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 10th Fiscal Period
July 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:

August 24, 2021
August 13, 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 10th Fiscal Period
9th Fiscal Period: Fiscal period ended November 2020 (from June 1, 2020 to November 30, 2020)
10th Fiscal Period: Fiscal period ended May 2021 (from December 1, 2020 to May 31, 2021)(1) Management Status
Fiscalperiod9th
10th

Operatingrevenuemillion yen
1,358
1,348

FiscalperiodProfitper unit

%
(5.2)
(0.8)

Operatingprofitmillion yen
594
593[% figures show the period-on-period increase (decrease)]
Ordinary
Profitprofit% million yen% million yen%(12.4)
467(14.4)
466(14.4)
(0.1)
460
(1.6)
459
(1.6)

Ratio of profit tounitholders’ equity
yen
1,983
1,951

9th
10th

%
2.2
2.2

Ratio of ordinary profit tototal assets
%
1.2
1.2

Ratio of ordinary profit tooperating revenue
%
34.4
34.1

(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
%
%
9th
1,983
466
13
3
1,996
469
100.0
2.2
10th
1,952
459
18
4
1,970
463
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
37,42837,122

million yen
21,10221,092Unitholders’ equity to total
assets%56.4
56.8

Net cashprovided by (used in)operating activities
million yen
1,759
948

Net cashprovided by (used in)investing activities
million yen
(300)
(165)

Net cashprovided by (used in)financing activities
million yen(1,424)(672)

Total assets

9th
10th

Net assets

Net assets
per unityen
89,666
89,622(4) Cash Flow Status
Fiscalperiod
9th
10th

-1-

Cash andcash equivalents
at end of period
million yen
920
1,031

2. Management Status Forecasts for the 11th Fiscal Period and the 12th Fiscal Period
11th Fiscal Period: Fiscal period ending November 2021 (from June 1, 2021 to November 30, 2021)
12th Fiscal Period: Fiscal period ending May 2022 (from December 1, 2021 to May 31, 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
11th
1,343 (0.4)
577 (2.7)
422 (8.1)
421 (8.2)
1,792
12th
1,337 (0.4)
567 (1.8)420 (0.6)
419 (0.6)
1,781(Reference) Estimated Profit per unit for the 11th Fiscal Period: 1,792 yen; 12th Fiscal Period: 1,781 yen

yen

yen

18
18

1,810
1,799

* 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:

10th

235,347 units

9th

235,347 units

10th

0 units

9th

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 November 2021 and May 2022” 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 9th fiscal
period, the Investment Corporation transferred a portion of the land of Ooedo-Onsen Monogatari Reoma Resort
on November 2, 2020 and simultaneously leased the transferred portion of the land 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
Economic activities in Japan remained stagnant during the fiscal period under review due to the extensionof the state of emergency declared in some metropolitan areas in April 2021 and the semi-emergency measures
for the prevention of COVID-19 infections, and the expansion of areas that are subject to them as the COVID19 pandemic continues. Seasonally adjusted real gross domestic product (GDP) based on the second
preliminary estimates for the January-March quarter excluding the effects of price fluctuations fell 1.0% fromthe previous quarter and 3.9% from the previous fiscal period, partially reflecting the downward revision ofprivate consumption expenditures from the first preliminary estimate (a 1.5% decrease quarter on quarter).
In this environment, all of the 14 onsen and spa-related facilities owned by the Investment Corporation
closed their doors temporarily from late January or early February 2021, to early March or mid-March toaddress the number of COVID-19 infections which began increasing around the end of December 2020.
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However, all of these facilities excluding Ooedo-Onsen Monogatari Kounkaku resumed operations by the endof May 2021, the point where the fiscal period under review closed. Operations on weekdays remained sluggish
due to the tendency of elderly people to stay home. Meanwhile, operations during the Golden Week holiday
and weekends turned out to be relatively high, due to the success of sufficient and thorough tenant measures tocontrol infection based on advice from outside infectious disease experts. The Investment Corporation believes
the improved results reflect increased visits by young people and family groups.
The overall guestroom occupancy rate (Note 1) for the fiscal period under review was 28.1%, far below
the results of the previous fiscal period. ADR (Note 2) rose 9.8% from the previous fiscal period. RevPAR(Note 3) and sales fell 44.8% and 49.4% period on period, respectively.
Looking at the Investment Corporation’s leasing business revenue for the fiscal period under review,
variable rents based on the annual results of the Ooedo-Onsen Monogatari Group, the tenant, for the period
through February 2021 were zero for all facilities for the second consecutive fiscal period, reflecting lower
occupancy rates due to COVID-19. 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 40,209 million yen at the end of the fiscal period underreview. Compared with the appraisal value of properties acquired at the end of the previous fiscal period(November 30, 2020), the capitalization rate, called the cap rate , was unchanged. However, the appraisal valueof properties acquired declined 30 million yen due to a future cash flow decrease that resulted from the review
of capital expenditures and the like by some of the facilities.
As a result, unrealized gain on total portfolio properties at the end of the fiscal period under review increased
to 5,603million yen due to depreciations appropriated in the fiscal period under review.
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.
(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 3,491 million yen through shortterm borrowing from a syndicate with Sumitomo Mitsui Banking Corporation (SMBC) as the arranger and 240
million yen through short-term borrowing from SMBC (Note) to allocate the funds to the repayment of a portionof 3,491 million yen and 250 million yen in long-term loans that became due on May 31, 2021. In addition, theInvestment Corporation made scheduled repayments of 87 million yen each on January 31, 2021 and April 30,
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 14,271 million yen and 38.4%, respectively, at the end of the fiscal period underreview.
(Note) Refer to the press release, “Notice Concerning Borrowing of Funds,” dated May 25, 2021, for details.

d. Overview of Financial Performance and Distributions-4-

As a result of the operations described above, business performance in the fiscal period under review
generated operating revenue of 1,348 million yen, operating profit of 593 million yen, ordinary profit of 460
million yen and profit of 459 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 1,952 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 1,970 yen (of which,excess distribution per unit was 18 yen).
(2) Outlook for the Next Fiscal Perioda. Management Environment in the Next Fiscal Period
In late June, the state of emergency that had been declared in prefectures excluding Okinawa was lifted andreplaced with semi-emergency measures to prevent COVID-19 infections. However, a state of emergency wasagain declared in the Tokyo metropolitan area in July. For four other prefectures, the semi-emergency measures
to prevent COVID-19 infections were also extended. Under the circumstances, there was a growing expectationthat the state of vaccination would rapidly progress in Japan and that latent consumption demand would be
actualized after the completion of a vaccination cycle. At the same time, there were also concerns over thedomestic spread of globally increasing COVID-19 variants, and the increase in the inflow of people from otherparts of Japan and overseas due to the Tokyo Olympics and Paralympics, for which preparation was in progress.
Future COVID-19 countermeasure trends involving the curbing of economic activity will decide the state ofJapan’s economy in the coming fiscal periods. Ups and downs are anticipated for some time.
In this environment, the Investment Corporation believes that consumer confidence affected by COVID-19
and infection prevention measure trends will greatly influence trends in intangible goods consumption (Note1), or more precisely, experience-based consumption (Note 2), on which leisure facilities (Note 3), its
investment targets, are based. Matters that require careful monitoring include the state of operations during theperiod of the Tokyo Olympics and Paralympics, the state of infection in the subsequent period, the state of the
progress of vaccination, which is rapidly advancing, and the effects of vaccination.
There is still little room for optimism regarding the performance of tenants of the facilities owned by theInvestment Corporation because the tenants operated some facilities only on weekends (from check-in on
Fridays to check-out on Mondays) in June based on their own judgment in response to weak demand due tovarious requests from governments for voluntary restraint and the like and a sense of caution among consumers
under the sustained COVID-19 pandemic. However, some of the facilities are showing signs of customers
returning, reflecting an enhanced sense of security because of efforts to publicize facilities' infection prevention
measures, a recovery in facility use by elderly persons which comprising a main weekday customer segment
as a result of their having received a second dose of vaccine, and the Ooedo model whose main targets arerepeat customers in neighboring areas. The Investment Corporation thinks that future demand recovery is
possible.
Based on these factors, the Investment Corporation believes that leisure facilities, its investment targets,have a chance to regain customers faster than facilities that depend heavily on demand from visitors such as
inbound tourists and domestic tourists from distant places.
(Note 1) “Intangible goods consumption” refers to consumption activities for providing a “series of experiences” which is acombination of individual events.
(Note 2) “Experience-based consumption” refers to consumption activities for the purpose of having experiences.

-5-

(Note 3) “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.”b. Future Management Policy and Challenges to Address
The Investment Corporation aims to build a portfolio focused on leisure facilities. For the time being,
however, the Investment Corporation's top priority is flawless measures to addressing the income and financial
risks created by the COVID-19 pandemic. Finding its way out of this crisis in such way, the Investment
Corporation strives to work out flexible growth strategies as external conditions improve in the future.
(a) External Growth Strategy
i. Utilization of Sponsor Pipeline
Looking at the supply side of onsen and spa-related facilities, many Japanese-style inns and hotels are
expected to close their businesses for persistent reasons, such as a lack of successors and a decline incompetitiveness due to the deterioration of facilities. Facility closures and sales in response to the results
aggravation due to the prolonged COVID-19 pandemic, and facility sales to raise funding for the survival of
businesses are anticipated as well. Properties introduced to the Investment Corporation and the Ooedo-Onsen
Monogatari Group are likely to remain relatively large in number.
The Ooedo-Onsen Monogatari Group opened or reopened after renewal three onsen and spa-related facilities
in the 12-month period from June 2020 to May 2021. They are Saikaibashi Corazon Hotel (Sasebo City,
Nagasaki Prefecture) and Ooedo-Onsen Monogatari Shiomiso (Murakami City, Niigata Prefecture) that began
to operate in July 2020, and Sendai Akiu Onsen Hotel Iwanumaya (Sendai City, Miyagi Prefecture) which
reopened in November 2020. The Group is expected to continue to acquire onsen and spa-related facilities 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 andspa-related facilities owned or developed by the Ooedo-Onsen Monogatari Group, including these threefacilities, 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 business model owned and operated by the Ooedo-Onsen MonogatariGroup 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.
Looking at variable rents, results for the fiscal period under review, and forecasts for the fiscal period ending
November 2021 and the fiscal period ending May 2022 are all zero due to occupancy rate declines during the-6-

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 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's top priority is understanding the continuing effect of COVID-19 on tenants’performance and associated rent income risks, and addressing risks for its financial management. Morespecifically, it is focused on the refinancing of existing loans. The Investment Corporation believes thatmaintaining its financial base through conservative LTV control and cash management is very important.
The goal of the Investment Corporation's medium- and long-term debt financing policy is to achieve stablefinancing at points when it acquires new properties and when existing loans become due while maintaining
favorable relationships with existing lenders through sufficient communication based on the provision of timely
and appropriate information. The Investment Corporation flexibly considers the implementation of equity
financing, considering the enhancement of the value of investment units over the medium to long term and the
dilution of distributions per unit.
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
Not applicable-7-

Assumptions Underlying Forecasts of the Financial Results
for the Fiscal Periods Ending November 2021 and May 2022
Item

Assumption

Calculation
period・ Fiscal period ending November 2021
(11th fiscal period: from June 1, 2021, to November 30, 2021) (183 days)
・ Fiscal period ending May 2022
(12th fiscal period: from December 1, 2021, to May 31, 2022) (182 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 May 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 September 2020 and August 2021 in the fiscal period
ending November 2021 (11th period) and the modified GOP for the period between March
2021 and February 2022 in the fiscal period ending May 2022 (12th period) by the premium
rate that 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 November 2021 (11th period) and the fiscal period ending May 2022
(12th period).
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 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-moriOoedo-Onsen Monogatari
Nagasaki Hotel Seifu
Ooedo-Onsen Monogatari
Kounkaku
Kinugawa Kanko Hotel
Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel
Total (Note 8)

Primary 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

74

-

6

-

81

42

-

4

-

46

174

-

8

-

182

78

-

6

-

85

51

-

10

0
(Note 7)

62

1,230

-

112

0

1,343

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-moriPrimary rent
(Note 2)
Fixed
Variablerent
rent(Note 3)(Note 4)

Secondary
rent(Note 5)Other
revenue

Total(Note 8)314
(Note 6)

-

30

-

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
Nagasaki Hotel Seifu
Ooedo-Onsen Monogatari
Kounkaku
Kinugawa Kanko Hotel
Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel
Total (Note 8)

74

-

6

-

80

42

-

4

-

46

174

-

7

-

182

78

-

6

-

85

51

-

10

0
(Note 7)

62

1,230

-

106

0

1,337

(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) Land rent based on the fixed-term land lease agreement is presented.
(Note 8) 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 93 million yen for the fiscal period ending
November 2021, and 93 million yen for the fiscal period ending May 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 451 million yen for
the fiscal period ending November 2021, and 454 million yen for the fiscal period ending May
2022.
・ The total amount of interest expenses and other borrowing-related expenses is expected to be
154 million yen for the fiscal period ending November 2021, and 147 million yen for the fiscal
period ending May 2022.
・ The balance of loans outstanding as of May 31, 2021 is 14,271 million yen.
・ In the fiscal period ending November 2021 and the fiscal period ending May 2022, it isassumed that the scheduled repayment of 175 million yen will be made separately.
・ The repayment of 10 million yen, a portion of 240 million yen in short-term borrowings, on
August 31, 2021 is assumed in the fiscal period ending November 2021. In addition, it isassumed that, of that amount, 1,449 million yen and 3,472 million yen in short-termborrowings due for repayment on August 31, 2021 and for the current portion of 2,190 million
yen in long-term loans due for repayment on November 30, 2021 will be refinanced.

- 12 -

Outstanding
Investment
Units

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

Other・ 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, 2,170 million yen, 1,423 million yen and 3,434 million yen in short-termborrowings due for repayment on February 28, 2022 and for 3,132 million yen in long-termloans due for repayment on May 31, 2022 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 May 31, 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 November 2021 and May 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 November 2021 and ending May 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 November 30, 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 May 31, 2021

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

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

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

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

305,228
1,347
306,575

303,751544
304,29616
68,483
10,08978,58935,035,715
37,428,394

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

(Thousands of yen)
As of November 30, 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 May 31, 2021

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

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

6,776,000

3,569,375

1,230,692

1,230,692

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

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

20,653,023

20,653,023(17,116)(20,175)(17,116)(20,175)

20,635,907

20,632,847

466,826

459,464

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

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

2.2. Statements of Income(Thousands of yen)
Fiscal period ended
November 30, 2020
Operating revenue
Leasing business revenue
Gain on sale of real estate properties
Total operating revenue
Operating expenses
Expenses related to leasing business
Asset management fees
Asset custody fees
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
Financing fees
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
May 31, 2021

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

1,348,319－
1,348,319

574,661
122,870
1,720
17,258577,073
119,720
1,676
17,032

3,600

3,600

44,313
764,424594,33135,716754,817593,501

10
1,212
1,222

11
637
648

54,68373,230127,914467,639
467,639942(0)
942
466,697
128

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

466,826

459,464

2.3. Statements of Unitholders’ Equity
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

Total
Unappropriatedretained
unitholders'
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)

Total changes of items
during period
Balance at end ofcurrent period

545,192

545,192

21,183,923

21,183,923(545,063)(545,063)(545,063)(545,063)(2,824)(2,824)(2,824)

ProfitTotal net
assets466,697

466,697

466,697

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

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

20,635,907

466,826

466,826

21,102,733

21,102,733

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

UnappropriatedTotal
unitholders'retained
Unitholders'
Total
AllowanceTotal
equityearnings
capitalsurplusfor
deduction(undisposed
temporary
from
loss)
difference unitholders'adjustments
capital(17,116)(17,116)

20,635,907

Dividends of surplus
Excess cash distribution
from allowance fortemporary difference
adjustments(3,059)(3,059)Total changes of items
during period
Balance at end ofcurrent period

466,826

466,826 21,102,733

21,102,733(466,693)(466,693)(466,693)(466,693)(3,059)(3,059)(3,059)ProfitTotal net
assets459,331459,331459,331459,331－(3,059)(3,059)(3,059)(7,361)(7,361)(10,421)(10,421)

20,653,023(20,175)(20,175)

20,632,847

459,464

459,464 21,092,312

21,092,312- 17 -

2.4. Statements of Cash Distributions

Item
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[Of which, excess cash distribution per unit
(pertaining to allowance for temporary
difference adjustments)]
IV. Retained earnings carried forward

Method of calculating distribution amount(Yen)
10th Fiscal Period(from December 1, 2020
to May 31, 2021)

9th Fiscal Period(from June 1, 2020
to November 30, 2020)
466,826,453
3,059,511
3,059,511

459,464,688
4,236,246
4,236,246

4,59,752,612[1,996]466,693,101

4,63,633,590[1,970]459,397,344[1,983]
3,059,511[1,952]
4,236,234

[13]

[18]

133,352

67,324

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.

As described above, distribution per unit for
the fiscal period under review is 1,970 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 1,952 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 the4,236,246 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 18 yen
per investment unit.

- 18 -

2.5. Statements of Cash Flows(Thousands of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Financing fees
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
Decrease in property, plant and equipment due to sale
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
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
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

Fiscal period ended
May 31, 2021

467,639444,973
73,230(10)
54,68344,552(4,533)(25,371)
1,125(7,061)(14,902)779,417
1,573
1,815,315
10(54,822)(937)
1,759,566

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(152,348)(147,672)(13)(300,034)(165,385)－－(165,385)

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

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