Lead Manager

SECTION 3
BUSINESS OVERVIEW
The composition of the portfolio by aircraft type and lease termination profile as of 30 June 2004 is outlined in
the charts below.The majority of aircraft in the portfolio are comprised of narrow bodied jets which have a more
liquid market as compared to wider bodied aircraft.
AIRCRAFT TYPE BY VALUE
4%
17%
41%
6%
4%
18%
10%
Source: Babcock & Brown
B737 41%
B747 10%
B757 18%
B767 4%
B777 6%
A320 17%
Other 4%
AIR PORTFOLIO LEASE TERMINATION PROFILE
BY VALUE
35%
30%
25%
20%
15%
10%
5%
0%
10%
19%
8%
04 05 06 07 08 09 10+
Source: Babcock & Brown
11%
6%
13%
33%
Asset trading
Babcock & Brown selectively invests in aircraft for its own account where there exists:
• Value arbitrage opportunities between different owners and different jurisdictions
• Value creation opportunities through restructuring, replacing or renewing underlying leases, and or
• An expectation of short-term changes in market rentals or asset values
Babcock & Brown typically holds aircraft only for as long as is necessary to reposition the asset before selling it
either to trade buyers or through syndication.This often has meant on-selling the asset simultaneously with
purchase.
Rail: Babcock & Brown Rail Management
BBRM’s primary activities include:
• Origination and acquisition of railcar assets (predominantly freight cars in North America)
• Leasing of railcar assets to end users
• Sale of assets to investors using proprietary financing structures that maximise the returns to those investors
• Fleet management, including lease administration, remarketing of equipment for renewal or placement with
new lessees
• Asset management, including overseeing the sale of railcars for investors
Babcock & Brown is currently active in railcar lease management only in North America, but has recently begun
to expand its activities to Europe.
BBRM’s business is highly scaleable, with management of an additional 10,000 railcars (an approximate doubling
of the current portfolio) requiring only approximately two additional full-time employees.
BBRM has strong relationships with railcar manufacturers developed through the team’s long history of operating
in the market. Babcock & Brown believes it is thus able to source railcars even in a tight market.
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