Creating peace of mind through honest and committed management.

December 16, 2015

Financial Report for the October 2015 Fiscal Period
Ichigo Office REIT Investment Corporation (Tokyo Stock Exchange, 8975)
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-office.co.jp/english
Ichigo Real Estate Investment Advisors Co., Ltd. (Ichigo Office REIT Asset Management Company)
Representative: Wataru Orii, President & Representative Statutory Executive Officer
Inquiries: Masanori Kubota, Statutory Executive Officer (Finance, Accounting)Telephone: +81-3-3502-4891
Submission of Financial Report (Yuka Shoken Hokokusho): January 27, 2016 (expected)
Dividend Payment: January 22, 2016 (expected)
Supplemental Material to Financial and Business Results: Yes (Corporate Presentation)
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1. Financial Results for the October 2015 Fiscal Period (May 1, 2015 - October 31, 2015)(1) Earnings(million yen; period-on-period change)

October 2015

Operating
Revenue
6,248

April 2015

5,020

24.5%

Operating
Profit
2,952

8.8%

2,267

Change30.2%

Recurring
Profit
1,854

6.0%

1,005

Change84.4%

Net
Income1,853

163.1%(28.7%)

704(50.0%)

ChangeOctober 2015

1,310

2.3%

Ratio of
Recurring Profit
to Total Assets
1.2%

April 2015

634

1.1%

0.8%

Net Income per Share(yen)

Ratio of Net Income
to Equity

ChangeRatio of
Recurring Profit
to Operating Revenue
29.7%
20.0%

(2) Dividends
Dividend per
Share

Total
Dividends

Dividend per
Share in Excessof Earnings

Total Dividends
in Excess of
Earnings

PayoutRatio

October 2015

(yen)
1,706

(million yen)
2,416

(yen)
0

(million yen)
0

(%)
130.3

Ratio of
Dividends
to NetAssets(%)
2.7

April 2015

1,603

1,811

0

0

257.1

2.7

(Note 1) The April 2015 dividend reflects a 1,107 million yen dividend reserve reversal and thus differsfrom Net Income.
(Note 2) The October 2015 dividend reflects a dividend reserve reversal of 562 million yen and thus
differs from Net Income.
(Note 3) The April 2015 and October 2015 payout ratios reflect new share issuances and are calculated as:
Payout Ratio = Total Dividends / Net Income x 100

(3) Assets and Equity

October 2015

Total Assets(million yen)
184,792

Net Assets(million yen)
93,255Equity Ratio
(%)
50.5

Net Assets per Share(yen)
65,843

April 2015

136,160

68,56250.4

60,657

Cash Flow fromOperating Activities

Cash Flow from
Investment Activities

Cash Flow from
Financing Activities

October 2015

(million yen)
5,180

(million yen)
(47,277)(million yen)
44,612

Cash and Cash
Equivalents at End of
the Period(million yen)
15,968

April 2015

18,531(25,920)

10,355

13,453(4) Cash Flow

2. Earnings Forecast for the April 2016 Fiscal Period (November 1, 2015 to April 30, 2016) and the October
2016 Fiscal Period (May 1, 2016 to October 31, 2016)(million yen; period-on-period change)

April 2016

Operating
Revenue
6,346

October 2016

6,472

1.6%

Operating
Income2,813(4.7%)

Recurring
Profit
2,176

2.0%

2,944

4.7%

2,301

ChangeChange17.4%

Net
Income
2,175

5.7%

2,300

ChangeChange
17.4%
5.7%
(yen)

Dividend per ShareDividend per Share in Excess of Earnings

April 2016

1,720

0

October 2016

1,760

0

(Note 1)
(Note 2)

The forecast Net Income per share for April 2016 is 1,536 yen and for October 2016 is 1,624 yen.
The April 2016 dividend reflects a dividend reserve reversal of 260 million yen, and the October
2016 dividend reflects a dividend reserve reversal of 200 million yen. Thus both differ from Net
Income of the relevant period respectively.

2

3. Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective
Restatement(i) Changes Accompanying Amendments to Accounting Standards:(ii) Changes Not Listed in (i):(iii) Changes in Accounting Estimates:(iv) Retrospective Restatement:

None
None
None
None

(2) Number of Shares Issued and Outstanding(i) The number of shares issued and outstanding (including treasury shares) was 1,130,323
shares at the end of April 2015 and 1,416,323 shares at the end of October 2015.
(ii) There were no treasury shares at either the end of April 2015 or at the end of October 2015.
Completion Status of Auditing ProceduresThis document is not subject to the auditing requirements set forth in the Financial Instruments and Exchange
Law of Japan. The auditing procedures in accordance with those requirements have thus not been completed asof the date of the publication of this document.
Appropriate Use of Performance Forecasts and Other Matters of Special Note
The forecasts presented above are current figures based on certain preconditions. Accordingly, the actual
operating revenue, operating income, recurring profit, net income, dividend per share, and dividend per share inexcess of earnings may vary due to changes in circumstances. Moreover, these forecasts should not be construed
as a guarantee of such performance or results.
For details on preconditions, please refer to the “Preconditions for Earnings Forecast of the Fiscal Periods
ending April 2016 and October 2016” on page 4.
This English version is a translation of the original Japanese notice and is provided solely for informational
purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shallprevail.

3

Preconditions for April 2016 and October 2016 Fiscal Period Earnings Forecasts
Item

Preconditions

Period November 1, 2015 – April 30, 2016 (182 days)
 May 1, 2016 – October 31, 2016 (184 days)

Portfolio Assets

 77 assets in total. The forecast assumes there will be no additional acquisitions or sales
before the end of October 2016.
 However, the number of assets may change due to acquisitions or sales.

Number of Shares The forecast assumes 1,416,323 shares issued and outstanding as of December 16, 2015.

Operating Revenue

OperatingExpenses Rental revenue is calculated conservatively based on lease contracts that are in effect as of
October 31, 2015 while taking into consideration such factors as historical rents, asset
competitiveness, and market conditions.
 Occupancy of 96.0% has been forecast for the end of April 2016 and 95.8% for the end of
October 2016.
 Rental expenses, Ichigo Office REIT’s principal operating expense, are calculated based on
historical data adjusted for anticipated expense variations. (Depreciation expenses are treatedseparately.) Anticipated property tax and city planning tax is 388 million yen for the April 2016 fiscal
period and 524 million yen for the October 2016 fiscal period.
 Building maintenance and repair expenses are forecast to be 115 million yen for the April
2016 period and 108 million yen for the October 2016 period. However, expenses for eachperiod could differ significantly from these forecast amounts for reasons including thevariability of maintenance and repair expenses, costs due to unexpected building damage,etc.
 Service provider expenses including property management fees, etc., are forecast to be 594
million yen for the April 2016 period, and 570 million yen for the October 2016 yen.
 Depreciation has been calculated using the straight-line method. Depreciation is calculated
by including the depreciation for future additional capital expenditures in the amortization
amount. Depreciation of 851 million yen has been anticipated for the April 2016 period and865 million yen for the October 2016 period.
 Incentive fees of 157 million yen for the asset management company have been anticipated
for the April 2016 period, and no incentive fees have been anticipated for the October 2016
period.
 Actual operating expenses may differ significantly from assumptions due to unforeseeable
factors.

Non-operating
Expenses Interest expenses of 483 million yen are anticipated for the April 2016 period, and 488
million yen for the October 2016 period.
 Borrowing-related expenses of 155 million yen are anticipated for the April 2016 period, and
156 million yen for the October 2016 period.

Borrowings

 Ichigo Office REIT’s balance of loans payable stands at 81,252 million yen as of April 30,
2016, and 81,110 million yen as of October 31, 2016.

Dividend per Share The dividend forecasts assume that distribution will comply with the dividend distribution
policy stipulated in Ichigo Office REIT’s Articles of Incorporation.
 The dividend for April 2016 is forecast to be 2,436 million yen, which is the total amount ofretained earnings of 2,175 million yen plus a dividend reserve reversal of 260 million yen.
The dividend for October 2016 is forecast to be 2,499 million yen, which is the total amountof retained earnings of 2,300 million yen plus a dividend reserve reversal of 200 million yen.
 The dividend per share is subject to change due to factors such as changes in rental revenue
associated with tenant turnover, the occurrence of unexpected maintenance and repair costs,
fluctuations in interest rates, as well as additional share issuance.

4

Dividend in Excessof Earnings per
Share Ichigo Office REIT does not plan on making any dividend distribution in excess of earnings
per share or retained earnings.

Other Performance forecasts are based on the assumption that material revisions will not be madeto laws and ordinances, the tax system, accounting standards, listing rules, and rules of theInvestment Trusts Association, Japan, etc.
 Performance forecasts are also based on the assumption that there will be no unexpectedmaterial change in general economic trends and real estate market conditions, etc.

5Financial Statements(1) Balance Sheet(Thousand yen)
April 2015(as of April 30, 2015)
AssetsCurrent assets
Cash and cash equivalents
Cash and cash equivalents in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets

October 2015(as of October 31, 2015)

6,339,011
7,146,522
36,814259,445―2,840

6,545,720
9,455,413
46,996
325,501
515,293748

13,784,634

16,889,673

8,473,551(851,537)

8,492,334(976,199)

7,622,013

7,516,134

32,545(15,029)

32,545(17,183)

17,515

15,362

261,009(71,268)

265,918(81,671)

189,741

184,247

56,743(23,816)

58,111(27,855)

Fixed assets
Property, plant, and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
FixturesAccumulated depreciation
Fixtures, net

32,92630,255Land
Construction in progress
Buildings in trust
Accumulated depreciation

18,825,582
124
29,266,605(2,563,456)

18,825,582
124
37,003,566(2,885,137)

Buildings in trust, net

26,703,148

34,118,429

52,575(9,136)57,868(10,259)

Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net

43,43947,608333,189(96,927)

351,538(109,675)

236,262

241,863

Fixtures in trust
Accumulated depreciation

254,089(92,729)

191,917(76,520)

Fixtures in trust, net

161,359

115,397

Land in trust
Construction in progress in trust

63,414,448
2,120

99,388,460
4,286

Total property, plant, and equipment

117,248,682

160,487,752

Intangible assets
Leasehold rights in trust

4,494,579

4,494,579

Total Intangible assets

4,494,579

4,494,579

6

(Thousand yen)
April 2015(as of April 30, 2015)

October 2015(as of October 31, 2015)

Investments and other assets
Investments in securities
Tenant leasehold and security deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total Fixed assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Accounts payable – otherAccrued expenses
Income taxes payable, etc.
Accrued consumption taxes, etc.
Advances received
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Shareholders’ capital
SurplusCapital surplus
Dividend reserve
Unappropriated retained earnings /loss
Total surplus
Total shareholders’ equity
Total net assets
Total liabilities and net assets

7―

2,022,112

15,227603,770
13,587

10,005
868,429
19,801

632,584

2,920,348

122,375,846

167,902,679

136,160,481

184,792,353

334,839
6,025,171
366,502
9,622
605
73,465
801,153
18,604
7,629,962

463,454
283,049
531,893
5,243
605
30,985
1,040,173
11,6072,367,010

53,555,141
1,723,922
4,683,727
4,815
59,967,607
67,597,570

81,110,726
1,744,540
6,311,861
2,725
89,169,854
91,536,865

34,130,503

58,781,415

20,566,420
13,160,756
705,230
34,432,407
68,562,911
68,562,911
136,160,481

20,566,420
12,053,620
1,854,031
34,474,073
93,255,488
93,255,488
184,792,353

(2) Income Statement(Thousand yen)
April 2015
(November 1, 2014 toApril 30, 2015)
Operating revenue
Rental revenue
Other rental revenue
Dividend income from investment in TK equity
Gain on sales of real estate

October 2015
(May 1, 2015 to
October 31, 2015)

4,386,495
483,980―
150,3115,596,972
633,787
17,808―5,020,788

6,248,567

2,133,086

2,545,378

Director’s compensation
Other operating expenses―
484,527
9,420
29,316
5,040
91,439654
631,997
10,16938,4335,040
64,181

Total operating expenses

2,752,829

3,295,855

Operating profit

Total operating revenue
Operating expenses
Rental expense
Loss on sales of real estate
Asset management fee
Asset custody fee
Administrative service fees

2,267,958

2,952,711

Non-operating income
Interest income
Reversal of distribution payable
Insurance Income
Other

1,153
852
10
142

1,615
639
―
―

Total non-operating income

2,159

2,255

Non-operating expenses
Interest expenses
Borrowing related expenses
Share issuance expenses
Other

409,090
806,962
48,576490,964
567,196
40,416―

2,212

Total non-operating expenses

1,264,629

1,100,789

Recurring profit

1,005,488

1,854,178

Extraordinary loss
Impairment loss

300,406―

300,406―

705,082

1,854,178

605

605

Total extraordinary losses
Income (losses) before income taxes
Income taxes – current
Total income taxes

605

605

Net income

704,477

1,853,573

Retained earnings brought forward
Unappropriated retained earnings/loss

753
705,230458
1,854,0318

(3)Statement of Shareholders’ Equity
April 2015 (November 1, 2014 to April 30, 2015)(Thousand yen)
Shareholders’ equity
Surplus
Shareholders’capitalBalance at start of theperiod25,782,839

Unappropriatedretainedearnings/loss

CapitalsurplusDividend
reserve

20,566,420

13,338,498

1,410,732

Total
shareholders’equityTotal
surplus35,315,652

Balance atstart of theperiod61,098,491

61,098,491

8,347,664

8,347,664

Changes during the period
Issuance of new shares

8,347,664

Reversal of dividend
reserve(177,741)

Dividends from surplus
Net income

177,741―――(1,587,721)(1,587,721)(1,587,721)(1,587,721)

704,477

704,477

704,477

704,477

Total changes during theperiod8,347,664―(177,741)(705,502)(883,244)

7,464,419

7,464,419

Balance at end of the period

34,130,503

20,566,420

13,160,756

705,230

34,432,407

68,562,911

68,562,911

October 2015 (May 1, 2015 to October 31, 2015)(Thousand yen)
Shareholders’ equity
Surplus
Shareholders’capitalBalance at start of theperiod34,130,503

CapitalsurplusDividend
reserve

20,566,420

13,160,756

Unappropriatedretainedearnings/loss
705,230

Total
shareholders’equityTotal
surplus34,432,407

Balance atstart of theperiod68,562,911

68,562,911

24,650,912

24,650,912

Changes during the period
Issuance of new shares

24,650,912

Reversal of dividend
reserve(1,107,136)

1,107,136―――

Dividends from surplus(1,811,907)(1,811,907)(1,811,907)(1,811,907)

Net income

1,853,573

1,853,573

1,853,573

1,853,573

Total changes during theperiod24,650,912―(1,107,136)

1,148,801

41,665

24,692,577

24,692,577

Balance at end of the period

58,781,415

20,566,420

12,053,620

1,854,031

34,474,073

93,255,488

93,255,488

9

(4) Cash Flow Statement(Thousand yen)
October 2015
(May 1, 2015 to
October 31, 2015)

April 2015
(November 1, 2014 toApril 30, 2015)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Share issuance expenses
Impairment loss
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term advance charges
Increase (decrease) in accrued consumption taxes
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable
Increase (decrease) in advances received
Decrease due to sale of property, plant, andequipment
Decrease due to sale of property, plant, andequipment in trust
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash generated by (used in) operating activities

705,082
667,704
48,576300,406(1,153)409,090
12,333―(545)(228,083)(59,765)
37,94487,69651,517

1,854,178
831,363
40,416―(1,615)490,964(10,181)(515,293)(66,056)(264,659)(42,480)
167,812
165,391
239,019

958,825―

15,944,448

2,809,010

41,376
18,975,454
1,153(444,076)(605)
18,531,926(22,679)
5,675,189
1,615(495,343)(605)
5,180,856(31,609)(27,029,280)
20,839(79,173)(39,194)(46,879,754)
19,791(4,839)1,537,017

1,935,346(338,390)(303,617)―(2,005,400)

Net cash generated by (used in) investment activities(25,920,596)(47,277,668)

Cash flows from financing activities
Increase in long-term loans payable
Decrease in long-term loans payable
Proceeds from issuance of shares
Dividends paid
Net cash generated by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period

31,610,500(27,966,758)
8,299,087(1,586,939)
10,355,889
2,967,220
10,485,827
13,453,047

29,644,000(7,830,537)
24,610,495(1,811,741)
44,612,217
2,515,405
13,453,047
15,968,453

Cash flows from investment activities
Purchase of property, plant, and equipment
Purchase of property, plant, and equipment in trust
Increase in tenant leasehold and security deposits
Decrease in tenant leasehold and security deposits
Increase in tenant leasehold and security deposits intrust
Decrease in tenant leasehold and security deposits in
trust
Purchase of investment securities

10