Japan Metropolitan Fund Investment : The 40th Fiscal Period Results(September 1, 2021 – February 28, 2022)

Japan Metropolitan Fund Investment Corporation

The 40th Fiscal Period Financial Results

(September 1, 2021 - February 28, 2022)

JAPAN METROPOLITAN FUND INVESTMENT CORPORATION

BALANCE SHEETS

As of August 31, 2021 and February 28, 2022

(Thousands of yen)

As of

August 31, 2021	February 28, 2022
ASSETS
Current assets:
Cash and bank deposits	64,815,529	38,840,649
Cash and bank deposits in trust	18,562,314	17,368,710
Rent receivables	1,047,098	1,014,373
Income taxes receivable	45,739	44,505
Consumption tax refundable	-	250,604
Other current assets	1,286,755	1,133,974
Total current assets	85,757,437	58,652,818
Non-current assets:
Property and equipment:
Buildings	2,474,308	2,465,178
Accumulated depreciation	(789,991)	(825,539)
Buildings, net	1,684,317	1,639,638
Building improvements	66,693	66,693
Accumulated depreciation	(30,620)	(32,110)
Building improvements, net	36,072	34,582
Furniture and fixtures	21,358	21,358
Accumulated depreciation	(15,834)	(16,329)
Furniture and fixtures, net	5,523	5,028
Land	28,459,580	28,459,580
Construction in progress	41,020	2,432
Buildings in trust	333,918,946	341,788,614
Accumulated depreciation	(109,594,075)	(114,653,464)
Buildings in trust, net	224,324,871	227,135,150
Building improvements in trust	12,218,969	12,214,832
Accumulated depreciation	(4,728,045)	(4,880,102)
Building improvements in trust, net	7,490,923	7,334,730
Machinery and equipment in trust	2,149,423	2,200,537
Accumulated depreciation	(1,395,775)	(1,449,236)
Machinery and equipment in trust, net	753,648	751,300
Furniture and fixtures in trust	4,975,095	5,142,042
Accumulated depreciation	(3,163,745)	(3,310,665)
Furniture and fixtures in trust, net	1,811,349	1,831,377
Land in trust	849,981,160	883,826,092
Construction in progress in trust	118,392	154,350
Total property and equipment	1,114,706,861	1,151,174,264
Intangible assets:
Goodwill	15,647,971	15,246,741
Leasehold rights in trust	5,053,919	5,033,845
Other intangible assets	226,099	314,470
Other intangible assets in trust	96,711	84,154
Total intangible assets	21,024,701	20,679,212
Investment and other assets:
Investment securities	10,611,996	13,115,153
Lease deposits in trust	1,539,837	1,487,004
Long-term prepaid expenses	1,927,613	2,114,255
Derivatives	-	58,935
Other investments	1,036	1,036
Total investment and other assets	14,080,484	16,776,384
Total non-current assets	1,149,812,048	1,188,629,861
Deferred assets:
Investment corporation bond issuance costs	151,154	157,163
Total deferred assets	151,154	157,163
TOTAL ASSETS	1,235,720,640	1,247,439,843
(To be continued on the following page)

(Thousands of yen)

As of

August 31, 2021	February 28, 2022
LIABILITIES AND NET ASSETS
Current liabilities:
Accounts payable - operating	3,828,778	3,900,536
Short-term borrowings	-	6,000,000
Current portion of long-term bonds issued - unsecured	6,000,000	6,000,000
Current portion of long-term borrowings	52,900,000	47,200,000
Accounts payable - other	71,301	51,027
Accrued expenses	2,228,371	2,195,628
Income taxes payable	605	605
Consumption tax payable	1,157,900	-
Rent received in advance	4,420,894	4,529,198
Deposits received	1,121,653	2,333,630
Current portion of tenant leasehold and security deposits in trust	674,895	68,065
Derivatives liabilities	37,772	13,498
Other current liabilities	156,720	214,028
Total current liabilities	72,598,893	72,506,218
Non-current liabilities:
Long-term bonds issued - unsecured	53,500,000	58,500,000
Long-term borrowings	426,275,000	431,975,000
Tenant leasehold and security deposits	1,785,226	1,821,305
Tenant leasehold and security deposits in trust	56,876,280	56,885,135
Asset retirement obligations	783,521	787,426
Derivatives liabilities	109,430	-
Other non-current liabilities	121,128	105,257
Total non-current liabilities	539,450,587	550,074,125
TOTAL LIABILITIES	612,049,481	622,580,343
Net Assets
Unitholders' equity:
Unitholders' capital	411,878,082	411,878,082
Surplus:
Capital surplus	202,855,188	202,855,188
Deduction from capital surplus	(11,999,843)	(11,999,843)
Capital surplus, net	190,855,344	190,855,344
Voluntary reserve
Reserve for reduction entry of property	770,557	-
Reserve for dividends	3,915,072	3,915,072
Retained earnings for temporary difference adjustment	2,785,030	1,127,716
Total voluntary reserve	7,470,660	5,042,789
Retained earnings	13,549,190	16,924,222
Total surplus	211,875,196	212,822,356
Total unitholders' equity	623,753,278	624,700,438
Valuation and translation adjustments:
Net unrealized holding gains (losses) on investment securities	65,083	105,365
Deferred losses on hedges	(147,202)	53,695
Total valuation and translation adjustments	(82,119)	159,061
TOTAL NET ASSETS	623,671,158	624,859,499
TOTAL LIABILITIES AND NET ASSETS	1,235,720,640	1,247,439,843

JAPAN METROPOLITAN FUND INVESTMENT CORPORATION

STATEMENTS OF INCOME AND RETAINED EARNINGS

For the Six Months Ended

August 31, 2021 and February 28, 2022

(Thousands of yen)

For the six months ended

August 31, 2021	February 28, 2022
Operating revenues
Rent and other operating revenues	38,022,596	37,812,164
Gain on sales of property	2,107,223	2,532,299
Dividend income	230,926	254,073
Total operating revenues	40,360,746	40,598,537
Operating expenses
Property-related expenses	17,239,266	16,995,117
Loss on sales of property	1,767,153	-
Asset management fees	4,449,593	3,690,930
Custodian fees	30,530	32,877
General administration fees	132,113	149,045
Compensation for Directors	5,782	5,782
Merger expenses	356,711	-
Amortization of goodwill	401,230	401,230
Other operating expenses	417,894	515,377
Total operating expenses	24,800,276	21,790,360
Operating income	15,560,469	18,808,177
Non-operating revenues
Interest income	411	343
Subsidy income	16,406	28,927
Sponsorship money income	-	52,800
Other non-operating revenues	4,443	4,537
Total non-operating revenues	21,261	86,607
Non-operating expenses
Interest expenses	1,492,843	1,409,884
Interest expenses on investment corporation bonds	174,240	183,369
Amortization of investment corporation bond issuance costs	21,632	24,403
Loan-related costs	339,053	349,077
Other non-operating expenses	4,166	3,223
Total non-operating expenses	2,031,935	1,969,957
Ordinary income	13,549,795	16,924,827
Income before income taxes	13,549,795	16,924,827
Income taxes
Current	605	605
Total income taxes	605	605
Net income	13,549,190	16,924,222
Unappropriated earnings at beginning of period	-	-
Retained earnings at the end of period	13,549,190	16,924,222

JAPAN METROPOLITAN FUND INVESTMENT CORPORATION

STATEMENTS OF CASH FLOWS

For the Six Months Ended August 31, 2021 and February 28, 2022

(Thousands of yen)

For the six months ended

August 31, 2021	February 28, 2022
Cash Flows from Operating Activities:
Income before income taxes	13,549,795	16,924,827
Adjustments to reconcile income before income taxes to net cash provided by
operating activities:
Depreciation	6,161,683	6,058,181
Amortization of goodwill	401,230	401,230
Amortization of investment corporation bond issuance costs	21,632	24,403
Gain on sales of property	(2,107,223)	(2,532,299)
Loss on sales of property	1,767,153	-
Loss on disposal of fixed assets	24,898	25,712
Interest income	(411)	(343)
Interest expenses	1,667,083	1,593,253
Changes in assets and liabilities:
(Increase) decrease in rent receivables	10,647	34,519
(Increase) decrease in income taxes receivable	(37,322)	1,233
(Increase) decrease in consumption tax refundable	-	(250,604)
(Increase) decrease in long-term prepaid expenses	(140,601)	(186,641)
Increase (decrease) in accounts payable - operating	(600,945)	(519,745)
Increase (decrease) in consumption tax payable	(56,050)	(1,157,900)
Increase (decrease) in accounts payable - other	(237,993)	5,188
Increase (decrease) in accrued expenses	(320,758)	(16,092)
Increase (decrease) in rent received in advance	101,972	108,304
Increase (decrease) in deposits received	(582,302)	(234,060)
Other, net	(244,887)	218,381
Sub total	19,377,601	20,497,548
Interest received	411	343
Interest expenses paid	(1,680,441)	(1,656,853)
Income taxes paid	(20,695)	(605)
Net cash provided by operating activities	17,676,875	18,840,433
Cash Flows from Investing Activities:
Purchase of property and equipment	(39,204)	(24,694)
Purchase of property and equipment in trust	(32,279,364)	(63,250,844)
Proceeds from sales of property and equipment in trust	29,669,968	24,044,255
Payments for sales of property and equipment in trust	(56,760)	(134,981)
Purchase of intangible assets	(131,258)	(109,055)
Purchase of intangible assets in trust	(5,440)	(2,169)
Payments of tenant leasehold and security deposits	(28,166)	(33,326)
Proceeds from tenant leasehold and security deposits	54,288	34,213
Payments of tenant leasehold and security deposits in trust	(3,708,690)	(2,135,537)
Proceeds from tenant leasehold and security deposits in trust	1,771,827	3,022,282
Proceeds from lease deposits	-	10,000
Proceeds from lease deposits in trust	7,500	42,833
Investment in securities	(1,893,098)	(2,463,603)
Payments for restricted bank deposits in trust	-	(4)
Net cash used in investing activities	(6,638,398)	(41,000,634)
Cash Flows from Financing Activities:
Proceeds from short-term borrowings	-	6,500,000
Repayments of short-term borrowings	-	(500,000)
Proceeds from long-term borrowings	39,750,000	28,500,000
Repayments of long-term borrowings	(46,750,000)	(28,500,000)
Proceeds from issuance of investment corporation bonds	8,449,966	4,969,586
Redemption of investment corporation bonds	(1,500,000)	-
Payments of merger cash distributions	(5,434,444)	-
Distribution payments	(11,710,354)	(15,977,875)
Net cash used in financing activities	(17,194,833)	(5,008,288)
Net change in cash and cash equivalents	(6,156,356)	(27,168,488)
Cash and cash equivalents at the beginning of period	72,563,168	82,864,510
Increase in cash and cash equivalents resulting from merger	16,457,698	-
Cash and cash equivalents at the end of period	82,864,510	55,696,022