Interim Report

Tourism Holdings Limited

2012 Chairman’s Report

Keith Smith

Tourism Holdings Limited (thl) has achieved a significant Summary of Results turnaround in performance in the half-year to December The NPAT for the first half at $4.2m is well above the prior 2011, with a strong increase in profit, resumption in dividend corresponding period due to the Rugby World Cup effect in New payments and positive indicators for continued growth. Zealand and the first high-season profit from the Road Bear business in the USA. Net Profit After Tax (NPAT) for the first half was well above the Revenue for the period increased by $23m or 27%. Revenue December 2010 half-year result, due to the Rugby World Cup effect excluding fleet sales increased by $16m to $83m. Road Bear in and the first high-season profit from the Road Bear represented $11m of the increase. business in the USA, acquired in December 2010. The Road Bear business has continued to perform above The Board is encouraged by the performance of the business in an expectations, with an EBIT of NZD$6.1m. This included the USA operating environment that continues to be difficult. high season period. The winter low season (January – June 2012) forecast is a loss of up to $1.0m at the EBIT level. As announced by our CEO Grant Webster, the new manufacturing Net Debt for the half was $102m compared to $91m for the prior joint venture RV Manufacturing Group LP (RVMG LP) provides an corresponding period. The debt increase for the half of $11m outstanding and rare opportunity to create a step change in reducing including increased fleet in Road Bear and the purchase of the costs, improving efficiency and provides a platform for strong profit Motek Hamilton building for $7.3m growth in that business. Vehicle sales were up by 60 units and $5m revenue. Excluding Road Bear, vehicle sales revenue was $12m compared to the prior Key Points corresponding period of $13m. A decline in New Zealand vehicle • NPAT of $4.2m, up from prior corresponding period sales revenue was planned due to the need to hold some fleet in (pcp) loss of $1.3m rentals for the Rugby World Cup. • Dividend of 2cps declared The higher taxation rates in the USA have lifted the company’s weighted average tax rate to 41% for the period. • Revenue increase of 27%, or 7% excluding Road Bear The movement in exchange rates since the budget was set has • Road Bear EBIT of $6.1m resulted in a New Zealand dollar translation impact on the result. • Manufacturing Joint Venture announced since balance date The Road Bear business surpassed budgeted EBIT by $2.2m, or • New Zealand Rentals EBIT of $2.9m, up from prior 73% in USD, but due to the exchange rate changes the actual EBIT corresponding period loss of $3.5m due primarily to translated to NZD was $2.3m, or 61%, above budget – a reduction Rugby World Cup of $0.4m due to the exchange rate. • Build cost reduction targets of over 10% achieved in large The exchange rates used for the FY2012 budgets set in April 2011 vehicle range were as follows: • Motek brand launched, focussed on vehicle sales NZD / USD $0.80 NZD/ AUD $0.75

The table below shows the performance by business group for the period.

Tourism Holdings Limited Six months ended 31 December 2011 Six months ended 31 December 2010 Operational Review Divisional Net Operating Divisional Net Operating Turnover EBIT Assets Cashflow Turnover EBIT Assets Cashflow ($million) ($million) ($million) ($million) ($million) ($million) ($million) ($million) Rentals New Zealand 28.5 2.9 89.1 (14.2) 23.2 (3.5) 84.4 (16.7) Rentals Australia 45.8 3.4 104.8 11.8 46.7 4.3 120.3 (19.2) Rentals USA 17. 2 6.1 22.8 4.0 - - 21.0 - Motek Manufacturing 7. 3 0.1 6.4 7. 3 5.2 0.8 10.0 2.6 Tourism Group 9.2 0.7 29.7 1.2 9.8 1.0 31.3 1.8 Group Support Services - (1.7) 11.9 (3.0) - (2.5) 5.3 (2.1) Group Total 108.0 11.5 264.7 7. 1 84.9 0.1 272.3 (33.6)

1 Dividend The macro trends for the New Zealand and Australia rentals The board has declared a 2cps dividend. The record date for the businesses remain difficult, with the high exchange rates being of dividend is 21st March 2012 and the payment date is 27th particular concern. The company will continue to enact revenue March 2012. and growth strategies, but there will be further cost reduction plans The resumption of dividends is a reflection of the board’s instigated over the coming months. In particular, the reduction in fleet expectations for positive NPAT results from the company and an on- and on-going reduction in build cost is expected to drive any profit going improvement in profitability. growth for the second half and FY2013 year. As indicated, the manufacturing business changes are not expected Joint Venture Manufacturing to materially affect the forecast EBIT for the second half. The – RV Manufacturing Group LP FY2013 forecast for manufacturing will not be known until after the transition plan is completed. Initial forecasts remain positive and the As released to the market on the 21st February 2012, thl has expectation remains for positive EBIT in the first full year of operation. entered into a series of agreements to form a joint venture The tourism businesses in New Zealand continue to be affected partnership for the manufacture and assembly of recreational and negatively by the reductions in visitation from core European and specialist vehicles within New Zealand. United Kingdom markets, and from the general coach market The consideration payable to thl will be based on the book value of declines still being experienced throughout the country. There is some the assets transferred, of about $7.5m. The joint venture business will growth from Asian markets, and focus remains on delivering product operate a June 30th financial year. to attract more of that customer base. There will be transition costs for the joint venture over the coming It is too soon to consider a detailed forecast for the FY2013 period months, although the new business is expected to be profitable at the as a whole, due to the on-going volatility and economic uncertainty in EBIT level in the FY2013 year, based on the current forecast volumes Europe and the United Kingdom. from the core customers of thl and Kea rentals. The thl building in Hamilton that was purchased for $7.3m last year will be targeted for Debt and Capital Management sale in the second half of the calendar year once the joint venture transition is completed. Debt levels, at $102m, were up on the prior corresponding period Kea Manufacturing Limited holds shareholdings in two other by $11m due to higher Road Bear fleet and the Hamilton building businesses in . The joint venture will, as part of the purchase. In addition, fleet sales were slower than planned. The agreements, acquire a 30% shareholding in Fiberglass Reinforced reduction in capital expenditure in the New Zealand and Australian Plastics (FRP) and a minimum 33% shareholding in Auckland businesses will flow through in later periods. Coach Builders (ACB). These businesses have supplied both Kea Gross Capital Expenditure for the FY2012 year is expected to Manufacturing and thl. The purchase of those shareholdings is be about $80m, with Net Capital Expenditure of $35m similar to expected to be financially beneficial through synergies within the joint previous forecasts. venture. Various ACB and FRP shareholder and regulatory approvals The equity ratio remains consistent with last year at 47%. The debt- are required to complete these share purchases. to-debt-plus-equity ratio was 43% as at December 31st. The Motek Specialist Vehicles business will revert to the name Action There are no changes of note expected within the coming six months Motor Bodies, as thl will retain the name Motek within its business. from a debt and capital management perspective. As previously The joint venture will arrange its own funding facilities separate from indicated, the building in Hamilton will commence a sale process, but the respective joint venture partners. any sale is not expected to be completed until FY2013. Fleet reductions planned will take effect throughout the FY2013 year Outlook in New Zealand and Australia, although the USA will continue to have fleet growth. The forecast for the year-end is for an EBIT result between $16m -$17m. NPAT is expected to be in the range of $5.0m - $6.0m. Overall, the business profitability is now influenced by five key profit areas with four differing market drivers. The groupings are Rentals New Zealand, Rentals Australia, Rentals USA, Tourism businesses and Manufacturing. The Road Bear business has continued to benefit from increased number of tourists visiting the USA and a positive tourism exchange rate (i.e. weak USD). The year-end Road Bear result is expected to be an EBIT of over NZD$5.0m.

2 Chairman’s Report

Business Overview Fleet operating costs in Australia were down 16%, with hire days Rentals down 4%. Total costs for the period were in line with last year with New Zealand lower fleet operating costs offset by higher fleet depreciation. EBIT The New Zealand business was focused largely on the Rugby World margin dropped from 8.5% to 7.5%, due primarily to a small drop in Cup, which contributed an improvement in EBIT of $4.5m. yield on rentals. The underlying business still had an improved result over the previous New leased sites opened in Cairns and Melbourne, providing year, reflecting internal work on lowering the cost of doing business operational efficiencies that are expected to reduce costs over time. and increasing add-on sales revenue for the business. The Melbourne site includes an expanded assembly factory that EBIT for the six months was $2.9m versus a loss of $3.5m in the will continue to produce the van product for Australia and has the prior corresponding period. potential to complete some assembly work for the RVMG LP joint Total revenue for the half year, of $28.5m, was up $5.3m on the prior venture business. corresponding period. Revenue excluding fleet sales was up $6.4m All the sites have used similar design principles to reduce build and or 34%. fitout costs whilst ensuring a much more efficient and customer Vehicle sales for the business of 233 were up on last year’s 201 with focused operating environment. a greater mix of cars in this year’s result. The launch of the Motek brand for vehicle sales has commenced Fleet Operating Costs were down 8% on the prior corresponding within the Australian dealer network. The website has been launched period despite an increase in hire days of 12%. Fleet depreciation and a new brand manager has commenced, focussing predominantly costs increased 14%. Total costs excluding fleet sold for the period on this aspect of the business. were therefore flat, creating an EBIT margin of 10% compared to A new General Manager, (Andrew Rickett) has been appointed and the loss last year. has a very strong rentals background, having owned and operated There has been substantial work completed on property development car rentals businesses in the UK. Andrew most recently has been for both the New Zealand and Australia businesses. A new purpose Strategic Business Development Manager for Australia. built leased site in Queenstown will open during March 2012 and will provide a significant operating and customer improvement as the United States business has operated from three separate sites for several years. This was the first full high season for the Road Bear business within thl and as such there are no prior corresponding period comparisons Australia for revenue and EBIT. Total revenue for the half year, of $45.8m, was down $0.9m on the The business substantially outperformed the original business case prior corresponding period. Revenue excluding feet sales in Australia expectations and original market forecasts released when it was was down $1.2m on the prior corresponding period. purchased in December 2010. EBIT was $3.4m versus $4.3m for the prior corresponding period. The following numbers are all in USD. Vehicle sales revenue was up marginally at $8.7m, although volume Total revenue for the half was pleasing, at USD$14.4m, or was down to 190 from last year’s 243. The increase in revenue per USD$9.5m excluding fleet sales. unit sold is a reflection of the fleet mix sold, with fewer small units EBIT for the period, at USD$5.2m, was USD$2.2m above forecast, sold in the period. reflecting strong cost control, revenue growth and chassis rebates. Fleet sales for the period were 113 and in line with expectations.

3 Chairman’s Report

The December year end fleet count was 362, compared to an Manufacturing acquisition fleet count of 242 in December 2010. The manufacturing business produced an EBIT result for the half The total fleet size for the peak trading period increased by 24% over of $0.1m, compared with $0.8m for the prior corresponding period. the prior year, which was one of the key drivers of the better than The reduction in EBIT directly reflects the lower volumes of product budgeted result. produced for the rentals business. The Road Bear business has remained a premium brand with a very The business will be reported in the future as part of the RVMG LP high customer satisfaction rating in the industry. joint venture. The focus for this business moving forward is to continue the stepped integration with the thl business and managed fleet growth in line Strategic Direction - thl with the ability to increase fleet sales and thus maintain rotation. The board has made a commitment to continuing the growth in Expectations for this high season (June to September) are for on- profitability and this year will broadly deliver to the goals in the Target going growth in rentals revenue. The new fleet range launched this Company Statement issued in April 2011. year has had a very positive early reception by the market for both At the Annual Meeting in November 2011 I commented on the rentals and fleet sales enquiries. board’s focus on ensuring the company builds earnings momentum. This remains the clear focus of the company, and the board reiterates Tourism Business the strategic comments made at that meeting. The Tourism business had a combined EBIT of $0.7m, down from Since the result release we have also held an investor relations day $1.0m in the prior corresponding period. Neither the Kiwi Experience with a number of the key institutional investors in the company. The nor Waitomo group as a whole saw any notable benefit from the day was well received and I encourage shareholders to review the Rugby World Cup. The decline for traditional coach business has presentation made to that group (available online www.thlonline.com). continued and the Waitomo business has felt the effects of that change. The retail and food and beverage business improved in comparison with the prior corresponding period, although top line visitation numbers to the core dropped. Within Kiwi Experience, yield remains the key concern, with United Kingdom backpacker arrivals continuing to decline. Capacity in this Keith Smith sector has not reduced and there continues to be significant Chairman price pressure. Kiwi Experience recently entered into a further three-year contract with STA Travel in the United Kingdom, which has been a very positive long-standing customer of the business. The expectations for this half have been reduced for these businesses and we expect the full year EBIT result to be down between 8 and 10% on the prior year.

4 5 Financial Statements

6 Consolidated Income Statement

For the six months ended 31 December 2011 (unaudited)

Note 6 months to 6 months to 12 months to Dec-11 Dec-10 Jun-11 $000’s $000’s $000’s

Continuing operations: Sales of services 82,704 66,800 145,019 Sales of goods 25,297 18,122 50,735 Total revenue 12 108,001 84,922 195,754 Cost of sales (21,583) (13,830) (40,770)

Gross Profit 86,418 71,092 154,984

Other operating (expenses) / income (110) 18 (112) Administrative expenses (14,291) (10,750) (23,202) Impairment of Goodwill - - (26,138) Other operating expenses (60,483) (60,249) (127,331)

Operating profit / (loss) before financing costs 11,534 111 (21,799)

Finance income 63 70 846 Finance expenses (4,147) (2,587) (6,985)

Net finance costs (4,084) (2,517) (6,139)

Profit / (Loss) before tax 7,450 (2,406) (27,938) Income tax (expense) / benefit (3,262) 1,094 594

Profit / (Loss) for the year 4,188 (1,312) (27,344)

Earnings per share for profit / (loss) attributable to the equity holders of the Company during the year Basic earnings per share (in cents) 4.3 (1.3) (27.9)

Diluted earnings per share (in cents) 4.1 (1.3) (27.9)

7 Consolidated Statement of Changes in Equity

For the six months ended 31 December 2011 (unaudited)

Share Retained Cash Flow Other Total Capital Earnings Hedge Reserves Equity Reserve

$000’s $000’s $000’s $000’s $000’s

Opening Balance as at 1 July 2010 143,798 33,686 (695) 5,426 182,215 Comprehensive Income Net Profit/(loss) for the Six Months Ending 31 December 2010 - (1,312) - - (1,312) Other Comprehensive Income Cash Flow Hedge Movement - - 58 - 58 Foreign Currency Translation Movement - - - 2,787 2,787 Total Comprehensive Income - (1,312) 58 2,787 1,533 Transactions with Owners Dividends on Ordinary Shares - (2,062) - - (2,062) Employee Share Option Expense - - - 83 83 Total Transactions with Owners - (2,062) - 83 (1,979)

Closing Balance as at 31 December 2010 143,798 30,312 (637) 8,296 181,769

Opening Balance as at 1 January 2011 143,798 30,312 (637) 8,296 181,769 Comprehensive Income Net Profit/(loss) for the Six Months Ending 30 June 2011 - (26,032) - - (26,032) Other Comprehensive Income Cash Flow Hedge Movement - - (428) - (428) Foreign Currency Translation Movement - - 728 728 Total Comprehensive Income - (26,032) (428) 728 (25,732) Transactions with Owners Dividends on Ordinary Shares - (110) - - (110) Employee Share Option Expense - - - 95 95 Total Transactions with Owners - (110) - 95 (15)

Closing Balance as at 30 June 2011 143,798 4,170 (1,065) 9,119 156,022

Opening Balance as at 1 July 2011 143,798 4,170 (1,065) 9,119 156,022 Comprehensive Income Net Profit/(loss) for the Six Months Ending 31 December 2011 - 4,188 - - 4,188 Other Comprehensive Income Cash Flow Hedge Movement - - (1,236) - (1,236) Foreign Currency Translation Movement - - 695 695 Total Comprehensive Income - 4,188 (1,236) 695 3,647 Transactions with Owners Employee Share Option Expense - - - 78 78 Total Transactions with Owners - - - 78 78

Closing Balance as at 31 December 2011 143,798 8,358 (2,301) 9,892 159,747

8 Consolidated Balance Sheet

As at 31 December 2011 (unaudited)

Dec-11 Dec-10 Jun-11 Note $000’s $000’s $000’s

Assets Property, plant and equipment 2 232,103 219,576 220,524 Intangible assets 6 23,325 51,473 23,510 Total non current assets 255,428 271,049 244,034

Cash and cash equivalents 5,900 5,218 3,685 Trade and other receivables 29,251 37,948 30,705 Inventories 21,175 20,037 38,646 Assets held for sale 1,314 1,341 1,314 Taxation receivable 1,062 1,584 1,343 Total current assets 58,702 66,128 75,693

Total assets 314,130 337,177 319,727

Equity Issued capital 143,798 143,798 143,798 Other reserves 8,358 8,296 9,119 Cash flow hedge reserve (2,301) (637) (1,065) Retained earnings 9,892 30,312 4,170 Total equity 159,747 181,769 156,022

Liabilities Interest bearing loans and borrowings 3 63,999 81,599 87,094 Derivative financial instruments 3 3,152 859 1,419 Deferred income tax liability 5,294 4,092 3,890 Total non current liabilities 72,445 86,550 92,403

Interest bearing loans and borrowings 3 43,720 14,116 15,457 Trade and other payables 23,781 26,891 31,156 Other liabilities and charges 427 1,924 344 Derivative financial instruments 3 44 49 60 Taxation payable 232 - 187 Revenue in advance 10,773 23,373 21,047 Employee benefits 2,961 2,505 3,051 Total current liabilities 81,938 68,858 71,302 Total liabilities 154,383 155,408 163,705

Total equity and liabilities 314,130 337,177 319,727

9 Consolidated Statement of Cashflows

For the six months ended 31 December 2011 (unaudited)

6 months to 6 months to 12 months to Dec-11 Dec-10 Jun-11 $000’s $000’s $000’s Operating Activities CASH WAS PROVIDED FROM: Receipts from customers 107,896 101,895 195,560 Interest received 62 69 845 Dividends received 1 1 1 107,959 101,965 196,406 CASH WAS APPLIED TO: Suppliers and employees 95,184 132,968 239,383 Interest 4,147 2,587 6,985 Taxation 1,559 - (511) 100,890 135,555 245,857 Net cash flows from / (used) in operating activities 7,069 (33,590) (49,451)

Investing Activities CASH WAS PROVIDED FROM: Sale of property, plant & equipment 2 16 1,292 Sale of subsidiary (partial receipt) - 687 - Sale of Intangibles 60 2 703 1,352 CASH WAS APPLIED TO: Purchase of property, plant & equipment 8,950 2,150 4,717 Acquisition of subsidiary - 11,842 3,264 Purchase of intangibles 530 7,869 274 9,480 21,861 8,255 Net cash used in investing activities (9,478) (21,158) (6,903)

Financing Activities CASH WAS PROVIDED FROM: Term debt 5,168 50,806 57,642 5,168 50,806 57,642

CASH WAS APPLIED TO: Dividends paid to parent shareholders - 2,062 2,172 - 2,062 2,172 Net cash flows provided from financing activities 5,168 48,744 55,470

Net increase / (decrease) in cash balances 2,759 (6,004) (884)

Opening cash brought forward 3,685 8,435 8,435 Foreign currency translation adjustment (544) 2,787 (3,866) Closing cash carried forward 5,900 5,218 3,685

10 Reconciliation of Profit after taxation with cashflows from operating activities

For the six months ended 31 December 2011 (unaudited)

6 months to 6 months to 12 months to Dec-11 Dec-10 Jun-11 $000’s $000’s $000’s

Operating profit / (loss) after tax 4,188 (1,312) (27,344) PLUS/(LESS) NON-CASH ITEMS: Depreciation 22,724 19,599 41,103 Amortisation of fixed term intangibles 715 876 2,018 Impairment of Goodwill - - 26,138 Impairment of Assets - - 1,727 Amortisation of executive share scheme 78 83 178 Movement in deferred taxation 1,404 (640) (621) Increase/(Decrease) in provision for doubtful debts 3 (9) 67

24,924 19,909 70,610

PLUS/(LESS) ITEMS CLASSIFIED AS INVESTING ACTIVITIES: Net loss/(gain) on sale of fixed assets 110 4 (112) Movement in rental assets Rental assets transferred to inventory 7,734 8,262 40,927 Purchase of rental assets (33,199) (58,099) (124,131) (25,355) (49,833) (83,316)

TRADING CASHFLOW 3,757 (31,236) (40,050)

PLUS/(LESS) MOVEMENTS IN WORKING CAPITAL: (Decrease) / Increase in accounts payable (5,575) 2,429 7,383 (Decrease) / Increase in revenue received in advance (10,274) 16,750 14,647 Increase / (Decrease) in provision for taxation 326 (779) (351) (Decrease) / Increase in employee benefits (90) (205) 341 Decrease / (Increase) in accounts receivable 1,454 (22,551) (14,841) Decrease / (Increase) in inventories 17,471 2,002 (16,580)

3,312 (2,354) (9,401)

Net cash flows from operating activities 7,069 (33,590) (49,451)

NZ IAS 16 requires the cash flows associated with the sale and purchase of rental assets to be classified as an operating activity. Below are the details of the sale of rental assets:

Proceeds from sale of rental assets 17,970 12,962 40,575 Book Value of assets sold (15,836) (10,612) (33,544) Gain on Sale 2,134 2,350 7,031

Net cash flows from operating activities prior to adoption of NZ IAS 16 22,298 11,547 34,105 resulting in the sale and purchase of rental assets being classified as an operating activity

11 Notes to the Financial Statements

For the six months ended 31 December 2011 (unaudited)

1. Statement of Accounting Policies Tourism Holdings Limited’s primary operations are the manufacture, rental and sale of motor homes and campervans and other tourism related activities. The parent is domiciled in New Zealand. The registered office is Level 1, 83 Beach Road, Auckland 1010, New Zealand. Tourism Holdings is a company registered under the Companies Act 1993 and is an issuer in terms of the Securities Act 1978. The financial statements have been prepared in accordance with the Companies Act 1993 and the Financial Reporting Act 1993. Tourism Holdings is a profit oriented company. These interim consolidated financial statements of Tourism Holdings Limited and its subsidiaries have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand and NZ IAS 34 Interim Financial Reporting. The accounting policies used in the preparation of these interim reports are consistent with those used in the June 2011 financial report and this report should be read in conjunction with the annual financial statements for the year ended 30 June 2011. During the period the Company and Group have adopted the following new and amended NZ IFRS’s as of 1 July 2011: NZ IAS 24 “Related Party Disclosures” (mandatory for annual periods beginning on or after 1 January 2011). The revised NZ IAS 24 mainly amends the definition of a related party. The Group has applied NZ IAS 24 from 1 July 2011. It has no significant impact on the Group’s financial statements. NZ IAS 34 “Interim Financial Reporting” (mandatory for annual periods beginning on or after 1 January 2011). The revised NZ IAS 34 provides additional guidance relating to required disclosures. The Group has applied NZ IAS 34 from 1 July 2011. It has no significant impact on the Group’s financial statements. Exposure Draft 121 ‘Proposals to Harmonise Australian and New Zealand Standards in Relation to Entities Applying IFRSs as Adopted in Australia and New Zealand” (published in July 2010). The Harmonisation Amendments set out amendments to NZ IFRSs as a result of proposals that were contained in Exposure Draft 121. It should be read in conjunction with “FRS 44” New Zealand Additional Disclosures which sets out the New Zealand “All Entity” disclosure requirements that are in addition to requirements in IFRSs which have been relocated to the separate disclosure standard. The effective date of the amendments is reporting periods beginning on or after 1 July 2011. This new standard has no significant impact on the Group’s financial statements. 2. Property, plant and equipment During the six months ended 31 December 2011, the Group acquired assets with a cost of $42,149k (six months ended 31 December 2010 $60,250k), of this rental assets acquired were $33,199k ($58,099k). Assets with a net book value of $15,838k were disposed of during the six months ended 31 December 2011 (six months ended 31 December 2010 $10,632k), of this rental assets disposed were $15,836k ($10,612k). This resulted in a gain on disposal of $2,024k ($2,345k) of this rentals assets gain on disposal was $2,134k ($2,350k).

3. Borrowings and loans NZ$000’s NZ$000’s NZ$000’s 31 Dec 30 June 31 Dec 2011 2011 2010

Non-current 63,999 87,094 81,599 Current 43,720 15,457 14,116 107,719 102,551 95,715

Movements in borrowings are analysed as follows: Six months ended 31 December 2010 Opening balance as at 1 July 2010 44,909 Borrowings 50,806 Closing amount as at 31 December 2010 95,715 Six months ended 31 December 2011 Opening balance as at 1 July 2011 102,551 Borrowings 5,168 Closing amount as at 31 December 2011 107,719

The Group has the following undrawn borrowing facilities: NZ$000’s NZ$000’s NZ$000’s 31 Dec 30 June 31 Dec 2011 2011 2010

Expiring beyond one year 16,144 24,304 28,272

The Group has sufficient working capital and undrawn financing facilities to service its operating activities and ongoing investment in rental motorhomes. Changes in the value of Derivative Financial Instruments reflect changes to the fair market value of interest rate swaps.

12 Notes to the Financial Statements

For the six months ended 31 December 2011 (unaudited)

4. Dividends There were no Group dividends paid during the six months ended 31 December 2011. (During the six months ended 31 December 2010 the Group paid dividends of $2,062k being 2c per share)

5. Disposal Groups. The Group had no discontinued operations during the six months to 31 December 2011 or the prior period. During 2010 the assets and liabilities related to the Fiji businesses operating as Tourism Transport Fiji and Great Sights Fiji were disposed of and sold as at 30 September 2010. Tourism Transport Fiji and Great Sights Fiji’s assets and liabilities were disposal groups and not discontinued operations as they did not represent a major line of the business. Tourism Transport Fiji and Great Sights Fiji’s assets and liabilities were transferred at their book value.

The major classes of assets and liabilities of the disposal groups sold were as follows: 30 September 2010 Consolidated Tourism Transport Fiji and Great Sights Fiji

Assets sold NZ$000’s FJD$000’s Property, plant and Equipment 1,151 1,662 Cash and cash equivalents 211 305 Inventories 48 70 Trade and other receivables 270 390 Amounts owing by related company 373 538 Total assets disposed 2,053 2,965

Liabilities directly associated with assets sold Deferred Income Tax 161 233 Trade and other payables 215 310 Provision for income tax 107 155 Total liabilities directly associated with assets disposed 483 698 Net assets disposed 1,570 2,267 Net assets disposed excluding related party amount due 1,197 1,729

6. Business Combinations No businesses were acquired during the six months ended 31 December 2011. On the 31 December 2010, the Group acquired 100% of the share capital of JJ Motorcars Inc, which trades as Road Bear RV, a motor home rental company based in the United States of America. As a result of this acquisition the group is expected to expand the Road Bear RV operations in the future in the USA. The goodwill of USD$5m paid for the acquisition is attributable to the acquired operations that are already in place as a going concern rather than having to set up the operations from the beginning. The goodwill is expected to be deducted for income tax purposes over 15 years. The following table summarises the consideration paid for Road Bear RV and the amounts of the assets and liabilities assumed recognised at the acquisition date.

Consideration NZ$000’s USD$000’s As at 31 December 2010 Cash 12,081 9,450 Vendor Loans 8,949 7,000 21,030 16,450

Total consideration transferred 21,030 16,450

Acquisition-related costs (included in expenses in the statement of NZ$000’s comprehensive income for the period ended 31 December 2010) 533

13 Notes to the Financial Statements

For the six months ended 31 December 2011 (unaudited)

Recognised amounts of identifiable assets acquired and liabilities assumed Acquiree’s carrying value and finalised fair value NZ$000’s USD$000’s Cash and cash equivalents 3,366 2,633 Other current assets 153 120 Plant and equipment 119 93 RV rental units 12,107 9,470 Revenue in advance and deposits held (224) (175) Net deferred tax liability (313) (245) Total identifiable net assets 15,208 11,896 Brand 720 543 Goodwill 5,102 4,011 Total assets acquired 21,030 16,450

The fair value of the plant and equipment and RV rental units was arrived at by taking the net book value of the assets held at 31 December 2010. Deferred tax has been provided in relation to the fair value of the RV rental units. No revenue or profits from the acquisition of Road Bear RV were recognised in the consolidated statement of comprehensive income for the period ended 31 December 2010. Earnings for the period from July 2010 to December 2010 are not stated as prior to thl ownership the business operated under a different tax classification whereby all income was attributable to the shareholder owners therefore comparatives are not meaningful. In the period ended 31 December 2011 the provisional fair values allocated at the time of acquisition were finalised. This resulted in an amount of NZ$720k being identified as attributable to the acquired “Road Bear RV Rentals and Sales” brand. The amount was reclassified from goodwill in the period ended 31 December 2011.

7. Income tax Income tax expense is recognised based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. 8. Capital Commitments As at 31 December 2011 capital expenditure on property plant and equipment contracted for but not yet incurred for New Zealand was NZ$1,387k (31 December 2010 NZ$7,273k). For Australia it was NZ$7,831k (31 December 2010 NZ$20,911k) and for the United States of America it was NZ$14,544k (31 December 2010 NZ$18,026k). 9. Post balance date events On the 23rd February 2012 thl declared a 2cps dividend fully imputed payable on 27th March 2012 with a record date of 21 March 2012. On the 21st February 2012 thl announced that it had entered into a series of agreements to form a joint venture manufacturing business in New Zealand with Kea Manufacturing (New Zealand) Limited (KMNZ). The new venture will be conducted as a limited partnership called RV Manufacturing Group LP (RVMG LP). RVMG LP will commence as a 50/50 partnership between thl and KMNZ. The transactions forming the joint venture include: (a) thl and KMNZ selling their respective motorhome and campervan manufacturing business to RVMG LP. The consideration payable to thl will be based on the book value of the assets transferred. Part of the consideration will represent thl’s capital contribution to RVMG LP and the remainder will remain outstanding as and advance from thl to RVMG LP. The thl and KMNZ agreements are unconditional and will settle on 1 March 2012 unless otherwise agreed by thl and KMNZ. (b) thl is also selling its specialist and body work business to RVMG LP. The consideration payable to thl under this agreement will also be based on the book value of the assets transferred. The amount will remain outstanding as an advance from thl to RVMG LP. The sale of this business is conditional on the assignment of certain key customer contracts and the lease of thl’s Motek Specialist Vehicles site in Hamilton. If these conditions are not satisfied by 31 August 2012 the parties may terminate the agreement, though this will not impact on the assets transferred under (a) above. The transactions will see circa $7.5m in assets transfer from thl to RVMG LP and is not expected to have any negative impact on the FY2012 EBIT result for the business. 10. Seasonality of Business The tourism industry is subject to seasonal fluctuations with peak demand for tourism attractions and transportation over the summer months. The operating revenue and profits of the Group’s segments are disclosed in note 12. New Zealand and Australia’s profits are typical generally over the southern hemisphere summer months and the United States of America’s profits are typically generated over the northern hemisphere summer months. 11. Related Party Transactions Disclosed in the Annual Financial Statements are related party transactions and balances. During the period July to December 2011 thl Australia purchased motorhomes and caravans from a new related party Jayco Australia at a value of NZ$2,501k. All of the transactions were conducted at ‘arms length’ on commercial terms and at market prices.

14 Notes to the Financial Statements

For the six months ended 31 December 2011 (unaudited)

12. Segment Note The chief operating decision maker (‘CODM’) has been identified as the executive team together with the Board of Directors. The CODM review the group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The CODM assess the performance of the operating segments based on a measure of operating profit (earnings before interest and tax). The measurement basis excludes the effects of operational expenditure or gains such as loss/gain on disposal or impairments of property, plant and equipment, fair value changes in foreign currency financial assets/liabilities and costs of major business acquisitions. Interest income and expenditure are not included in the result for each operating segment that is reviewed by the CODM. As at 31 December 2011 the CODM considers the business from both a geographical and service / product perspective, the CODM considers the performance of business based on the rentals division in Australia, United States of America and New Zealand, as well as the Manufacturing (Ci Munro/Motek) and Tourism Group segments. Group support costs are reported separately.

Six Months to December 2011 United New Zealand Australia States Group Ci Munro/ Tourism Support Rentals Motek Group Rentals Rentals Services Total $000’s $000’s $000’s $000’s $000’s $000’s $000’s

Sales of services 25,123 - 9,147 37,120 11,314 - 82,704 Sales of goods 3,375 7,328 - 8,681 5,913 - 25,297

Revenue from External customers 28,498 7,328 9,147 45,801 17,227 - 108,001 Operating profit 2,907 101 654 3,442 6,086 (1,656) 11,534 Capital Expenditure 21,807 371 273 11,336 56 8,306 42,149 Non Current Assets 87,424 2,287 30,296 98,090 24,591 12,740 255,428 Total Assets 104,349 12,405 32,727 126,053 27,751 10,844 314,130 Net Assets 89,076 6,384 29,737 104,837 22,744 11,940 264,718

Inter-segment transactions are entered into under normal commercial terms and conditions that would also be available to unrelated third parties. The CODM does not distinguish between revenue from internal or external customers when measuring the performance of segments. All revenue is reported to the executive team on a basis consistent with that used in the income statement.

United Six Months to December 2010 New Zealand Australia States Group Ci Munro/ Tourism Support Rentals Motek Group Rentals Rentals Services Total $000’s $000’s $000’s $000’s $000’s $000’s $000’s

Sales of services 18,654 - 9,751 38,326 - 69 66,800 Sales of goods 4,528 5,205 - 8,389 - - 18,122

Revenue from External customers 23,182 5,205 9,751 46,715 - 69 84,922 Operating profit (3,524) 771 1,077 4,263 - (2,476) 111 Capital Expenditure 23,656 137 1,545 34,443 - 469 60,250 Non Current Assets 87,913 2,425 31,603 124,833 17,478 6,797 271,049 Total Assets 115,008 15,529 35,107 147,653 21,030 2,850 337,177 Net Assets 84,418 10,034 31,259 120,239 21,030 5,285 272,265

Reconciliation of Segment result to profit/(loss) for the period. 6 months to 6 months to Dec-11 Dec-10 $000’s $000’s Total Reportable operating profit 11,534 111

Net Finance Costs (4,084) (2,517) Profit/(loss) before tax 7,450 (2,406) Income tax (expense)/benefit (3,262) 1,094 Profit/(loss) for the period 4,188 (1,312)

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash. They exclude deferred taxation, investments and derivatives designated as hedges of borrowings as they are not allocated to segments. Net segment assets are total segment assets less segment non interest bearing liabilities and cash on hand.

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Directors: Keith Smith, Chairman Non Executive Director John Bongard ONZM Non Executive Director Graeme Bowker Non Executive Director Rick Christie Non Executive Director Deepak Gupta Non Executive Director Graeme Wong Non Executive Director

Solicitors: Minter Ellison Rudd Watts, Auckland

Bankers: , ANZ, part of ANZ National Bank Limited

Executives: Grant Webster  Chief Executive Officer Ian Lewington Chief Financial Officer Quinton Hall Chief Information Officer Mike Horne General Manager, New Zealand Rentals Operations Kate Meldrum  General Manager, Marketing and Customer Experience Andrew Rickett General Manager Australian Operations Daniel Schneider CEO & President Road Bear RV Rentals & Sales Sue Sullivan General Manager, Sales

Auditors: PricewaterhouseCoopers, Auckland

Share Registrar: Link Market Service PO Box 384, Ashburton Tel: +64 3 308 8887 Fax: +64 3 308 1311

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Rentals Tourism operations Group support services New Zealand Waitomo Group Theh Beac House, Level 1 36 Richard Pearse Drive, Mangere 39 Waitomo Caves Road 83 Beach Road, Auckland City Private Bag 92 133, Private Bag 501 PO Box 4293, Shortland Street Auckand 1142, New Zealand Otorohanga 3940, New Zealand Auckland 1140, New Zealand Tel: +64 9 255 3910 Tel: +64 7 878 8227 Tel: +64 9 336 4299 Fax: +64 9 255 0629 Fax: +64 7 878 8858 Fax: +64 9 309 9269 Australia www.waitomo.com www.thlonline.com www.blackwaterrafting.co.nz Central West Business Park, Building 2, Associated companies www.ruakuri.co.nz 9 Ashley Street, Braybrook VIC 3019 RV Manufacturing Group LP PO Box 4194, Footscray West D.C Kiwi Experience 169 Bush Road, Albany 0632 Footscray West VIC 3012, Australia 85 Beach Road New Zealand Tel: +61 3 8398 8800 Auckland 1010 Action Motor Bodies Fax: +61 3 9687 4522 New Zealand 32 Kaimiro Street, Te Rapa Tel: +64 9 336 4286 United States of America Hamilton 3241, New Zealand Fax: +64 9 366 1374 Road Bear RV Rentals & Sales Tel: +64 7 850 2410 28404 Roadside Drive www.kiwiexperience.com www.actionmotorbodies.co.nz Agoura Hills, CA 91301 Tel: +1 818 865 2925 Overseas Fax: +1 818 991 2744 representation offices www.roadbearrv.com Germany www.maui-rentals.com Tel: +49 89 7257 9550 www.britz.com Fax: +49 89 7254 516 www.backpackercampervans.com United Kingdom www.exploremore.co.nz Tel: +44 20 7569 3075 Fax: +44 20 7569 3001

17 18 Group support services New Zealand The Beach House, Level 1 83 Beach Road, Auckland City PO Box 4293, Shortland Street Auckland 1140, New Zealand Tel: +64 9 336 4299 Fax: +64 9 309 9269 website: www.thlonline.com 2012