Lead Manager

BABCOCK & BROWN PROSPECTUS
KEY OFFER STATISTICS
Offer Price
Number of Shares to be issued under the Offer
Total gross proceeds from the Offer
Equity capitalisation - including BBIPL 2
Market capitalisation - excluding BBIPL 3
$5.00 per Share
110 million
$550 million
$1,625 million
$1,137 million
NOTES
1. BBIPL is a subsidiary of the Group through which US Executive Stakeholders hold their interest in the Group. Shares in Babcock & Brown and BBIPL will
have materially equivalent economic rights. See Section 8.4 for further details.
2. Based on the Offer Price multiplied by the total number of Shares on issue in Babcock & Brown and BBIPL following the Offer.
3. Indicative number due to possible adjustments between Executive Stakeholders as outlined in Section 2.4.
FORECASTS AND VALUATION 1
Year ended 31 December 2004 3 2005
Net profit after tax (pre-goodwill amortisation and restructure costs) 2, 3 $101.2 million $154.7 million
Earnings per Share (pre-goodwill amortisation and restructure costs) 2, 3, 4 41.7¢ 47.6¢
Assumed IPO capital deployed to 31 December 2005
$338.4 million
Assumed unutilised capital at year end (pre-leverage)
$184.6 million
Price earnings ratio – unadjusted 5 10.5x
Price earnings ratio – adjusted for unutilised capital and deferred
share-based remuneration 6 10.6x
NOTES
1. Forecasts are based on a number of estimates, assumptions and pro-forma adjustments that are subject to business, economic and competitive uncertainties and
contingencies with respect to future business decisions, which are subject to change and in many cases outside the control of Babcock & Brown and the
Directors.The Forecasts presented in this Prospectus may vary from actual financial results, and these variations may be material. Details of the Forecasts, the
assumptions on which they are based and discussion and analysis of them together with associated risk factors are set out in Sections 5 and 7.
2.With the exception of the tax charge for 2004 (see footnote 3), net profit after tax is calculated in accordance with AGAAP using the forecast exchange rates,
as set out in Section 5.3.2.2 but excludes one-off restructure cost of $9.8 million pre-tax in 2004 and goodwill amortisation.
3. Due to significant changes in the Group’s corporate and tax structure during 2004, no taxation charge has been forecast for 2004. In arriving at net profit after
tax for 2004 in the table above, the forecast effective tax rate for 2005 of 29% has been applied to the forecast 2004 profit before tax, goodwill amortisation and
restructuring costs to determine a tax charge for 2004 solely to facilitate an EPS calculation.The 2004 tax charge has not been reviewed by the Independent
Accountant and does not form part of the Directors’ Forecasts in this Prospectus.
4. Earnings per Share has been calculated in accordance with AASB1027 Earnings Per Share.The 2004 EPS is based on the 2004 net profit after tax calculated in
accordance with footnotes 2 and 3 and the time weighted number of fully diluted shares assuming that all Shares held by the pre-IPO owners immediately
prior to the IPO had been on issue for the entire year but allowing that the Shares to be issued as part of the IPO are only in existence (and only contribute
to forecast profit before tax, goodwill amortisation and restructure costs) for the period 1 October 2004 to 31 December 2004 (242.5 million Shares).The
2005 EPS is based on the 2005 forecast net profit after tax but before goodwill amortisation and the fully diluted number of Shares on issue immediately
following the Offer (325 million Shares).
5. Based on the Offer Price divided by Earnings Per Share (pre-goodwill amortisation and Restructure costs).
6.As per note 5, however:
• Unutilised capital of $185 million assumed to be outstanding as at 31 December 2005 and post-tax accrued interest on this unutilised capital of $7.9 million,
have been excluded from price and earnings respectively. It should be noted that this capital does not contribute to the earnings of the Group other than in
respect of this interest amount; and
• Earnings have been reduced to eliminate the impact of the deferred recognition of share based remuneration. Australian companies are not currently required
to recognise an expense for employee share-based payments. However, an expense will be recognised when Australian IFRS is introduced effective 1 January
2005. Babcock & Brown proposes to introduce a share-based remuneration plan in 2005 (see Section 4.7) which will defer the recognition of a portion of the
bonus pool expense to subsequent periods. For the purposes of this calculation, Babcock & Brown has assumed that the remuneration policy specified in this
Prospectus had been in place for the historic period such that the impact of the release of bonus deferrals from previous periods is fully reflected in this
adjusted multiple calculation.
3