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 12th Fiscal Period

July 20, 2022

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
Yoshimi Nishibeppu, Chief Planning & Coordination Officer+81-3-6262-5456

Scheduled date of submission of periodic securities report (yuka shoken hokokusho):Scheduled date of start of distribution payments:
Preparing supplementary explanatory materials on financial results:
Holding of brief session on financial results:

August 24, 2022
August 15, 2022

Yes
Yes (for institutional investors and analysts)[Amounts are rounded down to the nearest million yen, except for per unit figures]
1. Status of Management and Assets for the 12th Fiscal Period
11th Fiscal Period: Fiscal period ended November 2021 (from June 1, 2021 to November 30, 2021)
12th Fiscal Period: Fiscal period ended May 2022 (from December 1, 2021 to May 31, 2022)(1) Management Status
Fiscalperiod11th
12th

Operatingrevenuemillion yen
1,344
1,291

FiscalperiodProfitper unit

11th
12th

(2) Distribution Status
Fiscal period

Distribution
per unit(excludingexcess cash
distribution)

%
(0.3)
(3.9)

yen
1,667
1,503

Total
distribution(excludingexcess cash
distribution)

Operatingprofitmillion yen
589
554

%
(0.7)
(5.9)

Ratio of profit tounitholders’ equity

Excess cash
distribution
per unit

%
1.9
1.7

Total excess
cash
distribution[% figures show the period-on-period increase (decrease)]
Ordinary
Profitprofitmillion yen% million yen%
393(14.5)
392(14.5)
354
(9.8)
353
(9.9)
Ratio of ordinary profit tototal assets
%
1.1
1.0

Distribution
per unit(includingexcess cash
distribution)

Total
distribution(includingexcess cash
distribution)

Ratio of ordinary profit tooperating revenue
%
29.3
27.5

Distribution
Ratio of
Payoutdistribution to
net assets
ratio

yen
yen
million yen
yenmillion yen
million yen
%
%
11th
1,668
392
18
4
1,686
396
100.0
1.9
12th
1,503
353
18
4
1,521
357
100.0
1.7
(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
36,926
34,760

million yen
21,021
20,978Unitholders’ equity to total
assets%56.9
60.4

Net cashprovided by (used in)operating activities
million yen
934
2,473

Net cashprovided by (used in)investing activities
million yen
(104)
(89)

Net cashprovided by (used in)financing activities
million yen(711)(2,700)Total assets

11th
12th

(4) Cash Flow Status
Fiscalperiod11th
12th

Net assets-1-

Net assets
per unityen
89,32089,137

Cash andcash equivalents
at end of period
million yen
1,150
833

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

FiscalperiodOperatingrevenue

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

Ordinary
profitmillionmillionmillionmillion
%
%
%
%
yen
yen
yen
yen
13th
1,256 (2.7)
520 (6.2)
330 (6.8)
329 (6.8)
14th(Reference) Estimated Profit per unit for the 13th Fiscal Period: 1,401 yen

distribution)

yen

yen

yen

1,401
-

19
-

1,420
-

* 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:

12th

235,347 units

11th

235,347 units

12th

0 units

11th

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 Period Ending November 2022” on page 8.
Because of the replacement of shareholders of the Ooedo-Onsen Monogatari Group, the sponsor of the Investment Corporation,
the Investment Corporation is currently discussing measures for future issues and strategies for future growth with its sponsor.
Therefore, this report announces the operating result forecast only for the fiscal period ending November 30, 2022, due to uncertainty
in the assumptions for forecasting operating results. The Investment Corporation will announce its forecast for the fiscal period
ending May 31, 2023, as soon as it becomes available. For details, see the section “(2) Outlook for the Next Fiscal Period” on page
5 under “2.1.Management Status,” under “1. Management Status.”-2-1. Management Status
2.1. Management Status(1) Overview of the Fiscal Period under Review
a. Brief History of the Investment Corporation
Ooedo Onsen Reit Investment Corporation (the “Investment Corporation”) was established on March 29,
2016 (capital: 200 million yen, issued investment units: 2,000 units) under the Act on Investment Trusts andInvestment Corporations (the “Investment Trust Act”). Registration with the Kanto Local Finance Bureau wascompleted on May 13, 2016 (registration number 119, filed with the Director of the Kanto Local Finance
Bureau).
Subsequently, pursuant to the basic policy calling for “key investments in onsen and spa-related facilities
under the Ooedo business model (Note 1) that can achieve stable revenues and sustained growth” and “growthstrategy taking maximum advantage of support from the Ooedo-Onsen Monogatari Group (Note 2)”, thesponsor, the Investment Corporation issued new investment units via public offering (174,200 units) with
August 30, 2016 as the payment date and listed on the Real Estate Investment Trust Securities Market of Tokyo
Stock Exchange, Inc. (“Tokyo Stock Exchange”) (Securities Code: 3472) on August 31, 2016. Furthermore,
the Investment Corporation acquired 9 onsen and spa-related facilities (Note 3) (total acquisition price (Note4): 26,844 million yen) on September 1, 2016. At the beginning of the 4th fiscal period, the Investment
Corporation issued new investment units via public offering (56,330 units) and additionally acquired 5 onsen
and spa-related facilities (total acquisition price: 9,861 million yen) on December 4, 2017. During the 11th
fiscal period, 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. And during
the fiscal period under review, the Investment Corporation transferred Ooedo-Onsen Monogatari Nagasaki
Hotel Seifu, as a result of which, the total number of facilities owned by the Investment Corporation as of theend of the fiscal period under review stood at 13 facilities (total acquisition price: 34,449 million yen). The
total number of investment units issued and outstanding of the Investment Corporation as of the end of the
fiscal period under review stands at 235,347 units.
(Note 1) “Ooedo business model” is business expertise introduced in facilities operated by the Ooedo-Onsen Monogatari Groupcapable of maintaining high profitability and stable occupancy, which are possessed by the Ooedo-Onsen MonogatariGroup and believed to be highly competitive.
(Note2 ) “Ooedo-Onsen Monogatari Group” is comprised of the Investment Corporation’s sponsors, namely Ooedo-Onsen
Monogatari Hotels & Resorts Co, Ltd. and Ooedo-Onsen Monogatari Co., Ltd. (hereinafter “Ooedo-Onsen
Monogatari” and may be referred to as “Sponsors” collectively with Ooedo-Onsen Monogatari Hotels & Resorts Co.,
Ltd.) and their consolidated subsidiaries (meaning subsidiaries provided for in Article 8, Paragraph 3 of the Regulationon the Terminology, Forms, and Preparation Methods of Financial Statements (Ordinance of the Ministry of Finance
No. 59 of 1963, as amended), including the Asset Manager). The same applies hereinafter.
(Note 3) “Onsen and spa-related facilities” refers to facilities which provide as a primary function onsen or hot baths, andinclude baths (public bathing facilities which employ onsen or other similar facilities; the same hereinafter), ryokan(lodging of which main structure and facilities are Japanese style), hotels (lodging of which main structure andfacilities are Western style), resort facilities (facilities to provide opportunities for sports or recreational activities
during leisure time), amusement parks, or other leisure facilities (including multi-use facilities that contain theforegoing) that include hot baths as part of their core facilities. Onsen and spa-related facilities also refers to facilities
as a whole, including not only buildings with onsen or hot baths, but also the buildings and sites that are adjacent tosuch buildings or operated as one facility. The same applies hereinafter.
(Note 4) “Acquisition price” is the purchase price (not including expenses, such as consumption tax, local consumption tax, or
sale and purchase fees) of each property in the sale and purchase agreement, rounded down to the nearest million yen.
However, in the case of Ooedo-Onsen Monogatari Reoma Resort, since the Investment Corporation transferred partof the land on November 2, 2020 and at the same time leased the transferred part from the transferee, the "acquisition
price" is the purchase price (not including expenses, such as consumption tax, local consumption tax or sale andpurchase fees) of each real estate in the sale and purchase agreement pertaining to the property as of the time ofacquisition minus the amount equivalent to the book value pertaining to such transferred part as of the time of transfer
plus the amount equivalent to the premium paid as consideration for the establishment of the leasehold in the leaseagreement pertaining to establishment of the leasehold interest in the transferred part.

b. Investment Environment and Management Performance
During the fiscal period under review, tourism-related industries in Japan were affected by another spikein COVID-19 variants, such as the Omicron strain in 2022, after the state of emergency was lifted in in major
cities in October 2021. The number of cases subsequently began to decline amid progress in the third roundof vaccination, and people’s movements that had been restricted began showing signs of recovery with thesupport of the government’s promotion of tourism, for instance in prefectural discounts for local residents.
Meanwhile, factors adversely affecting the Japanese economy such as rising commodity prices due to anincreasingly weak yen since the beginning of 2022 and Russia's military advance in Ukraine have also been
emerging. The Investment Corporation believes that these factors require continuous monitoring.
In this business environment, while the overall occupancy rate of guest rooms (Note 1) was 59.0%, theADR (Note 2) was maintained at 1.1% above that in the previous fiscal period to prepare for a recovery phase.
-3-The Investment Corporation’s variable rents for the fiscal period under review, which ae calculated basedon the annual results of the Ooedo-Onsen Monogatari Group, the tenant, for the period through February2022, remained zero from the previous fiscal period for all facilities, reflecting lower occupancy during theperiod. However, the Investment Corporation received the full amount of fixed rents.
In the prevailing financing environment, bank credit for the hotel sector, which has long been affected by
the COVID-19 pandemic, continues to be restricted, with ongoing rises in financial costs and the shorteningof borrowing periods. With this background, the Investment Corporation sold Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu in January 2022 (Note 3) and appropriated the proceeds primarily to the repayment ofexisting borrowings to improve its financial position.
The appraisal value of properties acquired totaled 37,799 million yen at the end of the fiscal period underreview. In comparison to the appraisal value of properties acquired at the end of the previous fiscal period,
the capitalization rate remained unchanged. However, the appraisal value increased 240 million yen in total
thanks largely to a revision of capital expenditure plans at some of the facilities. Looking at unrealized
gain/loss (Note 4) for the entire portfolio at the end of the fiscal period under review, the unrealized gainincreased to 5,324 million yen as a result of the depreciation of the 13 properties that comprise the portfolio.
In addition, the Investment Corporation implemented essential repairs by tenants during the COVID-19
pandemic while taking steps to control expenditures including the postponement of a portion of capital
expenditures whose implementation could be delayed from the perspective of cash management. At the sametime, the Investment Corporation made the capital expenditures necessary for maintaining functions based ona capital expenditure plan that duly considered the conditions, characteristics and other factors of the owned
properties. (In principle, tenants bore repair expenses based on lease agreements.)
Further, the Investment Corporation continued its activities for acquiring new properties and gathering
information extensively from the marketplace instead of limiting its operations to the properties operated by
the Ooedo-Onsen Monogatari Group, anticipating the future and improvement in the financing environment.

(Note 1) Occupancy rate refers to the ratio of leased area to leasable area.
Guestroom occupancy rate is calculated using the following formula.
Guestroom occupancy rate = number of guestrooms sold during relevant period / number of rooms available for saleduring relevant period ×100 (%)(Note 2) Average daily rate (ADR) is calculated for a given time period by dividing total room revenue by the number of totalrooms sold.
(Note 3) Refer to the press release, “Notice Concerning Transfer of Real Estate in Japan (Ooedo-Onsen Monogatari Nagasaki
Hotel Seifu) ” and “Notice Concerning Early Repayment of Borrowings in Part” dated December 24, 2021, fordetails.
(Note 4) Unrealized gain/loss is calculated using the following formula.
Unrealized gain/loss = Total appraisal value of owned assets as of the end of the fiscal period under review – Totalbalance sheet amount (including equipment attached to buildings, structures, machinery and equipment, tools,
furniture and fixtures as well as leasehold right)

c. Overview of Capital Procurement
In the fiscal period under review, the Investment Corporation procured 3,236 million yen through shortterm borrowing and 3,215 million yen through long-term borrowing from a syndicate with Sumitomo Mitsui
Banking Corporation (SMBC) as the arranger and 220 million yen through short-term borrowing from SMBC
(Note 1) to allocate the funds to the repayment of a portion of 4,349 million yen, 2,102 million yen, and 230
million yen in short-term borrowings that became due on February 28, 2022. Moreover, the Investment
Corporation procured 1,736 million yen and 3,173 million yen through short-term borrowing from a syndicate
with SMBC as the arranger and 210 million yen through short-term borrowing from SMBC (Note 2) to allocate
the funds to the repayment of a portion of 3,215 million yen, 220 million yen in short-term borrowings and3,093 million yen in long-term borrowing that became due on May 31, 2022. In addition, the Investment
Corporation made scheduled repayments of 87 million yen each on January 31, 2022 and April 28, 2022, using
cash on hand and made early repayments of 600 million yen with the transfer of asset (Note 3). As a result, thetotal amount of interest-bearing debt and the ratio of such debt to total assets (LTV) came to 11,874 million
yen and 34.2%, respectively, at the end of the fiscal period under review.
(Note 1) Refer to the press release, “Notice Concerning Borrowing of Funds” dated February 21,2022 and “Notice Concerning
Borrowing of Funds (Finalization of the loan amount) ” dated February 22, 2022, for details.
(Note 2) Refer to the press release, “Notice Concerning Borrowing of Funds” dated May 24, 2022, for details.
(Note 3) Refer to the press release, “Notice Concerning Early Repayment of Borrowings in Part” dated December 24, 2021,
for details.

d. Overview of Financial Performance and Distributions
As a result of the operations described above, business performance in the fiscal period under review
generated operating revenue of 1,291 million yen, operating profit of 554 million yen, ordinary profit of 354
million yen and profit of 353 million yen.
-4-

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 1,503 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 1,521 yen (of which,excess distribution per unit was 18 yen).
(2) Outlook for the Next Fiscal Perioda. Management Environment in the Next Fiscal Period
The Investment Corporation expects that, in the Japanese economy, people’s movements that have been
restricted will begin to recover and the number of visitors to its facilities, particularly from within the same
prefectures and neighboring prefectures, will gradually increase. This is based on the assumption that the
downward trend in the number of COVID-19 cases will continue, the partial acceptance of foreign visitors that
resumed in June will continue, and approval will be given for a COVID-19 medication that has been developed.
Meanwhile, the Investment Corporation considers that the ongoing depreciation of the yen, rising consumer
prices caused in part by the prolonged situation in Ukraine, and the adverse effect of interest rate hikes in the
U.S. on the Japanese economy must continuously be monitored as risk factors in the next and subsequent fiscal
periods.
In such a business environment, the trends particularly in “experience-based consumption” (Note 3) among“intangible goods consumption” (Note 2), which is the basis of “leisure facilities” (Note 1) constituting theinvestment targets of the Investment Corporation, are expected to gradually recover. The Investment
Corporation also considers that the financial performance of tenants at its facilities may further recover fromnow on with the support of prefectural discount plans while remaining cautious about a resurgence particularly
of COVID-19 variant cases. On the other hand, it is the third year of the prolonged impact of COVID-19 since2020, and the Investment Corporation recognizes the need to continue its dialogues with tenants from thestandpoint of a lessor about measures necessary for ascertaining the prompt recovery and growth of tenants’performance, which is the precondition for ensuring the future leasing business revenue of the Investment
Corporation.
The shareholders of the Ooedo-Onsen Monogatari Group, the sponsor of the Investment Corporation, were
replaced with Lone Star Funds in February 2022 (for details, see the press release, “Notice Concerning Changes
in Parent Company and Specified Associated Corporation at the Asset Manager,” dated January 14 and 26,2022). In the Ooedo-Onsen Monogatari Group, the new shareholders have been leading the discussions on
measures to recover from the prolonged pandemic and promote growth. The Investment Corporation is also
holding consultations with its sponsor-cum-tenant to improve financing conditions such as the refinancing ofloans considered a current issue, stabilize medium- to long-term rent income, and turn a profit.
The topics of these consultations and discussions include measures to increase funds on hand to stabilize
the financial affairs of the Investment Corporation and measures to implement positive actions such as valueadding investment to raise the future profitability of the facilities and investment in new store opening.
For this reason, this report announces the operating result forecast for the Investment Corporation only forthe fiscal period ending November 30, 2022, due to uncertainty in the assumptions for financial forecasts.
(Note 1) “Leisure facilities” refers to facilities that provide consumers with leisure activities and fulfilling time which people
nowadays require, such as “enjoyment,” “communication,” “comfort and relaxation” and “health and intellectual
satisfaction.”(Note 2) “Intangible goods consumption” refers to consumption activities for providing a “series of experiences” which is acombination of individual events.
(Note 3) “Experience-based consumption” refers to consumption activities for the purpose of having experiences.

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

(b) Internal Growth Strategy
i. Rent Structure Emphasizing Stability
The Investment Corporation adopts a rent system that comprises primary rent (fixed rent combined with
GOP (Note 1)-linked variable rent) with the addition of secondary rent (amount equivalent to real estate-related
costs of each facility) in the long-term lease agreements concluded with the Ooedo-Onsen Monogatari Group
companies that are the tenants of the owned assets (Note 2). This along with having tenants pay repair expenses
in principle allows the Investment Corporation to secure stability of cash flow over the long term while pursuingbenefits from the upside of a GOP-linked rent income when facilities are generating favorable operating results.
Looking at variable rents, results for the fiscal period under review, and forecasts for the fiscal period ending
November 2022 are all zero due to occupancy rate declines during the COVID-19 pandemic. For the time being,
the Investment Corporation is focused on overcoming the current crisis and securing fixed rents to the
maximum degree possible. At the same time, the Investment Corporation works to redouble the surety of its
rent income by continuously monitoring tenants’ business performance and ability to pay rents to restore thestability 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.

-6-

ii. Strategic CAPEX (Note) Contributing to the Increase in Income and Enhancement ofCompetitiveness through the Expansion of Capacity
The Investment Corporation will implement CAPEX, which will contribute to an increase in value, such as
the extension and reconstruction of owned properties that have scope for an increase in asset value to increase
the number of guestrooms. Through this measure, it aims to secure potential income for the operator of theowned properties, as well as to increase rental income through the effective use of non-operating buildings andunused land on the premises in the medium to long term.
In addition, the Investment Corporation will strive to raise variable rents by increasing tenant income
through collaboration with the Ooedo-Onsen Monogatari Group, which has the expertise to improve added
value in onsen and spa-related facilities, by actively engaging, from the position of the facility owner, in various
measures to help enhance the competitiveness of facilities, as well as events and other measures to attract guests.
(Note) CAPEX (Capital Expenditure) does not refer to repair expenses for maintenance of real estate but refers to expenditure
for enhancing value and extending lifetime of real estate and its facilities.

(c) Financial Strategy
The Investment Corporation's top priority is understanding the impact of COVID-19 on tenants’ performanceand associated rent income risks and addressing risks to achieve efficient financing. More specifically, it isfocused on the refinancing of existing loans. The Investment Corporation believes that maintaining its financialbase through conservative LTV control and cash management is very important.
The 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 terms and theachievement of growth in 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 Period Ending November 2022
Item

Assumption

Calculation
periodManagedAssets・ Fiscal period ending November 2022
(13th fiscal period: from June 1, 2022, to November 30, 2022) (183 days)
・ It is assumed that there will be no change (acquisition or disposition of assets) to the 13
properties, which the Investment Corporation owns as of the date of this document, throughto the end of the fiscal period ending November 2022.
・ The managed assets may change due to acquisition of assets other than the owned properties
above, the disposition of assets under management, etc.
・ Lease operations revenue from the owned assets is calculated based on the lease agreements
effective as of the date of this document. It is calculated in light of rent revisions to be made in
the future, taking into consideration market trends and other factors. It assumes that there is nodelinquency or non-payment of rent by the tenant.
・ The period constituting the basis for calculating variable rents are determined by multiplying
the modified GOP for the period between September 2021 and August 2022 in the fiscal period
ending November 2022 (13th period) by the premium rate that is specified in each leaseagreement. This assumes that the effects of the COVID-19 pandemic will cause a decrease in
the modified GOP that becomes the basis of calculating variable rents, resulting in no variable
rents for all properties in the fiscal period ending November 2022 (13th 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.

Operatingrevenue・ Rent is calculated based on the following assumptions:[Ooedo-Onsen Monogatari Reoma Resort]
Fixed rent: 52,456,896 yen monthly
Variable rent: 5,181,730 yen monthly; and will be calculated using the following calculation
method from June 2019(1) Modified GOP (Note 1) for the most recent one-year period × 5.0%
(yearly; the monthly amount is 1/12th thereof)(2) Only if 58.7% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
Ooedo-Onsen Monogatari Reoma Resort, a fixed-term land lease agreement has been concluded
with the tenant and land rent based on this fixed-term land lease agreement of 83,700 yen permonth is received separately, however, this land rent will be revised every year and will becalculated as follows.
Amount of rent after revision = ((A×12－B) + B’) ÷ 12
A: Amount of rent at that particular point in time
B: Sum total of fixed asset tax and other taxes and public dues levied on the land, calculated
based on the tax notice as of October 31 immediately preceding the start date of theimmediately preceding base fiscal year (refers to one-year period commencing on December
1 each year; the same applies hereinafter), and the land rent (annual rent payable at thatparticular point in time)
B’: Sum total of fixed asset tax and other taxes and public dues levied on the land, calculated
based on the tax notice as of October 31 immediately preceding the start date of thatparticular base fiscal year, and the land rent (annual rent payable at that particular point intime)[Ooedo-Onsen Monogatari Ise-shima]
Fixed rent: 18,009,399 yen monthly
Variable rent: 962,993 yen monthly from December 2016; and will be revised every six months
and calculated as follows:(1) Modified GOP for the most recent one-year period × 4.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 77.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.

-8-

[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.
[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)
-9-

(2)

Only if 52.0% 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.
Fiscal Period Ending November 2022 (13th fiscal period)

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

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

(Millions of yen)

Secondary
rent(Note 5)Other
revenue

Total(Note 7)

314

-

30

0
(Note 6)

345

108

-

3

-

111

73

-

8

-

82

93

-

3

-

97

54

-

1

-

56

- 10 -

Ooedo-Onsen Monogatari
Awara
Ooedo-Onsen Monogatari
Kamoshika-so
Ooedo-Onsen Monogatari
Ikaho
Ooedo-Onsen Monogatari
Kimitsu-no-moriOoedo-Onsen Monogatari
Kounkaku
Kinugawa Kanko Hotel
Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel
Total (Note 7)

OperatingexpensesNon-operating
expenses
Borrowings

65

-

8

-

74

35

-

5

-

41

36

-

3

-

40

24

-

5

-

29

42

-

4

-

46

174

-

7

-

181

78

-

6

-

85

51

-

10

0
(Note 6)

62

1,154

-

100

0

1,255

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

・ Of the expenses related to leasing activities, which are a major component of operating
expenses, the expenses related to leasing activities other than the depreciation are calculated
based on past actual figures and by reflecting factors that cause expenses to fluctuate.
・ Taxes and public charges is assumed to be 87 million yen for the fiscal period ending
November 2022.
・ Building repair expenses are not expected to arise, as these expenses will, in principle, beborne by the tenant based on the lease agreement effective as of the date of this document.
・ Depreciation, which is calculated using the straight-line method inclusive of incidental
expenses and additional capital expenditure in the future, is assumed to be 440 million yen for
the fiscal period ending November 2022.
・ The total amount of interest expenses and other borrowing-related expenses is expected to be
189 million yen for the fiscal period ending November 2022.
・ The balance of loans outstanding as of May 31, 2022 is 11,874 million yen.
・ In the fiscal period ending November 2022, it is assumed that the scheduled repayment of 159
million yen will be made separately.
・ The repayment of 28 million yen before maturity was made on June 10, 2022.

- 11 -

Outstanding
Investment
Units

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

Other・ In the fiscal period ending November 2022, short-term loans of 1,724 million yen will be due
for repayment on August 31, 2022 and short-term loans of 1,713 million yen will be due forrepayment on November 30, 2022, 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, 2022.
・ Distribution per unit is calculated based on the expected number of investment units issued
and outstanding as of the end of the fiscal period ending November 2022 (235,347 units).
・ Distribution per unit (excluding excess cash distribution) is calculated based on the policy forcash distributions provided for in the Investment Corporation’s articles of incorporation.
・ Distribution per unit (excluding excess cash distribution) may change due to various factors,
including changes of portfolio, changes in rent revenue due to a relocation of tenant, etc., theoccurrence of unexpected capital expenditures, and other reasons.
・ Recording of allowance for temporary difference adjustments of 4,471,593 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 19 yen of excess distribution per unit will be conducted in the fiscal period
ending November 2022.
・ It is assumed that revisions that affect the above forecast figures will not be made to laws orordinances, tax systems, accounting standards, listing regulations, or rules or the like set by
The Investment Trusts Association, Japan.
・ It is assumed that unforeseen material changes in general economic trends, in real estate market
conditions, or in any other factors will not occur.

- 12 -

2. Financial Statements
2.1. Balance Sheets(Thousands of yen)
As of November 30, 2021

AssetsCurrent assets
Cash and deposits
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Total property, plant and equipment
Intangible assets
Leasehold interests in land
SoftwareTotal intangible assets
Investments and other assets
Deferred tax assets
Long-term prepaid expenses
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets- 13 -

As of May 31, 2022

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

2,078,429
180,2396,433
2,265,102

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

25,880,675(4,403,860)
21,476,814
29,989(3,199)26,789
600
(150)
449
16,314(4,310)12,004
10,657,384
32,173,441

302,27450
302,325

300,798
300,798

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

19
11,25010,08921,35932,495,599
34,760,701

(Thousands of yen)
As of November 30, 2021
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits
received
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Allowance for temporary
difference adjustments
Total deduction from unitholders'
capitalUnitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets- 14 -

As of May 31, 2022

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

169,075
5,119,741
6,754,582
85,321
3,251
1,012
117,571
230,392
6,138
12,487,085

3,529,625-

1,230,441

1,155,461

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

139,909
1,295,371
13,782,457

20,653,023

20,653,023(24,411)(28,648)(24,411)(28,648)

20,628,611

20,624,375

392,604

353,869

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

353,869
20,978,244
20,978,244
34,760,701

2.2. Statements of Income(Thousands of yen)
11th Fiscal Period(from June 1, 2021
to November 30, 2021)

12th Fiscal Period(from December 1, 2021
to May 31, 2022)

1,344,058
1,344,058

1,271,798
16,601
1,291,399

574,035
118,566
1,665
16,511

559,373
113,160
1,637
16,612

3,600

3,600

40,270754,649
589,408

42,369736,753554,645

10
750
761

13
554
567

56,914102,177
37,586
196,678
393,492
393,492956(1)
955
392,536
67

54,234
134,905
11,238200,377
354,835
354,835
1,014
(2)
1,011
353,82445

392,604

353,869

Operating revenue
Leasing business revenue
Gain on sale 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
collateralization-related expenses
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings(undisposed loss)- 15 -

2.3. Statements of Unitholders’ Equity
11th Fiscal Period (from June 1, 2021 to November 30, 2021)(Thousands of yen)

Unitholders' equity
Unitholders' capital

Surplus

Deduction fromunitholders' capital

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

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

Dividends of surplus

459,464 21,092,312 21,092,312(459,397) (459,397)

Excess cash distribution
from allowance fortemporary difference
adjustments(4,236)(4,236)(4,236)

ProfitTotal changes of items
during period
Balance at end ofcurrent period

459,464

Total net
assets(459,397)(459,397)(4,236)(4,236)

392,536

392,536

392,536

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

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

392,604

392,604 21,021,215 21,021,215

12th Fiscal Period (from December 1, 2021 to May 31, 2022)(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(24,411)(24,411) 20,628,611

Dividends of surplus
Excess cash distribution
from allowance fortemporary difference
adjustments(4,236)(4,236)392,604 21,021,215 21,021,215(392,558) (392,558) (392,558)(392,558)(4,236)(4,236)(4,236)

ProfitTotal changes of items
during period
Balance at end ofcurrent period

392,604

Total net
assets353,824

353,824

353,824

353,824(42,970)(42,970)－(4,236)(4,236)(4,236)(38,734)(38,734)

20,653,023(28,648)(28,648) 20,624,375

353,869

353,869 20,978,244 20,978,244- 16 -

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

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

392,604,088
4,236,246
4,236,246[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)
12th Fiscal Period(from December 1, 2021
to May 31, 2022)
353,869,580
4,236,246
4,236,246

396,795,042[1,686]
392,558,796

357,962,787[1,521]
353,726,541[1,668]4,236,246[1,503]
4,236,246

[18]

[18]

45,292

143,039

As described above, distribution per unit for
the fiscal period under review is 1,686 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 1,668 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.

As described above, distribution per unit for
the fiscal period under review is 1,521 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 1,503 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.

- 17 -

2.5. Statements of Cash Flows(Thousands of yen)

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
Refund of leasehold and guarantee deposits received
Proceeds from restricted bank deposits
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- 18 -

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

12th Fiscal Period(from December 1, 2021
to May 31, 2022)

393,492
452,782
102,177(10)
56,91441,360(14,058)(48,998)
1,125
5,128
(1,733)354,835
441,040
134,905(13)
54,234
1,136(41,272)
96,799(84,297)
1,125(3,041)(14,938)-

1,596,838

3,574
991,75410(56,007)(934)
934,823(3,049)2,534,302
13(59,372)(957)
2,473,986(103,970)(251)(104,222)(95,099)(74,979)
80,143(89,935)

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

8,467,044
3,215,322(10,749,830)(3,236,740)(396,795)(2,700,998)(316,947)
1,150,295
833,347