Outline of Consolidated Financial Statements (Japanese...

This document has been translated from a portion of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation, nor for direct, indirect, or any other form of damages that may arise from use of this translation. This English version includes some explanatory notes.

February 13, 2013

Outline of Consolidated Financial Statements (Japanese Accounting Standards) for the Fiscal Year Ended December 2012

Name of Company Listed: Tokyo Tatemono Co., Ltd. Exchange: First Section of Tokyo Stock Exchange Code Number: 8804 URL: http://www.tatemono.com Representative: Hajime Sakuma, President & Representative Director Contact: Fumio Inada, General Manager,

Corporate Communications and Investor Relations Department, TEL: +81-(0)3-3274-1984 Scheduled date of ordinary shareholders’ meeting: March 28, 2013 Scheduled date for submission of securities report: March 28, 2013 Scheduled day for commencement of dividend payment: March 29, 2013 Supplementary documents for results: Yes Results briefing: Yes (for analysts and institutional investors)

(Amounts are rounded down to the nearest one million yen.) 1. Consolidated Results of Operations for the Fiscal 2012 (January 1, 2012 to December 31, 2012) (1) Consolidated business results

Revenue from operations Operating income Recurring income Net income Million yen % Million yen % Million yen % Million yen %

FY2012 194,161 16.3 30,892 – 21,741 – 10,243 – FY2011 166,943 (15.8) (678) – (10,875) – (71,774) –

Note 1. The percentage figures indicate the percentage increase/decrease compared with the corresponding for the previous fiscal year. Note 2. Comprehensive income: Year ended December 31, 2012: 20,489 million yen (–%)

Year ended December 31, 2011: -69,061 million yen (–%)

Net income per share

Net income per share after adjusting for dilution Return on equity Recurring margin

on gross capital Operating margin on

revenue from operations Yen Yen % % %

FY2012 23.79 – 5.3 2.4 15.9 FY2011 (166.67) – (32.5) (1.2) (0.4)

(Reference) Investment income/loss due to equity method: Year ended December 31, 2012: 577 million yen Year ended December 31, 2011: 198 million yen

(2) Consolidated financial status Total assets Total net assets Owners’ equity ratio Owners’ equity per share Million yen Million yen % Yen

FY2012 895,296 212,491 22.9 476.23 FY2011 898,017 192,101 20.6 429.46

(Reference) Owners’ equity: As of December 31, 2012: 205,073 million yen As of December 31, 2011: 184,937 million yen

(3) Consolidated cash flows

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Cash and cash equivalents at end of period

Million yen Million yen Million yen Million yen

FY2012 57,332 (15,385) (35,855) 39,466 FY2011 8,053 (37,164) 41,116 32,889

2. Dividend Status

Dividend per share Total dividend

amount (Annual)

Payout ratio (Consolidated)

Ratio of dividends to net assets

(Consolidated) End of first

quarter End of interim

period End of third

quarter Year-end Annual

Yen Yen Yen Yen Yen Million yen % %

FY2011 – 0.00 – 0.00 0.00 – – – FY2012 – 0.00 – 5.00 5.00 2,163 21.0 1.1 FY2013 (Projection) 4 4 21.5

3. Projection of Consolidated Results of Operations for Fiscal 2013 Ending December 2013 (January 1, 2013 to December 31, 2013)

Revenue from operations Operating income Recurring income Net income Net income

per share Million yen % Million yen % Million yen % Million yen % Yen

Full year 215,000 10.7 21,000 (32.0) 12,000 (44.8) 8,000 (21.9) 18.58 Note 1: The percentage figures indicate the year-on-year percentage increase/decrease.

* Notes (1) Significant changes in subsidiaries accompanied by a change in the scope of consolidation during the term: None

(2) Changes in the accounting principles and changes or restatement of accounting estimates

(i) Changes in the accounting principles due to amendment of accounting standard, etc.: None (ii) Changes in the accounting principles other than (i): None (iii) Changes in the accounting estimates: None (iv) Restatement: None

(3) Number of outstanding shares (common shares)

(i) Number of outstanding shares (including treasury stock) at the end of the period As of December 2012: 433,059,168 shares As of December 2011: 433,059,168 shares

(ii) Number of shares of treasury stock at the end of the period As of December 2012: 2,440,516 shares As of December 2011: 2,429,546 shares

(iii) Average number of shares during the term As of December 2012: 430,623,698 shares As of December 2011: 430,634,786 shares (Reference) Summary of Non-Consolidated Financial Statements 1. Non-Consolidated Results of Operations for the Fiscal 2012 (January 1, 2012 to December 31, 2012) (1) Non-Consolidated business results

Revenue from operations Operating income Recurring income Net income Million yen % Million yen % Million yen % Million yen %

FY2012 139,569 24.3 25,865 – 19,034 – 9,403 – FY2011 112,318 (16.5) (4,551) – (12,901) – (71,772) –

Note 1. The percentage figures indicate the percentage increase/decrease compared with the corresponding for the previous fiscal year.

Net income per share

Net income per share after adjusting for dilution

Yen Yen

FY2012 21.73 –

FY2011 (165.87) –

(2) Non-Consolidated financial status Total assets Total net assets Owners’ equity ratio Owners’ equity per share Million yen Million yen % Yen

FY2012 814,250 198,920 24.4 459.73 FY2011 807,542 182,171 22.6 421.01

(Reference) Owners’ equity: As of December 31, 2012: 198,920 million yen As of December 31, 2011: 182,171 million yen

* Audit This outline of consolidated financial statements is not subject to the audit procedures under the Financial Instruments and Exchange Act. The audit procedures for consolidated financial statements under the Financial Instruments and Exchange Act were being applied at the time of disclosure of this outline of consolidated financial statements. * Explanation Regarding the Appropriate Use of Business Performance Projections, and Other Items Warranting Special Mention The performance projections and other statements regarding the future presented in these materials are based on information presently obtained by the Company and on certain assumptions deemed to be rational, and the actual performance may differ materially depending on various factors. See "1. Analysis of Operating Results and Financial Situation (1) Analysis of Operating Results" on page 2 of the accompanying materials for details about business performance projections.

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○ Contents of Accompanying Materials

1. Analysis of Operating Results and Financial Situation .................................................................................. 2 (1) Analysis of Operating Results ................................................................................................................. 2 (2) Analysis of Financial Situation .............................................................................................................. 6 (3) Basic Policy regarding Dividend Distribution of Revenue for the Current and Successive Term ........... 7

2. Corporate Group ............................................................................................................................................. 8 3. Management Policy ...................................................................................................................................... 11 4. Consolidated Financial Statement .............................................................................................................. 12

(1) Consolidated balance sheet .................................................................................................................... 12 (2) Consolidated statement of income and consolidated statement of comprehensive income ................... 14 (3) Consolidated Statements of Changes in Owners’ Equity ...................................................................... 16 (4) Consolidated Statements of Cash Flows ................................................................................................ 19 (5) Notes on the Going Concern ............................................................................................................... 20 (6) Significant Items Regarding Preparation of Consolidated Financial Statements .................................. 20 (7) Additional Information .......................................................................................................................... 20 (8) Notes on Consolidated Financial Statements ......................................................................................... 22

(Relating to Consolidated Balance Sheets) ........................................................................................... 22 (Relating to Consolidated Statements of Income) ................................................................................. 24 (Relating to Consolidated Statements of Cash Flows) .......................................................................... 25 (Segment Information) .......................................................................................................................... 26 (Relating to Rental Properties) .............................................................................................................. 29 (Relating to Special Purpose Companies Subject to Disclosure) .......................................................... 30 (Per Share Information) ........................................................................................................................ 32 (Major Subsequent Events) ................................................................................................................... 32

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1. Analysis of Operating Results and Financial Situation (1) Analysis of Operating Results (i) Current Operating Results

In the fiscal 2012, the Japanese economy showed some signs of a turnaround, primarily attributable to increased public spending associated with demand for post-quake restoration, which came into full swing. In the second half of the fiscal year, however, the economy stalled, mainly because of falling exports caused, among other things, by the persistent European sovereign debt problem and the slowing Chinese economy, as well as dampened consumer spending in the absence of certain policy effects.

In the real estate industry, there were signs of a recovery in the rental office market, reflecting an improving vacancy rate, offsetting the final stage of large new supply in the Tokyo metropolitan area and persistent weakness in rent levels. The residential housing market remained generally firm with high contract rate continuing, backed mainly by low interest rates. In the real estate investment market, there were moves toward a full-fledged recovery, such as increases in the number of new listings and a capital increase through a public offering by J-REITs, as well as a rise in momentum toward the acquisition of properties.

In this business environment, the Group took steps to improve its earnings strength and financial position, after it posted significant losses and was forced to cancel dividend payments in the previous fiscal year. These steps included securing profits available for dividend and reducing interest bearing debt by downsizing total assets.

As a consequence, total revenue from operations for the term rose from ¥166,943 million for the previous fiscal year, to ¥194,161 million, up 16.3%. This rise was attributable primarily to the posting of dividend income in Commercial Properties Business associated with the sale of the site (limited proprietary right of land) for Otemachi 1-6 Project (tentative name) by an SPC in which the Company has a capital stake. Operating income increased from an operating loss of ¥678 million to ¥30,892 million. Recurring income climbed from a recurring loss of ¥10,875 million to ¥21,741 million.

However, the Group recorded an extraordinary loss of ¥3,932 million, mainly reflecting profits and losses from sales of 25 condominiums for rent, etc. and impairment losses.

As a result, net income for the year totaled ¥10,243 million (compared to a net loss of ¥71,774 million for the previous fiscal year).

See below for an outline of business results by business segment.

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<Commercial Properties> In the Commercial Properties Business, the Company focused on tenant services, with the aim of “providing a

safe and comfortable space” in offices, and sought to improve occupancy rates at large scale properties, thereby strengthening its earnings sources.

In the fiscal year under review, the construction of Otemachi Financial City North Tower (Chiyoda Ward, Tokyo) and Nihonbashi TI Building (Chuo Ward, Tokyo) was completed, and Tokyo Tatemono Yaesu Building (Chuo Ward, Tokyo) was in operation for the full year. During the fiscal year, the company sold Tokyo Tatemono Nagoya Building. It also sold other properties, including the site (limited proprietary right of land) for Otemachi 1-6 Project (tentative name) (Chiyoda Ward, Tokyo) held by an SPC in which the Company has a capital stake and Yakuin Business Garden (Chuo Ward, Fukuoka City), and posted dividend income associated with these sales. In addition, the Company posted compensation for development services, etc. with the completion of the construction of Nakano Central Park (Nakano Ward, Tokyo)

As a result, revenue from operations was ¥67,499 million (up 54.9% from ¥43,570 million for the same period of the preceding fiscal year); and operating income was ¥33,164 million (up 354.1% from ¥7,303 million).

Item

FY2011 FY2012

Quantity, etc. Revenue from

operations (million yen)



Leasing of commercial properties

Leased area of buildings 487,182 m2 (Of which, subleased area 150,732 m2)

33,293


32,561

Real estate sales 1 property 1,080 1 property 5,400

Building management services – 7,231 – 10,860

Dividend income from SPC – 1,966 – 18,678

Revenue from operations – 43,570 – 67,499

Operating income – 7,303 – 33,164

<Residence>

In the Residence Business, to embody the concepts represented by the slogans “refined housing” and “comfortable and peaceful housing after residence,” which express the brand identity for Brillia condominiums, the Company started a product development project for working women called Bloomoi and an around-the-clock service called Brillia Daily Life Hotline to respond to issues in the condominium rooms.

During the fiscal year under review, the Company recorded sales from condominiums including Brillia Oimachi La Vie En Tower (Shinagawa Ward, Tokyo), The Tower Residence Otsuka (Toshima Ward, Tokyo), Brillia Laketown Parkside (Koshigaya City, Saitama Prefecture), Brillia Takatsuki Central Place (Takatsuki City, Osaka), etc. Sales of real estate for development of ¥10,862 million were included in housing sales.

A loss on revaluation of inventories and a loss on revaluation of SPCs of ¥4,760 million (compared to a loss of ¥6,857 million in the previous fiscal year) were posted in cost of revenue.

As a result, revenue from operations was ¥86,612 million (up 3.2% from ¥83,904 million for the same period of the preceding fiscal year); and the operating income was ¥983 million (compared with operating loss of ¥1,317 million for the same period of the preceding fiscal year).

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Item

FY2011 FY2012





Residence sales 1,309 units 64,334 1,188 units 66,756

Residence leasing


7,954


7,737

Condominium management services

Number of managed units 39,794 units 5,149 Number of managed units

42,312 units 5,318

Other – 6,464 – 6,800


Operating income (loss) – (1,317) – 983

< Brokerage >

In brokerage services for corporate customers, the Company strengthened proposal sales (CRE sales) for the effective use of real estate owned and operated by companies, among others. In brokerage services for individual customers, the Company launched the Authorization System of Used House Brillia, which provides certain guarantees for part of the condominiums sold by the Company based on building inspections, thereby endeavoring to expand the Company’s share in the brokerage area.

For the fiscal year under review, real estate sales fell, although brokerage fees increased in brokerage, appraisal, and consulting services.

As a result, revenue from operations was ¥8,354 million (down 19.2% from ¥10,336 million for the same period of the preceding fiscal year); and operating income was ¥115 million (from operating loss of ¥1,538 million for the previous fiscal year).

Item

FY2011 FY2012





Brokerage, appraisal and consulting services 999 properties 2,109 1,100 properties 2,245

Real estate sales 71 properties 5,540 21 properties 3,439

Dividend income from SPC – 424 – 374

Other – 2,261 – 2,294


Operating income – (1,538) – 115

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<Other businesses> For the fiscal year ended December 31, 2012, NIHON PARKING CORPORATION, which became a

consolidated subsidiary in the previous fiscal year, contributed to the performance of the metered parking lot business. In the Leisure Business, a warm bath facility called Ofuro-no-Osama Oimachi was in operation for the full year, and the capacity utilization of other facilities operated by the Company recovered from the decline in the aftermath of the earthquake, contributing to the improved results of this business segment. In the Asset Management Business, Tokyo Tatemono Investment Advisors Co., Ltd. originated private placement funds for overseas pension funds in efforts to increase assets under management.

As a result, revenue from operations was ¥31,694 million (up 8.8% from ¥29,132 million for the same period of the preceding fiscal year); and operating income was 2,751 million (up 103.9% from ¥1,349 million).

Item

FY2011 FY2012





Leisure – 11,198 – 11,856

Renovation – 4,741 – 4,082

Metered parking lot business Number of parking spaces 39,474 spaces 9,290 Number of parking spaces

40,214 spaces 11,538

Other – 3,902 – 4,217


Operating income – 1,349 – 2,751

(ii) Outlook for the Next Term Outlook for the next term:

(billion yen) Full-year projection FY2012 Compared with the fiscal year under review

Revenue from operations 215.0 194.1 +20.8

Operating income 21.0 30.8 -9.8

Recurring income 12.0 21.7 -9.7

Net income 8.0 10.2 -2.2

Looking ahead to the next fiscal year for the Residence Business, we anticipate an increase in revenue, primarily attributable to the completion of the construction and delivery of Brillia Tama New Town (Tama City, Tokyo), Brillia WELLITH Tsukishima (Chuo Ward, Tokyo), etc. and the inclusion of Tokyo Real Estate Management Co., Ltd. among the Group’s consolidated companies. However, profits from this business are expected to be reduced, chiefly reflecting the posting of dividend income associated with the sale of the site (limited proprietary right of land) for Otemachi 1-6 Project (tentative name) in the current fiscal year.

In the Commercial Properties Business, we plan to complete the construction of Tokyo Square Garden (Chuo Ward, Tokyo, total floor area of 117,000 square meters) held by an SPC in which the Company has a capital stake, and the construction of part (the entire project will be completed in 2014) of Otemachi 1-6 Project (tentative name) (total floor area of 198,000 square meters).

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(2) Analysis of Financial Situation (i) Analysis of Assets, Liabilities and Net Assets (Assets)

Total assets at the end of the term were ¥895,296 million, a decrease of ¥2,721 million from the end of the preceding year. The major factors were an increase in investment securities associated with investments in SPCs and the fair market valuation of listed stocks, a decrease in property and equipment due to a decrease in real estate for sale and sales of condominiums for rent. (Liabilities)

Total liabilities at the end of the term were ¥682,804 million, down ¥23,111 million from the end of the preceding year. This was mainly the result of a decrease in interest-bearing debt through the reduction of total assets and a decrease in investments received for real estate-specific joint enterprises. The balance of interest-bearing debt (excluding lease obligations) was ¥479,746 million (a decrease of ¥33,869 million from the end of the fiscal 2011). (Net assets)

Net assets at the end of the term were ¥212,491 million, an increase of ¥20,390 million from the end of the preceding fiscal year. This was primarily attributable to an increase associated with net income and a rise in the valuation difference on available-for-sale securities. The Company compensated for a capital loss by transferring capital surplus of ¥27,178 million to retained earnings. (ii) Analysis of Cash Flow Situation

Consolidated cash and cash equivalents (hereinafter “cash”) at the end of the term increased ¥6,577 million from the end of the preceding fiscal year, to ¥39,466 million. Cash provided by operating activities was ¥57,332 million, cash used in investing activities was ¥15,385 million, and cash used in financing activities was ¥35,855 million.

Cash flows for each category are as follows. (Cash flow from operating activities)

Cash provided by operating activities was ¥57,332 million (a rise of ¥49,279 million in cash from the previous fiscal year). This mainly reflected net income before income taxes and minority interests of ¥17,808 million and an increase in cash due to a decrease in inventories of ¥18,074 million. (Cash flow from investing activities)

Cash used in investing activities was ¥15,385 million (an increase of ¥21,779 million in cash from the previous year) This was primarily attributable to a decrease in cash due mainly to expenditure of ¥23,026 million for purchase of investment securities, ¥20,648 million for purchase of fixed assets, and a ¥10,921 million decrease in investments received for real estate specific joint enterprises, as well as an increase in cash attributable to income of ¥31,062 million from the sale of fixed assets. (Cash from financing activities)

Cash used in financing activities was 35,855 million (a decrease of ¥76,972 million in cash from the previous fiscal year). This was mainly the result of financing through hybrid finance and a decrease in interest-bearing debt through the reduction of total assets.

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(iii) Cash Flow Index Estimation

FY2010 FY2011 FY2012

Equity capital ratio 27.6% 20.6% 22.9%

Market value based equity capital ratio 17.4% 11.2% 21.1%

Ratio of cash flow to interest-bearing liabilities 7.7 years 63.8 years 8.4 years

Interest coverage ratio 6.9 1.0 6.9 Notes: 1) Each index is calculated by the following formulae using consolidated financial figures: Equity capital ratio: shareholder equity/total gross assets Market value based equity capital ratio: total market value of shares/total gross assets Ratio of cash flow to interest-bearing liabilities: interest-bearing liabilities/operating cash flow Interest coverage ratio: operating cash flow/interest payment 2) Total market value of shares is calculated as follows: end-term closing stock price x number of outstanding

stocks at end term (not including treasury stocks). 3) For operating cash flows and interest payment, the “cash flow from operating activities” and “amount of interest”

in the consolidated cash flow statement are used. Interest-bearing liabilities refer to all interest-bearing liabilities listed on the consolidated balance sheet.

(3) Basic Policy regarding Dividend Distribution of Revenue for the Current and Successive Term

For dividends, it is the Company’s policy to steadily return its profits to each stockholder by enhancing retained earnings to strengthen its management base and financial position and by comprehensively accounting for future operations, business expansion, and business outlook.

The Company plans a year-end dividend payment for the fiscal year under review of ¥5 per share, in line with its initial plan. As a result, the dividend payout ratio for the current fiscal year will be 21.0%.

For the following term, the Company plans to set a year-end dividend at ¥4 per share, in light of results forecasts for the next term. The dividend payout ratio for the succeeding term is estimated to be 21.5%.

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2. Corporate Group Principal businesses operated by the Company and its 48 affiliates (of which, 34 consolidated subsidiaries and

nine equity method affiliates), the names of companies that operate the businesses and their positioning are shown below. The segment classification is the same as that in the segment information.

(i) Commercial Properties

The Company and its consolidated subsidiaries Tokyo Tatemono Resort Co., Ltd., and Nihonbashi 1-Chome Development Special Purpose Corporation lease out and operate office commercial properties.

Consolidated subsidiaries Tokyo Tatemono Amenity Support Co., Ltd. and Shinjyuku Center Building Management Co., Ltd., and equity-method affiliates Tokyo Real Estate Management Co., Ltd. and Tokyo Building Service Co., Ltd. engage in the building management.

Prime Place Co., Ltd., a consolidated subsidiary, manages and operates commercial facilities.

(ii) Residence The Company develops and sells condominiums and detached houses, etc. Tokyo Tatemono Real Estate Sales Co., Ltd., a consolidated subsidiary, is a sales agent for condominiums for

sale, etc. Tokyo Tatemono Amenity Support Co., Ltd., a consolidated subsidiary, manages condominiums. The Company, Tokyo Tatemono Real Estate Sales Co., Ltd. and Kachidoki GROWTH TOWN Co., Ltd.,

consolidated subsidiaries, lease out and operate condominiums. E-state Online Co., Ltd., a consolidated subsidiary, provides web construction and support services for

condominiums sales, etc. and Tsunagu Network Communications, Inc., an equity-method affiliate, provides the Internet connection service for condominiums.

(iii) Brokerage

The Company provides brokerage services for real estate and the real estate appraisal and consulting businesses. Tokyo Tatemono Real Estate Sales Co., Ltd., a consolidated subsidiary, sells and buys real estate and provides

brokerage services.

(iv) Other businesses (Leisure)

The Company sells resort villas and develops leisure faculties around the Hatori Lake in Fukushima, and a consolidated subsidiary Tokyo Tatemono Resort Co., Ltd. operates these facilitates.

Tokyo Tatemono Resort Co., Ltd., a consolidated subsidiary, operates hotels and resort facilities. Hotness Co., Ltd., a consolidated subsidiary, operates a spa (premium bathhouse) business. J-Golf Co., Ltd., Tsurugashima Country Club Co., Ltd., Kawaguchiko Country Club Co., Ltd. and Tojo Golf

Club Co., Ltd., consolidated subsidiaries, and other nine companies operate golf courses. (Renovation)

Tokyo Tatemono Techno-build Co., Ltd., a consolidated subsidiary, operates a renovation business for buildings and condominiums, etc. (Pay-by-the-hour parking)

NIHON PARKING CORPORATION, a consolidated subsidiary, operates a pay-by-the-hour parking business. (Asset management)

Tokyo Tatemono Fund Management Co., Ltd., a consolidated subsidiary, operates businesses under the Real Estate Specified Joint Enterprise Act.

Tokyo Tatemono Investment Advisors Co., Ltd., a consolidated subsidiary, provides consulting services on real estate investments and arranges and manages real estate funds.

Tokyo Realty Investment Management, Inc., an equity-method affiliate, operates an asset management business

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for investment corporations as an asset management company under the Act on Securities Investment Trust and Securities Investment Corporations. (International operations)

Amenity Garden Shanghai Ltd. and Shanghai Dong Ying Real Estate Consulting Co., Ltd., consolidated subsidiaries, lease out and manage real estate in China.

Tokyo Tatemono (Shanghai) Real Estate Consulting Co., Ltd., a consolidated subsidiary, operates a real estate consulting business in China.

Shanghai Xiang Tai Real Estate Development Co., Ltd., an equity-method affiliate, and four other companies develop condominiums for sale, etc. in China. (Restaurant)

Tokyo Tatemono Resort Co., Ltd., a consolidated subsidiary, operates restaurants. (Finance)

Tokyo Tatemono Finance Co., Ltd., a consolidated subsidiary, operates a finance business. The business structure diagram that shows the above companies and businesses is as follows:

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(Business Structure Diagram) Please refer to the attachment (PDF).

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3. Management Policy Disclosure of the Company’s management policy is omitted because there was no material change from the

content of the disclosure made in the Outline of Consolidated Financial Statements for the Fiscal Year Ended December 2011 (disclosed on February 14, 2012).

The outline of the consolidated financial statements stated above may be viewed at the following pages: (Company websites) http://www.tatemono.com/english/ir/highlight.html (Tokyo Stock Exchange website (Company Search Page for information on listed companies)) http://www.tse.or.jp/english/listing/index.html

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4. Consolidated Financial Statement (1) Consolidated balance sheet

(Million yen)

End of FY2011 (December 31, 2011)


Assets Current assets

Cash *1 32,925 *1 39,468 Accounts receivable, trade 6,603 10,202 Marketable securities *1, 4 97 *1 5 TK investments *4 5,339 *4 6,875 Real estate for sale *1 51,478 *1 40,756 Real estate for sale in progress 35,277 37,618 Real estate for development 16,826 10,799 Deferred income taxes 3,520 2,348 Other current assets 16,318 14,942 Allowance for doubtful accounts (582) (571) Total current assets 167,804 162,445

Fixed assets Property and equipment

Buildings and structures 224,175 212,446 Accumulated depreciation (87,934) (89,409) Buildings and structures (net amount) *1, 2 136,241 *1, 2 123,037

Land *1, 2, 3 310,712 *1, 2, 3 302,123 Construction in progress 3,441 4,266 Other fixed assets 20,469 20,541

Accumulated depreciation (12,153) (12,942) Other fixed assets (net amount) *2 8,315 *2 7,599

Total property and equipment 458,710 437,027 Intangible assets

Lease rights *2 24,424 *2 24,704 Goodwill 3,325 3,094 Other *2 468 *2 590 Total intangible assets 28,218 28,389

Investments and other assets Investment securities *1, 4 164,045 *1, 4 192,827 TK investments *4 52,128 *4 50,843 Long-term loans 185 89 Deferred income taxes 6,218 1,778 Guarantee deposits paid *2 10,873 *2 10,943 Other investments *2, 4 29,894 *2, 4 30,891 Allowance for doubtful accounts (390) (264) Investment loss reserve (19,673) (19,673) Total investments 243,283 267,434

Total fixed assets 730,212 732,851 Total assets 898,017 895,296

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(Million yen)



Liabilities Current liabilities

Short-term borrowings *1 118,038 *1 106,778 Current portion of bonds 10,000 22,200 Accounts payable, trade *1 6,460 *1 9,307 Accrued income taxes 461 1,708 Reserve for compensation for completed work 5 4 Provision for bonuses 273 293 Reserve for bonuses to directors and corporate auditors 71 71 Investments received for real estate specific joint enterprises

*2 30,090 *2 24,770

Other current liabilities *1 31,994 *1 35,559 Total current liabilities 197,395 200,693

Long-term liabilities Bonds payable *1 109,750 99,950 Long-term debt *1 269,752 *1 245,625 Deferred income taxes 7,496 12,276 Deferred income taxes on land revaluation *3 20,911 *3 26,169 Accrued severance indemnities 7,079 7,676 Allowance for retirement benefits for directors 1,113 1,138 Provision for environmental measures 285 279 Guarantee deposits received *1 40,493 *1 43,696 Investments received for real estate specific joint enterprises

*2 38,508 *2 32,907

Other long-term liabilities *1 13,130 *1 12,390 Total long-term liabilities 508,521 482,111

Total liabilities 705,916 682,804 Net assets

Shareholders’ equity Capital 92,451 92,451 Capital surplus 90,696 63,518 Retained earnings (22,812) 11,164 Treasury stock (546) (549) Total shareholders’ equity 159,788 166,584

Accumulated other comprehensive income Valuation difference on available-for-sale securities 11,153 23,960 Deferred gains or losses on hedges – (368) Revaluation difference on land *3 16,446 *3 15,672 Translation adjustments (2,450) (774) Total of accumulated other comprehensive income 25,149 38,489

Minority interests 7,163 7,417 Total net assets 192,101 212,491

Total liabilities, minority interests and net assets 898,017 895,296

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(2) Consolidated statement of income and consolidated statement of comprehensive income (Consolidated statement of income)

(Million yen)

FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Revenue from operations 166,943 194,161 Cost of revenue *1 145,237 *1 140,385 Gross profit 21,706 53,775 Selling, general and administrative expenses 22,384 22,883 Operating income (loss) (678) 30,892 Non-operating income

Interest income 37 41 Dividend income 781 707 Equity in income of affiliated companies 198 577 Other 355 600 Total non-operating income 1,371 1,926

Non-operating expenses Interest expense 8,403 8,472 New share issue expenses 4 4 Bond issuance expenses 123 71 Distribution from real estate specific joint enterprises 1,668 1,202 Other 1,367 1,327 Total non-operating expenses 11,567 11,077

Recurring income (loss) (10,875) 21,741 Extraordinary income

Gain on sale of property and equipment 795 3,286 Gain on sale of investment securities 978 39 Compensation income – 493 Total extraordinary income 1,773 3,819

Extraordinary loss Loss on sale of fixed assets 14 1,109 Loss on retirement of property and equipment 123 118 Relocation-related losses 215 – Loss on sales of investment securities – 1 Loss on devaluation of investment securities 43,302 1,859 Loss on adjustment for changes of accounting standard for asset retirement obligations 69 –

Provision for investment loss reserve 19,075 – Provision for environmental measures 6 – Impairment loss *2 3,374 *2 3,992 Loss on disaster 607 – Loss on reversal of foreign currency translation adjustment – 671

Total extraordinary loss 66,787 7,752 Income (loss) before income taxes and minority interests (75,889) 17,808 Current income taxes 867 2,020 Deferred income taxes (5,382) 5,234 Total income taxes (4,514) 7,255 Income (loss) before minority interests (71,374) 10,553 Minority interests in income 399 309 Net income (loss) (71,774) 10,243

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(Consolidated statement of comprehensive income) (Million yen)

FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Income before minority interests (71,374) 10,553 Other comprehensive income

Valuation difference on available-for-sale securities (283) 12,190 Deferred gains or losses on hedges – (368) Revaluation difference on land 2,809 (4,201) Translation adjustments (75) 1,235 Share of other comprehensive income of associates accounted for using equity method (136) 1,081

Total of other comprehensive income 2,312 9,936 Comprehensive income (69,061) 20,489 Comprehensive income attributable to

Comprehensive income attributable to owners of the parent (69,448) 20,156

Comprehensive income attributable to minority interests 387 333

16

(3) Consolidated Statements of Changes in Owners’ Equity (Million yen)

FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Shareholders’ equity Capital

Balance at the beginning of the period 92,451 92,451 Changes in items during the period

Total changes in items during the period – – Balance at the end of current period 92,451 92,451

Capital surplus Balance at the beginning of the period 90,696 90,696 Changes in items during the period

Deficit disposition – (27,178) Disposal of treasury stock (0) (0) Transfer to capital surplus from retained earnings – 0 Total changes in items during the period (0) (27,178)

Balance at the end of current period 90,696 63,518 Retained earnings

Balance at the beginning of the period 50,692 (22,812) Changes in items during the period

Dividends from surplus (1,730) – Deficit disposition － 27,178 Net income (loss) (71,774) 10,243 Reversal of revaluation reserve for land – (3,427) Change of scope of consolidation – (16) Transfer to capital surplus from retained earnings – (0) Total changes in items during the period (73,504) 33,976

Balance at the end of current period (22,812) 11,164 Treasury stock

Balance at the beginning of the period (543) (546) Changes in items during the period

Acquisition of treasury stock (5) (3) Disposal of treasury stock 1 0 Total changes in items during the period (3) (3)

Balance at the end of current period (546) (549) Total shareholders’ equity


Dividends from surplus (1,730) – Net income (loss) (71,774) 10,243 Reversal of revaluation reserve for land – (3,427) Acquisition of treasury stock (5) (3) Disposal of treasury stock 0 0 Change of scope of consolidation – (16) Total changes in items during the period (73,509) 6,795

Balance at the end of current period 159,788 166,584

17

(Million yen)

FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Accumulated other comprehensive income Valuation difference on available-for-sale securities


Net changes in items other than shareholders’ equity (170) 12,807 Total changes in items during the period (170) 12,807

Balance at the end of current period 11,153 23,960 Deferred gains or losses on hedges

Balance at the beginning of the period – – Changes in items during the period

Net changes in items other than shareholders’ equity – (368) Total changes in items during the period – (368)

Balance at the end of current period – (368) Revaluation difference on land


Net changes in items other than shareholders’ equity 2,809 (773) Total changes in items during the period 2,809 (773)

Balance at the end of current period 16,446 15,672 Translation adjustments

Balance at the beginning of the period (2,136) (2,450) Changes in items during the period

Net changes in items other than shareholders’ equity (313) 1,676 Total changes in items during the period (313) 1,676

Balance at the end of current period (2,450) (774) Total of accumulated other comprehensive income


Net changes in items other than shareholders’ equity 2,325 13,340 Total changes in items during the period 2,325 13,340

Balance at the end of current period 25,149 38,489 Minority interests


Net changes in items other than shareholders’ equity 687 254 Total changes in items during the period 687 254


18

(Million yen)

FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Total net assets Balance at the beginning of the period 262,597 192,101 Changes in items during the period

Dividends from surplus (1,730) – Net income (loss) (71,774) 10,243 Reversal of revaluation reserve for land – (3,427) Acquisition of treasury stock (5) (3) Disposal of treasury stock 0 0 Change of scope of consolidation – (16) Net changes in items other than shareholders’ equity 3,012 13,594 Total changes in items during the period (70,496) 20,390


19

(4) Consolidated Statements of Cash Flows (Million yen)

FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Cash flows from operating activities Income (loss) before income taxes and minority interests (75,889) 17,808 Depreciation 9,023 8,790 Impairment loss 3,374 3,992 Goodwill amortization 245 252 Equity in income of affiliated companies (198) (577) Increase (decrease) in allowance for doubtful accounts 330 (136) Increase (decrease) in investment loss reserve 19,075 – Increase (decrease) in provision for bonuses (10) 19 Increase (decrease) in provision for bonuses to directors and corporate auditors

(149) 0

Increase (decrease) in provision for retirement benefits 688 597 Increase (decrease) in provision for retirement benefits for directors

(22) 25

Increase (decrease) in provision for environmental measures

6 (5)

Interest and dividend income (818) (749) Interest expense 8,403 8,472 Loss (gain) on devaluation of investment securities 43,302 1,859 Loss (gain) on sales of investment securities (978) (38) Loss (gain) on sales and retirement of fixed assets (657) (2,057) Relocation-related losses 215 –

Loss on reversal of foreign currency translation adjustment

– 671

(Increase) decrease in accounts receivable, trade (500) (3,595) (Increase) decrease in marketable securities 2,370 16 (Increase) decrease in TK investments – 338 (Increase) decrease in inventories 7,117 18,074 Increase (decrease) in guarantee deposits received (702) 3,071 Increase (decrease) in accounts payable, trade (178) (309) (Increase) decrease in guarantee deposits paid 82 (71) Increase (decrease) in deposits (1,149) 1,878 Other 6,911 7,574 Subtotal 19,891 65,900 Interest and dividends received 926 880 Interest paid (8,394) (8,349) Income taxes paid (4,369) (1,098) Net cash provided by operating activities 8,053 57,332

20

(Million yen)

FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Cash flows from investing activities Proceeds from maturity of marketable securities – 58 Proceeds from sale of marketable and investment securities 9,320 9,235

Payment for purchase of marketable and investment securities (21,837) (23,026)

Payment for purchase of investments in subsidiaries involving change in the scope of consolidation (1,605) –

Investments in TKs (a form of silent partnership) (130) (3,068) Proceeds from sale of investments in consortia 1,573 1,571 Proceeds from sale of fixed assets 7,639 31,062 Payment for purchase of fixed assets (21,113) (20,648) Payments of loans receivable (79) (13) Collection of loans 183 406 Increase (decrease) in investments received for real estate specific joint enterprises (3,398) (10,921)

Other (7,718) (40) Net cash used in investing activities (37,164) (15,385)

Cash flows from financing activities Increase (decrease) in short-term borrowings (800) (404) Increase in long-term debt 148,072 95,300 Repayment of long-term debt (127,512) (130,281) Payments for long-term accounts payable, other (931) (883) Proceeds from issue of bonds 25,000 15,000 Redemption of bonds – (12,600) Proceeds from sales of treasury stock 0 0 Acquisition of treasury stock (5) (3) Purchase of treasury stock of subsidiaries (200) – Dividends paid (1,730) (2) Payments of dividends to minority shareholders (120) (80) Proceeds from issue of shares to minority shareholders 414 – Other (1,069) (1,900) Net cash provided by/used in financing activities 41,116 (35,855)

Effect of exchange rate changes on cash and cash equivalents (22) 495

Net increase (decrease) in cash and cash equivalents 11,982 6,586 Cash and cash equivalents at beginning of year 20,906 32,889 Decrease in cash and cash equivalents resulting from the exclusion of subsidiaries from consolidation – (9)

Cash and cash equivalents at end of year *1 32,889 *1 39,466

21

(5) Notes on the Going Concern Not applicable

(6) Significant Items Regarding Preparation of Consolidated Financial Statements

1. Matters relating to the scope of consolidation (1) Number of consolidated subsidiaries: 34 Principal consolidated subsidiaries:

Major consolidated subsidiaries are listed under 2. Corporate Group. Tokyo Tatemono (U.S.A.), Inc. and another Group company are excluded from the scope of consolidation

because they are going through liquidation procedures and their importance has declined. Totate Building Co., Ltd. is excluded from consolidated subsidiaries as a result of its merger with Tokyo

Tatemono Resort Co., Ltd., a consolidated subsidiary. (2) Name of principal non-consolidated subsidiaries, etc. Principal non-consolidated subsidiary: METS1 Special Purpose Company (3) Special purpose companies subject to disclosure

The overview of special purpose companies subject to disclosure, the overview of transactions using special purpose companies subject to disclosure, and the amount of transactions with special purpose companies subject to disclosure are described in the “matters relating to special purpose companies subject to disclosure.” 2. Matters relating to the application of an equity method (1) Number of equity-method affiliates

Affiliates: 9 Name of principal affiliates: Tokyo Real Estate Management Co., Ltd.

Tokyo Building Service Co., Ltd. (7) Additional Information

(Adoption of accounting standards, etc. for accounting changes and error corrections) The Company has adopted the Accounting Standard for Accounting Changes and Error Corrections (ASBJ

Statement No. 24; December 4, 2009) and the Guidance on Accounting Standard for Accounting Changes and Error Corrections (ASBJ Guidance No. 24; December 4, 2009) for accounting changes or corrections of past errors that were made after the beginning of the first quarter of the consolidated fiscal year under review.

22

(8) Notes on Consolidated Financial Statements (Relating to Consolidated Balance Sheets)

*1 Assets pledged as collateral and liabilities for which collateral are provided as follows: Assets pledged as collateral End of FY2011

(December 31, 2011) End of FY2012

(December 31, 2012) Real estate for sale Buildings and structures Land

7,041 10,466 35,149

million yen million yen million yen

6,976 9,081

16,364


Total 52,658 million yen 32,423 million yen Liabilities for which collateral are provided End of FY2011


(December 31, 2012) Short-term borrowings Accounts payable, trade Other current liabilities Long-term debt Guarantee deposits received Other long-term liabilities

1,346 700

16 21,177

307 4,900

million yen million yen million yen million yen million yen million yen

3,120 700

16 5,556

291 4,200


Total 28,448 million yen 13,885 million yen Other than the above, cash and deposits (time deposits) of ¥1 million, marketable securities of ¥58 million, and

investment securities of ¥641 million were provided in the previous fiscal year, and cash and deposits (time deposits) of ¥1 million, marketable securities of ¥5 million, and investment securities of ¥778 million were provided in the current fiscal year under review, as assets in trust to safeguard in-house savings and business security deposits, etc. under the Building Lots and Buildings Transaction Business Act and other laws.

Of the assets above, in the previous fiscal year, Nihonbashi 1-Chome Development Special Purpose Corporation pledged buildings and structures of ¥883 million and land of ¥18,785 million as collateral for interest rate swaps and provided assets owned as general security for corporate bonds (specified bonds) of ¥2,500 million, in accordance with the provisions of Article 128 of the Act on Securitization of Assets (Act No. 105 of 1998). *2 Real estate for the real estate specific joint enterprise (in the anonymous association (tokumei kumiai) system)

are as follows: End of FY2011


(December 31, 2012) Buildings and structures and others Land Lease rights Other intangible assets Guarantee deposits paid Other investments

33,086 32,260 4,439

0 774 248


28,442 29,676 4,395

0 756 271


Total 70,809 million yen 63,542 million yen Investments received corresponding to the above are recorded in “investments received for real estate specific joint enterprises” under long-term liabilities. *3 Revaluation of land

The Company revaluates land for business in accordance with the Act on Revaluation of Land (Act No. 34 enacted on March 31, 1998) and records valuation difference in long-term liabilities and net assets.

- Revaluation method Land for business is revaluated based on the appraisal as stipulated in Article 2, Item 5 of the Order for Enforcement of Act on Revaluation of Land (Cabinet Order No. 119 of March 31, 1998). - Date of revaluation

23

December 31, 2000 *4 Preferred securities in special purpose companies (SPC) and TK investments for the purpose of real estate

investment are included as follows: End of FY2011


(December 31, 2012) Marketable securities TK investments

39 5,339

million yen million yen

— 6,875


Subtotal of current assets 5,378 million yen 6,875 million yen Investment securities TK investments Other investments

121,619 52,128

230


130,757 50,843

0


Subtotal of fixed assets 173,977 million yen 181,600 million yen Total 179,356 million yen 188,475 million yen During the fiscal year under review, TK investments (fixed assets) of ¥1,875 million were transferred to TK investments (current assets) to reflect a change in the purpose of holding them. *5 Contingent liabilities End of FY2011


(December 31, 2012) Guaranteed obligations 4,558 million yen 6,359 million yen

24

(Relating to Consolidated Statements of Income) *1 Write-down of the book value of inventories held for ordinary sale due to a fall in profitability FY2011

(Jan. 1, 2011 to Dec. 31, 2011) FY2012

(Jan. 1, 2012 to Dec. 31, 2012) Cost of revenue 7,026 million yen 3,286 million yen *2 Impairment loss The Group recorded impairment losses for the following asset groups during this consolidated fiscal year. FY2011 (Jan. 1, 2011 to Dec. 31, 2011)

Main use Type Location Impairment loss

Facilities of golf courses Land, buildings and structures and other

Kato City, Hyogo and other 1,652 million yen

Condominiums for rent and other

Land, buildings and structures and other

Minato Ward, Tokyo and other 1,721 million yen

For asset groups in which income arising from business operations and those asset groups to be sold in this consolidated fiscal year has been negative on an ongoing basis, the book value is reduced to the recoverable value, and the reduction is recorded in extraordinary losses as an impairment loss. The breakdown of impairment loss is as follows: Land 1,422 million yen Buildings and structures and other 1,952 million yen Total 3,374 million yen The recoverable value of the asset groups is primarily measured by net sale value. The appraisal value of the licensed real-estate appraiser or the planned sale value is used for the net sale value. FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Main use Type Location Impairment loss 11 condominiums for rent, etc.

Land, lease rights Buildings and structures

Shibuya Ward, Tokyo and other

3,992 million yen

For asset groups to be sold in this consolidated fiscal year, the book value is reduced to the recoverable value, and the reduction is recorded in extraordinary losses as an impairment loss. The breakdown of impairment loss is as follows: Land 2,391 million yen Lease rights 244 million yen Buildings and structures and other 1,356 million yen Total 3,992 million yen The recoverable value of the asset groups is primarily measured by net sale value. The planned sale value, etc. is used to evaluate the net sale value. Certain of the above assets have already been sold after posting an impairment loss

25

(Relating to Consolidated Statements of Cash Flows) *1 Relationship between cash and cash equivalents at the end of the year and the amount of items stated in

consolidated balance sheets is as follows: FY2011

(Jan. 1, 2011 to Dec. 31, 2011) FY2012

(Jan. 1, 2012 to Dec. 31, 2012) Cash and deposits Time deposits with the term of more than three months

32,925

(36)


39,468

(1)


Cash and cash equivalents 32,889 million yen 39,466 million yen

26

(Segment Information) a. Segment Information) 1. Overview of Reportable Segments

The reportable segments of the Company are the constituent units of the Company for which separate financial information is available and for which the Board of Directors conducts a regular review to determine the allocation of management resources and assess the business performance.

The Company operates business activities by establishing divisions corresponding to their line of business at head office, with the divisions formulating comprehensive strategies for the businesses they operate.

Therefore, the Company comprises business segments with the divisions as the basis and conducts the four businesses of commercial properties, residence, brokerage, and other as its reportable segments.

In the commercial properties business, the Company leases out and manages office buildings and commercial facilities. In the residence business, the Company sells condominiums and detached houses and leases out and manages condominiums. In the brokerage business, the Company sells and buys real estate and provides brokerage, real estate appraisal and consulting services. Other businesses include a Leisure business, Renovation business, and Metered Parking Lot business, among others. 2. Information on Revenue from Operations, Profit and Loss, Assets, and Other Items by Reported Segments FY2011 (January 1, 2011 to December 31, 2011) (Million yen)

Commercial properties Residence Brokerage Other Adjustment

(Note 1)

Amount recorded in

consolidated financial

statements (Note 2)

Revenue from operations External customers 43,570 83,904 10,336 29,132 – 166,943 Inter-segment or transfer 503 401 52 1,843 (2,801) －

Total 44,074 84,305 10,388 30,975 (2,801) 166,943 Segment income (loss) 7,303 (1,317) (1,538) 1,349 (6,475) (678) Segment assets 511,963 181,030 33,751 106,030 65,240 898,017 Other items

Depreciation 4,509 2,156 53 2,181 94 8,995 Investments in equity method affiliates 3,999 484 – 23,986 – 28,470

Increase in property and equipment and intangible assets

8,069 10,117 1,296 1,511 94 21,089

Note 1: (1) Adjustment of -¥6,475 million for segment income (loss) includes inter-segment elimination of ¥295 million and corporate expenses of -¥6,770 million that is not distributed to the reportable segments. Corporate expenses are primarily general and administrative expenses that do not belong to the reportable segments.

(2) Adjustment of segment assets of ¥65,240 million includes the company-level assets of ¥103,756 million and intersegment elimination of -¥38,516 million.

Note 2: Segment income is adjusted with operating income in the quarterly consolidated financial statements.

27

FY2012 (January 1, 2012 to December 31, 2012) (Million yen)


(Note 1)

Amount recorded in

consolidated financial

statements (Note 2)

Revenue from operations External customers 67,499 86,612 8,354 31,694 － 194,161 Inter-segment or transfer 475 374 188 2,001 (3,039) －

Total 67,974 86,986 8,542 33,696 (3,039) 194,161 Segment income 33,164 983 115 2,751 (6,122) 30,892 Segment assets 526,685 141,785 33,740 105,857 87,227 895,296 Other items

Depreciation 4,664 1,889 63 2,069 103 8,790 Investments in equity method affiliates 4,881 569 － 24,546 － 29,997

Increase in property and equipment and intangible assets

17,417 250 1,992 808 73 20,542

Note 1: (1) Adjustment of -¥6,122 million for segment income includes inter-segment elimination of ¥68 million and corporate expenses of -¥6,190 million that is not distributed to the reportable segments. Corporate expenses are primarily general and administrative expenses that do not belong to the reportable segments.

(2) Adjustment of segment assets of ¥87,227 million includes the company-level assets of ¥118,779 million and intersegment elimination of -¥31,552 million.

Note 2: Segment income is adjusted with operating loss in the quarterly consolidated financial statements. b. Related Information FY2011 (January 1, 2011 to December 31, 2011) FY2012 (January 1, 2012 to December 31, 2012) 1. Information by Product and Service

Information by product and service is omitted, as similar information is stated in “2. Information on Revenue from Operations, Profit and Loss, Assets, and Other Items by Reported Segments” in “a. Segment Information.” 2. Information by Region

Information by region is omitted, as both the amount of revenue from operations with external customers in Japan and the amount of tangible fixed assets located in Japan account for more than 90% of the amount of revenue from operations posted in the consolidated statement of income and the amount of tangible fixed assets posted in the consolidated balance sheet. 3. Information by Major Customer

Of revenue from operations with external customers, revenue from operations with any given major customer is less than 10% of revenue from operations posted in the consolidated statement of income. Therefore, information by major customer is omitted.

28

c. Information on Impairment Losses of Fixed Assets by Reported Segment FY2011 (January 1, 2011 to December 31, 2011) (Million yen)


Amount recorded in

financial statements

Impairment loss 132 1,428 1 1,812 – 3,374

FY2012 (January 1, 2012 to December 31, 2012) (Million yen)


Amount recorded in


Impairment loss 703 3,023 – 143 122 3,992

d. Information on Amortization of Goodwill and the Balance of Unamortized Goodwill by Reported Segment FY2011 (January 1, 2011 to December 31, 2011) (Million yen)


Amount recorded in


Amortization in the fiscal year under review 30 (2) 35 182 – 245

End balance 518 (8) 105 2,710 – 3,325 Note: Amortization of goodwill and the balance of unamortized goodwill are presented by offsetting the amortization of negative goodwill and

the balance of unamortized negative goodwill. FY2012 (January 1, 2012 to December 31, 2012) (Million yen)


Amount recorded in


Amortization in the fiscal year under review 30 (2) 35 189 – 252

End balance 488 (4) 70 2,540 – 3,094 Note: Amortization of goodwill and the balance of unamortized goodwill are presented by offsetting the amortization of negative goodwill and

the balance of unamortized negative goodwill.

29

(Relating to Rental Properties) The Company and certain of its consolidated subsidiaries own office buildings for rent, condominiums for rent,

and commercial facilities for rent in Tokyo and other regions. As some of office buildings for rent are used by the Company and some of its consolidated subsidiaries, they are

posted as real estate, including portions used as rental property. The amount recorded in consolidated balance sheet and the market value of these rental prosperities and real

estate including portions used as rental property are as follows: (Million yen)

FY2011

(Jan. 1, 2011 to Dec. 31, 2011)

FY2012 (Jan. 1, 2012 to Dec. 31, 2012)

Rental prosperities

Amount recorded in consolidated balance sheet

Balance at beginning of year 330,316 344,499

Changes during the year 14,183 (19,348)

Balance at end of year 344,499 325,151

Market value at end of year 371,225 356,019

Real estate including portions used as rental property

Amount recorded in consolidated balance sheet

Balance at beginning of year 107,628 107,095

Changes during the year (532) (1,140)

Balance at end of year 107,095 105,955

Market value at end of year 136,925 123,844 Notes: i) The amount recorded in consolidated balance sheet is the amount obtained by subtracting accumulated depreciation from acquisition

costs. ii) The market value at the end of the term is the value based on the valuation of properties by an outside licensed real-estate appraiser

for principal properties and the value calculated by the Company based on the Real Estate Appraisal Standards (including values adjusted using indicators) for other properties.

30

(Relating to Special Purpose Companies Subject to Disclosure) FY2011 (January 1, 2011 to December 31, 2011)

The Company and its consolidated subsidiary Tokyo Tatemono Real Estate Sales Co., Ltd. make investments in

special purpose companies (in the form of specific purpose companies (tokutei mokuteki gaisha) under the Act on Securitization of Assets, special limited liability companies (tokurei yugen gaisha), and limited liability companies (godo gaisha)) to diversify financing and clarify project management, and special purpose companies (34) in which the ratio of investment is 40% or more are subject to disclosure.

Relevant businesses are conducted with investments by the Company, Tokyo Tatemono Real Estate Sales Co., Ltd., and business partners and borrowings, etc. from financial institutions (nonrecourse loans and specified bonds).

The Company and Tokyo Tatemono Real Estate Sales Co., Ltd. plan to collect investments extended in an appropriate manner after the business is completed, and losses, if arise in the future, to be incurred by the Company and Tokyo Tatemono Real Estate Sales Co., Ltd. will be limited to the amount of their investments.

The Company and Tokyo Tatemono Real Estate Sales Co., Ltd. do not have investments with voting rights in these special purpose companies and do not send off officers or employees.

The amounts of transactions, etc. with special purpose companies in the fiscal year under review are as follows:

Balance at the end of FY2011

(Million yen)

Major income and loss (Note 6)

Item Amount (Million yen)

Investments, etc. (Note 1) Management business Brokerage services and sales agent services

152,287

–

–

Revenue from operations (Note 2) Cost of revenue (Note 3) Revenue from operations (Note 4) Revenue from operations (Note 5)

1,866

724 1,398

36

Notes: 1) The items that compose investments, etc. are marketable securities of ¥39 million, investment securities of ¥104,373 million, TK investments (current assets) of ¥5,000 million, TK investments (fixed assets) of ¥42,875 million, which are preferred securities and TK investments in specific purpose companies.

2) Dividends and distributed profits from investments are recorded as revenue from operations, and the breakdown by segment is as follows: ¥1,628 million of the commercial properties segment, ¥233 million of the residence segment, and ¥4 million for the brokerage segment.

3) Distributed losses from investments are recorded in the commercial properties segment as cost of revenue. 4) Fees for the asset management business entrusted with by special purpose companies are recorded as revenue from operations, and the

breakdown by segment is as follows: ¥832 million of the commercial properties segment, ¥115 million of the residence segment, ¥22 million of the brokerage segment, and ¥426 million for the other segment.

5) Fees for real estate asset sales brokerage services and sales agent services entrusted with by special purpose companies are recorded as revenue from operations, and the breakdown by segment is as follows: ¥35 million of the commercial properties. segment and ¥1 million for the other segment.

6) Other than the above, ¥6,143 million and ¥45,040 million in valuation losses (including the provision for an investment loss reserve) are recorded in the cost of revenue and extraordinary losses, respectively, as the real value of investments, etc. of the Company declined significantly.

Major assets, liabilities and net assets (simple aggregation) of special purpose companies on the latest closing date are as follows:

Major assets (Million yen) Major liabilities and net assets (Million yen)

Real estate Other

708,149 48,762

Borrowings, etc. (Note 7) Investment deposits received, etc. (Note 8) Other

513,011 252,865

(8,965)

Total 756,912 Total 756,912 Notes: 7) Borrowings, etc. represent nonrecourse loans and specified bonds of specific purpose companies.

8) Investment deposits received, etc. represent preferred capital and TK investments of specific purpose companies.

31

FY2012 (January 1, 2012 to December 31, 2012)

The Company and its consolidated subsidiary Tokyo Tatemono Real Estate Sales Co., Ltd. make investments in special purpose companies (in the form of specific purpose companies (tokutei mokuteki gaisha) under the Act on Securitization of Assets, special limited liability companies (tokurei yugen gaisha), and limited liability companies (godo gaisha)) to diversify financing and clarify project management, and special purpose companies (30) in which the ratio of investment is 40% or more are subject to disclosure.

Relevant businesses are conducted with investments by the Company, Tokyo Tatemono Real Estate Sales Co., Ltd., and business partners and borrowings, etc. from financial institutions (nonrecourse loans and specified bonds).

The Company and Tokyo Tatemono Real Estate Sales Co., Ltd. plan to collect investments extended in an appropriate manner after the business is completed, and losses, if arise in the future, to be incurred by the Company and Tokyo Tatemono Real Estate Sales Co., Ltd. will be limited to the amount of their investments.

The Company and Tokyo Tatemono Real Estate Sales Co., Ltd. do not have investments with voting rights in these special purpose companies and do not send off officers or employees.

The amounts of transactions, etc. with special purpose companies in the fiscal year under review are as follows:

Balance at the end of FY2012

(Million yen)

Major income and loss (Note 6)

Item Amount (Million yen)

Investments, etc. (Note 1) Management business Brokerage services and sales agent services

161,732

–

–

Revenue from operations (Note 2) Cost of revenue (Note 3) Revenue from operations (Note 4) Revenue from operations (Note 5)

17,950 1,210 3,030

1,414

Notes: 1) The items that compose investments, etc. are investment securities of ¥112,702 million, TK investments (current assets) of ¥6,875 million, TK investments (fixed assets) of ¥42,154 million, which are preferred securities and TK investments in specific purpose companies.

2) Dividends and distributed profits from investments are recorded as revenue from operations, and the breakdown by segment is as follows: ¥17,935 million of the commercial properties segment, and ¥14 million for the brokerage segment.

3) Distributed losses from investments, etc. are recorded as a cost of revenue, and the breakdown by segment is as follows: ¥1,036 million for the Commercial Properties segment, and ¥174 million for the Brokerage segment.

4) Fees for the asset management business entrusted with by special purpose companies are recorded as revenue from operations, and the breakdown by segment is as follows: ¥2,296 million of the commercial properties segment, ¥112 million of the residence segment, ¥11 million of the brokerage segment, and ¥610 million for the other segment.

5) Fees for real estate asset sales brokerage services and sales agent services entrusted by special purpose companies are recorded in the Commercial Properties segment as revenue from operations.

6) Other than the above, ¥659 million and ¥1,859 million in valuation losses (including the provision for an investment loss reserve) are recorded in the cost of revenue and extraordinary losses, respectively, as the real value of investments, etc. of the Company declined significantly.

Major assets, liabilities and net assets (simple aggregation) of special purpose companies on the latest closing date are as follows:

Major assets (Million yen) Major liabilities and net assets (Million yen)

Real estate Other

728,774 56,824

Borrowings, etc. (Note 7) Investment deposits received, etc. (Note 8) Other

514,625 272,132

(1,159)

Total 785,599 Total 785,599 Notes: 7) Borrowings, etc. represent nonrecourse loans and specified bonds of specific purpose companies.

8) Investment deposits received, etc. represent preferred capital and TK investments of specific purpose companies.

32

(Per Share Information) FY2011

(Jan. 1, 2011 to Dec. 31, 2011) FY2012

(Jan. 1, 2012 to Dec. 31, 2012)

Net assets per share 429.46 yen

Net loss per share 166.67 yen Diluted net income per share is not written as income per share is negative and there is no potential share.

Net assets per share 476.23 yen

Net income share 23.79 yen Diluted net income per share is not written as there is no potential share.

Note: Calculation Basis 1. Net assets per share

Item End of FY2011


(December 31, 2012)

Total net assets on the consolidated balance sheet (million yen)

192,101 212,491

Net assets pertaining to common stock (million yen) 184,937 205,073

Difference (million yen) Minority interests

7,163 7,417

Number of shares issued of common stock (thousand shares) 433,059 433,059

Number of treasury shares of common stock (thousand shares)

2,429 2,440

Number of common shares used for the calculation of net assets per share (thousand shares)

430,629 430,618

2. Net income (loss) per share

Item FY2011

(Jan. 1, 2011 to Dec. 31, 2011) FY2012

(Jan. 1, 2012 to Dec. 31, 2012)

Net income (loss) in consolidated statement of income (million yen)

(71,774) 10,243

Net income (loss) pertaining to common stock (million yen) (71,774) 10,243

Average number of shares of common stock during the year (thousand shares)

430,634 430,623

Summary of potential shares not included in the calculation of diluted net income per share due to the lack of dilution effect

– –

(Major Subsequent Events) Not applicable

Outline of Consolidated Financial Statements (Japanese...

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