This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Summary of REIT Financial Report for the 11th Fiscal Period
January 20, 2022
Stock Exchange Listing: TSE
URL: https://oom-reit.com/en/

REIT Issuer:
Ooedo Onsen Reit Investment Corporation
Securities Code: 3472
Representative: Fuminori Imanishi, Executive Director
Asset Manager:
Representative:
Inquiries to:

Ooedo Onsen Asset Management Co. Ltd.
Fuminori Imanishi, Chief Executive Officer
Yoshimi Nishibeppu, General Manager, Planning and Coordination
Department

Scheduled date of submission of periodic securities report (yuka shoken hokokusho):Scheduled date of start of distribution payments:
Preparing supplementary explanatory materials on financial results:
Holding of brief session on financial results:+81-3-6262-5456
February 25, 2022
February 8, 2022

Yes
Yes (for institutional investors and analysts)[Amounts are rounded down to the nearest million yen, except for per unit figures]
1. Status of Management and Assets for the 11th Fiscal Period
10th Fiscal Period: Fiscal period ended May 2021 (from December 1, 2020 to May 31, 2021)
11th Fiscal Period: Fiscal period ended November 2021 (from June 1, 2021 to November 30, 2021)(1) Management Status
Fiscalperiod10th
11th

Operatingrevenuemillion yen
1,348
1,344

FiscalperiodProfitper unit

%
(0.8)
(0.3)

Operatingprofitmillion yen
593
589

Ratio of profit tounitholders’ equity
yen
1,951
1,667

10th
11th

%
(0.1)
(0.7)

%
2.2
1.9

[% figures show the period-on-period increase (decrease)]
Ordinary
Profitprofitmillion yen% million yen
%
460
(1.6)
459
(1.6)
393
(14.5)
392(14.5)
Ratio of ordinary profit tototal assets
%
1.2
1.1

Ratio of ordinary profit tooperating revenue
%
34.1
29.3

(2) Distribution Status
Fiscal period

Distribution
per unit

Total
distribution(excludingexcess cash
distribution)(excludingexcess cash
distribution)

Excess cash
distribution
per unit

Total excess
cash
distribution

Distribution
per unit

Total
distribution(includingexcess cash
distribution)(includingexcess cash
distribution)

Distribution
Ratio of
Payoutdistribution to
ratio
net assetsyenyenmillion yen
yenmillion yen
million yen
%
%
10th
1,952
459
18
4
1,970
463
100.0
2.2
11th
1,668
392
18
4
1,686
396
100.0
1.9
(Note 1) The entire amount of total excess cash distribution is equivalent to the increase amount of allowance for temporary difference
adjustments.
(Note 2) Distribution payout ratio is rounded down to the first decimal place.

(3) Financial Position
Fiscalperiodmillion yen
37,12236,926

million yen
21,092
21,021

Unitholders’ equity to total
assets%56.8
56.9

Net cashprovided by (used in)operating activities
million yen
948
934

Net cashprovided by (used in)investing activities
million yen
(165)
(104)

Net cashprovided by (used in)financing activities
million yen
(672)
(711)

Total assets

10th
11th

Net assets

Net assets
per unityen
89,62289,320(4) Cash Flow Status
Fiscalperiod
10th
11th

-1-

Cash andcash equivalents
at end of period
million yen
1,031
1,150

2. Management Status Forecasts for the 12th Fiscal Period and the 13th Fiscal Period
12th Fiscal Period: Fiscal period ending May 2022 (from December 1, 2021 to May 31, 2022)
13th Fiscal Period: Fiscal period ending November 2022 (from June 1, 2022 to November 30, 2022)

FiscalperiodOperatingrevenue

Operatingprofit[% figures show the period-on-period increase (decrease)]
Distribution
Distribution
Excess cash
per unit
per unit
distribution
Profit(including(excluding excess
excess cash
per unit
cash distribution)

Ordinary
profitdistribution)

millionmillionmillionmillion
%
%
%
%
yen
yen
yen
yen
yen
12th
1,285 (4.3)
534 (9.3)
369 (6.0)
368 (6.0)
1,567
13th
1,255 (2.3)
521 (2.4)
378
2.3
377
2.3
1,602
(Reference) Estimated Profit per unit for the 12th Fiscal Period: 1,567 yen; 13th Fiscal Period: 1,602 yen

yen

yen

18
18

1,585
1,620

* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates and Retrospective Restatement(i) Changes in accounting policies accompanying amendments to accounting standards, etc.:
None(ii) Changes in accounting policies other than (i):None(iii) Changes in accounting estimates:None(iv) Retrospective restatement:
None(2) Total Number of Investment Units Issued and Outstanding(i) Total number of investment units issued and outstanding(including own investment units) at end of period:(ii) Number of own investment units at end of period:

11th

235,347 units

10th

235,347 units

11th

0 units

10th

0 units* Presentation of the status of implementation of audit procedures
At the time of disclosure of this financial report (kessan tanshin), the audit procedures pursuant to the Financial Instruments andExchange Act have not been completed.
* Explanation of the appropriate use of the management status forecasts, and other matters of special note
The management status outlook and other forward-looking statements contained in this document are based on information thatare currently available and certain assumptions that are deemed reasonable by the Investment Corporation. Accordingly, the actual
management status, etc. may differ materially due to various factors. In addition, the forecast is not a guarantee of the amount ofcash distribution. For the assumptions for the management status forecasts, please refer to “Assumptions Underlying Forecasts of
the Financial Results for the Fiscal Periods Ending May 2022 and November 2022” on page 8.

-2-

1. Management Status
2.1. Management Status(1) Overview of the Fiscal Period under Review
a. Brief History of the Investment Corporation
Ooedo Onsen Reit Investment Corporation (the “Investment Corporation”) was established on March 29,
2016 (capital: 200 million yen, issued investment units: 2,000 units) under the Act on Investment Trusts andInvestment Corporations (the “Investment Trust Act”). Registration with the Kanto Local Finance Bureau wascompleted on May 13, 2016 (registration number 119, filed with the Director of the Kanto Local Finance
Bureau).
Subsequently, pursuant to the basic policy calling for “key investments in onsen and spa-related facilities
under the Ooedo business model (Note 1) that can achieve stable revenues and sustained growth” and “growthstrategy taking maximum advantage of support from the Ooedo-Onsen Monogatari Group (Note 2)”, thesponsor, the Investment Corporation issued new investment units via public offering (174,200 units) with
August 30, 2016 as the payment date and listed on the Real Estate Investment Trust Securities Market of Tokyo
Stock Exchange, Inc. (“Tokyo Stock Exchange”) (Securities Code: 3472) on August 31, 2016. Furthermore,
the Investment Corporation acquired 9 onsen and spa-related facilities (Note 3) (total acquisition price (Note4): 26,844 million yen) on September 1, 2016. At the beginning of the 4th fiscal period, the Investment
Corporation issued new investment units via public offering (56,330 units) and additionally acquired 5 onsen
and spa-related facilities (total acquisition price: 9,861 million yen) on December 4, 2017. During the fiscal
period under review, the Investment Corporation transferred part of the land of Ooedo-Onsen Monogatari
Reoma Resort on November 2, 2020 and at the same time leased the transferred part from the transferee, as aresult of which, the total number of facilities owned by the Investment Corporation as of the end of the fiscal
period under review stood at 14 facilities (total acquisition price: 36,082 million yen). The total number ofinvestment units issued and outstanding of the Investment Corporation as of the end of the fiscal period underreview stands at 235,347 units.
(Note 1) “Ooedo business model” is business expertise introduced in facilities operated by the Ooedo-Onsen Monogatari Groupcapable of maintaining high profitability and stable occupancy, which are possessed by the Ooedo-Onsen MonogatariGroup and believed to be highly competitive.
(Note2 ) “Ooedo-Onsen Monogatari Group” is comprised of the Investment Corporation’s sponsors, namely Ooedo-Onsen
Monogatari Hotels & Resorts Co, Ltd. and Ooedo-Onsen Monogatari Co., Ltd. (hereinafter “Ooedo-Onsen
Monogatari” and may be referred to as “Sponsors” collectively with Ooedo-Onsen Monogatari Hotels & Resorts Co.,
Ltd.) and their consolidated subsidiaries (meaning subsidiaries provided for in Article 8, Paragraph 3 of the Regulationon the Terminology, Forms, and Preparation Methods of Financial Statements (Ordinance of the Ministry of Finance
No. 59 of 1963, as amended), including the Asset Manager). The same applies hereinafter.
(Note 3) “Onsen and spa-related facilities” refers to facilities which provide as a primary function onsen or hot baths, andinclude baths (public bathing facilities which employ onsen or other similar facilities; the same hereinafter), ryokan(lodging of which main structure and facilities are Japanese style), hotels (lodging of which main structure andfacilities are Western style), resort facilities (facilities to provide opportunities for sports or recreational activities
during leisure time), amusement parks, or other leisure facilities (including multi-use facilities that contain theforegoing) that include hot baths as part of their core facilities. Onsen and spa-related facilities also refers to facilities
as a whole, including not only buildings with onsen or hot baths, but also the buildings and sites that are adjacent tosuch buildings or operated as one facility. The same applies hereinafter.
(Note 4) “Acquisition price” is the purchase price (not including expenses, such as consumption tax, local consumption tax, or
sale and purchase fees) of each property in the sale and purchase agreement, rounded down to the nearest million yen.
However, in the case of Ooedo-Onsen Monogatari Reoma Resort, since the Investment Corporation transferred partof the land on November 2, 2020 and at the same time leased the transferred part from the transferee, the "acquisition
price" is the purchase price (not including expenses, such as consumption tax, local consumption tax or sale andpurchase fees) of each real estate in the sale and purchase agreement pertaining to the property as of the time ofacquisition minus the amount equivalent to the book value pertaining to such transferred part as of the time of transfer
plus the amount equivalent to the premium paid as consideration for the establishment of the leasehold in the leaseagreement pertaining to establishment of the leasehold interest in the transferred part.

b. Investment Environment and Management Performance
During the fiscal period under review, the Japanese economy was severely affected by the government
again declaring a state of emergency, particularly in metropolitan areas in April 2021 in response to thecontinuing COVID-19 pandemic and the subsequent measures taken to fight the disease. Subsequently, thestate of emergency was ended in October 2021, largely in response to a sharp decrease in new COVID-19
infections and an increase in the vaccination rate, resulting in the current trend of a recovery of the overall
occupancy rate of hotels and inns.
Some of the facilities owned by the Investment Corporation operated only on weekends during June 2021,
and in July 2021, all facilities resumed operation while taking thorough measures to prevent COVID-19
infections. Visits by the elderly, which are the largest segment of customers, had been restricted. They have
gradually resumed after the state of emergency was ended, infection preventive measures were communicated,and people who had received their second dose of the vaccine increased.
-3-

In this environment, the overall guestroom occupancy rate for the fiscal period under review (Note 1) was
50.7%, ADR (Note 2) fell 10.4%, RevPAR (Note 3) decreased 12.5%, and sales dropped 12.4% from theprevious fiscal period. The Investment Corporation’s variable rents for the fiscal period under review, whichae calculated based on the annual results of the Ooedo-Onsen Monogatari Group, the tenant, for the period
through August 2021, remained zero from the previous fiscal period for all facilities, reflecting lower
occupancy during the period. However, the Investment Corporation received the full amount of fixed rents,
whose ratio to total rents was high.
The appraisal value of properties acquired totaled 40,129 million yen at the end of the fiscal period underreview. In comparison to the appraisal value of properties acquired at the end of the previous fiscal period,
the capitalization rate remained unchanged. However, the appraisal value of properties acquired declined 80
million yen due to a decrease in future cash flow that resulted from the review of the expected amount of
capital expenditures by some of the facilities. Looking at unrealized gain/loss (Note 4) for the entire portfolio
at the end of the fiscal period under review, the unrealized gain increased to 5,829 million yen as a result of
the depreciation of the 14 properties that comprise the portfolio.
In addition, the Investment Corporation implemented essential repairs by tenants during the COVID-19
pandemic while taking steps to control expenditures including the postponement of a portion of capital
expenditures whose implementation could be delayed from the perspective of cash management. At the sametime, the Investment Corporation made the capital expenditures necessary for maintaining functions based ona capital expenditure plan that duly considered the conditions, characteristics and other factors of the owned
properties. (In principle, tenants bore repair expenses based on lease agreements.)
Further, the Investment Corporation continued its activities for acquiring new properties and gathering
information extensively from the marketplace instead of limiting its operations to the properties operated by
the Ooedo-Onsen Monogatari Group, anticipating the state of things after the end of the pandemic andimprovement in the financing environment.
(Note 1) Occupancy rate refers to the ratio of leased area to leasable area.
Guestroom occupancy rate is calculated using the following formula.
Guestroom occupancy rate = number of guestrooms sold during relevant period / number of rooms available for saleduring relevant period ×100 (%)(Note 2) Average daily rate (ADR) is calculated for a given time period by dividing total room revenue by the number of totalrooms sold(Note 3) Revenue per available room (RevPAR) is calculated for a given time period by dividing total room revenue by the
number of total rooms available for sale.
(Note 4) Unrealized gain/loss is calculated using the following formula.
Unrealized gain/loss = Total appraisal value of owned assets as of the end of the fiscal period under review – Totalbalance sheet amount (including equipment attached to buildings, structures, machinery and equipment, tools,
furniture and fixtures as well as leasehold right)

c. Overview of Capital Procurement
In the fiscal period under review, the Investment Corporation procured 4,904 million yen through shortterm borrowing from a syndicate with Sumitomo Mitsui Banking Corporation (SMBC) as the arranger and 230
million yen through short-term borrowing from SMBC (Note 1) to allocate the funds to the repayment of a
portion of 3,472 million yen, 1,449 million yen, and 240 million yen in short-term borrowings that became due
on August 31, 2021. Moreover, the Investment Corporation procured 2,190 million yen through short-termborrowing from a syndicate with SMBC as the arranger (Note 2) to allocate the funds to the repayment of a
portion of 2,190 million yen in long-term borrowings that became due on November 30, 2021. In addition, theInvestment Corporation made scheduled repayments of 87 million yen each on July 31, 2021 and October 31,
2021, using cash on hand. As a result, the total amount of interest-bearing debt and the ratio of such debt tototal assets (LTV) came to 14,069 million yen and 38.1%, respectively, at the end of the fiscal period underreview. The Investment Corporation voluntarily pledged its assets as collateral on November 30, 2021, toprioritize measures against risks in financial operations with a focus on efficient future financing, which is,more specifically, the completion of the refinancing of immediate borrowings (Note 3).
(Note 1) Refer to the press release, “Notice Concerning Borrowing of Funds,” dated August 24, 2021, for details.
(Note 2) Refer to the press release, “Notice Concerning Borrowing of Funds,” dated November 25, 2021, for details.
(Note 3) Refer to the press release, “Notice Concerning the Conclusion of Agreement on Creation of Security Interest,” dated
November 25, 2021, for details.

d. Overview of Financial Performance and Distributions
As a result of the operations described above, business performance in the fiscal period under review
generated operating revenue of 1,344 million yen, operating profit of 589 million yen, ordinary profit of
393million yen and profit of 392 million yen.
Concerning cash distribution for the fiscal period under review, pursuant to the cash distribution policies
provided in the Investment Corporation’s articles of incorporation, the amount of distribution was to be inexcess of an amount equivalent to 90% of the Investment Corporation’s earnings available for distribution as-4-

defined in Article 67-15, Paragraph 1 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957,
as amended; the “Special Measures Concerning Taxation Act”). Accordingly, the Investment Corporation
decided to distribute 1,668 yen per unit (excluding excess cash distribution).
Furthermore, in accordance with the policy for “distribution of cash in excess of profit” as stated in theInvestment Corporation’s articles of incorporation, the Investment Corporation makes a distribution for the4,236,246 yen in allowance for temporary difference adjustments (as defined in Article 2, Paragraph 2, item 30of the Ordinance on Accountings of Investment Corporations (Cabinet Office Ordinance No. 47 of 2006, as
amended; the “Investment Corporations Accountings Ordinance”) for the purpose of reflecting the effect on
distributions of the difference between accounting and tax treatment of earnings in association with therecording of interest expenses of asset retirement obligation and recording of depreciation of building bookvalue corresponding to asset retirement obligation and leasehold depreciation (as defined in Article 2,
Paragraph 2, item 30 (b) of the Investment Corporations Accountings Ordinance). This results in excess
distribution per unit of 18 yen.
As a result, distribution per unit for the fiscal period under review was determined as 1,686 yen (of which,excess distribution per unit was 18 yen).
(2) Outlook for the Next Fiscal Perioda. Management Environment in the Next Fiscal Period
The Japanese economy has been showing signs of recovery since the state of emergency in metropolitan
areas was lifted in October 2021. People’s movements, which had been restricted, began to resume as trips
within the same prefectures and neighboring prefectures increased with the support of a downward trend in
new COVID-19 infections, an increase in the percentage of people vaccinated, and the development andpossible approval of a COVID-19 medication. Meanwhile, there has been a surge of people infected with
COVID-19 variants such as the Omicron variant since the beginning of 2022. While the effectiveness of
vaccination, including third doses of the vaccine, existing drugs, and other options have been examined,
uncertainty still remains and the Investment Corporation expects that the progress will ebb and flow until the
economy reaches a full-fledged recovery.
In this environment, the Investment Corporation believes that trends in the number of people infected withvariants of the COVID-19 virus, the increase of the vaccination rate and consumer confidence will particularly
affects trends in intangible goods consumption (Note 1), or more precisely, experience-based consumption(Note 2), on which leisure facilities (Note 3) constituting its investment targets are based. Trends in the thirdround of vaccination and its effectiveness must also be monitored.
The performance of the tenants of the facilities owned by the Investment Corporation has been recovering
through the resumption of customers’ use of the facilities due to a decrease in new COVID-19 infections after
October 2021 and the support of prefectural governments using discount plans. The occupancy rates until
December 2021 reflected the trend of a recovery in repeat customers from neighboring areas, who are the main
targets of the Ooedo model, and the Investment Corporation expects that a further recovery in demand may
follow while the adverse effect of another spike in COVID-19 infections caused particularly by variants of thevirus must be monitored.
Changes in facilities owned include the sale of Ooedo-Onsen Monogatari Nagasaki Hotel Seifu on January
13, 2022 (Note 4). Part of the net proceeds from the sale was allocated to the repayment of existing borrowings
and the remainder will be used to stabilize the financial base of the future business, acquire properties,
implement CAPEX (Note 5) that will contribute to an increase in property value, and carry out other activities
to stabilize and strengthen investor value.
(Note 1) “Leisure facilities” refers to facilities that provide consumers with leisure activities and fulfilling time which people
nowadays require, such as “enjoyment,” “communication,” “comfort and relaxation” and “health and intellectual
satisfaction.”(Note 2) “Intangible goods consumption” refers to consumption activities for providing a “series of experiences” which is acombination of individual events.
(Note 3) “Experience-based consumption” refers to consumption activities for the purpose of having experiences.
(Note 4) For details, please refer to the releases Notice Concerning Transfer of Real Estate in Japan (Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu), and Notice Concerning Early Repayment of Borrowings in Part dated December 24, 2021.
(Note 5) For the definition of CAPEX, please refer to section ii. Strategic CAPEX Contributing to the Increase in Income andEnhancement of Competitiveness under (b) Internal Growth Strategy in b. Future Management Policy and Challenges
to Address.

b. Future Management Policy and Challenges to Address
The Investment Corporation aims to build a portfolio focused on leisure facilities but for the time being it
will place the highest priority on taking all possible measures to protect itself against income and financial risks
posed by COVID-19 and prepare to create flexible growth strategies when the external environment improves.

-5-(a) External Growth Strategy
i. Utilization of Sponsor Pipeline
An overview of the supply of onsen and spa-related facilities suggests that facility closures in response to
the results aggravation due to the prolonged COVID-19 pandemic and facility sales to raise funding for thesurvival of businesses are anticipated. Properties introduced to the Investment Corporation and the OoedoOnsen Monogatari Group are likely to remain relatively large in number.
In accordance with the sponsor support agreement concluded with the Sponsors on November 1, 2017, theInvestment Corporation is granted preferential negotiating rights for the acquisition of onsen and spa-related
facilities owned or developed by the Ooedo-Onsen Monogatari Group, and will also be preferentially provided
with third-party property sales information acquired by the Ooedo-Onsen Monogatari Group. The Investment
Corporation intends to continuously acquire mainly onsen and spa-related facilities with the Ooedo businessmodel owned and operated by the Ooedo-Onsen Monogatari Group by making maximum use of theabovementioned support.
ii. Utilization of Network Unique to the Asset Manager and Acquisition of Properties Other than
Properties Contributed by Sponsor
The Investment Corporation believes that the supply of leisure facilities defined in its Articles ofIncorporation (Note 1) is still insufficient to accommodate new infectious disease control measures andincreasingly diverse lifestyles and predicts that, in the medium and long term, the structural shift towards
increased use of leisure and the global movement of people will continue, picking up pace.
In this environment, information on the sale of leisure facilities with proven stable performance amid the
pandemic has been acquired using the asset manager’s own network. The Investment Corporation will
implement activities to acquire onsen and spa-related facilities in famous hot spring areas as well as a variety
of facilities which will help improve the balance of its existing portfolio and diversify risk, including properties
in urban settings such as ordinance-designated cities and core cities, new development projects and recently
built properties, and facilities to meet demand for inbound tourism post-COVID-19, based on an assessment of
new trends and changes in the lodging and leisure industries in light of the lessons learned from COVID-19. In
addition, the Investment Corporation will mostly secure preferential negotiating rights through the use of thebridge structure and other means for the time being while waiting for the financing environment to improveand opportunities for fundraising to be available.
(Note) The investment targets set forth in the Articles of Incorporation of the Investment Corporation are ryokans, hotels,bathing facilities, resort facilities, amusement parks and other leisure facilities, as well as their complex facilities.

(b) Internal Growth Strategy
i. Rent Structure Emphasizing Stability
The Investment Corporation adopts a rent system that comprises primary rent (fixed rent combined with
GOP (Note 1)-linked variable rent) with the addition of secondary rent (amount equivalent to real estate-related
costs of each facility) in the long-term lease agreements concluded with the Ooedo-Onsen Monogatari Group
companies that are the tenants of the owned assets (Note 2). This along with having tenants pay repair expenses
in principle allows the Investment Corporation to secure stability of cash flow over the long term while pursuingbenefits from the upside of a GOP-linked rent income when facilities are generating favorable operating results.
Looking at variable rents, results for the fiscal period under review, and forecasts for the fiscal period ending
May 2022 and the fiscal period ending November 2022 are all zero due to occupancy rate declines during the
COVID-19 pandemic. For the time being, the Investment Corporation is focused on overcoming the current
crisis and securing fixed rents to the maximum degree possible. At the same time, the Investment Corporation
works to redouble the surety of its rent income by continuously monitoring tenants’ business performance andability to pay rents to restore the stability of rents in the future.
(Note 1) “GOP” refers to gross operating profit, which is the amount remaining after deducting expenses arising directly frommanaging each facility, such as labor expenses and general and administrative expenses, from each facility’s sales.
The same applies hereinafter.
(Note 2) The rent system has been adopted in the lease agreements for the currently owned assets. However, this does notguarantee the same rent system will be adopted in the lease agreements for the facilities that the Investment
Corporation acquires in the future.

ii. Strategic CAPEX (Note) Contributing to the Increase in Income and Enhancement ofCompetitiveness through the Expansion of Capacity
The Investment Corporation will implement CAPEX, which will contribute to an increase in value, such as
the extension and reconstruction of owned properties that have scope for an increase in asset value to increase
the number of guestrooms. Through this measure, it aims to secure potential income for the operator of the-6-

owned properties, as well as to increase rental income through the effective use of non-operating buildings andunused land on the premises in the medium to long term.
In addition, the Investment Corporation will strive to raise variable rents by increasing tenant income
through collaboration with the Ooedo-Onsen Monogatari Group, which has the expertise to improve added
value in onsen and spa-related facilities, by actively engaging, from the position of the facility owner, in various
measures to help enhance the competitiveness of facilities, as well as events and other measures to attract guests.
(Note) CAPEX (Capital Expenditure) does not refer to repair expenses for maintenance of real estate but refers to expenditure
for enhancing value and extending lifetime of real estate and its facilities.

(c) Financial Strategy
The Investment Corporation's top priority is understanding the impact of COVID-19 on tenants’ performanceand associated rent income risks and addressing risks to achieve efficient financing. More specifically, it isfocused on the refinancing of existing loans. The Investment Corporation believes that maintaining its financialbase through conservative LTV control and cash management is very important.
The Investment Corporation's policy is to maintain LTV at a conservative level with a rate below 40% as abenchmark for the time being under the principle of 60% as maximum, while paying attention to themaintenance of its capital reserves during the COVID-19 pandemic. The Investment Corporation also aims tolower the risk premium and reduce financial costs by expanding its portfolio and diversifying risks including
those related to tenants and facility locations from medium- and long-term perspectives. At the same time, theInvestment Corporation seeks to gain high ratings, diversify its procurement methods, lengthen the averagedebt repayment period and introduce fixed interest rates.
(3) Significant Subsequent Events
Transfer of property
The Investment Corporation sold the following asset on January 13, 2022.
Name of asset soldOoedo-Onsen Monogatari Nagasaki Hotel Seifu
Transfer price:
1,640 million yen
Contract date
January 7, 2022
Date of share transfer January 13, 2022
Transferee
Not disclosed because consent has not been obtained from the transferee.
Impact on financial
The Investment Corporation plans to post a gain on sales of real estate properties
resultsof approximately 11 million yen for the 12th fiscal period(December 1, 2021 through May 31, 2022).

-7-

Assumptions Underlying Forecasts of the Financial Results
for the Fiscal Periods Ending May 2022 and November 2022
Item
Calculation
periodAssumption
・・ManagedAssets・・・Operatingrevenue・・

Fiscal period ending May 2022
(12th fiscal period: from December 1, 2021, to May 31, 2022) (182 days)
Fiscal period ending November 2022
(13th fiscal period: from June 1, 2022, to November 30, 2022) (183 days)
The number of properties owned by the Investment Corporation is assumed to decrease to 13
due to the transfer of Ooedo-Onsen Monogatari Nagasaki Hotel Seifu as of January 13, 2022.
It is assumed that there will be no changes other than the above (acquisition of new properties,
sale of owend properties,etc.) by the end of November 2022.
The managed assets may change due to acquisition of assets other than the owned properties
above, the disposition of assets under management, etc.
Lease operations revenue from the owned assets is calculated based on the lease agreements
effective as of the date of this document. It is calculated in light of rent revisions to be made in
the future, taking into consideration market trends and other factors. It assumes that there is nodelinquency or non-payment of rent by the tenant.
The periods constituting the basis for calculating variable rents are determined by multiplying
the modified GOP for the period between March 2021 and February 2022 in the fiscal period
ending May 2022 (12th period) and the modified GOP for the period between September 2021
and August 2022 in the fiscal period ending November 2022 (13th period) by the premium ratethat is specified in each lease agreement. This assumes that the effects of the COVID-19
pandemic since March last year will cause a decrease in the modified GOP that becomes thebasis of calculating variable rents, resulting in no variable rents for all properties in both thefiscal period ending May 2022 (12th period) and the fiscal period ending November 2022 (13thperiod).
Fixed rents are assumed to be paid in full based on the provisions of lease agreements thatare effective as of the date of this document.
Rent is calculated based on the following assumptions:[Ooedo-Onsen Monogatari Reoma Resort]
Fixed rent: 52,456,896 yen monthly
Variable rent: 5,181,730 yen monthly; and will be calculated using the following calculation
method from June 2019(1) Modified GOP (Note 1) for the most recent one-year period × 5.0%
(yearly; the monthly amount is 1/12th thereof)(2) Only if 58.7% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
Ooedo-Onsen Monogatari Reoma Resort, a fixed-term land lease agreement has been concluded
with the tenant and land rent based on this fixed-term land lease agreement of 83,700 yen permonth is received separately, however, this land rent will be revised every year and will becalculated as follows.
Amount of rent after revision = ((A×12－B) + B’) ÷ 12
A: Amount of rent at that particular point in time
B: Sum total of fixed asset tax and other taxes and public dues levied on the land, calculated
based on the tax notice as of October 31 immediately preceding the start date of theimmediately preceding base fiscal year (refers to one-year period commencing on December
1 each year; the same applies hereinafter), and the land rent (annual rent payable at thatparticular point in time)
B’: Sum total of fixed asset tax and other taxes and public dues levied on the land, calculated
based on the tax notice as of October 31 immediately preceding the start date of thatparticular base fiscal year, and the land rent (annual rent payable at that particular point intime)[Ooedo-Onsen Monogatari Ise-shima]
Fixed rent: 18,009,399 yen monthly-8-Variable rent: 962,993 yen monthly from December 2016; and will be revised every six months
and calculated as follows:(1) Modified GOP for the most recent one-year period × 4.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 77.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ito Hotel New Okabe]
Fixed rent: 12,296,799 yen monthly
Variable rent: 1,471,251 yen monthly from December 2016; and will be revised every six
months and calculated as follows:(1) Modified GOP for the most recent one-year period × 5.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 52.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Atami]
Fixed rent: 15,619,380 yen monthly
Variable rent: 939,716 yen monthly from December 2016; and will be revised every six months
and calculated as follows:(1) Modified GOP for the most recent one-year period × 4.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 74.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Toi Marine Hotel]
Fixed rent: 9,098,235 yen monthly
Variable rent: 1,016,579 yen monthly from December 2016; and will be revised every six
months and calculated as follows:(1) Modified GOP for the most recent one-year period × 7.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 72.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Awara]
Fixed rent: 10,963,033 yen monthly
Variable rent: 608,360 yen monthly from December 2016; and will be revised every six months
and calculated as follows:(1) Modified GOP for the most recent one-year period × 3.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 62.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Kamoshika-so]
Fixed rent: 5,953,916 yen monthly
Variable rent: 655,836 yen monthly from December 2016; and will be revised every six months
and calculated as follows:(1) Modified GOP for the most recent one-year period × 6.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 62.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Ikaho]
Fixed rent: 6,126,558 yen monthly
Variable rent: 708,097 yen monthly from December 2016; and will be revised every six months
and calculated as follows:(1) Modified GOP for the most recent one-year period × 7.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 67.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
-9-[Ooedo-Onsen Monogatari Kimitsu-no-mori]Fixed rent: 4,098,412 yen monthly
Variable rent: 436,860 yen monthly from December 2016; and will be revised every six months
and calculated as follows:(1) Modified GOP for the most recent one-year period × 5.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 52.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Nagasaki Hotel Seifu] ※Transferred on January 13, 2022.
Fixed rent: 12,496,532 yen monthly
Variable rent: 498,384 yen monthly from June 2018; and will be revised every six months andcalculated as follows:(1)
Modified GOP for the most recent one-year period × 2.2% (yearly; the monthly
amount is 1/12th thereof)(2)
Only if 44.7% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Kounkaku]
Fixed rent: 7,017,209 yen monthly
Variable rent: 755,005 yen monthly from June 2018; and will be revised every six months andcalculated as follows:(1)
Modified GOP for the most recent one-year period × 4.5% (yearly; the monthly
amount is 1/12th thereof)(2)
Only if 45.3% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Kinugawa Kanko Hotel]
Fixed rent: 29,069,741 yen monthly
Variable rent: 1,188,094 yen monthly from June 2018; and will be revised every six months
and calculated as follows:(1)
Modified GOP for the most recent one-year period × 2.4% (yearly; the monthly
amount is 1/12th thereof)(2)
Only if 56.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Kinosaki]
Fixed rent: 13,147,999 yen monthly
Variable rent: 650,945 yen monthly from June 2018; and will be revised every six months andcalculated as follows:(1)
Modified GOP for the most recent one-year period × 2.4% (yearly; the monthly
amount is 1/12th thereof)(2)
Only if 47.7% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Higashiyama Grand Hotel]
Fixed rent: 8,631,767 yen monthly
Variable rent: 940,567 yen monthly from June 2018; and will be revised every six months andcalculated as follows:(1)
Modified GOP for the most recent one-year period × 4.5% (yearly; the monthly
amount is 1/12th thereof)(2)
Only if 45.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.

- 10 -

Fiscal Period Ending May 2022 (12th fiscal period)(Millions of yen)
Property name

Ooedo-Onsen Monogatari
Reoma Resort
Ooedo-Onsen MonogatariIse-shima
Ito Hotel New Okabe
Ooedo-Onsen Monogatari
Atami
Ooedo-Onsen Monogatari
Toi Marine Hotel
Ooedo-Onsen Monogatari
Awara
Ooedo-Onsen Monogatari
Kamoshika-so
Ooedo-Onsen Monogatari
Ikaho
Ooedo-Onsen Monogatari
Kimitsu-no-moriOoedo-Onsen Monogatari
Nagasaki Hotel Seifu
Ooedo-Onsen Monogatari
Kounkaku
Kinugawa Kanko Hotel
Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel
Total (Note 9)

Primary rent
(Note 2)
Fixed
Variablerent
rent(Note 3)(Note 4)

Secondary
rent(Note 5)Other
revenue

Total(Note 9)

314

-

30

0
(Note 6)

345

108

-

3

-

111

73

-

8

-

82

93

-

3

-

97

54

-

1

-

56

65

-

8

-

74

35

-

5

-

41

36

-

3

-

40

24

-

5

-

29

17

-

1

11
(Note 7)

29

42

-

4

-

46

174

-

7

-

182

78

-

6

-

85

51

-

10

0
(Note 8)

62

1,172

-

101

11

1,285

Fiscal Period Ending November 2022 (13th fiscal period)(Millions of yen)
Property name

Ooedo-Onsen Monogatari
Reoma Resort
Ooedo-Onsen MonogatariIse-shima
Ito Hotel New Okabe
Ooedo-Onsen Monogatari
Atami
Ooedo-Onsen Monogatari
Toi Marine Hotel
Ooedo-Onsen Monogatari
Awara
Ooedo-Onsen Monogatari
Kamoshika-so
Ooedo-Onsen Monogatari
Ikaho
Ooedo-Onsen Monogatari
Kimitsu-no-moriPrimary rent
(Note 2)
Fixed
Variablerent
rent(Note 3)(Note 4)

Secondary
rent(Note 5)Other
revenue

Total(Note 9)

314

-

30

(Note 6)

345

108

-

3

-

111

73

-

8

-

82

93

-

3

-

97

54

-

1

-

56

65

-

8

-

74

35

-

5

-

41

36

-

3

-

40

24

-

5

-

29

- 11 -

Ooedo-Onsen Monogatari
Kounkaku

42

-

4

-

46

Kinugawa Kanko Hotel

174

-

7

-

181

78

-

6

-

85

51

-

10

0
(Note 8)

62

1,154

-

100

0

1,255

Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel
Total (Note 9)(Note 1) “GOP” refers to gross operating profit, which is the amount remaining after deducting expenses arising
directly from managing each facility, such as labor expenses and general and administrative expenses,
from each facility’s sales. “Modified GOP” is the amount remaining after deducting real estate-related
expenses for the property to be borne by the tenant (including, but not limited to, taxes and publiccharges, non-life insurance premiums and land and house rent, but excluding an amount equivalent toSecondary rent (defined below in Note 5)) from the GOP of each facility for the Modified GOP
Calculation Period (defined below in Note 4). The same applies hereinafter.
(Note 2) “Primary rent” refers to the sum of the fixed rent and the variable rent. The same applies hereinafter.
(Note 3) “Fixed rent” refers to the monthly amount provided for in each facility’s lease agreement. The same
applies hereinafter.
(Note 4) “Variable rent” refers to the amount obtained by multiplying each facility’s modified GOP for the mostrecent 1-year period (for the 6 months starting from December of each year, this means the 1-year
period from March of that year to February of the following year; for the 6 months starting from Juneof each year, this means the 1-year period from September of the previous year to August of that year)(these 1-year periods are referred to as “modified GOP Calculation Periods”) regarding each facilityby the specific rate provided for in each lease agreement (yearly; the monthly amount is 1/12th
thereof). The same applies hereinafter.
(Note 5) “Secondary rent” refers to an amount equivalent to the total amount of taxes, public charges, nonlife
insurance premiums, and other expenses (real estate management expenses) to be borne by theInvestment Corporation for each facility owned by the Investment Corporation. The same applies
hereinafter.
(Note 6) Land rent based on the fixed-term land lease agreement is included in the fixed rent.
(Note 7) Insurance proceeds received are presented.
(Note 8) Land rent based on the fixed-term land lease agreement is presented.
(Note 9) Rents of properties are rounded down to the nearest million yen. Therefore, the total of each property’s
rent, the total of fixed rents, the total of variable rents and the total of secondary rents may not add up
to the figure indicated in the Total column.

OperatingexpensesNon-operating
expenses
Borrowings

・ Of the expenses related to leasing activities, which are a major component of operating
expenses, the expenses related to leasing activities other than the depreciation are calculated
based on past actual figures and by reflecting factors that cause expenses to fluctuate.
・ Taxes and public charges is assumed to be 87 million yen for the fiscal period ending May
2022, and 86 million yen for the fiscal period ending November 2022.
・ Building repair expenses are not expected to arise, as these expenses will, in principle, beborne by the tenant based on the lease agreement effective as of the date of this document.
・ Depreciation, which is calculated using the straight-line method inclusive of incidental
expenses and additional capital expenditure in the future, is assumed to be 439 million yen for
the fiscal period ending May 2022, and 442 million yen for the fiscal period ending November
2022.
・ The total amount of interest expenses and other borrowing-related expenses is expected to be
164 million yen for the fiscal period ending May 2022, and 143 million yen for the fiscal
period ending November 2022.
・ The balance of loans outstanding as of November 30, 2021 is 14,069 million yen.
・ In the fiscal period ending May 2022 and the fiscal period ending November 2022, it isassumed that the scheduled repayment of 175 million yen will be made separately.
・ The repayment of 600 million yen before maturity is assumed to be made on January 13, 2022.
・ The repayment of 30 million yen, a portion of 230 million yen in short-term borrowings, on
February 28 2022 is assumed in the fiscal period ending May 2022. In addition, it is assumed
that, of that amount, 2,102 million yen and 4,349 million yen in short-term borrowings due
for repayment on February 28, 2022 and for 3,093 million yen in long-term borrowings due
for repayment on May 31, 2022 will be refinanced.

- 12 -

Outstanding
Investment
Units

・

・

Distribution
per unit(Excludingexcess cash
distribution)
Excess cash
distribution
per unit

・
・

・

・

Other

・

・

The assumed number of investment units issued and outstanding as of the date of thisdocument is 235,347, and it is assumed that the number of investment units will not change
due to any additional issuance of new investment units or another reason before November
30, 2022.
Distribution per unit is calculated based on the expected number of investment units issued
and outstanding as of the end of the fiscal periods ending May 2022 and November 2022
(235,347 units).
Distribution per unit (excluding excess cash distribution) is calculated based on the policy forcash distributions provided for in the Investment Corporation’s articles of incorporation.
Distribution per unit (excluding excess cash distribution) may change due to various factors,
including changes of portfolio, changes in rent revenue due to a relocation of tenant, etc., theoccurrence of unexpected capital expenditures, and other reasons.
Recording of allowance for temporary difference adjustments of 4,236,246 yen is expectedconcerning the difference in accounts for tax and accounting purposes associated withrecording of asset retirement obligation.
Regarding conducting excess cash distribution, the Investment Corporation will have a basic
policy of conducting excess cash distribution of which amount will be equivalent to theincreased amount of allowance for temporary difference adjustments. Pursuant to the policy,
it is assumed that 18 yen of excess distribution per unit will be conducted in each of the fiscal
periods ending May 2022 and ending November 2022.
It is assumed that revisions that affect the above forecast figures will not be made to laws orordinances, tax systems, accounting standards, listing regulations, or rules or the like set by
The Investment Trusts Association, Japan.
It is assumed that unforeseen material changes in general economic trends, in real estate market
conditions, or in any other factors will not occur.

- 13 -

2. Financial Statements
2.1. Balance Sheets(Thousands of yen)
As of May 31, 2021
AssetsCurrent assets
Cash and deposits
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Total property, plant and equipment
Intangible assets
Leasehold interests in land
SoftwareTotal intangible assets
Investments and other assets
Deferred tax assets
Long-term prepaid expenses
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets- 14 -

As of November 30, 2021

2,356,485
101,5176,866
2,464,869

2,475,520
107,620
6,799
2,589,940

26,761,904(3,686,238)
23,075,666
10,979(1,986)
8,992
600
(115)
484
9,972
(2,042)
7,930
11,208,770
34,301,844

26,896,509(4,135,462)
22,761,046
16,979(2,525)
14,453
600
(132)
467
15,651(3,039)12,612
11,208,770
33,997,351

303,751544
304,296

302,27450
302,325

15
41,49910,08951,60534,657,746
37,122,615

16
26,374
10,08936,48134,336,158
36,926,098

(Thousands of yen)
As of May 31, 2021
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits
received
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Allowance for temporary
difference adjustments
Total deduction from unitholders'
capitalUnitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets- 15 -

As of November 30, 2021

8,045
5,193,060
5,509,515
83,234
7,482
932
34,830247,064
6,973
11,091,139

91,8687,293,300
3,246,375
88,362
8,389
955
20,772
245,3319,960
11,005,314

3,569,375

3,529,625

1,230,692

1,230,441

139,096
4,939,164
16,030,303

139,5024,899,568
15,904,883

20,653,023

20,653,023(20,175)(24,411)(20,175)(24,411)

20,632,847

20,628,611

459,464

392,604

459,464
21,092,312
21,092,312
37,122,615

392,604
21,021,215
21,021,215
36,926,098

2.2. Statements of Income(Thousands of yen)
Fiscal period ended
May 31, 2021
Operating revenue
Leasing business revenue
Total operating revenue
Operating expenses
Expenses related to leasing business
Asset management fee
Asset custody fee
Administrative service fees
Remuneration for directors(and other officers)
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Interest income
Reversal of distributions payable
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
collateralization-related expenses
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings(undisposed loss)- 16 -

Fiscal period ended
November 30, 2021

1,348,319
1,348,319

1,344,058
1,344,058

577,073
119,720
1,676
17,032574,035
118,566
1,665
16,511

3,600

3,600

35,716754,817593,501

40,270754,649
589,408

11
637
648

10
750
761

50,927
82,956
133,884
460,266
460,266934
0
935
459,331133

56,914102,177
37,586
196,678
393,492
393,492956(1)
955
392,53667

459,464

392,6042.3. Statements of Unitholders’ Equity
10th Fiscal Period (from December 1, 2020 to May 31, 2021)(Thousands of yen)
Unitholders' equity
Unitholders' capital

Surplus

Deduction fromunitholders' capital

Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items during
period20,653,023

Unappropriatedretained
Unitholders'
Total
AllowanceTotal
earnings
capitalsurplusfor
deduction(undisposed
temporary
from
loss)
difference unitholders'adjustments
capital(17,116)(17,116) 20,635,907

Dividends of surplus(3,059)(3,059)(3,059)ProfitTotal net
assets466,826 21,102,733 21,102,733(466,693) (466,693)

Excess cash distribution
from allowance fortemporary difference
adjustments
Total changes of items
during period
Balance at end ofcurrent period

466,826

Total
unitholders'equity(466,693)(466,693)(3,059)(3,059)459,331459,331459,331459,331(10,421)(10,421)－(3,059)(3,059)(3,059)(7,361)(7,361)

20,653,023(20,175)(20,175) 20,632,847

459,464

459,464 21,092,312 21,092,312

11th Fiscal Period (from June 1, 2021 to November 30, 2021)(Thousands of yen)
Unitholders' equity
Unitholders' capital

Surplus

Deduction fromunitholders' capital

Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items during
period20,653,023

Total
Unappropriatedunitholders'retained
Unitholders'
Total
AllowanceTotal
equityearnings
capitalsurplusfor
deduction(undisposed
temporary
from
loss)
difference unitholders'adjustments
capital(20,175)(20,175) 20,632,847

Dividends of surplus
Excess cash distribution
from allowance fortemporary difference
adjustments(4,236)(4,236)459,464 21,092,312 21,092,312(459,397) (459,397) (459,397)(459,397)(4,236)(4,236)(4,236)

ProfitTotal changes of items
during period
Balance at end ofcurrent period

459,464

Total net
assets392,536

392,536

392,536

392,536(71,096)(71,096)－(4,236)(4,236)(4,236)(66,860)(66,860)

20,653,023(24,411)(24,411) 20,628,611

392,604

392,604 21,021,215 21,021,215- 17 -

2.4. Statements of Cash Distributions(Yen)
10th Fiscal Period(from December 1, 2020
to May 31, 2021)

Item

11th Fiscal Period(from June 1, 2021
to November 30, 2021)

I. Unappropriated retained earnings
II. Addition of excess distribution
Of which, allowance for temporary
difference adjustments
III. Distribution amount[Distribution amount per unit]
Of which,
Distribution amount from earnings[Of which, excess cash distribution per unit]
Of which,
Allowance for temporary difference
adjustments

459,464,668
4,236,246
4,236,246

392,604,088
4,236,246
4,236,246

463,633,590[1,970]459,397,344

396,795,042[1,686]
392,558,796[1,952]
4,236,246[1,668]4,236,246[Of which, excess cash distribution per unit
(pertaining to allowance for temporary
difference adjustments)]
IV. Retained earnings carried forward

[18]

[18]

67,32445,292

As described above, distribution per unit for

As described above, distribution per unit for

the fiscal period under review is 1,970 yen.

Method of calculating distribution amountthe fiscal period under review is 1,686 yen.

Concerning cash distribution (excluding

Concerning cash distribution (excludingexcess cash distribution), in order to ensure that

excess cash distribution), in order to ensure thatthe maximum amount of cash distribution of

the maximum amount of cash distribution of

earnings would be included in deductible

earnings would be included in deductible

expenses based on application of special

expenses based on application of special

provisions

provisionsfortaxationoninvestmentfortaxationoninvestment

corporations (Article 67-15, Paragraph 1 of thecorporations (Article 67-15, Paragraph 1 of theSpecial Measures Concerning Taxation Act),

Special Measures Concerning Taxation Act),

the

the

Investment

Corporation

decidedtoInvestment

Corporation

decidedtodistribute almost the entire amount of the

distribute almost the entire amount of theearnings provided in Article 136, Paragraph 1

earnings provided in Article 136, Paragraph 1of the Act on Investment Trusts and Investmentof the Act on Investment Trusts and Investment

Corporations, excluding the portion where cash

Corporations, excluding the portion where cash

distribution per investment unit would be lessdistribution per investment unit would be lessthan JPY1. As a result, the Investment

than JPY1. As a result, the Investment

Corporation declared a cash distribution per

Corporation declared a cash distribution perinvestment

investment

unit(excludingexcesscash

distribution) of 1,952 yen.

unit

(excludingexcesscash

distribution) of 1,668 yen.

In addition, pursuant to the policy for

In addition, pursuant to the policy for“distribution of money in excess of profits” as“distribution of money in excess of profits” asstated in Article 25 of its articles ofstated in Article 25 of its articles ofincorporation, the Investment Corporation

incorporation, the Investment Corporation

decided to make a distribution for thedecided to make a distribution for the4,236,246 yen in allowance for temporary

4,236,246 yen in allowance for temporary

difference adjustments for the purpose ofdifference adjustments for the purpose ofreflecting the effect on distributions of thereflecting the effect on distributions of thedifference in accounts for tax and accounting

difference in accounts for tax and accounting

purposes in association with expenses related

purposes in association with expenses related

to asset retirement obligations and leaseholdto asset retirement obligations and leasehold

depreciation (as defined in Article 2,depreciation (as defined in Article 2,

Paragraph 2, item 30 (b) of the Investment

Paragraph 2, item 30 (b) of the Investment

Corporations Accountings Ordinance). This

Corporations Accountings Ordinance). This

resulted in distribution of allowance forresulted in distribution of allowance fortemporary difference adjustments of 18 yen

temporary difference adjustments of 18 yen

per investment unit.

per investment unit.

- 18 -

2.5. Statements of Cash Flows(Thousands of yen)
Fiscal period ended
May 31, 2021
Cash flows from operating activities
Profit before income taxes
Depreciation
Borrowing related expenses
Interest income
Interest expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received
Other, net
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Refund of leasehold and guarantee deposits received
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Repayments of long-term borrowings
Distributions paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 19 -

Fiscal period ended
November 30, 2021

460,266
450,030
82,956(11)
50,927(44,552)(150)(1,020)
1,125
1,044
652
(35)
1,001,303
11(51,635)(942)
948,736

393,492
452,782
102,177(10)
56,91441,360(14,058)(48,998)
1,125
5,128
(1,733)
3,574
991,75410(56,007)(934)
934,823(165,385)－(165,385)(103,970)(251)(104,222)

3,713,545(25,420)(3,891,230)(469,752)(672,857)
110,493920,767
1,031,260

7,279,477(5,224,520)(2,302,890)(463,633)(711,566)
119,034
1,031,260
1,150,295