MITSUBISHI ESTATE Annual Report 2014

22 Business Combination1. ACQUISITION(1) Outline of the acquisitioni.Name and business of the acquired entity Name:MM Development Tokutei Mokuteki Kaisya Business:Holding, developing and disposing of real estateii.Objective of the acquisition To increase the involvement in operations of “MARK IS Minatomirai,” a shopping mall owned by MM Development Tokutei Mokuteki Kaisya, by purchasing all the newly issued preferred stocks.iii.Date of the acquisition August 1, 2013iv.Legal form of the acquisition Purchase of the newly issued preferred stocksv.Name of the acquired entity after the acquisition MM Development Tokutei Mokuteki Kaisyavi.Change in the ownership ratio Before the acquisition:39.5% After the acquisition:81.0%vii.Major rationale for determining the acquirer As a result of the purchase of the newly issued preferred stocks, the Company obtained the substantial control of MM Development Tokutei Mokuteki Kaisya.(2) Period for which the operational results of the acquiree were included in the consolidated financial statements of the acquirerFrom August 1, 2013 through January 31, 2014(3) Consideration transferred for the acquisitionCash on hand and in banks of ¥25,750 million ($250,194 thousand)(4) Amount of the recognized gain on the negative goodwill and its causeAmount:¥470 million ($4,572 thousand)Cause:The consideration transferred was less than the fair value of the net assets acquired.(5) Amount of the assets acquired and the liabilities assumed at the acquisition date and their major categoriesCurrent assets¥ 2,853 million ($ 27,725 thousand)Fixed assets ¥32,100 million ($311,892 thousand)Total assets ¥34,953 million ($339,618 thousand)Current liabilities¥22,623 million ($219,815 thousand)Total liabilities¥22,623 million ($219,815 thousand) (6) Effect on the consolidated statement of income assuming the acquisition was completed at the beginning of the fiscal year ended March 31, 2014 and the measurement methodOmitted due to immateriality21 Other Comprehensive IncomeThe following table presents reclassification and tax effects allocated to each component of other comprehensive income for the years ended March 31, 2014 and 2013:Millions of yenThousands of U.S. dollars201420132014Unrealized holding gain (loss) on securities:Amount arising during the year¥  8,042¥ 34,488$  78,147Reclassification adjustments for gains and losses included in net income—101—Amount before tax effects8,042 34,589 78,147 Tax effects(2,678)(11,231)(26,027)Unrealized holding gain (loss) on securities5,364 23,358 52,119 Deferred gain (loss) on hedging instruments:Amount arising during the year929 (539)9,034 Reclassification adjustments for gains and losses included in net income(237)468 (2,306)Amount before tax effects692 (71)6,728 Tax effects(266)6 (2,587)Deferred gain (loss) on hedging instruments426 (65)4,140 Revaluation reserve for Land:Tax effects(79)(1,384)(768)Foreign currency translation adjustments:Amount arising during the year41,806 19,708 406,203 Amount before tax effects41,806 19,708 406,203 Tax effects(52)(151)(509)Foreign currency translation adjustments41,754 19,556 405,693 Share of other comprehensive income of companies accounted for by the equity method:Amount arising during the year1,40567913,655Total other comprehensive income¥48,870¥ 42,145$474,840 ANNUAL REPORT 201475