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 9th Fiscal Period
January 20, 2021
REIT Issuer:
Ooedo Onsen Reit Investment Corporation
Securities Code: 3472
Representative: Fuminori Imanishi, Executive Director
Asset Manager:
Representative:
Inquiries to:

Stock Exchange Listing: TSE
URL: https://oom-reit.com/en/

Ooedo Onsen Asset Management Co. Ltd.
Fuminori Imanishi, Chief Executive Officer
Shinya Ito, General Manager, Planning and Coordination Department+81-3-6262-5456

Scheduled date of submission of periodic securities report (yuka shoken hokokusho):Scheduled date of start of distribution payments:

February 25, 2021
February 15, 2021

Preparing supplementary explanatory materials on financial results:
Holding of brief session on financial results:

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 9th Fiscal Period
8th Fiscal Period: Fiscal period ended May 2020 (from December 1, 2019 to May 31, 2020)
9th Fiscal Period: Fiscal period ended November 2020 (from June 1, 2020 to November 30, 2020)(1) Management Status
Fiscalperiod8th
9th

Operatingrevenuemillion yen
1,433
1,358

FiscalperiodProfitper unit

%
(0.5)
(5.2)

Operatingprofitmillion yen
678
594[% figures show the period-on-period increase (decrease)]
Ordinary
Profitprofit% million yen% million yen
%
(2.6)
546
(3.6)
545
(3.6)
(12.4)
467(14.4)
466(14.4)

Ratio of profit tounitholders’ equity
yen
2,316
1,983

8th
9th

%
2.6
2.2

Ratio of ordinary profit tototal assets
%
1.4
1.2

Ratio of ordinary profit tooperating revenue
%
38.1
34.4

(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
net assets
ratio

yen
yen
million yen
yenmillion yen
million yen
%
%
8th
2,316
545
12
2
2,328
547
100.0
2.6
9th
1,983
466
13
3
1,996
469
100.0
2.2
(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
38,32737,428million yen
21,183
21,102Unitholders’ equity to total
assets%55.3
56.4

Net cashprovided by (used in)operating activities
million yen
960
1,759

Net cashprovided by (used in)investing activities
million yen
(170)
(300)

Net cashprovided by (used in)financing activities
million yen(807)(1,424)

Total assets

8th
9th

Net assets

Net assets
per unityen
90,011
89,666(4) Cash Flow Status
Fiscalperiod
8th
9th

-1-

Cash andcash equivalents
at end of period
million yen
885920

2. Management Status Forecasts for the 10th Fiscal Period and the 11th Fiscal Period
10th Fiscal Period: Fiscal period ending May 2021 (from December 1, 2020 to May 31, 2021)
11th Fiscal Period: Fiscal period ending November 2021 (from June 1, 2021 to November 30, 2021)

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
10th
1,344 (1.0)
583 (1.8)
449 (4.0)
448 (4.0)
1,904
11th
1,343 (0.1)
580 (0.5)437 (2.5)436 (2.5)
1,857(Reference) Estimated Profit per unit for the 10th Fiscal Period: 1,903 yen; 11th Fiscal Period: 1,856 yen

yen

yen

18
18

1,922
1,875

* 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:

9th

235,347 units

8th

235,347 units

9th

0 units

8th

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 2021 and November 2021” on page 8.

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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 transferredpart of 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 orsale and purchase fees) of each real estate in the sale and purchase agreement pertaining to the property as of the timeof acquisition minus the amount equivalent to the book value pertaining to such transferred part as of the time oftransfer plus the amount equivalent to the premium paid as consideration for the establishment of the leasehold in thelease agreement 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 experienced a sharp downturn due to thestagnation of economic activity caused by the declaration of a state of emergency in early April 2020 and othereffects of COVID-19, and real gross domestic product (GDP) excluding the effects of price fluctuations (basedon seasonally adjusted data) fell 8.3% quarter on quarter in the April to June quarter and shrank 29.2% on anannualized basis, the largest contraction on record. The state of emergency was then entirely lifted in late May
through a gradual easing of restrictions and, due to a short-lived rebound in pent-up demand and the boost to
economic activity from economic stimulus such as the Go To Travel campaign in the tourism sector, real GDP
for the July to September quarter (based on seasonally adjusted data) rose 5.3% from the previous quarter andincreased 22.9% in annualized terms.

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In this environment, the 14 onsen and spa-related facilities owned by the Investment Corporation all closed
temporarily in mid to late April in response to requests to voluntarily close due to the COVID-19 pandemic.
While some facilities reopened from May, it took until July for all facilities to be back in operation. The
guestroom occupancy rate of individual facilities (Note 1) then appeared to improve gradually, reaching 84.9%
in November at the end of the fiscal period under review, reflecting the launch of the Go To Travel campaign
and the thorough implementation of infection control measures by tenants based on advices from an outside
infectious disease expert as well as the fact that the facilities mainly attract customers from neighboring regionsin Japan. The overall guestroom occupancy rate for the fiscal period under review was 51.9%, far below the
year-ago level. ADR (Note 2) rose 1.5% from the same period last year, while RevPAR (Note 3) and sales
declined 41.0% and 45.5% from the same period last year respectively.
Meanwhile, leasing business revenue for the fiscal period under review remained stable, supported by fixed
rents which account for a large share. Variable rents, which are calculated based on the annual results of thetenant, the Ooedo-Onsen Monogatari Group, until August 2020, came to zero for all facilities, reflecting thedecline in occupancy rates due to COVID-19.
The appraisal value as of the end of the fiscal period under review totaled 40,239 million yen. Comparedwith the appraisal value as of the end of the previous period (the end of May 2020), the total appraisal value ofthe 14 owned properties was reduced by 10 million yen, reflecting the transfer of some of the land of OoedoOnsen Monogatari Reoma Resort (see below) which resulted in a decrease of 10 million yen and no change in
the appraisal value of the other properties, while cap rate stayed unchanged. With regard to the unrealized
gain/loss (Note 4) of the entire portfolio at the end of the fiscal period under review, the unrealized gainincreased to 5,283 million yen, due to a decrease in the book value, reflecting the depreciation of the 14
properties and the transfer of some of the land of Ooedo-Onsen Monogatari Reoma Resort.
As for changes in the property portfolio, the Investment Corporation transferred part of an unused former
zoo site and parking lot land at Ooedo-Onsen Monogatari Reoma Resort in November 2020 for 805 million
yen (the name of transferee is not disclosed as the transferee's permission for disclosure was not obtained) as
land for a third-party solar power energy generation project to contribute to the renewable energy business andto improve net asset value and at the same time acquired the land lease right from the transferee for 145 million
yen to continue operating the parking lot part (Note 5). The Investment Corporation applied the proceeds (thedifference between the two amounts) to fund the partial repayment of loans and to improve its financial position.
It also developed plans for capital expenditure that took into account the status and features of the owned
properties to manage the implementation of necessary repairs by tenants and implement the necessary capital
expenditure for maintaining functions. (Repair expenses are basically borne by the tenants based on the leaseagreements.)
In addition, the Investment Corporation continued to conduct activities to acquire new properties widelyfrom the market once the COVID-19 pandemic is brought under control, without confining itself to theproperties managed by the Ooedo-Onsen Monogatari Group.
(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)(Note 5) Refer to the press release, “Notice Concerning Transfer, Etc. of Real Estate in Japan (Ooedo-Onsen Monogatari
Reoma Resort: Part of Land),” dated October 9, 2020 and “Notice Concerning Completion of Transfer, Etc. of Real
Estate in Japan (Ooedo-Onsen Monogatari Reoma Resort: Part of Land),” dated November 2, 2020, for details.

c. Overview of Capital Procurement
In the fiscal period under review, the Investment Corporation procured 1,487 million yen through shortterm borrowing from a syndicate with Sumitomo Mitsui Banking Corporation (SMBC) as the arranger in order
to allocate the funds to repayment of a part of 2,340 million yen (Note), a long-term borrowing, which matured
on November 30, 2020. In addition, the Investment Corporation made scheduled repayments of 93 million yen
on both July 31 and October 31, 2020 and 40 million yen on November 30, 2020, using cash on hand. As a-4-

result, the total amount of interest-bearing debt stood at 14,457 million yen and the ratio of interest-bearing
liabilities to total assets (LTV) at 38.6% as of the end of the fiscal period under review.
(Note) Refer to the press release, “Notice Concerning Borrowing of Funds,” dated November 24, 2020, 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 1,358 million yen, operating profit of 594 million yen, ordinary profit of
467million yen and profit of 466 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
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 1,983 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 the
3,059,511 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 13 yen.
As a result, distribution per unit for the fiscal period under review was determined as 1,996 yen (of which,excess distribution per unit was 13 yen).
(2) Outlook for the Next Fiscal Perioda. Management Environment in the Next Fiscal Period
Over the coming fiscal periods, the Japanese economy will suffer the effects of COVID-19. For service
consumption that involves the risk of infection, inbound demand cannot be expected to fully recover until the
global pandemic is brought under control or an effective vaccine or effective treatments for the virus become
widely available. With the Go To Travel campaign also temporarily suspended in December 2020 due to signsof a resurgence in infections and with a state of emergency declared for a second time in Tokyo and other areasin January 2021, the ebb and flow of the virus is expected to continue for some time. However, the Third
Supplementary Budget for FY2020, approved by Cabinet in December 2020, included spending of around 19.2
trillion yen to fund new stimulus and support for economic activity in the meantime, including extension of the
Go To Travel campaign, can be expected.
In this environment, the trend of “intangible goods consumption” (Note 2), or more precisely, “experiencebased consumption” (Note 3), on which the Investment Corporation’s investment target of leisure facilities(Note 1) are based, will be greatly affected by the course of the coronavirus pandemic. Developments need tobe carefully monitored, including the situation with regard to government support such as the Go To Travel
campaign which is expected to be extended until June this year (developments such as suspension due to further
waves) and the effect of such support, as well as hygiene and safety countermeasures introduced by businesses.
While weak consumer confidence and the tendency to stay at home because of the pandemic give little roomfor optimism about the performance of tenants in the facilities owned by the Investment Corporation, signs that
customers are starting to come back can also be seen because the thorough implementation of infection control
measures gives customers peace of mind and because the Ooedo model mainly targets regular customers inneighboring regions.
Because of these factors, the leisure facilities in which the Investment Corporation invests may be able toregain customers faster than other types of facilities which are dependent on demand from foreign and longdistance visitors. The Investment Corporation believes that if the pandemic shows signs of coming to an end,
with the prospect of effective vaccines and treatments becoming widely available, its business performance
may also improve significantly.
(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.

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(Note 3) “Experience-based consumption” refers to consumption activities for the purpose of having experiences.

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.
(a) External Growth Strategy
i. Utilization of Sponsor Pipeline
Looking at the supply aspect of onsen and spa-related facilities, many ryokans and hotels are expected todecide to discontinue their business due to persistent issues, such as a lack of successors and declining
competitiveness caused by aging facilities. In addition, a large number of facilities are expected to be put onsale in response to the rapid aggravation of business performance as a result of COVID-19 and for the purposeof procuring funds for capital expenditure for business survival. Information on properties brought to theInvestment Corporation and the Ooedo-Onsen Monogatari Group is likely to continue increasing.
The three onsen and spa-related facilities which the Ooedo-Onsen Monogatari Group opened or reopened
after renewal in the period from January 2020 to December 2020 were Saikaibashi Corazon Hotel (Sasebo City,
Nagasaki Prefecture) and Ooedo-Onsen Monogatari Shiomiso (Murakami City, Niigata Prefecture) in July
2020, and Sendai Akiu Onsen Hotel Iwanumaya (Sendai City, Miyagi Prefecture) in November 2020, andongoing acquisitions are expected in the future (Note). In accordance with the sponsor support agreement
concluded with the Sponsors on November 1, 2017, the Investment Corporation is granted preferential
negotiating rights for the acquisition of onsen and spa-related facilities owned or developed by the OoedoOnsen Monogatari Group, including these three facilities, and will also be preferentially provided with thirdparty 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 business model owned
and operated by the Ooedo-Onsen Monogatari Group by making maximum use of the abovementioned support.
(Note) There is no guarantee that the Investment Corporation will be able to acquire these properties.

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, an increasing amount of sales information on leisure facilities has been acquired using
the asset manager’s own network. The Investment Corporation will implement activities to acquire onsen andspa-related facilities in famous hot spring areas as well as a variety of facilities which will help improve thebalance of its existing portfolio and diversify risk, including properties in urban settings such as ordinancedesignated cities and core cities, new development projects and recently built properties, and facilities to meetdemand 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. Meanwhile, the Investment Corporation
will continue to secure preferential negotiating rights through the use of bridge structure and other means (Note2).
(Note 1) 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.
(Note 2) There is no guarantee that the Investment Corporation will be able to acquire these properties.

(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.
It will continue to make every effort to secure rent income and ensure stability through monitoring of tenants’business performance.
(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.

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(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 1) Contributing to the Increase in Income and Enhancement ofCompetitiveness through the Expansion of Capacity
The Investment Corporation will strategically implement CAPEX such as for the extension andreconstruction of owned properties with high occupancy and value-increasing potential (Note 2) in order toincrease the number of guestrooms. Through this measure, it aims to secure the potential income of the operatorof the owned properties, as well as to increase the rental income through the effective use of non-operatingbuildings and unused 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 1) 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.
(Note 2) “Value-increasing potential” refers to the capability for potential enhancement of asset value that investments, etc.
can bring.

(c) Financial Strategy
The Investment Corporation will place emphasis on maintaining its conservative financial position whilst
prioritizing action to address risks due to the effects of the coronavirus pandemic for the time being.
As to debt financing, the Investment Corporation strives to realize stable financing when acquiring newproperties and when existing loans reach their repayment date while maintaining its favorable relationship withexisting lenders. The Investment Corporation will consider implementing equity financing flexibly, taking into
account the enhancement of the value of investment units in the medium to long term and the dilution of
distribution per unit.
Although the Investment Corporation has set the upper limit of LTV at 60% in principle, it plans to keep
LTV at a conservative level of around 40% for the time being, while paying attention to capital reserves. The
Investment Corporation also aims to reduce financing costs by lowering the risk premium through the
expansion of the scale of the portfolio and the diversification of risks in terms of tenants and locations. In
addition, the Investment Corporation seeks to acquire a high rating, diversify financing sources, prolong the
average repayment date of debt and introduce fixed interest rates.
(3) Significant Subsequent Events
Not applicable-7-

Assumptions Underlying Forecasts of the Financial Results
for the Fiscal Periods Ending May 2021 and November 2021
Item

Assumption

Calculation
period・ Fiscal period ending May 2021
(10th fiscal period: from December 1, 2020, to May 31, 2021) (182 days)
・ Fiscal period ending November 2021
(11th fiscal period: from June 1, 2021, to November 30, 2021) (183 days)
・ It is assumed that there will be no change (acquisition or disposition of assets) to the 14
properties, which the Investment Corporation owns as of the date of this document, throughto the end of the fiscal period ending November 2021.
・ 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 2020 and February 2021 in the fiscal period
ending May 2021 (10th period) and the modified GOP for the period between September 2020
and August 2021 in the fiscal period ending November 2021 (11th 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 2021 (10th period) and the fiscal period ending November 2021 (11thperiod).
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:ManagedAssetsOperatingrevenue[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 30 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 30 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
Variable rent: 962,993 yen monthly from December 2016; and will be revised every six months
and calculated as follows:
-8-

(1)
(2)

Modified GOP for the most recent one-year period × 4.0% (yearly; the monthly
amount is 1/12th thereof)
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]
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 2021 (10th 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 8)315
(Note 6)-33

1
(Note 7)

350

108

-

3

-

111

73

-

8

-

82

93

-

4

-

97

54

-

1

-

56

65

-

8

-

74

35

-

6

-

41

36

-

4

-

40

24

-

5

-

29

74

-

6

-

81

42

-

4

-

46

174

-

8

-

182

78

-

6

-

85

51

-

10

0
(Note 8)

62

1,230

-

112

1

1,344

Fiscal Period Ending November 2021 (11th 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 8)315
(Note 6)

-

33

-

348

108

-

3

-

111

73

-

8

-

82

93

-

4

-

97

54

-

1

-

56

65

-

8

-

74

35

-

6

-

41

36

-

4

-

40

24

-

5

-

29

- 11 -

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu
Ooedo-Onsen Monogatari
Kounkaku
Kinugawa Kanko Hotel
Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel
Total (Note 9)

74

-

6

-

81

42

-

4

-

46

174

-

8

-

182

78

-

6

-

85

51

-

10

0
(Note 8)

62

1,230

-

112

0

1,343

(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 themost recent 1-year period (for the 6 months starting from December of each year, this means the 1year period from March of that year to February of the following year; for the 6 months starting from
June of each year, this means the 1-year period from September of the previous year to August of thatyear) (these 1-year periods are referred to as “modified GOP Calculation Periods”) regarding eachfacility by 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 98 million yen for the fiscal period ending May
2021, and 98 million yen for the fiscal period ending November 2021.
・ 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 448 million yen for
the fiscal period ending May 2021, and 451 million yen for the fiscal period ending November
2021.
・ The total amount of interest expenses and other borrowing-related expenses is expected to be
134 million yen for the fiscal period ending May 2021, and 142 million yen for the fiscal
period ending November 2021.
・ The balance of loans outstanding as of November 30, 2020 is 14,457 million yen.
・ In the fiscal period ending May 2021 and the fiscal period ending November 2021, it isassumed that the scheduled repayment of 175 million yen will be made separately.
・ In the fiscal period ending May 2021, the current portions of long-term loans (250 million yen
and 3,491 million yen) will be due for repayment on May 31, 2021 and it is assumed that thesame amounts will be refinanced.
・ In the fiscal period ending November 2021, short-term loans of 1,449 million yen will be due
for repayment on August 31, 2021 and the current portion of long-term loans of 2,190 million- 12 -

Outstanding
Investment
Units

・

・

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

・
・

・

・

Other

・

・

yen will be due for repayment on November 30, 2021 and it is assumed that the same amounts
will be refinanced.
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, 2021.
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 2021 and November 2021
(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 2021 and ending November 2021.
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, 2020
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, 2020

2,210,622
138,1546,251
2,355,028

2,245,992
140,140
6,546
2,392,678

26,493,480(2,796,416)
23,697,064
10,979(1,247)
9,731
600
(79)
520
3,498
(1,050)2,448
11,988,187
35,697,951

26,667,147(3,239,601)
23,427,545
10,979(1,616)
9,362
600
(97)
502
5,772
(1,402)
4,370
11,208,770
34,650,550

157,802
2,149
159,951

305,228
1,347
306,57515
104,578
10,089114,684
35,972,587
38,327,616

16
68,483
10,08978,58935,035,715
37,428,394

(Thousands of yen)
As of May 31, 2020
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, 2020

50,5566,240,110
89,251
8,329
936
39,513
261,314
5,795
6,695,808

118,701
1,487,480
6,194,120
82,1908,190
940
34,980246,4127,260
8,180,276

9,078,890

6,776,000

1,230,706

1,230,692

138,288
10,447,884
17,143,692

138,691
8,145,384
16,325,661

20,653,023

20,653,023(14,292)(17,116)(14,292)(17,116)

20,638,731

20,635,907

545,192

466,826

545,192
21,183,923
21,183,923
38,327,616

466,826
21,102,733
21,102,733
37,428,394

2.2. Statements of Income(Thousands of yen)
Fiscal period ended
May 31, 2020
Operating revenue
Leasing business revenue
Gain on sales of real estate properties
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
Total non-operating expenses
Ordinary profit
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
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, 2020

1,433,658
1,433,658

1,342,970
15,785
1,358,755

566,328
125,121
1,731
17,161
3,600
41,276755,219
678,438

574,661
122,870
1,720
17,2583,600
44,313
764,424594,331

10
563
573

10
1,212
1,222

63,464
69,268132,732
546,279

54,68373,230127,914467,639233
233
546,045937
0
938
545,10785
545,192

467,639942△0
942
466,697128
466,826

2.3. Statements of Unitholders’ Equity
8th Fiscal Period (from December 1, 2019 to May 31, 2020)(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
Unappropriatedretained
unitholders'
Unitholders'
Total
AllowanceTotal
equityearnings
capitalsurplusfor
deduction(undisposed
temporary
from
loss)
difference unitholders'adjustments
capital(11,467)(11,467) 20,641,555

Dividends of surplus

565,624 21,207,179 21,207,179(565,538) (565,538)

Excess cash distribution
from allowance fortemporary difference
adjustments(2,824)(2,824)(2,824)

ProfitTotal changes of items
during period
Balance at end ofcurrent period

565,624

Total net
assets(565,538)(565,538)(2,824)(2,824)545,107545,107545,107545,107(23,255)(23,255)－(2,824)(2,824)(2,824)(20,431)(20,431)

20,653,023(14,292)(14,292) 20,638,731

545,192

545,192 21,183,923 21,183,923

9th Fiscal Period (from June 1, 2020 to November 30, 2020)(Thousands of yen)
Unitholders' equity
Unitholders' capital

Surplus

Deduction fromunitholders' capital

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

UnappropriatedTotal
unitholders'retained
Unitholders'
Total
AllowanceTotal
equityearnings
capitalsurplusfor
deduction(undisposed
temporary
from
loss)
difference unitholders'adjustments
capital(14,292)(14,292) 20,638,731

Dividends of surplus
Excess cash distribution
from allowance fortemporary difference
adjustments(2,824)(2,824)545,192 21,183,923 21,183,923(545,063) (545,063) (545,063)(545,063)(2,824)(2,824)(2,824)

ProfitTotal changes of items
during period
Balance at end ofcurrent period

545,192

Total net
assets466,697

466,697

466,697

466,697(81,190)(81,190)－(2,824)(2,824)(2,824)(78,366)(78,366)

20,653,023(17,116)(17,116) 20,635,907

466,826

466,826 21,102,733 21,102,733- 17 -

2.4. Statements of Cash Distributions
(Yen)
Item

8th Fiscal Period(from December 1, 2019
to May 31, 2020)

9th Fiscal Period(from June 1, 2020
to November 30, 2020)

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

545,192,520
2,824,164
2,824,164

466,826,453
3,059,511
3,059,511

547,887,816[2,328]545,063,652

4,59,752,612[1,996]466,693,101[2,316]2,824,164[1,983]
3,059,511[Of which, excess cash distribution per unit
(pertaining to allowance for temporary
difference adjustments)]
IV. Retained earnings carried forward

[12]

[13]

Method of calculating distribution amount

128,868

133,352

As described above, distribution per unit for
the fiscal period under review is 2,328 yen.
Concerning cash distribution (excludingexcess cash distribution), in order to ensure thatthe maximum amount of cash distribution of
earnings would be included in deductible
expenses based on application of special
provisions for taxation on investment
corporations (Article 67-15, Paragraph 1 of theSpecial Measures Concerning Taxation Act),the Investment Corporation decided to
distribute almost the entire amount of theearnings provided in Article 136, Paragraph 1of the Act on Investment Trusts and Investment
Corporations, excluding the portion where cash
distribution per investment unit would be lessthan JPY1. As a result, the Investment
Corporation declared a cash distribution perinvestment unit (excluding excess cash
distribution) of 2,316 yen.
In addition, pursuant to the policy for“distribution of money in excess of profits” asstated in its articles of incorporation, theInvestment Corporation decided to make a
distribution for the 2,824,164 yen in allowancefor temporary difference adjustments for the
purpose of reflecting the effect on distributionsof the difference in accounts for tax andaccounting purposes in association withexpenses related to asset retirement obligations(as defined in Article 2, Paragraph 2, item 30 (b)of the Investment Corporations Accountings
Ordinance). This resulted in distribution ofallowance for temporary difference adjustmentsof 12 yen per investment unit.

As described above, distribution per unit for
the fiscal period under review is 2,328 yen.
Concerning cash distribution (excludingexcess cash distribution), in order to ensure thatthe maximum amount of cash distribution of
earnings would be included in deductible
expenses based on application of special
provisions for taxation on investment
corporations (Article 67-15, Paragraph 1 of theSpecial Measures Concerning Taxation Act),the Investment Corporation decided to
distribute almost the entire amount of theearnings provided in Article 136, Paragraph 1of the Act on Investment Trusts and Investment
Corporations, excluding the portion where cash
distribution per investment unit would be lessthan JPY1. As a result, the Investment
Corporation declared a cash distribution perinvestment unit (excluding excess cash
distribution) of 2,316 yen.
In addition, pursuant to the policy for“distribution of money in excess of profits” asstated in Article 25 of its articles ofincorporation, the Investment Corporation
decided to make a distribution for the
3,059,511 yen in allowance for temporary
difference adjustments for the purpose ofreflecting the effect on distributions of thedifference in accounts for tax and accounting
purposes in association with expenses related
to asset retirement obligations and leasehold
depreciation (as defined in Article 2,
Paragraph 2, item 30 (b) of the Investment
Corporations Accountings Ordinance). This
resulted in distribution of allowance fortemporary difference adjustments of 13 yen
per investment unit.

- 18 -

2.5. Statements of Cash Flows(Thousands of yen)
Fiscal period ended
May 31, 2020
Cash flows from operating activities
Profit before income taxes
Depreciation
Borrowing related expenses
Interest income
Interest expenses
Loss on retirement of non-current assets
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
Decrease in property, plant and equipment due tosaleOther, 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
Purchase of intangible assets
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
Proceeds from long-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, 2020

546,045
439,01269,268(10)
63,464233(41,203)(3,419)(45,468)
36,785(759)(534)

467,639444,973
73,230(10)
54,683－44,552(4,533)(25,371)
1,125(7,061)(14,902)－779,417(429)
1,062,985
10(65,829)(952)
996,214

1,573
1,815,315
10(54,822)(937)
1,759,566(170,933)－－(170,933)(152,348)(147,672)(13)(300,034)－
3,820,340(340,000)(3,755,250)(568,363)(843,273)(17,992)
903,390885,397

1,472,605－－(2,348,880)(547,887)(1,424,162)
35,369885,397920,767