Investment
Invincible Corporation

Financial Summary
for the 22nd Fiscal Period(from January 1, 2014 to June 30, 2014)

Name
Representative
Stock Listing
Securities CodeURL
Contact

:
:
:
:
:
:

Invincible Investment Corporation
Naoki Fukuda, Executive Director
Tokyo Stock Exchange8963
http://www.invincible‐inv.co.jp/eng/
Consonant Investment Management Co., Ltd.
(Asset Manager of Invincible Investment Corporation)
Akiko Watanabe, Manager, Planning Department
Tel. +81‐3‐5411‐2731

Start date fordividend distribution: September 25, 2014

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

1.

Performance for the 22nd Fiscal Period Ended June 30, 2014
(from January 1, 2014 to June 30, 2014)
1)

Business Results(Percentages in brackets represent change from previous fiscal period)

Operating Revenues

Operating Income

Ordinary Income

Net Income

mn JPY%

mn JPY%

mn JPY%

mn JPY%

22nd Fiscal Period

3,775(+37.8)2,234(+76.5)902(+155.4)901(+155.6)

21st Fiscal Period

2,740(‐0.7)

1,265(+2.8)

353(+5.3)

352(+5.3)Net Income
per Unit

Net Income /NAV*Ordinary Income /Total Assets

JPY%

Ordinary Income /Operating Revenues%%

22nd Fiscal Period

573

2.5

1.1

23.9

21st Fiscal Period

259

1.0

0.4

12.9

*NAV = Total net assets(Note) “Net Income per Unit” is calculated based on the average number of investment units and is rounded to thenearest yen.

2)

Cash Distributions
Distribution
per Unit

Distribution
Amount(Excluding excess
profit distribution
per unit)
JPY

ExcessProfitDistribution
per Unit

mn JPYJPY

ExcessProfitDistribution
AmountDividend
Payout Ratio

mn JPYDistribution /
NAV

%

%

22nd Fiscal Period

573

901

0

0

100.0

2.5

21st Fiscal Period

237

372

0

0

105.7

1.0

(Note 1)
(Note 2)

3)

Invincible Investment Corporation (INV) reversed JPY 20 million out of surplus and distributed JPY 237
per unit for the distribution for the 21st fiscal period ended December 31, 2013.
Dividend payout ratio is calculated by dividing “Distribution Amount” by “Net Income”.

Financial Position
Total Assets

NAV

NAV /Total Assets

mn JPY

22nd Fiscal Period
21st Fiscal Period

mn JPYNAV per Unit%

JPY

79,26136,37345.9

23,121

79,17635,84445.3

22,785(Note) “NAV per Unit” is calculated based on the number of investment units issued and outstanding at the end ofeach period, and is rounded to the nearest yen.

4)

Cash Flows
Cash Flows fromOperating Activities

Cash Flows from
Investment Activities

mn JPY

22nd Fiscal Period
21st Fiscal Period

mn JPY

Cash Flows from
Financing Activities
mn JPY

Closing Balance of Cashand Cash Equivalents
mn JPY

6,622‐5,802‐1,482

3,524

1,771

‐169

‐1,532

4,187

2 / 16

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period2.

Forecast for the 23rd Fiscal Period Ending December 31, 2014
(from July 1, 2014 to December 31, 2014)(Percentages in brackets represent change from previous fiscal period)
Distribution
Excess Profit
Operating
Ordinary
per Unit
Net Income (Excluding excess Distribution
IncomeIncomeprofit distribution
per Unit

Operating
Revenues

per unit)

23rd Fiscal Period(Reference)mn JPY%

mn JPY%

mn JPY%

mn JPY

%

JPY

JPY

4,323

+14.5

2,429

+8.7

1,602

+77.6

1,601

+77.6

600

0

Estimated net income per unit for the 23rd fiscal period: JPY 600

3 / 16

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period<Significant Events during the 23rd Fiscal Period>
INV issued new investment units through a global public offering in the fiscal period ending December
2014 (23rd fiscal period). INV used the funds procured from the global offering (the “Public Offering”)
along with additional borrowing and the refinancing of existing lending from leading Japanese and global
banks (the “Refinancing”) to acquire 18 extended stay/limited service hotels (the “18 Hotels”) (hereinafter
together with the Public Offering and the Refinancing, the “Transactions”).
The Public Offering, accompanying acquisition of the 18 Hotels, and the Refinancing were implemented inline with the portfolio repositioning and refinancing completed in May 2014, to further enhance INV’s
unitholder value under the support of the sponsor, Fortress Group.
1) Issuance of New Investment Units
INV resolved at its meeting of the board of directors held on June 23, 2014 and July 9, 2014 respectively
to conduct the issuance of new investment units and secondary distribution of investment units.
Payment for the new investment units issued via public offering was completed on July 16, 2014. In
addition, with respect to the issuance of new investment units through the third‐party allotment inconnection with the overallotment for the public offering, the payment was completed on August 13,
2014. As a result, INV raised JPY 23,962 million and the number of investment units issued andoutstanding of INV increased to 2,668,686. Please refer to the details of the public offering listed below.
(i)Issuance of new investment units through public offering(a) Number of investment units: 1,040,000 units
Domestic public offering: 527,322 units
International offering: 512,678 units(b) Issue price: JPY 22,688 per unit
(offer price)(c) Amount paid in: JPY 21,873 per unit
(issue value)(d) Total amount paid in: JPY 22,747,920,000(total issue value)(e) Payment date
: July 16, 2014

(ii)

Secondary offering of investment units outside Japan(a) Number of investment units: 70,151 units(b) Offer price: JPY 22,688 per unit(c) Total offer value: JPY 1,591,585,888(d) Seller: Infinite Value Investment Ltd.

(iii) Secondary offering of investment units (overallotment secondary offering)(a) Number of investment units: 55,507 units(b) Offer price: JPY 22,688 per unit(c) Total offer value: JPY 1,259,342,816(d) Delivery date
: July 17, 2014

4 / 16

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period(iv) Issuance of new investment units through third‐party allotment(a) Number of new investment units: 55,507 units(b) Amount paid in: JPY 21,873 per unit
(issue value)(c) Total amount paid in: JPY 1,214,104,611(total issue value)(d) Payment date
: August 13, 2014(e) Allotee: SMBC Nikko Securities Inc.

2) Refinancing
INV entered into a loan agreement as of June 23, 2014 to fund a portion of the acquisition of 18 Hotels
and to obtain a new syndicate loan (New Syndicate Loan (C)) with an interest rate of 0.80% plus
one‐month JPY TIBOR to refinance the New Syndicate Loan (A) carrying an interest rate of 1.50% plus
one‐month JPY TIBOR, together with the New Syndicate Loan (B).

All three “megabanks”

participating as lenders in the New Syndicate Loan (B) obtained in May 2014, namely Sumitomo Mitsui
Banking Corporation, The Bank of Tokyo‐Mitsubishi UFJ, Ltd. and Mizuho Bank, Ltd. will continue toparticipate as lenders in the New Syndicate Loan (C), which will lengthen the borrowing period,
further reduce borrowing costs, enhance the debt service coverage ratio, strengthen lender formationand secure greater financing availability and flexibility. As a result, the balance of interest‐bearing debt
is JPY 67,260 million and average interest rate is 1.09% after the implementation of refinancing as of July17, 2014.
(i)

Overview of the New Borrowing
New Syndicate Loan (C)LenderSumitomo Mitsui Banking
Corporation
The Bank of Tokyo‐Mitsubishi
UFJ, Ltd.
Mizuho Bank, Ltd.
Citibank Japan Ltd.
Shinsei Bank, Limited
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited

Borrowing
Date

July 17, 2014

BorrowingAmountJPY 57,300
millionInterest Rate(annual)0.98000％
Variableinterest rate
(Note 1)

Principal
Maturity
Date

Borrowing
MethodJuly 14, 2017

Secured(Note 2) /with noguarantee(Note 1) Interest rate applicable for the period from July 17, 2014 to August 28, 2014.
One‐month JPY TIBOR + spread (0.8%); however, two‐month JPY TIBOR + spread (0.8%) for the first interest
calculation period only.
(Note 2) First priority pledges over the real estate trust beneficiary interests for 65 properties: Nisshin Palacestage Daitabashi,
Nisshin Palacestage Higashi‐Nagasaki, Growth Maison Gotanda, Growth Maison Kameido, Emerald House,
Harmonie Ochanomizu, Suncrest Shakujii Koen, Growth Maison Shin‐Yokohama, Belle Face Ueno Okachimachi,

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Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

Grand Rire Kameido, Growth Maison Ikebukuro, Growth Maison Yoga, Route Tachikawa, Shibuya Honmachi
Mansion, City Heights Kinuta, Acseeds Tower Kawaguchi Namiki, Capital Heights Kagurazaka, College Square
Machida, Belair Meguro, Wacore Tsunashima I, Foros Nakamurabashi, Growth Maison Kaijin, College Square
Machiya, City House Tokyo Shinbashi, Winbell Kagurazaka, Nishiwaseda Crescent Mansion, Lexington Square
Akebonobashi, Casa Eremitaggio, Towa City Coop Shinotsuka II, Bichsel Musashiseki, Lexel Mansion Ueno
Matsugaya, Towa City Coop Sengencho, Royal Park Omachi, Lexington Square Haginomachi, Visconti Kakuozan,
Lexington Square Daitabashi, Lexington Square Honjo Azumabashi, AMS TOWER Minami 6‐Jo, Spacia Ebisu,
Kindai Kagakusha Building, Lexington Plaza Nishigotanda, Cross Square NAKANO, Ohki Aoba Building,
Lexington Plaza Hachiman, AEON TOWN Sukagawa, Hotel MyStays Kanda, Hotel MyStays Asakusa, Hotel
MyStays Kyoto‐Shijo, MyStays Shin Urayasu Conference Center, Hotel MyStays Maihama, Hotel Vista Premio
Dojima, Hotel MyStays Nagoya‐Sakae, Hotel MyStays Sakaisuji‐Honmachi, Hotel MyStays Yokohama, Hotel
MyStays Nippori, Hotel MyStays Fukuoka‐Tenjin‐Minami, Flexstay Inn Iidabashi, Hotel MyStays Ueno Inaricho,
Flexstay Inn Shinagawa, Flexstay Inn Tokiwadai, Flexstay Inn Sugamo, Hotel MyStays Otemae, Flexstay Inn
Kiyosumi Shirakawa, Flexstay Inn Nakanobu P1 and Flexstay Inn Nakanobu P2. First priority mortgages over two
real estate properties: Shinjuku Island and Times Kanda‐Sudacho 4th. Floating lien over nine properties: Hotel
MyStays Kanda, Hotel MyStays Kyoto‐Shijo, MyStays Shin Urayasu Conference Center, Hotel MyStays Maihama,Hotel Vista Premio Dojima, Hotel MyStays Nagoya‐Sakae, Hotel MyStays Sakaisuji‐Honmachi, Hotel MyStays
Yokohama and Hotel MyStays Fukuoka‐Tenjin‐Minami.

(ii) Overview of the Prepayment of Existing Borrowings
New Syndicate Loan (A)LenderBorrowing
Date

Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo‐Mitsubishi
UFJ, Ltd.
Shinsei Bank, Limited
Citibank Japan Ltd.
Shinsei Trust & Banking Co.,
Ltd.
Aozora Bank, Ltd.

December 20,
2013

Repayment
AmountJPY 17,552
million(Note 1)

Interest Rate(annual)1.64636％
Variableinterest rate

Principal
Maturity
Date

Borrowing
MethodDecember20, 2016

Secured /with noguarantee(Note 2)

(Note 1) The repayment amount is the outstanding balance after the scheduled payment (JPY 16.96 million) as of June 30, 2014.
(Note 2) Interest rate applicable for the period from June 30, 2014 to July 30, 2014.
One‐month JPY TIBOR + spread (1.5%)

New Syndicate Loan (B)LenderSumitomo Mitsui Banking
Corporation
The Bank of Tokyo‐Mitsubishi
UFJ, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
Limited

Borrowing
Date

Repayment
AmountMay 23, 2014

JPY 13,488
million(Note 1)

Interest Rate(annual)0.94636％
Variableinterest rate
(Note 2)

Principal
Maturity
Date

Borrowing
MethodMay 22, 2015

Secured /with noguarantee(Note 1) The repayment amount is the outstanding balance after the scheduled payment (JPY 11.25 million) as of June 30, 2014.
(Note 2) Interest rate applicable for the period from June 30, 2014 to July 30, 2014.
One‐month JPY TIBOR + spread (0.8%)

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Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

3) Acquisition of Assets
INV acquired the 18 Hotels, which exhibit stable revenue and have a high potential to achieve further
revenue growth, on July 17, 2014. Given the expected further increase in hotel users in Japan, the lowlevel of new supply of hotels in Japan, the high occupancy rates of our existing hotel properties and theincreasing market share of limited service/extended stay hotels in particular, the Asset Manager expects
hotels to have a stable operation and believes that the operation will expand in the future. The AssetManager has constructed a portfolio that focusses on both improved stability and future growth, andtherefore decided to position the residential properties and hotels as core assets and main target of
future investment targets for INV.
As a result, the number of properties held by INV after the acquisition of 18 Hotels increased to 91
properties (63 residences, 20 hotels, 7 offices and commercial facilities, and 1 parking lot), for a totalacquisition value of JPY 117,927 million and total leasable area of 224,574.36m2.
The overview of 18 Hotels is as follows,
Use

Hotel

Property
Number

Property Name

Location

Acquisition
Price(JPY million)(Note 1)

Appraisal
Value atAcquisition(JPY million)

SellerCategory ofSpecified
AssetsD3

Hotel MyStays
Kyoto‐Shijo

Kyoto‐shi,
Kyoto

6,024

6,110

Shijodori Holding
Tokutei Mokuteki
KaishaTrust Beneficial
Interest

D4

MyStays Shin‐Urayasu
Conference Center

Urayasu‐shi,
Chiba

4,930

4,980

Zephyrus Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D5

Hotel MyStays
Maihama

Urayasu‐shi,
Chiba

4,870

4,920

Zephyrus Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D6

Hotel Vista Premio
DojimaOsaka‐shi,
Osaka

3,845

3,900

Danube Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D7

Hotel MyStays
Nagoya‐Sakae

Nayoga‐shi,
Aichi

2,958

3,000

Zephyrus Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D8

Hotel MyStays
Sakaisuji‐Honmachi

Osaka‐shi,
Osaka

2,514

2,530

Nagahoribashi
Holding Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D9

Hotel MyStays
Yokohama

Yokohama‐shi,Kanagawa

2,119

2,150

Zephyrus Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D10

Hotel MyStays
NipporiArakawa‐ku,
Tokyo

1,898

1,910

Nishi Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D11

Hotel MyStays
Fukuoka‐Tenjin‐
MinamiFukuoka‐shi,
Fukuoka

1,570

1,580

Shijodori Holding
Tokutei Mokuteki
KaishaTrust Beneficial
Interest

7 / 16

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

Use

Hotel

Location

Acquisition
Price(JPY million)(Note 1)

Appraisal
Value atAcquisition(JPY million)

SellerCategory ofSpecified
AssetsFlexstay Inn Iidabashi

Shinjuku‐ku,
Tokyo

1,381

1,390

Aki Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D13

Hotel MyStays Ueno
Inaricho

Taito‐ku, Tokyo

1,331

1,340

Nishi Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D14

Flexstay Inn
ShinagawaShinagawa‐ku,
Tokyo

1,242

1,250

Nishi Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D15

Flexstay Inn
Tokiwadai

Itabashi‐ku,
Tokyo

1,242

1,250

Aki Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D16

Flexstay Inn Sugamo

Toshima‐ku,
Tokyo

1,192

1,200

Aki Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D17

Hotel MyStays
OtemaeOsaka‐shi,
Osaka

1,192

1,200

Aki Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D18

Flexstay Inn
Kiyosumi Shirakawa

Koto‐ku, Tokyo

749

754

Aki Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D19

Flexstay Inn
Nakanobu P1

Shinagawa‐ku,
Tokyo

589

593

Aki Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

D20

Flexstay Inn
Nakanobu P2

Shinagawa‐ku,
Tokyo

283

285

Aki Tokutei
Mokuteki Kaisha

Trust Beneficial
Interest

39,93840,342

Property
Number

Property Name

D12

Total
(Note 1)
(Note 2)Acquisition prices do not include adjustments for property taxes or city planning taxes, or national or local
consumption taxes; hereinafter the same.
Appraisal value is the appraisal price as of April 30, 2014 based on the appraisal report from Japan Real Estate
Institute.

8 / 16

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period4) Business Outlook
Financial results for the 23rd fiscal period are expected as follows.
The 23rd fiscal period ending December 31, 2014 (from July 1, 2014 to December 31, 2014)
Operating Revenues
Operating Income
Ordinary Income
Net Income
Earnings per Unit
Reversal of Surplus per Unit
Distribution per Unit (Excluding excess profit distribution per unit)
Excess Profit Distribution per Unit

JPY 4,323 Million
JPY 2,429 Million
JPY 1,602 Million
JPY 1,601 Million
JPY 600
JPY 0
JPY 600
JPY 0

INV plans to distribute all of the net income except for a fractional portion in which Distribution Per
Unit is less than JPY 1, using the proceeds from net income for the 23rd fiscal period.
Based on the above, INV plans to distribute JPY 1,601 million in total, (Distribution Per Unit: JPY 600)
for the 23rd fiscal period ending December 2014. The total distribution amount exceeds 90% of theamount of distributable income, and therefore meets the tax conduit requirement. The balance of thesurplus gained from negative goodwill resulting from the merger on February, 2010 (the “Surplus”)
after the distribution for the 23rd fiscal period will remain JPY 73 million.
(Note 1)

Due to the Offering, the number of investment units issued and outstanding at the end of the 23rd fiscal
period is 2,668,686 units.
(Note 2) One of the tax conduit requirements is the dividend payment requirement, in which investment
corporations are required to distribute at least 90% of their distributable income (Note 3).
(Note 3) Amount of distributable income for the next fiscal period (JPY 1,661 million (*)) × 90% = JPY 1,495
million(*) Distributable income for the next fiscal period (JPY 1,661 million) = Net income before income tax for the next
fiscal period (JPY 1,602 million) + Amortization of negative goodwill for each fiscal period (JPY 59 million)(**)(**) Amortization of negative goodwill for each fiscal period (JPY 59 million) = Gain on negative goodwill accrued
upon the merger (JPY 11,843 million) × (Number of months of fiscal period ÷ 1,200 months (***))(***) 1,200 months = 100 years × 12 months (1 year)

For the pre‐conditions and assumptions underlying the business outlook for the 23rd fiscal period,
please see “Pre‐Conditions and Assumptions Underlying Forecasted Performance for the 23rd Fiscal
Period (from July 1, 2014 to December 31, 2014)”.

(Disclaimer of Forward‐Looking Statements)
Forward‐looking statements, such as the forecast results described herein, are based on the informationthat we currently have and certain assumptions that we consider reasonable. The results may
significantly vary due to changes in the business, such as the occurrence of sales gains and losses inassociation with the disposals of properties, repayment of borrowings, decrease of the rent received,that are not forecasted as of today. Also, this forecast is not a guarantee of the distribution amount.

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Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period<Pre‐Conditions and Assumptions Underlying Forecasted Performance for the 23rd Fiscal Period(from July 1, 2014 to December 31, 2014)>
Item

Assumptions

Fiscal period

From July 1, 2014 to December 31, 2014

Assets undermanagement

INV assumes the number of properties is 91 properties based on the number ofproperties held by INV as of today.
In addition, INV assumes there will be no new acquisitions or disposals of existing
properties thereafter through to the end of the 23rd fiscal period.

Units outstanding

INV assumes the number of units issued and outstanding is 2,668,686 units, which isbased on the number of units issued by INV as of today. Also, INV assumes there will
be no additional issue of investment units thereafter through to the end of the 23rd
fiscal period.

Interest‐bearing liabilities

Balance as of the end of the 23rd fiscal period: JPY 67,260 million.
INV assumes there will be no additional repayments of the borrowings and no new
financing thereafter through to the end of the 23rd fiscal period.
INV assumes it will earn operating revenues of JPY 4,323 million for the 23rd fiscal
period.
The breakdown is as follows:

Operating revenues

・Rental revenues

JPY 4,323 million(of these, JPY 1,740 million are hotel revenues)

Rental revenues are calculated based on historical data taking into account tenant
trends, property competitiveness, market environment and other factors. In addition,
INV assumes there are no delinquencies or non‐payment of rent by tenants.
INV assumes it will incur property related expenses of JPY 1,661 million for the 23rd
fiscal period.
The breakdown is as follows:・Facility management fees
Operating expenses

・Taxes and other public charges
・Insurance expenses
・Other expenses
・Depreciation expenses

JPY 475 million(of these, JPY 40 million are repair costs)
JPY 163 million
JPY 5 million
JPY 134 million
JPY 881 million

Other than the property related expenses, INV assumes it will incur operating
expenses of JPY 232 million for the 23rd fiscal period.
INV assumes it will incur non‐operating expenses of JPY 827 million for the 23rd
fiscal period. The breakdown is as follows:

Non‐operating expenses

Distribution per unit

・Interest expenses
JPY 370 million
・Finance related costs
JPY 300 million(of those, JPY 194 million are one‐time expense of refinancing as of July 17, 2014)
・Other non‐operating expenses
JPY 157 million(of those, JPY 157 million are costs related to the issuance of investment units for
the Offering as of July 16, 2014)
The distribution per unit is calculated in accordance with the cash distribution policy
set forth in INV’s Articles of Incorporation.
INV assumes it will pay the distribution using net income as a source, and plans to
distribute JPY 1,601 million (JPY 600 per unit).

10 / 16

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

Item

Assumptions

Excess profit
distribution per unit

INV currently does not expect to make distributions in excess of profits (excess profit
distribution per unit).

Other

INV assumes there will be no amendments to laws and ordinances, the taxation
system, accounting standards and other regulations that will affect the foregoing
forecasts.
In addition, INV assumes there will be no unforeseen material changes in the market
environment, including general economic trends and real estate market conditions.

<For Reference>
As mentioned above, INV issued new investment units in a global public offering (the “Public
Offering”) and a third‐party allotment in connection with an over‐allotment option granted in relation
to the public offering (the “Over‐Allotment Option” and, together with the Public Offering, the“Offering”). Using the proceeds from the Offering and refinancing of loans (the “Refinancing”), INV
acquired 18 hotels (hereinafter together with the Offering and the Refinancing, the “Transactions”).
For ease of reference, figures for earnings per unit, distribution per unit and simulated earnings perunit are summarized in the table below.
Forecasts for simulated earnings per unit are shown for reference purposes, and indicate simulated
earnings per unit after excluding one‐time costs associated with the Transactions and treating theAcquisitions, the Offerings and the Refinancing as if they had taken place prior to the beginning offiscal period ended June 2014.
The simulated earnings per unit is purely a simulation intended to describe the effect of thetransactions, etc. described above and is neither a forecast nor prospect relating to INV’s earnings or
distribution per unit for a given operating period.
<Simulated Earnings per Unit>
Net Income per Unit
(Note 1)

Distribution per
Unit (DPU)

Simulated Earnings
per Unit

22nd fiscal period

JPY 573

JPY 573

JPY 600

23rd fiscal period (forecast)

JPY 600

JPY 600

JPY 628(Note 1)

(Note 2)Net Income per Unit in the 22nd fiscal period is calculated assuming that the number of investment
units issued and outstanding is 1,573,179 units, and Net Income per Unit in the 23rd fiscal period is
calculated assuming that the number of investment units issued and outstanding is 2,668,686 units.
Figures in the above table are rounded down to the indicated amount.

Simulated Earnings per Unit refer to earnings per unit calculated by applying the simulated
adjustment below, eliminating the effects of such factors as one‐time expenses and treating the

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Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

two hotels acquired in May, 2014 and the 18 hotels acquired in July, 2014 as if they wereacquired prior to the beginning of 22nd fiscal period.
Simulated adjustment is based on the total of the following adjustments:(i) Elimination of the gains from the sale of seven senior housing properties as of May, 2014.
(ii) The impact based on the assumption that the repositioning of the portfolio through the saleof seven senior housing properties and the acquisition of two hotels in May, 2014, and theacquisition of the 18 hotels in July, 2014 were implemented prior to beginning of 22nd fiscal
period.
(iii) The impact based on the assumption that the refinancing implemented in May, 2014 and July,
2014 were implemented prior to beginning of the 22nd fiscal period.
(iv) The tax amount based on the assumption that property taxes and city planning taxes will be
expensed at the beginning of the 22nd fiscal period on the two hotels acquired in May 2014
and 18 hotels acquired in July, 2014.
(v) Elimination of various one‐time charges in connection with the implementation of theTransactions.
(vi) With respect to both the 22nd fiscal period and the 23rd fiscal period, the calculation is basedon the assumption that a total of 1,095,507 units (1,040,000 units through the Public Offeringand 55,507 units through the Over Allotment Option) were issued at the beginning of the
22nd fiscal period and the number of investment unites issued and outstanding is 2,668,686
units.
The simulated earnings per unit for the 22nd fiscal period and the 23rd fiscal period is purely asimulation intended to calculate the normalized earnings per unit taking into consideration theeffect of the transactions, etc. described above and is neither a forecast nor prospect relating to
INV’s earnings or distribution per unit for a given operating period. Accordingly, there is no
guarantee that the simulated earnings per unit will ever be realized for any future operating
period, and INV is not obligated to revise any of the simulated figures regardless of any
changes in circumstances that may affect the above simulation.

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Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

3. Financial Statements
1) Balance Sheet of INV as of June 30, 2014
(Consistent with Japanese GAAP)

Items

21st Fiscal Period

22nd Fiscal Period( As of Dec. 31, 2013)( As of Jun. 30, 2014)

Ths JPY
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Accrued revenue
Accounts receivables
Prepaid expenses
Consumption tax receivable
Advance payment
OthersAllowance for doubtful accounts
Total current assets
Non‐current assets
Property, plant and equipment, at cost
Buildings
Equipment
Building improvements
Land
Buildings in trust
Equipment in trust
Building improvements in trust
Tools, furniture and fixtures in trust
Land in trust
Total property, plant and equipment, at cost
Intangible assets
OthersTotal intangible assets
Investment and other assets
Guarantee deposits
Long‐term prepaid expenses
OthersTotal investment and other assets
Total non‐current assets
Total assets

Items
Liabilities
Current liabilities
Accounts payable
Short‐term debts
Current portion of long‐term debts
Current portion of long‐term debts in trust
Accrued liabilities
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non‐current liabilities
Long‐term debts
Long‐term debts in trust
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits
Total non‐current liabilities
Total liabilities
Net assets
Unitholdersʹ equity
Unitholdersʹ capital
SurplusCapital surplus
Unappropriated retained earnings / loss
Total surplus
Total unitholdersʹ equity
Total net assets
Total liabilities and net assets%

1,457,257
2,729,902‐
10,948122,3217,419‐
10‐2,573
4,325,286

Ths JPY%

ChangesThs JPY%

5.5

759,058
2,765,504
2,574
71,193
120,941‐
17,1380‐1,391
3,735,018

2,461,796
22,7062,330
2,713,620
27,423,061
5,073,126
223,646
80,64636,582,527
74,583,461

94.2

78,131
21,5101,640
711,834
28,538,783
5,259,944
212,270
91,54040,447,565
75,363,220

95.1‐2,383,665‐1,196‐689‐2,001,786
1,115,722
186,818‐11,376
10,894
3,865,038
779,759

137
137

0.0

106
106

0.0

‐30
‐30

‐22.2

0.3
94.5
100.0

10,000
119,338
34,070163,40975,526,736
79,261,754

0.2
95.3
100.0

‐
‐105,032
694‐104,337
675,391
85,122

‐39.0
0.9
0.1

10,000224,371
33,375
267,746
74,851,345
79,176,632

4.7‐698,199
35,601
2,574
60,244‐1,379‐7,41917,138‐101,181‐590,268

‐13.6

1.0

21st Fiscal Period

22nd Fiscal Period( As of Dec. 31, 2013)%
Ths JPY( As of Jun. 30, 2014)
Ths JPY%

174,201‐
203,520
105,833
5,000
229,843525‐
385,886
5,048
1,109,859

ChangesThs JPY%

40.2‐30,762
13,488,750
17,348,580‐105,833
27,733‐107,908‐4
143,637‐28,364
27,87930,763,708

AI

‐73.9
‐1.0

1.4

143,439
13,488,750
17,552,100‐
32,733
121,934520
143,637
357,52232,92731,873,567

20,146,480
20,854,166
1,037,721
183,579
42,221,948
43,331,808

53.3
54.7

‐
9,960,000
1,025,726
28,663
11,014,390
42,887,957

13.9
54.1

‐20,146,480‐10,894,166‐11,995‐154,916‐31,207,558‐443,850

29,134,389

36.8

29,134,389

36.8

‐

‐

8.5
45.3
45.3
100.0

6,264,432
974,975
7,239,407
36,373,796
36,373,796
79,261,754

9.1
45.9
45.9
100.0

‐
528,972
528,972
528,972
528,972
85,122

7.9
1.5
1.5
0.1

6,264,432
446,0036,710,435
35,844,824
35,844,824
79,176,632

13 / 16

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

2) Statement of Income for the 6 months Ended June 30, 2014
(Consistent with Japanese GAAP)
Items

Operating revenues
Rental revenues (1)Gain on sales of properties
Operating expenses
Property related expenses (2)Depreciation expenses (3)NOI (1)‐(2)+(3)Asset management fees
Directorsʹ remuneration
Asset custodian fees
Administrative service fees
Provision of allowance for doubtful accounts
Bad debt loss
Other operating expenses
Operating income
Non‐operating revenues
Interest revenues
Profit from finance related cost adjustment
Reversal of allowance for doubtful accounts
Miscellaneous income
Non‐operating expenses
Interest expenses
Finance related costs
Investment unit issuance expenses
Miscellaneous losses
Ordinary income
Income before income taxes
Corporate tax, etc.
Net income
Retained earnings at the beginning of the period
Unappropriated retained earnings / loss at the end of the period

2１st Fiscal Period
2013/7/1‐
2013/12/31‐
Ths JPY%
2,740,449
100.0
2,740,449‐
1,474,679
53.8
1,261,221
527,420
2,006,648
125,000
4,800
3,986
19,0891,045
2,561
56,9751,265,770
46.2
355,54413.0
400
354,737‐406
1,267,953
46.3
672,128
579,038
15,4871,300
353,360
12.9
353,36012.9
605
352,755
12.9
93,247446,003

14 / 16

22nd Fiscal Period
2014/1/1‐
2014/06/30
Ths JPY%
3,775,772
100.0
2,772,419
1,003,352
1,541,127
40.8
1,281,791
527,9142,018,542
125,000
4,800
3,906
18,224‐‐
107,404
2,234,644
59.2
1,777
0.0
404
‐
475
898
1,334,001
35.3
376,514842,043
115,4385
902,42023.9
902,42023.9
605
901,815
23.9
73,159974,975

ChangesThs JPY
1,035,323
31,9701,003,352
66,44820,570494
11,894‐‐‐79‐864‐1,045‐2,56150,429968,874‐353,766
3‐354,737
475
491
66,048‐295,613
263,004
99,951‐1,294
549,059
549,059‐
549,059‐20,087
528,972

%
37.8

4.5

76.5
‐99.5

5.2

155.4
155.4
155.6

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

3) Statement of Cash Flows for the 6 months Ended June 30, 2014
(Consistent with Japanese GAAP)
21ｓｔ Fiscal Period
2013/7/1‐
2013/12/31
Ths JPY

Items
Cash flows from operating activities
Net income before taxes
Depreciation expenses
Investment unit issuance expenses
Finance related costs
Amortization of tenant leasehold and security deposits in trust
Interest revenues
Profit from finance related cost adjustment
Interest expenses
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in accounts receivable
Decrease (increase) in deposit payments
Decrease (increase) in consumption tax receivable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease in property and equipment due to sale
OthersSubtotal
Proceeds of interest
Payment of interest
Payment of corporate taxes, etc.
Cash flows from operating activities
Cash flows from investment activities
Payment for acquisition of tangible assets in trust
Repayment of tenant leasehold and security deposits
Repayment of tenant leasehold and security deposits in trust
Proceeds of tenant leasehold and security deposits in trust
OthersCash flows from investment activities
Cash flows from financing activities
Proceeds from short‐term debt
Repayment of short‐term debt
Proceeds from long‐term debt
Repayment of long‐term debt
Repayment of long‐term debt in trust
Finance related costs
Payment of distributions
Proceeds from issuance of investment units
Payment of investment unit issuance expenses
OthersCash flows from financing activities
Increase (decrease) in cash and cash equivalents
Beginning balance of cash and cash equivalents
Closing balance of cash and cash equivalents

15 / 16

22nd Fiscal Period
2014/1/1‐
2014/06/30
Ths JPY353,360
527,451
15,487579,038(683)(400)(354,737)
672,1281,045
6,458
748,197(7,419)(24,902)
24,617‐(127,432)
8,411(3,553)‐
5,481
2,422,548
390(650,982)(606)
1,771,350

902,420
527,945
115,438
842,043
(435)
(404)
‐
376,514(1,181)(60,244)‐7,419
143,637(87,869)(1,613)
18,110(28,364)
10,9094,367,451(6,762)
7,125,015
404(502,533)(609)
6,622,276(158,960)‐(49,761)
39,531(694)(169,885)(5,618,018)(154,916)(93,087)
81,527(17,833)(5,802,328)‐‐

13,500,000(11,250)‐(2,797,899)(11,000,000)(732,126)(342,802)‐(98,468)‐(1,482,546)(662,597)
4,187,160
3,524,562

20,350,000(22,891,500)‐(1,618,501)(355,323)
2,999,992‐(16,787)(1,532,119)
69,344
4,117,815
4,187,160

Invincible Investment Corporation (8963)
Financial Summary for the 22nd Fiscal Period

For further information:
Please contact
Planning Department at Consonant Investment Management, Co. Ltd.
Tel. +81‐3‐5411‐2731
Disclaimer
This document contains translations of selected information provided in the Japanese language Summary Financial
Report (Kessan‐Tanshin) for the 22nd Fiscal Period Ended June 30, 2014 (from January 1, 2014 to June 30, 2014) of Invincible
Investment Corporation (INV) dated August 27, 2014 and prepared under the timely disclosure requirements of theTokyo Stock Exchange.
This document is for informational purposes only and not for solicitation to invest in, or recommendation to buy, certain
products of INV. You should consult with securities firms if you intend to purchase investment units of INV.
This English language document is provided solely for the convenience of and reference by non‐Japanese investors andneither corresponds to the original Japanese documents nor is intended to constitute or form a part of any disclosure
document required by the Financial Instruments and Exchange Act of Japan or regulations thereunder, the Investment
Trust and Investment Corporation Act of Japan or regulations thereunder, or the listing rules of the Financial Instruments
Exchanges or other related rules and regulations. The Japanese language Summary Financial Report should always bereferred to as the original of this document.
English terms for Japanese legal, accounting, tax and business concepts used herein may not be precisely identical to theconcepts of the equivalent Japanese terms. With respect to any and all terms herein, including without limitation,
financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original
Japanese documents and English statements contained herein, the original Japanese documents shall always prevail.
None of INV, Consonant Investment Management Co., Ltd. (Asset Manager) or any of their respective directors, officers,
employees, partners, shareholders, agents or affiliates will be responsible or liable for the completeness appropriatenessor accuracy of English translations or the selection of the portions of any documents translated into English. No person
has been authorized to give any information or make any representations other than as contained in this document inrelation to the matters set out in this document, and if given or made, such information or representation must not be
relied upon as having been authorized by INV, Asset Manager or any of their respective directors, officers, employees,
partners, shareholders, agents or affiliates.
The financial statements are a translation of the audited financial statements of INV, that were prepared in accordancewith generally accepted accounting principles in Japan (Japanese GAAP) which may materially differ in certain respects
from generally accepted accounting principles and practices in other jurisdictions. In preparing the financial statements,
certain reclassifications and modifications have been made to the financial statements issued domestically in order topresent them in a format that is more familiar to readers outside Japan.
Many provisions of this document contain forward‐looking statements and information. We base these statements on
our beliefs as well as our assumptions in consideration of currently available information; therefore, there may becurrently known and unknown risks and uncertainties in such statements. The contents of forward‐looking statements
are subject to such risks, uncertainties, assumptions and other factors.
These forward‐looking statements are not a guarantee of future performance, and there are certain important factors that
could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward‐looking
statements, including without limitation: the general economy, market conditions, financial markets including theperformance of the real market, interest rate fluctuations, competition with our properties, and the impact of changing
regulations or taxation.
INV does not intend, and is under no obligation, to update any particular information included in this document. The
forward‐looking statements contained in this document speak only as of the date of release, August 27, 2014, and INV
does not undertake to revise those forward‐looking statements to reflect events occurring after the date of this release.

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