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Investor Presentaiton

JPR Statement of Income and Retained Earnings for the 21st Fiscal Period Achieved significant period-on-period increase in revenue and profits due to new property acquisition and other factors, and conducted partial repayment of borrowings before maturity to bolster earnings for the 22nd fiscal period and after (JPY mn) 20th Fiscal Period 21st Fiscal Period Change Jul. 1, 2011 Dec. 31, 2011 Amount Rental Revenues Other rental revenues Rent revenue - real estate (1) Operating revenue Property and other taxes Other expenses related to rent business Outsourcing expenses Utilities expenses 10,996 776 11,772 % 93.4% Jan. 1, 2012 - Jun. 30, 2012 Amount % Amount % 6.6% 100.0% 11,626 719 12,345 94.2% 5.8% 629 5.7% -56 -7.3% 100.0% 573 4.9% Increase/decrease by contract revision: (Note) The increase/decrease includes variations in 21st period due to factors changed in 20th period) 11,772 100.0% 12,345 100.0% 573 4.9% 1,061 9.0% 1,031 8.4% -29 -2.8% • Properties acquired in 20th period: ⚫ Properties acquired in 21st period: 1. Rent revenues • Properties owned at end of 19th period: Increase by new move-ins: -246 mn yen +267 mn yen Decrease by cancellation: -336 mn yen -183 mn yen +31 mn yen +844 mn yen 2,471 21.0% 2,432 19.7% -39 -1.6% 510 4.3% 496 4.0% -13 -2.7% 711 6.0% 682 5.5% -28 -4.0% Casualty insurance 28 0.2% 27 0.2% -1 -3.6% Repairs and maintenance 335 2.9% 347 2.8% 11 3.4% 2. Other rental revenues ⚫ Properties owned at end of 19th period: Incidental income: • Properties acquired in 20th period: - 58 mn yen - 55 mn yen] +2 mn yen Property management fees 218 1.9% 214 1.7% -3 -1.7% Management association accounts 554 4.7% 555 4.5% 1 0.3% 3. Expenses related to rent business Others 112 1.0% 107 0.9% -5 -4.5% • Properties owned at end of 19th period: - 164 mn yen Depreciation 1,824 15.5% 1,754 14.2% -69 -3.8% Property and other taxes: Expenses related to rent business (2) 5,357 45.5% 5,217 42.3% -139 -2.6% Utilities expenses: Asset management fees 421 3.6% 443 3.6% 21 5.1% Depreciation: - 48 mn yen -31 mn yen -71 mn yen Adm. service/custody fees 74 0.6% 74 0.6% 0 -0.1% Directors' compensation 6 0.1% 6 0.1% (Shinjuku Square: -38 mn yen, HDC Kobe; -26 mn yen, and others) • Properties acquired in 20th period: Trust fees 43 0.4% 42 0.3% -1 -2.4% • Properties acquired in 21st period: +24 mn yen +0 mn yen Other operating expenses 105 0.9% 167 1.4% 61 58.6% Operating expenses Operating income 6,009 51.0% 5,952 48.2% -57 -0.9% 4. Other operating expenses 5,763 49.0% 6,393 51.8% 630 10.9% Undeductible consumption taxes: +61 mn yen Profits ((1) (2)) 6,415 54.5% 7,127 57.7% 712 11.1% Net operating income (NOI) 8,239 70.0% 8,882 71.9% 642 7.8% 5. Non-operating income Non-operating income 10 0.1% 62 0.5% 51 478.7% ⚫ Settlement of management association accounts +48 mn yen Interest expenses (incl. investment corporation bonds) 1,402 11.9% 1,459 11.8% 57 4.1% Borrowing expenses 147 1.2% 373 3.0% 226 154.1% 6. Interest expenses Amortization of investment corporation bond issuance costs Other non-operating expenses Non-operating expenses Ordinary income Income before income taxes 20 0.2% 23 0.2% 3 16.3% • Interest expenses for loans: +55 mn yen 3 0.0% 2 0.0% -1 -41.2% 1,573 Net income Unappropriated retained earnings 13.4% 4,201 35.7% 4,201 35.7% 4,200 35.7% 4,226 1,858 15.1% 285 18.1% 7. Borrowing expenses 4,597 37.2% 396 9.4% Fees for early repayment: +198 mn yen 4,597 37.2% 396 35.9% Distributions per unit (Note 1) Total number of units outstanding at end of period 5,876 yen (715,000) 4,596 37.2% 4,622 6,430 yen (715,000) 396 37.4% 395 9.4% 9.4% 9.4% 554 yen (-) Japan Prime Realty Investment Corporation (Note 1) With regard to the cash distributions for the 20th and 21st fiscal periods, JPR includes part of the retained earnings brought forward that were internally reserved through the previous fiscal period, with the aim of having the profit distributions deducted as expenses based on application of the special provision on taxation of investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation) and in order to minimize the burden to unitholders incurred by accrual of income taxes, etc., and distributes the amount that is an integral multiple of the number of investment units outstanding as profit distributions. (Note 2) Amounts have been rounded down to the nearest specified unit and percentages have been rounded to the first decimal place. 5
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