Lead Manager

BABCOCK & BROWN PROSPECTUS
3. PRO-FORMA ADJUSTMENTS TO THE CONSOLIDATED
STATEMENTS OF FINANCIAL PERFORMANCE – AGAAP
Summary of Pro-forma Adjustments
The following adjustments have been made in converting the pro-forma amounts under AGAAP:
Year ended 31 December 2003 2003 2002 2001
$000 $000 $000
Pro-forma Revenues from Ordinary Activities under AGAAP 1,501,938 1,571,690 1,920,511
Adjustments to Profit/(loss) from Ordinary Activities before
Income Tax Expense
Profit/(loss) from ordinary activities before income tax expense
attributable to members and outside equity interests
under AGAAP (a) (17,089) 68,026 56,463
Reversal of losses on foreign exchange contracts (b) 44,917 23,922 3,835
Reversal of bonus expense (c) 160,769 142,258 187,607
Reversal of charges associated with the group’s previous capital structure (d) 1,663 19,952 3,705
Reversal of historic outside interest charges (e) 62,776 9,312 32,135
BBIPL outside equity interests (f) (75,911) (79,041) (85,124)
Pro-forma Profit from Ordinary Activities before
Bonus Expense and Income Tax Expense Attributable to
Members under AGAAP 177,125 184,429 198,621
(a) Profit/(loss) from ordinary activities before income tax expense attributable to members and outside equity interests under AGAAP represents the consolidated
profit or loss of BBH adjusted to include the results of entities which were not controlled by BBH prior to the IPO but which will be controlled by the
group following the IPO and to exclude the results of entities which were controlled by BBH prior to the IPO but which will not be controlled by Babcock
& Brown following the IPO.The results of BBH were initially prepared in US dollars in accordance with USGAAP.The above profits and losses have been
converted into AGAAP and translated to Australian dollars as per note 2.
(b) Reversal of losses on forward foreign exchange contracts entered to hedge Australian dollar exposures while Babcock & Brown was a US dollar reporting
entity. As no such hedges are to be entered into in the future, the impact of the hedges has been eliminated as a pro-forma adjustment. In the historical periods
the gains and losses associated with the underlying exposures were reflected in the foreign currency translation reserve.
(c) Consistent with the reporting format outlined in note 2(b), the bonus expense has been reversed.
(d) Reversal of compensation and other payments associated with the previous capital structure which will be non-recurring under the new capital structure.
(e) Reversal of outside equity interests under the previous structure for parties that will become shareholders in Babcock & Brown or BBIPL under the new
structure.
(f) Reflects the outside equity interest of the US Executive Stakeholders in BBH prior to the IPO.This interest is held through BBIPL.
185