Annual report
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ANNUAL REPORT OUR PURPOSE: TO OPEN UP THE WORLD FOR THOSE WHO WANT TO SEE 2025For personal use only
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Ownership & Entrepreneurship Brightness of future Taking responsibility Our People Egalitarianism, Irreverence, Fun & Unity Profit we are proud of One best way Reward & Recognition Family (Team), Village (Area), Tribe (Nation or Country) Our Customers Our company is our people. We care for our people’s health and wellbeing, their personal and professional development, and their finan- cial security. We believe that work should be challenging and fun for everyone. Our FCTG business and community provides an inspiring, personally rewarding and challenging career pathway for our people. Promotion and transfers from within will always be our first choice and will give people the opportunity to move within our company, locally and globally. We treat the FCTG businesses as our own, and all of our people have the opportunity to share in our company’s financial success with access to share programs, outcome and output-based incentives, BOS Schemes and profit share. In each of our businesses there is ‘one best way’ to operate globally. We value common sense over conventional wisdom in the way we run our business. At FCTG we encourage entrepreneurial thinking to foster ownership and focus on ongoing innovation and improvement. In Global Brands we Globalise, Standardise and/or localise our OBW systems as is appropriate. Our structure is simple, lean, flat and transparent, with accessible leaders and minimal layers between the Customer, the Frontliners and the Senior Leadership. Everyone belongs to a family (team), which is the most important group at FCTG. The Family (Team) is part of their local Village (Area) of 5 to 25 teams, a Tribe (Called a Nation or Country of 5 to 20 Areas). The Country is part of one of FCTG’s Global Brands and/or one of 4 regions- (Asia, EMEA, The Americas, ANZ) in addition to being part of one of 4 Divisions (Leisure, Corporate, Supply and GBS). A fair margin resulting in a business profit we can be proud of, is the key measure of whether we are providing our travelling customers and travel partners with unbeatable quality and value travel experiences and travel products, as well as a caring and respectful service – an experience customer and partners genuinely value. We recognize and celebrate our individual and collective successes with recognition and rewards which are based on measurable outcomes and output based quantitative KPI’s. What gets rewarded gets done is our basic principle and we financially reward outcomes rather than behaviour. We take full responsibility for our own successes or failures. We do not externalise. We accept that we have total ownership and responsibility but not always control. In our company we believe that every individual is equally important and has access to the same opportunities, rights, benefits and privileges. There is no them and us. Work from work (with some flexibility) is our default company position as most frontline people don’t have any choice. We work as a unified community and embrace diverse cultures, backgrounds and perspectives. We have an irreverent and fun culture of taking our business seriously but not ourselves. Our customers always have a choice, and we are committed to personally delivering exceptional, unbeatable and sustainable travel experiences to them, whatever it takes. For FCTG to survive, grow, and prosper, for generations, we must live by our Company Purpose, Vision and our Philosophies. Our culture must be celebrated and protected, while being robust and independent, with the ability to outlive our current and future leaders. Our Vision: To become the world’s most exciting and profitable travel retailer, personally delivering amazing experiences to our people, our customers and our partners. Our Purpose: To open up the world for those who want to see. OUR PHILOSOPHIES For personal use only
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FLIGHT CENTRE TRAVEL GROUP LIMITED (FLT) CORPORATE DIRECTORY Directors Graham Turner Gary Smith John Eales Robert Baker Colette Garnsey Kirsty Rankin Secretary David Smith Principal registered office and place of business in Australia 275 Grey St, South Brisbane QLD 4101 +61 7 3083 0088 ABN 25 003 377 188 Share register Computershare Investor Services Pty Ltd Level 1, 200 Mary Street, Brisbane QLD 4000 +61 7 3237 2100 Auditor Ernst & Young 111 Eagle Street Brisbane QLD 4000 Stock exchange listing FLT shares are listed on the Australian Securities Exchange. Website address https://www.fctgl.com/ This financial report covers the consolidated financial statements for the consolidated entity consisting of FLT and its subsidiaries. The financial report is presented in Australian currency. FLT is a company limited by shares, incorporated and domiciled in Australia. A description of the nature of the consolidated entity’s operations and its principal activities is included in the review of operations and activities in the directors’ report. The financial report was authorised for issue by the directors on 27 August 2025. The directors have the power to amend and reissue the financial report. FLT endorses the ASX's Corporate Governance Principles and Recommendations and complies in all areas, apart from amalgamating the Remuneration and the Nomination Committee. Further information on FLT's compliance with the Corporate Governance Principles and Recommendations, including FLT’s Corporate Governance Statement, can be found on the company's website, https://www.fctgl.com/investors#governance-documents CONTENTS Page Chairman's message .................................................................... 2 FY25 Results & Outlook ............................................................... 4 Directors' Report ........................................................................... 7 Auditor’s independence declaration to the Directors of Flight Centre Travel Group Limited ........................................... 36 Statement of profit or loss ........................................................... 37 Statement of other comprehensive income ............................. 38 Statement of cash flows ............................................................... 39 Balance sheet ................................................................................ 40 Statement of changes in equity .................................................. 41 Notes to the financial statements .............................................. 43 Tax Consolidated Entity Report ................................................. 119 Directors’ declaration ................................................................... 124 Independent Auditor's Report to the Members of Flight Centre Travel Group Limited ...................................................... 125 Shareholder information .............................................................. 130 Tax Transparency Report (unaudited) ........................................ 131 KEY DATES 2025/26 27 August 2025 2024/25 full year results released 10 September 2025 Director nomination deadline 18 September 2025 2024/25 final dividend record date 16 October 2025 2024/25 final dividend payment date 12 November 2025 Annual General Meeting 25 February 2026* 2025/26 half year results released 26 March 2026* 2025/26 interim dividend record date 16 April 2026* 2025/26 interim dividend payment date * Date is subject to change 1FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 1 For personal use only
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CHAIRMAN’S MESSAGE GARY SMITH I am pleased to present your company’s fiscal year (FY25) annual report. We began the year with very high expectations but ultimately fell short of delivering the strong bottom-line growth we initially targeted. While we again delivered record total transaction value (TTV) of $24.5billion - in the process, surpassing the prior year’s results for the 26th time in our 30 years as a listed entity - our $289.1million underlying profit before tax (UPBT) was below both our targets and our FY24 result. After tracking ahead of FY24 for the first three quarters, FY25 UPBT finished down 10% at $289.1million after a very challenging fourth quarter, which saw tensions escalate in the Middle East during what would normally be our leisure business’s peak trading period. We also encountered significant turbulence earlier in the year, with geopolitical tensions, macroeconomic uncertainty and the well documented volatility in the United States - related predominantly to trade and visitor entry policies - chipping away at consumer confidence and temporarily stalling our industry’s rapid post-COVID recovery. Pleasingly, we have now started to see some positive signs of a consumer confidence rebound in Australia following recent interest rate cuts. The volatility had a significant impact on the leisure sector in particular with some travellers choosing to bypass America or temporarily hold off on booking longer haul holidays. In Australia, for example, we saw a shift to shorter haul international holidays across June and July, with Japan taking the United States’ place among the top five destinations for Flight Centre customers. Our financial results are covered in detail elsewhere within this report, while Skroo has outlined our key operational achievements, along with the short and long-term strategies we have adopted to improve performance, within his column. CIRCA $450M IN CAPITAL MANAGEMENT INITIATIVES UNDERTAKEN While FY25 will not be remembered as a year of strong profit growth, our achievements were notable in several important areas: For example, we invested circa $450million in capital management initiatives, specifically: • A $200million reduction in the face value of outstanding convertible notes through a buy-back program • A $57million spend to buy-back issued capital during the first phase of an up to $200million on-market buy- back • $100million to pay down bank loans - FLT now has access to an undrawn $200million debt facility; and • $91million in fully franked dividend payments to shareholders, via the FY24 final dividend that was paid in October 2024 and the FY25 interim dividend that was paid in April 2025 In addition, your directors have declared a 29.0c per share fully franked FY25 final dividend. When combined with the FY25 interim dividend, this took payments for the year to 40.0c per share, in line with FY24. The dividends that were declared in relation to FY25 represented a 52% return of underlying net profit after tax to shareholders, a healthy increase on the 38% return during FY24, which is a testament to our confidence in the business and its future prospects. FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 2 For personal use only
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INVESTMENTS IN GROWTH SECTORS, CUSTOMER EXPERIENCE, ARTIFICIAL INTELLIGENCE AND DIGITAL TECH We also used our healthy cash reserves to acquire Cruise Club in the United Kingdom during the year. This acquisition has given us: • A UK platform for future expansion in the rapidly growing cruise sector; and • A UK beachhead for the Ignite business, which has performed very strongly in Australia as a packaged holiday specialist The cruise sector continues to prove incredibly buoyant, and we are confident that it offers a strong future growth opportunity. We are actively targeting market-share gains in this sector and are delivering very solid year-on-year growth through the Cruiseabout leisure network in Australia, MyCruises (part of Ignite), Travel Associates, Flight Centre and the CruiseHQ wholesale business. We are also investing significantly in initiatives that enhance the customer experience. During FY26, we will launch a leisure loyalty program in Australia, initially covering the Flight Centre, Cruiseabout and Travel Associates brands and delivering a range of new benefits to customers, including the ability to use points to book any product that is available through our participating businesses. The program is set to be launched late in the FY26 1H and we expect it to quickly become a significant part of our overall leisure offering. We are also investing in artificial intelligence (AI) group-wide through our internal AI Centre of Excellence and through partnerships with industry leaders, as outlined in Skroo’s column. DATA SECURITY As custodians of customer and corporate data across our global operations, we continued to lift investment in cybersecurity and privacy safeguards during FY25. These investments ensure we protect our customers’ trust and meet our regulatory obligations, while also providing a secure foundation for the AI-driven innovations outlined above. To support our digital transformation initiatives and as we expand our AI capabilities, we continue to adapt and refine our governance frameworks around this nascent and increasingly powerful technology. SUSTAINABILITY We also continue to invest in sustainability-related issues and initiatives. For example, in recent years, we have prioritised reforestation and, through the Flight Centre Planting for the Planet Program (offered as part of the Captain’s Pack), we have now committed to planting more than 2.5million trees globally. In July, I had the opportunity to visit the First Nations community on Vancouver Island who are directly benefitting from this initiative, which involves restoring and protecting sacred ecosystems for the Tseshaht Indigenous community through community collaboration and reforestation. OUR PEOPLE Of course, the most satisfying and important investments we make in any given year are in our people, both in support and customer-facing roles. We continue to believe very strongly in providing our people with a brightness of future - a path toward achieving their career goals - which encompasses crucial areas like training, learning and development. This is backed by a commitment to promote from within wherever possible. During FY25, a very healthy 34% of our vacancies globally were filled by internal candidates, a statistic we are very proud of. We are also proud of the unique benefits programs that are in place for our people and are currently working on reinvigorating the Moneywise (financial planning), Healthwise (health and fitness) and Travelwise (travel) offerings. Our aim is to elevate these businesses’ importance to our people and to ensure they have better access to these invaluable services globally. During FY25, we successfully embarked on the implementation of Workday Human Capital Management (HCM), a transformative step in modernising our people and culture (P&C) infrastructure. The Workday HCM implementation project exemplifies our dedication to leveraging innovative technology to strengthen our workforce capabilities and drive sustainable business performance and will enable us to establish a centralised and unified view of our global workforce data. This consolidation is critical in ensuring data accuracy, transparency, and accessibility across all regions. By leveraging Workday’s advanced reporting and analytics capabilities, we will gain real-time insights into workforce trends and performance metrics. These data-driven insights empower our leadership to make informed decisions that align our strategic objectives. Streamlining core P&C processes into a global One Best Way will provide significant efficiency gains, reducing administrative overhead and allowing our teams to focus on higher-value activities. This implementation represents a critical investment in our enterprise-wide operational excellence program, delivering long-term cost efficiencies and integration with our broader enterprise systems. On behalf of our Board, I would again like to thank our people for their efforts during what was a reasonably challenging year. CONCLUSION I would also like to thank you, our valued shareholders, for your ongoing support. We are very focussed on regaining our profit growth trajectory and delivering stronger returns. Strategies and plans are in place to boost short and longer- term performance and we are optimistic about our future prospects given our sector’s resilience and the strengths of our: • Global sales networks, which span both the leisure and corporate travel sectors; and • Balance sheet, which will allow us to capitalise on the opportunities that will inevitably arise. We have also invested in areas that are key performance drivers, which should help unlock a new era of growth, as outlined in Skroo’s column in this report. FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 3 For personal use only
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FY25 RESULTS & OUTLOOK GRAHAM TURNER MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER RESULT OVERVIEW FLIGHT Centre Travel Group (FLT) has delivered a $289.1million underlying profit before tax (UPBT) during the 2025 fiscal year (FY25). The result was at the mid-point of FLT’s revised range for the year (UPBT between $280million and $300million) and was achieved in a challenging global trading cycle, as outlined below. Statutory PBT was $213million, down 3% on the prior year. TTV reached a record $24.5billion, up 3% on the FY24 result. UPBT was tracking ahead of the prior year after the third quarter (Q3) but ultimately finished almost 10% below FY24, with Q4 results significantly affected by: • Underperformance and non-recurring costs in Asia, leading to a circa $30million year-on-year (YOY) earnings swing in the region ($9million FY24 UPBT to underlying $22million FY25 loss); and • The significant impacts of escalating tensions in the Middle East and the ongoing global downturn in bookings to the United States on leisure results late in the year. This temporary volatility disrupted booking patterns during FLT’s peak trading period - some customers either booked closer-to-home overseas holidays or delayed finalising plans - and saw the global leisure business’s UPBT dip below its strong FY24 profit. In Australia, bookings to the US decreased by 11% during the 4Q - a sharp turnaround from the 7% increase during the first nine months of the year. Global corporate profit also decreased YOY, although the business delivered 6% profit growth excluding Asia’s region- specific FY25 losses and its FY24 profit. Losses related predominantly to trade debtor provisions and region-specific costs associated with local mid-office system changes reporting during the FY25 1H, as well as customer downtrading. As outlined previously, FLT’s full year results were also adversely affected by: • Front-loaded investments in future growth drivers, including airfare aggregator TPConnects, digital enhancements and expansion in the global cruise sector; and • Significantly reduced supplier super over-ride income because of lower TTV growth in core leisure and corporate brands, as outlined below. FY25 TRADING UPDATE - CORPORATE • $12.3billion TTV (+2% YOY) • $190million UPBT (-10% YOY, but +6%, excluding Asia) • Corporate Traveller set to become a $5billion-per-year TTV business and outperforming in large US market • FCM securing large pipeline of new accounts, expanding addressable markets and set to benefit from industry consolidation • Tangible productivity gains delivered - 13% improvement over past two years The corporate business again delivered record TTV but growth in the Corporate Traveller and FCM brands was reasonably modest in a flat global market - pointing to further organic market-share gains - with account wins offsetting widespread client downtrading. Corporate Traveller outperformed in the US, delivering 12% 2H TTV growth in a contracting market, and should exceed $5billion in TTV during FY26. The business, which has a high growth, high margin profile, has strong future prospects given the strength of its offerings (people and digital platforms) and its relatively small share in large markets like the US and UK. FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 4 For personal use only
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Corporate Traveller has again started FY26 strongly in the US, delivering more than 20% TTV growth in July 2025 and establishing a new sales record for the month at a time when the local market contracted about 3% YOY (Source: Airline Reporting Corporation) Similarly, FCM is well placed for further TTV growth after expanding its: • Client base - contracted accounts totalling $1.3billion were secured during FY25; • Product offerings - introducing new tools and readying others for deployment; and • Addressable markets - delivering a wider range of services to customers, including consulting and an expanded global meetings and events (M&E) offering. FCM also expects to benefit from industry consolidation, given its strong position and profile globally, and is already seeing increased RFP activity and interest early in FY26. Losses in Asia during FY25 obscured the tangible benefits that have started to flow from the Productive Operations (PO) initiative. For example, TTV per full time employee (FTE) has now increased by 13% (based on average FTE) in the two years since PO was initiated. Stronger bottom-line results are expected as loss-making operations return to profitability and as the business services increasing volumes with a broadly flat underlying cost base. TRADING UPDATE - LEISURE • $11.8billion in TTV (+6.7% YOY) • $174.7million UPBT (-5.3% YOY but circa 35% above pre-COVID) • Major TTV growth in Travel Money (+31% to $1.2billion), Ignite (+20% to $455million), independent agent/ agency sector (+17% to $2.3billion) • Scott Dunn & online leisure TTV also growing at 10%+ YOY • Investments in growth engines - cruise and tour sectors, new loyalty program Lower margin brands predominantly drove FY25 TTV growth, with Flight Centre brand’s TTV increasing modestly and bolstered by average basket-size and components per booking (attachment) growth. Overall, the leisure business generated 86% of its record FY19 TTV result with just 42% of its FY19 FTE workforce, underlying strong productivity gains network-wide and rapid growth in scalable, employee-light offerings such as independent agents and online. Together, these channels delivered circa $4billion in TTV during FY25, albeit at low margin. Travel Money and package holiday specialist Ignite also grew strongly, with Travel Money’s wholesale foreign exchange offering contributing $340million in TTV in its second full year. Cruise and tour sales increased circa 20% throughout the business. The reintroduced Cruiseabout network in Australia and the acquired Cruise Club business in the UK made solid TTV contributions but collectively incurred circa $5million in losses while FLT invested to ready both businesses for meaningful future profit contributions. FLT has unveiled plans for a leisure loyalty program starting later this calendar year and initially encompassing Flight Centre brand, Travel Associates and Cruiseabout in Australia. This program will create a new engine of growth by: • Rewarding customers across the entire travel journey with the most accessible and diverse redemption options in market • Unlocking value for suppliers with new levers to grow sales and stronger access to customer data; and • Creating new partnerships beyond travel and deepening supplier relationships For FLT, the move is expected to accelerate digital and data- driven personalisation, expand revenue streams, increase basket size, improve retention and reactivate dormant customers - all of which drive long-term shareholder returns. BALANCE SHEET STRENGTH PAVING THE WAY FOR $450M IN CAPITAL MANAGEMENT INITIATIVES • $200million convertible note buy-back completed during 1H • Circa $60million in issued capital buy-back (up to $200million program) • $91million in fully franked dividends returned to shareholders (via FY24 $0.30 per share final dividend and FY25 $0.11 per share interim dividend) • $100million in bank debt repaid In addition, FLT’s directors today declared a fully franked $0.29 per share FY25 final dividend, taking payments for the year to $88million ($0.40 per share) and representing a 52% return of underlying profit after tax (FY24: 38%). This higher pay-out ratio underlying FLT’s confidence in its balance sheet and future prospects and takes the total investment in capital management initiatives since the start of FY24 to almost $1billion. Under its capital allocation framework. FLT continues to assess investment opportunities, with further proactive capital management activities expected to continue in FY26. STRATEGIC RESPONSE TO CYCLICAL CHALLENGES Targeted measures are in place to address short-term volatility, while positioning FLT for accelerated profit growth in an improving cycle. These measures include: • Cost optimisation - holding underlying costs broadly n line with FY25 through productivity gains and with cost reduction strategies offsetting inflation in some areas; • Capital discipline - a 15% - 20% FY26 capital expenditure reduction, with ongoing prioritisation of key initiatives; • Portfolio refinement - closure or repositioning of under- performing assets, including StudentUniverse and The Travel Junction (both closed), US leisure business Liberty (rebranded to Envoyage) and touring business Topdeck (repositioned early FY26); • Leveraging supplier relationships to capitalise on evolving travel patterns, emerging trends, including new air distribution models (NDC), and to optimise margins; and • Growth investments in artificial intelligence (AI), loyalty and high performing sectors, including cruise, tours and M&E in corporate (+35% FY25 TTV). Benefits are also expected during the 2H from the Global Business Services (GBS) area’s initiatives to enhance efficiency and lower costs across support areas with a circa $20million monthly cost base. Current focus areas include finance and technology structures, a new human resources information system and business process outsourcing optimisation. AI TRANSFORMATION FLT has established enterprise partnerships with Quantium and Anthropic, two of the world’s largest AI players, to embed AI in customer service, productivity and operations, and to complement initiatives that are underway within the company’s AI Centre of Excellence. The corporate PO initiative, which is now starting to deliver meaningful benefits, is using AI to route inbound requests more intelligently to consultants. In addition to enhancing customer experience, this capability has assessed more than 5million requests with nearly 50,000 FTE hours saved. FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 5 For personal use only
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FCM’s “Sam” product has also been super-powered with agentic AI and relaunched as a virtual travel assistant connected to FCM’s platforms. Sam can now answer routine travel questions and perform actions on behalf of the traveller, autonomously. The leisure business continues to invest in AI and broader digital initiatives and is set to deliver a significant uplift across its brand stable through: • The upcoming rollout of the Salesforce CRM, DataCloud and Loyalty platforms, equipping consultants with rich customer insights and leveraging AI to automate routine tasks, improve conversion and drive productivity; • New Travel Associates, Cruiseabout and customer loyalty apps; and • The introduction of AI Co-Captains in store to automate information retrieval and trip proposal generation, freeing up consultants to focus on high-value services. FY26 OUTLOOK FLT believes the cyclical challenges that affected FY25 results will continue to impact booking and travel patterns early in FY26. While these challenges are likely to be short-term, FY26 1H UPBT is expected to be reasonably flat given a degree of ongoing volatility early in the Q1 and the comparatively strong FY25 2Q result. Accelerated profit growth is expected during the 2H as key projects gain momentum and as the trading cycle gradually improves, with the prospect of further interest rate cuts in some countries helping to alleviate cost of living pressures and boosting consumer confidence. Some early signs of stabilisation are now starting to emerge including: • Improvement in some key consumer confidence metrics; • Stronger TTV growth across both leisure and corporate sectors, highlighted by Corporate Traveller’s record July TTV; and • Growth in leisure enquiry and web traffic as the company’s brands’ value propositions continue to resonate with cautious consumers. Targeted response plans have been implemented to address short-term cyclical challenges, while longer-term focuses on cost discipline and productivity gains have been maintained to deliver sustainable, structural change. FY26 profits should also be boosted by: • Stronger returns on investment in various initiatives, including Productive Operations, as outlined above; • Improvements in Asia, now that issues that impacted FY25 results are being addressed; • Benefits flowing form the GBS area’s initiatives during the 2H; and • A rebound in super over-ride income if TTV growth accelerates in an improving cycle. FLT is working with its airline partners to boost margins and deliver savings to customers via NDC, which now has a 10-15% adoption rate within FLT globally and is above 50% with some key carriers. In Australia, the company is building on its longstanding Qantas NDC relationship and growing sales under the airline’s new Premium Channel. FLT expects to provide FY26 market guidance at its Annual General Meeting on November 12, 2025. The company will prioritise sustainable YOY profit growth in the near-term, while retaining its longer-term focus on delivering a 2% UPBT margin. FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 6 For personal use only
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Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Flight Centre Travel Group Limited (FLT) and the entities it controlled at the end of, or during, the year ended 30 June 2025. PRINCIPAL ACTIVITIES The Group’s principal continuing activities consisted of leisure travel retailing and corporate travel management, plus in- destination travel experience businesses including tour operations, hotel management, destination management companies (DMCs) and wholesaling. There were no significant changes in the nature of the Group’s activities during the year. SIGNIFICANT CHANGES IN STATE OF AFFAIRS There was no significant change in the Group’s state of affairs during the year. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS Information on likely developments in the Group’s operations and the expected results of operations has been included in the FY25 Results & Outlook column on page 4. DIVIDENDS – FLIGHT CENTRE TRAVEL GROUP LIMITED Dividends paid to members during the financial year were as follows: 2025 2024 ORDINARY SHARES $'000 $'000 Final ordinary dividend for the year ended 30 June 2024 of 30.0c cents (2023: 18.0 cents) per fully paid share 66,312 39,491 Interim ordinary dividend for the year ended 30 June 2025 of 11.0c cents (2024: 10.0 cents) per fully paid share 24,657 22,100 90,969 61,591 MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR DIVIDENDS On 27 August 2025, FLT’s directors declared a fully franked 29.0 cents per fully paid ordinary share final dividend for the year ended 30 June 2025 (2024: 30 cents). The total amount of the dividend is $62.9million and represents 38% of FLT’s full year underlying NPAT. No other material matters have arisen since 30 June 2025. ENVIRONMENTAL REGULATIONS The group has determined that no particular or significant environmental regulations apply to it. REVIEW OF OPERATIONS – OVERCOMING OPERATIONAL RISKS A review of operations, financial position, business strategies and details of FLT’s outlook for 2025/26 are included on pages 2 to 6 of this report. DIRECTORS’ REPORT FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 7 For personal use only
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INFORMATION ON DIRECTORS The following persons were FLT directors during the financial year and up to the date of this report: DIRECTOR EXPERIENCE AND DIRECTORSHIPS SPECIAL RESPONSIBILITIES DIRECTORS' INTERESTS IN SHARES OF FLT AS AT DATE OF THIS REPORT ORDINARY SHARES Gary Smith BCom, FCA, FAICD Age: 65 FLT Director since 2007, Gary has vast tourism industry experience and has served on a diverse range of boards and tourism industry related bodies during the past 30 years. Gary is a Fellow of the Australian Institute of Company Directors and Chartered Accountants Australia and New Zealand. He is also a director of Michael Hill International Limited (from Feb-16) and National Roads and Motorists' Association Limited (the NRMA) (from Feb-19) Independent non- executive chairman 28,675 Remuneration & nomination committee member Audit and risk committee member John Eales BA, GAICD Age: 55 FLT Director since 2012, Chairman of Trajan Group Holdings Ltd (from Mar-21) and De Motu Cords Pty Ltd (from Jan-20). Director of Magellan Financial Group Limited (from Jul-17), and FUJIFILM Data Management Solutions Pty Ltd (from Jan-14). Independent non- executive director 13,438 Remuneration & nomination committee chairman Audit and risk committee member Robert Baker FCA, GAICD BBus (Accountancy) Age: 67 FLT Director since 2013. Former audit partner of PricewaterhouseCoopers with experience in retail, travel and hospitality sectors. Chairman of Gathid Limited (formerly Rightcrowd Limited) from Aug-17) and Goodman Private Wealth Limited (from Oct-14). Board member of Tourism Holdings Limited (from Nov-22), Apollo Tourism & Leisure Limited (from Jan-19 to Nov-22) and Ozcare (from Jan-22). Pro bono roles include Chairman of Archdiocesan Development Fund, Catholic Archdiocese of Brisbane (from Jan-18), and Chairman of the Audit and risk committee of Australian Catholic University Limited (from May-15). Independent non- executive director 7,307 Remuneration & nomination committee member Audit and risk committee chairman Colette Garnsey OAM Age: 65 FLT Director since Feb-18. Chairman of Laser Clinics Australia (previously Non-executive director from Nov-20). Non-executive director of Seven West Media (from Dec-18). O'Connell Street Associates (from Jul-21) and not-for-profit, the American Australian Association (from May-25). Extensive experience in Australia retail industry, marketing and distribution. Former advisory roles include advisor to Federal Minister for Trade and Investment, Australian Fashion Week, Melbourne Fashion Festival and CSIRO. Independent non- executive director 7,453 Remuneration & nomination committee member Audit and risk committee member Kirsty Rankin B.Com, MAICD Age: 65 FLT Director since Aug-22. Former CEO of Pinpoint Pty Ltd, and organisation that specialised in cultivating customer loyalty and engagement programs, prior to its sale to Mastercard in 2014. Subsequently a global executive with Mastercard in the USA. Current non- executive director of Azupay, a privately-owned real-time payments platform (from Dec-21), Stone & Chalk, a leading innovation start-up and scale-up hub (from Jun-22) and Beonic Ltd, an ASX-listed omni-data intelligence company (from Aug-21). Independent non- executive director 6,468 Remuneration & nomination committee member Audit and risk committee member Graham Turner BVSc Age: 76 Founding FLT Director with significant experience in running retail travel businesses in Australia, New Zealand, USA & Canada, UK, South Africa and Asia. Director of the Australian Travel Industry Association (from Sept-05). Managing Director 16,996,300 No directors held interests in share rights, options or performance rights during the year (2024: nil). DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 8 For personal use only
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SKILLS AND EXPERIENCE The current mix of skills and experience represented by the directors during the period, is as follows: GARY SMITH JOHN EALES ROBERT BAKER COLETTE GARNSEY KIRSTY RANKIN GRAHAM TURNER Travel or retail industry ü ü ü ü ü ü Senior executive ü ü ü ü ü Finance/capital markets ü Audit/accounting ü ü Legal* Regulatory/public policy ü International markets ü ü ü ü ü Strategy/risk management ü ü ü ü ü ü Governance ü ü ü ü ü Marketing/communications ü ü ü ü ü Technology/IT ü Sustainability & ESG ü * For expertise in areas not listed above, the directors seek expertise within FLT and externally where appropriate. COMPANY SECRETARY The company secretary, Mr David Smith (B.Com, LLB), joined FLT in 2002, and was appointed company secretary in February 2008. Mr Smith has more than 25 years legal experience and is also FLT’s general manager of mergers & acquisitions. Prior to joining FLT, Mr Smith held positions with Wilson HTM, Blake Dawson (now Ashurst) and Clayton Utz. MEETINGS OF DIRECTORS The number of meetings of the company’s board of directors and of each board committee held during the year ended 30 June 2025 and the number of meetings attended by each director were: COMMITTEE MEETINGS FULL MEETINGS OF DIRECTORS AUDIT & RISK REMUNERATION & NOMINATION A B A B A B Gary Smith 14 14 4 4 2 2 John Eales 13 14 4 4 2 2 Robert Baker 14 14 4 4 2 2 Colette Garnsey 14 14 4 4 2 2 Kirsty Rankin 14 14 4 4 2 2 Graham Turner 14 14 * * * * A = Number of meetings attended B = Number of meetings held during the time the director held office or was a member of the committee during the year * = Not a member of the relevant committee DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 9 For personal use only
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MATERIAL BUSINESS RISKS RISK MANAGEMENT APPROACH FLT’s risk management approach is guided by three fundamental principles: • Asset and Stakeholder Protection: Effective risk identification and management to safeguard the Group’s assets, personnel, and key stakeholders. • Operational Optimisation: Continuous improvement and informed decision-making to enhance the Group’s operations. • Growth and Sustainability Support: Balancing risk to ensure the Group’s growth and sustained value creation. Risk management is established by the risk management policy and strategy, and is a responsibility shared by all employees. OVERSIGHT AND GOVERNANCE The Board, via the combined Audit and Risk Committee, oversees the company’s risk management framework. This framework supports the Board and management to identify, evaluate, monitor, and manage key risks, supporting the protection of assets and enhancing shareholder value. The Audit and Risk Committee’s charter is available on our website at www.fctgl.com/investors#governance-documents. The CEO and management are accountable for identifying, assessing, and monitoring risks, and ensuring risk management activities are communicated in line with the Group’s risk strategy framework. While FLT does not have a dedicated internal audit function, regions have risk functions responsible for monitoring and helping to manage risks, along with dedicated specialists for risk categories including information security, cyber, privacy, and financial crime. The Enterprise Risk function operates independently of the business and provides an objective evaluation of FLT’s risk and control environment. The CEO and CFO provide the Board with a formal sign-off on the Group’s financial statements, in accordance with section 295A for the Corporations Act 2001 (Cth) and recommendation 4.2 of the ASX Corporate Governance Principles and Recommendations. That sign off is founded upon a sound system of risk management and internal control which is operating effectively in all material aspects in relation to financial reporting risks. Risk Management Framework The risk management framework is built around the following processes: • Identification: Identifying risks that could potentially materially impact on the Group’s strategic objectives and operations. • Assessment: Evaluating the impact and likelihood of key risks. • Mitigation and Control: Developing appropriate strategies and treatment to manage risks within acceptable levels. • Monitoring and Reporting: Ongoing monitoring and reporting of risks in line with the Group’s risk appetite. Risks are considered within the context of the Group’s strategic and operational goals across both financial and non- financial domains. The Board and / or Audit and Risk Committee reviews the FLT risk management policy and FLT’s risk management framework and is satisfied that it continues to be sound. Risk Classes The risk management strategy identifies key risk classes intrinsic to our business model, operations, and the external trading environment. By effectively managing these material risks, we support the achievement of FLT’s overall objectives. • Strategic Risks: Risks that may impact on the adequacy and viability of FLT’s business models in the medium / long term. • Financial Risks: Risks that impact FLT’s ability to financially support the strategic objectives of the organisation and to meet financial obligations as they fall due. • Operational Risks: Caused by inadequate management of internal processes, people, technology or external events that can lead to negative impacts on FLT. • Conduct & Compliance Risks: Risks associated with behaviours and actions taken that can have negative consequences for customers, counterparties, our people or FLT’s reputation. • Emerging Risks: Risks that cannot be fully assessed but may have a future impact on our business models and strategy. Typically, these risks are outside the control of the organisation. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 10 For personal use only
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The below section outlines the key risks currently associated with the Group, though it may not encompass every potential risk. The materiality of these risks is subject to change, and new risks may arise. The Group is committed to managing these risks effectively to mitigate any negative effects on our financial performance and reputation. However, it is important to note that some risks are outside the Group’s control. RISK APPROACH OBJECTIVE STRATEGIC Strategic risk management is delivered through our annual strategy and business planning process at group and divisional levels. Strategic risk assessment will consider the risks that inform our strategy and the risks introduced through strategic decisions into our business operations. Reduce uncertainty and maximise the upside of risks taken for superior returns. KEY RISKS • Competition risk • Inorganic growth • Organic growth • Transformational change • Sustainability • Market conditions OVERVIEW AND RISK FACTORS FLT faces various threats and disruptions that may impact its ability to effectively execute growth strategies, including both organic growth and strategic growth through mergers and acquisitions (M&A). Operating in a highly competitive environment, the Group encounters challenges from existing and new competitors and risks of disruption from emerging technologies and changing customer preferences. The successful achievement of the Group’s strategic growth objectives relies on the performance and alignment of its global divisions, as well as its investments. These areas are subject to influences from internal and external factors. The Group’s M&A strategy also includes significant risks, such as identifying suitable acquisition targets, conducting thorough due diligence, integrating acquired businesses, realising synergies, and meeting financial expectations. These risks could adversely affect the Group’s operational and financial performance. HOW WE MANAGE THESE RISK Strategic Planning and Diversification The Group actively evaluates its strategies and business model as part of its ongoing strategic planning process. Through diversification, we aim to reduce the risk of disruption and competition from market entrants, while striving for sustainable growth. Innovation and Technological Advancement To foster innovation and improve business operations, the Group invests in key capabilities and technologies, focusing on automation and digital transformation. Additionally, inorganic growth through mergers and acquisitions is consistently assessed and pursued when such investments offer strong value, returns, and complement our existing portfolio. Geographical Presence and Market Adaptation The Group’s established presence in key geographical regions enhances our understanding of local markets, supporting our global division and brand strategies with strong operations and oversight. We adapt to shifts in demand by prioritising streamlined, automated, and standardised business operations. Our diverse business lines and product offerings enable us to accommodate varying travel behaviours across different demographics. Consumer preferences play a central role in shaping our sales and marketing strategies, product procurement, and overall customer experience. Strategic Project Oversight Major strategic projects, including capital raising, mergers, acquisitions, divestment, joint ventures, and business initiatives or transformations undergo risk assessments. These assessments are designed to align with specific objectives and risk appetite of each project, ensuring they support the Group’s goals. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 11 For personal use only
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RISK APPROACH OBJECTIVE FINANCIAL Financial risks are managed through Board policy limits and tolerances translated from our Risk Appetite. Support financial requirements of strategic objectives and ensure financial obligations are met when they are due. KEY RISKS • Liquidity and capital access • Foreign exchange • Interest rate • Credit • Investment OVERVIEW AND RISK FACTORS Securing liquidity and access to capital is essential for the Group to achieve its business objectives and meet financial obligations. Failure to maintain a strong balance sheet or difficulties in obtaining favourable credit or capital facilities could adversely affect our operational and financial performance, as well as our ability to fulfil ongoing liquidity needs, including debt refinancing. As an international operator, FLT is exposed to foreign exchange risks, which can impact our operating and financial performance. Fluctuations in currency exchange rates influence future cash flows and may affect the demand for travel and tourism services, which are central to our business. The Group faces exposure to interest rate fluctuations, potentially increasing debt servicing costs. Global financial market developments might affect the liquidity of credit markets and our access to those markets, which could have a material impact on our future financial performance and position. Our business model relies on pre-payment by customers for travel-related services, along with sizeable corporate credit balances and supplier payment terms. Changes in these terms, customer refund requests, chargebacks or issues with receivables and recoverable assets could necessitate additional working capital, negatively impacting the Group’s operational and financial performance. HOW WE MANAGE THESE RISKS Liquidity Oversight The Group actively manages liquidity through rolling operating cash flow forecasts, supported by detailed 13-week cash flow forecasts prepared weekly for each business and country. These forecasts provide insight into cash inflows and outflows, helping identify potential liquidity gaps or surpluses. Regular assessment of liquidity ratios is conducted to evaluate the Group’s ability to convert assets into cash and cover short-term liabilities. Efforts to optimise working capital include effective management of receivables and payables, along with negotiating favourable terms with suppliers and customers. Debt structures are monitored in line with our capital management strategy, which aims to sustain growth, maintain a strong balance sheet, and maximise shareholder returns. The Group continually assesses its strategies and models as part of our strategic planning process. Through diversification, the Group aims to mitigate the threat of disruption and market entrants and pursue sustainable growth. Investment into key capabilities and technologies are made with the goal of fostering innovation, automation and digital transformation in respect of our business operations. Inorganic growth via mergers and acquisitions is continually assessed and executed where investment presents strong value, returns and complements our portfolio. Treasury and Financial Risk Management A central treasury department oversees financial risk management, guided by Board-approved policies on areas such as foreign exchange, interest rates, and credit risk, along with the use of derivative and non-derivative financial instruments. Treasury collaborates with operating units to identify, evaluate, and hedge financial risks. The Board provides written principles for overall risk management and policies for specific areas. Debtor and Supplier Risk Management The Group manages debtors and supplier risk through specific credit terms and criteria to assess the creditworthiness of suppliers and corporate customers. Regular evaluations and appraisals are conducted to ensure compliance with policies and standards. Based on risk profiles, the Group may require collateral or guarantees to secure payment obligations. Invoices are settled promptly and accurately, adhering to agreed terms. Acquisition and Investment Risk Management The Group follows a rigorous investment and due diligence process to evaluate financial, operational, legal, and strategic aspects of potential opportunities. Regular monitoring and reporting on existing investments ensure alignment with strategic objectives and value delivery. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 12 For personal use only
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RISK APPROACH OBJECTIVE OPERATIONAL Operational risks are assessed against their likelihood of occurring and the severity of their impacts. Risks avoided or mitigated through practicable control design and operation. KEY RISKS • People & Culture • Third-Party / Supply Chain • Cyber & Information Security • Technology • Artificial Intelligence (AI) OVERVIEW AND RISK FACTORS As a service-oriented organisation that relies on key senior management and personnel, the Group faces significant risks from staff turnover and loss of key employees. The absence of experienced consultants, sales teams, frontline managers, and senior leaders could disrupt business operations in the short term and negatively affect financial performance. The complexity of operating over 30 brands in multiple countries further amplifies these challenges. Attracting and retaining qualified staff is crucial to mitigate these risks. Our supply chain involves travel providers, major airlines, global distribution systems, and intermediaries including the International Air Transport Association (IATA). Reliance on third-party suppliers introduces risks of disputes or contractual failures that could harm reputation and financial performance. The current economic climate exacerbates these risks, as suppliers may alter engagement terms or default on payments due to operational challenges, posing direct threats to the Group’s operations and financial stability. As a multinational organisation processing customer payments and personal data across multiple jurisdictions, the group faces material cybersecurity and IT operational risk. Our business model requires robust technology infrastructure to support operations in multiple international markets, creating exposure to cyber threats, system failures, and regulatory compliance challenges. Operating under multiple privacy and data protection regimes including GDPR, and maintaining PCI DSS compliance for payment credit card processing, adds further complexity to our risk landscape. Primary cybersecurity and IT risks include ransomware attacks, data breaches, supply chain compromises, and system outages. Such incidents could result in operational disruption across our international network, revenue loss, regulatory penalties, and substantial reputational damage affecting customer confidence and future business performance. Non- compliance with regulatory requirements could result in sanctions, financial penalties, and operational restrictions. The Group remains committed to leveraging AI innovation to drive productivity, elevate customer experiences, and transform traditional travel offerings. At the same time, it recognises the importance of identifying and managing associated risks, including governance, data privacy, ethical considerations, and responsible use, to ensure AI is deployed in a way that is impactful, trustworthy and ethical, in addition to generating business value. HOW WE MANAGE THOSE RISKS Employment Management The Group emphasises a strong culture, reward, and recognition systems to maintain high staff satisfaction and retention. The Executive Team is collectively responsible for ensuring an organisational culture that meets objectives. Strong talent management, succession planning, and retention mechanisms are in place to secure key capabilities. Cybersecurity and IT Management The Group employs comprehensive cybersecurity frameworks designed to protect systems and data, detect security incidents, and enable rapid response to minimise business impacts. A dedicated Information Security team implements security controls and practices, supported by regular employee training programmes, security assessments, and continuous monitoring systems. Established incident response procedures provide additional protection against potential security events. Recognising emerging technology risks, the Group has implemented an AI governance framework, including policies, oversight committee, and reporting mechanisms to ensure responsible development and deployment of artificial intelligence technologies whilst managing associated cybersecurity and operational risks. Supply Chain and Third-Party Management The Group performs due diligence and relationship management to monitor supply chain and third-party risks. By maintaining a diverse supplier base, the Group reduces dependency and increases resilience. Ongoing supplier assessments ensure compliance, performance, and quality standards are met. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 13 For personal use only
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RISK APPROACH OBJECTIVE CONDUCT AND COMPLIANCE RISK Conduct and compliance risks are assessed and managed with a control environment designed to meet regulatory, customer, stakeholder, and community expectations. Risks avoided or mitigated through practicable control design and operation with consideration to legal, regulatory and codes of conduct. KEY RISKS • Privacy and data management • Financial crime compliance • Market integrity • Treating customers fairly OVERVIEW AND RISK FACTORS As a global retailer of travel and travel-related products, the Group faces regulatory risks linked to non-compliance with jurisdiction-specific requirements. Key areas of exposure include: • Data privacy breaches and mismanagement of confidentiality • Failures in external financial and regulatory reporting • Errors in tax payments and filings • Money laundering and terrorism financing risks and compliance obligations • Non-compliance with evolving risks and associated regulatory breaches • Bribery and corruption risks and associated regulatory breaches • Failure to identify material changes to laws, regulations, licensing, industry standards or codes. Any regulatory enforcement could significantly impact the Group’s reputation and financial performance. Monitoring ethical behaviour throughout our supply chain is vital, especially regarding human rights, modern slavery, and data security. Breaches such as fraud, bribery, corruption, anti-competitive actions, sanctions violations, money laundering, terrorism financing, cyber security and IT system continuity incidents and privacy violations pose substantial risks to our business. FLT is dedicated to ethical conduct and strong governance. This commitment is essential for business success and meets the expectations of shareholders, regulators, customers and employees. Any deviation from our code of conduct by employees or suppliers could lead to a breach of legislation or regulations and damage the Group’s reputation. HOW WE MANAGE THOSE RISKS Compliance by design The Group ensures regulatory compliance by implementing robust policies, effective training, advanced technology, and streamlined processes and monitoring. These measures help FLT maintain strong relationships with regulators, respond effectively to regulatory changes, secure necessary licences and certifications, and operate responsibly across international borders. Corporate Governance Framework Our corporate governance approach is designed to manage, oversee, and report conduct matters across the Group. FLT endorses the ASX Corporate Governance Principles and Recommendations, adhering to each as outlined in our Corporate Governance Statement. The Group actively monitors and reports any material breaches of our code of conduct directly to the Board. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 14 For personal use only
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RISK APPROACH OBJECTIVE EMERGING Emerging risks are assessed differently to other risk classes. Scenarios are utilised to inform mitigation plans to be implemented if the risk materialises. Understanding potential impacts and mitigations if risk were to materialise. KEY RISKS • Environmental, Social and Governance • Macroeconomic and Geopolitical • Technological OVERVIEW AND RISK FACTORS The Group, along with its customers, suppliers and service providers, is exposed to climate change risks, including rising sea levels, extreme weather conditions, and increased frequency of catastrophic events like floods, fires, storms, and droughts. These physical and financial challenges disrupt supply chains and affect sectors associated with leisure and corporate clients, such as agriculture, impacting travel patterns. Risks related to climate change mitigation efforts include policy and legal changes, shifts in investor and customer preferences, and technological advancements. These broad-scope risks can have significant domestic and international impacts, influence customer demand and potentially affecting the Group’s financial performance and prospects. The global travel industry faces a complex macroeconomic and geopolitical environment. Although travel demand remains resilient, consumer caution in spending on travel and business cost-cutting measures are noticeable. Geopolitical tensions, including conflicts in Ukraine and Middle East, contribute to increased travel advisories, regulatory changes, and operational risks, affecting traveller confidence and logistics. HOW WE MANAGE THESE RISKS Sustainability and Compliance The Group has a dedicated sustainability team which leads compliance efforts with jurisdictional sustainability standards. In the upcoming financial year, we will assess climate risks and opportunities following these standards. Regular monitoring of climate-related risks are presented to the Board, and the FY24 Sustainability Report outlines indirect and direct emissions for the Group. Digitisation of travel retailing To ensure the ongoing viability the Group’s business model and operations, we are adopting digital platforms and advanced technologies including artificial intelligence, machine learning and automation to create competitive advantage and counteract disruption with the market segment by digital entrants. We are also utilising this emerging technology to streamline operations and enhance customer experience. Risk Management Framework and Strategic Positioning Our risk management framework strengthens balance sheets and ensures proactive business continuity planning. Strong relationships with suppliers and partners ensure service reliability and adaptability. Traveller safety, flexibility, and support are paramount to fostering trust and loyalty during uncertain times. As travel remains a key discretionary category, our strategic positioning captures growth opportunities while safeguarding operations and reputation globally. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 15 For personal use only
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OVERVIEW JOHN EALES REMUNERATION AND NOMINATION COMMITTEE CHAIRMAN REMUNERATION REPORT GLOSSARY AIM: Alternative Investment Market KMP: Key management personnel BOS: Business ownership scheme KPIs: Key performance indicators, the basis for FLT’s STI’s CEO: Chief executive officer LSL: Long service leave CFO: Chief financial officer LTRP: Long Term Retention Plan DIP: Deferred incentive plan MDs: Managing directors EBITDA: Earnings before interest, tax, depreciation and amortisation NEDs: Non-executive directors EMEA: Europe, Middle East and Africa PBT: Profit before tax EPS: Earnings per share PCRP: Post COVID-19 Retention Plan EY: Ernst & Young RNC: FLTs Remuneration and Nomination Committee FLT: Flight Centre Travel Group Limited SBP: Share based payments FTSE: Financial Times Stock Exchange STIs: Short-term incentives FY: The fiscal year LTIs: Long-term incentives GRR: Global Recovery Rights CEO Group: FLT’s global executive team, consisting of Graham Turner, Adam Campbell, Chris Galanty, James Kavanagh and Greg Parker I am pleased to present your company’s FY25 remuneration report. In this column 12 months ago, I noted that the year to June 2024 saw a long-awaited and much welcomed - return to a degree of normalcy in our industry, as demand for travel continued to take off across both the leisure and corporate sectors. Unfortunately, this return to normalcy turned out to be relatively short-lived, although the challenges we encountered during FY25 were largely cyclical and paled in comparison to those we and our people experienced during and immediately after the pandemic. As highlighted elsewhere in this report, our company again delivered record TTV - a notable achievement in the prevailing trading conditions - but it fell short of achieving its profit growth targets. This means that our KMP forfeited the majority of their short-term incentives (STIs) for the year and did not achieve the profit margin related key performance indicator (KPI) needed to unlock the deferred incentive plan (DIP) that was in place during FY25. That does not, however, mean that they - and our people at all levels - did not make valuable contributions. We recognise and appreciate their commitment and dedication, which often comes to the fore at difficult times, and once again, thank them for their efforts. ONGOING FOCUS ON ATTRACTION AND RETENTION As Gary Smith noted in his introduction to this annual report, the most satisfying and important investments we make in any given year are in our people. These are genuine, long-term investments that start with attracting the right talent and extend through the development of their careers, as we strive to help them advance the skills needed to grow our business and create sustainable value for our shareholders. Naturally, remuneration plays a key role in that journey and in ensuring key people are retained, rewarded appropriately for their achievements and develop long-term careers with us. While we continue to refine our remuneration systems and offerings to ensure they remain fit-for-purpose and attractive in a highly competitive jobs market, our over-arching objectives in this area are again unchanged. FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 16 For personal use only
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In essence, we aim to: • Attract and retain the right people. This has always been a strength, as illustrated by our executive team’s tenure and varied career development paths; • Recognise and reward people appropriately for their contributions in growing the business and helping it achieve the long-term strategic objectives that will deliver sustainable growth in shareholder value; • Deliver simple, sensible and transparent incentive structures that are measurable and aligned to these strategic objectives; and • Further align our people’s interests to those of shareholders by providing ownership opportunities through share plans and incentive programs. This ownership ensures our people adopt the behaviours and implement the strategies that deliver long-term benefits for stakeholders, rather than over-indexing on short-term performance. The first bullet-point above is very important in the current context. The value of retaining world class talent and the intellectual property that comes with it is critical in a challenging climate, which is why we work to ensure that fixed pay for senior executives is positioned around the market median and that further upside is available via short and long-term incentive programs. Of course, it is also critical that our remuneration systems are understood and accepted, so we continue to engage with key stakeholders to enhance this understanding and to consider any feedback. This is a genuine two-way conversation, and several changes have been made to our remuneration structures over the years after these discussions, including the introduction of a cap on executive STI earnings. Generally, shareholders have responded positively to our company-specific remuneration system and the policies, beliefs and governance structure which underpin it, as evidenced by the strong endorsement this report has traditionally received from shareholders at our Annual General Meetings. To date, the largest vote against our report was 5.85% in 2007. A SIMPLE SYSTEM THAT IS PURPOSE-BUILT AND ALIGNED TO FLT’S STRATEGIC OBJECTIVES As a company, we value common-sense over conventional wisdom. This applies to all areas of our business and is very clearly illustrated in our remuneration structures, which are purpose-built to align to our specific requirements, rather than off-the-shelf offerings designed to suit companies with vastly different structures, objectives, cultures and beliefs. In essence, our remuneration packages for key executives during FY25 typically consisted of four components: • Fixed pay, including superannuation; • Variable STIs, which are tied to measurable and pre- determined targets, capped at 30% of fixed pay during FY25 and not guaranteed or paid in part of full; • The equity- based LTRP, a purpose built program introduced to encourage and reward a small group of key executives for continuing their careers with FLT for the long-term. This is first and foremost a retention program and its has been enormously successful in achieving this objective; and • The equity-based DIP, which was introduced during FY25 and targeted at a select group of very senior executives who could directly influence group profit and TTV growth. The DIP was the only major change to our remuneration structures for FY25 and it was introduced to serve two very clear purposes: 1. To help ensure that the packages we offered our key executives were competitive- which was critically important given that benchmarking indicated that an increase was necessary to bring our remuneration offerings closer in line with our peers; and 2. To fully reward executives for achieving an underlying 2% PBT margin, while continuing to grow the business Given that FLT did not achieve the targets required to trigger DIP payments to its people, it was unsuccessful in achieving the primary objectives listed above and, after consultation and analysis, it has now been scrapped for FY26. STRUCTURAL ENHANCEMENTS INTRODUCED FOR FY26 As a result, the company intends to make further enhancements and modifications during FY26 with a view to further simplifying and enhancing its remuneration structures. These changes include: • Increasing the cap on STIs to 75% of fixed remuneration for KMP, subject to the company overall achieving an underlying profit gateway. This group- wide profit gateway will encourage executives to act in the company’s best interests, rather than simply prioritising profit growth within their own business; • Introducing non-financial people and culture metrics, with the board able to moderate future STI outcomes down by up to 20% if performance against these metrics is deemed unacceptable; and • The introduction of a more conventional, equity-based LTI to replace the LTRP FLT plans to phase the current LTRP out over a three-year period. Given that most KMP are currently eligible to receive up to 30% of their fixed pay via the LTRP, this will typically mean that 10% reductions will take place over each of the next three years, with these reductions offset by corresponding LTI increases. The new LTIs will have a three-year performance period and will be built around three measurable KPIs: • Earnings per share (EPS) growth; • Total shareholder return (TSR) relative to peers; and • TTV growth. These broader metrics mean it will be more closely aligned to traditional LTI structures than its predecessor, the LTRP, while still focusing on participants on areas that the company considers important and that are aligned to its strategic objectives. It will also ensure that if our executives do well, our shareholders will also do well. BOARD COMPOSITION As is the case in all key areas throughout the business, FLT continues to refine its remuneration systems and structures to ensure they remain fit-for-purpose and are aligned with the company’s strategic objectives and shareholders’ interests. Changes that are being made in FY26 are designed to strengthen this alignment, while also incorporating some of the features that are typically found in more traditional remuneration systems and structures. Thank-you for your ongoing support of our company. FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 17 For personal use only
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REMUNERATION - KEY QUESTIONS How is FLT’s performance reflected in FY25 remuneration outcomes? The reward framework aims to align our employees interests with those of our shareholders and stakeholders. The remuneration outcomes reflect a pay-for-performance approach, aligned to the principle that “what gets rewarded gets done”. Short term incentive: The Group’s financial performance across its various business and regions delivered mixed results during the reporting period, with underlying PBT of $289m down from $320m in FY24. Despite a solid start to the year, performance in the second half was adversely affected by a range of factors including underperformance and additional non-recurring costs in Asia, as well as significant impacts from geopolitical unrest and broader macroeconomic uncertainty. As a result, STI outcomes for KMP varied in line with business performance, ranging from nil to 31 per cent of the maximum available. For all KMP, the maximum STI opportunity is equivalent to 30 per cent of fixed remuneration. Deferred Incentive Plan: The performance period for FY25 DIP completed on 30 June 2025. The DIP was subject to a TTV growth rate which was exceeded with a record TTV of $24.5b in FY25, up from $23.7b in FY24. The Group underlying PBT margin of 1.2% was below the target threshold and as a result there is nil vesting. What changes were made to remuneration in FY25? Fixed pay: Informed by benchmarking and as disclosed in the 2024 Notice of AGM, effective 1 December 2024 the fixed remuneration for Graham Turner, Group CEO & MD was increased from $807,185 to $1,200,000 per annum. The Australia based executives received the legislated increase in superannuation. Short-term incentives: For FY25, while annual performance targets were established for the STI, the incentive was delivered through a split-period structure. The first half payment, representing 30% of the maximum full-year opportunity, was based on performance from 1 July to 31 December 2024 and forecasted outcomes for the full year. The second half payment was determined based on the final FY25 results, less any amount paid in the first half. Deferred incentive plan: Informed by benchmarking, an equity-based deferred incentive plan was introduced in FY25. Executive KMP have a DIP target of 70 per cent of fixed pay, with the exception of Chris Galanty who has 20 percent due to his participation in the grandfathered BOS Multiplier Programme. The DIP is delivered in performance rights which is subject to a TTV growth gate opener and a Group underlying PBT margin performance hurdle, with a further 12-month deferral period. Long-term incentives: No changes were made to the LTRP. Non-Executive Director Fees: Following a benchmarking review the Board resolved to make the following changes to Non-Executive Director fees, effective 1 July 2024: > Increase the Board Chair fee from $301,807 to $350,000 per annum. > Increase the Board Committee member fee from $176,349 to $185,000 per annum. This is a single fee payable to each Non-Executive Director and covers any and all Committee memberships. REMUNERATION - KEY QUESTIONS FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 18 For personal use only
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Are any changes planned for FY26? Given the overall full-year performance fell below expectations, in some cases no STI would have been payable had a traditional full-year assessment applied. As a result, for FY26 the STI will revert to a single annual performance period and incentive payment structure. An annual comprehensive review of executive remuneration is conducted to ensure the framework remains fit for purpose. The Board and Management continue to support last year’s decision to increase the incentive opportunity for KMP. However, to enhance simplicity and clarity, they have resolved to consolidate the incentive structure into a single short-term incentive and long-term incentive, thereby discontinuing the DIP and LTRP as separate stand- alone plans. Short-term incentive: > Maximum STI opportunity: Increasing from 30 percent to 75 per cent of fixed remuneration for KMP. > Gateway: STI has previously been subject to the PBT gateway, this varied between business division and region. From FY26, all KMP will be subject to the Group underlying PBT gateway set at 90 per cent of budget, such that no STI is payable unless the Group gateway is met or exceeded, regardless of business division or regional performance. > Moderation: Non-financial People and Customer metrics are being introduced into the STI framework. The Board can moderate the STI outcome down by up to 20 per cent if performance against these measures is deemed unsatisfactory. This ensures that STI outcomes reflect not only results but also leadership behaviour, employee engagement, culture, and customer experience. The Board’s discretion can be applied regardless of financial performance. > Compliance: Mandatory compliance and code of conduct training and obligations must be completed before any STI is payable. Long-term incentive: > Maximum LTI opportunity: 100 per cent of fixed remuneration for KMP. > Performance metrics: The LTI will be subject to three performance metrics. Relative Total Shareholder Return (TSR), Earnings Per Share (EPS) and an internal measure of TTV growth. > Performance period: Three-year performance period. > Service condition: The current LTRP, which is not a traditional LTI and does not have performance-related hurdles, will be phased out over the next three years. For employees with a current 30 per cent LTRP, this will reduce by 10 per cent each year with a corresponding increase in the LTI performance metrics. By exception, Adam Campbell has a 50 per cent LTRP, which will reduce to 35 per cent in FY27 and 15 per cent in FY28, with full CEO LTI alignment at 100 per cent in FY29. Where does FLT’s remuneration sit relative to market? Fixed pay for executives is positioned around the market median, providing a competitive and equitable base salary. Importantly, we recognise and reward exceptional performance with total remuneration opportunities extending up to the 75th percentile, reflecting our commitment to incentivising achievement of business growth and customer success, outcomes that should also deliver sustainable growth in shareholder value. What proportion of remuneration is performance-based? The graph below sets out the mix of maximum remuneration for the Group CEO and other Executive KMP for FY25: REMUNERATION - KEY QUESTIONS FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 19 For personal use only
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Are STI payments capped? Yes, for FY25 an Executive’s STI is capped at 30 per cent of fixed pay. Are any STI payments deferred? There is currently no STI deferral. Are there any clawback provisions for incentives? Management and the Board may adjust or cancel incentive payments for any reason prior to disbursement at its sole discretion. Further, it may initiate action to recover incentives already paid (clawback) in circumstances including, but not limited to, material financial misstatements, (intentional or reckless), misconduct or unlawful conduct detrimental to the Group, or gross negligence. Does FLT buy shares or issue new shares for equity based plans? The Board has discretion to issue new securities or buy existing securities on-market. Can equity plan participants hedge their unvested awards? Consistent with the Corporations Act 2001, participants are prohibited from hedging their unvested performance rights. REMUNERATION - KEY QUESTIONS FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 20 For personal use only
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REMUNERATION REPORT - AUDITED This remuneration report has been prepared in accordance with section 300A of the Corporations Act 2001 and the information has been audited as required by section 308(3C) of the Corporations Act 2001. CONTENTS Section Page KMP for FY25 21 Executive remuneration outcomes for FY25 and the link to business performance 22 Executive KMP remuneration framework 23 Equity instrument disclosure 30 Remuneration governance 33 NED remuneration 34 Additional required disclosures 34 KMP FOR FY25 This report covers the KMP remuneration details for the company and consolidated entity consisting of FLT and the entities it controlled for the year ended 30 June 2025. Board and KMP are as defined by AASB 124 Related Party Disclosures and are responsible for planning, directing and controlling the entity’s activities. For FY25, the KMP were: NON-EXECUTIVE DIRECTORS TERM Gary Smith Chair Full Year John Eales Non-Executive Director Full Year Robert Baker Non-Executive Director Full Year Colette Garnsey Non-Executive Director Full Year Kirsty Rankin Non-Executive Director Full Year EXECUTIVE DIRECTOR CURRENT FLT ROLE FIRST FLT ROLE TENURE TERM Graham Turner CEO CEO 44 years Full Year EXECUTIVE KMP CURRENT FLT ROLE FIRST FLT ROLE TENURE TERM Adam Campbell CFO and CEO - Global Business Services Risk & Audit 18 years Full Year Chris Galanty CEO - Corporate Flight Centre Putney (UK) 28 years Full Year James Kavanagh CEO - Leisure Campus Travel Account Manager 21 years Full Year Greg Parker CEO - Supply Air Contracting (Australia) 22 years Full Year PARENT ENTITY With the exception of Chris Galanty, the executives listed above were also Parent Entity executives. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 21 For personal use only
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EXECUTIVE REMUNERATION OUTCOMES FOR FY25 AND THE LINK TO BUSINESS PERFORMANCE CURRENT AND PAST FINANCIAL PERFORMANCE The table below provides summary information on the Group’s and shareholder earnings for the five years to 30 June 2025. FY25 FY24 FY23 FY22 FY21 Profit / (loss) before income tax $212.6m $219.7m $70.5m ($377.8m) ($601.7m) Underlying profit / (loss) before income tax¹ $289.1m $320.4m $138.8m ($360.9m) ($507.1m) Profit / (loss) after income tax $108.2m $139.2m $47.4m ($287.2m) ($433.5m) Interim dividend 11.0c 10.0c — — — Final dividend 29.0c 30.0c 18.0c — — Earnings / (loss) per share (basic) 49.6c 63.7c 23.1c (142.4c) (217.5c) Share price at 30 June $12.48 $20.18 $19.05 $17.36 $14.85 (Decrease) / Increase in share price % (38) % 6% 10% 17% 34% 1 Underlying profit / (loss) before tax is a non-IFRS measure and is unaudited. Refer to note A1 segment information for reconciliation of underlying to statutory profit / (loss) before tax. SUMMARY OF FY25 REMUNERATION Group CEO remuneration Fixed pay: Informed by benchmarking and as disclosed in the 2024 Notice of AGM, effective 1 December 2024 the fixed remuneration for Graham Turner was increased from $807,185 to $1,200,000. STI: Graham Turner received FY25 STI outcome of $8,860, which is three per cent of the maximum STI opportunity, and is down from $147,424 in FY24. Fixed pay for Executive KMP Fixed pay: No Executive KMP received a fixed pay increase for FY25, with the exception of the superannuation increase in Australia. Previously, what was referred to as ‘targeted remuneration packages’ was split as 90 per cent base salary plus super and a 10 per cent at risk component. This was combined as the fixed pay component of the remuneration package. Incentives for Executive KMP STI: The Group’s financial performance across its various businesses and regions delivered mixed results during the reporting period, with underlying PBT of $289m, down from $320m in FY24. This financial performance resulted in an average FY25 STI outcome of 11% of the maximum STI opportunity, noting the individual outcomes are based on underlying PBT targets which vary between business and region. DIP: The performance period for the FY25 DIP completed on 30 June 2025. The DIP was subject to a TTV growth gate which was exceeded with a record TTV of $24.5b in FY25, up from $23.7b in FY24. The Group underlying PBT margin of 1.2% was below the target threshold and as a result there is nil vesting. LTRP: The LTRP award granted in July 2022, with a performance period ending 30 June 2025, is subject to a continued service condition. The rights are schedule to vest during the August 2025 trading window. EXECUTIVE KMP STI AWARDS IN FY25 STI MAX % OF FIXED REMUNERATION ACTUAL STI % OF MAX FORFEITED STI % OF MAX ACTUAL STI $ Graham Turner 30 % 3 % 97 % $8,860 Adam Campbell 30 % 31 % 69 % $103,561 James Kavanagh 30 % 11 % 89 % $31,688 Chris Galanty 30 % — % 100 % $0 Greg Parker 30 % 1 % 99 % $2,637 DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 22 For personal use only
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STATUTORY REMUNERATION & FRAMEWORK The following table shows the remuneration paid and payable to Executive KMP for the year ended 30 June 2025. Remuneration amounts are determined in accordance with the Corporations Act 2001. PAID AND PAYABLE REMUNERATION SHORT-TERM EMPLOYEE BENEFITS POST EMPLOYMENT BENEFITS CASH SALARY AND FEES1 SHORT TERM INCENTIVE BOS INTEREST2 SUPERANNUATION TOTAL PAID AND PAYABLE REMUNERATION NAME $ $ $ $ $ EXECUTIVE DIRECTOR Graham Turner 2025 1,007,450 8,860 — 29,932 1,046,242 2024 779,786 147,424 — 27,399 954,609 EXECUTIVE KMP Adam Campbell 2025 1,086,833 103,561 — 29,932 1,220,326 2024 1,086,833 203,503 — 27,399 1,317,735 Chris Galanty 2025 723,632 — 969,854 — 1,693,486 2024 695,698 76,514 1,067,736 — 1,839,948 James Kavanagh 2025 917,601 31,688 — 29,932 979,221 2024 917,601 105,226 — 27,399 1,050,226 Greg Parker 2025 875,850 2,637 — 29,932 908,419 2024 875,850 212,581 — 27,399 1,115,830 TOTAL KMP COMPENSATION (EXCLUDING NON-EXECUTIVE DIRECTORS AND LONG TERM BENEFITS) 2025 4,611,366 146,746 969,854 119,728 5,847,694 2024 4,355,768 745,248 1,067,736 109,596 6,278,348 1 Cash salary and fees includes accrued annual leave used and paid out as salary during the year. Chris Galanty’s remuneration is disclosed in AUD and is therefore subject to foreign exchange fluctuations. There was no increase in underlying GBP cash salary and fees for Chris Galanty for FY25. 2 BOS interest shown above does not take into account financial liabilities (principal repayments) that may relate to this investment. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 23 For personal use only
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STATUTORY REMUNERATION & FRAMEWORK (CONTINUED) LONG-TERM EMPLOYEE BENEFITS TOTAL PAID AND PAYABLE REMUNERATION LONG SERVICE LEAVE¹ BOS MULTIPLIER PROVISION² EQUITY SETTLED PLANS3 TOTAL REMUNERATION PERCENTAGE PERFORMANCE RELATED4 NAME $ $ $ $ $ % EXECUTIVE DIRECTOR Graham Turner 2025 1,046,242 254,170 — — 1,300,412 1 % 2024 954,609 32,002 — — 986,611 15 % EXECUTIVE KMP Adam Campbell 2025 1,220,326 96,267 — 544,994 1,861,587 6 % 2024 1,317,735 19,933 — 622,881 1,960,549 10 % Chris Galanty 2025 1,693,486 — 839,756 244,994 2,778,236 65 % 2024 1,839,948 — 733,255 345,393 2,918,596 64 % James Kavanagh 2025 979,221 89,123 — 284,945 1,353,289 2 % 2024 1,050,226 66,397 — 319,775 1,436,398 7 % Greg Parker 2025 908,419 131,327 — 259,728 1,299,474 — % 2024 1,115,830 (16,808) — 273,162 1,372,184 15 % TOTAL KMP COMPENSATION (EXCLUDING NON-EXECUTIVE DIRECTORS) 2025 5,847,694 570,887 839,756 1,334,661 8,592,998 2024 6,278,348 101,524 733,255 1,561,211 8,674,338 1 Long Service Leave (LSL) includes amounts accrued and taken during the year. LSL provisions are linked to overall executive remuneration (which consists of the short-term benefits noted above) and, therefore, vary from year to year. Movements are based on total salary which is dependent on performance during the year. Negative amounts are sometimes recognised, as provisions naturally adjust in periods where incentives are not earned and the rate used for LSL calculation reduces compared to prior periods. 2 BOS Multiplier program provisions are linked to profit and, therefore, vary from year to year. Information on the BOS program is included under the Business Ownership Scheme (BOS) Multiplier Program - grandfathered arrangement for Executive KMP. 3 FY25 Share-based payments represent amounts expensed in relation to rights granted under LTRP Grant 2023 (Grant 8) and LTRP Grant 2024 (Grant 9) and LTRP (Grand 10). A. Campbell, J. Kavanagh and G.Parker include matched rights granted under the ESP (refer Employee Share Plan (ESP)/General Terms). FY24 Share-based payments represent amounts expensed in relation to rights granted under LTRP Grant 2022 (Grant 7), LTRP Grant 2023 (Grant 8), LTRP Grant 2024 (Grant 9) and PCRP (refer Legacy Remuneration Arrangements). A. Campbell, J. Kavanagh, G.Parker include matched rights granted under the ESP (refer Employee Share Plan (ESP) / General Terms). 4 Performance related percentage calculated as the sum of the STI and BOS interest, and BOS Multiplier divided by total remuneration. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 24 For personal use only
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EXECUTIVE KMP REMUNERATION FRAMEWORK FLT’S REMUNERATION PHILOSOPHY FLT has a simple remuneration system that is tied to its core philosophies and strategic objectives. This remuneration framework is specifically designed to suit FLT’s goals, although it aligns with market practice by being: • Competitive, which allows the company to attract and retain high calibre people. • Aligned with participants’ interests, reflecting responsibilities and rewarding achievement in creating short and long- term shareholder value. • Acceptable to shareholders and strongly aligned with their interests. • Transparent, with clear targets set and achievements against these targets are measurable; and • Tied to the company’s longer-term objectives, capital management strategies and structures. Remuneration structures for Executive KMP are also carefully tailored to ensure they include an appropriate mix of: • Fixed pay; and • Variable pay with incentives ensuring a strong short and long-term alignment between executive and shareholder interests. Measurable, outcome-based KPIs underpin FLT’s STI programs and its overall remuneration framework globally. FLT believes that if the right outcomes are rewarded via its STIs, the company, its people, its customers and its shareholders will benefit. FLT’s belief in the value of using quantitative and outcome-based STIs to drive desired outcomes is articulated in the company’s core philosophies, which are included in this Annual Report. The company’s philosophies also underline FLT’s belief in the importance of providing its people with ownership opportunities and the chance “to share in the company’s success through outcome-based incentives, profit share, BOS and Employee Share Plans”. Accordingly, ownership opportunities are built into the company’s remuneration structures to encourage FLT’s people at all levels to behave as long-term stakeholders in the company and to adopt the strategies, disciplines and behaviours that create longer term value. REMUNERATION DELIVERY The graph below sets out the general remuneration structure for Executive KMP, highlighting the remuneration delivery between cash and equity components and spanning different time horizons, encouraging an ownership mindset and aligning the Executives’ interests with those of our shareholders. Note that Graham Turner, the Group CEO and Founder, does not participate in the LTRP. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 25 For personal use only
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FY25 EXECUTIVE KMP REMUNERATION COMPONENTS FIXED REMUNERATION Purpose To attract and retain high calibre employees capable of delivering business performance. Components Fixed remuneration includes cash salary, compulsory employer superannuation or pension contributions and any salary sacrificed items. Benchmarking The Board engages independent remuneration advisors, as required, to provide external benchmarking for executive roles. For Executive KMP, benchmarking primarily draws on two ASX- listed comparator groups: • Market capitalisation peer group: comprised of companies with a 12-month average market capitalisation ranging from 50%-200% of FLT’s market capitalisation. • Industry peer group: comprised of companies within the Consumer Discretionary GICS sector. For the London-based corporate CEO role, the market data provided was sourced from publicly disclosed remuneration arrangements for CEOs of organisations listed on the UK AIM and FTSE SmallCap index. STI Purpose Motivate and reward executives for achieving annual business goals and increasing shareholder value by meeting or exceeding profit targets. Targets are typically based on year-on-year growth in underlying PBT, aligning rewards with the delivery of sustainable shareholder value. Value Executive KMP have a maximum annual STI opportunity of 30% of fixed remuneration. Performance measures Group CEO Global FLT PBT growth. CFO & CEO GBS A combination of global FLT PBT growth and GBS budget and cost savings. CEO, Corporate A combination of global FLT PBT growth and global Corporate PBT growth. CEO, Leisure A combination of global Leisure PBT growth and regional (ANZ) PBT growth. CEO, Supply A combination of global FLT PBT growth and global Supply PBT. Delivery Annual awards are paid in cash, there is currently no deferral. Clawback Management and the Board may adjust or cancel incentive payments for any reason prior to disbursement at its sole discretion. Further, it may initiate action to recover incentives already paid (clawback) in circumstances including, but not limited to financial misstatements, (intentional or reckless), misconduct or unlawful conduct detrimental to the Group, or gross negligence. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 26 For personal use only
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FY25 EXECUTIVE KMP REMUNERATION COMPONENTS (CONTINUED) LTRP Purpose Assist in the retention of executive talent; enhancing the level of ownership to focus executive attention on driving sustainable long-term growth; and align the interests of executives with those of security holders. Value The maximum LTRP opportunity for FY25 was equivalent to: CFO & CEO - GBS 50% of fixed remuneration CEO's OF CORPORATE, LEISURE & SUPPLY 30% of fixed remuneration Instrument Awards under this plan are made in the form of performance rights. A performance right is a right to acquire one fully paid FLT security provided the service condition is met. No dividends/distributions are paid on unvested, or unexercised, LTRP awards. Grant value / price The volume weighted average price over the 10 trading days following the release of FLT’s full year results. Performance condition The LTRP is subject to continued service over the performance period. Given its purpose as a retention tool, there are no performance-related conditions. Performance period Performance is measured over a three-year period. The FY25 grant has a performance period commencing 1 July 2024 and ending 30 June 2027. Vesting / delivery The Board has discretion to issue new securities or buy existing securities on-market. Termination / forfeiture Resignation or dismissal: all unvested performance rights are forfeited. Clawback The Board has overarching discretion over the LTRP and can “alter, modify, add to or repeal” any provisions of the LTRP Plan Rules. Management and the Board may adjust or cancel incentive payments for any reason prior to disbursement at its sole discretion. Further, it may initiate action to recover incentives already paid (clawback) in circumstances including but not limited to, material financial misstatements (intentional or reckless), misconduct or unlawful conduct detrimental to the Group, or gross negligence. Hedging Consistent with the Corporations Act 2001, participants are prohibited from hedging their unvested performance rights. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 27 For personal use only
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FY25 EXECUTIVE KMP REMUNERATION COMPONENTS (CONTINUED) DIP Purpose The DIP was introduced for FY25 to serve two very clear purposes: 1. Ensuring the remuneration package we offer our DIP participants is competitive - which is critically important. Benchmarking conducted in FY24 indicated that an increase was necessary to bring our remuneration offerings closer in line to the median of our peers; and 2. To reward our DIP participants for delivering our strategic objective - the underlying 2% PBT margin - while continuing to grow the business. Value1 The FY25 DIP opportunity for KMP was equivalent to: TARGET 70% of fixed remuneration MAXIMUM 105% of fixed remuneration Instrument Awards under this plan are made in the form of performance rights. A performance right is a right to acquire one fully paid FLT security provided the service condition is met. Grant value / price The volume weighted average price over the 10 trading days following the release of FLT's full year results. Performance condition Two performance measures apply to the DIP grants made during FY25: TTV Growth: Year-on-year TTV growth is required, acting as a gate opener, before any incentive under the deferred incentive plan may be awarded. This is to strike a balance and ensure the focus on PBT margin is not to the detriment of TTV growth. PBT Margin: PBT margin is used as it assesses operational efficiency by measuring how effectively the Group manages operating expenses and generates profit relative to revenue. The vesting schedule set out below reflects the Board's view that vesting ought to commence at a 1.6 percent underlying profit margin, ensuring that participants are rewarded for delivering efficient growth - specifically, achieving TTV growth alongside improved margins. PBT Margin % of RIGHTS VESTING Below 1.6% Nil 1.6% 30% 1.6% - 2.0% 30% - 100% (prorated) 2.0% - 2.5% 100% - 150% (prorated) Performance period Performance is measured over a 12-month period, with rights then deferred for an additional 12 months before vesting. Vesting / delivery The Board has the discretion to issue new securities or buy existing securities on-market. Termination / forfeiture Resignation or dismissal: all unvested performance rights are forfeited. Clawback The Board has overarching discretion over the DIP and can "alter, modify, add to or repeal" any provisions of the Plan Rules. Management and the Board may adjust or cancel incentive payments for any reason prior to disbursement at its sole discretion. Further, it may initiate action to recover incentives already paid (clawback) in circumstances including, but not limited to, material financial misstatements (intentional or reckless), misconduct or unlawful conduct detrimental to the Group, or gross negligence. Hedging Consistent with the Corporations Act 2001, participants are prohibited from hedging their unvested performance rights. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 28 For personal use only
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LEGACY REMUNERATION ARRANGEMENTS Business Ownership Scheme (BOS) Multiplier Program - grandfathered arrangement for Executive KMP To ensure that leaders of some key businesses remained in their roles for the long-term, the company offered a BOS Multiplier program, a tailor-made award. Under this program, invited senior executives became entitled to multiples of 5, 10, and up to 15 times the BOS return in the last full financial year before their BOS note was redeemed, provided they achieved tenure-related hurdles. One current Executive KMP, Chris Galanty, continues to participate in the BOS Multiplier program. Mr Galanty’s BOS (CG BOS) was hibernated for the period 1 January 2020 to 30 June 2022 (CG Hibernation Period). Mr. Galanty elected to repay the face value of the CG BOS at the end of the Hibernation Period to Flight Centre and the CG BOS (including its relevant entitlements) recommenced in accordance with its amended and restated terms, in particular: • if the CG BOS is finally redeemed after its fifth anniversary but before its tenth anniversary, Mr. Galanty will be entitled to a one-off payment equivalent to the CG BOS return for FY19 multiplied by five, being the applicable redemption multiple; • if the CG BOS is finally redeemed after its tenth anniversary but before its fifteenth anniversary, Mr. Galanty will be entitled to a one-off payment equivalent to the CG BOS return for the last full financial year before the final redemption date, multiplied by 10, being the applicable redemption multiple; • if the CG BOS is not redeemed by the end of FY28 (when it must then be redeemed) a final redemption multiple of 15 multiplied by CG BOS return for the last full financial year will be payable; and • if the CG BOS is finally redeemed after its fifth anniversary but before its fifteenth anniversary (FY28) as a result of Mr. Galanty transferring into a comparable or more senior role within Flight Centre, an affiliate or a related body corporate or as a result of the sale of any material and relevant part of the business (collectively the Relevant Actions), then the redemption multiple payable to Mr. Galanty will be the number of full years the CG BOS note has been held as at the date of the Relevant Action multiplied by the relevant interest earnings of the CG BOS for the last full financial year before the redemption date. The BOS’s Face Value, being the amount paid by the holder to purchase the BOS, is guaranteed – subject to the issue of a designation notice, it cannot decrease in value – and will always be deducted from the final redemption multiple payment. Provisions for these future payments are taken up annually and the amounts are shown in the KMP remuneration table. These provisions can be positive or negative as the company adjusts accruals to meet the anticipated future obligation. BOS MULTIPLIER PROGRAM EXECUTIVE KMP GRANT DATE VESTED FORFEITED FINANCIAL YEARS IN WHICH BOS RETURN MULTIPLE MAY VEST MINIMUM TOTAL BOS RETURN MULTIPLE1 MAXIMUM TOTAL BOS RETURN MULTIPLE1 BALANCE AT 30 JUNE 2025 % % $ Chris Galanty 1 July 2010 100 % — 2016 - 2028 5 times 15 times 10,214,107 1 The BOS Holder will be entitled to be paid an amount equivalent to his or her BOS return for the last full financial year before the redemption date, multiplied by the applicable redemption multiple. The BOS return multiple is dependent on profit during the last full financial year before the date of redemption, neither the minimum nor maximum amount can be reliably estimated until redeemed. SERVICE AGREEMENTS No fixed-term service agreements are in place with FLT’s directors or KMP. Senior executives are bound by independent and open-ended employment contracts that are reviewed annually. The company requires KMP to provide at least 12 weeks’ written notice of their intention to leave FLT. If FLT gives notice, it must also provide at least 12 weeks’ written notice. Termination payments to executives and other employees who are displaced as a result of their roles becoming redundant are assessed on a case-by-case basis and are capped by law. FLT is not bound, under the terms of any executive’s employment contract, to provide termination benefits beyond those that are required by law. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 29 For personal use only
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EQUITY INSTRUMENT DISCLOSURES RIGHTS HELD DURING THE YEAR Valuation of rights The fair value of base and matched rights (from Grant 9 there is no split of base and matched rights and participants are granted rights, referred to as base rights below) under the plan is estimated at the date of grant using a fixed dollar amount of rights granted for each participant and the Black-Scholes option pricing model. The fair value is allocated equally over the period from grant date to vesting date and is included in the remuneration report compensation tables. Details of rights provided as remuneration to KMP are set out below: BASE RIGHTS MATCHING RIGHTS GRANT NUMBER GRANT DATE DATE/YEAR VESTED AND EXERCISABLE1 EXPIRY DATE VALUE PER RIGHT AT GRANT DATE2 DATE/YEAR VESTED AND EXERCISABLE1 EXPIRY DATE VALUE PER RIGHT AT GRANT DATE2 LTRP 4b 1 July 2018 August 2021 1 July 2030 $54.26 August 2023 1 July 2030 $51.58 LTRP 5b 1 July 2019 August 2021 1 July 2030 $42.06 August 2024 1 July 2030 $38.84 LTRP 6 1 July 2020 August 2023 1 July 2030 $11.30 August 2023 1 July 2030 $11.30 LTRP 6b 1 July 2020 August 2021 1 July 2030 $11.30 August 2023 1 July 2030 $11.30 LTRP 7 1 July 2021 August 2024 1 July 2030 $17.27 August 2024 1 July 2030 $17.27 LTRP 8 1 July 2022 August 2025 1 July 2030 $17.02 August 2025 1 July 2030 $17.02 LTRP 9 1 July 2023 August 2026 1 July 2030 $20.59 LTRP 10 1 July 2024 August 2027 1 July 2030 $19.94 DIP FY25 1 July 2024 June 2025 1 June 2026 $16.62 1 The vesting date is the day the Company releases full year financial results to the ASX in the year of vesting. 2 The maximum value of each grant can be calculated by multiplying the fair value of the rights on the grant date by the number of rights granted during the relevant year. This amount represents the maximum value which will be expensed over the performance period. The minimum value is nil if the service conditions are not met. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 30 For personal use only
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RIGHTS HOLDINGS The number of rights over ordinary FLT shares held during the financial year by FLT’s group KMP, including the number granted, vested, exercised and forfeited is set out below: GRAHAM TURNER FY25 DIP1 Base Rights — — 27,329 — — — — 27,329 454,120 ADAM CAMPBELL FY25 DIP1 Base Rights — — 37,693 — — — — 37,693 626,336 LTRP Grant 10 Base Rights — — 26,923 — — — — 26,923 536,820 LTRP Grant 9 Base Rights — 27,053 — — — — — 27,053 — LTRP Grant 8 Base — 16,335 — — — — — 16,335 — Match — 16,335 — — — — — 16,335 — LTRP Grant 7 Base — 15,712 — — 15,712 (15,712) — — — Match — 15,712 — — 15,712 (15,712) — — — PCRP Match 1 35,000 — — — — (35,000) — — — Match 2 — 35,000 — — 35,000 (35,000) — — — CHRIS GALANTY FY25 DIP1 Base Rights — — 6,709 — — — — 6,709 111,482 LTRP Grant 10 Base Rights — — 10,063 — — — — 10,063 200,660 LTRP Grant 9 Base Rights — 13,439 — — — — — 13,439 — LTRP Grant 8 Base — 8,129 — — — — — 8,129 — Match — 8,129 — — — — — 8,129 — LTRP Grant 7 Base — 7,820 — — 7,820 (7,820) — — — Match — 7,820 — — 7,820 (7,820) — — — PCRP Match — 35,000 — — 35,000 (35,000) — — — EXECUTIVE KMP RIGHTS BALANCE AT 1 JULY 2024 BALANCE AT 30 JUNE 2025 VALUE OF RIGHTS GRANTED DURING THE YEAR $ VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER GRANTED NUMBER FORFEITED NUMBER VESTED NUMBER EXERCISED NUMBER VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER 1 The value of the DIP is at grant date. Targets were not achieved and no payments made. DIP has now concluded. The relevant portion of the expense relating to these rights was recognised during the year ended 30 June 2025. Refer to note D3. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 31 For personal use only
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RIGHTS HOLDINGS (CONTINUED) EXECUTIVE KMP RIGHTS BALANCE AT 1 JULY 2024 BALANCE AT 30 JUNE 2025 VALUE OF RIGHTS GRANTED DURING THE YEAR $ VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER GRANTED NUMBER FORFEITED NUMBER VESTED NUMBER EXERCISED NUMBER VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER JAMES KAVANAGH FY25 DIP1 Base Rights — — 31,981 — — — — 31,981 531,421 LTRP Grant 10 Base Rights — — 13,706 — — — — 13,706 273,283 LTRP Grant 9 Base Rights — 13,767 — — — — — 13,767 — LTRP Grant 8 Base — 7,931 — — — — — 7,931 — Match — 7,931 — — — — — 7,931 — LTRP Grant 7 Base — 7,017 — — 7,017 (7,017) — — — Match — 7,017 — — 7,017 (7,017) — — — PCRP Match — 20,000 — — 20,000 (20,000) — — — GREG PARKER FY25 DIP1 Base Rights — — 30,571 — — — — 30,571 507,992 LTRP Grant 10 Base Rights — — 13,102 — — — — 13,102 261,242 LTRP Grant 9 Base Rights — 13,158 — — — — — 13,158 — LTRP Grant 8 Base — 7,326 — — — — — 7,326 — Match — 7,326 — — — — — 7,326 — LTRP Grant 7 Base — 6,951 — — 6,951 (6,951) — — — Match — 6,951 — — 6,951 (6,951) — — — PCRP Match — 10,000 — — 10,000 (10,000) — — — 1 The value of the DIP is at grant date. Targets were not achieved and no payments made. DIP has now concluded. The relevant portion of the expense relating to these rights was recognised during the year ended 30 June 2025. Refer to note D3. DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 32 For personal use only
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SHAREHOLDING The number of ordinary shares held during the financial year by FLT’s directors and KMP is set out below: BALANCE AT THE START OF THE YEAR RECEIVED ON THE EXERCISE OF RIGHTS ESP PURCHASED SHARES ESP MATCHED SHARES VESTED OTHER CHANGES BALANCE AT THE END OF THE YEAR EXECUTIVE DIRECTOR Graham Turner 16,640,081 — — — 356,219 16,996,300 EXECUTIVE KMP1 Adam Campbell2 47,870 101,424 1,106 392 (91,546) 59,246 Chris Galanty 78,101 50,640 — — (53,000) 75,741 James Kavanagh2 95,406 34,034 1,859 876 (30,050) 102,125 Greg Parker2 90,644 23,902 743 176 (25,000) 90,465 1 Executive KMP share sales predominantly driven by tax liabilities. 2 A. Campbell, J. Kavanagh, and G. Parker participated in the ESP and were issued with ordinary shares under the same terms and conditions as all other ESP participants. At period end A. Campbell held 667 (2024: 541), J. Kavanagh held 1,566 (2024: 1,550) and G. Parker held 626 (2024: 445) held conditional matched rights that had been granted under the ESP but had not yet vested. EMPLOYEE SHARE PLAN (ESP) / GENERAL TERMS Under the ESP, eligible employees are granted a conditional right to one matched share for every two shares purchased (for cash consideration), subject to vesting conditions. To receive the matched shares, participants must hold the acquired shares for a period of two years and one month and still be employed with FLT at the end of that time. If the acquired shares are sold before the end of the vesting period, conditional rights to the matched shares are forfeited. The matched shares may be issued by FLT, purchased on-market or allocated from treasury shares. OPTIONS No options (i.e. a right to acquire a security upon payment of an exercise price) were granted as remuneration during FY25 and no unvested or unexercised options are held by Executive KMP as at 30 June 2025 (2024: Nil). REMUNERATION GOVERNANCE FLT’s Remuneration Nomination Committee (RNC) oversees and monitors executive remuneration and provides specific recommendations on remuneration and incentive structures, policies and practices and other employment terms for directors and senior executives as covered under the RNC Charter which is available on FLT’s website. To ensure independent remuneration-setting processes and outcomes, the Committee is comprised solely of NEDs, all of whom are, in the Board's opinion, independent. Other Directors and/or members of the senior management team may attend RNC meetings to provide information, reports, and updates to the Committee. The RNC is supported by local remuneration committees that operate within FLT’s key geographic divisions. These local committees generally meet quarterly and include the local MD, CFO and People & Culture leader. The RNC may engage external and independent remuneration advisors as required. No remuneration recommendations were sought or received from any advisor during the year. SECURITY TRADING POLICY FLT has a share trading policy which prohibits directors, senior executives and their closely connected persons from entering into margin loans, hedging or any other arrangement that would have the effect of limiting their exposure to risk in relation to an element of their remuneration that has not yet vested or has vested but remains subject to a holding lock. The policy is available on FLT’s website at https://www.fctgl.com/investors#governance-documents. . DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 33 For personal use only
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NON-EXECUTIVE DIRECTOR STATUTORY REMUNERATION The following table shows the remuneration paid and payable to Non-Executive Directors for the year ended 30 June 2025. Remuneration amounts are determined in accordance with the Corporations Act 2001. To preserve independence, NEDs receive fixed fees that reflect the positions’ demands and responsibilities. NED remuneration is not linked to performance, and NEDs are not eligible to participate in any incentive schemes or employee equity plans. FLT’s Constitution provides that NEDs may determine their own remuneration, but the total amount provided to all Directors (not including the Group CEO and any other Executive Directors) must not exceed the sum agreed by security holders at a general meeting. The maximum aggregate remuneration of $1.5m per annum was approved by shareholders at the 2024 AGM. ACTUAL REMUNERATION FOR NON-EXECUTIVE DIRECTORS: SHORT-TERM BENEFITS POST EMPLOYMENT BENEFITS TOTAL PAID AND PAYABLE REMUNERATIONCASH FEES SUPERANNUATION NAME YEAR $ $ $ Gary Smith 2025 320,068 29,932 350,000 2024 274,408 27,399 301,807 John Eales 2025 165,919 19,081 185,000 2024 158,873 17,476 176,349 Robert Baker 2025 165,919 19,081 185,000 2024 158,873 17,476 176,349 Colette Garnsey 2025 165,919 19,081 185,000 2024 158,873 17,476 176,349 Kirsty Rankin 2025 165,919 19,081 185,000 2024 158,873 17,476 176,349 TOTAL 2025 983,744 106,256 1,090,000 2024 909,900 97,303 1,007,203 ACTUAL SHAREHOLDING FOR NON-EXECUTIVE DIRECTORS: BALANCE AT START OF THE YEAR CHANGES BALANCE AT END OF THE YEARNAME Gary Smith 25,675 3,000 28,675 John Eales 13,438 — 13,438 Robert Baker 7,307 — 7,307 Colette Garnsey 7,453 — 7,453 Kirsty Rankin1 4,478 1,990 6,468 1 There is an opening balance adjustment due to a misstatement from prior year which has been corrected and carried through in the current year. This adjustment relates to 1,310 shares held in a nominee account that were acquired on 6 October 2023. LOANS TO KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES There were no loans provided to key management personnel and their related parties during the period (2024: $nil). End of remuneration report DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 34 For personal use only
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INDEMNIFICATION AND INSURANCE OF OFFICERS An Officers' Deed of Indemnity, Access and Insurance is in place for directors, KMP, the company secretary and some other executives. FLT has agreed to provide indemnification to the fullest extent permitted by law. Liabilities covered include legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the company or its controlled entities. Disclosure of premiums paid is prohibited under the insurance contract. No payment has been made to indemnify a director, KMP, the company secretary or other executives during or since the financial year. INDEMNIFICATION OF AUDITOR To the extent permitted by law, FLT has agreed to indemnify its auditor, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. PROCEEDINGS ON BEHALF OF THE COMPANY No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001. NON-AUDIT SERVICES The company may decide to employ the auditor on assignments additional to its statutory audit duties where the auditor's expertise and experience with the company and/or the group are important. Details of the amounts paid or payable to the auditor (Ernst & Young) for audit and non-audit services provided to the consolidated group during the year are set out in note F13. The board has considered the position and, in accordance with the advice received from the audit and risk committee, is satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the auditor’s provision of non-audit services did not compromise the Act’s independence requirements because none of the services undermine the general principles relating to auditor independence as set out in APES110 Code of Ethics for Professional Accountants. The audit and risk committee reviewed all non-audit services to ensure they did not impact the auditor’s impartiality and objectivity. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration, as required under section 307C of the Corporations Act 2001, is set out on page 36. ROUNDING OF AMOUNTS The company is of a kind referred to in Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the directors' report. Amounts in the directors' report have been rounded off in accordance with that Instrument to the nearest thousand dollars or, in certain cases, to the nearest dollar. This report is made in accordance with a directors’ resolution. G.F. Turner Director BRISBANE 27 August 2025 DIRECTORS’ REPORT CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 35 For personal use only
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 111 Eagle Street Brisbane QLD 4000 Australia GPO Box 7878 Brisbane QLD 4001 Tel: +61 7 3011 3333 Fax: +61 7 3011 3100 ey.com/au Auditor’s independence declaration to the directors of Flight Centre Travel Group Limited As lead auditor for the audit of the financial report of Flight Centre Travel Group Limited for the financial year ended 30 June 2025, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Flight Centre Travel Group Limited and the entities it controlled during the financial year. Ernst & Young Alison de Groot Partner 27 August 2025 For personal use only
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FOR THE YEAR ENDED 30 JUNE 2025 2024 NOTES $'000 $'000 Revenue A2 2,783,944 2,710,748 Other income A3 52,780 99,920 Share of profit / (loss) of joint ventures and associates E1 3,344 (2,435) Employee benefits F1 (1,410,327) (1,420,668) Sales and marketing (191,829) (170,929) Tour, hotel & cruise operations - cost of sales (164,938) (150,067) Depreciation and amortisation (149,390) (159,326) Finance costs A4 (65,823) (79,898) Impairment reversal / (charge) A5/F7 6,854 (39,850) Other expenses A4 (651,994) (567,787) Profit before income tax 212,621 219,708 Income tax expense F12 (104,437) (80,553) Profit after income tax 108,184 139,155 Profit attributable to Company owners 109,489 139,638 Non-controlling interests (1,305) (483) 108,184 139,155 Earnings per share for profit attributable to the ordinary equity holders of the company: CENTS CENTS Basic earnings per share F2 49.6 63.7 Diluted earnings per share F2 49.0 50.2 The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes. STATEMENT OF PROFIT OR LOSS FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 37 For personal use only
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FOR THE YEAR ENDED 30 JUNE 2025 2024 NOTES $'000 $'000 Profit after income tax 108,184 139,155 OTHER COMPREHENSIVE INCOME Items that have been reclassified to profit or loss: Hedging (Loss) / Gain reclassified to profit or loss F11 (2,628) 3,271 Items that may be reclassified to profit or loss: Changes in the fair value of cash flow hedges F11 8,272 (5,507) (Loss) / Gain on net investment hedges F11 (2,478) 804 Net exchange differences on translation of foreign operations F11 66,598 (8,969) Income tax on items of other comprehensive income F12 (977) 457 Total other comprehensive income / (loss) 68,787 (9,944) Total comprehensive income 176,971 129,211 Attributable to Company owners 178,276 129,694 Non-controlling interests (1,305) (483) 176,971 129,211 The above consolidated statement of other comprehensive income should be read in conjunction with the accompanying notes. STATEMENT OF OTHER COMPREHENSIVE INCOME FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 38 For personal use only
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FOR THE YEAR ENDED 30 JUNE 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES NOTES $'000 $'000 Receipts from customers¹ 2,965,146 2,835,779 Payments to suppliers and employees¹ (2,759,943) (2,366,367) Royalties received — 375 Interest received 30,824 36,288 Interest paid (non-leases) (28,886) (36,562) Interest paid (leases) F7 (11,954) (9,789) Government subsidies received — 893 Income taxes paid (60,789) (49,343) Income taxes refunded 4,760 10,206 Net cash inflow from operating activities B1 139,158 421,480 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of subsidiaries, net of cash acquired A6 (2,335) — Payments for property, plant and equipment F6 (34,340) (21,708) Payments for intangibles A5 (68,316) (73,896) Payments for the purchase of financial asset investments — (99) Proceeds from financial asset investments 10,293 20,000 Termination of net investment hedge (4,078) — Distributions received from JVs and associates E1 1,669 — Net cash outflow from investing activities (97,107) (75,703) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings B4 150,463 3,217 Repayment of borrowings B4 (129,588) (252,092) Partial repurchase of convertible notes B5 (197,581) (84,153) Payment of principal on lease liabilities F7 (91,303) (90,551) Partial termination of fair value hedge B5 (8,833) — Lease surrender payments F7 (233) (236) Proceeds from issue of shares 10,831 7,532 Payments for share buy-back D4 (57,125) — Payments for purchase of shares on market (7,197) (10,722) Dividends paid to company owners B7 (90,969) (61,591) Dividends paid to non-controlling shareholders in subsidiaries (728) (408) Dividends paid to non-controlling interests B7 (240) — Net cash outflow from financing activities (422,503) (489,004) Net decrease in cash held (380,452) (143,227) Cash and cash equivalents at the beginning of the financial year 1,136,865 1,278,936 Effects of exchange rate changes on cash and cash equivalents 51,226 1,156 Cash and cash equivalents at end of the financial year B1 807,639 1,136,865 1 Including consumption tax. The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. STATEMENT OF CASH FLOWS FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 39 For personal use only
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AS AT 30 JUNE ASSETS 2025 2024 Current assets NOTES $'000 $'000 Cash and cash equivalents B1 815,511 1,138,142 Financial asset investments B2 — 10,007 Trade receivables F3 910,104 885,348 Contract assets F4 295,574 300,642 Other assets F5 94,138 103,701 Other financial assets C3 19,712 22,068 Current tax receivables 27,929 18,697 Derivative financial instruments C2 8,835 3,988 Total current assets 2,171,803 2,482,593 N o n - c u r r e n t a s s e t s Financial asset investments B2 10,728 7,729 Property, plant and equipment F6 70,987 62,599 Intangible assets A5 1,093,661 1,025,048 Right of use asset F7 228,089 201,472 Other assets F5 132,400 26,702 Other financial assets C3 34,459 1,056 Investments in joint ventures and associates E1 44,859 43,164 Deferred tax assets F12 321,503 363,918 Derivative financial instruments C2 586 — T o t a l n o n - c u r r e n t a s s e t s 1,937,272 1,731,688 Total assets 4,109,075 4,214,281 LIABILITIES Current liabilities Trade and other payables F8 1,643,621 1,765,626 Contract liabilities F9 95,455 90,994 Financial liabilities A7 2,023 3,683 Lease liabilities F7 81,689 80,752 Borrowings B4 16,767 11,202 Convertible notes B5 186,446 280,825 Provisions F10 62,956 52,793 Current tax liabilities 6,802 5,336 Derivative financial instruments C2 15,651 6,089 Total current liabilities 2,111,410 2,297,300 N o n - c u r r e n t l i a b i l i t i e s Trade and other payables F8 61,994 2,154 Contract liabilities F9 79,107 32,135 Financial liabilities A7 — 5,915 Lease liabilities F7 182,195 173,813 Borrowings B4 124,359 102,561 Convertible notes B5 292,655 338,999 Provisions F10 26,650 26,086 Deferred tax liabilities F12 5,106 5,798 Derivative financial instruments C2 1,973 26,317 T o t a l n o n - c u r r e n t l i a b i l i t i e s 774,039 713,778 Total liabilities 2,885,449 3,011,078 Net assets 1,223,626 1,203,203 EQUITY Contributed equity D4 1,402,677 1,437,888 Treasury shares D4 (17,793) (27,800) Reserves F11 160,621 131,969 Retained profits / (accumulated losses) (321,257) (339,777) Equity attributable to the Company owners 1,224,248 1,202,280 Non-controlling interests (622) 923 Total equity 1,223,626 1,203,203 The above consolidated balance sheet should be read in conjunction with the accompanying notes. BALANCE SHEET FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 40 For personal use only
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FOR THE YEAR ENDED 30 JUNE CONTRIBUTED EQUITY TREASURY SHARES RESERVES RETAINED PROFITS TOTAL NON- CONTROLLING INTEREST TOTAL EQUITY NOTES $'000 $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July 2023 1,374,592 (14,748) 193,068 (417,824) 1,135,088 1,409 1,136,497 Profit for the year — — — 139,638 139,638 (483) 139,155 Other comprehensive income — — (9,944) — (9,944) — (9,944) Total comprehensive income for the year — — (9,944) 139,638 129,694 (483) 129,211 Transactions with owners in their capacity as owners: Non-controlling interest recognised — — — — — (3) (3) Employee share-based payments D4/F11 63,296 — (34,520) — 28,776 — 28,776 Financial assets at FVOCI reserve F11 — — (286) — (286) — (286) Treasury shares D4 — (13,052) — — (13,052) — (13,052) Equity component of convertible bond, net of tax B5/F11 — — (16,349) — (16,349) — (16,349) Dividends provided for or paid B7 — — — (61,591) (61,591) — (61,591) Balance at 30 June 2024 1,437,888 (27,800) 131,969 (339,777) 1,202,280 923 1,203,203 Profit / (loss) for the year — — — 109,489 109,489 (1,305) 108,184 Other comprehensive income — — 68,787 — 68,787 — 68,787 Total comprehensive income for the year — — 68,787 109,489 178,276 (1,305) 176,971 Transactions with owners in their capacity as owners: Non-controlling interest recognised — — — — — (240) (240) On-market share buy-back D4 (57,125) — — — (57,125) — (57,125) Equity transaction costs D4 (545) — — — (545) — (545) Employee share-based payments D4/F11 22,459 — (14,259) — 8,200 — 8,200 Acquisition reserve F11 — — (3,173) — (3,173) — (3,173) Financial assets at FVOCI reserve F11 — — 286 — 286 — 286 Treasury shares D4 — 10,007 — — 10,007 — 10,007 Equity component of convertible bond, net of tax B5/F11 — — (22,989) — (22,989) — (22,989) Dividends provided for or paid B7 — — — (90,969) (90,969) — (90,969) Balance at 30 June 2025 1,402,677 (17,793) 160,621 (321,257) 1,224,248 (622) 1,223,626 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. STATEMENT OF CHANGES IN EQUITY FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 41 For personal use only
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SIGNIFICANT MATTERS 43 A FINANCIAL OVERVIEW 44 A1 Segment information 44 A2 Revenue 50 A3 Other income 51 A4 Expenses 52 A5 Intangible assets 53 A6 Business combinations 55 A7 Financial liabilities 56 B CASH MANAGEMENT 57 B1 Cash and cash equivalents 57 B2 Financial asset investments 58 B3 Cash and financial asset investments– financial risk management 59 B4 Borrowings 60 B5 Convertible notes 61 B6 Ratios 63 B7 Dividends 64 C FINANCIAL RISK MANAGEMENT 65 C1 Financial risk management 65 C2 Derivative financial instruments 68 C3 Other financial assets 73 D REWARD AND RECOGNITION 74 D1 Key management personnel 74 D2 Business ownership scheme (BOS) 75 D3 Share-based payments 76 D4 Contributed equity and treasury shares 83 E RELATED PARTIES 84 E1 Investments accounted for using the equity method 84 E2 Related party transactions 85 F OTHER INFORMATION 86 F1 Employee benefits expense 86 F2 Earnings per share 87 F3 Trade receivables 88 F4 Contract assets 90 F5 Other assets 91 F6 Property, plant and equipment 92 F7 Leases 93 F8 Trade and other payables 96 F9 Contract liabilities 97 F10 Provisions 98 F11 Reserves 99 F12 Tax 100 F13 Auditor's remuneration 102 G GROUP STRUCTURE 103 G1 Subsidiaries 103 G2 Deed of cross guarantee 104 G3 Parent entity financial information 106 H UNRECOGNISED ITEMS 108 H1 Commitments 108 H2 Contingencies 108 H3 Events occurring after the end of the reporting period 108 I SUMMARY OF ACCOUNTING POLICIES 109 NOTES TO THE FINANCIAL STATEMENTS FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 42 For personal use only
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SIGNIFICANT MATTERS The following significant events and transactions occurred during or after the end of the reporting period: CAPITAL MANAGEMENT Partial repurchase of convertible notes During the period FLT repurchased convertible notes with a total face value of $200,400,000, which resulted in a gain of $11,466,000. The notes were repurchased on the open market and are part of the $400,000,000 1.625% convertible notes due in November 2028. Refer to note B5. Repayment of debt facility FLT entered into a new, $200,000,000 Receivables Financing Facility in October 2024 and had utilised $123,500,000 of this facility at 30 June 2025. This is a two year facility which is secured against trade receivables of FLT’s Corporate business. With the availability of the Receivables Financing Facility, FLT reduced the size of the Syndicated Facility Agreement to $200,000,000. During the period, FLT repaid $100,000,000 drawn under the Syndicated Facility Agreement, meaning that as of 30 June 2025 the amount borrowed under the Syndicated Facility Agreement is nil with an undrawn committed amount available of $200,000,000. The Syndicated Facility Agreement matures in April 2026. Share buy-backs On 28 April 2025 FLT announced it would commence an on-market share buy-back of up to $200,000,000. The buy-back is subject to prevailing share price and market conditions and is at FLT’s discretion. The buy-back will be conducted for up to 12 months. As at 30 June 2025, FLT had bought-back $57,125,000 in shares. ACQUISITIONS DURING THE PERIOD On 29 October 2024, FLT through its subsidiary Flight Centre Travel Group (European Holdings) Ltd acquired 100% of Travelworld International (Manchester) Limited (Cruise Club UK), a Manchester based cruise business for £2,586,000 including completion adjustment ($5,030,000). Net of cash acquired, the cashflow from investing activities was $2,335,000 (completion adjustment recorded as a payable). The acquisition will fast track FLT’s growth in the cruise sector globally while also strengthening FLT’s UK Leisure presence. MATTERS SUBSEQUENT TO THE END OF THE REPORTING PERIOD On 27 August 2025, FLT’s directors declared a final dividend for the year ended 30 June 2025. Refer to note B7 for details. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 43 For personal use only
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A FINANCIAL OVERVIEW This section provides information that is most relevant to explaining the Group's performance during the year, and where relevant, the accounting policies that have been applied and significant estimates and judgements made. A1 Segment information A2 Revenue A3 Other income A4 Expenses A5 Intangible assets A6 Business combinations A7 Financial liabilities A1 SEGMENT INFORMATION (A) IDENTIFICATION AND DESCRIPTION OF SEGMENTS FLT has identified its operating segments based on the internal reports that are reviewed and used by the Board and executive team (chief operating decision makers - CODM), in assessing performance and in determining resource allocation. The company’s executive team consists of the following members: • Managing director • Chief financial officer and chief executive officer - Global Business Services • Chief executive officer – Leisure • Chief executive officer – Corporate; and • Chief executive officer – Supply Supply is not considered a reportable segment due to it being the procurement function for the Corporate and Leisure segments. The reportable segments are consistent to the prior year - Leisure, Corporate and Other. LEISURE The Leisure segment combines the retail store front and online brands for retail customers, luxury travel brands Travel Associates and Scott Dunn, Independent agents and complementary offerings. CORPORATE The Corporate segment includes the FCM brand, Corporate Traveller and other Corporate customer brands. OTHER Other segment includes Brisbane-based and other head office support businesses, including Supply, that support the global network (including global head office teams), and the share of profit or loss relating to the investment in Pedal Group. Also included is Travel Management Services which incorporates touring, ground-handling and hotels. The Group consolidation adjustments are also included in this segment. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 44 For personal use only
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A1 SEGMENT INFORMATION (CONTINUED) (B) MAJOR CUSTOMERS FLT provides services to and derives revenue from a number of customers. The company does not derive more than 10% of total consolidated revenue from any one customer. (C) UNDERSTANDING THE SEGMENT RESULT Segment information is presented below in the manner in which it is presented to the CODM and upon which they make their decisions. SEGMENT REVENUE The measurement of segment revenue has not changed since 30 June 2024. Refer to note A2 for details of revenue policies. Sales between segments are carried out at arm's length and are eliminated on consolidation. ALTERNATIVE PROFIT MEASURES In addition to using profit as a measure of the Group and its segments’ financial performance, FLT uses EBITDA, underlying EBITDA and underlying profit before tax (PBT) as this information is presented to and used by the CODM. These unaudited measures are not defined under IFRS and are, therefore, termed “non-IFRS” measures. Within this note, Earnings before net interest, tax, depreciation and amortisation, royalty and intercompany service fee (EBITDA), Underlying earnings before net interest, tax, depreciation and amortisation, royalty and intercompany service fee (Underlying EBITDA), Underlying PBT, royalty and intercompany service fee (Underlying PBT) are non-IFRS measures. A reconciliation of these non-IFRS measures and specific items to the nearest measure prepared in accordance with IFRS is included in the tables on the following pages. SEGMENT ASSETS AND LIABILITIES The amounts provided to the board and CODM in respect of total assets and total liabilities are measured in a manner consistent with that of the financial statements. These reports do not allocate total assets or total liabilities based on the operations of each segment. FLT has not disclosed non-current assets by segment as this information is not provided to or reviewed by the chief operating decision makers nor produced for other reasons and, as such, the cost of developing and providing this information exceeds the attributable benefits. TOTAL TRANSACTION VALUE (TTV) TTV is unaudited, non-IFRS financial information and does not represent revenue in accordance with Australian Accounting Standards. TTV represents the price at which travel products and services have been sold across the Group’s various operations, both as agent for various airlines and other service providers and as principal, plus revenue from other sources. TTV has been reduced by refunds. FLT’s revenue is, therefore, derived from TTV. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 45 For personal use only
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A1 SEGMENT INFORMATION (CONTINUED) (D) SEGMENT INFORMATION PRESENTED TO THE BOARD OF DIRECTORS AND EXECUTIVE TEAM The segment information provided to the Board and executive team for the reportable segments for the years ended 30 June 2025 and 30 June 2024 is shown in the table below and on page 47. LEISURE CORPORATE OTHER TOTAL 30 JUNE 2025 $'000 $'000 $'000 $'000 Segment information TTV¹ 11,846,799 12,343,413 337,418 24,527,630 Agency revenue from the provision of travel 1,268,711 1,106,198 24,982 2,399,891 Principal revenue from the provision of travel 92,707 32,106 5,481 130,294 Revenue from tour, hotel & cruise operations 30,249 — 193,543 223,792 Revenue from other businesses 14,245 5,971 9,751 29,967 Total revenue from contracts with customers 1,405,912 1,144,275 233,757 2,783,944 EBITDA¹ 240,181 200,287 (41,814) 398,654 Depreciation and amortisation (81,260) (32,086) (36,044) (149,390) Interest income 328 12 28,840 29,180 Interest expense (10,590) (2,415) (52,818) (65,823) Net profit / (loss) before tax, royalty and intercompany service fee 148,659 165,798 (101,836) 212,621 Royalty — — — — Intercompany service fee — — — — Net profit / (loss) before tax 148,659 165,798 (101,836) 212,621 Reconciliation of EBITDA to Underlying EBITDA EBITDA¹ 240,181 200,287 (41,814) 398,654 Productive Operations initiative2 — 22,805 — 22,805 Student Universe hibernation & trading loss 10,058 — — 10,058 TTJ trading loss & closure costs3 — — 11,015 11,015 Leisure loyalty program4 15,288 — — 15,288 GBS projects incl HRIS5 — — 8,745 8,745 Gain on buy-back and remeasurement of convertible notes — — (11,466) (11,466) Right of use asset impairment reversal — — (6,854) (6,854) Underlying EBITDA¹ 265,527 223,092 (40,374) 448,245 Amortisation of convertible notes — — 25,121 25,121 Student Universe hibernation & trading loss 610 — — 610 Leisure loyalty program 54 — — 54 Productive Operations initiative — 1,068 — 1,068 Underlying profit before tax¹ 174,669 189,671 (75,275) 289,065 1 TTV is non-IFRS financial information and is not subject to audit procedures, and does not represent revenue in accordance with Australian Accounting Standards. TTV represents the price at which travel products and services have been sold across the Group’s various operations, both as agent for various airlines and other service providers and as principal, plus revenue and other income from other sources. TTV has been reduced by refunds. FLT’s revenue is, therefore, derived from TTV., EBITDA, underlying EBITDA and underlying PBT are unaudited, non-IFRS measures. 2 Productive Operations initiative is a corporate business transformation project focused on lowering costs and growing income through automation and personal service. Costs incurred relate to transitional activities and the global alignment of processes. 3 Includes trading losses and closures costs in relation to Infinity wholesale business division - TTJ in December 2024. 4 Costs to date relate to technology and systems, including enhanced data capabilities, development of apps and a new Customer Relationship Management tool, deployment of specialist teams, external consultancy fees and other individually insignificant items. 5 Costs relate to implementation of Human Resources Information System (HRIS) as well as restructure costs associated with GBS operating model initiatives. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 46 For personal use only
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A1 SEGMENT INFORMATION (CONTINUED) RESTATED1 LEISURE CORPORATE OTHER TOTAL 30 JUNE 2024 $'000 $'000 $'000 $'000 Segment information TTV2 11,102,807 12,105,285 536,369 23,744,461 Agency revenue from the provision of travel 1,246,151 1,082,442 29,280 2,357,873 Principal revenue from the provision of travel 84,412 24,616 7,832 116,860 Revenue from tour, hotel & cruise operations 15,786 — 188,998 204,784 Revenue from other businesses 9,222 4,908 17,101 31,231 Total revenue from contracts with customers 1,355,571 1,111,966 243,211 2,710,748 EBITDA2 234,041 228,478 (39,960) 422,559 Depreciation and amortisation (85,592) (48,340) (25,394) (159,326) Interest income 127 — 36,246 36,373 Interest expense (7,965) (1,900) (70,033) (79,898) Net profit before tax, royalty and intercompany service fee 140,611 178,238 (99,141) 219,708 Royalty — — — — Intercompany service fee — — — — Net profit before tax 140,611 178,238 (99,141) 219,708 Reconciliation of EBITDA to Underlying EBITDA EBITDA2 234,041 228,478 (39,960) 422,559 SU impairment (non-cash), restructuring costs and other head office lease impairment 39,524 8,798 1,033 49,355 US Wholesale (GoGo) trading loss & closure costs3 — — 17,207 17,207 Discova Americas trading loss & closure costs4 — — 9,998 9,998 Employee retention plans - COVID Related Retention Plans 4,400 5,058 79 9,537 Productive Ops5 — 7,105 — 7,105 Gain on buy-back and remeasurement of convertible notes — — (48,022) (48,022) Supplier loss6 — — 10,723 10,723 Underlying EBITDA2 277,965 249,439 (48,942) 478,462 Amortisation of convertible notes — — 30,816 30,816 Productive Ops5 — 12,046 — 12,046 Discova Americas trading loss & closure costs4 — — 1,561 1,561 US Wholesale (GoGo) trading loss & closure costs3 — — 351 351 Underlying profit before tax2 184,535 211,245 (75,395) 320,385 1 Restated due to Management’s decision to restructure Infinity (Other) to Independents (Leisure) effective July 2024. 2 TTV, EBITDA, underlying EBITDA and underlying PBT are unaudited, non-IFRS measures. 3 Closure of US Wholesale business in February 2024 4 Closure of Discova Americas business in June 2024. 5 Productive Operations initiative is a corporate business transformation project focused on lowering costs and growing income through automation and personal service. As part of the Productive Operations initiative, FLT has invested in the development of software assets (in-house and software as a service) and these activities will result in the retirement of certain legacy systems. 6 Supplier loss relates to expected credit loss of $10.7m on contract assets due to deteriorated creditworthiness of REX airlines as of 30 June 2024. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 47 For personal use only
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A1 SEGMENT INFORMATION (CONTINUED) (E) ADDITIONAL INFORMATION PRESENTED BY GEOGRAPHIC AREA In addition to the segment information provided above, the below table presents geographic revenue disclosures and also PBT information which has been included to aid user understanding. Other Segment includes head office based support functions and Travel Management Services incorporating touring, ground-handling and hotels. AUSTRALIA & NZ AMERICAS EMEA ASIA OTHER SEGMENT TOTAL 30 JUNE 2025 $'000 $'000 $'000 $'000 $'000 $'000 Segment information TTV¹ 13,588,628 4,853,976 4,361,256 1,443,994 279,776 24,527,630 Agency revenue from the provision of travel 1,325,764 495,169 461,576 98,508 18,874 2,399,891 Principal revenue from the provision of travel 98,767 12,152 8,135 4,229 7,011 130,294 Revenue from tour, hotel & cruise operations 30,249 — — — 193,543 223,792 Revenue from other businesses 18,526 1,024 2,931 1,076 6,410 29,967 Total revenue from contracts with customers 1,473,306 508,345 472,642 103,813 225,838 2,783,944 EBITDA¹ 333,815 71,743 83,851 (17,957) (72,798) 398,654 Depreciation and amortisation (66,878) (14,610) (21,169) (5,969) (40,764) (149,390) Interest income 15,715 34,371 59,749 2,554 (83,209) 29,180 Interest expense (16,550) (34,548) (37,931) (9,870) 33,076 (65,823) Net profit / (loss) before tax, royalty and intercompany service fee 266,102 56,956 84,500 (31,242) (163,695) 212,621 Royalty 12,092 (4,337) (7,062) (678) (15) — Intercompany service fee 6,224 (3,035) (2,380) (848) 39 — Net profit / (loss) before tax 284,418 49,584 75,058 (32,768) (163,671) 212,621 Reconciliation of EBITDA to Underlying EBITDA EBITDA¹ 333,815 71,743 83,851 (17,957) (72,798) 398,654 Productive Operations initiative2 2,895 1,742 6,545 8,670 2,953 22,805 Student Universe hibernation & trading loss — 10,058 — — — 10,058 TTJ trading loss & closure costs3 — — — — 11,015 11,015 Leisure loyalty program4 3,000 435 — — 11,853 15,288 GBS projects incl HRIS5 — — — — 8,745 8,745 Gain on buy-back and remeasurement of convertible notes — — — — (11,466) (11,466) Right of use asset impairment reversal — — — — (6,854) (6,854) Underlying EBITDA¹ 339,710 83,978 90,396 (9,287) (56,552) 448,245 Amortisation of convertible notes — — — — 25,121 25,121 Student Universe hibernation & trading loss — 610 — — — 610 Leisure loyalty program — — — — 54 54 Productive Operations initiative — — — 1,068 — 1,068 Underlying profit before tax¹ 271,997 69,801 91,045 (21,504) (122,274) 289,065 1 TTV, EBITDA, underlying EBITDA and underlying PBT are unaudited, non-IFRS measures. Underlying EBITDA and underlying PBT exclude royalty and intercompany service fee. 2 Productive Operations initiative is a business transformation project focused on lowering costs and growing income through automation and personal service. Costs incurred relate to transitional activities and the global alignment of processes. 3 Closure of Infinity wholesale business division - TTJ in December 2024. 4 Costs to date relate to technology and systems, including enhanced data capabilities, development of apps and a new Customer Relationship Management tool, deployment of specialist teams, external consultancy fees and other individually insignificant items.. 5 Costs relate to implementation of Human Resources Information System (HRIS) as well as restructure costs associated with GBS operating model initiatives. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 48 For personal use only
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A1 SEGMENT INFORMATION (CONTINUED) RESTATED1 AUSTRALIA & NZ AMERICAS EMEA ASIA OTHER SEGMENT TOTAL 30 JUNE 2024 $'000 $'000 $'000 $'000 $'000 $'000 Segment information TTV2 12,677,819 5,023,990 4,199,976 1,527,522 315,154 23,744,461 Agency revenue from the provision of travel 1,283,769 501,703 460,368 99,677 12,356 2,357,873 Principal revenue from the provision of travel 86,282 12,855 6,118 4,312 7,293 116,860 Revenue from tour, hotel & cruise operations 15,786 — — — 188,998 204,784 Revenue from other businesses 15,782 2,357 3,323 3,160 6,609 31,231 Total revenue from contracts with customers 1,401,619 516,915 469,809 107,149 215,256 2,710,748 EBITDA2 323,957 20,413 96,341 17,533 (35,685) 422,559 Depreciation and amortisation (70,455) (22,362) (38,149) (5,993) (22,367) (159,326) Interest income 11,893 30,739 44,338 4,928 (55,525) 36,373 Interest expense (15,476) (31,070) (25,478) (10,173) 2,299 (79,898) Net profit / (loss) before tax, royalty and intercompany service fee 249,919 (2,280) 77,052 6,295 (111,278) 219,708 Royalty 10,943 (2,875) (7,241) (888) 61 — Intercompany service fee 2,783 (2,234) 609 (1,113) (45) — Net profit / (loss) before tax 263,645 (7,389) 70,420 4,294 (111,262) 219,708 Reconciliation of EBITDA to Underlying EBITDA EBITDA2 323,957 20,413 96,341 17,533 (35,685) 422,559 SU impairment (non-cash), restructuring costs and other head office lease impairment 1,033 39,524 8,798 — — 49,355 US Wholesale (GoGo) trading loss & closure costs3 — 17,207 — — — 17,207 Discova Americas trading loss & closure costs4 — — — — 9,998 9,998 Employee retention plans - COVID Related Retention Plans 3,470 2,037 1,831 1,062 1,137 9,537 Productive Ops5 — — — 1,463 5,642 7,105 Gain on buy-back and remeasurement of convertible notes — — — — (48,022) (48,022) Supplier loss6 — — — — 10,723 10,723 Underlying EBITDA2 328,460 79,181 106,970 20,058 (56,207) 478,462 Amortisation of convertible notes — — — — 30,816 30,816 Productive Ops5 — — 12,046 — — 12,046 Discova Americas trading loss & closure costs4 — — — — 1,561 1,561 US Wholesale (GoGo) trading loss & closure costs5 — 351 — — — 351 Underlying profit before tax2 254,422 56,839 99,727 8,820 (99,423) 320,385 1 Management’s decision to restructure Infinity (Other) to Independents (Australia & NZ) effective July 2024 has resulted in a restatement to the geographic segment. 2 TTV, EBITDA, underlying EBITDA and underlying PBT are unaudited, non-IFRS measures. Underlying EBITDA and underlying PBT exclude royalty and intercompany service fee. 3 Closure of US Wholesale business in February 2024. 4 Closure of Discova Americas business in June 2024. 5 Productive Operations initiative is a business transformation project focused on lowering costs and growing income through automation and personal service. As part of the Productive Operations initiative, FLT has invested in the development of software assets (in-house and software as a service) and these activities will result in the retirement of certain legacy systems. 6 Supplier loss relates to expected credit loss for the voluntary administration of REX airlines. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 49 For personal use only
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A2 REVENUE 2025 2024 $'000 $'000 Agency revenue from the provision of travel 2,399,891 2,357,873 Principal revenue from the provision of travel 130,294 116,860 Revenue from tour, hotel & cruise operations 223,792 204,784 Revenue from other businesses 29,967 31,231 Total revenue from contracts with customers 2,783,944 2,710,748 Additional disaggregation of revenue by geographic region is presented in note A1 Segment Information. ACCOUNTING POLICY REVENUE FROM CONTRACTS WITH CUSTOMERS AGENCY REVENUE FROM THE PROVISION OF TRAVEL Revenue is generated when FLT, acting as an agent, arrange and book travel and travel related products to be provided by suppliers to retail and corporate consumers. The supplier of the travel products is the principal in the wider travel sales transaction. From FLT's perspective (under AASB 15), the supplier of the travel products is the customer in the agency relationship. The service is paid for in a variety of ways, including guaranteed base payments, commissions, mark-ups, transaction fees, other ancillary fees and in the case of cancelled travel, cancellation fees. Rebates are received for using travel consolidator systems known as Global Distribution Systems (GDS) or Network Distribution Capabilities (NDC) to access and book travel supplier products. In addition, volume incentives are received from suppliers for achieving annual targets. Guaranteed base payments, commission, mark-ups and transaction fees are paid for and received at the time of booking. Rebates and volume incentive payments received will vary depending on the terms of the contract. Receipt of payment can vary between upfront to post contract completion once availed data is known. Revenue is recognised over time as the supplier of the travel products (the customer in the agency relationship under AASB 15) simultaneously receives and consumes the benefit of the travel agency services. Practically revenue is recognised when the booking is finalised as this is when the performance obligation is satisfied. The revenue is variable, however it is not subject to material constraints, except for volume incentives which are recorded by applying the following: • Year-end differences – judgements and estimation techniques are required to determine revenue from consumers anticipated to travel over the remaining contract year and the associated incentive rate applicable to these forecast levels. A combination of historical data and actual ticketed data from external sources is used to predict the anticipated travel revenue and associated incentive rate. • Utilisation rates – the likelihood of the consumer cancelling the travel prior to departure. • Volume revenue has been booked to the extent of flown / availed revenue at guaranteed rates or expected incentive rates. Except as noted above, the travel supplier, as principal, is responsible for refunds to the front end customer, not FLT as agent. FLT have applied practical expedient AASB 15(121) where revenue to be recognised in future periods, for unsatisfied or partially satisfied performance obligations as at reporting date, is not disclosed as the performance obligation will be completed within 12 months or less. Supplier incentives and lump-sum revenue From time-to-time, incentives or lump sum amounts are received from suppliers. The supplier of the travel products is the customer in the agency relationship under AASB 15. The recognition pattern is dependent on the specific terms of each contract. The revenue is only recognised upfront where there has been a distinct service transferred upfront, otherwise it is recognised over the term of the contract in line with the delivery of the performance obligation. The revenue can be either fixed or variable and is constrained where contract terms require the supplier to be refunded in part or full upon termination of the contract. Associated contract costs may be eligible for capitalisation as fulfilment assets and amortised over the same period. Lump sum deferred revenue is recognised over the contract terms which typically range between 1 – 10 years. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 50 For personal use only
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A2 REVENUE (CONTINUED) PRINCIPAL REVENUE FROM THE PROVISION OF TRAVEL Revenue is generated when FLT, acting as principal, provides travel related products and services to customers. This includes products and services provided by our currency exchange business Travel Money, advertising revenue, hotel management revenue and conference revenue. Revenue is recognised when the performance obligation has been satisfied. The revenue may be variable or fixed and is typically recognised over time as the service is provided. The most likely method is used for variable revenue recognition. The revenue is not subject to material constraints and it is recognised only as performance obligations have been satisfied. REVENUE FROM TOUR, HOTEL AND CRUISE OPERATIONS FLT has a number of touring and ground-handling operations provided through the brands Top Deck, Back-Roads, Discova Asia. In addition FLT provides hotel operations through Away Camakila. Revenue is generated from tour, hotel and cruise operations when FLT, acting as principal, provides tours, ground-handling services and hotel accommodation, cruise cabins, and other hotel services (e.g. restaurant, spa). Revenue is variable and includes the gross amount sold less any cancellations/refunds. Revenue is recognised over the duration of the tour/accommodation/cruise period or when the ground-handling service, hotel service or cruise cabin is provided. The costs associated with fulfilling these services such as transport, accommodation costs, wages and food and beverage are expensed over the same duration and disclosed as cost of tour, hotel and cruise operations in the statement of profit or loss. As principal, FLT is responsible for refunds to the customer, with an allowance for refunds taken into consideration in the recognition of revenue. REVENUE FROM OTHER BUSINESSES Revenue is generated when FLT, typically acting as principal, provides other services to customers. This includes services provided by the brands FC Business School, Travel Academy and TPConnects. Revenue is recognised when the performance obligation has been satisfied. The revenue may be variable or fixed and is typically recognised over time as the service is provided. The most likely method is used for variable revenue recognition. The revenue is not subject to material constraints as it is recognised only when all performance obligations have been satisfied. A3 OTHER INCOME 2025 2024 NOTES $'000 $'000 OTHER INCOME Interest 29,180 36,373 Rent and sub-lease rentals F7 7,164 7,305 Buy-back and remeasurement of convertible notes B5 11,466 48,022 Gain on financial liabilities A7 1,660 4,600 Mark-to-market gain on financial asset equity investments held at FVTPL 3,035 3,003 Net foreign exchange gains 216 — Government subsidies 59 617 Total 52,780 99,920 BUY-BACK AND REMEASUREMENT OF CONVERTIBLE NOTES During the first half of FY2025, there was a partial repurchase of convertible notes due November 2028, resulting in a gain of $11,466,000. In prior year Convertible notes due November 20271 were partially repurchased resulting in gain of $10,982,000 on the partial repurchase and a gain of $37,040,000 on the remeasurement. Refer to Note B5 for further details. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 51 For personal use only
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A4 EXPENSES Profit before income tax includes the following expenses: 2025 2024 NOTES $'000 $'000 FINANCE COSTS BOS interest expense 3,061 2,583 Interest and finance charges 12,569 21,183 Coupon on convertible notes 13,034 15,233 Amortisation of convertible note at effective interest rate B5 25,121 30,816 Lease interest expense F7 11,954 9,789 Unwind of make good provision discount F10 84 294 Total finance costs 65,823 79,898 OTHER EXPENSES Other occupancy costs 39,272 41,743 Rent expense F7 8,620 9,124 Consulting and outsourcing fees 98,900 77,016 Independent agent consultant fees 97,349 95,079 Communication and IT 246,238 228,285 Net foreign exchange losses 731 1,539 Supplier loss1 F4 — 10,828 Movement in expected credit loss provision and bad debt expense / (reversal) F3 / F4 14,807 (2,835) Other expenses 146,077 107,008 Total other expenses 651,994 567,787 1 The Group recorded an expected credit loss of $10.7m on contract assets due to deteriorated creditworthiness of REX airlines as of 30 June 2024. In addition to the depreciation and amortisation disclosed in the Statement of profit or loss, ‘Tour, hotel & cruise operations - Cost of sales’ in the Statement of profit or loss statement includes $356,000 (2024: $729,249) relating to depreciation and amortisation directly attributable to the delivery of tour and hotel services. Refer to note F7 for depreciation and amortisation relating to right of use assets under AASB16. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 52 For personal use only
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A5 INTANGIBLE ASSETS OVERVIEW FLT continues to focus on enhancing productivity, reducing costs and making it easier for customers to interact and transact with its brands and people across all channels. Growing digital capabilities has also been a priority. These strategies are reflected in the growth in intangibles through additions. ACCOUNTING POLICY USEFUL LIVES Definite life brand names are amortised over their expected useful life, not exceeding 15 years. Customer relationships are amortised over their expected useful life, not exceeding seven years. Software is amortised using the straight-line method over the project’s period of expected future benefits, which varies from 2.5 to 5 years, with some core software products amortised over 10 years. The assets’ residual values and useful lives are reviewed and adjusted if appropriate at each reporting period’s end. Additional information on intangible assets accounting policies is included in note I (i) . GOODWILL BRAND NAMES, LICENCES AND CUSTOMER RELATIONSHIPS SOFTWARE TOTAL Opening Balance at 1 July 2023 $'000 $'000 $'000 $'000 Cost 906,894 141,362 368,880 1,417,136 Accumulated amortisation (including accumulated impairment losses) (83,375) (115,171) (164,101) (362,647) Net book amount at 1 July 2023 823,519 26,191 204,779 1,054,489 Additions — — 73,896 73,896 Disposals & retirements1 — — (1,367) (1,367) Impairments2 (19,484) (2,108) (14,816) (36,408) Amortisation — (9,064) (49,524) (58,588) Exchange differences (6,569) 14 (419) (6,974) Net book amount at 30 June 2024 797,466 15,033 212,549 1,025,048 Opening Balance at 1 July 2024 Cost 905,554 104,372 365,119 1,375,045 Accumulated amortisation (including accumulated impairment losses) (108,088) (89,339) (152,570) (349,997) Net book amount at 1 July 2024 797,466 15,033 212,549 1,025,048 Additions — — 68,316 68,316 Acquisitions 2,628 2,225 — 4,853 Disposals & retirements1 — — (12,171) (12,171) Amortisation — (4,784) (43,075) (47,859) Exchange differences 48,228 1,095 6,151 55,474 Net book amount at 30 June 2025 848,322 13,569 231,770 1,093,661 Cost 956,672 111,562 425,275 1,493,509 Accumulated amortisation (including accumulated impairment losses) (108,350) (97,993) (193,505) (399,848) Net book amount at 30 June 2025 848,322 13,569 231,770 1,093,661 1 Balances shown net of accumulated amortisation. 2 Refer to Note A5 - Impairment tests for further details. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 53 For personal use only
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A5 INTANGIBLE ASSETS (CONTINUED) (A) IMPAIRMENT TESTS Critical accounting estimates, assumptions and judgements - impairment of goodwill and indefinite life intangibles The Group tests goodwill and indefinite life intangibles (mainly brand names) annually for impairment, in accordance with the accounting policy stated in note l(g). For all cash-generating units (CGUs) which contain goodwill or indefinite life intangibles and all other CGUs which show an indicator of impairment, the recoverable amounts have been determined based on the higher of fair value less costs of disposal or value-in-use calculations. These calculations use cash flow projections based on management’s financial forecasts and cover a five-year period. Refer below for details of these assumptions and the potential impacts of reasonable changes to the assumptions. Goodwill and indefinite life intangibles are allocated to the CGUs, identified in accordance to relevant business and country of operation. Each segment includes a number of separately identifiable CGUs or groups of CGUs. Goodwill and indefinite life intangibles allocated to individually significant CGUs or groups of CGUs are presented at the net book amount below: GOODWILL INDEFINITE LIFE BRAND NAMES & LICENCES2 2025 2024 2025 2024 $'000 $'000 $'000 $'000 Global Leisure 435,796 409,830 6,165 5,573 Global Corporate 367,314 345,050 — — Other1 45,212 42,586 249 741 Total 848,322 797,466 6,414 6,314 1 Other includes CGUs which are not individually significant. $34,000 of impairment of software was recorded in the year ended 30 June 2024. 2 FLT owns these brands and licences and intends to continue to use them indefinitely. Current year There has been no impairment of goodwill or indefinite life brand names & licences in the current year. Prior year During the prior period it was decided to restructure Student Universe under FLT’s Jetmax online travel agency group to gain synergies across the brands, as a result it was impaired. FLT recorded a non-cash impairment to goodwill of $19,484,000, indefinite life brand names of $2,108,000 and software of $14,782,000. The impairment was recognised in the Leisure segment and Americas geographic information in note A1. Post impairment there is no remaining goodwill, brand names or software in the Student Universe CGU. The recoverable amount of the Student Universe CGU was determined by reference to a fair value less cost to sell methodology. The key assumptions in the model are as follows: • Five year budgeted EBITDA based on management’s forecast of revenue, taking into account the maintainable growth rate of both on-line and travel services • Revenue forecasts take into account historical revenue and consider external factors such as projections of gross on- line airline bookings • A rate of 2% was used to extrapolate cash flows beyond budget period to calculate a terminal value • No cost to sell was applied as the business will be restructured internally. Management applied a pre-tax discount rate of 17.4% based on available market data and data from other comparable listed companies within the travel sector. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 54 For personal use only
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A5 INTANGIBLE ASSETS (CONTINUED) (B) KEY ASSUMPTIONS USED FOR VALUE-IN-USE / FAIR VALUE LESS COST TO SELL CALCULATIONS The discount rates shown were applied to CGUs. For the purposes of impairment testing, fair value methodologies were applied and a long-term growth rate of 2.5% (2024: 2.0% - 2.5%) was used to extrapolate cash flows beyond the budget period and calculate a terminal value. These assumptions have been used for the analysis of each CGU within the business segment, in line with local expected long-term inflation. PRE-TAX DISCOUNT RATE GOODWILL & BRAND NAMES 2025 2024 CGU % % Global Leisure 14.2 15.8 Global Corporate 13.5 15.0 Other CGUs (excluding those listed above) 14.3 15.8 The basis of estimation of the five-year cash flows uses the following key operating assumptions: • Five-year budgeted EBITDA is based on management's forecasts of revenue from travel services, taking into account expected TTV/sales growth • Revenue forecasts take into account historical revenue and consider external factors such as market sector and geography • Costs are calculated taking into account historical margins, forecast increases and estimated inflation rates over the period, consistent with the locations in which the CGUs operate • Where fair value less cost to sell methodology has been appropriately applied, the costs to dispose are estimated at 2% of enterprise value Management has calculated the discount rates based on available market data and data fro comparable listed companies within the travel sector. (C) IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS There are no CGUs identified as being sensitive to changes in key assumptions. A6 BUSINESS COMBINATIONS (A) CURRENT YEAR ACQUISITIONS On 29 October 2024, FLT through its subsidiary Flight Centre Travel Group (European Holdings) Ltd acquired 100% of Travelworld International (Manchester) Limited (Cruise Club UK), a Manchester based cruise business for £2,586,000 including completion adjustment ($5,030,000). Net of cash acquired, the cashflow from investing activities was $2,335,000 (completion adjustment recorded as a payable). The acquisition will fast track FLT’s growth in the cruise sector globally while also strengthening FLT’s UK Leisure presence. Net identifiable assets acquired were £528,000 ($1,028,000). Brand names of £1,066,000 ($2,074,000) and goodwill of £1,258,000 ($2,448,000) were recognised. The purchase price accounting for Cruise Club UK is final as at 30 June 2025. (B) PRIOR YEAR ACQUISITIONS There were no acquisitions in the prior period. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 55 For personal use only
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A7 FINANCIAL LIABILITIES 2025 2024 CURRENT $'000 $'000 Contingent consideration 2,023 3,683 Total current financial liabilities 2,023 3,683 NON-CURRENT Put option financial liability — 5,915 Total non-current financial liabilities — 5,915 Contingent consideration and the put option financial liability (prior year) are recognised in relation to the acquisitions listed below. FLT has determined that contingent consideration and put option is classified as Level 3 (2024: Level 3) under the AASB 13 Fair value measurement hierarchy as the main valuation inputs outlined below are unobservable. Any changes in the fair value of the contingent consideration are recorded through other income in the statement of profit or loss. The put option liabilities that exist, outlined for each company below, have been recognised as a financial liability and in the acquisition reserve of the parent entity. Changes in fair value have gone through the statement of profit or loss. AVMIN PTY LIMITED (AVMIN) The financial liability related to the put option for AVMIN of $2,023,000 (2024: $3,683,000) has been recorded as part of current contingent consideration. The potential undiscounted amount of this liability has been estimated as the value of future expected cash flows for the settlement of the put option for AVMIN. The expected cash flows are based on a multiple of the average NPAT for the year ended 30 June 2023 and for the year ended 30 June 2024. TRAVEL TECHNOLOGY FZ LLC (TPCONNECTS) Concurrent with the acquisition in the year ended 30 June 2022, FLT through its subsidiary Flight Centre Travel Group (UAE Holdings) Limited entered into a call option over the non-controlling shareholders’ remaining 30% interest in TPConnects and the non-controlling shareholders entered into a corresponding put option. The call option could be exercised after 1 July 2027 and the put option could only be exercised by TPConnects if the call option is not exercised by FLT. During the year an agreement was reached to purchase the remaining 30% for USD6,000,000 ($9,651,000). This amount was recognised against the put option financial liability with the difference recognised in the acquisition reserve. Refer Note F11. As a result of the purchase agreement, the call and put options were terminated. FINANCIAL LIABILITIES NOTES $'000 Closing balance at 1 July 2024 9,598 Net foreign exchange movements 563 Avmin Pty Limited (Avmin) A3 (1,660) Travel Technology FZ LLC (TPConnects) (6,478) Closing balance at 30 June 2025 2,023 SIGNIFICANT ACCOUNTING ESTIMATE The valuations used to determine the carrying amount of put option financial liabilities are based on forward looking key assumptions that are, by nature, uncertain. This requires an estimation of future earnings which includes assumptions in relation to revenue growth and the cost of business operations. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 56 For personal use only
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B CASH MANAGEMENT FLT has a capital allocation framework in place which looks to maximise shareholder returns and long-term growth while balancing a conservative capital structure. B1 Cash and cash equivalents B2 Financial asset investments B3 Cash and financial asset investments - financial risk management B4 Borrowings B5 Convertible notes B6 Ratios • Net debt • Gearing ratio B7 Dividends B1 CASH AND CASH EQUIVALENTS 2025 2024 $'000 $'000 Cash at bank and on hand 622,444 718,287 Restricted cash¹ 193,067 419,855 Total cash and cash equivalents 815,511 1,138,142 1 Restricted cash and cash equivalents relates to cash held within legal entities of the group for payment to product and service suppliers or cash held for supplier guarantees where contractually required. Restricted cash includes monies paid to the group by end consumers for payment to local International Air Transport Association (IATA) for ticketed travel arrangements, and refund monies received from IATA awaiting payment to end consumers. In the current year it has been determined that only where FLT has the cash in bank for future IATA payments is the cash required to be shown as restricted (prior period comparatives have not been restated). In conjunction with this change, trade receivables that relate to transactions not yet remitted to IATA have been disclosed as trade receivables pledged as security, refer Note F3. RECONCILIATION TO STATEMENT OF CASH FLOWS 2025 2024 $'000 $'000 Cash and cash equivalents 815,511 1,138,142 Bank overdraft (7,872) (1,277) Balance per Statement of Cash Flows 807,639 1,136,865 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 57 For personal use only
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B1 CASH AND CASH EQUIVALENTS (CONTINUED) RECONCILIATION OF PROFIT AFTER TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2025 2024 $'000 $'000 Profit after income tax for the year 108,184 139,155 Depreciation and amortisation 149,390 159,326 N e t l o s s o n d i s p o s a l o f n o n - c u r r e n t a s s e t s 8,635 2,286 Share of (profits) / loss of joint ventures & associates (3,344) 2,435 Impairment (reversals) / charges (6,854) 39,850 Dividends paid to non-controlling shareholders in subsidiaries 728 408 Fair value adjustment to contingent consideration (1,660) — Non-cash employee benefits expense - share based payments 15,263 24,235 Non-cash employee benefits expense - other — 446 Amortisation of convertible notes 25,121 30,816 Non-cash other income - buy back and remeasurement of convertible note (11,466) (48,022) Non-cash other income - other (3,093) (7,603) Lease surrender payments 233 236 Net exchange differences (15,202) (445) Increase in trade receivables, contracts assets and other assets (78,174) (57,878) (Decrease) / increase in trade creditors and other payables (114,400) 94,212 Increase in net income taxes payable 48,894 41,075 Increase in other provisions 16,903 948 Net cash inflow from operating activities 139,158 421,480 B2 FINANCIAL ASSET INVESTMENTS 2025 2024 CURRENT $'000 $'000 Debt securities - Fair value through other comprehensive income (FVOCI) — 10,007 Total current financial asset investments — 10,007 NON-CURRENT Equity investments - Fair value through profit or loss (FVTPL) 10,728 7,729 Total non-current financial asset investments 10,728 7,729 Debt securities measured at FVOCI have contractual cash flow characteristics that are solely payment of principal and interest and are held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. Debt securities and repurchase receivables are measured at amortised cost, only if both the following conditions are met: • it is held within a business model whose objective is to hold assets in order to collect contractual cash flows • the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest Debt securities at FVOCI (corporate bonds) are measured at fair value, which is determined by reference to price quotations in a market for identical assets. FLT has determined that they are classified as Level 2 (2024: Level 2) under the AASB 13 Fair Value Measurement hierarchy. Equity investments at FVTPL are measured at fair value, which is determined using discounted cash flow technique using estimated future cash flow and discount rate. FLT has determined that they are classified as Level 3 (2024: Level 3) under the AASB 13 Fair Value Measurement hierarchy, based on the valuation technique as described above. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 58 For personal use only
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B3 CASH AND FINANCIAL ASSET INVESTMENTS - FINANCIAL RISK MANAGEMENT CREDIT RISK Credit risk arising from cash and cash equivalents and financial asset investments is managed in accordance with group treasury policy. Limits are set on credit rating, type of security, counterparty exposure and maturity. Credit quality has been assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. There has been no significant increase to credit risk for cash and cash equivalents and financial assets. EQUIVALENT S&P RATING AA AND ABOVE AA-TO A- BBB+ TO BBB- NON INVESTMENT GRADE / UNRATED UNRATED - FX BUSINESS CURRENCY HOLDINGS TOTAL AT 30 JUNE 2025 $'000 $'000 $'000 $'000 $'000 $'000 Cash and cash equivalents 76,974 556,854 88,900 17,835 74,948 815,511 Equity investments - FVTPL — — — 10,728 — 10,728 Debt securities - FVOCI — — — — — — AT 30 JUNE 2024 Cash and cash equivalents — 897,813 95,276 89,237 55,816 1,138,142 Equity investments - FVTPL — — — 7,729 — 7,729 Debt securities - FVOCI — 10,007 — — — 10,007 ACCOUNTING POLICY FLT has applied the simplified approach for provisioning for expected credit losses prescribed by AASB 9 for financial assets held at amortised cost. Additional information on trade and other receivables accounting policy is included in note I (m). The maximum exposure to credit risk is the carrying amount of financial assets and the carrying amount of cash and cash equivalents as disclosed above. Rated assets falling outside the AAA and BBB- range are considered non-investment grade / unrated. These include term deposits in overseas banks held by the subsidiaries, mainly in South Africa. Unrated FX business currency holdings consist of cash on hand for trading purposes as part of the Travel Money foreign exchange business. MARKET RISK INTEREST RATE AND FOREIGN CURRENCY RISK The group holds investments at variable rates. FLT’s profit and operating cash flows are, therefore, exposed to changes in market interest rates. The group constantly analyses its interest rate exposure. The group has no exposures to interbank offered rates (IBORs) on its non-derivative financial instruments that have been replaced or reformed as part of the market-wide initiatives. Refer to note C1 for sensitivity of interest rate risk and foreign currency risk. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 59 For personal use only
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B4 BORROWINGS 2025 2024 CURRENT NOTES $'000 $'000 Bank loans (including bank overdraft) 16,157 10,592 Net unsecured notes principal¹ D2 610 610 Total current borrowings 16,767 11,202 NON-CURRENT Bank loans 124,359 102,561 Total non-current borrowings 124,359 102,561 1 Refer to note D2 for further information on the net unsecured notes that form part of the Business Ownership Scheme (BOS). CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES 2025 2024 BORROWINGS $'000 $'000 Opening Balance at 1 July 113,763 410,370 Cashflow - Proceeds from borrowings¹ 150,463 3,217 Cashflow - Repayment of borrowings¹ (129,588) (252,092) Proceeds from bank overdrafts 7,064 1,203 Repayment of bank overdrafts (469) (49,428) Foreign exchange movement (107) 493 Closing Balance at 30 June 141,126 113,763 1 This includes the bank debt facilities, the periodic use of the repurchase facility and operation of the Business Ownership Scheme (BOS) during the year. Further details of BOS are included in note D2. The group classifies interest paid within cash flows from operating activities. FINANCIAL RISK MANAGEMENT CAPITAL MANAGEMENT FLT have a $200,000,000 secured Syndicated Facility Arrangement (SFA) undrawn (2024: $350,000,000 facility, $250,000,000 undrawn). Facility has a maturity date of 28 April 2026 (2024: April 2026). The facility is guaranteed by certain members of the Group. At 30 June 2025 FLT complied with the net leverage ratio and fixed charges cover ratio covenants for the fiscal year. This satisfied the financial covenants requirements under the SFA. FLT’s next covenant compliance obligation is 31 December 2025. In October 2024, a $200,000,000 Receivables Financing Facility was made available to the Group. Of the $200,000,000, $76,500,000 is undrawn. With the introduction of the Receivables Financing Facility, the SFA Facility limit was reduced from $350,000,000 to $200,000,000. The Receivables Financing Facility is set to expire in October 2026. Further details of the financing can be found in Note F3. At 30 June 2025 FLT complied with all obligations under the Receivables Financing Facility. CASH FLOW AND FAIR VALUE INTEREST RATE RISK The group holds borrowings which are issued at both effective fixed and variable rates. FLT’s profit and operating cash flows are, therefore, exposed to changes in market interest rates. The group constantly analyses its interest rate exposure, taking into consideration refinancing, renewal of existing positions and alternative financing. The group calculates the impact a defined interest rate shift will have on profit or loss. For each analysis, the same interest rate shift is used for all currencies. Under group policy, the maximum percentage of outstanding external group debt that may be maintained at a fixed interest rate is 50%, unless the group’s Global CFO and Global Treasurer approve otherwise. Current bank loan facilities are subject to annual review (except the Syndicated Facility Arrangement and Receivables Finance Facility) and are a mix of fixed and floating interest rates. Refer Note F3 for information on Receivables Finance Facility. Non-current loan facilities have maturities between 1-3 (2024: 1 - 4 years) and are at a mix of fixed and floating rates. The current interest rates on loan facilities range from 0.55% - 8.5% (2024: 0.55% - 11.00%). NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 60 For personal use only
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B4 BORROWINGS (CONTINUED) LIQUIDITY RISK The group has access to additional financing via unused bank loan facilities, repurchase agreements, credit card facilities, bank guarantees, receivables financing and letter of credit facilities. BANK LOANS & LEASING FACILITIES CREDIT CARDS BANK GUARANTEES & LETTERS OF CREDIT 2025 2024 2025 2024 2025 2024 $'000 $'000 $'000 $'000 $'000 $'000 Unused 364,648 313,635 95,317 107,466 43,242 33,590 Used 140,516 113,555 119,438 74,807 97,889 72,991 Total facilities 505,164 427,190 214,755 182,273 141,131 106,581 Bank guarantees and letters of credit are provided as security on various facilities with vendors and in accordance with local travel agency licensing and IATA regulations. Refer to note C1 for a sensitivity analysis of borrowings' interest rate risk and details of borrowings' maturity profiles and associated liquidity risks. There have been no defaults during the period. FAIR VALUE The carrying amount of the group’s borrowings approximates their fair values, as commercial rates of interest are paid and the impact of discounting is not significant. ASSETS PLEDGED AS SECURITY $7,500,000 of FLT's cash is invested with the providers of certain bank guarantees and letter of credit facilities and used as collateral for bank guarantees and letters of credit issued under those facilities. The carrying amount of trade receivables at the reporting date that have been pledged as security and not derecognised is $184,243,000. Refer Note F3. B5 CONVERTIBLE NOTES 2025 2024 $'000 $'000 CURRENT Convertible notes due November 20271 — 280,825 Convertible notes due November 20282 186,446 — Total current convertible notes 186,446 280,825 NON-CURRENT Convertible notes due November 20271 292,655 — Convertible notes due November 20282 — 338,999 Total non-current convertible notes 292,655 338,999 1 The convertible notes due November 2027 were classified as current in comparative period as note holders had an option to redeem the remaining $325,000,000 face value of the bond in November 2024. The put date passed and the Notes can now be redeemed in November 2027. 2 The convertible notes due November 2028 are classified as current as note holders have an option to redeem the remaining $199,600,00 face value of the bond in May 2026. ACCOUNTING POLICY The component of convertible notes that exhibits characteristics of a liability is recognised as a liability in the balance sheet, net of transaction costs. On issuance of convertible notes, the fair value of the liability component is determined using a market rate for an equivalent non-convertible note; and this amount is carried as a non-current liability on the amortised cost basis until extinguished on conversion or redemption. The increase in liability due to passage of time is recognised as a finance cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders’ equity, net of transaction costs. The carrying amount of the conversion option is not remeasured in subsequent periods. Transaction costs are apportioned between the liability and equity components of the convertible notes based on the allocation of proceeds to the liability and equity components when the instruments are first recognised. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 61 For personal use only
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B5 CONVERTIBLE NOTES (CONTINUED) CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES 2025 2024 NOTES $'000 $'000 Opening Balance at 1 July 619,824 688,940 Amortisation of convertible note at effective interest rate A4 25,121 30,816 Cashflow - partial repurchase of convertible notes (197,581) (84,153) Gain on partial repurchase of convertible notes A3 (11,466) (10,982) Gross equity component of convertible notes bought back F11 32,841 23,356 Gain on remeasurement of convertible notes A3 — (37,040) Changes in fair value hedge during the period 10,362 8,887 Closing Balance at 30 June 479,101 619,824 SUMMARY OF KEY TERMS OF CONVERTIBLE NOTES DETAILS CONVERTIBLE NOTES DUE NOVEMBER 2027 CONVERTIBLE NOTES DUE NOVEMBER 2028 Issuance Date 17 November 2020 1 November 2021 Face Value 400,000,000 400,000,000 Face Value - Outstanding 325,000,000 199,600,000 Strike Price $20.04 (subject to changes post-issuance) $27.30 (subject to changes post-issuance) Adjusted Strike Price $19.39 $26.42 Put Date - Option to Redeem Elapsed - At face value plus accrued but unpaid interest (November 2024) At face value plus accrued but unpaid interest (May 2026) Maturity Date 17 November 2027 1 November 2028 Interest Rate 2.50% per annum 1.625% per annum Effective Interest Rate 7.00% per annum (based on seven-year amortisation) 7.12% per annum (based on 4.5-year amortisation) Interest Payment Frequency Semi-annually in arrears (May and November) Semi-annually in arrears (May and November) Amortisation Period Seven-year estimation Significant judgement applied, 4.5-year estimation PARTIAL REPURCHASE OF CONVERTIBLE NOTES During the period convertible notes were partially bought back. DETAILS 2025 2024 Convertible notes due due November 2028 due November 2027 Face Value of Notes 200,400,000 75,000,000 Repurchase Price 197,581,000 84,153,000 Gain from Fair Value Re-measurement 11,466,000 10,982,000 Liability Component Allocation 164,740,000 60,797,000 Equity Component Allocation 32,841,000 23,356,000 Net Equity Impact (Net of Tax) 22,989,000 16,349,000 Hedge accounting has been discontinued for the repurchased convertible notes, previously designated as the hedged item in a fair value hedge. The cumulative adjustment to the carrying value of the hedged item is included in the gain on buy- back. To preserve an effective hedging relationship, the interest rate swap, serving as the hedging instrument, has been partially terminated, with a notional value of $200,400,000. The termination payment of $8,833,000 is reflected under Partial termination of fair value hedge in the statement of cash flows. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 62 For personal use only
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B6 RATIOS CAPITAL MANAGEMENT FLT maintains a funding structure that allows it to meet its operational and regulatory requirements, while providing sufficient flexibility to fund growth, working capital requirements and future strategic opportunities. The Group’s capital structure includes a mix of debt, general cash and equity attributable to the parent’s equity holders. NET CASH / (DEBT) 2025 2024 NOTES $'000 $'000 Cash at bank and on hand (excluding restricted cash) B1 622,444 718,287 Financial investments - current B2 — 10,007 Financial investments - non-current B2 10,728 7,729 633,172 736,023 Less: Borrowings - current B4 16,767 11,202 Borrowings - non-current B4 124,359 102,561 141,126 113,763 Net cash / (debt)¹ 492,046 622,260 FLT continues to be in a net cash position (30 June 2024: net cash position). FLT bought back $197,581,000 of convertible notes, bought back $57,125,000 of shares and paid $90,969,000 in dividends (to company owners and non-controlling shareholders in subsidiaries) during the period, reducing the net cash balance. 1 Net cash / (debt) = (Cash + financial investments) – (current and non-current borrowings). The calculation excludes restricted cash (refer note B1) and convertible notes. The calculation also excludes the impact of AASB 16 Leases in respect of the current and non-current lease liabilities. GEARING RATIO 2025 2024 NOTES $'000 $'000 Total borrowings B4 141,126 113,763 Total equity 1,223,626 1,203,203 Gearing ratio¹ 11.5 % 9.5 % 1 Gearing ratio = Total borrowings / Total equity. The calculation excludes the convertible note and lease liabilities from total borrowings. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2021 FLIGHT CENTRE TRAVEL GROUP 63 For personal use only
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B7 DIVIDENDS OVERVIEW When determining dividend returns to shareholders, FLT’s board considers a number of factors, including the company’s anticipated cash requirements to fund its growth and operational plans and current and future economic conditions. A final dividend has been declared taking into account traditional seasonal cashflows, anticipated cash outflows and one-off profit items. The combined interim and final dividend represents a $87,584,000 (2024: $88,023,000) return to shareholders, 58% (2024: 47%) of FLT’s statutory NPAT. The combined dividend represents 38% (2024: 29% ) of FLT’s full year underlying NPAT. 2025 2024 ORDINARY SHARES $'000 $'000 Final ordinary dividend for the year ended 30 June 2024 of 30.0c cents (2023: 18.0 cents) per fully paid share 66,312 39,491 Interim ordinary dividend for the year ended 30 June 2025 of 11.0c cents (2024: 10.0 cents) per fully paid share 24,657 22,100 90,969 61,591 The final dividend is per fully paid ordinary share fully franked based on tax paid at 30%. The aggregate amount of the proposed dividends expected to be paid on 16 October 2025 out of retained profits at 30 June 2025, but not recognised as a liability at the end of the year are as follows: 2025 2024 AMOUNT PER SECURITY CENTS AMOUNT PER SECURITY CENTS Final dividend 29 30 $'000 $'000 Final dividend 62,927 65,923 FRANKING CREDITS $'000 $'000 Franking credits available for subsequent financial years based on a tax rate of 30% 36,903 102,570 The above amounts represent the balance of the franking account at the end of the financial year, adjusted for: i. Franking credits that will arise from the current tax liability’s payment ii. Franking debits that will arise from the dividend payments recognised as a liability for the reporting period’s end; and iii. Franking credits that will arise from the receipt of dividends recognised as receivables at the reporting period’s end. The dividend recommended by the directors since year-end, but not recognised as a year-end liability will reduce the franking account by $27.0m (2024: $28.4m.) 1 Underlying NPAT is an unaudited, non-IFRS measure. Current year underlying PBT of $289,065,000 excludes underlying adjustments detailed in note A1. Underlying NPAT of $166,547,000 excludes the related tax impact of $122,518,000. 2025 2024 DIVIDENDS PAYABLE $'000 $'000 Opening balance at 1 July — — Dividends declared - parent entity 90,969 61,591 Dividends declared - attributable to non-controlling interest 240 — Cashflow - Dividend payment (91,209) (61,591) Closing balance at 30 June — — NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 64 For personal use only
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C FINANCIAL RISK MANAGEMENT This section provides information relating to FLT Group’s exposure to financial risks, how they affect the group’s financial position and performance and how the risks are managed. C1 Financial risk management C2 Derivative financial instruments C3 Other financial assets C1 FINANCIAL RISK MANAGEMENT OVERVIEW FLT maintains a strong balance sheet and liquidity, managing financial risks like market, credit, and liquidity risks. A central treasury department, guided by board-approved policies, oversees these risks by utilising both derivative and non-derivative financial instruments and coordinating with the group's operating units. Market and credit risks are detailed in balance sheet notes, while hedge accounting effects, liquidity risk, and sensitivities are discussed separately. LIQUIDITY RISK FLT closely manages and monitors liquidity at a group level through rolling operating cashflow forecasts, supported by Global Treasury review of short-term,13-week cashflow forecasts prepared weekly at a detailed level by business and country. During the year FLT complied with the net leverage ratio, and the fixed charges cover ratio financial covenants for the twelve month periods to 31 December 2024 and 30 June 2025. FLT’s next covenant compliance obligation is 31 December 2025. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 65 For personal use only
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C1 FINANCIAL RISK MANAGEMENT (CONTINUED) LIQUIDITY RISK (CONTINUED) MATURITIES OF FINANCIAL LIABILITIES The tables below analyse the Group’s financial liabilities and net and gross settled derivative financial instruments into relevant maturity groupings. Groupings are based on the remaining period to the contractual maturity date at the reporting period’s end. The amounts disclosed in the table are the contractual undiscounted cash flows. 2025 LESS THAN 12 MONTHS BETWEEN 1 AND 2 YEARS BETWEEN 2 AND 5 YEARS MORE THAN 5 YEARS TOTAL CONTRACTUAL CASH FLOWS CARRYING AMOUNT Non-derivatives $'000 $'000 $'000 $'000 $'000 $'000 Trade and other payables 1,591,219 — — — 1,591,219 1,591,219 Financial liabilities 2,023 — — — 2,023 2,023 Borrowings 22,932 124,304 235 — 147,471 141,126 Convertible note 210,969 8,125 329,063 — 548,157 479,101 Lease liabilities 88,364 66,653 109,227 33,365 297,609 263,884 Total non-derivatives 1,915,507 199,082 438,525 33,365 2,586,479 2,477,353 Derivatives 15,651 1,973 — — 17,624 17,624 Derivatives - net settled 15,651 1,973 — — 17,624 17,624 2024 Non-derivatives Trade and other payables 1,708,553 — — — 1,708,553 1,708,553 Financial liabilities 3,683 — 7,727 — 11,410 9,598 Borrowings 16,530 107,180 1,004 — 124,714 113,763 Convertible note 335,563 406,500 — — 742,063 619,824 Lease liabilities 84,475 66,117 98,723 28,159 277,474 254,565 Total non-derivatives 2,148,804 579,797 107,454 28,159 2,864,214 2,706,303 Derivatives 18,809 15,040 — — 33,849 32,406 Derivatives - net settled 18,809 15,040 — — 33,849 32,406 SUMMARISED SENSITIVITY ANALYSIS The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate risk and foreign exchange risk. The foreign exchange sensitivities are based on the Group’s exposures existing at balance date taking into account the Group’s designated cash flow hedges. Interest rate sensitivities are based on reasonable changes in interest rates on that portion of cash, investments and borrowings affected. Foreign currency risks, as defined by AASB 7 Financial Instruments: Disclosures, arise on account of financial instruments being denominated in a currency that is not the functional currency in which the financial instrument is measured. Differences from the translation of financial statements into the Group’s presentation currency are not taken into consideration in the sensitivity analysis. Foreign exchange sensitivities are based on reasonably possible changes in foreign exchanges rates. For interest rate and foreign exchange rate sensitivities, all other variables are held constant. Sensitivity figures are pre-tax. The movement in equity excludes movements in retained earnings. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 66 For personal use only
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C1 FINANCIAL RISK MANAGEMENT (CONTINUED) SUMMARISED SENSITIVITY ANALYSIS (CONTINUED) CARRYING AMOUNT INTEREST RATE RISK FOREIGN EXCHANGE RISK 2025 -1% +1% - 1 0 % +10% Financial assets $'000 PROFIT PROFIT PROFIT PROFIT Cash and cash equivalents 815,511 (7,406) 7,406 17,852 (14,606) Equity securities - FVTPL 10,728 — — — — Trade & other receivables 939,503 — — 2,608 (2,134) Contract assets 308,310 — — 12,764 (10,443) Other financial assets 54,171 — — — — Derivative financial instruments 2,031 — — (6,904) 5,648 Financial liabilities Trade and other payables 1,591,219 — — 18,314 (22,384) Financial liabilities 2,023 — — — — Borrowings - current 16,767 (168) 168 — — Borrowings - non-current 124,359 (1,244) 1,244 — — Convertible notes (including derivatives) 479,101 (1,830) 1,830 — — Derivative financial instruments 14,130 — — (6,420) 5,252 Total increase / (decrease) (10,648) 10,648 38,214 (38,667) CARRYING AMOUNT INTEREST RATE RISK FOREIGN EXCHANGE RISK 2024 - 1 % +1% - 1 0 % +10% Financial assets $'000 PROFIT PROFIT PROFIT PROFIT Cash and cash equivalents 1,138,142 (11,381) 11,381 13,494 (11,040) Equity securities - FVTPL 7,729 — — — — Debt securities - FVOCI 10,007 (100) 100 — — Trade & other receivables 907,956 — — 16,376 (13,399) Contract assets 314,561 — — 13,076 (10,699) Other financial assets 23,124 — — — — Derivative financial instruments 2,518 — — (22,248) 16,100 Financial liabilities Trade and other payables 1,708,553 — — (40,153) 32,853 Financial liabilities 9,598 — — (538) 657 Borrowings - current 11,202 (88) 88 — — Borrowings - non-current 102,561 (1,000) 1,000 — — Convertible note (including derivatives) 619,824 (4,000) 4,000 — — Derivative financial instruments 24,895 — — (8,097) 5,609 Total increase / (decrease) (16,569) 16,569 (28,090) 20,081 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 67 For personal use only
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C1 FINANCIAL RISK MANAGEMENT (CONTINUED) SUMMARISED SENSITIVITY ANALYSIS (CONTINUED) CARRYING AMOUNT INTEREST RATE RISK FOREIGN EXCHANGE RISK 2025 -1% +1% - 1 0 % +10% Financial assets $'000 EQUITY EQUITY EQUITY EQUITY Derivative financial instruments 7,390 — — 6,451 (5,278) Financial liabilities Derivative financial instruments 3,494 — — 5,273 (6,420) — — 11,724 (11,698) CARRYING AMOUNT INTEREST RATE RISK FOREIGN EXCHANGE RISK 2024 -1% +1% - 1 0 % +10% Financial assets $'000 EQUITY EQUITY EQUITY EQUITY Derivative financial instruments 1,470 — — 4,125 (3,386) Financial liabilities Derivative financial instruments 7,511 (395) 393 (25,589) 22,571 (395) 393 (21,464) 19,185 Other than disclosed in the table above, there are no other equity impacts as a result of movements in interest rates and foreign exchange rates. There is no profit or equity impact as a result of other price risk. C2 DERIVATIVE FINANCIAL INSTRUMENTS 2025 2024 CURRENT ASSETS NOTES $'000 $'000 Forward foreign exchange contracts - designated in a cash flow hedge 6,804 1,470 Forward foreign exchange contracts - FVTPL 2,031 2,518 Total current derivative financial instrument assets 8,835 3,988 NON-CURRENT ASSETS Forward foreign exchange contracts - designated in a cash flow hedge 586 — Total non-current derivative financial instrument assets 586 — CURRENT LIABILITIES Forward foreign exchange contracts - designated in a cash flow hedge 3,494 5,043 Interest rate swaps - designated in a fair value hedge 4,201 — Forward foreign exchange contracts - FVTPL 7,956 1,046 Total current derivative financial instrument liabilities 15,651 6,089 NON-CURRENT LIABILITIES Forward foreign exchange contracts - FVTPL 1,973 667 Cross currency interest rate swaps - designated in a net investment hedge — 2,468 Interest rate swaps - designated in a fair value hedge — 23,182 Total non-current derivative financial instrument liabilities 1,973 26,317 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 68 For personal use only
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C2 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) FINANCIAL RISK MANAGEMENT FAIR VALUE Forward foreign exchange contracts are measured at fair value, which is based on observable forward foreign exchange rates and the respective currencies' yield curves, as well as the currency basis spreads between the respective currencies. Interest rate swaps are measured at fair value, which is calculated as the present value of the estimated future cash flows. Estimate of future cash flows are based on interbank borrowing rates. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument. See hedge accounting set out below for derivatives designated as part of a hedging relationship to which hedge accounting is applied. Changes in fair value for derivative instruments that do not qualify for hedge accounting are recognised immediately in the statement of profit or loss. The forward foreign exchange contracts and interest rate swaps are classified as Level 2 (2024: Level 2) under the AASB 13 Fair value measurement hierarchy, based on the valuation technique described above. MARKET RISK The Group has no exposures to IBORs on its derivative financial instruments that have been replaced or reformed as part of these market-wide initiatives. CREDIT RISK The maximum exposure to credit risk in relation to derivatives at the reporting period's end is the fair value of all forward foreign exchange contracts, cross currency interest rate swaps and interest rate swaps as disclosed above. Credit quality can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. All counterparties have an equivalent S&P rating ranging from A - A A -. HEDGE ACCOUNTING ACCOUNTING POLICY All derivatives are recognised in the balance sheet at fair value and are classified as FVTPL except where they are designated as part of an effective hedge relationship and classified as hedging derivatives. The carrying value of a derivative is remeasured at fair value throughout the life of the contract. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. The method of recognising the resulting fair value gain or loss on a derivative depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged. The Group designates its derivatives as fair value hedges when hedging fair value of recognised assets or liabilities or a firm commitment. The Group designates its derivatives as cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a foreign currency risk associated with a highly probable foreign currency forecast transaction. The Group designates its derivatives as net investment hedges when hedging foreign currency risk attributable to a net investment in a foreign operation. FLT documents at the inception of the transaction the relationship between hedging instruments and hedged items, the risk being hedged and the Group’s risk management objective and strategy for undertaking these hedge transactions. The effectiveness of the hedges is measured throughout the life of the hedging relationship. Ineffectiveness arises in the event of over hedging, whereby the notional amount of the designated hedge instrument exceeds the notional amount of the hedged item attributable to the hedged risk, or timing mismatches. Where ineffectiveness is identified, any revaluation gains or losses on the ineffective portion of the hedging instrument are immediately recognised in the statement of profit or loss in foreign exchange gains or foreign exchange losses or interest expense. The effective portion of changes in the fair value of derivatives that are designated as cash flow hedges are recognised in the cash flow hedge reserve within equity. The effective portion of changes in the fair value of derivatives that are designated as net investment hedges are recognised in the foreign currency translation reserve within equity. Amounts accumulated in equity are transferred to the statement of profit or loss in the period(s) in which the hedged item affects the statement of profit or loss. Changes in the fair value of derivatives that are designated as fair value hedges are recorded in profit or loss, together with any changes in the fair value of the hedged items that are attributable to the hedged risk. If the fair value hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to profit or loss over the period to maturity using a recalculated effective interest rate. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 69 For personal use only
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C2 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) RISK MANAGEMENT STRATEGY The fundamental objective is to minimise risk. This is achieved by minimising the volatility in the statement of profit or loss and variations in cash flows. The objective is not to maximise revenue or minimise costs, however in certain situations hedging may deliver value to FLT by minimising downside risk. There is no speculation allowed and all treasury activities and transactions must be linked to underlying business requirements. FLT currently holds an interest rate swap which has been designated in a fair value hedge relationship for Convertible notes due November 2028. The swap is being used to hedge the exposure to changes in the fair value of its fixed rate 1.625% convertible note. There is an economic relationship between the hedged item and the hedging instrument as the terms of the interest rate swap match the terms of the convertible note (i.e., notional amount, maturity, and payment). The Group has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the interest rate swap is identical to the hedged risk component. To test the hedge effectiveness, the Group uses the hypothetical derivative method and compares the changes in the fair value of the hedging instrument against the changes in fair value of the hedged item attributable to the hedged risk. THE EFFECTS OF HEDGE ACCOUNTING At 30 June 2025, FLT holds the following forward foreign exchange contracts (FECs) to hedge its exposure on forecast foreign currency receipts and forecast foreign currency payments. NOTIONAL AMOUNT IN LOCAL CURRENCY CARRYING AMOUNT AVERAGE FORWARD PRICE CHANGE IN FAIR VALUE USED FOR MEASURING INEFFECTIVENESS FOR THE PERIOD CASH FLOW HEDGES – 2025 '000 $'000 $'000 EUR 39,400 3,652 0.58 3,652 GBP 20,450 1,982 0.50 1,982 USD (9,634) (1,307) 0.66 (1,307) FJD 29,350 (314) 1.44 (314) SGD (18,050) 72 0.83 72 Others (190) (190) 3,895 3,895 NOTIONAL AMOUNT IN LOCAL CURRENCY CARRYING AMOUNT AVERAGE FORWARD PRICE CHANGE IN FAIR VALUE USED FOR MEASURING INEFFECTIVENESS FOR THE PERIOD CASH FLOW HEDGES – 2024 '000 $'000 $'000 USD 192,432 (76) 0.60 (76) THB 171,146 (232) 1.44 (232) JPY 88,752 (87) 23.45 (87) EUR 69,620 (2,055) 0.53 (2,055) GBP 33,220 (194) 12.42 (194) Others (929) (929) (3,573) (3,573) NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 70 For personal use only
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C2 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) CURRENCY CHANGE IN VALUE USED FOR MEASURING INEFFECTIVENESS CASH FLOW HEDGE RESERVE CASH FLOW HEDGES – 2025 $'000 $'000 Foreign currency receipts EUR (410) (410) USD 235 235 GBP (57) (57) ZAR (52) (52) SGD 25 25 — 3 3 Foreign currency payments EUR 4,061 4,061 GBP 2,040 2,040 USD (1,542) (1,542) FJD (323) (323) AED (69) (69) — (16) (16) 3,895 CURRENCY CHANGE IN VALUE USED FOR MEASURING INEFFECTIVENESS CASH FLOW HEDGE RESERVE CASH FLOW HEDGES – 2024 $'000 $'000 Foreign currency receipts EUR (2,303) (2,303) FJD (629) (629) THB (245) (245) GBP (242) (242) USD (193) (193) Other (449) (449) Foreign currency payments EUR 249 249 USD 117 117 ZAR (113) (113) NZD 103 103 SGD 54 54 Other 78 78 (3,573) NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 71 For personal use only
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C2 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) At 30 June 2025, FLT holds an interest rate swap to hedge its exposure on convertible notes. The impact of hedging instruments designated in hedging relationships at 30 June 2025 on the balance sheet of the Group is as follows. Note this is shown in the consolidated balance sheet in liabilities as derivative financial instruments. NOTIONAL AMOUNT CARRYING AMOUNT CHANGE IN VALUE USED FOR MEASURING INEFFECTIVENESS FAIR VALUE HEDGE - INTEREST RATE SWAP $'000 $'000 $'000 FAIR VALUE HEDGES - 2025 Interest rate swap 199,600 4,201 (10,148) FAIR VALUE HEDGES - 2024 Interest rate swap 400,000 23,182 (8,906) CARRYING AMOUNT ACCUMULATED FAIR VALUE ADJUSTMENTS CHANGE IN VALUE USED FOR MEASURING INEFFECTIVENESS FAIR VALUE HEDGE - CONVERTIBLE NOTE $'000 $'000 $'000 FAIR VALUE HEDGES - 2025 Convertible note (185,763) (4,201) 10,148 FAIR VALUE HEDGES - 2024 Convertible note 339,018 (23,182) 8,906 NOTIONAL AMOUNT IN LOCAL CURRENCY CARRYING AMOUNT CHANGE IN VALUE USED FOR MEASURING INEFFECTIVENESS CASH FLOW HEDGES - CROSS CURRENCY INTEREST RATE SWAP '000 $'000 $'000 CASH FLOW HEDGES - 2025 Cross currency interest rate swap - Euro — — (2,478) NET INVESTMENT HEDGES - 2024 Cross currency interest rate swap - Euro 63,925 (2,468) 804 During the year the cross currency interest rate swap was terminated. The change in fair value accumulated in equity has not been reclassified to profit and loss in accordance with accounting standards. CHANGE IN VALUE USED FOR MEASURING INEFFECTIVENESS FOREIGN CURRENCY TRANSLATION RESERVE NET INVESTMENT HEDGES - CROSS CURRENCY INTEREST RATE SWAP $'000 $'000 NET INVESTMENT HEDGES - 2025 Investment in subsidiaries (2,478) (1,735) NET INVESTMENT HEDGES - 2024 Investment in subsidiaries 804 (1,728) The impact of hedging instruments designated in hedging relationships at 30 June 2025 on the consolidated statement of profit or loss of the Group is as follows. These are all shown in the consolidated statement of profit or loss in other expenses as net foreign exchange losses or finance costs in interest and finance charges paid/payable. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 72 For personal use only
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C2 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) INEFFECTIVENESS RECOGNISED IN THE INCOME STATEMENT HEDGING GAIN /(LOSS) RECOGNISED IN OCI AMOUNT RECLASSIFIED FROM OCI TO THE INCOME STATEMENT CASH FLOW HEDGES $'000 $'000 $'000 Hedges of forecast foreign currency transactions 2025 — 8,272 (2,628) 2024 — (5,507) 3,271 NET INVESTMENT HEDGES 2025 — (2,478) — 2024 — 804 — C3 OTHER FINANCIAL ASSETS 2025 2024 $'000 $'000 Accrued interest 929 2,552 Loans to related parties 83 — Security deposits 18,700 19,516 Total current other financial assets 19,712 22,068 Loans to external parties 163 156 Security deposits 916 900 Other receivables 33,380 — Total non-current other financial assets 34,459 1,056 ACCOUNTING POLICY Loans to related parties, external parties and security deposits are measured at amortised cost, as they are held in order to collect contractual cash flows which are solely principal and interest. FINANCIAL RISK MANAGEMENT FAIR VALUE Due to their short-term nature, the carrying amounts of current other financial assets are assumed to approximate their fair values. The carrying amounts of non-current other financial assets equals their fair values, due to the commercial rates of interest earned and paid respectively, and the impact of discounting is not significant. CREDIT RISK The maximum exposure to credit risk at the reporting period’s end is the carrying amount of other financial assets as disclosed above, however FLT has categorised these as having an insignificant amount of credit risk and therefore no expected credit loss has been recognised. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 73 For personal use only
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D REWARD AND RECOGNITION This section provides a breakdown of the various programs FLT uses to reward and recognise employees and key executives, including Key Management Personnel (KMP). FLT believes that these programs reinforce the value of ownership and incentives, both of which are key parts of the company's philosophies and culture, and drive performance both individually and collectively to deliver better returns to shareholders. These programs also result in changes to the Group's contributed equity. The PCRP and GRR programs were introduced as a strategic response to the profound impacts that COVID-19 restrictions had on the business, with a focus on ensuring key executives who would be crucial to FLT’s recovery were retained while the business recovers and during the rebuilding phase. D1 Key management personnel D2 Business ownership scheme (BOS) D3 Share-based payments • Long term retention plan (LTRP) • Post-COVID-19 retention plan (PCRP) • Global recovery rights (GRR) • Employee share plan (ESP) • Deferred incentive plan (DIP) D4 Contributed equity and treasury shares D1 KEY MANAGEMENT PERSONNEL KMP COMPENSATION 2025 2024 $ $ Short-term employee benefits 6,711,710 7,078,652 Post-employment benefits 225,984 206,899 Long-term benefits 1,410,643 834,779 Share-based payments 1,334,661 1,561,211 Total KMP compensation 9,682,998 9,681,541 Detailed remuneration disclosures are provided in the remuneration report from page 21. Supporting information on Non- Executive Directors, Executive Director and Executive KMP remuneration is included in the remuneration report from page 22. EQUITY INSTRUMENT DISCLOSURES RELATING TO KMP Details of LTRP, PCRP and ESP provided as remuneration to KMP and shares issued on the exercise of such, together with terms and conditions, can be found from page 30 of the remuneration report. OTHER TRANSACTIONS WITH KMP Directors and specified executives receive travel services from FLT and its related companies on normal terms and conditions to employees. Director related companies receive travel services from FLT and its related companies on normal terms and conditions to other customers. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 74 For personal use only
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D2 BUSINESS OWNERSHIP SCHEME (BOS) OVERVIEW FLT believes it is important that its leaders see the businesses they run as their own and, under the BOS, eligible employees (front-line team leaders) invest in unsecured notes in their businesses as an incentive to improve short and long-term performance. ACCOUNTING POLICY The Australian BOS program is an ASIC-registered unsecured notes scheme. In Australia, the scheme re-commenced in April 2022 in the Travel Associates business, November 2022 in the Travel Money business, and January 2023 in the Ignite business. The employees receive a variable interest return on investment based on the individual business’s performance and is, therefore, exposed to the risks of his or her business, as neither FLT nor any of its group companies guarantees returns. The unsecured notes are repayable within 30 days’ notice by either party, upon termination of the note holder’s employment or on the 10th anniversary of the date of issue of the unsecured note. Interest is generally payable in arrears, one month in arrears. FLT has arrangements through its subsidiary, P4 Finance Pty Ltd (P4), to provide stapled BOS loans on an arm's length, commercial basis to fund eligible business leaders’ acquisition of unsecured notes. Under the terms of these loans, unsecured note holders agree that FLT will hold the Unsecured Note Certificate in escrow and note holders must assign the payment of funds owing on an unsecured note to P4. Accordingly, the Group has, at a consolidated level, offset FLT's unsecured note liability and P4's loan receivable in the group balance sheet and has also netted the interest income earned on loans provided by P4 against interest paid by FLT on the unsecured notes. BUSINESS OWNERSHIP SCHEME Both the unsecured notes and loans are recorded at amortised cost. 2025 2024 $'000 $'000 Unsecured notes principal 6,100 6,240 Loans held for unsecured notes (5,490) (5,630) Net unsecured notes principal 610 610 The unsecured note holders earn a variable, non-guaranteed return, based on their business's performance. BOS MULTIPLIER PROGRAMME As noted in the Remuneration Report, the key executive that has a Founder BOS in place as at June 2025 is Chris Galanty. ACCOUNTING POLICY A liability for the employee benefit of the potential BOS return multiple has been recognised as a provision (refer to note F10) when there is a contractual obligation or valid expectation that payment will be made. The BOS multiplier is recognised as current as it has vested for the KMP. 2025 2024 CURRENT NOTE $'000 $'000 Employee benefits F10 10,214 7,873 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 75 For personal use only
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D3 SHARE-BASED PAYMENTS OVERVIEW FLT has a number of plans which issue share rights to employees and key executives, including: • Long Term Retention Plan (LTRP) • Post-COVID-19 Retention Plan (PCRP) (concluded June 2024) • Global Recovery Rights (GRR) • Employee Share Plan (ESP) • Deferred Incentive Plan (DIP) (2025: Nil expense given targets not achieved and no payments made. DIP has now concluded) EXPENSES ARISING FROM SHARE-BASED PAYMENT TRANSACTIONS Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expense were as follows: 2025 2024 $'000 $'000 Long term retention plan 12,230 11,933 Post COVID-19 retention plan — 510 Employee share plan 2,901 2,688 Global recovery rights plan 132 9,104 Total expenses arising from share-based payment transactions 15,263 24,235 Directors are not eligible to participate in the LTRP, PCRP, GRR, DIP or ESP. ACCOUNTING POLICY AND VALUATION The fair value of performance rights granted are recognised as an employee benefit expense with a corresponding increase in reserves. The fair value is measured at grant date and recognised over the period during which employees become unconditionally entitled to the rights. The fair value at grant date is determined using the Black-Scholes option pricing model. The fair value of the rights granted excludes the impact of any non-market vesting conditions (for example, continued employment). Non-market vesting conditions are included in assumptions about the number of rights that are expected to become exercisable and the length of the vesting period. At the reporting period’s end, the entity revises its estimate of the number of rights that are expected to become exercisable and the most likely vesting period. The employee benefit expense recognised each period takes into account the most recent estimate. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 76 For personal use only
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D3 SHARE-BASED PAYMENTS (CONTINUED) LONG TERM RETENTION PLAN (LTRP) GENERAL TERMS Invited participants are granted base rights, for no consideration, in annual tranches over a 12 year period with vesting conditions based upon continued service. At the time base rights are granted, participants are granted a corresponding number of matched rights for no consideration (one matched right for each base right granted). From Grant 9 there is no split of base and matched rights and participants are granted rights, referred to as base rights below. Rights granted under the plan carry no dividend or voting rights. When exercisable, each right is convertible into one ordinary FLT share. The plan’s rules stipulate that the number of shares resulting from exercising all unexercised rights cannot exceed 5% of the company’s issued capital (currently less than 1%). VESTING REQUIREMENTS Base rights granted to participants for each tranche will vest on the base rights vesting dates as noted in the table below, subject to the service condition being satisfied (participants remain employed by the company at the vesting date). Matched rights granted to participants for each tranche will vest on the matched rights vesting dates as noted in the table below, subject to the service condition being satisfied (participants remain employed by the company at the vesting date) and the base rights (or shares) in respect of the respective grant continue to be held. METHOD OF SETTLEMENT The base rights and matched rights may be newly issued by FLT, purchased on-market or allocated from treasury shares. VALUATION The fair value of base and matched rights under the plan is estimated at the date of grant using a fixed dollar amount of rights granted for each participant and the Black-Scholes option pricing model which takes into account the rights’ term, the rights’ non-tradeable nature, the expected dividend yield and risk-free rate for the rights’ term. The fair value is recognised in the balance sheet as part of reserves over the period that the right vests with a corresponding expense recognised in the employee benefits costs. GRANT NUMBER GRANT DATE BASE RIGHTS MATCHING RIGHTS DATE/YEAR VESTED AND EXERCISABLE¹ EXPIRY DATE VALUE PER RIGHT AT GRANT DATE DATE/YEAR VESTED AND EXERCISABLE¹ EXPIRY DATE VALUE PER RIGHT AT GRANT DATE 4 1 July 2018 August 2021 1 July 2030 $54.26 August 2021 1 July 2030 $54.26 4b 1 July 2018 August 2021 1 July 2030 $54.26 August 2023 1 July 2030 $51.58 5 1 July 2019 August 2022 1 July 2030 $42.06 August 2022 1 July 2030 $42.06 5b 1 July 2019 August 2021 1 July 2030 $42.06 August 2024 1 July 2030 $38.84 6 1 July 2020 August 2023 1 July 2030 $11.30 August 2024 1 July 2030 $11.30 6b 1 July 2020 August 2021 1 July 2030 $11.30 August 2023 1 July 2030 $11.30 6c 1 July 2020 August 2022 1 July 2030 $11.30 August 2023 1 July 2030 $10.79 6d 1 July 2020 August 2023 1 July 2030 $11.30 August 2024 1 July 2030 $11.30 7 1 July 2021 August 2024 1 July 2030 $17.27 August 2023 1 July 2030 $17.27 7c 1 July 2021 August 2022 1 July 2030 $17.27 August 2024 1 July 2030 $17.27 7e 1 July 2021 August 2023 1 July 2030 $17.26 August 2024 1 July 2030 $17.26 8 1 July 2022 August 2025 1 July 2030 $17.02 August 2025 1 July 2030 $17.02 9 1 July 2023 August 2026 1 July 2030 $20.59 10 1 July 2024 August 2027 1 July 2030 $19.94 1 The vesting date is the day the Company releases full year financial results to the ASX in the year of vesting. The weighted average contractual remaining life (until expiry date) is 5 years. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 77 For personal use only
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D3 SHARE-BASED PAYMENTS (CONTINUED) LONG TERM RETENTION PLAN (LTRP) (CONTINUED) The LTRP rights held by executives, including those KMP separately disclosed in the remuneration report, is set out below: BALANCE AT START OF THE YEAR DURING THE YEAR BALANCE AT END OF THE YEAR 2025 VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER GRANTED NUMBER FORFEITED NUMBER VESTED NUMBER EXERCISED NUMBER VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER Grant 10 Base — — 745,275 (22,190) 1,824 — 1,824 721,261 Grant 9 Base — 713,879 2,955 (66,875) — — — 649,959 Grant 8 Base — 378,399 — (24,521) 4,644 (4,644) — 349,234 Match — 378,399 — (24,521) 4,644 (4,644) — 349,234 Grant 7 Base — 305,251 — (4,289) 290,813 (224,436) 66,377 10,149 Match — 304,436 — (4,289) 289,998 (221,747) 68,251 10,149 Grant 7c Base 4,574 — — — — (2,283) 2,291 — Match 2,291 8,078 — — 8,078 (8,078) 2,291 — Grant 6 Base 31,003 — — — — (22,568) 8,435 — Match 21,734 — — — — (9,425) 12,309 — Grant 6b Base 5,137 — — — — (5,137) — — Match 23,417 — — — — — 23,417 — Grant 6c Base 6,112 — — — — (3,068) 3,044 — Match — 13,953 — — 10,909 (10,909) — 3,044 Grant 6d Base 15,031 — — — — — 15,031 — Match 11,157 — — — — — 11,157 — Grant 5 Base 6,167 — — — — (3,964) 2,203 — Match 13,707 — — — — (11,274) 2,433 — Grant 5b Base 4,355 — — — — (4,355) — — Match — — — — — — — — Grant 4 Base 673 — — — — (673) — — Match 5,043 — — — — (3,974) 1,069 — Grant 4b Base 5,498 — — — — — 5,498 — Match 1,128 — — — — (1,128) — — NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 78 For personal use only
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D3 SHARE-BASED PAYMENTS (CONTINUED) LONG TERM RETENTION PLAN (LTRP) (CONTINUED) BALANCE AT START OF THE YEAR DURING THE YEAR BALANCE AT END OF THE YEAR 2024 VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER GRANTED NUMBER FORFEITED NUMBER VESTED NUMBER EXERCISED NUMBER VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER Grant 9 Base — — 767,901 (33,076) 20,946 (20,946) — 713,879 Grant 8 Base — 418,654 — (28,677) 11,578 (11,578) — 378,399 Match — 418,654 — (28,677) 11,578 (11,578) — 378,399 Grant 7 Base — 339,676 — (18,102) 16,323 (16,323) — 305,251 Match — 339,676 — (18,917) 16,323 (16,323) — 304,436 Grant 7c Base 10,369 — — — — (5,795) 4,574 — Match 2,291 8,078 — — — — 2,291 8,078 Grant 7e Base — 4,691 — — 4,691 (4,691) — — Match — 4,691 — — 4,691 (4,691) — — Grant 6 Base — 197,319 — — 197,319 (166,316) 31,003 — Match — 197,319 — — 197,319 (175,585) 21,734 — Grant 6b Base 18,512 — — — — (13,375) 5,137 — Match — 23,417 — — 23,417 — 23,417 — Grant 6c Base 13,953 — — — — (7,841) 6,112 — Match — 13,953 — — — — — 13,953 Grant 6d Base — 42,898 — — 42,898 (27,867) 15,031 — Match — 42,898 — — 42,898 (31,741) 11,157 — Grant 5 Base 25,495 — — — — (19,328) 6,167 — Match 26,798 — — — — (13,091) 13,707 — Grant 5b Base 4,355 — — — — — 4,355 — Match — 4,355 — — 4,355 (4,355) — — Grant 4 Base 10,032 — — — — (9,359) 673 — Match 12,383 — — — — (7,340) 5,043 — Grant 4b Base 5,498 — — — — — 5,498 — Match — 4,030 — — 4,030 (2,902) 1,128 — NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 79 For personal use only
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D3 SHARE-BASED PAYMENTS (CONTINUED) POST-COVID-19 RETENTION PLAN (PCRP) GENERAL TERMS Invited participants are granted one-off base rights, for no consideration, with vesting conditions based upon continued service. When these base rights are granted, participants are also granted a corresponding number of one-off matched rights in two separate tranches for no consideration (one matched right for each base right granted). Rights granted under the plan carry no dividend or voting rights. When exercisable, each right is convertible into one ordinary FLT share. The plan’s rules stipulate that the number of shares resulting from exercising all unexercised rights cannot exceed 5% of the company’s issued capital (currently less than 1%). VESTING REQUIREMENTS Base rights granted to participants will vest on the base rights’ vesting date as noted in the table below, subject to the service condition being satisfied (participants remain employed by the company at the vesting date). Matched rights granted to participants for each tranche will vest on the matched rights’ vesting dates as noted in the table below, subject to the service condition being satisfied (participants remain employed by the company at the vesting date) and for Tranche 1 matched rights that the base rights (or shares) in respect of the respective grant continue to be held, and for Tranche 2 matched rights’ that the Tranche 1 matched rights (or shares) continue to be held. METHOD OF SETTLEMENT The base rights and matched rights may be issued by FLT, purchased on-market or allocated from treasury shares. VALUATION The fair value of base and matched rights under the plan is estimated at the date of grant using the Black-Scholes option pricing model. The fair value is allocated equally over the period from grant date to vesting date. GRANT NUMBER GRANT DATE DATE/YEAR VESTED AND EXERCISABLE¹ EXPIRY DATE VALUE PER RIGHT AT GRANT DATE Grant 1 29 June 2020 Base Rights August 2022 1 July 2031 $9.66 Matching Rights - Tranche 1 August 2023 1 July 2031 $9.25 Matching Rights - Tranche 2 August 2024 1 July 2031 $8.83 1 The vesting date is the day the Company releases full year financial results to the ASX in the year of vesting. The weighted average contractual remaining life (until expiry date) is 6 years. The PCRP rights held by executives, including those KMP separately disclosed in the remuneration report, is set out below: BALANCE AT START OF THE YEAR BALANCE AT END OF THE YEAR 2025 VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER GRANTED NUMBER FORFEITED NUMBER VESTED NUMBER EXERCISED NUMBER VESTED AND EXERCISABLE NUMBER UNVESTED NUMBERGrant 1 Base 139,219 — — — — (108,490) 30,729 — Match 1 141,614 — — — — (117,500) 24,114 — Match 2 — 245,355 — — 245,355 (210,412) 34,943 — 2024 Grant 1 Base 459,899 — — — — (320,680) 139,219 — Match 1 — 295,169 — — 295,169 (153,555) 141,614 — Match 2 — 250,169 — (4,814) — — — 245,355 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 80 For personal use only
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D3 SHARE-BASED PAYMENTS (CONTINUED) GLOBAL RECOVERY RIGHTS (GRR) The GRR has identical objectives to the PCRP but is a broader program targeted at FLT’s global workforce. GENERAL TERMS Invited participants (all employees globally excluding board members and senior executives) are granted one-off rights, for no consideration. Rights granted under the plan carry no dividend or voting rights. When exercisable, each right is convertible into one ordinary FLT share. The plan’s rules stipulate that the number of shares resulting from exercising all unexercised rights cannot exceed 5% of the company’s issued capital (currently less than 1%). VESTING REQUIREMENTS Rights granted to participants will vest on the rights’ vesting date as noted in the table below, subject to the service condition being satisfied (participants remain employed by the company at the vesting date). METHOD OF SETTLEMENT The rights may be issued by FLT, purchased on-market or allocated from treasury shares. VALUATION The fair value of rights under the plan is estimated at the date of grant using the Black-Scholes option pricing model which takes into account the rights’ term, the rights’ non-tradeable nature, the expected Divided yield and risk-free rate over the rights’ term. The fair value is allocated equally over the period from grant date to vesting date. GRANT NUMBER GRANT DATE RIGHTS DATE/YEAR VESTED AND EXERCISABLE¹ EXPIRY DATE VALUE PER RIGHT AT GRANT DATE Grant 1 25 June 2021 February 2023 February 2028 $15.06 Grant 2 15 June 2022 February 2024 February 2029 $17.02 1 The vesting date is the day the Company releases half year financial results to the ASX in the year of vesting The weighted average contractual remaining life (until expiry date) for Grant 1 is 3 years, and for Grant 2, is 4 years. BALANCE AT START OF THE YEAR DURING THE YEAR BALANCE AT END OF THE YEAR VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER GRANTED NUMBER FORFEITED NUMBER VESTED NUMBER EXERCISED NUMBER VESTED AND EXERCISABLE NUMBER UNVESTED NUMBER2025 Grant 2 316,843 — 180 (5,726) — (202,214) 109,083 — Grant 1 360,132 — — (1,650) — (98,907) 259,575 — 2024 Grant 2 — 1,781,809 — (497,145) 1,781,809 (967,821) 316,843 — Grant 1 737,988 — — (53,270) — (324,586) 360,132 — NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 81 For personal use only
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D3 SHARE-BASED PAYMENTS (CONTINUED) EMPLOYEE SHARE PLAN (ESP) GENERAL TERMS Eligible employees are granted a conditional right to one matched share for every two shares purchased (for cash consideration), subject to vesting conditions. Employees are eligible to participate if they have been employed full time or permanent part-time for at least three months. VESTING REQUIREMENTS A participant must hold the acquired shares for a period of two years and one month and still be employed with FLT at the end of that time. If acquired shares are sold before the end of the vesting period, conditional rights to the matched shares are forfeited. METHOD OF SETTLEMENT A participant who satisfies the vesting conditions will become entitled to the matched shares on the last day of the vesting period. The matched shares may be newly issued by FLT, purchased on-market or allocated from treasury shares. VALUATION – ACQUIRED SHARES The market value of shares issued under the plan, measured as the weighted average price at which FLT’s shares are traded on the ASX during the five days following the date on which the contributions are paid, is recognised in the balance sheet as an issue of shares in the period the shares are acquired by the employee. VALUATION – MATCHED SHARES The fair value of matched shares allocated (but not issued) under the plan is estimated at the date of grant using the Black- Scholes option pricing model which takes into account the rights’ term, the rights’ non-tradeable nature, the expected divided yield and risk-free rate over the rights’ term and is recognised in the balance sheet as part of reserves over the period that the matched share vests with a corresponding expense recognised in the employee benefits costs. NUMBER OF MATCHED SHARES NOTES 2025 2024 Issued under the plan to participating employees — 37,463 Allocated from the share trust to participating employees 46,859 57,423 Purchased on-market under the plan to participating employees 173,278 27,927 220,137 122,813 Weighted average market price of matched shares: Issued $0.00 $22.08 Allocated from share trust $20.05 $21.82 Purchased on-market $19.43 $21.47 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 82 For personal use only
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D4 CONTRIBUTED EQUITY AND TREASURY SHARES OVERVIEW Typically movements in contributed equity relate to shares issued under the ESP, which reinforces the importance that FLT places on ownership to drive business performance and overall results. Where shares in FLT are acquired on-market purchases prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. RECONCILIATION OF ORDINARY SHARE CAPITAL: The following reconciliation summarises the movements in authorised and issued capital during the year. Issues of a similar nature have been grouped and the issue price shown is the weighted average. Detailed information on each issue of shares and buy-back is publicly available via the ASX. DETAILS NOTES NUMBER OF SHARES WEIGHTED AVERAGE ISSUE PRICE $'000 Opening balance at 1 July 2023 218,075,659 1,374,592 ESP 370,636 $20.32 7,532 Treasury shares 2,585,037 $21.57 55,764 Closing balance at 30 June 2024 221,031,332 1,437,888 ESP 454,360 $16.18 7,351 Treasury shares 753,405 $20.05 15,108 On market share buy-back1 (4,416,438) $12.93 (57,125) Equity raising transaction costs (545) Closing balance at 30 June 2025 217,822,659 1,402,677 1 On 28 April 2025 FLT announced it would commence an on-market share buy-back of up to $200,000,000. The buy-back is subject to prevailing share price and market conditions and is at FLT’s discretion. The buy-back will be conducted for up to 12 months. RECONCILIATION OF TREASURY SHARES: The following reconciliation summarises the movements in treasury shares held in a share trust for future allocation to employee share plans. Items of a similar nature have been grouped and the price shown is the weighted average. DETAILS NOTES NUMBER OF SHARES WEIGHTED AVERAGE PRICE $'000 Opening balance at 1 July 2023 (796,479) — (14,748) Issue of shares through share trust (2,585,037) $21.57 (55,764) Allocation of shares to ESP matched shares 113,389 $20.84 2,363 Allocation of shares to LTRP 420,482 $20.30 8,591 Allocation of shares to PCRP 447,584 $20.26 9,069 Allocation of shares to GRR 1,111,814 $20.90 23,236 Gain in equity on allocation of shares (547) Closing balance at 30 June 2024 (1,288,247) (27,800) Issue of shares through share trust (753,405) $20.05 (15,108) Allocation of shares to ESP matched shares 46,794 $20.05 938 Allocation of shares to LTRP 402,939 $19.35 7,799 Allocation of shares to PCRP 457,037 $19.29 8,817 Allocation of shares to GRR 302,439 $18.18 5,499 Loss in equity on allocation of shares 2,062 Closing balance at 30 June 2025 (832,443) (17,793) NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 83 For personal use only
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E RELATED PARTIES This section provides information relating to the FLT Group related parties and the extent of related party transactions within the Group and the impact they had on the Group’s financial performance and position. E1 Investments accounted for using the equity method E2 Related party transactions E1 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD OVERVIEW JOINT VENTURES FLT holds a 46.8% shareholding in Pedal Group Pty Ltd (2024: 46.8%). FLT continues to have joint control. Significant shareholdings in Pedal Group include a 100% shareholding in 99 Bikes Pty Ltd and 99 Bikes NZ Limited, a Brisbane and Auckland based national chain of retail bike stores, and a 100% shareholding in Advance Traders (Australia) Pty Ltd and Advance Traders (New Zealand) Limited, Brisbane and Auckland based wholesale bike companies and a 100% shareholding in PGP Co Pty Ltd, a Brisbane based property purchasing company for 99 Bikes leases. FLT received a dividend from Pedal Group of $1,669,000 (2024: $0). FLT continues to have joint control. Contractual arrangements are in place to establish joint control over each entity’s economic activities, including financial and operating decisions. ASSOCIATES FLT has a 50% shareholding in Evolve Travel Limited (ETL), a New Zealand based entity that has the purpose of creating stronger preferred supplier arrangements with an independent travel group for the mutual benefit of both parties. SHARE OF JOINT VENTURE AND ASSOCIATES CARRYING VALUE AND RESULTS Joint venture and associates information is presented in accordance with the accounting policy described in note I(c)(ii) and is set out below. 2025 2024 $'000 $'000 Interest in joint ventures 44,854 43,159 Interest in associates 5 5 Total interest in joint ventures and associates 44,859 43,164 2025 2024 SHARE OF RESULTS $'000 $'000 Profit / (Loss) from joint ventures 3,344 (2,435) Profit from associates — — Total comprehensive profit / (loss) 3,344 (2,435) CONTRACTUAL COMMITMENTS FLT has no commitments in relation to its joint venture and associate entities at 30 June 2025 (2024: nil). PARENT ENTITY FLT is the ultimate parent entity within the Group. SUBSIDIARIES AND JOINT VENTURES Interests in subsidiaries are set out in note G1 and interests in joint ventures and associate are set out in note E1. FLT is a joint venture (JV) partner in Pedal Group Pty Ltd. The other JV partners are related parties, namely Graham Turner’s family company, Gainsdale Pty Ltd 21.82% (2024: 21.83%), and Graham Turner's son, Matthew Turner’s family companies Hootie Blowfish Pty Ltd 14.09% (2024:14.12%), Counting Crows Pty Ltd 0.55% (2024: 0.38%) and his direct employee share plan holdings of 0.39% (2024: 0.39%). The remaining 16.40% (2024: 16.48%) is held by other minor parties including Pedal Group employees who are not considered related parties. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 84 For personal use only
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E2 RELATED PARTY TRANSACTIONS KMP COMPENSATION AND OTHER TRANSACTIONS KMP disclosures are set out in note D1. TRANSACTIONS WITH RELATED PARTIES 2025 2024 Income from joint venture & associate-related parties $ $ Management fees — 625 Travel and conference 48,413 4,900 Other 53,724 42,394 Expenses to joint venture & associate-related parties Override distributions 2,662,216 2,095,253 Income from director-related entities Travel and conference 899,374 874,396 Other 76,331 55,040 Expenses to director-related entities Conference expense 467,976 359,786 Membership expense¹ 609,224 1,045,277 1 Membership expense relates to FLT’s annual membership and accreditation to Australian Travel Industry Association (ATIA) of which Graham Turner is a Director. From time to time, related entities may enter into transactions with FLT. These transactions are on the same terms and conditions as those entered into by other FLT subsidiaries or customers. Joint venture and associate related parties can choose to use FLT group purchasing ability and any costs incurred are passed directly through. These transactions are included in the disclosure above. OUTSTANDING BALANCES The following balances are outstanding at the end of the reporting period in relation to transactions with related parties: 2025 2024 Joint ventures & associates $ $ Current receivables — 1,006 Current payables — — Director-related entities Current receivables 2,024,262 1,986,008 Current payables 998 359 No provisions for doubtful debts have been raised in relation to any outstanding balances and no expenses have been recognised in respect of bad or doubtful debts due from related parties. LOANS TO RELATED PARTIES Loans to KMP, joint venture and associate related parties were nil during the current year and prior year. GUARANTEES FLT has provided company guarantees to the suppliers of Pedal Group joint venture of $16,796,457(2024: $8,995,502). The JV partners, Gainsdale Pty Ltd and Hootie Blowfish Pty Ltd, provide full indemnity to FLT up to their respective Pedal Group shareholding percentages. No liability was recognised as the guarantee’s fair values are immaterial. TERMS AND CONDITIONS All other transactions were made on normal commercial terms and conditions and at market rates. Outstanding balances are unsecured and are repayable in cash. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 85 For personal use only
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F OTHER INFORMATION This section provides the remaining information relating to the FLT financial report that must be disclosed to comply with the accounting standards and other pronouncements. F1 Employee benefits expense F2 Earnings per share F3 Trade receivables F4 Contract assets F5 Other assets F6 Property, plant and equipment F7 Leases F8 Trade and other payables F9 Contract liabilities F10 Provisions F11 Reserves F12 Tax F13 Auditor’s remuneration F1 EMPLOYEE BENEFITS EXPENSE EMPLOYEE BENEFITS EXPENSE 2025 2024 NOTES $'000 $'000 Defined contribution superannuation expense 83,647 77,087 Share based payments expense D3 15,263 24,235 Other employee benefits expense 1,311,417 1,319,346 Total employee benefits expense 1,410,327 1,420,668 Staff numbers (full-time equivalents) 12,411 12,514 In addition to the employee benefits expense disclosed above, ‘Tour, hotel & cruise operations - Cost of sales’ in the statement of profit or loss includes $2,296,000 (2024: $5,285,000) relating to employee costs directly attributable to the delivery of tour and hotel services. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 86 For personal use only
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F2 EARNINGS PER SHARE OVERVIEW Statutory earnings per share (EPS) was 49.6 cents (2024: 63.7 cents), a decline of 22.1% on the prior comparative period. At an underlying level1, EPS decreased 27.5% to 76.1 cents (2024: profit 105.0 cents). 2025 2024 CENTS CENTS Basic earnings / (loss) per share Profit attributable to the company’s ordinary equity holders 49.6 63.7 Diluted earnings / (loss) per share Profit attributable to the company’s ordinary equity holders 49.0 50.2 Reconciliation of earnings used in calculating EPS $'000 $'000 Profit attributable to the company’s ordinary equity holders used in calculating basic earnings per share 109,489 139,638 Profit attributable to the company’s ordinary equity holders used in calculating diluted earnings per share2 109,489 120,733 Weighted average number of shares used as the denominator NUMBER NUMBER Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share3 220,602,679 219,190,058 Adjustments for calculation of diluted earnings per share: Share rights and convertible note options 3,030,239 21,495,941 Weighted average number of ordinary shares used in calculating diluted earnings per share 223,632,918 240,685,999 1 Underlying EPS is an unaudited, non-IFRS measures. Refer to note A1 for breakdown of underlying PBT used in the calculation of underlying EPS. Underlying NPAT includes the tax impact of underlying adjustments of ($18,081,000) (2024: ($10,220,000)). 2 In the prior year, diluted EPS is lower than basic EPS primarily due to the other income and finance costs recognised in relation to the convertible notes. Refer to note B5. 3 The basic EPS denominator is the aggregate of the weighted average number of ordinary shares. INFORMATION CONCERNING THE CLASSIFICATION OF SECURITIES LTRP, PCRP, GRR, DIP & ESP Rights granted under the LTRP, PCRP (finalised 30 June 2024), GRR (finalised 30 June 2024), DIP (finalised 30 June 2025) and entitlements to matched shares under the ESP are considered contingently issuable ordinary shares as at 30 June 2025. They are included in the determination of diluted earnings per share to the extent to which they are dilutive, based on the number of shares that would be issuable if the end of the period were the end of the contingency period. The rights are not included in the determination of basic earnings per share. Details of the incentive plans are set out in note D3. CONVERTIBLE NOTES Convertible notes issued during prior years and which are convertible into shares (24,316,000 shares as at 30 June 2025) were excluded from the diluted weighted average number of ordinary shares calculation at 30 June 2025. If the notes were converted into shares, favourable profit adjustments relating to interest expense and valuation of derivatives used to hedge interest exposure would result in an anti-dilutive effect on earnings per share. Details relating to the convertible notes are set out in note B5. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 87 For personal use only
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F3 TRADE RECEIVABLES 2025 2024 $'000 $'000 Trade receivables 939,503 907,956 Less: Provision for expected credit losses (29,399) (22,608) Total trade receivables 910,104 885,348 ACCOUNTING POLICY FLT has applied the simplified approach for provisioning for expected credit losses prescribed by AASB 9. Additional information on trade receivables accounting policies is included in note I (m). FINANCIAL RISK MANAGEMENT MARKET RISK Interest rate risk Receivables are generally non-interest bearing and are not, therefore, subject to interest rate risk. The exception is other receivables, which generally arise from transactions outside the Group’s usual operating activities. Interest may be charged at commercial rates where the repayment terms exceed six months. Collateral is not normally obtained. Foreign exchange risk The Group operates internationally and is subject to foreign exchange risk arising from exposure to foreign currencies. In addition to identifying foreign exchange risk likely to arise from future commercial transactions, group treasury recognises assets and liabilities in foreign currencies and, where appropriate, uses forward exchange contracts and currency swaps to reduce foreign currency risk. The Group’s exposure to foreign currency risk on trade receivables at the end of the reporting period is set out below in Australian dollars: 2025 2024 TRADE RECEIVABLES $'000 $'000 United States Dollar 4,214 30,019 Euro Member Countries 2,619 3,276 New Zealand Dollar 350 13,714 United Kingdom Pound 93 5,143 Switzerland Franc — 5,013 Viet Nam Dong — 4,967 South Africa Rand — 3,095 Indonesia Rupiah — 2,874 Other 822 9,175 Foreign exchange risk on trade payables is set out in note F8. FAIR VALUE Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value. CREDIT RISK Credit risk arises from exposure to corporate, leisure and other customers, including outstanding receivables and committed transactions. The maximum exposure to credit risk at the reporting period’s end is the receivables carrying amount. The group does not hold collateral as security. Credit risk exposure is monitored regularly as per below: Corporate Corporate clients’ credit quality is assessed by analysing external credit ratings and financial position where appropriate. Individual risk limits are established for all corporate customers, in accordance with corporate credit policy, with regular monitoring and reporting to management. Leisure Agency and principal sales to end-consumers are typically settled in cash or via major credit cards at time of booking, reducing trade receivables balances and mitigating credit risk. Independent agents' credit quality is assessed by analysing external credit ratings and financial position where appropriate. Independent agents’ debtors are subject to weekly payment sweeps and are generally settled before payment is required to the supplier therefore mitigating credit risk. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 88 For personal use only
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F3 TRADE RECEIVABLES (CONTINUED) Product suppliers Receivables are due from suppliers in relation to overrides, commissions, refunds and other revenue streams. Suppliers’ credit quality is assessed and the provisions increased based on assumptions around the deterioration in ageing, known or expected financial difficulty of customers and individual customer credit risk assessment with reference to external rating agencies and industry. Other Concentration of risk in respect of remaining receivables, which includes receivables from government agencies, is considered low. FINANCE RECEIVABLES The carrying amount of trade receivables includes receivables which are subject to a financing arrangement. These trade receivables have not been derecognised from the balance sheet because the Group retains substantially all the risks and rewards. The amount received has been recognised as a secured non-current bank loan. Refer to Note B4. The arrangement with the bank is such that the customers remit cash directly to the Group and the Group transfers the collected amounts to a collections account. Trade receivables continue to be measured at amortised cost. The following information shows the carrying amount of trade receivables at the reporting date that have been pledged as security and not derecognised, as well as the secured borrowings. 2025 2024 NOTES $'000 $'000 Trade receivables pledged as security B4 184,243 — Associated secured borrowing 123,500 — FLT also has an amount owing to IATA which has not yet been received from its corporate customers and therefore is secured against trade receivables. Amounts received from customers but not yet paid to IATA are shown as restricted cash. The below table shows the carrying amount of trade receivables at the reporting date that have been pledged as security and not derecognised against the IATA payable. The prior period comparative has not been restated and amounts payable to IATA were disclosed as restricted cash. 2025 2024 NOTES $'000 $'000 IATA payable, not received in cash at year end 50,165 — PROVISION FOR IMPAIRMENT OF RECEIVABLES 2025 2024 Movements in the provision for impairment of receivables are as follows: NOTES $'000 $'000 Balance at 1 July 2024 22,608 31,826 Movement in expected credit loss provision and bad debt expense / (reversal)¹ A4 15,445 (2,835) Changes due to foreign exchange translation 1,155 295 Receivables written off during the year as uncollectible or reversed due to collectability2 (9,809) (6,678) Balance at 30 June 2025 29,399 22,608 1 The creation and release of the provision for impairment of receivables is included in other expenses (refer note A4) in the statement of profit or loss. 2 The provision has reduced based on customer payments being received and removing customer balances where recoverability is highly unlikely. At risk customers were provided for in FY24 and continue to be provided for in FY25 unless payment has been received. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 89 For personal use only
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F4 CONTRACT ASSETS 2025 2024 $'000 $'000 Volume incentive receivables 259,177 239,006 Accrued revenue 49,133 75,555 Loss allowance (12,736) (13,919) Total contract assets 295,574 300,642 ACCOUNTING POLICY A contract asset is the right to consideration in relation to volume incentive payments received from suppliers for achieving annual targets and other services transferred to the customer (under AASB 15) in advance of payment. If services are transferred to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. Refer to note A2 for accounting policy on recognition of volume incentive receivables. SIGNIFICANT CHANGES IN CONTRACT ASSETS The movement in contract assets each period is dependent on the contract period, volume, tier levels, rebate rates and payment terms as negotiated with each individual supplier. FINANCIAL RISK MANAGEMENT MARKET RISK Interest rate risk Contract assets are generally non-interest bearing and are not, therefore, subject to interest rate risk. Collateral is not normally obtained. Foreign exchange risk The Group operates internationally and is subject to foreign exchange risk on contract assets arising from exposure to foreign currencies. In addition to identifying foreign exchange risk likely to arise from future commercial transactions, group treasury recognises assets and liabilities in foreign currencies and, where appropriate, uses forward exchange contracts to reduce foreign currency risk. 2025 2024 CONTRACT ASSETS $'000 $'000 United States Dollar 74,337 65,564 Singapore Dollar 29,772 31,947 Euro Member Countries 7,215 15,769 United Kingdom Pound 1,026 1,444 Fiji Dollar 1,013 1,451 New Zealand Dollar 574 — Other 942 1,515 FAIR VALUE Due to the short-term nature of these assets, their carrying amount is assumed to approximate their fair value. CREDIT RISK Credit risk arises from exposure to suppliers, including outstanding receivables and committed transactions. Credit risk management assesses supplier and corporate clients’ credit quality by analysing external credit ratings and financial position where appropriate. Regular monitoring and reporting to management is performed. The maximum exposure to credit risk at the reporting period’s end is the contract assets carrying amount. The Group does not hold collateral as security. LOSS ALLOWANCE OF CONTRACT ASSETS NOTES 2025 2024 Movements in the loss allowance of contract assets are as follows: $'000 $'000 Balance at 1 July 13,919 3,353 Movement in expected credit loss provision and loss allowance (reversal) / expense1 A4 (638) 10,828 Changes due to foreign exchange translation (3) (262) Written off during the year as uncollectible or reversed due to collectability (542) — Balance at 30 June 12,736 13,919 1 In FY24 the Group recorded an expected credit loss of $10.7m on contract assets due to deteriorated creditworthiness of REX airlines. This was recognised as a bad debts expense and disclosed separately in the supplier loss line. Refer note A4. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 90 For personal use only
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F5 OTHER ASSETS 2025 2024 $'000 $'000 GST / consumption tax receivable 7,808 11,397 Inventories 26,338 28,305 Prepayments 54,689 58,215 Fulfilment assets 5,303 5,784 Total current other assets 94,138 103,701 Inventories 117,254 17,438 Prepayments 4,266 364 Fulfilment assets 10,880 8,900 Total non-current other assets 132,400 26,702 FULFILMENT ASSETS Contract costs may be eligible for capitalisation as fulfilment assets and are amortised over the contract period, refer note A2. INVENTORIES Inventories have been disclosed as non-current when they are not expected to be used within the next 12 months. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 91 For personal use only
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F6 PROPERTY, PLANT AND EQUIPMENT ACCOUNTING POLICY USEFUL LIVES Land is not depreciated. For other assets, depreciation is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows: • Buildings 30 years • Plant and equipment 2 - 8 years The assets’ residual values and useful lives are reviewed and adjusted if appropriate at each reporting period’s end. Additional information on property, plant and equipment accounting policies is included in note I (n). FREEHOLD LAND & BUILDINGS PLANT & EQUIPMENT TOTAL OPENING BALANCE AT 1 JULY 2023 NOTES $'000 $'000 $'000 Cost 5,483 325,522 331,005 Accumulated depreciation (2,742) (261,610) (264,352) Net book amount at 1 July 2023 2,741 63,912 66,653 Additions — 21,708 21,708 Disposals¹ — (4,072) (4,072) Depreciation expense (19) (22,096) (22,115) Exchange differences 66 359 425 Net book amount at 30 June 2024 2,788 59,811 62,599 OPENING BALANCE AT 1 JULY 2024 Cost 5,580 310,498 316,078 Accumulated depreciation (2,792) (250,687) (253,479) Net book amount at 1 July 2024 2,788 59,811 62,599 Additions 101 34,239 34,340 Acquisitions 750 — 750 Disposals¹ — (5,539) (5,539) Depreciation expense (8) (21,583) (21,591) Exchange differences 134 294 428 Net book amount at 30 June 2025 3,765 67,222 70,987 AT 30 JUNE 2025 Cost 6,449 312,529 318,978 Accumulated depreciation (2,684) (245,307) (247,991) Net book amount at 30 June 2025 3,765 67,222 70,987 1 Balances shown net of accumulated depreciation. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 92 For personal use only
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F7 LEASES This note provides information for leases where the Group is a lessee. AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS 2025 2024 NOTES $'000 $'000 Rent income from sub-leasing of right-of-use assets A3 7,164 7,305 Interest expense on lease liabilities A4 (11,954) (9,789) Rental expense relating to short-term and low-value leases A4 (8,620) (9,124) Depreciation/amortisation expense of right-of-use assets (79,940) (78,623) (93,350) (90,231) AMOUNTS RECOGNISED IN THE BALANCE SHEET RIGHT OF USE ASSETS LEASE LIABILITIES PROPERTY VEHICLES OFFICE EQUIPMENT SOFTWARE TOTAL TOTAL $'000 $'000 $'000 $'000 $'000 $'000 Balance as at 1 July 2023 196,140 164 149 78 196,531 259,423 Additions 19,846 1,340 — — 21,186 21,186 Disposals (683) (241) — — (924) (1,076) Depreciation and amortisation expense (78,128) (294) (124) (77) (78,623) — Impairment (3,442) — — — (3,442) — Lease modifications 67,880 — — — 67,880 67,347 Interest expense — — — — — 9,789 Lease liability repayment — — — — — (100,340) Exchange differences (1,323) 163 25 (1) (1,136) (1,764) Balance as at 30 June 2024 200,290 1,132 50 — 201,472 254,565 Balance as at 1 July 2024 200,290 1,132 50 — 201,472 254,565 Additions 68,544 11 — — 68,555 68,152 Disposals (519) (948) — — (1,467) (1,358) Depreciation and amortisation expense (79,721) (158) (61) — (79,940) — Impairment reversal 6,714 125 15 — 6,854 — Lease modifications 30,651 — — — 30,651 28,127 Interest expense — — — — — 11,954 Lease liability repayment — — — — — (103,257) Exchange differences 2,118 (155) 1 — 1,964 5,701 Balance as at 30 June 2025 228,077 7 5 — 228,089 263,884 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 93 For personal use only
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F7 LEASES (CONTINUED) CURRENT AND NON-CURRENT CLASSIFICATIONS 2025 2024 $'000 $'000 Current 81,689 80,752 Non-current 182,195 173,813 Total lease liabilities 263,884 254,565 Refer to note C1 for contractual undiscounted cashflows and maturity analysis. AMOUNTS RECOGNISED IN THE STATEMENT OF CASHFLOW 2025 2024 $'000 $'000 Operating - payments of interest (11,954) (9,789) Financing - payments of principal (91,303) (90,551) Financing - lease surrender payments (233) (236) Total cash (outflow) relating to leases (103,490) (100,576) ACCOUNTING POLICY FLT leases various offices, retail stores, equipment, vehicles and software. Rental contracts are typically made for fixed periods of 1 year to 6 years. Contracts may contain both lease and non-lease components. For leases of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • fixed payments (including in-substance fixed payments), less any lease incentives receivable • variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date • amounts expected to be payable by the Group under residual value guarantees • the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and • payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Group: • where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received; • uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by FLT, which does not have recent third party financing, and • makes adjustments specific to the lease, e.g. term, country, currency and security. FLT is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 94 For personal use only
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F7 LEASES (CONTINUED) ACCOUNTING POLICY (CONTINUED) Right-of-use assets are measured at cost comprising the following: • the amount of the initial measurement of lease liability; • any lease payments made at or before the commencement date less any lease incentives received; • any initial direct costs; and • restoration costs. Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low- value assets comprise IT equipment and small items of office furniture with a value less than $7,500. A sale and leaseback is one where FLT sells an asset and immediately reacquires the use of the asset or a portion of the asset by entering into a lease with the buyer. The gain is recognised immediately in other income in the statement of profit or loss. The right-of-use asset is measured as a proportion of the previous carrying amount of the underlying asset, reflecting the rights retained under the leaseback. SIGNIFICANT JUDGEMENT IN DETERMINING THE LEASE TERM OF CONTRACTS WITH RENEWAL OPTIONS The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. Majority of FLT’s leases are renegotiated, therefore the renewal options are not typically exercised. IMPAIRMENT CURRENT YEAR The impairment reversal of $6,854,000 in the current period relates to the reversal of the right-of-use asset property that were originally written down due to the impairment of the CGUs during the COVID-19 global pandemic. The CGUs continue to operate with these leases still in effect. PRIOR YEAR The impairment expense of $(3,442,000) in the prior period related to right-of-use asset property that is no longer being utilised by FLT. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 95 For personal use only
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F8 TRADE AND OTHER PAYABLES 2025 2024 CURRENT $'000 $'000 Trade payables 685,681 743,759 Client creditors 616,519 712,332 Other trade creditors and accrued expenses 289,019 252,462 GST / consumption tax payable 5,915 11,496 Accrued unsecured note interest 296 268 Annual leave 46,191 45,309 Total current trade and other payables 1,643,621 1,765,626 2025 2024 NON CURRENT $'000 $'000 Trade payables 61,994 2,154 Total non current trade and other payables 61,994 2,154 Non current trade payables relate to payables associated with Ignite’s agreement with Oceania Cruises Ltd (Explorations operated by Norwegian cruises). FINANCIAL RISK MANAGEMENT MARKET RISK Foreign exchange risk The Group’s exposure to foreign currency risk on trade and other payables at the end of the reporting period is set out below: 2025 2024 $'000 $'000 United States Dollar 53,495 103,169 Fiji Dollar 39,419 45,913 Euro Member Countries 29,762 47,323 New Zealand Dollar 25,999 24,460 United Kingdom Pound 12,538 15,200 Thailand Baht 7,063 12,485 South Africa Rand 7,058 5,999 Singapore Dollar 4,974 6,212 Indonesia Rupiah 3,351 6,484 Viet Nam Dong 202 11,665 Other 14,165 15,439 Refer to note F3 for the Group’s approach to foreign exchange risk and the Group's exposure to foreign currency risk on trade and other receivables. FAIR VALUE The trade and other payables' carrying amounts are assumed to approximate their fair values given their short term nature. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 96 For personal use only
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F9 CONTRACT LIABILITIES 2025 2024 CURRENT $'000 $'000 Deferred revenue 95,182 89,218 Revenue constraint 273 1,776 Total contract liabilities 95,455 90,994 NON-CURRENT Deferred revenue 79,107 32,135 Total non-current contract liabilities 79,107 32,135 ACCOUNTING POLICY DEFERRED REVENUE Deferred revenue is a contract liability that typically relates to revenue received in advance for tours and cruise cabins and lump sum payments from suppliers. It represents revenue received in advance of the completion of the performance obligation under the contract. It is recognised when the consideration is received or is due (whichever is earlier). Deferred revenue is released to the statement of profit or loss as the performance obligation is met. REVENUE CONSTRAINT FLT has recognised a contract liability which recognises the uncertainty that the travel may be cancelled prior to departure. This is calculated using booking volumes and margins, known or anticipated travel restrictions and cancellation probability rate based on trading patterns. SIGNIFICANT CHANGES IN CONTRACT LIABILITIES The movement in deferred revenue is dependent on timing and volume of tours and cruises at each reporting period and any significant lump sum payments received within a contract period. Revenue released from opening deferred revenue to the statement of profit or loss during the year was $77,942,000 (2024: $65,158,000). The revenue constraint has reduced in the current year as refunds have been paid to the end consumers, decreasing cancellation rates and less travel uncertainty. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 97 For personal use only
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F10 PROVISIONS 2025 2024 CURRENT NOTES $'000 $'000 E m p l o y e e b e n e f i t s - l o n g s e r v i c e l e a v e 47,833 41,859 Employee benefits - BOS Multiplier D2 10,214 7,873 Make good provision 4,909 3,061 Total current provisions 62,956 52,793 NON-CURRENT E m p l o y e e b e n e f i t s - l o n g s e r v i c e l e a v e 16,496 14,781 Make good provision 10,154 11,305 Total non-current provisions 26,650 26,086 MOVEMENTS IN PROVISIONS Movements in each class of provision, other than employee benefits, for the financial year are set out below: MAKE GOOD PROVISION NOTES $'000 Carrying amount at 1 July 2024 14,366 Additional provisions recognised 913 Increase in discounted amount arising from passage of time and discount rate adjustments A4 84 Utilised (305) Other changes 5 Carrying amount at 30 June 2025 15,063 LONG SERVICE LEAVE (LSL) AMOUNTS NOT EXPECTED TO BE SETTLED WITHIN 12 MONTHS The current portion of the LSL provision represents the amount where the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting date, as the employees have completed the required service period and also certain circumstances where employees are entitled to pro-rata payments. However, based on past experience, the Group does not expect all employees to take the full amount of accrued long service leave or require payment within the next 12 months. The following amounts reflect this leave that is not expected to be taken or paid within the next 12 months: 2025 2024 $'000 $'000 Long service leave obligations expected to be settled after 12 months 42,135 36,255 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 98 For personal use only
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F11 RESERVES 2025 2024 Reserves NOTES $'000 $'000 Cash flow hedge reserve A 3,241 (710) Share-based payments reserve B 34,821 49,080 Acquisition Reserve C (47,775) (44,602) Foreign currency translation reserve D 118,761 53,925 Equity component of convertible note E 51,997 74,986 Financial assets at FVOCI reserve — (286) Other reserves (424) (424) Total reserves 160,621 131,969 MOVEMENTS IN RESERVES: (A) CASH FLOW HEDGE RESERVE Balance 1 July (710) 855 Gains / (losses) on FEC cash flow hedges 8,272 (5,507) Reclassified to profit or loss (2,628) 3,271 Deferred tax F12 (1,693) 671 Balance 30 June 3,241 (710) FLT apply hedge accounting under AASB 9 Financial Instruments. See note C2 for further details. The cash flow hedge reserve is used to record gains or losses on hedging instruments on a cash flow hedge that are recorded as other comprehensive income. Amounts are reclassified to the statement of profit or loss in accordance with our hedging policy as described in note C2. No ineffectiveness (2024: Nil) has been recognised in the statement of profit or loss. (B) SHARE-BASED PAYMENTS RESERVE Balance 1 July 49,080 83,600 Share-based payments expense 11,226 12,484 Treasury share transactions (24,815) (42,712) Deferred tax F12 (670) (4,292) Balance 30 June 34,821 49,080 The share-based payments reserve is used to recognise the fair value of rights issued under the LTRP, PCRP (finalised 30 June 2024), ESP, and GRR as they vest over the vesting period. (C) ACQUISITION RESERVE Balance 1 July (44,602) (44,602) Call option over non-controlling interest cancelled and not exercised A7 (3,173) — Balance 30 June (47,775) (44,602) (D) FOREIGN CURRENCY TRANSLATION RESERVE Balance 1 July 53,925 62,304 (Losses) / gains on net investment hedge (2,478) 804 Deferred tax F12 716 (214) Net exchange differences on translation of foreign operations 66,598 (8,969) Balance 30 June 118,761 53,925 Exchange differences arising on translation of the foreign controlled entities are recognised in other comprehensive income, as described in note I (d), and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 99 For personal use only
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F11 RESERVES (CONTINUED) MOVEMENT IN RESERVES (CONTINUED) (E) EQUITY COMPONENT OF CONVERTIBLE NOTE 2025 2024 NOTES $'000 $'000 Balance 1 July 74,986 91,335 Partial repurchase of convertible notes due November 2027 B5 — (23,356) Partial repurchase of convertible notes due November 2028 B5 (32,841) — Deferred tax F12 9,852 7,007 Balance 30 June 51,997 74,986 F12 TAX (A) INCOME TAX EXPENSE (I) INCOME TAX EXPENSE / (CREDIT) 2025 2024 $'000 $'000 Current tax 48,853 36,659 Deferred tax 55,294 50,178 Adjustments for current tax of prior periods 290 (6,284) Income tax expense 104,437 80,553 Deferred income tax (benefit) / expense included in income tax comprises: Decrease in deferred tax assets 41,009 17,681 Increase in deferred tax liabilities 14,285 20,116 Prior period adjustments — 12,381 55,294 50,178 Numerical reconciliation of income tax to prima facie tax (receivable) / payable Profit before Income tax expense 212,621 219,708 Tax at the Australian tax rate of 30% (2024 - 30%) 63,786 65,912 Tax effect of amounts in calculating taxable income: Non-deductible amounts 1,355 2,571 Deductible amounts (955) (626) Interest denial 651 873 Legal costs 41 246 Intangibles 671 (804) Borrowings 831 — Investments — 6,060 Share based payments 7,032 2,292 Property, plant and equipment 611 (96) Other amounts 2,952 (2,804) 76,975 73,624 Tax losses derecognised 32,710 17,800 Tax losses recognised (3,569) (4,383) Effect of different tax rates on overseas income (1,969) (204) Under / (Over) provision of prior year’s income tax 290 (6,284) 27,462 6,929 Income tax expense 104,437 80,553 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 100 For personal use only
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F12 TAX (CONTINUED) (II) AMOUNTS RECOGNISED DIRECTLY IN EQUITY Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss and other comprehensive income is directly debited or credited to equity. 2025 2024 N e t d e f e r r e d t a x - ( c r e d i t e d ) / d e b i t e d d i r e c t l y t o e q u i t y NOTES $'000 $'000 Share-based payments reserve F11 670 4,292 Equity component of convertible note F11 (9,852) (7,007) (III) TAX EXPENSE / (INCOME) RELATING TO ITEMS OF OTHER COMPREHENSIVE INCOME Cash flow hedges F11 1,693 (671) Net investment hedge F11 (716) 214 Total tax expense / (credit) relating to items of other comprehensive income 977 (457) (IV) UNRECOGNISED POTENTIAL DEFERRED TAX ASSETS 2025 2024 $'000 $'000 Unused tax losses for which no deferred tax asset has been recognised (non-capital) 244,446 112,583 Temporary differences relating to brand name impairment (capital) and other intangibles 55,804 53,453 Investments 13,512 13,512 Lease & decommissioning 1,118 3,327 Other 9,266 8,476 324,146 191,351 Potential tax benefit 76,268 47,444 KEY ESTIMATES & JUDGEMENTS - UTILISATION OF TAX LOSSES In most cases the unused tax losses have no expiry date. Therefore, while there is uncertainty in the market, assumptions have been made to support carrying the tax losses. Where the tax losses could not be supported by future operating profits in the near term or losses were incurred in jurisdictions with restrictions on their use, FLT have not recognised the tax losses. Unrecognised unused tax losses in 2024 were incurred by the Group across numerous jurisdictions. These losses have various expiry dates from 2025 through to indefinite carry forward. (B) DEFERRED TAX ASSETS (DTA) The balance comprises temporary differences attributable to: 2025 2024 $'000 $'000 Intangible assets 4,534 4,974 Lease Liability 61,314 62,683 Tax losses 280,538 324,723 Provisions - non current 6,403 6,443 Trade and other payables 12,058 12,199 Property, plant and equipment 20,544 18,738 Provisions 17,540 14,879 Trade receivables 5,223 7,473 Employee benefits 12,911 18,378 Other 14,034 16,088 435,099 486,578 S e t - o f f o f d e f e r r e d t a x l i a b i l i t i e s p u r s u a n t t o s e t - o f f p r o v i s i o n s (113,596) (122,660) Net deferred tax assets 321,503 363,918 All movements in DTA were recognised in the statement of profit or loss, with the exception of items stated in note F11, and F12 (a)(ii). NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 101 For personal use only
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F12 TAX (CONTINUED) (C) DEFERRED TAX LIABILITIES (DTL) The balance comprises temporary differences attributable to: 2025 2024 $'000 $'000 Borrowings 8,792 22,487 Contract asset 22,168 15,598 Intangible assets 26,981 27,943 Property, plant and equipment 2,152 3,464 Right of use asset 52,133 51,116 Other 6,476 7,850 118,702 128,458 S e t - o f f o f d e f e r r e d t a x l i a b i l i t i e s p u r s u a n t t o s e t - o f f p r o v i s i o n s (113,596) (122,660) Net deferred tax liabilities 5,106 5,798 All movements in DTL were recognised in the statement of profit or loss, with the exception of items stated in note F12 (a)(ii) and (iii). F13 AUDITOR’S REMUNERATION During the year, the following fees were paid or payable for services provided by the Lead Auditor of the consolidated entity, its related practices and non-related audit firms: 2025 2024 $ $ FEES TO ERNST & YOUNG (AUSTRALIA) Fees for auditing the statutory financial report of the parent covering the group and auditing the statutory financial reports of any controlled entities 1,931,855 2,220,485 Fees for other assurance and agreed-upon-procedures services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor or another firm 234,000 32,030 Fees for other services - Tax compliance 511,318 501,992 - Global Business Services 1,753,090 — - Others — 54,064 4,430,263 2,808,571 FEES TO OTHER OVERSEAS MEMBER FIRMS OF ERNST & YOUNG (AUSTRALIA) Fees for auditing the financial report of any controlled entities 2,303,565 2,254,579 Fees for other assurance and agreed-upon-procedures services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor or another firm 182,719 863,695 Fees for other services - Tax compliance 726,609 390,006 3,212,893 3,508,280 7,643,156 6,316,851 FEES TO NON LEAD AUDITOR AUDIT FIRMS FOR: Fees for auditing the financial report of any controlled entities 104,156 365,553 Fees for other assurance and agreed-upon-procedures services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor or another firm — 24,968 Fees for other services - Tax compliance 806,220 140,385 - Others 139,245 611,841 1,049,621 1,142,747 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 102 For personal use only
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G GROUP STRUCTURE This section explains significant aspects of the FLT Group structure and how changes have affected the group. G1 Subsidiaries G2 Deed of cross guarantee G3 Parent entity financial information G1 SUBSIDIARIES MATERIAL SUBSIDIARIES The Group’s principal subsidiaries are set out below. They have share capital consisting solely of ordinary shares that the Group holds directly and the proportion of ownership interests held equals the Group's voting rights. The country of incorporation or registration is also their place of business. Subsidiaries that sell travel or travel related services and contribute to more than 10% of the Group's underlying net profit or loss before tax or 10% of the Group's net assets are considered material to the Group. NAME OF ENTITY COUNTRY OF INCORPORATION CLASS OF SHARES/ OWNERSHIP EQUITY HOLDING 2025 2024 % % Australian OpCo Pty Ltd¹ Australia Ordinary 100 100 Flight Centre (UK) Limited United Kingdom Ordinary 100 100 Flight Centre Travel Group (USA) Inc USA Ordinary 100 100 1 This controlled entity has been granted relief from the requirement to prepare financial reports in accordance with ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission. For further information refer to note G2. There are no significant restrictions on the entities' ability to access or use the assets and settle the liabilities of the Group. NON-CONTROLLING INTERESTS FCM TRAVEL STANDARDS FOR JAPAN CO., LTD (FCM JAPAN) FCM Japan is controlled by FLT with a 66% (2024: 66%) interest. The remaining 34% (2023: 34%) interest is held by NSF Engagement Corporation (a joint venture of Sony Corporation and NTT Facilities, Inc.) and is recognised as a non- controlling interest. LINK TRAVEL GROUP PTY LTD (LINK TRAVEL GROUP) Link Travel Group Pty Ltd (Link Travel Group) is controlled by FLT with a 60% (2024: 60%) interest. The remaining 40% (2023: 40%) is held by Goldman Travel Corporation Pty. Limited and Spencer Group of Companies Pty Ltd and is recognised as a non-controlling interest. The above non-controlling interests are not material to the Group. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 103 For personal use only
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G2 DEED OF CROSS GUARANTEE Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 (Instrument) certain wholly-owned subsidiaries (as defined in the Instrument and listed below) are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and directors' reports. To obtain the relief, the Instrument requires FLT and each of its relevant wholly owned subsidiaries to enter into a Deed of Cross Guarantee in a prescribed form. The effect of the Current Deed (described below) is that FLT guarantees each creditor payment in full of any debt if any of the relevant wholly owned subsidiaries (that are party to the Current Deed described below) are wound up under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Corporations Act 2001, FLT will only be liable in the event that after six months any creditor has not been paid in full. The relevant wholly owned subsidiaries (that are a party to the Current Deed described below) have also given similar guarantees in the event that FLT is wound up. There is one Deed of Cross Guarantee currently in effect dated 8 June 2021 (Current Deed). The parties to the Current Deed as at 30 June 2025 are Flight Centre Travel Group Limited (as holding entity and trustee), Australian OpCo Pty Ltd, P4 Finance Pty Ltd, Travel Services Corporation Pty Ltd, Flight Centre Technology Pty Ltd, Ignite Travel Group Pty Ltd, Ignite Holidays Pty Ltd, Ignite Travel Pty Ltd, Travel Money Currency Exchange Pty Ltd, Travel Money Holdings Pty Ltd, Travel Partners Holdings Pty Ltd, Top Deck Tours Pty Ltd, Jati Travel Pty Ltd, Top Deck Tours Limited and Flight Centre (China) Pty Ltd (as a group entity and alternative trustee). Jati Travel Pty Ltd and Top Deck Tours Limited acceded to the Current Deed via a Deed of Assumption dated 10 April 2025. These parties collectively represent the Closed Group for the purposes of the Instrument and, as there are no other parties to the Current Deed (that are controlled by FLT or otherwise), they also represent the Extended Closed Group. Set out below is the consolidated statement of profit or loss and statement of other comprehensive income, consolidated balance sheet and a summary of movements in consolidated retained earnings for FLT and the wholly owned subsidiaries listed above: FOR THE YEAR ENDED 30 JUNE 2025 2024 STATEMENT OF PROFIT OR LOSS $'000 $'000 RESTATED¹ Revenue 1,455,261 1,342,390 Buy-back and remeasurement of convertible notes 11,466 48,022 Other income 197,179 183,395 Share of profit / (loss) of joint ventures and associates 3,344 (2,435) EXPENSES Employee benefits (657,303) (630,385) Sales and marketing (129,026) (114,123) Tour, hotel & cruise operations - cost of sales (104,995) (86,525) Amortisation and depreciation (84,322) (75,671) Finance costs (149,049) (139,036) Impairment reversal 2,176 — Other expenses (416,223) (368,294) Profit before income tax expense 128,508 157,338 Income tax expense (41,071) (48,358) Profit after income tax expense 87,437 108,980 STATEMENT OF COMPREHENSIVE INCOME Items that have been reclassified to profit or loss: Hedging gain reclassified to profit or loss (2,628) 3,271 Items that may be reclassified to profit or loss: Changes in the fair value of cash flow hedges 8,272 (5,507) Income tax credit / (expense) on items of other comprehensive income (1,693) 671 Total other comprehensive income 3,951 (1,565) Total comprehensive loss for the year 91,388 107,415 1 Restated to include new parties to the Deed. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 104 For personal use only
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G2 DEED OF CROSS GUARANTEE (CONTINUED) AS AT 30 JUNE 2025 2024 ASSETS $'000 $'000 RESTATED¹ Current assets Cash and cash equivalents 289,141 628,412 Financial asset investments — 10,007 Trade receivables 562,394 451,261 Contract assets 236,517 250,898 Other assets 76,566 73,471 Other financial assets 2,852 5,779 Current tax receivables 1,873 4,215 Derivative financial instruments 19,774 4,719 Total current assets 1,189,117 1,428,762 Non-current assets Financial asset investments 10,729 12,329 Property, plant and equipment 30,189 24,829 Intangible assets 201,518 166,097 Right of use asset 126,426 121,548 Other assets 123,597 19,792 Other financial assets 1,628,421 1,305,510 Investments in subsidiaries, joint ventures and associates 1,116,765 1,132,899 Deferred tax assets 237,369 256,169 Derivative financial instruments 586 — Total non-current assets 3,475,600 3,039,173 Total assets 4,664,717 4,467,935 LIABILITIES Current liabilities Trade and other payables 1,073,628 1,108,424 Contract liabilities 77,955 64,458 Contingent consideration 2,023 3,683 Lease liability 50,175 46,606 Borrowings 610 610 Convertible note 186,446 280,829 Provisions 49,789 42,930 Derivative financial instruments 21,200 6,168 Total current liabilities 1,461,826 1,553,708 N o n - c u r r e n t l i a b i l i t i e s Trade and other payables 1,535,896 1,183,055 Contract liabilities 75,803 26,690 Financial liabilities — — Lease liability 91,561 96,980 Borrowings 123,097 99,597 Convertible note 292,655 338,999 Provisions 18,175 18,460 Deferred tax liabilities — 317 Derivative financial instruments 1,946 26,310 T o t a l n o n - c u r r e n t l i a b i l i t i e s 2,139,133 1,790,408 Total liabilities 3,600,959 3,344,116 Net assets 1,063,758 1,123,819 EQUITY Contributed equity 1,402,677 1,437,888 Treasury shares (17,793) (27,800) Reserves 101,405 132,842 Retained losses (422,531) (419,111) Total equity 1,063,758 1,123,819 1 Restated to include new parties to the Deed. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 105 For personal use only
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G2 DEED OF CROSS GUARANTEE (CONTINUED) 2025 2024 $'000 $'000 SUMMARY OF MOVEMENTS IN CONSOLIDATED RETAINED PROFITS RESTATED1 Retained profits at the beginning of the financial year (419,111) (466,501) Dividends provided for and paid (90,857) (61,590) Profit from ordinary activities after income tax 87,437 108,980 Retained (loss) / profit at the end of the financial year (422,531) (419,111) 1 Restated to include new parties to the Deed. G3 PARENT ENTITY FINANCIAL INFORMATION SUMMARY FINANCIAL INFORMATION The financial information for the parent entity, FLT, has been prepared on the same basis as the consolidated financial statements, except for the investments which are carried at cost. The individual financial statements for the parent entity show the following aggregate amounts: PARENT 2025 2024 $'000 $'000 Current assets 1,730,198 1,785,041 Total assets 5,138,854 4,738,802 Current liabilities 983,044 1,087,422 Total liabilities 4,174,561 3,720,795 Contributed equity 1,402,677 1,437,888 Treasury shares (17,793) (27,800) Reserves Cash-flow hedge reserve 7,212 455 Compound instrument - equity component 51,997 74,986 Share-based payments reserve 34,821 49,080 Share premium reserve (4,195) (2,810) Acquisition reserve (8,976) (8,976) Financial assets at FVOCI 4 (282) Foreign exchange reserve (1,988) (3,275) Profit reserves 309,792 307,999 Retained losses (809,258) (809,258) Total shareholders’ equity 964,293 1,018,007 Profit / (Loss) after tax for the year 92,770 140,584 Total comprehensive Income 96,719 139,020 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 106 For personal use only
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G3 PARENT ENTITY FINANCIAL INFORMATION (CONTINUED) GUARANTEES ENTERED INTO BY THE PARENT ENTITY PARENT 2025 2024 $'000 $'000 United Kingdom 174,003 156,448 India 27,039 27,280 China 9,379 9,078 Ireland 8,314 7,613 Hong Kong 5,349 5,280 Canada 6,189 8,319 France 40,376 12,901 New Zealand 4,581 3,912 USA 4,774 4,152 Japan 1,507 1,331 Australia 12,216 6,747 Singapore 2,586 2,270 Other 476 199 Total 296,789 245,530 FLT, as parent entity, has provided both parent company guarantees and issued letters of credit to beneficiaries. The parent entity is liable to pay any claim, subject to the terms of the parent company guarantee or letter of credit, in the event that obligations are not met. FLT has also entered into a deed of cross guarantee. Refer to note G2 for terms and parties to the deed. No liability was recognised by the parent entity or consolidated entity, as the guarantee’s fair values are immaterial. CONTINGENT LIABILITIES OF THE PARENT ENTITY Contingent liabilities of the parent entity at 30 June 2025 have been disclosed in note H2. CONTRACTUAL COMMITMENTS Except as noted in note H1, there are no other material contractual commitments of the parent entity. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 107 For personal use only
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H UNRECOGNISED ITEMS This section provides information about items that are not recognised in the financial statements but could potentially have a significant impact on the Group’s financial position and performance. H1 Commitments H2 Contingencies H3 Events occurring after the end of the reporting period H1 COMMITMENTS AIRTREE FLT has an agreement with AirTree Ventures 2 Partnership LP to invest $5,000,000 into the venture capital fund. To date FLT has received capital calls to the value of $4,748,868 which have been recognised as Equity instruments – Fair value through profit or loss (refer note B2), leaving $251,132 to be called in the future. The amount to be called has not been recognised as a liability at period end as FLT does not have a present obligation. The obligation only arises upon receipt of the capital call notices. FLT has no control or managerial involvement in the running of the venture capital fund and the total contribution of $5,000,000 is less than 4% of the total capital in the fund. CONTRACTUAL COMMITMENTS Neither the parent entity, nor the Group, have any material contractual obligations to purchase plant and equipment or intangible assets at balance date (2024: $nil). H2 CONTINGENCIES GENERAL CONTINGENCIES FLT is a global business and from time to time in the ordinary course of business it receives enquiries from various regulators and government bodies. FLT cooperates fully with all enquiries and these enquiries do not require disclosure in their initial state, however should the company become aware that an enquiry is developing further or if any regulatory or government action is taken against the Group, appropriate disclosure is made in accordance with the relevant accounting standards. As a global business, from time to time FLT is also subject to various claims and litigation from third parties during the ordinary course of its business. The directors of FLT have given consideration to such matters which are or may be subject to claims or litigation at year end and, unless specific provisions have been made, are of the opinion that no material contingent liability for such claims of litigation exists. The Group had no other material contingent assets or liabilities. H3 EVENTS OCCURRING AFTER THE END OF THE REPORTING PERIOD DIVIDENDS On 27 August 2025, FLT’s directors declared a final dividend for the year ended 30 June 2025. Refer to note B7 for details. No other material matters have arisen since 30 June 2025. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 108 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES This section details FLT's accounting policies. Material accounting policy information are contained with the financial statement notes to which they relate and are not detailed in this section. I SUMMARY OF MATERIAL ACCOUNTING POLICIES FLT’s remaining principal accounting policies adopted in the consolidated financial report’s preparation are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report is for the consolidated entity consisting of FLT and its subsidiaries. (A) BASIS OF PREPARATION This general purpose financial report has been prepared on a going concern basis and in accordance with Australian Accounting Standards and interpretations issued by the Australian Accounting Standard Board and the Corporations Act 2001. FLT is a for-profit entity for the purpose of preparing the financial statements. COMPLIANCE WITH IFRS The Group’s consolidated financial statements also comply with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). EARLY ADOPTIONS OF STANDARDS The Group has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2024. HISTORICAL COST CONVENTION These financial statements have been prepared under the historical cost convention, as modified by the revaluation of FVOCI financial assets, revaluation of FVTPL financial assets, derivative financial instruments and contingent consideration. ROUNDING OF AMOUNTS Amounts in the financial statements have been rounded off to the nearest thousand dollars or, in certain cases, the nearest dollar, in accordance with the Australian Securities and Investments Commission’s Instrument 2016/191. (B) CHANGES IN ACCOUNTING POLICY Amendments to AASB 112 Income Taxes became effective for year beginning 1 July 2024. Further accounting policy detail below under (T) Tax. (C) PRINCIPLES OF CONSOLIDATION (I) SUBSIDIARIES The consolidated financial statements incorporate the assets and liabilities of all FLT subsidiaries at 30 June 2025 and the subsidiaries’ results for the year then ended. FLT and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity. Subsidiaries are all entities (including structured entities) over which the Group has control. FLT controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the entity's activities. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date control ceases. The acquisition method of accounting is used to account for business combinations by the group (refer to note I (h) Business Combinations). Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the transferred asset’s impairment. Subsidiaries’ accounting policies have been changed, where necessary, to ensure consistency with the group’s policies. Investments in subsidiaries are accounted for at cost in FLT’s individual financial statements. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, statement of profit or loss, statement of other comprehensive income, statement of changes in equity and statement of financial position respectively. (II) JOINT ARRANGEMENTS & ASSOCIATES Investments in joint arrangements are classified as either joint operations or joint ventures (JVs). The classification depends on each investor's contractual rights and obligations, rather than the legal structure of the joint arrangement. FLT only has JVs, which are accounted for in the consolidated financial statements using the equity method. Under the equity method, they are initially recognised at cost by the parent entity and subsequently the share of the JV entity’s profit or loss is recognised in the statement of profit or loss. The share of post-acquisition movements in reserves is recognised in the statement of other comprehensive income. JV details are set out in note E1. FLT reassesses its interests in joint arrangements and associates for changes in control at least annually or where there has been changes in circumstances including but not limited to changes to shareholdings and shareholder agreements. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 109 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (C) PRINCIPLES OF CONSOLIDATION (CONTINUED) Upon gaining control, FLT re-measures its existing investment to fair value with any difference between the carrying amount and its fair value recognised in the profit or loss. The transaction is then accounted for in accordance with the acquisition method of accounting, refer note I (h) Business Combinations. Upon loss of joint control, FLT measures and recognises its remaining investment at its fair value. The difference between the investment’s carrying amount upon loss of joint control and the remaining investment’s fair value and proceeds from disposal is recognised in profit or loss. When the remaining investment constitutes significant influence, it is accounted for as an investment in associate. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies. Investments in Associates are also accounted for using the equity method. (III) CHANGES IN OWNERSHIP INTERESTS The Group recognises any non-controlling interest, in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interests’ proportionate share of the acquired entity’s net identifiable assets. Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Profit or Loss, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position and Consolidated Statement of Changes in Equity. The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with group equity owners. An ownership change will result in an adjustment between the carrying amounts of the controlling and non- controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to FLT owners. When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group has directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest in a JV or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. (IV) SHARE TRUSTS FLT has set up a share trust to administer the various employee share schemes it initiates to incentivise and reward employees. The trust holds shares which have been purchased by employees or are fully vested, and from time-to-time treasury shares. The trust is consolidated. (D) FOREIGN CURRENCY TRANSLATION (I) FUNCTIONAL AND PRESENTATION CURRENCY Items included in each of the Group entities’ financial statements are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Australian dollars, which is FLT’s functional and presentation currency. (II) TRANSACTIONS AND BALANCES Foreign currency transactions are translated into the functional currency at the prevailing exchange rates at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Exceptions arise if the gains and losses are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other income or other expenses. Non-monetary items that are measured at fair value in a foreign currency are translated at the exchange rates when the fair value is determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. (III) GROUP COMPANIES For foreign operations with different functional currencies to the presentation currency, results and financial position are translated into the presentation currency as follows: • Assets and liabilities for each balance sheet presented are translated at the closing rate of that balance sheet’s date • Income and expenses for each statement of profit or loss and statement of other comprehensive income are translated at average exchange rates; and • All resulting exchange differences are recognised in other comprehensive income NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 110 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (D) FOREIGN CURRENCY TRANSLATION (CONTINUED) On consolidation, exchange differences arising from the translation of any net investment in foreign entities and of borrowings and other financial instruments designated as hedges of such investments are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange difference is reclassified to profit or loss, as part of the gain or loss on sale where applicable. Goodwill and fair value adjustments arising on foreign operations' acquisitions are treated as the foreign operations’ assets and liabilities and are translated at the closing rate. (E) REVENUE For accounting policies on revenue, refer to note A2. (F) OTHER INCOME Specific accounting policies for other income are set out below: (I) LEASE INCOME Lease income from operating leases is recognised as income on a straight-line basis over the lease term. (II) INTEREST INCOME Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the instrument’s original effective interest rate, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate. (III) DIVIDENDS Dividends are recognised when the right to receive payment is established. This applies even if they are paid out of pre- acquisition profits. However, the investment may need to be tested for impairment as a consequence. (IV) ROYALTIES Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement. (V) INTERCOMPANY SERVICE FEES Remuneration for services provided between FLT group entities. The revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement. These fees are eliminated on consolidation. (G) IMPAIRMENT OF ASSETS Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation but are impairment tested annually or more frequently if events or changes in circumstances indicate they might be impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal, or value-in-use. To assess impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are independent of the cash inflows from other assets or asset groups (cash-generating units). Impaired non-financial assets, other than goodwill, are reviewed for indicators for possible reversal of impairment at each reporting date. (H) BUSINESS COMBINATIONS The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for a subsidiary’s acquisition comprises the transferred assets’ fair values, the liabilities incurred and the equity interest issued by the Group. The consideration transferred also includes any contingent consideration arrangement’s fair value and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at acquisition date. Where equity instruments are issued in an acquisition, the instruments’ fair values are their published market prices at the exchange date. Transaction costs arising on equity instruments’ issue are recognised directly in equity. The excess of the consideration transferred over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the acquired subsidiary’s net identifiable assets and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase. Where settlement of any part of cash consideration is deferred, future amounts payable are discounted to their present value at the exchange date. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Where there are NCIs, these are measured at either the acquisition date fair value or the proportionate share of the net identifiable assets acquired. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 111 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (H) BUSINESS COMBINATIONS (CONTINUED) For some acquisitions, Put and Call options over NCIs are entered into simultaneously when business combinations are initially recorded. For these acquisitions, it has been determined that the option does not provide the parent with a present ownership interest in the shares subject to the Put. The NCI is treated as having been acquired when the Put option is granted (i.e. it is de-recognised) and a financial liability at the present value of the redemption amount under the arrangement is recorded for the NCI Put. The difference between the liability recorded and the NCI de-recognised is recorded in the acquisition reserve in equity in accordance with AASB 10. After the initial recognition of the acquisition reserve it is not subsequently re-measured. The financial liability relating to the put options over NCI is subsequently accounted for under AASB 9 with all changes in the carrying amount recognised in profit or loss until exercise. (I) INTANGIBLE ASSETS (I) GOODWILL Goodwill represents the excess of the acquisition’s cost over the fair value of the Group’s interest in the fair value of the acquired subsidiary or associate’s net identifiable assets at the acquisition date. Goodwill on subsidiaries’ acquisitions is included in intangible assets. Goodwill is not amortised but is impairment tested annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the entity’s disposal include the sold entity’s carrying amount of goodwill. Goodwill is allocated to CGUs for impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. (II) BRAND NAMES, LICENCES, AND CUSTOMER RELATIONSHIPS Other intangible assets, such as brand names, licences and customer relationships, are acquired as part of business combinations and are recognised initially at fair value. Where they have an indefinite useful life, such as brand names, they are not subject to amortisation but are tested annually for impairment or more frequently if events or changes in circumstances indicate they may be impaired. Key factors taken into account in assessing the useful life of brands are: • The brands are well established and protected by trademarks across the globe. The trademarks are generally subject to an indefinite number of renewals upon appropriate application; and • There are currently no legal, technical or commercial obsolescence factors applying to the brands which indicate that the life should be considered limited. (III) OTHER INTANGIBLE ASSETS - SOFTWARE Research costs associated with software development are expensed as incurred. Development expenditure incurred on an individual project is capitalised if the project is technically and commercially feasible and adequate resources are available to complete development. The expenditure capitalised includes all directly attributable costs, including costs of materials, services, direct labour and an appropriate proportion of overheads. (J) CASH AND CASH EQUIVALENTS For statement of cash flows presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. Amounts outstanding from EFT, credit card and debit card point of sale transactions are classified as cash and cash equivalents. (K) FINANCIAL ASSETS (I) CLASSIFICATION Financial assets are classified in the following categories: financial assets at amortised cost, FVTPL and FVOCI. The classification depends on the purpose for which the assets were acquired. • Amortised cost - Applies to instruments which are held within a business model whose objective is to hold assets in order to collect contractual cash flows and the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest • Fair value through profit and loss (FVTPL) - Applies to instruments which are within a business model where the objective is neither to hold to collect contractual cash flows nor hold to sell • Fair value through other comprehensive income (FVOCI) - Applies to instruments which satisfy the requirements of the business model test and contractual cashflow test. Management classifies its investments at initial recognition and re-evaluates this classification each reporting date, except for FVOCI where the classification is irrevocable. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 112 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (K) FINANCIAL ASSETS (CONTINUED) (II) RECOGNITION AND DERECOGNITION Regular purchases and sales of financial assets are recognised on trade-date (the date on which the Group commits to purchase or sell the asset). Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at FVTPL. Financial assets carried at FVTPL are initially recognised at fair value and transaction costs are expensed in the statement of profit or loss. Financial assets are derecognised when the rights to receive cash flows from them have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. (III) SUBSEQUENT MEASUREMENT Financial assets at amortised cost are carried at amortised cost using the effective interest method. Financial assets at FVTPL are subsequently carried at fair value. Gains or losses arising from changes in the fair value are presented in the statement of profit or loss within other income or other expenses in the period in which they arise. Income such as interest and dividends from financial assets at FVTPL is recognised separately to gains or losses in the statement of profit or loss as part of other income when the Group’s right to receive payments is established. Financial assets classified as FVOCI are subsequently carried at fair value. Gains or losses arising from changes in the fair value are presented in other comprehensive income with the exception of impairment which is recognised in the statement of profit or loss immediately. When debt securities classified as FVOCI are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified in the statement of profit or loss as gains and losses from investment securities. (IV) IMPAIRMENT - EXPECTED CREDIT LOSSES FLT applies the simplified approach to the measurement of expected credit losses (ECLs). FLT assesses the credit risk, probability of default and overall expected credit losses of financial assets each reporting date by reference to historical ageing and write off data, and using groupings with similar loss patterns (i.e. by geographical region and customer type). The calculation reflects the probability-weighted outcomes and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. For trade receivables, contract assets and lease receivables which do not contain a significant financing component, AASB 9 offers a policy choice between the application of the general model or a simplified approach. Under the simplified approach, the tracking of changes in credit risk is not required, but instead requires the recognition of lifetime ECLs at all times and allows the use of a provision matrix, incorporating the probability of default, as a practical expedient. FLT has elected the simplified approach for trade receivables and contract assets. (L) FAIR VALUE MEASUREMENT FLT measures certain financial instruments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: • In the principal market for the asset or liability; or • In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. An asset or liability's fair value is measured using the assumptions that market participants use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, as described in notes A7, B2 and C2. (M) TRADE RECEIVABLES Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment in accordance with the simplified approach see note I (k) iv above. The impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The impairment amount is recognised in the statement of profit or loss in other expenses. When a trade receivable for which an impairment allowance has been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of profit or loss. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 113 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (N) PROPERTY, PLANT AND EQUIPMENT Buildings and other property, plant and equipment are stated at historical cost less depreciation. Land is held at historical cost. Historical cost includes expenditure directly attributable to the item’s acquisition. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, when it is probable that future economic benefits associated with the item will flow to the group and the item’s cost can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. An asset’s carrying amount is impaired immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note I (g)). A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the asset’s carrying amount does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. (O) INVENTORIES Inventories are valued at the lower of cost and net realisable value. Cost primarily represents average costs. Where inventories relate to cruise cabins that are pre-purchased as part of our principal business, with sail dates greater than 12 months, they are classified as non-current. (P) TRADE AND OTHER PAYABLES These amounts are liabilities for goods and services provided to the group prior to the financial year's end, but not yet paid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months of the reporting date. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. (Q) PROVISIONS Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events and it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow relating to any item included in the same class of obligations is small. To measure provisions at present value at the reporting period’s end, management estimates the expenditure required to settle the present obligation. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. Provision increases brought about by the passage of time are recognised as interest expenses. (I) MAKE GOOD PROVISION The Group is required to restore leased premises to their original condition at the end of the respective lease terms. A provision has been recognised for the present value of the estimated expenditure required to remove any leasehold improvements and restore the leased premises. These costs have been capitalised as part of the cost of leasehold improvements and are amortised over the shorter of the lease term or the asset’s useful life. (R) EMPLOYEE BENEFITS (I) WAGES AND SALARIES, ANNUAL LEAVE AND SICK LEAVE Liabilities for employees’ wages and salaries, including non-monetary benefits and annual leave are classified as current and recognised in trade and other payables up to the reporting period’s end and represent the amounts expected to be paid when the liabilities are settled. Sick leave is recognised as an expense when the leave is taken and measured at the rates paid or payable. All other short-term employee benefit obligations are presented as trade and other payables. (II) INCENTIVES AND BONUS PLANS A liability for employee benefits in the form of incentives and bonus plans is recognised as payable when there is a contractual obligation or valid expectation that payment will be made. (III) LONG SERVICE LEAVE The liability for long service leave which is expected to be settled within 12 months and the portion that is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in provisions. The liability represents the present value of expected future payments to be made for the services employees provided up to the reporting period’s end. The company considers expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments at the reporting period’s end are discounted using market yields on national corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 114 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (R) EMPLOYEE BENEFITS (CONTINUED) (IV) RETIREMENT BENEFIT OBLIGATIONS The Group provides retirement benefits to employees through a defined contribution superannuation fund. Contributions are recognised as expenses as they become payable. (V) TERMINATION BENEFITS Termination benefits may be payable when employment is terminated before the normal retirement date or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it commits to either terminating a current employee’s employment according to a detailed formal plan without the possibility of withdrawal or providing termination benefits following an offer made to encourage voluntary redundancy. (S) BORROWINGS Borrowings are initially recognised at fair value, net of transaction costs incurred, and are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on loan facilities’ establishment are recognised as loan transaction costs to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. If there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. Borrowing costs are recognised as expenses in the period in which they are incurred and include: • Interest on bank overdrafts and short and long-term borrowings; and • Unwinding of discount on deferred payables. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer the liability’s settlement for at least 12 months after the reporting period’s end. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or other expenses. (T) TAX (I) INCOME TAX The income tax expense or benefit for the period is the tax payable or receivable on the current period’s taxable income based on each jurisdiction’s applicable income tax rate. Adjustments are made for changes in deferred tax assets and liabilities attributable to temporary differences and for unused tax losses. The current income tax charge is based on tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns in respect of situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the assets’ and liabilities’ tax bases and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from an asset or liability’s initial recognition in a transaction other than a business combination that at the time of the transaction does not affect accounting or taxable profit or loss except for transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences such as recognition of a right of use asset and lease liability. Deferred income tax is determined using rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only to the extent that it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity controls the timing of the temporary differences’ reversals and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same tax authority. Current tax assets and tax liabilities are offset when the entity has a legally enforceable right to offset and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 115 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (T) TAX (CONTINUED) Current and deferred tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity. In these cases, the tax is also recognised in other comprehensive income or directly in equity. Companies within the Group may be entitled to claim tax incentives (eg. the Research and Development Tax Incentive regime in Australia). The effect of this is a reduction to the income tax payable and current tax expense. (II) TAX CONSOLIDATION LEGISLATION FLT and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1 July 2003. The head entity, FLT, and the tax consolidated group’s controlled entities continue to account for their current and deferred tax amounts. These tax amounts are measured as if each entity continues to be a standalone taxpayer. In addition to its current and deferred tax amounts, FLT also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from the tax consolidated group’s controlled entities. (III) NATURE OF THE TAX SHARING ARRANGEMENT Members of the tax consolidated group have entered into a tax sharing agreement that provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement on the basis that the possibility of default is remote. (IV) NATURE OF THE TAX FUNDING AGREEMENT Members of the tax consolidated group have entered into a tax funding agreement. Under the tax funding agreement, the wholly-owned entities fully compensate FLT for any current tax payable assumed and are compensated by FLT for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to FLT under the tax consolidation legislation. The funding amounts are the amounts recognised in the wholly-owned entities' financial statements. Amounts receivable or payable under the tax funding agreement are due when the head entity's funding advice is received. This advice is issued as soon as practicable after each financial year's end. The head entity may also require payment of interim funding amounts to pay tax instalments. The funding amounts are recognised as current intercompany receivables or payables. Any differences between the amounts assumed and amounts receivable or payable under the tax funding agreements are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities. (V) International Tax Reform - Pillar Two Model Rules The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalisation of the global economy. The Pillar Two framework aims to ensure Multinational organisations pay a minimum effective corporate tax rate of 15% income arising in each jurisdiction in which they operate. Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates. The legislation was effective for the Group’s financial year beginning 1 July 2024. The Group has performed an assessment of the Group’s potential exposure to Pillar Two income taxes and based on the assessment performed, the Group does not expect a potential exposure to Pillar Two top-up taxes. AASB 112 Income Taxes was amended in June 2023 in response to Pillar Two and requires a mandatory temporary exception from the recognition and disclosure of deferred taxes arising form the implementation of Pillar Two model rules. The Group has applied the mandatory temporary exception of Pillar Two deferred taxes under AASB 112 Income Taxes and has not recognised or disclosed information about deferred taxes and liabilities related to Pillar Two income taxes. (U) EARNINGS PER SHARE (I) BASIC EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit attributable to the company’s equity holders, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. (II) DILUTED EARNINGS PER SHARE Diluted earnings per share adjusts basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 116 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (V) CONTRIBUTED EQUITY Ordinary shares are classified as equity (note D4) and entitle the holder to participate in dividends and the proceeds of the company’s wind up in proportion to the number of and amount paid on the shares held. On a show of hands, every holder of an ordinary share present at a meeting, either in person or by proxy, is entitled to one vote. Upon a poll, each share is entitled to one vote. Ordinary shares have no par value and there are no partly paid shares currently on issue. Incremental costs directly attributable to new share or option issues are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to shares or options issued for a business acquisition are not included in the acquisition’s cost as part of the purchase consideration. If the entity reacquires its own equity instruments, as the result of a share buy-back for example, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid, including any directly attributable incremental costs (net of income taxes), is recognised directly in equity. (W) DIVIDENDS Provision is made by the parent entity for any dividend declared, being appropriately authorised and no longer at the entity’s discretion on or before the end of the financial year but not distributed at balance date. (X) GST / CONSUMPTION TAX Revenues, expenses, assets and liabilities are recognised net of the amount of associated consumption tax, unless the consumption tax incurred is not recoverable from the taxation authority. In this case, it is recognised as part of the asset acquisition’s cost or as part of the expense. Receivables and payables include consumption taxes receivable or payable. The net amount of consumption tax recoverable from, or payable to, the taxation authority is included with other assets or payables in the balance sheet. Cash flows are presented on a gross basis. The consumption tax components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority are presented as operating cash flows. (Y) NEW ACCOUNTING STANDARDS ADOPTED BY THE GROUP The Group has applied the following standards and amendments for the first time for its annual reporting period commencing 1 July 2024: • AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-current (AASB 101) • AASB 2022-6 Amendments to Australian Accounting Standards - Non-current Liabilities with Covenants (AASB 101) The amendments listed above did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods. (Z) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2025 reporting period. FLT is in the process of determining the impact of these new standards and amendments. AASB 2024-2 AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS - CLASSIFICATION AND MEASUREMENT OF FINANCIAL INSTRUMENTS (AASB 7 & AASB 9) (EFFECTIVE FOR ANNUAL PERIODS BEGINNING ON OR AFTER 1 JANUARY 2026) On 29 July 2024, the AASB issued targeted amendments to AASB 9 and AASB 7 to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments: • clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; • clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; • add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and • update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI). FLT is still assessing the impact on its operations or financial statements. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 117 For personal use only
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I SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (Z) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE (CONTINUED) AASB 18 PRESENTATION AND DISCLOSURE IN FINANCIAL STATEMENTS (EFFECTIVE FOR ANNUAL PERIODS BEGINNING ON OR AFTER 1 JANUARY 2027) AASB 18 has been issued to improve how entities communicate in their financial statements, with particular focus on information about financial performance in the statement of profit or loss. This will replace AASB 101 Presentation of Financial Statements and applies for annual reporting periods beginning on or after 1 January 2027. The key presentation and disclosure requirements established by AASB 18 are: • The presentation of newly defined subtotals in the statement of profit or loss • The disclosure of management defined performance measures (MPM) • Enhanced requirements for grouping information (ie aggregation and disaggregation) AASB 18 is accompanied with limited consequential amendments to the requirements in other accounting standards, including AASB 107 Statement of Cash Flows. AASB 18 introduces three new categories for classification of all income and expenses in the statement of profit or loss: operating, investing and financing. Additionally, entities will be required to present subtotals for ‘operating profit or loss’, ‘profit or loss before financing and income taxes’ and ‘profit or loss’. For the purpose of classifying income and expenses into one of the three new categories, entities will need to assess their main business activity, which will require judgement. There may be more than one main business activity. AASB 18 also requires several disclosures in relation to MPMs, such as how the measure is calculated, how it provides useful information and a reconciliation to the most comparable subtotal specified by AASB 18 or another standard. The Group is still to consider the impacts of the new disclosure requirements. There are no other standards that have been issued but are not yet effective and that are expected to have a material financial impact on the entity in the current or future reporting periods and on foreseeable future transactions. NOTES TO THE FINANCIAL STATEMENTS CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 118 For personal use only
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Set out below is relevant information relating to entities that are consolidated in the consolidated financial statements at the end of the financial year as required by the Corporations Act 2001 (s.295(3A)(a)). KEY ASSUMPTIONS AND JUDGEMENTS Determination of Tax Residency Subsection 295(3A) of the Corporations Act 2001 requires that the tax residency of each entity which is included in the ‘Consolidated Entity Disclosure Statement’ be disclosed. In the context of an entity which was an Australian resident, “Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as the determination of tax residency is highly fact dependent and there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining residency, the consolidated entity has applied the following interpretations: Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Taxation Ruling TR 2018/5. Foreign tax residency The consolidated entity has applied current legislation and, where available, judicial precedent in the determination of foreign tax residency. Trusts Australian tax law does not contain specific residency tests for trusts. Generally, trusts are taxed on a flow-through basis so there is no need for a general residence test. There are some provisions which treat trusts as residents for certain purposes, but this does not mean the trust itself is an entity that is subject to tax. CONSOLIDATED ENTITY DISCLOSURE STATEMENT FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 119 For personal use only
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CONSOLIDATED ENTITY DISCLOSURE STATEMENT continued FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 120 For personal use only
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CONSOLIDATED ENTITY DISCLOSURE STATEMENT continued FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 121 For personal use only
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CONSOLIDATED ENTITY DISCLOSURE STATEMENT continued FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 122 For personal use only
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CONSOLIDATED ENTITY DISCLOSURE STATEMENT continued FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 123 For personal use only
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The board declared the following in accordance with a resolution of the directors of Flight Centre Travel Group Limited: 1. In the opinion of the directors: (a) the financial statements and notes of Flight Centre Travel Group Limited for the financial year ended 30 June 2025 are in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the consolidated entity's financial position as at 30 June 2025 and of its performance for the year ended on that date; and ii. complying with Accounting Standards and the Corporations Regulations 2001; (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable (c) the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and correct; 2. Note I (a) to the financial statements contains a statement of compliance with International Financial Reporting Standards 3. At the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in note G2 will be able to meet any obligations or liabilities to which they are, or may become, subject to by virtue of the deed of cross guarantee described in note G2. 4. This declaration has been made after receiving the declarations required to be made to the directors by the chief executive officer and the chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2025. On behalf of the board G.F. Turner Director BRISBANE 27 August 2025 DIRECTORS’ DECLARATION FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 124 For personal use only
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 111 Eagle Street Brisbane QLD 4000 Australia GPO Box 7878 Brisbane QLD 4001 Tel: +61 7 3011 3333 Fax: +61 7 3011 3100 ey.com/au Independent auditor’s report to the members of Flight Centre Travel Group Limited Report on the audit of the financial report Opinion We have audited the financial report of Flight Centre Travel Group Limited (the Company) and its subsidiaries (collectively the Group), which comprises the balance sheet as at 30 June 2025, the statement of profit or loss, statement of other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2025 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit proc edures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. For personal use only
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Recognition and measurement of volume incentive contract assets and revenue Why significant How our audit addressed the key audit matter The Group generates volume incentive revenue from travel providers for achieving annual targets. The volume incentive revenue process is inherently judgemental and includes various assumptions including: ▪ Contract periods do not correspond to the Group’s financial year end. Judgement is required to determine expected future volumes and the tiered commission rates to be applied in the circumstances. ▪ Contracts are renegotiated periodically. Updates to terms and contractual agreements may result in variations being received which may relate to past performance. Given the judgement and estimation involved in the Group’s accounting for volume incentives, this was a key audit matter. We evaluated the Group’s judgements in determining the volume incentive revenue recognised. In performing our audit procedures, we: ▪ Evaluated the Group’s accounting for volume incentives was in accordance with AASB 15 Revenues from Contracts with Customers. ▪ Obtained a sample of the volume incentive agreements and reconciled the agreed rates to incentive volume revenue calculations. ▪ Agreed the underlying travel data used in the volume incentive calculations to independent third-party booking information and supplier confirmed data (where available). ▪ Evaluated renegotiations are supported by adequate documentation. ▪ Agreed volume incentive revenue to cash receipts on a sample basis. ▪ Assessed the adequacy of the disclosures included in Notes A2 and F4 to the financial statements. Decentralised operations Why significant How our audit addressed the key audit matter As disclosed in Note A1 to the financial report, the Group operates Leisure and Corporate travel-related agency and principal businesses with a diverse range of revenue recognition methods. The businesses are supported by both global and local management teams including a global supply procurement function. The Group operates in over 20 countries and approximately half of the revenue generated by the Group is from countries outside Australia. The subsidiaries (“components”) of the Group use a wide range of financial and other non-financial systems (“IT systems”) to capture financial transactions and other information which are consolidated by the Group. There is also a large volume of inter-group transactions due to components procuring travel product from supply procurement functions or each other. These transactions require identification and elimination to ensure accurate reporting of the consolidated Group financial performance and position. Consolidation of the Group’s results at year end involves significant oversight by the Group to monitor components’ financial reporting. In addition, the analysis and reporting of the Group’s most significant and judgemental accounting estimates across the Group are primarily centralised in head office. This requires extensive co-ordination efforts by the Group to capture and analyse information from a wide range of individual stakeholders, geographies and IT systems. In our role as Group auditor, we are required to obtain sufficient appropriate audit evidence regarding the financial information of the components within the Group and co- ordinate with components to obtain relevant information for matters assessed at the Group level. Our audit considered the requirements of the Australian Auditing Standard 600 Special Considerations-Audits of a Group Financial Report (Including the Work of Component Auditors (as Amended), which was effective for the first time in the current year audit. To obtain sufficient appropriate audit evidence on significant transactions and balances that consolidate into the Group’s financial reporting, we performed the following audit procedures: ▪ Performed a risk assessment for the entire Group with input from component audit teams. The Group audit team considered risks of material misstatement to the Group financial statements to determine the accounts and extent of work assigned to each component audit team in relevant locations. Consideration was given to the nature, size and risks associated with each of the Group’s businesses and the extent to which centralised testing could be effectively performed by the Group audit team. ▪ For in-scope components, we sent instructions to the component audit teams, including significant risk areas to be considered, audit testing thresholds and the information to be reported back to the Group audit team. ▪ Attended regular meetings with functional and regional leadership across the Group during the year to understand and evaluate key judgements made by these businesses in applying Group accounting policy and accounting standards. ▪ Evaluated the consistency of application, and compliance with, the Group’s accounting policies and accounting standards across the Group’s entities. For personal use only
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Why significant How our audit addressed the key audit matter The geographic spread and number of businesses within the components, and the requirement to obtain and consolidate data from separate IT systems substantially increases the effort required to obtain the necessary audit evidence and is therefore considered a key audit matter ▪ For relevant significant revenue processes, our testing, conducted on a sample basis, addressed the complexity in inter-group transactions to ensure that each component of revenue relating to transactions is accurately reported and where appropriate eliminated on consolidation. ▪ Evaluated the sufficiency and appropriateness of work performed by component teams and assessed the impact of accounting and auditing matters reported by the component audit teams. This included reviewing certain audit workpapers of the component audit teams which responded to higher risk areas. ▪ The work performed by each team was considered, and where relevant, the key judgements were discussed, as were findings relevant to the group audit. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2025 annual report, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of: ▪ The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and ▪ The consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001; and for such internal control as the directors determine is necessary to enable the preparation of: ▪ The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ▪ The consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. For personal use only
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor ’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ▪ Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ▪ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ▪ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ▪ Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ▪ Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ▪ Plan and perform the Group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the Group financial report. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the Group audit. We remain solely responsible for our audit opinion. For personal use only
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 21 to 34 of the directors’ report for the year ended 30 June 2025. In our opinion, the Remuneration Report of Flight Centre Travel Group Limited for the year ended 30 June 2025, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Alison de Groot Amy Cinquini Partner Partner Brisbane Brisbane 27 August 2025 27 August 2025 For personal use only
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The shareholder information set out below was applicable at 28 July 2025. (A) DISTRIBUTION OF EQUITY SECURITIES NUMBER OF SHARES NUMBER OF SHAREHOLDERS 1-1,000 61,594 1,001-5,000 11,865 5,001-10,000 1,409 10,001-100,000 753 100,001 and over 50 75,671 There were 7,242 holders of less than a marketable parcel of ordinary shares. (B) EQUITY SECURITY HOLDERS TWENTY LARGEST QUOTED EQUITY SECURITY HOLDERS NAME NUMBER HELD PERCENTAGE OF ISSUED SHARES Gainsdale Pty. Ltd. 16,590,943 7.6 % L1 Capital Pty Ltd. 13,898,668 6.4 % Gehar Pty Ltd 12,013,848 5.5 % James Management Services Pty Ltd 11,279,101 5.2 % State Street Global Advisors Australia Ltd. 9,934,179 4.6 % The Vanguard Group, Inc. 7,133,533 3.3 % Marin Currie Australia 6,087,039 2.8 % Macquarie Investment Management Global Ltd 4,466,756 2.1 % FLT Share Plan 4,349,200 2.0 % Vanguard Investments Australia Ltd. 4,320,115 2.0 % BlackRock Institutional Trust Company, N.A. 3,944,177 1.8 % First Sentier Investors 3,302,480 1.5 % DFA Australia Ltd. 3,217,823 1.5 % BlackRock Investment Management (Australia) Ltd. 3,061,125 1.4 % IFM Investors 2,564,685 1.2 % Paradice Investment Management Pty.Ltd. 2,507,158 1.2 % BofA Global Research (UK) 2,422,901 1.1 % Principal Global Investors (Equity) 2,358,876 1.1 % Optar Capital 1,716,503 0.8 % Netwealth Investments Ltd. 1,560,164 0.7 % 116,729,274 53.8 % 1 Substantial holder (including associate holdings) in the company. ORDINARY SHARES VOTING RIGHTS On a show of hands, every member present at a meeting in person or by proxy shall have one vote. Upon a poll, each share shall have one vote. Options and performance rights have no voting rights. ON-MARKET BUY-BACKS On the 28th April 2025, FLT announced its intention to undertake an on-market buy-back of up to $200 million. The buy- back is subject to prevailing share price and market conditions and is at FLT’s discretion. The buy-back will be conducted for up to 12 months. As at 30 June 2025, FLT had bought-back $57,125,000 in shares. SHAREHOLDER INFORMATION FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 130 For personal use only
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As one of the world's largest travel agency groups FLT is committed to being a responsible corporate taxpayer. The Board has therefore chosen to provide additional disclosure of tax information as recommended by the Board of Taxation's Voluntary Tax Transparency Code. FLT is classified as a 'large business' for the purposes of the Tax Transparency Code and has therefore chosen to disclose the following information in this annual report: • Tax policy, strategy and governance summary • Reconciliation of accounting profit to tax expense • Reconciliation of income tax expense and income tax payable • Identification of material temporary and non-temporary differences • Accounting effective company tax rates for Australian and global operations • Tax contribution summary for corporate taxes paid • Information about international related party dealings TAX POLICY, STRATEGY AND GOVERNANCE STATEMENT APPROACH TO RISK MANAGEMENT AND GOVERNANCE ARRANGEMENTS FLT operates under a Tax Risk Management and Governance Policy, which is approved by the Board Audit committee and sets out FLT's commitment to managing its global tax obligations. It is consistent with the Australian Taxation Office (ATO) and the Organisation for Economic Co-operation and Development (OECD)'s recommendations for tax risk management and governance, as well as being consistent with FLT's overarching Risk Management Policy. FLT's Tax Risk Management and Governance Policy includes formal tax policies and procedures that are reviewed and updated at least annually. FLT has appropriate systems, processes and controls in place to identify, evaluate, mitigate, monitor and report on tax risks. ATTITUDE TOWARDS TAX PLANNING AND ACCEPTED LEVEL OF RISK IN RELATION TO TAXATION FLT takes a conservative approach to tax risk, and the management of tax risk will be balanced with FLT's objective to create and safeguard shareholder value. Where there is a choice between an aggressive tax position and a more conservative position, FLT will take the more conservative approach. That is, FLT aims for certainty on tax positions it adopts but where tax law is unclear or subject to interpretation, written advice or confirmation will be sought as appropriate. As a global travel business, FLT has entities in many jurisdictions around the world, including some considered low, or no tax according to the OECD. These businesses are purely established to support the ordinary business operations of FLT in those countries. APPROACH TO ENGAGEMENT WITH THE ATO AND OTHER REVENUE AUTHORITIES FLT's tax philosophy is based on an open, co-operative and transparent relationship with the Revenue Authorities. FLT maintains good relationships with the ATO and other revenue authorities. Openness, honesty and transparency are paramount in all dealings with the tax authorities and other relevant bodies, with the aim of minimising the risk of challenge, dispute or damage to FLT's credibility. FLT is aware of and, where appropriate, effectively uses the services and compliance products offered by the revenue authorities to reduce its tax risks and compliance costs (e.g. private ruling process, electronic lodgement, tax portal etc). TAX TRANSPARENCY REPORT (UNAUDITED) FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 131 For personal use only
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INCOME TAX EXPENSE (I) INCOME TAX (CREDIT) / EXPENSE 2025 2024 $'000 $'000 Current tax 48,853 36,659 Deferred tax 55,294 50,178 Adjustments for current tax of prior periods 290 (6,284) Income tax expense 104,437 80,553 Deferred income tax (benefit) / expense included in income tax comprises: Decrease in deferred tax assets 41,009 17,681 Increase in deferred tax liabilities 14,285 20,116 Prior period adjustments — 12,381 55,294 50,178 Numerical reconciliation of income tax to prima facie tax (receivable) / payable Profit before Income tax expense 212,621 219,708 Tax at the Australian tax rate of 30% (2024 - 30%) 63,786 65,912 Tax effect of amounts in calculating taxable income: Non-deductible amounts 1,355 2,571 Deductible amounts (955) (626) Interest denial 651 873 Legal costs 41 246 Intangibles 671 (804) Borrowings 831 — Investments — 6,060 Share based payments 7,032 2,292 Property, plant and equipment 611 (96) Changes in tax rate — — Other amounts 2,952 (2,804) 76,975 73,624 Tax losses derecognised 32,710 17,800 Tax losses recognised (3,569) (4,383) Effect of different tax rates on overseas income (1,969) (204) Under / (Over) provision of prior year’s income tax 290 (6,284) 27,462 6,929 Income tax expense 104,437 80,553 (II) AMOUNTS RECOGNISED DIRECTLY IN EQUITY Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss and other comprehensive income is directly debited or credited to equity. 2025 2024 N e t d e f e r r e d t a x - ( c r e d i t e d ) / d e b i t e d d i r e c t l y t o e q u i t y NOTES $'000 $'000 Share-based payments reserve F11 670 4,292 Equity component of convertible note F11 (9,852) (7,007) INCOME TAX PAID AND INCOME TAX PAYABLE (III) TAX EXPENSE / (INCOME) RELATING TO ITEMS OF OTHER COMPREHENSIVE INCOME Cash flow hedges F11 1,693 (671) Net investment hedge F11 (716) 214 Total tax expense / (credit) relating to items of other comprehensive income 977 (457) TAX TRANSPARENCY REPORT (UNAUDITED) CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 132 For personal use only
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INCOME TAX PAID AND INCOME TAX PAYABLE (CONTINUED) (IV) UNRECOGNISED POTENTIAL DEFERRED TAX ASSETS 2025 2024 $'000 $'000 Unused tax losses for which no deferred tax asset has been recognised (non-capital) 244,446 112,583 Temporary differences relating to brand name impairment (capital) and other intangibles 55,804 53,453 Investments 13,512 13,512 Lease & decommissioning 1,118 3,327 Other 9,266 8,476 324,146 191,351 Potential tax benefit 76,268 47,444 KEY ESTIMATES & JUDGEMENTS - UTILISATION OF TAX LOSSES In most cases the unused tax losses have no expiry date. Therefore, while there is uncertainty in the market, assumptions have been made to support carrying the tax losses. Where the tax losses could not be supported by future operating profits in the near term or losses were incurred in jurisdictions with restrictions on their use, FLT have not recognised the tax losses. Unrecognised unused tax losses in 2025 were incurred by the group across numerous jurisdictions. These losses have various expiry dates from 2026 through to indefinite carry forward. (V) CALCULATION OF CURRENT TAX EXPENSE 2025 2024 NOTES $'000 $'000 Current income tax expense of current period F12 48,853 36,659 Prior period adjustments to current tax receivable (290) 1,442 Effect of currency translation (389) (18) Current income tax expense 48,174 38,083 (VI) RECONCILIATION OF INCOME TAX EXPENSE TO INCOME TAX PAID AND PAYABLE Net current tax receivable at the beginning of the period (13,361) (12,307) Less income tax paid (56,029) (39,137) Current income tax expense (i) 48,174 38,083 Net current tax receivable at the end of the period (21,216) (13,361) EFFECTIVE COMPANY TAX RATES 2025 2024 Effective company tax rate % % Effective tax rate - Global 49.12 % 36.66 % Primarily, the difference between the Australian corporate tax rate of 30% and FLT's effective tax rate is being driven by the effect of global tax rate differences, tax losses derecognised and goodwill impairment. TAX TRANSPARENCY REPORT (UNAUDITED) CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 133 For personal use only
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TAX CONTRIBUTION SUMMARY 2025 2024 AUSTRALIA OTHER COUNTRIES TOTAL AUSTRALIA OTHER COUNTRIES TOTAL Taxes paid by/on behalf of FLT $'000 $'000 $'000 $'000 $'000 $'000 Corporate income tax 2,145 33,777 35,922 1,271 24,486 25,757 Employment taxes (payroll tax, FBT) 31,319 40,139 71,458 29,258 21,096 50,354 Withholding taxes 10,988 9,119 20,107 7,978 5,402 13,380 Other taxes — 524 524 — 8,063 8,063 Taxes collected on behalf of others GST/VAT (collected and remitted) 41,138 57,501 98,639 45,867 65,144 111,011 GST/VAT (paid but reclaimed) (40,190) (49,820) (90,010) (45,602) (57,329) (102,931) PAYG/PAYE/salary withholding 138,586 162,996 301,582 137,452 165,857 303,309 Total Tax Contribution 183,986 254,236 438,222 176,224 232,719 408,943 TOTAL TAX CONTRIBUTION BY COUNTRY TOTAL TAX CONTRIBUTION BY TAX TYPE TAX TRANSPARENCY REPORT (UNAUDITED) CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 134 For personal use only
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RELATED PARTY TRANSACTIONS FLT has international related party dealings with its subsidiaries when it is in the best interests of FLT to do so. These dealings are conducted following the arm's length principle as required by Australian taxation law and international taxation norms. FLT maintains contemporaneous transfer pricing documentation supporting the pricing of related party dealings in accordance with Australian tax legislation and the OECD Transfer Pricing Guidelines. The key international related party dealings which have a material impact on FLT's Australian taxable income are listed below. KEY INTERNATIONAL RELATED PARTY DEALINGS DESCRIPTION Royalties FLT licences its brand names, trademarks and other intellectual property to its overseas subsidiaries. FLT subsidiaries may own other brand names, trademarks and intellectual property. Services FLT's head office is located in Brisbane, Australia as the company was founded in Australia and its largest operations are in Australia. Accordingly, there are a number of specialist teams located at the FLT headquarters which provide services to the overseas subsidiaries. In addition overseas subsidiaries also provide services to FLT. Loans FLT has loans to and from its overseas subsidiaries. Dividends FLT receives dividends from overseas subsidiaries. Group Cost and Income Allocations FLT and its overseas subsidiaries may enter into global contracts with suppliers and / or customers for which income and / or expenses may be allocated amongst the group. TAX TRANSPARENCY REPORT (UNAUDITED) CONTINUED FINANCIAL REPORT 2025 FLIGHT CENTRE TRAVEL GROUP 135 For personal use only