Ｏｎｅリート投資法人（3290） – [Delayed] Summary of Financial Results for the Fiscal Period Ended February 2022 (REIT)

Summary of Financial Results for the Fiscal Period Ended February 2022 (REIT) Translation Purpose Only Stock Exchange Listing: Tokyo Stock Exchange April 14, 2022 URL: https://one-reit.com/en/ (Name) Hirofumi Nabeyama (Name) Hirofumi Nabeyama (Name) Takeshi Akimoto One REIT, Inc. 3290 REIT Issuer: Securities Code: Representative: Asset Management Company: Mizuho REIT Management Co., Ltd. Representative: Contact: (Title) Chief Executive Officer (Title) Executive Officer Finance & (Title) Executive Director Administration Division TEL: +81-3-5220-3804 Scheduled date of submission of securities report: Scheduled date of commencement of distribution payment: Preparation of supplementary financial results briefing materials: Yes Holding of financial results briefing session: May 30, 2022 May 19, 2022 Yes (for institutional investors and analysts) (Amounts are rounded down to the nearest million yen) 1. Status of Management and Assets for the Fiscal Period Ended February 2022 (September 1, 2021, to February 28, 2022) (1) Management Status (% figures are the percentage of increase (decrease) compared with the previous period) Fiscal period Ended Feb. 2022 Ended Aug. 2021 Operating revenue million yen 4,384 4,889 % (10.3) 20.4 Operating profit Ordinary profit Net income million yen 2,262 2,878 % (21.4) 125.9 million yen 1,967 2,613 % (24.7) 155.4 million yen 1,966 2,612 % (24.7) 155.6 Fiscal period Net income per unit Ratio of net income to equity Ratio of ordinary profit to total assets Ratio of ordinary profit to operating revenue yen 7,423 10,890 % 3.4 5.0 % 1.6 2.3 Ended Feb. 2022 Ended Aug. 2021 (2) Distributions status Distribution per unit (excluding distribution in excess of earnings) yen 7,326 7,546 Total distributions (excluding distribution in excess of earnings) million yen 1,966 1,810 Fiscal period Ended Feb. 2022 Ended Aug. 2021 Distribution per unit in excess of earnings Total distributions in excess of earnings Distribution payout ratio Ratio of distributions to net assets yen － － million yen － － % 99.9 69.2 % 44.9 53.5 % 3.3 3.4 (Note) Distribution payout ratio is calculated by the following formula (rounded down to one decimal place). Distribution payout ratio = Total distributions (excluding distribution in excess of earnings) ÷ Net income × 100 (3) Financial position Fiscal period Ended Feb. 2022 Ended Aug. 2021 (4) Status of cash flows Fiscal period Ended Feb. 2022 Ended Aug. 2021 Total assets Net assets Equity ratio Net assets per unit million yen 130,582 113,808 million yen 61,322 53,156 % 47.0 46.7 yen 228,417 221,570 Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Cash and cash equivalents at end of period million yen (15,432) (12,252) million yen 14,047 1,026 million yen 10,221 9,500 million yen 2,105 11,453 1 2. Forecast of Financial Results for the Fiscal Periods Ending August 2022 (March 1, 2022, to August 31, 2022) and February 2023 (September 1, 2022, to February 28, 2023) (% figures are the percentage of increase (decrease) compared with the previous period) Translation Purpose Only Operating revenue Operating profit Ordinary profit Net income million yen million yen % million yen % million yen % 1.3 (0.8) 4,439 4,405 2,127 2,071 (5.9) (2.6) 1, 826 1,773 (7.2) (2.9) 1,825 1,771 Distribution per unit (excluding distribution in excess of earnings) Distribution per unit in excess of earnings Fiscal period Ending Aug. 2022 (Note) Ending Feb. 2023 Fiscal period Ending Aug. 2022 (Note) Ending Feb. 2023 % (7.2) (2.9) yen － － yen 7,120 6,600 (Reference) Forecast net income per unit (fiscal period ending August 2022): 6,799 yen Forecast net income per unit (fiscal period ending February 2023): 6,599 yen (Note) As tenants of owned properties are scheduled to vacate in the fiscal period ending August 31, 2022, operating revenue and other amounts are expected to be lower than the forecasted operating results for the fiscal period ending August 31, 2022, announced in “Summary of Financial Results for the Fiscal Period Ended August 2021 (REIT).” However, we plan to maintain the forecast distribution levels announced in the same document by allocating retained earnings brought forward to distributions. * Other (1) Changes in accounting policies, changes in accounting estimates and retrospective restatement ① Changes in accounting policies accompanying amendments to accounting standards, etc.: Yes No ② Changes in accounting policies other than ①: No ③ Changes in accounting estimates: No ④ Retrospective restatement: (Note) For more details, please see “Notes on Changes to Accounting Policies” on page 17. (2) Total number of investment units issued and outstanding ① Total number of investment units issued and outstanding (including own investment units) at end of period 268,468 units 239,908 units Fiscal period ended Feb. 2022 Fiscal period ended Aug. 2021 ② Number of own investment units at end of period Fiscal period ended Feb. 2022 Fiscal period ended Aug. 2021 (Note) For the number of investment units used as the basis for calculating net income per unit, please refer to － units － units “Notes on Per Unit Information” on page 27. * Summary of financial results are exempt from the audit by a certified public accountant or an auditing firm. * Special note The management status outlook and other forward-looking statements contained in this document are based on information currently available to and certain assumptions deemed reasonable by One REIT. Accordingly, actual management status and other results may differ materially due to a variety of factors. In addition, the forecast is not a guarantee of the amount of distributions. For the assumptions for the forecast of management status, please refer to “Assumptions for the Forecast of Management Status for the Fiscal Periods Ending August 2022 and February 2023” presented on page 7. 2 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 〇 Table of Contents 1. Management Status ……………………………………………………………………………………………………………………………………………… 4 (1) Management Status …………………………………………………………………………………………………………………………………………. 4 ① Overview of the Fiscal Period Under Review ………………………………………………………………………………………………….. 4 ② Outlook for the Next Fiscal Period ………………………………………………………………………………………………………………… 5 ③ Subsequent Material Events ………………………………………………………………………………………………………………………….. 6 (2) Investment Risks …………………………………………………………………………………………………………………………………………….. 8 2. Financial Statements …………………………………………………………………………………………………………………………………………….. 9 (1) Balance Sheet …………………………………………………………………………………………………………………………………………………. 9 (2) Statement of Income ……………………………………………………………………………………………………………………………………… 11 (3) Statement of Unitholders’ Equity…………………………………………………………………………………………………………………….. 12 (4) Statement of Cash Distributions ……………………………………………………………………………………………………………………… 14 (5) Statement of Cash Flows ……………………………………………………………………………………………………………………………….. 15 (6) Notes on the Going Concern Assumption …………………………………………………………………………………………………………. 16 (7) Notes on Matters Concerning Significant Accounting Policies ……………………………………………………………………………. 16 (8) Notes on Changes to Accounting Policies ………………………………………………………………………………………………………… 17 (9) Notes to the Financial Statements ……………………………………………………………………………………………………………………. 18 (10) Increase (Decrease) in Total Number of Investment Units Issued and Outstanding ………………………………………………. 28 3. Reference Information ………………………………………………………………………………………………………………………………………… 29 (1) Information on Price of Assets Under Management, Etc. ……………………………………………………………………………………. 29 (2) Status of Capital Expenditures ………………………………………………………………………………………………………………………… 41 (3) Borrowing Status ………………………………………………………………………………………………………………………………………….. 43 3 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 1. Management Status (1) Management Status ① Overview of the Fiscal Period Under Review (A) Brief History of the Investment Corporation One REIT has Mizuho REIT Management Co., Ltd. (hereinafter referred to as the “Asset Management Company”) (Note 1), which is a member of the Mizuho Financial Group, as its asset management company, and sets middle-sized office buildings (Note 2) as its focal investment target while incorporating other office buildings, etc., aiming to construct a portfolio that both ensures stable income in the medium to long term and exhibits growth potential. Furthermore, One REIT strives for further growth with the aim of maximizing unitholder value under the basic policies of “continuous growth of distributions” and “disciplined external growth while considering the portfolio and financial structure,” alongside obtaining various support in terms of property acquisition, management, and financial aspects from our sponsor, Mizuho Trust & Banking Co., Ltd., which has an abundant track record in the Japanese real estate market. The Investment Corporation was incorporated, pursuant to the Act on Investment Trusts and Investment Corporations (hereinafter the “Investment Trust Act”), on June 25, 2013, with the Asset Management Company as the organizer and listed on the J-REIT section of the Tokyo Stock Exchange (securities code: 3290) on October 9, 2013. With public offering, etc. that followed, the total number of investment units issued and outstanding as of the end of the period under review stands at 268,468. (Note 1) Mizuho Financial Group, Inc., Mizuho Trust & Banking Co., Ltd. and Mizuho Realty One Co., Ltd. (hereinafter referred to as “MONE”) fall within the scope of parent companies of the Asset Management Company. MONE is a wholly owned subsidiary of Mizuho Trust & Banking Co., Ltd., the sponsor, and holds all issued shares of the Asset Management Company and Mizuho Real Estate Management Co., Ltd. (hereinafter referred to as “MREM”). Three companies, namely MONE, the Asset Management Company and MREM, together comprise the MONE Group. MREM is the management company of MONE Group’s private real estate fund. (Note 2) “Middle-sized Office Building” is a category of office building with a total floor area within the range of 3,300 m2 (approximately 1,000 tsubos) and 33,000 m2 (approximately 10,000 tsubos). (B) Investment Environment and Management Performance For the economic environment during the period under review (fiscal period ended February 2022 (17th fiscal period)), the number of new COVID-19 cases fell into the end of 2021, and there were movements toward normalization of economic and social activities. However, it remains difficult to foresee when the situation will be resolved with a phase of re-expansion from January 2022 due to the emergence of a variant. In the office building leasing market, although there has been a lull in the rise in vacancy rates, the spread of new work styles such as telecommuting, triggered by needs to prevent the spread of COVID-19, is making it more apparent that companies are reviewing their office strategies. One REIT acquired six properties (Kuramochi Building Daiichi, REID-C Chiba Ekimae Building, Shinkawa 1-chome Building, Hakozaki 314 Building, Aperto Higashi-Nakano Building and Daido Life Mito Building; total acquisition price of 15,657 million yen; hereinafter referred to as the “newly acquired assets”) on September 24, 2021. Through acquisition of these assets, One REIT sought to improve the quality of its portfolio through tenant diversification and stabilization of the revenue base. Furthermore, One REIT conducted leasing activities focused on maintaining and enhancing occupancy rates by flexibly setting new advertised rent and such in light of market trends, while working to realize optimal costs in property management by taking into consideration tenant needs and the characteristics of the respective properties. As such, One REIT endeavored to enhance leasing business revenues. As a result, One REIT’s portfolio as of the end of the fiscal period ended February 2022 comprised a total of 31 properties (total acquisition price: 119,927 million yen; not including silent partnership equity interest) with a total leasable area of 171,928.65 m2, and the occupancy rate as of the end of the fiscal period ended February 2022 was 97.6%. (C) Overview of Financing In the fiscal period ended February 2022, One REIT procured 6,000 million yen through syndicated loans arranged by Mizuho Trust & Banking Co., Ltd. and Mizuho Bank, Ltd. on September 7, 2021, and used the funds for scheduled repayment of existing borrowings and payment of various related costs. In addition, One REIT executed capital increase of 7,628 million yen (total paid-in amount) through public offering with a payment date of September 22, 2021, as well as 3,000 million yen in short-term borrowings and 4,900 million yen in long-term borrowings on September 24, 2021. The proceeds were used to partially fund the acquisition of six new properties and incidental expenses. Furthermore, One REIT executed capital increase of 381 million yen (total paid-in amount) by way of third-party allotment in connection with the capital increase through public offering, with payment date of October 15, 2021. In addition, on January 27, 2022, One REIT issued its first green bond (5th Unsecured Investment Corporation Bonds, total issue amount: 3,000 million yen), and used the proceeds alongside cash on hand to repay 3,000 million yen in short-term borrowings procured on September 24, 2021, for the purpose of allocation to the acquisition of Kuramochi Building Daiichi, a specified asset meeting eligibility criteria, before their maturity on February 28, 2022. As a result, as of the end of the fiscal period ended February 2022, the balance of interest-bearing liabilities was 61,574 million yen and the ratio of interest-bearing liabilities to total assets (LTV) was 47.2%. 4 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 (D) Overview of Business Performance and Distributions As a result of the management described above, business performance in the fiscal period ended February 2022 was operating revenue of 4,384 million yen, operating profit of 2,262 million yen, ordinary profit of 1,967 million yen and net income of 1,966 million yen. One REIT decided to distribute almost the entire amount of unappropriated retained earnings after deduction of the amount internally reserved in or before the previous fiscal period with the incurrence of gain on sale of real estate properties and such in a manner that the maximum amount of distributions of earnings would be included in deductible expenses by application of the special provisions for taxation on investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation). As a result, One REIT declared distribution per investment unit of 7,326 yen. ② Outlook for the Next Fiscal Period (A) Future Investment Environment The domestic economy is expected to pick up by balancing measures to prevent the spread of COVID-19, including vaccinations, and resumption of economic activities going forward. However, resurgence of COVID-19 cases and its prolongation, impact from the Russian invasion of Ukraine and the resulting economic sanctions, etc., as well as fluctuations in financial and capital markets should continue to be watched carefully. In the office building leasing market, close attention needs to be paid to the impact of COVID-19 on tenants and the movements of tenants, such as cutback of office expenses in line with deterioration of business results and reviewing of future offices amid the promotion and increase of remote work. In the office building transaction market, since there still are many investors both in Japan and abroad who are eager to acquire prime investment properties, transaction prices are expected to remain at a high level. In the office building transaction market, since there still are many investors both in Japan and abroad who are eager to acquire prime investment properties, transaction prices are expected to remain at a high level. However, it will be important to firmly maintain the attitude of making selective investment while carefully monitoring the impact of COVID-19 and other factors on the trends of the real estate market. (B) Future Management Policy and Challenges to Address One REIT strives to grow while obtaining various support in terms of property acquisition, management and financial aspects from our sponsor, Mizuho Trust & Banking Co., Ltd., which has an abundant track record in the Japanese real estate market, and aims to maximize unitholder value. One REIT will seek to maintain and increase the value of assets under management through operation and management aimed at maximizing competitiveness (internal growth) as well as improve the portfolio quality by continuing to conduct selective investment (external growth) to achieve stable growth over the medium to long term. In order to achieve the growth strategy in both aspects of external growth and internal growth as described above, it is the policy of One REIT to take full advantage of support from Mizuho Trust & Banking Co., Ltd., the sponsor, in addition to utilizing investment expertise and business as well as other resources of the Asset Management Company, MONE and MREM. (a) External growth One REIT aims to expand asset size, while maintaining and enhancing the portfolio quality by conducting investment having assessed the location, building specifications, tenant attributes, etc. of individual properties, based on the policy to build a portfolio with middle-sized office buildings as the core investment target while also incorporating other office buildings, etc. With the Tokyo metropolitan area, which has a relatively large market size and holds abundant acquisition opportunity, as the primary investment target region and also targeting ordinance-designated cities and core regional cities equivalent to ordinance-designated cities (Note) (hereinafter collectively referred to as “ordinance-designated cities, etc.”) which offer the prospect of a degree of rental demand, One REIT will seek to build a portfolio that diversifies investment to regional areas as well. By formulating main investment target areas and degree of importance for each region in the Tokyo metropolitan area and in ordinance-designated cities, etc., investment areas are carefully selected and, furthermore, suitability of location is scrutinized in each investment area in terms of convenience of transportation, ability to attract tenants, etc. (Note) “Core regional cities” refers to non-ordinance-designated cities located outside the Tokyo metropolitan area that are the location of a prefectural government (prefectural capitals) or their equivalent. 5 (b) Internal growth One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 One REIT will seek to maintain and increase occupancy rates and increase lease business revenue by taking the following initiatives. ◆ Strengthening collaboration with property management companies and brokers ◆ Building and strengthening tenant relations ◆ Negotiating for upward rent revisions to meet the market trends ◆ Maintaining and enhancing property value through utilization of strategic CAPEX (capital expenditure) (Note) ◆ Reducing operation/management costs by reviewing current contracts ◆ Strengthening ESG (environment, society and governance) initiatives for which there is strong demand from society (Note) “Strategic CAPEX (capital expenditure)” refers to implementing capital expenditures for renovation work, introduction of individual air-conditioning systems, improvement of building visibility through renovating entrance areas and other work for maintaining and enhancing property value based on long-term perspectives, in a timely and appropriate manner while taking priority level and other factors into consideration. ③ Subsequent Material Events Not applicable. 6 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 Assumptions for the Forecast of Management Status for the Fiscal Periods Ending August 2022 and February 2023 Item Assumptions Calculation period Fiscal period ending August 2022 (18th fiscal period) (March 1, 2022, to August 31, 2022) (184 days) Fiscal period ending February 2023 (19th fiscal period) (September 1, 2022, to February 28, 2023) (181 days) Assets under management The real estate and real estate trust beneficiary rights held as of February 28, 2022, total 31 properties. Otherwise, it is assumed that no change in assets under management (acquisition of new properties, disposition of portfolio properties, etc.) will take place through the end of the fiscal period ending February 2023. Changes in assets under management may occur from acquisition of new properties, disposition of portfolio properties, etc. Operating expenses ending August 2022 and 357 million yen in the fiscal period ending February 2023. Operating revenue Occupancy rate of portfolio (average during the period) based on the above “Assets under Operating revenue of the above “Assets under management” is used as an assumption. The calculation of property-related operating revenue assumes that there will be no late or delinquent payments of rent by tenants, given the lease agreements effective as of the date of today, tenant trends, market trends, etc. In addition to tenants vacating Tokyo Parkside Building on February 28, 2022, the calculation reflects the move-out and move-in of tenants recognized or expected by the Asset Management Company. management” is assumed to be 97.2% in the fiscal period ending August 2022 and 97.7% in the fiscal period ending February 2023. Property-related operating revenue is calculated after taking into account a certain degree of decrease due to the impact of COVID-19. As to operating revenue other than property-related operating revenue, it is assumed that there will be no changes to the properties held as of today and no gain or loss on sale of real estate properties. Property-related expenses, which are the main component of operating expenses, are estimated to be 1,937 million yen in the fiscal period ending August 2022 and 1,958 million yen in the fiscal period ending February 2023. Expenses other than depreciation are calculated based on historical data and by reflecting factors causing fluctuations in expenses. 1) Property management fees are estimated to be 429 million yen in the fiscal period ending August 2022 and 411 million yen in the fiscal period ending February 2023. 2) Depreciation is calculated using the straight-line method, including ancillary costs, etc. Depreciation is estimated to be 568 million yen in the fiscal period ending August 2022 and 584 million yen in the fiscal period ending February 2023. 3) Fixed asset tax, city planning tax, etc. are estimated to be 357 million yen in the fiscal period 4) Repair expenses are estimated to be 113 million yen in the fiscal period ending August 2022 and 126 million yen in the fiscal period ending February 2023, based on the repair plan formulated by the Asset Management Company for each property. However, repair expenses may greatly differ from the forecast amount because increased or additional repair expenses may arise due to unforeseeable factors. Operating expenses other than property-related expenses (asset management fee, asset custody fees, administrative service fees, etc.) are estimated to be 374 million yen in the fiscal period ending August 2022 and 376 million yen in the fiscal period ending February 2023. Among the above, asset management fees of 286 million yen for the fiscal period ending August 2022 and 284 million yen for the fiscal period ending February 2023 are expected. Interest expenses, interest expenses on investment corporation bonds and borrowing-related expenses are expected to be 288 million yen for the fiscal period ending August 2022 and 286 million yen for the fiscal period ending February 2023. Amortization of investment unit issuance costs is expected to be recorded at 5 million yen for each of the fiscal period ending August 2022 and the fiscal period ending February 2023. Amortization of investment corporation bond issuance costs is expected to be 5 million yen for each of the fiscal period ending August 2022 and the fiscal period ending February 2023. The balance of interest-bearing liabilities as of February 28, 2022, is 61,574 million yen. The borrowings due for repayment in the fiscal period ending February 2023 totaling 9,000 million yen are expected to be refinanced in the same amount on September 7, 2022. In addition to the above, it is assumed that there will be no change in the balance of interest-bearing liabilities (new borrowings, repayment of borrowings, etc.) until the end of the fiscal period ending February 2023. Non-operating expenses Interest-bearing liabilities 7 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 Item Investment units assumed. Distribution per unit (excluding distribution in excess of earnings) Assumptions 268,468 units that are the investment units issued and outstanding as of the date of today are It is assumed that there will be no other change in the number of investment units due to issuance of new investment units, etc. until the end of the fiscal period ending February 2023. Distribution per unit (excluding distribution in excess of earnings) is calculated by assuming the cash distribution policy stipulated in the Articles of Incorporation of One REIT. For the fiscal period ending August 2022, it is assumed that retained earnings brought forward of 85 million yen of One REIT will be allocated to distributions. Distribution per unit (excluding distribution in excess of earnings) is subject to change due to a variety of factors, including fluctuations in rent revenue caused by change in assets under management, relocation of tenants, etc. or occurrence of unforeseen repairs. Distribution per unit in excess of earnings There are no plans at this point in time to distribute cash in excess of earnings. However, cash distribution in excess of earnings may be made for the purpose of reducing occurrence of corporate tax and other taxes derived from discrepancy between tax and accounting treatment. Other It is assumed that there will be no revision of laws and regulations, tax systems, accounting standards, listing rules, rules of The Investment Trusts Association, Japan, etc. that will impact the forecast figures above. It is assumed that there will be no serious unforeseen change in general economic trends, real estate market conditions, etc. (2) Investment Risks Disclosure is omitted because there is no significant change from “Investment Risks” in the securities report (submitted on November 29, 2021). 8 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 16th fiscal period (As of Aug. 31, 2021) 17th fiscal period (As of Feb. 28, 2022) (Unit: thousand yen) 2. Financial Statements (1) Balance Sheet Assets Current assets Cash and deposits Cash and deposits in trust Operating accounts receivable Prepaid expenses Income taxes receivable Consumption taxes receivable 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 Buildings in trust Accumulated depreciation Buildings in trust, net Structures in trust Accumulated depreciation Structures in trust, net Machinery and equipment in trust Accumulated depreciation Machinery and equipment in trust, net Tools, furniture and fixtures in trust Accumulated depreciation Tools, furniture and fixtures in trust, net Land in trust Construction in progress in trust Total property, plant and equipment Intangible assets Land leasehold interests in trust Other Total intangible assets Investments and other assets Investment securities Lease and guarantee deposits Long-term prepaid expenses Deferred tax assets Total investments and other assets Total non-current assets 9 3,133,360 6,367,301 75,711 157,776 － － 936 9,735,086 3,636,820 (1,010,473) 2,626,347 9,842 (4,995) 4,847 63,479 (62,122) 1,357 3,744 (1,352) 2,392 3,770,347 26,813,480 (4,077,162) 22,736,317 25,511 (4,382) 21,129 300,889 (87,514) 213,374 81,324 (42,178) 39,146 70,970,623 9,457 100,395,342 3,278,336 1,636 3,279,973 38,548 10,300 307,965 11 356,824 104,032,140 3,263,960 6,957,579 77,163 194,062 51 319,110 942 10,812,870 3,645,780 (1,074,776) 2,571,004 9,842 (5,318) 4,524 64,275 (62,201) 2,074 3,744 (1,634) 2,110 3,770,347 30,558,226 (4,544,305) 26,013,921 25,511 (5,275) 20,236 328,717 (103,133) 225,584 85,280 (46,968) 38,311 83,357,166 13,237 116,018,519 3,278,336 2,054 3,280,391 17,664 10,300 359,683 17 387,665 119,686,576 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 16th fiscal period (As of Aug. 31, 2021) 17th fiscal period (As of Feb. 28, 2022) (Unit: thousand yen) Deferred assets Investment unit issuance expenses Investment corporation bond issuance costs Total deferred assets Total assets Liabilities Current liabilities Operating accounts payable Current portion of long-term borrowings Accounts payable – other Accrued expenses Income taxes payable Accrued consumption taxes Advances received Other Total current liabilities Non-current liabilities Investment corporation bonds Long-term borrowings Leasehold and guarantee deposits received Leasehold and guarantee deposits received in trust 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’ capital Unitholders’ capital, net Surplus Unappropriated retained earnings (undisposed loss) Total surplus Total unitholders’ equity Total net assets Total liabilities and net assets － 40,806 40,806 113,808,033 213,715 6,000,000 418,365 3,830 690 109,898 667,174 24,865 7,438,539 6,500,000 41,174,000 294,490 5,244,559 53,213,049 60,651,589 51,154,926 *2 (611,285) (611,285) 50,543,640 2,612,802 2,612,802 53,156,443 *1 53,156,443 113,808,033 22,515 60,366 82,881 130,582,328 187,896 9,000,000 587,505 5,650 714 42,304 740,917 9,936 10,574,924 9,500,000 43,074,000 383,192 5,727,539 58,684,732 69,259,656 59,164,521 *2 － － 59,164,521 2,158,150 2,158,150 61,322,671 *1 61,322,671 130,582,328 10 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 (Unit: thousand yen) 16th fiscal period (From: Mar. 1, 2021 To: Aug. 31, 2021) 17th fiscal period (From: Sep. 1, 2021 To: Feb. 28, 2022) *1 3,681,450 *1 327,382 714 *2 879,917 4,889,464 *1 1,633,882 259,580 4,427 18,705 3,876 90,654 2,011,126 2,878,338 46 3,379 710 61 4,196 147,027 21,980 88,394 5,624 3,869 2,088 268,984 2,613,550 2,613,550 843 4 847 2,612,702 100 2,612,802 *1 4,032,431 *1 351,066 652 － 4,384,150 *1 1,778,699 264,454 4,534 18,985 3,876 51,575 2,122,125 2,262,024 50 － 698 － 749 159,296 23,385 101,246 4,503 4,266 2,132 294,829 1,967,944 1,967,944 971 (6) 965 1,966,978 191,171 2,158,150 (2) Statement of Income Operating revenue Leasing business revenue Other leasing business revenue Dividends received 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 Directors’ compensations Other operating expenses Total operating expenses Operating profit Non-operating income Interest income Insurance claim income Reversal of distributions payable Other Total non-operating income Non-operating expenses Interest expenses Interest expenses on investment corporation bonds Financing fees Amortization of investment unit issuance expenses Amortization of investment corporation bond issuance expenses Other Total non-operating expenses Ordinary profit Net income before income taxes Income taxes – current Income taxes – deferred Total income taxes Net income Retained earnings brought forward Unappropriated retained earnings (undisposed loss) 11 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 (3) Statement of Unitholders’ Equity 16th fiscal period (March 1, 2021, to August 31, 2021) Balance at beginning of period 51,154,926 － － 51,154,926 Changes during period Dividends of surplus Distribution in excess of earnings from allowance for temporary difference adjustments Net income Total changes during period Balance at end of period (Unit: thousand yen) Unitholders’ equity Unitholders’ capital Unitholders’ capital Deduction from unitholders’ capital Allowance for temporary difference adjustments Total deduction from unitholders’ capital Unitholders’ capital, net (611,285) (611,285) (611,285) － 51,154,926 (611,285) (611,285) (611,285) (611,285) (611,285) 50,543,640 Unitholders’ equity (Unit: thousand yen) Surplus Unappropriated retained earnings (undisposed loss) Total surplus Total unitholders’ equity Total net assets Balance at beginning of period 1,213,315 1,213,315 52,368,241 52,368,241 Changes during period Dividends of surplus Distribution in excess of earnings from allowance for temporary difference adjustments Net income Total changes during period Balance at end of period (1,213,214) (1,213,214) (1,213,214) (1,213,214) (611,285) (611,285) 2,612,702 1,399,487 2,612,802 2,612,702 1,399,487 2,612,802 2,612,702 2,612,702 788,202 788,202 53,156,443 53,156,443 12 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 17th fiscal period (September 1, 2021, to February 28, 2022) (Unit: thousand yen) Issuance of new investment units 8,009,594 8,009,594 Balance at beginning of period Changes during period Dividends of surplus Reversal of allowance for temporary difference adjustments Net income Total changes during period Balance at end of period Balance at beginning of period Changes during period Issuance of new investment units Reversal of allowance for temporary difference adjustments Net income Total changes during period Balance at end of period Unitholders’ equity Unitholders’ capital Unitholders’ capital Deduction from unitholders’ capital Allowance for temporary difference adjustments Total deduction from unitholders’ capital Unitholders’ capital, net 51,154,926 (611,285) (611,285) 50,543,640 611,285 611,285 611,285 8,009,594 59,164,521 611,285 － 611,285 8,620,880 － 59,164,521 Unitholders’ equity Surplus Unappropriated retained earnings (undisposed loss) Total surplus Total unitholders’ equity (Unit: thousand yen) Total net assets 2,612,802 2,612,802 53,156,443 53,156,443 8,009,594 8,009,594 － 1,966,978 8,166,227 (611,285) (611,285) 1,966,978 1,966,978 (454,652) (454,652) － 1,966,978 8,166,227 2,158,150 2,158,150 61,322,671 61,322,671 Dividends of surplus (1,810,345) (1,810,345) (1,810,345) (1,810,345) 13 (4) Statement of Cash Distributions I. Unappropriated retained earnings II. Capitalization Of which: Reversal of allowance for temporary difference adjustments III. Amount of distributions [Amount of distributions per investment unit] IV. Retained earnings carried forward Method of calculating the amount of distributions One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 16th fiscal period (From: Mar. 1, 2021 To: Aug. 31, 2021) 17th fiscal period (From: Sep. 1, 2021 To: Feb. 28, 2022) Amount Amount (Unit: yen) 2,612,802,961 611,285,584 611,285,584 1,810,345,768 [7,546] 191,171,609 2,158,150,331 － － 1,966,796,568 [7,326] 191,353,763 2 of the Articles Pursuant to the distribution policy provided in Article 35, Paragraph 1, Item of Incorporation of One REIT, the amount of distributions shall be in excess of an amount equivalent to 90% of the amount of earnings available for distribution of One REIT provided in Article 67-15, Paragraph 1 of the Act on Special Measures Concerning Taxation, but no more than the amount of earnings. Based on such policy, One REIT decided to pay out distributions of earnings of 1,810,345,768 yen, which is the largest integral multiple of the total number of investment outstanding units (239,908 units) out of the remaining amount after deducting the amount internally reserved in or before the previous fiscal period with the reversal of allowance for temporary difference adjustments, the accrual of gain on sale of real estate properties from unappropriated retained earnings. One REIT will not engage in the distribution of cash in excess of earnings provided in Article 35, Paragraph 2 of the Articles of Incorporation of One REIT. issued such and and 2 of the Articles Pursuant to the distribution policy provided in Article 35, Paragraph 1, Item of Incorporation of One REIT, the amount of distributions shall be in excess of an amount equivalent to 90% of the amount of earnings available for distribution of One REIT provided in Article 67-15, Paragraph 1 of the Act on Special Measures Concerning Taxation, but no more than the amount of earnings. Based on such policy, One REIT decided to pay out distributions of earnings of 1,966,796,568 yen, which is the largest integral multiple of the total number of investment outstanding units (268,468 units) out of the remaining amount after deducting the amount internally reserved in or before the previous fiscal period with the accrual of gain on sale of real estate from properties unappropriated retained earnings. One REIT will not engage in the distribution of cash in excess of earnings provided in Article 35, Paragraph 2 of the Articles of Incorporation of One REIT. issued such and and 14 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 (Unit: thousand yen) 16th fiscal period (From: Mar. 1, 2021 To: Aug. 31, 2021) 17th fiscal period (From: Sep. 1, 2021 To: Feb. 28, 2022) (5) Statement of Cash Flows Cash flows from operating activities Net income before income taxes Depreciation Amortization of investment unit issuance expenses Amortization of investment corporation bond issuance expenses Interest income Reversal of distributions payable Interest expenses Decrease (increase) in operating accounts receivable Decrease (increase) in consumption taxes receivable Decrease (increase) in prepaid expenses Decrease in property, plant and equipment in trust due to sale Increase (decrease) in operating accounts payable Increase (decrease) in accounts payable – other Increase (decrease) in accrued consumption taxes Increase (decrease) in advances received Decrease (increase) in long-term prepaid expenses Other Subtotal Interest received Interest paid Income taxes paid Cash flows from operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of property, plant and equipment in trust Purchase of intangible assets Payments of leasehold and guarantee deposits Refund of leasehold and guarantee deposits received Proceeds from leasehold and guarantee deposits received Refund of leasehold and guarantee deposits received in trust Proceeds from leasehold and guarantee deposits received in trust Proceeds from redemption of investment securities Cash flows from investing activities Cash flows from financing activities Proceeds from short-term borrowings Repayment of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from issuance of investment corporation bonds Proceeds from issuance of investment units Distributions paid Cash flows from 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 15 2,613,550 504,164 5,624 3,869 (46) (710) 169,007 (6,204) 51,252 8,067 8,119,378 38,613 (5,352) 56,497 5,064 40,171 21,737 11,624,685 46 (170,130) (991) 11,453,609 (9,577) (12,184,366) － (300) (50,462) 22,965 (617,522) 586,247 376 (12,252,639) － － 2,850,000 － － － (1,823,514) 1,026,485 227,455 9,273,206 *1 9,500,662 1,967,944 553,602 4,503 4,266 (50) (698) 182,681 (1,452) (319,110) (36,286) － (25,818) 17,060 (67,594) 73,743 (51,718) (14,109) 2,286,962 50 (180,861) (999) 2,105,151 (4,782) (16,018,628) (588) － (288) 88,990 (235,862) 718,842 20,058 (15,432,257) 3,000,000 (3,000,000) 10,900,000 (6,000,000) 2,976,173 7,982,576 (1,810,766) 14,047,983 720,877 9,500,662 *1 10,221,539 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 (6) Notes on the Going Concern Assumption Not applicable. (7) Notes on Matters Concerning Significant Accounting Policies 1. Standards for valuation and method of valuation of assets Securities Other securities Stocks and others without a quoted market price Stated at cost determined by the moving average method. Silent partnership equity interests The method of incorporating an equity interest’s proportionate amount of the net amount of income (loss) of the silent partnership is adopted. 2. Method of depreciation of non-current assets ① Property, plant and equipment (including trust assets) The straight-line method is adopted. The useful life of core property, plant and equipment is as follows: 3-59 years Buildings 4-40 years Structures 5-10 years Machinery and equipment Tools, furniture and fixtures 3-15 years ② Intangible assets The straight-line method is adopted. ③ Long-term prepaid expenses The straight-line method is adopted. 3. Accounting for deferred ① Investment unit issuance expenses assets Amortized using the straight-line method over 3 years. ② Investment corporation bond issuance costs Amortized using the straight-line method through to the redemption date. 4. Standards for ① Accounting for property tax, etc. recognition of revenue and expenses Of the tax amount assessed and determined for property tax, city planning tax, depreciable asset tax, etc. on real estate, etc. held, the method adopted is that the amount corresponding to the relevant calculation period is expensed as expenses related to leasing business. The amount equivalent to property tax, etc. in the fiscal year including the acquisition date when money was paid to the seller as reimbursement upon acquisition of real estate, etc. is included in the cost of acquisition of the relevant real estate, etc. and not recognized as expenses. The amount equivalent to property tax, etc. included in the cost of acquisition of real estate property was 32,758 thousand yen in the 16th fiscal period, and 17,539 thousand yen in the 17th fiscal period. ② Standards for recognition of revenue • Sale of real estate properties For sale of real estate properties, revenue is recognized when the customer, the buyer, obtains control of the real estate and other assets as a result of fulfilling the delivery obligations stipulated in the real estate property sale agreement. In the statement of income, “Gain on sale of real estate properties” or “Loss on sale of real estate properties” is presented as the amount of “Revenue on sale of real estate properties,” the amount paid for the real estate properties, less “Cost of sale of real estate properties,” which is the book value of real estate properties sold, and “Other expenses on sale,” which are expenses directly related to sale. • Utilities revenue Utilities revenue is recognized as revenue in accordance with the supply of electricity and other services to the lessee (customer), in accordance with the real estate property lease agreement and related agreements. For Utilities revenue deemed as revenue for which One REIT is an agent, One REIT recognizes as revenues net amount received as charges for electricity and other services supplied by the relevant third party provider, less the amount paid to said provider. 16 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 5. Hedge accounting ① Hedge accounting method method Special treatment is applied to interest rate swap transactions since they satisfy the requirements for special treatment. 6. Scope of funds in the statement of cash flows 7. Other matters serving as the basis for preparing financial statements ② Hedging instruments and hedge items Hedging instruments: Interest rate swap transactions Hedged items: Interest on borrowings ③ Hedging policy One REIT conducts derivative transactions for hedging risks provided for in the Articles of Incorporation pursuant to the financing policy stipulated in the Asset Management Guideline. ④ Method of assessing hedge effectiveness Since interest rate swap transactions satisfy the requirements for special treatment, assessment of hedge effectiveness is omitted. The funds (cash and cash equivalents) in the statement of cash flows consist of cash on hand and cash in trust; deposits that can be withdrawn at any time and deposits in trust; and short-term investments with a maturity of 3 months or less from the date of acquisition, which are readily convertible to cash and bear only an insignificant risk of price fluctuation. ① Accounting for trust beneficiary rights in real estate, etc. Concerning trust beneficiary rights in real estate, etc. held, all accounts of assets and liabilities within trust assets as well as all accounts of revenue and expenses from the trust assets are recognized in the relevant account item of the balance sheet and statement of income. The following material items of the trust assets recognized in the relevant account item are separately listed on the balance sheet. (1) Cash and deposits in trust (2) Buildings in trust; structures in trust; machinery and equipment in trust; tools, furniture and fixtures in trust and land in trust; construction in progress in trust (3) Land leasehold interests in trust (4) Leasehold and guarantee deposits received in trust ② Accounting for non-deductible consumption taxes. Non-deductible consumption taxes in the acquisition of assets is included in the cost of acquisition of the respective assets. (8) Notes on Changes to Accounting Policies 1. Application of accounting standards, etc. for recognition of revenue At the beginning of the fiscal period under review, One REIT adopted the Revised Accounting Standard for Revenue Recognition, etc. (ASBJ Statement No. 29, March 31, 2020; hereinafter the “Accounting Standard for Revenue Recognition”). As a result, revenue is now recognized as the amount expected to be received in exchange for promised goods or services at the time of the transfer of their control to the customer. The amount of the impact on financial statements of the fiscal period under review from applying “Accounting Standard for Revenue Recognition,” etc. is minimal. In accordance with the transitional measures set forth in Paragraph 89-3 of the Accounting Standard for Revenue Recognition, notes related to revenue recognition for the previous period are not presented. 2. Application of accounting standards, etc. for fair value measurement The Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019; hereinafter the “Accounting Standard for Fair Value Measurement”) and other standards have been applied from the beginning of the fiscal period under review. As a result, pursuant to transitional measures set forth in Paragraph 19 of the Accounting Standard for Fair Value Measurement and in Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No.10, the Accounting Standard for Fair Value Measurement and other standards are applied prospectively. The amount of the impact on financial statements of the fiscal period under review from applying “Accounting Standard for Revenue Recognition,” etc. is minimal. In accordance with Article 2, Paragraph 5 of the Supplementary Provision of the Cabinet Office Ordinance Partially Revising Regulation on Terminology, Forms, and Preparation Methods of Financial Statements (Cabinet Office Ordinance No. 61, September 24, 2021), the matters listed in Article 8-6-2, Paragraph 1, Item 3 of the revised Regulation on Terminology, Forms, and Preparation Methods of Financial Statements have been omitted. July 4, 2019), new accounting policies stipulated by 17 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 (Additional Information) [Notes on Provision and Reversal of Allowance for Temporary Difference Adjustments] 16th fiscal period (March 1, 2021, to August 31, 2021) 1. Reason for reversal, related assets, etc., and amount of reversal Related assets, etc. Reason for reversal Land in trust, etc. Sale of properties with impairment losses (Unit: thousand yen) Allowance for temporary difference adjustments (611,285) 2. Specific method of reversal The plan is reversal of the corresponding amount at the time of sale of the property. 17th fiscal period (September 1, 2021, to February 28, 2022) Not applicable. (9) Notes to the Financial Statements [Notes to the Balance Sheet] Corporations *1. Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment 16th fiscal period (As of Aug. 31, 2021) 17th fiscal period (As of Feb. 28, 2022) 50,000 50,000 (Unit: thousand yen) *2. Allowance for temporary difference adjustments 16th fiscal period (March 1, 2021, to August 31, 2021) 1. Reason for provision, related assets, etc., initial amount and amount of provision Balance at beginning of period Provision amount during period Reversal amount during period (Unit: thousand yen) Balance at end of period Reason for reversal 611,285 － 611,285 － 611,285 － Related assets, etc. Occurred event Initial amount Land in trust, etc. Incurrence of impairment loss 2. Specific method of reversal The plan is reversal of the corresponding amount at the time of sale of the property. 17th fiscal period (September 1, 2021, to February 28, 2022) 1. Reason for provision, reversal, related assets, etc., initial amount of provision and reversal Related assets, etc. Occurred event Initial amount Balance at beginning of period Provision amount during period Reversal amount during period Balance at end of period 611,285 611,285 － (611,285) － (Unit: thousand yen) Reason for reversal Sale of properties with impairment losses Land in trust, etc. Incurrence of impairment loss 2. Specific method of reversal Reversal of the corresponding amount was made at the time of sale of the property. 18 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 [Notes to the Statement of Income] *1. Breakdown of property-related operating income (loss) 16th fiscal period ( From: Mar. 1, 2021 To: Aug. 31, 2021 ) (Unit: thousand yen) 17th fiscal period ( From: Sep. 1, 2021 To: Feb. 28, 2022 ) 2,945,746 554,688 156,439 24,575 3,681,450 277,921 49,460 327,382 4,008,832 374,859 300,375 298,911 7,844 97,225 12,273 504,043 38,349 1,633,882 2,374,950 3,251,686 587,612 168,842 24,290 4,032,431 316,519 34,546 351,066 4,383,497 412,557 359,885 295,064 8,345 96,146 14,917 553,432 38,349 1,778,699 2,604,798 A. Property-related operating revenue Leasing business revenue Rent revenue Common area charges revenue Parking revenue Other rent revenue Other leasing business revenue Utilities revenue Other revenue Total Total Total property-related operating revenue B. Property-related operating expenses Property management fees Expenses related to leasing business Utilities expenses Taxes and public dues Insurance premiums Repair expenses Trust fees Depreciation Other sundry expenses Revenue on sale of real estate, etc. Cost of sale of real estate, etc. Other expenses on sale Gain on sale of real estate properties Total property-related operating expenses Property-related operating income (loss) [A− B] C. *2. Breakdown of gain on sale of real estate properties 16th fiscal period (March 1, 2021, to August 31, 2021) Yushima First Genesis Building, 36 Sankyo Building, and fab Minami-Osawa (Note) (Unit: thousand yen) 9,390,000 8,119,378 390,703 879,917 (Note) Only the sum of each of the items of breakdown of gain on sale of real estate properties is indicated as it is required by the buyer as a prerequisite for the transfer that the transfer prices of individual properties not be disclosed. 17th fiscal period (September 1, 2021, to February 28, 2022) Not applicable. [Notes to the Statement of Unitholders’ Equity] 1. Total number of investment units authorized, and total number of investment units issued and outstanding 16th fiscal period ( From: Mar. 1, 2021 4,000,000 units To: Aug. 31, 2021 ) ( From: Sep. 1, 2021 17th fiscal period To: Feb. 28, 2022 ) 4,000,000 units 239,908 units 268,468 units Total number of investment units authorized Total number of investment units issued and outstanding 19 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 [Notes to the Statement of Cash Flows] *1. Reconciliation of cash and cash equivalents at end of period to the amount of balance sheet accounts 16th fiscal period ( From: Mar. 1, 2021 To: Aug. 31, 2021 ) ( From: Sep. 1, 2021 (Unit: thousand yen) 17th fiscal period To: Feb. 28, 2022 ) 3,263,960 6,957,579 10,221,539 3,133,360 6,367,301 9,500,662 Cash and deposits Cash and deposits in trust Cash and cash equivalents [Notes on Financial Instruments] 1. Matters concerning status of financial instruments (1) Policy for handling financial instruments One REIT procures funds through issuance of investment units, borrowings from financial institutions or issuance of investment corporation bonds, etc. upon acquisition of new assets under management, etc. One REIT limits derivative transactions to those for investing funds for the purpose of hedging the risk of fluctuations in interest rates on borrowings, etc. and other risks. (2) Description of financial instruments and associated risks, and risk management structure The use of the funds from borrowings and issuance of investment corporation bonds are primarily as funds for acquisition of assets under management, repayment of debt, etc. Concerning the liquidity risk and interest rate fluctuation risk associated with such financing, One REIT manages and limits the concerned risks by diversifying the lending financial institutions, as well as considering and implementing effective use of surplus funds, procurement of funds from the capital market through issuance of investment units, etc. and other various procurement of funds. In addition, borrowings with floating interest rates are exposed to the risk of the interest rate payable rising. One REIT manages the concerned risk by adjusting the ratio of borrowings with floating interest rates (ratio of the balance of borrowings with floating interest rates to the amount of borrowings in total) depending on the financial environment, etc., as well as making derivative transactions (interest-rate swap transactions, etc.) available as a hedging instrument for hedging the risk of floating interest rates rising and converting the interest expenses to fixed interest rates. Deposits are those for investing One REIT’s surplus funds and are exposed to the credit risk of, for example, failure of the financial institutions that are holding the deposits, but One REIT exercises prudence by limiting the deposit period to short term, taking security and liquidity into consideration and taking the market environment and status of cash flows fully into account. Leasehold and guarantee deposits received are deposits from tenants and are exposed to the risk of return of the deposits to tenants due to tenants moving out of properties. One REIT limits the concerned risk by setting aside an amount in the range that will not hinder the return of deposits. Investment securities are equity investments in silent partnerships and are exposed to the credit risk of the issuer, risk of fluctuation in the value, etc. of real estate, etc. and risk of fluctuation in interest rates. (3) Supplementary explanation on matters concerning fair value, etc. of financial instruments Certain assumptions, etc. are adopted in the calculation of financial instruments. Accordingly, there may be cases where the concerned values will vary when different assumptions, etc. are adopted. 2. Matters concerning fair value, etc. of financial instruments The following is the carrying amount and fair value as of August 31, 2021, and the amount of difference between these. Please note that the following table does not include silent partnership equity interests (Note 2). In addition, as “Cash and deposits” and “Cash and deposits in trust” are cash and settled within a short period of time, the fair value is approximately the same as the book value,and thus notes are omitted. (1) Current portion of long-term borrowings (2) Investment corporation bonds (3) Long-term borrowings Liabilities total (6) Derivative transactions Carrying amount 6,000,000 6,500,000 41,174,000 53,674,000 － Fair value 6,000,366 6,498,850 41,428,868 53,928,085 － (Unit: thousand yen) Amount of difference 366 (1,150) 254,868 254,085 － 20 One REIT, Inc. (3290) Summary of Financial Results for the Fiscal Period Ended February 2022 The following is the carrying amount and fair value as of February 28, 2022, and the amount of difference between these. Please note that the following table does not include silent partnership equity interests (Note 2). In addition, as “Cash and deposits” and “Cash and deposits in trust” are cash and settled within a short period of time, the fair value is approximately the same as the book value,and thus notes are omitted. (1) Current portion of long-term borrowings (2) Investment corporation bonds (3) Long-term borrowings (4) Leasehold and guarantee deposits received (5) Leasehold and guarantee deposits received in trust Liabilities total (6) Derivative transactions Carrying amount 9,000,000 9,500,000 43,074,000 383,192 5,727,539 67,684,732 － Fair value 9,009,468 9,478,100 43,216,613 373,901 5,202,693 67,280,776 － (Unit: thousand yen) Amount of difference 9,468 (21,900) 142,613 (9,290) (524,846) (403,956) － (Note 1) Method of calculating the fair value of financial instruments and matters concerning d