Lead Manager

SECTION 3
BUSINESS OVERVIEW
Babcock & Brown seeks to have a strong local presence in each of the countries in which it operates, and to staff
its offices predominantly with citizens or nationals of that country. Local knowledge and relationship networks
have enhanced Babcock & Brown’s ability to grow its business in new jurisdictions and have made a strong
contribution to the Group’s transaction origination capabilities.
Babcock & Brown promotes a collegial and informal culture with a strong work ethic and is characterised by
relative lack of hierarchy, a relatively flat management structure and team orientation. Babcock & Brown believes
that these factors have all contributed to a relatively low turnover amongst professional staff, particularly at the
senior levels.
Employee investment
Executives are also prominent investors in a number of Babcock & Brown investment products.This is expected
to continue post-listing, so that Executives will be able to participate in syndications alongside (and on the same
terms) as third party investors.The Directors believe that this should provide strong alignment between the
interests of Executives, Shareholders and investors going forward.A summary of the policy is set out in Section
4.8.1.
Financial summary
The table below summarises the historical and Forecast Net Revenue by Business Group and should be read in
conjunction with, and qualified by, the more detailed financial information in Section 5.
Year to 31 December ($000) 2001A 2002A 2003A 2004F 2005F
Net Revenue
– Real Estate 30,779 25,716 64,198 83,527 117,797
– Infrastructure and Project Finance 42,744 69,456 84,352 104,111 156,717
– Operating Leasing 82,036 83,226 79,704 101,619 122,604
– Structured Finance 171,784 156,998 124,573 96,524 97,127
– Corporate Principal Investment
and Funds Management (996) 12,439 38,655 38,328 29,120
Net Revenue 326,347 347,835 391,482 424,109 523,365
Other revenue (1,263) 600 1,073
Total business revenue 325,083 348,435 392,555 424,109 523,365
Net Revenue by earnings type 2
– Advisory 172,106 174,273 169,561
– Investment Management 118,561 143,339 185,946
– Principal Investment 100,815 106,497 167,858
Total Net Revenue 326,347 347,835 391,482 424,109 523,365
NOTES
1.All amounts in foreign currencies for historical financial information in 2001-2003 and forecast financial information for 2004 and 2005 are translated at
constant exchange rates based on the rates assumed for the 2004 Forecasts. Prior to the Offer, the Group managed its activities with US dollars as its benchmark
currency. Historical financial information has been prepared from statements prepared in US dollars.This use of constant exchange rates, whilst not consistent
with Australian GAAP, has been adopted in the table above and in the Business Overviews in Section 3 of this Prospectus, as Babcock & Brown believes that
this basis provides a more meaningful insight into the activities and financial performance of Babcock & Brown given the prior practice of managing its
activities using the US dollar as its benchmark currency.
2. Net Revenue by earnings type was not collated prior to 2003.
40