CRE : Summary of Consolidated Financial Statements for the First Two Quarters of the Fiscal Year ending July 31, 2021

March 15, 2021

CRE Inc.

Summary of Financial Statements (Unaudited)

For the First Two Quarters of the Fiscal Year ending July 31, 2021

(Translated from the Japanese original)

Corporate Information

Code: 3458 Listing: First Section of the Tokyo Stock Exchange (URLhttps://www.cre-jpn.com/english/)

Representative: Tadahide Kameyama, Representative Director, President Contact: Hidetoshi Nagahama, Director

E-mail:[e-mail]

Anticipated date for filing Shihanki Hokokusho (a Japanese-language quarterly business report): March 16, 2021 Expected date of payment for dividends: ―

Preparation of supplementary explanation material for quarterly financial results: Yes Presentation meeting for quarterly financial results: Yes

(Rounded down to the nearest million)

1. Consolidated Performance for the first two quarters of Fiscal 2021 (August 1, 2020 through January 31, 2021)

(1) Consolidated Operating Results (accumulated total)

(Percentages represent changes from corresponding period of previous year)

Net sales	Operating profit	Recurring profit	Net income attributable to owners of the parent company
First two quarters of Fiscal 2021 First two quarters of Fiscal 2020	Millions of yen 34,752 11,429	% 204.1 17.7	Millions of yen 5,853 554	% 956.4 17.9	Millions of yen 5,684 454	% ― 13.3	Millions of yen 4,032 304	% ― (7.8)

(Note) Comprehensive income:

3,710 million yen (448.4%) for the first two quarters of fiscal 2021 676 million yen (287.5%) for the first two quarters of fiscal 2020

Net income per share	Fully diluted net income per share
First two quarters of Fiscal 2021 First two quarters of Fiscal 2020	Yen 147.37 12.11	Yen 147.12 12.07

(2) Consolidated Financial Position

Total assets	Net assets	Equity ratio
First two quarters of Fiscal 2021 Fiscal 2020	Millions of yen 72,100 70,142	Millions of yen 26,331 20,004	% 36.5 28.5

(Reference) Equity capital: 26,331 million yen for the first two quarters of fiscal 2021, 20,002 million yen for fiscal 2020

2. Payment of Dividends

Dividends per share
First quarter-end	At end of first half	Third quarter-end	Year-end	For the year
yen	yen	yen	yen	yen
Fiscal 2020	―	0.00	―	22.00	22.00
Fiscal 2021	―	0.00
Fiscal 2021 (Estimated)	―	23.00	23.00

(Note) Change in the latest release of dividend forecast: None

3. Anticipated Consolidated Results for Fiscal 2021 (August 1, 2020 through July 31, 2021)

(Percentages represent changes from corresponding period of previous year)

Net sales	Operating profit	Recurring profit
Millions of yen	%	Millions of yen	%	Millions of yen	%
Full year	46,100	11.9	5,000	18.2	4,500	11.1

Net income attributable to owners of the parent company	Net income per share
Millions of yen	%	Yen
Full year	2,900	11.0	105.97

(Note) Change in the latest release of consolidated results forecast: Yes

*Notes:

• (1) Changes in significant subsidiaries during this quarter: None

  (Changes in specified subsidiaries involving change in consolidation scope)

• (2) Adoption of accounting methods specific to quarterly consolidated financial statements: Yes

• (3) Changes in accounting policy, changes in accounting estimate and retrospective restatement

• 1. Changes associated with revision of accounting standards, etc: None

• 2. Changes other than 1: None

• 3. Changes in accounting estimates: None

• 4. Restatements: None

(4) Number of outstanding shares (common stock)

• 1. Number of outstanding shares, including treasury stock, at end of term: 27,462,600 shares at January 31, 2021 26,309,200 shares at July 31, 2020

• 2. Number of shares of treasury stock at end of term: 2,011 shares at January 31, 2021 1,063,311 shares at July 31, 2020

• 3. Average outstanding number of shares (quarterly cumulative period):

  27,366,994 shares at January 31, 2021 25,138,540 shares at January 31, 2020

*This quarterly financial report falls outside the quarterly review procedures.

*Information concerning proper use of forward-looking statements and other important matters

This report contains forward-looking statements about plans and expectations pertaining to CRE's business activities, based on information available to management at the time of preparation and on certain assumptions that management believes to be reasonable. These forward-looking statements are not guarantees of future performance, and actual results, performance, achievements and financial position may differ materially from statements expressed or implied herein due to various factors.

Quarterly Consolidated Financial Statements (1) Quarterly Consolidated Balance Sheets

Fiscal 2020 As of July 31, 2020 Thousands of yen	Fiscal 2021 As of January 31, 2021 Thousands of yen
Assets Current assets Cash and deposits Accounts receivable-trade Notes receivable-trade and Accounts receivable from completed construction contracts Real estate for sale Real estate for sale in process Advance payments-trade Prepaid expenses Others Allowance for doubtful accounts Total current assets Fixed assets Tangible fixed assets Buildings and structures Accumulated depreciation Buildings and structures (net) Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles (net) Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures (net) Land Lease assets Accumulated depreciation Lease assets (net) Construction in progress Total tangible fixed assets Intangible fixed assets Goodwill Others Total intangible assets Investments and other fixed assets Investment securities Claims provable in bankruptcy, claims provable in rehabilitation and other Long-term prepaid expenses Deferred tax assets Lease and guarantee deposits Others Allowance for doubtful accounts Total investments and other fixed assets Total fixed assets Total assets	14,466,126 485,405 143,033 20,395,781 8,715,918 3,374,710 1,055,477 703,577 (15,963)	17,454,477 507,164 164,327 19,342,626 8,713,159 3,759,073 1,234,406 429,207 (29,504)
49,324,066	51,574,940
4,155,207 (1,927,543)	4,222,658 (1,990,116)
2,227,664	2,232,542
417,449 (246,911)	416,481 (260,589)
170,538	155,891
147,500 (96,202)	158,108 (107,438)
51,297	50,670
1,877,030 472,388 (251,183)	1,906,867 472,442 (264,690)
221,205	207,751
14,013	―
4,561,749	4,553,723
1,296,836 144,898	1,178,711 219,817
1,441,735	1,398,528
7,210,680 62,468 1,245,391 60,348 6,218,658 83,564 (65,718)	6,605,695 34,012 1,130,585 231,881 6,528,971 79,778 (37,262)
14,815,392	14,573,662
20,818,877	20,525,914
70,142,943	72,100,854
Fiscal 2020 As of July 31, 2020 Thousands of yen	Fiscal 2021 As of January 31, 2021 Thousands of yen
Liabilities Current liabilities Accounts payable-trade Accounts payable for construction contracts Short-term loans payable Current portion of long-term loans payable Lease obligations Accrued corporate and other taxes Deposits received Unearned revenue Allowance for employees' bonuses Allowance for directors' bonuses Allowance for sublease losses Asset retirement obligations Others Total current liabilities Fixed liabilities Long-term loans payable Lease obligations Liability for retirement benefits Allowance for loss on guarantees Asset retirement obligations Allowance for sublease losses Lease and guarantee deposits received Others Total fixed liabilities Total liabilities Net assets Shareholders' equity Common stock Capital surplus Retained earnings Treasury stock Total shareholders' equity Accumulated other comprehensive income Unrealized gains (losses) on investment securities Deferred gains (losses) on hedges Foreign currency translation adjustment Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets	11,994,136 135,032 1,000,000 9,752,331 28,804 1,377,803 1,484,492 1,620,977 49,799 250,000 70,275 587 274,689	8,508,670 216,430 ― 2,294,094 29,514 1,938,704 1,481,401 1,609,578 52,497 ― 33,242 ― 444,349
28,038,929	16,608,482
13,703,300 286,955 238,808 30,661 253,361 21,552 7,115,073 450,217	19,825,892 272,008 252,376 31,946 254,338 18,858 7,484,683 1,020,940
22,099,930	29,161,043
50,138,860	45,769,526
2,240,348 3,612,271 14,170,090 (955,171)	3,071,105 5,030,738 17,615,693 (288)
19,067,539	25,717,249
1,070,359 (30,919) (104,317)	678,675 (31,035) (33,862)
935,122	613,778
1,420	300
20,004,083	26,331,327
70,142,943	72,100,854

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income

First Two Quarters of Fiscal 2020 (August 1, 2019 through January 31, 2020) Thousands of yen	First Two Quarters of Fiscal 2021 (August 1, 2020 through January 31, 2021) Thousands of yen
Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest received Equity in income of affiliates Others Total non-operating income Non-operating expenses Interest paid Commission fee Removal expenses Others Total non-operating expenses Recurring profit Extraordinary income Gain on sales of investment securities Others Total extraordinary income Extraordinary expenses Loss on change in equity Others Total extraordinary expenses Profit before dividend distribution from silent partnerships and income taxes Dividends distribution from silent partnerships Income before income taxes Total income taxes Net income Net income attributable to non-controlling interests Net income attributable to owners of the parent company	11,429,779 9,096,275	34,752,271 26,913,125
2,333,503	7,839,145
1,779,417	1,985,630
554,086	5,853,515
2,179 97,571 10,493	1,803 75,932 22,567
110,245	100,303
99,467 44,700 60,000 5,866	93,808 144,399 ― 31,303
210,034	269,511
454,296	5,684,306
21,486 1	148,988 ―
21,488	148,988
3,149 1,218	769 111
4,367	881
471,417	5,832,413
―	5,649
471,417	5,826,764
190,451	1,793,792
280,966	4,032,971
(23,549)	―
304,515	4,032,971

Quarterly Consolidated Statements of Comprehensive Income

First Two Quarters of Fiscal 2020 (August 1, 2019 through January 31, 2020) Thousands of yen	First Two Quarters of Fiscal 2021 (August 1, 2020 through January 31, 2021) Thousands of yen
Net income Other comprehensive income Unrealized gain (loss) on available-for-sale securities Foreign currency translation adjustment Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to owners of the parent company Comprehensive income attributable to non-controlling interests	280,966 404,187 7,385 (15,952)	4,032,971 (395,995) (5,045) 78,575
395,619	(322,465)
676,586	3,710,506
701,486 (24,899)	3,711,627 (1,120)

(4) Consolidated statements of cash flows

First Two Quarters of Fiscal 2020 (August 1, 2019 through January 31, 2020) Thousands of yen	First Two Quarters of Fiscal 2021 (August 1, 2020 through January 31, 2021) Thousands of yen
Cash flows from operating activities Income before income taxes Depreciation and amortization Amortization of goodwill Share of (profit) loss of entities accounted for using equity method Increase (decrease) in allowance for doubtful accounts Increase (decrease) in allowance for employees' bonuses Increase (decrease) in allowance for sublease losses Increase (decrease) in provision for loss on guarantees Increase (decrease) in provision for directors' bonuses Increase (decrease) in liability for retirement benefits Interest and dividends received Interest paid Loss (gain) on sales of investment securities (Increase) decrease in notes and accounts receivable (Increase) decrease in inventories Increase (decrease) in notes and accounts payable Decrease (increase) in advance payments (Increase) decrease in guarantee deposits Increase (decrease) in lease and guarantee deposits received Others Subtotal Proceeds from interest and dividend income Payment of interest Payment of income taxes Net cash provided by operating activities Cash flows from investing activities Purchase of short-term and long-term investment securities Proceeds from sales and redemption of short-term and long-term investment securities Purchase of property, plant and equipment Purchase of intangible fixed assets Others Net cash (used in) investing activities	471,417 187,654 188,124 (97,571) 4,132 (423) (8,330) ― 2,500 (181) (2,242) 99,467 (21,486) 206,730 (4,981,127) 834,120 (996,514) (164,194) 148,303 (238,045)	5,826,764 129,156 118,124 (75,932) (14,915) 2,698 (39,727) 1,285 (250,000) 13,567 (1,920) 93,808 (148,988) (43,053) 1,018,453 (3,404,067) (384,362) (308,601) 361,237 682,371
(4,437,667)	3,575,899
183 (89,043) (159,986)	220 (85,227) (1,274,090)
(4,686,514)	2,216,801
(447,547) 346,050 (680,010) (68,565) (44,852)	(278,400) 583,061 (137,163) (75,435) (182)
(894,926)	91,880
First Two Quarters of Fiscal 2020 (August 1, 2019 through January 31, 2020) Thousands of yen	First Two Quarters of Fiscal 2021 (August 1, 2020 through January 31, 2021) Thousands of yen
Cash flows from financing activities Proceeds from short-term loans Repayment of short-term loans Proceeds from long-term loans Repayment of long-term loans Repayment of lease obligations Proceeds from issuance of common shares Execution of stock option Proceeds from disposal of treasury shares Cash dividends paid Others Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of fiscal year Cash and cash equivalents at end of first half of fiscal year	1,000,000 (25,000) 3,026,573 (843,101) (13,880) ― 10,228 ― (526,820) ―	― (1,000,000) 11,847,443 (13,270,645) (14,367) 1,548,363 1,000 1,552,945 (555,432) 567,819
2,627,998	677,126
4,599 (2,948,842) 9,032,949	2,542 2,988,351 14,466,126
6,084,106	17,454,477

Information regarding sales, profit or loss, assets, liabilities and other items by reporting segment Fiscal 2020 (August 1, 2019 through January 31, 2020)

(Thousands of yen)

Reporting Segments	Other Operations (Note 1)	Total	Adjustment (Note 2)	Quarterly consolidated statements of income amount (Note 3)
Real estate management business	Logistics investment business	Asset management business	Total
Sales External customers Inter-segment	11,072,466 50,650	24,081 609	318,774 1,800	11,415,322 53,059	14,456 －	11,429,779 53,059	－ (53,059)	11,429,779 －
Total	11,123,117	24,690	320,574	11,468,382	14,456	11,482,839	(53,059)	11,429,779
Segment income (loss)	976,569	(107,147)	130,920	1,000,341	4,698	1,005,040	(450,953)	554,086

(Notes) 1. The classification "Other Operations" represents business segments not included under other reporting segments.

• 2. The (450,953) thousand yen segment income or loss adjustment includes (3,297) thousand yen in inter-segment elimination and (447,656) thousand yen in corporate expenses not allocated to any particular segment. Primary corporate expenses are general administrative expenses which are not associated with reporting segments.

• 3. Segment income or loss has been reconciled with operating income on the quarterly consolidated statements of income.

Fiscal 2021 (August 1, 2020 through January 31, 2021)

(Thousands of yen)

Reporting Segments	Other Operations (Note 1)	Total	Adjustment (Note 2)	Quarterly consolidated statements of income amount (Note 3)
Real estate management business	Logistics investment business	Asset management business	Total
Sales External customers Inter-segment	12,581,714 42,815	21,626,156 1,235	542,187 5,365	34,750,059 49,416	2,211 8,752	34,752,271 58,169	－ (58,169)	34,752,271 －
Total	12,624,530	21,627,392	547,553	34,799,475	10,964	34,810,440	(58,169)	34,752,271
Segment income (loss)	1,138,915	4,884,664	346,279	6,369,858	1,158	6,371,017	(517,501)	5,853,515

(Notes) 1. The classification "Other Operations" represents business segments not included under other reporting segments.

• 2. The (517,501) thousand yen segment income or loss adjustment includes (4,975) thousand yen in inter-segment elimination and (512,525) thousand yen in corporate expenses not allocated to any particular segment. Primary corporate expenses are general administrative expenses which are not associated with reporting segments.

• 3. Segment income or loss has been reconciled with operating income on the quarterly consolidated statements of income.