For Immediate Release REIT Issuer: ORIX JREIT Inc. (TSE: 8954) Yutaka Okazoe President and Executive Director Asset Management Company: ORIX Asset Management Corporation Yoshitaka Kamemoto President and CEO Inquiries: Hajime Nakamura General Manager Corporate Planning Department TEL:+81 3 5418 4858 ORIX JREIT Announces Revision of Earnings & Distributions Forecasts for the 24 th Fiscal Period (Ended February 28, 2014), Revision of Earnings & Distributions Forecasts for the 25 th Fiscal Period (Ending August 31, 2014) and Earnings & Distributions Forecasts for the 26 th Fiscal Period (Ending February 28, 2015) TOKYO, March 3, 2014 ORIX JREIT Inc. ( OJR ) announces the following revisions to its earnings & distributions forecasts for the 24 th fiscal period from September 1, 2013 through February 28, 2014 and 25 th fiscal period from March 1, 2014 through August 31, 2014 announced in its Financial results for 23 rd Fiscal Period announced on October 15, 2013. Additionally, OJR announces the earnings & distributions forecasts for the 26 th fiscal period from September 1, 2014 through February 28, 2015. 1. Revised Earnings & Distribution Forecast for the 24 th Fiscal Period from September 1, 2013 through February 28, 2014 Distribution Revenue Ordinary Net per unit (excluding distribution in earnings) Distribution in earnings per unit Previous forecast (A) 13,505 5,623 4,009 3,999 2,370 0 Revised forecast (B) 13,673 5,712 4,128 4,118 2,440 0 Change (B A) 167 88 119 119 70 - Percentage change 1.2% 1.6% 3.0% 3.0% 3.0% - 1. 1,687,494 units of investment units are issued at the end of the fiscal period. 2. revenue, operating income, ordinary income and net income are rounded down to the nearest million yen. Percentage change is rounded to the first decimal place. 1/6
2. Revised Earnings & Distributions Forecast for the 25 th Fiscal Period from March 1, 2014 to August 31, 2014 Distribution per unit Distribution in Ordinary Net (excluding Revenue distribution in earnings per (million unit yen) earnings) Previous forecast (A) 13,765 5,645 4,026 4,016 2,380 0 Revised forecast (B) 15,511 6,659 4,887 4,877 2,480 0 Change (B A) 1,746 1,014 861 861 100 - Percentage change 12.7% 18.0% 21.4% 21.4% 4.2% - 1. 1,966,174 units of investment units are forecast to be issued at the end of the fiscal period. 2. revenue, operating income, ordinary income and net income are rounded down to the nearest million yen. Percentage change is rounded to the first decimal place. 3. Reason for Revision OJR has upward revised its distribution forecast for the 24 th fiscal period (ended February 2014) and the 25 th fiscal period (ending August 2014) announced on October 15, 2013, as shown in the 1.and 2. tables above, mainly due to the following factors and revised its earnings forecast along with this. (1) The 24 th fiscal period (ended February 2014) i Acquisition of three assets (Clio Fujisawaekimae, J-ONE SQUARE, Cross Mall Shimonoseki-Chofu) based on the resolution at the board meeting held on December 17, 2013 (Note 1). ii Increase of rental income of existing properties due to improvement on lease condition etc. iii Decrease of funding-related expenses etc. (2) The 25 th fiscal period (ending August 2014) i Acquisition of three assets (Clio Fujisawaekimae, J-ONE SQUARE, Cross Mall Shimonoseki-Chofu) based on the resolution at the board meeting held on December 17, 2013 (Note 1). ii Issue of new investment units and secondary offering of units based on the resolution at the board meeting held on March 3, 2014 (Note 2). iii Acquisition of eight assets (SHIBUYA PINE Bldg., MG Ichigaya Building, JouLe SHIBUYA, intervillage OH! MAGARI, Valor Suzuka Shopping Center, The Kitahama PLAZA, West Park Tower IKEBUKURO, myatria Higashijujo) based on the resolution at the board meeting held on March 3, 2014 (Note 3). 1. For details of the acquisition of assets, please refer to the press release ORIX JREIT Announces Asset Acquisitions ( Clio Fujisawaekimae, J-ONE SQUARE, Cross Mall Shimonoseki-Chofu ) announced on December 17, 2013. 2. For details of the issue of new investment units and secondary offering of units, please refer to the press release ORIX JREIT Announces Issue of New Investment Units and Secondary Offering of Units announced to be at a late date. 3. For details of the acquisition of assets, please refer to the press release ORIX JREIT Announces Asset Acquisitions SHIBUYA PINE Bldg., MG Ichigaya Building, JouLe SHIBUYA, intervillage OH! MAGARI, Valor Suzuka Shopping Center, The Kitahama PLAZA, West Park Tower IKEBUKURO, myatria Higashijujo announced today. 2/6
4. Earnings & Distributions Forecast for the 26 th Fiscal Period from September 1, 2014 to February 28, 2015 Revenue Ordinary (million yen) Net Distribution per unit (excluding distribution in earnings) Distribution in earnings per unit Forecast 15,579 6,633 4,965 4,955 2,520 0 1. 1,966,174 units of investment units are forecast to be issued at the end of the fiscal period. 2. revenue, operating income, ordinary income and net income are rounded down to the nearest million yen. Disclaimer: The revision of the Earnings & Distributions Forecast for the 25 th Fiscal Period (Ending August 2014) and the Earnings & Distributions Forecast for the 26 th Fiscal Period (Ending February 2015) are calculated based on certain assumptions shown in the attached reference material. Accordingly, these forecasts provide no guarantees of actual operating revenue, operating income, ordinary income, net income, and distribution per unit, which may differ due to future additional acquisitions or sales of properties, changes in the management environment, etc. Appendix for reference: Assumptions for Earnings Forecasts for the 25 th fiscal period (Ending August 31, 2014) and 26 th Fiscal Period (Ending February 28, 2015) 1. This is the English translation of original Japanese documents and is provided solely for information purposes. If there are any discrepancies between the translation and the Japanese original, the latter shall prevail. 2. The original Japanese version of this announcement is being distributed today to the Kabuto Club, the Ministry of Land, Infrastructure, Transport and Tourism Press Club, and the Ministry of Land, Infrastructure, Transport and Tourism Construction Specialty Publication Press Club. 3/6
I. Assumptions for Earnings Forecasts for the 25 th Fiscal Period and 26 th Fiscal Period Fiscal period Properties owned Number of investment units issued Interest-bearing debt 25 th Fiscal Period from March 1, 2014 through August 31, 2014 26 th Fiscal Period from September 1, 2014 through February 28, 2015 The earnings forecasts assume a total of 81 properties that OJR owned as of March 3, 2014 are added to SHIBUYA PINE Bldg., The Kitahama PLAZA (additional) scheduled to be acquired on March 20, 2014, JouLe SHIBIYA, intervillage OH! MAGARI, Valor Suzuka Shopping Center and West Park Tower IKEBUKURO scheduled to be acquired on April 1, 2014 and MG Ichigaya Building, myatria Higashijujo scheduled to be acquired on April 4, 2014, totals to 88 properties, (The Kitahama PLAZA is counted as one property due to an additional property with existing owned it), The earnings forecasts assume no transfers of operating assets (acquisitions of additional properties or sales of existing properties) during the entire period ending February 28, 2015. It is possible that the number of OJR s properties owned may change as a result of acquisitions or sales. With the addition of 278,680 units to be issued (265,410 units to be issued by public offering and 13,270 units to be issued through third party allotment with over-allotment option as resolved at OJR s March 3, 2014 board meeting) to the above number of investment units issued, the earnings forecasts assume a total of 1,966,174 units. The number of investment units to be issued through third party allotment assumes that all the allowable number of units to be issued (13,270) will be issued. As of March 3, 2014 OJR has interest-bearing debt of 199,633 million yen, composed of 177,133 million yen in long-term loans and 22,500 million yen (Note 1) in investment corporation bonds, giving an LTV based on total assets of 49.1% and LTV based on unitholders capital (Note 2) of 52.3%. It is assumed that OJR will repay the full amount of 125 million yen (maturity date: March 20, 2014 and June 20, 2014) in long-term loan by internal cash and refinance the 5,000 million yen (redemption date: August 12, 2014) in investment corporation bonds that will mature during the 25 th period (ending August 2014). It is assumed that OJR will refinance the full amount of 3,812 million yen (maturity date: September 18, 2014) in long-term loan that will mature during the 26 th period (ending February 2015). Furthermore, there are no investment corporation bonds reaching maturity during the 26 th period. It is assumed that 32,109 million yen of the proceeds from the issue of investment units through public offering resolved at OJR s March 3, 2014 board of directors meeting will be allotted to acquisition funds for the scheduled acquisition properties, and if the allotted amount falls short of the amount necessary for the acquisitions, that the shortage will be procured through borrowings or cash on hand. OJR plans to allocate the full amount of the proceeds from the issue of new investment units through third party allotment with over-allotment option as a part of funds for the specified assets acquisition or a part of repayment of borrowings etc. Accordingly, the balance of interest-bearing debt at the end of the fiscal period ending August 2014 is forecast to stand at 213,178 million yen, composed of 190,678 million yen in long-term loans and 22,500 million yen in investment corporation bonds. As a result of the issue of new investment units through public offering and third party allotment etc., as resolved at the March 3, 2014 board meeting, OJR expects the unitholders capital to 4/6
increase, resulting in an LTV based on total assets of 47.0% and an LTV based on unitholders capital of 49.7%. However, the above balance of interest-bearing debt and LTVs may vary depending on the issue price of offered investment units. revenue expenses Non-operating expenses Distribution per unit Distribution in retained earnings per unit Other (Note 1) LTV based on total assets (%) = Interest-bearing debt Expected total assets 100 Expected total assets is the amount where net increase in interest-bearing debt and unitholders capital since the end of August 2013 is added to total assets as of the end of August 2013. (Note 2) LTV based on unitholders capital (%) = Interest-bearing debt (Interest-bearing debt + Unitholders capital) 100 Leasing business income is calculated on the basis of lease agreements valid as of March 3, 2014, taking into account the market environment, the competitiveness of each property and negotiations with tenants. Furthermore, the scheduled acquisition properties are calculated based on assumed lease agreement terms after scheduled acquisition date as of March 3, 2014. Forecasts assume no arrears or non-payment of rents by tenants. In principle, OJR treats the fixed assets and city planning taxes imposed on its real estate payable during a fiscal period as leasing business expenses of that period. On the other hand, these taxes payable in the fiscal year of asset acquisition are not recorded as expenses but added to the acquisition price of the relevant property. Repair and maintenance expenses may vary considerably from the forecast because each fiscal year the amount changes considerably and these expenses do not arise in a regular manner. Property and other taxes are forecasted to stand 1,126 million yen in the 25 th fiscal period and 1,126 million yen in the 26 th fiscal period. Property management fees are forecasted to stand at 1,361 million yen in the 25 th fiscal period and 1,357 million yen in the 26 th fiscal period. Depreciation expenses are forecasted to stand at 3,188 million yen in the 25 th fiscal period and 3,201 million yen in the 26 th fiscal period. Non-operating expenses (interest expenses on loans and investment corporation bonds, etc.) are forecasted to stand at 1,776 million yen in the 25 th fiscal period and 1,672 million yen in the 26 th fiscal period. The above non-operating expenses include a forecast 85 million yen relating to the issue of new investment units by public offering and secondary offering as resolved at the March 3, 2014 board meeting. It is supposed that distributions to be made should be in 90% of the amount available for distribution, but the maximum of the profit amount. The amount of distribution per unit may vary depending on such factors as changes in leasing income due to changes of tenants, transfers of assets, changes in interest rates and the additional issue of new investment units There is no plan to conduct distribution in profits. It is assumed that there will be no revision to legislation, the tax system, accounting standards, stock market listing regulation and regulations of The 5/6
Investment Trusts Association, Japan, etc., that will affect the numerical forecasts above. It is assumed that there will be no major unforeseen changes to ordinary economic trends and real estate market conditions, etc. 6/6