MIRAI : (Delayed) (REIT) Financial Report for the Fiscal Period ended April 30, 2021 (The 10th Period)

(REIT) Financial Report for the Fiscal Period ended April 30, 2021 (The 10th Period)

													June 15, 2021
Name of REIT issuer:	MIRAI Corporation				Stock exchange listing: Tokyo Stock Exchange
Security code:		3476								URL:https://3476.jp/en/
Representative:		Michio Suganuma, Executive Director
Name of asset manager:	Mitsui Bussan & IDERA Partners Co., Ltd.
Representative:		Michio Suganuma, Representative Director, President
Contact:		Nobuaki Takuchi, Director, CFO
		TEL: [phone]
Scheduled date for submission of securities report:		July 29, 2021
Scheduled date for commencing dividend payments:	July 8, 2021
IR Material:	Will be posted on the website
IR Meeting:	Will be held for institutional investors and securities analysts
										(Figures are rounded down to the nearest million yen)
1. Performance for the Fiscal Period ended April 2021 (The 10th period from November 1, 2020 to April 30, 2021)
(1) Operating Results									(% represents change from the previous period)
	Operating Revenue			Operating Profit		Ordinary Profit	Net profit
Period ended	Million yen	%		Million yen		%			Million yen		%	Million yen		%
Apr. 30, 2021	4,973	(7.3)			2,321		(11.5)			2,073		(12.8)	2,072		(12.8)
Oct. 31, 2020	5,367	(1.5)			2,622		(8.5)			2,378		(8.4)	2,376		(8.4)
	Net Profit per Unit	Net Profit to Net Assets			Ordinary Profit to	Ordinary Profit to
		Total Assets		Operating Revenue
Period ended		Yen					%					%			%
Apr. 30, 2021		1,246					2.8					1.3			41.7
Oct. 31, 2020		1,429					3.1					1.5			44.3

(Note) Net Profit per Unit is calculated by dividing the net income by the day-weighted average number of investment units. (Fiscal period ended October 31, 2020 = 1,662,240 units, Fiscal period ended April 30, 2021 = 1,662,240 units)

(2) Distributions

	Distributions	Total	Distributions	Total	Distributions	Total
	per Unit	Distributions	per Unit	Distributions		Distributions
	(excluding	(excluding	in excess of	Distributions	(including	(including	Payout Ratio
	earnings per	in excess of	to Net Assets
	distributions in	distributions in	distributions in	distributions in
	excess of	excess of	Unit	earnings	excess of	excess of
	earnings)	earnings)			earnings)	earnings)
Period ended	Yen	Million yen	Yen	Million yen	Yen	Million yen	%	%
Apr. 30, 2021	1,238	2,057	9	14	1,247	2,072	99.3	2.7
Oct. 31, 2020	1,429	2,375	-	-	1,429	2,375	99.9	3.1

(Note 1) Distributions in excess of earnings per unit amounted 9 yen for the Fiscal Period ended April 30, 2021 is made from the allowance for temporary difference adjustment. There is no distribution by decreasing unitholders' capital on taxation.

(Note 2) Total Distributions (including distributions in excess of earning) for the Fiscal Period ended April 30, 2021 is composed of distributions of net assets deducting unitholders' capital (excluding distributions in excess of earnings) at period-end and distributions of the allowance for temporary difference adjustment (distributions in excess of earning) as changes in deferred losses on hedges during the period.

(Note 3) Payout Ratio = Total Distributions (excluding distributions in excess of earnings) / Net Profit * 100

Payout Ratio for the Fiscal Period ended April 30, 2021 is 100.0% using the Total Distributions (including distributions in excess of earnings).

(Note 4) Distributions to Net Assets are calculated based on Total Distributions (excluding distributions in excess of earnings).

(3) Financial Position

	Total Asset	Net Asset	Net Assets to Total Assets	Net Assets per Unit
Period ended	Million yen	Million yen	%	Yen
Apr. 30, 2021	161,815	75,110	46.4	45,186
Oct. 31, 2020	159,222	75,428	47.4	45,377

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(4) Cash Flows

				Cash and Cash
	Operating Activities	Investing Activities	Financing Activities	Equivalents at End of
				Period
Period ended	Million yen	Million yen	Million yen	Million yen
Apr. 30, 2021	9,273	(10,096)	625	5,274
Oct. 31, 2020	6,160	(686)	(4,607)	5,471

2. Forecasts for the Fiscal Period ending October 2021 (The 11th Period from May 1, 2021 to October 31, 2021) and ending April 2022 (The 12th Period from November 1, 2021 to April 30, 2022)

(% represents change from the previous period)

									Distributions per	Distributions in
									Unit (excluding
	Operating Revenue	Operating Profit	Ordinary Profit	Net Profit	excess of earnings
	Distributions in excess
									of earnings)	per Unit
Period ending	Million	%	Million	%	Million	%	Million	%	Yen	Yen
	yen		yen		yen		yen
Oct. 31, 2021	5,104	2.6	2,356	1.5	2,096	1.1	2,095	1.1	1,260	-
Apr. 30, 2022	5,026	(1.5)	2,375	0.8	2,094	(0.0)	2,093	(0.0)	1,260	-

(Reference) Forecasted Net Profit per Unit (Forecasted Net Profit / Forecasted Unit at end of period)

The Fiscal Period ending October 2021:
Forecasted Unit at end of period 1,662,240 units	Forecasted Net Profit per Unit 1,260 yen
The Fiscal Period ending April 2022:
Forecasted Unit at end of period 1,662,240 units	Forecasted Net Profit per Unit 1,259 yen

Others

1. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements due to corrections of errors

(i)	Changes in accounting policies due to revisions to accounting standards	None
(ii)	Changes in accounting policies other than (i)	None
(iii) Changes in accounting estimates	None
(iv) Restatement of prior period financial statements due to corrections of errors	None

(2) Number of investment units issued and outstanding

(i) Number of investment units (including treasury units) issued and outstanding at the end of each period

As of Apr. 30, 2021:	1,662,240 units As of Oct. 31, 2020:	1,662,240 units
(ii) Number of treasury units issued and outstanding at end of period
As of Apr. 30, 2021:	0 unit As of Oct. 31, 2020:	0 unit

• Financial Report is not subject to audit by certified public accountants or audit corporations.
• Explanation on the appropriate use of forecasts and other notes

(Note to forward-looking statements)

This document contains forecasts and other forward-looking statements based on the information currently available and on certain assumptions judged as rational by MIRAI Corporation. (hereafter referred to as "MIRAI"), and the actual operating results and so on may differ significantly from that anticipated by MIRAI due to various factors. Moreover, the forecasts are not intended to guarantee any amount of dividend distribution and distribution in excess of earnings. For notes regarding assumptions underlying these forecasts, please refer to "Assumptions Underlying Forecasts for the Fiscal Periods Ending October 31, 2021 and April 30, 2022." on page 3.

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Assumptions Underlying Forecasts for the Fiscal Periods Ending October 31, 2021 and April 30, 2022

Item		Assumptions
Calculation period	・	The Fiscal Period Ending October 2021: May 1, 2021 to October 31, 2021 (184 days)
・	The Fiscal Period Ending April 2022: November 1, 2021 to April 30, 2022 (181 days)
	・	The forecasts assume that MIRAI owns 34 assets as real estate and real estate trust beneficiaries (hereinafter the
Portfolio assets		"Portfolio assets") as of the released date of this document.
・	No other acquisitions and sales of properties is assumed.
	・	In practice, this may change due to movements of investment assets.
Total number of	・	The forecast assumes 1,662,240 units.
investment units
・	No change in the number of investment units due to any issuances of new units are assumed until April 30, 2022.
issued
	・	Of the outstanding interest-bearing debt balance of 78,700 million yen as of today. MIRAI assumed that the current
		portion of short-term debt of 3,000 million yen and long-term debt of 11,500 million yen that will mature during the
		fiscal period ending October 31, 2021 and April 30, 2022 would be refinanced into long-term debt.
Interest-bearing debt	・	The interest-bearing debt outstanding as of October 31, 2021 and April 30, 2022 is expected to be 78,700 million yen.
	・	The LTV (based on total assets) as of October 31, 2021 and April 30, 2022 is expected to be approximately mid 48%.
	・	The calculation of the LTV (based on total assets) uses the following formula.
		LTV (based on total assets) = total amount of interest-bearing debt outstanding / total assets
	・	Lease business revenue from the "Portfolio assets" is calculated primarily by taking into account leasing contracts
		effective as of today, trends in the real estate leasing market (vacancy rates, rent levels, etc.) and status of negotiation
		with tenants.
Operating revenue	・	It is assumed that hotels with variable rent (Smile Hotel Naha City Resort, Smile Hotel Hakataeki-mae, Smile Hotel
		Nagoya-Sakae) will not incur variable rent until the end of April 2022.
	・	Considering the spread of COVID-19, risk of 38 million yen for the fiscal period ending October 31, 2021 and 84
		million yen for the fiscal period ending April 30, 2022 decline in lease business revenue are estimated.
	・	Expenses for the lease business other than depreciation are based on past records and information provided by the
		current owners, etc. while reflecting other variable factors into consideration.
	・	In principle, the fixed asset tax, city planning tax, and depreciation asset tax (the "Fixed Asset and City Planning
		Taxes") of "Asset to be Acquired" during a fiscal year will be settled on the acquisition date with current owners in
		proportion to holding period for the assets. Such costs are to be capitalized without having any impact to profit and/or
		loss in the fiscal period of the acquisition.
	・	Total repair expenses for buildings are calculated based on the repair plans developed by Mitsui Bussan & IDERA
		Partners Co., Ltd., the asset manager of MIRAI and takes into account the engineering reports and appraisal reports,
		and are accrued in each fiscal period. It should be noted, however, that the actual repair expenses in each fiscal period
		may differ considerably from the estimates, mainly due to urgent repair expenses for any damages of assets arising
		from unexpected factors, significant yearly fluctuations in the amount of repair expenses and the nature of repair
		expenses whereby they do not arise on a regular basis.
Operating expense	・	Depreciation including incidental expenses is calculated using the straight-line method.
	・	The breakdown of expenses for the lease business is as follows.
		The Fiscal Period Ending	The Fiscal Period Ending
		October 31, 2021	April 30, 2022
		Outsourcing services:	375 million yen	365 million yen
		Utilities expenses:	474 million yen	388 million yen
		Taxes and dues:	407 million yen	394 million yen
		Repair expenses:	72 million yen	67 million yen
		Other expenses for leasing business:	273 million yen	294 million yen
		Depreciation:	609 million yen	625 million yen
	・	Other operating expenses (asset management fees, administrative servicing fees, etc.) are estimated to be 534 million
		yen for the fiscal period ending October 31, 2021, and 514 million yen for the fiscal period ending April 30, 2022.
Non-operating	・	Interest expenses and borrowing-related expenses are estimated to be 260 million yen for the fiscal period ending
expenses		October 31, 2021, and 280 million yen for the fiscal period ending April 30, 2022.
	・	Distributions per unit (excluding distributions in excess of earnings) are calculated based on the cash distribution policy
		described in the Articles of Incorporation of MIRAI.
	・	The amount of distributions per unit (excluding distributions in excess of earnings) may fluctuate due to various factors
Distributions per unit		such as acquisitions and sales of assets, changes in rent income caused by tenant relocations, unexpected repairs
(Excluding		incurred, and interest rate fluctuations.
distributions in excess	・	Derivatives transactions (interest rate swaps transaction) will be continuously in place during the fiscal periods ending
of earnings)		October 31, 2021 and April 30, 2022. It is estimated that deferred losses on hedges as deduction from net assets (as
		specified in Item 30-B, Clause 2, Article 2 of the Calculation Rules for Investment Corporations) is 480 million yen
		which is the same amount as the fiscal period ended April 30, 2021. It is calculated based on the assumption that there
		is no change in the market value of interest rate swaps.
Distributions in	・	As described above, no change in the amount of deferred losses on hedges as deduction from net assets is assumed in
	the fiscal period ending October 31, 2021 and fiscal period ending April 30, 2022, and distributions in excess of
excess of earnings per
	earnings related to the allowance for temporary difference adjustment are not scheduled at present.
unit
・	Distributions in excess of earnings by decreasing unitholders' capital under taxation are not scheduled at present.
	・	Excluding above, it is assumed that impact of spread of COVID-19 will not be significantly wider than current estimate
		and that the epidemic will not last longer. In reality, potential for the impact of spread of New Coronavirus Infection
		continuing to expand and becoming prolonged cannot be ruled out.
Others	・	The forecasts assume that no revisions that may impact the above projections will be made to laws and regulations,
		taxation, accounting standards, listing rules, the rules of the Investment Trust Association, Japan, or others.
	・	The forecasts assume no unforeseeable significant changes in the general economic trends and real estate market
		conditions.

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3. Financial Statements

(1) Balance Sheet

				(Thousands of yen)
			As of October 31, 2020	As of April 30, 2021
	Assets
	Current assets
	Cash and deposits		3,255,545	3,379,883
	Cash and deposits in trust	2,397,565	2,076,752
	Operating accounts receivable		126,496	117,198
	Prepaid expenses	132,783	133,358
	Other		28	113
	Total current assets	5,912,418	5,707,305
	Non-current assets
	Property, plant and equipment
	Buildings		-	424,386
	Accumulated depreciation	-	(3,960)
	Buildings, net		-	420,425
	Structures	-	564
	Accumulated depreciation		-	(62)
	Structures, net	-	502
	Land		-	4,230,785
	Buildings in trust	35,570,357	34,669,961
	Accumulated depreciation		(3,558,091)	(3,966,358)
	Buildings in trust, net	32,012,266	30,703,602
	Structures in trust		322,658	318,733
	Accumulated depreciation	(55,064)	(61,460)
	Structures in trust, net		267,593	257,272
	Machinery and equipment in trust	219,025	188,940
	Accumulated depreciation		(50,940)	(54,162)
	Machinery and equipment in trust, net	168,084	134,777
	Tools, furniture and fixtures in trust		125,329	217,106
	Accumulated depreciation	(21,171)	(29,655)
	Tools, furniture and fixtures in trust, net		104,157	187,451
	Land in trust	120,282,810	119,722,380
	Construction in progress in trust		-	27,345
	Total property, plant and equipment	152,834,912	155,684,544
	Intangible assets
	Software	11,752	16,851
	Other		231	231
	Total intangible assets	11,983	17,083
	Investments and other assets
	Long-term prepaid expenses	374,113	318,508
	Deferred tax assets		47	7
	Guarantee deposits	11,006	11,006
	Other		56,134	56,134
	Total investments and other assets	441,300	385,656
	Total non-current assets		153,288,197	156,087,284
	Deferred assets
	Investment corporation bond issuance costs		21,896	20,637
	Total deferred assets	21,896	20,637
	Total assets		159,222,513	161,815,227

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						(Thousands of yen)
				As of October 31, 2020		As of April 30, 2021
	Liabilities
	Current liabilities
	Operating accounts payable			808,801		695,967
	Distributions payable	11,888	11,215
	Short-term borrowings			-		3,000,000
	Current portion of long-term borrowings	3,000,000	11,500,000
	Accounts payable - other			504,224		484,404
	Accrued expenses	2,111	1,128
	Income taxes payable			1,491		752
	Accrued consumption taxes	179,767	314,647
	Advances received			653,192		598,553
	Deposits received	592	4,299
	Other			301		118
	Total current liabilities	5,162,371	16,611,088
	Non-current liabilities
	Investment corporation bonds	2,000,000	2,000,000
	Long-term borrowings			70,700,000		62,200,000
	Leasehold and guarantee deposits received	-	143,311
	Leasehold and guarantee deposits received in			5,466,986		5,270,387
	trust
	Derivatives liabilities	464,758	480,108
	Total non-current liabilities			78,631,745		70,093,807
	Total liabilities	83,794,116	86,704,895
	Net assets
	Unitholders' equity
	Unitholders' capital			73,516,089		73,516,089
	Deduction from unitholders' capital
	Allowance for temporary difference			(538,565)		(463,764)
	adjustments
	Total deduction from unitholders' capital	(538,565)	(463,764)
	Unitholders' capital, net			72,977,523		73,052,324
	Surplus
	Unappropriated retained earnings			2,915,631		2,538,115
	(undisposed loss)
	Total surplus	2,915,631	2,538,115
	Total unitholders' equity			75,893,155		75,590,440
	Valuation and translation adjustments
	Deferred gains or losses on hedges			(464,758)		(480,108)
	Total valuation and translation adjustments	(464,758)	(480,108)
	Total net assets			75,428,396		75,110,331
	Total liabilities and net assets		159,222,513	161,815,227

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