Investor Briefing

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Investor Briefing Acquisition and Capital
Raising March 2003
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Disclaimer

• This presentation is not a recommendation, by ABN
  AMRO Morgans, Wilson HTM, Caliburn Partnership
  or Flight Centre Limited, that you invest in the
  securities.  You should conduct and rely on your
  own investigations.  This offer is only made to
  persons that fall within one of the exclusions
  from the disclosure requirement contained in
  section 708 of the Corporations Act. 
• To the maximum extent permitted by law
• no representation, warranty or undertaking,
  express or implied, is made and no responsibility
  or liability is accepted, by Caliburn
  Partnership, ABN AMRO Morgans, Wilson HTM or
  Flight Centre Limited, as to the adequacy,
  accuracy, completeness and reasonableness of this
  presentation and
• no responsibility for any errors or omissions
  from this presentation whether arising out of
  negligence or otherwise is accepted by Caliburn
  Partnership, ABN AMRO Morgans, Wilson HTM or
  Flight Centre Limited.

All Australian currency unless otherwise
indicated Unless stated otherwise, an exchange
rate of A/0.371 has been used
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Agenda

• Executive Summary
• Transaction Overview
• Strategic Rationale
• Overview of Flight Centre
• Proforma Financials
• Capital Raising
• Summary
• Appendices

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1. Executive Summary

• Flight Centre proposes to acquire Britannic, a
  leading UK corporate travel business
• Fixed acquisition price of 45.3 million (A122
  million) plus deferred profit share and
  performance payments
• No additional debt from acquisition - 5.6
  million (A15 million) in cash on Britannics
  balance sheet
• EPS enhancing - 2002 proforma

Refer Appendix A for details Based on 5.6
million cash on Britannics balance sheet as at
31 December 2002. In addition, Flight Centre
will assume any additional cash generated by
Britannic between 1 January 2003 and completion
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1. Executive Summary contd

• Capital raising to fund initial payment and
  preserve balance sheet flexibility
• A79.6 million via a Non-Renounceable Entitlement
  Offer
• 120 at an Offer price of 18/share (11.3
  discount to last price)
• Founders have taken up approximately 1.03 million
  shares (approximately A18.5 million)
• All new shares will qualify for the fully franked
  interim dividend of 18.5 cents per share payable
  on 29 April 2003
• Balance of consideration (in later years) funded
  from free cash flow

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2. Overview of Britannic

• Leading UK corporate travel agency
• Focused on medium to large corporate accounts
• Key clients include a number of major UK and
  multi-national corporations
• Provides innovative, end-to-end, travel
  management solutions
• Network of 24 offices and 40 locations throughout
  the UK
• Experienced management team led by Britannic
  founder Alan Spence
• Demonstrated track record of profitability and
  growth

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2. Financial Track Record

• Britannic is a profitable company with a
  consistent track record

Britannics Historical Financial Performance

• In the past two years, Britannics business model
  has moved away from commission based to fee based
  revenue resulting in increased profitability and
  decreased revenue

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2. Acquisition Summary

• Fixed acquisition price of 45.3 million (A122
  million) plus deferred profit share and
  performance payments see Appendix A
• 6.3x pro-forma historical (CY02) EBIT
• Synergies and cost savings from the acquisition
  not factored in
• Acquisition is scheduled to complete in mid March
  2003
• Alan Spence, the MD and CEO of Britannic, will
  enter into a service agreement to the end of 2007

After factoring anticipated levels of
performance payments (assuming 10 growth in
earnings per annum), discounting the deferred
payments (at 10), and based on an exchange rate
of A/0.371. The multiple does not factor in
any additional cash generated by Britannic
between 1 January 2003 and completion
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3. Immediate Scale in Key UK Market

• Britannic is a leading corporate travel agent in
  the United Kingdom
• UK market will become Flight Centres second
  largest market (moves from 6 to 15 of total
  sales)

Source Business Travel World 2002 Note Amex
also has a substantial corporate travel business
but it is not referred to in the Business Travel
World table
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3. Developing a Global Platform

• Further development of corporate travel platform,
  consistent with recent Hong Kong and ITG
  corporate acquisitions

• Increased exposure to strategic UK market a key
  international corporate market
• Complements existing UK corporate business
• Premium corporate accounts
• Enhances capacity to provide global corporate
  offering

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4. Overview of Flight Centre

• Leading Australian travel retailer
• Rapidly expanding corporate travel operations
• In just 22 years, grown from single Sydney store
  to more than 1,000 shops and businesses
• Operations encompass Australia, New Zealand, UK,
  Canada, US, South Africa and Hong Kong
• ASX listed - market capitalisation of A1.8
  billion
• Since listing in 1995, Flight Centre has achieved
  average total shareholder returns (capital
  appreciation and dividends) of in excess of 50
  per annum
• Five year CAGR in sales of 25 and EBIT of 34

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4. Growth in Sales and Stores
All graphs are years ended 30 June
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4. Growth in Profits
All graphs are years ended 30 June
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4. Recent Interim Result Highlights

• 37 increase in sales (to A2.14 billion)
• 47 increase in pre-tax profits (to A44.94
  million)
• Declared a fully franked interim dividend of 18.5
  cents a share (48 increase)
• Flight Centres 1000th retail store now open
• At this time, we are unable to predict trading
  patterns in the second half of this year
• Having said that, the Company has successfully
  weathered several significant negative industry
  events in recent times
• With our geographic and industry spread, Flight
  Centre has grown in its capability to perform in
  the face of adversity

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5. Proforma Financials

• The acquisition enhances EPS on a historic
  pro-forma basis
• 3 post goodwill
• 9 pre goodwill
• Synergies and cost savings have not been factored
  in
• No additional debt from acquisition
• Flight Centre will assume 5.6 million (A15
  million) in cash
• Goodwill on acquisition of A100 million

Based on 5.6 million cash on Britannics
balance sheet as at 31 December 2002. In
addition, Flight Centre will assume any
additional cash generated by Britannic between 1
January and completion
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6. Capital Raising

• Flight Centre is seeking to raise A79.6 million
  via a Non-Renounceable Entitlement Offer
• 120 at an Offer price of 18/share
• Purpose of raising
• Fund acquisition of Britannic (initial payment)
  whilst maintaining Flight Centres ability to
  capitalise on the opportunities provided by
  continuing industry rationalisation
• Offer price of 18/share
• 11.3 discount to Flight Centres last traded
  price on Tuesday 4 March of 20.30 per share
• 14.5 discount to Flight Centres one month VWAP
  of 21.06 per share

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6. Capital Raising contd

• Institutional Entitlement Offer
• Accelerated entitlement issue for Founders and
  Significant Institutional shareholders
• Founders have committed to take up 1.03 million
  shares (approximately 18.5m)
• Remaining Founder entitlements are to be placed
  with institutions
• Retail Entitlement Offer
• Remaining institutional shareholders and retail
  shareholders
• Standard Rights Issue Timetable
• All shares issued under the Offer will qualify
  for the fully franked interim dividend of 18.5
  cents per share payable on 29 April 2003
• It is proposed that the Retail Entitlement Offer
  is underwritten by ABN AMRO Morgans and Wilson
  HTM

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6. Key Dates
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7. Summary

• Sensible acquisition and good strategic fit
• Strengthens Flight Centres growing corporate
  business
• Provides scale in strategic UK market
• Experienced management team, with MD incentivised
  to remain with the business
• EPS enhancing - 2002
• Synergies / cost savings (not factored in)
• Opportunity to purchase new shares in Flight
  Centre at a 11.3 discount to the last trading
  price
• All new shares will qualify for the fully franked
  interim dividend of 18.5 cents per share payable
  on 29 April 2003

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Questions
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Contact Details
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Appendices
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A - Purchase Price

• Initial fixed component acquisition price of
  45.3 million (A122 million)
• Initial payment 30.58m (A82.4m) Payable on
  completion
• 2nd payment 6.16m (A16.6m) Payable 18 months
  after completion
• Balance (20) 8.54m (A23.0m) Payable at the
  end of 2007
• Performance based component
• Semi-annual payments of up to 10 of Britannics
  EBIT until the end of 2007, subject to certain
  performance benchmarks
• Payment (after the end of 2007) equal to 50 of
  the total amount by which the annual EBIT over
  the period from the current year to the end of
  2007 exceeds a 10 compound annual growth rate
• On acquisition Flight Centre will assume 5.6
  million (A15 million) in cash on Britannics
  balance sheet
• Enterprise value of 39.7 million (A107 million)

Based on 5.6 million cash on Britannics
balance sheet as at 31 December 2002. In
addition, Flight Centre will assume any
additional cash generated by Britannic between 1
January and completion
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B - Proforma Financial Performance
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C - Proforma Financial Position