated 367,200
investment units at a ratio of 4 units (post‐unit split) of the Company per one investment unit of LCP. As a result, investment units issued
and outstanding were 636,695 units as of February 1, 2010.
On July 29, 2011, the Company completed a third party allotment of 711,597 investment units at a price of ¥9,837 per unit.
On December 20, 2013, the Company completed a third party allotment of 224,887 investment units at a price of ¥13,340 per unit.
On July 16, 2014, the Company completed its fourth public offering totaling 1,040,000 new investment units at a price of ¥21,873 per unit.
527,322 of such units were issued in connection with a Domestic Public Offering, and the remaining 512,678 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 13,
2014, the Company issued 55,507 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥23.9 billion were used to repay the Company’s outstanding short term borrowings and in connection withthe acquisition of 18 properties during this fiscal period.
On July 15, 2015, the Company completed its fifth public offering totaling 500,000 new investment units at a price of ¥57,817 per unit.
211,250 of such units were issued in connection with a Domestic Public Offering, and the remaining 288,750 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 12,
2015, the Company issued 25,000 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥29.3 billion were used to repay the Company’s outstanding long term borrowings and in connection withthe acquisition of 14 properties during this fiscal period.
On March 30, 2016, the Company completed its sixth public offering totaling 459,512 new investment units at a price ¥81,217 per unit.
194,144 of such units were issued in connection with a Domestic Public Offering, and the remaining 265,368 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On April 27, 2016,
the Company issued 22,626 investment units domestically in connection with the exercise of an over‐allotment option. Net proceeds ofapproximately ¥37.9 billion were used to repay the Company’s outstanding long term borrowing and in connection with the acquisitionof 6 properties during this fiscal period.
On March 13, 2017, the Company completed its seventh public offering totaling 185,000 new investment units at a price ¥46,897 per unit
in connection with Japanese Primary Offering.

10

On October 12, 2017, the Company completed its eighth public offering totaling 887,959 new investment units at a price ¥44,118 per unit.
515,017 of such units were issued in connection with a Domestic Public Offering, and the remaining 372,942 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On November 1,
2017, the Company issued 44,398 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥39.8 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 preferred security during this fiscal period.
On August 1, 2018, the Company completed its ninth public offering totaling 909,524 new investment units at a price ¥45,776 per unit.
432,024 of such units were issued in connection with a Domestic Public Offering, and the remaining 477,500 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 21,
2018, the Company issued 45,476 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥42.2 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 TK investment during this fiscal period.

2. Summary of Significant Accounting Policies(a) Basis of Presentation
The Company maintains its accounts and records in conformity with accounting principles and practices generally accepted in Japan(“Japanese GAAP”), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial Instruments
and Exchange Act of Japan, and other related regulations, which are different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The financial statements are prepared based on the Japanese audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and filed with the Kanto Local Finance Bureau as required by the Financial Instruments and Exchange
Act of Japan. In preparing the accompanying financial statements, certain information in the notes has been added and certain
reclassifications have been made from the financial statements issued domestically for the convenience of the readers outside Japan.
The financial statements are not intended to present the financial position and the results of operations in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan.
The Company’s fiscal period is a six‐month period, which ends at the end of June and December of each year.

Amounts less than ¥1 thousand and US$1 thousand have been rounded down. As a result, the totals shown in the financial statements
and notes thereto do not necessarily agree with the sum of the individual amounts.
The Company does not prepare consolidated financial statements as it has no subsidiaries.
(b) Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short‐term investments which are highly liquid and readily convertible
to cash, have a low risk of price fluctuation, and mature within three months from the date of acquisition.
(c) Valuation standard and method for securities
Other securities without fair market value are recorded at cost being determined by the moving average method.
(d) Property and Equipment
Property and equipment are recorded at cost. Depreciation of property and equipment, except for land, is calculated on a straight‐line
basis over the estimated useful lives of the assets as stated below:
For the six months ended
June 30, 2019

Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

16‐50

Buildings and accompanying facilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5‐29

Tools, furniture and fixtures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

4‐10

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5‐67

Buildings and accompanying facilities in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

2‐33

11

Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3‐55

Tools, furniture and fixtures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

2‐19(e) Intangible Assets
Amortization of a domestic term leasehold interest for business use is calculated by the straight‐line method over the lease term.
(f)Long‐term Prepaid Expenses

Long‐term prepaid expenses are amortized on a straight‐line basis.
(g) Investment Unit Issuance Costs
Investment unit issuance costs are recorded as expenses when incurred.
(h) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the straight‐line method over the period through the redemption of thebonds.
(i)

Allowance for Doubtful Accounts

Allowance for doubtful accounts is provided based on past experience for normal receivables and on a valuation of any receivables fromcompanies and individuals with financial difficulties.
(j)

Conversion of assets and liabilities in foreign currency into Japanese yen

Receivables and payables denominated in foreign currencies are translated into yen at the exchange rate in effect at the balance sheet
date, and differences arising from the translation are included in the statements of income.
(k) Impairment of Fixed Assets
An assessment for impairment is carried out on an asset or group of assets, such as fixed assets, intangible assets and investments,
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the asset or group of assets isdeemed to be impaired, an impairment loss is recognized for the difference between the carrying amount and the recoverable value ofthe asset or group of assets using the discounted cash flow model.
(l)

Accounting Treatment of Trust Beneficiary Interests in Real Estate Trusts

For trust beneficiary interests in real estate trusts, which are commonly utilized to obtain ownership in investment properties in Japanand through which the Company holds all of its real estate, all assets and liabilities with respect to assets in trust, as well as all income
generated and expenses incurred with respect to assets in trust, are recorded in the relevant accounts of the balance sheet and statementof income and retained earnings of the Company in proportion to the percentage that such trust beneficiary interest represents. Certain
material accounts with respect to assets and liabilities in trust are presented separately from other accounts in the balance sheets of theCompany.
(m) Income Taxes
Deferred tax assets and liabilities are computed based on the temporary differences between the financial statement and income tax
basis of assets and liabilities using the applicable statutory tax rate.
(n) Consumption Taxes
Consumption taxes withheld and consumption taxes paid are not included in the statement of income and retained earnings.
Consumption taxes paid are generally offset against the balance of consumption taxes withheld. As such, the excess of payments overamounts withheld are included in current assets and the excess of amounts withheld over payments are included in current liabilities as
the case may be.
(o) Taxes on Property and Equipment
Property and equipment are subject to various taxes, such as property taxes and urban planning taxes on an annual basis. An owner of aproperty is registered in the record maintained by the local government in each jurisdiction, and such taxes are imposed on the ownerregistered in the record as of January 1 of each year based on the assessment made by the local government.
Under the above tax rules, a seller of a property at the time of disposal is liable for these taxes on the property from the date of disposal tothe end of the calendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued tax

12liabilities and the amount of settlement reflects this adjustment. For the purchaser, a portion of such taxes calculated from the acquisition
date to the end of the calendar year is capitalized as a cost of the property in accordance with Japanese GAAP. In subsequent calendar
years, half of such taxes on property and equipment for each calendar year are charged as operating expenses in each fiscal period.
No taxes on property and equipment were capitalized for the six months ended June 30, 2019.

3. U.S. Dollar Amounts
The Company maintains its accounting records in Japanese yen. The U.S. dollar amounts included in the accompanying financial
statements and notes thereto represent the arithmetical result of translating Japanese yen into U.S. dollars at the rate of ¥107.79 = US$1,
the effective rate of exchange prevailing at June 30, 2019. The inclusion of such U.S. dollar amounts associated with the fiscal six months
ended June 30, 2019 is solely for the convenience of readers outside Japan. Such translations should not be construed as representations
that the Japanese yen amounts represent, or have been, or could be converted into, U.S. dollars at that or any other rate.

4. Allowance for temporary differences adjustment
For the six months ended December 31, 2018
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. Reason, related assets and amounts(in thousands of yen)
Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringrights in trust

Amortization

EndingduringbalanceperiodperiodLeaseholdReversalReason for reversalofleasehold rights in¥ (46,329)¥ (46,329)‐‐¥ (46,329)¥ (46,329)¥ (46,329)‐‐¥ (46,329)

‐

trust

Total

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

For the six months ended June 30, 2019
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. Reason, related assets and amounts(in thousands of yen)
Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringperiodLeaseholdrights in trust

Amortization

ReversalEndingduringbalanceperiodReason for reversalofleasehold rights in¥ (131,332)¥ (46,329)¥ (85,002)‐¥ (131,332)

‐

trust

13

Total¥ (131,332)¥ (46,329)¥ (85,002)‐¥ (131,332)(in thousands of U.S dollars)
Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringReversalrights in trust

Amortization

Reason for reversal

balanceperiodperiodLeaseholdEndingduringofleasehold rights in$ (1,218)$ (429)$ (788)‐$ (1,218)$ (1,218)$ (429)$ (788)‐$ (1,218)

‐

trust

Total

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

5. Status of cancellation of own investment units
As ofDecember 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Total number of investment units cancelled ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total amount cancelled ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥81,341
3,999,980

‐
‐

¥

‐
‐

$

6. Cash and Cash Equivalents
Cash and cash equivalents shown in the statements of cash flows consist of the following balance sheet items.
As ofDecember 31,
2018

June 30,
2019

June 30,
2019

Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙

3,985,335
7,079,268¥

48,833,358
6,766,348(in thousands of
U.S. dollars)
453,041$
62,773

Cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥11,064,604¥

55,599,707$(in thousands of yen)

515,815

7. Property and Equipment
The following tables show the summary of movement in property and equipment for the six months ended June 30, 2019.
At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of yen)
Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥‐¥

19,142,244¥‐

Buildings and accompanying facilities ∙∙∙∙∙‐

5,111,168‐¥

19,142,244
5,111,168¥

62,90842,886¥62,90842,886¥

19,079,335

Tools, furniture and fixtures∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3,192

1,066,225‐

1,069,418

14,924

14,254

1,054,494

Leasehold rights∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

10,637,811‐

10,637,811‐‐

10,637,811

5,068,281

Construction in progress ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

9,817

‐

9,817

‐

‐

9,817

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

144,380,745

464,106

14,739,815

130,105,036

13,178,580

1,783,951

116,926,456

14

Buildings and accompanying facilities
in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

32,567,092

535,596

3,345,141

29,757,547

7,460,526

1,034,766

22,297,021

228,964

5,957

7,256

227,665

94,9806,121

132,685

Tools, furniture and fixtures in trust ∙∙∙∙∙∙∙∙∙∙

1,690,363

174,658

48,725

1,816,296

611,887

120,088

1,204,408

Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

203,881,464‐

4,843,676

199,037,787‐‐

199,037,787

Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

20,500,965‐

7,394,198

13,106,766

242,158

103,342

12,864,608

Construction in progress in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

14,364‐

14,364‐‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

403,252,788¥

37,161,951¥

30,378,814¥

410,035,925¥

21,708,852¥

3,168,320

14,364¥

388,327,072

At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of U.S dollars)
Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$‐$

177,588$‐

Buildings and accompanying facilities ∙∙∙∙∙‐

47,417‐$

177,588
47,417

$

583
397

$

583
397

$

177,004

Tools, furniture and fixtures∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

29

9,891

‐

9,921

138

132

9,782

Leasehold rights∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

98,690‐98,690‐‐98,69047,019Construction in progress ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

91

‐

91

‐

‐

91

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities
in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,339,463

4,305

136,745

1,207,023

122,261

16,5501,084,761

302,134

4,968

31,033

276,069

69,2139,599

206,856

2,124

55

67

2,112

881

56

1,230

Tools, furniture and fixtures in trust ∙∙∙∙∙∙∙∙∙∙

15,682

1,620

452

16,850

5,676

1,114

11,173

Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,891,469‐

44,936

1,846,532‐‐

1,846,532

Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

190,193‐

68,598

121,595

2,246

958

119,348

Construction in progress in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

133

‐

133

‐

‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

3,741,096$

344,762$

281,833$

3,804,025$

201,399$

29,393133$

3,602,626

Increases in the net book values are mainly due to the changes of investment structure for the Cayman Islands hotels and capitalized expenditures.

8.Fair Value of Investment and Rental Properties
The following tables show the net book value and the fair value of the investment and rental properties in the aggregate for the six
months ended December 31, 2018 and June 30, 2019.
Residential
As of / For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

86,569,109

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(660,828)
85,908,280

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

102,440,000¥

85,908,280$(28,986,463)
56,921,817¥

72,197,000

796,996(268,916)
528,080$

669,793

Retail facilities
As of / For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

4,912,468

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(45,728)
4,866,739

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

6,170,000¥

4,866,739$(41,503)4,825,236¥

6,140,000

45,150(385)
44,765$56,962Hotel
As of / For the six months ended15

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

245,453,345

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

46,421,563
291,874,909

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

354,366,000¥

291,874,909$

2,707,810

34,680,926
326,555,836¥

321,7453,029,555

393,926,158$

3,654,570

Total
As of / For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

336,934,923

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

45,715,006
382,649,930

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

462,580,000¥

382,649,930$

3,549,957

5,652,960
388,302,890¥

52,444
3,602,401

472,263,158$

4,381,326

Notes:
1.Fair value has been determined based on the appraisals or research provided by independent real estate appraisers.
2.For rental revenues and expenses for the six months ended December 31, 2018 and June 30, 2019, please refer to “Note 13: Rent Revenues－Real Estate and Expenses Related toProperty Rental Business“

9.Investment corporation bonds
The following table shows the details of investment corporation bonds for the six months ended June 30, 2019.
For the six months ended June 30, 2019
Beginning

EndingBeginning

EndingInterestbalancebalancebalancebalancerate (%)(in thousands of yen)
1st unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2023)(1)(2)
2nd unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2028) (1)(2)(in thousands of U.S. dollars)

1,000,000

1,000,000

9,277

9,277

0.400

1,000,000

1,000,000

9,277

9,277

0.800

2,000,000

2,000,000

18,554

18,5540.550

4,000,000

4,000,000

37,10937,109

3rd unsecured investment corporation bond(Issued on October 12, 2018 and due on October 12, 2023)(1)(3)
Total investment corporation bonds
Notes:(1)

The bonds were issued with pari passu conditions among specified investment corporation bonds.

(2)

The funds are mainly used to acquire properties in trust.

(3)

The funds are mainly used to repay existing borrowing.

(4)

Repayment schedule of investment corporation bonds for the next five years after each balance sheet date are as follows:

As ofJune 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Within 1 year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
1‐2 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

¥

‐
‐

$

‐
‐

2‐3 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐‐

3‐4 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,000,000

9,277

16

4‐5 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

2,000,000

18,55417

10. Loans Payable
The following table shows the details of loans payable for the six months ended June 30, 2019.
For the six months ended June 30, 2019

Classific
ation

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)MizuhoBank, Ltd.

Short‐term loans
payable‐0.269

02‐Aug‐19

3,400

‐

3,400

‐

0.269

02‐Aug‐19

3,395

‐

3,395

‐

0.269

02‐Aug‐19

10,195‐

10,195‐

5,992,000

55,589‐‐55,5890.480‐

5,992,000

55,589‐‐55,589

0.480

‐

‐

5,992,000

55,589‐‐55,5890.480

3,330,000‐‐

3,330,000

30,893‐‐30,8930.480

3,000,000‐‐

3,000,000

27,831‐‐

27,8310.480

2,670,000‐‐

2,670,000

24,770‐‐24,7700.480

1,335,000‐‐

1,335,000

12,385‐‐

12,3850.480

366,500‐

366,500‐

366,000‐

366,000‐

1,099,000‐

1,099,000‐

MizuhoBank, Ltd.

5,992,000

‐

‐

MUFG
Bank, Ltd.

5,992,000‐

5,992,000

ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedLong‐term loans
payable3,400‐

Sumitomo
Mitsui
Banking
Corporation

ResonaBank,
Limited.

Maturity
date‐

366,500

Total
Short‐termloanspayableAverageinterest
rate (%)
(1)

3,400

‐

MUFG
Bank, Ltd.

Endingbalance

Decrease(in thousands of U.S. dollars)

366,500

Sumitomo
Mitsui
Banking
Corporation

Increase

MUFG
Bank, Ltd.

668,000‐‐

668,000

6,197

‐

‐

6,197

0.480

MizuhoBank, Ltd.

5,992,000‐‐

5,992,000

55,589‐‐55,5890.590

MUFG
Bank, Ltd.

5,992,000‐‐

5,992,000

55,589‐‐55,5890.590

5,992,000‐‐

5,992,000

55,589‐‐55,5890.590

3,330,000‐‐

3,330,000

30,893‐‐30,8930.590

3,000,000‐‐

3,000,000

27,831‐‐

27,8310.590

2,670,000‐‐

2,670,000

24,770‐‐24,7700.590

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedUse ofproceeds

Remarks(2)

Unsecured andunguaranteed(2)

Unsecured andunguaranteed

16‐Jul‐19

16‐Jul‐19

16‐Jul‐19

16‐Jul‐19

16‐Jul‐19

16‐Jul‐19

16‐Jul‐19

16‐Jul‐19

16‐Jul‐20

16‐Jul‐20

16‐Jul‐20

16‐Jul‐20

16‐Jul‐20

16‐Jul‐20

18Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
ResonaBank,
Limited.

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

1,335,000‐‐

1,335,000

12,385‐‐

12,3850.590

MUFG
Bank, Ltd.

668,000‐‐

668,000

6,197

‐

‐

6,197

0.590

MizuhoBank, Ltd.

3,682,000‐‐

3,682,000

34,159‐‐34,1590.480

3,400,000‐

3,400,000‐

31,542‐

31,542‐0.343

850,000‐

850,000

‐

7,885

‐

7,885

‐

0.343

3,400,000‐‐

3,400,000

31,542‐‐

31,5420.600

MUFG
Bank, Ltd.

850,000‐‐

850,000

7,885

‐

‐

7,885

0.600

MizuhoBank, Ltd.

465,000‐

465,000

‐

4,313

‐

4,313

‐

0.461

MUFG
Bank, Ltd.

1,125,000‐

1,125,000‐

10,436‐

10,436‐0.461

2,181,000‐

2,181,000‐

20,233‐

20,233‐0.461

Sumitomo
MitsuiTrust Bank,
Limited
MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedLong‐term loans
payableIncrease

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.

Japan Post
Bank Co.,Ltd.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.

The Daishi
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
MizuhoBank, Ltd.

570,000‐

570,000

‐

5,288

‐

5,288

‐

0.461

570,000‐

570,000

‐

5,288

‐

5,288

‐

0.461

650,000‐

650,000

‐

6,030

‐

6,030

‐

0.461

2,000,000‐

2,000,000‐

18,554‐

18,554‐0.461

1,000,000‐

1,000,000

‐

9,277

‐

9,277

‐

0.461

333,000‐

333,000

‐

3,089

‐

3,089

‐

0.461

1,270,000‐

1,270,000‐

11,782‐

11,782‐0.461

1,000,000‐

1,000,000

‐

9,277

‐

9,277

‐

0.461

270,000‐

270,000

‐

2,504

‐

2,504

‐

0.461

965,000‐‐

965,000

8,952

‐

‐

8,952

0.569

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

16‐Jul‐20

16‐Jul‐20

28‐Aug‐19

22‐Jan‐19

22‐Jan‐19

22‐Jan‐21

22‐Jan‐21

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐19

30‐Mar‐20

19

Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.

Japan Post
Bank Co.,Ltd.
The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.

Long‐term loans
payableThe
Hyakugo
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

1,125,000‐‐

1,125,000

10,436‐‐

10,4360.569

2,180,000‐‐

2,180,000

20,224‐‐

20,2240.569

570,000‐‐

570,000

5,288

‐

‐

5,288

0.569

570,000‐‐

570,000

5,288

‐

‐

5,288

0.569

650,000‐‐

650,000

6,030

‐

‐

6,030

0.569

2,000,000‐‐

2,000,000

18,554‐‐

18,5540.569

333,000‐‐

333,000

3,089

‐

‐

3,089

0.569

270,000‐‐

270,000

2,504

‐

‐

2,504

0.569

500,000‐‐

500,000

4,638

‐

‐

4,638

0.569

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.569

270,000‐‐

270,000

2,504

‐

‐

2,504

0.569

MizuhoBank, Ltd.

1,965,000‐‐

1,965,000

18,229‐‐18,2290.669

MUFG
Bank, Ltd.

1,125,000‐‐

1,125,000

10,436‐‐

10,4360.669

2,180,000‐‐

2,180,000

20,224‐‐

20,2240.669

570,000‐‐

570,000

5,288

‐

‐

5,288

0.669

570,000‐‐

570,000

5,288

‐

‐

5,288

0.669

650,000‐‐

650,000

6,030

‐

‐

6,030

0.669

1,333,000‐‐

1,333,000

12,366‐‐

12,3660.669

270,000‐‐

270,000

2,504

‐

‐

2,504

0.669

500,000‐‐

500,000

4,638

‐

‐

4,638

0.669

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.

The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐20

30‐Mar‐21

30‐Mar‐21

30‐Mar‐21

30‐Mar‐21

30‐Mar‐21

30‐Mar‐21

30‐Mar‐21

30‐Mar‐21

30‐Mar‐21

20

Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
The
Hiroshima
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
Citibank,
N.A., Japan
Branches
Citibank,
N.A., Japan
Branches
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.

AEON
Bank, Ltd.

The Tokyo
Star Bank,
LimitedThe Tokyo
Star Bank,
LimitedLong‐term loans
payableThe Tokyo
Star Bank,
LimitedMizuhoBank, Ltd.

Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Towa
Bank, Ltd.

The
Shizuoka
Bank, Ltd.
The
Gunma
Bank, Ltd.

MizuhoBank, Ltd.

ResonaBank,
Limited.

Increase

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.669

270,000‐‐

270,000

2,504

‐

‐

2,504

0.669

1,000,000‐

1,000,000

‐

9,277

‐

9,277

‐

0.469

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.569

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.669

1,000,000‐

1,000,000

‐

9,277

‐

9,277

‐

0.469

3,000,000‐‐

3,000,000

27,831‐‐

27,8310.669

700,000‐‐

700,000

6,494

‐

‐

6,494

0.469

1,600,000‐‐

1,600,000

14,843‐‐

14,8430.569

1,700,000‐‐

1,700,000

15,771‐‐

15,771

0.669

634,000‐‐

634,000

5,881

‐

‐

5,881

0.469

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.469

333,000‐‐

333,000

3,089

‐

‐

3,089

0.469

333,000‐‐

333,000

3,089

‐

‐

3,089

0.469

333,000‐‐

333,000

3,089

‐

‐

3,089

0.469

252,000‐‐

252,000

2,337

‐

‐

2,337

0.469

200,000‐‐

200,000

1,855

‐

‐

1,855

0.469

165,000‐‐

165,000

1,530

‐

‐

1,530

0.469

1,633,000‐‐

1,633,000

15,149‐‐15,1490.569

333,000‐‐

333,000

3,089

‐

‐

3,089

0.569

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

30‐Mar‐21

30‐Mar‐21

15‐Jun‐19

15‐Jun‐20

15‐Jun‐21

30‐Jun‐19

30‐Jun‐21

20‐Jul‐19

20‐Jul‐20

20‐Jul‐21

14‐Mar‐20

14‐Mar‐20

14‐Mar‐20

14‐Mar‐20

14‐Mar‐20

14‐Mar‐20

14‐Mar‐20

14‐Mar‐20

14‐Mar‐21

14‐Mar‐21

21Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
The Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Towa
Bank, Ltd.

The
Shizuoka
Bank, Ltd.
The
Gunma
Bank, Ltd.

MizuhoBank, Ltd.

ResonaBank,
Limited.
The Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.
AEON
Bank, Ltd.

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

333,000‐‐

333,000

3,089

‐

‐

3,089

0.569

333,000‐‐

333,000

3,089

‐

‐

3,089

0.569

253,000‐‐

253,000

2,347

‐

‐

2,347

0.569

200,000‐‐

200,000

1,855

‐

‐

1,855

0.569

165,000‐‐

165,000

1,530

‐

‐

1,530

0.569

1,733,000‐‐

1,733,000

16,077‐‐

16,0770.669

333,000‐‐

333,000

3,089

‐

‐

3,089

0.669

333,000‐‐

333,000

3,089

‐

‐

3,089

0.669

333,000‐‐

333,000

3,089

‐

‐

3,089

0.669

900,000‐‐

900,000

8,349

‐

‐

8,349

0.669

Maturity
date

The
Shizuoka
Bank, Ltd.
The
Dai‐ichi Life
Insurancecompany,
Limited
The
Gunma
Bank, Ltd.
Sumitomo
Mitsui
Banking
Corporation
MizuhoBank, Ltd.
The
Dai‐ichi Life
Insurancecompany,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
ResonaBank,
Limited.

253,000‐‐

253,000

2,347

‐

‐

2,347

0.669

200,000‐‐

200,000

1,855

‐

‐

1,855

0.669

500,000‐‐

500,000

4,638

‐

‐

4,638

0.669

165,000‐‐

165,000

1,530

‐

‐

1,530

0.669

3,000,000‐‐

3,000,000

27,831‐‐

27,8310.519

4,321,000‐‐

4,321,000

40,087‐‐40,0870.619

3,000,000‐‐

3,000,000

27,831‐‐

27,8310.619

355,000‐‐

355,000

3,293

‐

‐

3,293

0.369

355,000‐‐

355,000

3,293

‐

‐

3,293

0.369

334,000‐‐

334,000

3,098

‐

‐

3,098

0.369

Remarks(2)

Unsecured andunguaranteed

14‐Mar‐21

14‐Mar‐21

14‐Mar‐21

14‐Mar‐21

14‐Mar‐21

14‐Mar‐22

14‐Mar‐22

14‐Mar‐22

14‐Mar‐22

14‐Mar‐22

Long‐term loans
payableThe Towa
Bank, Ltd.

Use ofproceeds

14‐Mar‐22

14‐Mar‐22

14‐Mar‐22

14‐Mar‐22

14‐Sep‐20

29‐Nov‐21

29‐Nov‐21

13‐Oct‐20

13‐Oct‐20

13‐Oct‐20

22Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
ResonaBank,
Limited.
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.

Long‐term loans
payableThe
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.

MizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
ResonaBank,
Limited.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

300,000‐‐

300,000

2,783

‐

‐

2,783

0.369

190,000‐‐

190,000

1,762

‐

‐

1,762

0.369

167,000‐‐

167,000

1,549

‐

‐

1,549

0.369

167,000‐‐

167,000

1,549

‐

‐

1,549

0.369

355,000‐‐

355,000

3,293

‐

‐

3,293

0.469

355,000‐‐

355,000

3,293

‐

‐

3,293

0.469

333,000‐‐

333,000

3,089

‐

‐

3,089

0.469

300,000‐‐

300,000

2,783

‐

‐

2,783

0.469

190,000‐‐

190,000

1,762

‐

‐

1,762

0.469

167,000‐‐

167,000

1,549

‐

‐

1,549

0.469

167,000‐‐

167,000

1,549

‐

‐

1,549

0.469

500,000‐‐

500,000

4,638

‐

‐

4,638

0.669

500,000‐‐

500,000

4,638

‐

‐

4,638

0.669

500,000‐‐

500,000

4,638

‐

‐

4,638

0.669

355,000‐‐

355,000

3,293

‐

‐

3,293

0.669

355,000‐‐

355,000

3,293

‐

‐

3,293

0.669

333,000‐‐

333,000

3,089

‐

‐

3,089

0.669

1,500,000‐‐

1,500,000

13,915‐‐

13,9150.669

300,000‐‐

300,000

2,783

‐

‐

2,783

0.669

190,000‐‐

190,000

1,762

‐

‐

1,762

0.669

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

13‐Oct‐20

13‐Oct‐20

13‐Oct‐20

13‐Oct‐20

13‐Oct‐21

13‐Oct‐21

13‐Oct‐21

13‐Oct‐21

13‐Oct‐21

13‐Oct‐21

13‐Oct‐21

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

23

Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
The
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.
The
Dai‐ichi Life
Insurancecompany,
LimitedMizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
MizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation

Long‐term loans
payableMizuhoBank, Ltd.
Sumitomo
Mitsui
Banking
Corporation

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

166,000‐‐

166,000

1,540

‐

‐

1,540

0.669

166,000‐‐

166,000

1,540

‐

‐

1,540

0.669

500,000‐‐

500,000

4,638

‐

‐

4,638

0.669

1,250,000‐‐

1,250,000

11,596‐‐

11,5960.769

1,065,000‐‐

1,065,000

9,880

‐

‐

9,880

0.769

1,250,000‐‐

1,250,000

11,596‐‐

11,5960.769

1,250,000‐‐

1,250,000

11,596‐‐

11,5960.869

1,060,000‐‐

1,060,000

9,833

‐

‐

9,833

0.869

1,250,000‐‐

1,250,000

11,596‐‐

11,5960.869

1,850,000‐‐

1,850,000

17,163‐‐

17,1630.319

1,850,000‐‐

1,850,000

17,163‐‐

17,1630.319

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.750

MUFG
Bank, Ltd.

500,000‐‐

500,000

4,638

‐

‐

4,638

0.750

MizuhoBank, Ltd.

2,442,000‐‐

2,442,000

22,655‐‐22,6550.369

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

20,595‐‐

20,5950.369

1,998,000‐‐

1,998,000

18,536‐‐

18,5360.369

1,110,000‐‐

1,110,000

10,297‐‐

10,2970.369

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.369

890,000‐‐

890,000

8,256

‐

‐

8,256

0.369

2,443,000‐‐

2,443,000

22,664‐‐

22,664

0.469

ShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedMizuhoBank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

13‐Oct‐22

13‐Oct‐22

13‐Oct‐22

13‐Oct‐23

13‐Oct‐23

13‐Oct‐23

11‐Oct‐24

11‐Oct‐24

11‐Oct‐24

13‐Oct‐19

13‐Oct‐19

27‐Jun‐23

27‐Jun‐23

17‐Jul‐21

17‐Jul‐21

17‐Jul‐21

17‐Jul‐21

17‐Jul‐21

17‐Jul‐21

17‐Jul‐2224Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

MUFG
Bank, Ltd.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,220,000‐‐

2,220,000

20,595‐‐

20,5950.469

1,997,000‐‐

1,997,000

18,526‐‐

18,5260.469

1,110,000‐‐

1,110,000

10,297‐‐

10,2970.469

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.469

890,000‐‐

890,000

8,256

‐

‐

8,256

0.469

MizuhoBank, Ltd.

2,442,000‐‐

2,442,000

22,655‐‐22,6550.569

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

20,595‐‐

20,5950.569

1,997,000‐‐

1,997,000

18,526‐‐

18,5260.569

1,110,000‐‐

1,110,000

10,297‐‐

10,2970.569

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.569

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.

Long‐term loans
payableIncrease

Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
Limited

890,000‐‐

890,000

8,256

‐

‐

8,256

0.569

766,000‐‐

766,000

7,106

‐

‐

7,106

0.369

766,000‐‐

766,000

7,106

‐

‐

7,106

0.369

467,000‐‐

467,000

4,332

‐

‐

4,332

0.369

150,000‐‐

150,000

1,391

‐

‐

1,391

0.369

120,000‐‐

120,000

1,113

‐

‐

1,113

0.369

30,000‐‐30,000

278

‐

‐

278

0.369

AEON
Bank, Ltd.

60,000‐‐60,000

556

‐

‐

556

0.369

MizuhoBank, Ltd.

2,521,500‐‐

2,521,500

23,392‐‐

23,3920.369

2,521,500‐‐

2,521,500

23,392‐‐

23,392

0.369

MizuhoBank, Ltd.
Sumitomo
Mitsui
Banking
Corporation
MUFG
Bank, Ltd.

ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

17‐Jul‐22

17‐Jul‐22

17‐Jul‐22

17‐Jul‐22

17‐Jul‐22

14‐Jul‐23

14‐Jul‐23

14‐Jul‐23

14‐Jul‐23

14‐Jul‐23

14‐Jul‐23

02‐Aug‐21

02‐Aug‐21

02‐Aug‐21

02‐Aug‐21

02‐Aug‐21

02‐Aug‐21

02‐Aug‐21

26‐Sep‐21

26‐Sep‐21

25

Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

MUFG
Bank, Ltd.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,133,000‐‐

2,133,000

19,788‐‐19,7880.369

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.369

684,000‐‐

684,000

6,345

‐

‐

6,345

0.369

546,000‐‐

546,000

5,065

‐

‐

5,065

0.369

500,000‐‐

500,000

4,638

‐

‐

4,638

0.369

445,000‐‐

445,000

4,128

‐

‐

4,128

0.369

137,000‐‐

137,000

1,270

‐

‐

1,270

0.369

AEON
Bank, Ltd.

273,000‐‐

273,000

2,532

‐

‐

2,532

0.369

MizuhoBank, Ltd.

3,287,000‐‐

3,287,000

30,494‐‐30,4940.469

3,287,000‐‐

3,287,000

30,494‐‐30,4940.469

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Long‐term loans
payableIncrease

Sumitomo
Mitsui
Banking
Corporation

Maturitydate

Use ofproceeds

26‐Sep‐21

26‐Sep‐21

26‐Sep‐21

26‐Sep‐21

26‐Sep‐21

26‐Sep‐21

26‐Sep‐21

26‐Sep‐21

26‐Sep‐22

26‐Sep‐22(2)

MUFG
Bank, Ltd.

2,600,000‐‐

2,600,000

24,120‐‐24,1200.469

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.469

833,000‐‐

833,000

7,727

‐

‐

7,727

0.469

667,000‐‐

667,000

6,187

‐

‐

6,187

0.469

500,000‐‐

500,000

4,638

‐

‐

4,638

0.469

445,000‐‐

445,000

4,128

‐

‐

4,128

0.469

167,000‐‐

167,000

1,549

‐

‐

1,549

0.469

AEON
Bank, Ltd.

334,000‐‐

334,000

3,098

‐

‐

3,098

0.469

MizuhoBank, Ltd.

3,287,500‐‐

3,287,500

30,499‐‐30,4990.569

3,287,500‐‐

3,287,500

30,499‐‐30,4990.569

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation

Remarks

Unsecured andunguaranteed

26‐Sep‐22

26‐Sep‐22

26‐Sep‐22

26‐Sep‐22

26‐Sep‐22

26‐Sep‐22

26‐Sep‐22

26‐Sep‐22

26‐Sep‐23

26‐Sep‐23

26

Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)

MUFG
Bank, Ltd.

(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,600,000‐‐

2,600,000

24,120‐‐24,1200.569

1,000,000‐‐

1,000,000

9,277

‐

‐

9,277

0.569

833,000‐‐

833,000

7,727

‐

‐

7,727

0.569

667,000‐‐

667,000

6,187

‐

‐

6,187

0.569

500,000‐‐

500,000

4,638

‐

‐

4,638

0.569

445,000‐‐

445,000

4,128

‐

‐

4,128

0.569

166,000‐‐

166,000

1,540

‐

‐

1,540

0.569

AEON
Bank, Ltd.

333,000‐‐

333,000

3,089

‐

‐

3,089

0.569

MUFG
Bank, Ltd.

‐

850,000‐

850,000

‐

7,885

‐

7,885

0.373

‐

3,400,000‐

3,400,000‐

31,542‐

31,542

0.373

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Long‐term loans
payableEndingbalance

Decrease

Sumitomo
MitsuiTrust Bank,
LimitedMizuhoBank, Ltd.

‐386,000‐

386,000

‐

3,581

‐

3,581

0.361

MUFG
Bank, Ltd.

‐

1,275,000‐

1,275,000‐

11,828‐

11,8280.361‐

2,100,000‐

2,100,000‐

19,482‐

19,4820.361‐

500,000‐

500,000

‐

4,638

‐

4,638

0.361

‐

500,000‐

500,000

‐

4,638

‐

4,638

0.361

‐

1,000,000‐

1,000,000

‐

9,277

‐

9,277

0.361

‐

333,000‐

333,000

‐

3,089

‐

3,089

0.361

‐

1,270,000‐

1,270,000‐

11,782‐

11,7820.361‐

270,000‐

270,000

‐

2,504

‐

2,504

0.361

‐

300,000‐

300,000

‐

2,783

‐

2,783

0.361

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Senshu
Ikeda Bank,
Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

26‐Sep‐23

26‐Sep‐23

26‐Sep‐23

26‐Sep‐23

26‐Sep‐23

26‐Sep‐23

26‐Sep‐23

26‐Sep‐23

22‐Jan‐22

22‐Jan‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

29‐Mar‐22

27

Classification

Name oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)AozoraBank, Ltd.
THE
NISHI‐NI
PPON
CITY
BANK,
LTD.
The Tochigi
Bank, Ltd.
Long‐term loans
payableKiraboshi
Bank, Ltd.

Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
Total
long‐term
loans
payableTotal loans payable

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)‐

1,000,000‐

1,000,000

‐

9,277

‐

9,277

0.594

‐

1,000,000‐

1,000,000

‐

9,277

‐

9,277

0.594

‐

500,000‐

500,000

‐

4,638

‐

4,638

0.594

‐

1,000,000‐

1,000,000

‐

9,277

‐

9,277

0.869

‐

1,000,000‐

1,000,000

‐

9,277

‐

9,277

0.340

‐

1,000,000‐

1,000,000

‐

9,277

‐

9,277

0.334

17,684,000

17,684,000

224,774,000

2,085,295

164,059

164,059

2,085,295

17,684,000

18,783,000

224,774,000

2,095,491

164,059

174,255

2,085,295

224,774,000

225,873,000

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

29‐Mar‐24

29‐Mar‐24

29‐Mar‐24

29‐Mar‐29

17‐Jun‐22

17‐Jun‐22

Notes:(1)

The average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to three decimal places.

(2)

The funds are mainly used to acquire properties in trust and for repayment of loans payable.

(3)

Long‐term loans payable include current portion.

(4)

Repayment schedule of long‐term loans payable (except for the current portion) for the next five years after each balance sheet date are as follows:

As ofJune 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
1‐2 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

57,380,000$

532,331

2‐3 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

52,602,000

488,004

3‐4 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

29,645,000

275,025

4‐5 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

28,843,000

267,585

11. Net Assets
The Company issues only non‐par value units in accordance with the Investment Trust Act, and the entire amount of the issue price of
new investment units is allocated to unitholders’ capital within net assets. The Company is required to maintain net assets of at least¥50,000 thousand (US$463 thousand) as required by Article 67‐4 of the Investment Trust Act.
The number of investment units authorized was 10,000,000 units as of December 31, 2018 and June 30, 2019.
The number of investment units issued and outstanding were 5,666,840 as of December 31, 2018 and June 30, 2019 respectively.

12.Appropriation of Retained Earnings
In accordance with the distribution policy in Article 17, Paragraph 1, of the Company’s articles of incorporation which stipulates making
distributions in excess of 90% of distributable profit as defined in Article 67‐15, Paragraph 1 of the Special Taxation Measures Act of Japanfor the fiscal period.
The following table shows the appropriation of retained earnings for the six months ended December 31, 2018 and June 30, 2019.
For the six months ended

December 31,

June 30,

June 30,

28

2018

2019

2019
(in thousands of
U.S. dollars)(in thousands of yen)
Unappropriated retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Reversal of allowance for temporary differences adjustment∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

9,140,372¥

21,131,966$

196,047‐(125,201)(1,161)(85,002)‐‐

Distributions in excess of retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Allowance for temporary differences adjustment ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deduction from unitholders capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(204,006)‐‐

Distributions ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(9,537,291)(9,384,287)(87,060)

Of which, distributions of earnings∙∙ ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(9,248,282)(9,384,287)(87,060)

Of which, allowance for adjustment of temporary differences ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(85,002)‐‐

Of which, deduction from unitholders capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(204,006)‐‐

Retained earnings / losses carried forward ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥(107,910)¥

11,622,477$

107,825

The distribution in respect of the six months ended June 30, 2019 of ¥1,656 (US$15.3) per investment unit, amounting to a total
distribution of ¥9,384,287thousand (US$87,060 thousand) was proposed and approved at the Board of Directors meeting on August 22,
2019. These financial statements do not reflect these distributions payable.
Cash distributions per investment unit were ¥1,683 and ¥1,656 (US$15.3) for the six months ended December 31, 2018, and June 30, 2019,respectively.
Notes related to provision and reversal of allowance for temporary differences adjustment is below.
For the six months ended December 31, 2018
In this table, the Company recorded allowance for temporary differences adjustment below.
(a) Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.

Leasehold rights in trust

Reason for occurrence

Allowance for temporary difference adjustments

Occurrence of amortization of leasehold rights in trust

85,002(b) Method of reversal
Method of reversal

Related assets, etc.

Leasehold rights in trust

Upon sale, the corresponding amount is scheduled to be reversed.

For the six months ended June 30, 2019
In this table, the Company reversed allowance for temporary differences adjustment below.
(c) Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.

Leasehold rights in trust

Reason for reversal

Allowance for temporary difference adjustments

Sale of leasehold in trust(125,201)(in thousands of U.S dollars)

Related assets, etc.

Leasehold rights in trust

Reason for reversal

Allowance for temporary difference adjustments

Sale of leasehold in trust(1,161)(d) Method of reversal

Related assets, etc.

Leasehold rights in trust

Method of reversal

Upon sale, the corresponding amount is scheduled to be reversed.

2913. Rent Revenues － Real Estate and Expenses Related to Property Rental Business
Rent revenue – real estate and expenses related to property rental business for the six months ended December 31, 2018 and June 30,
2019 consist of the following:
For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Rental revenue – real estate:
Rental revenue and common area charges (*)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total rental revenue – real estate ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥13,258,939
345,284
13,604,224¥

Expenses related to property rental business:
Facility management fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Property related taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total expenses related to property rental business ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income from property leasing activities∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥667,393547,232
13,8173,039,033
183,199
4,450,676
9,153,548¥(*)Variable rental revenue of hotels ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥4,953,767

11,795,812
357,587
12,153,399

$

$

¥
¥

662,160
565,715
13,723
3,048,495
200,561
4,490,658
7,662,741

$
$

6,143
5,248
127
28,281
1,860
41,661
71,089¥4,304,181$

39,931¥$

109,433
3,317
112,750

14. Management Contract Revenue
For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)Management contract revenue:
Hotel management revenue∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Hotel management expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Management contract revenue ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥‐‐‐Management contract expenses:
Management fee ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total management contract expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income from management contract ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥

‐
‐
‐
‐
‐
‐

¥
¥

¥

¥
¥

1,406,749
826,160
580,5883,490
36,279
119,824
4,782
164,376
416,211

$
$

$

$
$

13,050
7,664
5,386

32
336
1,111
44
1,524
3,861

15. Breakdown of Gain on sales of Properties
For the six months ended December 31, 2018
Not Applicable.
For the six months ended June 30, 2019
Royal Parks
Tower
Minami‐Senju(in thousands of yen)
12,209,814¥
27,745,250
6,422,775
21,923,169
153,225
337,910
5,633,813¥
5,484,169

Spacia Ebisu

Revenue from sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Cost of properties sold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other sale‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Gain or loss on sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥30

Royal Parks
Tower
Minami‐Senju(in thousands of U.S. dollars)
113,274$
257,400
59,586203,387
1,421
3,134
52,266$50,878Spacia Ebisu

Revenue from sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $Cost of properties sold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other sale‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Gain or loss on sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $16. Income Taxes
The Company is subject to corporate income taxes in Japan. The Company may deduct from its taxable income the amounts distributed
to its unitholders, provided the requirements are met under the Special Taxation Measures Act of Japan. Under this act, the Company
must meet a number of tax requirements, including a requirement to distribute in excess of 90% of distributable profit for the fiscal
period in order to be able to deduct such amounts. If the Company does not satisfy all of the requirements, the entire taxable income of
the Company will be subject to regular corporate income taxes in Japan.
The Company has a policy of making distributions in excess of 90% of its distributable profit for the fiscal period to qualify for conditions
set forth in the Special Taxation Measures Act of Japan to achieve a deduction of distributions for income tax purpose and it distributes
approximately 100% of distributable profit. Hence, the Company has treated the distributions as a tax allowable deduction as defined in
the Special Taxation Measures Act of Japan.
(a) Reconciliations of the Company’s effective tax rates and statutory tax rates are as follows:
For the six months ended

December 31,
2018

June 30,
2019(Rate)
Statutory tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deductible cash distributions ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in valuation allowance ∙∙∙∙∙∙∙∙∙∙∙
Change of tax rates
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

31.51 %
(31.84)(0.35)
0.00
0.69

31.51 %
0.00
(31.58)(0.05)
0.12

Effective tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

0.01 %

0.00 %(b) Deferred tax assets and liabilities consist of the following:
As of

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Deferred tax assets:
Enterprise tax payable
Allowance for doubtful accounts ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and other (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Land (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net loss carried forward(*1) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

27
549,474
1,367,722
7,153,149

46
428,965
786,792
747,198

12
0
3,979
7,299
6,931

10,142
153,295‐

10,16876,182477,213

94
706
4,427

Subtotal ‐ deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Valuation allowance for tax loss carried forward
Valuation allowance for the sum of deductible temporary differences

9,235,105(7,153,149)(2,037,871)

2,527,862(747,198)(1,743,389)

23,451(6,931)(16,173)

Asset retirement obligations ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Fixed‐term leasehold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Adjustment of acquisition price (Overseas properties)

¥

1,294

¥

1,294

$

Subtotal ‐ valuation allowance(*2) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(9,191,020)(2,490,588)(23,105)

Total ‐ deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

44,08437,274

345

Deferred tax liabilities:
Asset retirement obligations ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred gains or losses on hedges ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

9,751
34,333

9,711
27,56290
255

Total ‐ deferred tax liabilities

44,08437,274345

31

Net deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

¥

‐

¥

‐

$

‐

(*1)The amounts of tax loss carried forward and the deferred tax assets are indicated by carry‐forward period.
For the six month ended December 31, 2018

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of yen)Tax loss carried forward (a)5,164,678

1,317,493‐

349,185

321,791‐

Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(5,164,678)(1,317,493)‐(349,185)(321,791)‐

7,153,149(7,153,149)

Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

‐

‐

‐

‐

(a)Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
For the six month ended June 30, 2019

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of yen)Tax loss carried forward (a)‐78,982‐

668,215‐‐

747,198

Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐(78,982)‐(668,215)‐‐(747,198)

Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

‐

‐

‐

‐

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of U.S. dollars)
Tax loss carried forward (a)

‐

732

‐

6,199

‐

‐

6,931

Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

(732)

‐

(6,199)‐‐(6,931)

Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

‐

‐

‐

‐

(a) Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
(*2)Valuation allowance decreased ¥6,700,432 thousand (US$62,161 thousand).This main reason is the offset of the tax loss carriedforward.

17. Leases(a) Lease rental revenues
The future minimum rental revenues pursuant to existing rental contracts as of December 31, 2018 and June 30, 2019 scheduled to bereceived are summarized as follows:
As of

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

9,754,753
63,134,893¥

9,754,753
58,695,396$

90,497544,534

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

72,889,647¥

68,450,150$

635,032(b) Lease rental expenses
The future minimum rental expenses pursuant to existing rental contracts as of December 31, 2018 and June 30, 2019 scheduled to be
paid are summarized as follows:
As of

December 31,
2018

June 30,2019(in thousands of yen)

June 30,2019(in thousands of32

U.S. dollars)
Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

312,959
9,934,076¥

268,4877,824,534$

2,490
72,590Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

10,247,035¥

8,093,022$

75,081

18. Financial Instruments(a) Qualitative information for financial instruments(i) Policy for financial instrument transactions
The Company raises funds through loans payable , investment corporation bonds, and the issuance of investment units toacquire real estate properties, pay property maintenance expenses and/or repay existing loans payable. Surplus funds aremanaged carefully through investments in financial instruments taking into account liquidity and safety in light of the current
financial market conditions. Derivative instruments are used only for hedging purposes and not for speculation.
(ii) Nature and extent of risks arising from financial instruments and risk management
The funds raised through loans payable and investment corporation bonds are mainly used to acquire real estate properties orproperties in trust and for the repayment of existing loans payable. Liquidity risks relating to loans payable are managed by thefinance department of the Asset Manager by preparing monthly plans for funds, and monitoring the covenants defined in loan
agreements.
(iii) Supplemental information for financial instruments
The fair value of financial instruments is based on quoted market prices if available. When quoted market prices are notavailable, fair value is estimated using valuation techniques which contain various assumptions. If other valuation models orassumptions were used, the estimated value may differ.
(b) Quantitative information for financial instruments
The following table shows the carrying amounts, fair values and valuation differences of financial instruments for which fairvalue is available as of December 31, 2018 and June 30, 2019.
As ofDecember 31,
2018
Carrying
amounts

June 30,
2019

Fair value

Carrying
amounts

Difference

June 30,
2019

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Assets:Current:(1) Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥3,985,335(2) Cash and bank deposits in trust. ∙∙∙∙∙

7,079,268

Total assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥11,064,604¥

3,985,335¥‐

7,079,268¥

11,064,604

¥

¥

‐

48,833,358¥

6,766,348‐¥

55,599,707

48,833,358¥

6,766,348¥

55,599,707

‐

$

‐
¥

‐

453,041$

62,773$515,815453,041$‐

62,773$515,815‐$‐

Liabilities:(3)Short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,099,000

1,099,000(4) Current portion of long‐term loans
payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

54,745,000(5) Investment corporation bonds ∙∙∙∙∙∙∙∙

4,000,000

54,745,000‐

51,744,000

3,996,500(3,500)4,000,000(6) Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

170,029,000

Total liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥229,873,000¥

229,869,500¥(3,500)¥228,774,000¥

228,779,300

¥

5,300

$

2,122,404$

2,122,453$

49(7)Derivatives∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥124,029¥

124,029¥‐¥

179,861¥

179,861

¥

‐

$

1,668

$

1,668

$

‐

170,029,000‐

173,030,000

‐

‐

‐

51,744,000‐

480,044

480,044‐

4,005,300

5,300

37,10937,15849

173,030,000‐

1,605,250‐

1,605,250

‐

Notes

(i)The methods and assumptions used to estimate fair value are as follows:(1)Cash and bank deposits and(2)Cash and bank deposits in trust(3)Short‐term loans payable
Because of their short maturities, the carrying amounts approximate their fair value.
(4)Current portion of long‐term loans payable(6)Long‐term loans payable
Long‐term loans payable with floating interest rates reflecting changes in market rates within a short term period are stated at their carrying amounts as their carrying
amounts approximate their fair values.
(5)Investment corporation bonds

33

The fair values of investment corporate bonds are determined based on the present value of contractual cash flows discounted at current market interest rates which would
be applicable to new investment corporate bonds under the same conditions and terms.
(7)Derivatives
Please refer to the “20. Derivatives” below.

(ii) Financial instruments for which fair value is difficult to determine are as follows:
As of

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙¥

2,009,816¥

1,746,941$

16,206

Investment securities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

54,640,213¥

17,856,387$

165,659

Tenant leasehold and security deposits are not publicly traded, and it is difficult to determine their fair value based on estimated future cash flows because the repayment datesof those deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
Fair values of preferred securities interest are not subject to disclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

(iii) Cash flow schedule of financial assets after the balance sheet dateWithin 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years(in thousands of yen)
As of December 31, 2018:
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3,985,335
7,079,268

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

11,064,604

¥

‐

¥

‐

¥

‐

¥

‐

¥

‐

As of June 30, 2019:
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

48,833,358
6,766,348

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

55,599,707

¥

‐

¥

‐

¥

‐

¥

‐

¥

‐

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years(in thousands of U.S. dollars)
As of June 30, 2019:
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

453,041
62,773

$

‐
‐

$

‐
‐

$

‐
‐

$

‐
‐

$

‐
‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

515,815

$

‐

$

‐

$

‐

$

‐

$

‐

(iv) Cash flow schedule of financial liabilities after the balance sheet dateWithin 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years(in thousands of yen)
As of December 31, 2018:
Short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of long‐term loans payable ∙∙∙Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,099,000
54,745,000‐‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

55,844,000‐‐‐
50,130,000¥

50,130,000‐‐‐
55,601,000¥

55,601,000‐‐‐
32,895,000¥

32,895,000‐‐
3,000,000
27,843,000¥

30,843,000‐‐
1,000,000
3,560,000¥

4,560,000

As of June 30, 2019:
Short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

Current portion of long‐term loans payable ∙∙∙51,744,000

‐

‐

‐

‐

‐

Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

1,000,000

2,000,000

1,000,000

Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

57,380,000

52,602,000

29,645,000

28,843,000

4,560,000

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

51,744,000¥

57,380,000¥

52,602,000‐¥

30,645,000‐¥

30,843,000‐¥

5,560,000

34Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years(in thousands of U.S. dollars)
As of June 30, 2019:
Short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

Current portion of long‐term loans payable ∙∙∙480,044

‐

‐

‐

‐

‐

Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

9,277

18,554

9,277

Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

480,044532,331$532,331‐

488,004$

488,004‐

275,025$

284,302‐

267,585$

286,139

42,304$

51,581

19. Investment securities
As of December 31, 2018
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand and TK interest recorded on the Balance Sheetat ¥36,783,826 thousand are not subject to disclosure of fair value as they have no market value and their fair values are extremely
difficult to recognize.
As of June 30, 2019
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand (US$165,659 thousand) are not subject todisclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

20. Derivatives
Information on derivative transactions undertaken by the Company as of December 31, 2018 and June 30, 2019 is as follows. Derivative
instruments are used for hedging purposes only and are subject to hedge accounting.
As of December 31, 2018:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)Interest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Principle
accounting
methodCurrency
options
Sell –USD Call(Optionpremium)
Currency
options
Buy –USD Put
Optionpremium

Long‐term
borrowings

Futuretransactions
denominatedina foreign
currency¥

71,640,000¥ 34,729,000¥¥

4,444,000¥

1,903,000¥¥(124,943)¥(53,157)¥¥

4,444,000¥

1,903,000¥¥

140,288¥

88,792¥

48,781(87,318)

162,566(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

As of June 30, 2019:
Contract amount(*1)

Contract amount(*1)

35Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)Interest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Principle
accounting
methodCurrency
options
Sell –USD Call(Optionpremium)
Currency
options
Buy –USD Put
Optionpremium

Long‐term
borrowings

Futuretransactions
denominatedina foreign
currency

Fair
Value
(*2)

Over 1year

Total(in thousands of U.S. dollars)¥

84,074,000¥ 51,413,000¥¥

5,134,140¥

1,933,140¥¥(133,171)¥(42,806)¥¥

5,134,140¥

1,933,140¥¥

225,420¥

102,873¥(19,845)(33,916)

233,622$779,979$

476,973$$

47,630$17,934$$(1,235)

$

(397)

$

$

47,630$17,934

$

$

2,091

$

954

$

(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

21. Asset Retirement Obligations
The Company has an obligation under a fixed‐term leasehold agreement to restore its leased land, which represents the land where
COMFORT HOTEL MAEBASHI, owned by the Company, is located upon the termination of agreement. The estimated period of useof property is estimated at 43 years based on the lease period per the agreement. The assets retirement obligation for the restoration isrecognized as a liability using discount rate at 1.342%.
Movements of asset retirement obligations for the six month ended December 31, 2018 and June 30, 2019 are as follows.

For the six month ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Balance at the beginning of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Liabilities incurred due to the acquisition of properties ∙∙∙∙∙∙∙

31,891¥

32,107‐

Accretion expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

215

Balance at the end of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥32,107

$

‐

‐

213
¥

32,321

297
1

$

299

22. Segment Information
Segment information for the six months ended December 31, 2018 and June 30, 2019 is as follows:(a) Operating Segment Information
Disclosure is omitted as the Company is comprised of a single reportable segment engaged in the property rental business.
(b) Enterprise‐wide Disclosures(i) Information about Products and Services
Disclosure is not required as revenues from external customers for the single segment are in excess of 90% of total revenues.
(ii) Information about Geographic Areas(1) Revenues from Overseas Customers:
For the six months ended December 31, 2018

Disclosure is not required as revenues from external customers located in Japan are in excess of 90% of total revenues.

36

(184)

(314)

2,167

For the six months ended June 30, 2019(in thousands of yen)
Japan

Grand Cayman
24,098,860

Total

3,240,809

27,339,670(in thousands of U.S. dollars)

Japan

Grand Cayman
223,572

Total
30,065

253,638(2)Tangible Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers
Information about major clients for the six‐month periods ended December 31, 2018 and June 30, 2019 were as follows:
For the six months ended December 31, 2018

Name of client

Operating Revenues

Related segment(in thousands of yen)

Mystays Hotel Management Co.,Ltd.

¥7,297,799

Real estate investing business

For the six months ended June 30, 2019

Name of client

Operating Revenues

Operating Revenues(in thousands of yen)(in thousands of U.S. dollars)

Related segment

Mystays Hotel Management Co.,Ltd.

¥6,581,126$61,055

Real estate investing business

Undisclosed (1)¥5,633,813$52,266

Real estate investing business

Undisclosed (2)¥5,484,169$50,878

Real estate investing business

Notes(1) The name of the client (an affiliate of a foreign real estate fund) is not disclosed, as the client’s consent has not been obtained for disclosure. The client is
not included in the group entities of the company and the Asset Manager.
(2) The name of the client (a Japanese TMK (Tokutei Mokuteki Kaisha)) is not disclosed, as the client’s consent has not been obtained for disclosure. The
client is not included in the group entities of the company and the Asset Manager.

23. Profit or Loss from Equity Method, etc
For the six months ended December 31, 2018
(in thousands of yen)
Investments in affiliates

54,640,213

Investments, if equity method was adopted

54,640,213

Investment gains (losses), if equity method was adopted

846,78037

For the six months ended June 30, 2019(in thousands of yen)(in thousands of US dollars)

Investments in affiliates

17,856,387

165,659

Investments, if equity method was adopted

17,856,387

165,659

Investment gains (losses), if equity method was adopted

3,487,698

32,356

24. Related‐Party Transactions(a) Parent Company and Major Corporate Unitholders
For the six months ended December 31, 2018
Share capital
Type ofrelated‐party

Interested
party of the
Asset
Manager

Transactions for the period

Votinginterest intheCompany

Relationshipwith theCompany¥ 0.1‐

Seller of real estate
trust beneficiaryrightsAcquisition of real estate trust
beneficiary rights(2)(4)

Investment
managementbusiness¥ 0.1‐

Seller of real estate
trust beneficiaryrightsMinato‐ku,
Tokyo

Investment
managementbusiness¥ 0.1‐

Dogo TMK(3)Minato‐ku,
Tokyo

Investment
managementbusiness¥ 0.1

Naqua Hotel &Resorts
Management
Co., Ltd.(3)Minato‐ku,
Tokyo

Hotel
managementbusiness

Mystays HotelManagement
Co., Ltd.(3)Minato‐ku,
Tokyo

Hotel
managementbusiness

Company
nameLocation

Aki TMK(3)Minato‐ku,
Tokyo

Investment
managementbusiness

Raetia TMK(3)Minato‐ku,
Tokyo

HL Investments
2 TMK(3)Business

Balance at the end of period

Amounts (1)Amounts(1)Balancesheet
account(in thousands ofyen)¥ 20,691,000‐‐

Acquisition of real estate trust
beneficiary rights(2)(4)¥ 16,731,000‐‐

Seller of real estate
trust beneficiaryrightsAcquisition of real estate trust
beneficiary rights(2)(4)¥ 5,286,000

‐

‐

‐

Seller of real estate
trust beneficiaryrightsAcquisition of real estate trust
beneficiary rights(2)(4)¥ 5,039,000

‐

‐

¥ 10

‐

Lease holder andoperator of hotel

Rental Revenues¥ 1,112,683

Rentalreceivables¥141,119¥ 100‐

Lease holder andoperator of hotel

Rental Revenues¥ 7,297,799

Rentalreceivables¥ 2,264,664(in millions ofyen)Type of transactions(in thousands ofyen)

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Terms and conditions are decided pursuant to the Asset Managerʹs Regulations on Transactions with Sponsor‐related Persons and the Management Manual regarding(3)

The seller, Aki TMK,Raetia TMK, HL Investments 2 TMK, Dogo TMK, Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co.

Transactions with Sponsor‐related Persons.

Ltd has no relationship to be stated, they receive investment through funds that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager
directly and indirectly owning 100% of issued shares. Accordingly, we treat Aki TMK,Raetia TMK, HL Investments 2 TMK, Dogo TMK, Naqua Hotel & Management
Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd as a related party.
(4)

The transaction amount exclude adjusted amount of real property tax and city planning tax, as well as consumption tax and local consumption tax.
Acquisition of real estate trust beneficiary rights are relating to below
Acquisition cost(in thousands of yen)

Property No.

Property nameSeller

D60

Hotel MyStays Premier Akasaka
Hotel MyStays
Premier Sapporo Park

Aki TMK

20,691,000

Raetia TMK

16,731,000

HL Investments 2 TMK

5,286,000

Dogo TMK

5,039,000

D61
D62

Hotel MyStays Ueno East
Hotel MyStays
Midosuji Honmach

D63

Total

47,747,000

For the six months ended June 30, 2019
Share capital
Type ofrelated‐party

Company
nameLocation

Business(inmillionsof yen)(inthousandsof U.S.
dollars)

Transactions for the period
Votinginterest intheCompany

Relationshipwith theCompany

Balance at the end of period

Amounts (1)Type oftransactions(inthousandsof yen)(inthousandsof U.S.
dollars)

Amounts(1)Balancesheet
account(inthousandsof yen)(in thousandsof U.S.
dollars)

38

Interested
party of the
Asset
Manager

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato‐ku,
Tokyo

Hotel
managementbusiness

¥ 10

$ 92

‐

Lease holder andoperator of hotel

RentalRevenues¥590,306$5,476

Rentalreceivables¥197,253$1,829Mystays
HotelManagement
Co., Ltd.(2)Minato‐ku,
Tokyo

Hotel
managementbusiness

¥ 100

$ 927

‐

Lease holder andoperator of hotel

RentalRevenues¥6,581,126$61,055

Rentalreceivables¥1,834,677$17,020

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds
that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we
treat Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd as a related party.

(b) Affiliates
For the six months ended December 31, 2018
Share capital
Type ofrelated‐party

Company
nameLocation

BusinessAmounts (1)(2)

Relationshipwith theCompany

Investmen
t ratio(in millions of yen)Affiliates

Seven Mile
ResortHoldings
Ltd.

Grand
Cayman,CaymanIslands

Investment
manageme
nt business¥ 36,783

100.0%

TK investment

Transactions for the period

Balance at the end of period(in millions of yen)

Balancesheet
account(in millions of yen)

¥ 36,783‐‐

Amounts (1)(2)Type oftransactions
Investmentin the TK(2)(3)

Amounts (1)(2)(1)

Investment amount in USD is converted to yen using the exchange rate fixed by foreign exchange forward (USD 1=JPY 110.45 (rounded down to two decimal places)).

(2)

INV initially funded USD 339,836 thousand (JPY 37,534 million). However, based on the closing settlement, the Cayman SPC did not need as much capital as anticipated.
Therefore, INV received a refund of the TK investment in the amount of USD 6.8 million on December 10, 2018 (Cayman Island local time) from the Cayman SPC. Thus, theamounts indicated are those after the partial refund.

(3)

Investment was made based on a TK agreement.

(4)

The TK is a TK with Seven Mile Resort Holdings Ltd. as an operator.

For the six months ended June 30, 2019
Transactions for the period

Share capital
Type ofrelated‐party

Affiliates

Company
nameSeven Mile
ResortHoldings
Ltd.

Amounts (1)(2)
LocationGrand
Cayman,CaymanIslands

Business

Investment
manageme
nt business(inmillionsof yen)¥ 36,783(inthousandsof U.S.
dollars)$ 341,254

Relationshipwith theCompany

Investmen
t ratio100.0%

TK investment

Balance at the end of period

Amounts (3)Amounts (3)(in millionsof yen)(inthousandsof U.S.
dollars)

Balancesheet
account(in millionsof yen)(in thousandsof U.S.
dollars)

Refund of
TK
investment(3)¥ 36,783$ 341,254‐‐‐

Acquisitionof fixed
assets (3)¥ 35,903$ 333,091‐‐‐

Type oftransactions

Investment amount in USD is converted to yen using the exchange rate fixed by foreign exchange forward (USD 1=JPY 110.45 (rounded down to two decimal places)).

(1)

INV initially funded USD 339,836 thousand (JPY 37,534 million). However, based on the closing settlement, the Cayman SPC did not need as much capital as anticipated.

(2)

Therefore, INV received a refund of the TK investment in the amount of USD 6.8 million on December 10, 2018 (Cayman Island local time) from the Cayman SPC. Thus, theamounts indicated are those after the partial refund.
Investment was made based on a TK agreement with Seven Mile Resort Holdings Ltd. as an operator. INV acquired the Leasehold of the Cayman Hotels by way of a(3)

distribution in kind after the termination of the TK agreement on May 9, 2019. Acquisition price of Leasehold differs from the amount of refund of the TK investment since thebook value as of May 9, 2019 is deemed the acquisition price of these properties.

(c) Board of Directors and Major Individual Unitholders
For the six months ended December 31, 2018

Type ofrelated‐party

Directors
and close
relatives

Name

Naoki
FukudaBusiness / Occupation

Executive officer of theCompany andmanagement director ofConsonant Investment
Management Co., Ltd.

Votinginterest intheCompany‐

Transactions for the period

Balance at the end of period
Amounts(3)Type of transactions(in thousands of yen)
Payment of the assets management
fee to Consonant Investment
Management Co., Ltd.(1)Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Balance sheet
account

Amounts(3)(in thousands ofyen)¥279,774

Accruedexpenses¥148,500¥1,100Accruedexpenses¥864

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

39

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which was(3)Consumption taxes are not included in the transaction amount, but are included in the balance at the end of period.

agreed between the Asset Manager and the Company.

For the six months ended June 30, 2019
Transactions for the period
Type ofrelated‐party

Directors
and close
relatives

Name

Naoki
FukudaBusiness /Occupation

Executive officer of
the Company andmanagement
director ofConsonantInvestment
Management Co.,Ltd.

Votinginterest intheCompany‐

Balance at the end of period

Amounts(3)Type of transactions

Payment of the assets
management fee to Consonant
Investment Management Co.,
Ltd.(1)
Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Amounts(3)(inthousandsof yen)(inthousandsof U.S.
dollars)¥419,700$3,893

¥600

$5

(in
thousandsof yen)(inthousandsof U.S.
dollars)

Accruedexpenses¥291,276$2,702

Accruedexpenses¥324$3

Balance sheet
account

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of period.

25. Parent company and/or significant affiliates(a) Information on the parent company
Not Applicable.

(b) Summary of financial statements of the significant affiliates
The significant affiliates in the year ended June 30, 2019 is Kingdom TMK. Summary of financial statements are as follows:
Kingdom TMK
As of / For the six months ended
December 31, 2018
June 30, 2019
June 30, 2019(in thousands of yen)(in thousands of US dollars)
Total specified assets
Total other assets
Total current liabilities

100,856,568

100,524,164

932,592

3,784,525

3,972,036

36,849212,208

106,709989

Total non‐current liabilities

66,280,661

66,280,661

614,905

Total net assets

38,148,224

38,108,830

353,546

Operating revenue

2,350,784

2,333,624

21,649

Income before income taxes

1,729,001

1,689,613

15,675

Net income

1,728,124

1,688,730

15,666

26. Per Unit Information
The following table shows net asset value per unit as of December 31, 2018 and June 30, 2019 and net income per unit for the six months
then ended. Net income per unit is calculated by dividing the net income attributable to unitholders by the weighted average number ofunits outstanding. The Company has no potentially dilutive units.
As of / For the six months ended

December 31,
2018

June 30,
2019
(Yen)

June 30,
2019(U.S. dollars)40

Net asset value per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥39,063¥

41,125

$

381

1,504

¥

3,748

$

34

Net income per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Weighted average number of units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5,575,457

5,666,840‐

27．Subsequent Events(a) Issuance of New Investment Units
The board of directors held on July 1, 2019 and July 10, 2019 approved the issuance of new investment units and secondary distributionof investment units. Payment for the new investment units issued via public offering was completed on July 18, 2019. In addition, withthe respect to the issuance of new investment units through the third‐party allotment in connection with the overallotment for the public
offering, the payment was completed on August 15, 2019. As a result, holders’ capital becomes JPY235,576 million and the number ofinvestment units issued and outstanding become 6,096,840 units.

(i) Issuance of new investment units through public offering
Number of investment units

Domestic public offering : 194,524 units
International: 215,000 units

Total: 409,524 units

Issue price (offer price): JPY58,898 per unit

Total issue price (total offer price): JPY 24,120,144,552

Amount paid in (issue value): JPY 56,939 per unit

Total amount paid in (total issue value): JPY 23,317,887,036

Payment date

: July 18, 2019(ii) Secondary offering of investment units (overallotment secondary offering)Number of investment units: 20,476 units

Offer price: JPY 58,898 per unit

Total offer value: JPY 1,205,995,448

Delivery date

: July 19, 2019(iii) Issuance of new investment units through third‐party allotment
Number of investment units: 20,476 units

Amount paid in (issue value): JPY 56,939 per unit

Total amount paid in (total issue value): JPY 1,165,882,964

Delivery date

: August 15, 2019

Allotee: Mizuho Securities Co, Ltd.

41

(b) New borrowings
In order to raise a part of the funds to be used for the acquisition of the 18 hotel properties acquired on July 19,2019, the Company
decided on the implementation of the following borrowings at its board of directors’ meeting held and entered into the borrowing
agreement on July 1, 2019.

New Syndicate Loan (L)LenderSyndicate formed by Mizuho Bank, Ltd.

Borrowing amountJPY 27,400 million

Interest rate, etc.

Base rate (1‐month JPY TIBOR) +0.700%, 0.550%, 0.500%, 0.450%, 0.350%, 0.200%

Interest payment date(i) The last Japanese business day of each month before the principal maturity date, beginningwith July 31, 2019, and (ii) the principal maturity date,Principal repayment method

Lump‐sum repayment

Borrowing method

Unsecured / with no guarantee

Borrowing dateJuly 19, 2019,

Maturity dateJuly 16, 2025, January 16, 2025, July 16, 2024, January 16, 2024, January 16, 2023, July 18, 2020(c) Acquisition of assets (properties)
The Company decided to acquire 18 hotel properties as shown in the following table, of which the total acquisition price is JPY 82,646
million, on July 1, 2019 and the acquisitions have been closed on July 19, 2019.
Acquisition

Use

Property
number

Property nameLocation

Construction

pricecompletion

(JPY

date

million)(Note)

Hotel

D64

Hotel MyStays

Sapporo-shi,

Sapporo Aspen

Hokkaido

December 1995

15,543Total
rentable
area

SellerCategory of
specified asset(㎡)

15,313.17

Touyako

Trust beneficial

Godo Kaishainterest

YaeyamaHotel

D65

Art Hotel Ishigakijima

Ishigaki-shi,
Okinawa

Resort Hotel
January 1984

9,731

17,247.54

Tokutei
Mokuteki

Trust beneficial
interest

KaishaSaturnia
Hotel

D66

Hotel MyStays Fuji

Fujiyoshida-shi,

Onsen Resort

Yamanashi

November 2016

9,405

5,498.49

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha

Hotel

Hotel

D67

D68

Hotel Sonia Otaru

Hotel

MyStaysKanazawa Castle

Otaru-shi,
Hokkaido

Kanazawa-shi,Ishikawa

Shirahama

April 1992
March 1998

5,930

6,509.41

November 2018

January1997

Trust beneficial
interest

KaishaCalvisJune 1982
February 1991

Tokutei
Mokuteki

5,682

5,931.84

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha42

Acquisition

Use

Property

Property namenumberLocation

Construction

pricecompletion

(JPY

date

million)(Note)

Total
rentable
area

SellerCategory of
specified asset

(㎡)

HL
Hotel

D69

Art

Hotel

Niigata

StationNiigata-shi,
NiigataInvestments 2
April 1985

5,524

10,403.01

Tokutei
Mokuteki

Trust beneficial
interest

KaishaShirahama
Hotel

D70

Hotel

MyStays

Nagoya Nishiki

Nagoya-shi,
Aichi

March 1974

5,197

6,077.99

Tokutei

Trust beneficial

Mokutekiinterest

KaishaShirahama
Hotel

D71

Hotel Nord Otaru

Otaru-shi,
Hokkaido

March 1996

4,296

6,047.43

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha

Hotel
Hotel

D72

MyStays

Kagoshima

Kawaguchiko

Kagoshima-shi,
KagoshimaTenmonkan

September 1990

3,445

7,659.55

Tokutei

Trust beneficial

Mokutekiinterest

KaishaShirahama
Hotel

D73

Art Hotel Asahikawa

Asahikawa-shi,
Hokkaido

October 1987

3,197

25,131.84

Tokutei

Trust beneficial

Mokutekiinterest

KaishaCalvis
Hotel

D74

Hotel

MyStaysMatsuyama

Matsuyama-shi,
Ehime

July 2000

3,098

8,274.37

Tokutei

Trust beneficial

Mokutekiinterest

KaishaKawaguchiko
Hotel

D75

Hotel

MyStays

Sapporo Susukino

Sapporo-shi,
Hokkaido

May 1981

3,059

2,853.26

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha

Hotel

D76

Hotel

MyStays

SapporoNakajima

Park

Hotel

D77

Hokkaido

February 1991

2,118

5,473.41

Tokutei

Trust beneficial

Mokutekiinterest

KaishaHotel

MyStays

SapporoNakajima

Park Annex

Shirahama

Sapporo-shi,Shirahama

Sapporo-shi,
Hokkaido

September 1991

1,584

1,775.21

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha43

Acquisition

Use

Property
number

Property nameLocation

Construction

pricecompletion

(JPY

date

million)(Note)

Total
rentable
area

SellerCategory of
specified asset(㎡)

CalvisHotel

D78

Flexstay

Inn

Sakuragicho

Yokohama-shi,
Kanagawa

November 1991

1,425

1,308.61

Tokutei

Trust beneficial

Mokutekiinterest

KaishaMyCUBE
Hotel

D79

by

MYSTAYS Asakusa
Kuramae

Hotel
Hotel

D80

Calvis

Taito-ku,Tokyo

September 1991

1,287

2,156.70

Tokutei

Trust beneficial

Mokutekiinterest

KaishaMyStays

KagoshimaTenmonkan Annex

Kawaguchiko

Kagoshima-shi,
KagoshimaFebruary 1985

1,168

2,047.70

Tokutei

Trust beneficial

Mokutekiinterest

KaishaKawaguchiko
Hotel

D81

Hotel
NayoroMyStays

Nayoro-shi,
Hokkaido

November 2014

957

1,985.27

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha(Note) Acquisition prices do not include adjustments for property taxes or city planning taxes, or national or local consumption taxes; hereinafter the same.

44